Australian Ethical super assets approach $4b

A “seismic shift” in consumer attitudes to responsible investing has seen Australian Ethical report a 19% rise in net profit after tax (NPAT) of $11.3 million.

In its FY21 results report to the Australian Securities Exchange (ASX), it saw inflows of $1.03 billion and funds under management (FUM) of $6.07 million which was a 56% and 50% increase on the previous year respectively.

Superannuation FUM increased 43% to $3.9 billion and inflows of $614 million during the year while super members increased by 22%. The firm said super inflows were driven by the direct-to-consumer channel reflecting ongoing growth in the firm’s digital acquisition strategy.

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This made Australian Ethical one of the fastest-growing super funds in the country by FUM and member numbers, it said.

The fund said the strong results were driven by “strategic investment to strengthen investment capability, distribution and brand awareness, as well as a seismic shift in consumer attitudes towards responsible investing and the ongoing relative outperformance of ESG [environmental, social and governance] and green funds”.

In particular, the firm’s Emerging Companies fund attained a performance fee of $2.9 million during the year.

The board declared a fully franked final dividend of 4 cents per share (cps) as well as a special performance fee dividend of 1 cps which brought the total dividend for the year to 8 cps, a 33% increase.

John McMurdo, Australian Ethical chief executive and managing director, said: “Our ethical investment approach is rapidly gaining popularity due to our climate-friendly portfolios that achieve strong performance, as our award-winning products achieve record net inflows.

“This presents a once-in-a-business-lifetime opportunity for Australian Ethical to grow into one of Australia’s largest and most successful investment managers. Expenses in the short-term reflect deliberate investment to realise ambitious growth in FUM and revenue to achieve just that.

“More broadly, our strategic focus remains on deepening our investment capability, expanding our product offering, growing our brand awareness, fully digitising and upgrading the customer experience and significantly expanding our customer base.”

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