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Post by dualinvestor on Apr 12, 2016 6:13:41 GMT
I have been a investor in Zopa for many years, which now appears to be a managed fund (rather than as the acronym, which for those of you have not exercised your mind over it stands for "Zone of Potential Agreement", suggests a market) and a more recent investor in Ratesetter. Tomorrow is my 60th birthday and I shall be equalising my investment on both "platforms." Each will be five figures.
For some time I have been concerned about the quality of information provided by Zopa, figures do not add up on the summary page, nearly a month after the launch of their "new" products there is still no information regarding funds on the market, position in queue or speed of lending. readily available. Of more concern to me is that the rate I actually receive in interest is significantly below the rate stated as the average return on my loan book.
Therefore starting next month I shall publish the actual percentage return on my investments. If it hadn't been for the tinkering with products by Zopa they would have been homogeneous, i.e. "longer" term subject to the respective protection funds.
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Post by GSV3MIaC on Apr 12, 2016 7:14:08 GMT
Look forward to seeing the results, but you are braver than me. I started with Z too, but when they misplaced their acronym I switched 100% to RS, not just 50%.
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Post by Ton ⓉⓞⓃ on Apr 12, 2016 8:04:53 GMT
I have been a investor in Zopa for many years, which now appears to be a managed fund (rather than as the acronym, which for those of you have not exercised your mind over it stands for "Zone of Potential Agreement", suggests a market) and a more recent investor in Ratesetter. Tomorrow is my 60th birthday and I shall be equalising my investment on both "platforms." Each will be five figures. For some time I have been concerned about the quality of information provided by Zopa, figures do not add up on the summary page, nearly a month after the launch of their "new" products there is still no information regarding funds on the market, position in queue or speed of lending. readily available. Of more concern to me is that the rate I actually receive in interest is significantly below the rate stated as the average return on my loan book. Therefore starting next month I shall publish the actual percentage return on my investments. If it hadn't been for the tinkering with products by Zopa they would have been homogeneous, i.e. "longer" term subject to the respective protection funds. Hi & Welcome to the forum! When you publish can you say what method you're using? I suppose we're talking about IRR (internal rate of return) or XIRR. I suspect a lot people will be doing what you're proposing and it'll be good if we can understand where we're all coming from.
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Post by dualinvestor on Apr 12, 2016 8:25:02 GMT
For the first 12 months I shall use the formula for AER set out in Financial Services advertising regulations, I will also publish the actual return with no adjustment e.g. 0.5% after one month, 0.1% after two etc
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Post by propman on Apr 12, 2016 9:46:15 GMT
For the first 12 months I shall use the formula for AER set out in Financial Services advertising regulations, I will also publish the actual return with no adjustment e.g. 0.5% after one month, 0.1% after two etc You may find that there is a significant impact from whether you include accrued interest or just paid interest. this is particularly the case if you invest on the annual market where interest is paid as a bullet at the settlement of the loan. To get to AER you would need to estimate the additional interest accrued.
In addition, it will make a difference what rate you reinvest at. Reinvesting at market rate will reduce the time when funds aren't generating income, but at the cost of sub-optimal returns. However increasing the rate to as high as you think you can get in a reasonable period will have an upfront cost (loss of potential interest for periods when funds are unlent) with the benefit spread over the term of the loans made, so initial returns will be unrepresentative of the full position.
- PM
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Post by dualinvestor on Apr 12, 2016 10:06:23 GMT
Let's not over complicate this, as the title suggests the purpose of the thread is to inform readers of my ACTUAL RETURNS. i shall look at both sites tomorrow morning, add funds from my bank account to each to make the investment equal in both (this addition will be around 0.5% of the total portfolio in each), they have been at this level for the last month so the peculiarities of repayment schedules and accrued interest have already had an opportunity to be insignificant to actual returns. The one major diference between the portfolios is diversification, due to the longevity of the accounts there are approximately 1200 loans in Zopa and 250 in Ratesetter.
Having been a qualified Chartered Accountant for over 30 years I am aware of all the potential knobs and tweaks I could make so that this would be a scientific comparison however that is not the purpose of the thread, it is just to tell people I received x% on site A and y% on site B, from roughly homogeneous portfolios. In the real world that is what matters to people with an investment not estimated, and sometimes artificial, adjustments that really only mean anything to financial professionals. It is not meant to be financial advice or a recommendation to either site, merely a record of the result.
PS Both accounts have re-lending switched on, so any difference in the rate of relending will reflect in the actual performance of each site, as of this morning 100% of the Ratesetter protfolio is lent (at a stated return of 6.2% pa) and 98% of the Zopa account is on l;oan (at a stated rate of 5.3%)
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momac
Posts: 21
Likes: 13
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Post by momac on Apr 12, 2016 22:11:05 GMT
Have a very jolly happy birthday dualinvestor!:-))
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Post by dualinvestor on May 13, 2016 6:24:55 GMT
Result to 13 May 2016 Ratesetter Total Return 0.051% AER 6.3% Amount lent out 98.4% Zopa Total Return 0.043% AER 5.3% Amount lent out 99.7% I shall not be publishing any further detail or answering queries on these figures, please do not post on this thread so that this information will be readily avaiable for those that want to see it, if you wish to discuss the results please create your own thread for that purpose. A belated thank you momac for the birthday wishes, had a splendid day  |
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SteveT
Member of DD Central
Posts: 6,875 
Likes: 7,924
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Post by SteveT on May 13, 2016 9:53:38 GMT
To clarify your new personal "rules of engagement", are we permitted to add simple expressions of approval (  ), wonderment (  ) or distaste (  ) ? |
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Post by Ton ⓉⓞⓃ on May 13, 2016 11:12:55 GMT
Result to 13 May 2016 Ratesetter Total Return 0.051% AER 6.3% Amount lent out 98.4% Zopa Total Return 0.043% AER 5.3% Amount lent out 99.7% I shall not be publishing any further detail or answering queries on these figures, please do not post on this thread so that this information will be readily avaiable for those that want to see it, if you wish to discuss the results please create your own thread for that purpose. A belated thank you momac for the birthday wishes, had a splendid day This thread already has the discussion in it, so how about new thread where you put the figures in where again you ask that Users debate it but over on this thread?
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Post by GSV3MIaC on May 13, 2016 12:48:26 GMT
The easiest way to avoid the numbers getting lost in the subsequent debate is to add (all) the numbers to the first posting (by editing it) .. that one is always easy to find (being at the top of the thread). 'Please don't post on my thread' is basically unenforceable (even the platform owners beta/announcement threads don't manage it without a lot of moderator intervention).
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SteveT
Member of DD Central
Posts: 6,875
Likes: 7,924
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Post by SteveT on May 13, 2016 13:43:09 GMT
The easiest way to avoid the numbers getting lost in the subsequent debate is to add (all) the numbers to the first posting (by editing it) .. that one is always easy to find (being at the top of the thread). ... and has the added advantage that we all don't get notified of a new post every time you edit it and add more riveting new figures 
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), wonderment ( 
) or distaste ( 
) ?