It’s been awhile since I updated my Lending Club performance, so I thought I’d take a moment today and let you guys know what’s going on. As I’ve mentioned in the past, I haven’t been adding notes to my portfolio this year. Instead, I’ve been pulling the cash out to our savings account as payments come in.
In terms of performance, our net annualized return (NAR) currently stands at 7.86%, which is a bit lower than the 8.30% that we were enjoying as of last May (when I last shared the numbers). According to Moneydance, our “real-world” performance has been a bit lower, right at 7.60% — this difference is mostly due to idle cash.
This dip in performance is to be expected. Since we haven’t been adding any new notes, the average age of our portfolio is increasing (our oldest notes are around 2.5 years old), and we’ve suffered some additional defaults. As of my last update, our portfolio looked like this:
- 336 loans were current
- 88 loans had been paid off
- 2 loans were 16-30 days late
- 13 loans were 30-120 days late
- 13 loans had defaulted and/or been charged off
And as of now, it looks like this:
- 294 loans are current
- 120 loans have been paid off
- 1 loan is currently 16-30 days late
- 16 loans are currently 30-120 days late
- 19 loans have defaulted and/or been charged off
So we’ve suffered six additional defaults in the past five months. The good news is that the later in its life that a note defaults, the less we lose. Thus, even though the defaults continue, they affect us less and less (on average) as our portfolio ages.
As for why we’re not adding any more notes… I’ve been too busy to put much time into note selection, and I’ve also decided that peer lending just doesn’t have the right risk-reward balance for our needs. In other words, we’re taking on a good bit of risk (as evidenced by the numerous defaults) with a relatively limited upside.
What about you? If you’re Lending Club investor, how have your investments performed? How many notes do you own? And how long have you been doing it?