P2P trusts: Time to be wary or snap up opportunities?

The flurry of peer-to-peer lending investment trusts unveiled over the past year and a half has attracted a significant level of interest from investors excited by the prospect of 6%-plus yields and other diversification benefits, with £1.7bn raised in 2015 alone.

High profile fund managers including Neil Woodford, Invesco Perpetual's Mark Barnett, BMO Asset Management's Gary Potter and Rob Burdett, and AXA Framlington's George Luckraft have all invested in P2P trusts, after new launches have opened up the sector to institutional investors for the first time. But despite their popularity, a number of managers remain wary of the vehicles at this point in their evolution, as share price performance has been volatile and they are concerned the funds remain untested in an environment of rising interest rates. The largest trust P2P Global Investment...