AUSTRALIA - FTSE Group and the Association of Superannuation Funds of Australia (ASFA) have unveiled a series of indices providing industry standard tax-adjusted benchmarks for superannuation funds.
The development of the FTSE ASFA Australia Index Series, which comprises 36 indices, was spurred by superannuation funds' demand for benchmarks which enable them to measure portfolio performance on an after-tax basis.
ASFA said that superannuation funds and their fund managers have been searching for ways to better measure investment decisions with tax positions. The range provides options for different tax categories, including tax exempt, superannuation funds, mix-tax bracket and high-tax bracket.
FTSE Group deputy chief executive officer Donald Keith said: "We began our market consultation two years ago and quickly appreciated the complexities involved in developing a solution."
He explained that the series provides a better representation of the Australian equity market, which helps investors to make investment decisions taking into account tax issues.
ASFA added that Australian investors also face augmenting pressure, as the industry drives towards compulsory after-tax reporting.
ASFA chief executive officer Pauline Vamos commented: "As an industry, we are focused on moving superannuation funds and fund managers towards after-tax reporting in a manner that is clear and consistent."
She added: "This is an area where we have been actively involved for some time, including the ASFA paper on the Effect of tax on superannuation fund investment returns released in early 2008."
The series also includes an alternative to non tax-adjusted Australian equity benchmarks.
A newly formed independent committee of senior superannuation investment professionals and finance industry professionals will manage the series and ensure it evolves in line with market developments.
ASFA said the series is designed primarily for benchmarking, although it can be used for the underlying for index-linked products, including ETFs, structured products and other derivatives.
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