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 holding growth assets. The Retail Fund aims to achieve returns 4.00% above inflation after management costs over a 10 year period. The Wholesale Fund aims to achieve returns 4.50% above inflation after management costs over a 10 year period.
The Fund invests primarily in growth assets such as Australian and international shares, unlisted property and alternative assets.
| 1m | 3m | 6m | 1y | 3y | 5y | 10y | Since inception | |
|---|---|---|---|---|---|---|---|---|
| Fund | -0.1% | 3.7% | 10.5% | 11.9% | 14.2% | 11.6% | 9.3% | 9.4% |
| Benchmark | 0.5% | 4.5% | 11.3% | 14.4% | 15.8% | 13.4% | 10.3% | 9.6% |
| CY 2024 | CY 2023 | CY 2022 | CY 2021 | CY 2020 | |
|---|---|---|---|---|---|
| Fund | 16.5% | 14.0% | -13.4% | 22.0% | 7.1% |
| Benchmark | 15.9% | 14.5% | -5.0% | 21.1% | 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.
Defensive-focused funds performed slightly better and in line with benchmarks, while growth-focused funds slightly underperformed. This was in large part due to the relative outperformance of defensive asset classes, like International Fixed Income against its benchmark, compared to underperformance from Domestic and International Equities allocations against their benchmark.
In local currency terms, global equity markets delivered another impressive quarter (MSCI ACWI +8.0%). US markets performed well thanks to somewhat resilient macroeconomic data, and a September rate cut (S&P 500 +8.0%). Artificial intelligence optimism drove gains in not only in the US but Asia as well, with the likes of Alibaba more than doubling in share price (CSI 300 +19%). The United Kingdom recorded solid gains across various sectors like Financials, Healthcare, and Materials, while broader European markets trailed (FTSE 100 +7.5%, MSCI Europe +3.9%), due to fiscal concerns causing European yields to spike e.g. 30-year German and Italian government bond yields hit their highest in more than a decade. The Funds’ own active tilt to Asian equities was a beneficiary of the broader rally in Asia, however this was offset by the Funds’ positioning in Information Technology and its lack of exposure to the Energy and Materials sector which also posted significant gains.
Domestically, the local equity market followed a similar theme, with Materials (and to a lesser extent Energy) being a detractor to relative performance (S&P ASX 300 +5.0%). Gold miners continued their run, with the price of gold continuing to break new records. Mitigating this, however, was renewed interest in small cap companies which benefited the Funds’ active domestic equities strategies in the quarter. Small caps broadly outperformed their large cap peers as investors began to refocus on areas of the market where valuations remain attractive.
Central banks globally are now over a year into their cutting cycles and as such the last quarter saw more muted monetary policy activity. Europe was largely unchanged (apart from the UK with one cut), while dollar economies like US, Australia and Canada all pushed out one rate cut. In tandem with equities, corporate bonds performed well, outperforming government bonds, while medium-term bonds (5-10yr) outperformed longer-term bonds (+10yrs), due to both fiscal and political uncertainty globally. The Funds’ overweight international corporate bonds as well as active duration positioning all added relative value over the quarter.