Financial Services Institute of Australasia (Finsia)
Most households rely on traditional interest-bearing debt which can expose them to significant risks, such as sudden changes in economic growth or interest rates. Such risks could be alleviated through a better mix of external debt and equity for households via shared equity loans. Shared equity loans also appear to be a good investment for the investment house sharing the equity. On the basis of limited data, they return significant abnormal returns or ‘alpha’ for their risk.