Peer to Peer Lending

It's a little off topic for a fixed income forum, but the post below ended up as a discussion of the merits of peer to peer compared to bonds and seemed to generate some interest

https://www.fixedincomeinvestor.co.uk/x/forum.html#/discussion/531/gilts-what-a-crazy-world-we-re-livin-in

What are other people's experiences both of direct lending via the likes of Zopa, Funding Circle or Ratesetter or the listed funds such as VSL and P2P which are currently trading at large discounts and so offering potentially high yields?

Comments

  • I have not tried the main crowd funding sites but have used Downing crowd. Their due diligence seems good and on some offers such as the 6% property bonds there is a cushion with some small initial loss absorbed by their own funds. Some offers are not that attractive so you need to read carefully and pick and choose.

    Re investment trusts , the discount /premium is subject to what is on trend and if your not careful can have the double whammy of buying at a premium dropping to a discount and seeing 4 years of dividends lost with a 20 % drop eg ESP. With VSL it has done better since Woodford sold and hopefully will return back to par but the divi is good and worth holding if its price is just maintained. With all trusts the level of risk seems to multiply upwards and needs thought otherwise you can be trapped, for me that is the advantages of ORB bonds as there should be an exit at some point even if its a way off - even Enquest hopefully....

    Its a pity that the issuance is so poor from good firms. Oh for the days of UNITE Bruntwood Tesco etc.
  • if you can get good deal at good price from bigger institutions, why waste time on petty retail punters
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