All the uncertainty surrounding Brexit has built a consensus among analysts that interest rates aren’t going up any time soon. With that in mind, we thought we’d offer a brief reminder of the attractions of our managed portfolio service, with its net 7 per cent yield.
Managed Portfolio Service
Clients of the Money&Co Portfolio Service have access to loans with a typical fixed return of 7%, without the need to manage a portfolio of loans. You will receive a quarterly statement with detail of what is held in the portfolio and all transactions during the quarter.
Money&Co. loans are typically asset-backed, meaning Money&Co. has a charge on behalf of its lenders over an asset, usually a property. Money&Co. will ensure that there is sufficient headroom to allow for any financial shocks and that it will be able to recover lenders funds if the borrower is in default. Nonetheless, lenders must understand that their capital is at risk.
As the client, your portfolio will be managed according to parameters agreed with you at the outset. You can elect to have interest from your loans paid out twice annually, or retained in your portfolio for reinvestment.
New Loans Latest
Project Rhapsody is now 72 per cent funded. The loan offer has an A risk rating, and provides a fixed-rate return of 8 per cent over five years.
Fuller detail is excerpted from the borrower’s offering on site below. The whole pitch – vetted according to our credit committee’s best efforts, though we cannot warrant the accuracy of the statements – is available to logged in users.
Historical Performance And IFISA Process Guide
That figure is the result of over £17 million of loans facilitated on the site, as we bring individuals looking for a good return on capital together with carefully vetted small companies seeking funds for growth. Bear in mind that lenders’ capital is at risk. Read warnings on site before committing capital.
All loans on site are eligible to be held in a Money&Co. Innovative Finance Individual Savings Account (IFISA), up to the annual ISA limit of £20,000. Such loans offer lenders tax-free income. Our offering is an Innovative Finance ISA (IFISA) that can hold the peer-to-peer (P2P) business loans that Money&Co. facilitates. For the purposes of this article, the terms ISA and IFISA are interchangeable.
So here’s our guide to the process:
The ISA allowance for 2019/20 is unchanged from last tax year at £20,000, allowing a married couple to put £40,000 into a tax-free environment. Over three years, an investment of this scale in two Money&Co. Innovative Finance ISAs would generate £8,400 of income completely free of tax. We’re assuming a 7 per cent return, net of charges and free of tax here.
Once you have made your initial commitment, you might then consider diversifying – buying a spread of loans. To do this, you can go into the “loans for sale” market. All loans bought in this market also qualify for IFISA tax benefits.
Risk: Security, Access, Yield
Do consider not just the return, but the security and the ease of access to your investment. We write regularly about these three key factors. Here’s one of several earlier articles on security, access and yield.