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Post by blanik on Oct 6, 2019 10:49:07 GMT
Looks like the projected return has changed, it now shows a range rather than the gross / net figure it had before.  |
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Post by erniec on Oct 6, 2019 11:31:52 GMT
My wife and I effectively have 4 accounts between us, non-ISA and ISA, and, interestingly the spread on all of them is the same as yours - 1.3%.
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aju
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Post by aju on Oct 6, 2019 12:14:22 GMT
I checked and mine are a bit different than yours with less of a spread but the loan amounts are quite a bit larger.
One thing I did notice is that yet again the s/w people forgot to change the lfaq link and I get a whoops error when clicking it.
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Post by Ace on Oct 6, 2019 12:18:42 GMT
Same here. My range is 4.0% to 5.3%, all in plus.
My Zopa quoted NAR is 5.17%. My calculated XIRR is 5.84%. Not sure why the large discrepancy between these two.
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aju
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Post by aju on Oct 6, 2019 13:19:03 GMT
Same here. My range is 4.0% to 5.3%, all in plus. My Zopa quoted NAR is 5.17%. My calculated XIRR is 5.84%. Not sure why the large discrepancy between these two. My plus range was 3.9 - 5.2 so pretty similar, NAR is 5.05% but I don't have a split XIRR in fact I only ever have an overall XIRR for both mine and Mrs AJU investments as a whole. We only have at worst 20% in Plus and are reducing this to 10%. Also we have made some considerable reductions in our lending in all products as we moved investments over to RS at the beginning of the year so the Xirrs are not that reliable at present either.
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Post by Ace on Oct 6, 2019 15:47:48 GMT
Same here. My range is 4.0% to 5.3%, all in plus. My Zopa quoted NAR is 5.17%. My calculated XIRR is 5.84%. Not sure why the large discrepancy between these two. My plus range was 3.9 - 5.2 so pretty similar, NAR is 5.05% but I don't have a split XIRR in fact I only ever have an overall XIRR for both mine and Mrs AJU investments as a whole. We only have at worst 20% in Plus and are reducing this to 10%. Also we have made some considerable reductions in our lending in all products as we moved investments over to RS at the beginning of the year so the Xirrs are not that reliable at present either. We've been here before aju, if the XIRRs are correctly calculated then they will be completely reliable as they take full account of any lending reduction. 😉
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aju
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Post by aju on Oct 6, 2019 16:12:25 GMT
My plus range was 3.9 - 5.2 so pretty similar, NAR is 5.05% but I don't have a split XIRR in fact I only ever have an overall XIRR for both mine and Mrs AJU investments as a whole. We only have at worst 20% in Plus and are reducing this to 10%. Also we have made some considerable reductions in our lending in all products as we moved investments over to RS at the beginning of the year so the Xirrs are not that reliable at present either. We've been here before aju , if the XIRRs are correctly calculated then they will be completely reliable as they take full account of any lending reduction. 😉 I've tried all ways to get rid of my -XIRR percentages on Mrs Aju's ISA products after we removed 5 figure sums and then restarted relending and all I can do is put it down to errors I guess in my calcs but there are also known anomalies in excel XIRR as any quick search over the web will pull up with examples etc. That said I have got them quite close to correct for our annuals and alltime but it's the monthly on-goings that are a somewhat skewed. I try to get my 12 monthly rolling XIRR to give me a good representation of changes but to be fair I have got my fingers crossed some months. Mind you we are still very much in the black and our end of years with fixed start and finish values seem to be very reasonable and more acceptable - I do use a number of check calculation as well. Edit: What might skew it to negative is that I am moving returned money from Invest to ISA and the values are dated as 1st of the month even though many of them are throughout the month. It's not ideal I guess but I'm guessing I've over simplified it for 12 monthly rolling checks.
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aju
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Post by aju on Oct 6, 2019 17:09:38 GMT
My Zopa quoted NAR is 5.17%. My calculated XIRR is 5.84%. Not sure why the large discrepancy between these two. As I understand it, the NAR is a geometric mean calculated using daily figures while XIRR is a mean weighted by cash flow. The geometric mean will, I think, always be less than XIRR. ICBA to calculate the geometric mean for my portfolio using daily figures but I have done so using monthly figures and the difference is 0.4 percent points. I liked your ICBA abb. never seen that one before but I like it - assuming I got the translation correct or worse it exposes my mindset. 
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zlb
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Post by zlb on Oct 6, 2019 20:30:28 GMT
Wonder whether they've started indicating a range rather than 'target' is owing to FCA warning about transparency.
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Post by GSV3MIaC on Oct 7, 2019 13:00:16 GMT
Still leaves 10% out of that range, either better or worse. That is a pretty sloppy limit, compared to '3 sigma', or 99% confidence.
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trium
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Post by trium on Oct 10, 2019 1:31:07 GMT
Since Zopa has long since become a black box platform with zero ability to influence the loans you are matched to then it's about time they went the whole hog and black-boxed the returns too. IOW, default losses should be shared equally among all lenders, ending the current ridiculous reliance on being dealt a decent hand.
As I've posted before, my returns are appalling, have consistently been so for two years and are actually getting worse. Somewhere this is balanced by the winners who will probably not agree with my first paragraph.
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zlb
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Post by zlb on Oct 10, 2019 8:47:19 GMT
Since Zopa has long since become a black box platform with zero ability to influence the loans you are matched to then it's about time they went the whole hog and black-boxed the returns too. IOW, default losses should be shared equally among all lenders, ending the current ridiculous reliance on being dealt a decent hand. As I've posted before, my returns are appalling, have consistently been so for two years and are actually getting worse. Somewhere this is balanced by the winners who will probably not agree with my first paragraph. agreed black box the returns - mine just permanently skim along the bottom. The zopa bank offer will perhaps be what they think of as the 'black box' offer, whereas, yes they should black box the return - it's one of the main problems with it. Instead they are spending years promising/working on some future reduction in the 1% (where there are problems when 1% might = £200 to one (defaulting) person). Maybe there's an implication here for if the platform collapses and who lenders would be seeking their money back from.
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Post by propman on Oct 10, 2019 9:19:01 GMT
Losses are a given for all lending and particularly lending at the higher rates required by lenders. I am very uneasy with the RS model where the losses are "black boxed". In reality some of the interest that would otherwise flow to the lenders is syphoned off and used to repay bad debts. This gives the impression that everything is fine as excessive bad debts are only visible from the performance of the provision Fund and passes most lenders by. In reality losses will happen in a down turn as the PF has struggled in good times. In addition, when higher bad debts happen, these are paid for by future investors making contributions not just to cover the losses on the loans made but to fill the void created by the losses. I expect that this is why they have recently changed their model to reduce rates. As I have written before, when losses arrive, investors will over react and their business model will struggle, potentially tying up liquidity and potentially occurring when repayments have stopped or reduced materially.
As for a 90% coverage, more extreme conditions are increasingly hard to predict. A 3 sigma spread is asking for an all but certain return. This is not the nature of P2P where your capital is really at risk. I would expect the spread to be wider than they are admitting. I suggest that this amount might only be the variation due to the varied mix of loans assuming that the loans perform as a cohort in line with their current expectations.
- PM
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