Macquarie rolls out geared super investment

Macquariehas become the second Australian fund manager to include a geared option in an investment vehicle, following the roll out yesterday of its new superannuation initiative, Macquarie SuperOption.

Macquarie’s offering of a geared option in the new investment vehicle now places them in the same vein asColonial First State, which launched its Colonial First State Geared Global Share Fund in August last year.

Macquarie technical manager David Shirlow says the geared investment option, called the Macquarie Geared Growth Fund, will give superannuation investors the opportunity to accelerate their investment growth by borrowing to invest.

Shirlow says the target level of gearing with Macquarie SuperOptions will vary between zero and 60 per cent depending on market conditions.

But Shirlow admits the gearing option would carry a greater level of risk for investors than other investment options.

Macquarie SuperOptions will offer a total of 29 investment options, which were selected by Macquarie with the assistance of van Eyk Research.

The SuperOptions vehicle will also offer four model portfolios selected by van Eyk, each with varying exposure to growth assets.

Shirlow says the geared option should only be considered by sophisticated investors.

“The geared growth option is designed to give investors the potential for greater and faster investment growth within their overall superannuation investment,” he says.

“Naturally, this strategy carries greater risk, as gearing increases the volatility of investments.”