General investing and allowing for tax implications

Hi Peter,

Thanks for your long-term support of Market Matters – we’re chuffed you value the service; it’s certainly evolved and grown over the years! This is really a tax question, so out of our wheelhouse. From a general sense, and using the example you provided, one would need to expect huge outperformance from WBC over CBA to make the trade stack up, although this is clearly an extreme example.

We’re proponents of active management, and this works better in low tax environments, however, we find that focusing too much on tax consequences and not enough on optimizing positioning can be detrimental over the long term.