6 Month Results
The results for the first 6 months of investing through Lending Works are as follows –
For the first 3 of the 6 months the 5 year rate was set at 5.5%, which then increased to 6% (3 year rate currently 4.5%, March 2018) , so the 5.75% ‘Expected ROI’ is the average over the 6 months. This is a unique feature of Lending Works, both the 3 and 5 year rates are reviewed on a weekly basis and can go up or down the for following week. The discrepancy with the ‘Actual ROI’ can largely be put down account roll up (deposits/invested funds not falling on complete months), this is something you need to consider with most of these P2P platforms. In an ideal world you want a deposit to clear and start earning interest on the 1st of the month so you get a nice full maximum return for the month, in reality this generally dose not work. A lot of platforms still only offer deposit via bank transfer (Lending Works do offer Debit Card deposits) which typically take 2-3 days to clear, and then it can take anywhere from 1 to 10 working days for the funds to be assigned an investment opportunity and start earning interest. Hence why you should generally expect a slightly lower ‘Actual ROI’ to ‘Expected ROI’. This deficit should reduce tough the longer you are in a fund, providing the platform is delivering what they claim to be offering.
Lending Works also has a reason to shout about, in October 2017 it became the first P2PFA member to be granted full FCA authorisation. This is no small feat, as the P2P sector develops in to a maturing market, a number of platforms have fallen foul of the FCA and consequently shut up shop. Lending Works was also able to launch its own ISA in February 2018, meaning investors now have a tax free (up to £20’000) offering. Lending Work’s is also set to break the £100 million in loans mark in April 2018, just four years after opening its doors.
There is simply no reason for me to consider dropping Lending Works from my portfolio at this time. The returns are healthy and pretty much as expected, the company appears to be in good health the the future looks promising. That being said it’s still very early days for the platform and it’s place in my portfolio, so i will cautiously grow my exposure to Lending Works over the coming months and optimistically wait to see what the future brings.