Budget super changes and contributions to super are the major focus in the industry at the moment - but Aviva's Navigator platform is also focussing on managing the money effectively once it is contributed.
Budget super changes and contributions to super are the major focus in the industry at the moment - but Aviva's Navigator platform is also focussing on managing the money effectively once it is contributed.
Clearly, superannuation and pensions are tax effective in comparison to other alternatives but just how tax effective depends on which platform and which investment funds you choose according to Aviva's group director, Rob Donaghy.
A recent study by Aviva Research has highlighted the relative tax effectiveness of Australian equity investment funds available on the Navigator platform determined by five factors - franking levels, stock turnover, capital gains distributed, net growth in unit balances and the existence of gearing.
Conducted for the second year running this study looks beyond risk and return and focuses on the key drivers of tax effectiveness.
| Top 5 Tax Effective Funds | 2006 | 2005 |
| BT Wholesale Australian Share Fund | 1 | 3 |
| Vanguard Australian Shares Index Fund | 2 | 4 |
| Perpetual's Wholesale Geared Australian Fund | 3 | 2 |
| MLC Investment Trust IncomeBuilder | 4 | 6 |
| Ausbil Australian Active Equity Fund | 5 | 8 |
Source: Aviva Research
BT topped the study after a good showing in 2005 while Perpetual's Geared Fund and Vanguard have also demonstrated steady and consistent performance across the five areas.
Noticeably, Aberdeen's Financials Fund dropped back from the top of the pack as a result of lower franking levels, increased capital distributions and redemptions.
"Just because you choose a tax-effective fund it doesn't necessarily mean you'll get a tax effective result" said Rob.
"Some platforms do little to help manage tax issues for investors. Aviva recognises that proactively managing tax liabilities can mean extra money for the individual investor. It's a pity we still see so much focus on before tax rather than after tax returns" said Rob.
Aviva's Navigator platform provides a variety of tax effective features to allow financial advisers to manage their clients' superannuation investments and increase the end net value of their investment portfolio by managing tax liabilities.
Tax saving features include:
- Contributions tax deducted only when required to be remitted to the ATO and not in advance
- Optimisation of capital gains to minimise tax
- Parcel management by financial advisers to achieve a reduced capital gains tax liability
- Capital gains tax management when transferring from superannuation to pension
- Anti-detriment payments to dependents of members who die.
"Navigator is firmly focused on managing tax efficiently for our customers. The research we conduct supplements this by looking at all components of a fund to ensure we provide a choice of great growth opportunities for everyone who uses Navigator," said Rob.
-ends-
For additional commentary on Aviva Research findings please contact Stuart Fechner on 0407 839 080.
Further information is available from:
Tim Cobb
General Manager Marketing and Public Relations
Phone: (03) 9829 8509
Mobile: 0418 529 387
Notes to editors:
- Aviva Australia is a group of two specialist financial services companies: Navigator and Norwich Union Life Australia Ltd. Portfolio Partners is the Australian funds management arm of Aviva plc. Through these companies we provide products and services in the areas of wealth creation and wealth protection for more than 300,000 customers throughout Australia.
- Aviva is one of the leading providers of life and pensions to Europe with substantial positions in other markets around the world, making it the world's fifth largest insurance group based on gross worldwide premiums at 31 December 2005.
- Aviva's principal business activities are long-term savings, fund management and general insurance, with worldwide total sales of £41.5 billion and assets under management of £364 billion at 31 December 2006.
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