Warakirri Australian Equities After-tax Performance Survey
Warakirri has continued its history of innovation by releasing an after-tax performance survey, providing accurate after-tax performance numbers for many of Australia's leading Australian equities managers – the first of its kind in Australia.
For more information please click on the link below.
Warakirri Australian Equities After-tax Performance Survey
To subscribe to the Survey, please contact David Elliott on 03 8613 1111 or david.elliott@warakirri.com.au If you are a manager interested in participating in the Survey, please contact Andrew Nolan on 03 8613 1111 or andrew.nolan@warakirri.com.au
After-Tax Performance Analytics
Recommended Objective
To encourage manager behaviour consistent with maximising after-tax Australian equity returns for investors
Solution
After-tax measurement of Australian equity performance
The Cooper Review
"The relatively low tax rate on superannuation generally appears to cause trustees and managers to believe that the potential leakage from lack of careful tax management is minimal, but in a large super fund, even a few basis points can mean millions of dollars."
"...trustees should have express regard for taxation issues at all stages of the investment process: strategy, implementation and monitoring."
"...managers should manage portfolios in a tax-aware manner for the benefit of investors."
"...the Panel has concluded that super fund tax issues are not being given adequate priority by the industry."
Warakirri After-Tax Performance Analytics
Warakirri's After-Tax Performance Analytics aims to improve after-tax return outcomes and align manager behaviour with the interests of superannuation fund members. This is achieved by giving managers access to the information, measurement and education they require to assist them to deliver the best possible after-tax return outcome for fund members.
Australian equities provides the biggest opportunity for after-tax management. This is so because of the following factors:
- Australian equities typically make up the largest asset class in an Australian superannuation fund's portfolio;
- Australian equities are actively traded (CGT discount for securities held for greater than 12 months); and
- Australian equities provide franking credits.
These factors can have a significant impact on after-tax performance and should be taken into account during a manager's investment decision-making process.
A simple comparison of the traditional before tax approach versus Warakirri's after-tax approach highlights the following differences:
|
|
Typical Approach |
Warakirri's Solution |
|
Focus on maximising after-tax returns |
NO |
YES |
|
After-tax performance can be assessed versus after-tax benchmarks |
NO |
YES |
|
Encourages behaviour that is consistent with the tax status of a fund's members |
NO |
YES |
|
Managers aware of tax lots of companies held in portfolios |
NO |
YES |
|
Performance fees paid on an accurate basis – from a member's perspective |
NO |
YES |
For further information on Warakirri's After-Tax Performance Analytics, please contact us.
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