The team at Mintos has shared their latest Insight report, which is their monthly publication that summarizes what’s been happening on their platform, including wider market updates, educational topics, and other pertinent information.
During the last 6 months, the dynamics of the investment market “have changed dramatically compared to 2021,” according to the update from Mintos.
Stocks, bonds, REITs, and cryptocurrencies have been “under immense pressure this year as high levels of inflation (among other factors) have affected global markets.”
On Mintos, the average interest rate “has risen consistently, but a significant part of the year has been characterized by the on-flow effects of the war in Ukraine, affecting the YTD net return.”
In terms of Mintos activity in June, investors “earned around €2.4 million in interest at an average rate of 11.6%.”
As noted in a blog post, it’s no secret that “the terrain of the investment landscape has changed drastically in the first half of 2022.” Inflation, rising interest rates, tighter monetary policies, and increasing geopolitical risks “have resulted in an investment environment that’s quite different from this time last year.”
As mentioned in the update, some assets, however, “have held up better than others in these changing conditions.”
The average YTD net return on Mintos (which has over 42% of the market share in Europe15) is 3.3%16 “before we consider the effects of investments in Russian loans (see below for further explanation).”
At the beginning of the year, the supply of loans on Mintos “was on the low side resulting in an average interest rate of around 9% (in EUR).” However, the loan supply “has been steadily growing, with the average interest rate rising to around 14% (in EUR) at the end of June.”
A significant part of the year “has been characterized by the flow-on effects of the war in Ukraine, affecting the ability of Russian lending companies to transfer money to Mintos because of sanctions and restrictions.”
For the remainder of 2022, Mintos has “a positive outlook considering the attractive 14% average interest rate (in EUR) achieved at the end of June.” So all else being equal, Mintos expects “the average net return to grow healthily over the rest of this year.”
Although 2022 has posed some challenges for investors, as history tells us, global investment markets (and returns) “do eventually return to a healthier state.”
If this year has highlighted anything, it’s “the fact that having a long-term view when it comes to investing can be highly beneficial.”
It can help investors “focus less on short-term losses and more on portfolio performance in the long run.”
For more details on this update, check here.