michaelc
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Post by michaelc on Dec 16, 2018 23:14:56 GMT
MrCLondon describes here an easy way to calculate your return here. I thought it really was excellent and relatively quick to do. p2pindependentforum.com/post/300792/threadPerhaps for finance types, this is like 1+1=2 but for the rest of us I thought this so useful I plan to set up spreadsheets for all my p2p investments. Anyway, I finally got around to trying it. I applied it to all the transactions in the main account that are going to/from my bank account and thus decided not to record my ISA as a seperate account. I obtained the figures from FS and did not cross-check with my banking records since they look broadly right. Given FS's "excellent" record of providing "meticulous" updates with "flawless" figures within, I felt "safe" to do that. Since mid December 2016 when I made my first deposit, I've counted around 30-40 transactions going to and from FS and the XIRR() function calculates 0.073 which I assume means 7.3%. Now, the unknown here is the amount to record as the final debit (or your balance). I assume my xirr is 7.3% and not something between 10% and 12% because the the amount I recorded from my dashboard doesn't include interest accrued. So if I understand correctly, this 7.3% is a little pessimistic because of the interest owed to me but its also optimistic because it assumes full recovery of all loans. At least doing this allows one to play around with that final withdrawl figure and see what the XIRR would be under different recovery scenarios. |
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Godanubis
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Anubis is known as the god of death and is the oldest and most popular of ancient Egyptian deities.
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Post by Godanubis on Dec 17, 2018 0:39:16 GMT
Just had quick look at my FISA in FS and in last year there were 28000 transactions. My spreadsheet is huge. I take simple approach How much did I have on one day. How much the same day 1 year later. As long as it is >15% I’m happy. Just the basic investment no accrued interest but included any loss. Accrued interest tends to stand about 10% of capital at any one time. losses total about 1.6% before any recovery. Similar simple calc call for other platforms work out about 12% overall Ferengi mentality a profit is a profit  |
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Post by dan1 on Dec 17, 2018 9:58:58 GMT
The method you describe is pretty much how I calculate the IRR. There is one minor complication if you're including the accrued interest figure from the My Investments page - it includes the minimum interest of 30 days so unless all those investments close today then your XIRR may very slightly be over estimated. It's relatively uncommon for investments to close within the minimum interest period but the one with the highest effective rate of return at 450% (closed after 1 day active, 15% rate * 30 days / 1 day = 450%).... www.fundingsecure.com/myaccount/loan/4647228882 |
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arby
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FS XIRR
Dec 17, 2018 11:56:09 GMT
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Post by arby on Dec 17, 2018 11:56:09 GMT
So if I understand correctly, this 7.3% is a little pessimistic because of the interest owed to me but its also optimistic because it assumes full recovery of all loans. At least doing this allows one to play around with that final withdrawl figure and see what the XIRR would be under different recovery scenarios. This is one I always struggle with, because I believe that in certain circumstances your 7.3% may not be pessimistic and could actually be very optimistic. I believe you're right that 7.3% is the 'correct' figure assuming no accrued interest is realised, but this also makes the assumption that all capital in any currently active loan is recovered. For example, if you assume you'll lose 10% of capital and all interest in any loan overdue more than 60 days then the return drops massively (for people with a number of overdue loans, which most people probably have). The part all of us struggle the most with is the appropriate default rate. Following the FS historical rate is probably not appropriate either given their fast expansion and potentially relaxing their lending rules to do so.
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bugs4me
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Post by bugs4me on Dec 17, 2018 12:22:45 GMT
My current IRR with FS is standing at 6.48%. The problem with the 12% return boast is that it only takes a couple of big ones falling down to knock the returns for six.
In my case, most of the loans I’ve been involved with since 2013 have repaid successfully but then along came the infamous totally mismanaged turbine loan followed by the W***h H***l loan - I have allowed for a 50% wipe out in my IRR calculations with this one. Once that loan is eventually repaid, albeit probably partially then I will have finally exited FS.
So whilst the majority of loans will complete, the fly in the ointment are those inevitable defaults. Of course there will always exist professional borrowers who are far more skilled at extracting lenders funds with little intention of fulfilling their side of the obligation. Unfortunately though when this is coupled with an incompetence factor of a P2P platform then it becomes extremely difficult to justify the time and effort required to be in P2P in the first place.
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Post by mrclondon on Dec 17, 2018 12:26:25 GMT
The part all of us struggle the most with is the appropriate default rate. Following the FS historical rate is probably not appropriate either given their fast expansion and potentially relaxing their lending rules to do so. I think an analysis of the Lendy 'Claims underway' list should give a pretty representative view of how these sorts of p2p loans behave once they get into a distressed state (say 90+ day late) and need recovery action. On average the capital recovery has been 77%, with probably some more bits still to come as a result of the action being taken. So c. 20% capital loss would seem a reasonable provision, bearing in mind that a number of loans have been recovered in full with all interest and so not listed on the claims underway tab. Loan |
| Capital Recovery | | PBL167 | 65.5% | | PBL161 | 66.7% | | PBL155 | 39.3% | | PBL147 | 100.0% | | PBL123 | 100.0% | | PBL094 | 57.3% | | PBL081 | 66.2% | | PBL074 | 100.0% | | PBL067 | 100.0% | | PBL066 | 100.0% | | PBL065 | 69.9% | | PBL056 | 62.3% |
If you then assume say 20% of FS loans (or what ever % you feel is realistic) will need recovery action (i.e. receiver/administrator intervention), the estimated capital loss on your loanbook is 4% of capital lent (20% default x 20% loss on default).
