There are many third party tools out there that many seasoned investors already know about. However, Lending Club continues to add functionality to their own site like net annualized return. Today I noticed something that I had not seen before which was a link to ‘Understanding Your Returns’. It is located under the summary tab, which shows up by default when you login:
I know that at least the link is new to that location, but I’m not sure if the information it leads to was always available. The link takes you to a page that is full of valuable information. To start with, it explains to you how your returns will decrease over time if you have a new account and also provides you a snapshot of your adjusted net annualized return, weighted average interest rate, average age of portfolio and number of notes.
It then gives you a fantastic graph which will compare your account with other Lending Club accounts. If anyone wants to brag about how high their light blue dot falls on this chart, please Contact Us and maybe we will add your graph to the bottom of this post so everyone can admire your top notch note picking abilities. The red dots are accounts with similar weighted average and the blue ones are all Lending Club accounts. You will notice on mine that I fall happily in with my peers. There are also several filters below that will allow you to further manipulate the graph which could lead to more interesting information.
Below the graph section you will see a note: The chart is not intended to be a direct comparison of your returns relative to those of other investors. There are many factors that could make your returns better or worse than those of other portfolios at a given point in time. If you find that your returns are more volatile than you would like, there are several things to consider
They go on to explain things that will affect returns such as note concentration. Given that notes and your net annualized return can change daily, this isn’t meant to be a perfect representation. However, I still found it very valuable in understanding Lending Club returns.