Generate KiwiSaver Review: Active Management with an Ethical Core

Generate occupies an unusual position in the KiwiSaver market. They are an active manager — picking stocks and making allocation decisions rather than tracking an index — but they are also one of the few providers where ethical and responsible investment is central to the identity rather than an add-on product. Most ethical KiwiSaver funds sit on either side of that line. Pathfinder is deeply ethical and charges around 1.35%. Simplicity is deeply cheap at 0.24% and has ethical screens but does not pick stocks. Generate tries to do both.

Whether they succeed at that depends on what you value most.

The Investment Approach

Generate is an active manager. This means their investment team makes deliberate decisions about which companies, sectors, and geographies to invest in — rather than simply tracking a market index. The investment process integrates environmental, social, and governance factors alongside traditional financial analysis. ESG is not applied as a separate overlay. It is built into the same process that evaluates a company's financial prospects.

On the ESG side, Generate considers climate impact, energy efficiency, water use, human rights, labour standards, and governance practices. On the financial side, they look at the same fundamentals any active manager would — earnings, valuation, competitive position, growth trajectory.

The idea is that companies managing ESG issues well are more forward-looking and better positioned for long-term performance. Whether that thesis holds is debated, and the evidence is mixed, but Generate has staked its entire investment identity on it.

The Ethical Screen

Generate specifically excludes companies directly involved in the manufacture of tobacco, whale meat, cluster munitions, or nuclear explosive devices. Beyond these explicit exclusions, the fund applies active ownership — engaging directly with company management, voting on shareholder resolutions, and working with external fund managers to address ESG risks in portfolio companies.

Generate also directs capital toward positive impact investments: housing, education, healthcare provision, climate change mitigation, and environmental protection. This is impact investing — putting money into assets that aim to generate a measurable social or environmental benefit alongside a financial return.

The funds have been recognised as Mindful Funds by Mindful Money, the independent New Zealand charity that tracks and certifies responsible investment providers. In 2025, Generate received a Highly Commended in Mindful Money's Ethical and Impact Investment Awards for Best Ethical KiwiSaver Provider.

The Performance

The Generate Focused Growth Fund returned 6.1% per annum over the five years to March 2026, according to Morningstar KiwiSaver survey data. That places it mid-pack among the major growth funds — behind Milford at 7.6% and Simplicity at 7.0%, ahead of the bank funds at 5.1% to 5.6%, and ahead of Fisher Funds at 4.1%.

The annual fee on the growth fund is 1.08%. That is higher than Milford (1.03%), significantly higher than the bank funds (0.75% to 0.80%), and roughly four and a half times Simplicity (0.24%).

The Cost Conversation

This is where Generate becomes polarising. At 1.08%, the fee is one of the highest in the market. It is not the highest — Fisher Funds charges 1.12% and Pathfinder charges around 1.35% for a certified ethical fund — but it is in the top tier.

The question is what you are paying for. With Generate, you are paying for three things: active management that aims to outperform, ESG integration that aims to reduce risk, and positive impact investments that aim to do good. In theory, the combination justifies the fee. In practice, the five-year return of 6.1% trails the cheapest passive option — Simplicity at 7.0% for 0.24% — by 0.9% per year after fees. That gap, compounded over decades, is not trivial.

Whether Generate's active approach will outperform over the next five years is unknowable. Past performance is not a reliable indicator.

Who It Suits

Generate is not the cheapest option. It is not the highest-performing option. It is the option for someone who wants active management with a genuine ethical commitment, and is willing to pay a premium for both. The ethical screen is substantive — Mindful Fund recognition, explicit exclusions, impact investing, active ownership. The active management is real — stock selection, allocation decisions, ESG integration.

If the ethical dimension matters deeply to you, Generate is worth comparing against Simplicity's ethical funds at 0.24% — same exclusions, passive approach, dramatically lower cost — and Pathfinder at 1.35% — stronger certification, deeper screening, higher cost. The decision comes down to whether you believe active management and impact investing are worth the fee premium over a passive ethical alternative.