Detailing its quarterly results for the three months to 30 June, Australian Ethical said it saw retail and wholesale net flows of $195 million which was mostly attributable to superannuation.
Following the completion of the administration transition from Mercer to GROW, the firm was able to resume marketing its superannuation offering and saw flows of $210 million.
“The number of members consolidating their super balances has increased after enhancements to the join process, while superannuation guarantee contributions continue to underpin stable ongoing positive net flows.”
In the institutional space, net flows were $61 million into its fixed income funds and mandates following the acquisition of Altius Asset Management, which was completed in September 2024 and added $1.9 billion to the firm’s FUM.
Meanwhile, strong investment performance contributed $591 million. The fund manager flagged its fund had benefited from “limited exposure to resources and fossil fuels”. This was divided between $200 million to its investment arm and $390 million for its superannuation funds.
Managers also added alternative defensive exposures, bolstered allocations to private markets and active fixed income in light of the market volatility, Australian Ethical said.
This quarter’s flows led FUM to rise from $13.1 billion at the end of March to $13.9 billion, a gain of 6 per cent after a 1 per cent decline in the previous quarter. Over the financial year, FUM has risen by a third from $10.4 billion to $13.9 billion, thanks to total organic flows of $593 million over the 12 months in addition to inorganic flows from the Altius acquisition.
Mark Simons, the firm’s chief financial officer, said the fund manager stands out against peers for its active ethical approach, which is particularly attractive for younger investors.
“Our strong share price growth over the past financial year is a reflection of consistent execution against our strategy aligning to the increase in our addressable market,” he told InvestorDaily’s sister brand, Money Management.
“Every investment we make is made in line with our ethical charter, which seeks to do good by people, animals and planet. This appeals to our consistently growing customer base and especially young Australians. In what has become an unpredictable market environment, it’s excellent to see our diversified business model, across both investment and super products and asset base, continue to remain resilient.”
Speaking to InvestorDaily sister brand Money Management earlier this month, John Woods, head of multi-asset, explained that as an ethical fund manager, private markets are a particularly important feature for Australian Ethical.
“There are opportunities in private markets to access investments that let us have more impact, providing capital into the not-for-profit space, which just aren’t available in the public space and advisers have been asking for that. How can we demonstrate through our investments that we are having a positive influence and private markets have been some of the best ways for us to do that,” Woods said.
“It’s hard to find a listed company in Australia that offers core renewable exposure, for example, but we can find that in private markets and put that capital to work and earn a good return.
“Some of these companies are quite sizeable but they just haven’t ever listed.
“Batteries are becoming an increasingly important part of electrical infrastructure within Australia, there’s some within the ASX such as AGL and Origin Energy but they are a tiny exposure, if you want a meaningful exposure then you have to invest privately.”
