Australian Ethical hits record FUM fuelled by strong super growth

Australian Ethical’s funds under management (FUM) expanded 5 per cent from September to reach $9.67 billion at the end of December, marking a new record high.

In an ASX listing, Australian Ethical said its record FUM was underpinned by “further customer growth, positive new inflows and investment performance”.

“This impressive result has been achieved despite the continued challenging conditions impacting the broader market, with our superannuation product set providing diversification to our growth in these volatile conditions,” said managing director John McMurdo.

The fund manager reported a positive net inflow of $145 million in the December quarter, driven by strong superannuation net flows, ongoing new customer growth, and substantial contributions from superannuation guarantee, bolstering a robust annuity-based source of new flows.

During the quarter, managed fund net flows continued to be impacted, with outflows reaching a modest $7 million, as a result of cautious investor sentiment reflecting the broader market volatility.

For the half year ended 31 December, overall net flows were $259 million, up from $186 million in the first half of 2023.

McMurdo highlighted as a standout the fund manager’s “strategic transformation plan” which, he noted, continues to “move from strength to strength” supported by “strong headline growth, increased scale and improving underlying operating leverage”.

“The consistent and continued business growth we are delivering, reflects the growing consumer demand for our style of investing and the quality of our business model and delivery,” said McMurdo.

The fund manager also reported strong investment performance during the quarter of $325 million, while half-year performance was reported at $202 million with the most recent quarter offsetting the negative first quarter performance.

In its full-year results released in August, Australian Ethical announced a 48 per cent jump in funds under administration to reach $9.2 billion.

The firm attributed the growth to positive new flows, solid investment performance, and the completion of its successor fund transfer with Christian Super.

“Forty-eight per cent is an exceptional year, I’d love it to continue. But I think we’re well positioned to capture investors who are seeking to generate strong financial returns in the right way,” deputy chief investment officer John Woods recently told Super Review’s sister brand InvestorDaily at the time.

“Our brand resonates well there. Superannuation continues to be a growing sector and, particularly with unemployment where it is, more people take more jobs, it’s good for super. So I think we’re well positioned to keep growing in that space.”