Australian Ethical CEO John McMurdo. Source: Australian Ethical
Australian Ethical CEO John McMurdo. Source: Australian Ethical
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  • Investment mainstay Australian Ethical (AEF) is forecasting increased profits in its upcoming full year report
  • AEF is expecting to pull in between $8.8 million and $9.3 million in underlying profit after tax before performance fees, a 29 per cent jump compared to last year’s $7.0 million
  • Within the guidance, the company also outlined plans to lower fees, which are expected to bring its average revenue margin down by around 0.04 per cent per annum
  • The news triggered a mixed response from AEF investors, pulling the fund manager’s share price down as much as 3.5 per cent at open this morning
  • Shares are currently 0.10 per cent down, trading at $9.70 apiece

Investment mainstay Australian Ethical (AEF) is forecasting increased profits in its upcoming full year report, prompting a mixed response from its shareholders.

AEF, the notable trustee of the Australian Retail Super Fund, is expecting to pull in between $8.8 million and $9.3 million in underlying profit after tax before performance fees. This figure is up around 29 per cent compared to last year’s $7.0 million.

Funds under management, which hit a milestone $5 billion earlier this year, have also continued to rise to $5.68 billion at the end of April, a 40 per cent jump since the end June last year.

The earnings forecast comes alongside new plans to lower fees in an attempt to make its fund offerings more competitive. The fee reductions will come into effect at the start of next month and are expected to pull AEF’s average revenue margin down by around 0.04 per cent per annum.

The news appears to have garnered a mixed reception from AEF investors. The fund manager dropped as much as 3.5 per cent at open this morning. Shares bounced back to trade at a slight premium to yesterday’s closing price then fell by a smaller percentage in the afternoon.

The mixed response is perhaps unsurprising given AEF shares have more than doubled since January to now trade at record-high levels, necessitating a compelling full-year report to justify recent hikes and investor expectations.

Commenting on the earnings forecast and the recent influx of investor interest, AEF CEO John McMurdo said the company expected higher profitability in the medium to long term.

“We are seeing unprecedented interest and demand for ethical investing as Australians open their eyes to how out products deliver attractive investment returns and make a positive difference in the world,” he said.

“Looking ahead we expect this growth in ethical investing to accelerate.”

AEF shares are currently 0.10 per cent down, trading at $9.79 apiece at 12:05 AEST.

AEF by the numbers
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