Managed Funds Margin loans: What's your LVR

Discussion in 'Shares & Funds' started by Glebe, 10th Sep, 2006.

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  1. Rick__

    Rick__ Well-Known Member

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    Overall Share/Trust LVR is 73.3%

    Fund Margin Loan 51.6%
     
  2. Bob__

    Bob__ Well-Known Member

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  3. Simon Hampel

    Simon Hampel Founder Staff Member

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    Of course there's no information on the Macquarie website about their new product that I can see.

    Macquarie also don't typically offer very good max-LVRs on the types of funds I want to invest in, which can impact on your overall performance.
     
  4. Glebe

    Glebe Well-Known Member

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  5. hillsguy

    hillsguy Well-Known Member

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    Sim, we actually capitalise the ML interest and then re-invest distribuition with more funds from ML.

    EG - if we receive distribuition of $20K we would re-invest $40K ( the extra 20K comes from ML )

    I remember working this out a while ago but cannot find the spreadsheet.

    Assuming one does not require the cashflow from the fund I think one is better off capitalising the interest vs paying it.

    I remember having a crack at a spreadsheet a while back that showed the difference however cannot find it now :(
     
  6. Simon Hampel

    Simon Hampel Founder Staff Member

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    Yup, I think this is a reasonable strategy ... you will be maintaining your LVR by gearing up your reinvestments to offset your capitalised interest.
     

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