Steerpike
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Post by Steerpike on Jan 10, 2017 16:17:12 GMT
All these bullet loans, activation delays, and protracted recovery processes can impact returns, at least in the short term.
Ignoring accrued interest, since I joined FS 15 months ago my account has achieved 4.96% XIRR.
Possibly a somewhat unfair comparison, but of all the platforms that I use FS has recorded one of the worst returns, whereas good ol' SS (12%) and MT (11%) perform exactly as expected.
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Kyrios
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Post by Kyrios on Jan 10, 2017 16:31:07 GMT
All these bullet loans, activation delays, and protracted recovery processes can impact returns, at least in the short term. Ignoring accrued interest, since I joined FS 15 months ago my account has achieved 4.96% XIRR. Possibly a somewhat unfair comparison, but of all the platforms that I use FS has recorded one of the worst returns, whereas good ol' SS (12%) and MT (11%) perform exactly as expected. Due to the bullet nature of the loans and your somewhat recent "membership", it is indeed a bit unfair comparison. But I would be very interested to have your statistics regarding default rates and actual crystallized losses over the period, if you are willing to share...
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Steerpike
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Post by Steerpike on Jan 10, 2017 17:20:12 GMT
All these bullet loans, activation delays, and protracted recovery processes can impact returns, at least in the short term. Ignoring accrued interest, since I joined FS 15 months ago my account has achieved 4.96% XIRR. Possibly a somewhat unfair comparison, but of all the platforms that I use FS has recorded one of the worst returns, whereas good ol' SS (12%) and MT (11%) perform exactly as expected. Due to the bullet nature of the loans and your somewhat recent "membership", it is indeed a bit unfair comparison. But I would be very interested to have your statistics regarding default rates and actual crystallized losses over the period, if you are willing to share... FS publish statistics regarding loans, defaults, and overall return rates and I have no reason to doubt them, however, my point was that in the (actually not that) short term returns may be significantly lower than might reasonably be expected because of the reasons that I cited.
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mikes1531
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Post by mikes1531 on Jan 10, 2017 17:52:21 GMT
All these bullet loans, activation delays, and protracted recovery processes can impact returns, at least in the short term. Ignoring accrued interest, since I joined FS 15 months ago my account has achieved 4.96% XIRR. Possibly a somewhat unfair comparison, but of all the platforms that I use FS has recorded one of the worst returns, whereas good ol' SS (12%) and MT (11%) perform exactly as expected. I'm not surprised by the above. SS and MT always will look good in such a comparison because, AIUI, they pay interest monthly. It will take a while for a FS XIRR to produce a good result, and the actual return won't be known until the account is wound down and closed. Growing the FS account via further investments exacerbates the issue. When I was building up my FS account, there was a point in Apr.'15 (about 18 months after I started) when my XIRR was 2.18%! At that time I had a lot of loans that were nearing maturity. My return improved to 9.12% by Jul.'15 once the interest payments started coming in.
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Steerpike
Member of DD Central
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Post by Steerpike on Jan 10, 2017 18:08:19 GMT
All these bullet loans, activation delays, and protracted recovery processes can impact returns, at least in the short term. Ignoring accrued interest, since I joined FS 15 months ago my account has achieved 4.96% XIRR. Possibly a somewhat unfair comparison, but of all the platforms that I use FS has recorded one of the worst returns, whereas good ol' SS (12%) and MT (11%) perform exactly as expected. I'm not surprised by the above. SS and MT always will look good in such a comparison because, AIUI, they pay interest monthly. It will take a while for a FS XIRR to produce a good result, and the actual return won't be known until the account is wound down and closed. Growing the FS account via further investments exacerbates the issue. When I was building up my FS account, there was a point in Apr.'15 (about 18 months after I started) when my XIRR was 2.18%! At that time I had a lot of loans that were nearing maturity. My return improved to 9.12% by Jul.'15 once the interest payments started coming in. Interesting, I was rather late to the FS party, and it appears that my return at this point on the curve is somewhat better than you experienced, perhaps because I sold a few parts on the SM last year, however, I also have loans outstanding from 2015. If my return reaches 9% in 3 months from now I will be reasonably satisfied.
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SteveT
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Post by SteveT on Jan 10, 2017 18:22:44 GMT
I'm now approaching 2 years in and my XIRR has crawled steadily up to about 8.5%.
Were I to start winding up my FS account now, I've so much locked into vastly overdue loans (that may eventually repay capital and accrued interest in full, but equally may lose 20%/40%/60% of capital) that I reckon my "end state XIRR" could be anywhere between 2-3% and 12-13%.
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