Sustainable funds in NZ buck global trends.
16 quarters of consecutive inflows - New Zealand sustainable funds continue to stand out.
Flows into ESG Intentional managed funds, ETFs and KiwiSaver funds in New Zealand have showed continued resilience in 2025 despite geopolitical headwinds affecting global demand. In this article, we review the fund flows and total assets of these funds to Q3 2025.
ESG Intentional Funds in New Zealand in Q3 2025
Morningstar has identified 49 ESG Intentional managed funds & ETFs and 27 ESG Intentional KiwiSaver funds domiciled in New Zealand at the end of September. This represents a fraction of the total fund market in New Zealand which features 1308 managed funds, ETFs and KiwiSaver funds.
Figure 1 Count of ESG Intentional Funds Domiciled in New Zealand. Note, count excludes feeder funds, fund of funds, and segregated mandates. Source: Morningstar Direct as of October 2025.
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.
Managed Funds & ETFs
In Q3, flows into New Zealand domiciled ESG Intentional Managed Funds and ETFs doubled compared with the prior quarter, with NZD 165m in net new money. This represents a rebound compared to prior quarters which saw a dampening of inflows.
The funds attracting the highest inflowsin the quarterweretheEvidential Sustainable Global Bond, Kernel Global ESG NZD Hedged andHarbourSustainable NZ Shares.
Table 1 Top 10 New Zealand domiciled ESG Intentional managed funds and ETFs by inflows in Q3 2025. Source: Morningstar Direct as of October 2025.
Q3 2025 represented the 16th consecutive quarter of positive inflows into New Zealand ESG funds, an exceptional record by global standards.
By comparison, US domiciled ESG funds have suffered net outflows for 12 consecutive quarters, while the rest of APAC, including Australia, has seen varied results, fluctuating between net positive and net negative quarters. Europe, traditionally the global powerhouse of ESG inflows, has been challenged by two quarters of net negative flows this year, though asset levels remain at record highs.
Figure 3 Quarterly flows into ESG Intentional funds globally. There were 7,139 such funds identified by Morningstar at the end of Q3 2025, representing over USD 3.7 trillion in assets. Note, the vast majority of Europe’s outflows in Q3 were driven by a pension fund’s decision to transfer assets into custom ESG mandates managed by BlackRock. Excluding this transfer, European outflows registered USD 3.1 billion. Source: Morningstar Direct as of October 2025.
As such, New Zealand’s consistent demand for ESG Intentional funds continue to buck international trends. This has led to an ever-growing asset pool, with total assets for these funds exceeding NZD 7 billion for the first time at the end of September. This represents an 11.5% increase since the end of 2024, and a 161% increase since the end of the 2022. This increase has been driven by significant inflows combined with the healthy capital growth seen among these funds.
Figure 4 Figure 5 Total assets of New Zealand domiciled ESG ETFs and managed funds to the end of Q3 2025. The market has hit NZD 7 billion for the first time in Q3. Source: Morningstar Direct as of October 2025.
KiwiSaver Funds
Q3 2025 saw inflows of NZD 84 million into ESG Intentional KiwiSaver funds, an increase of 20% on Q2. As depicted in Figure 5, this represents a similar story of ongoing positive inflows, though owing to the nature of KiwiSaver funds as superannuation schemes, flows typically see less inter-quarter variability owing to the regular contributions made by members. It does, however, speak to the continued interest in ESG among individual KiwiSaver investors, in addition to institutional interest we see in managed funds and ETFs.
Figure 6 Quarterly inflows into ESG Intentional KiwiSaver funds. Source: Morningstar Direct as of October 2025.
The KiwiSavers funds attracting the most inflows in the quarter were dominated by Booster’s Socially Responsible fund range. The top 10 ESG KiwiSaver funds commanding the highest inflows in Q3 are noted in Table 2 below.
Table 2 New Zealand domiciled ESG Intentional KiwiSaver funds attracting the highest inflows in Q3 2025. Source: Morningstar Direct as of October 2025.
In terms of total fund assets, ESG Intentional KiwiSaver funds hit NZD 4.92 billion in Q3, a whisker away from the NZD 5 billion. This represents an increase of 11% since the end of calendar year 2024, and a 64% increase since the end of calendar year 2022.
These results demonstrate consistent demand for ESG focused funds among both institutional and retail investorsin New Zealand. This reflects a differentiated market to many other regions globally, and indicates a resilience to global geopolitical trends.
