1. EASY TO SET UP

You can start investing in only two steps: first, select your desired target risk-return and second, agree to terms and conditions. The Portfolio Manager does the rest.

New Portfolio Manager

  1. CONTINUOUS INVESTMENT

You now only have to set your Portfolio Manager up once and it will invest at your desired risk-return level. There’s no need to reactivate it at any point in the future even if allocations in your portfolio change over time. The new Portfolio Manager will adjust to these changes on its own.

The Portfolio Manager invests into new loan applications periodically throughout the day. It analyzes your current portfolio, your available capital and all loans available on the market and invests in a sub-set of loans that help you reach your risk-return target the fastest. Just keep in mind that lower risk loans are always preferred over higher risk loans.

P2P lending TIP: Reinvest your returns, don’t let returns sit idle / Use automation to invest-reinvest

  1. AUTOMATIC RISK BALANCING

Over time your portfolio will most likely change in its allocation and risk level. When previously you had to make all the changes and adjustments manually, now the new Portfolio Manager monitors your portfolio’s current risk-return automatically. Based on the changes it will continuously adapt its future investments to provide you with a portfolio level risk-return that matches your selected level.

The Portfolio Manager continuously measures the risk-return of your portfolio by calculating its weighted average risk. This risk factor is compared to the risk-return target you have set through the product interface and the calculation is done before each investment decision to determine the types of loans that can be added to your portfolio.

New PM_Automatic Risk Balancing

  1. AUTOMATIC DIVERSIFICATION

Having a proper diversification is one of the criteria that has the biggest effect on your return. The new Portfolio Manager will make implementing this recommendation a seamless experience since it is fully automated.

The Portfolio Manager takes into account your portfolio size and adjusts the size of each investment that provides an optimal diversification level. Larger portfolios will invest in larger amounts and smaller portfolios in lower amounts. Bid amount changes as your portfolio size changes.

P2P lending TIP: Diversify your loans / Spread your money over many loans


16 responses to “4 major benefits of the new Portfolio Manager”

    • Hi, Mart!
      Thanks for pointing that graph out. Today, all the bids made with the new Portfolio Manager are shown in the BidsManual column in our loan dataset, due to the fact that it hasn’t been updated yet. Our engineering team is working on it and as we speak and the dataset will be fixed by tomorrow.

  1. In Partel’s interview on the 23rd of October, he claimed that the portfolio manager accounted already to 45% of the investments.
    Quote:
    “9. How many investors are you predicting will be using the passive web interface vs how many will be holing out to use the API?
    We expect that roughly 80% of investors will use the passive web interface and rest will come through the API. Already after two days the new Portfolio Manager accounts for 45% of the new investments without any marketing.

    The graph Mart Roosileht mentions makes Partel’s statement hard to believe.

    And as an active investor, I have to say that I care very little for how good your portfolio manager is, as long as you don’t take down the primary and secondary market.

    • Hi, Hélder!
      Our engineering team is working on updating the dataset as we speak and it will be fixed by tomorrow.

  2. So one question. Do I get it correctly, that the new API is still not in production – i.e. only in the sandbox – but the old, distinctive, PM has been retired already?

    • Hi, Soeren!
      Bondora API isn’t yet in production. Also, the Sandbox environment does not have the later API version but we plan to release the new API version to Sandbox during next week.
      Meanwhile, the old PM hasn’t retired – it runs as long as the target size of your portfolio wasn’t reached.

  3. 6 Major Disadvantages of Bondora:

    (1) The Portfolio Manager does not allow you to exclude countries that show ultra high default rates. All you passive Investors throw your money into a black hole.

    (2) Bondora has turned from an open minded “Dr. Jekyll” into an obsucre, intransparent “Mr. Hyde”. Need Proof: to show the remaining principal of defauted loans as current is just wrong. Tip for Bondora: the recovery statistics also need some bending of the rules as I can still see the total remaining principal that has defaulted.

