Fewer investors but bigger numbers for margin lending

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Margin lending has seen growth over the last year, driven by strong performance in the direct channel.

New research from Investment Trends has found that despite a falling number of clients, total outstanding margin debt has increased. The 2015 Margin Lending Investment Report found the number of active margin lending investors as of September 2015 was 67,000, down 3,000 from 2014. But in spite of the decline in investors, total outstanding margin debt increased 4% to $12.3bn over the year to September 2015.

The report found the average loan size per margin lending client had grown by 8% from September 2014, to $180,000. The figure was slightly higher than the pre-GFC high.

“The margin lending industry grew year on year despite turbulent market conditions,” said Recep Peker, Head of Research for Wealth Management at Investment Trends. “The performance of the direct channel is underpinning the growth in total outstanding margin debt, while the intermediary/advised channel has remained relatively flat.”

The report said self-directed margin loans now comprise 45% of outstanding debt, up from 34% in September 2010.