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 long-term growth through investment in listed companies on Australian and international stock exchanges that meet our Ethical Criteria. The Fund aims to track the blended index, before taking into account fees and expenses over a 7 year period.
The opportunity to invest in a diversified share portfolio of Australian and international companies on the basis of their social, environmental and financial credentials. Generally, all Australian investments will have a market capitalisation greater than the 200th ranked stock listed on the ASX. The Fund has a low level of turnover and aims to be fully invested at all times.
| 1m | 3m | 6m | 1y | 3y | 5y | 10y | Since inception | |
|---|---|---|---|---|---|---|---|---|
| Fund | -4.2% | -3.2% | -0.2% | 4.0% | 5.7% | 12.0% | 7.1% | 8.2% |
| Benchmark | - | 1.0% | 3.4% | 9.2% | 9.3% | 14.8% | 8.4% | 8.5% |
| CY 2024 | CY 2023 | CY 2022 | CY 2021 | CY 2020 | |
|---|---|---|---|---|---|
| Fund | 16.9% | 14.6% | -14.4% | 21.8% | 7.1% |
| Benchmark | 16.3% | 15.1% | -3.9% | 20.3% | 2.7% |
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.
Global and Australian equity markets had a turbulent start to 2025, with volatility rising following President Trump’s election win. Initial optimism around deregulation and tax cuts drove markets higher, but gains were reversed as aggressive tariff policies sparked inflation concerns and fears of slowing growth.
The S&P/ASX 300 and MSCI World ex-Australia indices peaked in mid-February before falling on renewed trade uncertainty. The Fund’s benchmark fell -2.73% over the March quarter. The Diversified Shares Fund (Wholesale) returned -3.10% net of fees, while the Retail class returned -3.20%.
Globally, investors rotated out of overvalued US equities into European and Asian markets, which outperformed on a relative basis. Former high-flying themes such as AI underperformed, weighed down by emerging global competition (e.g. DeepSeek) and uncertainty around returns from major capex spenders. Crowded exposures to Momentum and Size also underperformed, while Defensive and Low Volatility factors gained traction.
Domestically, the Fund’s underweight to Materials detracted, as non-held within gold miners outperformed amid geopolitical tension and rising gold prices. Technology also lagged on risk-off sentiment. In contrast, the overweight to Communication Services contributed positively, driven by Telstra’s dividend uplift and share buyback. Domain was another contributor, with the Fund exiting its position after a takeover bid. The underweight to Consumer Discretionary also added value amid weakening sentiment.
Internationally, the overweight to Information Technology detracted, with holdings impacted by sharp selloffs in names like NVIDIA (-20%) and Microsoft (-11%) due to competitive and macroeconomic concerns. Conversely, the underweight to Consumer Discretionary helped, with stocks like Amazon (not held) falling on tariff-related pressures.