What is Margin Lending

A margin loan lets you borrow money to invest in shares, managed funds, master trusts and wraps. This is also known as gearing. Just like investing in property where the loan is secured against the property, your margin loan is secured against your shares, managed funds, master trusts and wraps. As the table below shows, based on the underlying assumptions, you can build a larger, more diversified investment portfolio to increase your potential for wealth creation. Please note that, in the event that actual performance does not reflect the underlying assumptions, your potential for generating losses may also be magnified.

Source: Advance Investment Solutions. Chart shows capital growth performance of a selection of shares from 31 December 1999 to 31 December 2009. Interest rate 8% pa paid on borrowed funds. Dividends, imputation credits, and facility costs are not included. Capital gains tax consequences are not considered. Past performance is not indicative of future performance. Any changes in assumptions could significantly change the results. You should also consider that investment returns are highly dependent on economic cycles and market volatility.