It is that time again when I share my investment returns. I like sharing these details because I believe in transparency and I know people are interested in my returns and how they are trending over time. I started out in marketplace lending many years ago with just Lending Club and Prosper but slowly have added new investments over the years. I included a relatively new account this quarter, StreetShares, they are a small business lender with a difference – you can read about them here and also listen to my podcast with the co-founders from last year.
Overall Marketplace Lending Return at 7.73%
The downward trend continues unabated in my returns. And while I said last quarter that was my worst ever, unfortunately I can now say the same again. In fact, this quarter set new lows, with one of my Lending Club accounts actually losing money during the quarter. This is the first time that has happened with any of my marketplace lending accounts.
I complained last quarter that the annualized return, based just on the latest quarterly numbers, on my main Lending Club account had dropped to 2.1% in Q4. Well, this quarter it dipped further. The balance on this account on December 31, 2016 was $39,733, the balance on March 31, 2017 was $39,472 for a -2.6% annualized return according to Lending Club’s own statements. I have had negative months here and there but never before have I experienced a negative quarter at Lending Club or Prosper since I started investing almost eight years ago.
When I look at where the recent defaults have been coming from the majority are in the D and E grade 36-month loans issued in 2015. These loan grades have underperformed significantly, something we covered in some depth earlier this year. When I said last quarter that I hoped the worst is behind us that clearly was not the case. I now expect my returns to continue to drift downward as more of this 2015 vintage hits their peak default months.
Now on to the numbers. Click the table below to see it at full size.
As you look at the above table you should take note of the following points: [Read more…]