|
|
Post by samford71 on Jun 7, 2018 19:10:04 GMT
We have a pretty reasonable idea how P2P is performing in net returns terms (post defaults) because AltFi produces an index of those returns ( AltFi returns). Over the past 3 years, their index has returned 18.3% (5.8% annualized). The index is made up of 4 platforms (FC, Zopa, RS, MI) which constitute around 70% of the P2P market in the UK based on origination volumes this year (and more than this over the past 3 years). Clearly, MI is somewhat hard to access for smaller investors but it's also the lowest returning over the past 3 years, so a volume-weighted basket of FC/RS/Zopa would have returned 6%. If you add in the next two biggest platforms, AC and LI, then returns would be a bit higher. The AC 3-year return at 19.9% (6.2% annualized) and LI, while unknown, is probably around 20%. Added to the four platforms in the index this takes you to around 80% of the P2P market. Given that 80% of the market has produced positive net returns, then to generate negative returns you would either have had to be unlucky on the major platforms (poor MLIA on AC, Z+ on Zopa etc) or used some of the plethora of small platforms. Those smaller platforms have produced less consistent returns, with some generating 12%+ and other struggling to stay positive. Also many of these are "self-select" platforms where the distribution of returns across the lending base is more volatile (TC as a prime example). |
|
|
|
Post by df on Jun 7, 2018 21:23:16 GMT
Every platform I used brought me some profit and I don't regret moving some of my funds from banks to p2p, overall this pot is performing far better than banks. Saying that, if Col's failure results in total loss, my narrative will be different.
|
|
bg
Member of DD Central
Posts: 1,368 
Likes: 1,929
|
Post by bg on Jun 7, 2018 21:32:03 GMT
Was happy with Zopa for 8 or 9 years from 2005. RS, again happy until 5 year rates dropped below 6%. Happy with the new F.C. account, making 7%+. Happy with AC qaa and 40daa. Only just started with lendingworks but it looks good so far. Are you sure you're making 7%+ with FC though? My opinion is they are hiding the true state of the loan book (probably why they have stopped users from downloading the loan book). They do not clearly state what percentage of your loan book is either processing, late or downgraded and therefore unsellable (and likely in the passage of time to become a default). If you click 'sell' it will tell you what amount of your live loans is 'available for sale', ie stripping out these problem loans. My portfolio currently has £41k of unavailable for sale loans. If I assume a default rate of 50% on that (which I consider to be a reasonable assumption) then my return since the 'new' account came in is way below 7% (in fact negative). I think a lot of people are assuming they are getting 7% but are in for a nasty shock as time passes and loans are defaulted.
|
|
upland
Member of DD Central
Posts: 479
Likes: 175
|
Post by upland on Jun 8, 2018 6:34:24 GMT
Since 2012/13 I have made between 4 and 6.6 % overall. Generally I have increased my holdings and have several accounts that I favour. I am moving away from some of the "12%" sites as I dont get that from them. My target is about 6.5% overall. Generally happy with things but it can all change and I do move in and out of some accounts as I see fit.
|
|
upland
Member of DD Central
Posts: 479
Likes: 175
|
Post by upland on Jun 8, 2018 6:37:12 GMT
I think a lot of people are assuming they are getting 7% but are in for a nasty shock as time passes and loans are defaulted. I agree whatever the headline rate is touted. I do measure it for me every year and it can be an illuminating and sobering experience.
|
|
alibaba
Member of DD Central
Posts: 341
Likes: 245
|
Post by alibaba on Jun 8, 2018 10:26:19 GMT
We have a pretty reasonable idea how P2P is performing in net returns terms (post defaults) because AltFi produces an index of those returns ( AltFi returns). Over the past 3 years, their index has returned 18.3% (5.8% annualized). The index is made up of 4 platforms (FC, Zopa, RS, MI) which constitute around 70% of the P2P market in the UK based on origination volumes this year (and more than this over the past 3 years). Clearly, MI is somewhat hard to access for smaller investors but it's also the lowest returning over the past 3 years, so a volume-weighted basket of FC/RS/Zopa would have returned 6%. If you add in the next two biggest platforms, AC and LI, then returns would be a bit higher. The AC 3-year return at 19.9% (6.2% annualized) and LI, while unknown, is probably around 20%. Added to the four platforms in the index this takes you to around 80% of the P2P market. Given that 80% of the market has produced positive net returns, then to generate negative returns you would either have had to be unlucky on the major platforms (poor MLIA on AC, Z+ on Zopa etc) or used some of the plethora of small platforms. Those smaller platforms have produced less consistent returns, with some generating 12%+ and other struggling to stay positive. Also many of these are "self-select" platforms where the distribution of returns across the lending base is more volatile (TC as a prime example). Totally agree with the above, TC has been an absolute disaster for me, been in since 2013 and will lose all of the accumulated interest and a chunk of the capital, loans are constantly kicked into the long grass and it takes years before any final resolution. The claims made by a number of p2p sites are questionable to say the least, as with all of these things the truth will out but unfortunately there will be victims along the way.
