Gearing strategies gaining popularity
There is growing investor confidence in getting back into gearing strategies, according to Leveraged.
Pointing to Investment Trend's 2015 Margin Lending Investor Report, 80 per cent of Leveraged customers were intending to maintain or build on their gearing strategy.
Leveraged head of distribution, direct, Darryl Drown, said there had been a shift in the type of customer who was gearing and how they were gearing their portfolios.
"We're seeing the rise of the unadvised of ‘direct' investor and we're seeing younger people with smaller facilities taking up the strategy while others are ‘buying the dips' or diversifying an existing portfolio using their margin loan," Drown said.
"With the current low interest rate environment and market volatility presenting opportunities to acquire blue-chip stocks at reasonable prices, borrowing to invest in shares and managed funds is a strategy that is likely to be one that more financial advisers revisit or at least consider as part of a client's overall financial plan."
Drown noted that diversification was a significant factor for some investors taking up margin loans.
"Many people will have significant exposure to ‘mum and dad' stocks in their super funds and come to the realisation that they also have the same shares acquired as a result of various demutualisations in their share portfolio as well," he said.
Recommended for you
Adviser losses this week are quadruple the same period a year ago, with the industry falling into negative territory for the last 12 months.
Colonial First State has announced the latest manager to join its Edge managed accounts menu, focusing on providing investors with a strategic income.
Rising advice fees has prompted Radar Results to increase its price guide to a minimum of $3,000 per client to reflect the changing shape of the adviser landscape.
Investment consultancy Ascalon Capital has appointed a new partner, who joins from 20 years at Zenith Investment Partners, as well as a new chief executive amid a “bold new chapter” for the firm.
