2020 DIRECTINVEST BlueChip20 delivers a simple process whereby you can borrow part of the amount that you invest.
You can match your 2020 DIRECTINVEST BlueChip20 investment with an interest only loan of the same amount. By matching your contributions with a BlueChip20 investment loan, you can increase your participation in the market and may further benefit from the growth of your Blue Chip share portfolio.
Although historical returns and performance are not necessarily an indication of future returns or performance, the following table demonstrates the pre-tax out performance of a geared and ungeared investment in the S&P/ASX 20 shares over 1, 3, 5 and 10 years to 31 March 2008.
| |
Without Gearing
|
With Gearing |
| 1 Year |
-3.64% |
-17.6% |
3 Years
|
26.88% |
40.14% |
5 Years
|
22.94% |
35.47% |
10 Years
|
17.68% |
23.26% |
Based on the performance of the S&P ASX 20 Accumulation Index to 31/03/08. Assumes gearing level of 50% on the initial contribution and interest calculated at 2.5% above RBA cash rate. This does not include the impact of any additional contributions or additional gearing. Source: Iress.
If you choose the gearing option we arrange an interest only loan for you up to the same amount. You can then add to this investment through monthly instalments for as little as $500, debited directly from your nominated bank account.
What can I borrow?
Minimum initial loan
|
$5,000 |
Maximum initial loan
|
The amount of your Initial Contribution |
Minimum monthly draw down
|
$500 |
Maximum monthly draw down
|
The amount of your Monthly Instalment Contribution
|
What is the interest rate?
As a further offer, we have negotiated a 0.25% interest rate discount off Equity Margins Limited standard interest rates for the duration of the loan.
2020 DIRECTINVEST BlueChip20 Margin Lending Interest Rates (as at 10/07/2008*)
Variable Interest Rate (in arrears)
|
| 2020 DIRECTINVEST Discounted Rate |
10.25% |
There are no loan establishment charges for individual borrowers. The Loan is provided by Equity Margins Limited, a wholly owned subsidiary of Merrill Lynch & Co, Inc. The loan is a margin loan and will be secured over your interest in 2020 DIRECTINVEST BlueChip20.
Please note in deciding to borrow to invest, gearing can increase returns but it can also magnify losses when markets fall.
| Fee Disclosure |
2020 DIRECTINVEST may receive a dealer group service fee of up to 0.385% for investments in the BlueChip20.
2020 DIRECTINVEST may also receive a trailing commission of up to 0.50% for investments utilising the optional BlueChip20 investment loan.
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