MLC has decided to provide after-tax return results for a selection of its products to help financial advisers give their clients an idea of the amount of money they are likely to receive from their investment activities.
MLC investment research manager David Hutchinson said: “After-tax reporting increases transparency and provides greater insight into investors’ financial position by showing what the client will actually receive in their pocket, rather than a generic performance figure.
“We’ve had a focus on after-tax returns with our portfolios for a long time. Therefore, trying to support that focus by reporting these returns is a natural flow on from that,” he added.
The post-tax returns reported by MLC will appear in two forms. The first of these is before redemption, which is the return investors would receive after paying tax on the distributed amount. The second is after full redemption, which illustrates the investor’s position subsequent to paying tax on all distributions and any capital gains tax incurred when redeeming from the fund.
In addition, MLC will be gearing their post-tax calculations to specifically highlight three tax brackets, low (using 16.5 per cent), medium (using 31.5 per cent) and high (using 46.5 per cent), as well as the superannuation tax rate of 15 per cent for self-managed superannuation funds.
The reporting of after-tax returns will initially be available from August, 2006, on the MLC MasterKey Unit Trust, the MLC MasterKey Investment Service and MLC wholesale funds. The figures can be accessed via the firm’s adviser website.
Hutchison said he expected after-tax information to be prepared for all MLC products at some point in the future.
“It’s our thought that eventually the Australian market will go down the route of the US and basically get to the stage where everyone is reporting this way,’ he said.
