A bad month?

I think looking only at default data it is impossible at this stage to determine portfolio performance on +

This is because Zopa don't default until at least 90 days, as typical policy. Looking at the data on "lates" from their downloadable loan book it can take longer, probably if they are in positive dialogue with the customer. And also, unless a loan is a fraud or first payment non-payment default, most customers make some payments before their position deteriorates.

So anyone that only started lending on + from Q3 2016 will have no idea of performance unless you take you late's and estimate that there will be a capital loss on a % of these. From my experience, the 6 to 18 month window is where we'll see the true estimate of final bad debt performance.

All of this will make the performance of + look far better than the long term reality at the start. We're not really going to know for another 6-months. And by then, Zopa could have changed their allocation or risk policy, so this performance may not be reflective of future. If you were being cynical you might think it would be in Zopa's interest to make sure this initial performance meets lenders expectations...

Kevin.

smart approach westonKevTMP - I've been tracking my stuff and its not too bad although, as people say, it does seem to have have wobbled a bit of late. To a certain degree I think I have been lucky in all my + loans so far. All are at the recommended 1% level that is £10/£1000. Since I let some classics re-lend redirect to + at the outset until I had roughly £1000 it restricted my lend to £10 bets, so to speak.

From a perspective of being here way before Classic (safeguard) started and I have 300+ loans that are in presafeguard and of those only 37 are actually defaulted. Of my default's many are still paying something - albeit mostly only principle. I have written them off in my mindset a long while ago and apart from the fact that the interest rates were considerably better in the old days I'm still happy with the return I get from zopa today.

You're micro-managing five year investments. It doesn't work like that. It may be frustrating but you want know what you're real return is for a year or two at least, until you've had 100s of loans rolling over, maturing, paying early etc.

its like investing in the stock market and after six months saying "I'm up (or down ) 5% - this is (or isn't) working". Like it or loath it you're in a long term investment. Looking at last month's bad debt and wincing is not the way to go. IMO ZOPA should not provide these data, but simply email each investor each year what their cumulative return is.

I'm still happy and not reducing my holdings, but it is a concern that over a quarter of my defaults have not repaid a penny and the majority of the others just one payment.

What exactly do Zopa do to recover these losses?  

Dare I say they just reduce the visibility of these to a level that only the determined can find the info. In the old days if a default ocurred they would email me and tell me who it was now its almost impossible to find out by looking at the statements info.

(I'm still trying to figure out what is actually included in bad debt) its much harder to see whats missing now that the old loanbook statement list is not available.)

The cynic in me struggle with this daily - my excel skills are getting better though. I've nearly got a statement reader working just got to find a way to deal with exceptions in the descriptions that is making life difficult. What I can see so far though is that I still can't see what has been missed just when its been missed. The old system did give you missed payments and why (sort of).

Fortunately I only have 37 defaults and 21 collections over the whole of my book. Thats a total of 3212 loans since 2006 and up to 1/3/2017 of which 1697 are still active. 

Update 17:47 : Actually of the 21 collections, only 5 are actually a danger, the rest are in classic and unless the safeguard fails they will be paid out.


 

I have defaulters that are still paying - probably only capital and very small interest though. To be honest I wrote off a lot of defaults a long while ago, all of them are in pre-safeguard and span over a number of years. I've made back way more than what I've lost and my overall XIRR from day one is just under 5% after tax, defaults and fees etc. I'm expecting some defaulters in plus too at some point but as others say its real early days. My spead in + is < 10% anyway.

Some lending started back in 2006 (£100) and increased quite a bit when I took kings shilling in 2007 - before Safeguard - and again when I pulled personal pension in 2013. In plus I just used existing zopa funding. Its way better than main banks even before crisis and to be honest competes with the best current accounts prior to last round of interest rate decimation.

I have some other investments, shares etc but my positions there haven't changed since I left work, gives you an inkling where my shares are I guess. The divi on those is getting too close for the taxman these days so I guess i'll have to take some steps on that, wifey won;t know whats hit her ;-)

So overall I'll stick with zopa for now, bring on the bloody IFISA is what I say now.