Author Topic: MVRs and interest  (Read 2944 times)

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Offline Ian Lee

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MVRs and interest
« on: 11/05/2016, 10:43:34 AM »
I've just started a SPA3CFD portfolio using Saxo. I think I've got this right but thought I'd double check;  looking at my Saxo charges it appears to me that the interest rate they charge on a cfd is exactly the same for a stock that has a 10%MVR compared to a stock with say a 75% or even a 100%MVR.  Have I got this right? Seems somewhat counter intuitive to me because you're borrowing more with a lower MVR....

This would seem to me that not only are you getting a much better leverage with a lower MVR, but in effect the cost of borrowing is lower.  So there seems to be an advantage (in the borrowing costs) in sticking to stocks with a lower MVR, with say 10 or 15%.  One side effect of this would be skewing your portfolio towards larger caps rather than small and mid caps which could be a disadvantage (against a SPA3ASX portfolio for example) in certain market conditions where small and mid caps might be realising bigger gains than the big caps. Or have I misread this?
Regards Ian

Offline Sharkie

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Re: MVRs and interest
« Reply #1 on: 11/05/2016, 11:24:52 AM »
I think you will find that the interest you are paying on CFDs is based on the total value of the instrument and, as you have found, this is not related to the MVR.

Try calling Saxo to confirm this.

Offline Ian Lee

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Re: MVRs and interest
« Reply #2 on: 11/05/2016, 11:38:34 AM »
thanks Sharkie :thumb:

Offline Ian Parke

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Re: MVRs and interest
« Reply #3 on: 11/12/2016, 02:08:00 PM »
When are we going to get an updated MVR list

Offline Campbell Sinclair

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Re: MVRs and interest
« Reply #4 on: 13/12/2016, 01:16:00 PM »
Hi Ian,

Posted an updated file to download here: http://www.sharewealthsystems.com/forum/index.php/topic,2353.msg15398.html#msg15398

Kind Regards,

Campbell Sinclair