To continue to hold Zopa and Ratesetter?

TUVOK

I have held holdings in both Zopa and Ratesetter since 2016 and have had an excellent return on both with no problems.
I have read some articles in which warnings about continuing to hold peer to peer in the near future could result in losses.
I know of course that there is no financial coverage on these "investments".
I hold these two companies as I believe that they are the best of their type, but would welcome members views on continuing to hold them.
Thanks for any/all replies.

Ixel

This is just a personal opinion, but I've sold what I could in RateSetter last month. The reduction in interest rates sort of worries me about the long term, not to mention that investing in ETF's can be more profitable long term (granted there's volatility, but RateSetter could have a scenario where losses never ever recover).

Alexland

With P2P, in the event of platform failure can you accept and afford to lose most or all the money you have invested? If not it might be time to reduce exposure and/or look for better investments. My view is that the likely P2P return is too low for the size of the risk so I closed all our accounts.

sebtomato

I had large investments in both Zopa and Ratesetter, and I have sold 99% of it now. I think they are performing much better and more secure than many other smaller P2P platforms (or troubled Funding Circle).
However, it's a bit of a domino effect currently, with several platforms gone into administration in recent months, and investors withdrawing from all P2P investments now, meaning all P2P platforms are all at risk of losing significant business/customers and closing one after another.

Returns are now much lower than when P2P took off, so not worth the risk of losing capital in my opinion. Even platforms that had so called "secured" loans have shown that security was not that great anyway (or assets overestimated), or it could take years to get some of the money back in case of default (earning no interest in the meantime and never getting paid the original interest due).

I think the next 12 months is going to be very bloody for P2P, and only the fittest will remain after that. Assetz Capital and Funding Circle could be probably the next casualties, given the lack of liquidity and amount of defaults.

Prism

I only hold Ratesetter. The recent lower returns don't worry me as bank interest rates have been dropping at the same time. I would rather have lower returns and more liquidity.

ChesterDog

It's a conundrum for me.

On the one hand, it's useful diversification and Ratesetter (I came out of Zopa some time ago) gets my vote for the relative security of the money I have invested there.

On the other hand, the returns are not, I feel, sufficient for the risk of capital loss that is associated with it.

Some time ago, I decided to let our Ratesetter investments naturally wind down. They are all in five-year loans, so this obviously is a long term process. We are using that monthly interest payment and return of capital as our income source (it actually significantly exceeds our needs).

Perhaps I should accelerate the process. Or perhaps I should cease the withdrawals now that the amount invested is quite a bit lower than at the start.

In the end, I find that whenever I revisit the question, I come to the same conclusion as before: just let it naturally unwind.

We only have about 5% of our assets there, so it's not a life-changing decision either way.

Frequentlyhere

Another just naturally winding down with Ratesetter (never held anything meaningful with Z).

I'm less concerned with the rates but more with the PF coverage. They try to make it look like coverage is rising, but it is falling. This said, they're not doing too badly bad debt wise compared to others so, I don't (yet) see a reason yet to exit more quickly personally.

Also invest with Assetz, but closely monitoring, and not a life changing amount.

firestone

with regards the OP i think if you are worried enough to ask others on a forum then you probably have your own answer and that's not being rude but based on myself.At One point over 5 years i had about 8 platforms with the idea of spreading the risk but in the end i decide i was worried about some of them so run them down
In the end i was left with Landbay which closed to retail so i now have Ratesetter which i still think is One of the strongest and Octopus Choice which seems to be One of the few making a profit and has a big parent company and am happy to hold (at least at the moment)

TUVOK

Thank you for all for your most informative replies.
Yes, I am in the process of running down Ratesetter and yes according to peer to peer related articles is with Zopa the strongest, so why?
Nothing logical, all seems ok, but I think some sort of large stock market fall is on the cards in the next 18 months, so I believe that will effect all investments. As such I'm looking for more secure investments albeit with lower returns, I'm also nearly 74 years old and I'm trying to lock extensive investing profits into more inflation/recession proof holdings.
As I'm in no way an expert on peer to peer platform use, I've just basically invested in which ever way on them that other experts have advised, so what is the best way to run down/close either Ratesetter and/or Zopa? that help would be much appreciated.

firestone

i would guess you have 3 or 4 ways of doing it
if in an ISA try to do a transfer
if the product you have is fee free sell it and withdraw (or pay the fee and sell)
Or most platforms allow you to set interest and capital to be paid monthly to a bank account

Albermarle

Assetz Capital and Funding Circle could be probably the next casualties

I would think Assetz is one of the stronger platforms, would be more than a bit surprised to see them go down .