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€25k invested in prize bonds

pbwinner

Hiya,
Thought I'd update this thread on the success (or not) of €25k (yes, €25,000) I invested in PBs since February.

Purpose of this thread is to give some indication of the success rate of PBs for the ordinary punter as I assume €25k is large amount to invest in one go.

Planning to keep it in there for a year or so.

Winnings to date: €25

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dxhound2005

Nothing for me today. The 2019 Annual Report is on the website. There will probably be newspaper reports about it in the next couple of weeks.

The fund at 31 December was €3.655 billion, up 7%. If every bond was worth €6.25 that would be 584.8 million bonds. But probably about 4% of bonds at 31 December were worth €6.35 so that would make it slightly fewer. The biggest monthly sales were January €55.259 million.

https://www.statesavings.ie/media/pdf/prizebonds_annualreport_2019.pdf

As we know there have been abnormally high sales this year, so the fund would probably be around €3.8 billion now.

Agent Smyth

It's very easy to calculate what the fund value is at the end of each month
This is because the prize fund is .5% of the total fund

Hibernicis

Agent Smyth wrote: »

It's very easy to calculate what the fund value is at the end of each month
This is because the prize fund is .5% of the total fund

So is it ((wpf*(365/7)+1,900,000)/i) where wpf is the weekly prize fund and i is the declared interest rate ? The 1,900,000 is the uplift for the prizes in the last weeks of June and December.

The above gives the following result based on yesterday’s prize fund of €328,400

=((328,400*(365/7)+1,900,000)/0.005) = €3,804,742,857 which tallies with dxhound2005‘s figure of €3.8 billion.

dxhound2005

Agent Smyth wrote: »

It's very easy to calculate what the fund value is at the end of each month
This is because the prize fund is .5% of the total fund

I think it may not be that straightforward. Because a fixed €5,280,000 was allocated to big prizes in 2018 and 2019, and it would depend how that calculation is done in conjunction with the monthly change in €50 prizes. A sort of unintended consequence of fixing the value of big prizes, is that the return given to all €50 winners as a collective keeps going up. As long as more bonds are bought each month than are cashed in. But that can't be known at the start of the year.

In 2018 €5,280,000 was paid out in big prizes, €11,169,100 in €50 prizes. Percentage of prizes money to €50 prizes 67.9%. In 2019 €5,280,000 was paid out in big prizes, €12,352,400 in €50 prizes, 70.05%. That can be applied to the 0.5% overall return to say that €50 winners as a collective got a DIRT free return of 0.3395% in 2018, 0.3502% in 2019. Equivalent to 0.473% subject to DIRT (35% in 2019), which is a decent return in today's interest rate environment.

Of course you need a lot of bonds to achieve that average. Somewhere along the way if the fund keeps going up, a re-balancing of the prize structure might happen. It will happen if the notional interest rate changes, like it did in August 2017.

Agent Smyth

Your all over thinking it (at least from my point of view)
The prize fund is .5% of the total fund at the end of each month
All prizes are fixed for the year except the €50 one which increase every month if there is an increase in the fund
So every year there is
2x €1,000,000
50x €50,000
520x €1000
520x €500
And lets use Mays prize fund as this example to find out how much was in the fund at the end of April
There is 5268 €50 prizes in May now multiply that by 52 to give you the yearly total
273,936 x €50
Add them all together to get the yearly or to be more correct .5% of the total fund at the end of April
so the yearly prize fund in May was €18,976,800.00
And that is .5% of €3,795,360,000*
Which according to NTMA is what the PB fund is worth at the end of April

*please note all calculations were done on the back of a cigarette pack so there might be a few mistakes

Hibernicis

Agent Smyth wrote: »

Your all over thinking it

I was simply trying to express it as a formula.

If I alter the formula above to (((wpf*52)+1,900,000)/i) where wpf is the weekly prize fund and i is the declared interest rate then I get exactly the same result as you did:

=(((€328,400*52)+ €1,900,000)/0.005) = €3,795,360,000

The difference is whether a year is 52 weeks or 365 days, which is probably moot as the results are very similar.

