One year Robocash with 14.44% yield

Robocash had its first anniversary on February 21st. I knew that I was one of the first five investors, but I could not remember if I really invested on the launch day. A glimpse on my account statement revealed that I funded my account on the first day, but my first investment was one day later. I guess this delay was caused due to my greed as I waited for the 17 percenters, which were announced but never showed up. So I decided one day later to go with the 14 percenters, which is a great interest rate for lenders.

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A lot has happened during the first year

Checking my account value showed me 1’144.40 Eurorobocash robot (although 1’360 were invested and 84.4 accrued interest). As I did not change a thing after my deposit of EUR 1’000, the yield calculation is really easy this time 1’144.40 / 1000 = 14.44%, so I do not need to calculate XIRR today ;). I find this yield very interesting, as if I assume that 14% is the monthly yield and I take compounding interest in to account, I could possibly go as high as 14.93% (theoretically). No lamenting, 14.44 percent is great (although I cannot factor the risk), even more as I had no business to do the whole year at all. I just asked myself where the difference comes from. It is explainable with a cash drag which occured somewhere down the road. I just let the money there and just checked irregularly if it was reinvest. There was a period of about 2 weeks were nothing was invested at all plus some weeks where I had some cash leftover on my account. As I see now this cost me 0.49 percent in yield (ok, this is not accurate as robocash loans have durations of less then 30 days – if no buyback event occurs – so my theoretical yield could be slightly higher then 14.93%. But hey, I let this be, as my actual real world yield is sensational with 14.44 percent ;)).

Robocash did improve their settings, but the surface looks not very different, which is nice I think.

The story of 10k Euro max investment

The deposit limit has been set to 10k Euro per investor. Pay in more was refused. Now it looks like this is a yearly limit, so every investor should be able to double his stake after one year of investing. So the max amount is now 20k, if you invested 10k for one year. Your remaining deposit limit is shown if you click add funds in your dashboard. In my case the number is not correct though… But you should be able to double your holding.

If there comes more money from exsting investors, could this lead to loan shortages? Theoretically yes, but practically I doubt it. If we look at the numbers: 1’800 investors invested 3 milions of Euros, equals 1’667 Euro per investor. Further I believe the 3 milion investments content reinvestments made. So my guess is that the average investment amount is lower. So I conclude that existing investors topping up their account will have limited impact on loan supply. But in the end, I do not know it 😉

Conclusion

Robocash yielded greatly without me intervening once. This is passive investing at its best. No surprise I had robocash in my top 10 on a top seed.. Let us hope that the loan supply will be increased so that all investors get their funds invested. Further I hope that the first thousand investors will get some special promo as it was promised to us.

Viventor is back

Ok, Viventor never really disappeared but kept a low profile. I stopped investing beginning last year as my funds were not invested anymore over an extended period. The marketplace never tried to grow at all cost but managed it with a matter of prudence. (You can read here in German what their approach is). I always liked the platform, but what should I do when my money lies on my account for weeks, furthermore as there were alternatives? As it seems today’s situation is different, and Viventor emerged as an alternative to Viainvest of Swaper, where there are reports of cash piling up. For me the situation is not that bad as only 10 to 15 percent of my funds sit on my account. If this is not going to change, I will withdraw funds and send them to Viventor.

What sort of loans are available?

At the moment there are more then one thousand loans with buyback and 12 percent interest. The total volume is easily more then 1 milion. The loans duration is up to 3 years, but are amortised monthly, so that the effective duration of your funds is lower. Further I don’t believe that most of these loans make it to maturity. I guess most will be bought back down the road. Sometimes there are some loans with 14% yield, but don’t expect to get too many of them as they are in high demand ;). If you are investing with Mintos, then some of the loan originators will be familiar to you: Aforti Finance and Mybucks. My guess is that these loan originators want to diversify their sources of capital, to not being dependent to only one marketplace.

Viventor primary market loans
Overview of current 12 percent loans availability

What to consider?

I observed the loan volumina for some weeks now and I think it is stable. Of course this can switch quickly, but in my opinion Viventor follows a sustainable strategy so the current situation will remain. One really good thing is that you don’t need a certificate of taxation for Viventor. There will no interest be withheld. It used to be mandatory to have that tax certificate, but not anymore. Makes life easier. All you need for sign up is an utility bill and an identification document.

Conclusion

As I already have written: I really lkie Viventor’s approach. It is prudential and non hectic. They don’t want to do business with every loan originator and are willing to decline some, even if this means there is less volume on the platform. The platform runs very quickly and looks nice, the ai does what it should. The only reason why Viventor was not in my Top 10 is, that it was nearly impossible to get invested in 2017 until last October. If you would like to sign up, follow me. By the way, if you use my link and invest EUR 500 for 30 days you get 10 Euros cashback.

