Investors have been flocking to capitalise on Singapore REITs, for some of the world's best dividend returns today. According to SGX My Gateway, they have achieved an indicative average dividend yield of 6.7%p.a. so far this year, which bests the 3.9%p.a. dividend yield for both the STI and MSCI World REIT Index.
From 19 September 2016, we give you an edge. With margin financing starting from 2.88%p.a., you can leverage bigger returns on this highly favoured dividends sector.
There are 39 REITs available for financing from 2.88%p.a.! And REITs are just the beginning. We offer the same low rate for many other Grade 1 stocks as well. Click here to find out what grade a particular stock is classified under.
Grade Based Interest Rate
|Grade 1||Grade 2||Grade 3|
Terms and conditions for Grade Based Financing are available here.
At a Glance
If you are still unsure about what margin trading is exactly, view our infographic for an easy-to-understand explanation.
Margin financing could potentially increase your yield. The following example illustrates how it works.
|Initial Capital Outlay S$10,000||Without Margin||
*For illustration purposes only. Trade commissions and other fees were not included in the calculations.
To learn more about margin financing, please click here.
Margin financing is a leveraged product. Its risk and return profiles are magnified several times. While the amount of the initial margin required to enter into a transaction may be small relative to the value of the transaction, a relatively small market movement would have a proportionately larger impact which may result in losses that are in excess of the initial margin/capital invested.
If the market moves against the position that you are holding, it may result in margin calls or requests to place additional funds on deposits with the company to cover the shortfall in the margin requirement level to maintain the position.
If you are unable to put in the additional funds, your broker may close out the position without prior notice to you. In addition, you will still be liable for any further losses that may result from this.
Over-Exposure and Overtrading
Investors often look only at the margin required and fail to appreciate and take into account the full contract value. When trading in a large number of contracts, the total potential exposure of such contracts may be significantly beyond the investor's financial resources.