Does your KiwiSaver Hate The Environment?
By Andrew Broadley
I suck at investing.
While I certainly envy those who make some serious money in crypto-currencies and shares, I kinda just can’t be arsed. I like to think I have better things to do but I’m not entirely sure that’s true. So when Kiwisaver came along and promised to do it for me, I was overjoyed. Banks are notoriously dodgy people and if there's anything they are good at it’s making money, so maybe just this once they could actually make me some? I wasn’t the only one – around 3 million of us Kiwis have signed up for Kiwisaver and (fingers crossed) are making some decent profits. But what’s the catch? After all, I did say banks are notoriously dodgy people. Well they may be saving your cash but that doesn’t mean they are saving much else.
For those who don’t know, Kiwisaver isn’t a regular savings account. Instead the money coming out of your paycheck each week is handed over to a fund manager who invests that money into shares and stocks and hopefully grows your investment. The risk here can be minimal or it can be large depending on what investment provider and fund you chose. But what if the ‘best investment’ isn’t the best?
In the past there have been claims of all kinds of questionable shit happening with your funds. Your latest growth could have come from investments in weapons or gambling or fossil fuels. We are all lovely, eco-friendly people I’m sure. We love to bring a dirtied tote bag from our favourite thrift store with us to Countdown and we love to put our free range eggs into that very tote, but how do we ensure our funds share these values?
When the government established Kiwisaver it required all fund managers to submit their portfolios (what they are investing in and how the investments are going). This information has to be available which means the information is out there. But for most of us, accessing it is either not possible or it’s just sort of confusing. It involves long winded names of companies that are linked to other companies and a bunch of random abbreviations that can all be very overwhelming. Luckily, other people have done the hard work for you, and one in particular is making the process easier than ever.
Mindful Money (www.mindfulmoney.nz) is a great source that has been set up by Barry Coates, a former Green Party MP with a long history of working for environmental groups. The app allows you to select your current Kiwisaver provider and fund and gives you a breakdown of where the money is going. I recently discovered my Kiwisaver has a real hankering for animal testing. To be clear, your Kiwisaver isn’t investing in animal testing itself, that’s not a business, but they are putting your money into the stocks of businesses that use these practices. If you are happy with your current provider, great, if not, the app allows you to choose what values you want to prioritise, and even how risky of an investment you want to make, and then finds appropriate funds. It allows you to exclude investments in things such as fossil fuels and animal testing, as well as ethical concerns around tobacco, gambling, alcohol and more. It then provides a list of new Kiwisaver providers and provides a breakdown as to where they would be putting your money. Not only that but it provides details on what the average returns for that fund have been and what fees they charge you. Essentially it airs everyone’s dirty laundry for you to pick the uh, least.. dirty.. (None of them are fresh out of the wash). Once you have a fund that suits you, you can simply apply to join! The new provider will do the hard work of contacting your current provider and switching all your hard earned growth over to your new fund manager, who hopefully, is someone a little nicer than Mr bank man.
Mindful Money is a great resource that is making ethical investing easier than ever and elsewhere there are plenty more articles and resources for you to learn a bit more. Kiwisaver doesn’t have to be confusing or overwhelming anymore. Once you have the information, the process of consciously choosing your fund is super easy and a great way to ensure your Kiwisaver growth reflects your personal one.