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An interim conclusion after half a year of housers

After nearly half a year of investing with housers it is time to take a interim counclusion. During my investment period a lot have happened at the marketplace. The first projects in Portugal have been financed, new Cities in Italy came in to the mix and besides all that a hotel was financed. Further the dashboard was revamped and one can find now lots of data and overviews to all investments made. I get detailled income statements, income splits and a lot more. The diversification index (see picture) shows me that I am only medium diversified (66 out of 100 points).Housers Portfolio Shame on me 😉 Objectively I must say that it is really hard to improve as some factors are limited by nature (type of investments/geographically distribution etc). There just aren’t that many types of investment possibilites other then buy to let (BTL), buy to sell (BTS) or development loans to invest in. So I guess my setup is not that bad at all ;). I think the spidernet graph is a little ahead in time and there will be new opportunities on the platform. Even I got a load of data know, I don’t see a total yield figure and this leads me to my next point

Data, everywhere data

The abundance of data is enormous, but mostly estimations. This alone does not matter to me, but it is really annoying to check if the projects yield as they should. It works for example by checking the account statement which is downloadable. I have to admit that my investment horizon with nearly six months is too short as the buy to sell projects are laid out for 12 months, so no property is sold in which I am invested. We can actually see the developments of the properties, there are actual photos. Some of my BTS projects our just out of the renovation period and are being marketed. It will be interesting to see whether the estimaed yield can be reached. Development loans are easy, they just pay a fixed rate (deduction of 1/10 as commission for housers). The rental properties pay their rent punctually, so I asked myself where that money comes from as most of them are just out of renovation and there are no tenants at the moment. The money is taken out of the funding, so the investors basically advanced the rent to them self. The system is called «instant yield», plus the yield is guaranteed for the first year. The support did not explain to me where this position can be viewed in the business plan. I asked them 4 times but until today no detail explanations was received, I just asked to be told where I can find this information in the business plan. It does not really matter at the moment as it gets really interesting when the properties are rented by tenants. Then we will see if the income will rise or will be below estimations, at that point in time we will be able to determine if the estimations are ok or way off.

Increasing interest rates and porperty prices

In view of the occasion, as the stocks exchanges lose terrain as the yields go up. I did check the German housing prices and the yield evolution of 10 year German government bonds (see picture below). I was just wondering about the general coherence of property prices and interest rates.

Hedonische Immobilienpreise Renditen Staatsanleihen
Hedonic German Housing Index versus yield evolvement of government bonds

You can read everywhere that lower interest rates pump property prices. According to my graph (and the utilized instruments) we can see a coherence from starting 2011. While the blue line(Housing prices, left scale) increases, the yields (=interest rate, red line, right scale) decreases. It looks like as if yields fall below 2%, property prices are set to rise. This would make sense, as people want to get more as the 2 percent (above long term inflation goal) out of bonds, but this is just speculation.

What’s my point?

If we believe in a scenario where interest rates rise, property prices will decrease automatically. This would not be that good for my selling projects with housers as the estimated prices would not be achieveable. Further the same situation would apply on rents, so my yields would decrease. We are not there yet, one should just think about the possibility. I don’t believe that interest rates will go up dramatically during the next one to two years. But what do I know 😉

Conclusion

I am generally satisfied with housers. If this status remains will be seen and depends largely if the targeted sale prices can be achieved or not. In some months I will know more and report back when the first properties are (hopefully) sold. New investors (Dutch investors are restricted from the platform, maybe other countries, if so let me know please) get EUR 25 Bonus, if you via this link and invest at least 50 Euro. You will need to invest the bonus to be able to withdraw it. You should therefor top up your account with 75 Euros, then you can invest in 2 projects. If you sell one of your projects on the secondary market, your bonus becomes eligible to withdraw.

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Impact of foreign currency investments on returns (view from an EUR Investor)

This post is not about a specific marketplace, but the impact which investing in foreign currencies can have on our yield. Especially Mintos offers a lot of currencies to their investors to invest in. I have checked the development of some foreign currencies against the Euro during the past 10 years. It is a view of an Euro investor who invested in different currencies.

Why investing in foreign currencies?

There are lots of reasons, but I guess the main goal is to get access to higher yieldings. Higher coupons look more attractive then lowers. Who does not want to invest in 5 percent bonds, if you get only one percent in your home currency (to make it easier, I set coupon = yield to maturity, which is only true, if the bond price is at 100%)? It is not that simple though. The difference of 4% (5 – 1%) is without risk, exchange rate risk, which you onboard. It can be very quick and your 4 percent yield advantage ends up in smoke (usually higher yielding currencies weaken because of higher inflation expectations etc), or you are lucky and your chosen currency increases in value. No one knows beforehand! Further you need to understand that every currency exchange comes at a cost which reduce your return. So you should check the offered exchange rates closely. Mostly the offers from transferwise, currencyfair or revolut are very good and you save a lot of money by using them.

What happened during the last 10 years?

Source Bloomberg / own depiction, monthly data (31.12.07 bis 29.12.17), indexed

Throughout the last 10 years we saw many crisis (financial crisis, euro debt crisis etc). So there was a lot of movement between currencies. Ultimatively I am surprised how many more or less stable currency pair there were, even there were outliers. Above you see an illustration with the performances of seven currencies against the Euro over a timespan of 10 years (31.12.2007 bis 29.12.2017). Below if have added a table with the yearly returns.

