Australian Ethical surpasses $5 billion in funds under management

From

John McMurdo

Australian Ethical (ASX: AEF) today announced it has passed $5 billion in funds under management (FUM), meeting an audacious and visionary target set back in 2015 when FUM was $1.4 billion.

Australian Ethical’s FUM grew by 16.9 per cent to $5.05 billion for the quarter ended 31 December 2020, up from $4.32 billion as at 30 September 2020. FUM also increased by 24.6% per cent for the financial year to date following record net inflows during the period and exceptional investment performance.

The significant milestone and growth rate extend Australian Ethical’s position as Australia’s fastest growing super fund, as an increasing number of Australians take confidence in its 34-year track record of delivering above-market returns combined with proven positive impact.

John McMurdo, Australian Ethical CEO, said: “Back in 2015, we set the audacious goal of growing funds under management from $1 billion to $5 billion by 2020. It’s great to have met that target.

“Of course, 2015 was also the year that Australia and other countries around the world committed to the Paris Agreement on climate change, and the United Nations established the Sustainable Development Goals (UN SDGs).

“And while progress has been disappointingly slow on both those fronts, at Australian Ethical we’re showing what positive action looks like by investing in ethical companies that are driving a more sustainable future while delivering strong returns for our customers.”

In addition to record net inflows, AEF’s FUM growth is also attributable to exceptional investment performance after fees that drove growth in asset values of $573 million for the financial year to date.

Its Emerging Companies Fund delivered a return of 35.9 per cent (wholesale) in 2020 calendar year, while its Australian Shares Fund delivered returns of 21 per cent per cent (wholesale); both over the last calendar year.

The Australian Shares Fund, launched in 1994, was recently described by Morningstar in an ESG Commitment Level report as “setting the ESG standard for Australian domestic-equity strategies”.

Morningstar also named AEF as one of just six global leaders, out of 40, for its ESG Commitment. This is due to AEF’s ethical and sustainable investment philosophy, which involves selecting investments that make a positive impact on people, planet, or animals, while still targeting above-market risk-adjusted returns. The investment process includes strict due diligence regarding ethics, environmental impact, social responsibility and good governance.

In this way, and through its Australian Ethical Foundation, AEF supports the transition to a low-carbon economy, limiting environmental damage, protecting human rights, and promoting equality through ethical investing, active corporate engagement, and social impact.

Mr. McMurdo continued: “We think our approach proves that sustainability and outperformance can move in tandem. That’s because good does better: it’s better for your bottom line, and has a better impact for people, planet, and animals.

“After 34 years of employing an ethical investment philosophy and generating above-market returns in our premium products, it’s great to see so many in the finance industry now seeking to emulate our approach and launching their first sustainable or ESG products.

“And while the transition to a sustainable future is underway, we mustn’t underestimate the pace at which it must happen.

“It’s both the future of long-term prosperity and a future worth investing in.”

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