Propagation would help funds minimise tax

22 November 2011
| By Chris Kennedy |
image
image
expand image

Superannuation funds, government funds and multi-mandate managers may be missing out on tax efficiencies, according to DST Global Solutions.

Tax parcel optimisation is a process which allows asset managers and asset owners to reduce tax through appropriate parcel selection when selling shares.

“Tax benefits should be considered alongside other fundamentals and analysis that managers examine prior to trading,” said David Rhind, DST Global Solutions regional solutions head.

“However, delivery of timely and meaningful tax parcel information across managers in a fund, whilst retaining necessary privacy, is a hurdle that the industry needs to overcome,” he said.

For the fund to improve post-tax performance, the pre-trade analysis has to be undertaken at the fund level and be part of a custodian’s standard offering to their clients. To date however, custodians have been offering this service known as ‘propagation’ on a fee-for-service basis as opposed to part of their standard offering, he said.

“With more sophisticated systems, investment managers and asset owners are starting to consider the advantages of tax parcel optimisation services.

“Tax parcel optimisation can be used in both rising and falling markets, resulting in either current or future benefits.”

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest developments in Super Review! Anytime, Anywhere!

Grant Banner

From my perspective, 40- 50% of people are likely going to be deeply unhappy about how long they actually live. ...

1 year 4 months ago
Kevin Gorman

Super director remuneration ...

1 year 4 months ago
Anthony Asher

No doubt true, but most of it is still because over 45’s have been upgrading their houses with 30 year mortgages. Money ...

1 year 4 months ago

Future Group is set to take on nearly $1 billion in funds under management (FUM) and welcome more than 100,000 new members following two significant successor fund transf...

2 days 7 hours ago

The International Monetary Fund (IMF) has issued a sobering assessment of the global economic landscape in its latest World Economic Outlook, dramatically revised after D...

2 days 9 hours ago

Growth from the listed company’s key businesses has propelled Generational Development Group to new milestones in the three months to 31 March....

2 days 9 hours ago

TOP PERFORMING FUNDS

ACS FIXED INT - AUSTRALIA/GLOBAL BOND