Wednesday, 30 January 2019

Peer to Peer Lending Performance – My First Five Months of Investing



I’ve been investing in Peer to Peer lending through TruePillars for just over five months now and I thought it would be appropriate to give an update on how I’ve gone towards my initial goal.  To recap, my initial goal was to have no loan greater than five percent of my portfolio value and diversify the loans through a number of different industries.  Overall I’m happy with the progress I’ve made and the returns I’ve achieved.


Portfolio Loan Diversification

While it has taken its time I’ve slowly grown my loan Portfolio to have investments in 56 different loans and still actively working to increase this number by reinvesting the capital and interest received into new loans.  I’ve also now achieved my target diversification with the largest loan attributing to 4.7% of my total portfolio. 



Portfolio Loan Industry Diversification

To calculate the industry diversification I have achieved, I have utilised the industry details provided by TruePillars on the summary tab of each of the loans I own.  I’ve then used a 100% pie chart of the current outstanding values of all the loans associated with the different industries.  This can be found in graph below.  



It should be noted that Other Services covers a very board range of businesses… For example, the complete list of businesses associated with other services ranges from a pet boarding house to hair dressers to nail salons to windscreen replacement to automotive smash repairs to management consulting business to indoor trampoline park… The list goes on and as can be seen a very diverse range of industries… 

Portfolio Returns

As I mentioned in my blog on performance management (insert link), I’ve been tracking the performance of my portfolio in two ways.  The first is the returns as provided on the Truepillars website (return on invested funds), the second is calculated based on total funds sitting in my Truepillars account (money invested + money available to invest).  This way I could see the overall return of the capital I have tied up in the TruePillars account.  My performance is as per the graph below.



It should be noted however the overall performance calculation will be skewed lower as it included the additional capital I’ve added during the months of August, September, October and December of which purchased loans may not have been due to pay out until the following month.  

To put all of this in perspective I’ve received the equivalent of 3.2% of the current total portfolio as interest income.  In the new few months I will have received enough interest to cover the largest loan potion I own.  

In summary I’m happy with my TruePillars performance and am keen to see how it progresses and grows over time.  I’ll give an update at the one year mark to show the progress made and how it has changed in that time.  In my next blog I will talk about the learnings I’ve acquired along the way of applying my current TruePillars investment strategy.  

2 comments:

  1. Fascinating. Thankyou for bringing this to my attention and sharing your progress.

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    Replies
    1. No problems, Hope you've found it useful and keen to here your experiences if you dip your toe in.

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