Portfolio update june 2018

It’s been a long while since I’ve done a portfolio update and a lot has changed, so I thought I’d share! Definitely some huge changes within the last year in terms of asset classes and I’ve had to make many changes to be more liquid to be ready to finance my new home (which will hopefully be finished in October).

Real estate is now pretty much gone from my portfolio. If you remember, I owned a small 12m2 dorm room style apartment in Northern Tallinn, which offered reasonable returns, but was also the most illiquid investment in my portfolio. Due to ridiculous price growth and lack of time and enthusiasm to manage the property, I sold it at the start of the year, cashing out a solid 20%+ yearly return, so overall not bad. Any exposure I have towards real estate now is real estate fund stocks and crowdfunding projects.

The rest of my portfolio is currently divided up between the stock market and P2P investments, with stock market investments totalling 25% of my investments and P2P investments 74%. The missing 1% is random trivia not worth mentioning here.

Stock investments are mostly single stocks from the baltic stock market, a total of 83.5% of stock investments or a total of 21% of portfolio, and some index fund investments, which total 16.5% or a total of a bit over 4% of total portfolio.

From the Baltic market positions which are bigger (more than 5% of total portfolio) are TKM (Tallinna Kaubamaja) and SAB (┼áiauliu bankas), some smaller positions are in LHV (LHV bank), Tallink and the just-IPO’d Tallinna Sadam and a few tiny positions of SAF, TEL, APG, Merko, Eften. This is the lazy money I keep in my portfolio, mostly to buy and keep forever.

For index positions, these are currently much smaller than usually since I’m waiting for my home purchase to be finalised to finally start building an international portfolio, so it’s half invested into the third pension pillar (LHV Indeks pluss) and the rest is in a convenience index investing product that I’ve left ticking for tax reasons, kasvukonto (has a bit of EXSA, VAL, SPYW).

Social lending and crowdfunding are currently the core of my portfolio due to their high liquidity and current high returns. After years of testing through many different sites, I’ve kept only three among my investments, maybe will add a fourth when more finances free up or these shrink up (as Omaraha is currently).

Biggest portion of P2P investments are via Mintos, which is currently a whopping 40% of my portfolio, mostly due to the cashback and super fast secondary market. This is where my new home’s furniture money is currently earning interest.

Second biggest position, which has however been shrinking is Omaraha. Due to lower loan volumes and drops in interest rates, the effective returns are way below what they were even last year, and I’ve been slowly transferring money out to stop if from just sitting there. Will see how it goes. Currently at 24.5% of portfolio and slowly decreasing.

Last position is my higher risk part of the portfolio, investments into real estate developments mostly, which is Crowdestate. This houses a bit less than 10% of my total portfolio, however growth isn’t particularly fast since there aren’t too many projects. This is about the level I intend to keep this investment at.

There you go, current overview! At the end of the year I will have to liquidate some investments due to high expenses associated with hope purchasing, but hopefully once I sell the current home I’ll be able to patch up the damage and have a chance to add some new assets.

 

Mintos cashback vol 3

Well, 2018 has started well – by mid-march I will have achieved the cashflow returns that took me all of 2017 to reach. Goes to show that sometimes having a bit of luck and cash at the correct time happens completely accidentally.

My biggest portfolio move this year was selling the small 12m2 rental apartment I had in Tallinn. While it was offering good rental returns, then in the long run it wasn’t in a very good house and 16m2 apartments have slowly started to gain popularity. Also, the prices of 12m2 apartments have reached ridiculous heights and since I needed to cash out something from my portfolio since I bought a new home which is being built, and I have to have cash available for various expenses in late autumn.

This deal however ended up being surprisingly well timed because I was able to drop most of the money from the sale into Mintos’s cashback program, which over the course of the last month has created some nice returns

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Of course the campaign has been very popular – there are days when there are no 60+mo loans and days when even the supply for 48mo+ loans has run out, but checking every now and then allows you to pick between countries and loan lengths to boost your portfolio. Since I’ve been investing mostly into Mogo loans anyway then I didn’t really feel much increased risk from temporarily increasing my exposure to them.

While this is a short term boost to investments (since when the cashback ends I will slowly have to start withdrawing money from the repayments), then it’s safe to say that Mintos has helped me boost my returns for the year significantly. Those who still have some cash laying around, then the campaign lasts for another 10 days (until March 16).

Mintos cashback program

It seems like Mintos is growing at such a rate that they need more investors’ money and therefore they are offering for the month of December a cashback program for investors willing to invest into long term loans via the primary market.

As someone whose portfolio in Mintos mostly consisted of long term loans (mostly mogo) anyways, then this is not a particular hardship to take part in – the cashback offers 2-5% cashback depending on the length of loans you are willing to put your money into.

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You can already see the effect this promotion is having by the fact that a) the primary market is pretty empty if you go looking for 60+month loans and looking at the stats for the whole month then half way through the month, Mintos seems to be on track of 45-50 million euros worth of loans being funded. Essentially they are reaching a point where through Mintos as much money is invested as through most other Baltic P2P portals, so super impressive for them!

Looking at the amount of money invested, and assuming maybe half of it would be invested into loans which qualify for the program (since there’s plenty of people who still wish to have only short term loans) the expense for the cashback I would assume, would run somewhere into the range of a couple of hundred thousand to half a million euros to be paid out to the investors.

I’ve also added a bit of extra money to Mintos this month, and will probably add another top-off to benefit from the cashback offer. There are a lot of interesting aspects to this offer, I assume at least some investors will be selling the loans they invested into on the secondary market once the program is over, so I’d expect it would be reasonable to stock up some cash to pick up bbg loans which are on sale on the secondary market at the start of January.

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For my portfolio it’s a nice boost to have, probably in the range of 50-100 euros max depending how much I deposit extra, but a nice Christmas present overall. The cashback gets paid out within a week as well, so if you invest now, then you’ll have time to reinvest the cashback amount as well after it’s deposited.

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