llew
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Post by llew on Oct 7, 2017 0:06:38 GMT
I am relatively new to AC. I recently joined after siphoning off some Ratesetter investments which were no longer performing well, and I am slowly reducing my exposure in FC after their recent change. AC seemed like the perfect new home for these poor lost pennies.
I have initially split my investment up into different auto investment accounts, as I was interested in having a PF as a safeguard for losses... playing it safe, for relatively low risk interest. However my impatience, intrigue and hunger for more interest has had me delving into looking at the manual loans. It is a little more exciting this way and it is more rewarding.
I have noticed when browsing that the loan listings show which of your accounts have funds invested already, e.g. "30DAA £5", "GBBA £50" etc etc. If I want to invest manually at a higher rate in a particular loan, will AC's algorithm recognise what I am doing and try where possible to shift some exposure of my auto investment account to another loan? Or will it not consider my manual investment at all?
I understand the algorithm for auto investment accounts will not let you invest more than 20% into a single loan, which is something but still rather large! There is a provision fund, but at the end of the day I have in mind that it is discretionary.
Thanks for reading.
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ilmoro
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Post by ilmoro on Oct 7, 2017 0:29:16 GMT
I am relatively new to AC. I recently joined after siphoning off some Ratesetter investments which were no longer performing well, and I am slowly reducing my exposure in FC after their recent change. AC seemed like the perfect new home for these poor lost pennies. I have initially split my investment up into different auto investment accounts, as I was interested in having a PF as a safeguard for losses... playing it safe, for relatively low risk interest. However my impatience, intrigue and hunger for more interest has had me delving into looking at the manual loans. It is a little more exciting this way and it is more rewarding. I have noticed when browsing that the loan listings show which of your accounts have funds invested already, e.g. "30DAA £5", "GBBA £50" etc etc. If I want to invest manually at a higher rate in a particular loan, will AC's algorithm recognise what I am doing and try where possible to shift some exposure of my auto investment account to another loan? Or will it not consider my manual investment at all? I understand the algorithm for auto investment accounts will not let you invest more than 20% into a single loan, which is something but still rather large! There is a provision fund, but at the end of the day I have in mind that it is discretionary. Thanks for reading. Pretty sure each account operates independently so manual investments wont affect your exposure in auto accounts other than where you reduce your QAA investment by redeploying to MLIA which inevitably reduces your QAA exposure to loans (assuming sweep is enabled)
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llew
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Post by llew on Oct 7, 2017 0:43:32 GMT
Thanks for the quick reply. Yes I have sweep enabled and plan for QAA to be used for this purpose only (funds queued awaiting investment). I am more concerned with 30DAA / GBBA, whose account funding I can easily fix long term however these accounts could over expose me a little if they don't take into account my manual loans.
I am probably over thinking it a little and should feel safe in the knowledge of the provision fund, providing I keep tabs on loan book performance.
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duck
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Post by duck on Oct 7, 2017 3:39:54 GMT
Pretty sure each account operates independently so manual investments wont affect your exposure in auto accounts ....... Confirmed. This was my concern when I first set up a GBBA for my wife to run alongside my and my businesses MLIA's and I built a spreadsheet to work off the downloadable info to see what 'she' was investing in. Thanks to a recent improvement by AC this is no longer necessary since you can now see what loans the 'black box' accounts have bought into. I suppose the other way to look at this is if you have satisfied yourself with some DD that the loan is 'good' you should be pleased that it is GBBA eligible since you have a bit more of a 'good' loan!
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llew
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Post by llew on Oct 7, 2017 14:36:54 GMT
Duck, I suppose you are right there about being pleased you have a bit more of a "good loan" with protection!
A bit off topic, but does anyone know how the 30DAA deals with suspended trading loans? Does the system pull your money out of the suspended loan and plug the gap in another way? Or does a portion of your 30DAA investment become withheld? I'm guessing it is the former and it just gets plugged with QAA or some other poor soul's money - as I can see one suspended trading loan in my 30DAA and the balance is £0.
