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Post by charles on Mar 9, 2017 4:39:55 GMT
Hi everyone, It just occurred to me that a number of you here on the forum, myself included, may hold any number of P2P Investment Trusts in your ISA. These P2P Investment Trusts served an important function at the time of launch - they provided diversification, professional management and quite importantly, because they are listed entities, a way to shield your chunky 8 - 10% yields from very substantial taxes on dividend/income by including them in your tax-free ISA. But as more and more of these P2x platforms launch their own tax-free IFISA wrappers - and we ain't seen nothin' yet, since as this FT article reports, the big three (i.e. FC, RS and ZP) have yet to gain regulatory approval - I'm wondering whether any of you may now be thinking, "well, I can jolly well diversify P2P risk myself and save on all those management fees, thank you very much!" So a couple of questions: 1) Does anyone hold these P2P Inv Trusts in their ISA? 2) And if so, which ones? 3) Will the introduction of IFISAs change your view on the value of these Inv Trusts? 4) And if so, what do you intend to do? Please take a minute to share your thoughts and take part in the poll above. I'm very keen to hear what people are thinking in the run-up to the end of this tax year! Kind regards, Charles
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Post by charles on Mar 9, 2017 10:44:54 GMT
Pretty quiet on this board... Tough crowd (pun not intended).
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registerme
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Post by registerme on Mar 9, 2017 11:23:33 GMT
"None". Which isn't an option and doesn't really fit within "Other".
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jonah
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Post by jonah on Mar 9, 2017 20:11:02 GMT
Currently is also different to potential future.
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Post by charles on Mar 10, 2017 3:59:57 GMT
"None". Which isn't an option and doesn't really fit within "Other". Is it safe to assume then, judging by the response or lack thereof, that most of the investors on this forum are savvy enough to make their own P2P investments and therefore don't invest in or hold these P2P trusts?
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mason
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Post by mason on Mar 10, 2017 7:19:46 GMT
Is it safe to assume then, judging by the response or lack thereof, that most of the investors on this forum are savvy enough to make their own P2P investments and therefore don't invest in or hold these P2P trusts? The trusts have a very different risk profile to directly held P2P loans. I've not been tempted, as I can get double digit returns from directly held loans without the significant capital fluctuations experienced in the trusts.
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registerme
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Post by registerme on Mar 10, 2017 11:28:47 GMT
Is it safe to assume then, judging by the response or lack thereof, that most of the investors on this forum are savvy enough to make their own P2P investments and therefore don't invest in or hold these P2P trusts? Well I'm wary of a) using the words safe and assume in the same sentence and b) over-generalising, but a significant proportion of the forum population are 1) early adopters in the P2P space, 2) relatively time rich and / or 3) feel confident enough to select platforms and loans in their own right (which doesn't mean that there isn't space for aggregators). I know for fact that P2P Global, Ranger Direct and FCIT have been discussed on occasion, with some people occasionally buying when the NAV drops enough for their tastes. If I had to sum up general sentiment towards them it would seem to be "why pay for beta" (subtext being "when I can get better returns myself")? Something else that people might consider, I certainly do anyway, is that you can't write off bad debt against your P2P earnings if you wrap your investments in an ISA.....
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Post by davee39 on Mar 10, 2017 11:57:30 GMT
P2p Global & VPC Venture Capital, not held in an ISA.
Yes I can make my own decisions, and I have excluded several popular providers here which I think might prove too good to be true. Investments made with funds pulled out of FC, something VPC has also done.
Reasons for investing
- Global Diversification
- Regular income
- Potential Capital Gain. If the discounts do not narrow from the current 18 to 20% I expect a winding up vote will focus managers efforts.
Neither trust has managed the promised yield so far, currently I think it is about 6 to 7% at current prices.
VPC has performed appallingly, losing 7% capital value blamed on FC loans, hedging, and numerous spurious reasons to try to justify its fees. I am however breaking even & will hold for discount recovery. Share re-purchase has been halfhearted.
P2P strikes me as grossly undervalued, since the capital value remains close to the issue price and the discount is around 20%. I am showing an overall loss having initially bought in at a 10% discount. I am continuing to make monthly purchases. Shares are being bought back by the trust on a daily basis.
