Two months ago I reviewed Lending Club PRIME sharing my thoughts and results after opening the account in April 2010. Now I am coming up on a year since the account was opened and I still remain very happy with how it is going.
As you can see in the graphic above my NAR is now 10.37% as compared with 10.48% two months ago. The account has increased in value by $663 since my last review, but I have had two more defaults which bumped my NAR down a bit. I have been tracking my NAR daily just to see the impact of the defaults – both these new defaults came in the same week and my NAR dropped from 10.70% down to 10.17%. I have a few more loans that have slipped into late status so I expect some of these loans will end up defaulting and my NAR will drop further.
My Actual Investment Return
More interesting to me than NAR is the real world return. Over the six month period from Sept 30, 2010 to March 31, 2011 the actual increase in the value of my account was 4.53%, or an annualized rate of 9.06%. Now, this is lower than the NAR because of way the that formula is calculated. This is why I always recommend that investors calculate their actual return instead of relying on the Lending Club NAR number. I am still very happy with a 9% return, particularly when I consider this is a PRIME account which means it is a completely hands off investment.
Below are the loan details. Lending Club has added a net 76 new loans to the portfolio and if you compare the breakdown with last time it is pretty much exactly the same.
For a detailed explanation of how a PRIME account works you should read my initial Lending Club PRIME Review.