Margin Lending

 

Wealth building with tax advantages

Most people are familiar with the concept of borrowing money to invest in property, but did you know the same concept applies to shares or managed funds? The basis of margin lending or gearing means that you can invest now and take advantages of opportunities to enhance your portfolio - rather than wait until you have the cash to invest.

Unlock your existing investments purchasing power

Depending on the assets provided as security, you can borrow up to 75% of their market value, giving you greater investment capital.

Diversify your investments

With more funds to invest, you can spread your potential risk and build a more diversified portfolio, enabling you to benefit from possible future growth and income from these investments.

Increase your cash flow

The additional purchasing power you obtain from your Margin Loan means the opportunity to acquire more income producing assets. This can be a smart way to raise cash for business or investment purposes without having to sell your investments or be liable for capital gains tax.

Risks of Margin Lending

Like any investment, a margin loan involves some risk.  While borrowing to invest more money in shares and managed funds increases your potential returns, it can also increase potential losses.  However, you can manage your margin loan to maximise the benefits and minimise the risks.  The most common risks associated with margin lending are:

  • Margin calls as a result of market volatility and/or high gearing levels;
  • Increase in borrowing costs, i.e. interest rate increases;
  • Changes to tax laws which may impact the strength of your tax deductions.

To take out a margin loan call 1300 655 015 or talk to your adviser today.

St.George Margin Lending is Wilson HTM Investment Group's preferred supplier of margin lending and capital protected loan facilities.