Weathering uncertainty & delivering resilient performance
The financial landscape in FY23 saw unparalleled volatility, particularly in fixed income and equity markets, and ethical investment portfolios were not immune to the challenges. As energy market disruption sent shockwaves through markets in early 2022, inflation and interest rate expectations surged and small and micro cap stock valuations came under pressure, while Resources and Energy stocks (underweight sectors for our ethically-screened Funds) performed strongly; causing headwinds for our funds’ performance in the first half of the financial year.
But we held firm to our ethical investment beliefs and approach that has steered us through many cycles and market volatility since our inception 37 years ago. As market conditions settled, a more optimistic outlook for inflation and interest rates emerged, allowing fundamentals to once again drive performance. Earnings-focused companies experienced a well-deserved upswing, the impact on resource prices from the Ukraine war subsided, and our ethically-screened portfolios (and the stocks underpinning them) performed much better in the latter half of the financial year.
Our rigorous ethical assessment and disciplined, fundamental investment analysis proved its mettle in FY23 – navigating these uncertainties and delivering robust performance in the second half of the financial year - and serving as strong validation of the enduring value and resilience of our investment approach.
Competitive ethical investment returns in FY23 and since inception
In the face of these unprecedented market conditions, a number of our managed funds, along with our SMA Portfolio, delivered healthy returns over the financial year and have each outperformed their benchmark since inception.
Australian Shares Fund (Wholesale)
13.4% p.a.
For the year ended 30 June 2023*
12.5% p.a.
Since inception vs. benchmark return of 9.5%
Emerging Companies Fund (Wholesale)
9.2% p.a.
For the year ended 30 June 2023*
12.4% p.a.
Since inception vs. benchmark return of 5.8%
Balanced Fund (Wholesale)
10.4% p.a.
For the year ended 30 June 2023*
7.1% p.a.
Since inception vs. benchmark return of 6.9%
High Growth Fund (Wholesale)
15.3% p.a.
For the year ended 30 June 2023*
11.5% p.a.
Since inception vs. benchmark return of 10.8%
Australian Shares Portfolio (SMA)
16.5% p.a.
For the year ended 30 June 2023*
13.8% p.a.
Since inception vs. benchmark return of 13.1%
Past performance is not a reliable indicator of future performance. Australian Ethical offers a diverse range of managed funds depending on your clients’ investment objective, timeframe and risk profile. See our managed funds performance.
Looking ahead
We’re committed to balancing ethics and professional investment management to deliver long-term returns to investors. We continue to see promising opportunities in the Healthcare, Renewables, and Information Technology sectors. These sectors have proven to be valuable long-term investments, and with many small caps remaining undervalued, we believe our portfolios are well-positioned for the year ahead. As the financial landscape continues to evolve, our ethical investment approach remains a beacon of stability, guiding investors towards a brighter and more sustainable future.
We’re committed to balancing ethics and professional investment management to deliver long-term returns to investors. We continue to see promising opportunities in the Healthcare, Renewables, and Information Technology sectors.
FY23 in review
Check out our latest managed fund performance, along with investment commentary and market insights from our expert team.
*Total returns are calculated using the sell (exit) price, net of management fees and gross of tax as if distributions of income have been reinvested at the actual distribution reinvestment price. The actual returns received by an investor will depend on the timing, buy and exit prices of individual transactions. Return of capital and the performance of your investment in the fund are not guaranteed. Past performance is not a reliable indicator of future performance. Figures showing a period of less than one year have not been adjusted to show an annual total return. Figures for periods of greater than one year are on a per annum compound basis. The current benchmark may not have been the benchmark over all periods shown in this email. The calculation of the benchmark performance links the performance of previous benchmarks and the current benchmark over the relevant time periods.
Australian Shares Fund (Wholesale) benchmark is a composite S&P/ASX Small Industrials Accumulations Index till 12 August 2019 and S&P/ASX 300 Accumulation Index thereafter. Inception date: 23/01/2012.
Emerging Companies Fund (Wholesale) benchmark is the S&P ASX Small Industrials Index. Inception date: 30/06/2015.
Balanced Fund (Wholesale) benchmark is the Australian Ethical Balanced Composite. Inception date: 28/03/2018.
High Growth Fund (Wholesale) benchmark is the Australian Ethical High Growth Composite. Inception date: 13/01.2012.
Australian Shares SMA Portfolio benchmark is the S&P/ASX 200 Accumulation Index. Inception date: 16/04/2020. Source: Praemium portal. Our SMA portfolio is available for investment via Praemium, Netwealth and HUB24.
This article may contain material provided by third parties derived from sources believed to be accurate at its issue date. While such material is published with necessary permission, Australian Ethical accepts no responsibility for the accuracy or completeness of, nor does it endorse any such third party material. To the maximum extent permitted by law, we intend by this notice to exclude liability for this third party material.
This is general information only and is not intended to provide you with financial advice or take into account your individual investment objectives, financial situation or needs. Before acting on it, consider its appropriateness to your circumstances and read the Financial Services Guide, the Product Disclosure Statement and the Target Market Determination relevant to the product which is available on our website.
Interests in the Australian Ethical Retail Superannuation Fund (ABN 49 633 667 743, USI/SPIN AET0100AU) are offered by Australian Ethical Investment Limited (ABN 47 003 188 930, AFSL 229949) and issued by the Trustee of the Fund, Australian Ethical Superannuation Pty Limited (ABN 43 079 259 733, RSEL L0001441, AFSL 526 055). Interests in the Australian Ethical Managed Funds are issued by Australian Ethical Investment Ltd (ABN 47 003 188 930, AFSL 229949).
