sydb
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Post by sydb on Oct 1, 2018 14:42:53 GMT
Beginner question. Re 30DA and QA accounts, once an investor has loans matched to their money, can AC decide to move their money from one loan to another without any interaction from the investor? I am not happy with the level of diversification and want to know if drip feeding will secure better diversification. If money can be moved by AC from loan to loan on their whim, then there is no way to control diversification with these accounts.
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amphoria
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Post by amphoria on Oct 1, 2018 14:48:39 GMT
Beginner question. Re 30DA and QA accounts, once an investor has loans matched to their money, can AC decide to move their money from one loan to another without any interaction from the investor? I am not happy with the level of diversification and want to know if drip feeding will secure better diversification. If money can be moved by AC from loan to loan on their whim, then there is no way to control diversification with these accounts. You get the same share of every loan as everyone else, so you are as diversified as possible. This process is continuous.
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star dust
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Post by star dust on Oct 1, 2018 14:52:34 GMT
Beginner question. Re 30DA and QA accounts, once an investor has loans matched to their money, can AC decide to move their money from one loan to another without any interaction from the investor? I am not happy with the level of diversification and want to know if drip feeding will secure better diversification. If money can be moved by AC from loan to loan on their whim, then there is no way to control diversification with these accounts. In my experience things get moved around all the time. It's not a static thing. Presumably some changes are due to 're-balancing' but I think a lot is nothing to do with your individual account per se, it's a reflection of AC overall. The full rationale behind allocations I think only chris and the hamster know 
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cb25
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Post by cb25 on Oct 1, 2018 14:58:36 GMT
Beginner question. Re 30DA and QA accounts, once an investor has loans matched to their money, can AC decide to move their money from one loan to another without any interaction from the investor? I am not happy with the level of diversification and want to know if drip feeding will secure better diversification. If money can be moved by AC from loan to loan on their whim, then there is no way to control diversification with these accounts. You get the same share of every loan as everyone else, so you are as diversified as possible. This process is continuous. If a Lender ends up with an unacceptable percentage in one loan (subjective I know), not much consolation knowing others are equally badly off. Not sure what the maximum percentage AC quote for a single loan in these accounts.
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sydb
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Post by sydb on Oct 1, 2018 15:04:52 GMT
You get the same share of every loan as everyone else, so you are as diversified as possible. This process is continuous. Thank you. So there is no way to control diversification. Why, then, does the platform enable an investor to place 'sells' against individual loans within the 30DA and QA accounts which then appear on the ML account? (I assume individual buys are possible too, maybe.)
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SteveT
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Post by SteveT on Oct 1, 2018 15:11:58 GMT
You get the same share of every loan as everyone else, so you are as diversified as possible. This process is continuous. Thank you. So there is no way to control diversification. Why, then, does the platform enable an investor to place 'sells' against individual loans within the 30DA and QA accounts which then appear on the ML account? (I assume individual buys are possible too, maybe.)
It doesn’t. If you place any Buy / Sell orders, they will apply only to your MLA (even if you start by viewing a loan from your QAA/30DAA). You can’t buy / sell individual loans in the Access accounts.
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ilmoro
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'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 Oct 1, 2018 15:17:20 GMT
You get the same share of every loan as everyone else, so you are as diversified as possible. This process is continuous. Thank you. So there is no way to control diversification. Why, then, does the platform enable an investor to place 'sells' against individual loans within the 30DA and QA accounts which then appear on the ML account? (I assume individual buys are possible too, maybe.)
Buys & sells solely relate to manual accounts. I assume you mean if you look at your holdings via the QAA it takes you to the generic loan page from where you can buy/sell. If you have no holding via the MLIA or free cash in the MLIA nothing will actually happen. The QAA/30DAA work like a fund, the fund holds X amount of loan and you therefore hold the same % of that holding in X as the % you have invested in the account. You have no control over X.
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sydb
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Post by sydb on Oct 1, 2018 15:17:21 GMT
Well, that's what is 'appearing' in mine. Whether they will actually occur or not, they are appearing as 'sell' instructions in the ML account.
Also, I don't agree with the 'diversified as possible' comment. This is subjective. It matters to me whether all my money is going to one borrower or not, even if spread over a number of loans.
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sydb
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Post by sydb on Oct 1, 2018 15:21:37 GMT
Thank you. So there is no way to control diversification. Why, then, does the platform enable an investor to place 'sells' against individual loans within the 30DA and QA accounts which then appear on the ML account? (I assume individual buys are possible too, maybe.)
Buys & sells solely relate to manual accounts. I assume you mean if you look at your holdings via the QAA it takes you to the generic loan page from where you can buy/sell. If you have no holding via the MLIA or free cash in the MLIA nothing will actually happen. The QAA/30DAA work like a fund, the fund holds X amount of loan and you therefore hold the same % of that holding in X as the % you have invested in the account. You have no control over X. Ok. That's a bit of a weirdness in the system, isn't it? My 'sell' instructions are appearing in my ML account.