Agent Smyth

Hibernicis wrote: »

I was simply trying to express it as a formula.

Sorry Hibernicis, didn't mean to offend with my opening comment, but when I see formulas, I see complications where sometimes there doesn't need to be any

dxhound2005

The Indo seems to be the only paper so far to use the media briefing. Sometimes the papers can mangle the information, but they have covered it accurately. They picked up on something I noticed with the figures. The sales were actually down in 2019 compared to 2018, but because encashments were lower the overall fund increased.

https://www.independent.ie/business/personal-finance/prize-bond-sales-surge-of-530m-raises-fund-to-365bn-39192647.html

abff

Look at the latest figures, the prize fund available for €50 prizes is just 0.36% of the total fund. This means that a person with a total holding of €25,000 can expect on average to win 1.8 prizes a year. Someone with €100,000 can expect to win on average 7.2 times a year.

Of course there will be huge variations around this average. With a total holding of €100,000 I waited almost 6 months between wins from mid July last year to early January this year (when I won €100) and another 3 months for my next €50 win. Then I won €50 on April 24th, another €50 the following week and €100 this week.

Total wins to date are as follows:

2017 (8 months): €500
2018: €200
2019: €500
2020: €350

Overall my net annualised return has been just over 0.5%, which is somewhat ahead of expectations and an awful lot better than I would have earned if I had put the money on deposit.

dxhound2005

abff wrote: »

Look at the latest figures, the prize fund available for €50 prizes is just 0.36% of the total fund. This means that a person with a total holding of €25,000 can expect on average to win 1.8 prizes a year. Someone with €100,000 can expect to win on average 7.2 times a year.

Of course there will be huge variations around this average. With a total holding of €100,000 I waited almost 6 months between wins from mid July last year to early January this year (when I won €100) and another 3 months for my next €50 win. Then I won €50 on April 24th, another €50 the following week and €100 this week.

Total wins to date are as follows:

2017 (8 months): €500
2018: €200
2019: €500
2020: €350

Overall my net annualised return has been just over 0.5%, which is somewhat ahead of expectations and an awful lot better than I would have earned if I had put the money on deposit.

2017 is slightly distorted because the notional interest rate was 0.85% for the first seven months, changed to 0.5% on 01 August. 2018 and 2019 combined are exactly on the expected average, and you are looking good to exceed it in 2020. I also got a return of around 0.5% in both 2018 and 2019, which I posted about. I have a bit more than €100K, but like you I have had 26 weeks and 15 weeks with no win in the past three years.

You may have seen my post #5963 where I counted the wins achieved by 60 million bonds. That is a big enough sample to prove the average luck 1.8 and 7.2 calculations. But someone would need to have many multiples of 100K to guarantee that return over a one or two year time scale.

abff

dxhound2005 wrote: »

2017 is slightly distorted because the notional interest rate was 0.85% for the first seven months, changed to 0.5% on 01 August. 2018 and 2019 combined are exactly on the expected average, and you are looking good to exceed it in 2020. I also got a return of around 0.5% in both 2018 and 2019, which I posted about. I have a bit more than €100K, but like you I have had 26 weeks and 15 weeks with no win in the past three years.

You may have seen my post #5963 where I counted the wins achieved by 60 million bonds. That is a big enough sample to prove the average luck 1.8 and 7.2 calculations. But someone would need to have many multiples of 100K to guarantee that return over a one or two year time scale.

Absolutely. I think the “residual” return for the first 3 months I held bonds was around 0.5%, but that’s a relatively small proportion of the 3 years for which I have held them. The variation from feast to famine and back again strikes me as somewhat untypical, but I’m probably not an extreme outlier.

At today’s retail rates, even one €50 win or better (a 99.93% probability) is better than the net return I would receive by putting the money on deposit, so I think I’ll stick with my current approach for now.

Needless to say, this should not be looked at in isolation. It should form part of an overall investment strategy that includes both higher risk and lower risk assets.

dxhound2005

abff wrote: »

Absolutely. I think the “residual” return for the first 3 months I held bonds was around 0.5%, but that’s a relatively small proportion of the 3 years for which I have held them. The variation from feast to famine and back again strikes me as somewhat untypical, but I’m probably not an extreme outlier.

