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Corporate bonds - via Wisealpha platform

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  1. #11

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    Wonder if it is breaching some regulation somewhere in the world (not that an investor cares)..
    but there are reasons why bonds are set at 50k or 100k or 200k per clip.. that's to deter retail investors as they deem the trouble not worth the deal...


  2. #12

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    Their website doesn't make it easy to figure out the kind of bid-offer spread they charge. To those who have an account with them, any concrete example ?

    The "Service Fee" they charge looks fairly high to me.

    Also, note the following language in case you want to sell your bonds. In other words the platform doesn't provide any liquidity for buying back bonds.

    Can I sell my Fractional Bonds portfolio and withdraw my funds at anytime?

    You will receive your cash in your account once another member has purchased the investments you are selling.
    nivantj likes this.

  3. #13

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    In short, partially guaranteed win Mark-Six!!!


  4. #14

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    Quote Originally Posted by freeier
    Particularly the Junk bonds that give really high coupons, buying them are tantamount to buying penny stocks, either you have some really really backdoor news or you are a major speculator..
    Not sure I agree about this. Penny stocks are probably going to be worth pennies (or less) in 5 years. On the other hand, a 7.6% bond from Amiga Loans is highly likely to return its capital, and you've taken chunky coupons in the interim.

    I wouldn't buy their stock, I'm a bit happier to buy their debt.

  5. #15

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    The 10 year historical default probability of B-rated issuers such as Amigo (not Amiga !) Loans is 15%.


  6. #16

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    Quote Originally Posted by jrkob
    The 10 year historical default probability of B-rated issuers such as Amigo (not Amiga !) Loans is 15%.
    Apologies on typo

    So 1/7 chance of default over ten years, say 1/70 chance in any given year vs. 6-7% annual yield enhancement over the period... Holding 7 of these names seems like a winner?

    Usual cautions apply!

  7. #17

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    Quote Originally Posted by GentleGeorge
    Holding 7 of these names seems like a winner?
    You assume correlation between defaults to be zero.
    In reality this is not the case and you underestimate your potential losses.
    DimSumBond likes this.

  8. #18

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    It seems like a way to federate risks and take advantage of that middle-man cut operating model that is all the rage in a world lacking in innovation.

    I would recommend to look out for how wide the spread is and whether there are any trading charges.

    Nothing really appealing here. Risk of defaults will likely go up in the non-top tier grade bonds over the next decade as interest rates remain low and the cost of business goes up in an environment where consumers and businesses are price sensitive.


  9. #19

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    With a dearth of investments providing yield it can work nicely alongside other ETF's. The service fees are staggered and decline the more your invest. There is a counter party risk which is probably the biggest concern at present. IMO it is an interesting fintech prospect.


  10. #20

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    Quote Originally Posted by Paxbritannia
    My my, you're rather highly strung. Settle down.

    Mentioning it in one thread as an option is not tantamount to pushing it. I was merely making the point that there were alternatives to bond funds run by HSBC etc that seemed to take high management fees. The purpose of this thread is to have a more detailed discussion about the pros/cons and to see if anyone else has tried them out. I've been debating putting some cash in myself but haven't pulled the trigger yet. I have no association with the website.

    On a more positive note, thanks to GentleGeorge for sharing his experience.
    My apology, I thought you had advertised it a few times in the other thread, but actually you only mentioned it once. I posted this comment, in case the op didn't see it:

    "By investing in WiseAlpha Notes, you will not be holding the underlying bond investments or other investments discussed herein. This means you do not have voting rights in respect of any of the underlying bond investments or other investments.

    You may not have recourse to the Financial Services Compensation Scheme."


    Basically, they are aggregating the funds of investors to buy these bonds, collecting the dividends and then paying them. However, there's no obligation for them to actually buy those bonds, just to pay you the interest (and return of capital) as though you did own them.
    I would rather keep my LON:IEMB, with its 4.8% dividend.
    shri likes this.

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