Try Bondora Portfolio Manager without the risk of losing money

Bondora News

We are excited to announce a pilot campaign with the goal of ensuring trust in using Portfolio Managers for making investments on Bondora platform. We believe that using Portfolio Managers is the most efficient way to invest on our platform; and thus, welcome you to try them out without the risk of losing money* during the campaign period from April 21, 2015 to April 30, 2015 (both dates inclusive)!

The campaign

The investment amount placed using Portfolio Managers during the campaign period (further, campaign bids) is guaranteed by Bondora to produce no net loss on investment. On November 30, 2015 Bondora will propose to buy campaign bids in defaulted loans (further, defaulted campaign bids) for a total compensation amount equaling the net loss of the investor’s pool of campaign bids (see below).

Compensation amount

Try Portfolio Manager without the risk of losing moneyThe compensation amount equals the total principal of the investor’s campaign bids in default status on November 30, 2015, less the total of received interest from campaign bids by November 30, 2015 and projected interest from current campaign bids on November 30, 2015.

Compensation amount example

A Portfolio Manager places a total of three bids in a total of three loans during the campaign period: bids A, B, C.

On November 30, 2015, loan A is current, while loans B and C have defaulted. The principal of defaulted bids are B1 and C1. The bids, A, B, C have generated interest amounts of A2, B2 and C2 until November 30, 2015. In addition, bid A is scheduled to produce additional interest after November 30, 2015 in the amount of A3.

In this example, the compensation amount paid would equal to (B1+C1)-(A2+B2+C2)-(A3). On November 30, 2015 investors can opt out of the campaign and keep the defaulted bids in their portfolios.

Terms and conditions

There is no need for investors to opt in. All bids made by Portfolio Managers during the campaign period are automatically covered, regardless of whether the Portfolio Manager was created before the campaign period or during.

  • Only bids made by Portfolio Managers during the period of April 21, 2015 to April 30, 2015 (both dates inclusive) are covered, manually placed bids are not covered.
  • In order to participate in the program you need to have an existing one or create a new Portfolio Manager to participate in the campaign.
  • Investors can opt out from the campaign by refusing to sell their defaulted campaign bids on November 30, 2015.
  • Investors cannot opt out for only a fraction of bids made during the campaign, meaning that investors need to sell either all defaulted campaign bids, or none of the defaulted campaign bids.

What is the purpose of the campaign?

We strive to make our service as accessible and easy to use as possible, and we believe Portfolio Managers play an important role in this. Please consider this as an excellent opportunity to try out our Portfolio Manager strategies or to invite your friends to become a Bondora investor risk-free*.

We are dedicated to providing our investors with plenty of quality investment opportunities, while ensuring that only quality applications get to the financing stage. That commitment is backed up by our effective debt handling process.

We will use on the results and feedback gained from this campaign to develop new features and products for our investors in the future. Depending on your feedback, we may introduce similar mechanisms later on or turn this into a product on its own, so please let us know what think about this initiative in the comments below.

* Please remember that your capital remains at risk as you are providing unsecured personal loans. The campaign covers the credit risk for the investments made by Portfolio Managers during the campaign period, however, it does not account for the operational or any other risks; and thus, there is a possibility that you may lose some or all of your investment, as it is not protected by any financial compensation scheme. To learn more about the risks please read our investment guide.

21 responses to “Try Bondora Portfolio Manager without the risk of losing money”

  1. Does it include also bids made by Dynamic PM which is created manually by investor or only preset PM’s by Bondora?

    • Hello, Andrej! Yes, the bids made by the Dynamic PMs during the campaigns are also included in the protection program.

  2. If the loan selected by PM during this campaign defaults on for example 1 December 2015, then it won`t be bought back by Bondora. Am I right?

    • Hello, Märt! You are right, Bondora will calculate the compensation amount based on the status of the campaign bids as of November 30, 2015.

  3. Not that great, with an advertised return of 19% you are merely offering to pay the losses of six months MINUS the projected interests on the whole period! So, on an average loan duration of four years, the customer can still lose because of the remaining 3,5 years defaults. Why don’t you cover the total losses for the whole period (if your claims of 19% are true that should not be a problem for you).
    Why don’t you allow people to choose countries and more features in your portfolio manager? that would attract investors back: freedom and transparency. I’m a new customer but people around the internet are really fleeing from bondora because of diminishing transparency and platform issues. This is not a strong enough move in my eyes.

  4. Hello, Aldo! Thanks for your feedback, this is valuable for evaluating campaign results and deciding on how to evolve it in the future.

