Top Ethical KiwiSaver Schemes

Ethical KiwiSaver is (or isn’t ) a bit of a minefield. While many schemes claim to be ethical, for example, not investing in fossil fuels or weapons, they might still plough money into booze, gambling or companies with dodgy environmental records.

Many KiwiSaver funds already negatively screen out the type of companies that give Greta Thunberg the heebie-jeebies, and adhere to the United Nations’ Principles for Responsible Investment. But that doesn’t mean they positively screen, too, by seeking out sustainable investments.

This is why if you’ve ethical concerns about where your KiwiSaver money is going, you need to thoroughly investigate your fund’s investments.

→ Related article: KiwiSaver: An Ethical Investing Guide

However, while saving the planet is an admirable goal, the whole point of KiwiSaver is saving enough for a comfortable retirement. And, fortunately, many ethical funds offer returns in line with regular KiwiSaver schemes.

As we mention above, many KiwiSaver schemes invest ethically, but don’t label their funds as such. And for this round-up of the current top-earning funds, we’ve only included KiwiSaver providers that specifically promote their ethical or sustainable credentials.

As you can see, even the top 10 best performing ethical funds of the past year did pretty badly. The average loss was -10.3%. However, to put this into perspective, the top 10 performing funds of 2022 only managed an average return of 4.1%. And the top 10 funds by number of members were down on average -11.6%. So choosing an ethical KiwiSaver fund doesn’t automatically make you an outlier when it comes to returns.

Please note, all figures are from the latest Disclose Register KiwiSaver Fund Update , released on 26/04/23, which covers returns up to the end of last year.

Top Performing Ethical & Sustainable KiwiSaver Funds

1) MERCER | SUSTAINABLE CONSERVATIVE FUND

Investments are managed in a way that is sustainable for the environment and society. Mercer actively invests in companies involved in providing solutions to the world’s sustainability challenges, such as renewable energy, water infrastructure and pollution control. Excludes investments involving gambling, tobacco, alcohol, armaments, pornography and fossil fuel extraction. This fund is managed with reference to environmental, social and governance (ESG) factors and is certified by the Responsible Investment Association of Australasia.

Past year return net charges and tax: -7.04%

Net returns for the 10-year period ending 31/12/22:  3.22%

2) MERCER | SUSTAINABLE PLUS MODERATE FUND

Investments are managed in a way that is sustainable for the environment and society. Mercer actively invests in companies involved in providing solutions to the world’s sustainability challenges, such as renewable energy, water infrastructure and pollution control. Excludes investments involving gambling, tobacco, alcohol, armaments, pornography and fossil fuel extraction. This fund is managed with reference to environmental, social and governance (ESG) factors and is certified by the Responsible Investment Association of Australasia.

Past year return net charges and tax: -8%

Net returns since fund started (2015): 3.1%

3) QUAYSTREET | QUAYSTREET SOCIALLY RESPONSIBLE INVESTMENT FUND

The guiding philosophy of the fund is to endeavour to have a diversified portfolio of investments that are considered to be environmentally and socially sustainable. Excludes investments involving gambling, tobacco, alcohol, armaments, pornography and fossil fuel extraction, and favours investing in companies that do a better job of managing ESG issues.

Past year return net charges and tax: -8.38%

Net returns for the 10-year period ending 31/12/22: 4.75%

4) INVEST NOW | INVESTNOW MACQUARIE ETHICAL LEADERS HEDGED GLOBAL FIXED INTEREST INDEX FUND

The fund is a passively managed international fixed interest portfolio that is designed to track the return of the Bloomberg Barclays MSCI Global Aggregate SRI Select ex Fossil Fuels Index. The fund is fully hedged to New Zealand dollars. The fund is governed by the Supplementary Sustainable Investment Policy and is managed to specific ‘sustainable investment’ criteria which prohibits investments in certain companies or activities, and encourages investment in companies with strong environmental, social and governance characteristics.

