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  • Fiscal Frontiers

P2P Review: 2019 YTD

March 2019 Update

(Disclaimer at end of post)


INTRODUCTION


If you’re interested in how we did in 2018, you can check out our January post on that topic.


We started 2019 with funds in two different platforms: Mintos Marketplace and Lending Loop. We have done our best to curate as much useful information from these two services as possible, but let us know in the comments, in a message through this site, or on twitter @fiscalfrontiers if you have any questions about other things you’d like to know, or of things that you think we should be keeping track of.

THE BIG PICTURE


The first quarter of 2019 is over! That means we’re already 100 days into the new year, which, I guess means we can’t call it a new year anymore - It’s just the year we’re in. On the bright side, our Mintos account crossed €1,000 in March, which was not very meaningful in the broader sense of things, but it’s always good to see another comma in our investment accounts.


More interestingly, while both our Mintos and our Lending Loop accounts have continued their upward trends, with revenue outpacing fees and missed payments, through the first three months of the year, both of the accounts saw decreasing income and decreasing expected annual returns each successive month. It’ll be interesting to see when they start to “bottom out”, as far as income and ROI are concerned. You’ll see the decline under each of the headings below, but first, just a snapshot of where we stood on March 31, 2019:

Read on below for a month-by-month breakdown of how these accounts are earning their income and how we track it.

MINTOS MARKETPLACE


If you are interested in investing in Mintos, then you can click this link to receive 1% cashback on your average daily invested balance over your first three months.


One of the great things about Mintos is the guaranteed buyback of defaulting loans. What this means is that your account should always be on an upward trend, even if there is some variance in the ascent from month-to-month. The history of our account looks like this so far:


Our Mintos account progress through 2019

The last row of the table (2019 ROI) is a calculation of what our return on investment would be for 2019 if the income we’d earned up to the end of the particular month was sustained for the rest of the year. It is a little concerning that our profit and 2019 projected ROI keep falling every month, especially since our returns should be compounding. Hopefully the compounding kicks in in the long term.


As of March 31, 2019, we had €953.62 of outstanding notes on Mintos, broken down by loan grade like this:

The table on the left shows the actual dollars of each kind of loan grade, while the one on the right is a percentage breakdown. The more dark blue on the above tables, the better. If you look at last month’s version of the same chart, you’ll see the dark blues have begun to fade, giving way to the paler blues. This month-to-month change is captured by the next chart.


The next chart shows our whole portfolio on a day-by-day basis, as it becomes more or less delinquent. Looking at it, the two shades of blue represent the loans which are in good standing or in their grace period. Alternatively, the warmer colours (yellow, orange, and red) represent loans that are progressively later. The more blue on the chart, the better!

The portion of our account that was in the good blue zone stayed relatively constant, but the portion of that good blue that was actually in its grace period ballooned mid-March and at the end of March. It looks like we may have a warm (coloured) April to report on next month if that big bubble of grace period loans starts rising up the chart to the yellow and orange categories.


More delinquent loans mean less interest income. Buckle up! This educational ride through the fiscal frontier looks like it’s going to get interesting for Mintos after a relatively calm February and March.


LENDING LOOP


If you are interested in investing in Lending Loop, then you can click on this link to earn an additional $25 once you lend your first $1,500 on the platform.


Unlike our Mintos account, our Lending Loop account can be a little harder to track the performance of. While Lending Loop will show you the value of your outstanding principal and cash balance at any given time, this is not necessarily the best reflection of your portfolio, since it does not account for the fact that some of that principal is going un-repaid and may be lost forever. Because of this, we at Fiscal Frontiers like to dig through the data to come up with a better reflection of our account’s performance.


The below table shows how much interest we’ve earned in a particular period, but we subtract from that amount any fees paid to Lending Loop or missed principal payments. To be fair, if a principal payment that was missed in a prior period gets paid in a later period, we add that in as income in that later month under “recouped principal”.


For example, if you look at the below table, we made $22.72 of income in 2018, but we missed $2.35 of principal repayments. At the end of the year, there was no telling if those payments would be received, so it made sense to subtract them from our income. Now, having sifted through the data, that $2.35 has actually been repaid in 2019.

Once we get our calculation of profit for a given time period, it is easy to take that and calculate our real or projected return on investment:

The 2019 ROI row simply shows what our annual ROI would be if we earned income at that rate based on all the information we had available up to that point (without any compounding). For example, if we continued to earn $13.38 every month, for all of 2019, like we did in January, then our annual ROI would be 15.77%.


As of March 28, 2019, we had $1,017.70 of outstanding notes on Lending Loop broken down by loan grade like this:

The table on the left shows the actual dollars of each kind of loan grade, while the one on the right is the percentage breakdown. The more blue on the above tables, the better. If you look at last month’s version of the same chart, you’ll see the warm colours have started to expand.

Our account is on an upward trend, though. To the left is a simple chart that shows the upward climb of our account. Note that the chart does not account for the fact that some of our loans may default and the remaining principal may be lost. That said, over the long term, those will show up eventually, so we are not overly concerned when looking at a long-term trend like this.


CONCLUSION


The first quarter of 2019 saw three months of growth, but slowing growth. Whether that will continue or if the trend will reverse itself in the short or long term remains to be seen. But, those are worries for next month. As for the rest of this month, stay tuned next week for our update on how our two robo-investors have been doing!


We at Fiscal Frontiers are not investment advisers and our only goal is to report to you on the performance of investments we have made so that you can consider our experience along with all the other information available to make an informed decision on what is best for you. Peer-to-peer loans are inherently risky and all of a particular loan could be lost.


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