We propose a framework that asset owners can use for making and implementing any decision to manageinvestments in-house. It involves addressing four elements: capabilities, costs, alignment and governance;with key aspects identified for consideration within each element. The framework draws on guidancefrom the literature, and insights from interviews with executives from the Australian superannuation fundindustry. We...

We model the tax drag from active funds management by simulating portfolios based on reported monthly holdings of 207 active Australian equity funds between July 2000 and December 2010, and then compare both pre-tax- and after-tax fund returns versus those for passive indices modeled under the same assumptions. Tax drag erodes 65% of the 0.74%...

This study stems from the Australian Government’s response to the recommendations of the 2014 Financial System Inquiry (the FSI). The FSI found that the superannuation system was not operationally efficient due to a lack of price-based competition in the sector, with the result that potential benefits of scale were not being realised (despite the introduction...

This paper looks at whether the share of income going to older Australians in the form of the pension is increasing, and examines the state of Australia’s generational bargain; asking is it fair and is it sustainable? Overview There has been a marked growth in pension cost and cohort. The percentage of people of retirement...

So-called variable annuity products which provide certain guaranteed minimum benefits are popular in the United States and Europe but are only in their infancy in Australia. We consider hybrid products with minimum withdrawal rates guaranteed for a fixed term or for life and the financial derivatives embedded in them. A capital markets style model can...