In an announcement to the ASX on Thursday, Australian Ethical reported a record $9.02 billion in funds under management (FUM) at 31 May 2023, an increase of 3 per cent since 31 March 2023 and 45 per cent since 30 June 2022.
It was also during the latter period, in November, that the fund finalised its merger with Christian Super.
After welcoming Christian Super’s 28,000 new members, Australian Ethical reported it held more than $8 billion in funds under management.
“The business is now better positioned than ever for further headline and earnings growth following the successful integration of the Christian Super successor funds transfer (SFT), and following positive investments’ returns, and organic net cashflows,” Australian Ethical managing director John McMurdo commented.
Meanwhile, the two months since March 2023 saw further positive net flows of $90 million, despite the challenging economic and market environment, with superannuation flows remaining particularly resilient at $110 million, while managed funds lost $20 million.
Australian Ethical also expects strong headline growth metrics for the second half of the financial year, with revenue forecast to grow 21 per cent compared to the first half, driven by higher average FUM.
Moreover, the fund projected underlying profit after tax (UPAT) for the second half to be approximately 30 per cent higher than the first half and in the range of $6.3 to $6.8 million, taking full year UPAT before performance fees for the year ending 30 June 2023 from $11.3 to $11.8 million.
“The higher level of funds under management now presents Australian Ethical the opportunity to both continue to invest in the business to capture the significant addressable market for responsible investing, and simultaneously see operating leverage emerge in the future earnings profile of the business,” the fund said in its statement.
On Thursday, Australian Ethical also confirmed that it has selected GROW Technology Services as its new superannuation administrator, which the fund attributed to a “strong alignment of innovative cultures between the organisations”.
“The multi-year project to transition to GROW has commenced, with member transition to GROW’s platform expected to be complete in FY25.”
“This and other future initiatives are expected to deliver cost savings for the business over the medium to long term, enhance the customer experience and will underpin Australian Ethical’s long-term growth.”