benaj
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Post by benaj on May 2, 2018 22:10:07 GMT
Before I started investing the plus with Zopa in April 2017, I have been told the projected return for the plus was 6.5%. I suppose tax return is a simple way to measure performance of Zopa plus.
Although I started selling off the entire portfolio after 8 months of investing, this is my summary of tax year 17/18
Gross earnings: 5.77% of the amount of all time loan book investment
Loan principal deemed irrecoverable in the year: 3.65%
Net earnings: 2.11% (8 months investing before started selling off the entire portfolio)
I had reinvestment on during the investment period, and built up 1107 loans in total after lending 500 loans initially. It seems this is a bit off compared to 6.5% projected rate.
Back to reality, after the selling fees and more defaults (27 defaults in total) since 5th April 2018, I earned 0.76% on paper in my all time loan book.
I wonder what other people are earning in the tax year 17/18.
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cb25
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Post by cb25 on May 4, 2018 16:39:15 GMT
benaj Using the 'high water mark' of my Z+ investment as the divisor, as the amount I had in Z+ varied over the 2017/18 tax year, my return shows -interest of 8.38% -irrecoverable losses of 4.66% Hard to say what my exact figures are (though must be higher than I've used above though, due to use of the high water mark) because my Z+ balance was increasing until mid-June 2017, decreasing thereafter as I withdraw all repayments to fund an IFISA.
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ashtondav
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Post by ashtondav on May 5, 2018 11:48:19 GMT
I made spot on 5.5% for a mix of plus and core. I withdrew repayments during the year. Obviously if you sold then returns would be much (MUCH) lower, as you’re left with late payers and defaulters. Zopa is a 5 year product, and returns over one year are not indicative.
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cb25
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Post by cb25 on May 5, 2018 13:19:33 GMT
I made spot on 5.5% for a mix of plus and core. I withdrew repayments during the year. Obviously if you sold then returns would be much (MUCH) lower, as you’re left with late payers and defaulters. Zopa is a 5 year product, and returns over one year are not indicative. Imo not really possible to tell how much of an effect that is. Just under 9% of my portfolio (by value) is in defaulted loans and another 15% with comments. Even if I assume the commented loans (typically missed payment) deliver nothing, I'd expect to be getting around 76% of the expected return but I'm nowhere close to that by my figures. My Z+ started 2017 and 2018 calendar years with approximately the same figure invested, but 2018 YTD bad debt is about 80% higher than one would expect from 2017's bad debt pro-rata'd. (Accept we're only 1/3 into 2018). Years ago when I had money in OEICs, I'd have money in a fund that had done badly for (say) 3 years, analysts say "give it time, it's a long term thing", so I waited another year, still bad, waited another, still bad...when I eventually pulled out, I'd lost even more. Ultimately, I go with my gut and accept the consequences if it's wrong.
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ashtondav
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Post by ashtondav on May 5, 2018 16:04:05 GMT
Going with your gut is not always the best decision. However it is the one that provides peace of mind, and because of that alone it’s a valid thing to do.
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cb25
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Post by cb25 on May 5, 2018 16:05:45 GMT
Going with your gut is not always the best decision. However it is the one that provides peace of mind, and because of that alone it’s a valid thing to do. Well, I'd say it was 'gut based on figures' but accept the effect of defaults/late payers skews the figures somewhat.
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benaj
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Post by benaj on May 7, 2018 5:51:20 GMT
I made spot on 5.5% for a mix of plus and core. I withdrew repayments during the year. Obviously if you sold then returns would be much (MUCH) lower, as you’re left with late payers and defaulters. Zopa is a 5 year product, and returns over one year are not indicative. I think the return of my zopa plus would be 3-4%+ for the 12 months if i held on longer and didn’t sell the whole portfolio, but It wasn’t looking good to beat the revised 4% zopa core return and unlikely to achieve 6.5% expected return with 4 months remaining in the tax year. I was definitely navive to invest in zopa plus even the product has not been tested for 5 years. I could made a choice to hold my zopa plus longer more than 5 years but i realised the product wasn’t right for me after investing 8 months. There are always something new to invest, sometimes it is not possible to wait 5 years before deciding. May be zopa can introduce zopa zoom for D/E only loan book lending for higher risk return.
