The Australian Ethical Investment Limited (ASX: AEF) share price is rising after a solid start to FY22.
Australian Ethical is a fund manager that is focused on providing investment products that align with investor’s values and also generate competitive returns. Investments are guided by the Australian Ethical Charter which shapes its ethical approach and underpins both its culture and its vision.
Australian Ethical’s September 2021 quarter
The fund manager said that its funds under management (FUM) increased by 8% over the three months to 30 September 2021 to $6.54 billion.
Management explained that strong net flows worked together with solid investment performance contributed to the uplift in FUM.
Australian Ethical broke down the changes in FUM into three different areas.
Its managed funds saw $0.16 billion of net flows, with FUM ending at $1.96 billion. This was driven by continued growth in the adviser channel, particularly from platforms.
Superannuation experienced $0.18 billion of net inflows, with an ending FUM of $4.21 billion. Australian Ethical said that the inflows were driven by higher value member rollovers.
However, ‘institutional’ saw a net outflow of $0.05 billion. But this section’s FUM only was $0.38 billion.
Australian Ethical said that these key milestones demonstrate “positive momentum in the implementation of Australian Ethical’s growth strategy, particularly in brand awareness, engagement with advisers and enhancing the customer experience.
Other statistics
Australian Ethical also shared a few different numbers for investors to think about.
It said that it had 71,273 funded customers. That is split between 61,373 superannuation members and 12,810 managed fund investors. The average revenue margin was 1.01%.
Thoughts on this update and the Australian Ethical share price
Australian Ethical is one of the fastest growing fund managers on the ASX and probably one of the best.
Not only is it exposed to the very-useful growth trend of superannuation, but it’s also benefiting from the growing demand from investors for greener and more ethical investment choices. FUM continues to grow nicely.
I think Australian Ethical is a really good business. However, the Australian Ethical share price valuation certainly takes into account that growth potential. Its price/earnings ratio (p/e ratio) is in the triple digits.
