I will start with the evolution of my positions throughout 2018 by type of investment.
The distribution of my investments by category remains more or less constant. The most notable is the decline of my stock market positions, mainly due to the sharp falls of the markets in recent months.
During December, my investments in participatory platforms can be summarized as follows:
- In November I began to invest in two new platforms: NEO Finance and Twino. In a couple of months I will present my assessment of them.
- I increased my positions especially in Mintos, October, Swaper, Fast Invest and Linked Finance.
- The best platforms in terms of XIRR are 1) real estate: Bricks&People and Estateguru; 2) P2B: Envestio; and 3) P2P: NEO Finance, Finbee and Swaper. To point out that the case of NEO Finance is due to the very generous welcome promotion (40 EUR) together with the fact that it's been just two months since I started investing.
- The best return rates in December have been 1) real estate: Bulkestate and Bricks&People; 2) P2B: Envestio; and 3) P2P: Finbee, Viainvest and Fast Invest.
- For Mintos, I present the combined yields of all currencies, taking into account the exchange rate, and separately for each currency (without applying the exchange rate).
- To compare all platforms, see my Comparator.
All interests are calculated before taxes
The profitability of December exceeded November with 6.75% (versus 27.6%). Real Estate Crowdfunding platforms have improved their profitability compared to September to 5.8%, unlike those of P2B Crowdfunding platforms and P2P Crowdlending platforms, which have dropped half percentage point to 7.0 and 8.3%, respectively.
As for delays and defaults, to highlight:
- Delays in Estateguru, which used to average around 5% of all loans, have risen to 12.3%. Together with the first three defaults (all in December).
- First default (the same company) of Flender (on top of a delayed loan, which doesn't look too good), and Linked Finance (plus three additional delays).
- Delays and defaults of Finbee fall within the expected, being a platform without Buyback. The case of Fellow Finance the situation is a bit more worrisome, since defaults are so far not compensated by the returns obtained by current loans.
- The "delays" of real estate platforms as Housers or Inveslar are not surprising either - property sales take time and so far delays are only a couple of months late. In the case of Privalore it is starting to become worrying since they are already several months late and affect 3 of my 7 active investments.
- CrowdEstate does not allow to easily check for delays. There are some, but it is difficult to define how many unless one consults each project one by one.
- To compare all platforms, see my Comparator.
* Variation in the number of active projects compared to last month; I only include platforms without Buyback; Green if the parameters (delays and defaults) have improved compared to last month and red if they have worsened.
Since all my investments are long-term and paid in full at the end of the project (full bullet), I had not seen any profitability until this month, when my first two projects (Nometņu Street and Zaļumnieki) were completed. This has been reflected in the XIRR that reaches now 5.6% (it was 0% until now) and the annualized profitability for December (37.0%). The returns offered are excellent (always above 13%) together with a historical default rate of 0%, so I will continue investing in all new projects. Unfortunately, the platform is not too active, with only one new project per month.
Some payments are delayed, but end up arriving (plus the corresponding compensation for the delay). About half of my portfolio are projects that are paid in full at the end. As projects start maturing, the monthly return and XIRR should increase significantly in the coming months.
A new feature of CrowdEstate (since November) is the possibility to invest (or not) in projects financed in several stages ( "Multiple rounds investing"). I decided not to invest in second rounds, as I believe it goes against the principle of diversification. Basically it would mean investing several times on the same project.
My strategy is to continue investing in each new project. I've actually increased my position by 7.8% during December.
The net annual return offered by the platform, which only takes into account yields and reimbursed projects, amounts to an impressive 20.65%. On the other hand, Estateguru has given me a couple of disappointments in December. On the one hand, delays that used to be around 5% of the loans have soared to 12.3% (from 3% November). December revenues were significantly lower than in November, breaking the almost perfect upward trend in recent months. On the other hand, I had my first defaults during the month of December, specifically three, accounting for 2.3% of my portfolio. This will have a very negative effect on my performance. Failure does not mean that the investment is lost, but are in the process of recovering the warranty. I am informed by Estateguruthat, so far, investors have not lost any of its investments in the platform. Besides, I hope that these defaults are partly compensated over the coming months when several projects that are paid in full at the end begin maturing.
My strategy is still to invest in each new project, except those funded in several stages (in which only I invest in one of the stages). I've actually increased my position by 6.8% during December.
Profitability has taken a big leap this month. Besides, I seem to have reached the point where the benefits will allow me to invest on each project without further deposits into the platform. Although I don't rule to make additional deposits if the number of projects o offer increases, my intention is not to raise my position in the short or medium term.