At today’s retail rates, even one €50 win or better (a 99.93% probability) is better than the net return I would receive by putting the money on deposit, so I think I’ll stick with my current approach for now.

Needless to say, this should not be looked at in isolation. It should form part of an overall investment strategy that includes both higher risk and lower risk assets.

That is a function of you owning about 0.003% of all the bonds. Much too small statistically to establish a regular pattern. It would be far less likely to get your 14 prizes in 2018/2019 at regular intervals of 7 or 8 weeks.

I can echo your experience in that 11 of my 15 wins in 2018 were concentrated into just 3 months, 2x4, 1x3, obviously leaving just 4 wins in the other 9 months.

abff

dxhound2005 wrote: »

That is a function of you owning about 0.003% of all the bonds. Much too small statistically to establish a regular pattern. It would be far less likely to get your 14 prizes in 2018/2019 at regular intervals of 7 or 8 weeks.

I can echo your experience in that 11 of my 15 wins in 2018 were concentrated into just 3 months, 2x4, 1x3, obviously leaving just 4 wins in the other 9 months.

I agree that an even distribution of prizes would be unlikely, but I suggested that the actual pattern was somewhat untypical, but probably not a complete outlier. I’m not sure why you decided to highlight the first part of my statement, but not the second.

While I know it’s completely random, I can’t help feeling that I’m on a bit of a roll at present and will probably be checking my results with more anticipation that usual over the next few weeks. Not very logical, but human nature I guess.

Senature

Just realised I won €50 last Friday, was wondering why there was a random lodgment to my bank account and then the penny dropped :-)

tuisginideach

Zilch today

abff

Having had wins in each of the last three drawings, I find myself irrationally disappointed that I didn't feature in this week's list. Another long famine looms.

Sligo Quay

abff wrote: »

Having had wins in each of the last three drawings, I find myself irrationally disappointed that I didn't feature in this week's list. Another long famine looms.

Spare a thought for the rest of us, nothing for me today, only one €50 so far in 2020.

anewme

Havent logged in to the tracker for ages. Logged in to see that I won €50 last week. First win in a year.

Andrew Flexing

No joy.

Jan:XXXXX
Feb: €XXX
Mar: XXX€
Apr: €XX€
May: €€X

PB2018

Wins on 15th May 2020: €0
Last win - 10th April 2020: €50
Weeks since last win: 5
€134k invested in prize bonds since July 2017
Win ratio: 18 wins in 150 weeks (12%)
2017 (Jul-Dec): 5 x €50 = €250
2018 (Jan-Dec): 4 x €50 = €200
2019 (Jan-Dec): 5 x €50 = €250
2020 (Jan-date): 4 x €50 = €200

dxhound2005

€50 for me today, first win since 09 April. The set of bonds started off 2019 well, but then decided to go to sleep for a year.

Up to date as of Friday 15 May 2020.

15 May 2020
Prize Bond Number Value of Prize
MN572863 €50

10 May 2019
Prize Bond Number Value of Prize.
MN576032 €50

26 Apr 2019
Prize Bond Number Value of Prize
MN572878 €50 (15 numbers away from today's winner)

22 Feb 2019
Prize Bond Number Value of Prize
MN576064 €50 (32 numbers away from 576032)

08 Feb 2019
Prize Bond Number Value of Prize
MN571962 €50

Cork Lass

Nothing for us this week.

pbwinner

Winnings on 15th May 2020: €0
Last win 9th April 2020: €50
Total winnings on €25k from Feb 2011 to date: €2950
2011: €75 x 4 €300
2012: €75 x 6 €450
2013: €50 x 12 €600
2014: €50 x 9 €450
2015: €50 x 5 €250
2016: €50 x 5 €250
2017: €50 x 4 €200
2018: €50 x 2 €100
2019: €50 x 6 €300
2020: €50

Hibernicis

abff wrote: »

I agree that an even distribution of prizes would be unlikely, but I suggested that the actual pattern was somewhat untypical, but probably not a complete outlier…….