    Our analysis shows that the default curve, although not guaranteed, tends to flatten out after the first 6 months of loan repayment and thus, we designed the pilot program keeping this in mind.

    Country selectors, as well as numerous other filters, are available for the use on Primary Market, whereas, Portfolio Managers are designed for automated investing based on Bondora Ratings, which account for country risk.

    • Great! a reason more to guarantee no losses overall.You should be bulletproof then. Why do I guess that won’t happen?

    • Hello, Aldo! Not sure I understood the question in your last comment.

  5. What about rescheduled loans? If a loan is about to default but is being rescheduled it doesn’t even have time to default until November 30th. So a loan could still count as current without having made a single payment.

    • Hello!

      We designed the program to allow for 6 monthly repayments (that’s why the compensation amount is calculated only at the end of November), as according to our analysis, the default curve, although not guaranteed, flattens out irrespectively of whether a loan was rescheduled or not during this period (meaning that the time suffices for a reschedule loan to default again in case the borrower does not intend to pay back).

  6. Hello, just making sure I understand this correctly…

    (B1+C1)-(A2+B2+C2)-(A3) where A3 is future scheduled interests for the loan that is current (A).

    So that means that if I decide to take compensation for defaulted loans, I won’t be earning any future interests from the loans that are paying as intended?

    • Hello, Marten!

      The current loans will remain in your portfolio and you will keep receiving the interest from those as scheduled. However, the scheduled interest from those current loans will be deducted from the compensation amount when the compensation takes place.

  7. Sorry Bondora,

    but this “special offer” is worth nothing in my opinion. I fully agree with the other investors who claim that the chance of a defaulted loan is very small after only 7 months from loan-issuing.
    Although this is not a 90% likely case, here comes a possibility how with only ONE payment (possibly even only principal paid once), the loan could still not have defaulted after these 7 months (but will then very soon afterwards):

    04/30: Loan successfully issued
    06/15: 1st payment – Paid (possibly principal only)
    07/15: 2nd payment – Missed
    08/15: 3rd payment – Missed (loan 31D overdue now)
    09/05 to 09/12: Loan rescheduled, e.g. for next payment due on 10/03
    10/03: 1st rescheduled payment – Missed
    11/03: 2nd rescheduled payment – Missed (loan 31D overdue now)
    11/30: Protection ends – Loan not defaulted yet

    Deducting any interest earned PLUS the SCHEDULED interest for current loans (without knowing if this interest will ever been paid) from your guarantee amount is really not a good offer for potential investors.

    Currently I only have a mere 500 EUR invested on Bondora, but due to Bondora’s approach not to listen to investors, I won’t invest any additional money currently. With a good platform and proven system, you could have 25x the above amount invested by me – but currently that won’t happen.

    If you (Bondora) believe in the portfolio manager, then guarantee to buy ALL defaulted loans over their full lifetime from investors, plus possibly guarantee and reimburse a minimum interest of 5% to your investors as well (instead of the current statistical claim of 19%).

    Invest in faster and better default recovery to gain trust. There’s hundreds of possibilities, work on it!

    Wish you success in doing the “right” thing, creating a truly great platform while considering investors’ needs and wishes – then your “funded loans amount” will increase automatically.

    Regards, Philip

    • Hello, Philip!

      Thanks for your detailed feedback, much appreciated!

      As the Terms & Condition section states, you can opt out of the program in case you are not satisfied with the proposed campaign terms.

  8. There was a time when Partel Tomberg shared the latest default curves with your forum members, but in spite of many requests that no longer occurs. Most of us investors do not have the knowledge to be able to analyse the information in the form you provide, so maybe you could arrange for these default curves to be made available to us so that we can regain some confidence in the possibility of recovery of defaulted loans. This is a major disincentive for us investors following the high level of defaults which occurred in your new market areas last year and is the reason why we don;t use the portfolio managers when we cannot have a choice of country.

    • Hello, James!

      Thanks for the recommendation on showing the latest demand curves, that definitely makes sense.

    • Jevgenijs I hope you will really be able to provide this information, because I believe the future for Bondora will depend on people having confidence in a good level of recovery for the defaulted loans. The default curves were previously posted on the forum by Partel and Taavi, but we have not seen an update for about 15 months, which doesn’t look good during a period when the default percentage has risen so much.

  9. I fully agree with JamesFrance. The reason why we investors don’t use the Portfolio Manager is the fact that we can not differ between countries and / or between loans which are fully verified or not.

    If Bondora would give us these possibilities back, I would reactivate the Portfolio Manager and start investing with fresh money immediatelly .