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Loan Against Mutual Funds vs Loan Against Shares: Comparative Overview
LAMF typically provides higher LTV and lower margin-call risk than LAS, positioning mutual-fund units as steadier collateral for cost-efficient borrowing.
Both Loan Against Mutual Funds (LAMF) and Loan Against Shares (LAS) allow borrowing against market holdings, yet differ in volatility and collateral management. LAMF offers a higher LTV ratio for debt-fund units, generally up to 80 %, compared with 50-60 % for shares. Mutual funds face fewer margin calls and are less exposed to daily market swings, making them more stable collateral.
LAS may offer faster liquidation but involves greater risk and charges. LAMF, therefore, suits investors seeking stable, cost-effective credit backed by diversified assets.