ashtondav
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Post by ashtondav on Jul 1, 2018 18:49:17 GMT
Yeah take those points. I only have access to hedgies through ITs and mainly unimpressive. Target Absolute Return Funds - bl**dy useless on the whole. Ok, I guess cash is the only real protector - maybe a bit of gold. Commercial property? Forget it, it’s being dematerialised by AMZN. Infrastructure looks sound, though.
I do wish we could have access to NSI index linkers - ideal for a retired old codger like me!M
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ashtondav
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Post by ashtondav on Jul 1, 2018 8:29:04 GMT
Who knows? Under £2M on the 5 year market now!
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ashtondav
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Post by ashtondav on Jul 1, 2018 7:56:54 GMT
This seems like a prudent decision by FC. The default rate on their 2016 loan cohort is running around 0.8% above prior cohorts, which clearly adds around 0.5-0.6% to their LGD numbers. It's unlikely that can be improved at this point. I also perceive isses with their 2H17 and 1H18 cohorts. There is no doubt that they are trying to ramp up their loan book size into the IPO, since their valuation depends on that number and lower quality loans may be going on to the book. I tend to think that 6-7% may still be optmistic. However, I'm not that bearish on FC. I think any platform that can generate even 5% over the next few years will be doing a great job. Given a choice I prefer FCIF to FC. Around 25% of the FCIF loans are originated out of the US. I was in a meeting with the head of the consumer lending arm of a major US bank last week. They are seeing the wages from SME employees up >6% yoy against <2% in 2017. The consumer is in good shape with 45% of credit card balances being paid in full, while <10% are the minimum. Consumers are not feeling the pinch with luxuries up 13% yoy. This is despite gasoline prices up 19% yoy. This is in total contrast to UK SME/consumer position. All the equivalent early signals are that default rates from SME loans, development loans, consumer loans etc are rising in the UK. Brexit uncertainty is really bearing down, the impact of the weak currency has faded and we're just late cycle. I don't think there is anywhere really to hide. I think it's a bit naive to think other platforms are going to avoid the same issues, even those that are currently still loved like Abl, MT etc. That isn't a recommendation. I'm winding down pro-cyclical stuff like P2P to buy alpha. FCIF is an IT so it can get hammered by selling pressure but at a fundamental level I think to reduce UK loan exposure to buy US loan exposure is a decent trade. So where do you stash your wedge? - shares at the end of a nine year bull market? - interest rates rising so bond prices falling? - top BS accounts below inflation? - p2p which will collapse with the next recession? There is nowhere. I will buy FCIF when it sinks to a 20% discount which it will sometime in the next two years - not before.
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ashtondav
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Post by ashtondav on Jun 30, 2018 13:08:05 GMT
“Ongoing...”
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ashtondav
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Post by ashtondav on Jun 30, 2018 12:04:07 GMT
FC has now lowered its higher projected returns, so I guess the cat is now out of the bag. Well on the higher risk a/c yes. But they’ve increased the return estimate on the lower risk option. peehaps the cat is half in, half out of the bag.
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ashtondav
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Post by ashtondav on Jun 30, 2018 8:09:31 GMT
If this is a true and accurate depiction of the AC PF, I think AC will kick this can down the road as long as possible. I must admit it had not registered with me that the PF was so small compared to the liability.
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ashtondav
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Post by ashtondav on Jun 29, 2018 12:25:36 GMT
I'm in the MSM SPECIAL 30-DAY ACCESS ACCOUNT and have just checked that I receive 5.25% Thanks, wasn't aware of such an account (plus I mentioned 5.5% rather than the 5.25% you'd mentioned) So where is the MSM account? I can’t see it on the Assetz website.
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ashtondav
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Post by ashtondav on Jun 29, 2018 11:49:09 GMT
Yes, I suppose it’s consistent that if the average is 7% some could be earning 10% and others 4%.
unlucky?
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ashtondav
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Post by ashtondav on Jun 29, 2018 10:54:11 GMT
Now given as a range 6% to 7%, rather than 7.2%
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ashtondav
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Post by ashtondav on Jun 28, 2018 10:38:41 GMT
I think The PF is used, to repay the CAPITAL shortfall when all recovery actions have been taken and assets sold. Based on experience with other sites that can be a good two years after the technical default date, maybe three with complex assets.
keep calm and carry on....
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ashtondav
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Post by ashtondav on Jun 28, 2018 8:21:34 GMT
If you had over £400k of loans there is now way increased bad debt was due to “bad luck”. I would have thought your loan book was pretty representative of the whole and therefore a good proxy for the total loan book.
