The Australian Ethical Investment Limited (ASX: AEF) share price is up slightly after revealing growth of its funds under management (FUM) in the June 2021 update.
Australian Ethical is a leading ethical investment manager. It has been operating since 1986. The manager aims to provide investment products that align with people’s values and also provide competitive returns. Its investments are guided by the Australian Ethical Charter.
Australian Ethical June FUM
It said that its FUM increased by 12% to $6.07 billion for the quarter ending 30 June 2021, up from $5.41 billion at 31 March 2021.
The company said that this was driven by record quarterly net flows and strong investment performance.
Its managed funds grew from $1.9 billion to $2.17 billion over the quarter, with net flows contributing $120 million of that rise.
Superannuation improved from $3.51 billion to $3.9 billion. Net flows contributed $200 million of the increase.
The rest of the growth came from market movements (an increase in share market values) and ‘other’.
FY21 performance
Australian Ethical also share its FUM movement for the full 2021 financial year. It achieved net flows of $1.03 billion for the year to 30 June 2021. That was a 56% increase on the previous 12 months.
Those net flows, combined with an investment performance which added $0.99 billion, drove a 50% increase in FUM to $6.07 billion.
Managed funds FUM started the year at $1.33 billion and finished at $2.17 billion of FUM, with $420 million of net flows. Superannuation FUM started the year at $2.72 billion and ended at $3.9 billion, with $610 million of net flows.
Summary thoughts on Australian Ethical and the share price
The business continues to grow in size. Bigger FUM is likely to mean higher profit, and higher profit margins, after taking into account its plans to lower investment fees for investors.
Ethical investing is a growth area. Not only is the Australian Ethical investment team doing well, but the general public are also increasingly wanting their money to be invested in ethical businesses. Or at least avoid the ‘unethical’ ones.
However, the Australian Ethical share price is riding high, so it’s not cheap right now. There are other ASX growth shares which may be better value.
