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Coronavirus drains $520m from Australian Ethical

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Australian Ethical was shaken by market volatility in the first quarter of the year, recording a drop of a half a billion dollars in funds under management, but strong inflows helped counteract the harm.

The ethical fund manager ended March with $3.59 billion in funds under management (FUM), 8 per cent down from $3.87 billion in FUM at the end of the previous quarter. 

The unprecedented falls in global equity markets saw a $520 million fall in the group’s funds, however it was partly offset by $240 million in net inflows during the quarter. 

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The majority of inflows came to the company’s superannuation product ($190 million), with the resulting $50 million flowing into its managed funds. 

For the financial year to 31 March, Australian Ethical saw 5 per cent growth in FUM, with $390 million in inflows to its super fund, while $150 million went to its managed funds.

In light of the government’s early release of super measure, the group stated it is regularly stress testing the business for varying scenarios, including modelling around different levels of increased redemptions and the consequent impacts on the liquidity of its super fund.  

Australian Ethical said it is “satisfied” with its liquidity to meet a higher demand for withdrawals.

On 1 April, the group reduced its percentage-based administration fee on its super and pension products, cutting from 0.41 per cent to 0.29 per cent per annum. 

The administration fee is now 0.29 per cent of members’ daily fund balance plus $97 per annum per member.

 

Coronavirus drains $520m from Australian Ethical
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Sarah Simpkins

Sarah Simpkins

Sarah Simpkins is a journalist at Momentum Media, reporting primarily on banking, financial services and wealth. 

Prior to joining the team in 2018, Sarah worked in trade media and produced stories for a current affairs program on community radio. 

You can contact her on [email protected].

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