Fund manager Australian Ethical Investment has upgraded its June 30 profit estimates after boosting funds under management (FUM) to more than $5.6 billion – a record for the group.
That saw the market take the news in its stride and marked the shares up to $9.92, a new 52-week high.
But late selling saw the shares ease by 0.1% over the session to end at $9.79.
The company told the ASX yesterday that it now expects full-year post-tax pre-fee profits of between $8.8 million and $9.3 million, up 29% on $7 million in 2019-20.
The guidance anticipates ″no significant market movements” before 30 June. In other words, as long as there is no market crunch in the next five weeks.
The fund announced it will also reduce fees from June 1, which will see its average revenue margin decrease by about four basis points per annum to 1.01%, but improve its competitiveness.
Funds under management at Australian Ethical grew by 5% in April to $5.68 billion, including $100 million of net inflows and $170 million from improving investments. It says it has attracted $800 million so far this year.
The fund reported “extraordinary momentum in the adviser channel”, which saw a 177% jump in flows from advisors. The company said customer numbers had risen 17% from June, 2020.
“We are seeing unprecedented interest and demand for ethical investing as Australians open their eyes to how our products deliver attractive investment returns and make a positive difference in the world,” chief executive John McMurdo said in the statement to the ASX.
“Our momentum to date gives us confidence in our strategy and confirms that now is the time to cement our market leadership. Expense growth in the short term will be reflective of our investment to capture the acceleration in demand.”
He said profits would increase in the medium to longer-term as the fund reaps the benefits of scale.
