Dodgy KiwiSaver investments? Fisher Funds responds.

Dodgy KiwiSaver investments? Fisher Funds responds.

Like many New Zealanders, I was pretty horrified to read NZ Herald’s report yesterday that $150 million of KiwiSaver funds have been invested in assets that are blacklisted by the New Zealand Superannuation Fund.

These blacklisted assets include investments in companies involved with:

  • Cluster munitions
  • Anti-personnel mines
  • Nuclear
  • Human rights abuses in developing worlds (and sale of whale meat)
  • Tobacco

The report made for pretty grim reading, and suggests that the likes of ANZ and Westpac are two of the biggest offenders. Those banks – and John Key himself – have responded to say that there are investment choices available and ultimately it’s the individual’s responsibility to check where their investments are being used. ANZ mentioned that they specifically have an ‘ethical’ fund option (I reckon that ANZ should change the name of that fund to the ‘standard’ fund and label the others as ‘unethical’ instead of the reverse, but that’s a different story).

Again, like many New Zealanders, I hadn’t given much thought to where my funds were being used. I’m certainly guilty of not putting the effort in to research that. I’m not exactly an avid saver; I hate all the terminology, the risk, and – perhaps shamefully – the responsibility of handling all that money, so I was more than happy to leave it to Fisher Funds. I don’t think I chose them specifically; the relationship came about due to a past employer most likely.

I looked for Fisher Funds in the list of providers within the report and found that they were “only” guilty of investing in tobacco and nuclear; two of the less dubious of the 5 blacklisted areas to be fair, but with a father who was a chain-smoker and passed away too early from a heart attack not so long ago, and not being a fan of massive corporations like those in the tobacco industry, that one still really struck home for me and I certainly wouldn’t want to be supporting tobacco firms.

Another name that caused alarm bells in the list was Mercer. While Fisher Funds were less dominant in the rankings, ranked second best in the list of providers for investing in the ‘human rights abuses category’ was Mercer. This one struck home as just a few days ago – Monday 15th August, with the Herald’s report coming out on Thursday 18th August – I’d received an innocent email from Fisher Funds letting me know that they were “making some changes to who administers the Fisher Funds TWO KiwiSaver Scheme”, i.e. dropping Mercer and replacing with TEL, in order to “provide a more consistent experience”.

That was a little too timely, so I emailed Fisher Funds with the following:

I’ve just read the Herald report on unethical investment funds and found that my funds have been used for investment in tobacco, blacklisted by the NZSF. That same report lists Mercer as second highest on the list for investment in companies known for gross human rights misconduct and sale of whale meat.

Is this the real reason that Fisher Funds are changing companies, rather than to ‘ensure consistency of experience’? And are my funds being used for investment in the tobacco industry?

To Fisher Funds’ credit, I received a reply from Fisher Funds Managing Director, Carmel Fisher, the next day. Carmel’s given me permission to post her response:

Good afternoon Mark,

Thanks for taking the time to email. I can understand your reaction to the NZ Herald story about KiwiSaver funds investing in armaments and “cluster bombs”.

As active managers of your KiwiSaver savings, we are deliberate in our choice of what companies and sectors we will invest in, and which ones we won’t. We have chosen to specifically avoid investment in the armaments and tobacco industries. In the funds that we actively manage, our clients have no exposure to armaments, tobacco or “cluster bombs” as sensationally described by the NZ Herald to grab headlines.

The NZ Herald story has chosen to use a classification developed by the NZ Super Fund to categorise “blacklist companies” including companies involved in the nuclear and tobacco industries. We don’t agree with the classification which includes any business “involved in” the respective industries. This is a very broad definition which could encompass companies with a very small and indirect exposure to a particular industry. For example, under this classification, our KiwiSaver scheme was described as having an exposure to the nuclear industry via a small holding in Honeywell, an American diversified company that produces a variety of commercial and consumer products. A small percentage of its sales are in the “defence and space” sector, which according to this classification, makes it a blacklisted nuclear company.

The NZ Herald analysis highlighted a small exposure to the tobacco industry in our KiwiSaver scheme. This exposure was via a fixed interest holding in a fund that is managed by an outsourced manager. We are in discussions with that manager to ensure that our policy prohibiting exposure to the armaments and tobacco industries is applied in the funds that they manage for us.

We have always been transparent with our clients as we believe it is important that you know exactly where your savings are invested. We encourage you to visit our website to see the investments that we hold on your behalf, and contact us if you would like to discuss your portfolio further.


Carmel Fisher
Managing Director, Fisher Funds

While this didn’t shine any extra light on the change from Mercer (and at least that change has happened and the new chaps, TEL, weren’t referenced in the ‘dirty’ list) it did raise a few questions about the validity of the reporting, with Carmel Fisher outright disagreeing with classification and also stating that they avoid investments in ‘armaments and tobacco industries’.

Fisher Funds have also posted an update to their Facebook Page here:

If you want to do your own research, Fisher Funds have this resource which shows where their KiwiSaver funds are invested.