Plenti’s fixed income investment platform is offering an attractive investment option as markets remain mercurial.

The retail investment lending platform of fintech lender Plenti Group (ASX:PLT) is looking an increasingly attractive play for investors after a stable return option during the current economic and market volatility.

The Plenti Lending Platform is aimed at a broad range of retail investors – from millennials seeking a simple, stable alternative to equity investments, to self-managed super funds and retirees looking for strong, stable returns over the longer term.

Investors choose an indicative term, ranging from one month to seven years, and then punch in a desired rate of return, up to a maximum set by Plenti. Investors funds are matched to loans to creditworthy Australian borrowers, after which they receive regular repayments of principal and interest.

 

Strong track record

Since its establishment in 2014 the platform has paid investors more than $80 million in interest.

Importantly, investors have been paid every cent of capital and interest due to them thanks to the Provision Fund model, which comprises cash held on trust for the benefit of investors.

The model is designed to protect investors from loss in the event a borrower misses a payment or defaults.

Before establishment of the platform, consumer credit in Australia was only available to institutional and wholesale investors.

Today the Plenti Lending Platform has attracted around 25,000 retail investors who funded over $890 million in consumer loans – attractive asset class which has traditionally only been available to institutional investors.

 

Higher returns across asset classes

Plenti’s analysis shows the average returns delivered by its lending platform are significantly higher than several other common investment options.

A comparison of annual returns from 2019 to 2022 year-to-date (YTD) as at June 22, 2022 revealed the following average returns:

^annualised returns shown are based on performance to date. Source: Plenti Group

 

A $10k example invested in each option with return compounded shows the following cumulative growth from the initial investment date until June 22, 2022.

The figures assume monthly repayments of capital and interest are reinvested on the platform at the same interest rate.

 

Prior performance is not an indicator of future performance. Investments in the Plenti Lending Platform are not investments in an ADI and do not benefit from any government guarantee. Capital at risk.
Note: Plenti lending rates are displayed on an annualised basis and net of applicable fees. Plenti rates assume borrower payments received are continually reinvested at the stated rate and assume the investment is protected by the Provision Fund in the event of any borrower late payment or default, however there is no guarantee or warranty as to any protection from the Provision Fund. See Plenti’s PDS for further details.
Source: Plenti Group

 

Plenti estimates that based on the current 5-year Income Market rate of 4.60% on June 2022, returns on a $10,000 investment on its lending platform would be as follows:

1. Reserve Bank of Australia https://www.rba.gov.au/statistics/tables/#interest-rates
2. Weighted average daily market rate – Plenti Lending Platform 5-year Income Market.
3. ASX 30 Day Interbank Cash Rate Futures Implied Yield Curve June 21, 2022
Source: Plenti Group

 

Stable returns over time

Plenti CEO Daniel Foggo said that by joining retail lending platforms, savvy investors could enjoy the rewards of attractive, stable returns

The Plenti Lending Platform funds loans facilitated by Plenti, Australia’s largest consumer fintech lender.

In FY22 the company continued to grow across its three key lending verticals – automotive, renewable energy and personal loans, with loan originations increasing by 134 per cent. Plenti also achieved a $1.3 billion loan portfolio and a positive full-year Cash NPAT for the first time during the financial year.

“Savings accounts are good for keeping your money secure, but are not the most effective way to build wealth. We’re seeing many Aussies dip their toes into investing to set themselves up for their next life chapter. Many are looking for simple, reliable and low-cost investment options to help achieve their financial freedom” Foggo said.

 

This article was developed in collaboration with Plenti Group, a Stockhead advertiser at the time of publishing.

 This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.