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What are the Portfolio Manager features?

Portfolio Manager has various features to help you customize your investment to your preferred risk strategy and liquidity requirements.

  • Investment size calculation tailored to meet your targets
  • Advanced settings lets you override each individual variable in our investment size formula
  • Option to split your investment into multiple smaller bids to make it more liquid
  • More control through granular risk-return strategy options
  • Expected portfolio distribution charts include existing loans to improve estimates
  • More inventory as Portfolio Manager also buys from the Secondary Market

Investment size calculation

The suggested investment size takes into calculation data specific to your portfolio and strategy to arrive at the suggested investment size. The algorithm includes six variables:

1.  Point of diversification (X – by default 200)

2.  The desired capital deployment period (Y – by default 2 weeks)

3.  The number of loans expected to be available for investment over this period (Z)

4.  Your total deposits (T)

5.  Your available cash balance (C)

6.  Your expected cash inflow over the defined deployment period (CF)

The suggested investment size is calculated by dividing your cash balance and expected cash inflow over the defined deployment period with the number of loans expected to be available during this period.

Plainly put; the suggested investment size equals (C + CF) / Z.

The minimum investment is €5. The maximum investment is calculated by dividing your total deposits with the point of diversification (T / X). Point of diversification is the number of loans that you should include in your portfolio to have a reasonably diversified portfolio.

Advanced settings lets you override each individual variable in our investment size formula

Investors who feel the default settings do not suit them can change most of the individual variables in the formula above. You can override the point of diversification and capital deployment period. You can also set your own minimum and maximum amounts instead of using our formula. Additionally, you can define the free cash balance you would like to keep on your account for withdrawals.

Option to split your investment into multiple smaller bids to make it more liquid

Everyone’s investment is different and every investor on Bondora has their own unique amounts of capital. So naturally, some investors are making considerably larger investments into single loans compared to others. For such investors, you have the option to split your investments into smaller bids in order to be better able to liquidate parts of your larger portfolios. For example: If your investment per loan is €100 and you have defined the bid size to be €15, then the system will make 7 bids into a loan: 6 bids of €15 and 1 bid of €10.

More control through granular risk-return strategy options

Investors who want to increase or decrease the available investment pool can do so by choosing from 9 strategies. Simply slide the risk-return slider to suit your strategy: ranging from Ultra Conservative to Opportunistic.

Please note: these strategies remain within the context of Bondora and therefore an Ultra Conservative strategy cannot be compared with an ultra-conservative stock or bond strategy (e.g. blue chips or German bonds). Bondora should be viewed as a higher yield part of your portfolio and total portfolio allocation towards Bondora should be set based on this assumption.

Expected portfolio distribution charts include existing loans to improve estimates

The expected portfolio distribution charts calculation includes both your existing and new loans. To arrive at the estimates, the loans that are expected to be added to your portfolio over the desired allocation period are added to the existing portfolio. The estimates for new loans are calculated based on your chosen risk-return strategy and recent market statistics.

More inventory as Portfolio Manager also buys from the Secondary Market

Secondary Market trading varies from month to month, but even when it’s performing well, it’s nowhere near competing with the Primary Market inventory volumes. This is due to the lack of advanced investors transacting on the Secondary Market. We are addressing the liquidity constraint by adding the Secondary Market inventory to the pool available for the Portfolio Manager. This will both increase the liquidity for existing investors as well as allow new investors to buy into seasoned and lower risk assets.

The Portfolio Manager will buy only loans that are not overdue (principal or interest) at a price equal to the principal balance or below. No trades will be made above par or on overdue loans until it’s possible to completely harmonize the Primary and Secondary Market pricing.

If you are only interested in new originations then you can turn off this option through the Portfolio Manager Advanced Settings.

Click on Settings to learn more about the Portfolio Manager Advanced Settings.