oxdoc
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Post by oxdoc on Apr 1, 2018 10:03:49 GMT
Hello, I started investing with AC with a small amount of money about a year ago and I'm considering whether to up my investment. I invested in the GBBA and GEA. I've noticed, though, that about 7% of my invested capital is now in suspended loans, which exceeds the amount I've earnt in interest, which makes me unsure about investing more. Whilst AC's statistics page gives "actual" losses of between 0-6% depending on the year, I do wonder how much is tied up in loans that haven't been defaulted but where there is not actually a clear route to repayment, which would effectively make losses higher. I was wondering have any of you who have been invested in AC for several years actually received good returns, even if funds tied up in suspended loans are deemed losses? I.e. did most of the money in loans that were suspended get paid back to you eventually? |
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Post by chris on Apr 1, 2018 10:50:57 GMT
Alt-fi provide return analysis based upon the raw data of the entire loan book using their own standard definition for defaults, right offs, recoveries, and losses applied equally across all the verified platforms. I'm sure others will weigh in with their own experiences but that is the only independent whole book analysis I'm aware of. |
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ashtondav
Member of DD Central
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Post by ashtondav on Apr 1, 2018 18:23:06 GMT
Alt-fi provide return analysis based upon the raw data of the entire loan book using their own standard definition for defaults, right offs, recoveries, and losses applied equally across all the verified platforms. I'm sure others will weigh in with their own experiences but that is the only independent whole book analysis I'm aware of. The problem is “across the whole loan book”. Unfortunately diversification in GBBA2 is still inadequate therefore returns could be massively over or under forecast. Until diversification is properly sorted MLA, QAA and 30 day are the AC accounts that make sense
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oxdoc
Posts: 19
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Post by oxdoc on Apr 1, 2018 19:19:41 GMT
Thanks very much for those replies and the like to Alt-fi.
From my own perspective, I don't consider that a huge problem (though it is undesirable) since I intend to be a long-term investor and I use several different platforms, so I expect my luck to average out fairly well, though it does make it difficult to estimate your expected return based on the types of loans you're being invested in. Edit - just to add, for customer feedback purposes, that I do consider the poor diversification to be a significant problem and I don't see why it should be that difficult to spread people's funds more evenly across loans (surely people's large loan parts can be divided up and swapped between accounts or something).
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oxdoc
Posts: 19
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Post by oxdoc on Apr 27, 2018 21:09:59 GMT
I looked again at my loan books and found the percentage (by value) of suspended loans has risen to 13.5% of my total account, way above the interest earned. I wonder does the Alt-fi analysis take into account the fact that loans may not have much chance of paying out even though they have not yet been defaulted or marked down in value in any way?
Does anyone have any idea what proportion of loans that get suspended are repaid or have their suspension removed within, say, a year? (Any longer than that and I would call the loan effectively in default myself.)
I'm not happy with the fact that AC don't make it easy for lenders to tell exactly how much of their money is tied up in suspended loans, without going through pages of data. It seems that there is scope for people to be misled if they think their account balance is X and they are earning a good return, but then when it comes to withdrawing money they find they actually have a lot less than they thought due to these suspensions.
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lpa
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Post by lpa on May 3, 2018 16:36:16 GMT
I'm not happy with the fact that AC don't make it easy for lenders to tell exactly how much of their money is tied up in suspended loans, without going through pages of data. It seems that there is scope for people to be misled if they think their account balance is X and they are earning a good return, but then when it comes to withdrawing money they find they actually have a lot less than they thought due to these suspensions.So my question is with a chunky balance in QAA and a number of suspended loans dotted about within this if I decided to withdraw my balance today would it all be disbursed or would the suspended loans be stuck pending resolution?
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ilmoro
Member of DD Central
'Wondering which of the bu***rs to blame, and watching for pigs on the wing.' - Pink Floyd
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Post by ilmoro on May 3, 2018 17:27:19 GMT
I'm not happy with the fact that AC don't make it easy for lenders to tell exactly how much of their money is tied up in suspended loans, without going through pages of data. It seems that there is scope for people to be misled if they think their account balance is X and they are earning a good return, but then when it comes to withdrawing money they find they actually have a lot less than they thought due to these suspensions.So my question is with a chunky balance in QAA and a number of suspended loans dotted about within this if I decided to withdraw my balance today would it all be disbursed or would the suspended loans be stuck pending resolution? Under normal market conditions it would all be disbursed. The QAA/30DAA hold a significant portion of funds in cash to allow liquidity & the provision fund covers suspended loans if required.
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lpa
Posts: 45
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Post by lpa on May 3, 2018 17:44:10 GMT
Thank you for that clarification.
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