Colonial Geared Investments has increased the loan to valuation ratios (LVRs) applied to the vast majority of its managed funds to provide advisers and their clients with greater investment flexibility in the lead up to the new financial year.
The financial services organisation reviewed 1,500 of its managed funds and decided to boost the acceptable LVR on 1,200 of them to 75 per cent.
Colonial changed the LVRs to allow financial advisers to maintain the existing levels of gearing employed by their clients in times of increased market volatility and economic dips.
Furthermore, the financial services entity believes the new levels will give investors the opportunity to accelerate their wealth creation strategies by being able to fund a larger portfolio.
Colonial Geared Investments general manager Craig Keary said: “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.
“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,” he added.