|
|
upland
Member of DD Central
Posts: 479
Likes: 175
|
Post by upland on Jun 9, 2018 6:37:03 GMT
I have a friend who has never done well with FC and I wonder whether large payments in all at once are not so good. I have always put small amounts in more often and there may be a marginal benefit. With OC thats probably true too and if you are worried about the RS PF then with them too. Some of the other collective websites
I do have a concern that if your return does depend on the skill of use of the website for the self select types that those sites will ultimately experience problems. If a diversified selection of the sites loans does less than OK then the average investor will depart. This may take years to happen and this must put a strain on the remaining holders and the websites ability to fund its loans. Its hard to know whether the new punters coming in compensate for the old investors leaving but an investor base that is growing well must be good for the site and the converse is not so good.
|
|
macq
Member of DD Central
Posts: 1,934
Likes: 1,199
|
Post by macq on Jun 9, 2018 8:05:36 GMT
Think you are right about the average investor departing if things go wrong in anyway and that maybe the problem of P2P growing.The people who have got involved in self select loans since the early days have by and large gone in with their eyes open but i would guess that the market for that business probably settled at a level of investors a while back and may now even decline a bit (possibly back more to the BH & institution's who were already in debt products) But there may come a time in the future where you will not notice defaults as the % rate will be lower to hide them,as companies need new customers but people are put off by defaults or not getting instant access.
The likes of FC & RC etc are looking to the future with a Black box type product and you have Zopa looking to become a bank.Once these companies start to become more mainstream and advertise rates the problem for them will be that they can't miss their target as its no good them mentioning a rate in an advert on day time tv and having small print saying about defaults at the bottom of the screen as the general public will see the headline rate and expect that.If P2P were to take off with general type accounts and fall short then bad headlines and claims of mis-selling will follow.Imagine the fuss if Zopa as a bank was to offer a product that did not hit the rate it would be far different from when it was a P2P company
|
|
zlb
Member of DD Central
Posts: 1,422
Likes: 333
|
Post by zlb on Jun 9, 2018 9:22:59 GMT
I have a friend who has never done well with FC and I wonder whether large payments in all at once are not so good. I have always put small amounts in more often and there may be a marginal benefit. With OC thats probably true too and if you are worried about the RS PF then with them too. Some of the other collective websites I do have a concern that if your return does depend on the skill of use of the website for the self select types that those sites will ultimately experience problems. If a diversified selection of the sites loans does less than OK then the average investor will depart. This may take years to happen and this must put a strain on the remaining holders and the websites ability to fund its loans. Its hard to know whether the new punters coming in compensate for the old investors leaving but an investor base that is growing well must be good for the site and the converse is not so good. yes, understanding how the platform diversifies also. I tend to only understand exactly what's going on if I've got a sheet download... Which FC apparently don't do now. The 'how is my loan diversified' point is not mentioned on Z. I've decided that my personal dd doesn't get me anywhere because most self select defaults have valuation issues around unique buildings, or the borrower behaves in a way that's unpredictable. Agree also re concern for loan sales to new investors... Is there a point at which I won't be able to sell? Etc..
