New Zealand’s Stock Exchange, Te Paehoko o Aotearoa, known as the NZX, is one of around 60 established stock exchanges around the world. The NZ share market lists 178 companies and funds, including household names that Kiwis use everyday, like Briscoes and Air New Zealand, through to companies that keep our country running, such as Mainfreight and Vector. 

So what’s the NZX 50, can you invest in it, and how do its annual returns compare to other global indexes?

NZ share market companies

The NZX is a trusted member of the World Federation of Exchanges (WFE), and it provides opportunities to trade in multiple ways on the NZX. 

How many companies are on the NZX?

As of October 2024, there are 126 public companies, or pakihi, listed on NZX. They have a combined total value of around NZ$381 billion, which is approximately US$233 billion — that’s more than Pepsico (PEP) and less than T-Mobile US (TMUS). This compares to the NYSE, which at the same time in October, had a total market cap of US$39.18 trillion, and the Nasdaq, which had a total market cap of US$30.22 trillion.

Companies wanting to list on the NZX exchange Main Board need to meet the NZX’s listing requirements. These include having: 

• A market cap minimum (total dollar market value) of NZ$10 million
• 20% shareholders of more than 100 people who are ‘members of the public’ (not employees, management, or company directors)
• To report twice a year to the NZX, and their shareholders
• To meet a range of governance obligations

Dual-listed companies on the ASX

Around 50 New Zealand companies are dual-listed on the ASX, with around 10 Kiwi-founded companies listed only on the Australian Securities Exchange (ASX). Dual-listed means a company is publicly listed on two exchanges. 

The companies on both the NZX and ASX may be familiar to many Kiwis. They include Air New Zealand (AIR), Auckland International Airport (AIA), Briscoe Group (BGP), Chorus (CNU), Contact Energy (CEN), Mercury NZ (MCY), Meridian Energy (MEL), NZME (NZM), and Spark NZ (SPK). 

Read more: The ASX and its largest ETF 

How does the NZX work?

The NZX is New Zealand’s exchange for equities (company shares), funds (ETFs), S&P/NZX Indices, derivatives (financial contracts) — including:

• SGX-NZX Dairy Derivatives 
• NZX Equity Derivatives Market (NZCX)  
• NZX Energy
• Fonterra Shareholders' Market (FSM), 
• NZX Debt Market (NZDX)
•  NZ Emissions Trading Scheme (NZ ETS). 

The NZX also provides trading, settlement, depository and data services, and is a clearing house. 

Also under the NZX umbrella are investing fund manager Smart — you’ll see their name on many of the funds listed on the NZX — and advisory platform NZX Wealth Technologies, which looks after admin, custodial activities and reporting for investment advisers and financial services providers. 

The difference between NZSX vs NZDX

The NZSX is the NZX Main Board, and the NZDX is the NZX Debt Market:

• The Main Board (NZSX) is a market for trading company shares, or hea — referred to as equities — and funds (ETFs)
• The Debt Market (NZDX) is a market for listed debt securities, including corporate and government debt, such as bonds

Bonds are an asset class, which are essentially loans to a government, council or company. So when you hear that your local council has debt, bonds may be one of the ways they’ve sought to raise money to pay for local projects. 

Some investors choose to invest in bonds because they pay a fixed interest rate over a fixed term. This means investors know what return to expect when their bonds reach maturity at the end of the investing term. According to the FMA (NZ’s Financial Markets Authority), government bonds ‘have the highest creditworthiness and therefore the lowest risk’. 

Read more: What are bonds?

S&P/NZX Indices

There are 21 S&P/NZX Indices (aka indexes) that track New Zealand’s Exchange. Some indexes group under company value, like MidCap (medium-sized) or SmallCap (small-sized), and other indexes categorise across investing sectors.

Examples are sectors such as consumer discretionary, which includes companies like Hallenstein Glasson (HLG) and Michael Hill International (MHJ), and communication services, which includes Chorus (CNU) and Sky Network Television (SKT). 

An index categorisation, such as the NZX 50, which we talk about next, can provide a month-to-month snapshot of how each sector is performing in the New Zealand economy. You can read more about the methodology behind the indexes here.

What is the NZX 50 Index?

The NZX 50 Index, also called the S&P/NZX 50, is an index that contains the 50 largest companies listed on the NZX Main Board. It was introduced in March 2003 — replacing the NZSE 40 — and is the New Zealand Exchange’s main share market index, representing around 90% of the NZX’s total market value. Like other indexes, or kuputohu, such as the S&P 500, it’s overseen by S&P Global Ratings. 

How is the NZX 50 weighted?

The NZX 50 is weighted by market cap (total dollar market value) — meaning, the index includes only the 50 largest companies listed on the exchange. To be included on the index, a company’s total shares are multiplied by the share value, which add up to equal a dollar value that sits within the range of the top 50 largest companies. So: Share price x number of shares = top 50 company value.

