Share investment performance

ASX Investment Performance Report - December 2004

The Australian Stock Exchange commissioned Russell Investment Group to report on the performance of various investments on a consistent net basis (i.e. after all costs and taxation) over the ten-year and twenty-year periods ended 31 December 2004. Performance is calculated over these two periods for two reasons: to assist personal investors who invest for the medium and longer term, and to provide a reasonable comparison between investment sectors.

Report Highlights

  • Real returns have been particularly strong for residential investment property, listed property trust investments and Australian shares over the ten year period from 1 January 1995 to 31 December 2004.
  • Over the 10 year period ending 31 December 2004, at the lower marginal tax rate, the after-tax returns of residential investment property (10.6% p.a.), listed property (12.3% p.a.), Australian shares (11.6% p.a.), fixed interest (6.7% p.a.) and cash (3.8% p.a.) have all exceeded the average rate of inflation (2.6% p.a.). At the top marginal tax rate, the after-tax returns from residential investment property, listed property and Australian shares were well above inflation. Returns from fixed interest assets were only slightly higher than inflation, but cash returns (after tax) fell slightly short of average inflation.
  • Returns from overseas shares were 7.9%. After-tax returns have not been calculated due to complex global tax regimes.
  • Overall, at the top marginal tax rate, the effective tax rate for Australian shares is around 22%, residential investment property is around 28%, listed property is around 29%, fixed interest and cash is around 49%. The relatively low effective tax rate for Australian shares can be attributed mainly to the benefits of dividend imputation.

Results by Investment Sectors – Ten Years 

Results by Investment Sectors – Ten Years to 2004

*Only before-tax return has been calculated
? All returns are net of expenses

Also available: