Australian Ethical shares wobble amid 9% fall in funds under management

The Australian Ethical Investment Ltd (ASX: AEF) share price is seesawing today following the company’s funds under management (FUM) update.

At market open, the fund manager’s shares were down almost 3% to $5.04. However, since then, its shares have rebounded to trade at $5.27, up 1.74%.

Australian Ethical delivers FUM and earnings guidance update

Investors are sending the Australian Ethical share price higher after digesting the company’s FUM and merger update with Christian Super.

In its release, Australian Ethical reported positive net flows of $102 million. This included a $150 million redemption by an institutional client that is internalising management of its sustainable option.

When excluding the institutional redemption, net flows came to $252 million for the June quarter.

Management noted that the performance was underpinned by superannuation contributions which recorded net flows of $200 million. However, managed funds experienced net flows of $50 million on the back of cautious market sentiment, amid volatility.

In total, net flows for FY22 stood at $943 million.

Although, when excluding the institutional portfolio, net flows were $1.14 billion – a 20% increase on FY21.

Overall, FUM at 30 June 2022 fell 9% to $6.2 billion with investment performance impacted by highly volatile investment markets.

Nonetheless, FUM for FY22 is up 2% due to strong net flows which offset the negative investment performance.

In addition to the FUM update, Australian Ethical announced it has signed a successor fund transfer deed with Christian Super. This will see all of Christian Super members, as well as its $1.96 billion of FUM, transferred into Australian Ethical super in late 2022.

Lastly, Australian Ethical noted that its emerging companies fund will pay a performance fee of $400,000 after outperforming its benchmark.

As such, the FY22 underlying profit after tax (UPAT) guidance range now sits between $10 million to $10.4 million.

Australian Ethical share price snapshot

Since the start of 2022, the Australian Ethical share price has continued to tread downwards posting a loss of 62%.

Its shares hit a 52-week low of $4.34 last month and have moved sideways since.

Australian Ethical commands a market capitalisation of roughly $582.17 million.

The post Australian Ethical shares wobble amid 9% fall in funds under management appeared first on The Motley Fool Australia.

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Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Australian Ethical Investment Ltd. The Motley Fool Australia has recommended Australian Ethical Investment Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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