In this week’s podcast, MB Fund’s Chief Investment Officer, Damien Klassen, explores the hidden cost of portfolio turnover — examining how frequent trading can quietly erode long-term returns through higher tax bills, why every taxable transaction matters, and how a more tax-aware investment approach can help investors keep more of what they earn.
Key Talking Points:
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Capital Growth vs. Dividends: Capital growth is significantly more tax-efficient than dividends, which means investors should prioritize growth-oriented investments.
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Impact of Turnover: High turnover in funds can negatively affect performance, especially for investors in higher tax brackets, potentially costing them 2-3% per annum.
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Investment Structure Matters: Choosing investment structures that allow for individual stock selection can optimize tax outcomes and reduce tax liabilities.
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Tax Timing Strategies: Timing the sale of investments can help minimize capital gains taxes, such as waiting an additional year to benefit from tax discounts.
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Capital Loss Realization: Investors can strategically realize capital losses to offset gains, enhancing overall tax efficiency in their portfolios.
Take us on your daily commute! Nucleus Investment Insights is available in Podcast form on iTunes and all major Android Podcast Platforms.
Damien Klassen is Chief Investment Officer at the Macrobusiness Fund, which is powered by Nucleus Wealth.
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The information on this blog contains general information and does not take into account your personal objectives, financial situation or needs. Past performance is not an indication of future performance. Damien Klassen is an Authorised Representative of Nucleus Advice Pty Limited, Australian Financial Services Licensee 515796. And Nucleus Wealth is a Corporate Authorised Representative of Nucleus Advice Pty Ltd.