|
|
starfished
Member of DD Central
Posts: 298 
Likes: 216
|
Post by starfished on Jun 9, 2018 13:21:58 GMT
My addictive spreadsheets tell me... | Name | Joined | Status | Yield (p.a.) Pre Tax Exclude joiner bonuses | Comments | | | | Bond Mason
| 29/01/2017
| Closed | 6.3%
|
|
|
|
|
|
| Zopa
| 14/07/2010
| Withdrawing | 4.9% | under 1% of the maximum amount I put in, I have written off to nil | Ratesetter
| 26/02/2011 | Withdrawing | 4.3% | | Bondora
| 23/12/2012
| Withdrawing | 7.9% | c. 30% of the maximum amount I put in, I have written off to nil | Funding Secure
| 03/09/2013 | Withdrawing | 9.6% | c. 5% of the maximum amount I put in, I have written off to nil |
| | | |
| Abundance
| 21/11/2012 | Trying to Increase | 3.7% |
| Moneything
| 12/06/2016 | Trying to Increase | 1.4% | c. 15% of the maximum amount I put in, I have written off to nil |
| | | | | Unbolted
| 07/12/2017 | Increasing
| 1.6% | | | Lending Works | 27/01/2018 | Increasing | 3.6% |
|
|
|
michaelc
Member of DD Central
Say No To T.D.S.
Posts: 5,710
Likes: 2,985
|
Post by michaelc on Jun 9, 2018 14:39:11 GMT
My addictive spreadsheets tell me... | Name | Joined | Status | Yield (p.a.) Pre Tax Exclude joiner bonuses | Comments | |
| | Bond Mason
| 29/01/2017
| Closed | 6.3%
|
|
|
|
|
|
| Zopa
| 14/07/2010
| Withdrawing | 4.9% | under 1% of the maximum amount I put in, I have written off to nil | Ratesetter
| 26/02/2011 | Withdrawing | 4.3% |
| Bondora
| 23/12/2012
| Withdrawing | 7.9% | c. 30% of the maximum amount I put in, I have written off to nil | Funding Secure
| 03/09/2013 | Withdrawing | 9.6% | c. 5% of the maximum amount I put in, I have written off to nil |
|
|
|
|
| Abundance
| 21/11/2012 | Trying to Increase | 3.7% |
| Moneything
| 12/06/2016 | Trying to Increase | 1.4% | c. 15% of the maximum amount I put in, I have written off to nil |
|
|
|
|
| Unbolted
| 07/12/2017 | Increasing
| 1.6% |
| | Lending Works | 27/01/2018 | Increasing | 3.6% |
|
Interesting set. I wonder why you are withdrawing from the platform that has provided you the highest yield though? Also, how do you keep track? For the first year or so I didn't keep any records myself then I discovered how much work it is with some platforms just to get a rolling apr. So now I record every few weeks what my position is on each platform but its pretty crude.
|
|
starfished
Member of DD Central
Posts: 298
Likes: 216
|
Post by starfished on Jun 9, 2018 16:35:29 GMT
Also, how do you keep track? For the first year or so I didn't keep any records myself then I discovered how much work it is with some platforms just to get a rolling apr. So now I record every few weeks what my position is on each platform but its pretty crude. At the time I made the decision to withdraw, the yield was not looking as good. I was sitting on sizeable amounts that I had chosen to write down capital to nil which subsequently paid up with interest. To be honest I still stand by the decision to withdraw as I know it is more luck than skill that the yields ended up so high on FS and particularly Bondora, given the significant misrepresentation of risk. I think when the trust is gone, no matter the return to date, best to get out. Zopa being the first, I kept track of so much initially (I especially loved reading and gathering data on listings but actually invested in only a few of them and I was glad to be part of the last one ever). Over time that became less sustainable, so now I keep a track of just money in and out and current open loans. A few sites, I keep also past loans I have been in, if easy to keep track. It still takes a little bit too much time which is why I try to keep my "active" P2p options down to five. On that note, Unbolted is very fiddly on the keeping track easily front... Edit - I left BM due to the minimum amount later set not due to any trust issues.
|
|
upland
Member of DD Central
Posts: 479
Likes: 175
|
Post by upland on Jun 12, 2018 9:43:07 GMT
My addictive spreadsheets tell me... Interesting set. I wonder why you are withdrawing from the platform that has provided you the highest yield though? Odd that as I am doing the same with a site that specialises is white knuckle ride property investment that I have had no defaults on my tax form to date. Perhaps I should reconsider .....
|
|