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ashtondav
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Post by ashtondav on May 7, 2018 7:26:47 GMT
Yes, Zopa and other p2p platforms have not really explained that their 5 year products are long term investments that only stand A CHANCE of delivering forecast returns if they are held for the long term and all repayments are reinvested.
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Post by stevexxx on May 8, 2018 9:34:50 GMT
Yes, Zopa and other p2p platforms have not really explained that their 5 year products are long term investments that only stand A CHANCE of delivering forecast returns if they are held for the long term and all repayments are reinvested. I dont think zopa could have been more clearer, the first thing you see larger than life on your statements page is the vid about understanding your loans, but for those who havnt seen it youtu.be/taEcfBuoUDEBasicly half those who are going to default will do so in the first 12 months. the rest over the period of the loan.. its this latter stage you will gain...I do think people worry far to much and it becomes infectious.. Before investing read and watch everything, check out reviews, understand how it works, its NOT a bank account like some think it is..
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benaj
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Post by benaj on May 8, 2018 13:57:32 GMT
I am pretty sure a lot of people saw the video after seeing defaults from investing the zopa plus rather than seeing it before deciding investing zopa plus.
Zopa did adjust the return from 6.5% to 4.6% for the plus. I suppose this 4.6% return is in line with the zopa classic in 2015, 2016. The actual return of full 2017 has yet to be published by zopa
It's hard to tell whether zopa can increase the return for the plus in the future. May be zopa will introduce a higher return product one day, who knows.
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aju
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Post by aju on May 8, 2018 14:43:11 GMT
Yes, Zopa and other p2p platforms have not really explained that their 5 year products are long term investments that only stand A CHANCE of delivering forecast returns if they are held for the long term and all repayments are reinvested. I dont think zopa could have been more clearer, the first thing you see larger than life on your statements page is the vid about understanding your loans, but for those who havnt seen it youtu.be/taEcfBuoUDEBasicly half those who are going to default will do so in the first 12 months. the rest over the period of the loan.. its this latter stage you will gain...I do think people worry far to much and it becomes infectious.. Before investing read and watch everything, check out reviews, understand how it works, its NOT a bank account like some think it is.. Yeah I agree but I'm not convinced the video has been there that long and many of the people who have seen that before lending will only just be getting the defaults anyway as it takes 4/5 months for loans to go bad before they actually default and show in lending. On youtube it says Nov2017 but I guess it was on zopa itself before that. There was a lot of press about the D/E changes back in august (I think) which also hit certain areas of the press. I'm convince the video would be after that. Also it will start to be more noticeable since December as many people would have been covered by SG and not even seen the defaults unless they know how to see them in the downloadable alltime loanbook CSV's. So I guess the defaults are sticking out more with Core and Plus now. I also dispute that the video is the first thing you see not on my screen it isn't as the website is so whitespace happy that even on my 24" screen I have to reduce the Zoom to see even a hint of it. If I reduce the screen then I can see the text of the video. On my phone and tablet its quite a way down the page and its mute I'd even get there when all i'm trying to see is my statements. I'm being provocative I know but its not the first thing one sees unless I scroll down. That said if you can even get that far without Zopa falling over then well done in the last few days its been falling over almost as badly as TSB is. Today its fell over 3 times, they've at least change the login so if you get your secret phrase wrong you can see the letters to correct. Thing is all these issues and the catalog of problems does not instill confidence in what was a much more stable system than in the last 12 months or more. (Yes I've brought things to their attention) but to be hoenest they are rather busy firefighting on the next changes most of the time.)
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trium
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Post by trium on May 10, 2018 9:55:39 GMT
4.68% from mostly Plus with some residual Classic, however the year-on-year figure is still trending downwards as defaults continue to hit (2 more this week) where there were no defaults in the same period last year. An eight-week rolling XIRR got as low as 1.07% in January and now bumps along between 3.2-3.8% according to how long it's allowed to rise before the next default comes along.
Like others I was drawn into Plus by the allure of 6.5%. That forecast was heavily downgraded around August last year, just as my first defaults were materialising, though the average rates and projected returns on disbursed loans actually began to drop in June.
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