An index measuring the after-effects of capital gains tax has been launched by the FTSE Group and the Association of Superannuation Funds of Australia (ASFA).
FTSE Group and ASFA announced the expansion of the FTSE ASFA Australia Index Series yesterday, brought about in response to support from superannuation funds for additional industry standard after-tax benchmarks. Tax-adjusted indices that included franking credits and off market buy-backs were launched in 2009. A benchmark that included capital gains tax would facilitate after-tax assessments on a far more granular level, ASFA stated.
The new index could also be used as the basis for the creation of index-linked products such as exchange-traded funds, structured products and other derivatives due to its liquid and tradable nature, the group stated.
ASFA chief executive, Pauline Vamos (pictured), said the continued development of the benchmark was an example of how the industry could help drive reform.
“After-tax reporting is of growing importance, given the Government’s Stronger Super proposals around setting investment strategies with regard to the after-tax outcomes,” she said. “The outcome of the Stronger Super reforms is to create a set of objective criteria to benchmark superannuation funds. These indices are clearly part of the solution.”
More after-tax benchmarks brought further clarity to market performance, and would help trustees provide better investment performance for members, she added.
Sunsuper chief investment officer, David Hartley, said that while people focused on fees and costs, it was actually tax that took the biggest amount out of super savings.
