You can borrow up to a percentage of the market value of an approved security - this is known as the margin lending ratio (MLR). To find up-to-date lists of approved securities that Leveraged Equities lend against and their lending ratios, please view our margin lending ratios documents.
Diversify your portfolio
This is a key strategy to reduce investment risk. Leveraging your portfolio can enable you to invest across a broader range of assets, achieving more balance, potentially reducing risk and increasing returns.
Increased investment potential
Leveraging your portfolio can increase your investment potential by allowing you to purchase more shares or invest in higher-value assets with the same amount of capital.
Access your equity
When an investment opportunity arises you may not always wish to sell your current investments. With the margin lending you can borrow against your existing securities without needing to sell them.
Flexibility through leverage
Leveraging your portfolio offers greater flexibility in managing investments, as you can adjust your holdings more easily and quickly in response to market changes or other factors.
Potential income tax deductibility
Interest may be tax deductible provided the funds are used for taxable income generating purposes. Your taxation advisor may be able to assist you and we recommend you seek their advice.
Changes to the value of your investments
Investments can fluctuate due to various market conditions and economic events, resulting in larger gains or losses. The risk can be reduced through regular monitoring, diversification, and setting a long-term investment strategy.
Changes to interest rate
The interest rate on margin lending can change over time, increasing the cost of borrowing and potentially reducing returns. The risk can be managed by diversifying investments across different asset classes and maintaining adequate collateral.
Margin call risk
If the value of the assets falls below a certain level, it can trigger a margin call. This requires the loan to be paid down or collateral to be provided. By setting a gearing level below the maximum ratio, this can reduce the risk of receiving a margin call.