31 March 2025
Australian Ethical is one of Australia's leading ethical fund managers. By investing responsibly in well-managed ethical companies, we deliver competitive financial performance to our clients and positive change to society and the environment. Since our inception in 1986, our Ethical Charter has guided all investment decisions and underpinned our business practices. Every year 10 per cent of our profits* are distributed to charitable organisations and social impact initiatives through The Australian Ethical Foundation.
To provide exposure to primarily Australian fixed interest securities that meet our Ethical Criteria, generating income with some capital growth potential over the medium to long term. The Fund aims to track the return of the Bloomberg AusBond Composite 0+ years Index before taking into account management costs over a 3 year period.
The opportunity to invest in a diversified portfolio of interest-bearing investments generating income. The Fund is invested in primarily fixed rate bonds, from issuers such as the Commonwealth and State Governments, banks and other corporate issuers that meet the Australian Ethical Charter.
| 1m | 3m | 6m | 1y | 3y | 5y | 10y | Since inception | |
|---|---|---|---|---|---|---|---|---|
| Fund | 0.2% | 1.3% | 1.0% | 3.1% | 1.5% | -0.8% | 1.4% | 2.3% |
| Bloomberg AusBond Composite Bond Index (0+Y) | 0.2% | 1.3% | 1.0% | 3.2% | 1.7% | -0.5% | 1.8% | 2.7% |
| CY 2024 | CY 2023 | CY 2022 | CY 2021 | CY 2020 | |
|---|---|---|---|---|---|
| Fund | 2.7% | 4.7% | -10.0% | -3.3% | 4.2% |
| Bloomberg AusBond Composite Bond Index (0+Y) | 2.9% | 5.1% | -9.7% | -2.9% | 4.5% |
Portfolio diversification: Diversify your portfolio by investing in companies and sectors not well covered by other fund managers and brokers.
Help build a better world: Invest in the new, low‐carbon economy, fund medical and technology breakthroughs, efficient transport and more.
Promote human rights: We strive to avoid any investment in companies involved in the poor treatment of asylum seekers or the exploitation of workers through poor working conditions.
Fixed income markets were largely stable through the March quarter. The Australian Ethical Fixed Interest Fund (Wholesale) returned +1.3% for the quarter, in-line with the benchmark 1.3% return.
Australian 10-year yields ended the quarter just 0.02% higher. Yields initially fell in January and February on expectations of further central bank easing. The Fed held rates steady during the quarter, but markets increased expectations for three cuts in 2025. In February, the RBA cut rates by 0.25%, its first move since November 2023, but signalled limited room for further easing by forecasting trimmed mean inflation at 2.7%, above its mid-target.
Late in the quarter, uncertainty rose around global trade policy, particularly US tariff plans under President Trump. This outlook led funds with duration exposure—such as the Altius Sustainable Bond Fund, Australian Ethical Fixed Interest Fund, and Altius Green Bond Fund—to modestly increase duration positions in anticipation of weaker economic activity.