UniSuper has chosen financial services software company GBST to provide its after-tax benchmarking technology, the university and research sector fund said.
From 1 July 2011, the performance of UniSuper's Australian share managers will be calculated after tax, with excess returns measured against a GBST-calculated S&P/ASX series of after-tax indices.
UniSuper's head of portfolio analysis and implementation Dharmendra Dayabhai said the fund had been considering an after-tax benchmark and return methodology for some time and the Cooper Review had heightened the issue.
"We recognise the importance of post-tax considerations and assessing after-tax performance means we are further aligning our investment managers to the best interests of our members.
"It was important for us to work with an independent and flexible provider that could implement an after-tax model smoothly and we are confident that GBST are best placed to deliver what we need," Dayabhai said.
Benchmarking funds on an after-tax basis can boost member portfolio returns by as much as 200 basis points, a submission to the Cooper Review showed.
"We're seeing increased demand for after-tax solutions from clients and prospects as greater emphasis is placed on super fund transparency and accountability," GBST Quant head Neil Detering said.
"Our team works closely with clients to ensure the right benchmark is selected so that it best fits their investment processes and is also easily comparable for members to read and interpret."
Custom benchmarks range from slight variations to standard industry indices, such as the FTSE/ASFA series, through to completely custom calculations that leverage GBST's extensive data set and experience, GBST said.
"As the industry moves towards after-tax measurement and performance becoming the norm, the next challenge is for fund managers to make tax considerations an integral component of their investment process," Detering said.
