Some KiwiSaver managers have already sold millions of dollars in investments in Russian companies while others including the New Zealand Superannuation Fund are reviewing their positions as Russia continues its attack on the Ukraine.
But an ethical investment expert says all New Zealand fund managers should immediately sell their shares in Russian companies, particularly major state-backed enterprises, government bonds and the oil and gas companies that fund much of Russia's military spending.
"The New Zealand public should be assured that their funds are not supporting the Russian state at a time of massive suffering for the people of Ukraine," says Barry Coates, former Green MP and chief executive of Mindful Money - a website which helps people find out whether their KiwiSaver funds are invested ethically."
Coates has estimated some $100 million was invested in Russia as of the end of September 30, 2021 across KiwiSaver funds, other investment funds, the NZ Superannuation Fund and ACC.
Some have already moved to sell up.
An ANZ spokeswoman confirmed its funds, which include KiwiSaver, now have no investments in Russia.
"When we saw the situation was rapidly deteriorating last week we acted quickly and commenced divesting ~$12m of Russian holdings we owned (representing less than 0.04 per cent of funds under management.)
"This is in line with our philosophy of active investment management and responsible investing."
A Westpac spokesman said in light of current events and international sanctions against Russian entities, it sold all Government Bonds and listed shares on the Russian stock exchange across all its investment funds, including Westpac KiwiSaver.
"We initiated these sales last week.
"Prior to the Russian invasion of Ukraine, our exposure to investments in Russia made up less than 0.1 per cent of our holdings."
A Fisher Funds spokesman said in the funds it managed directly it had no investments in Russian stocks or bonds.
"We have two international bond managers that manage a small portion of our KiwiSaver funds. One of these managers has a very small holding in Russian securities, but overall the exposure in our KiwiSaver funds is negligible (<0.05 per cent)."
The spokesman said Fisher Funds was currently reviewing this exposure as New Zealand and the global community reviews and strengthens its sanctions on Russia.
A spokesman for Kiwi Wealth said it had a small amount of Russian stock holdings, amounting to less than 0.005 per cent of its total assets under management.
"We do not hold any Russian bonds. We are currently assessing whether further action should be taken regarding the stock holdings."
NZ Super Fund spokesman Conor Roberts said it held approximately $3.1m in sovereign bonds and $9.4m of equities in Russian Federation companies covering retailing, media, telecommunication, banking and financial services, marketing, retail, chemical and mining sectors.
"We are currently assessing the implications of Russia's actions under our responsible investment policy regarding the fund's exposures. Any decisions will be implemented and then announced."
The Herald has also requested comment from ACC on how much it has invested in Russia and what its intentions are.
But investors who have waited to act may now find it impossible to exit their investments with the Bank of Russia banning brokers from selling securities held by foreigners on the Moscow Exchange from Monday (today NZ Time).
The move is part of a raft of measures announced in a bid to restore some calm to its investment markets after a route that pushed some Russian Eurobonds into distressed territory last week.
Reuters also reported that trading on the Moscow Exchange would remain closed on Tuesday extending the suspension of trading on Monday amid a full-blown financial crisis triggered by Western sanctions.
Coates said the United States and its allies had adopted sanctions aimed at individuals, state-owned enterprises, military suppliers and the financial sector, while New Zealand had imposed travel bans and diplomatic restrictions but no sanctions on companies.
He said the effect of international sanctions would have little impact on New Zealand investment funds, other than some Russian companies being removed from international indexes.
Coates said hundreds of KiwiSaver and investment funds had been invested in Russia with fund holdings including major state-backed institutions, such as Sberbank, Gazprom and Rosneft, as well as Russian government bonds.
"While the value of this investment is not globally significant, many New Zealanders will be concerned that their funds are being used to support Russian companies at a time when civilians are being terrorised and killed by Russian aggression.
"Sanctions may not be required for the KiwiSaver and investment funds that invest our savings, but those funds should divest anyway. It is not a responsible position for New Zealand funds to be investing in Russian companies or the Russian government. It is important that the New Zealand public's hard-earned savings are not used to support Russia's warmongering."
Coates said most of the New Zealand investments were in Russian oil and gas companies, such as the state-backed Gazprom and Rosneft, as well as large companies such as Novatek and Lukoil.
"The earnings from these companies play a major role in financing the Russian military.
"There are also investments in Russian government bonds. While sanctions are not required of New Zealand fund managers, an ethical position would be to divest immediately."
He said the investments were generally a small proportion of the overall holdings of a fund and divesting was unlikely to have a major impact on the value of KiwiSaver or other investments.