Tax reduction strategies surrounding the prepayment of loan interest has historically driven the number of margin lending accounts higher in the June quarter, but this has not materialised in 2008.The net number of client accounts for the June quarter increased 2.2 per cent to 206,000, compared with ten per cent for June quarter 2007 and seven per cent for June quarter 2006.The underlying margin lending value jumped ten per cent, or almost $8 billion to $83 billion - during a period when the benchmark All Ordinaries fell three per cent.The underlying value increase is due to investors purchasing more securities in their leveraged portfolios, but using their own cash and not borrowed funds.Outstanding margin lending fell two per cent to $32 billion for the June quarter, and is down almost 16 per cent on the December quarter peak of $37.8 billion.Leveraged investors appear to still enjoy the comfort of capital protection, even after this year's budget curtailed the interest rate relief investors could claim for tax purposes.Protected equity investments increased for a fifth straight quarter to $2.9 billion.For the June quarter, protected equity represented 9.1 per cent of all margin lending, up from 8.7 per cent in the March quarter, 7.4 per cent for the December quarter 2007 and 6.7 per cent for the September quarter 2007.