OPINION: Do you care where your KiwiSaver money is invested?
Is the most important thing that it gets a good return for you and the fees are at a level you’re comfortable with? Do you care where the New Zealand Super Fund and the ACC, who are the biggest investors in this country, put their money?
I ask this in light of a couple of developments in the last few days about decisions on investments. First, there was Grant Robertson announcing the new KiwiSaver default providers last week. Now there are reasons why some companies are default providers and others missed out, and fees appeared to be the most important one. I’ve never been in a default provider and feel a bit sad for those who are because your KiwiSaver could grow into a really significant asset for you over your lifetime and you should take control of who operates it. But that’s just an aside.
What bothered me last week was that the Minister of Finance started making rules about where the default providers could and couldn’t invest. In particular, he said they must not invest in fossil fuels. Now is that smart? Should the finance minister be telling investment professionals where they put their money to get the best possible returns for their investors?
If oil and coal mining companies get a good return because they sell so much of their stuff, shouldn’t KiwiSaver investors get a cut of the profits too and increase the value of their KiwiSaver fund?
So what is the most important thing for you in your KiwiSaver? Is it the return on your investment because the provider is clever? Or do you want your money to only go on ethical investments? Frankly, I’m in the former. I don’t have a KiwiSaver anymore because I withdrew it at the age of 65, but if I did, I wouldn’t mind in the slightest if the fund was invested in BHP or Exxon Mobil, or BP.
And then there’s the matter that I talked about just before I finished my show on Tuesday. The hypocrisy of the New Zealand Super Fund divesting from its investments in Israeli banks, which were only worth about $4m anyway, and keeping half a billion dollars worth of investment in over 600 Chinese companies, including companies blacklisted by the US government for violating the rights of ethnic minorities. I wouldn’t be surprised if there are KiwiSaver funds that take the same attitude.
So do you care where your KiwiSaver money goes or do you just want a good return?
Listen to Peter Williams every weekday from 9am on Magic Talk.