Marketplace or P2P lending has grown considerably in recent years.
It’s fair to say this pocket of the alternative finance sector is now a fully fledged asset class, with a loyal fan base and an army of skeptics to boot.
P2P lending has been tried by many investors, looking to fill a hole in their portfolios and giving them exposure to a novel type of risk. But as a passionate believer in corporate bonds and being at the forefront of opening up access to this incredible asset class I want to highlight the opportunities afforded by corporate bonds.
In this brief article I will highlight the opportunities and risks associated with both asset classes, giving you the confidence to assess the merits of both.
The rise of corporate bonds
The media doesn’t get excited about corporate bonds. Journalists are more interested in hyping up new products like P2P lending, equity-based crowdfunding and cryptocurrencies because they are heavily marketed to ordinary investors.
Of course, most investors don’t want excitement. Rather, they’re looking for consistent steady returns. So, whilst the financial press treats corporate bonds like they don’t exist, savvy investors remain open minded and focused on the numbers.
The past decade has seen an impressive bull market in corporate bonds. Issuance has grown by $29 trillion in the 10 years since the financial crisis, a remarkable statistic that points to the importance of these instruments to the global economy and the huge amount of pension fund money entering the asset class .
In fact, the FT recently observed that, “the shift to bond financing by companies is welcome, and there is plenty of room for further sustainable growth.”
This is good news for companies. It’s even better news for investors because it means increased liquidity, transparency, regulatory scrutiny, diversification and perhaps most important of all, choice.
Institutional investors who are the primary beneficiaries in terms of access to corporate debt now enjoy a large and ever-growing pool of bonds to choose from.
The sheer scale and diversity of the corporate bond market now gives investors the chance to make this the most significant part of their investment strategy and only with WiseAlpha can everyday investors benefit from building a portfolio in this premium asset class.
As with all investments your capital is at risk. WiseAlpha members purchase Notes which are fractions of individual corporate bonds.
See full Risk Statement at www.wisealpha.com