jaswells
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Post by jaswells on Sept 28, 2017 0:40:39 GMT
I have a decent sum invested in 8 platforms and it is interesting to see this sector evolve. Over the coming months it is in for a big shake up and we can see some major changes beginning to take place.
Wisealpha seems to fit somewhere between the two but traditional p2p (choosing who you invest in) is becoming less common with the reforms at FC, others may follow.
I thought I would share my actual returns to date and state of affairs with each lender:
Traditional p2p:
Assetz - 7-8%- 5% default- however longer term loans
Lendy- 10-12%- 15% default and rising
Moneything- 11% - 10% default and rising
Lendinvest- 5% no default
Crowdfunding p2p:
Ratesetter- 4.5%- default unknown
Zopa- 5% and falling- default unknown
FC- 5.6%- - big changes future returns uncertain
Wisealpha - 4.8% averaged out - no default.
My feeling is that Wisealpha has emerged as a safer proposition over time- Lack of DD, exposure to dodgy borrowers, risky business and low asset quality is exposing the sector to some obvious challenges . For this reason Wisealpha remains my favourite platform in the sector and the only one I am adding to. Loans are based on highly regulated bonds in the financial sector and the initial fruits being offered in the emerging p2p sector are clearly going to come under pressure in the coming months as rising bad loans have to be resolved.
Diversification remains key
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ben
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Post by ben on Sept 28, 2017 0:49:07 GMT
I have a decent sum invested in 8 platforms and it is interesting to see this sector evolve. Over the coming months it is in for a big shake up and we can see some major changes beginning to take place. Wisealpha seems to fit somewhere between the two but traditional p2p (choosing who you invest in) is becoming less common with the reforms at FC, others may follow. I thought I would share my actual returns to date and state of affairs with each lender: Traditional p2p: Assetz - 7-8%- 5% default- however longer term loans Lendy- 10-12%- 15% default and rising Moneything- 11% - 10% default and rising Lendinvest- 5% no default Crowdfunding p2p: Ratesetter- 4.5%- default unknown Zopa- 5% and falling- default unknown FC- 5.6%- - big changes future returns uncertain Wisealpha - 4.8% averaged out - no default. My feeling is that Wisealpha has emerged as a safer proposition over time- Lack of DD, exposure to dodgy borrowers, risky business and low asset quality is exposing the sector to some obvious challenges . For this reason Wisealpha remains my favourite platform in the sector and the only one I am adding to. Loans are based on highly regulated bonds in the financial sector and the initial fruits being offered in the emerging p2p sector are clearly going to come under pressure in the coming months as rising bad loans have to be resolved. Diversification remains key Sensible diversification is the key but wise alpha have had very few bonds mature so a bit early yet. Plus defaults in themselfs do not always mean a capital loss although the Lendy ones probably will. Also if your looking for something different then the P2P loans have a look at something like Property Partner, Brick owner or one or two similar sites.
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macq
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Post by macq on Sept 28, 2017 7:06:42 GMT
Would say i see them more as a diy bond fund then P2p but so far i have had no problems but like any investment there is always the chance of a loss (any of the bonds in retail could come under pressure for example) but you do hope with the banks doing the DD & more chance of recovery with at least the senior secured bonds that there is a bit of safety in your choice.
The only problem for me is that the new issues have gone from 5 years or less to more like 6 - 8 years and the interest rate has come down which makes it look not so good and harder to judge where rates will be in that time period and the fee on the bond hits harder on some of the new bonds as well due to the lower rate.
You then start to look at the high yield bonds for a better rate but your risk goes up due to not being secured(all be it on a bigger company then say Joe Bloggs the builder)
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puddleduck
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Post by puddleduck on Sept 28, 2017 8:23:21 GMT
I do not see Wisealpha as P2P either - I think generally the offering is much safer as we are buying into bonds of major international businesses, rather than smaller SMEs.
My issue is that as mentioned above is that rates have gone down - when I joined 8%-ish was common and timeframes shorter - recently bond lengths have gone up and rates seem to be 50% of what they were a year ago. Wisealpha for me is still am immature business, and I do not yet feel confident to invest in offers with a 6 year+ maturity date, as we do not have a sellable commodity should the platform fail I believe.
Nevertheless, I do like the site - especially the 8% Wisealpha bonds when there are offered!
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jaswells
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Post by jaswells on Sept 28, 2017 10:05:06 GMT
Agreed, not p2p technically, however many major platforms only have collective pools to lend into rather than lending directly to chosen businesses (FC,Ratesetter,Zopa)- and in some ways this feels even less p2p. I think some of the other p2p sites are finding it really challenging to offer quality customer services against constant barrage and email requests for information on individual loans. Personnel costs must be rising to deal with new challenges as they arise.
