Margin loans can be a useful tool for some, more experienced investors. As with choosing where to invest your money, finding value in a loan can be key. Canstar reveals the margin loans on our database that received a 5-Star Rating in 2020.
A margin loan is a product which allows you to borrow money to invest in shares or managed funds. While you can potentially grow the value of your portfolio using a margin loan, there are risks to be aware of and it’s important to consider whether a margin loan is right for you.
If it is a tool you feel confident in using and you’re weighing up your options, Canstar has assessed the margin loans in our database to discern which ones offer outstanding value to investors.
Canstar Research assessed 11 margin loan products from nine providers based on an equally-weighted combination of:
Products were rated against consumer profiles based on two types of investor: those who predominantly invest in the share market (Share Investor), and those who mainly invest in managed funds and who may use an adviser (Managed Funds Investor).
This year, three products took out a 5-Star Rating for one or both of the consumer profiles used.
Below, in alphabetical order by provider name, are the margin loans which received a 5-Star Rating this year.
Provider | Product name | Consumer profile |
Leveraged | Direct Investment Loan | Share Investor |
Nabtrade | Margin Loan | Managed Funds Investor, Share Investor |
Westpac | Online Investing Loan | Managed Funds Investor, Share Investor |
Margin lending specialist Leverage has been recognised with a 5-Star Rating for its Direct Investment Loan in the Share Investor profile. Canstar Research found that this loan performed strongly on price due to the low interest rates on offer relative to the other products assessed. The Leveraged fixed rates were deemed to be particularly competitive. This is the second year in a row that this Leveraged product has won a 5-Star Rating.
According to Leveraged, its Director Investment Loan comes with a “simple” online application process, no minimum loan amount, a maximum credit limit of $500,000, and no application or establishment fees.
For the second year in a row, nabtrade’s Margin Loan product has received a 5-Star Rating across both the Share Investor and the Managed Funds Investor profiles. Canstar Research found that its fixed and variable rates were competitive relative to the other products assessed, while its loan management and support features also provided value to customers.
nabtrade says its Margin Loan offers investors access to over 700 international equities, and integration between their loan and nabtrade accounts.
For the fifth year in a row, Westpac has won a 5-Star Rating for its Online Investing Loan across both profiles, after first receiving one in 2016. Both its variable and fixed rates stood out for the value they offered investors, and the product also received a high score for its features.
Looking at some of the specifics of the Westpac Online Investment Loan, it offers several features including a maximum credit limit of $500,000 and the ability to integrate your loan account with a Westpac Online Investing Account.
For more information on how products are assessed and what makes for a 5-Star margin loan, take a look at the 2020 Margin Loans Star Ratings methodology document. You can also compare margin loans with Canstar to see if you can find one that suits your investment needs.
If you’re unsure whether investing using a margin loan is right for you and what the potential risks could be, you may want to seek guidance from a financial adviser.
This advice is general and has not taken into account your objectives, financial situation, or needs. It is not personal advice. Consider whether this advice is right for you, having regard to your own objectives, financial situation and needs. You may need financial advice from a suitably qualified adviser. For more information, read Canstar’s Financial Services and Credit Guide (FSCG) and our detailed disclosure. Canstar may receive a fee for referring you to a product provider – for further information, see how we get paid. Payment of fees for ads does not influence our Star Ratings or Awards.
Canstar is a comparison website, not a product issuer, so it’s important to check any product information directly with the provider. Consider the Product Disclosure Statement (PDS), Target Market Determination (TMD) and other applicable product documentation before making a decision to purchase, acquire, invest in or apply for a financial or credit product. Contact the product issuer directly for a copy of the PDS, TMD and other documentation.
Canstar is an information provider and in giving you product information Canstar is not making any suggestion or recommendation about a particular credit product or loan. If you decide to apply for a credit product or loan, you will deal directly with a credit provider, and not with Canstar. Rates and product information should be confirmed with the relevant credit provider. For more information, read the credit provider’s key facts sheet and other applicable loan documentation for that product. Read the Comparison Rate Warning.
All information about performance returns is historical. Past performance should not be relied upon as an indicator of future performance; unit prices and the value of your investment may fall or rise.
Canstar is an information provider and in giving you product information Canstar is not making any suggestion or recommendation about a particular product. The information has been prepared without taking into account your individual investment objectives, financial circumstances or needs. Before you decide whether or not to acquire a particular financial product you should assess whether it is appropriate for you in the light of your own personal circumstances, having regard to your own objectives, financial situation and needs. You may wish to obtain financial advice from a suitably qualified adviser before making any decision to acquire a financial product. Please refer to the product disclosure statement (PDS) and Canstar’s Financial Services and Credit Guide (FSCG) for more information, and read our detailed disclosure, important notes and liability disclaimer.
The Star Ratings referred to in this article were published in January, 2020. View the Canstar Margin Loans Star Ratings Methodology and Results for more information. The results do not include all providers and may not compare all features relevant to you. They do not constitute a suggestion or recommendation about any particular margin loan product, and Canstar is not providing a recommendation for your individual circumstances. Star Ratings are only one factor to take into account when considering products.
Current rates and fees may be different to what was rated. Costs, features and other product information should be confirmed with the relevant product provider. If you decide to apply for a margin loan, you will deal directly with the provider, not with Canstar. Read our FSCG.
Any advice provided on this website is general and has not taken into account your objectives, financial situation or needs. Consider whether this advice is right for you. Consider the Product Disclosure Statement and Target Market Determination before making a purchase decision. Canstar provides an information service. It is not a credit provider, and in giving you information about credit products Canstar is not making any suggestion or recommendation to you about a particular credit product. Research provided by Canstar Research AFSL and Australian Credit Licence No. 437917. You must not reproduce, transmit, disseminate, sell, or publish information on this website without prior written permission from Canstar.