by Editor | 3 Feb, 2020 | Investment
Managing an ethical investment portfolio requires constant care, awareness and analysis. A sector that has particular significance currently is energy. We strongly believe in a lower carbon future and that society needs to transition away from fossil fuels as quickly as possible, but reflecting this belief in our investment strategy requires a balanced and considered approach.
Our Chief Executive, Mark Wilcox, outlines our thinking around fossil fuels:
Anglican Financial Care (who manages the Christian KiwiSaver Scheme) has a policy on fossil fuels but this does not extend to full divestment.
First and foremost, we stand by biblical principles which infer creation is to be cared for and protected for future generations. In our opinion, the 2015 Paris Agreement targets infer risks to companies within the energy sector who don’t appropriately adapt their business models. We have elected to respond by excluding exposure to coal and tar sands companies and to rank other energy companies according to their extent of contribution towards a lower-carbon world.
We recognise that fossil fuel divestment is a matter of importance to the Church and that some of us share a sense of frustration with the lack of progress towards the Paris Agreement targets. However, while the future is renewables and green technology, and progress has been made, fossil fuels will still be the planet’s dominant fuel source for a long time yet (likely at least until 2050). Accordingly, there would be considerable financial risk to our members in taking a full divestment approach at this stage.
In recognition that part of the solution lies with alternative energy solutions, we have made a significant investment in a global alternative energy fund. We also have a long-standing forestry investment. We recently sold the cutting rights to the trees but has retained full ownership of the land and is currently re-planting.
For a more detailed analysis on investing towards a renewable and green technology future, we recommend a Wells Fargo white paper: It’s Not Easy Being Green—The Future of Fossil Fuels.
The bottom line is that our lives revolve around energy use, and lots of it. Fossil fuels generate most of that energy today. Recent progress in renewables and green technology has been made, and it is the future. The green movement has investors believing that fossil fuel use will soon die. We are doubtful. It takes energy to create energy, and green technologies often require fossil fuel use too. Additionally, emerging market energy use continues to climb higher. By 2050, the planet’s dominant fuel source will still likely be fossil fuels. For the planet’s sake, let’s hope that green progress has a higher gear still.
If you would like to check for yourself how Christian KiwiSaver Scheme investments mitigate the impact of climate change or to see – as ethical investors – what we do invest in, visit our website or call us on (0508) 738 473.
![Investment returns to 30 September 2019]()
by Editor | 29 Oct, 2019 | Investment
The quarter had another positive performance with both shares and bonds (fixed interest securities) performing strongly in the quarter. Longer term returns are also positive with growth assets (with their higher weighting toward shares) outperforming the more conservative income assets (and their weighting toward bonds). The positive returns continued despite the many uncertainties in the quarter e.g. ongoing US and China trade tensions, talk of US presidential impeachment, Hong Kong riots, Brexit developments and the attack on Saudi oil production.
No doubt some of this uncertainty weighed on investor minds and led to a softening in the growth outlook. Central Banks (Government owned banks but independent) indicated further easing (i.e. lower interest rates), trying to offset the reduced growth outlook.
Despite the many uncertainties the funds continue to achieve good gains. Whilst investor sentiment could affect short term returns we continue to invest (cautiously) focussing on long term performance.
Investment returns at 30 September 2019, before fees and tax:
The table with ID 10 not exists.
by Editor | 29 Oct, 2019 | Investment
Your KiwiSaver scheme has an interest in the Hapua Forest. 100,000 seedlings were planted this winter in the forest in the Hawkes Bay. This is the second of three plantings. Last year 62,500 seedlings were planted. Radiata pine is a versatile wood that’s easy to slice, mould, plane, glue, stain and paint. It is the world’s most widely planted softwood plantation tree and grows really well in New Zealand.
The 2019 planting happened over five days in winter and involved a crew of 36 on-site each day. The seedlings were around 30 cm tall at the time of planting. Depending on the terrain there were 750 to 950 planted on each hectare, and 117 hectares were planted. These seedlings will take up to 25 years to mature into trees for harvest.
The seedlings were provided by a family business that’s been around for decades. Growing their seedlings sustainably has been a focus for Murrays Nurseries Woodville since the nursery started. The business takes pride in investing heavily in research and development in a number of key areas to increase productivity while remaining environmentally conscious. Part of their research is into the reduction in the use of fungicides and fertilisers.
Because trees can store carbon, radiata pine plantations are useful ‘carbon sinks’. About 50% of the dry matter in the wood is carbon – largely cellulose (about 65%) and lignin (about 30%). Depending on growth rate and wood density, a hectare of pine trees locks up 4–7 tonnes of elemental carbon per year, which is equivalent to 15–26 tonnes of carbon dioxide absorbed from the atmosphere. A 1,000-hectare forest can absorb 15,000–26,000 tonnes of carbon dioxide per year.
