Here’s the 3rd and last piece of the monthly updates for my Beat the Market Experiment, a set of three real money portfolios started on November 1st, 2012. See also my $10,000 Benchmark and $10,000 Speculative portfolio updates for March 2013.
$5,000 LendingClub Loan Portfolio. Below is a screenshot of my LendingClub account as of 3/1/13. I’ve had loans at LC before, but sold them all on the secondary market and started fresh for this tracking experiment. Here are screenshots of my total balance and my portfolio details. I would say my overall risk level is moderate-conservative with mostly A and B rated loans (top two grades).
The portfolio is now 4 months old, with 206 currently active loans, 7 loans that were paid off early, and one is in funding. Two of the active loans are currently between 16-30 days late. The current weighted average interest rate is 12.36%, which means I can lose 4.36% to defaults and still net an 8% return.
I pick loans using a preset filter based on my LendingClub filters post as well as my Prosper filter research noted below. I never spend any time reading individual loan descriptions, as I’m trying to keep this mostly passive and scalable. The filters are saved online and it takes just a minute to reinvest interest, although I still tend to forget until I do these updates. In additional to outstanding loan principal, the account also has $249 in idle cash, $25 in funding limbo, and $38 in accrued interest.
LendingClub.com account value: $5,160 (includes principal + accrued interest, after fees)
$5,000 Prosper.com Loan Portfolio. Below are screenshots of my Prosper account page as of 3/1/13.
My Prosper portfolio now has 213 currently active loans, 9 loans that were paid off early, and one in funding. One of the active loans is between 1-30 days late, one loan that was late last month went back to current. That makes 2 loans so far that were late which went back to current. Prosper tells me that my current annualized return is 10.8%, so I’m guessing that’s my weighted average interest rate. This portfolio is also mostly loans from their top two grades.
I use Prosper’s free Quick Invest feature which automatically uses any free cash to invest in loans that satisfy my preset criteria (see my Prosper loan filters post for details). Essentially, I have automatic dividend reinvestment.
Prosper.com account value: $5,133 (includes principal + accrued interest, after fees)
Total P2P loan value: $10,293 (includes principal + accrued interest, after fees)
I know this isn’t the same as reporting the actual liquid value of the loans, but it’s the best I can do for now. To stay on the conservative side, I plan to assume that any loan that is 30 days late will be a full default of all remaining principal. So far, none of my loans are 30 days late, although I’m sure it will happen sooner or later.