Portfolio review

November 2019 Portfolio returns

Peer to peer portfolio review Posted On
Posted By Eimantas

Although nothing special happened in my portfolio during November, I had an opportunity to attend the largest fintech conference in the Baltic states called Fintech Inn. In it, there were talks regarding different issues and solutions regarding financial technologies and startups and one of the topics covered were crowdfunding. There are a few important things everyone should know when investing in p2p platforms in Europe and I will share them at the end of my portfolio review.

This month seems to still suffer from lover interest rates across all platforms. None of the platforms managed to reach my goal of 1% growth, but few did come close. The main issue is that platforms either suffer from the smaller interest rate or experienced cash drag that lover overall results.

PlatformSize at the begging of the month Monthly change Monthly gains Average interest rate Funds added during this month
Finbee.lt791.19€7.12€0.90%14.83%
Mintos2019.76€17.24€0.85%11.09%
Robocash1343.25€12.87€0.96%12%
Grupeer242.56€ 1.94€0.80%12.31%
Nordstreet* 247.12€2.2€ 0.89%10.5%
Estateguru102€0.98€0.96%11.15% 150€
Total at the end of the month**4940.39€42.35€0.89%150€

*Nordstreet platform does not hold my deposits directly, but uses Paysera platform as a money holder and directly moves money trough that accounts when I invest or gain interests. When calculating monthly change I will give monthly gains percentage rather than whole portfolio size change.

**This is the total amount invested after this month with interest gained and deposits accounted in.

Portfolio distribution between peer to peer platforms at the end of November
Portfolio distribution between loan types

Finbee results:

Finbee is still a mixed bag for me. Although it managed to show good results this month, especially if I account for the amount that is not yet invested, due to cash drag. Counting portfolio without the cash drag get me ~1%, that’s close to my target but off the 14% yearly interest rate that I should be getting.

Cash drag pile is still getting bigger every month and soon I will have 1/8 of the Finbee portfolio just sitting and doing nothing. If it reaches 100€ I will just transfer it to Mintos or any other platform that seems to have more loans available.

Another point I would like to hear information from Finbee is about their debt recovery process, given that some of the loans have no updates for months. For me, as an investor, it’s not clear if those loans can even be recovered.

If you would like to register to Finbee, I would ask you to use my affiliate link. This helps to support this blog.

Mintos results:

Mintos this month is way below the target goal. And I guess this can be attributed to their lower yearly rates in last two months. The situation seems to be getting a bit better and I managed to increase my low-end interest rate to 11.5% in auto-invest tool, but I would like to keep it at 12%.

If you would like to join Mintos you can do this by using this link. It will give you a signing bonus of 0.5%. from your investments during first 90 days.

Still having doubts about Mintos? Check my review!

Robocash results:

During October I noticed that there is a quite big cash drag on this platform and during November I tried lowering it, but it did not bulge. I changed the lower end interest rate mark, extended loan duration, but nothing helped. Around 300€ from 1300€ stayed not invested through the month. What’s the point of money if they are not making more money?

If the situation does not change, at the end of December I might just pull part of my money out and invest in index funds. At least there I can grow my whole portfolio without cash drag.

Want to invest in Robocash? Register by clicking here. Or click here if you want to check my review.

Grupeer results:

Nothing really changed here, still getting almost the exact sum as last month. Not planning to expand it and not planning to lower it. At least not in December. Later on, maybe. In my portfolio, Grupeer allows me to expand a bit more into different markets that do not get covered as well by other platforms, like Mintos. But I don’t like the platform itself to keep larger sums of money in it. As a business it is okay, but the user interface and information provided to the investor is terrible.

Join Grupeer by clicking this link!

Nordstreet results:

The new loan I financed last month started paying interests. Sadly the new loan payment date is at the end of the month, and loans tend to be always late on payments, this will distort my monthly growth rates as payments will often carry over the next month.

