The Australian Ethical Investment Ltd (ASX: AEF) share price rose more than 5% after revealing its FY25 fourth quarter update.
Australian Ethical is a fund manager focused on providing investors with investment management products that align with their values and provide returns.
June 2025 quarterly update
The business revealed strong quarterly net flows and good investment performance in the fourth quarter of FY25.
The fourth quarter of FY25 showed retail and wholesale net flows of $195 million, which mostly came from superannuation thanks to record financial year-end voluntary contributions.
The business also reported institutional net inflows of $61 million from its fixed income funds and mandates after the acquisition of Altius Asset Management early in FY25 and is beginning to win new clients within the relatively new institutional channel.
Overall, quarterly funds under management (FUM) rose from $13.1 billion at March 2025 to $13.94 billion at June 2025, with market movements contributing the rest of the improvement (being $591 million).
FY25 update
Total organic flows for FY25 were $593 million across superannuation and investments, while the acquisition of Altius contributed $1.93 billion of inorganic FUM.
Its FUM was $10.44 billion at June 2024 and increased to $13.94 billion in June 2025.
Management commentary
The Australian Ethical CEO John McMurdo said:
Our strong fourth quarter result, and our full year FUM growth of 34% reflects the ongoing disciplined execution of our strategy as well as the resilience of our ethical investment approach in the face of challenging economic and geo-political cycles.
The continued demand for our way of investing has delivered record super net flows of $209m in the quarter. Our investment performance has also contributed to strong FUM growth, and I’m thrilled that we have been able to reward investors with strong returns during this period. Together, this further demonstrates that ethical investing can deliver great outcomes while making money a force for good.
Final thoughts on the Australian Ethical share price
The market has already responded to the positive news, so I wouldn’t call it a hidden bargain. But, if FUM continues growing over time, then its net profit and share price could continue rising over time as well. I think it’s one to watch, but I’d choose to buy it during periods of market volatility. The share prices of some fund managers seem to drop more than others during volatility.
Until then, there are other ASX growth shares I’ve got my eyes on.
