nrw
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Post by nrw on Aug 22, 2017 15:48:21 GMT
"As a result of the increasing proportion of lower risk, lower return loans we expect to approve, we are expecting a lower targeted return of 4.5% for new investments in Plus. Similarly, the targeted return for new investments in Core will be 3.7% reflecting a shift towards lower risk loans in the A-C markets."
Plus launched with projected returns in 2016 of 7.5%. It's now down to 4.5%.
The reward does not fairly reflect the risk.
I'm oooot.
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aligibbs
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Post by aligibbs on Aug 22, 2017 15:50:49 GMT
Where are you going instead?
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nrw
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Post by nrw on Aug 22, 2017 16:15:11 GMT
Where are you going instead? Funding Circle - I like the new Zopa-esque model (in the highest risk market, yielding >6%) FCIF - publicly traded, yields 6.5% corporation tax paid LendInvest Capital (the fund rather than the platform) - yields 8%-10% for sophisticated investors LendInvest retail bond - 5.25%, secured against the business Higher risk retail bonds on ORB - eg. Ladbrokes yielding >5% wiseAlpha retail bonds - higher yielding ones (~7%) Downing bonds - yielding >5% Advancr bonds - older ones (which I hold) yield >8% Property Partner - higher yielding properties, which also provide the potential for capital growth in the long term ... [ But don't get me wrong, it's hard to find a return right now with a reasonable balance of risk - the world is upside down and feasting on cheap credit... ]
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ashtondav
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Post by ashtondav on Aug 22, 2017 16:21:10 GMT
Nowhere. When bad debt is on the increase you can run, but you can't hide. The rates will decline because they are going to reject more D & E borrowers, also as Zopa reports the more solvent borrowers repay early in harder times - especially when there is no penalty.
i was with Zopa in 2008. It sure wasn't pretty then, and it won't be this time. But I still made money in 2008 when my equity holdings tanked 30% or more.
Hunker down, folks.
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aligibbs
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Post by aligibbs on Aug 23, 2017 8:08:24 GMT
Where are you going instead? Funding Circle - I like the new Zopa-esque model (in the highest risk market, yielding >6%) FCIF - publicly traded, yields 6.5% corporation tax paid LendInvest Capital (the fund rather than the platform) - yields 8%-10% for sophisticated investors LendInvest retail bond - 5.25%, secured against the business Higher risk retail bonds on ORB - eg. Ladbrokes yielding >5% wiseAlpha retail bonds - higher yielding ones (~7%) Downing bonds - yielding >5% Advancr bonds - older ones (which I hold) yield >8% Property Partner - higher yielding properties, which also provide the potential for capital growth in the long term ... [ But don't get me wrong, it's hard to find a return right now with a reasonable balance of risk - the world is upside down and feasting on cheap credit... ] Thanks, will check them out :-)
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nrw
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Post by nrw on Aug 23, 2017 9:44:24 GMT
The dilemma is whether to incur £1,600 in fees selling out now or wind down my loan book as loans are repaid... what are others doing? The loan book is clearly - by Zopa's own admission - not as healthy as originally projected...
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angrysaveruk
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binomial
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Post by angrysaveruk on Aug 23, 2017 10:08:37 GMT
The dilemma is whether to incur £1,600 in fees selling out now or wind down my loan book as loans are repaid... what are others doing? The loan book is clearly - by Zopa's own admission - not as healthy as originally projected... That is a pretty big investment, I guess it depends how much of it you can risk. My own view is to let the stuff covered by the provision fund earning a reasonable return run down naturaly and withdrawl on a weekly basis. Ill probably sell my remaining balance off in 12 months or so unless I get the impression something is going to hit the fan before then. The rest I am taking out. My general outlook is we are going to see some kind of major financial storm within the next 18 months and sub prime P2P loans are going to be hit hard. Losses on P2P platforms are going to be followed by loss of liquidity with everyone wanting to withdrawl their money. Disclaimer: I am naturally very Bearish about investments in general and you should "bear" this in mind when reading my posts.
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nrw
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Post by nrw on Aug 23, 2017 10:35:55 GMT
The dilemma is whether to incur £1,600 in fees selling out now or wind down my loan book as loans are repaid... what are others doing? The loan book is clearly - by Zopa's own admission - not as healthy as originally projected... That is a pretty big investment, I guess it depends how much of it you can risk. My own view is to let the stuff covered by the provision fund earning a reasonable return run down naturaly and withdrawl on a weekly basis. Ill probably sell my remaining balance off in 12 months or so unless I get the impression something is going to hit the fan before then. The rest I am taking out. My general outlook is we are going to see some kind of major financial storm within the next 18 months and sub prime P2P loans are going to be hit hard. Losses on P2P platforms are going to be followed by loss of liquidity with everyone wanting to withdrawl their money. Disclaimer: I am naturally very Bearish about investments in general and you should "bear" this in mind when reading my posts. I'm in Zopa Plus - no provision fund covering my arse!
