New Zealand ESG Funds draw bumper inflows in Q2 2026
Flows into ESG Intentional managed funds and ETFs in New Zealand attracted over NZD 500 million which was treble the average inflows of the prior four quarters.
Morningstar’s ‘ESG Intentional’ designation identifies funds which, by prospectus or other regulatory filings, claim to focus on sustainability, impact, or environmental, social, and governance factors. This does not include ‘ESG integrated’ funds where ESG considerations the focus of the investment process, nor does it include funds that employ limited exclusionary screens.
Morningstar identified 53 managed funds & ETFs and 29 KiwiSaver funds domiciled in New Zealand that are ESG Intentional in the quarter.
Managed Funds & ETFs
Flows into New Zealand domiciled ESG Intentional Managed Funds and ETFs attracted NZD 524m in net new money in Q2 2026 representing the largest quarterly net inflow over the past 3 years. This was well above the prior four quarters which saw an average of NZD 145 million of net new investment.
The funds attracting the highest inflows in the quarter included Dimensional Global Sustainability (hedged and unhedged) and Munro Global Growth Climate Leaders. A sizeable portion of the Dimensional inflows were transfers from equivalent unit trust funds into PIE wrappers. Munro’s Global Growth Climate Leaders PIE was newly launched in Q2. The fund is a specialised climate fund with a concentrated portfolio focused on clean energy, transport, energy efficiency and circular economy.
Overall Q2 2026 was the 19th consecutive quarter of positive inflows into New Zealand ESG funds, continuing an exceptional record against global peers.
By contrast, over the same period ESG funds domiciled in Australia have faced a number of quarterly outflows, including Q2, while in the US Q2 was its first quarter of inflows after a grueling 14 quarters of consecutive outflows. Markets in Asia have moved to net negative territory since Q3 2025. In Europe, the world’s largest market for ESG funds at 84% of assets, has performed much stronger, yet still faced hiccups in 2025 with quarters of net negative flows.
A range of factors are cited as contributing to a cooling of demand globally, including rallying of oil and defense stocks, concerns of greenwashing, and targeted anti-ESG campaigns by Republican politicians and lawmakers in the US.
In this context the market for ESG funds in New Zealand has been remarkable. There could be several drivers. One factor may be that the investment rationale is more rooted in ethics, as opposed to ESG investing for outperformance, commonly touted in other markets. Ethical investment has been spurred by strong advocacy from groups such as Mindful Money and may have contributed to more resilient demand while arguments of outperformance have been susceptible to market cycles.
As a result of continued inflows and capital growth, total assets of New Zealand ESG funds and ETFs now exceed NZD 9 billion, up 17% from Q1, and more than quadruple 2021 figures.
The largest ESG Intentional Funds and ETFs now include Russel Investments Sustainable Global Shares, Evidential Sustainable Targeted Factor and Dimensional Global Sustainability, all exceeding NZD 800 million in assets.
KiwiSaver Funds
Q2 2026 saw inflows of NZD 84 million into ESG Intentional KiwiSaver funds, a 53% increase on Q1. This continues a pattern of long-term positive inflows. This indicates the continued interest in ESG options among KiwiSaver members, in addition to institutional interest we see in managed funds and ETFs.
The KiwiSaver funds attracting the most flows continue to be dominated by Booster,Pathfinder and Kernel, as noted in Table 3 below.
As a result of these inflows,total assets in ESG Intentional KiwiSaver funds hit NZD 5.5 billion in Q2, representing a 52% increase since 2023.
The largest ESG Intentional KiwiSaver funds by size are noted below, with the Booster KiwiSaver Socially Responsible High Growth fund now the first to exceed NZD 1bn in assets.
