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Post by gusgorilla on Apr 2, 2016 2:14:47 GMT
I am very puzzled by a couple of things on this platform. I hope somebody can help. I seem to be missing some things.
1. Why do people appear to be bidding for parts of projects at large premiums on the secondary market whilst at the same time the primary market seems to be struggling to fill projects. What's the point of paying way over the odds on the secondary market?
2. Why have fixed return projects offered similar rates to variable return projects? Surely fixed return projects are less desirable because they will suffer the effects of inflation.
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pom
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Post by pom on Apr 2, 2016 8:59:48 GMT
I am very puzzled by a couple of things on this platform. I hope somebody can help. I seem to be missing some things. 1. Why do people appear to be bidding for parts of projects at large premiums on the secondary market whilst at the same time the primary market seems to be struggling to fill projects. What's the point of paying way over the odds on the secondary market? 2. Why have fixed return projects offered similar rates to variable return projects? Surely fixed return projects are less desirable because they will suffer the effects of inflation. 1 - I'd assume for diversification. Personally it doesn't appeal to me as given the duration of the projects I'm happy to take my time to build up a portfolio of projects as they launch. 2 - Whilst you might want to consider inflation when deciding if you like the offered rates at all I suspect it's pretty irrelevant to deciding between fixed & variable (I could be wrong), when payments are reliant on weather and fixed FITs rather than traditional economics. A variable might perform better if its particularly sunny/windy, but there won't be any change to the payments just cos the economy changes (unless the projects go totally bust anyway)
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Post by mrclondon on Apr 2, 2016 19:56:48 GMT
The variable rate loans pay their coupon as dividends not interest, and hence receive preferential tax treatment. However apart from the first few loans written, there have been very few. I have only invested in the variable rate loans, I don't regard any of the variants of fixed rate loans on abundance to be good value. gusgorilla, you mentioned inflation - that is built into the yield curve on all the debentures, including the fixed rate ones.
The huge premiums on the SM are a mystery to me. Study the prospectuses and you'll find a graph of the yield curve ... the annual % return in the early years is low and very high in later years. Only a couple of years into that 20 year yield curve you would not expect annual returns of more than 2 or 3% IIRC. (and hence 9 months accrued income of 2.25% or less)
The high premiums are as pom suggested mainly a product of diversification demand, and a total lack of understanding of the yield curve. Paying a 10% premium is nuts. That's somewhere in the region of 3 years income at this stage in the yield curve.
Nobody should be buying on abundance without first studying the prospectus documents for each debenture carefully. These are not straight forward.
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littonowl
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Post by littonowl on Dec 5, 2016 11:52:30 GMT
I have just made my first investment here but I did not find any information as to whether I get any interest whilst the loan is filling, like FS and some ABL ones. Grateful for any info. Not been with Abu long, but as most debentures only start earning once the projects are up and running (and producing returns via feed-in tariffs etc) then I don't believe you do. Not seen anything to that regard either on the Corporate bonds, but expect they'd advertise if this was the case, as they did with their 2% Cash ISA offering, whilst waiting for IFISA approval earlier in the year...?
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ben
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Post by ben on Dec 5, 2016 12:41:58 GMT
I always invest a little bit to begin with and wait til it a bit closer to add full amount, least that way I get smething if it fills up quick at the end. Never been an issue so far.
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jj
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Jolly Jammy
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Post by jj on Dec 5, 2016 17:01:59 GMT
This will be my first Abundance investment. I've not had any interest last month so this 12% seem like a headline hook to me.
So It looks like I'll be getting 12% over 15 months. That works out at the same as 9% over one year.
Having said that I am not complaining, just living & learning.
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Steerpike
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Post by Steerpike on Dec 5, 2016 17:16:07 GMT
I received the email announcing the construction bond on 2nd December and the loan offer quotes an expected close date of 31 January, so 2 months to raise nearly £4m, seems reasonable for this platform. I will invest but probably not until January, meanwhile there are other places for my money.
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jj
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Jolly Jammy
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Post by jj on Dec 11, 2016 9:57:14 GMT
Hello all,
I would like to ask a question about Abundance's investment strategy.
What I gather is that most investments are 20 years, for example.
At the beginning the rate is low about 4% then works up to high rates of return.
My question is what happens if the investment is sold off before the 20 years ?
Considering the rates are low at the beginning are investors compensated ?
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Steerpike
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Post by Steerpike on Dec 11, 2016 10:18:07 GMT
Hello all, I would like to ask a question about Abundance's investment strategy. What I gather is that most investments are 20 years, for example. At the beginning the rate is low about 4% then works up to high rates of return. My question is what happens if the investment is sold off before the 20 years ? Considering the rates are low at the beginning are investors compensated ? I had one that repaid early and the answer is yes, I think that the objective is to pay compensation sufficient to achieve the headline XIRR. For the details of the calculation you will have to read the offer document for the investment that you are considering.
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jj
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Jolly Jammy
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Post by jj on Dec 11, 2016 13:25:20 GMT
Glad to hear that. Thanks.  |
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ben
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Post by ben on Dec 11, 2016 20:48:37 GMT
I received the email announcing the construction bond on 2nd December and the loan offer quotes an expected close date of 31 January, so 2 months to raise nearly £4m, seems reasonable for this platform. I will invest but probably not until January, meanwhile there are other places for my money. I would look again if want to invest as going pretty quick
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Steerpike
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Post by Steerpike on Dec 12, 2016 8:24:42 GMT
I received the email announcing the construction bond on 2nd December and the loan offer quotes an expected close date of 31 January, so 2 months to raise nearly £4m, seems reasonable for this platform. I will invest but probably not until January, meanwhile there are other places for my money. I would look again if want to invest as going pretty quick I have been monitoring this and it moved much faster than I expected, possibly because of the general shortage elsewhere and the recent £304k cash return. I jumped in last week when it hit 80%. Let's hope that the project goes well, if not, at £3.9m there could be a lot of investors crying into their mulled wine in Christmas 2017.
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Post by brokenbiscuits on Dec 12, 2016 10:01:13 GMT
I would look again if want to invest as going pretty quick I have been monitoring this and it moved much faster than I expected, possibly because of the general shortage elsewhere and the recent £304k cash return. There are a few p2p sites where you can get 12% returns. This is the only that I know of that will not get taxed down to a lower return due to the isa. So a genuine 12% return must be a factor too.
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kaya
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Post by kaya on Dec 24, 2016 15:57:08 GMT
Explain this one. Amount offered £4.42, Asking Price £5.00, highest bid £10.00. That cannot be serious.
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nush
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Post by nush on Dec 24, 2016 16:46:32 GMT
Explain this one. Amount offered £4.42, Asking Price £5.00, highest bid £10.00. That cannot be serious. i was looking at this loan earlier and i dont get it either. i would like to know because i have loans outside of my isa and i am looking for the best way to move them in to my isa, via buy and sell.
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