Wisealpha appears a lean business which is growing organically. My only concern would relate to the speed of growth and whether WA can become profitable in the face of only a steady stream of new investors and lower yields. They have openly admitted their monthly costs elsewhere. They have, however, been extremely successful in their crowdfunding campaigns.
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invester
P2P Blogger
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Post by invester on Sept 28, 2017 10:18:23 GMT
Personally I like Wisealpha's model.
On the face of it, it seems fairly simplistic and transparent. They need scale though, offering a couple of millions worth of bonds isn't going to be enough. On the plus side, their proposition to the customer is something a little different, although I hope they don't go the same way of 'trust us to manage your money' and offer no choice for a blended interest rate which seemingly ticks down 0.1% every couple of months.
Compare that to the likes of similar sized platforms getting their hands dirty with property loans and the kind of staffing power involved to keep these on the straight and narrow.
If I were a betting man I'd be pretty confident of WA still existing in 2 years, that's more than I can say than for certain platforms.
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Post by Wisealpha on Sept 28, 2017 13:13:16 GMT
Hi Guys,
Interesting views. We intend on keeping the main market for those who want to choose their own bonds because different folks have different wants but we will also be launching our own smart interest product where you can select your rate and term - so you'll have a choice of what you want to do.
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shimself
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Post by shimself on Sept 28, 2017 13:25:07 GMT
Hi Guys, Interesting views. We intend on keeping the main market for those who want to choose their own bonds because different folks have different wants but we will also be launching our own smart interest product where you can select your rate and term - so you'll have a choice of what you want to do. How are you going to manage conflicting maturity dates? ( It's entirely plausible that say interest rates are up, and so old bond issues resale prices are down in a couple of years. ) I wouldn't buy these unless I was prepared to hold to term, which is why I am so disappointed not to see more RPI or Libor linked offerings
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Post by Wisealpha on Sept 28, 2017 13:38:03 GMT
Maturity mismatch will be managed by how we change a number of things:
- the rates we offer will be dynamic so may change at different times
- We can manage the bonds we offer on the site versus what we hold - so there is no reason to sell at a loss especially if we have continuous funds flowing in
- Higher rates are skewed to longer maturities (so for example 7 year will be 8.0% to begin with) and will give us an opportunity to also buy when prices are depressed and make gains
- We'll also build a reserve of cash to fund any near-term mismatches.
- Please note rates are more than likely to come down after the introductory launch if the market continues to get hotter.
These bonds will have no ability to redeem early without a hefty fee so people will have to hold to term so we can manage our cash appropriately.
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jaswells
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Post by jaswells on Jan 23, 2018 12:15:05 GMT
2018 will be an interesting year for p2p. How companies address and resolve their mounting bad loans will be critical for the industry but significant haircuts are now being seen across more and more defaulted loans. I have recently got notice of my first capital losses in AC and MT. Lendy and FS appear to live in extended states of denial but clearly carry some big loans waiting to be almost written off. Zopa's returns appear to have almost evaporated. FC has become a blackhole and RS churns out the reasonable returns whilst dangerously flirting with huge losses itself. Wisealpha has blotted its copybook with New Look bonds and its recent bond price has collapsed. However, this brings me back to one reason I like Wisealpha loans (senior secured and heavily invested in by institutions and fund managers). I always feel the weight of the financial sector will get behind bondholders to ensure fair play (see link), hence I feel confident of a decent resolution as various stakeholders align their interests. This is in no way how I feel about most p2p sites and their attempts to brush some bad loans under the carpet and sometimes treat lenders with disregard and disdain. |
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Post by caveman38 on Jan 24, 2018 16:52:16 GMT
2018 will be an interesting year for p2p. How companies address and resolve their mounting bad loans will be critical for the industry but significant haircuts are now being seen across more and more defaulted loans. I have recently got notice of my first capital losses in AC and MT. Lendy and FS appear to live in extended states of denial but clearly carry some big loans waiting to be almost written off. Zopa's returns appear to have almost evaporated. FC has become a blackhole and RS churns out the reasonable returns whilst dangerously flirting with huge losses itself. Wisealpha has blotted its copybook with New Look bonds and its recent bond price has collapsed. However, this brings me back to one reason I like Wisealpha loans (senior secured and heavily invested in by institutions and fund managers). I always feel the weight of the financial sector will get behind bondholders to ensure fair play (see link), hence I feel confident of a decent resolution as various stakeholders align their interests. This is in no way how I feel about most p2p sites and their attempts to brush some bad loans under the carpet and sometimes treat lenders with disregard and disdain. What recent bond price collapsing are you referring too?
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jaswells
Member of DD Central
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Post by jaswells on Jan 24, 2018 21:32:45 GMT
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