Here we have the calculations for gross and net annualised yields for MarketFinance investors.
Calculating the weighted average gross annualised yield
This is the weighted average gross annualised yield for all trades that closed in the corresponding time period. It is calculated before fees, losses and tax.
The calculation is as follows:
Calculating the weighted average net annualised yield
Fees payable by investors
MarketFinance charges a percentage of any profits earned by investors, depending on the sum of funds held on the platform.
Net annualised yield is calculated before losses and tax.
There are no sign-on or on-going service fees – Investors only pay fees on the profits they earn.
Please note that not all funds held on the platform will be deployed at all times. Short-term investments will inevitably lead to a portion of uninvested funds.
Historical fund deployment rates on the platform have varied between 65% and 85%. As volumes traded on the platform grow, we expect an average deployment rate across all investors of more than 75%. Prospective investors should account for this cash drag when estimating their likely returns.