If you’re considering using a margin loan to invest in 2018, Canstar’s latest Margin Loan Star Ratings can help you decide which loans offer better value for your needs.
After crunching the data, Canstar has announced four 5-Star recipients
In this year’s results, 5-Star ratings were awarded to margin loans provided by (in alphabetical order) ANZ, CommSec, CommSec Adviser Services and Westpac.
|5-Star Rated Margin Loans – 2018|
|Company Name||Product Name||Consumer Profile|
|ANZ||Share Investment Loan||Share Investor|
|CommSec||Margin Loan||Managed Fund Investor, Share Investor|
|CommSec Adviser Services||Adviser Services Investment Loan||Managed Fund Investor|
|Westpac||Online Investment Loan||Managed Fund Investor, Share Investor|
5-Star Margin Loans: What they offer
ANZ – Share Investment Loan
ANZ’s Share Investment Loan was awarded 5-Stars under the share investor consumer profile.
According to Canstar researchers, this product has one of the longest lists of acceptable securities on the market and offers access to a personal account manager regardless of the initial size of the account.
The product also has flexible security – for instance, ANZ does not charge investors any additional cost if they wish to hold only a single stock within their portfolio.
The tables below display the current advertised interest rates for ANZ’s variable and 1-Year fixed margin loans, based on a $100,000 credit limit for investing in shares.
CommSec – Margin Loan
CommSec’s margin loan was awarded a 5-Star rating in both the Share Investor and Managed Fund Investor profiles.
Canstar researchers scored this product highly for its margin loan trading features, such as the ability to trade instantly via BPAY or online transfer, loan aspects (including the option of making extra repayments with no penalty, the availability of a cash advance, and the ability to make progressive drawdowns with no minimum drawdown amount), direct client services ( no minimum loan amount is required for an investor to be eligible for a personal account manager as well as access to an online and mobile helpline available 11 hours each day) and application process.
Additionally, CommSec was found to have an above average number of securities (both shares and managed funds) against which they are willing to lend, and competitive interest rates.
The tables below display the current advertised interest rates for CommSec’s variable and 1-year fixed margin loans, based on a $100,000 credit limit for investing in shares.
CommSec Adviser Services- Adviser Services Investment Loan
The CommSec advise channel product, the Adviser Services Investment Loan, was awarded 5-Stars under the Managed Fund investor profile.
Canstar researchers highlighted this product’s impressive margin call conditions which allow 72 hours to respond to a margin call and a 10% buffer for market fluctuations before a margin call.
The Adviser Services Investment Loan offers 90 portfolio platforms and has no application fees for most application types (excluding trust applications), no low balance fees and no early repayment fees.
Its number of acceptable securities for ASX200 shares, non-ASX200 shares and managed funds was found to be above market average.
The tables below display the current advertised interest rates for CommSec Adviser Services’s variable and 1-year fixed margin loans, based on a $100,000 credit limit for investing in managed funds.
Westpac- Online Investment Loan
Westpac’s Online Investment Loan was awarded 5-Stars for both the share investor and managed fund investor profiles.
This product had near best pricing scores, with consistently low interest rates across both its fixed and variable offerings.
Its standout features include:
- No application or establishment fees
- No transaction limits
- No minimum amounts for loan drawdowns or repayments
- Ability to transact on accounts 24 hours a day, 7 days a week
- LVRs up to 75% depending on the security
- 10% margin call buffer
- Split/combination features
- Split available at any time without application fees
- Investors also have the option of a split interest rate that combines the flexibility of a variable interest rate with the security of a fixed interest rate.
- No fees charged on switching
- Same day cash advances available online
- No early repayment penalty
The tables below display the current advertised interest rates for Westpac’s variable and 1-year fixed margin loans, based on a $100,000 credit limit for investing in shares.
How Canstar Rated Margin Loans
In rating the margin loans, Canstar’s research team assessed products on price and features across two consumer profiles:
- Share Investor: Predominantly invests in the share market
- Managed Funds Investor: Predominantly invests in managed funds with the use of an adviser
To assess margin loans on price, Canstar researchers looked at fixed and variable rates for a credit limit of $50,000, $250,000 and $500,000 as the point of cost comparison.
This considered the average variable interest rate over six months as well as the 1-year fixed rate paid in advance.
In assessing for features, the researchers considered the number of acceptable securities for each margin loan as well as the loan-to-value ratio.
They also accounted for other product features such as trading tools (e.g. risk management, portfolio platform), and direct client services and aspects of the loan (e.g. cash advance, repayments, split/combination features).
For a more detailed explanation, view the Canstar Margin Loans Rating Methodology (PDF).