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Return & risk

Historic returns

We have compared the performance of an average investment in Swedish consumer loans through Brocc’s platform (after fees and credit losses) with a handful of other commonly occurring interest alternatives in the Swedish market.

Regardless of whether you compare Swedish government bonds or other alternatives with higher returns (and risk) such as high yield bonds or hedge funds, it is clear that an investment in Swedish consumer loans with us has resulted in both higher and more stable returns. The most obvious evidence for Brocc’s superior risk adjusted return is our Sharpe ratio, which exceeds 4.

Given this, it is not strange that increasing numbers of investors are becoming aware of something that the Swedish banks have known for a long time – that an investment in Swedish creditworthy private individuals generates a high and stable return at a low level of risk.

Trend in SEK 10,000 from date of investment

 

Swedish consumer loans – the most secure in Europe

Sweden’s unique methods for ensuring the payment capacity of borrowers means that Swedish consumer loans are the most secure in Europe. This combined with the in-depth credit assessment we conduct help make your investment low risk.

Percentage of non-performing loans per EU country

Data from European Banking Authority, 30/09/2017

What happens during a recession?

Generous margins (interest less credit losses) generated positive returns even during the most recent recession in 2008.
Comparison: During the same period, the OMX 30, Sweden’s major stock index, declined by 51

Average lending rate 11.1%. Weighted average value for credit losses for Nordax bank, Collector, Resurs Bank, TF Bank, Svea Ekonomi, SevenDay, Avida Finance, JSM Financial Group, Marginalen Bank, Forex Bank, Ikano Bank, Komplett bank.no, and Bank Norwegian. Information taken from each bank’s annual report.

Risk distribution of your investment

We always distribute your investment between several different loans. Even when depositing SEK 10,000, your money is equally divided between at least 40 separate loans and for a deposit of SEK 1,000,000 the investment is divided between at least 100 separate loans. As a result, there are many different borrowers in your portfolio, which means that if an individual borrower cannot meet its repayment plan for some reason the impact on you will be limited in relation to your overall investment.

Risk distribution

Risk classes

We base our operations on transparency and openness. Below you will find the target return and risk for the various risk classes.
A borrower who applies for a loan is assigned a credit class based on our assessment of the borrower’s credit risk. Credit class A has the lowest risk and interest rate, while credit class F has a high level of risk and interest. We carefully analyze all loan applications and approve and grant only those with sufficient good repayment capacity.

* Average interest based on the interest rate range in each credit class. Interest rates from 3.25%-18.99%. ** Based on our own collected data for historical credit losses from 2016 through June 2018. *** Target return, excluding Brocc’s service charge.

High return at low risk

By investing in unsecured consumer loans through Brocc, you can generate a higher return than on most fixed income instruments. At the same time, you do not need to worry about the fluctuations in the stock market to get a favorable return. Through investments in consumer loans with us, your return will be predictable and stable at a lower level of risk than of investing in stocks or bonds.

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