30 September 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 accompanied by high levels of risk through investment in overseas companies. The Fund aims to track MSCI World Index ex Australia (AUD) Net, before taking into account fees and expenses over a 3 year period.
The opportunity to invest in a diversified portfolio of companies listed on international stock exchanges, which meet the Australian Ethical Charter.
| 1m | 3m | 6m | 1y | 3y | 5y | 10y | Since inception | |
|---|---|---|---|---|---|---|---|---|
| Fund | 1.2% | 5.0% | 10.7% | 19.5% | 21.2% | 14.7% | 11.1% | 6.0% |
| Benchmark** | 2.0% | 6.2% | 12.7% | 23.6% | 23.2% | 16.8% | 13.7% | 9.7% |
| CY 2024 | CY 2023 | CY 2022 | CY 2021 | CY 2020 | |
|---|---|---|---|---|---|
| Fund | 27.6% | 25.2% | -16.5% | 29.1% | 2.9% |
| Benchmark** | 31.8% | 23.9% | -12.1% | 30.1% | 6.3% |
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 equity markets delivered another strong quarter, with the MSCI World Ex Australia Index rising 6.1%, outperforming the ASX300 (+5.0%). US equities led gains, supported by resilient earnings, robust consumer demand, and accelerating AI adoption. Despite persistent geopolitical and economic headwinds, investor sentiment remained constructive, buoyed by expectations of rate cuts and deregulation.
The defining feature of the quarter was the remarkable calm in markets. Volatility remained low even as uncertainty around inflation, economic growth, and geopolitical tensions—including potential government shutdowns—grew. Equity performance appeared driven by a singular expectation: that the Federal Reserve would begin easing rates, regardless of whether inflation had been fully subdued. This narrative supported strength across global developed markets.
Momentum factors continued to dominate market leadership. AI-related stocks, now comprising over 40% of the S&P 500’s market cap, were key contributors to both performance and risk. However, elevated valuations and crowding in high-beta names prompted caution. Under the surface, sector and factor rotations, along with low asset correlations, created pockets of volatility.
The International Shares Fund (Retail) (the “Fund”) returned 5.0% net of fees over the quarter. At a sector level, stock selection in Information Technology and Financials negatively impacted relative performance, while our underweight exposure to Consumer Staples and our overweight exposure to Communication Services assisted performance. The performance of the “Magnificent 7” was mixed with Alphabet, Apple, NVIDIA and Tesla (not held) outperforming the benchmark, while Meta, Microsoft and Amazon (not held) posted below-benchmark returns. Alphabet’s share price rose 14% in September alone, and over 35% for the quarter overall, marking its best quarterly performance since 2005. The company’s share price surged due to strong earnings growth, momentum in AI products like Gemini, a favorable antitrust ruling, and increased investor returns through dividends and buybacks.