aju
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Post by aju on Oct 22, 2019 23:33:22 GMT
So this is the worst month in quite a few months and so bad that I am pretty sure I have more default loss than the interest will hit this month. -114% thus far.
since selling out a considerable sum in may the default/interest reduction %age has been
Jun -90% eg interest = £100 default = £90
Jul -92%
Aug -45%
Sep -51%
Oct -114%
Oct is worst but haven't looked at the actual defaults yet. If I'm lucky the early adopter may just bring the month back into the black.
Mrs Aju is having a better month but had a bad one last month with -114% meaning that was a loss of £4.
Not sure how much I might just pull out of Zopa myself but I'm still convinced I've not waited long enough yet. Talk about holding one's nerve.
Time will tell!
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Post by propman on Oct 23, 2019 10:09:19 GMT
As has been said before, sellouts will inevitably leave a disproportionate number of loans that have been late. As a result, you can expect the return to be significantly lower on the unsellable loans. In addition, the sale of the previously defaulted loans brought forward the income from these that would normally help offset defaults in a mature loanbook reducing the future income to offset future defaults. finally, loans later in their life yield a proportionally smaller portion of their capital as interest over their remaining term and so defaults have a larger proportional impact.
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aju
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Post by aju on Oct 23, 2019 15:40:20 GMT
As has been said before, sellouts will inevitably leave a disproportionate number of loans that have been late. As a result, you can expect the return to be significantly lower on the unsellable loans. In addition, the sale of the previously defaulted loans brought forward the income from these that would normally help offset defaults in a mature loanbook reducing the future income to offset future defaults. finally, loans later in their life yield a proportionally smaller portion of their capital as interest over their remaining term and so defaults have a larger proportional impact. Yeah that is as you say Sellouts is one of the issues and I am compensating for that but I am also relending again in the ISA side and moving all returned money in the Invest side across to the ISA side as well. One of the reasons I am holding my nerve, for want of a better term, is that I expect the relending in ISA and transfering from Invest to start to smooth things out a bit. As I said this month was particularly bad but fortunately Mrs AJU half of the game is a little more stable - she has more SG cover than I do. As a result I usually just consolidate all our figures to treat it as a single investment and its still doing quite well overall. Our overall XIRR numbers are still reporting healthy overall return relative to what we get in our safe bank returns where apart from our current account returns Marcus is delivering 1.5% until 31/8/2020 Tax free as Mrs Aju does not pay tax. Group 4.57%
Invest(me) 5.52%
Invest(MrsAju) 4.84%
ISA(Me) 4.03%
ISA(MrsAju) 3.92%
The difference between Mrs Aju and myself is I have early adopter of 0.5%.
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trium
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Post by trium on Oct 25, 2019 2:36:40 GMT
So this is the worst month in quite a few months and so bad that I am pretty sure I have more default loss than the interest will hit this month. -114% thus far. since selling out a considerable sum in may the default/interest reduction %age has been Jun -90% eg interest = £100 default = £90
Jul -92%
Aug -45%
Sep -51%
Oct -114%Oct is worst but haven't looked at the actual defaults yet. If I'm lucky the early adopter may just bring the month back into the black. Mrs Aju is having a better month but had a bad one last month with -114% meaning that was a loss of £4. Not sure how much I might just pull out of Zopa myself but I'm still convinced I've not waited long enough yet. Talk about holding one's nerve. Time will tell! I assume you've not included debt sale proceeds in calculating the figure for June? My recent figures, ISA/Standard combined: Jul 73.30% Aug 94.72% Sep 148.80% Oct to date 67.78% While I have been withdrawing repayments I have not sold loans and the book is ageing naturally. Clearly you experience significantly better months than me on some occasions and considerably worse months on others. Whether that averages out long-term I don't know but I will re-iterate my discontent at the current system whereby you have no control whatsoever over the loans you are allocated and your performance against the average will depend on pure luck
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ashtondav
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Post by ashtondav on Oct 25, 2019 7:14:21 GMT
If you are withdrawing on any platform returns will decline, because you will eventually be left with only late payers and bad debt, with all the “good” loans having repaid.
This is even more the case if you sell. In this scenario you are immediately left with a portfolio of intermittent payers, late payers and defaults.
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Post by propman on Oct 25, 2019 9:25:33 GMT
If you are withdrawing on any platform returns will decline, because you will eventually be left with only late payers and bad debt, with all the “good” loans having repaid. This is even more the case if you sell. In this scenario you are immediately left with a portfolio of intermittent payers, late payers and defaults. As Zopa typically default loans 4-6 months after they stop paying significant amounts, I'm ot sure this is definitely the case. defaults are net positive as they can only produce income. however the impact of defaults increases as the number of loans declines leading to greater volatility, while the apparent improvement of the first 3 months interest with no defaults from new loans (whether new money or rollovers) will improve the apparent performance, this would not be expected to continue beyond 5 months, so yes roolling over will make it appear that the results improve rather than withdrawing making it worse.
