Changes are happening - please bear with us while we update our site.

Changes are happening - please bear with us while we update our site. Click here to give us your advice and feedback.

FY21 guidance: Is Australian Ethical (ASX:AEF) a top ASX share?

Fund manager Australian Ethical Investment Limited (ASX:AEF) gave FY21 half year profit guidance today. Does the projection make it a great ASX share?

Fund manager Australian Ethical Investment Limited (ASX: AEF) gave FY21 half year profit guidance today. Does the projection make it a great ASX share?

Australian Ethical describes itself as the country’s leading ethical investment manager. Since 1986, the company has provided investors with wealth management products that align with their values and it has been delivering strong returns.

HY21 earnings guidance

Australian Ethical said that it’s expecting its underlying net profit after tax (UPAT) for the six months to 31 December 2020 to be between $4.6 million and $5.1 million. The mid-point of that guidance is an 11% increase compared to the prior corresponding period.

The fund manager said that strong growth in funds under management (FUM) was partially offset by the impact of superannuation fee reductions including those implemented by the second half of FY20, and fee and threshold reductions across some managed funds in October 2020.

Australian Ethical believes that revenue will be more than $50 million this financial year.

Funds under management movement since 30 September 2020

FUM increased to $4.92 billion at 30 November 2020. This was an increase of 14% from $4.32 billion at 30 September 2020, and up 21.6% since 30 June 2020.

Australian Ethical explained that the increase came from exceptional investment performance of $0.43 billion and strong net flows of $0.18 billion in October and November.

Outlook

John McMurdo, the CEO of Australian Ethical, said: “We have seen excellent momentum in the first half of this financial year as a growing number of Australians seek to do good and do well with their money. Buoyed by excellent investment performance, we expect this strong growth in net inflows to continue. 

Meanwhile, we are actively implementing our strategic roadmap to ensure we realise the potential of ethical investing in delivering a better future. This includes investing in our brand, in our customer experience and in diversifying our distribution channels to maximise our reach and our impact.

Financials in the second half of the financial year compared to the first half will be impacted by higher operating expenses, as well as increased investment in strategic and regulatory initiatives as we position our business for continued success.”

Summary thoughts

This seems like a solid update by the ethically-focused fund manager. However, it is priced for that growth with a price/earnings ratio of around 60. I think it could be worth a long term buy in this environment, but there are other ASX growth shares I like the look of more such as Pushpay Holdings Ltd (ASX: PPH).

$50,000 per year in passive income from shares? Yes, please!

With interest rates UP, now could be one of the best times to start earning passive income from a portfolio. Imagine earning 4%, 5% — or more — in dividend passive income from the best shares, LICs, or ETFs… it’s like magic.

So how do the best investors do it?

Chief Investment Officer Owen Rask has just released his brand new passive income report. Owen has outlined 10 of his favourite ETFs and shares to watch, his rules for passive income investing, why he would buy ETFs before LICs and more.

You can INSTANTLY access Owen’s report for FREE by CLICKING HERE NOW and creating a 100% FREE Rask Account.

(Psst. By creating a free Rask account, you’ll also get access to 15+ online courses, 1,000+ podcasts, invites to events, a weekly value investing newsletter and more!)

Unsubscribe anytime. Read our TermsFinancial Services GuidePrivacy Policy. We’ll never sell your email address. Our company is Australian owned.

Information warning: The information on this website is published by The Rask Group Pty Ltd (ABN: 36 622 810 995) is limited to factual information or (at most) general financial advice only. That means, the information and advice does not take into account your objectives, financial situation or needs. It is not specific to you, your needs, goals or objectives. Because of that, you should consider if the advice is appropriate to you and your needs, before acting on the information. If you don’t know what your needs are, you should consult a trusted and licensed financial adviser who can provide you with personal financial product advice. In addition, you should obtain and read the product disclosure statement (PDS) before making a decision to acquire a financial product. Please read our Terms and Conditions and Financial Services Guide before using this website. The Rask Group Pty Ltd is a Corporate Authorised Representative (#1280930) of AFSL #383169.

At the time of publishing, the author of this article does not have a financial or commercial interest in any of the companies mentioned.
Skip to content