While I know it’s completely random, I can’t help feeling that I’m on a bit of a roll at present and will probably be checking my results with more anticipation that usual over the next few weeks. Not very logical, but human nature I guess.

I was interested in this series of posts and I think we have all had the “lucky streak” feeling from time to time (sometimes calling it a glitch or whatever!) I’ve graphed my wins over the last few years to see what the pattern was.

Note that my holding changed at the very end of 2018. So my win rates are as follows:
2018: Holding - €200,000, number of €50 wins is 12 – .3%
2019: Holding - €250,000, number of €50 wins is 20 – .4%
2020: Holding - €252,000, number of €50 wins is 11 to date

Points of note:
Low point: 13 consecutive weeks in 2018 with no win
High point: 5 consecutive weeks in 2018 with a €50 win each week (all in the month of June)
High point: 3 consecutive weeks in 2019 with a total of 5no. €50 wins

Gaps between wins:
1 x 13 weeks
2 x 7 weeks
3 x 6 weeks
3 x 5 weeks
1 x 4 weeks

Conclusions:
Viewed by week, no pattern emerges
Viewed by month, its slightly better, in that I win most months, but the number of wins is very unpredictable, varying between 0 and 5.

dxhound2005 wrote: »

That is a function of you owning about 0.003% of all the bonds. Much too small statistically to establish a regular pattern.

This really says it all. While my annual winnings are somewhat in line with the notional interest rate (adjusted for the large prizes), for even the larger holding here monthly and weekly winnings viewed in isolation are very unpredictable.

Negative_G

Negative_G wrote: »

Winnings on 4th October 2019: €50
Last win on 14th June 2019: €50
Previous win 10th May 2019: €50

Total winnings

Total winnings since Feb 2015 on €50k: €1,250
Total winnings since Oct 2016 on €20k: €250

Winnings on 15th May 2020: €50
Last win on 4th October 2019: €50
Previous win 14th June 2019: €50

Total winnings

Total winnings since Feb 2015 on €50k: €1,300
Total winnings since Oct 2016 on €20k: €250

I must say, 7 months for a €50 return is pretty applying when there is €70k 'invested'.

abff

Negative_G wrote: »

Winnings on 15th May 2020: €50
Last win on 4th October 2019: €50
Previous win 14th June 2019: €50

I must say, 7 months for a €50 return is pretty applying when there is €70k 'invested'.

I presume you intended to say 'appalling'? I agree that it's less than would be expected based on an average prize fund of around 0.36% per annum, excluding the larger weekly prizes. Your average expectation over 7 months would be €150 and over a full year would be €250.

So your actual 'winnings' were around 1/3rd of expected winnings over the past 7 months and around 3/5ths of expected winnings over the past 12 months. In percentage terms, it equates to a net annualised return of around 0.12% over the past 7 months and 0.21% over the past year.

This is disappointing, but probably still better than you would have earned if you had put the money on deposit, given the abysmally low interest rates that are currently available on deposits. An Post accounts currently pay 0.15%, subject to DIRT and rates from the various banks are generally a lot worse, with most offering 0.01% or 0.02% or even 0.00%.

Mantis Toboggan

I'm trying to buy prize bonds but it's saying I need to download a form complete it and post it off.

Is it possible to just buy these online?

Peter File

Mantis Toboggan wrote: »

I'm trying to buy prize bonds but it's saying I need to download a form complete it and post it off.

Is it possible to just buy these online?

You can buy them online. Are you a new customer for them?
"Existing customers may already be registered for online purchases of Prize Bonds and Fixed Term State Savings Products.
Please complete Personal Details to proceed."
https://www.statesavings.ie/prize-bonds

WacoKid

Mantis Toboggan wrote: »

I'm trying to buy prize bonds but it's saying I need to download a form complete it and post it off.

Is it possible to just buy these online?

Initial registration needs to be done via posted form or drop into the GPO. You need to provide proof of ID etc.

Once you have made an initial purchase through the form you can buy online from then on.

When registering best to just buy minimum amount of bonds allowed and then do the subsequent purchases online.

Mantis Toboggan

Yeah new customer. Perfect cheers.