Exchange Traded Funds (ETF) have seen huge adoption over the past decade, with the bulk of funds going into passive funds, that track an index, and have low fees. 

Managed funds, on the other hand, suffer from having more onerous application processes, higher minimum investment levels, and in many cases, they’re only open to sophisticated investors. 

Australian Ethical, an ESG/ethical super fund, has made the move to offer an ETF option for its High-Conviction Fund. The shift aims to make it easier for retail investors to access their more exotic offerings, which were previously only available to sophisticated investors. 

“As the ETF market continues to grow, we expect investors will increasingly look towards ethical actively managed ETFs for their portfolios. Investing through an ETF allows investors to invest in a wholesale fund without needing to meet a managed fund minimum of $25,000. There is planning under way for another Active ETF later in the year as well to broaden our product offerings in the ETF market.” Says Sandip Pinnawalage, Head of Product at Australian Ethical.

The ETF (ticker: AEAE) went live today on the Cboe stock exchange (previously Chi-X), and offers exposure to 25 to 30 stocks, sourced from the ASX300, as well as a small number form New Zealand. 

All stocks have been analysed in line with their Ethical Charter, and Sandip explained that the fund has access to the firm’s advocacy work that covers a range of key issues. 

Top holdings include: Bank of Queensland, Coles, Westpac and Telstra. 

“Our investment team leverages over 35 years of proven track record and expertise as Australia’s original ethical investor. We are extremely proud of having some of the highest standards in the market for both our ethical portfolio and financial returns. Democratising access to ethical investment, through the release of products such as this ETF, is a very important part of our strategy.” Says John McMurdo, CEO of Australia Ethical.

Australian Ethical has seen strong growth in recent years, and at the end of 2021 they had funds under management of $6.9 billion. 

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