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The
margin loan is a credit line using traded securities as collateral:
blue-chips stocks; bonds; mutual funds; precious metals; deposit
accounts and life insurance policies. This allows the investor to
obtain cash quickly, with light procedures, an open end period and a
low rate. All these features make the margin loan a good wealth
management tool.
A
margin loan can
be obtained in France, Luxembourg and Switzerland through our company.
Are defined as securities: blue-chips stocks; bonds; mutual funds;
precious metals and life insurance policies. The margin loan on life
insurance depends on its issuing jurisdiction. Are not eligible the
derivative products like the structured products and the shares of
private companies that are not traded in a major stock exchange.
The
beneficial owner
of the securities receives a credit line as a percentage of value held
on deposit, which represents the risk of each class of asset. The
investor retains the ownership of the securities that are managed by
the lending bank according to the deposit agreement. The use of the
loan is free: financial need for short term; investment opportunity;
real estate down payment and early repayment of debt. This is one the
great advantage of this kind of loan.
Margins
of loans: blue-chips
stocks: 30 to 40% of value; bonds: 65 to 80%; gold: 65%; mutual funds:
50 to 70%; deposit accounts: 80 to 90%; life insurance policies: 70 to
85%. The wealth portfolio is evaluated by the bank for the securities
pledged as collateral. All other assets are not accepted for a margin
loan but solutions do exist, like the credit line for art
assets from a
EUR2 million.
The alternatives: margin
loan is for traded securities only. Other assets could be pledged for
loan or credit line negotiation, such as artwork and real estate.
Artwork, fine art collections and jewelry could be used from a value
of EUR2 million and up to EUR80 million. This will include famous
paintings that show high values. A loan or a credit line will be for
50% of the estimated value. Maximum period is 20 years. Real estate
with no or low debt could apply for equity release up to 50% of the
value of the property, from EUR300, 000 or higher.
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The project of
EU regulation authority for alternative funds.
The
EU bodies are trying to create a single European regulator for the
hedge funds. This project face the dispersion of the promoters and fund
managers as well as the offshore funds. However, a political will seems
to prevail over the obstacles in order to launch another regulation.
The weakness of
the dollar is associated with a volatility of the currency.
A
lower dollar against the euro, combined with a high volatility of the
currencies form a new cocktail that worries the central banks and the
authorities because it could harm the international economy seeking a
recovery. In addition, the dollar's suppremacy could be challenged as
an international currency.
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