No KiwiSaver fund managers have been found to have broken the law relating to cluster munitions, though police will investigate further if there's more evidence.
Police and the Financial Markets Authority looked into whether the country's default providers run by ANZ, Westpac, ASB, AMP and Grosvenor broke the law by investing in companies which make cluster bombs and mines.
The Cluster Munitions Act prohibits this.
Opposition parties had called for the Government to review the rules, though Prime Minister John Key said the problem wasn't big enough to merit change.
Police say fund managers "generally buy their securities on traded markets, so these are shares traded between shareholders as opposed to providing funds to the companies that produce these weapons".
"Additionally, New Zealand fund managers also place money with offshore fund managers, who may undertake share trading on overseas markets, rather than the New Zealand fund managers investing directly."
The fund managers in question were found to have invested in companies such as Northrop Grumman, Fluor Corp, Honeywell International and Lockheed Martin.
Police say there's "significant threshold" to breach the Act, and "at this stage" there's no evidence there's been offending.
But despite the police findings, the Green Party says the Government needs to clarify the law around investment in cluster bombs.
"New Zealanders haven't changed their opinion on the ethics of cluster bombs so it's time the Government set some clear bottom lines for responsible investment when it comes to these illegal weapons of war," finance spokesperson Julie Anne Genter says.
"New Zealanders have strong values, and it's the Government's responsibility to uphold those shared values in law and policy."