ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. Australian Ethical Investment's annualized return on invested capital (ROIC %) for the quarter that ended in Dec. 2025 was 100.46%.
As of today (2026-06-24), Australian Ethical Investment's WACC % is 11.48%. Australian Ethical Investment's ROIC % is 86.11% (calculated using TTM income statement data).
Australian Ethical Investment generates higher returns on investment than it costs the company to raise the capital needed for that investment. It is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases.
Australian Ethical Investment (ASX:AEF) ROIC % Explanation
ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. The reason book values of debt and equity are used is because the book values are the capital the company received when issuing the debt or receiving the equity investments.
There are four key components to this definition. The first is the use of operating income or EBIT rather than net income in the numerator. The second is the tax adjustment to this operating income or EBIT, computed as a hypothetical tax based on an effective or marginal tax rate. The third is the use of book values for invested capital, rather than market values. The final is the timing difference; the capital invested is from the end of the prior year whereas the operating income or EBIT is the current year's number.
Why is ROIC % important?
Because it costs money to raise capital. A firm that generates higher returns on investment than it costs the company to raise the capital needed for that investment is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases, whereas a firm that earns returns that do not match up to its cost of capital will destroy value as it grows.
As of today, Australian Ethical Investment's WACC % is 11.48%. Australian Ethical Investment's ROIC % is 86.11% (calculated using TTM income statement data).
Australian Ethical Investment generates higher returns on investment than it costs the company to raise the capital needed for that investment. It is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases.
Be Aware
Like ROE % and ROA %, ROIC % is calculated with only 12 months of data. Fluctuations in the company's earnings or business cycles can affect the ratio drastically. It is important to look at the ratio from a long term perspective.
Australian Ethical Investment ROIC % Related Terms
Australian Ethical Investment ROIC % Historical Data
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
For the Asset Management subindustry, Australian Ethical Investment's ROIC %, along with its competitors' market caps and ROIC % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Australian Ethical Investment ROIC % vs Asset Management Industry
For the Asset Management industry and Financial Services sector, Australian Ethical Investment's ROIC % distribution charts can be found below:
* The bar in red indicates where Australian Ethical Investment's ROIC % falls into.
Note:
The Operating Income data used here is two times the semi-annual (Dec. 2025) data.
The tax rate is limited to between 0% and 100%.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Australian Ethical Investment (ASX:AEF) has a ROIC % of 100.46% as of Dec. 2025. Return on invested capital is the ratio of current-period net income to average two-period invested capital. View historical data on Australian Ethical Investment and its competitors.
Is Australian Ethical Investment's ROIC % too high?
Australian Ethical Investment's current ROIC % is 100.46%. The Asset Management industry median ROIC % is 1.18. Australian Ethical Investment's value of 100.46% is 8413.6% above this industry median. Overall, Australian Ethical Investment has a GF Score™ of 98/100 and is considered Possible Value Trap, reflecting its overall financial health beyond just this single metric.
How does Australian Ethical Investment's ROIC % compare to BLK and BX?
Australian Ethical Investment's ROIC % of 100.46% can be compared against companies in the Asset Management industry. The industry median ROIC % is 1.18. Australian Ethical Investment's value of 100.46% is 8413.6% above this benchmark. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good ROIC % for an Asset Management company?
The median ROIC % among Asset Management companies is 1.18, based on 709 companies in the industry. Companies in the top quartile (top 25%) have a ROIC % significantly above this median, while those in the bottom quartile fall well below. However, ROIC % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Australian Ethical Investment's current ROIC % of 100.46% is 8413.6% above the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high ROIC % mean?
A high ROIC % can signal that a stock is expensive relative to its fundamentals. Return on invested capital is the ratio of current-period net income to average two-period invested capital. View historical data on Australian Ethical Investment and its competitors. For the Asset Management industry, the median ROIC % is 1.18 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Australian Ethical Investment's current ROIC % is 100.46%. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Australian Ethical Investment stock overvalued right now?
Based on GuruFocus' analysis, Australian Ethical Investment (ASX:AEF) is currently considered Possible Value Trap. The stock's GF Value™ is A$6.36, compared to a current price of A$4.05 — trading 36.3% below its estimated fair value. The current ROIC % is 100.46% and 8413.6% above the Asset Management industry median of 1.18. Australian Ethical Investment's overall GF Score™ is 98/100 with 2 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is ROIC % calculated?
ROIC % is calculated from a company's financial statements. For Australian Ethical Investment (ASX:AEF), the current ROIC % is 100.46% as of Dec. 2025. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Australian Ethical Investment (ASX:AEF) Overvalued in 2026?
Based on GuruFocus' analysis, Australian Ethical Investment stock appears to be undervalued.
The current stock price of A$4.05 is trading 36.3% below its estimated GF Value™ of A$6.36.
GuruFocus considers Australian Ethical Investment to be Possible Value Trap.
Key valuation signals for ASX:AEF:
ROIC %: 100.46%
GF Value™: A$6.36 vs. price of A$4.05 (36.3% below fair value)
Industry Position: 8413.6% above the Asset Management median
No single metric tells the full story. See the ASX:AEF stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Australian Ethical Investment Business Description
Australian Ethical Investment Ltd is an Australian-based company engaged in the operating segment of Funds Management. The company is involved in acting as the responsible entity for a range of public offer ethically managed investment schemes and acting as the Trustee of the Australian Ethical Retail Superannuation Fund (Super Fund). The various products offered by the company are Super, Managed funds, ETFs, Insurance, and Pension.
98GF Score
Get the complete analysis for ASX:AEF
ROIC % is just one metric. See GF Value™, 30-year financials, guru trades, warning signs, and more.
Quick Browse
Personalize
Premium Gurus 
Create New Portfolio
ASX:AEF has been successfully added to your 