When burnt as fuel in a car engine, petrol releases 2.62 kilograms of carbon dioxide per litre. On this basis, a typical car produces 1 tonne of carbon dioxide for every 5,555 km driven or 3 tonnes for an average year’s driving (16,666 km). This is equivalent to the amount of carbon dioxide that 33–60 pine trees absorb in one year.
Read more about Hapua Forest in our February 2019 article.
The Encyclopaedia of New Zealand https://teara.govt.nz/en/radiata-pine/page-1/
![Investment returns to 30 September 2019]()
by Editor | 8 Aug, 2019 | Investment
All funds had very pleasing returns for the June quarter with strong contributions from both shares and bonds.
Sharemarkets have been supported by lower interest rates and the prospect of global central bank easing. Shares have been recently trading at record highs despite evidence of a slowdown in global growth. Sharemarkets, however, remain sensitive to future developments.
The International Monetary Fund (IMF) nudged down its global growth forecasts in July to 3.2% for this year and 3.5% for 2020, citing the potential for adverse developments including further US-China trade tariffs, US auto tariffs, or a no-deal Brexit as items that could “sap confidence, weaken investment, dislocate global supply chains, and severely slow global growth below the baseline”.
Boris Johnson’s win in Britain’s conservative party leadership race did not erase concerns around the future of Britain (i.e. Brexit). The looming Brexit deadline (31 October) will no doubt come increasingly into focus.
The funds remain diversified, emphasise quality, and are cautiously invested with a focus on longer-term returns.
The investment returns (before fees and tax) to 30 June 2019 were:
The table with ID 6 not exists.
by Jo Cheramie | 8 Aug, 2019 | General, Investment, KiwiSaver
Many of us have grown up with the stories of Winnie the Pooh. If we didn’t, some of us may have seen the recent movie called ‘Christopher Robin’ which re-introduces Winnie the Pooh to a wider audience.
Many of us would be surprised to know that Winnie the Pooh owned a gun in 100 Acre Wood. We would be puzzled as to why they would own guns in that wood as they don’t hunt, and they don’t have target practice. Yet, in one account of Winnie the Pooh’s exploits, there was a knock on the door of his tree. Winnie answered the door … with a gun in his hands.
When A. A. Milne started writing about Winnie the Pooh in 1926, it was a different time with a different attitude toward guns. Like climate change, guns and munitions have increasingly become something that people are concerned about.
After the attacks on the Al-Noor Mosque and the Linwood Islamic Centre in Christchurch earlier this year there has been a growing concern about whether New Zealand KiwiSaver providers have invested funds in arms or munitions. There are some providers that have invested in this industry. But the Christian KiwiSaver Scheme is not one of those; it is among a small number of KiwiSaver providers that provide ethical investments and excludes munitions.
In a recent Colmar Brunton survey, over 70 percent of respondents answered that it was important for them that their KiwiSaver money was not invested in weapons. The survey found that a lot of members didn’t know if their funds were invested in munitions at all.
In New Zealand, there are over 2.7 million people signed up with KiwiSaver. The New Zealand Herald quoted a 2018 Consumer survey finding that around seven out of 10 people wanted their money invested ethically. But only around 8,600 people had signed up to specifically targeted ethical investment funds. While some people may hesitate in investing in ethical funds as they may feel these funds give lower returns, some of the best companies in the current market are those that are the most sustainable companies – they look after the environment and their employees. So thinking seems to be changing among investors.
Remember you can log into your account and check which fund your money is invested in. Or, if you prefer, give us a call on (0508) 738 473.
Winnie the Pooh image from www.disneyclips.com
![Investment returns to 30 September 2019]()
by Jo Cheramie | 8 Aug, 2019 | General, Investment
Some of you are asking what’s a PIR and what’s the fuss about them? Your PIR is your Prescribed Investor Rate and this is the tax rate that applies to investment earnings in certain types of investments including KiwiSaver. Having the wrong PIR will cost you money.
There are three PIR rates: 10.5%, 17.5% and 28%. As a general rule if your taxable income is above $48,000 then your PIR should be 28%.
It’s important to have the correct PIR. If your PIR is too high then you will be paying more tax than you need to. We understand that Inland Revenue hasn’t been giving refunds in these situations. If your PIR is too low then you could be facing a tax bill.
Has Inland Revenue been in touch with you about your PIR? Earlier this year Inland Revenue identified 450,000 New Zealanders who they determined were on the wrong PIR. Inland Revenue has started contacting those who appeared to have a PIR that was too low and advising how much tax they owe.
Inland Revenue recently replaced their computer system and that means it can now check your PIR against your personal taxable income. Your PIR is based on your income. If your income changes (up or down), this might mean a change in your PIR. Your residency status can also affect your PIR.
A guide to calculating your PIR is available to help you.
You can log into your Christian KiwiSaver Scheme account and check your PIR. If you need to change your PIR then send us an email. If you’re not sure then you can phone us on 0508 738 473.