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Post by Ace on Dec 17, 2018 17:23:44 GMT
Just had quick look at my FISA in FS and in last year there were 28000 transactions. My spreadsheet is huge. I take simple approach How much did I have on one day. How much the same day 1 year later. As long as it is >15% I’m happy. Just the basic investment no accrued interest but included any loss. Accrued interest tends to stand about 10% of capital at any one time. losses total about 1.6% before any recovery. Similar simple calc call for other platforms work out about 12% overall Ferengi mentality a profit is a profit You wouldn't need to detail all 28000 transactions to calculate your true XIRR, just those transactions that involve transfers between your IFISA and your bank account.
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Godanubis
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Anubis is known as the god of death and is the oldest and most popular of ancient Egyptian deities.
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Post by Godanubis on Dec 17, 2018 17:33:41 GMT
Just had quick look at my FISA in FS and in last year there were 28000 transactions. My spreadsheet is huge. I take simple approach How much did I have on one day. How much the same day 1 year later. As long as it is >15% I’m happy. Just the basic investment no accrued interest but included any loss. Accrued interest tends to stand about 10% of capital at any one time. losses total about 1.6% before any recovery. Similar simple calc call for other platforms work out about 12% overall Ferengi mentality a profit is a profit You wouldn't need to detail all 28000 transactions to calculate your true XIRR, just those transactions that involve transfers between your IFISA and your bank account. OK . I Never actually take any money 💰 out of FS . I leave that for the money from Lendy and a one handed man can count on his fingers what they pay. For Lendy payback equals withdrawal and at moment move to Welendus.
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benaj
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Post by benaj on Dec 17, 2018 17:50:03 GMT
My accrued interest is about 9% at the moment (shortest live loan is 49 days). I had taken some money out when I wanted my money to earn something instead of waiting.
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Godanubis
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Anubis is known as the god of death and is the oldest and most popular of ancient Egyptian deities.
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Post by Godanubis on Dec 17, 2018 20:51:49 GMT
The part all of us struggle the most with is the appropriate default rate. Following the FS historical rate is probably not appropriate either given their fast expansion and potentially relaxing their lending rules to do so. I think an analysis of the Lendy 'Claims underway' list should give a pretty representative view of how these sorts of p2p loans behave once they get into a distressed state (say 90+ day late) and need recovery action. On average the capital recovery has been 77%, with probably some more bits still to come as a result of the action being taken. So c. 20% capital loss would seem a reasonable provision, bearing in mind that a number of loans have been recovered in full with all interest and so not listed on the claims underway tab. Loan |
| Capital Recovery | | PBL167 | 65.5% | | PBL161 | 66.7% | | PBL155 | 39.3% | | PBL147 | 100.0% | | PBL123 | 100.0% | | PBL094 | 57.3% | | PBL081 | 66.2% | | PBL074 | 100.0% | | PBL067 | 100.0% | | PBL066 | 100.0% | | PBL065 | 69.9% | | PBL056 | 62.3% |
If you then assume say 20% of FS loans (or what ever % you feel is realistic) will need recovery action (i.e. receiver/administrator intervention), the estimated capital loss on your loanbook is 4% of capital lent (20% default x 20% loss on default). Working hard again thanks. This is recovery to date and more may be finally returned. Even still it shows that depending on how you actually manage your loans returns should be 8-18% after defaults if you were unlucky enough to invest in them all equally.
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copacetic
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Post by copacetic on Dec 18, 2018 0:26:54 GMT
... I thought this so useful I plan to set up spreadsheets for all my p2p investments. I've been tracking my p2p investment portfolio since I started in p2p (I'm currently spread across 9 platforms so want a non time consuming way to track!)- I posted my own spreadsheet tracker at the start of last year if you want to use it: p2pindependentforum.com/post/237852/threadYou can use it as mrclondon suggests and just fill in the all the payment amounts and dates between bank account and platform and just enter the platform balance on the most recent date. It also has space for expected bad debts if you're in any distressed loans and the summary sheet helps keep track of which plaforms have actually performed well. FS is an odd one since it only pays interest after at least 6 months have passed so XIRR jumps up a fair bit after a successful loan repayement as opposed to interest monthly platforms which show smoother performance, at least until a catastrophic default. Just had quick look at my FISA in FS and in last year there were 28000 transactions. That sounds like it was pretty time consuming! I guess it depends on your pot size but my own conclusions on p2p in general have been that the hands off platforms have had a much higher £ return/hour spent than the individual loan platforms. I'm generally withdrawing from these platforms based on my own results, FS being the exception since it offers the occasional <40% LTV non-development loan at >=10% rate which is sufficiently low risk/high reward to entice me (provided they actually remember to register the security..!)
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