For several months now, I invest half for the projects in Madrid, which were clearly over-represented in my portfolio, reaching more than 50%, coupled with the recurrent news of the overheated housing market in Madrid (and other major cities in Spain like Barcelona or Mallorca).
An excellent feature of Housers is the admirable punctuality when selling (and paying) for investment projects: only 1 out of 113 is slightly delayed. In fact, generally they pay several months ahead of schedule.
In Inveslar, yields remain constant at around 1.5% for more than a year now. The low XIRR for the moment is due to the majority projects being fairly long term (7 of my 12 projects are 36 or 60 months), and all interest received are for the rent. None of my projects for 12-14 months has finalized yet. Once sold (there are a couple that should start getting sold already), the XIRR should trigger several percentage points.
The platform, though no very active, is increasing the repertoire of project types offered: three mortgage loans at fixed rate and a project by an external promoter (rather than by Inveslar as usual). The latter (Eugenia IN) surprisingly has an agreed sale even before completing the funding.
Privaloreby offering only investment opportunities (rehabilitation), offers very irregular returns. Since March 2018, the platform offers only opportunities in Madrid, whereas previously focused exclusively in Barcelona. The biggest drawback is that three of my seven active investments are quite delayed (two delayed by 6 and 8 months), so I have decided not to invest in any new project until they catch up selling the old ones. In any case, the platform does not offer any new project since early October (although there are three under study that should be activated soon).
During December, Privalore reported that the buyer of the reserved project Ayala 117 (still under construction) decided not to purchase it. Since the contract accounts for a penalty charge by the defaulting party, such penalty will swell the profit from the sale when it materializes. It seems that is not bad news after all.
I've been investing just for three months with Envestiobut it has already become the platform with the best return rate (18.3%!). Virtually all projects that have invested in offer returns above 20%. Please note that many of the projects that appear are actually new funding tranches/tiers of the same project (up to eleven sometimes), so by investing in them, we don't increase our diversification. To this, one needs to add that the platform has been quite inactive for the last month. Only three new projects in December, and none was new.
With the returns offered and Buyback (!), I intend to increase my position in the coming months (if the offer peaks up).
Throughout 2018, we have invested over 5.5 million Euro distributed in 6,400 investment. The yields of Flender are excellent, increasing progressively until stabilizing between 8 and 9%. The current XIRR is 18.2% thanks still to the summer promotion that offered 10% of the invested amount in cash. It should progressively lower over the coming months until an expected 10%. The biggest drawback is the first default on a project by Flender. It does not count as a loss. We still have to wait (probably) several months before we know how it turns out. It's the Irish Premier Golf Tours Limited project, which was also funded through Linked Finance. Flender has started legal activities to recover the loan (which are estimated at 35% probability). There is a second loan that has begun to cause problems. But hey, it is within what can be expected.
I intend to continue to invest in all new projects, although the platform is not very active lately.
The Irish platform is the most active by far of all P2B platforms I use. Yields have been increasing progressively to stabilize at around 8% in recent months. The only downside is the first default (the Irish Premier Golf Tours Limited project, which was also funded through Flender), together with three delayed projects. At some point, these defaults will start counting as losses, thus decreasing my XIRR. In any case, I intend to continue to invest in all new projects. I've actually increased my position by 11.1% in December.
Also, Linked Finance is considering to introduce mortgage loans in the coming months. These loans would be different to the loans for SMEs, typically offered by Linked Finance: LTV <75%, Return rates of 4% to 6%, Repayment period of 3 to 5 years and full refund at the end of the term.
October (ex Lendix)
Lendix cambió nombre e imagen en octubre del 2018, pasando a llamarse October. El resto se mantiene igual. En diciembre, han comenzado a operar también en Holanda (además de Francia, España e Italia). El mayor (único) problema hasta hoy son los dos proyectos en proceso de recobro judicial desde agosto y noviembre: Technofirst (curiosamente mi primer proyecto) y A&A Marketing Service. Aunque entra dentro de lo normal, estos incidentes han hecho que mi TIR se vuelva negativo (-0.05% para ser exactos). Como punto a favor, aclarar que, a diferencia de otras plataformas, October provisiona el 100% del importe (ya que los procesos de recobro judicial llevan mucho tiempo y el resultado es inseguro). Las provisiones son pérdidas potenciales y con el tiempo puede que se recupere una parte o la totalidad del importe debido. Todas las otras plataformas no consideran dichas pérdidas hasta que no termina el proceso de recobro judicial. Esperemos que sea algo puntual y mi TIR salga de números rojos. Mi intención es continuar invirtiendo en todos los nuevos proyectos y confiar que las rentabilidades vuelvan a su curso. De hecho he aumentado mi posición en un 18.9% durante diciembre.