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aju
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Post by aju on Oct 25, 2019 9:44:32 GMT
If you are withdrawing on any platform returns will decline, because you will eventually be left with only late payers and bad debt, with all the “good” loans having repaid. This is even more the case if you sell. In this scenario you are immediately left with a portfolio of intermittent payers, late payers and defaults. As Zopa typically default loans 4-6 months after they stop paying significant amounts, I'm ot sure this is definitely the case. defaults are net positive as they can only produce income. however the impact of defaults increases as the number of loans declines leading to greater volatility, while the apparent improvement of the first 3 months interest with no defaults from new loans (whether new money or rollovers) will improve the apparent performance, this would not be expected to continue beyond 5 months, so yes roolling over will make it appear that the results improve rather than withdrawing making it worse. Its this aspect that bothers me and is really starting to look like i may just have to bail. That said having most withdrawn on invest and reinvesting into ISA side as well as relending on ISA Im checking if things stabilise. Also in our ISA relending we are getting some 100 new loans a month so there is quite a bit of churn. The rates seem to be reducing though as well which i guess is a factor in these theories too. Have had an increase in default payments this month but still very small compared to the default overall.
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Post by Deleted on Oct 25, 2019 10:19:06 GMT
I just don't think even the target returns from Zopa reflect the risk, and I wasn't even achieving the target so sold out earlier this year, with very little remaining now. I sell additional loans as the odd one catches up any arrears and becomes eligible for sale. I started a thread a while back discussing the risk/return of zopa vs some in RateSetter and some in Marcus (FSCS protected but lower return), which was the approach I took. p2pindependentforum.com/thread/14535/switching-zopa-ratesetter-bank |
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Greenwood2
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Post by Greenwood2 on Oct 25, 2019 12:01:30 GMT
I just don't think even the target returns from Zopa reflect the risk, and I wasn't even achieving the target so sold out earlier this year, with very little remaining now. I sell additional loans as the odd one catches up any arrears and becomes eligible for sale. I started a thread a while back discussing the risk/return of zopa vs some in RateSetter and some in Marcus (FSCS protected but lower return), which was the approach I took. p2pindependentforum.com/thread/14535/switching-zopa-ratesetter-bankRS was better then 6.0% - 6.5% achievable, now it's down to about 5.1% on Max and 5.2% on the 5 year. With the bad debt on Zopa being allowable against tax they are pretty close now and if you have an early adopter bonus Zopa may be better.
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Post by Deleted on Oct 25, 2019 13:01:06 GMT
I never achieved the Zopa target so Ratesetter is better in my view given the PF which at least smooths returns even if it runs out eventually. Over 5% is achievable in the 1 year market but obviously not sure for how long that will be the case.
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coogaruk
Hello everyone! Anyone remember me?
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Post by coogaruk on Oct 25, 2019 14:49:46 GMT
Ratesetter is better in my view given the PF which at least smooths returns even if it runs out eventually. Over 5% is achievable in the 1 year market but obviously not sure for how long that will be the case. Indeed. Up to 5.5% as recently as this week.
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aju
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Post by aju on Nov 3, 2019 18:28:39 GMT
So this is the worst month in quite a few months and so bad that I am pretty sure I have more default loss than the interest will hit this month. -114% thus far. since selling out a considerable sum in may the default/interest reduction %age has been Jun -90% eg interest = £100 default = £90
Jul -92%
Aug -45%
Sep -51%
Oct -114%Oct is worst but haven't looked at the actual defaults yet. If I'm lucky the early adopter may just bring the month back into the black. Mrs Aju is having a better month but had a bad one last month with -114% meaning that was a loss of £4. Not sure how much I might just pull out of Zopa myself but I'm still convinced I've not waited long enough yet. Talk about holding one's nerve. Time will tell! so finally got round to recording the Oct stat and it was not quite as bad as it appeared when I started this thread. The final result for Oct was -92% when I added in the early adopter 0.5% then the final outcome was -87%. At least there was no loss after all apart from the months interest that is. its not great though I have to admit. The above figures do not factor in the early adopter bonus.
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ashtondav
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Post by ashtondav on Nov 4, 2019 7:37:17 GMT
I had a good October with £75 net on investment of £16,000.
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benaj
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Post by benaj on Nov 4, 2019 8:59:38 GMT
I checked my monthly statement for my 0 active loans account, I received 1 single payment from a borrower with IVA in October, repaying at the rate of 6.9% capital a year.
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