Australian Ethical’s funds under management (FUM) slumped 1 per cent to $13.1 billion in the three months to 31 March.
Namely, the March quarter ended with $4.17 billion FUM for its investments business – down from $4.29 billion at the end of last year, and $8.92 billion for its superannuation business, which slipped from $8.96 billion.
However, Aus Ethical said its super business and values-aligned channel proved resilient over the quarter, reporting positive retail and wholesale flows of $110 million.
According to the investment manager, continued superannuation guarantee contributions provided insulation during challenging market conditions and helped to maintain flows.
Moreover, market volatility over the quarter saw the ASX 300 lose some 4 per cent. Aus Ethical confirmed its diversified asset base – which encompasses international equities, private markets, fixed income and local equities – saw a comparatively better, but still negative investment performance of -1.6 per cent for the quarter, or -$220 million.
At the same time, the period witnessed net institutional outflows of some $60 million, which related to fixed income funds and mandates.
“This was driven by an institutional client’s working capital requirements and mortgage capital management. These funds are low margin and the impact on revenue is slight,” it said.
Notably the ethical investment manager continues to see traction in their channel for values-aligned organisations, adding $30 million during the quarter and offsetting redemptions in managed funds and investment products. Net flows into the non-super investment products were $1 million.
Managing director John McMurdo added on Wednesday: “In what has become a challenging market environment, I am pleased that our diversified business model and asset base continues to be resilient with FUM down only 1 per cent to $13.10 billion.
“Regardless of the context, we remain firmly focused on investing in line with our Ethical Charter as we have done for over 38 years and during which we have proven that investing ethically delivers over the long term and during various economic and geopolitical cycles.
“We remain focused on our strategy which continues to deliver positive outcomes for our various stakeholders,” the managing director added.
Meanwhile, and following the resumption of marketing campaigns post the super administration transition to GROW, Aus Super’s member base grew over the period.
It also confirmed that super outflows have moderated since the completion, which saw the transition of some 100,00 members from the Mercer platform to GROW Inc in the second quarter.
In its half-year results, released in February, Aus Ethical said its super channel flows were “predictably below” the comparative half, given its regular marketing program was scaled back during the seven-week limited service period covering the transition.
“While this transition is now complete and operational, improvements to the digital experience to lift rollovers from new members are a key focus area during the fourth quarter,” the firm said.
