My p2p lending portfolio (February update)
This is the second month I’m keeping this investments log. The main reason for it is to track my investments better and learn from my mistakes. My last month’s (and first) updates are here.
The biggest changes since last month in my portfolio are:
- I’ve significantly reduced my investments in PeerBerry
- I’ve invested in more project on Viventor, Crowdestate, Grupeer and Neo Finance
- my Mintos portfolio started to perform a lot better
My investments in Fast Invest and Mintos are a lot bigger than on any other platform. I’ve stopped adding funds to these platforms and instead I’ll add more to Grupeer, Crowdestate and Neo Finance.
My p2p portfolio overview
This is how my portfolio evolved since January:
I’ve gained a 239 EUR profit last month from my p2p investments. It’s not enough to cover my current lifestyle, but it’s heading in the right direction.
I’ve also withdrawn 1500 EUR from my portfolio. This is part of the 3400 EUR I’ve removed from PeerBerry and I’m looking for some better investment opportunities on Crowdestate or Grupeer to move the funds there.
Is my p2p portfolio diversified enough?
I’m already investing in about 15 p2p lending platforms from different European countries, so my investments are not tied to any single platform.
In addition, I always keep my investments small. Around 80% of my investments are under 50 EUR. If one loan defaults, it won’t affect me too much.
In order to reduce the risk of my p2p investments, I’m also trying to diversify my investments as much as possible on some extra 3 directions: country, loan type and loan terms.
My investments grouped by country
Most of the loans I’ve invested in are from different countries in the EU. If one’s economy goes through a recession, the others might be ok and not all my investments are affected. I think if all the entire EU goes through a recession this would mean there’s a recession at a global level. At that point, it won’t matter how diversified my investments are they will all be affected.
My investments grouped by loan type
I’ve realised last month that around 80% of my p2p investments were put in personal/consumer and short-term loans. I’ve pushed my investments since then to other types of loans as well: business, real estate development and invoice financing. This is still a work in progress.
My investments grouped by loan term
I’ve gained some better interest rates on Mintos by extending the loan terms I’m investing in from 12 to 18 months. They have better returns but it will be harder to get rid of them during a recession.
Some notes on the platforms I’m investing in
Mintos started to perform better this month. I’ve increased the loan terms I’m investing in from 12 to 18 months. I’ve also removed some of the worst performing loan originators from my auto-invest settings.
The net annual return increased from 10.7% to 10.9% since last month. I expect it to rise a bit more. I have only about 10-15% of my loans late with their payments, compared with the 20% late loans I had last month.
I didn’t do anything on my auto-invest settings since last month. Fast Invest delivers month to month steady results. There are fewer 15% loans and a lot more 13.5% loans to invest in, but those are still really good. Combined with the buyback guarantee after 3 days of payment delay, Fast Invest looks like the ideal platform to invest in. I do like the returns I get from the platform, but I’m not going to add any new funds there in the near future.
I’ve moved around 70% of my funds out of PeerBerry because of 2 things I didn’t like.
The main reason I moved such a large part of funds there was because of the short loan terms. 99% of them are short-term loans with a maximum of 45 days term. That means if I want to get my funds out of the platform fast, in theory, I should be able to do it in about a month. In reality. 30-40% of the loans are always late 30 to 60 days. Instead of being able to withdraw my funds in 1 month, it’s more realistic to think I’m able to withdraw them in 3 months. And that’s not what I was looking for.
The other reason I’ve moved most of my funds out is somewhat moral. I’m not really ok to invest in payday loans and help loan shark companies profit from people in need. I did some investigations last month on the loan originators found on PeerBerry and most of them borrowed money with around 500% to 5000% APR, depending on the sum you borrow. Therefore I’ve moved most of my funds out and the ones I have I’ll be investing them in real estate and car leasing loans.
The actual returns so far are decent, even with the late loans. I get paid for the delays as well, although I have no idea how much and I don’t see anywhere when was the loan paid.
EstateGuru delivers constant results with loans at 10-11%. The thing I don’t like is that you always have to invest round sums in new projects. I get around 7 EUR interest each month from the platform I’d rather keep investing in EstateGuru. But it doesn’t let me, because I need at least 50 EUR to invest in a new project. It’s hard to keep my funds on the platform unless I invest at least 10.000 EUR there, which I’m not prepared to do.
I like that Envestio lets me invest even 1 EUR in a project. If I receive an interest payment, I can immediately invest it in an available project.
Lately, there have been a few available projects at 15% interest rate. I think people got used with 17-20% interest rates and now 15% doesn’t sound that good.
All the payments come on time so far, so I have no reason to complain about Envestio so far.
I need to add more funds on Grupeer so I can keep my investments on the platform. The minimum investment is at 10 EUR and I only receive around 4 EUR per month in interest.
Crowdestate has projects with good returns and lots of people that just buy parts of the new projects and then immediately put them on sale on the secondary market. Any new project at around 16% interest rate is sold out in less than 2 hours and then most of the loan shares are available for sale on the marketplace. With, of course, 1% or 2% more.
This makes investing in Crowdestate a bit harder. It’s risky enough with no buyback guarantee, so the high interest rates are there for a reason, to cover for the also high LTV ratio. When that possible return is shaved, it also makes the investment unattractive.
Viventor, Crowdestor and Bulkestate
Viventor seems like a good platform but I need a few more months to see if it delivers the expected returns or not. So far, it’s a good platform for diversifying my portfolio.
Crowdestor announces small projects 1 week in advance. Transferring funds on the platform takes about 1-2 days, so I usually forget to invest in some of the projects I like. By the time I remember about the project, it’s already funded and I withdraw my funds from the platform.
I don’t know if Bulkestate had any new projects because they were really small and usually funded in less than an hour, so I got tired to try to invest on the platform. I think it’s a good platform to invest in, but it’s difficult to do so.
I love how fast you can transfer money on Neo Finance. It takes around 2 hours, day or night. I’m going to add some more funds there, because the minimum investment is 10 EUR, and I get less than 10 EUR in interest payments each month. Even worse, I need to pay a 0.29 EUR fee when I withdraw funds. That prevents me from withdrawing my current small wins.
Abundance and Brickowner
It’s hard to invest in green projects on Abundance. They’re not that many and the last one they published accepted a minimum of 90.000 GBP investment, instead of the usual 100 GBP. I’ll start looking into other platforms like Trine as an alternative.
Brickowner promises huge returns on the projects it publishes. The latest one expects a 72% return in 3 years. I’ve invested 100 GBP in it to see what happens.
Twino and Bondora
I still have 6 months to go with Twino until my loans reach their term. Both of them have defaulted now so I can’t sell them, but they still deliver payments every month.
Bondora shows me that the return rate of my 10 EUR investments is 29% per year. Since it’s been 3 or 4 months since I added those funds on Bondora and I gained 0.4 EUR since, it’s hard for me to believe the 29% return rate.