My Bondora portfolio (2015, October)

There has been a significant amount of drama happening around Bondora this month.The new passive portfolio manager caused a fair bit of controversy and the API is still in testing so many investors have at least temporarily reduced investments. For me, the old PM is still active and can give out about 4K worth of loans, so I’m hoping that will tide me over until you can use the API to invest. This means that all the money I transferred into social lending this month went into Moneyzen and Estateguru. However, my Bondora portfolio is big enough that it just does its own thing even without adding in money.

octoberinvestments

Due to not adding much money into Bondora for the last couple of months, you can see the 60+ defaults becoming a more significant part of my portfolio. There are two reasons for this – firstly that the loans from the big growth months from last year are now defaulting, and the loan pieces that are defaulting at this point are starting to be the 15-25€ pieces as opposed to the 5€ pieces that used to default earlier. However, despite the continuously increasing defaults this was another record month for me in terms of interest earned:

octoberinterestearned

Total interest earned for October ended up being 108,29€, meaning that this year is likely to end at 110€/month from Bondora, so I’m quite happy with the overall result already due to how much less I’ve invested into Bondora this year compared to what I had originally planned. Adding in Estateguru and Moneyzen, my P2P monthly earnings come just close to 125€.

bondoraocttotal

I plan to add just a bit more money into Bondora this year to finish December with a total of 5K euros in deposits. My account will turn 3 years old in December and I guess I’ll have to write a longer overview into returns from Bondora and whether or not it’s been performing as I wished it to.

octoberrecovery

Another topic that’s starting to become more and more interesting as my portfolio ages is the recovery rate. I see pretty decent movement from recovery every month, and at this point I’m waiting for my monthly recovery to reach 20€/month. Should probably realistically happen mid-way through next spring. Recovery for last months looks like this:

recoverystatsoct

Overall, I’d say, keep calm and wait for the API. I’ll probably be looking into it soon as well, once other third parties have made their solutions accessible. Overall, I was thinking about it a bit and I don’t even need anything super complex. I’d probably set my PM to just what I had now – AA, A, B &C loans OR any kind of Estonian loan. Not rocket science, so I’d assume that with the help of some friends working in IT it should be doable once more details about how the API works come apparent (like how exactly do the loans get distributed between bids!)

7 thoughts on “My Bondora portfolio (2015, October)

  1. Very interesting Kristi, thanks a lot. What do you think of Mintos ? Thanks a million for your blog.

    Arnaud from France, bondora investor.

    1. Hey!
      I think that the interest rates in Mintos are slightly too low at the moment to be attractive for me. Overall, I think they have a good concept as a marketplace and they will do well, but the returns are looking much lower than the Estonian sites I have available. I’m still waiting for the interest rates to balance out there, to see if it’s worth it to start a portfolio there.

  2. Cool, when i release my portfolio manager on top of bondora’s API, your conditions would be:

    #Country == “EE” OR in_array(#Rating, array(“AA”, “A”, “B”, “C”))

    Can’t wait for bondora to really go forward with the API. The API they have there has stayed the same since they first released the sandbox environment for playing around…

    1. This is not a surprise for me. Why would they want do boost their API? If the API was successful then no one would use their Portfolio Manager anymore. And without the Portfolio Manager they are not able to fill the risk loans.

  3. without going into the “works” of giving out loans, what is your ultimate protection against loan defaults? what is your worst case scenario per platform? and does the platform you use provide adequate contracts that can be used in the process of loan collections incl. contractual penalties?

    1. Ultimate protection is faith that overall recovery processes for consumer loans will follow the current proven path (based on how banks & other credit providers recover). You cannot avoid defaults, you just have to trust that they will average out. Worst case scenario currently is for me equal to inflation, looking at the past 3 years I don’t see a reason to fear negative returns.
      Legally sadly they’ve made the info about contracts more hidden, but it would be incredibly unprofessional of them to not have water tight contracts to the extent of the law.

  4. full disclosure: i’m not into the peer-to-peer loan platforms due to the lack of knowledge how the loan principal is protected and adequate return achieved incl. interest, penalties for delay, default collections ..

    one may say that faith is wishful thinking in loan business. if one cannot avoid defaults then one should protect oneself in case of defaults. be it in the form of default loan collection.

    “average out” may prove to be not very good strategy if underline assumptions fail – if you remember the cause of the last financial crisis was due to the miscalculating the risk of housing debt derivatives.

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