UniSuper has delved into the after-tax investment world by appointing technology firm GBST to provide after-tax benchmarking solutions designed to boost member portfolio returns by up to two per cent each year.
The new partnership will come into play from 1 July, and would see UniSuper’s Australian shares managers have their performance calculated on an after-tax basis.
Excess returns would then be measured against a GBST-calculated S&P/ASX series of after-tax indicies.
As super fund members accumulate their retirement savings and retire on after-tax returns, this could significantly boost the funds available to them on retirement, according to UniSuper’s head of portfolio analysis and implementation, Dharmendra Dayabhai.
She said the fund had been considering an after-tax benchmark and return methodology for some time and that the Cooper Review had heightened the issue.
“We recognise the importance of post-tax considerations and assessing after-tax performance means we are further aligning our investment managers to the best interest of our members,” Dayabhai said.
UniSuper noted the Cooper Super System Review by Gordon Mackenzie of ATAX University of NSW claimed the after-tax benchmarking and returns methodology could boost member portfolio returns by as much as two per cent each year.
The quantitative data services business, GBST Quant, provides benchmark solutions both pre- and post-tax. The custom benchmarks could range from slight variations to standard industry indices through to completely custom calculations, according to Neil Detering, head of GBST Quant.
“As the industry moves towards after-tax measurement and performance becoming the norm, the next challenge is for fund managers to make tax considerations an integral component of their investment process,” Detering said.
