Challenging markets hit Australian Ethical FUM
Ethical investment manager Australian Ethical has cited the ongoing challenging market environment for its modest decrease in assets over the latest quarter.
The firm’s funds under management (FUM) slumped 1 per cent to $13.1 billion in the three months to 31 March, it said in an ASX update.
Namely, the March quarter ended with $4.17 billion FUM for its investments business – down from $4.29 billion at the end of last year – and $8.92 billion for its superannuation business, which slipped from $8.96 billion in the previous quarter.
However, Australian Ethical said that its super business and values-aligned channel proved resilient over the quarter, with the values-aligned organisations adding $30 million during the quarter and offsetting redemptions in managed funds and investment products.
According to the investment manager, continued superannuation guarantee contributions provided insulation during challenging market conditions and helped to maintain flows with superannuation seeing $110 million in net flows.
At the same time, the period witnessed net institutional outflows of some $60 million, which related to fixed income funds and mandates.
“This was driven by an institutional client’s working capital requirements and mortgage capital management. These funds are low margin and the impact on revenue is slight,” it said.
Managing director, John McMurdo, said: “In what has become a challenging market environment, I am pleased that our diversified business model and asset base continues to be resilient with FUM down only 1 per cent to $13.1 billion.
“Regardless of the context, we remain firmly focused on investing in line with our Ethical Charter as we have done for over 38 years and during which we have proven that investing ethically delivers over the long term, and during various economic and geopolitical cycles.
“We remain focused on our strategy which continues to deliver positive outcomes for our various stakeholders,” the managing director concluded.
Meanwhile, and following the resumption of marketing campaigns post the super administration transition to GROW, Australian Super’s member base grew over the period. It also confirmed that super outflows have moderated since the completion, which saw the transition of some 100,000 members from the Mercer platform to GROW Inc in the second quarter.
In its half-year results, released in February, Australian Ethical previously said that its super channel flows were “predictably below” the comparative half, given its regular marketing program was scaled back during the seven-week limited service period covering the transition.
“While this transition is now complete and operational, improvements to the digital experience to lift rollovers from new members are a key focus area during the fourth quarter,” the firm concluded.
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Jessica Penny
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