    (3) Bondora does not have “Skin in the Game” as they hold 0% of the issued loans. Bondora’s income comes mainly from issueing loans and management fees. This causes moral hazard among Bondora as they earn more by issueing more loans even at the cost of the investor.

    (4) Bondora had a significant loss in 2014. http://www.baltic-course.com/eng/finances/?doc=108037

    (5) Bondora may grant preferred access for institutional money. need proof: https://www.bondora.com/en/contracts/terms_of_use :”We may also offer preferred access to the matketplace and additional non-standard advisory services to institutional investors, as stipulated in the Terms of Use.”.

    (6) Bondora has retroactively changed T/C causing major disadvantages for the investors. Collection Fees for defaulted loans, even for those issued under the old T/C, have to be paid by the investor lowering the expected recovery. This lower then expected recovery is not included in the interest rates of the old loans causing them to be priced too low.

    (7) Bondora does not offer a buyback guarantee like other platforms.

    • Hi YaCop, please find our replies below:
      (1) The Portfolio Manager is an automated tool allowing passive investors to get access to our industry leading returns with minimal time efforts. Investors who want to actively manage their portfolio and pick individual loans can invest manually or over the API in the future.
      (2) Every point of data about the loans, repayments and loan schedules are available for each visitor and investor. You can see the data on your portfolio and across Bondora. The level of transparency of Bondora is not matched by any other platform.
      (3) Bondora has invested significant amount of capital into building up the marketing, origination and servicing platform required for investors to be able to access the industry leading returns. Most of our income is derived from management fees that are only received through loans that make repayments. The companies who have “Skin in the Game” do not provide access to retail investors.
      (4) Bondora raised a significant equity round in the beginning of 2015 to continue to grow and build the company. The small loss of 2014 is marginal compared to the size of the market we are targeting.
      (5) Institutional investors are a key part of developing a great service for retail investors and ensuring the long-term stability of the industry. In order to service this segment sometimes preferred access has to be provided – this is not something unique to Bondora.
      (6) This is not correct – Terms and Conditions have not been changed retrospectively.
      (7) Returns on Bondora are significantly higher than anywhere else in the industry. Differently from our competitors there is no need for a buyback program or any other instrument to deliver positive returns. We recommend diversifying across other platforms in case you are interested in a more conservative risk-return profile. Bondora suits you in case you are looking to earn returns of above 12%, have a long-term investment view (5+ years) and are more risk tolerant.

    • Hi Kai-Riin Saluste,

      I presume you are not a Bondora employee but someone having a laugh.

      (7) Returns on Bondora are significantly higher than anywhere else in the industry. Differently from our competitors there is no need for a buyback program or any other instrument to deliver positive returns.

      I found that very amusing

    • He is right. You don’t need buyback to have have positive returns with bondora.

      The only thing you need is to calculate your returns the way bondora does. Then you will see that bondora is quite profitable. For instance I have more than 25% profit with bondora.

      (end Sarcasm)

    • I wonder why you do not come up with some figures that undermine your statements because I am fed up with statements like – “Bondora is the Best”.

      Let’s have a look on your whole loanbook from 31.10.2015. As this represents all loans ever issued, this should serve best our purpose and we can close out your repetitive argument of suggesting more diversification.

      See my table here: http://www.bilder-upload.eu/show.php?file=05c3bb-1446746918.png

      For EE your return are impressive, no question about it. For all other countries, the investors are deeply underwater.

      You may assume that non-EE countries behave like EE. But this is not justified. Example: Your worst year in EE was in 2009 when 27% of the funded amount defaulted.