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ashtondav
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Post by ashtondav on Jun 28, 2018 7:58:35 GMT
That's BS. These accounts have never stated clearly that their diversification was only 20%. It is cited as an example on the website but nowhere does it actually state that this was typical level of diversification or even that 20% was a worst case. Hence why so many are pissed that they've had their investments grabbed by suspended loans within weeks of the loans being formed - if that isn't neglected due diligence by the loan assessors, I don't know what is. AC have weasled their way around how these accounts worked to the point where damage limitation required that they withdraw the GEIA and GBBA. Likewise, the provision funds and how they work is a constant source of misunderstanding and it's detailed workings communicated via reaction to flack they receive on this forum - a situation that offers no real confidence or legal standing of the explanations. AC are a joke and I very much doubt they have a long term future. Considering the tone and content of your post I feel obliged to counter this for the sake of other forum readers, your points in order: 1, Yes 20% was cited as a possible example of how diversification could work and it was clearly explained this could well happen. And you are surprised that it actually did this when you knew this information existed at the time you invested (or should have) So here you are trying to discredit AC when their product did what the example said, now that is BS in my book. I , like many on this forum, invested in the GBBA and GEA, but having an understanding of how it could invest our money limited our investment to amounts we were comfortable being invested in individual loans and also added smaller amounts over a period of time to maximise diversification. Not difficult to do if you take a little time to understand what you are investing in. 2, GBBA1 and GEA were withdrawn for totally different reasons to what you infer in your post, and yet again you are trying to paint a picture of deceit and dubious motives by AC that simply do not exist , again total BS on your part. To be clear here, GBBA1 was withdrawn as the interest rates on offer were too low to support the 7% yield of GBBA1, GBBA2 was launched and at launch worked exactly how the old GBBA1 did, GEA was withdrawn due to the limited future supply of green energy loans. Both these discontinued accounts have since benefited from the improved diversification process which operated across all the automated accounts however the limited supply of new loans to these accounts prior to closure did adversly affect their diversification potential. The provision fund is perfectly well understood and documented. To be totally clear for you again here is how it works: - The PF only protects the automated accounts
- With the exception of the QAA and 30 Day access account defaulted loans are not tradeable.
- With the exception of paying late interest on non-defaulted loans for the automated accounts the AC PF only provides discretionary protection for capital loss AFTER all recovery options have been concluded. So there is no protection provided at the point of default and no protection for loss of interest during this recovery process which may take years, typically 2-3 years is not uncommon. Yes this means you have to wait for your money back, it's not like RateSetter!
- The PF is discretionary for legal reasons and has to be operated in this manner. If AC provided a guarantee of protection from loss through the PF this would constitute an insurance product potentially requiring AC to register as an insurance provider and requiring different legal oversight.
- If you think AC is operating it's PF in a dubious or non-standard way I suggest you go and take a look at the other secured loan SME/Property platforms like Lendy and you will see similar arrangments exist there. It is not the same as the personal loans world of RS or Zopa and everyone has to accept that.
AC are not a joke however your statements here are. You are, of course, correct. But the level of diversification offered, together with the way the PF functioned meant they were very inadequate, ill thought out products, not really fit for purpose, and bound to result in the scabrous comments seen on this thread. Very silly product design, and very flawed - if not toxic.
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ashtondav
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Post by ashtondav on Jun 26, 2018 13:03:34 GMT
Lending works has both a PF and insurance in case of borrower unemployment, sickness etc. It pays 6% on 5 year money and the charge for selling out is 0.6% (at least I think that’s the fee). Waaaaaay smaller though so the platform risk is higher, maybe.
AC pays over 6% but it’s fire and forget accounts offer inadequate diversification and a provision fund that will only benefit your grandchildren! Their 30 day account is good value though.
cant think of anything else with a PF. You could go higher up the risk threshold. My experience with Fundingsecure is you might get lucky and achieve 6%
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ashtondav
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Post by ashtondav on Jun 26, 2018 7:28:33 GMT
I’ve got about £10,000 in AC 30DAA just waiting for RS 5 yr to get back to 6%.
Maybe a long wait...
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ashtondav
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Post by ashtondav on Jun 26, 2018 7:08:57 GMT
Yes the 5 loans are an acid test of the a.c. recovery team, which to be fair has been one of the best in the industry so far. However i think the problem loans resoulved have been reasonably straight forward, these 5 i think are entirely different. Cannot say I entirely agree that the automated accounts operated in the manner set out in the lender prospective i read when I was in these accounts. It strongly suggested that internal trading within the accounts was to take place so as to reduce the over weight holdings down to nearer the over all percentages which individual loans formed of the overall fund, as on the whole the new funds operate now. This was turned off due to software issues and never resolved until the issue became a hot topic on this forum when the Scottish loan hit trouble. It was the sole reason I pulled out of the automated accounts early on, I am now slowly withdrawing from A.C. due to unease about the risk level of loans relative to interest rates, a successful set of recoveries may change my mind, but I can not see it at present. One thing is for sure, if these 5 loans fail badly the provision funds would be just about be empty and the effects on lender confidence could be very serious for ac. Yep, I’m only in QAA until resolution of these loans - an acid test of the PF and recovery ability. I would not expect much for 12 months or so as these things take a long time if playing it the AC and FS way...
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