P2P has place in “optimal” 2024 portfolios
Peer-to-peer lending can play a role in creating the “optimal” investment portfolio for 2024, according to a new analysis by Robocash.
Analysts at the Croatian peer-to-peer lending platform have found that for 2024, investors should keep two-thirds of their investment portfolios in fixed-income instruments such as P2P loans.
The analysis took a view of 10 portfolio allocation models split across nine different investment assets to work out the most successful portfolio structure.
The highest returns were found in crypto-heavy portfolios, but the Robocash analysts warned that “this approach contradicts the idea of diversification and significantly increases the risks of investments.”
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Should economic instability persist this year, the trend towards portfolio diversification will relevant, the analysts added. However, the most diversified portfolios are not necessarily offering the most efficient returns.
The analysis found that the most optimal portfolios will contain 64.9 per cent of fixed income assets, namely bonds, P2P investments and deposits. The remaining part of the portfolio should be made up of assets with a variable return (30.6 per cent) and foreign currency assets (4.5 per cent).
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“The returns here are lower than, for example, in the case of maximizing diversification or considering a risk-free rate for the Sharpe ratio. But this combination is optimal in terms of achieving the best risk-return ratio,” the analysts added.
The analysts looked at a series of investment methods including Value at Risk strategies, the Black-Letterman model, the Sharpe-ratio, risk and return parity, Pareto risk minimization and profitability maximization.
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