Ethical KiwiSaver funds growing slowly

ANZ claim automatically enrolling people in conservative Kiwisaver funds may shortchange investors. Photo / Kellie Blizard

More than $28 million has been invested in socially responsible KiwiSaver funds since the scheme was launched nearly five years ago.

While that is only a fraction of the approximately $11 billion invested in the retirement savings scheme, it is a growing pool of money.

When KiwiSaver began in 2007 there was only one scheme offering the socially responsible choice.

The Asteron Fund has since closed but there are now at least six other providers who give investors the option to invest where companies are chosen based on their environmental and community considerations as well as financial criteria.

This can mean excluding industries such gambling, alcohol, tobacco and armaments.

Roger Spiller, the New Zealand spokesman for the Australasian Responsible Investment Association and an Auckland-based financial adviser, said the market was slowly growing.

"I don't think it has been a situation where there has been a huge proportion of money going in but the general scene is developing."

Spiller said one of the biggest challenges was educating the public and financial advisers.

"A lot of it is education and perception about what it is and why you would want to do it from an investor point of view."

He did not believe many financial advisers took it into account when advising investors and few were certified by the association.

"There are not a lot of advisers engaging at that level."

Spiller believed the global financial crisis had put more of a spotlight on socially responsible investing rather than detracting from it. He said better ethics and investing for the long term were more recognised now and could have helped to avoid the crisis.

The performance of socially responsible funds has been a mixed bag so far.

OnePath's SIL Sustainable Growth Fund has returned 1.2 per cent a year over three years while ASB First Choice Global Sustainability Fund has returned 5.3 per cent a year over the same period. The sector average for both funds is 4.31 per fund.

Fidelity Life's Ethical Kiwi Fund has returned 5.6 per cent a year over three years, compared with the average for its sector of 6.9 per cent.

SuperLife principal Michael Chamberlain said its Ethica fund was one of a number of single sector funds it offered access to. He said it had performed better than other Australasian share funds in the past year because it excluded investment in Australia's mining sector.

Fidelity Life chief executive Milton Jennings said the company began offering its ethical fund about two years ago and it now had $7.2 million invested in it.

GOOD MONEY

Socially responsible KiwiSaver funds include:

* ASB Global Sustainability Fund $3.4m
* OnePath SIL Sustainable Growth Fund $1.1m
* SuperLife Ethica $4m
* Fidelity Life Ethical Kiwi Fund $7.2m
* Craigs Investment Partners SRI $8m
* Grosvenor Social Responsibility Fund $5.2m.