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Post by stuartassetzcapital on Apr 23, 2018 8:52:43 GMT
There is currently almost £33 million of availability on the SM, which I believe is an all-time high. Should this be viewed as a positive development with plenty of diversification available ? Or should it be viewed in terms of limited appetite by lenders for the available loans ? In fairness there is now a whopping £105 million invested in the Instant Access and 30 Day accounts which is also an all-time high, which should surely be viewed favourably. Furthermore, if my understanding is correct, quite a lot of the current availability on the SM was a result of these two accounts increasing their cash reserves by attempting to reduce some of their holdings. It's basic supply & demand, most MLIA investors are looking for "fair value" or better returns for the level of risk that they are taking with their money. AC now market themselves largely as a savings platform, via the various AC managed accounts (in other words savers give AC discretion to invest their money in whatever they want in return for a set return) so AC can underwrite £10's Million of loans that most MLIA investors don't see as offering attractive enough returns, hence loads are available on the SM & no amount of offering a diversity argument will make 5-7% rates look attractive to these genuine investors, as opposed to savers. Classic pricing for liquidity & not risk - this is not intended to be a criticism of the AC strategy but as a MLIA investor I no longer find hardly any loans offering sufficient rates for the risk I think they represent, so I have invested in AC equity, via Seedrs instead, as I see it as a much better medium/long term investment. I think you will find there are very few loans in the 5-7% rate going forwards - almost every one in our current pipeline starts at 8% MLA.
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ton27
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Post by ton27 on Apr 23, 2018 13:48:19 GMT
Most of my funds in AC are in the MLA but the amount has been steadily declining over the past year as interest rates have fallen. I will be pleased if I can start investing again. Can AC/Stuart advise why rates are now to be increased - is it a trend or AC taking a smaller cut?
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Post by chris on Apr 23, 2018 14:05:47 GMT
Most of my funds in AC are in the MLA but the amount has been steadily declining over the past year as interest rates have fallen. I will be pleased if I can start investing again. Can AC/Stuart advise why rates are now to be increased - is it a trend or AC taking a smaller cut? It's a trend. AC have always taken broadly the same margin.
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iren
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Post by iren on Apr 23, 2018 17:00:44 GMT
Are AC artificially maintaining an appearance that loan diversification is possible when it is not.
I am currently selling some loans and repurchasing them in my ISA. I have noticed that on many occasions when a loan is processed, I neither sell us much as I am targeting in my Standard account or buy as much as I’m targeting in my ISA although my ISA has contained spare cash in advance.
I had always thought that whether I am able to sell a loan would depend on whether there is a willing buyer, but I now see that is not the case.
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Post by chris on Apr 23, 2018 17:13:16 GMT
Are AC artificially maintaining an appearance that loan diversification is possible when it is not. I am currently selling some loans and repurchasing them in my ISA. I have noticed that on many occasions when a loan is processed, I neither sell us much as I am targeting in my Standard account or buy as much as I’m targeting in my ISA although my ISA has contained spare cash in advance. I had always thought that whether I am able to sell a loan would depend on whether there is a willing buyer, but I now see that is not the case. More likely a bug somewhere. That area is under intense rewrite at the moment giving the market place matching algorithm a fresh start without all the legacy code that has built up over the years. Give me a couple of weeks and things will be working much more quickly and smoothly. I can categorically state there are no algorithms or manipulations in place to skew the market.
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IFISAcava
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Post by IFISAcava on Apr 23, 2018 17:22:44 GMT
Are AC artificially maintaining an appearance that loan diversification is possible when it is not. I am currently selling some loans and repurchasing them in my ISA. I have noticed that on many occasions when a loan is processed, I neither sell us much as I am targeting in my Standard account or buy as much as I’m targeting in my ISA although my ISA has contained spare cash in advance. I had always thought that whether I am able to sell a loan would depend on whether there is a willing buyer, but I now see that is not the case. I've got over 200 loans in my MLIA portfolio (built up in the time since MLIA was activated for the ISA) - I'd say that's pretty diversified (although I am overweight in some loans and underweight on others based on interest rate, LTV, time remaining, loan availability etc).
