Do you know where your KiwiSaver money is invested?
A recent study by the NZ Herald, RNZ and Fairfax showed that some of the government-appointed KiwiSaver schemes held
investments in weapons manufacturers, tobacco companies, palm oil producers and other less socially responsible
industries. People who sign up to KiwiSaver, but do not pick a scheme or self-manage their own portfolios, are
automatically allocated to one of nine default providers and may therefore have unknowingly invested in these companies.
Shareclarity Managing Director Daniel Kieser says it’s probably not that easy to break down exactly where one’s money
has been allocated. The funds themselves may have unwittingly invested in those businesses through indexes or companies
that service those industries. Many electronics or parts manufacturers for example supply the weapons industry directly,
or indirectly if their products are sold to other manufacturers that themselves supply to the weapons industry.
“It’s not always black and white unfortunately”, says Daniel.
What is interesting however, is that it reaffirms a growing trend toward socially conscious investing, especially among
younger investors. A study by the Scorpio Partnership showed that 61% of people under the age of 35 “expect their wealth
management firm to screen investments based on environmental, social and governance factors”.
“We’re seeing the same trend on our platform. Users are spending more time reading about what companies do and how they
operate than what their expected earnings could be”.
“They’re interested in companies that resonate with them personally and, to coin Warren Buffet, are easily
understandable”.
ENDS