ashtondav
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Post by ashtondav on Aug 16, 2017 9:19:26 GMT
Hi. For diversification reasons I have opened an auto bid enabled account with FC. I have set the secondary market rates at the same level as the primary - why would a want a lower rate?
Can anyone who invests with both FC an Z, give me a "compare and contrast" experience of returns, ease and speed of lending. I am thinking of 1% investments and an nitial deposit of £3,000. Sorry if this is the subject of another thread, I have looked.
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ceejay
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Post by ceejay on Aug 16, 2017 9:32:57 GMT
I don't think you'll find many people here supporting an "autobid" strategy on FC - you will be dumped with all the rubbish that no-one else wants.
Remember that a key difference vs Z is that on FC you have the option to pick and choose, so if you assume that people who are doing that have any sense at all, it would seem to follow that those relying on autobid will get less than the average returns.
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ashtondav
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Post by ashtondav on Aug 16, 2017 9:55:33 GMT
Thanks for that. Does that mean that the illustrative returns quoted by FC for auto bid are at risk, or more vulnerable than those on Zopa?. I guess I'm trying to compare autobid with Zopa plus and identifying which is more likely to deliver on expectations. To date I am getting 6%+ with Zopa+. The attraction of FC autobid is obviously the extra percentage point of interest.
thanks.
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ceejay
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Post by ceejay on Aug 16, 2017 10:15:03 GMT
I guess like a lot of people starting out with FC, I turned on autobid mainly just to get some money placed. I didn't keep it on for long. I then spent the next two months sifting through all the  I'd been given, and dumping anything I didn't like the look of. And, on FC, it is incredibly easy to get rid of a dodgy loan part at the moment: just list it at par and it's gone within seconds, no matter how bankrupt the borrower looks. There's just no time to do any DD. Buying new loans is better in many ways because you have at least some time to kick the tyres - except that unless you want to spend your whole life looking out for new loans, you have virtually no chance of picking up the higher risk band loans as they go pretty quickly as well. You can sometimes do better by going to the SM and being prepared to pay a small premium (up to 0.5%). This also gives you the option to select shorter loan durations if you are concerned about becoming overweight in 4-5 year loans which, in the case of a liquidity crisis, you'd be stuck with. To sum up: if you want a hands-off experience, stick with Zopa. If you have the time and inclination to get involved, FC is a place to do it. Very different experiences! Incidentally, I have a Z account but I emptied it some time ago as I hated not having the visibility or control over loan duration. |
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ashtondav
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Post by ashtondav on Aug 16, 2017 10:31:59 GMT
Thanks, I'm not interested in spending hours on DD, so if autobid can't deliver 6.9%ish I'll stick with z or maybe look at AssetzCapital.
Ta for your time.
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Post by Butch Cassidy on Aug 16, 2017 10:59:00 GMT
Thanks, I'm not interested in spending hours on DD, so if autobid can't deliver 6.9%ish I'll stick with z or maybe look at AssetzCapital. Ta for your time. AC is a decent product for those without the time or inclination to bother spending on DD but FC has it's benefits; Autobid would be a last resort however, as has been said, it mops up the dross & impaired stuff everyone else avoids, as well as a few decent loans but if you can give an hour/day or just a couple of hours at a weekend/evening you can dramatically improve your returns by manual selection, I would guesstimate probably a couple of % on top of FC estimated return.
If you have even the slightest clue about looking at financials or even just reading the loan comments section which covers late payments & other relevant issues you can avoid the most toxic potential defaults & due to the massive loan volume their are always decent loans available via SM. It depends on your own risk appetite what level of returns you target but if you pay modest, say upto 0.6% premiums you can invest a 4/5 figure sum virtually immediately in a good spread of solid loans & would be unlucky not to return very near a double digit net % after fees & defaults. Many people flip high interest loans at par after a fixed length of time (usually 1-6 months) so you can even build a portfolio without paying a premium at all but this is a bit more time consuming. I no longer use the PM as I don't have a bot & now exclusively invest in D/E band loans via SM which whilst risker also pay the highest interest rates, upto 21.9% I tend to buy & hold.
