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S&P Dow Jones Indices launches tax-aware index solutions in Australia
S&P Dow Jones Indices (S&P DJI), a leading provider of financial market indices, has launched a tax-aware benchmark series, the S&P/ASX Franking Credit Adjusted Indices, which allow investors to more precisely measure the performance of the Australian equity market by factoring in the impact of franking credits attached to dividends
The Asset 2 Mar 2015

S&P Dow Jones Indices (S&P DJI), a leading provider of financial market indices, has launched a tax-aware benchmark series, the S&P/ASX Franking Credit Adjusted Indices, which allow investors to more precisely measure the performance of the Australian equity market by factoring in the impact of franking credits attached to dividends.

 
The new index suite provides franking credit-adjusted versions of the most widely followed Australian equity benchmarks, the S&P/ASX 200 and the S&P/ASX 300. The indices utilize tax rates relevant to two segments of investors: one version incorporates a 0% tax rate relevant for tax-exempt investors, whereas the other uses a 15% tax rate relevant for superannuation funds. The franking credits attached to both regular and special cash dividends are included in the respective calculations.
 
“Investors typically are focused on after-tax investment returns. As a result, Australian investors require standardized benchmarks that incorporate the tax effects of franking credits,” said Michael Orzano, Directorof Global Equity Indices at S&P Dow Jones Indices. “With the launch of the S&P/ASX Franking Credit Adjusted Indices, we are proud to bring simple, transparent, and representative benchmarks that account for the impact of franking credits for the two important investor segments.”
 
 “Tax-exempt investors and superannuation funds are two very important segments of the Australian investment community that require different measurement for their portfolios compared to other investors,” adds Daphne van der Oord, head of Australia and New Zealand at S&P Dow Jones Indices. “S&P DJI is committed to developing world-class indices that cater to the special needs of different investor segments in Australia.”
 
“We are excited about the launch of the S&P/ASX Franking Credit Adjusted Indices,” said Brian Goodman, Product Development Manager at the Australian Securities Exchange (ASX). “We look forward to bringing more quality, innovative index solutions to local and international investors by combining our local insights with S&P Dow Jones Indices’ wealth of experience in index research and development.”
 
Since 2000, S&P DJI has collaborated with ASX to introduce a wide range of indices, many of which are recognized internationally as Australia’s principal investable benchmarks.
 
These include headline indices such as the S&P/ASX 200, the S&P/ASX 300, the S&P/ASX Small Ordinaries, and the S&P/ASX MidCap 50. The latest launch signals S&P DJI’s further penetration in Australia by providing benchmark solutions that are fully aligned with local market characteristics.
 
The index family currently includes the following sub-indices:
  • S&P/ASX 200 Franking Credit Adjusted Daily Total Return Index (Tax-Exempt)
  • S&P/ASX 200 Franking Credit Adjusted Daily Total Return Index (Superannuation)
  • S&P/ASX 200 Franking Credit Adjusted Annual Total Return Index (Tax-Exempt)
  • S&P/ASX 200 Franking Credit Adjusted Annual Total Return Index (Superannuation)
  • S&P/ASX 300 Franking Credit Adjusted Daily Total Return Index (Tax-Exempt)
  • S&P/ASX 300 Franking Credit Adjusted Daily Total Return Index (Superannuation)
  • S&P/ASX 300 Franking Credit Adjusted Annual Total Return Index (Tax-Exempt)
  • S&P/ASX 300 Franking Credit Adjusted Annual Total Return Index (Superannuation)
 

 

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