Past year return net charges and tax: -9.62%

Net returns since fund started (2020): -5%

5) BOOSTER | SOCIALLY RESPONSIBLE MODERATE FUND

The Socially Responsible Moderate Fund is certified by the RIAA. It uses in-depth analysis and environmental, social and governance (ESG) factors to help assess socially responsible investment opportunities. It avoids investing in fossil fuels, nuclear power, weapons, alcohol, gambling and genetically modified organisms.

Past year return net charges and tax: -9.78%

Net returns since fund started (2020): 1.65%

6) MERCER | SUSTAINABLE PLUS BALANCED FUND

Investments are managed in a way that is sustainable for the environment and society. Mercer actively invests in companies involved in providing solutions to the world’s sustainability challenges, such as renewable energy, water infrastructure and pollution control. Excludes investments involving gambling, tobacco, alcohol, armaments, pornography and fossil fuel extraction. This fund is managed with reference to environmental, social and governance (ESG) factors and is certified by the Responsible Investment Association of Australasia.

Past year return net charges and tax: -10.4%

Net returns for the 10-year period ending 31/12/22: 5.51%

7) INVEST NOW | INVESTNOW MACQUARIE ETHICAL LEADERS BALANCED FUND

The fund is a diversified portfolio with a slightly higher allocation to a mix of growth assets (e.g., shares and listed property) relative to a mix of income assets (e.g., cash and fixed income). The fund has been certified by the Responsible Investment Association of Australasia.

Past year return net charges and tax: -11.69%

Net returns since fund started (2020): 3.15%

8) MERCER | SUSTAINABLE PLUS GROWTH FUND

Investments are managed in a way that is sustainable for the environment and society. Mercer actively invests in companies involved in providing solutions to the world’s sustainability challenges, such as renewable energy, water infrastructure and pollution control. Excludes investments involving gambling, tobacco, alcohol, armaments, pornography and fossil fuel extraction. This fund is managed with reference to environmental, social and governance (ESG) factors and is certified by the Responsible Investment Association of Australasia.

Past year return net charges and tax: -12.46%

Net returns since fund started (2015): 5.15%

9) SUPERLIFE | ETHICA FUND

The Ethica Fund integrates environmental, social and governance (ESG) factors as a core part of its investment approach. Where the fund engages external investment managers, or invests into external funds, it selects those who show a superior commitment to ESG in their investment process through evaluation and ongoing monitoring of their performance. One of the primary ESG factors used for screening is an investment’s greenhouse gas emission intensity (GHG). It’s expected that these screens will result in at least a 50% reduction in the fund’s GHG emissions profile when compared with market benchmarks that do not consider ESG factors.

Past year return net charges and tax: -12.73%

Net returns for the 10-year period ending 31/12/22: 5.94%

5) BOOSTER | SOCIALLY RESPONSIBLE BALANCED FUND

The Socially Responsible Moderate Fund is certified by the RIAA. It uses in-depth analysis and environmental, social and governance (ESG) factors to help assess socially responsible investment opportunities. It avoids investing in fossil fuels, nuclear power, weapons, alcohol, gambling and genetically modified organisms.

Past year return net charges and tax: -12.85

Net returns since fund started (2014): 5.48%

Compare KiwiSaver Providers with Canstar

If you’re comparing KiwiSaver funds, the comparison table below displays some of the products currently available on Canstar’s database for a KiwiSaver member with a balance of $20,000 in a Growth fund, sorted by Star Rating (highest to lowest), followed by company name (alphabetical) – some may have links to providers’ websites. Use Canstar’s KiwiSaver comparison selector to view a wider range of retirement funds. Canstar may earn a fee for referrals.

To read more about our latest KiwiSaver Scheme Provider Award click this link. Or to compare KiwiSaver providers, click on the button below.

Compare KiwiSaver providers for free with Canstar!

About the author of this page

This report was written by Canstar’s Editor, Bruce Pitchers. Bruce began his career writing about pop culture, and spent a decade in sports journalism. More recently, he’s applied his editing and writing skills to the world of finance and property. Prior to Canstar, he worked as a freelancer, including for The Australian Financial Review, the NZ Financial Markets Authority, and for real estate companies on both sides of the Tasman.