Macquarie not phased by volatility

Despite the recent difficulties suffered by some leveraged investors, Macquarie’s Equity Markets Group has launched a new protected loan that allows investors to borrow 100 per cent of capital.

The MQ Listed Protection Loan (LPL) will also be the first 100 per cent protected loan to be listed on the stock exchange, Macquarie said.

Macquarie associate director in the equity markets group Pia Cooke said that the LPL was targeted in part at investors who are cash poor or who have suffered margins calls because of the market downturn, but are still seeking gearing opportunities.

Macquarie said the LPL allows investors to select from a range of blue chip shares, has no margin calls no matter how the shares perform and has an annual ‘walk away’ feature that means investors can hand back any shares to Macquarie that are not performing.

“This means investors aren’t ‘locked in’ to poorly performing stocks over the longer term — a major disincentive in some other protected loan products,” Cooke said.

Investors can return underperforming shares with no further payments to make, she said.

Cooke said that the LPL was developed in response to those investors who believed that while the market has fallen by around 20 per cent in the past six months, new buying opportunities have been created for longer-term three to five year investments.