New Vanguard ethically focussed fund welcomed

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Simplicity KiwiSaver welcomes new Vanguard ethically focussed fund

Nonprofit KiwiSaver manager Simplicity today announced its decision to fully adopt a new Vanguard fund that eliminates investments in nuclear weapons, other controversial weapons (eg. landmines, and cluster bombs) and tobacco.

The move follows Vanguard’s introduction of this option for NZ and Australian investors, also announced today.

Sam Stubbs, Simplicity’s managing director, applauded Vanguard for taking swift and decisive action in the face of growing demand for more ethical investment options in New Zealand.

“This fund reflects what Kiwis care about, and it’s satisfying that all our discussions have paid off,” he said.

"This response from one of the world’s largest investment managers shows that they have listened to the concerns of Kiwis and acted quickly to offer a solution. Hats off to them.” said Stubbs.

“It’s very satisfying to know this fund will be available to Australian investors too,” he said. “It’s another example of Kiwis leading the way,” he said. "It also shows how important KiwiSaver now is to offshore managers, including Vanguard, as KiwiSaver will be a $200 billion pool of savings by 2030,” he added.

“KiwiSaver is starting to give Kiwis a voice on the global investment stage, and here’s a prime example of that,” Stubbs said. “This helps make New Zealand a leader in the global change to ethical investing”, he said.

Simplicity had called for the industry’s adoption of the New Zealand Superannuation Fund's “blacklist” as a way to address public concerns. They arose following revelations that some KiwiSaver schemes were invested in cluster bombs and tobacco.

"The MSCI index that the new Vanguard fund tracks closely matches the NZ Super Fund blacklist, excluding the tobacco, nuclear weapons, and controversial weapons sectors.” Stubbs said.

Simplicity plans to use the new Vanguard fund for all its offshore share investments, and hedge them fully to the NZ dollar.

Stubbs said Simplicity was further committed to being an ethical operator by returning all profits to members, by having the lowest fees in the market, and by giving 15% of management revenues to charities annually. Simplicity is also a paperless business, minimising environmental impacts.

Stubbs said anticipated changes in fees disclosure and reporting requirements next year would be another significant step forward for KiwiSavers. “Investors can have real confidence that they know their investments are invested ethically, and soon find out what they really pay in fees,'’ he said.

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