Studies of Life

Learning by doing.

IsePankur (now “Bondora”) Returns In 10 Months

10 April 2014 by Jim

This is a series of posts on my personal returns of investing in Bondora. The next post in this series is about the results after investing in Bondora / isePankur for 14 months

IsePankur Growth

I’ve continued heavily investing in IsePankur to the point where it now exceeds my total stock portfolio worth (but not for long, I’m striving for a healthy balance here).

The main reason is that isePankur gives me much more predictable returns than the stockmarket. That’s not a reason not to invest in stocks, but a nice opportunity for diversification.

As can be seen on the chart above, my percentage return increased all the way up to January 2014, which is the period when I started adding large amounts of money to my account, so the returns had to drop for some time. The reason is simple: If there are no new funds added from outside, the money earned on already invested funds is reinvested, and therefore earns money again. So 100 EUR invested in January (balance: 100 EUR) might already pay back 7 EUR in February, which will in turn be reinvested (balance: 107) , so the return in February will increase incrementally. As long as there is new ‘fresh’ money to invest in my account (which I wired there) the ROI will not increase. In another 2 months, I will be fully invested again, and then the process outlined above will continue to increase the ROI again, hopefully again around 22% (it now stands at 17%, which isn’t bad either).

The indicated ROI on IsePankur is the actual amount of return planned, minus all the overdue amounts, which usually do get paid back but with some delay. So the actual ROI is most probably higher than what’s indicated up front.

Another interesting chart is the comparison of planned vs actually paid amounts of principal and interest in percentages:

IsePankur past planned VS paid amounts.

As you can see, both lines seem to be approaching their true value with a few ups and downs. You can see that the percentage of principal paid is higher than the percentage of interest actually paid, which will probably be due to prioritisation of principal repayment by IsePankur (i.e. if someone owes 100 in principal, 20 in interest and pays 90, that 90 will be labelled fully as ‘principal’ and not as 80 principal and 10 interest).

I expect the two lines to stabilise over longer periods of time around the 70-85% range, which means that three quarters of what is planned is actually paid back. That may sound like a horrible percentage but the non-paid amounts are included in the 17-22% actual ROI calculation that I’ve talked about above, so there are no surprises there, and if 100% of planned payments were actually paid, as unrealistic as that may be, the actual return would probably be 30% or higher. Additionally, this perceived risk you see here can be looked at like a gatekeeper: this is what keeps investors from flooding IsePankur, which in turn would lower interest rates. So it’s actually a good thing. An equilibrium keeping the interest and ROI high for us.

IsePankur / Bondura still seems like a great investment to me, and I can’t wait to see how it evolves once I’m fully invested again.

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