Bondora portfolio performance – May 2017

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.
Estonia AA A B C D E F HR
2015
Q1
Actual 14,59% 13,86% 15,60% 18,44% 20,30% 23,27% 24,57% 23,38%
Target 13,10% 13,84% 14,31% 15,76% 18,47% 20,43% 23,17% 23,51%
2015
Q2
Actual 14,28% 11,39% 15,09% 14,38% 21.90% 17,63% 31,44% 19,88%
Target 13,20% 13,82% 14,29% 15,89% 18,40% 20,46% 23,08% 23,65%
2015
Q3
Actual 15,50% 15,14% 16,11% 17,70% 18,34% 26,84% 28,25% 28,17%
Target 13,18% 13,85% 14,30% 15,79% 18,43% 20,32% 23,19% 23,85%
2015
Q4
Actual 13,99% 15,27% 15,10% 19,23% 20,13% 14,52% 23,76% 27,76%
Target 12,20% 13,17% 13,81% 15,50% 17,59% 18,41% 21,29% 20,83%
2016
Q1
Actual 11,85% 13,61% 15,14% 19,17% 23,91% 26,09% 24,10% 35,39%
Target 10,62% 11,32% 12,09% 14,38% 16,17% 17,51% 18,28% 17,96%
2016
Q2
Actual 9,64% 1,07% 13,98% 15,89% 18,46% 21,62% 29,03% 27,21%
Target 8,15% 9,74% 11,46% 13,62% 15,22% 16,47% 17,05% 17,10%
2016
Q3
Actual 9,82% 12,19% 11,88% 14,51% 18,54% 22,94% 25,08% 28,11%
Target 8,40% 9,77% 11,48% 13,64% 15,22% 16,48% 17,04% 17,10%
2016
Q4
Actual 9,27% 10,37% 12,20% 15,77% 18,75% 26,46% 30,35%
Target 8,21% 8,61% 9,61% 11,10% 12,47% 14,09% 14,94%
2017
Q1
Actual 8,64% 8,41% 12,23% 13,94% 21,40% 24,95% 32,06%
Target 8,35% 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.
Finland AA A B C D E F HR
2015
Q1
Actual 8,09% 6,35% 7,27% 10,52% 18,87% 41,80%
Target 12,87% 13,33% 14,50% 16,61% 18,15% 20,82%
2015
Q2
Actual 3,95% 8,88% 11,15% 8,22% 5,14% 11,78%
Target 12,88% 13,33% 14,67% 16,67% 18,07% 20,86%
2015
Q3
Actual 1,55% 8,46% 11,18% 14,00% 6,55% 17,20%
Target 12,90% 13,30% 14,70% 16,58% 18,36% 20,81%
2015
Q4
Actual 0,96% 10,86% 15,36% 14,23% 8,68% 24,81%
Target 12,89% 12,80% 14,49% 16,02% 16,86% 18,11%
2016
Q1
Actual 15,10% 12,59% 17,40% 25,26% 21,73% 15,51%
Target 9,87% 11,22% 12,56% 13,44% 14,24% 14,40%
2016
Q2
Actual 16,92% 16,65% 14,03% 21,85% 19,41% 6,11%
Target 12,07% 14,05% 16,17% 17,55% 18,27% 19,19%
2016
Q3
Actual 8,21% 17,46% 15,40% 13,32% 13,79% -2,08%
Target 12,45% 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%
Target 9,90% 11,87% 14,32% 16,37% 20,66% 27,53%
2017
Q1
Actual 18,09% 18,99% 19,46% 22,65% 35,21% 25,97%
Target 11,86% 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.
Spain AA A B C D E F HR
2015
Q1
Actual -6,00% -8,33% -6,83% 5,53% 10,48% 8,96%
Target 12,62% 12,90% 14,33% 16,21% 18,32% 20,24%
2015
Q2
Actual -13,72% -10,31% 4,44% 10,84% 13,13%
Target 12,85% 14,33% 16,23% 18,32% 20,22%
2015
Q3
Actual 15,64% -6,92% 6,13% 11,31% 3,06%
Target 13,11% 14,55% 16,18% 18,32% 20,31%
2015
Q4
Actual 17,91% -1,11% 6,20% 16,33% 12,20%
Target 13,41% 14,93% 16,24% 17,85% 18,06%
2016
Q1
Actual 37,26% 24,79% 18,72%
Target 14,61% 14,58% 13,93%
2016
Q2
Actual -14,26% 5,03% 1,22%
Target 19,41% 20,16% 20,36%
2016
Q3
Actual 30,01% 26,62% 10,39%
Target 19,30% 20,24% 20,65%
2016
Q4
Actual 38,66% 24,41% 31,02%
Target 16,44% 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-Q1 2015-Q2 2015-Q3 2015-Q4 2016-Q1 2016-Q2 2016-Q3 2016-Q4 2017-Q1
Actual 12,61% 11,77% 12,98% 15,48% 20,89% 16,07% 16,19% 22,54% 20,86%
Target 16,56% 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.

2009 2010 2011 2012 2013 2014 2015 2016 2017
Country Actual Actual Actual Actual Actual Actual Actual Target Actual Target Actual Target
EE 16,54% 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%
FI 9,56% 8,74% 10,19% 15,50% 19,15% 16,85% 25,98% 17,68%
SK -9,31%
ALL 16,54% 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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