Australian Ethical adds $1bn to FUM in three months

The ethical manager wrapped up the financial year with a strong performance, gaining almost $1 billion in funds under management (FUM) to $14.5 billion from the March quarter.

The performance was a result of strong rollover activity and growing super guarantee (SG) contributions in its super business, as well as sound investment returns and organic flows generated over the period.

Net flows for super over the three months was $196 million, which follows the final transition of members to the GROW platform, reactivation of employment platform acquisition channel and improving digital marketing performance, while new member momentum has also lifted in the second half, Australian Ethical said.

Meanwhile, the launch of Australian Ethical Growth Opportunities Fund in March, alongside the Clean Energy Finance Corporation's (CEFC) $125 million investment have provided "a degree of resilience" against the anticipated higher-than-usual redemptions in advised and direct channels during a period of market volatility, it said.

"During the period, we have continued to see strong demand for our approach to investing, with new super member joins increasing in the second half of the year. We have also seen demand growing for our newly launched Growth Opportunities Fund," Australian Ethical managing director John McMurdo said.

"The diversification and resilience of our business model continues to allow us to grow, even in periods of market stress."

Australian Ethical saw negative flows in retail and wholesale investment of $26 million in the quarter, as client capital activities also resulted in negative FUM movement of $8 million.

However, McMurdo noted the final quarter's $650 million investment performance allowed the ethical manager to finish the financial year strongly.

"The new FUM milestone is a pleasing result given the substantial economic and market challenges of FY26," McMurdo continued.

"The decision to build out our investment team and diversify asset classes over recent years, was rewarded in what has been a challenging year for many fund managers, with Australian Ethical achieving positive returns across most of our portfolios, and net-inflows into core product categories."

For the full year, Australian Ethical recorded positive retail and wholesale net flows of $491 million and institutional net flows of $173 million, partially offset by the previously disclosed inorganic institutional outflow associated with the Australian Unity Bank mandate.