What are the Portfolio Manager settings?
If you joined Bondora after 24 August 2022, you wouldn't have access to Portfolio Manager or Portfolio Pro. Instead, get the most out of automated investing and earn up to 4%* returns p.a. with Go & Grow Unlimited.
Portfolio Manager has various settings that make it easier for you to get the most out of your investments.
Maximum bid size
Maximum investment per loan
Buying loans on the Secondary Market
The spare cash balance
Selling loans on the Secondary Market
In addition to the risk strategy, you can also determine the maximum bid size and the maximum investment per loan. If you want to keep it simple, you can have them calculated automatically by clicking "Calculate automatically". Depending on the available capital, the "Suggested investment size" indicator shows the amount Portfolio Manager recommends per investment. You can increase or decrease this amount. If you choose a higher amount, keep in mind that your portfolio could be less diversified and the risk increases due to a smaller spread of your capital.
The bid size lets you set the maximum size of a position in your portfolio. The smallest bid amount in Portfolio Manager is €5. Even so, when the demand for a loan is high Portfolio Manager will put in a bid that’s lower than €5 (e.g., €1). This happens when a distribution of €5 per investor cannot be achieved because more investors are bidding on the same loan.
Portfolio Manager will automatically implement bids from €1. This is to make life easier for you, so you don’t have to compete with other investors through limited access to specific loans. No additional intervention is needed from you.
If you set the "Max investment per loan" higher than the "Bid size", it may happen that the Portfolio Manager bids on the same loan multiple times. Your investment in one loan is then divided into several parts. In other words, auctions receive more than one offer from you. This can be beneficial. For example, it is possible to sell single parts on the Secondary Market later, rather than the whole loan. On the other hand, you could argue this gives you less diversification overall.
In the settings option, you can choose whether Portfolio Manager will buy loans from other investors on the Secondary Market in addition to newly issued ones. If you activate this, only current loans will be purchased at the time of the transaction (in other words, it won’t buy overdue or defaulted loans). Portfolio Manager never acquires loans at a premium – only those at par or a discounted value.
The amount you set as spare cash will not be invested. It will always remain on your Bondora account for you to use as you wish. You can use this reserve as collateral to withdraw to your bank account at any time, or you can use it to buy loans yourself on the Secondary Market. If your Bondora account contains less cash than your chosen spare cash balance, Portfolio Manager will not reinvest in any more loans until the desired reserve is exceeded. As a result, any amount in your Bondora account that exceeds the set reserve will be reinvested.
Portfolio Manager not only buys new loans for you, but it can also take care of selling them again automatically when you need cash or when you want to stop investing with Bondora. Just scroll down to the bottom of the Portfolio Manager page and expand the "Sell loans" section. Here, you can enter the amount of cash you want to liquidate in your portfolio.
The duration of the selling process depends on the market demand and the status of your loans.
Remember: You will miss out on profits by selling loans, as with this approach, you can only expect the loan's current principal amount and no future interest. You should also be aware that current loans are sold much faster than defaulted loans (due to investor demand).
It’s likely that a higher number of overdue loans will remain in your portfolio, which cannot be sold as fast and therefore may potentially generate losses until recoveries generate a cash flow back into your portfolio.
If you decide to liquidate your investments on Bondora, the most profitable way to do this (other than waiting until the loans reach maturity) is to stop any reinvestment and withdraw interest and principal repayments on a regular basis to your bank account.