bigfoot12
Member of DD Central
Posts: 1,817
Likes: 816
|
Post by bigfoot12 on May 7, 2018 7:52:38 GMT
I have just restarted lending on FC, which is why I read your post with interest. The first day of lending I received a more varied range of risk bands than I am used to. This is too small a sample so I have had a look at the loanbook. I have removed as many first/second charge property loans as I could find. And I have excluded as many whole loans as I can (loanparts=1). | A+ | A | B | C | D | E | Total Result | | 2016 & 2017 | 24.7% | 27.7% | 20.7% | 14.2% | 8.9% | 3.7% | 100.0% | | 2018 to date | 15.3% | 31.0% | 21.7% | 15.2% | 10.2% | 6.6% | 100.0% |
The above is by number of loans. looking at total debt the numbers are a little different (more A and A+) but the change is similar. |
|
dorset
Member of DD Central
Posts: 281 
Likes: 187
|
Post by dorset on May 7, 2018 13:53:11 GMT
Of my 32 defaults in 2018 the risk bands were:
A+ 3
A 3
B 7
C 14
D 5
E 0 (I don't have many Es)
All the loans were picked manually prior to 18 September 2017.
I made a pretty consistent 8% pa with FC between 2011 and 2017. I'm probably making less than 4% in 2018 due to the much higher default rate. This is on my loan book of 1700 loans at peak in September 2017 and now down to 1320 due to run off. In other words heavily diversified. All my loans are now at 53 months down to 1 months repayments due so it will be interesting to see how the loans perform as they mature.
|
|
|
|
Post by steamer on Jun 29, 2018 9:45:59 GMT
vaelin,I find your work very interesting. I had stopped lending because with near 700 loans I have made 5.2 - 7.5% profit in the last 4 years but at the end of the first 1/4 of this financial year I have made a net LOSS each month which is now just over 0.5% of my capital. My statistical ability is not great but that seems to be outside the expected range. I have yet to assess the age of the default loans before I consider lending again.
|
|
coogaruk
Hello everyone! Anyone remember me?
Posts: 706
Likes: 464
|
Post by coogaruk on Jun 30, 2018 10:58:12 GMT
FC has now lowered its higher projected returns, so I guess the cat is now out of the bag.
|
|
blender
Member of DD Central
Posts: 5,719
Likes: 4,272
|
Post by blender on Jun 30, 2018 11:25:37 GMT
FC has now lowered its higher projected returns, so I guess the cat is now out of the bag. FC lending bank's income and value is related to the size of the loan book. So it's a matter of making the return as low as possible to attract borrowers, before they become unable to fund it from their new lenders.
|
|
ashtondav
Member of DD Central
Posts: 1,814
Likes: 1,092
|
Post by ashtondav on Jun 30, 2018 12:04:07 GMT
FC has now lowered its higher projected returns, so I guess the cat is now out of the bag. Well on the higher risk a/c yes. But they’ve increased the return estimate on the lower risk option. peehaps the cat is half in, half out of the bag.
|
|
|
|
Post by debaser on Jun 30, 2018 15:02:10 GMT
I didn't make any new investment on FC for over 2 years (when they changed it over to all being automatic, I never opted in to one of the options). I decided just to let the money that was in their play out, see what happens.
In 2018 it seems like every month another loan defaults, and it is A+ and A rated loans that are defaulting. I have watched my "Annualised return (after fees and bad debts)" plummet. It's now down to 4%. The "Estimated fully diversified return (after fees and bad debts)" is still a respectable 7.6%, but I don't know if the best thing to do is just to get out. Because I am basically losing money every month now. The 4% is based on the money made previously, I am having a net loss in most months of 2018.
It looks like the selling process has been streamlined since I last looked at it - they've made this more automatic and removed fees? So I could get out easier now.
On the other hand, 4% return (if it stays at that) is actually still better than I would get from putting the money into any savings account. So I don't know what to do. I could invest it in another p2p platform, but I am not sure if there is actually much difference between them. I could bang the money into index tracking funds in my S&S ISA, but I'm already doing that every month. The point of p2p investing for me was to have more short-term returns on my savings (i.e. 1-5 years instead of the 20+ years or retirement that I wait for stocks and shares to go up in value).
When FC first made everything automatic I was against it and didn't like it, but looking at the site now, they say I can get 6-7% or 5-5.5% returns, maybe I should actually just put more in? My portfolio has become less diverse by just leaving it to rot for over a year. But given my past experience, I know those figures could be a complete fiction, because I have had a return of 4% on what was a fully diversified portfolio - was an unusually bad year?
If I chose "conservative" and got the 5% they claim, then that would outperform what I'm getting now... so right now I'm actually thinking instead of pulling all my money out like I was originally thinking, maybe I'll start putting more in. I can always sell later. It seems like most of the money is made early on anyway, because all the defaulting starts. If I opt to let FC start buying again, will it be buying up the terrible loans of everybody that's trying to get out?
|
|