No plans to expand more on Nordstreet for the foreseeable future as my loans will come up to term in the next few months. After that, I will increase its size to eliminate cash drag.

Nordstreet now gives out referral bonuses. If you want to invest in this platform, I recommend using this link and you will get extra 1% annualized return on your investment made on your first month!

Estateguru results:

During this month I deposited another 150€ into Estateguru to increase its size similar to Nordstreet. I am quite happy that I managed to invest all of that sum into new loans. Although it sucks that all 3 loans are not paid monthly, two out of three will be paid quarterly and one at the end of the term.

Just like Norstreet, I will continue being passive in this platform until something changes.

Join Estateguru by clicking here!

Fintech Inn conference review and upcoming EU regulations:

Fintech Inn was an event organised by the Lithuanian government that seeks to gather industry leaders and experts into one room. As an event it was interesting, I found that a lot of presentations and discussions were lacking in quality that I would like, but there were some good bits that made the conference worthwhile for me.

On day two there were few panels about crowdfunding and for the first time, I heard a really important message for peer to peer investors in the EU. Currently, to my knowledge, only the Lithuanian government tries to regulate peer to peer lending market, but currently, there is legislation being drafted on the EU level. And it will look similar to how it currently is in Lithuania.

Right now, all platforms that are regulated by Lithuanian central bank, are not allowed to have auto investing tools that invest in business loans. Consumer loans are fine, as long as it is a person behind the loan and not a company. The logic behind this is that peer to peer business loans is a different asset class than just peer to peer lending loans. Think more corporate obligations rather than peer to peer. And auto investing makes it look more like an ETF tracking corporate bonds than peer to peer lending.

For example, this is what users from Lithuania see when they want to set up the auto investing tool on Estate guru:

So how will this affect investors? Well as of right now, given that this is only drafting phase, it’s still unclear what the regulation will look like. But if it passes as I describe, I think a lot of real estate loan financing platforms will take a hit. A lot of investors with larger portfolios do like to automate loans as it takes a lot of time to manage everything on your own. But if that choice is disabled, then they might leave peer to peer platforms to other investments. Even on Mintos, if I had to manually invest my 2000€ portfolio, I would rather just leave the platform as it would become a job.

But then there is another thing, platforms like Mintos are not real estate financing platforms, but they do work with loan originators rather than lend money directly. And this might become an issue. With such regulation, their business model might become illegal (note: I am not a lawyer) as they finance business that issues loans rather than issue loans themselves. I think this is a really important issue that will affect a lot of investors and one that I will try to follow as much as I can.

As for the next month:

So far I fulfilled my yearly goal of having at least 4 500€ invested in peer to peer lending. So there is no need to invest any more into any platform. At the same time, I already managed to prepare a 3 000€ sum for the stock market, but not yet sure about the platform or ETF that I should go with. At least I managed to narrow down platforms to 3 candidates.

Interactive Brokers, Trading 212 and Evarvest (not yet launched). Interactive Brokers is the most secure option out of 3, but large monthly fees will impact my portfolio growth to the point where it won’t be beneficial to invest for the first few years. They take a monthly fee of 10$ (3$ if you are under 25). That’s 120 a year, or what on average yield, a 3 000€ dividend portfolio gets from dividends in a year. Other two are startups that promise low fees, Evarvest is not yet operating, so who knows what they will bring, but Trading 212 has 0 fees. No transaction fees, no monthly fees. Only inactivity fee for every 6 months (if you trade, it won’t count as being inactive). This is the choice I am currently leaning towards too.

So for the next month, I will probably continue researching ETF’s and deciding on my first move. So far I am considering between accumulating and distributing ETF’s, but not sure if there is a point to it, given that I will probably reinvest dividends anyway. Tax issues are currently irrelevant, given that there is a tax break for 500€ earned in dividends each year. (same as interest from peer to peer)

Anyways, that’s it for this month, and happy holiday season everyone!

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