AQR to address tax issues on global investments

Global equities manager AQR Capital Management is redressing the balance in its favour by developing a program to address taxation issues on global investments after it was asked to consider the effect of the Australian tax environment on the way it managed portfolios.

AQR has developed a tax-aware enhancement that aims to increase the overall returns achieved by its clients’ global equities investments.

Although tax-aware Australian equity products have been a feature of the local market for some years, little attention had been given to global equity products.

“The impact of tax on investment performance, even in the concessional tax environment of superannuation, represents a substantial area for potential improvement in the funds management industry,” said AQR head of Australian institutional business Jeff Dunn.

He said recognising tax-related information and managing the impact of capital gains tax as an additional consideration in portfolio construction represented an important step towards more efficient implementation of global equity portfolios.

“We are in the process of implementing the tax aware enhancement for our existing clients where they have chosen to participate É and we are offering it as an optional enhancement to our global equity capability to all clients going forward,” Dunn said.

He said the tax aware enhancement would be available directly to separate account clients and smaller institutional clients while retail investors can get access through BTIM international equity funds managed by AQR.