I have never used Zopa as the returns are too low for the risk IMO but have been with FC since the early days & have achieved just over 11% net return pa having never invested in property or farmed any cashback or referrals. Most of that was achieved when rates were lower than currently available but I also value helping support SME's so can tolerate a few loss & defaults but think FC provides a good part of an overall diversified portfolio.
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SteveT
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Post by SteveT on Aug 16, 2017 11:02:44 GMT
I reckon buying the FC investment trust (FCIF) is a much better option than Autobid, especially bought inside an ISA or SIPP
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Post by beeje13 on Aug 16, 2017 11:07:02 GMT
Thanks, I'm not interested in spending hours on DD, so if autobid can't deliver 6.9%ish I'll stick with z or maybe look at AssetzCapital. Ta for your time. Definitely look at Assetz capital. I think they have higher standards than FC when it comes to picking borrowers. And the loans are secured there whereas on FC they are not. It's good to hear you're getting good results with Zopa+, some users on here have had very low or even negative returns.
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bg
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Post by bg on Aug 16, 2017 12:26:24 GMT
Thanks, I'm not interested in spending hours on DD, so if autobid can't deliver 6.9%ish I'll stick with z or maybe look at AssetzCapital. Ta for your time. I wouldn't listen to all you read on here necessarily. Some people think they can tell if a company is 'rubbish' or not by looking at a one line business profile and a few basic lines from a couple of years P&L and balance sheet - but you can't. I have seen plenty of companies with what appear stronger summary financial statements default and plenty of those with apparent weaker balance sheets repay just fine. Any loan that is late or missed a payment can not be bought or sold so you are shielded from truely bad loans. There is no 'inside' knowledge. Unless you actually speak to the particular SME you won't know if they have a strong order book, if they have lost a big contract or if they need a new significant item of machinery, if a key staff meneber has left/died etc etc - these are some of the major factors that can cause a company to default and nobody is doing that. FC have their own credit assessment team who have a lot more information than we can see and as with any platform (Zopa included) you have to place some trust in them. As long as you diversify then autobid should return 6.5-7.5% over a reasonable period of time (by that I mean minimum a couple of years). How it gets there is irrelevent as long as you get that return (ie if some loans default as they will). The ironic thing is if FC made their autobid complately black box (as Zopa now have done) so you couldn't see much information for each loan or manage any individual loans then you wouldn't get some of these comments. The funding circle investment trust (which also invests in randomly selected loans) also yields just over 7% which is an indication of what a random investment strategy will give you. I have also had a Zopa account since it started which has been in wind down mode for a number of years. I think you will earn a higher rate with FC autobid (7%) than Zopa's riskier offering (6% last time I checked). You shouldn't disgard FC just because they give more information than Zopa. If I were you I would diversify between the two platforms. In my experience speed of lending is also much faster at FC. FC also has the added bonus of being able to liquidate much quicker and cheaper than Zopa. 99% of the time you can sell out for a 0.25% fee in a matter of minutes. When I have tried to sell out of Zopa they charge a fortune.
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markr
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Post by markr on Aug 16, 2017 12:44:13 GMT
Thanks, I'm not interested in spending hours on DD, so if autobid can't deliver 6.9%ish I'll stick with z or maybe look at AssetzCapital. I reckon, in current conditions, Autobid should deliver 6.9% without too much trouble. The majority of loans that Autobid buys will be either primary market loans or loans bought from "sell after N payments" flippers. While, in theory, flippers could sort through their loan parts and hold back "good" ones, I don't think that many do, preferring a blanket "sell everything" policy. So the huge majority of stuff you buy won't be rubbish that the seller doesn't want, but simply the output of someone's sell algorithm. Autobid can't buy downgraded or late loans, so there usually isn't a window where a loan is dodgy but sell-able. There's also nothing wrong with having a sell algorithm of your own, FC is fairly unique in that the automated and manual accounts operate on the same loan parts, so you could put loans bought by Autobid up for sale, with a premium, and the proceeds of any sales will be recycled by Autobid. Of course, you may buy the same loan back so ensure the premium covers the selling fee! It shouldn't take much more than an hour a week or so putting loans up for sale, and the proceeds are reinvested automatically. Autobid has few fans here, but that's because we're all P2P hobbyists who like to tinker with our investments, but for someone who wants an automatic account, FC Autobid is fine. That said, definitely do have a look at Assetz.
