Tax-managed responsible investing reaps investment returns
Responsible investing should be implemented in a tax-managed way for superannuation funds, according to Parametric.
In its research paper, ‘Tax-managing a Responsible Investing Portfolio’ the firm said tax-managed responsible investing sat within the regulatory framework of super funds and the responsible idea of funds managing their stakeholders, including fund members and the tax office.
“The principles embody our description of a tax equilibrium superannuation funds must strike between their ‘responsible’ tax citizenship obligations and the very real stake fund members have in funds managing the tax implications of their investment decisions well,” it said.
“The opportunity is for superannuation funds to bring a neat, holistic coherence to their own two-sided (tax) stakeholder management as funds holds companies to account around the same principles.”
Parametric noted that while the risk was rewarded in terms of investment performance, the year-on-year journey could be bumpy.
“For a superannuation fund prepared to take on active risk to implement Responsible Investing, it seems an easy and useful extension to add a much smaller risk budget to pursue Responsible Investing in a tax-managed way, with results that are smoother, measurable and more immediately harvestable,” it said.
Recommended for you
Data and technology provider Novigi has acquired Iress’ superannuation consulting and managed services business from Apex Group.
AMP is to launch a digital advice service to provide retirement advice to members of its AMP Super Fund, in partnership with Bravura Solutions.
Unveiling its performance for the calendar year 2024, AMP has noted a “careful” investment in bitcoin futures proved beneficial for its superannuation members.
SuperRatings has shared the median estimated return for balanced superannuation funds for the calendar year 2024, finding the year achieved “strong and consistent positive” returns.
