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Australian Ethical

  •   26 August 2021
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Australian Ethical’s (ASX:AEF) investment in growth pays dividends, with record annual FUM growth, revenue, and profit

26 August 2021: Australia’s original responsible investment manager Australian Ethical today announced annual results including FY21 underlying profit after tax (UPAT) of $11.1 million and operating revenue of $58.7 million, up 19% and 18% respectively on FY20.

These 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 and green funds.

These three crucial factors combined with strong performance across most funds in the investment portfolio to drive record net inflows of $1.03 billion and funds under management (FUM) to $6.07 billion, a 56% and 50% increase respectively on FY20.

Broken down further super FUM increased 43% to $3.9 billion and managed funds FUM increased 63% to $2.17 billion. Managed funds net flows increased 122% to $0.42 billion, as the strategic focus on climate-friendly funds and investment in marketing gained significant traction.

As a result, Australian Ethical’s customer base grew by 23%, with managed fund customers increasing by 31% and super members by 22%. Australian Ethical remains one of the fastest-growing super funds in the country by both number of members and FUM.

Strong investment performance also multiplied the positive impact of rapidly-growing FUM on the stellar annual results, including $2.9 million in performance fees from Australian Ethical’s Emerging Companies Fund.

These outstanding annual results allowed the Board to declare a fully franked final dividend of 4 cents per share for FY21, as well as a special performance fee dividend of 1 cent per share, bringing the total dividend for the year to 8 cents per share, an increase of 33% on the previous year.

John McMurdo, Australian Ethical CEO and MD, said: “It has been a pivotal year for ethical investing with climate pledges and sustainable commitments being made around the world. As the pandemic continues to reshape economies and global markets, a near-universal desire for a more sustainable future is emerging. 

“The recent Intergovernmental Panel on Climate Change (IPCC) report is a historic moment for investors and corporations to step up and support urgent and large-scale initiatives to reduce emissions.

“We strongly believe that profit and purpose can go hand-in-hand. Embedding ethics into the investment process can allow for excellent investment performance that also creates a positive impact for people, planet and animals, and addresses growing issues like climate change.

“Australian Ethical’s success and impact proves that when purpose is a genuine part of your corporate identity and is embedded in your strategy and your governance, it’s possible for the average Australian to find great investment products to use their money as a force for good. 

“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.

“This will help to cement our leadership in ethical and climate-friendly investment and, in turn, achieve much greater profit growth over the medium and long-term.”

 


 

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