Matti Vansen’s portfolio report – October 2021

Previously, I have been writing my portfolio reports in Finnish, but due to growing interest and the many questions I’ve received from readers, I will be writing in English this time. There will of course be a Finnish language version with the same content.

Following the last update, I have invested in several investment products. In the stock market portfolio, I bought World minimum volatility ETF (iShares) and Electric Vehicles and Driving technology ETF (iShares), as well as MSCI World Health Care ETF (Xtrackers). These investments were made mostly because I don’t want overlapping assets in my stock portfolio, and I want to diversify geographically. 

I have identified several sectors that I believe show potential for growth, including electric vehicles, battery technologies, and world health care. I furthermore participated in one IPO (Modus Therapeutics) in my other portfolio. Currently, my stock portfolio seems to be beating the market index (Helsinki OMX) for this year, significantly, and the Sharpe ratio is well over 1. As the stock market is nearing an all-time high, I have only invested in specific sectors where I see growth potential for the future. I have not bought direct company stocks for a while, except the IPO and a couple of other MedTech companies, in small batches. Therefore, a big part of my portfolio remains allocated to cash, EstateGuru, and capital investments. 

I have contemplated buying investment apartments or real estate, but after I sold everything a couple of years ago, I have focused on other investments. I am too lazy (or busy?) to monitor and maintain investment apartments and tenants. I don’t want to be renovating apartments in my limited spare time, nor running after tenants in order to collect payments. And the yields in investment apartments in Helsinki capital regions are at the 3-5% level, so already, without leverage, I get more from EstateGuru products.

After the previous blog post (sorry, still only in Finnish), I have invested an additional €10 000 into my EstateGuru portfolio. There are a couple of reasons why I have invested significantly more in EstateGuru than in stocks or anything else:

– I believe in the growth of the real estate sector as the general interest level remains low, and governments are afraid to raise the interest rate.

– I can see into the “engine room” as a country manager, and I trust in the product.

– I can secure international and geographical diversification.

– I can get ongoing diversification (money flows in at different intervals; the most important part of creating a passive income portfolio!).

– The interest rates are very attractive compared to stocks, historically, and the product is historically safe, which provides a great trade-off.

Okay, let’s look at my EG portfolio again:

As mentioned, I deposited another €10 000  at the end of September. Sometimes people ask me where I get the money. Sadly, the answer is not monthly saving, but risk investing. I made three small exits in the spring of 2021, from three different MedTech companies where I had options and/or shares. I never encourage people to make such risky investments, but I have to say that sometimes they do pay off. Apparently. Thus far, I have deposited a total of €48 001 into EstateGuru.

Here’s the statement summary from my account to visualize how the funds have moved.

Currently, I have 227 active loans, of which 30 loans (13,2 %) are late or defaulted. I am not worried about late or defaulted loans, as I know how EstateGuru deals with them. The communication with the borrower is prompt, but getting defaulted loans does take time. I have been in the business for seven years, and I can assure you that EstateGuru’s recovery speed and efficacy are in their own league compared to what I have seen as a lawyer and consultant in the crowdfunding industry.

The monthly income in my EstateGuru portfolio has been between €100-200, but after  I invested €25 000 in the summer (July) and €10 000  in September, I am expecting higher future income (there’s a tab where you can check the future income separately).

The annual return (XIRR) has been 11,68 % thus far, and I have earned €2 600 in interest. I have also earned some referral bonuses for referring my friends to the platform. I have also fully invested this money.  

I can’t help mentioning my investment strategy at EstateGuru: I invest in anything. I don’t do manual investments, except occasionally. I do not have any restrictions on the AI policies, and therefore I get to invest in most of the loans whenever I have money available. This being said, I only use Auto Invest (AI). 

There are several reasons why I use AI:

1. I can see into the engine room, and I completely trust our loan risk policy.

2. Without AI investments, I would miss out on most of the investments, as many of the loans are fully invested with AI money, and the cases never see daylight as they’re already full when they get to the platform.

3. If I were to check all the cases, it would constitute another day job. There are guys who do that as a day job (risk analysts and loan managers at EG), and as I trust in them, I don’t need to double-check.

4. AI keeps my money moving and there is no cash drag, which results in a higher yearly yield.