A Margin Loan allows you to borrow to invest in growth assets, such as shares and managed funds, meaning you can increase your investment opportunities more than if you were using only your own funds.
Check out the difference borrowing to invest can make in this case study.
Features you can add to your Margin Loan
Exchange Options Plus allows you to combine a number of options strategies using Exchange Traded Options (ETOs). Depending on your circumstances, ETOs can form part of your overall investment strategy to create wealth and protect your share portfolio under your Margin Loan or Investment Funds Multiplier.
Benefits of Exchange Options Plus:
- Protect your securities from a potential drop in price
- Increase the amount you have available to invest by borrowing up to 100% of the exercise price
- Earn additional income from the securities you hold
- Buy call options using the available funds on your margin loan
Instalment Plus combines two investment strategies: borrowing to invest, and regular investing. By implementing a regular savings and investment plan you can progressively build an investment portfolio.
You need just $1,000 with a minimum loan of $2,000 to get started, with a minimum monthly contribution of $250.
Benefits of Instalment Plus:
- Buy through the ups and downs of the market
- You may be able to buy at a lower average price if the overall price is trending upward
- Progressively build an investment portfolio
Short Plus allows you to implement a short selling strategy, using your Margin Loan to borrow the shares. Depending on your circumstances, short selling can form part of your overall investment strategy to create and protect wealth in a falling market.
Benefits of Short Plus:
- Profit from a falling security price
- Continue to trade and potentially profit from a bear market
- An alternative hedging strategy to warrants or options
- Pursue a long/short or pairs trading strategy so you can potentially profit on both sides of the trade
- Potentially earn interest on your short selling collateral, helping offset other interest costs associated with your margin loan
Rewards Plus offers you a way to earn Qantas Points, to keep your Frequent Flyer membership active and help you to enjoy the benefits you want sooner.
Benefits of Rewards Plus:
- Enjoy the benefits of membership of the Qantas Frequent Flyer program
- Earn Qantas Points to redeem on flights, flight upgrade awards, products from the Qantas Store, hotels, wine and more
You earn Qantas Points based on your loan balance. The table below shows you how many Qantas Points you could potentially earn using Rewards Plus. This is valid for accounts opened after 1 August 2016.
|Loan balance||Qantas Points|
|Less than $150,000||Up to 30,000 points per $100,000 p.a. pro-rata|
|$150,000 to $499,999||Up to 40,000 points per $100,000 p.a. pro-rata|
|$500,000 to $999,999||Up to 50,000 points per $100,000 p.a. pro-rata|
|$1,000,000 or greater||Up to 60,000 points per $100,000 p.a. pro-rata|
Benefits and risks of a Margin Loan
|Maximise investment opportunity||Borrowing additional money to invest increases your exposure to an investment, enhancing your profits and potential dividends earned if the portfolio rises.|
|Diversification||A Margin Loan can enable you to diversify your investment portfolio. Borrowing to invest gives you access to more funds, allowing investment into a different range of asset classes, industries and companies.|
Manage your investment activities with the help of a flexible facility, including:
|Potential tax deductibility||Depending on your individual circumstances, you may be entitled to claim an income tax deduction for some or all of your borrowing costs.|
|Changes in portfolio values and interest rates||It is possible the performance of your investments or changes in interest rates will result in you earning a lower return or incurring a larger loss than if you had not borrowed to invest.|
|Events resulting in your loan becoming due||Events, such as margin calls and events of default or termination, can result in some or all of your loan being due for payment in a short period, including immediately.|
|Mismatch of cash flows and restrictions on the ability to deal in investments||Interest and other charges can become due for payment before you receive any distributions from your investments.|
|Net proceeds may not cover the loan||You are required to repay the total amount owing when declared due irrespective of any net sale proceeds.|
|Reliance on others||Reliance on operations, policies and procedures of the Lender, Nominee and Sponsor, and the Authorised Person acting in your interests.|
|Powers of the Lender, Nominee and Sponsor||You give a Power of Attorney allowing certain acts by the Lender, Nominee and Sponsor.|
|Legislative changes||Changes to legislation and taxation policies can impact your facility.|
|A Margin Loan is more complex than a traditional loan||Gearing can magnify your potential gains and losses. Ensure you have read and understood the Product Guide, as well as obtain the appropriate financial advice before investing.|