Bondster has newly launched the secondary market that allows investors to sell their current investments to each other. Bondster thus offers investors additional space for investment and portfolio diversification. Moreover, the secondary market increases investors' liquidity and allows them to withdraw from an investment earlier.
Investing in loans has been on the rise in recent years all over the world. During last year's outbreak of the coronavirus pandemic, these investments saw a sharp decline in interest but it has risen sharply again since the beginning of the year. Starting from April 2021, the amount of money invested on the platform Bondster.cz reached the pre-pandemic levels.
12 thousand investors
More than 12,000 people investing on Bondster now have the opportunity to trade their investments on the so-called secondary market. This is a place where they can either sell their current investments to other investors or buy from them. Up until now, Bondster only had a primary market, where people could invest in secured loans from proven non-bank lenders.
Benefits of the secondary market
The secondary market brings investors several important benefits. Above all, it allows them to easily withdraw from investments in which they no longer want to participate. This gives them more flexibility and also liquidity. If an investor wants to withdraw from an investment loan prematurely, he will simply offer it to other investors. When selling on the secondary market, it is possible to reduce the price of the loan and thus sell it to another interested person faster.
The secondary market also gives investors access to investments that are no longer available on the primary market and have been "sold out" due to their popularity. By doing so, they can improve their portfolio diversification or achieve above-average returns that are currently 7.8% p.a. for investments in Czech crowns and 14.8% p.a. for investments in euros.
A trade between investors
On the secondary market, investors trade directly with each other. Bondster only charges a one-time 0.5% sales fee. When selling, the investor can, at his own discretion, increase the price of the loan and thus earn more. At the same time, it increases liquidity for investors, which increases the attractiveness of investments on Bondster.
If an investor needs funds for personal reasons, he can easily obtain them by selling selected investment loans on the secondary market. The secondary market thus brings another interesting space for investment and diversification of the investment portfolio.
"The secondary market gives investors more choice when making investments and will further increase the attractiveness of Bondster not only on Czech but also on the European scale. We have been recently seeing great interest especially from foreign investors, who currently make up about 40% of the total number of investors,” says Bondster’s CEO Pavel Klema.
Author: Michal Razga