When you invest with Lending Club you can assign each investment to a portfolio. This is a great way for p2p investors to keep track of their investments. While Lending Club does provide some analysis capabilities of your portfolios there is no way to compare their ROI.
That is no longer a problem. Earlier this week popular third party statistics site, Nickel Steamroller, rolled out a new feature in their analysis tool. For some time now investors have been able to upload their Lending Club portfolio to Nickel Steamroller and see their estimated ROI. Below is a screen shot of the breakdown of my IRA account that I uploaded the morning.
I have found this tool useful because it discounts late loans (using the same formula that Lendstats uses) and gives a more accurate picture of what your expected ROI will be going forward. It is particularly useful for newer accounts where loans will not have had enough time to default (a loan cannot default until it is at least 120 days past due).
See Your Estimated ROI Broken Down by Portfolio
Now, with the additional of a portfolio breakdown tool, Nickel Steamroller can show investors how each portfolio within their Lending Club account is performing. Below is a screenshot from the same IRA account that shows this portfolio breakdown (click on the image to view it in full size).
It takes your Lending Club portfolios and breaks them out so you can see how much money you have in each one and more importantly how each portfolio is contributing to your overall ROI. As you can see in the table above I have a small portfolio called Lendstats IRA 1 that has 15 notes but it has an estimated ROI of just 2.97%, despite sn average interest rate of 16.20%. This is because two of these fifteen notes are currently over 30 days late. Thankfully, my other portfolios are doing very well.
How I Use Lending Club Portfolios
I have been using portfolios on Lending Club almost since I started investing. The way I use them is to group all my identical investments together. I have pretty strict filtering criteria when I select loans but I do tweak this criteria from time to time. Every time I tweak my filters I create a new portfolio.
The reason I do this is that I want to see if this new tweak is going to provide better returns in the long run. Now, with the help of Nickel Steamroller’s new tool I will be able to revisit these portfolios in the coming months to see how the new criteria are performing compared with the older ones.
I think this is really going to help Lending Club investors. What do you think? Do you use portfolios inside your Lending Club account? Let me know in the comments below.
Hat tip to Matthew at P2P Lending News for his idea to add this feature.