Centralised provider should manage equity portfolio
Australian superannuation funds should manage equity portfolio implementation on a single platform through a centralised provider, according to Parametric.
Director of research and after tax solutions Raewyn Williams believes portfolio implementation and execution should be separate from investment idea creation and should be managed through a centralised portfolio management (CPM) manager.
Referring to a research paper from Towers Watson titled ‘Centralised Portfolio Management', Williams said CPM can retrieve value lost from tax.
The paper said the CPM manager "implements trades put forward by the portfolio's underlying active managers, taking a whole-of-portfolio focus with an aim to minimise transaction costs and tax, while balancing the tracking error introduced relative to the underlying portfolio."
But Williams said not all CPM methods are the same
"It is important to differentiate in particular between tax-managed CPM and old-style emulation solutions which may have in-built lagging conditions and continue to ignore tax in the way the portfolio is managed and outcomes measured," she says.
AUTHOR
Malavika Santhebennur
Recommended for you
AMP is to launch a digital advice service to provide retirement advice to members of its AMP Super Fund, in partnership with Bravura Solutions.
Unveiling its performance for the calendar year 2024, AMP has noted a “careful” investment in bitcoin futures proved beneficial for its superannuation members.
SuperRatings has shared the median estimated return for balanced superannuation funds for the calendar year 2024, finding the year achieved “strong and consistent positive” returns.
The second tranche of DBFO reforms has received strong support from superannuation funds and insurers, with a new class of advisers aimed to support Australians with their retirement planning.
