Funds manager Australian Ethical Investment expects another strong year ahead as more investors seek out investments that match their principles.
The funds manager on Monday reported a 23 per cent fall in annual net profit to $1.97 million – mainly the result of reduced fees for the group’s superannuation fund, the transition to a new company pay structure, and a property impairment in Canberra.
But funds under management, for the year to June 30, lifted by just under a third to $1.17 billion while revenue rose six per cent to $21.2 million.
“The market for ethical investment continues to grow as investors and consumers come to the realisation that they can invest ethically while achieving strong and consistent returns,” managing director Phil Vernon said.
“In addition to our continued focus on implementing strategic initiatives to increase our competitiveness, including reducing our superannuation fees and our operating expenses over the coming year, we expect to see another strong year of growth ahead.”
Mr Vernon said that just as consumer habits were changing – such as through increased demand for organic foods and cage-free eggs – so too was the demand for investment products.
The climate change debate had raised the issue of sustainability and increased awareness of ethical investing.
The group’s client base was growing very strongly, with the superannuation fund attracting 20 per cent more members in the past financial year.
“We have no reason to believe that that will decrease – we’re fully expecting a similar sort of growth rate,” Mr Vernon said.
But the higher numbers were not due solely to a general increase in demand for ethical investing, he said.
Australian Ethical also had invested in its digital capabilities and social media presence, making it easy for clients to access the company and conduct transactions online.
Mr Vernon said that in the 2014/15 financial year, the group’s flagship fund, small Australian companies, had performed the best while cash and fixed interest bought up the rear.
Shares in Australian Ethical gained $1.50, or 2.7 per cent, to $57.00.
AUST ETHICAL EXPECTS STRONG YEAR AHEAD
* Annual net profit of $1.97 million, down 23pct
* Revenue of $21.2 million, up 6pct
* Final fully-franked dividend of $1.20 per share, unchanged