Vanguard was the first fund manager in Australia to report the after-tax performance of its funds, publishing the results for our index funds in October 2004. Our parent led the debate in the United States, where after tax reporting has been mandatory for all fund managers since 2002. 

Jeremy Duffield, Vanguard's Managing Director is leading the debate in Australia. He says: "Taxes can potentially take the largest chunk out of an investor's return, so we believe we owe it to our clients to support the case for greater transparency in investment reporting. After-tax returns provide the truest indication of the real value of an investment. We want to educate our investors so they understand the different tax impacts on their investments so they can make more informed investment decisions."

After-tax reporting is an indicative return that illustrates how tax impacts the return of a fund based on an investor's personal tax rate. Depending on your tax bracket and the type of fund you invest in, the after-tax return can be higher or lower than the actual before tax return of the fund.

Vanguard has always focused on tax efficiency when managing its funds. Our investment approach takes into account the real impact of all costs - including taxes and transaction costs. One example of this is how our  "buy and hold" strategy takes advantage of capital gains discounts and the deferral of capital gains liabilities to reduce the tax burden on investors.