What happened?
The Australian Ethical Investment Ltd (ASX: AEF) share price has surged by more than 5% today. The fund manager updated its earnings guidance after better than expected returns in its Emerging Companies Fund has resulted in a performance fee.
Australian Ethical Investment advised that its Emerging Companies Fund returned almost 14%, after fees, for wholesale investors (investments over $25,000). This is compared to its benchmark index, S&P ASX Small Industrials, which returned negative 7.4%
As a result, a performance fee of $3.64 million, calculated as 20% of the fund's one-year outperformance over its benchmark, was earned by Australian Ethical Investment. The performance fee and a proportionate increase in the contribution to the Australian Ethical Foundation adds to the expected underlying profit before tax (UPAT) that was announced on 22 June 2020.
The revised UPAT for FY2020 is now expected to be between $9 million and $9.5 million, which is an increase of over 40% from FY2019.
What does Australian Ethical Investment do?
Australian Ethical Investment provides investors an opportunity to invest in products that align with their values and provide competitive returns. Its investments are guided by the Australian Ethical Charter and it structures its investing on three pillars, which are caring for the planet, people and animals.
Australian Ethical Investment currently has $3.92 billion in funds under management as of 31 May 2020 and a market cap sitting over $700 million.
The Australian Ethical share price has had a storming run from its $2 lows in mid-March up to its all-time highs of $9 in mid-June. The share price has since dropped away, but it is still up over 200% on its lows this year and currently sits at $6.68 per share.
