RateSetter loans were among the most stable investment assets during the first quarter of 2020, research from the peer-to-peer lender has found.
The ‘big three’ platform looked at how a £10,000 investment would have performed in a number of assets over the three-month period, comparing both stability and returns.
Gold and bitcoin produced the best returns but they were extremely volatile, the research found, while equities performed the worst.
The most stable assets were government bonds, cash and RateSetter loans (see graph below).
“We are in the midst of a major economic shock and most mainstream investments have seen a major adjustment; however, our analysis shows that some investments are weathering the storm much better than others,” said Rhydian Lewis, chief executive of RateSetter.
“There is a great deal of uncertainty around the economic outlook and there is undoubtedly a long way to go before things get back to normal, but people are starting to notice the stable and earning characteristics of RateSetter’s P2P investments which are valuable as part of a diversified portfolio.”
Gold, a volatile asset, but often considered favourably by investors during times of economic stress, registered the best return of the investments analysed, of £1,773 (12 per cent).
Investing £10,000 in bitcoin would have made £439, government bonds £398 and savings accounts £38.
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Meanwhile, investing £10,000 through RateSetter would have earned £101.
Equities fared poorly over the period. An investment that tracked the FTSE 100 reduced in value by 25 per cent (-£2,522).
Emerging market funds would have lost £1,643 over the period, while corporate bonds would have lost £70.