Announcing a change to the LendingRobot Expected Return

As the Lend Academy Investments team continues to work towards integration between LendingRobot and NSR Invest, today we are pleased to announce a change to the Expected Return displayed for investor accounts. We believe this change will benefit our clients by substantially enhancing the relevance of the return metrics available on the LendingRobot platform.

Previously, LendingRobot has used an Expected Return – which is an IRR calculation based on historical performance, plus the anticipated future cash flows (monthly payments) for a particular loan. This return methodology measures how we expect your loan/account to perform for the life of the loan or portfolio being measured – in other words, both experienced and future return. However, we have found that this creates complications in helping our clients to understand how their account has performed historically, since realized performance is all we can indicate with data & fact – the current formula relies on projections that may or may not materialize.

Based on the differences we’ve observed between historical and expected performance, we have elected to change to a historical-only return that reflects the performance of all loans in your portfolio. For LendingRobot clients who also use the NSR Platform, this is the same Loan Performance metric we use there.

It’s important to note that due to limitations on data available from our marketplace partners, neither the new nor old formula consider the timing of cash flows in and out of your account (deposits and withdrawals), but rather consider the performance of loans from their origination date and discounts late loans based on historical loss experience.

Since this calculation method is only reflective of performance across a sample of more than one loan, a return will no longer be indicated for individual loans in your portfolio. Additionally, since returns only become meaningful once a portfolio has a chance to season (time for loans that will not pay to become evident), you won’t see a return for accounts that have an average portfolio age of less than 6 months.

So, in summary here are the changes clients will see going forward:

  • Only experienced (actual) performance results will be reflected in your account return
  • Returns will no longer be available for individual notes within an account
  • Returns will be available for accounts with an average portfolio age > 6 months
  • The updated methodology is now in place for Lending Club & Prosper accounts
  • On behalf of the Lend Academy Investments team, we appreciate your loyalty and look forward to announcing future enhancements that will improve your investing experience.


    1. jj says:

      Wow, I never trusted the expected return number in the monthly emails, but mine dropped by over 11%!
      Though now it more closely matches the platforms’ numbers and is much more realistic. A bit late however.

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