An update of my Iuvo strategy

Some 3.5 months ago I wrote about my new strategy with Iuvo. I think now is the time to make a first check and see if it was worth. I am aware that it is still early to evaluate, but the figures for now look promising. My yield used to be between 10 and 11 percent with prior to my change of strategy. Now I slowly approach a XIRR of 12 percent and hopefully more.

Loanbook

Really nice at Iuvo is that the primary and secondary market data is exportable and if you like analyze it in Excel for example. It is always good to have data to make some conclusions, but for me this data is too less detailed, especially in comparison to Bondora or Finbee.
Anyway, I was able to draw a picture for me out of the data. As you know, investors do not get any interest if the borrower does not pay. The loan originator “only” covers the capital, not the interest when a buyback occurs. We could argue if this is fair or not. In the end the investors decides if he wants to invest under this conditions or not. Even if this system looks inferior to other buyback schemes, it has its benefits. The loan originator is more stable in case of big defaults which need to be covered. Anyway, we have to accept the circumstances at Iuvo.

A figure of interest for me is in this case how many loans go into buyback without paying a single installement. In my portfolio I get 14.2 percent of these loans. As I only invest in loans with 14.9 interest rates in Euro and with weekly or bi-weekly installements. Taking this into account I compute a yield of 12.81% ((0.149 x (1-0.142)). This is just a snapshot. If I compare this to the loans on the primary market, with the same parameters, I get a yield of 11.95%. The defaults amount to 19.8% there. Now the question comes up, why is my non payer rate lower? There is only one reason: I am just pretty good 😉 Of course this is just nonsense, as I let the autoinvest do the work, so it is more hazardous. Or it is because of the snapshot. If many loans are bought back a day earlier to the snapshot, my current loan number is actually increased. Of course it could have also a statistical reason: I have less loans then the primary market, so I may be an outlier. I conclude out of my data (which I will monitor now monthly), that a yield of 11 to 13% is achievable with my settings. On top of the mentionned yields there are sometimes late fees, which improve the yield a bit.

Conclusion

The achievable yield with Iuvo lays in the middle of p2p marketplaces with buyback. I needed a long time to get acustomed to the fact that there are no interest payments out of the buyback. The longer I think now about this, the weirder it becomes to actually get interest out of buyback. What do you think about that? I am aware that other platforms handle this differently, which is not bad at all. We just have to deal with the cirumstances. In the end it is of course possible to achieve yields below 10 percent, if you are out of luck. Let’s hope this does not happen to us 😉 Just one side note for closure: the shown yield in your account is just the average yield of all your holdings in your portfolio. It has nothing to do with your actual yield.

Saving the best till last: Cashback offer up to 90 Euro

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.

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.