Performance report 2018

Thanks for sharing benaj. I'm only a handful of months into my p2p journey (so much more of a newbie than you!), so this is very useful to see what returns your getting. I'm guessing that this is pure interest and doesn't take into account pending defaults as it's too early to realize those?

p2pgirl, I agree with df that it's difficult to predict the how much will be recovered in some loans. A number of loans in arrears have not been reported as default nor losses. 

On FundingSecure, I have 3 loans recovered without losses, one loan unredeemed and 181 loan parts repaid with full interest. Meanwhile, my current Lendy XIRR is above my expectation after 28 months, despite only 10 completed loans out of 16 repaid with full interest and I don't have clue how many loans will be repaid / recovered in 2019. I have 12 loans awaiting for recoveries. On Ablrate, XIRR is above 12% despite a few borrowers have missed payments and the positions are not clear.

benaj,

Interesting figures, have you left Zopa off the list as you are all out of there now. Sometimes it's interesting to see the worst performers as well as the best ones.

My Zopa has been getting a bit worse this month, still way up on the deal but nearly 80 default value has been crystalised this month measured against interest received so far. The end of the month wil be more accurate I know but it has been the worst since I started lending on Zopa in 2006.

Across all our 4 accounts though things are slightly better. Both ISA's defaults still seem to be non paying apart from the recent fire sale that is. Invest older defaults are still paying very slowly but something is coming through.

So i thought i'd cobble together all Our XIRR's since 2015 on Zopa as follows. 

2015 - 6.52%
2016 - 6.10%
2017 - 5.45%
2018 - 5.79%

and the overall XIRR for the past 4 years was 5.5%.

Since 1st Jan we have been running down our Invest sides and at present pushing the funds into RS 5Y at an average of 6% or so (approx 3.2% if we did not relend). This is a slow process as we are not selling just withdrawing daily at the moment but wondering if it will be better to limit this to weekly or even monthly.

Its actually 90/10 in my invest and 90/20 in Mrs Aju's Invest and in both our ISa's. Yours is slightly higher and I think ours will be higher next year once a whole year of considerable investment starts to bite next year - defaults pending of course ;-).

The 3.2% is an approximation as on both Zopa and RS they use amortizing loans as opposed to a normal lumpsum invested in a bank where the whole investment is at the same rate throughout the year until you withdraw it. The easiest way to explain it is check the payments expected in your loan data, in this case RS, and simply divide the return (interest) by the loan amount and then divide by the number of years (month*12) - its an approximation but its not far off.

An example would be one of my recent RS loans, the biggest and longest we have at present.I have a table of all my loans and all Mrs Aju's loans and its a rough average of 50.5% over 7 loans using this formula. In reality a lot of loans will fall out earlier and will actually result in slightly higher true rate.

This is why Zopa and RS and probably the other sites have a very prominent statement along with their headline rates that states the returns must be reinvested to maintain these rates. It's also why many people when they start to run down their accounts are surprised to see that the rates fall quite a bit.

This is also the reason I keep tables of all our accounts and lendings - with expected returns and rates etc - that enable me to see when banks change their rates I can compare different products depending on how we need to keep our funds both investing for best rates and also have funds available for day to day things. It is a juggle sometimes for example as being retired our main criteria for lending is to maintain a buffer that is better than inflation so that inflation tax does not hit our funds but also bearing in mind that PF/SG are a buffer against defaults - Zopa has dropped their PF and the rates are not that great compared to say our new toy of RS which has a PF - of course one has to be realistic and bear in mind the current climate and the vulnerability of said Protection funds etc.

Oops I've wittered on too far and answered some questions that were not posed.

Hopefully you can see about the rates issue, I'm sure you already knew where I was coming from and were just clarifying. I know some people will say its really the rate for the 1Y or its really the rate for say Regular savings, which we definitely utilise too. But when it comes time funding Mrs Aju's impromptu shopping trips whilst keeping the best investment rates working it's a fine juggle and it pays to be well informed what each true rate really means. 

HTH

I thought you knew what I meant , but it is important to know this I feel that if you don't consider it then you are not truly making an informed decision that's why I took the time to detail it just in case you didn't know.

Its extremely important knowing what the real/true rate is as how can i compare whether to suck funds out of P2P at 5% or out of my regular saver at 5% or my current accounts like TSB at 5%. I have many accounts I managing across our investments and when I have to make a decision I want to be able to make it fast but correctly. That said I still make horrendous mistakes ones but I try to keep them to a minimum. (A recent one was to forget I could have got a cashback on a purchase of laptop - that one cost me >£20 but I was in a rush and therefore not thinking straight.)

The real choice in those three is to take it from P2P 1st then the Reg saver then TSB as a last resort as TSB will pay more in the year I withdraw the funds. The 1st 2 are a safety one but I would take out of P2P by turning off relend in Zopa or returning capital or Capital and Interest rather than selling at a fee and i'd use TSB as a last resort. (Assuming all the lent values are similar)

I know it sounds stupid but I always remember what my granny used to say was to look after the pennies and the pounds look after themselves.

In reality it takes very little of my time to do these comparisons as I have built up the necessary tables as a monthly/yearly update thing. The calculation I did for your question was something I just added into my RS tables as you asked it and I had forgotten to put them it in there, its very early days on our RS venture.

I understand what you are saying but I'm not sure one gets an APR/AER for Zopa loans to compare with and I don't remember seeing one for RS either. The thing is each loan in either zopa and RS is a separate entity and has a defined end point. Not sure APR/AER can be compared in these scenarios either.

You are also right I am going to move our Invest on rundown into RS for a while and then when we have what I feel is enough in there I will redirect to another product probably a reg saver again. Not the best thing but as long as it can be compared by how much it might deliver if it completes then I can compare it. With the absence of APR on the lender side of the P2P sites I use I'd be most comfortable doing what I do. 

I do use XIRR in my Zopa as shown earlier but sadly in the P2P world it requires one to have the historical after fact data to get a value. I'm trying to make a decision on not knowing what may happen in the future so whilst its not ideal it is possible to see what the resultant lending value might be, ignoring future defaults of course, based on not relending.

I'll be happy to be wrong but I already have the stats and therefore with them I can make a decision based on information rather than a stab in air based on an interest rate that is not quite correct or to put it more accurately may not deliver what the lender was expecting. The excellent 'forewarned is forearmed' saying springs to mind.

Thanks for your perspective though.