Though I’m currently enjoying a lovely 34 degrees and sunshine in Valencia, then not all is sunshine and rainbows in my Bondora portfolio. Firstly, the influx of defaulted loans is steady and secondly, since I’ve slowly reduced money invested monthly as well, then actual numbers of interest earned have also dropped.
As you can see, this month ended with red + yellow loans actually totalling over 25% of current portfolio value. One of the reasons for this is that I’m now seeing the influx of defaults from the second half of last year when I added in increasing amounts of funds. This will likely look even sadder in the next few months when I reduce the money invested further. Not that I’m looking forward to the moment when 20% of the pie will be defaulted loans but that is not completely out of the realm of potential options.
As stated, there was an actually almost 3 euro drop in interest earned, mostly due to more loans defaulting. The final total for the month of June ended up just below 100€ (99,16€), which is a bit sad since I hoped that I was over the 100€ hump for good. I’m hoping July will perform better, but so far there hasn’t been a particular influx of payments like there is at times in summer. Also, the recovery of defaulted loans wasn’t particularly great this month either, the total recovered was barely over 5€.
Compared to May I actually ended up with so many new defaults it was a bit surprising, 15 more stage 1 loans was a bit more than expected in comparison to the recovery. It’s still a very long time horizon plan to see anything from recovery but it’s clear how this is demotivating to see – the default rate of loans in my portfolio is getting quite high despite the fact that I’ve heavily steered towards lower risk grade loans in the past few months.
Looking at the overall investments, as stated, I’ve reduced the amount I invest in Bondora per month to about 100-120€ or so, depending on how much free funds I have. This slows me down in terms of my goal for Bondora portfolio size for the year 2015, but across all social lending platforms I’m on track for 10 000€ principal value, since while Moneyzen is doing slow, then I’ve added Estateguru into my portfolio as well. Time will tell how the second half of the year will play out.