How Australian Ethical is beating active peers
With share price growth of 45 per cent for FY25, Australian Ethical has shared why it believes the firm has done so well compared to its peers.
Earlier this week, Money Management covered how Australian Ethical saw the best performance of listed fund managers for the 12-month period, narrowly beating Pinnacle Investment Management which saw growth of 44 per cent.
Meanwhile, other active fund managers such as Perpetual, GQG and Platinum Investment Management have reported double-digit losses over the same period.
Speaking to Money Management, 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.
“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.”
Sustained fund flows have particularly been seen in its superannuation channel supported by the increase in the Super Guarantee to 11.5 per cent last June and to 12 per cent from this new financial year. This was providing Australian Ethical with regular inflows, despite slower inflows into its investment products from retail and institutional clients.
For example, the firm said it had experienced a “challenging” period in the three months to 31 March with net institutional outflows of $60 million which related to fixed income funds and mandates. On the other hand, its superannuation channel saw $110 million in positive flows.
Simons also alluded to the acquisition of fixed income specialist Altius Asset Management in September 2024 which “materially lifted” the firm’s assets under management by $1.9 billion. Current FUM at Australian Ethical stands at more than $13 billion.
“We’ve also continued to invest in the quality of our platform, including the transition from Mercer to Grow Inc, NAB to State Street, and the successful onboarding of Charles River for our fixed income asset class. These transitions are underpinning improvements to our operating leverage,” he concluded.
AUTHOR
Laura Dew
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