Australian Ethical says it is proving that investors don’t have to choose between doing well and doing good

Derek Rose
(Australian Associated Press)

 

Australian Ethical says it is proving that investors don’t have to choose between doing well and doing good.

The ethical wealth manager on Wednesday announced its first-half profits rose 40 per cent to $4.4 million on $23.3 million in revenue, as its net inflows doubled to $295.8 million.

Its net inflows to its managed flows rose 150 per cent to $96.4 million, with its overall funds under management reached $4.14 billion as of January 31.

Board chairman Steve Gibbs called it the best six months for the company ever.

“It’s all about the realisation that people actually care where their money is being invested,” he said.

“That sentiment is really pulling them to come to us. All of the numbers are just fantastic.”

Its superannuation members increased 13 per cent in the half to 43,264.

Although Australian Ethical is the default superannuation option for a few companies most of its members come to it directly.

“They’re choosing us,” Mr Gibbs said. “We’re not being chosen for them.”

Australian Ethical said its Australian Shares Fund gained 29.6 per cent in 2019, significantly outperforming its benchmark thanks in part from a strong performance by the Fisher and Paykel Healthcare, neuroscience company Cogstate and non-retail REITS like Mirvac, Lendlease, Stockland and Charter Hall.

That’s evidence, Mr Gibbs said, that taking into account ethical considerations – such as refusing to invest in fossil fuel companies – doesn’t diminish investment returns.

Still all of its funds would be hard-pressed to compete with the appreciation in Australian Ethical’s own share price, which has risen more than twentyfold since the start of 2013, going from 19.3 cents to over $4.

Mr Gibbs said the company’s share price appreciation had been “extraordinary” but he could never countenance putting members’ funds entirely in one company.

At 1320 AEDT Australian Ethical shares were down 1.7 per cent to $4.04, up 5.2 per cent for the year.

Australian Ethical announced a fully franked interim dividend of 2.5 cents per share, up 25 per cent from its interim dividend a year ago.

Ten per cent of its profit is donated to the Australian Ethical Foundation, which donated $360,000 in 2019 to 20 community organisations.

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