What the NZX 50 contains

• Common stocks and ordinary equity stocks that include:
  • New Zealand Listed Issuer — the primary listing (company) is the NZX Main Board (NZSX)
  • Foreign Exempt Issuer — the issuer has a secondary listing on the NZX and a primary listing on another exchange recognized by the NZX

What the NZX 50 does not contain:

• Hybrid stocks such as convertibles, bonds, warrants (a type of derivative), and preferred stocks
• Exchange traded funds (ETFs) 
• Securities with restrictions on ownership that prevent a broad range of investors from trading them, such as cooperatives
• Companies that are currently the target of an acquisition — such as Tower (TWR) replacing Arvida Group (ARV) when the by Stonepeak Alps BidCo acquisition completes, which we talk about below

The NZX 50 list — sector breakdown

The companies listed on the NZX 50 index are categorised across a range of investment sectors:

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The most dominant company sectors on the NZX 50 are health care (representing more than a quarter of the index), including Fisher & Paykel Healthcare (FPH) and Ryman Healthcare (RYM), industrials like Auckland International Airport (AIA), and utilities such as Contact Energy (CEN). Together, these sectors add up to more than 63% of NZX 50 representation. 

While at the lower-weighted end, the energy sector, which includes Channel Infrastructure NZ (CHI), and materials sectors, including Vulcan Steel (VSL) and Fletcher Building (FBU), both represent just a 0.4% weighting on the index.

The top 10 NZX 50 constituents by market cap 

1. Fisher & Paykel Healthcare (FPH)
2. Meridian Energy (MEL) 
3. Auckland International Airport (AIA) 
4. Infratil (IFT) 
5. Mercury (MCY) 
6. Ebos (EBO) 
7. Mainfreight (MFT) 
8. Contact Energy (CEN)
9. Spark (SPK) 
10. The a2 Milk Company (ATM) 

NZX 50 historical average return

Zooming out, the average annualised return of the NZX 50 for the past 10 years has been 8.99% — more than 3.5% higher than New Zealand’s top term deposit interest rates for 5 years. And in the 20 years between when the index was started in March 2003 until March 2023, according to S&P Global, it had ‘an annualised return of almost 10% per year’.

Zooming closer into the short term, the NZX 50 has experienced some fluctuations: 

• 1 year annualised returns have been 9.98%
• 3 years have dropped into the negatives, at -2.19%
• 5 years only a small amount better at  2.6%

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Read more: How compounding growth and compound interest works

The NZX 50 vs other global indices

The S&P 500 is famous for its average historical return. In the more than 21 years since it launched, however, according to, S&P Dow Jones Indices’ Global Equity Indices director Sean Freer, the NZX 50 may offer ‘better return at lower risk than the S&P 500’. 

It’s hard to compare the 50-company NZX 50 against the 500-company S&P 500, however, with the latter listing many of the world’s largest companies. The S&P 500 is also two years into a bull market cycle (when markets climb) — which itself followed a steep Covid recovery — and that has been largely driven by ‘The $3 trillion club’, which includes Apple (AAPL), Microsoft (MSFT), and Nvidia (NVDA), companies heavily invested in AI innovation.

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Freer also said in his Celebrating 20 Years of the S&P/NZX 50 Index summary, that the NZX 50 has ‘outperformed the S&P/ASX 200’, adding that New Zealand’s benchmark index has lower volatility ‘despite having only a quarter of the constituents’.  This may have been be in part due to the dominance of the financials and materials sectors on the ASX — aka big banks and mining industries — both industries impacted by global factors, such as events in China, as well as boom-bust cycles. 

When does the NZX 50 change, and why?

Quarterly rebalancing

The NZX 50 is rebalanced every quarter, in March, June, September and December. This is when companies that fall below the market cap range of the top 50 best performers are replaced by companies that have surpassed them. In other words, the NZX 50 is adjusted (rebalanced) every three months to ensure it contains the top 50 largest companies listed on the exchange.  

In 2024, up until mid-October, there was ‘No change’ in the rebalancing of the index (aside from the removal of the newly acquired Arvida Group). However, in December 2023 during quarterly rebalancing, two companies were replaced: Pacific Edge (PEB) and Synlait Milk (SML) were replaced by Gentrack Group (GTK) and Turners Automotive Group (TRA).

Not meeting index requirements

Outside of quarterly rebalancing, if a stock no longer meets the index inclusion requirements, S&P Global Indices will make changes. 

On 22 October 2024, New Zealand insurer Tower Insurance (TWR) is set to replace Arvida Group (ARV) on the NZX 50. Arvida is to exit both the NZX and S&P/NZX Indices, with Stonepeak Alps BidCo’s $1.2 billion acquisition of Arvida expected to be greenlit by the Overseas Investment Office. Tower may also replace Arvida on the NZX 50 Portfolio and MidCap Indices.

