Investment Trends Margin Lending Report sheds new light on investor intention

The release of the 2016 Margin Lending Investor Report has been welcomed by Head of Leveraged, David Arnold. The in-depth study of Australian margin lending users’ attitudes and behaviours is based on a survey of 1,418 Australian-based investors conducted between July and August 2016 by leading research firm Investment Trends.

Commenting on the report, David Arnold said: “In what is a highly competitive environment combined with volatile market conditions, we are pleased to retain our position jointly as the industry’s highest rated margin lender, which reflects Leveraged’s widely acknowledged reputation for providing a superior customer experience and great client communication.

“While there has been a slight contraction in the overall number of active margin lending accounts across the industry, the report found that margin lending investors are becoming more savvy risk managers, and have a stronger intent to borrow more through their margin loans. In addition, a larger portion of active borrowers also indicated they now recognised gearing as a proven means to conveniently diversify their share portfolio, without dipping into their own cash or selling down other investments.

“Certainly for those with such an established line of credit, there have been recent opportunities to diversify out of existing shareholdings or to acquire shares or managed funds that may have been on the watch list for some time. With interest rates at historic lows, those with a longer term investment horizon can benefit by building a bigger holding in sectors with firm growth projections.

“With property investment out of reach for many busy and highly mobile career builders, investing in and building on a share portfolio can be an alternative to accumulating wealth with a view to one day realising some other pretty big life goals. It’s a message we at Leveraged are keen to communicate.

“Many people don’t realise that you can start the investment journey with thousands – rather than hundreds of thousands of dollars, and as a margin loan is effectively a line of credit, you are only paying interest on the money you draw down to invest in shares or managed funds. As a strategy, it’s primarily all about positioning and for some investors, a matter of ‘lying in wait’ for the right time to move.

“At Leveraged, we are continually freshening up the content on our website with educational sections such ‘Get More out of Gearing’, which has proven to be popular as investors and potential investors seek to understand how they can better position themselves to benefit from market movements as opportunities present themselves.

“No matter which Leveraged product a customer chooses, our easy to establish competitive loans and outstanding service will help them to get more out of gearing and get started sooner on their own investment journey. These are all factors that have helped cement our industry reputation as the professional’s choice,” Mr Arnold concluded.