So, to clarify, presently, everyone with money in the QAA/30DAA account has about 5% of their total investment with T** U***?
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cb25
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Post by cb25 on Oct 1, 2018 16:13:35 GMT
Buys & sells solely relate to manual accounts. I assume you mean if you look at your holdings via the QAA it takes you to the generic loan page from where you can buy/sell. If you have no holding via the MLIA or free cash in the MLIA nothing will actually happen. The QAA/30DAA work like a fund, the fund holds X amount of loan and you therefore hold the same % of that holding in X as the % you have invested in the account. You have no control over X. Ok. That's a bit of a weirdness in the system, isn't it? My 'sell' instructions are appearing in my ML account.
So, to clarify, presently, everyone with money in the QAA/30DAA account has about 5% of their total investment with T** U***?
My 30DAA/QAA - yes, 4.72% in T** U**
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sydb
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Post by sydb on Oct 1, 2018 16:37:42 GMT
Thank you for all the clarification. As you say, it's just like a fund, with allocation outside the investor's control. The continual redistribution of all active loans to both new and existing investors is a new technique to me so took a while to get my head around.
Is a loan excluded from redistribution once it defaults? Certainly it seems that 'suspended trading' loans are still actively distributed.
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amphoria
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Post by amphoria on Oct 1, 2018 16:53:21 GMT
Thank you for all the clarification. As you say, it's just like a fund, with allocation outside the investor's control. The continual redistribution of all active loans to both new and existing investors is a new technique to me so took a while to get my head around.
Is a loan excluded from redistribution once it defaults? Certainly it seems that 'suspended trading' loans are still actively distributed.
Suspended loans in the Access Accounts are also re-distributed as long as there is sufficient money in the Provision Funds to cover any expected shortfall. This is the "in normal market conditions" caveat on withdrawals.
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sydb
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Post by sydb on Oct 1, 2018 17:56:43 GMT
So this includes defaulted loans? They don't get stuck with the investors at the time? They just stay in the continuously redistributed fund until a time when it is decided that all that is going to be recovered has been recovered, and any shortfall is covered by the provision fund (or everyone suffers, proportionately)?
I'm just a bit confused because I saw a comment from someone who was whining about being stuck with a large amount of a defaulted windfarm loan, claiming not to have been responsible for apportioning their money in such a way. I am confused whether they bought this as a manual investment or not. Maybe it was before the access accounts were created. Sorry, I don't know the history.
Edit - ok, I see the difference between the 30DA/QAA, the GBBA and the MIA now I think. The windfarm loan was made through the GBBA where loans do stick to the investors at the time of money in and are not continually redistributed. It's a bit like an automatic diversification of MIA into loans that are available at the time. It seems to me that it is not an account you want to chuck a lot of money in at any one time.
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ceejay
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Post by ceejay on Oct 1, 2018 22:53:30 GMT
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Edit - ok, I see the difference between the 30DA/QAA, the GBBA and the MIA now I think. The windfarm loan was made through the GBBA where loans do stick to the investors at the time of money in and are not continually redistributed. It's a bit like an automatic diversification of MIA into loans that are available at the time. It seems to me that it is not an account you want to chuck a lot of money in at any one time. Not quite. Some changes were made a few months ago which mean that loans are continually redistributed between investors in GBBA2 and the PSA (not sure whether its been applied to the late and unlamented GEIA which is where the worst of the windfarms were to be found). However, if a loan gets into trouble then the music stops and whoever is holding that piece is stuck with it until it can be resolved. For this reason there is now no great disadvantage to throwing a lot of money in at once vs. dribbling it in - you'll get diversified anyway.
As you have now worked out, this is a critical difference wrt QAA/30DAA, where "in normal market conditions" you can always get your money out, regardless of a few duff loans.
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cb25
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Post by cb25 on Oct 2, 2018 8:49:46 GMT
I'm just a bit confused because I saw a comment from someone who was whining about being stuck with a large amount of a defaulted windfarm loan, claiming not to have been responsible for apportioning their money in such a way. I am confused whether they bought this as a manual investment or not. Maybe it was before the access accounts were created. Sorry, I don't know the history.
Confession: I'm one of those that go 'whining' on about having close on £6K stuck in defaulted loan 227. If you ever have the misfortune to get a sizeable amount stuck in an AC loan, I'll be interested to see how you deal with it.
Problem with AC and defaulted loans is that they (imo) have a bias towards the borrower. As long as the borrower stays in communication with AC, the borrower is allowed by AC's Ts&Cs to set the options of any Lender Vote. Unsurprisingly, as with loan 227, the borrower rarely goes with a vote option of "force the borrower to repay the loan immediately". If you're not already signed up for the AC private board, I'd really suggest you do so.
As to packaged accounts, I'd say - don't inject a massive amount in one go (your choice of 'massive'). Rather, as you suggest, feed some in then check the maximum percentage allocation. If it's OK, add to it.
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