FTSE ASFA Australia Index Series
Up until now, benchmarks for the Australian equity market have only been available on a pre-tax basis and haven’t taken into consideration Australia’s unique tax treatment of franking credits attached to dividends and off-market buy-backs.
This can create a misalignment in the Australian market between fund managers and superannuation funds, as some investment decisions can be attractive on a pre-tax basis but unattractive on an after-tax basis.
As a result, there is increasing pressure amongst Australian superannuation funds to move from measuring fund managers on a pre-tax basis to an after-tax basis.
FTSE and ASFA (the peak body representing Australia’s superannuation industry) have come together to help address this misalignment by creating the first industry-standard Australian index series with tax-adjusted benchmarks.
The FTSE ASFA Australia Index Series uses varying tax rates to calculate after-tax benchmarks for all types of investors:
- Tax exempt investors
- Superannuation funds
- Investors in the mid-tax bracket
- Investors in the high-tax bracket
The index calculation takes into account:
- Franking credits attached to dividend distribution
- Franking credits attached to off-market buy-backs
- The tax treatment on the capital gains attached to off-market buy-backs
The FTSE ASFA Australia Index Series is designed primarily for benchmarking purposes and can also be used as the basis for the creation of index-linked products such as Exchange Traded Funds (ETFs), structured products and other derivatives. The series includes both a non tax-adjusted version and tax-adjusted versions for each of the following:
- FTSE ASFA Australia Large Cap 50 Index
- FTSE ASFA Australia Mid Cap 150 Index
- FTSE ASFA Australia Large/Mid 200 Index
- FTSE ASFA Australia Small Cap Index
- FTSE ASFA Australia All-Share Index
- FTSE ASFA Australia All-Share ex-100 Index
For further information please contact us
