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Post by ingenue on Oct 30, 2020 12:00:13 GMT
My defaults for October outweighed my interest by a factor of 2. The shape of things to come? Are you running down your loan book? I know it's variable between accounts, but my return is pretty good again this month. Yes, I'm running down. In addition to a larger core holding, I still have a few hundred in plus which has performed pretty terribly for me, with total earnings peaking in Jan 2018. Maybe things will improve once the remaining plus loans have worked their way out.
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ashtondav
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Post by ashtondav on Oct 31, 2020 8:23:00 GMT
If you’re running down your investment your returns will decrease because eventually you will be left with only unsellable, untradable defaults and bad payers.
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Post by ingenue on Nov 2, 2020 19:52:09 GMT
If you’re running down your investment your returns will decrease because eventually you will be left with only unsellable, untradable defaults and bad payers. Trouble is my actual returns in core and plus would both have to increase to reach the bottom of the range of my projected returns. Really, I'm not that unhappy with the returns achieved given present circumstances, but I wonder if zopa is being slow to adjust their projections to reflect the new reality.
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Greenwood2
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Post by Greenwood2 on Nov 2, 2020 20:22:00 GMT
If you’re running down your investment your returns will decrease because eventually you will be left with only unsellable, untradable defaults and bad payers. Trouble is my actual returns in core and plus would both have to increase to reach the bottom of the range of my projected returns. Really, I'm not that unhappy with the returns achieved given present circumstances, but I wonder if zopa is being slow to adjust their projections to reflect the new reality. But that is unlikely to happen if you have a depleted loan book with a surplus of bad loans. Zopa have reduced their expected after bad debt returns, we will have to see how accurate they are.
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Post by ingenue on Nov 4, 2020 13:11:35 GMT
Trouble is my actual returns in core and plus would both have to increase to reach the bottom of the range of my projected returns. Really, I'm not that unhappy with the returns achieved given present circumstances, but I wonder if zopa is being slow to adjust their projections to reflect the new reality. But that is unlikely to happen if you have a depleted loan book with a surplus of bad loans. Zopa have reduced their expected after bad debt returns, we will have to see how accurate they are. I've just noticed today that zopa have added a caveat to their projected returns. Your current projected returns have not yet been adjusted to reflect any impact from the Coronavirus on your investment.
We will be factoring this in once we have more data through which to model projected returns reliably.
Perhaps that's been there a while, but it's consistent with what I'd been suspecting independently. Even with the rider, it's possibly somewhat questionable to still be listing projected returns that they know to be unreliable. At the least they could remove the lower bound.
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aju
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Post by aju on Nov 4, 2020 15:17:49 GMT
But that is unlikely to happen if you have a depleted loan book with a surplus of bad loans. Zopa have reduced their expected after bad debt returns, we will have to see how accurate they are. I've just noticed today that zopa have added a caveat to their projected returns. Your current projected returns have not yet been adjusted to reflect any impact from the Coronavirus on your investment.
We will be factoring this in once we have more data through which to model projected returns reliably.
Perhaps that's been there a while, but it's consistent with what I'd been suspecting independently. Even with the rider, it's possibly somewhat questionable to still be listing projected returns that they know to be unreliable. At the least they could remove the lower bound. It would be more acceptable for them to at least try and be genuine. Surely if they remove the lower boundary then there might be an issue with the unwary thinking rates are even better than they really are. Unless i've misunderstood the point. My biggest issue with the rates for us - we are no longer reinvesting but withdrawing - is that were it not for the fact that we have been with Zopa since the start and therefore built up quite a head of steam returns wise then we would be looking at heading in the direction of capital losses. I am aware that when one sells or stops lending then the existing defaults and any new ones will result in some quite serious looking reductions in interest return over the following months. Couple that with the covid states too and having 3-4 hundred percent interest losses month on month are probably not that unusual. I always thought it was significant that Zopa removed the spreads for one account on a weekly basis seemed to be removed when things started to take a downward turn. That said they never seemed to line up with our returns amounts in the good time before we sold anything. Zopa added in the NAR screens but in my view they don't really give an accurate picture of ones investment either but I guess that's just me. Just a few personal thought I'm sure others would disagree.
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Post by ingenue on Nov 4, 2020 19:45:12 GMT
I've just noticed today that zopa have added a caveat to their projected returns. Your current projected returns have not yet been adjusted to reflect any impact from the Coronavirus on your investment.
We will be factoring this in once we have more data through which to model projected returns reliably.
Perhaps that's been there a while, but it's consistent with what I'd been suspecting independently. Even with the rider, it's possibly somewhat questionable to still be listing projected returns that they know to be unreliable. At the least they could remove the lower bound. Surely if they remove the lower boundary then there might be an issue with the unwary thinking rates are even better than they really are. Unless i've misunderstood the point. You've not misunderstood the point. My thinking was that if we assume that covid isn't going to improve returns, then the pre-covid calculated upper bound is at least still valid in that we can be pretty sure that post-covid returns aren't going to be better than that. However the pre-covid calculated lower bound is essentially meaningless. I suggest that until they've completed their new modelling, zopa present the projected range of return as God knows what -- pre-covid upper bound or more seriously < pre-covid upper bound
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johni
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Post by johni on Nov 4, 2020 23:20:47 GMT
Zopa never portrayed accurate returns for me. I have always been at the bottom of the range of below. The year before last I ended up 0.8% below due to defaults.
