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
A member body representing some prominent wealth managers is concerned super funds’ dominance is sidelining small companies in capital markets.
Earlier this month, several Australian superannuation funds fell victim to credential stuffing attacks, which saw a small number of members lose more than $500,000.
Small- to medium-sized funds have become collateral damage in an "imperfect" model for super industry levies, a financial institution has said.
Big business has joined the chorus of opposition against the proposed Division 296 tax.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
DomaCom DFS Mortgage
90.28 3 y p.a(%)
2
GAM LSA Private Shares AU I
37.08 3 y p.a(%)
3
DomaCom Lot 21 Chellaston Road Munno Para West SA 5115 Australia
31.44 3 y p.a(%)
4
Fidante Credit Suisse Global Private Equity
31.12 3 y p.a(%)
5
Global X GlobalX FANG+ ETF
28.28 3 y p.a(%)
