"Your Average Interest" rate?

What % of your portfolio is in distressed loans though chris

My dashboard shows 23%. I hold parts with rates from 12% to 18%, but a small amount of loan #35 at 68% is skewing the rate.
This rate is for current holdings only, so excludes interest received for redeemed or sold loan parts.

I'm guessing it includes unpaid interest for loan parts that I sold but which were later suspended, as they still show in my "loan book"

(I retain a £1 holding of sold parts, to keep track of unpaid interest).

I have withdrawn over 90% of this account this year so this rate is only representative of the leftovers, so not very useful to me.

As the rate relates mostly to unpaid interest which I do not really expect to receive, I have not paid it much attention and have not used XIRR.

The mystery of my low XIRR has been solved!  Perhaps it's a cautionary tale.  I broke down the sequence of payments into smaller discrete periods of one month, and tested each month to see where any aberrations might occur.  it soon became obvious that a substantial withdrawal in October followed by some deposits created a situation that the XIRR algorithm could not handle.  I therefore used XIRR to calculate returns for subsequent periods and even then for November and December I got some very strange results indeed -  0.23 per cent for November and 0.34 per cent for November & December combined. The simple returns in these periods were far greater than this.  I then estimated for 2015 to end July and the XIRR was 11.18 per cent - remarkably similar to the weighted average return given on the dashboard.

Searching the internet I discover that XIRR has problems computing certain types of cash flow, & I'm not the first to find it can produce nonsense results.  I found a site (Pine-grove.com) which allows one to compute an IRR for up to 24 items of income or expenditure, so checked the XIRR results against theirs.   The November figure was 17.84 per cent and the November-December figure was 14.56 per cent.   The 2015 figure was exactly the same as XIRR at 11.18 per cent.

My version of Excel is 2003 so perhaps MS have done something about the algorithm since then.  But all this is a warning not to put blind faith in XIRR.

[NB  In calculating the IRR I use only the initial investment (or AC balance at the beginning of the month), transfers to and from my bank account, and the AC balance at the end of the month.]

I think that it is probably a difficult thing to work out meaningfully , FC quotes three figures that most of us would be used to. I have a newish holding of about 60 loans , I started 3-4 months ago with a bit over 2 K now. The dashboard rate varies from 9.9 to 10.15. I have 15% combined in the GBBA and GEIA (both equal). Typically I have weighted amounts with much more in the loans that I like the look of. But as I am no expert so a little in most of them hedges my bets a bit I feel. It makes admin and searching a bit easier for me as the risked sum indicates what I thought about it at the time. I have about 15% cash but as I grow the holdings intend to keep that to less than 5%. Most of the holdings have come from shrapnel.

I put more money into simple loans that I understand with property type first charges , avoid very high LTVs , most environmental loans or ones with only a month or two to go. I put less in second charges , trade debenture types , low interest return propositions , multiple interconnected situations , or these loans that have an LTV based upon what it will be worth when finished.

It seems to have taken a long time for much income to trickle onto the overall sum.

I dont expect it to settle down for some months more but eventually I should be able to estimate monthly income and work out some sort of real return. As I see it even with asset security when a loan goes wrong one will probably be deprived of the use of the capital for perhaps up to two years and so the headline return rate is impacted significantly by relatively few bad loans. So I am hoping that the fluctuation in the return will be fairly small.

Thanks Chris , I was hoping that with AC the quality of the disaster when it goes wrong would be better than from elsewhere. It seems easy to lose 25-30% of your return with loans that go wrong hence my diversified and tortoise like approach. Surely with the higher yields the number of loans one holds must be less and any interruption will dent the returns more significantly ?