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Colonial Geared Investments increases LVRs to give clients more opportunities

1 June 2007

Colonial Geared Investments has extended the loan to valuation ratios (LVR) on over 90 per cent of its managed funds giving advisers and their clients more options with their investments.

"Of the 1,500 managed funds reviewed to date, over 1,200 now have an LVR of 75 per cent or more," said Craig Keary, General Manager Colonial Geared Investments. "We’ve been able to achieve this while retaining our 10 per cent buffers, which mean advisers have a great opportunity to free up equity and further diversify their clients’ investments.

"It is not uncommon to see an advised client’s gearing ratio drop over the last financial year from 50 per cent to 40 per cent or even lower. With gearing ratios at this level, the fact that we have increased LVRs on most of our funds provides more options."

Increased LVRs means advisers might choose to maintain existing levels of debt, thereby gaining more protection in times of market volatility or downturn. Or they can opt to drawdown and invest the additional funds made available to create a larger investment portfolio.

"Many advisers have indicated that they will be using the revised LVRs in conjunction with a yearly rebalancing strategy to ensure a client has the optimal level of gearing when entering the new financial year," said Mr Keary.

"We regularly consult our advisers and other leading industry experts to ensure that we provide advisers with the flexibility and support they need to deliver optimum outcomes for their clients. Over the coming months we expect to have more good news as our remaining managed funds and shares pass through the review process."


For more information contact:

Steve Batten
The Commonwealth Bank
P: (02) 9378 2504
M: 0411 080 268