POWERED BY MOMENTUM MEDIA
After-tax reporting a necessity for MySuper compliance: Parametric
Parametric managing director Scott Lawrence has said superannuation funds need to invest more in after-tax performance to meet MySuper requirements.
Lawrence said trustees have an obligation to maximise net returns for members under new MySuper legislation.
"The legislation that relates to MySuper products specifically says trustees need to have an investment objective to maximise net returns," he said.
Lawrence said that while superannuation funds were aware of the importance of after-tax benchmarks, they were unaware of how to resolve the issue.
He said super funds needed to invest in the technology to produce after-tax reporting so that managers could make the right decisions and maximise returns.
Lawrence said Parametric supplied the technology to Catholic Super, which has been using after-tax reporting for one year.
Chief investment officer for Catholic Super Garrie Lette said it was part of the fund's process of moving its Australian equity portfolio towards an after-tax outcome.
"So what Parametric gives to us is a customised benchmark…customised to the circumstances of each of the mandates we have got and then matching after-tax benchmark," he said.
Lette said it allowed it to compare the before- and after-tax performance of managers, but he did not expect it to impact on Catholic Super's investment strategy.
"Our managers have always assured us that they have always managed the portfolios with a view to our tax situation, and with a view to optimising after-tax outcomes, so we don't imagine it will make a major difference to the way the portfolios are managed, but at the margin we think it's the right thing to do," he said.
According to Lette, after-tax reporting will become "stock standard" in the next five years.
Lawrence said tax had an impact on most aspects of the investment strategy, and if funds wanted to implement an after-tax investment strategy, tax should be front and centre.
"Whether it's a change in asset allocation or a change in managers, usually tax has an impact," Lawrence said.
AUTHOR
Staff Writer
Money Management staff writers are writers who contribute to the website from time to time. If you would like to discuss the content contained within this article please contact us.
Recommended for you
Private market assets in super have surged, while private debt recorded the fastest growth among all investment types.
The equities investor has launched a new long-short fund seeded by UniSuper, targeting alpha from ASX 300 equities using AI insights.
The fund has strengthened efforts to boost gender diversity, targeting 40:40:20 balance across its investment teams by 2030.
The lower outlook for inflation has set the stage for another two rate cuts over the first half of 2026, according to Westpac.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
DomaCom DFS Mortgage
92.15 3 y p.a(%)
2
Global X 21Shares Bitcoin ETF
53.24 3 y p.a(%)
3
Global X GlobalX FANG+ ETF
43.15 3 y p.a(%)
4
DomaCom Shoreline North Coogee
36.26 3 y p.a(%)
5
GAM LSA Private Shares AU I
35.87 3 y p.a(%)
