AEF - Back on the up?, page-48

When AEF was above $12 I warned holders that they were in for a severe fall when the equity markets turned as AEF was significantly overvalued & had no significant competitive advantage over any other fund manager.

The response I got at the time was that AEF was unique, had strong growth track record etc etc.

Instead of looking at the fundamentals, people were blinded by the ESG credentials of AEF.

AEF is no different from any other fund manager that specialises in a particular area.

AEF's performance is driven by inflows & underlying investment performance, both of which are largely driven by the fund managers/analysts & their ability to pick winners. Fund managers & analysts who can move wherever they like & will do wherever they can earn the most money.

So although it's nice to invest in an ethic fund to give you a warm & fuzzy feeling about doing your bit for the planet, don't forget the fundamentals.