My social lending portfolio (2014, 1st Q)

When I started using Isepankur then I was desperate for information and I was very happy over the rare few bloggers who decided to actually share their investment information. So, it is only fair that I summarize my own portfolio with some sort of a regular schedule as well. There isn’t much point in doing it monthly, because I don’t invest that much. (Also, I’m just lazy). However, I can give an overview every quarter about the results.

My portfolio so far is about 2000 euros, so definitely way smaller than most of the big users in social lending, but I think it serves as a pretty good representation of a small scale investor.

My portfolio strategy

I run a very conservative portfolio. It currently consists of a total of 248 loans. Out of those, 190 (76%) are A1000 loans, meaning the best credit type. Another 32 (13%) are A900 credit rating, 15 (6%) are B1000 loans, and the other credit groups combined make up only 5% of my portfolio.

Q1 pie

This is what my current portfolio looks like. Out of the 248 active loans, a total of 12 (117€) are in the red, which means that they have missed their last payment by 60+ days. Out of those 12 loans about 2 make any kind of payments at this moment. Out of the 12 loans 6 are A1000 and other other 6 are a lower credit group.

2. Building up my portfolio

I add in about 100-150€ of extra money per month, it depends on my other expenses as well. My first goal was to hit a good diversification rate, which I have by this point. My next goal is to try and keep steadily building my portfolio. You can see my investments below. I started investing at 5€ per loan and then increased it to 10€ per loan. I’m currently trying giving out investments at 25€ per loan.

Q1 total investments

What you can tell by this chart is that I started slowly and that I spent a lot of money on other things in December. Even if I added no money in, then my portfolio would keep increasing by about 80 euros per month, which is what I get back in principal and interest payments every month.

3. Interest rates

As I said, I run with a very conservative portfolio, which means I try to get both high credit rating and high interest rate loans. So far I’ve managed to keep my average interest rate up at 26%+. This is unlikely to continue, but so far I’m not seeing a huge drop in the interest rates.

Currently the monthly interest payments that I receive are about 40 euros. I’m trying to build them up to 60 euros by the end of the year, but that’s likely to be a bit too optimistic of a target.

Q1 returns

The IP statistics themselves are a bit too optimistic. When I calculate the results of my portfolio myself, though, then I still end up with about 21%, which is still a very good result.

Have fun lending!

4 thoughts on “My social lending portfolio (2014, 1st Q)

  1. 20+% is fantastic. Let’s hope it stays there for at least a little longer. In the developed world, this kind of returns on fixed income instruments are hard to find, and the rules of the free market will inevitably press it down over the long term.

    I keep stumbling mentally on this sentence though: “I run with a very conservative portfolio, which means I try to keep my interest rates high.”

  2. That’s what I thought, the reason for stumbling is that it’s a bit paradoxical. Typically, we can’t have it both ways and have to sacrifice one to get the other. The fact that both can currently be achieved is, in my opinion, a telltale sign of an arbitrage opportunity, in this case created by IP being a niche player in a tiny country that has not yet managed to attract professional investors at large.

    If/when they do, and I have to assume they want to, as volume rather than higher rates is what will make IP money in a scalable and sustainable fashion, the rates will go down.

    If they don’t, we should at some point start wondering why..

Comments are closed.