Australian Ethical Reports Q1 Funds Under Management Dip
The firm recorded a $70 million decrease in total funds as wholesale redemptions outweighed inflows.
Updated on Oct. 16, 2026 in Investing
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Australian Ethical saw its total funds under management slip to $14.43 billion in Q1 FY27, down from $14.5 billion at the end of FY26. The decline reflects $100 million in net outflows within the firm's investment business.
Why it matters
Challenging market conditions characterised by persistent inflationary pressures and higher interest rates have weighed on total assets. While superannuation net flows remained positive, the firm is navigating a period where wholesale redemptions currently exceed new investment gains.
Total funds under management reached $14.43 billion this quarter, a decrease from $14.5 billion at the end of FY26. The investment business recorded $100 million in net outflows, though these were partially offset by $130 million in superannuation net flows.
The players
Australian Ethical
This is an Australian investment manager that specialises in ethical and socially responsible investing across superannuation and managed funds.
Reichstein Foundation
This is a philanthropic organisation that acts as a founding investor for new financial products, including the recently launched balanced income fund.
The details
Despite the overall drop, Australian Ethical continues to expand its offerings, recently launching the Australian Ethical Balanced Income Fund with support from the Reichstein Foundation. The firm also anticipates bringing in additional middle-market clients in the coming months.
Timeline
The reporting of $14.5 billion in total funds occurred at the end of FY26.
The $70 million decrease in funds was recorded during Q1 FY27.
The firm expects to land further middle-market clients in early FY27.
Market Dynamics
This decline follows a pattern set by the 2023-2024 Australian inflationary interest rate cycle, where sustained high interest rates have pressured asset values across the financial services sector. The firm's ability to maintain growth relies on balancing these broader macroeconomic headwinds against its niche market performance.
Investors should note that while wholesale flows are currently negative, the firm maintains strong superannuation inflows which help stabilise overall assets. Those with exposure to the firm's managed products may see continued volatility until market interest rates stabilise.
The takeaway
Investors should keep an eye on how the firm manages its private market transaction pipeline, which targets deals between $25 million and $75 million. Diversifying across different product lines remains a key strategy for the firm to mitigate the impact of specific market-sector outflows.
What happens next
The firm is targeting the acquisition of additional middle-market clients in early FY27, which may influence future quarterly results.
Further reading
For more context on market movements, visit the Australia Investing section.
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