LendingRobot vs. Nickel Steamroller vs. LendingClub Automated Investing

I've been investing with LendingClub for 16 months and have tried a handful of different strategies. Today I decided to check in and see how each has been performing.  

A few words of warning before I detail the results:

LendingClub returns drop over time

  • The time period I'm detailing is still relatively short, and some of the strategies have less than 100 notes, so the data set is pretty small.
  • Data is from the Nickel Steamroller portfolio analysis tool.
  • This post is not investment advice or an endorsement of any service or approach. 

 

Strategy A - Nickel Steamroller's estimated ROI

112 notes, Avg, rate - 21.4%, Loss - 5.6%, ROI - 15.4%

This strategy makes use of Nickel Steamroller's estimated return on investment measure for loans that are currently open for investment. This is a manual strategy which involves checking the active loans page and then finding the highest rated loans in your LendingClub account. NSR appears to be working on an automated service

 

Strategy B - LendingRobot

181 notes, Avg, rate - 18.3%, Loss - 4.3%, ROI - 13.5%

LendingRobot is a paid service that promises to invest in the loans with highest expected returns before they are "snatched up by hedge funds". 

 

Strategy C - Almost funded

64 notes, Avg, rate - 17.9%, Loss - 4.6%, ROI - 12.7%

The least scientific strategy, this is simply me logging in and grabbing a few loans that are more than 90% funded with an interest rate of 15% or higher.

 

Strategy D - Filters to minimize defaults

181 notes, Avg, rate - 13.3%, Loss - 2.9%, ROI - 9.7%

The most conservative strategy, this approach was based largely on researching strategies on LendAcademy and constructing a filter that would limit defaults. Unlike the other strategies, this portfolio is comprised primarily of A (26%), B (35%), and C (18%) grade notes.

 

Strategy E - PRIME/Automated Investing with a filter

426 notes, Avg, rate - 23.3%, Loss - 5.9%, ROI - 16.6%

The strategy employs LendingClub's automated investing feature (formally named PRIME) with the following instructions:

  • Target Allocation by grade: A : 0%, B : 0%, C : 0%, D : 15%, E : 25%, F : 30%, G : 30%
  • Term: 36 and 60 month
  • Filter: Exclude CA, credit lines > 8, max debt-to-income = 25%, monthly income > $7,500, 0 inquiries in the last 6 months. Unfortunately this filter has only been active for a portion of the period and I failed to create a separate portfolio to segregate the results

 

Closing

I hope this brief report is helpful for anyone exploring P2P investing. When I began my research I benefited from the countless others who reported on their approaches and results