Australian Ethical has reached a significant milestone, surpassing $13 billion in funds under management (FUM) despite facing challenges in its superannuation business. The fund manager reported a rise in FUM from $12.95 billion to $13.26 billion in the latest quarter, driven by positive net flows from retail and wholesale channels.
While the superannuation segment experienced slower flows due to a transition impacting its operations, Australian Ethical managed to offset this with $173 million in net flows from other channels. The transition, involving a shift in superannuation administration services from Mercer to GROW Inc., led to a limited service period during the quarter.
Despite the challenges in the superannuation business, Australian Ethical remains optimistic about stabilizing flows in the second half of the financial year. The fund manager highlighted that the completion of the transition process would pave the way for improved operational efficiencies and cost savings, supporting future growth and profitability.
Investments net flows, excluding institutional funds, saw a positive trend with $72 million in inflows during the quarter. The values-aligned channel, catering to not-for-profit organizations and values-aligned businesses, contributed significantly to the overall net flows, reflecting increased sales efforts and a strong pipeline of opportunities.
Furthermore, Australian Ethical attributed $190 million to positive investment performance during the quarter, underscoring the resilience of its business model amid operational disruptions. Managing director John McMurdo emphasized the strength of the company’s diversified channels, which continued to deliver positive outcomes despite challenges in the superannuation segment.
Looking ahead, Australian Ethical remains committed to expanding its investment capabilities and maintaining its position as a responsible investment manager. The firm has significantly bolstered its investment team over the past 18 months, broadening its expertise across various asset classes to meet the evolving needs of advisers and clients.
Leah Willis, head of distribution at Australian Ethical, highlighted the firm’s enhanced investment offerings, including sustainable bond options and expertise in private markets and infrastructure debt. These strategic initiatives aim to provide advisers with a comprehensive suite of responsible investment solutions to align with their clients’ sustainability goals.
In conclusion, Australian Ethical’s achievement of surpassing $13 billion in FUM underscores its resilience and strategic focus on responsible investing. Despite facing challenges in the superannuation sector, the company’s diversified channels and commitment to sustainability-driven investment strategies position it well for future growth and success in the evolving financial landscape.
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