The Go & Grow portfolio continues to breeze through 2020

Platform Updates

We’re in the final quarter of 2020, and despite it being a year full of unexpected events, Bondora continues to grow. We recently reached 140,000 investors, which is a very proud milestone for us. Fun fact: It’s almost enough people to fill a big football stadium like the Olympia stadium in Berlin… twice! 🀩

Bondora investors can fill nearly 2 Olympia stadiums – wow!
Bondora investors can fill nearly 2 Olympia stadiums – wow!

Above all, most investors love Go & Grow. Time goes by, and the world changes, but Go & Grow is still on top thanks to its simplicity and user-friendliness. Every quarter, we publish a detailed post sharing everything you need to know about the Go & Grow portfolio distribution because of its incredible popularity. Here you can find the most recent figures, updated as of October 2020.

Calculated risks

Diversification is key. We say it over and over because it’s true. It goes without saying, but the principle of diversification is at the very core of our business offering, and Go & Grow is no exception. Instead of investing everything in only one credit rating, we spread investments across all 8 ratings, from HR to AA.

Figure 1a - Go & Grow Portfolio Overview – October 2020
Figure 1a – Go & Grow Portfolio Overview – October 2020

The largest distribution is in F- and E-rated loans (nearly 27% each), followed by D- (18%) and C-rated loans (12%). With more than 100,000 loan pieces in its portfolio, Go & Grow provides investors with a diversification level that traditionally was only available with more complex investment options.

Recent decisions to pause loans in Finland and Spain haven’t dramatically changed the portfolio’s overall composition by credit-rating, as numbers are quite similar to the previous quarter.

Where are all the loans from?

Estonia continues to lead by country-distribution with a 45% share, up 1% from the previous quarter. We expected this result because loans are only being issued in Estonia for the time being. Finnish loans declined to 40%, and Spanish loans are remaining constant at 15%.

Figure 2 – Go & Grow portfolio distribution by country – October 2020
Figure 2 – Go & Grow portfolio distribution by country – October 2020

Investing goals

It’s ever-interesting looking at the goals our investors have when using Go & Grow. Extra Income remains the most popular reason, at 60%β€”more than all the others combined. Rainy Day and Retirement follow with 11% each, while the least used categories are Children (4%) and Travel (5%).

Figure 3 – Investors' chosen goal – October 2020
Figure 3 – Investors’ chosen goal – October 2020

More money every day

Diversification, simplicity, and no management fees. These and other benefits are why investors love Go & Grow. Here are some of the top benefits:

The rumors are true! When investing with Go & Grow, your money can yield returns every single day. To check how much you have been earning every 24 hours, visit the “Statements” section of the left-panel menu.

Track your returns under Statements.
Track your returns under Statements.

Plan your financial future with Go & Grow

Have you used our forecast tool? It’s a simple and interactive tool that lets you plan the financial future of your dreams! To find the tool, click on the sandwich icon in the top-right corner of your Go & Grow account, then click on “Forecast.”

You can play around with it as much as you want as it has no connection with your real Go & Grow account. Use it to simulate investment scenarios to create your investment plan, and see where you will be in 5, 10, or even 40 years!

Click here to learn more about the Go & Grow Forecast tool.
Click here to learn more about the Go & Grow Forecast tool.

Ideal for friends and family

Go & Grow is one of the best investment options you can recommend to friends and family because everyone will find it easy to use. From a distant aunt that never invested before to your investment-savvy stock-trader friend, Go & Grow can work for anyone. Besides, when you invite a new investor, you can get a referral bonus based on the amount they invest. If you’re not using it already, you’re missing out. Check out the details here.

Top 5 reasons why people love Go & Grow:

  1. Up to 6.75%* p.a. net return
  2. Incredibly easy to use – great for beginners!
  3. Start with as little as €1 (Yes, you read that right.)
  4. Zero annual management fees
  5. Create a goal and receive updates on your progress

Is the rate of up to 6.75%* p.a. guaranteed?

The rate is not guaranteed; however, the average net return on the Bondora platform is much higher than this. With this and our outstanding 12-year track record, we believe the rate of up to 6.75%* p.a. is achievable.

The net return is capped at 6.75%* p.a. All excess returns over this percentage are reinvested to ensure you can earn the rate of 6.75%* p.a., despite there being no guarantee in place.

OK, what’s the catch?

There’s none. Really. We charge a flat €1 withdrawal fee, no matter the size of the account, and that’s it. This helps us continue to operate the Bondora platform while you can continue to grow your wealth.

Let’s talk about risks

While it’s great to be able to say we’ve delivered on our promises to investors so far, we need to make sure you’re aware of the risks:

Risk 1: The net return falls below 6.75%* p.a.

As we just mentioned, although returns are not guaranteed, a headline benefit of Go & Grow is the high-yielding return of up to 6.75%* p.a. Compared to the net return rates achieved since Bondora was established, the rate of 6.75%* p. a. provides a substantial buffer. Today, the Go & Grow portfolio mirrors the overall composition of the loans – in other words, loans across different risk ratings and countries. These loans have been originated using our latest generation of credit analytics, a proprietary model developed for over a decade.

Therefore, the actual Internal Rate of Return (IRR) of the Go & Grow portfolio significantly outperforms the headline rate of 6.75%* p.a. – the returns generated over this amount are held as reserves and reinvested to minimize risks further. Bondora has no claim on these reserves. Overall, this gives us statistical confidence that the rate of 6.75%* p.a. is deliverable for the foreseeable future. Please note: The yield achieved in past periods does not guarantee the return rate in future periods.

However, a risk that may affect our ability to deliver on the rate of 6.75%* p. a. is the number of investments we receive from investors. For example, suppose more money is added to Go & Grow accounts by investors than we can originate in loans. In that case, this results in a percentage of the portfolio remaining in cash (meaning those investments won’t be earning returns). In this scenario, we may decide to add a limit to the amount new investors can invest. In an extreme case, we could stop accepting new investors altogether and form a waiting list.

Risk 2: Liquidity

The plan for Go & Grow was always to have a product with fast liquidity for investors. To create it, we analyzed close to a decade of cash flow data on Bondora investor transactions to determine the inflows, outflows, and how the portfolio cash flows moved overall. This is so investors can withdraw money from their Go & Grow account at short notice.

We also analyzed cash flow data from several banks and investment funds – specifically, their redemption and withdrawal cash flows during the global financial crisis of 2007-08. This, combined with our own data, has given us the necessary information to mitigate the liquidity risk as much as possible.

In the unlikely event that Bondora cannot fulfill all withdrawals from Go & Grow, two possible scenarios will occur (and will be decided by whichever occurs first). We have simplified them into two short points below. However, for a full description, please read section 7.6. of the Go & Grow Terms of Use.

  1. The investor will receive their full withdrawal once there’s enough money available in the Go & Grow portfolio, generated via further returns or investments.
  2. Once there’s enough balance available, the investor will receive partial payouts – paid out each banking day until the full withdrawal has been fulfilled.

Want to know more about Go & Grow? Click here.


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