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Gen Y and experienced company executives are both showing a desire to use margin lending to take advantage of the sharemarket volatility. They accept there's a risk but the upside can't be ignored. Photo: AFR

Savvy Gen Ys and company executives are braving extreme volatility and tumbling markets, and becoming more active in margin lending as they hunt for better returns in a low interest rate environment.

But margin calls are also on the rise as the plunge in oil, mining and bank stocks hits hard.

They've got pretty significant cash flow and they're just doing something that will mean they're going to get there a little bit quicker.

Chris Smith, VISIS Private Wealth partner

A 25 per cent slide in the share price of ANZ since August 2015 and a 38 per cent tumble by BHP Billiton over the same time will put pressure on even the most conservatively geared portfolio.

[img]http://www.grayline.com.au/images/brisbane/brisbanecity/soutbank-brisbane-1024x768.jpg[/img]

But while the number of margin calls is creeping up on Reserve Bank of Australia figures, by and large investors are wary of the extreme sharemarket volatilityand are being conservative. Total margin lending sits at $12.3 billion and has been mainly steady for three years.

Generation Y, or those born between 1984 and 1996, are keeping their heads when it comes to risk.

Chris Smith, the national winner of the Certified Financial Planner of the Year award in 2015 and a partner with VISIS Private Wealth, says Gen Y and experienced business people arebecoming more active in margin lending.

They are factoring in the sharp volatilitybut gearing conservatively. But they've decidedthe holding costs in a low interest rate environment are low enough, and the future returns rewarding enough.

A common method forGen Yis to regularly buy shares or managed funds on the market dips and match those buys with a similar amount that has been borrowed. Often the goal is to build up a deposit for a house and the lessons learned from the global financial crisisare being closely heeded.

"They've got pretty significant cash flow and they're just doing something that will mean they're going to get there a little bit quicker,[/img]http://theage.com.au/business/markets/gen-ys-executives-seek-upside-in-margin-loans-20160207-gmo49j.html