Wise Alpha

firestone

think its pitched as a hold to term fixed rate product for people who may not invest in funds but are looking for a rate better then a B/S bond backed by a household name(but it would be better if people understand bonds & ytm etc) rather then a bond fund with its ups and downs in price and sell when you like.
Think the idea is quite good and if the likes of HL or iii were offering it it would be well received even with the risk of the company behind the bond itself i.e Tesco or whoever.At the moment there is the risk like all fintech of the platform itself.

firestone

Think this is a bit like the thread that is running of why don't people invest.Because of scams people are very wary of any new product with good reason.But maybe in a 100 years a few of this fintech companies will be mainstream,the problem is knowing which ones.
You have big investment managers/funds buying into Ratesetter/zopa you have the Octopus investment company whose funds you can buy through Fidelity etc backing their own property P2p product Octopus choice and Zoopla backing Landbay.Its unlikely that any of these are scams but with no compensation scheme they come with a bigger risk.
I am not up on the history of B/S but can imagine the replies when someone said give us your money for a year and we will give you a bit more back.Or the trust that people would have had to have to invest for the first time in Investment trusts or even give your money on the doorstep to the man from the Pru.

Jackthedog

While the 'smart' bonds are not especially attractive WiseAlpha itself has an interesting proposition. They buy senior secured bonds in 100k tranches and investors buy notes on a portion of them for a fee of 1% levied on the coupon payments.

The net result for most investors is that they can choose the bond notes they prefer. Assuming the platform carries on honouring the notes, in the longer term for some people this is a better proposal than many p2p loan offerings. On the other hand the bond values can go up or down and this could offer a bumpy ride to term.

For anyone who understands bonds but doesn't want to invest in bond funds which can be equally pricey and be fairly low yielding at times this may be a reasonable punt for a small percentage of a portfolio.

Linton

A major problem with bond funds is that they remove a key benefit of bond investing - the guaranteed return of capital at maturity. The ability to be able to choose a portfolio of corporate bonds with appropriate maturity dates for one's circumstances could be very useful.

Shashy

economic wrote: »

thanks but i know all that, just wanted to find out if its worth investing in. 7% seems quite high for a pool of corporate bonds. was wondering if there is a catch?

The very first reply to your post makes the catch completely clear.

Glen_Clark

Linton wrote: »

In my view they can provide a perfectly sensible investment both for diversification and income.

Only for those who can make a realistic assesment of the risks involved. Which, lets face it, is beyond the overwhelming majority of private personal investors on forums.
So 'Blanket Condemnation' looks like the most practical and safest policy.