Refers to a type of loan called a margin loan which enables you to buy shares or units in a managed
fund where the shares or managed fund are used as security. If the price of the share or managed fund
falls below a certain level and breaches your agreed loan to value ratio (LVR), you are required to
contribute more funds personally to return your LVR back to its agreed level. If you can’t, the investment
is sold sometimes at the wrong time. Like all geared investing there are risks and professional advice
should be sought.
See also Loan to Value Ratio (LVR).« Back to Glossary Index