IFISAcava
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Post by IFISAcava on Mar 17, 2019 15:47:03 GMT
Spent a few hours today doing XIRRs for the first time - and thanks to spareapennyor2 for the easy to use spreadsheet template. These are my rates over the past couple of years, allowing for cash drag, secondary market fees/gains/losses, drawdown delays, lost interest & capital, etc. (all of course provisional as I remain invested in all these platforms so all could be worsened if major defaults occur). All are in IFISAs so in effect are post-tax figures. I am not especially prone to a lot of withdrawing/depositing using flexi-ISA rules as I am in a bit of a tax trap at the moment where any taxable income is taxed at a marginal rate of 70%+. So one could probably get these up a fraction of a percent by more active management of free cash balances. Landlord Invest 9.31% Lending Works 4.75% Crowd2fund 7.43% PropLend 7.03% Relendex 6.40% HNWL 7.31% ABLRate 12.98% MoneyThing 9.03% Assetz Capital 6.96% Funding Secure 6.39% (4.36% if I write off residual defaulted loans) Quite eye-opening - I think only ABL is up there with what I had hoped/thought I was getting, most are a percent or two lower. FS is (of course) the worst offender. |
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Post by mrclondon on Mar 17, 2019 16:23:54 GMT
These are mine, generally from when the platform launched to present. The exceptions are FC (loans from 2010-13 only run off since Dec 13), FC-ISA (from Q1 2018), RS (run off will complete in a couple of months), AC-ISA from Q3 2018, W&Co run off completed Q2 2018. Proplend only since Q4 2018.
| Name | XIRR | | Assetz Capital | 11.0% | | Lendy | 11.6% | | Funding Secure | 9.8% | | ThinCats | 9.3% | | Funding Knight | 8.4% | | Funding Circle | 7.4% | | Funding Empire | 10.7% | | MoneyThing | 11.8% | | Ratesetter | 6.0% | | Wellesley & Co | 6.2% | | Abundance Gen. | 3.8% | | Collateral | 4.0% | | Funding Circle ISA | 5.7% | | Assetz Capital ISA | 7.0% | | Proplend | 5.5% | | Loanpad | 5.9% |
None of these contains any allowance for unwritten off bad debt, which will drop the returns on most platforms down to the 6 to 7% I have long been forecasting. Also worth noting that the majority of the FS yield has ben realised via the SM by offering discounts equivalent to the basic rate tax liability being passed on - so essentially the 9.8% is after tax and is equivalent to just over 12% gross.
The Proplend figure is lower than it should be and represents the relatively short time I've been lending there, and the fact that most of my loans pay their interest in the final week of the month. (6.5% is probably a fairer figure)
The story of these figures is a stark one ... I have had very few loans written off (of the bigger platforms 1 on TC, 2 on FS, none on MT/L/AC; only FC correctly write off bad debt and then recover it)
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Post by mrclondon on Mar 17, 2019 18:01:14 GMT
I've just received a PM asking a question on my recent post that I think is probably of interest to a wider audience. "What % of your loanbook do you expect to write off ?"
As of today I have 28% of my loanbook in what I would term a seriously distressed state ( > 90 days overdue is perhaps the easiest way to visualise it), against which I have applied various loss contingencies from 0% through to 100%, but averaging 36%. Which means I expect to write off c. 10% of the current value of my loan book based on current seriously distressed loans.
Applying my current contingencies would drop the XIRR's as follows Lendy to 5.6%, TC to 7%, FS to 9% and MT/AC to 9.5%. (And Col -ve for obvious reasons)
It's worth noting that because I have had many good years out of the platforms and have adopted a wide diversification, the effect on XIRR of a few write offs is not that great. It is also the case that I don't expect going forwards it will be as easy to shift "slighytly distressed" loans through SMs as it has been, so I expect that in the future I'll end up holding a higher proportion of distressed loans in my loanbook. Given that figure is already at 28%, there will come a point, possibly not that far away when I decide the overall risk outweighs the potential reward.
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IFISAcava
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Likes: 3,018
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Post by IFISAcava on Mar 17, 2019 18:39:42 GMT
I've just received a PM asking a question on my recent post that I think is probably of interest to a wider audience. "What % of your loanbook do you expect to write off ?"
As of today I have 28% of my loanbook in what I would term a seriously distressed state ( > 90 days overdue is perhaps the easiest way to visualise it), against which I have applied various loss contingencies from 0% through to 100%, but averaging 36%. Which means I expect to write off c. 10% of the current value of my loan book based on current seriously distressed loans.
Applying my current contingencies would drop the XIRR's as follows Lendy to 5.6%, TC to 7%, FS to 9% and MT/AC to 9.5%. (And Col -ve for obvious reasons)
It's worth noting that because I have had many good years out of the platforms and have adopted a wide diversification, the effect on XIRR of a few write offs is not that great. It is also the case that I don't expect going forwards it will be as easy to shift "slighytly distressed" loans through SMs as it has been, so I expect that in the future I'll end up holding a higher proportion of distressed loans in my loanbook. Given that figure is already at 28%, there will come a point, possibly not that far away when I decide the overall risk outweighs the potential reward.
In comparison (and having been active for a shorter period) As a proportion of capital: I have: 0.37% actual crystallised loss of capital. 2.1% of capital rated as "probable loss" (meaning in trouble and I estimate I will probably lose this proportion) 1.8% of capital rated as "possible loss" (meaning in trouble but I estimate I will probably recover this proportion). So 3.9% classified in trouble overall. Other loans are of course affected in various ways but either I expect 100% recovery or there is a PF or other means of covering any losses. As a proportion of interest received/accrued to date: the above losses translate into something like: 2.2% crystallised loss 12.4% probable loss 10.9% possible loss So at present the likely forecast scenario is 14.6% loss of interest and the worst case forecast scenario is a 25% loss of interest (if all bad loans recover 0%). Unforecast scenarios are, obviously, a known unknown and part of the overall risk of P2P. Could be better or worse (much worse) looking ahead.
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IFISAcava
Member of DD Central
Posts: 3,692
Likes: 3,018
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Post by IFISAcava on Mar 17, 2019 18:58:15 GMT
Perhaps also of interest: the top 5 sources of probable/possible losses to date are:
Collateral
Crowdstacker
Archover
Abundance
Lending Crowd.
All of the above risk no overall gain or an overall loss (capital loss greater than interest received) in the worst case scenario of all troubled loans recovering zero.
AC has escaped No 1 spot after the I** loans turnaround.
Lendy and FS I managed to escape before things got too bad - I will make a profit even if all residual loans written off.
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