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angrysaveruk
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Post by angrysaveruk on Aug 23, 2017 10:45:31 GMT
That is a pretty big investment, I guess it depends how much of it you can risk. My own view is to let the stuff covered by the provision fund earning a reasonable return run down naturaly and withdrawl on a weekly basis. Ill probably sell my remaining balance off in 12 months or so unless I get the impression something is going to hit the fan before then. The rest I am taking out. My general outlook is we are going to see some kind of major financial storm within the next 18 months and sub prime P2P loans are going to be hit hard. Losses on P2P platforms are going to be followed by loss of liquidity with everyone wanting to withdrawl their money. Disclaimer: I am naturally very Bearish about investments in general and you should "bear" this in mind when reading my posts. I'm in Zopa Plus - no provision fund covering my arse! If I was in your position I would exit now and take the sell out fee. That is just my opinion though, other people would probably stay in.
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ashtondav
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Post by ashtondav on Aug 23, 2017 11:35:21 GMT
Well whatever comes it won't be as bad as 2008 - the worst since 1929.
And I made a respectable return in 2008. Oh and when comparing with other platforms do remember they have zero experience of a massive credit collapse - unlike ZOPA. It's worth bearing in mind.
Am I happy about 4.5%? No. Am I selling out of +? No. I'll reduce by reinvesting some of my repayments in assetzcapital and the new improved FC account.
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angrysaveruk
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Post by angrysaveruk on Aug 23, 2017 11:53:56 GMT
Well whatever comes it won't be as bad as 2008 - the worst since 1929. And I made a respectable return in 2008. Oh and when comparing with other platforms do remember they have zero experience of a massive credit collapse - unlike ZOPA. It's worth bearing in mind. Am I happy about 4.5%? No. Am I selling out of +? No. I'll reduce by reinvesting some of my repayments in assetzcapital and the new improved FC account. To a certain extent 2008 was cut short by QE kicking the can down the road. Debt levels are much higher now (althought alot of it is now on governments balance sheets) and we are now down the road. I am pretty sure we are going to see a soverign debt crisis in the western economies.
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star dust
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Post by star dust on Aug 23, 2017 11:56:46 GMT
The dilemma is whether to incur £1,600 in fees selling out now or wind down my loan book as loans are repaid... what are others doing? The loan book is clearly - by Zopa's own admission - not as healthy as originally projected... It's a long time since I got out of Zopa and maybe things are quite different so I may be barking up the wrong tree. However, when I decided to exit because of a change in the model and lowering rates I had a loan book with a mix of pre-and safeguarded loans 3&5 year terms, and I decided to leave it in run-off for a while because of the high volume of early repayments and redemptions. My loan book shrank nearly 50% in just over a year, and I finally decided to take the, considerably reduced, sell-out fee hit about 18 months from the start of run-off when it seemed worth it to get the tail enders out.
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Post by WestonKevTMP on Aug 23, 2017 12:31:45 GMT
The dilemma is whether to incur £1,600 in fees selling out now or wind down my loan book as loans are repaid... what are others doing? The loan book is clearly - by Zopa's own admission - not as healthy as originally projected... Personally I would let it naturally wind down. Loans that you've held for a period of time will be safer than new originations. So a mature portfolio should have lower defaults than overall estimates (which Zopa clearly got wrong, by a large margin) Kevin.
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Post by WestonKevTMP on Aug 23, 2017 12:36:27 GMT
Well whatever comes it won't be as bad as 2008 - the worst since 1929. And I made a respectable return in 2008. Oh and when comparing with other platforms do remember they have zero experience of a massive credit collapse - unlike ZOPA. It's worth bearing in mind. I find this a little irrelevant. The Zopa data that is 11+ years old won't be much use. Long history of lending data didn't help Northern Rock or HBoS. What is important is the experience of the current team and how to use the data they have, and knowledge of how to manage a portfolio as economic cycles change. I don't know the current Zopa team and I'm sure they are wise heads, but I understand no-one remains in the risk team from 9 years ago. Kevin.
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ashtondav
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Post by ashtondav on Aug 23, 2017 13:22:28 GMT
It wasn't the amount, or lack, of data they had that sunk them. It was management incompetence in strategy and execution, combined with straying from their historic core competence.
Of course experience of the worst recession in 70 years is of value. The issue is whether Zopa management are competent or not in applying its lessons. The latest actions suggest they are applying those lessons.
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