Investment update 16 July 2018

Last week in the markets

Over the past week Australian shares lost 0.1%, with small company shares down a similar amount. Shares in developed countries rose 1% with US shares up 1.5%. Shares in emerging markets rose 1.5%. The Australian dollar fell 0.1% to 74.24 US cents. The Australian 10-year bond yield rose slightly to 2.63%, with the US 10-year bond yield also up slightly at 2.83%. The oil price fell 3.8% to 71.01 US dollars per barrel.

Taxing times

It’s around this time of the year that you, your friends or family members may be scrambling to finalise tax returns. Hopefully it’s not a tax return from too many years ago.

Tax is a highly complex area. There are many taxes and tax breaks, and they apply differently to various people. 

The taxation of super is also complex. For example:

  • Returns from super are taxed, but pension returns aren’t.
  • Within super there are different tax rules that apply to returns from income and capital gains.
  • Franking credits are valuable because they can offset some other taxes.
  • Sometimes there are different rules which apply to certain types of income earned offshore.

Mine Super’s Asset Allocation Team incorporates the impact of taxes on a wide range of asset class returns. We then construct investment portfolios to generate the best after-tax risk-adjusted returns for our members. Because super and pensions are taxed differently, we also create unique super and pension portfolios – we were one of the first funds in Australia to do this. This is one example of the work we do to help our members achieve exceptional retirement outcomes.

Signing off

David Bell | Chief Investment Officer

Past performance isn't necessarily an indicator of future performance.

Data sourced from Bloomberg.