POWERED BY MOMENTUM MEDIA
Propagation would help funds minimise tax
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.”
Recommended for you
Super funds had a “tremendous month” in November, according to new data.
Australia faces a decade of deficits, with the sum of deficits over the next four years expected to overshoot forecasts by $21.8 billion.
APRA has raised an alarm about gaps in how superannuation trustees are managing the risks associated with unlisted assets, after releasing the findings of its latest review.
Compared to how funds were allocated to March this year, industry super funds have slightly decreased their allocation to infrastructure in the six months to September – dropping from 11 per cent to 10.6 per cent, according to the latest APRA data.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
Spire Oaktree Opportunities XI Second Close
61.07 3 y p.a(%)
2
Spire Oaktree Opportunities XI First Close USD
59.21 3 y p.a(%)
3
DomaCom Lot 21 Chellaston Road Munno Para West SA 5115 Australia
31.73 3 y p.a(%)
4
Fidante Credit Suisse Global Private Equity
30.15 3 y p.a(%)
5
DomaCom 4/27 Crombie Avenue Bundall QLD 4217 Australia
26.71 3 y p.a(%)
