Unit Trust Financing
Double Up* your Investment Portfolio
Maximize Your Investment Potential:
1. With no additional cash outlay*
2. Financing rates of:
|Unit Trust Portfolio||SGD Financing Rates|
|≥ SGD 250,000||2.5% p.a.|
|< SGD250,000||2.88% p.a.|
3. Financing available for over 200 unit trusts (Marginable UT)
2 easy ways to use UT Financing:
– No additional cash required!
Example 1: Assume you would like to pledge S$10,000 worth of your Marginable UT. This allows you to purchase up to $10,000 more of Marginable UT or $5,000 more of non Marginable UT.
Example 2: Assume instead, that you would like to deposit $10,000. This allows you to purchase up to $20,000 Marginable UT.
For both Example 1 and Example 2, you pay SGD0.79 (2.88% x 10,000 / 365) per day. It is accrued daily and compounded at the end of the month.
While profits may be magnified as a result of leverage it is important to note that unfavorable price movements may result in your losses being maginfied. Understanding the initial margin requirements of the Phillip Investment Account – Margin (M)
All new Phillip Investment Account – Margin (M) will have an initial credit limit of S$50,000. Please contact your trading representative or financial adviser for limit revision.
Margin Ratio is used to compute the amount of investment you can make using leverage and for the purpose of computing margin calls.
1 Collateral = Market value of unit trusts x 0.7 (Financing Factor for Grade B)
2 Ledger (Debit Balance) = the amount you borrowed to buy additional unit trusts
Where MR is ≥ 140% the account is deemed to be within a healthy range.
Where MR is 130% ≤ MR < 140%, client is not permitted to buy any additional Unit Trust using leverage even if he has available credit limit; client may sell his existing holdings to reduce his Debit Balance.
120% ≤ MR < 130% : Client is required to satisfy margin call within 3 market days including the date of notice to restore the MR to at least 130%.
MR < 120% : Client is required to satisfy force-selling call on the same day before 3:00 pm to restore the MR to at least 130%.