FTSE Russell partnering with a $7 billion fund to roll out a series of indices designed specifically for Australian superannuation funds investing in global equities.
The FTSE All-World ex Australia Net Tax (Super) Index Series, created in partnership with Qantas Super, is aimed at measuring the "true performance" of global equities on an after-tax basis, so as to "better reflect equity returns for superannuation members."
The indices project returns that take into account the deduction of both capital gains tax and withholding tax, which FTSE Russell said "enables funds to accurately measure after-tax investment performance against an after-tax industry benchmark that is representative of the tax in superannuation member returns."
Qantas Super chief executive Michael Clancy explained: "Tax is one of the largest costs of investing, so managing our members' assets in a tax-efficient way is really important. By doing so, we seek to improve investment outcomes for our members and build their confidence in their financial future."
"At Qantas Super, we identified the need for a global index that incorporates the tax impacts that apply to members of Australian superannuation funds and worked with FTSE Russell for a solution. This new index series is a terrific tool to help superannuation funds understand and manage the impact tax has on investment outcomes. FTSE Russell was a superb partner in bringing this idea to life," Clancy said.
FTSE Russell managing director Asia Jessie Pak added: "FTSE Russell has a strong track record of calculating net-of-tax total return indexes for different investor types, the newest of which is for Australian superannuation funds.
"Providing our clients with indexes that take into consideration superannuation tax rates reduce the tracking error between a fund and the index, therefore providing a more accurate measure of the fund's performance."