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Mastering the 'Margin Call': A Guide to Managing Market Volatility in LAMF
Investors can mitigate margin call risks in LAMF by managing LTV ratios and maintaining proactive liquidity buffers.
Market fluctuations can impact the value of pledged mutual funds, triggering margin calls under a Loan Against Mutual Funds (LAMF).
Understanding Loan-to-Value (LTV) ratios - typically 50% for equity and up to 80% for debt funds—helps investors stay prepared. Proactive strategies such as topping up collateral, partial repayment, or choosing lenders with higher buffers reduce risk.
Regular monitoring ensures continuous liquidity and prevents forced liquidation during volatile markets.