Investment allocation algorithm

Hi Mousey_saver, 

I hope you are well. 

My apology for any confusion regarding our deposit allocation. 

Currently, we are experiencing a queue which has meant that some loans that you've previously seen open for investment may have been filled. 

We are working extremely hard to get more capacity onto the platform and have new loans coming shortly.  

Once your investment has been allocated, we'll send you a quick confirmation email letting you know.

You'll find that we won't automatically redistribute your money across new loans – and so your portfolio would remain the same until individual loans redeem and are replaced by new ones, with different rates.

So, if you were to invest £1000 this will be spread across our available loans. Our automatic diversification is a feature that will be worked on but doesn't currently happen. You are however able to feed your Choice account regular deposits.

Just to let you know that we are currently hard at work making the information on the statistics page a lot clearer, as we know that that people will want to know if and roughly how long they might have to wait before their money’s hard at work.

Please do let me know if you have any further questions. 

Best,
Vanessa 

I don't think that the automatic diversification is in use at the moment. Assume that as much as 10% of a deposit might be in one loan. I spread my investments over several months. I am happy with OC so far.

Hi fogey , bigfoot12 and macq , thanks for your questions and I’m really pleased you’re enjoying Octopus Choice. Also, apologies for only getting back to you now!

In response to your questions, our automatic diversification feature is now up and running! So, if you end up with over 10% of your investment invested in one loan, we’ll automatically rediversify your entire portfolio to lower your exposure.

We do weekly checks to see if this is the case and, at this point, all your loan parts will be sold. You will then jump straight to the front of the queue for buying new ones. So, note that this will mean you end up with a new interest rate.

Then, as you go to the front of the queue, you will be allocated smaller amounts of your previous loan parts, along with new ones from the available loan book.

I'm of course unable to give advice on what is best, however we know some of our customers do drip feed in their investment over time for this reason.

I hope this helped and please do ask if there's any further clarification I can give, or if you have any other questions

Thanks,
Joe

Not a problem macq! Most of our long-term investors will be diversified across a large number of loans, like yourself – and it's most likely that portfolios become more diversified with time, not less; but we've introduced the rebalancing feature in case the opposite takes place.

We're confident that 10% provides a sufficiently strong level of diversification – but as with all our features it's something we're always looking closely at, so thanks for the feedback; we'll definitely bear it mind as we develop.

Really glad you're happy with the product, though! With regard to the Octopus Choice ISA, we'll be launching it to existing investors first, and most likely only to new subscriptions to begin with – with transfers following later. We've always tried to grow the product in a controlled, managed way; and this should help to ensure people continue to get invested as quickly as possible.

Finally, we're always exploring the possibility of including other types of lending – some longer-term than others. We'll have some more concrete news to share over the next few months, so watch this space!