Key takeaways

  • All countries have generated double digit realized net returns for the last three consecutive quarters. Though some of the Q1 2017 figures may decrease over time they’re all very likely to remain well into the double digits.
  • As we move from 2015 to the present Estonia, Spain and Finland are all generating returns to a more equal degree. Previously the performance across countries was less balanced.
  • The realized net return in each quarter of 2016 was significantly higher than the same quarter in the previous year by a minimum of 321 basis points.

Actual and targeted bondora net returns by grade and country

Estonia

  • “AA,” “B” and “F” rated loans have all outperformed their target every quarter since Q1 of 2015 offering investors an excellent range of returns across various risk levels.
  • For each of the previous nine quarters more loan ratings have outperformed their target than those that have not.
  • Loan ratings “B” through “F” have all returned double digits since Q1 of 2015.
EstoniaAAABCDEFHR
2015
Q1
Actual14,59%13,86%15,60%18,44%20,30%23,27%24,57%23,38%
Target13,10%13,84%14,31%15,76%18,47%20,43%23,17%23,51%
2015
Q2
Actual14,28%11,39%15,09%14,38%21.90%17,63%31,44%19,88%
Target13,20%13,82%14,29%15,89%18,40%20,46%23,08%23,65%
2015
Q3
Actual15,50%15,14%16,11%17,70%18,34%26,84%28,25%28,17%
Target13,18%13,85%14,30%15,79%18,43%20,32%23,19%23,85%
2015
Q4
Actual13,99%15,27%15,10%19,23%20,13%14,52%23,76%27,76%
Target12,20%13,17%13,81%15,50%17,59%18,41%21,29%20,83%
2016
Q1
Actual11,85%13,61%15,14%19,17%23,91%26,09%24,10%35,39%
Target10,62%11,32%12,09%14,38%16,17%17,51%18,28%17,96%
2016
Q2
Actual9,64%1,07%13,98%15,89%18,46%21,62%29,03%27,21%
Target8,15%9,74%11,46%13,62%15,22%16,47%17,05%17,10%
2016
Q3
Actual9,82%12,19%11,88%14,51%18,54%22,94%25,08%28,11%
Target8,40%9,77%11,48%13,64%15,22%16,48%17,04%17,10%
2016
Q4
Actual9,27%10,37%12,20%15,77%18,75%26,46%30,35%
Target8,21%8,61%9,61%11,10%12,47%14,09%14,94%
2017
Q1
Actual8,64%8,41%12,23%13,94%21,40%24,95%32,06%
Target8,35%8,61%9,61%10,79%12,70%13,99%14,71%

Finland

  • “C” rated loans in Finland have outperformed the same rating in all other countries for the last four consecutive quarters.
  • Also, “C” rated loans are offering a nice risk/reward balance as this mid-level rating has delivered performance above its targeted figure for the last five quarters.
FinlandAAABCDEFHR
2015
Q1
Actual8,09%6,35%7,27%10,52%18,87%41,80%
Target12,87%13,33%14,50%16,61%18,15%20,82%
2015
Q2
Actual3,95%8,88%11,15%8,22%5,14%11,78%
Target12,88%13,33%14,67%16,67%18,07%20,86%
2015
Q3
Actual1,55%8,46%11,18%14,00%6,55%17,20%
Target12,90%13,30%14,70%16,58%18,36%20,81%
2015
Q4
Actual0,96%10,86%15,36%14,23%8,68%24,81%
Target12,89%12,80%14,49%16,02%16,86%18,11%
2016
Q1
Actual15,10%12,59%17,40%25,26%21,73%15,51%
Target9,87%11,22%12,56%13,44%14,24%14,40%
2016
Q2
Actual16,92%16,65%14,03%21,85%19,41%6,11%
Target12,07%14,05%16,17%17,55%18,27%19,19%
2016
Q3
Actual8,21%17,46%15,40%13,32%13,79%-2,08%
Target12,45%14,34%16,37%17,89%18,91%19,19%
2016
Q4
Actual-15,40%18,30%23,98%23,85%30,85%32,06%
Target9,90%11,87%14,32%16,37%20,66%27,53%
2017
Q1
Actual18,09%18,99%19,46%22,65%35,21%25,97%
Target11,86%11,20%13,81%15,47%18,70%23,57%

Spain

  • The average excess return above the targeted figure in Spain for the last five quarters was 3.74% which is in between the same measurement for Estonia (5.32%) and Finland (1.84%).
  • The “E,” “F,” and “HR” loans all outperformed their targeted figure in the last two consecutive quarters.
  • Each loan rating segment in the last three quarters has outperformed the same rating in the previous year’s quarter with the exception of “E” in 2017.” For example, “E” of Q4, 2016 generated a realized net return of 38.66% compared to Q4 of 2015 where this segmented returned only 6.20%. This outperformance is likely to hold even in the coming months.
  • “E” and “F” rated loans all outperformed their targeted figure in the last three consecutive quarters.
SpainAAABCDEFHR
2015
Q1
Actual-6,00%-8,33%-6,83%5,53%10,48%8,96%
Target12,62%12,90%14,33%16,21%18,32%20,24%
2015
Q2
Actual-13,72%-10,31%4,44%10,84%13,13%
Target12,85%14,33%16,23%18,32%20,22%
2015
Q3
Actual15,64%-6,92%6,13%11,31%3,06%
Target13,11%14,55%16,18%18,32%20,31%
2015
Q4
Actual17,91%-1,11%6,20%16,33%12,20%
Target13,41%14,93%16,24%17,85%18,06%
2016
Q1
Actual37,26%24,79%18,72%
Target14,61%14,58%13,93%
2016
Q2
Actual-14,26%5,03%1,22%
Target19,41%20,16%20,36%
2016
Q3
Actual30,01%26,62%10,39%
Target19,30%20,24%20,65%
2016
Q4
Actual38,66%24,41%31,02%
Target16,44%17,15%27,79%

Actual and targeted bondora net returns across portfolio per quarter

The realized net returns in 2016 average 18.92% per quarter compared to a quarterly average of just 13.21% for 2015. Additionally, this increase has occurred without any significant reduction in the variety of loan ratings across each country. In other words, the increase in average quarterly performance does not appear to come at the cost of investors taking on more risk.

2015-Q12015-Q22015-Q32015-Q42016-Q12016-Q22016-Q32016-Q42017-Q1
Actual12,61%11,77%12,98%15,48%20,89%16,07%16,19%22,54%20,86%
Target16,56%16,52%16,79%16,28%14,66%15,64%16,38%16,41%14,84%

Actual and targeted bondora net returns across previous 8 years

We’re pleased to see an increase in performance relative to a slowdown in total realized net returns in 2013, 2014, and 2015. This downshift came as we increased our exposure to countries beyond Estonia in those same years. A positive trend is building as the total realized net return has increased each consecutive year since 2015. With three more strong quarters in 2017 we should be able to continue the momentum.

200920102011201220132014201520162017
CountryActualActualActualActualActualActualActualTargetActualTargetActualTarget
EE16,54%29,55%24,43%23,25%21,13%20,86%18,45%17,00%11,22%13,86%16,42%11,22%
ES-9,62%-4,06%6,50%17,42%16,59%21,48%35,49%27,25%
FI9,56%8,74%10,19%15,50%19,15%16,85%25,98%17,68%
SK-9,31%
ALL16,54%29,55%24,43%23,25%18,54% 11,19%12,99%16,57%18,81%15,89% 20,92% 14,84%

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