      Now look on the default rates (and also the volume) for all non-EE:
      Spain: for all loans issued in 2013, 57% of the funded amount is still in default after recovery. 2014 is already at 49% (this is 1.9 Mio. Euro of Investor’s Money).
      Finland: for all loans issued in 2013, 36% of the funded amount is still in default after recovery. 2014 is already at 24% (this is 1.5 Mio. Euro of Investor’s Money).
      Slovakia: for all loans ever issued, 70% of the funded amount is still in default after recovery

      Also have a look on the Ratio Recovery to EAD1 for each year. For EE, recovery rate is already is much higher than in non-EE for all comparable years.

      And now please factor in that up to 35% of the EE-recovery goes to DCAs, leaving investors with just 65% of the recovered principal for the optimistic scenario for all Defaults in EE after June 2015.

      I do not wonder anymore why,
      you decided to “turn” defaulted loans into current loans.
      you do not post the monthly loan volume anymore. Because it is, at best, flat for more than a year now.
      you decided to remove the figures like Interestpaid and default from your statistics page.

      Let’s get down to business: If you believe in your own words, why do you not buyback my portfolio at face value (read: outstanding principal) and you can reap the profits of your recovery process and of the to-be-paid interest. Deal?

      BTW: I foresee that you will discontinue the Loanbook.

  4. Hi,

    I understand the way your going and I think it’s a good thing to automate the investing process. But the new portfolio manager is very limited with only 3 choices.

    For example, the loan with rating C, D, E, F and HR does not fit in my investment strategy.
    I want to invest only in loans rated as AA, A and B. But there is no profile that covers that selection. I understand that I can pick the loans by hand on the market. But that is too time consuming for me.

    Is it possible to make an extreme conservative profile in the new profile manager?

    • I second to Jan’s opinion.

      We need a conservative option!
      This is the main flaw of the new PM. You claim to be capable of achieving a certain estimated return but in reality you can never foresee various circumstances than can cause mass defaults among more vulnerable (higher risk rating) borrowers.

      There needs to be an option to invest conservatively. Your API is nowhere near finished and the third parties who are meant to offer us what we need are nowhere to be seen yet.

      Please add a fourth option to those who don’t want to invest above B. (and while you’re at it why not add another one for those who want to risk wildly and invest in E-HR? I’m sure there are people who will do it.)

    • Hi, Jan and thanks for sharing your thoughts with us!
      I will forward your suggestion to our development team.

  5. I won’t use this portfolio manager even if you send me a mail every week how great it is.
    I’m very disappointed how bondora tries to shroud the key numbers on the statistic part of my investment.
    There are defaulted loans and we have to learn how to live with them. They won’t not disappear because you find a new definition. The influence of defaulted loans is very little at the beginning while interest part of payment is high but in the future it will grow and grow.
    So you have to keep defaults in mind.
    Where can I see the fees of the incasso anywhere?

    There is a bug in https://www.bondora.ee/en/MyAccount/MyInvestmentsAll if you use filters – principal overdue is calculated for all loans.

    Per your definition if a loan is 60+ the borrower has to pay at once the whole principal. So the displayed value of overdue principal is not correct. It should be the whole outstanding principal of the defaulted loan and not the part of the past.

    I feel manipulated by that what you are showing as now and I don’t like that.
    Martin/Oktaeder

    • Exactly right and I will go more far than that. I feel cheated. My current profit are only the money I can realistically recover. All defaulted loans are sellable for like 20% face value top, overdue loans for like 40%, rest for 98-100%. Taking this into account, I am currently in 9-11% loss and not in 20% profit as bondora is trying to tell me. If I turn on portfolio manager I have no say into whether bondora will put my money into some other experiment like Slovakia. I wan’t at least this level of control because bondora does not guarantee me ANYTHING. As someone said, give me face value of principal guarantee if I go for portfolio manager and I am all in and I will trust you that you will do your best to pick the right borrowers, but what I see now, you just take almost any crap, just to make your fees. When I can filter it, it is not great, but it is OK, but when you take this option from me, I am going somewhere else and luckily there are more and more P2P systems springing up all around so I will have my free choice. You are slowly but surely going to hell.