Dofinance represents the maximum simplicity in its management. It works as if you contracted a fixed-term deposit (the higher profitability, the longer the term). The big drawback is that a few months ago, the maximum yield offered by Dofinance lowered from 12 to 9%, which has resulted in a gradual downward adjustment which has already almost reached its goal (9.2% in December). 9% is low for a P2P platform, but using my promotional LINK promotional, you will get a 10% (instead of 9%) during the first 90 days (10% VIP status). On the other hand the functioning of the platform is really effective and simple and it helps me to diversify positions. So far, my idea is to keep my current position.
Throughout 2018, the average interest rate rose from 12.78% to 14.3% (11.88% growth). The accumulated turnover grew from € 5.2 million to € 40.8 million through 1/12/18) (an increase of 685%). The investment volume grew from € 1.4 million in 2017 to € 8.1 (until 1/12/18) (478.57% growth). Besides that, now Fast Invest has more than 28,000 customers.
Just three months since I opened my account, but Fast Invest has already become one of my favorite platforms. Easy to use and a continuous flow of loans at 15% (3-6 per day) has led me to increase my positions by 14% over December, so the profitability is not yet stabilized at its maximum. If the supply of loans is maintained at the current level, I will keep increasing my positions over the coming months.
Very disappointing results for the moment. Interest rates are really attractive (up to 55%!), but withoutBuyback, so I've been a bit more cautious investing than with other platforms. As of today, the many defaults do not compensate for the higher returns offered, leaving me at the end with negative returns, at least for now. As to my strategyas they offer no Buyback, I have invested only in loans with interest rates above 48% and always the minimal amount, which in the case of Fellow Finance is quite high (25 EUR). I must say that there are other less risky loans, which surely would have resulted in a better performance than my (so far) failed investment strategy. It is a complex platform, and customer service is not particularly good, so I have many doubts about how it works. Surely studying it further can result in better results. I'll keep playing around without increasing my position hoping to be able to offer a more positive review in the coming months.
Although time yields are excellent, being a platform without BuybackI am still awaiting how the platform evolves in the medium-long term once delinquencies stabilize. Overdue and unpaid loans account for 11.5% and 7.5% of my portfolio, respectively. My AutoInvest selects only loans above 18%. For me it makes no sense to invest in loans without Buyback below that figure, considering there are other platforms that offer up to 14-15% with Buyback (Mintos, Fast Invest and Grupeer). For the moment my strategy is to keep my position (reinvesting profits). In a couple of months, once I see at what levels returns stabilize, I will decide whether to increase my position or start withdrawing funds.
FinBee has announced that they have been working since early 2018 on DESICO, a collective funding platform for worldwide companies to market their converted titles into tokens.
One of my favorite platforms, with really consistent results. During November , there was a small problem of Cash Drag which has been fixed since mid-December (only 21 loans in November). The average interest of offered loans, which had been falling sharply to 12.9% has recovered in December to 13.9%. Possibly I will increase my positions over the coming weeks.
In November, Grupeer improved its AutoInvest, which now allows to set up up to ten different strategies and prioritize them. Previously, AutoInvest had only two criteria: interest rate and term. Grupeer has added more criteria: type of loan, country, partner, type of payment schedule.
When presenting my results, Mintos is a bit more complicated, since I invest in five different currencies. The graph shows the combined results of the platform in red (converting each currency into EUR according to the exchange rate of each month). Of note is the large drop in the combined profitability to a poor 2.5% in December. This is due to the large drop in all currencies against the Euro in December.
The best XIRR (so far) for my investments are my accounts in EUR (18.3%, thanks to excellent promotions from February to May by Mogo, Getbucks and Lendo) and Georgian lari (GEL - 15.9%).
The maximum yields offered by loans in Euro every day, after being a bit low for a couple months (11.5-13% maximum during November), have increased to a 14% offered by at least 5-6 originators (Varks, Money, ExpressCredit, Metrokredit, Sebo, Bino ...). Since October, I started investing manually, both in the primary and secondary markets.
Interest rates offered in Laris (GEL) and Tenges (KAZ) loans remained stable at 16% and 17-18%, respectively. They are usually always available in both the primary and secondary markets.
Loans in sterling pounds (GBP), which had been really scarce during most of October and November, have returned to the Marketplace, although at an interest of 10% maximum.
