Australian Ethical’s Funds Under Management Soar 34% to $13.94 Billion
Australian Ethical Investment Ltd has reported a record $13.94 billion in funds under management, driven by robust net inflows and disciplined ethical investing amid economic challenges.
- 34% full-year growth in funds under management to $13.94 billion
- Record superannuation net inflows of $209 million in Q4
- Acquisition of Altius Asset Management adds $1.93 billion FUM and fixed income expertise
- Strong investment performance benefiting from ethical, low fossil fuel exposure
- Positive institutional net flows and integration progress of Altius funds
Robust Growth Amid Challenging Conditions
Australian Ethical Investment Ltd has delivered a standout performance for the financial year ending 30 June 2025, reporting a 34% increase in funds under management (FUM) to a record $13.94 billion. This growth reflects a combination of strong net inflows, solid investment returns, and strategic acquisitions, underscoring the resilience of its ethical investment approach despite ongoing economic and geopolitical uncertainties.
Superannuation Flows Drive Momentum
The company’s fourth quarter saw retail and wholesale net inflows of $195 million, predominantly driven by superannuation contributions. Record year-end voluntary contributions and the resumption of marketing campaigns following the transition from Mercer to GROW Inc have played a pivotal role. Enhancements to the member onboarding process have also encouraged more Australians to consolidate their super balances with Australian Ethical, while steady superannuation guarantee contributions continue to provide a reliable flow of funds.
Strategic Acquisition Bolsters Fixed Income Offering
In early FY25, Australian Ethical acquired Altius Asset Management, adding $1.93 billion in inorganic FUM and strengthening its fixed income capabilities. The integration of Altius has progressed well, with all three transitioning fixed income funds now recommended by Lonsec Research. Institutional net flows of $61 million in Q4 from fixed income funds and mandates indicate growing traction in this relatively new channel for the company.
Investment Discipline and Ethical Focus Pay Off
Investment performance contributed $591 million to FUM growth in the quarter, benefiting from Australian Ethical’s disciplined approach. The team’s limited exposure to resources and fossil fuels, combined with active management that trimmed overvalued holdings and increased allocations to private markets and alternative defensive assets, has helped navigate market volatility. This strategy aligns with the company’s commitment to ethical investing, demonstrating that values-driven approaches can deliver competitive returns.
Looking Ahead
Australian Ethical’s CEO John McMurdo highlighted the company’s ability to reward investors with strong returns while making money a force for good. The firm’s continued growth and integration efforts position it well to capitalize on increasing demand for ethical investment solutions in Australia’s superannuation and institutional markets.
Bottom Line?
Australian Ethical’s record growth and strategic moves set the stage for further expansion in ethical investing.
Questions in the middle?
- How will Australian Ethical sustain growth amid evolving economic and geopolitical risks?
- What are the long-term impacts of the Altius acquisition on institutional market penetration?
- Can Australian Ethical maintain its investment performance advantage with limited fossil fuel exposure?