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Post by charles on Mar 10, 2017 12:35:02 GMT
I know for fact that P2P Global, Ranger Direct and FCIT have been discussed on occasion, with some people occasionally buying when the NAV drops enough for their tastes. If I had to sum up general sentiment towards them it would seem to be "why pay for beta" (subtext being "when I can get better returns myself")? Something else that people might consider, I certainly do anyway, is that you can't write off bad debt against your P2P earnings if you wrap your investments in an ISA..... Well, that's true, but the tax-efficiency of an ISA works both ways; it's only fair that if you don't pay any tax on gains, you don't get to use losses for tax deductions. In other words, can't have your cake and eat it. In any case, presumably, seeing as most forum members here are experienced early adopters, the "non-performing loan ratio" should be relatively low, so that's where a tax-free ISA is perfect, because a 12% yield is a 12% yield, not c.6% after HMRC reach in and take their pound of flesh? (it's amazing how tax changes the risk-reward profile, isn't it?)
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Liz
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Post by Liz on Mar 10, 2017 13:22:46 GMT
"None". Which isn't an option and doesn't really fit within "Other". Is it safe to assume then, judging by the response or lack thereof, that most of the investors on this forum are savvy enough to make their own P2P investments and therefore don't invest in or hold these P2P trusts? Yes. The IT's are also high risk. Just look at their past performance.
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stevio
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Post by stevio on Mar 11, 2017 8:48:39 GMT
This is an interesting concept, particularly if packaged in a tax free wrapper such as an ISA or Pension. Also, higher rate tax payers or those with interest pushing them close to the higher rate, might benefit the most from moving that income within a tax free wrapper and out of their taxable income Particularly seeing the ISA/Pension limits allow a fairly large concentration of investment, which you might not want concentrated in just one P2P platform ISA/Pension provider What is the difference between a Investment Trust and Fund in terms of costs and performance? Are there also P2P Funds? Can these be accessed by one of the fund supermarkets such as H&L? Generally, how have they performed vs directly investing in the platform? Any specific examples? 7% seems comparable with BM (although BM is not within a tax wrapper yet) charles questions in the first post, particularly 3 and 4, don't appear to have been answered by contributors so far and answers may take the raw information provided so far more useful
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Post by charles on Mar 14, 2017 5:40:29 GMT
This is an interesting concept, particularly if packaged in a tax free wrapper such as an ISA or Pension. Also, higher rate tax payers or those with interest pushing them close to the higher rate, might benefit the most from moving that income within a tax free wrapper and out of their taxable income Particularly seeing the ISA/Pension limits allow a fairly large concentration of investment, which you might not want concentrated in just one P2P platform ISA/Pension provider What is the difference between a Investment Trust and Fund in terms of costs and performance? Are there also P2P Funds? Can these be accessed by one of the fund supermarkets such as H&L? Generally, how have they performed vs directly investing in the platform? Any specific examples? 7% seems comparable with BM (although BM is not within a tax wrapper yet) charles questions in the first post, particularly 3 and 4, don't appear to have been answered by contributors so far and answers may take the raw information provided so far more useful There are some P2P Funds out there - my very rudimentary research suggests you've got Prime Meridian and AlphaFlow, but those are US-based and I suspect it won't be long before you get a couple popping up in the UK. The key question, of course, which applies to both the Inv Trusts or Open-ended Funds, will be whether the benefits of professional management (in terms of enhanced risk-adjusted performance) more than compensate for the costs involved (i.e. another layer of fees). Don't think there are enough funds with enough publicly available data to do a comparison yet - but it's on my "to-do list" later this year. Regards, Charles
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ilmoro
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Post by ilmoro on Mar 14, 2017 14:00:23 GMT
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Post by hnwlending on Mar 15, 2017 10:42:17 GMT
I've only just been made aware of your forum and it looks great, although I am completely new to forums to please excuse me if I'm not following the right etiquette!
I am the MD of HNW Lending Ltd. We are a fully FCA authorised firm (authorised in January 2017) and also have HMRC permission to offer IF ISAs and have flexible ISAs . I don't really understand why people would invest through a trust when you have so much extra control if you invest directly in a platform and choose your own loans so you get the type of diversification you want.
We have been going for 3 years, have done over 150 loans, and have never lost a penny of interest or capital to date as all the loans we do are secured loans. Secured loans means first or second charge on property or taking an asset like a high value car or plane into a storage facility under our control
We are basically funded by a collection of wealthy individuals, with the average individual investor having over £100k invested in our loans. We do however allow investors to put a minimum of £5k per loan (or £10k per loan outside of the ISA). Investors choose which loans they wish to invest in and the rate investors earn ranges from about 7% to 15% depending on the risk of the loan - ie a low LTV (loan to value) first charge would pay lower interest than a high LTV second charge
My number is 07958 636 106 and email is ben@hnwlending.co.uk if you wanted to find out any more information
Thanks
Ben
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Post by charles on Mar 16, 2017 15:13:53 GMT
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