Professional Share Trader Margin Loan
Margin loans are not for everyone and are more suited for the professional share trader.
Some of these loans allow you to:
- Select from a range of securities, including Separately Managed Accounts, Exchange Traded Funds and selected Australian Equities Managed Funds
- Gain greater exposure to the share market for the same capital outlay; this can also make it easier to diversify your portfolio
- Receive any ordinary dividends or distributions
- Segregate your geared investment from other property assets.
However there are risks associated with these types of investment loans. Some of these are:
- While borrowing to invest more money in shares and managed funds increases your potential returns, it can also increase potential losses
- The value of securities may not go up, or, if they do go up, the increase in value may not be sufficient to cover the costs of borrowing
- Interest, fees and charges apply. You need to ensure that you can fund your obligations under your loan and any interest on the loan (including the payment of any interest, fees and charges)
- If you do not meet your obligations, the securities will be sold to satisfy these obligations
- You should also consider the taxation consequences. Investors should seek independent professional tax advice on any taxation matters.
- These loans are not for all investors.