CommSec margin loan

Margin lending is an investment strategy that may potentially help maximise the return from your portfolio whether you have an existing share portfolio or are just establishing one.

It uses one of the oldest financial techniques to enhance your returns – gearing. Gearing means that you borrow money to invest whilst using your own cash or shares as collateral. The idea is that you increase your portfolio (investment) through gearing, thereby increasing your potential for profit and access to dividends or distributions (returns) over time. Margin lending may provide tax advantages, enhance opportunities to create wealth and allow you to diversify your portfolio.

You can borrow between 40 and 75 per cent of the market value of approved shares or managed funds. If you take out a margin loan and prepay interest on or before 30 June, you may be eligible for a tax deduction in the same financial year.

Before you apply for a margin loan, it is important to look at your overall financial position and consider your ability to meet your obligations in a volatile market. While gearing multiplies your opportunity for gains in a rising market, it can also multiply your losses should markets fall.

• Important information.
  This information has been prepared without taking account of the objectives, needs, financial and taxation situation of any particular individual. For this reason, any individual should, before acting on the information, consider the appropriateness of it having regard to their objectives, needs, financial and taxation situation and if necessary, seek appropriate independent financial advice.
• Please be aware that a CommSec margin loan exposes you to unfavourable movements in the value of shares and units in managed funds, and possibly to margin calls. Please be aware that you are personally liable for any shortfall that occurs should your entire portfolio have to be sold to answer a margin call where there have been falls in the market value of your investments. Only investors who fully understand the risks associated with gearing into investments should apply. All applications for a margin loan are subject to the Commonwealth Bank's credit approval process. Fees and charges apply.
• CommSec margin loan is a product of Commonwealth Bank of Australia ABN 48 123 123 124 AFSL 234945 administered by its wholly owned but non-guaranteed subsidiary Commonwealth Securities Limited ABN 60 067 254 399 AFSL 238814 ("CommSec"), a Participant of the ASX Group.