In December, I have begun to invest in rubles (RUB) attracted by the large amount of loans offered at a interest rate (4-5 providers offer loans between 17 and 18.5%). Let's wait and see…
The XIRR of loans in Tenges (KAZ) from Kazakhstan had been very low over the past three months (below 10%, compared to 17-18% would be expected) due to the high proportion of delays (sometimes more than half) of long-term loans of Finance ID. Luckily, the three suppliers in KAZ pay for accrued interest after 60 days, so from November, I have started to receive the interests for such delays, which has bounced my return rates to the expected range (16.0%). Besides, I have stopped investing in loans from ID Finance.
- eFaktor is a provider of bill financing in Polish zloty (PLN). The average number of invoices issued in Poland is 25,000 PLN (6,500 EUR), the average repayment period is 49 days and an annual yield of up to 9%.
- GetBucks, on top of Kenya, Botswana, Zambia and Poland, now also offers consumer loans in South Africa in EUR, ranging from 30 to 1,300 euros, with an annual interest rate of up to 12%.
- Cash On Go Ltd. is a new originator of UK loans offering a product (Peachy), with loans ranging from 100 GBP (112 EUR) to 1,000 GBP (1,122 EUR) with maturities of up to 12 months and net return rate of up to 12%.
- Cashwagon is the first provider in Asia, based in Singapore and with operations in five countries: Sri Lanka, Indonesia, Vietnam, Cambodia and the Philippines. It offers interest rates of up to 10%.
- kz offers short-term loans issued in Kazakhstan with an interest rate of up to 12% on loans in EUR and 19% in Tenge (KZT).
Besides, some existing originators increased in November their geographic range:
- IuteCredit now offering personal loans at 11% for investments in Macedonia (in addition to the IuteCredit personal loans already on the market in Albania, Moldova and Kosovo).
- New personal loans issued by the subsidiary of Creditstar in Estonia (Monefit) with yields of up to 12% (plus the already available Creditstar loans in Poland, Spain, Czech Republic and Finland).
- Placet Group has added personal loans from Lithuania with yields of up to 9% (on top of its loans in Estonia).
Mintos has announced that in the future, they will offer personal accounts (with IBAN) and debit cards. The personal account can be used to make and receive payments around the world, or receive the salary directly into the account by Mintos.
Without offering spectacular returns, Peerberry makes up with its amazing regularity (always returns around 11%), and minimum follow-up and zero Cash Drag. I intend to keep my position as long as everything stays like this.
The loans originator Credit Plus joined Peerberry in October with an interest rate that has recently increased to 12% (compared to the 11.5% with which they started). Peerberry has also begun to offer short-term Russian loans issued by Credit Star (owned by the Aventus Group).
The problem of Cash Drag during Summer, which exceeded at points 50%, seem to be finally and definitely overcome with the introduction of new originators. However, since 19 November, all loans are offered at 12%, compared with the previous 14%. Another important point is that the interests of longer-term loans (180-365 days) are paid in full at the end, so the platform's XIRR does not reflect the profitability of the platform and should increase considerably over the coming months, when they the first loans over 180 days long start to mature. At the moment, my strategy is to maintain my current position.
In recent months, two new originators joined the platform: LLP Z-Finance of Kazakhstan and MFC Zaymer of Russia . As of today, Robocash has reached 4,500 registered users, the volume of investments has exceeded 4 million, and has generated profits of nearly half a million Euro.
Swaper, after three months with yields above 16% (thanks to the 2 % additional return for amounts invested over 5,000 euros), has taken a big drop in December. I suspect this is due to the recurrent problem of Cash Drag which has hovered around 15-20% all month and the fact that I increased my position in a 15% (and it takes a month to start generating interests).
Another platform with moderate returns but excellent functionality, without Cash Drag and which requires a minimum follow-up. Monthly yields were up to now quite regular between 10.2 and 11.3%. In December, Viainvest has given us a pleasant surprise: the monthly return rate has jumped nearly two percentage points to a 12.9%. I intend to keep my position while performance is maintained.
Unlike other platforms, Viainvest withholds taxes. I present here tax-free results to facilitate comparisons. From 1 December 2018, Viainvest has announced that such tax withholding is no longer automatically applied to the income of loans originated in Poland by VIA SMS PL Sp. For investments in loans originated in Spain or the Czech Republic, withholding will continue to apply.
Similar yields to those of Peerberry. During December, the "problem" of lack of loans above 9% seems to have been solved. I am quite satisfied with the performance so I'll keep my position.
Viventor has announced the addition of Mozipo, an old acquaintance for Mintos users. Founded in 2007, Mozipo was one of the first consumer lenders in Lithuania to offer online loans. The company is part of the FINCO association. Its Lithuanian subsidiary, Moment Credit, offers consumer loans from 50 to 7,000 Euro with a term of 2-60 months.