New Zealanders are increasingly contributing to weapons companies, with KiwiSaver investments surging to $392.4 million, according to analysis from charity Mindful Money.
Mindful Money aims to provide transparency for New Zealanders when it comes to their KiwiSaver and other managed fund investments through research and website tools. The charity’s analysis, shared on Thursday, found weapons investments have increased by 40.9% from the previous year.
Breaking that $392.4 million down, Mindful Money found:
- $199.7 million goes towards military weapons
- $156.1 million is invested in firearms companies
- $21.1 million goes towards controversial weapons
- $11.7 million is for nuclear weapons
For this analysis, it sources portfolio data from the Companies Office Disclose Register and then researches indirect investment in external funds to get a full picture of fund holdings.
The holdings are then matched with Mindful Money’s global database of companies of concern.
A contributor to this investment increase, Mindful Money says, is the rise in military weapons being sold and used in Gaza by the Israeli military.
The charity found $71.9 million of KiwiSaver and retail funds invested in 15 weapons companies used by the Israeli military - this is a jump of 18.9% over the year to the end of March.
These companies include Boeing, in which New Zealand invests $13.8 million of the $71.9 million.
Mindful Money says Boeing is; “the largest supplier of weapons to Israel, particularly of missile guidance systems, as well as bombs and aircraft”.
Other companies include Rheinmetall which the charity says supplies tank shells to Israel, and RTX Corp which makes missiles, sensors and communication kits.
Alongside this, $179.9 million is invested in non-weapons companies Caterpillar ($81.3 million) and Amphenol ($98.6 million).
The charity says; “Armoured D9 bulldozers produced by Caterpillar have been crucial for Israel’s ground invasion of the Gaza Strip, accompanying combat troops and paving their way by clearing roads and demolishing buildings.”
Amphenol’s Israeli subsidiary Amphenol Bar-Tec “is a dominant supplier in the Israeli military connector market”, it says.
“Fund providers are chasing short-term profits,” Mindful Money founder and chief executive Barry Coates says.
“The chase for higher returns [by fund providers] means that Kiwis’ hard-earned savings are being used to invest in companies whose weapons have resulted in the devastation of Gaza.”
Coates says the companies supporting the weapons, ammunition, bulldozers and technology need to be held accountable for their actions.
“They should not be benefiting from our investment.”
Mindful Money says there appears to be no direct financing from New Zealand investors towards weapons used by Hamas.
Firearms investment more than doubles
The charity also discovered there has been a dramatic increase when it comes to KiwiSaver investment in companies producing and selling firearms - at 110%, this has more than doubled.
And it highlights Walmart.
New Zealand KiwiSaver investment towards Walmart is $115.8 million. The charity says this represents a 144% increase over the year.
“While primarily a general merchandise retailer, Walmart sells shotguns, rifles, ammunition, and firearm components like scopes at stores across the United States,” Mindful Money says.
Managed funds
Managed fund investments in weapons hit $509.2 million by March, the charity says.
Firearms companies increased by 64% and military weapons investments went up by 24% over the previous year.
“This shows the trend toward increasing weapons investments spans across New Zealand’s broader investment landscape.”
Coates says while many New Zealanders recognise weapons can be necessary for defence, they don’t want their savings supporting weapons companies that “indiscriminately sell their weapons to whoever will pay”.
Global boom
Mindful Money says this surge in the country’s weapons investments reflects a broader global boom driven by multiple conflicts including Russia’s invasion of Ukraine.
“The S&P Aerospace & Defence Industry has seen extraordinary growth with a 16.5% increase in the past year alone and a staggering 307% growth over the past decade,” the charity says.
“Weapons companies have recorded higher short term profits, leading to huge investment increases from KiwiSaver and investment providers chasing higher returns.”
‘I didn’t sign up for this’
Coates says he believes if people knew this was where their investments were going, they would be unhappy and shocked. “A typical reaction is ‘I didn’t sign up for this’.”
Mindful Money says 80% of New Zealanders want to avoid investing in weapons companies through their KiwiSaver or investment funds, reflecting a disconnect between where their money is going and their values.
People can and should challenge their fund providers, Coates says. “People should know where their money is going.”
Coates says “what we would love to see more of are fund providers being open and upfront”.
But there is some hope, according to the charity, as it has identified 36 weapons-free funds from 13 different KiwiSaver providers.
"New Zealanders have options," Coates says. "Analysis shows that returns from ethical funds have been comparable or higher than conventional funds."
7 Comments
I'm with a mainstream KS fund provided by one of the big 4.
I also own shares, so I wanted to find out if the fund owned the same companies. Many emails later I got a grudging and unfriendly cut and paste of an excel sheet with some company names.
Is this standard for other KS funds? Surely you could expect a dashboard with some details of the contents of the fund?
Of the 4 that I've been with, 3 have readily, publicly accessible documents showing investment mix by company and percentage of fund.
Great for those of us who want to put our money elsewhere than funding tools of injury and levers for forced starvation via controlled siege. F#@k that.
Look, I'll take a bit of childhood labour in my portfolio. Maybe internment of an ethnic minority. Oh and some environmental raping and pillaging.
But weapons manufacturing? A step too far.
With Europe being forced to spend the amount committed under Nato membership, surely arms is good business from a financial perspective. From a moral one quite a different answer.
So the real question is, do you want to invest for ethics, or do you invest to grow your money. The majority will be the latter, and investment funds will go where they see the best profit. Some may be willing to forego some profit for the ethical aspect, but I'd be of the opinion on the majority being in the other camp.
With Simplicity: their data on holdings is pretty transparent. https://simplicity.kiwi/about-us/ethical-investments It's also notable their performance, as being based in low-cost index trackers, sits well above where it should be in the market, so I don't think having a good crack at ethical investing is hurting my own investments and it suggests many of the active funds are getting it wrong to some greater or lesser extent.
Another difficulty is that so many companies have divisions that manufacture for military contracts, while so much of their other business is civilian. And once you scratch the surface, how about things like generic electronics parts and advanced materials (like carbon fibre, PTFE, ceramics, metal alloys) that can, but not necessarily will, end up in military applications?
I think the best you can hope for is that your provider makes an attempt to get it right.
If these companies don't/won't supply someone else will fill the gap. Unfortunately there's always been money made out of war and it's associated arms manufacturing companies. Purely from an investment perspective the time to buy was about a year before the Russo-Ukraine war.
The US govt gives millions of dollars in aid to Istrael so I wouldn't be surprised if Israel was persuaded to purchase from US companies. If you feel morally indignant about Boeing being an arms supplier to Israel then perhaps stop purchasing any US made product as it could very well be funded by the US govt.
Maybe someone will produce an app in NZ like Canada has where you can scan a product and see if its made in the US and choose not to buy it.
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