Responsible investing should be implemented in a tax-managed way for superannuation funds, according to Parametric.
In its research paper, ‘Tax-managing a Responsible Investing Portfolio’ the firm said tax-managed responsible investing sat within the regulatory framework of super funds and the responsible idea of funds managing their stakeholders, including fund members and the tax office.
“The principles embody our description of a tax equilibrium superannuation funds must strike between their ‘responsible’ tax citizenship obligations and the very real stake fund members have in funds managing the tax implications of their investment decisions well,” it said.
“The opportunity is for superannuation funds to bring a neat, holistic coherence to their own two-sided (tax) stakeholder management as funds holds companies to account around the same principles.”
Parametric noted that while the risk was rewarded in terms of investment performance, the year-on-year journey could be bumpy.
“For a superannuation fund prepared to take on active risk to implement Responsible Investing, it seems an easy and useful extension to add a much smaller risk budget to pursue Responsible Investing in a tax-managed way, with results that are smoother, measurable and more immediately harvestable,” it said.
Australia is becoming increasingly recognised as an attractive investment opportunity against global counterparts, recent analysis has found.
Pension funds in Australia and the UK are embracing recent developments that will facilitate the deployment of superannuation capital toward the energy transition in both countries.
With the Goldman Sachs’ S&P 500 long-term outlook occupying headlines over recent days, an Aussie economist has weighed in, noting that, while difficult to time, the US market is poised for a downturn.
The appetite for digital infrastructure has grown significantly among Australia’s superannuation funds, with assets like data centres, fibre optic networks, and telecommunications now viewed as strategic investments in their portfolios.