Australian Ethical has reported a 0.4 per cent decrease in funds under management (FUM) for the September quarter to $6.18 billion.
In an announcement to the ASX on Wednesday, Australian Ethical attributed the FUM reduction to negative investment performance following volatility in investment markets as well as a $183 million redemption by an institutional client.
This was the final redemption by the client that, as flagged previously by Australian Ethical, has internalised the management of its sustainable options following its successor fund transfer (SFT) into another fund.
The ethical investment manager experienced positive net flows of $30 million over the quarter.
“Excluding this institutional redemption, Australian Ethical recorded positive retail and wholesale net flows of $213 million for the quarter,” it said.
“Quarterly net flows have been driven predominantly by continuing solid flows in the superannuation business, which are less impacted by cautious market sentiment related to market volatility.”
Australian Ethical’s FUM at the end of September included $4.37 billion in superannuation, up from $1.79 billion three months prior, and $1.8 billion in managed funds, up from $4.23 billion.
In an update on its merger with Christian Super, Australian Ethical reported that the SFT is progressing and is expected to be completed on 25 November.
Implementation and integration costs related to the merger are expected to remain in the range of $3 million to $4 million as previously indicated.
Christian Super had $1.96 billion in FUM as of the end of September and 30,200 members — all of whom will be transferred into existing Australian Ethical Super options.
“Following the SFT, increased scale will allow Australian Ethical to pass on superannuation fee reductions to all members and improve competitiveness of our super offering,” the ethical investment manager said.
Jon Bragg is a journalist for Momentum Media's Investor Daily, nestegg and ifa. He enjoys writing about a wide variety of financial topics and issues and exploring the many implications they have on all aspects of life.