Policy & Research

FTSE ASFA Australia Index Series

For a clearer picture of performance

Superannuation funds in Australia rely on indices to benchmark their fund's performance, communicate this to their members, and to assess the performance of their fund managers. Traditionally, superannuation funds have used indices calculated on a pre-tax basis for benchmarking purposes. This can create a misalignment between superannuation funds and their fund managers as some investment decisions are attractive on a pre- tax basis but harm after-tax performance.

As a result, an increasing number of superannuation funds are now measuring their fund managers on an after-tax basis using the FTSE ASFA Australia Index Series. The FTSE ASFA Australia Index Series provides a range of benchmarking solutions for superannuation funds, institutional and retail investors to better align investment decisions with tax positions.

Now available: FTSE ASFA capital gains tax indices

Since the 2009 launch of the original FTSE ASFA tax-adjusted indices which calculate the effects of franking credits and off -market buy-backs, a significant number of superannuation funds have supported the need for a benchmark which also includes capital gains tax in order to facilitate after-tax assessments on a far more granular level.

FTSE, in conjunction with the FTSE ASFA Advisory Committee, undertook an extensive study of the effects of capital gains tax on a portfolio and developed a unique methodology to calculate both realised and unrealised capital gains tax. The new FTSE ASFA capital gains tax indices also include the effects of franking credits and off-market buy-backs.

The expansion of the FTSE ASFA Australia Index Series now provides greater flexibility, enabling superannuation funds to select the after-tax benchmark that best suits their requirements, whether it's franking credits, participation in off-market buy-backs, capital gains tax, or all three.