I don't understand the gobbledegook, what's the difference..

Gross yield is the overall rate your current portfolio will earn over the next 12 months.

Annualised return is your earnings over the last twelve months, it adds in cashback and profits/losses from loan part sales and subtracts fees and losses.

The diversified return is an estimate of return after fees, and taking into account average losses assuming you have at least 100 loans.

Of course the rusty abacus used to calculate these values is not renowned for its accuracy.

Actually I think annualised is calculated over the life of your account, not the last 12 months (although it is an annualised number). I could be wrong though. 8>.

You are exactly right.

The third is actually the case where you have losses exactly meeting the FC predicted average for the risk bands you hold . . t'ain't by any stretch of the imagination 'the worst case', which could be a lot worse if a) FC's bad debt estimates turn out to be too optimistic, or b) you are unlucky in the loans you hold (and you are more likely to be better/worse than the predicted average is you have fewer than the 100 loans they recommend. I suspect 'fully diversified', as they call it, actually means 'if you held every loan in the book so your average loss was just exactly what FCs average loss calculation would show', so even 100 loan diversification isn't going to necessarily get you there). If you manage to pick losers you could get all the way down to 'very negative %age indeed', while FC still record an =average= the rest of the folks are happy with.

I think that if a lender cannot do better than the 'fully diversified' then better to switch on Autobid and use spare personal time for another hobby.

Yes, but it's the theoretical 'most likely' not the theoretical worst case.

Actually, iirc, if you kept putting everything into 15% ers, the Funny Counting number shown would be 16.x% or similar, since the 15% is flat, but they display the compounded version.