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Post by Butch Cassidy on Aug 16, 2017 12:54:19 GMT
Thanks, I'm not interested in spending hours on DD, so if autobid can't deliver 6.9%ish I'll stick with z or maybe look at AssetzCapital. Ta for your time. I wouldn't listen to all you read on here necessarily. Some people think they can tell if a company is 'rubbish' or not by looking at a one line business profile and a few basic lines from a couple of years P&L and balance sheet - but you can't. I have seen plenty of companies with what appear stronger summary financial statements default and plenty of those with apparent weaker balance sheets repay just fine. Any loan that is late or missed a payment can not be bought or sold so you are shielded from truely bad loans. There is no 'inside' knowledge. Unless you actually speak to the particular SME you won't know if they have a strong order book, if they have lost a big contract or if they need a new significant item of machinery, if a key staff meneber has left/died etc etc - these are some of the major factors that can cause a company to default and nobody is doing that. FC have their own credit assessment team who have a lot more information than we can see and as with any platform (Zopa included) you have to place some trust in them. As long as you diversify then autobid should return 6.5-7.5% over a reasonable period of time (by that I mean minimum a couple of years). How it gets there is irrelevent as long as you get that return (ie if some loans default as they will). The ironic thing is if FC made their autobid complately black box (as Zopa now have done) so you couldn't see much information for each loan or manage any individual loans then you wouldn't get some of these comments. The funding circle investment trust (which also invests in randomly selected loans) also yields just over 7% which is an indication of what a random investment strategy will give you. I have also had a Zopa account since it started which has been in wind down mode for a number of years. I think you will earn a higher rate with FC autobid (7%) than Zopa's riskier offering (6% last time I checked). You shouldn't disgard FC just because they give more information than Zopa. If I were you I would diversify between the two platforms. In my experience speed of lending is also much faster at FC. FC also has the added bonus of being able to liquidate much quicker and cheaper than Zopa. 99% of the time you can sell out for a 0.25% fee in a matter of minutes. When I have tried to sell out of Zopa they charge a fortune. Whilst I accept most of what is said above & am certainly not claiming any "inside info" MY BOLD is most definitely wrong; try 4272, 4871, 8120, 8404,10001, 14493, 14724, 16788, 18393, 18899, 27938, 30574, 36208 as just a selection which have had late payments & other serious issues that are still tradable on the SM & they are just some which I have chosen to keep, others have been sold.
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bg
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Post by bg on Aug 16, 2017 13:03:06 GMT
Whilst I accept most of what is said above & am certainly not claiming any "inside info" MY BOLD is most definitely wrong; try 4272, 4871, 8120, 8404,10001, 14493, 14724, 16788, 18393, 18899, 27938, 30574, 36208 as just a selection which have had late payments & other serious issues that are still tradable on the SM & they are just some which I have chosen to keep, others have been sold. Well none of the loans listed are late, all of them are fully up to date as they must be to be tradeable. If you think they are truely bad loans why have you chosen to keep them?
