rambler
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Post by rambler on Jan 11, 2018 11:25:48 GMT
My Z+ ISA summary currently says I am earning 9.8% with a projected retrurn (presumably after expected defaults) of 5.2%.
Does any one know how the projected return is calculated and how often the figure is updated?
Do other people have the same or similar figures on their Z+ accounts?
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Post by portlandbill on Jan 11, 2018 11:38:28 GMT
My figures are "At 10.8% Projected return of 5.6%" but these are not ISA Z+
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benaj
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Post by benaj on Jan 11, 2018 12:15:29 GMT
Projected return is a funny number. It gives you an expectation of what you can "earn" with all your non-defaulted loans while expecting some of your loans entering the default zone if invest in zopa regularly over the year.
The number will be updated when there is a change in your loan book.
This projected return can go even higher than 5.5% when the loan book is left with high risk loans only (D&E). Mine says I'm currently earning 17.9% with a projected return of 7.9%, which I say this is completely false representation.
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groon
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Post by groon on Jan 11, 2018 16:56:46 GMT
Projected return on my ISA Z+ is 5.2% and on Mrs groon's is 5%, ie similar to the OP's.
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benaj
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Post by benaj on Feb 8, 2018 9:48:25 GMT
Projected return is a funny number. It gives you an expectation of what you can "earn" with all your non-defaulted loans while expecting some of your loans entering the default zone if invest in zopa regularly over the year. The number will be updated when there is a change in your loan book. This projected return can go even higher than 5.5% when the loan book is left with high risk loans only (D&E). Mine says I'm currently earning 17.9% with a projected return of 7.9%, which I say this is completely false representation. I checked my Zopa account earlier, another new default this morning as expected. The funny thing about projected return in Zopa, in some cases Zopa tells you projected return is increasing even when there are more defaults in your portfolio. Now it tells me I am "earning" At 18.7% of Projected return of 8.4, fantastic isn't it?
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rambler
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Post by rambler on Feb 9, 2018 22:30:28 GMT
Since my OP my figures have changed (downwards) to 9.5% and 5.1% after defaults.
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easylender
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Post by easylender on Feb 9, 2018 23:26:22 GMT
I suspect it works like this. Depending upon risk category and duration, each of our loan parts has an interest rate, a probable default rate, and a probable recovery rate. Projected returns are the aggregate of these rates over our loan part portfolio. Consequently if an individual lender experiences a batch of defaults it will have little effect upon their stated projected returns. However, if Zopa find that the aggregate of all the loans in a particular risk category are not performing as expected they may change the corresponding anticipated default and recovery rates and this will change a lenders projected returns.
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Post by newlender on Feb 10, 2018 5:59:07 GMT
I am drawing down my Investing side as the repayments are made and intend to focus exclusively on the ISA side. I have earnings of 20% (projected 8%) on Z+ Investing and 8.5% (5%) on Z+ ISA. The former is due to a large number of D/E loans made before they tweaked the figures - Z+ ISA seems more stable hence the lower returns. As I have 60 defaulted loans in Z+ Investing, is it theoretically possible to be left with a loan book consisting solely of defaulted loans? I reckon I'll cash in anything I can soon and wait for April 6, but that will leave me with a rump of defaults.
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Post by propman on Feb 22, 2018 13:24:11 GMT
I believe the projection is based upon the current undefaulted loans and ignores the return to date. So idf a loan with an expected return less than the average defaults then the expected rate would rise.
Unfortunately I don't know how to access the default assumptions so I cannot check this or how the "average" is calculated. In the past averages were usually means of the rates and merely deducted the expected defaults. This took no account of the length of the loans or the different amounts lent, while the loss of interest from loans that default has also not been adjusted (which is significant for higher risk loans). As a result, it is not an estimate of what the portfolio will actually return.
- PM
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