Superannuation flows help Australian Ethical buck investment losses

Superannuation flows mean Australian Ethical has seen positive inflows of $114 million in the September quarter, but managed funds saw outflows. 

In a quarterly update, the firm said its funds under management remained unchanged from June to September at $9.2 billion. 

The firm noted that a lack of growth was the result of $124 million in losses from investment performance, which offset positive inflows. 

Superannuation rose from $7.21 billion to $7.23 billion, but FUM in managed funds – which also includes separately managed accounts – dropped slightly from $2 billion to $1.96 billion as a result of market performance and cautious investor sentiment relating to broader market volatility triggering $3 million in outflows.

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The firm merged with Christian Super in November 2022, which brought over 28,000 members to the super fund division. The merger with Christian Super had come about after the fund failed the Your Future, Your Super performance test and was urged to merge with a larger fund by the Australian Prudential Regulation Authority (APRA).

“Australian Ethical reported positive net flows of $114 million in the September 2023 quarter, underpinned by solid superannuation net flows of $117 million. Customer numbers continued to grow as more people entrust their retirement savings to Australian Ethical and Superannuation Guarantee contributions provide a strong annuity-based source of net flows,” the firm said in an ASX update.

The Superannuation Guarantee increased in July from 10.5 per cent to 11 per cent, and will increase again in the next two years to reach 12 per cent.

Total customers at the firm increased to over 129,000 during the quarter, up from 127,000 at the end of FY2022–23.

Managing director John McMurdo said: “Australian Ethical has delivered another quarter of positive net flows, despite challenging market conditions more broadly. Our diversified business model across both super and investments is serving us well, with consistent superannuation growth despite the market environment.”

Earlier this year, the firm announced the appointment of Ludovic Theau as chief investment officer, John Woods was promoted from head of asset allocation to deputy chief investment officer, and Alison George was appointed as head of impact and ethics.