Sunday, 26 April 2020

Pete2Peer Portfolio Performance Update


While I have had a break from writing due to some other commitments, with the current climate and uncertainty due to COVID-19, I’m sure all are interested in how the P2P portfolio is performing. The investments to date have been ticking along nicely and while it is early days for COVID-19, three of the four platforms I invest in have shown little signs of reduced performance to date. This is something I will be watching closely over the next few months. We will break down the individual platform performance and an overview of the whole portfolio.

TruePillars

In the last few months I’ve adjusted my focus on loan diversity and have been working to lower my individual exposure to a single loan: I’ve made great headway in this regard with currently over 165 different loans and a current max exposure of 1.7%. New loans I purchase into now only account for approximately 0.7% of my TruePillars portfolio.
I’ve sliced data two ways to show the makeup of loan grades and the distribution of the industries I invest in. TruePillars rates loans on a grade of one through five, with five considered the lowest risk. Below is the distribution of loan grades in my portfolio.



With 165 loans it allows for diversification across multiple industries. Breaking these out based on the standard industries against each loan, the following pie chart shows my investment portfolio distribution.


Overall my TruePillars account is progressing well with some steady returns of just over 12%. However, this platform specialising in small business loans has seen an increase in loans that have agreed deferrals of payments to help businesses affected by legislated COVID closures (e.g. gyms, cafes, etc). While last month’s income was down a little, I fully expect this month’s income to be down close to 40%. I will be posting separate blogs shortly to discuss the impacts I’ve seen on each platform starting with TruePillars.

MoneySpot

This platform has been a consistent earner for us with no active involvement required from myself achieving annualised returns of around 12.8%. March 2020 was no different pulling in 13.22%. The one figure I will be keeping a close eye on is the default rate which currently sites at 5.77% for March. This was 5.33% in January.

RateSetter

I have continued to add to this platform in fits and burst which has consequently resulted in the returns currently a little depressed on some months.  RateSetter is tracking close to where I expect it to be just below the 8% mark.  All my investment to date has been in the 5-year lending market for maximum return. Over the next few months, I expect to continue to add some funds to increase the overall portfolio weight of this platform and at this stage has not shown any adverse effects from the last few months.

OurMoneyMarket

This platform I’ve made the call to not actively use and will see out the current investments only.  As such I’m only on every month to track its progress and withdraw my available funds.  The platform has achieved an average annualised return of 10%.  Last month saw an annualised rate of 11.06%. 

Overall Performance

To keep track of the individual performance of each platform, I track them on a single graph below and then aggregate the results to give my overall portfolio returns.


We can see that the overall returns of the portfolio are tracking between 10 and 12%, averaging 11.2% return for the previous 12 months. Part of the driver for the return is the split in allocation weighting to each platform. The following graph below shows I still have about 70% of my funds in two platforms. While this is changing, I’ve not actively added as much over the last few months to even up the distribution.  You’ll also note I will be tapering off the fourth platform out of the mix.


I feel the full impact of COVID-19 on the loan space is yet to fully materialise so am keenly watching the space to see how my investments continue to perform. As with all investments there is risk which is why we diversify into multiple loans and platforms. 

Hope all are faring well and staying safe in these crazy times. 

TruePillars current performance in COVID-19

It is apparent that COVID-19 will have impacts that extend beyond health implications of the virus.  Economies are locked down around the wo...