• Positive retail and wholesale net flows offset by negative investment performance and institutional outflow
• Transition to new administration platform GROW delivers cost efficiencies and improved member experience
• Strengthened executive team with new COO and CRO hires

Australian Ethical Investment Ltd reported $14.08 billion in funds under management (FUM) as at 31 December 2025, representing a 1% decrease over the quarter. The movement in FUM was driven by positive retail and wholesale net flows, which were offset by negative investment performance and an inorganic institutional outflow during the period. Managing Director John McMurdo noted that despite challenging investment market conditions, it has been a pleasing first half of the year. On the superannuation side, changes to the company's digital marketing capability delivered an increase in new member joins in Q2. With the completion of the transition to the GROW administration platform, Australian Ethical is realizing cost efficiencies and can focus on uplifting the member experience to support continued growth. The company has also built a strong middle market pipeline for its investment products, with net flows expected in the second half of FY26. Following the sale of its banking business to Bank Australia, a $0.25 billion low-margin institutional mandate has been redeemed and transferred, which will not impact profit as the small annual revenue reduction will be offset by planned simplification and cost savings.Australian Ethical continues to be recognized for its leadership in ethical investing, winning Money Magazine's 2026 Best of the Best Awards for best ESG Superannuation Product and Best ESG Pension Product. The company remains on track with the implementation of the Charles River platform across its investment portfolio, a significant step forward in building an institutional-grade investment platform.The strength of the brand and business outlook has enabled Australian Ethical to attract high-calibre talent to its executive team, with the appointments of Anthony Lane as COO and Natalie Kooyman as CRO.

The solid pipeline in newer channels, as well as upcoming product innovation, positions Australian Ethical well for ongoing success and continued growth into the second half of the year.