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Simplicity KiwiSaver excludes fossil fuels, pornography, weapons...

Fuseworks Media
Fuseworks Media

KiwiSaver manager Simplicity moves to exclude investments in fossil fuels, pornography, alcohol, weapons and gambling.

Following a comprehensive review, Simplicity, NZ’s fastest growing KiwiSaver scheme, will be excluding investments in fossil fuel extraction, pornography, alcohol, weapons and gambling from all it’s KiwiSaver and non KiwiSaver funds.

Simplicity already excludes investments in nuclear weapons, tobacco, landmines and cluster munitions. "Excluding investments in these additional areas is a global trend that makes sense for our members. They should receive better returns, and it’s what KiwiSaver members want," said Sam Stubbs, Managing Director of Simplicity KiwiSaver.

A recent Consumer survey showed 77% KiwiSaver members were concerned about their funds investing in pornography; 73% were concerned about weapons; 70% about gambling; and 69% about tobacco.

Past performance indicates that had Simplicity been investing with these exclusions for the past five years, it’s returns would have been +0.76% p.a. better for it’s Growth funds, +0.54% p.a. for it’s Balanced funds, and +0.19% for it’s Conservative funds.

"The data clearly shows that these exclusions should be better for future returns and reflect a global trend," said Mr Stubbs. "It says a lot about how consumers and investors are behaving" he said. "Traditional ‘sin’ stocks no longer provide better returns. People are voting with their wallets." said Mr Stubbs.

"This is the result of months of research. The data supports the change, and it’s what KiwiSaver members want", said Mr Stubbs. Simplicity is in discussions with it’s offshore providers about how best to effect the changes.

"We hope to have these key funds changes completed within a year, but think we can do a lot of it within a few months" said Mr. Stubbs. The impact on local investments is relatively small, requiring the sell down of shares in Sky City, which has underperformed the NZ Share index over the past five years.

While the exclusions will remove approximately 2,800 companies from eligibility for investment, Balanced KiwiSaver and Investment funds will remain very diversified, with over 20,000 different investments in 23 countries. In return for divestment of these industries, investments in Health Care, Consumer Goods, Technology and Financial companies globally will increase.

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