Advisers managing superannuation investments should be wary of the tax effectiveness of platforms and investment funds, Aviva has warned.
Aviva Research has highlighted the relative tax effectiveness of Australian equity investment funds available on the Navigator platform.
It determined them by five factors: franking levels, stock turnover, capital gains distribution, net growth in unit balances and gearing.
Conducted for the second year running, the study looked beyond risk and return and focused on the key drivers of tax effectiveness.
BT Wholesale Australian Share Fund topped the study, after coming third in 2005, while Perpetual’s Wholesale Geared Australian Fund and Vanguard Australian Shares Index Fund also performed well.
Noticeably, Aberdeen’s Financials Fund dropped back from the top of the pack as a result of lower franking levels, increased capital distributions and redemptions.
“Just because you choose a tax-effective fund it doesn’t necessarily mean you’ll get a tax effective result,” Aviva group director Rob Donaghy said.
“Some platforms do little to help manage tax issues for investors. Aviva recognises that proactively managing tax liabilities can mean extra money for the individual investor. It’s a pity we still see so much focus on before tax rather than after tax returns.”
