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After-tax investing for superannuation funds: What should managers manage?

Published on 01 Sep 15 by "TAXATION IN AUSTRALIA" JOURNAL ARTICLE

The transition from a pre-tax investment focus to a genuine after-tax investment focus is an important trend shaping the way large funds manage their investment portfolios. This creates opportunities for tax professionals to use their knowledge and skills to help superannuation funds deliver on their core mission, generating healthy investment returns for members. This article identifies some misunderstandings around the types of investment taxes funds are seeking to address as part of their investment strategy, and provides a model for understanding how these taxes can be effectively managed.

The article focuses in particular on the impact of capital gains tax on a large fund’s listed equities portfolio, which represents an average 46% of the fund’s invested capital. The article concludes by describing an emerging investment approach known as “centralised portfolio management”, which demonstrates how these insights can be implemented in an intelligent, methodical and practical way.

Author profile

Raewyn Williams CTA
Raewyn leads Parametric’s Australian Research efforts, working with Parametric’s Global Research, Product and Portfolio Management teams. She sets the Australian research agenda and ensures that Parametric Australia maintains a position of intellectual leadership in after-tax investing and implementation efficiency. Raewyn has had prior roles at Russell, QIC, Barclays Global Investors and KPMG. Raewyn was formerly a member of the Tax Institute Superannuation Committee and previously served on committees with FTSE, the FSC and ASFA. Raewyn graduated with Bachelors of Economics and Law from the University of Sydney, has a Graduate Diploma of Legal Practice from the College of Law, is a Graduate of the Australian Institute of Company Directors and is a Chartered Tax Adviser. Raewyn has completed the St James Ethics Centre’s Short Course for Good Leadership as Queensland’s nominated representative and is a signatory to the Banking and Finance Oath. Raewyn also serves with a number of not-for-profit entities, including as an elected Chair and Board member of the Conference Executive of Churches of Christ NSW (COCNSW), a member of the Investment Committee of COCNSW and a former committee member of Western District Joggers and Harriers and the Georges River Festival of the Feet. - Current at 05 August 2020
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