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Author Topic: Fred93 returns - Lendingclub vs Prosper

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Fred93 returns - Lendingclub vs Prosper
OP: May 08, 2017, 11:00:00 PM
I've never really done a long term Prosper vs LC comparison of returns before, and its about time so...



I've computed my monthly returns the simplest possible way.  I took month-end account value divided by prior month-end account value, minus one, and multiplied it by 12 to annualize.  When I added money during the month, I treated it as if it was present the entire month, which adds a small negative bias to the resulting numbers.  This occurred during several months in 2015.

First thing I notice is that the Prosper returns are more volatile.  They really jump up and down.  Some of this is expected, because my Prosper account contains fewer loans than my LC account.  On the other hand, that odd month up, even month down pattern in the last year is very strong, which may indicate something about how Prosper processes chargeoffs.  It is what one might expect if they processed chargeoffs every other month, for example. 

For comparison, I've shown the Orchard Index on the same chart.  http://www.orchardindexes.com

Some big picture thoughts...

I was amazed to see how closely my returns matched between Prosper and LC.  I use a similar loan selection strategy on both platforms.

I am happy to be beating the Orchard Index consistently.  The limitation of the Orchard Index is that they don't tell us what P2P companies are in the index, or their weightings.  I presume that both LC and P are in the index, but there's no way to be sure.

We're all moving to lower returns.
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Fred93 returns - Lendingclub vs Prosper
#1: May 09, 2017, 11:00:00 PM
My chart shows almost the opposite of yours: my Lending Club returns have been much more volatile month to month. My accounts were the same size until around mid-2016, and since then I've been adding cash only to Prosper, such that it's now about 2x LC.

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Fred93 returns - Lendingclub vs Prosper
#4: September 16, 2017, 11:00:00 PM
I started off with exact same amounts in LC and Prosper, but over time, Prosper has not been stunning, and lagged behind LC until suddenly - just in past few months - I got a flurry of late and charge-offs in LC. Whoa! It was bad! I am getting LC back on track by use of the secondary market by selling off any questionable, late or non-seasoned notes. Returns so for 23+% (but only for the Folio notes).
While Prosper has slightly out-performed, using the Folio secondary platform has opened up more liquidity for my (SMALL) investment capital.
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