You see for example if somebody had changed EUR to Swiss franc, he would have made more then 40 percent. Ok this example is extreme. Against the safe heaven CHF, most currencies had not the slightest chance. The illustrations though shows that there were extreme movements, but over the years it relativise most of the times..

A closer look

Source Bloomberg / own calculations, yearly returns

I start with the table above. An Euro investor would have made profit from investments in CHF, but lost money with GBP and Polnish Zloty investments. This means conversely that GBP Investors made money by investing in Euro, same is true for PLN investors. This statement is only true in this 10 year context, just to be clear. What is really important is that in my calculations I have not included any yields, only price changes. This means that if you had invested in p2p or elsewhere which returned some percent annualy, there would not be a loss in any currency. If we take a holding period of 10 years plus reinvestments (compound interest) into the calculation, the outcome would be even better. You see, there are only 2 outlier years which have a massive impact on the total return.

From the following four currencies only the investment in Georgian Lari returned negative. A special case demonstrates the Danish Krona as the Danish National Bank pegs the DKK to the EUR. There are only minimal yearly deviations.

Source Bloomberg / own calculations, yearly returns

Conclusion

Investments in foreign currencies can be beneficial, but are risky. If you cannot swallow fluctuations should stay in his base currency, there are engough investment possibilities. I will update the performances of the currencies quarterly. If you want me to add further currencies, let me know. Again: I have not included any yield figures in my calculations. This means, if one had invested for 10 years with a yearly return of 2.5 percent only, there would be profit in any currency pair. This is not investment advice, but only as basis for your decisions.

A closer look at Iuvo Group / nice autoinvest

Early last year I quit with Iuvo, as I was not completely happy with the platform. Besides the handling of delayed loans (no interest if loan is bought back), the investment process without an autoinvest and an overall not really good functionality of the marketplace, made me leave the platform. Some months ago I (plus every investor who quit earlier the year) received an offer to rejoin them (they paid 25 Euro cashback), so I decided to give it another try. At the moment I am more happy then ever. The marketplace runs smoothly, the autoinvest does his job and my yield gets better.

Iuvo’s handling of delayed loans

As per today all loans are secured by a buyback guarantee after 60 days, but only the capital is protected, not the accrued interest (these you only get if the borrower pays before the buyback happens, plus late fees on top). So this is different to most other buyback marketplaces which redeem capital plus interest. You need to know (and be ok with) that if you invest with Iuvo. On the other side this system has its benefits: you can buy delayed loans and speculate that the borrower pays. If he does, you get all interest plus latefees, not only for your holding period. I tried that for some time, but the result was not that good ;). Maybe you can find a pattern and take advantage of the cirumstances.

The autoinvest makes a lot of settings possible

You can invest either manually (as I did for testing purposes) or configure an autoinvest portfolio. There are a lot of settings possible, so you can invest in loans you like. To do that you need an idea what works best (or you just figure it out). My tests have revealed that the best performing loans come with short payment intervals (7 to 15 days), more then 12% interest rate which have paid at least one installement. To be clear: These settings performed well during my tests, but this does not necessarely mean something. To make such a statement I had too few loans for a too short duration. This means the result could be just a lucky punch, I will update my results in the coming months. Then we know more.

My ai configuration is like this:

I like that the ai shows me if there are loans available matching my criteria. At this point we could easily spot any misconfiguration. My return varies between 10 and 11 percent at the moment, but I am optimistic to get over 12% in the coming weeks. I saw investors which achieved that, so it is possible. Hint: the return figure in your dashboard just shows you the average interest rate of all your loans in the portfolio, so it is unsignificant.

Conclusion & Cashback Bonus

All in all I am more confident concerning Iuvo as I used to be. Should my strategy work out, we have found an alternative to all the Latvian buyback platforms, as Iuvo resides in Estonia (used to be in Bulgaria). If you cannot deal with the fact that only capital is protected, but not the interest then I suggest you to better stay away from this platform. In my opinion this circumstance makes the platform more secure, as they only have to cover the capital, but not the interest in a case of a delay. Of course this can reduce the yield.

A final note: New investors can join Iuvo and benefit from a cashback promotion: 30 Euro Cashback (equals 3%) with EUR 1’000 invested, or 90 Euro cashback if investment is at least 2’500 Euro (equals 3.6% Cashback). After you invested the first thousand, you have 60 days to increase your ivnestment by 1.5k to 2.5k Euro total, to get additinal 60 Euros (or you just keep your 30 Euros already received). If you want to take advantage of this offer, drop me a message via contact form. I have to preregister you myself at Iuvo in the background with your email, after that you can register your account. As soon as I preregistered you, I will notify you quickly by email. To be clear: I get the same bonus by referring you, so you support my blog if you join through me. This is absolutely free for you.