sharetrader
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  1. #1
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    Dec 2016
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    Default Margin lending on NZX50 ETF

    Is anyone margin lending their portfolio on the NZX50 (FNZ) ETF or similar ETFs?

    Would love to see a comparison of returns over a multi year timeframe on 20-30% borrowings vs no borrowing.

    ASB is lending up to 60% so taking into account a 50% drop in share prices, one could borrow $30 for every $100 invested and still avoid a margin call if the markets were to drop 50%

  2. #2
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    Quote Originally Posted by epower View Post
    Is anyone margin lending their portfolio on the NZX50 (FNZ) ETF or similar ETFs?

    Would love to see a comparison of returns over a multi year timeframe on 20-30% borrowings vs no borrowing.

    ASB is lending up to 60% so taking into account a 50% drop in share prices, one could borrow $30 for every $100 invested and still avoid a margin call if the markets were to drop 50%
    Have been margin lending for around 11 years.
    ASB are good people to deal with if you are a premium customer.
    For me it is a choice that involves risk but gives freedom and opportunity.
    I lost big on nzog but then regained it on several utilities-learnt a lesson about diversification of risk.ASB advised me to diversify more at the onset -which I intended to do but held on too long.
    I do not like looking back and take no record of returns so can not provide figures.
    The main rule I use is to buy with the intention of long term holding with the aim of dividend return.If a share rises above its long-term value I rebalance my portfolio by selling a few-accordingly if the price keeps rising I sell more if I have a better place to put my money(Or ASB money) .

  3. #3
    Legend peat's Avatar
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    Aug 2004
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    Whanganui, New Zealand.
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    Surely it is borrowing, not lending 🤪
    I occasionally modestly leverage into positions
    using CMC, but, as I have hinted i keep it pretty low key
    For clarity, nothing I say is advice....

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