With dividends and franking credits taking on renewed relevance for Australian investors, Oliver Renton explains how imputation strategies seek to optimise tax-effective income while maintaining exposure to the growth potential of equities. 

He explores who these strategies may suit, how they compare with term deposits and fixed income, and the risks investors should keep in mind. 

Renton also explains why active management can be particularly important when investing for yield, helping investors look beyond headline yields and avoid potential “yield traps”.

Here's an excerpt from the podcast:

“Broadly speaking, an imputation fund is purposely looking to optimise the overall tax effective yield profile of that fund.

“Yield appeals to different investors in different ways and tax effective yield is no different.

“For an income fund, I think [active management is] even more important.

“Active management should, and we think does, have the ability to sort of rule out those stocks that are maybe perceived as yield traps, stocks that are structurally impaired or challenged.”

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