investment selection, kiwisaver, investing

Are there KiwiSaver Schemes that invest as per our religious beliefs?

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Are you aware that religion oriented KiwiSaver schemes exist?

On the National Capital blog, we’ve covered in detail many different types of funds. We’ve covered glidepath funds, ethical funds, and even services where you can mix-and-match KiwiSaver funds

But this blog post is different again, because we will now go into KiwiSaver schemes based on religion. These may be of interest to people with strong religious beliefs.

An overview of KiwiSaver schemes based on religious beliefs

Most schemes aren’t made with the intention of being used by people of a specific faith. Think for example of your bank, or an investment firm. The KiwiSaver schemes these companies run are made for the general public. In New Zealand, a country which is becoming even more secular, religious concerns are likely not an important concern for most investors.

Some religion oriented schemes have come and gone in New Zealand. However, out of the approximately 35 KiwiSaver schemes that are currently operating, two of them are made for people with religious faith. These are Amanah KiwiSaver Limited (Islamic focused) and the Christian KiwiSaver Scheme (Christianity focused).

1. Amanah KiwiSaver Limited (Amanah)

Amanah is an Islam oriented KiwiSaver provider. They aim to provide an ethical return to investors over the long term, while making sure they comply with their ethical mandate.

Amanah “requires all investments to comply with the rules on permitted business activities and business financial requirements defined by the AAOIFI Shari’ah standards” (source: Amanah SIPO)

As of 9 May 2019, Amanah had investments in 42 companies which included Alphabet, Apple, Microsoft, and a number of other well known companies. They also invest into some less well known companies such as Stryker Corporation and Tyler Technologies Inc.

Amanah have an ethical mandate, which they follow in accordance with their Islamic principles. This is mandated by hundreds of years of scholarly discussion by Clerics of Islam, Christianity and Judaism. They don’t, for instance, lend money, as this goes against their mandate.

I personally found it interesting to see some of the criteria they apply when choosing stocks to buy. For one, Amanah’s ethical mandate says the companies they invest into must have low levels of debt and high levels of productive assets. Additionally, their mandate says that more than 67% of the total assets of a company must be making or doing something for the good of mankind.

Other areas of investment such as money lending, gambling, pork, weapons, tobacco and alcohol are forbidden.

One thing that should be pointed out is that AmanahNZ is a U.S. dollar denominated investment. This means that you invest U.S. dollars into the fund, and receive returns in U.S. dollars. If investors wish to contribute NZ dollars into the fund, this money will be converted into U.S. dollars at the current exchange rate.

If you wish to read more about Amanah, click this link here to read their Product Disclosure Statement.

2. Christian KiwiSaver Scheme

The Christian KiwiSaver Scheme (formerly known as the Koinonia KiwiSaver Scheme) is a fund which is “open to all Christian denominations for people who want to make an ethical choice for their KiwiSaver investment” (source).

Originally, this scheme was a KiwiSaver scheme made with Anglicans in mind. But in 2018, the scheme rebranded into the Christian KiwiSaver Scheme, broadening their potential appeal. 

At the time they did this, the fund had approximately $45 million under management, which makes it relatively small. In terms of comparison for example, Mercer’s KiwiSaver Scheme currently has around $2 billion (or $2,000 million) in funds under management.

Being a KiwiSaver scheme for Christians, they have some criteria for who can join the scheme. If you fall under one of their three criteria below, then you are eligible to join (source).

  • You are “employed by a Christian organisation whose primary activities are Christian mission or ministry”

  • You possess “an active Christian faith”

  • You are “an immediate family member or dependant of a person with an active Christian faith”

As of writing, the Christian KiwiSaver Scheme has three types of funds. They have a growth fund, a balanced fund, and an income fund. Each is actively managed, and invests according to Christian principles and ethical principles.

The Christian KiwiSaver Scheme also goes into detail in its Ethical Investment Policy about areas they choose not to invest in (e.g. gambling and fossil fuels). I found it informative to read their logic behind their stances on different investment sectors. Many of the reasons they give for not investing in a certain sector lie with biblical principles.

Their Ethical Investment Policy may be of interest to you if you’re a Christian who might be interested in them as a provider.  

Where can I go for free KiwiSaver advice?

If you’re unsure about which KiwiSaver fund you should be in, we highly recommend using our KiwiSaver HealthCheck.

Our KiwiSaver HealthCheck is a simple way for you to find out which KiwiSaver fund is best for you. And it’s a great way to get some financial advice for free. It asks questions like “Are you saving for your first home, or for retirement?” in order to better understand your financial goals.

After filling out this form, you will then be offered the opportunity to talk to a financial advisor over the phone. The reason for this is because we understand you may want to discuss the recommendations with a real person and ask any questions you may have. Also, there are some significant points that many Kiwis are generally unaware of and most people find this very valuable.

It is during this time that we will explain to you your personalised recommendations and financial situation. Our recommendations are based on hours of research done by our trained team. They look at numerous KiwiSaver funds to find the most appropriate ones for our clients.

Once you choose to take on our recommendations, we can then help you implement them. And if you don’t choose to, no worries. There are no obligations for you to take on our recommendations. And as mentioned before, they come at no cost to you.

Are you interested in getting free financial advice?

If so, make sure to fill out our KiwiSaver HealthCheck. Your future self will thank you for it.

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Are you with the right KiwiSaver fund provider for you? Take our free KiwiSaver HealthCheck and find out!

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