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iren
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Post by iren on Apr 23, 2018 17:39:06 GMT
Are AC artificially maintaining an appearance that loan diversification is possible when it is not. I am currently selling some loans and repurchasing them in my ISA. I have noticed that on many occasions when a loan is processed, I neither sell us much as I am targeting in my Standard account or buy as much as I’m targeting in my ISA although my ISA has contained spare cash in advance. I had always thought that whether I am able to sell a loan would depend on whether there is a willing buyer, but I now see that is not the case. More likely a bug somewhere. That area is under intense rewrite at the moment giving the market place matching algorithm a fresh start without all the legacy code that has built up over the years. Give me a couple of weeks and things will be working much more quickly and smoothly. I can categorically state there are no algorithms or manipulations in place to skew the market. Thanks. That's good to know.
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Post by Butch Cassidy on May 2, 2018 13:22:36 GMT
It's basic supply & demand, most MLIA investors are looking for "fair value" or better returns for the level of risk that they are taking with their money. AC now market themselves largely as a savings platform, via the various AC managed accounts (in other words savers give AC discretion to invest their money in whatever they want in return for a set return) so AC can underwrite £10's Million of loans that most MLIA investors don't see as offering attractive enough returns, hence loads are available on the SM & no amount of offering a diversity argument will make 5-7% rates look attractive to these genuine investors, as opposed to savers. Classic pricing for liquidity & not risk - this is not intended to be a criticism of the AC strategy but as a MLIA investor I no longer find hardly any loans offering sufficient rates for the risk I think they represent, so I have invested in AC equity, via Seedrs instead, as I see it as a much better medium/long term investment. I think you will find there are very few loans in the 5-7% rate going forwards - almost every one in our current pipeline starts at 8% MLA. I have received 7 "Upcoming loan" notification e-mail's since this post; #692 - 7%, #709 - 8%, #719 - 7%, #720 - 7%, #722 - 6%, #723 - 6%, #725 - 6%
Perhaps AC are not bothering to notify lenders of the higher rate loans?
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Post by slumberingaccountant on May 2, 2018 16:55:49 GMT
I am not seeing an increase in rates. the ones coming through for investment are mainly 6-7%. I wont invest much at 6% and take the risk as well. The Pipeline is not showing any movement to higher rates, so its fairly slow slog at the moment to get invested, particularly as i am getting lots of repayments in my Non-ISA MLIA.
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IFISAcava
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Post by IFISAcava on May 2, 2018 17:33:03 GMT
After disillusionment with GBBA2’s algo, a week ago I entered fresh equal buy instructions for every MLA loan there is, except ones with less than 4 months to go, and my average rate is 6.98%. before defaults...
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Post by chris on May 3, 2018 4:07:17 GMT
After disillusionment with GBBA2’s algo, a week ago I entered fresh equal buy instructions for every MLA loan there is, except ones with less than 4 months to go, and my average rate is 6.98%. before defaults... Before losses. Default != loss.
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ashtondav
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Post by ashtondav on May 3, 2018 6:49:58 GMT
After disillusionment with GBBA2’s algo, a week ago I entered fresh equal buy instructions for every MLA loan there is, except ones with less than 4 months to go, and my average rate is 6.98%. before defaults... That seems too low.
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cb25
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Post by cb25 on May 3, 2018 8:12:10 GMT
It is what it is. I was just trying to provide an actual example of what’s available right now. For me, a well diversified (1.25% currently) portfolio at 7% is a more better, more honest, return than what I had in the GBBA2. It’s good enough for me for now, especially in an ISA. My MLA is 7.26% (not hugely higher), but then I try to be fairly cautious.
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Post by stuartassetzcapital on May 3, 2018 11:31:07 GMT
A number of loans in the pipeline are popping out with older (and lower) agreed rates as can be seen above but the overall pipeline getting close to draw (not necessarily visible publicly yet) is going higher in rate. Pretty much nothing new is being agreed or in fact needing to be agreed below 8% MLA I am advised.
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Steerpike
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Post by Steerpike on May 3, 2018 12:24:16 GMT
A number of loans in the pipeline are popping out with older (and lower) agreed rates as can be seen above but the overall pipeline getting close to draw (not necessarily visible publicly yet) is going higher in rate. Pretty much nothing new is being agreed or in fact needing to be agreed below 8% MLA I am advised. This is interesting and seems to run counter to recent trends, are interest rates on the increase again, have Assetz started taking a smaller slice, or is the next batch of loans more risky?
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