Margin Account / Leveraging Using a margin account or leveraging your portfolio means borrowing against your existing assets to invest in the market.
Leveraging a portfolio on a conservative basis is a very useful strategy for many investors. However, leveraging also multiplies your investment risk, as well as incurring an interest cost.
Once you have made the decision that the benefits of leveraging an asset or a portfolio outweigh the risks inherent in the strategy, then your adviser at HOLST will be happy to discuss the best intermediary to suit your individual circumstances. Financial intermediaries offer different services and we are happy to help you select the intermediary that best suites your requirements and financial situation.
Some of the benefits associated with leveraging a portfolio include being able to:
diversify your portfolio
access your equity
increase your capital returns, and
assist your tax planning
Leveraging an investment multiplies the effect of both rising and falling security values. Only investors who understand the risks of leveraging their portfolio and who have the financial capacity to absorb these risks should contemplate using a strategy that leverages an asset. If the value of your investment falls you may be required to repay a portion of the loan or lodge additional cash or acceptable securities.
Intermediaries offering Margin Loan (leveraged) accounts have features that allow:
Margin Loans (lump sum) from $25,000 to $5,000,000
Margin Loans (instalment) from $1,000
Finance based upon the market value of your investment portfolio as follows: - Listed Shares (up to 75%) - Hybrids/Income Securities (up to 90%) - Managed Funds (up to 70%) - Cash Management Trusts (up to 100%) - Real Estate - residential (up to 80%)
Capital Protected Loans
Securities held in your own name
Third Party securities accepted
No assessment of assets/liabilities (unless lodging residential real estate as security)
No establishment or account keeping fees (except for trust and company applications)
Prepaid, fixed and variable interest rates
A personal Account Manager and monthly statements
View your portfolio over the internet
Please contact your HOLST adviser to discuss a leveraged portfolio and how the strategy can assist you with your investment objectives.
