Australasian shares more tax efficient than cash
The KiwiSaver After-Tax Performance Survey revealed the Tax Cost Ratio –the amount of tax KiwiSaver funds pay on their assets – for all the default funds bar Mercer, which failed to submit its data by the Morningstar deadline.
The survey revealed default funds managed by AMP, ASB, AXA, OnePath and Tower paid between 1.30% and 1.92% of their assets in taxes.
Morningstar co-head of research, Chris Douglas, said that while tax is a determining factor in fund returns, “investors and advisers should be wary about selecting investments on the basis of the likelihood of the amount of tax which will need to be paid.”
The survey also revealed the differing tax treatment of various asset classes, and how efficient Australasian equities are compared to other asset classes.
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