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Australian Ethical posts record results

The $4.05 billion wealth manager has reported record inflows of $660 million for the financial year, telling Financial Standard that it's balanced MySuper offering returned 6.9% net of fees for the quarter.

For the 2020 financial year, Australian Ethical's balanced option returned 2.3% net of fees.

In comparison, AustralianSuper recorded 0.52% for its balanced MySuper offering over the same period.

Australian Ethical chief financial officer Mark Simons told Financial Standard the results prove that ethical, sustainable investments can generate market leading results.

"At the moment ESG funds are outperforming their peers, and I hope that continues," he said.

"Ethical investments are very much in the mainstream; they create sustainable returns, which are equal if not better [to their not-so-ethical counterparts].

"It's proof that the myth has been busted; ethical investing is a positive, and it produces great returns."

Australian Ethical's record inflows of $660 million drove an 18.6% increase in funds under management to $4.05 billion for the financial year, despite challenging market conditions bleeding $20 million from the investment manager. In the June quarter alone, FUM increased by 12.9%, up from $3.59 billion at the end of March.

It comes despite a $40 million drawdown on the manager's super offering following the government's changes to early super release conditions.

FUM in Australian Ethical's super offering lifted 11% during the quarter, while its managed funds offering increased by nearly 17%.

For the 12 months to end of June, FUM for its managed funds lifted 14.7%, while its superannuation offering saw a 20.4% boost.

The wealth manager also gained 14,000 new clients across its super and managed funds offerings over the financial year; a 19.7% increase in 12 months.

Simons said a particularly devastating bushfire season, as well as the global climate change movement, had helped boost client numbers.

"The bushfires really resonated with people; [they realised] they needed to take climate action and that they could make their money matter by doing that," he said.

"It's really the rise of a conscious consumer; people are really thinking about how they can make a difference, whether it's in their own ethical approach to living or if it's where they put their super."

The wealth manager saw a huge spike in client numbers in January, pulling in $112 million in net inflows for its super and managed fund offerings. In super alone, the manager saw $80 million in net inflows for the month.

For the March quarter, Australian Ethical saw $241 million in net inflows, while in the June quarter it raked in $119 million, as both discretionary investors and consumers shifted towards more ethical investments.

Australian Ethical now has over 57,000 super fund members and managed fund investors.

Read more: Australian EthicalFinancial StandardMySuperAustralianSuperESGMark Simons
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