Investing in the NZX 50

You can invest in the NZX 50 index on the NZX through ETFs (exchange traded funds) that track the index and include the top 50 companies listed on the NZX. These are managed by Smart (formerly Smartshares): 

• Smart S&P/NZX 50 ETF (NZG) — first listed in July 2020 and tracks the S&P Index with a market cap weighting, ranging from 3.37% to 16.76% — this is a passive ETF, which means it tracks the NZX 50 but isn’t actively managed by a fund manager
• Smart NZ Top 50 ETF (FNZ) — first listed on 10 December 2004, and rather than tracking the index with a full market cap weighting, it weights companies around the 5% mark, ranging from 4.15% to 5.55%, which reduces the potential of swings in the fund

Read more: ETF vs stocks: What’s the difference?

The NZX 50 is an indicator of the NZ economy

The performance of the NZX 50 shows how New Zealand’s economy is doing. Like other global share markets, the NZX can be volatile day-to-day and month-to-month, which can depend on market factors that may affect a company’s stock. These may include:

• Company updates (issued to traders, brokers and the media) — such as staff layoffs, mergers and acquisitions, or new deals
• Local and global economic events — such as a recession, war, or events like the covid pandemic
• Earnings results — are required by the NZX to be published every six months, on a full and half year basis. They include information about the company’s performance, which includes financial statements showing operating revenue, profit and losses, and cash balances and assets 
• Interest rates — these are set by the Reserve Bank of New Zealand (RBNZ). When they’re higher (4-5% and above), they can negatively impact a company’s growth potential by reducing a company’s ability to borrow money, but when they are lower (below 4%) companies are able to borrow more cheaply to invest in their business, increasing the potential to innovate and grow

NZX opening and closing — and visiting the NZX

The NZX regular trading hours are 10am - 4.45pm. But the market also has a number of sessions before and after trading. Understanding these can help to explain the differences in prices that can occur on either side of each trading day.

Pre-Open Session: 8.30am

This is when orders can be placed, deleted, amended, or after hours trades can be reported, but no one can actually trade on the market.

Opening Auction: 10am-ish

The market opens at a random time 30 seconds either side of 10am — meaning somewhere between 09:59:30am and 10:00:30am. 

An opening auction algorithm calculates opening prices.

Continuous or Regular Trading Session: 10am - 4.45pm

This is when the market is open for buying and selling — aka trading.

Pre-Close Session: 4.45pm-ish

This is similar to the Pre-Open session, but at the end of day, after the Regular Trading Session. Again, no trades can take place. 

Closing Auction: 5pm-ish

At a random time between 4.59.30pm and 5.00.30pm, the same algorithm used at the Opening Auction decides the closing ‘print price’. That is, the price when demand exactly meets supply for orders. Often — and especially when there are index rebalances — the majority of the daily volume of trades go through at the closing match price — which can sometimes be significantly higher or lower to the trading price before 4.45pm.

The NZX is closed for 13 annual holidays, with two shorter trading days throughout the year. Take a deeper look at a typical NZX trading day here.

The NZX opening bell

The NZX is based in Wellington, with offices in Auckland. Companies listing on the NZX or celebrating a milestone — as well as occasional visitors — may get an opportunity to ring the opening bell at the Wellington NZX headquarters to start the day’s trading.

The history of the NZX

New Zealand’s stock exchange ‘has a rich history’ that began in the late 1800s.

1866

Dunedin was home to New Zealand’s first stock exchange and brokers’ association during the gold rush era at a time when it was the capital of Otago, and New Zealand’s largest city was awash with gold and money, and when allegedly ‘The first miners literally picked up nuggets where they lay’. 

1913 - 1922

The Stock Exchange Association of New Zealand was formed to unite the Dunedin exchange with the Auckland, Thames, Wellington, Reefton and Christchurch exchanges. Other regional cities later joined, including Taranaki in 1916, Invercargill in 1920 and Gisborne in 1922.

1983 

The ’80s brought with it more changes, and the association became the New Zealand Stock Exchange (NZSE).

1987

Following the infamous Black Monday stock market crash of 1987, company governance structure requirements were amended to a standard that remains today.

1991

The introduction of technology and digital trading meant that trading floors in the regions were no longer needed, so they were closed. 

2003

The New Zealand Stock Exchange officially became the NZX, which also listed on the Main Board exchange under the ticker, NZX.

For more than 150 years, based in the regions then becoming New Zealand’s Stock Exchange, the NZX, our homegrown share market has been a trusted place where Kiwis can invest in New Zealand companies and funds. While the benchmark main index, the NZX 50, may not be exposed to the rises of the Big Tech companies in the US, it can provide an opportunity for investors looking to diversify, which may offer lower risk and steady returns.

Keen for more? Get up close with NZX-listed company CEOs, and hear the latest trends and insights behind Aotearoa New Zealand’s economy in the NZX Opening Bell podcast.