Two more default KiwiSaver providers are ditching their investments in companies that make cluster bombs, landmines or nuclear weapons.
Westpac said it was making the move to remove investments in all companies connected to all three manufacturers, in response to customer feedback.
Fisher Funds, which only had investments in the nuclear arms company Honeywell International, said it had now exited from that company as well as an investment in tobacco that had been made by an external manager against its wishes.
An RNZ investigation earlier this month found several default providers either directly, or indirectly invested in these types of companies.
Westpac said none of its KiwiSaver funds invested directly in cluster bomb, landmines or nuclear weapon companies, but its default fund had exposure to such companies through a fund managed by Vanguard.
Index tracking funds like Vanguard were commonly used by investors to gain access to international shares at a lower cost than investing in them directly themselves.
However, due to customer feedback, it was now committed to getting out of such industries, no matter how indirect, a Westpac spokesperson said.
"This process is expected to involve exiting from the existing underlying funds, and identification or creation of funds which don't have exposure to those entities but which otherwise achieve the closest possible match to the existing fund. The process is underway and will be completed as soon as is practicable," it said in a statement.
The bank was now looking at alternative options, it added.
Default KiwiSaver provider Fisher Funds said it had always had a policy of not investing in the armaments or tobacco industries, but a review of its investments two weeks ago had picked up two small holdings in the nuclear weapons company Honeywell International and a fixed income investment in the tobacco industry.
Fisher Funds managing director Carmel Fisher said the investments were made by an external manager who did not follow Fisher's ethical policy.
"We acted quickly to exit our Honeywell and also our fixed income investment in the tobacco industry, so we are now free, and both of our Kiwisaver schemes are free, from tobacco and armaments."
Customer feedback, in the wake of the news that several default providers had investments in such companies, prompted the review.
"We found these holdings through our outsourced managers who hadn't adhered to our policy. They now know that they are to adhere to our policy in any future investments," Ms Fisher said.
Several default providers had already made similar moves in the past two weeks.
Grosvenor's default KiwiSaver fund switched out of Vanguard to a responsible investment index fund that was more expensive to invest in but the company said it would absorb the cost.
That meant all of Grosvenor's KiwiSaver products did not invest in companies that made cluster bombs, landmines or nuclear weapons.
AMP had also committed to exiting out of prohibited investments by the end of the year.
There are nine default KiwiSaver providers appointed by the government: AMP, ANZ, ASB, BNZ, Fisher Funds, Grosvenor, Kiwibank, Mercer and Westpac.
All nine were found to have either direct or indirect investments in companies that make cluster bombs, anti-personnel mines or nuclear weapons.
Since RNZ News broke the story two weeks ago, four providers have announced they have dumped all their investments in these companies, or were planning to.
AMP said it would ditch all investments in these prohibited companies by the end of the year.
Grosvenor has switched from the index tracking fund its default fund followed to a socially responsible index.
Today, Westpac announced it will commit to exiting all its investments in these types of companies, no matter how indirect.
And Fisher Funds said it had gotten rid of the two small holdings it had in a nuclear weapons and tobacco company.
Mercer, which has indirect holdings in nuclear and land mine manufacturers, said it was reviewing its investment policy, including indirect holdings in such companies.
ASB said it was reviewing its investments, but had not yet committed to anything.
That left just ANZ and BNZ to take any action.