Product logo

How can we help?

Ask anything. Find answers instantly.

Go & GrowGo & Grow overviewFeaturesAdd moneyGo & Grow payment limits Withdraw moneyFees & taxesRisksMy accountGetting started with BondoraAccount identificationChanging my detailsReferral programSecurityAdd moneyHow do I add money to my Bondora account?Which currencies does Bondora accept?Why is my money reserved on my account? How long does it take for my payment to arrive?I forgot to add my reference numberWise payments are no longer supportedCredit card and Klarna payments are no longer acceptedSecurityWithdrawHow to withdrawWithdrawal informationErrorsMy portfolioWhat is the Secondary Market?Building a portfolioMonitor performancePaying taxesAffiliate partnersHow can I become an affiliate partner?Portfolio ManagerPortfolio Manager overviewPortfolio Manager featuresPortfolio Manager settingsPortfolio ProPortfolio Pro overviewPortfolio Pro criteriaPortfolio Pro featuresAbout BondoraGeneral informationOperational managementCorporate governanceRisk factorsCredit and investment risksOperational risksRegulatory, governance and legal risksRisk management processLoan originationUnderwriting processMarketingCollection & recoveryDebt collection and recovery overviewWrite-off overviewFinancial market overviewWhat’s important to know about the Estonian economy?What’s important to know about the Finnish economy?What’s important to know about the Spanish economy?What is the state of the consumer lending market in Estonia?What is the state of the consumer lending market in Finland?What is the state of the consumer credit market in Spain?How does the consumer lending market in Europe affect Bondora?How can I contact customer support?

How can I use the Portfolio Manager - Technical Summary?

For any investors who are familiar with Excel or SQL, below you will find a technical summary of how we calculate the expected rate of return used in our Portfolio Manager. 

(Note: Underlined text are functions (Excel and/or SQL)

Inputs

  • The number of times that interest is compounded per year (NumberOfCompounds in the following)

Inputs specific for Existing portfolio:

  • Existing investment (portfolio value on Dashboard)
  • Expected return (ER) of current portfolio (weighted by portfolio value). Lower confidence interval is used for the pessimistic scenario and upper confidence interval value for the optimistic scenario.
  • Weighted average outstanding period of the current portfolio

Inputs specific for New portfolio:

  • Investment amount (free cash on the account OR promised cash in the flow
  • ER of new portfolio (Unweighted ER of simulated purchases from loans put on the market in the last 90 days loans for each risk strategy). Lower confidence interval is used for the pessimistic scenario and upper confidence interval value for the optimistic scenario.
  • Deposit per month (average monthly deposit, based on last 12 months’ data)
  • Investment Period (in years, client input)

 Interim calculations

  • Cash from existing investments

CashFromExistingInvestments = PMT(ER/12; WeightedAverageOutstandingPeriod; -ExistingInvestment) * WeightedAverageOutstandingPeriod

Note: this assumes that the investment period is greater or equal to the weighted average outstanding period. As it might not always be the case, the following is used instead in the future value calculations:

  • Cash from existing investments until the end of investment period

CashFromExistingInvestmentsTilEndOfInvestmentPeriod = min(PMT(ER/12; NumberOfCompounds * InvestmentPeriod; -ExistingInvestment) * NumberOfCompounds * InvestmentPeriod; CashFromExistingInvestments)

  •  Monthly cash from existing investment

MonthlyCashFromExistingInvestment = CashFromExistingInvestments / WeightedAverageOutstandingPeriod

  • Monthly cash from existing investment until then end of investment period

MonthlyCashFromExistingInvestmentsTilEndOfInvestmentPeriod = MonthlyCashFromExistingInvestment

  •  Expected monthly return (EMR). This is calculated separately for existing and new portfolio and for both pessimistic and optimistic scenario

EMR = (1+ER)^(1/12)-1

Future value calculations (Note that these are calculated separately for pessimistic and optimistic scenario)

  • Future value of principal

FutureValueOfPrincipal = InvestmentAmount * (1+EMR) ^ (NumberOfCompounds * InvestmentPeriod)

  • Future value of monthly contributions from existing portfolio

This is divided into two parts: during outstanding period and after outstanding period.

FutureValueOfMonthlyContributionsFromExistingPortfolio_OutstandingPeriod = MonthlyCashFromExistingInvestmentTilEndOfInvestmentPeriod *((1+EMR) ^ (Period)-1 / EMR)

Where Period = min(WeightedAverageOutstandingPeriod; NumberOfCompounds * InvestmentPeriod)

and

FutureValueOfMonthlyContributionsFromExistingPortfolio_AfterOutstandingPeriod =

FutureValueOfMonthlyContributionsFromExistingPortfolio_OutstandingPeriod *(1+EMR) ^ (max((InvestmentPeriod – WeightedAverageOutstandingPeriodYears) * NumberOfCompounds); 0)

  • Future value of monthly deposits

FutureValueOfMonthlyDeposits = DepositPerMonth*(((1+EMR) ^ (NumberOfCompounds * InvestmentPeriod) -1)/EMR)

  • Total future value

TotalFutureValue = FutureValueOfPrincipal + FutureValueOfMonthlyContributionsFromExistingPortfolio_OutstandingPeriod + FutureValueOfMonthlyContributionsFromExistingPortfolio_AfterOutstandingPeriod + FutureValueOfMonthlyDeposits

Profit calculation

  • Net profit

NetProfit = TotalFutureValue - InvestmentAmount – MonthlyDeposits*InvestmentPeriod*12 – ExistingInvestment*PeriodCoefficient

where

PeriodCoefficient = min((InvestmentPeriod*12)/ WeightedAverageOutstandingPeriod; 1)


Product logo

* Capital at risk. Investments made with Bondora are not guaranteed, nor is the preservation of value invested guaranteed. Please note that the yield achieved in past periods does not guarantee the rate of return in future periods. The yield of Go & Grow is up to 6.75% p.a. Before deciding to invest, please review our risk statement and consult with a financial advisor if necessary.