keith
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Post by keith on Sept 26, 2017 3:30:28 GMT
Hi,
Does anyone know of some way to control reinvestment so that a large amount does not get dumped in any one loan? This seems to be something of a flaw in managing risk on the system now that the PF has gone. One way is to get everything that repays into a holding account and then drip it back in onto the market but it seems very cumbersome. Any other ideas?
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jonah
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Post by jonah on Sept 26, 2017 5:30:20 GMT
Hi, Does anyone know of some way to control reinvestment so that a large amount does not get dumped in any one loan? This seems to be something of a flaw in managing risk on the system now that the PF has gone. One way is to get everything that repays into a holding account and then drip it back in onto the market but it seems very cumbersome. Any other ideas? As far as I know, the PF is still there! Potentially you are thinking of some of the zopa products as I believe they are removing their 'safeguard' PF?
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ashtondav
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Post by ashtondav on Sept 26, 2017 5:54:35 GMT
The Ratesetter philosophy is that because it has a provision fund diversification is unnecessary.
RS has not ditched its PF.
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alender
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Post by alender on Sept 26, 2017 7:43:25 GMT
This is a question I asked of RS when I first started, but I was told that it is not necessary to split the loans in RS as in the event of the PF not being able to cope a resolution event is called and all loans and losses are pooled on a pro rata basis. Money is then repaid as it comes in, I would guess less administration expenses.
It is slightly different now as RS will first reduce interest and/or capital repayments to investors in the hope of continuing on (at least for a time), I believe all repayments are again reduced on a pro rata basis.
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keith
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Post by keith on Sept 26, 2017 9:05:10 GMT
Thanks all. I don't know why I thought the PF had gone - must be my aging memory. If all is indeed pro-rata then no need to worry. Many thanks.
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Post by GSV3MIaC on Sept 26, 2017 11:50:47 GMT
It's still a (minor) issue in that an early repayment (which happens quite often) can send 100% of your RS balance back at you, at a most inopportune time. If you could slice and dice a little, the odds of this happening would be much reduced.
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ceejay
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Post by ceejay on Sept 26, 2017 22:57:25 GMT
It's still a (minor) issue in that an early repayment (which happens quite often) can send 100% of your RS balance back at you, at a most inopportune time. If you could slice and dice a little, the odds of this happening would be much reduced. Indeed. For this reason, if I have a (relatively) large chunk to invest, I will normally feed it into the market (manually) in a few bites, separated by at least hours and if necessary days. Worked so far.
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