Top 2 Ethical KiwiSaver fund options
Ethical investing is certainly taking centre stage around the globe, and KiwiSaver is no exception. With over 3 million people taking part in the scheme, and over $70 billion in funds invested, KiwiSaver is a fantastic opportunity to invest in companies that have a positive impact in the community and on the environment.
Positive and negative screening
Ethical KiwiSaver schemes often refer to their investment approach as subject to either ‘Negative’ or both ‘Negative and Positive’ screening.
Negative screening: the investment strategy of excluding certain companies or industries that are considered harmful to the environment or society. This is the typical approach taken by ethical KiwiSaver funds. For example, KiwiSaver funds that employ a negative screening strategy will say no to the following:
Fossil fuels
Nuclear power production
Military weapons manufacturing
Civilian firearms production
Tobacco production
Alcohol production
Gambling operations
Adult entertainment
Genetically modified organisms
Positive screening: the investment strategy of looking at companies and industries and deciding whether they have a positive impact on society and the environment. Companies now report on ‘ESG’ (Environment, Social and Governance) factors therefore it is now possible for fund managers to complete detailed analysis and perform this screening. This approach is often paired with negative screening, and is less common in the KiwiSaver space.
Ethical KiwiSaver options
In this blog, we will compare a few KiwiSaver providers on their level of social and environmental responsibility, as well as returns and fees.
CareSaver
An ethical and research based KiwiSaver Scheme managed by Pathfinder Asset Management Limited, launched in 2019. CareSaver rate all investments on environmental, social and governance (ESG) metrics, and use both a ‘negative’ and ‘positive’ screening approach. CareSaver also donate 20% of their management fees to a charity which you can select from a list of partner charities, most of the big name charities are available. CareSaver are also part of the Investor Group on Climate Change and have been certified by RIAA (Responsible Investments Association Australasia) for their efforts in regards to socially and environmentally responsible investments.
Returns as at September 2020, after fees before tax:
1 year average return: 5.8%/year
3 year average return: N/A
5 year average return: N/A
Fees as at September 2020
Total fees: 0.83%/year
Fixed fee: $27/year
Returns as at September 2020, after fees before tax:
1 year average return: 8.4%/year
3 year average return: N/A
5 year average return: N/A
Fees as at September 2020
Total fees: 1.12%/year
Fixed fee: $27/year
Returns as at September 2020, after fees before tax:
1 year average return: 14.1%/year
3 year average return: N/A
5 year average return: N/A
Fees as at September 2020
Total fees: 1.25%/year
Fixed fee: $27/year
Booster Socially Responsible Investments (Booster SRI)
Booster SRI funds were introduced in 2010, and use a ‘negative’ screening strategy. The Booster SRI funds are certified by the Responsible Investments Association Australasia also.
Returns as at September 2020, after fees before tax:
1 year average return: N/A (introduced on 24 March 2020)
3 year average return: N/A
5 year average return: N/A
Fees as at September 2020
Total fees: 1.12%/year
Fixed fee: $36/year
Returns as at September 2020, after fees before tax:
1 year average return: 9.3%/year
3 year average return: 9.0%/year
5 year average return: 8.5%/year
Fees as at September 2020
Total fees: 1.25%/year
Fixed fee: $36/year
Returns as at September 2020, after fees before tax:
1 year average return: 14.4%/year
3 year average return: 12.1%/year
5 year average return: 11.6%/year
Fees as at September 2020
Total fees: 1.30%/year
Fixed fee: $36/year
If you want to know if your KiwiSaver fund is invested in ethical investments, being maximised for returns, and suitable for your personal situation, follow the link below to our online fact find. The fact find only takes 5 minutes to complete, and once you have finished we will provide you with a free no-obligation KiwiSaver recommendation.