Morningstar to track after-tax returns
THE push for fund managers to report after-tax performance figures has been backed by the Morningstar research group, which has revealed plans to begin tracking post-tax returns from next year.
Morningstar chief executive Scott Cooley told Money Management the research house would aim to report after-tax returns for all funds management groups it rates by the end of 2005.
Cooley, an American, where reporting of after-tax returns is mandatory, said it was important Australian investors and their advisers compare funds on a post-tax basis.
“You have a country here where someone on a fairly modest income can be on a tax rate of 47 per cent, so tax is a very important issue here,” he said.
Last month, index manager Vanguard announced it would publish post-tax performance figures on all its funds — one of the first groups to make the move in Australia.
However, Morningstar’s push to report after-tax performance for all managers will hinge on their willingness to supply the research house with additional information, including short and long-term capital gains breakdowns of their funds, and details about dividend imputations and franking credits.
Cooley said he expected most fund managers would supply the information.
“We have talked to a few fund managers and most of them are broadly supportive,” he said.
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