Choosing an ethical KiwiSaver fund

While most New Zealanders want their KiwiSaver fund to be as responsible as possible, far fewer of us invest specifically in an ethical fund. This could be people sticking with their existing provider, not knowing what to look for in an ethical fund, or simply not having the time to  research and compare the right fit.

With the boost your payments get from employer and government contributions, your KiwiSaver may be your most significant investment. So if responsible investing is important to you, start with how and where your KiwiSaver money is invested.

From a financial perspective, ethical investing is a way to manage the financial risks of environmental, social, and governance factors. For investors, ethical investing means having a positive impact on issues including equality, climate change, and environmental stewardship.

Using ethical KiwiSaver as a force for good

When you put money into your KiwiSaver, you’re not just growing your nest egg. You are investing in various businesses and sectors. It follows that you should be able to invest in the companies and sectors that you believe in and want to support.

You may not realise that most KiwiSaver investments are managed funds. Therefore, it’s possible to choose the types of funds your KiwiSaver savings are invested into. So, to select the right ethical fit for your KiwiSaver fund:

• Think about your goals and values and look for funds (and fund managers) that have similar values 
• Research screening criteria for the particular fund or funds you’re considering and what screening tools and approaches tools the provider is using
• Look for a provider with experience in this area – do a little digging to find out how long they have been managing ethical investments
• Watch out for fees - ethical KiwiSaver funds shouldn’t attract higher fees than equivalent ‘mainstream’ funds.

There’s now a range of managed ethical funds available through many KiwiSaver providers. These funds may include acronyms such as ESG (Environmental, Social and Governance) or RI/SRI (Socially Responsible Investing) in the name. They offer an accessible way to get involved in responsible investing and benefit from the expertise behind them.

Choose how your KiwiSaver is invested

Some KiwiSaver schemes offer the flexibility to select which the types of funds you’d like to invest in. With Nikko AM for example, you could hand-pick a specific fund, or create diversity by selecting from a variety of single sector funds (which invest in a specific asset class such as NZ shares, or a sector such as property).

Learn about the flexibility of the Nikko AM KiwiSaver Scheme

A fund backed by decades of experience

Actively managed by a dedicated SRI portfolio manager, the Nikko AM SRI Equity Fund comprises 30-35 Australasian companies - chosen for their potential for growth of income and capital. Offered to corporate investors since 2001, the fund is now available to individual investors. This fund combines specific exclusions with ESG integration. Learn about the Nikko AM SRI Equity Fund and approach to Responsible Investing.

There’s a growing number of KiwiSaver funds available, each with different ethical focuses. Consider your ethical non-negotiables, and fees versus the performance track record, to find your ‘best fit’. So as well as being part of the change you want to see in the world, you can start to invest in that change too.