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Post by Butch Cassidy on Aug 16, 2017 13:18:50 GMT
Whilst I accept most of what is said above & am certainly not claiming any "inside info" MY BOLD is most definitely wrong; try 4272, 4871, 8120, 8404,10001, 14493, 14724, 16788, 18393, 18899, 27938, 30574, 36208 as just a selection which have had late payments & other serious issues that are still tradable on the SM & they are just some which I have chosen to keep, others have been sold. Well none of the loans listed are late, all of them are fully up to date as they must be to be tradeable. If you think they are truely bad loans why have you chosen to keep them? At no point have I claimed that they are truly bad loans, in fact I have kept them because I think the opposite  I have although sold some similar loans that have subsequently defaulted via the SM at par, which is exactly where autobid feeds from & why it has a lower rate of return than is achievable via manual selection. Many investors would prefer to avoid loans with late payment histories, CCJ's & other serious issues - this is possible with manual selection by reading the loan comments & not with autobid that blindly buys whatever fits the criteria. I support impaired SME loan's even though the risk of default maybe higher because I think it is the correct thing to do for the broader economy, I also rate FC's recovery procedures, mine is currently running at 44% & don't mind accepting a few losses as long as the impact on overall returns is not too great - but my approach will clearly not suit everyone.
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bg
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Post by bg on Aug 16, 2017 13:25:40 GMT
Well none of the loans listed are late, all of them are fully up to date as they must be to be tradeable. If you think they are truely bad loans why have you chosen to keep them? At no point have I claimed that they are truly bad loans, in fact I have kept them because I think the opposite I have although sold some similar loans that have subsequently defaulted via the SM at par, which is exactly where autobid feeds from & why it has a lower rate of return than is achievable via manual selection. Many investors would prefer to avoid loans with late payment histories, CCJ's & other serious issues - this is possible with manual selection by reading the loan comments & not with autobid that blindly buys whatever fits the criteria. I support impaired SME loan's even though the risk of default maybe higher because I think it is the correct thing to do for the broader economy, I also rate FC's recovery procedures, mine is currently running at 44% & don't mind accepting a few losses as long as the impact on overall returns is not too great - but my approach will clearly not suit everyone. Fair enough - but when I said truely bad loans, I meant loans that are late, have a CCJ or have defaulted. I would say that a loan that had a CCJ that has been removed is not bad. Likewise a loan with a late payment in the past (this can happen for a variety of reasons) I would not classify as truely bad. But then again it's all a matter of opinion. The point I was trying to make (badly!) is that autobid can only buy fully up to date loans that are not in default and have no CCJ's. I think if you want an entirely hands off experience then it's fine if you are targetting a 7% return.
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blender
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Post by blender on Aug 16, 2017 15:13:35 GMT
Thanks for that. Does that mean that the illustrative returns quoted by FC for auto bid are at risk, or more vulnerable than those on Zopa?. I guess I'm trying to compare autobid with Zopa plus and identifying which is more likely to deliver on expectations. To date I am getting 6%+ with Zopa+. The attraction of FC autobid is obviously the extra percentage point of interest. thanks. FC does not quote returns for Autobid as far as I know. They quote historical returns for all lenders. So if manual bidders do better (which is likely the case and reasonable considering the time spent) then Autobid must have done worse. Having said that I reckon that you could expect 6.5% + from Autobid. Using advanced Autobid is essential, to avoid picking up old low-rate loans at par. But I would set the rates higher than the current PM. Having done that I would expect to get 6.5-7%. Then remember that FC's calculation only covers money lent, not including the money in available funds. The other factor is that FC as a platform is very safe, and so well worth including for very low platform risk and moderate returns.
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I'd been given, and dumping anything I didn't like the look of. And, on FC, it is incredibly easy to get rid of a dodgy loan part at the moment: just list it at par and it's gone within seconds, no matter how bankrupt the borrower looks. There's just no time to do any DD.
I have although sold some similar loans that have subsequently defaulted via the SM at par, which is exactly where autobid feeds from & why it has a lower rate of return than is achievable via manual selection. Many investors would prefer to avoid loans with late payment histories, CCJ's & other serious issues - this is possible with manual selection by reading the loan comments & not with autobid that blindly buys whatever fits the criteria. I support impaired SME loan's even though the risk of default maybe higher because I think it is the correct thing to do for the broader economy, I also rate FC's recovery procedures, mine is currently running at 44% & don't mind accepting a few losses as long as the impact on overall returns is not too great - but my approach will clearly not suit everyone.