Boom: 88 KiwiSaver funds invested in nukes
New research says 88 KiwiSaver funds have investments in nuclear weapons.
Thursday, March 18th 2021, 1:45AM 
6 Comments
by Daniel Smith
Barry Coates
Analysis of KiwiSaver portfolio data at September 30, 2020 shows that $210 million of KiwiSaver funds are invested in companies that produce weapons.
Of that total, $52 million is invested in 17 nuclear weapons producers.
The revelation came as a surprise to Mindful Money founder Barry Coates, who told Good Returns that “most funds in New Zealand make the claim that they are not invested in nuclear weapons.”
“We did analysis a year and a half ago and found that there were investments in nuclear weapons and we thought that there was a process of funds getting out of them.
“It came as a big surprise that so many funds are invested in nuclear weapons when it is so clear that many members of the public don’t want that to happen.”
Mindful Money’s analysis shows the value of the 88 KiwiSaver funds invested in nuclear weapons was $52 million at the end of September 2020.
Most at risk of having nuclear weapons systems in their fund are those passive portfolios that have little exclusions on weapons systems as a part of their index funds.
Along with 41 other KiwiSaver funds, the NZ Super Fund has investments in BAE Systems, one of the largest defence companies in the world. They produce nuclear weapons systems and have sold arms to the Saudi military since Saudi Arabia became involved in the Yemen war.
A spokesperson from NZ Super told Good Returns that while the “NZ Super Fund excludes companies involved in the manufacture of nuclear explosive devices, we do not exclude companies involved in the manufacture of delivery and control systems for nuclear weapons.”
Meaning that NZ Super screens companies that make nuclear explosive devices, but not the companies that make the rocket propulsion that bring these bombs to their targets.
Other passive funds have also been caught out.
The NZX-run SuperLife Age Steps – Age 30 is invested in a range of weapons manufacturers. Along with 56 other KiwiSaver funds they invest in Safran S.A., a French company producing key components for a new generation of nuclear missiles. And alongside 23 other KiwiSaver funds they invest in Lockheed Martin, a top producer of military equipment, whose weapons have allegedly been sold to a number of governments who have been implicated in human rights violations.
Hugh Stevens, Smartshares CEO told Good Returns that “Smartshares’ range of investment choices is designed to allow investors to make informed decisions that suit their own unique need and preferences. To achieve this, we offer a range of funds, from fully integrated responsible investment options to full market index tracking options.”
Many of the 88 KiwiSaver funds that had investments in nukes were index funds.
Coates says that many managers of New Zealand index funds may say, “‘Because it is in a passive portfolio we have no control over the mandate.’ But if that is the case then why don’t you get a passive portfolio that does have those exclusions.”
John Berry, CEO and founder of Pathfinder, believes that Mindful Money is an invaluable resource, but that the onus should not be on consumers to do the digging themselves.
“Providers should actually be making it really clear what they do and don’t invest in.
“One thing I often see is that managers have a long list of exclusions, and it is almost like it is reactionary and they add to the list every time there is another exclusion. But I think there should be a framework behind these exclusions so that consumers can understand what funds thinking is.”
Whether in active or passive funds Berry says that manager’s “should know what is in the underlying portfolio. But we should remember that if a company is legal you can invest in it.
“What we need is for providers to be really clear with what they are invested in so consumers can make a choice that aligns with their values.”
The 2020 annual survey of the New Zealand public by Mindful Money and the Responsible Investment Association of Australasia showed that 81% of Kiwis want to avoid weapons in their investments.
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It is important to note the distinction that governs our exclusion policy between companies involved in the production of nuclear explosive devices and distinct delivery systems comes from the New Zealand Nuclear Free Zone, Disarmament, and Arms Control Act 1987 (Nuclear Free Act).
It bans "any nuclear weapon or other explosive device capable of releasing nuclear energy", but excludes "the means of transport or delivery of such a weapon or device if separable from and not an indivisible part of it.”