Hi all - I am thinking of getting a margin loan.
I am with ANZ e-trade but they seem to have a limited number of stocks you can borrow against which includes no managed funds. St George on the other hand have managed funds in their list of eligible stocks to borrow against. This sounds preferable as I could get a diversified portfolio more cheaply (less broker fees) by buying a managed fund. If I build up my own diversified portfolio it would cost me a bomb in fees as I would have to pay for each trade.
Any tips here on what to look for? Am I on the right track or are both of these products no good and I should be looking for something else?
By the way - 9.9% is a high rate for a margin loan I reckon. What is the average long term return on equity for a diversified stock portfolio? If it is less than 9.9% I am being screwed by the bank! Hopefully it is 12% or more.