The PIE structure compounding benefit

Investor Knowledge

The PIE structure compounding benefit

Wholesale 1 PIE Trust Returns

As at April 30, 2025

53.27

%

Total Cumulative Return Since Inception is the compounded monthly, distributions after deductions for all charges before tax (Investor PIR = 0%) since the establishment of this fund. Returns are re-invested in this scenario (time-weighted return). Past performance is not a guarantee of future performance. The fund was established 30 June 2022 and made its first investments in September 2022.

13 Jun

Investing in a PIE can offer a tax advantage for high-income earners and trusts. And these tax benefits can compound over time.

Author

Andrew
Dunning

Sound investment strategies have always been about more than just generating a return. They also focus on preserving those returns and minimising any factors that can eat into your profits. And one factor that can greatly influence your net return is taxation.

This is where investing in a Portfolio Investment Entity (PIE) can be helpful.

IMMEDIATE TAX ADVANTAGE

As you know, the PIE pays tax on behalf of its investors at a maximum rate of 28%. This structure provides a tax advantage for high-income earners taxed at 39% and for many Trusts, which will see their tax rate rise from 33% to 39% starting from 1 April 2024.

COMPOUNDING TAX BENEFITS

The benefits of a PIE investment become even more significant when you take into account the compounding effect of these tax savings over the long term. The graph below shows the compounding impact of the PIE tax rate vs 33% and 39% tax rates, assuming a 10% p.a. net return.

Like to learn more about the Wholesale 1 PIE Trust and why we chose the PIE structure? Get in touch – we will be happy to have a more detailed discussion.

Note: This article is intended to provide general information and does not constitute financial advice. We recommend you speak with a financial adviser for advice tailored to your individual circumstances. Investors must qualify as Wholesale Investors as that term is defined in sections 3(2)(a) – (c) or 3(3)(a) of Schedule 1 of the Financial Markets Conduct Act (“FMCA”). The Trust is not suitable for retail investors.