For those who are losing money on Plus...

I think most of us already understood what they’re saying beforehand but some of us are still doing far worse than they say. I did very well from Plus in the first 4-5 months when there were no defaults because it was too soon. Since then it’s been shocking. So bad I started logging my Zopa ‘earnings’ figure and bad debt figure on an almost daily basis since July 1st. In a few months I’ll produce a graph.

For now tho,
Earnings today are £10.48 higher than July 31st. So yes I suppose I’m not losing money. But that’s on a £15k investment, previously 20k and is despite Access and Classic loans which are safeguarded, and a monthly early adopter bonus.
So.... take off access and classic profit and early adopter bonus and that £10.48 profit is probably more like a few hundred quid loss.
Yes I did well in the first 4 months but if that is going to offset the following year and more then things need to change very soon.

They say we should expect a negative month every 3 or 4 months. Well how come almost 4 months on from July 31st are my Plus returns so negative!!?

Very nice article Zopa, but it’s not quite the full story!! Some of us are losing money!
I’ve sold out of access now as I want as much money out of Zopa as possible so that will help highlight Plus’s shocking performance going forward. Roll on March 18 for their new Plus personal performance figures so I can see just how much I’m losing and screenshot it on here.

Don't you have to wait 5-10 years before you have all the recovery numbers in? Assuming Z actually chase the borrowers through bankruptcy,  CCJ, IVA, etc.

I'm afraid this just confirms to me that my maths is correct. Fully accept that I've just hit the less tasty end of the stick in this case, and am v.glad it was only a taster portfolio.

Just as a nice easy comparision, Zopa say in that link

"FACT: About 4 out of 5 Plus investors have had up to 3 months where their losses are more than earnings in the first 18 months of their investment"

I say:

"FACT: R00lish, the most important of all Z+ investors (and therefore the most statistically relevant   ) opened his Z+ account 15 months ago. From the following 14 months performance, he has had 7 months of positive returns, and 7 months of negative returns. The first 6 months were all positive, and so from the last 8 months I have had just one month with a positive return.

Moreover, whilst this alone suggests at least perhaps a 0% return, the losses I experienced were typically far greater than the gains, meaning I've probably lost about 4% at this point.

From the 114 loans I was issued, 9 are now in default, so 7.8% of my initial portfolio. 3 further are in collections.

God knows where this puts me on the normal distribution of returns, but i think it's to the left. A lot to the left. A little more...nearly there....just a bit more. There. 

Can anyone beat my sterling underperformance? 

regardless of what zopa say I am very glad to be out of this product and very pleased I only had a few thousand invested.

I've looked at a 1 month statement - on that month if applied would be annual of 4%. I have 'earnings' overall but they aren't noticeably changing much. 

What I don't understand is why the info statement with the monthly statement table online (not downloaded accounts) says that losses are not tax deductable, on the tiny value quoted below that:

(bad debt1*) Bad debt: New defaults - £12.00
Bad debt: Repayments from defaults

of which £0.39 had been eligible for tax relief

£0.39

*info statement about bad debt 1. "This figure relates to any Zopa loan that was written off and closed as bad debt during the specified period that have not been covered by safeguard. You may have additional borrowers in arrears, or that are currently being managed by our collections agency"

It reads as fixed loss to me, and therefore should be tax recoverable.

newlender

I've been with Zopa since Dec 2013 but mostly sold out around Nov last year. Based on my own experience if you (mostly) sell out your returns will be very poor since you're left with a higher percentage of loans that have had missed payments. That said the sellout fees for the last bit of your portfolio are generally far too high to justify making a clean break so just letting them wind down naturally is what I opted for.

My own 'statistics' (which are too small to be statistically significant) for the last 11 months are:
Net loss in 5 months out of 11
Interest of £57.26
Bad debt of £84.07

Before Plus my money weighted rate of return was 5.04%. After the total MWRR since Dec '13 was 4.35%. I sold out mostly because I didn't think the returns justified the volitility on my small balance in Plus and I had better opportunities elsewhere.

Yes, that's correct.  But a typical new portfolio should see far fewer D/E borrowers.  I suspect that Zopa are accepting fewer sub-prime borrowers nowadays. In my ISA (Z+ section) I have just 10 E loans and 60+ A*.