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Greenwood2
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Post by Greenwood2 on Nov 5, 2020 7:27:09 GMT
Surely if they remove the lower boundary then there might be an issue with the unwary thinking rates are even better than they really are. Unless i've misunderstood the point. You've not misunderstood the point. My thinking was that if we assume that covid isn't going to improve returns, then the pre-covid calculated upper bound is at least still valid in that we can be pretty sure that post-covid returns aren't going to be better than that. However the pre-covid calculated lower bound is essentially meaningless. I suggest that until they've completed their new modelling, zopa present the projected range of return as God knows what -- pre-covid upper bound or more seriously < pre-covid upper bound But Zopa have also said they have tightened lending criteria due to covid, so although there may be more defaults in pre-covid cohorts there may be less in the covid cohort. And they have already lowered the projected rates because of the current uncertainties. I don't suppose any modelling can cope with the effects of Covid at least until we are out of it.
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aju
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Post by aju on Nov 5, 2020 9:51:10 GMT
You've not misunderstood the point. My thinking was that if we assume that covid isn't going to improve returns, then the pre-covid calculated upper bound is at least still valid in that we can be pretty sure that post-covid returns aren't going to be better than that. However the pre-covid calculated lower bound is essentially meaningless. I suggest that until they've completed their new modelling, zopa present the projected range of return as God knows what -- pre-covid upper bound or more seriously < pre-covid upper bound But Zopa have also said they have tightened lending criteria due to covid, so although there may be more defaults in pre-covid cohorts there may be less in the covid cohort. And they have already lowered the projected rates because of the current uncertainties. I don't suppose any modelling can cope with the effects of Covid at least until we are out of it. I hadn't actually considered the post covid borrowers but to be honest I'm done with P2P for the most part in terms of new investment anyway - took a hit on the MRA in sales earlier in the year but was worth it I feel. Clearly I'm still stuck with a lot of loans/funds that will take time to show a profit if any in the increasing defaults I am seeing. Mind you I can't see the wood for the trees in the monthlies that I've accepted the negatives for the time being and looking at the world view for want of a better term. Perhaps when things settle more (Running off wise) my XIRR's will start working again I've tried all sorts of things to get them to report useful figures to no avail.
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Post by ingenue on Nov 5, 2020 11:05:49 GMT
You've not misunderstood the point. My thinking was that if we assume that covid isn't going to improve returns, then the pre-covid calculated upper bound is at least still valid in that we can be pretty sure that post-covid returns aren't going to be better than that. However the pre-covid calculated lower bound is essentially meaningless. I suggest that until they've completed their new modelling, zopa present the projected range of return as God knows what -- pre-covid upper bound or more seriously < pre-covid upper bound And they have already lowered the projected rates because of the current uncertainties. I don't suppose any modelling can cope with the effects of Covid at least until we are out of it. My understanding is that they have lowered target rates, but not yet projected rates. I don't blame Zopa for being unable to reliably project returns under the current situation. My issue is with them continuing to display projected returns that they know to be unreliable (and lenders having to hover over a small superscript to see that caveat). As already explained, I was puzzled why my projected range of return seemed unachievable given my actual return. Now I know that the projected return almost certainly is unachievable, yet still displayed. I'll stop banging on about it now.
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Post by fuzzyiceberg on Nov 5, 2020 15:22:06 GMT
Zopa's target rates should be reasonable estimates - they are based on Zopa's current lending rates and credit criteria. Projected returns on the other hand are a total guess since anyone with any established portfolio pre March will take an unknown Covid hit. Zopa have to date been giving 6 month interest free payment holidays to anyone who asks for one, and I think this is likely to be extended for a further six months per recent FCA 'guidance'. (Though why Zopa think they are free to give our money away interest free is another matter, or indeed give anyone a holiday. It's not their money after all, and I dont see why I, personally, should not be free to ignore FCA 'guidance'. They don't regulate me.)
My money was all transferred into a Zopa ISA bewteen mid 2017 and Jan 18. Using my own algorithm* I estimate my XIRR on that ISA to be about 0.5% so far.
* My algorithm simulates disposing of the entire portfolio and allows amonst other things for 80% of loans in arrangements and deferred loans to default. Of couse I might get lucky and the Covid hit may not be that bad. But that seems a 'reasonable worst case' estimate to me. I totally ignore any Zopa performace returns as they aare utterly meaningless at the moment.
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Greenwood2
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Post by Greenwood2 on Nov 6, 2020 16:18:28 GMT
Update from Zopa on projected returns and safeguard loans.
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aju
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Post by aju on Nov 6, 2020 17:31:18 GMT
Update from Zopa on projected returns and safeguard loans. Yeah, sadly ... 1. Zopa times out before you can read each one so have to log back in to read the next. 2. No dates on the docs so who knows whether they are new or not 3. Trying to print them results in text so small you need a mag glass to read them (On chrome anyway) Thankfully I got PDF copies using "Nimbus" extension - looked like they may work using "Print Friendly" and give an even easier read down the line but I'd need to compare the originals to be sure as PF tends to chop stuff out sometimes .. On the dating of their documents - I spoke to Zopa a while back and they seemed to think it was a good idea. Its a shame they cannot follow through on a good suggestion. also I wonder if they are that interested in the Zopa site anyway as its so clunky now its beggars belief that zopa are really that interested in the platform. As for their promises of speeding up the processing in the website and worse the backend its a wonder there is no steam coming our of the servers. Oh well I must try and read the docs now but to be honest my interest in lending with them is not at the fore front at the moment. Rant for the day over with
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Post by ingenue on Nov 6, 2020 19:48:10 GMT
Update from Zopa on projected returns and safeguard loans. Looks like the projections are gone from the site for the time being.
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