The Australian Ethical Investment Ltd (ASX: AEF) share price rose as high as $8.64 this morning before retreating to its current price of $7.88, down 4.95% for the session.
This comes after the company this morning announced an earnings guidance for FY21.
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What did Australian Ethical announce?
The company advised that its Emerging Companies Fund has outperformed its benchmark, the S&P ASX Industrials Index over the last 12 months.
In today's statement, Australian Ethical was pleased to reveal that the Emerging Companies Fund returned 51.1% after fees (including performance fees) for wholesale investors in FY21, compared to the benchmark which returned 33%.
Australian Ethical will earn a performance fee of 20% of the Fund's one-year outperformance over the benchmark.
According to the announcement, this translates to a performance fee of $2.89 million.
The performance fee will result in a material lift in the company's underlying profit after tax (UPAT), with new guidance between $10.7 million and $11.2 million for FY21. This figure represents a midpoint increase of 18% against the prior corresponding period.
Australian Ethical has 8 managed fund options for retail and wholesale investors. The Emerging Companies fund is classified as the most aggressive option with the highest risk/reward according to the company.
Australian Ethical share price in 2021
The Australian Ethical share price has been a strong performer from both year-to-date and FY21 perspectives, increasing around 60% and 26%, respectively.
Australian Ethical previously upgraded its earnings back on 27 May, where UPAT guidance was upgraded to $8.8 million – $9.3 million for FY21. Despite the positive announcement, the company's shares would slide 3.37% on the day to $9.45.
By 10 June, Australian Ethical shares would have tumbled 27% to $7.13 since the earnings upgrade announcement.
Despite a rocky start to June, the Australian Ethical share price has bounced off lows and currently trading at $7.88.
