July P2P Portfolio Update

Lending Club

Lending Club continues to do very well, although I sill have quite a few defaults waiting to happen. I’ve started the process to rebalance my loan terms to a 50/50 mix of 36/60 month notes. Thus far I have only used reinvested payments, as a result its been a slow moving process. Its now at 28% 36 month and 72% 60 month.

 

Current Portfolio Breakdown

Has you can see I continue to bias my investing toward risk. In fact when I am buying loans I sort by interest rate descending and buy accordingly. There is a fairly stable IRR of about 12%. Even as the defaults occur, the ROI will dip to ~11% but quickly move back into the 12% range.  I’m not sure if this trend will last but I am now about 15 months into Lending Club so the charge-off amounts are actually becoming lower (the charge-offs have less impact).

Below is the portfolio analyzer that from Nickel Steamroller. You can upload you own portfolio here to see how your notes might “actually” be performing.

NSR Portfolio Analyzer

Prosper

With Prosper I had something exciting happen (well at least to me), my first seasoned loans started to registered on my seasoned loan value.  All around Prosper is providing outstanding returns. Both Lending Club and Prosper continue to do well, even as my portfolio ages. I added 2K to Prosper in the last month which is part of my goal to have 20K invested in P2P lending. In all fairness, my Lending Club portfolio is much more mature, and is likely more accurate.  There is a lot of new money flowing into my Prosper account which will inflate the ROI due to the fact defaults take 4 months to occur.

 

Current Portfolio Breakdown

 

 

Conclusion

I’m still very pleased with my results.

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  • http://twitter.com/SocialLoans Peter Renton

    Thanks for the update Michael. Given your loan mix at Lending Club I think 12.66% is a good number. I am curious as to what your Portfolio tool says about your return. Of course, as I mentioned in my post earlier today I am always interested in returns calculated through XIRR(). If you get around to doing that let me know.

    • http://www.nickelsteamroller.com/ Michael

       Peter, I added it. I’ll look into XIRR but right now I am focusing on a new set of Prosper tools.  Thanks for the comment!

      • http://twitter.com/SocialLoans Peter Renton

        Thanks, 10.5% is excellent. If you are working on Prosper tools I would love to have some kind of CSV download of my portfolio there. Not sure if that is possible but it would be good to be able to analyze our investments offline in a similar way to Lending Club. I would love to be able to assign portfolios as well so I can compare strategies. Not sure what is possible but I am sure whatever you come up with will be useful.

  • http://twitter.com/ThomasDeLong Tom DeLong

    Thanks, Michael.  Great returns!

  • http://www.nickelsteamroller.com/ Michael

    According to LC: Weighted Average Rate 16.82%

    • Russell Warden

      My weighted average is 13.36, but my ROI stays around 10%.  My loan portfolio is a little over 75% in A/B/C loans.  I tried to find your bio to see your background in investing, but do you worry you are taking on too much “macro economic” risk in your loan selection.  I work in bank auditing, so I am reminded every day how a loan portfolio can acquire huge hidden risks that only show up under stress.  And then suddenly the money maker blows up.  

      I’m just curious of your thoughts about if you are adequately pricing the risk based on the portfolio composition I see in this post.  And I’m a huge nickelsteamroller groupie :)

      • http://www.nickelsteamroller.com/ Michael

        Russell, this is an EXCELLENT question/point. I am actually working on a post as we speak to address just. If you look at 2008 A grade loans out performed all other loans dramatically. Thanks for the comment, I will be doing a post on this shortly (next day or two). I hope you jump in on the comments there.

        • Russell Warden

          Yes, I’ll be around — I wish I would’ve found this website sooner, I pretty much visit daily to play around with Filters.  This is my main concern with Prosper — Prosper has similar ROI, but their average credit rating is below Lending Club (If I remember correctly, they are roughly the same number but use two different scores with differing scales).  Don’t know if you are addressing this in the post, but I’ll stay tuned

          • http://www.nickelsteamroller.com/ Michael

            Prosper has arguably a more conservative under writing procedure. They also use ScoreX which also measures the probability someone will repay debt they default on.  The ROIs LC and Prosper use in marketing are quite different. Prosper posts ROI from the beginning of Prosper 2.0 while Lending Club picks a smaller time frame which biases the ROI higher. There are a lot of ways to spin the numbers but I feel we have enough information in my charts and stat tables to help determine what is what. I also created P2Pxml.com for this purpose.

          • Russell Warden

            I was making the ROI based on Lendstats numbers.  I don’t remember seeing a side-by-side ROI comparison on this website, although I’m sure it exists.

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