"Māori ethics put people and the environment first because both are fundamental to living and thriving."
That's the starting point for new wealth management firm Tahito, which co-founder Temuera Hall says is guided by Te Ao Māori ancestral knowledge principles.
Hall (Ngāti Tūwharetoa, Te Arawa) moved to Auckland five years ago and is based at JMI Wealth's offices in Takapuna.
"We don't invest in anything that pokes into Ranginui [Sky Father] or breaks into Papatūānuku [Earth Mother]," he says.
"Many companies are planning to go carbon zero but do they look after their staff or the families of their staff or communities? How well do they engage? You have to look through the language."
The fund claims to be a world-first in indigenous ethical Aotearoa investment and Paul Glass, founder of Devon Funds, says its a welcome addition to the market.
"I think indigenous investment will be a real growth area."
Of the shares held in 27 listed companies by the one-year-old Tahito Te Tai ō Rahua [Transtasman] Fund, none are in armaments, gambling, alcohol, tobacco or activities which don't align with its principles. Companies are scored by 50 measures.
Some shares are in ASX 200 or NZX 50 Index companies "but we depart from the tracking error," Hall, who is fluent in te reo Māori adds, referring to other fund managers' widespread holdings.
"We accept our tracking error. We have it because we are not linked like those other fund managers. We're benchmark unaware."
So SkyCity Entertainment shares are not in the wholesale fund with retail aspirations: "We have some pretty basic exclusions. Gambling is one of them. We're very much at the bottom of the economic ladder as Māori, with incarceration rates and social issues, so we support reducing addictions."
Also out are Air New Zealand, Contact Energy, Genesis, Rio Tinto and BHP Group "but we do invest in Meridian because that's clean energy". That company meets other benchmarks too.
Shares in Spark, Sims Metal Management, Brambles, Kathmandu, Stockland, Meridian, Kiwi Property, Summerset Group and Transurban are also in Tahito because these demonstrate a commitment to the environment, social, sustainability, ethical, community, staff and charitable goals.
Take Meridian, which Hall said demonstrated a commitment to KidsCan, Rainbow Tick, Zero 2025 Carbon, Te Rūnanga o Ngai Tahu, Sustainable Development Goals, Power Up Meridian Empowering Communities, Greenhouse Gas Protocol, Carbon Zero and Cemars carbon management "although there's a review of that company due to spilling water over a dam".
Kathmandu's commitment is shown by its involvement with the Fair Labour Association, Sustainable Apparel Coalition, Australian Packaging Covenant Organisation, Certified B Corporation to balance purpose and profit and the Himalayan Trust.
Spark's significant commitment to Kia Kaha Te Reo Māori is one of the reasons it's in the fund along with its involvement with the Spark Foundation and many other commitments.
Metlifecare was in the fund but Swedish giant EQT's $1.27 billion takeover toppled that.
came out in front, looking at care for the elderly and community engagement," Hall said. Shares are not held in Ryman Healthcare or Oceania.
Scales Corporation is being considered.
With ASX listed Brambles, it's in for working with The Global Food Banking Network, Sustainable Development Goals, Barron's 100 Most Sustainable Companies, the Ellen MacArthur Foundation and CDP, the non-profit global environmental disclosure platform.
Each company is scored on te taiao [environment], hapori [social], mana whakahaere [governance], commitment to climate change, environmental pillar, human capital, development and corporate governance themes.
Shares are also held in Fisher & Paykel Healthcare.
Australian real estate firm Stockland comes in for particular praise for its high level of disclosure, which Hall said can be downloaded easily.
"As soon as you do this, you become the kaitiaki of these values."
So how did Tahito's new fund do in its inaugural year?
"The annual return from the fund in the year to September 30 was 1.4 per cent," he said, adding that beat the index with an overall -2.4 per cent annual return. "It's not a lot but it's a positive return considering where the market moved."
Nor is the fund big yet, standing at just $3m although Hall hopes some big-time investors will soon jump on his waka. The NZ Super Fund is aware of it and Brett Russell of the ever-expanding Russell Group says: "I'm not across this one, however we are having good conversations with iwi at the moment."
An NZ Super Fund spokesman said that business "has met with Tahito. It has an interesting approach and is something we plan to look at in the future."
Hall wants the fund to have a retail face, to draw more investors "but there's a lot more compliance", he says, citing product disclosure statements and the like when making offerings to the general public.
"We want to get to about $50m, all going well, in the second half of next year."
Could commercial iwi interests be drawn too?
"A lot of Māori organisations need income but many iwi already have exposure to the financial markets. Some iwi are in the wings looking at investing", he says citing a mental health entity.