The country's biggest bank, ANZ, has voted to dump all direct KiwiSaver investments in controversial weapons and tobacco.
An RNZ investigation earlier this month found several default KiwiSaver providers either directly or indirectly invested in tobacco companies and weapons manufacturers that made cluster bombs, anti-personnel mines and nuclear weapons.
In a statement to RNZ, ANZ said none of its funds had any direct holdings in companies that made cluster bombs.
It said its Investments Board voted on Monday to get rid of any direct holdings in companies that made other "controversial" weapons, including anti-personnel mines and nuclear armaments.
The bank would also be removing direct investments in tobacco companies.
It made the decision to because it felt it was the "right thing to do" and because of the strength of feeling among its customers, it said.
It said it did invest in collective funds that might have money in weapons companies, and it was considering also excluding those investments.
The move would not significantly impact its investment returns, the statement said.
ANZ is the country's largest KiwiSaver provider, with more than 700,000 people investing over $8 billion in its scheme.
It has followed in the steps of seven other KiwiSaver providers in divesting its investments in armaments.
BNZ is now the only default provider yet to take action.