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mikes1531
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Post by mikes1531 on Oct 7, 2017 14:59:12 GMT
...does anyone know how the 30DAA deals with suspended trading loans? Does the system pull your money out of the suspended loan and plug the gap in another way? Or does a portion of your 30DAA investment become withheld? I'm guessing it is the former and it just gets plugged with QAA or some other poor soul's money - as I can see one suspended trading loan in my 30DAA and the balance is £0. I don't see how AC could legitimately extricate money from suspended loans. Surely it would be unethical if they do that after the loan is suspended. Besides, who would be on the buying side of that transaction? And if they did it immediately before a suspension, wouldn't they be accused of insider trading? If they did it well before the suspension they could possibly get away with it by saying the QAA/30DAA are very risk-averse, so they exit from loans at the first whiff of trouble. ISTM that this has been discussed in another thread.
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shimself
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Post by shimself on Oct 7, 2017 16:06:40 GMT
This problem will be solved when they get round to evening out the QAA etc investments. My (small) GBBA account has one loan taking up 87%. My more reasonable size GEIA has two loans of around 20% each, making them more like the size of a considered and thought about MLIA investment.
Given AC's amazing shrapnelator it seems very odd that they can't divide holdings up more evenly. They have said they will
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mikes1531
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Post by mikes1531 on Oct 7, 2017 17:11:10 GMT
This problem will be solved when they get round to evening out the QAA etc investments. I may be wrong, but I'm not convinced the QAA works that way. I don't think individual accounts are assigned specific loan parts. ISTM that the holdings reported to me as being held in my QAA are just a simple proportion of what's held in the overall QAA. If 2.9% of the QAA is in Loan 550, then everyone who looks at their QAA holdings will see that 2.9% of their QAA is in #550. The other day, I invested about a quarter of my QAA balance in loan parts. The percentage of my QAA in #550 was unchanged. I really don't think that when funding my purchase the QAA took a proportional bit out of every one of the 290 loans 'held' by my QAA so as to keep the share of each loan unchanged. Right now, my account shows that 2.91003% of my QAA is in #550. What does yours show?
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shimself
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Post by shimself on Oct 7, 2017 17:30:21 GMT
2.91009696853623 %
In order my biggest holding is in loan 550 then 312 489 548 464 532 .... Is that the same for everyone?
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n
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Post by n on Oct 7, 2017 17:34:13 GMT
mikes1531 #550 in QAA 2.9093% and in 30DAA 2.91%. I seem to recall reading recently that both those accounts operate from the same pool of loans.
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jonah
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Post by jonah on Oct 7, 2017 20:53:52 GMT
mikes1531 yes this was discussed in another thread. I think it was chris who basic said that if you are trading in or out of suspended loans in QAA or 30 day account then it is the PF covering it. In effect currently both accounts have a proportional approach, with you holding a fraction of all loans the QAA holds in totality.
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mikes1531
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Post by mikes1531 on Oct 7, 2017 22:09:05 GMT
mikes1531 yes this was discussed in another thread. I think it was chris who basic said that if you are trading in or out of suspended loans in QAA or 30 day account then it is the PF covering it. In effect currently both accounts have a proportional approach, with you holding a fraction of all loans the QAA holds in totality. If that's the case then anyone who withdraws fully from either of the accounts is really just passing their share of any suspended loans to the remaining investors. So, as I think has been observed elsewhere, suspended loans in these accounts are of no consequence to individual investors until the account balances drop so low that all, or most, of what the accounts are left holding is suspended loans. At that point, withdrawals would have to be suspended. But ISTM that is extremely unlikely to happen. It would require very serious problems on the platform, and if that were to happen all investors in the platform would have real problems. I won't spend any time worrying about that.
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llew
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Post by llew on Oct 7, 2017 22:15:19 GMT
....I think it was chris who basic said that if you are trading in or out of suspended loans in QAA or 30 day account then it is the PF covering it. ... Ah ha, that would make sense. I thought it would be AC (the provision fund) temporarily plugging gaps in problem loans until trading continues, with those types of accounts. I appreciate everyone's input, I now have a better understanding.
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Post by valerieb on Oct 8, 2017 12:27:32 GMT
Thanks for this. I must have missed, or not taken in, the earlier discussion about how loans are held in these accounts and, as I'm currently holding a large sum (for me) in the 30 day account, it's a relief to know it's safer than I thought.
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