dermot
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Post by dermot on Dec 14, 2017 17:07:58 GMT
Can someone remind me what the maximum percentage of my total GBBA holding should reside in a single loan? (Only have my phone to hand and scrolling through a ton of T&Cs is a bit of a pain)
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SteveT
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Post by SteveT on Dec 14, 2017 17:09:22 GMT
Can someone remind me what the maximum percentage of my total GBBA holding should reside in a single loan? (Only have my phone to hand and scrolling through a ton of T&Cs is a bit of a pain) 20% (but if you withdraw funds from your GBBA after it's already put 20% into a loan, it may not be able to reduce that loan back to 20% if there is a selling queue or the loan is suspended)
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dermot
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Post by dermot on Dec 14, 2017 18:15:05 GMT
OK, more or less what I'd thought.
You can imagine my surprise, then, when I find just now that the suspended #227 D*** M*** takes up a full 25% of my GBBA holding, in spite of no significant cash (just the odd bit of interest when it was very very slow to reinvest) being withdrawn for many months. Just the reverse, in fact, as I've been dribbling in small amounts as interest and capital has repaid from MLIA and green.
I think I'll log a call with Assetz, since this isn't exactly diversified terribly well.
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Post by crabbyoldgit on Dec 14, 2017 18:54:48 GMT
not suprised that people are finding more than the advertised 20% max holding per loan has been breached in this case. Part of the program should have traded loan parts between holders within the individual black box funds to even out risk, but it caused issues and has been to all practicle purposes been turned off for a long time. A patch to the program was promised but never I think recieved any priority in the to do list, so I withdrew from these funds exclusively for that reason.
Just hope for AC that this loan repays or the PF can pay out in full, as I believe investers would have every reasonable cause to feel aggrieved if their losses were higher than those which would have occured if their holdings were limited to 20%.
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mary
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Post by mary on Dec 14, 2017 19:35:34 GMT
Irrespective, a 20% exposure to one borrower is not anywhere near sufficient diversification to ensure losses should not (in the average cas) exceed gains.
This is my main problem with the naming/marketing of these "accounts", many people think that they are a sort of bank account, when clearly they are not.
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Post by dan1 on Dec 14, 2017 21:12:50 GMT
Looking at this from the other perspective, is now a better time to dump money into the GBBA if this large loan has recently been suspended from trading? Are there similar behemoths that will take the place of 227, i.e. no better diversification?
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ashtondav
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Post by ashtondav on Dec 15, 2017 8:55:53 GMT
Until AC can provide diversification to the 1% level GBBA is bargepole material given the murky "working" of the clear as mud PF.
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jonah
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Post by jonah on Dec 15, 2017 9:44:04 GMT
Looking at this from the other perspective, is now a better time to dump money into the GBBA if this large loan has recently been suspended from trading? Are there similar behemoths that will take the place of 227, i.e. no better diversification? Well, I’m guessing now is better than next week, as I suspect by the end of next week GBBA will be at a lower rate of interest.
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happy
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Post by happy on Dec 16, 2017 14:21:30 GMT
The GBBA/GEIA and the more recent PSIA diversification is not really fit for purpose when investing large amounts at a time as it has a tendency to focus on the few loans that have large amounts on the SM at that time. I have however achieved reasonable levels of diversification (up to around 10% max in any one loan) in the GBBA/GEIA by manually adding smaller amounts in over time and avoiding adding more while my larger loan holdings had any SM availability. Really should not need to go through this level of S&H for an automated account IMHO but despite some lengthy debate with AC and OPs here well over a year ago AC never managed to prioritise the promised automated diversification tool.
About 3-4 months ago I put a spare £3000 into the PSIA as somewhere to hold it for a while and to see what happened to it (£1k initially and then another £2k). Just checked on it and it has purchased almost 27% in one loan, 21.5% in another and 19% in another. So 67% invested in 3 loans and over £800 in the largest holding! So it seems that there are situations where the diversification can be even worse than the advertised 20%........Use with caution until AC provides proper diversification on these automated accounts, they have been told enough times to know people are not really comfortable with how things work right now.
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bigfoot12
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Post by bigfoot12 on Dec 16, 2017 16:28:45 GMT
This is my main problem with the naming/marketing of these "accounts", many people think that they are a sort of bank account, when clearly they are not. I have an account with my bookmaker and my stockbrokers - I don't confuse them with my bank accounts.
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michaelc
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Post by michaelc on Dec 16, 2017 18:59:29 GMT
Hmmm. I read this with interest not knowing as much as I should about AC's mechanisms.
I put in a few k in one go a couple of months ago and put all of it in the GBBA. Unless I'm using the site incorrectly, it looks like it has purchased 36 loans so far with around 10% left in cash. I think I should be happy with that and it certainly seems contrary to some of the 20% posts above.
Perhaps they've improved the algorithm or perhaps it was a scarcity of eligible loans that limited how much was invested into each one.
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jonah
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Post by jonah on Dec 16, 2017 19:09:29 GMT
Looking at this from the other perspective, is now a better time to dump money into the GBBA if this large loan has recently been suspended from trading? Are there similar behemoths that will take the place of 227, i.e. no better diversification? Well, I’m guessing now is better than next week, as I suspect by the end of next week GBBA will be at a lower rate of interest. When I said next week... looks like I meant this weekend. New investment from Wednesday.
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sl75
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Post by sl75 on Dec 16, 2017 21:30:26 GMT
This is my main problem with the naming/marketing of these "accounts", many people think that they are a sort of bank account, when clearly they are not. I have an account with my bookmaker and my stockbrokers - I don't confuse them with my bank accounts. I suspect that neither your bookmaker nor your stockbroker "accounts" offer a specific rate of interest on monies invested.
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SteveT
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Post by SteveT on Dec 17, 2017 7:48:23 GMT
Hmmm. I read this with interest not knowing as much as I should about AC's mechanisms. I put in a few k in one go a couple of months ago and put all of it in the GBBA. Unless I'm using the site incorrectly, it looks like it has purchased 36 loans so far with around 10% left in cash. I think I should be happy with that and it certainly seems contrary to some of the 20% posts above. Perhaps they've improved the algorithm or perhaps it was a scarcity of eligible loans that limited how much was invested into each one. Out of interest, of your 36 loan holdings, what are the 3 largest and what % has it stuck into each of them? If you've 10% cash still to be invested, I'll be surprised if you don't have at least 1 holding up at the 20% limit (likely #544)
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michaelc
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Post by michaelc on Dec 17, 2017 16:27:11 GMT
Hmmm. I read this with interest not knowing as much as I should about AC's mechanisms. I put in a few k in one go a couple of months ago and put all of it in the GBBA. Unless I'm using the site incorrectly, it looks like it has purchased 36 loans so far with around 10% left in cash. I think I should be happy with that and it certainly seems contrary to some of the 20% posts above. Perhaps they've improved the algorithm or perhaps it was a scarcity of eligible loans that limited how much was invested into each one. Out of interest, of your 36 loan holdings, what are the 3 largest and what % has it stuck into each of them? If you've 10% cash still to be invested, I'll be surprised if you don't have at least 1 holding up at the 20% limit (likely #544) Thanks for making me take a second look at this! So, firstly it was 20% in cash - my mistake sorry. Then about 20% each on 495 and 544. Next biggest are 10% each on 562 and 382. Time to study what those loans are! (Which as other posters have said perhaps partly defeats the purpose of such an "account"). Possibly time also to forget the gbba and do it manually.
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