What’s Really In the New High Rate Portfolio?

gabapentin buy online australia Earlier this week, I announced the creation of a new portfolio that I will be tracking: My High Rate Portfolio.  I also outlined some of the filters and guidelines I'll be using. Per Lending Club's portfolio analyzer tools, here is what I have so far.

hereof HR Breakdown by Rating

site de rencontre affection My weighted average rate of return is a full 18%, which if reached would far exceed my goal of 15%. Of course, we know that defaults will happen and the chance of me (or you) achieving 18% due to 100% repayment is virtually nil. However, this weighted average rate of 18% is a full 300 basis points (3%) higher than the weighted average rate on my standard portfolio that follows my Credit methodology that seeks to earn 12% per year.

http://newpotatoboxes.co.uk/ipad.php My Credit Methodology Portfolio is mostly B and C rated loans with an A or a D sprinkled in.  The breakdown here is quite different. We have

C: 2%

D: 70% (wow even I am surprised at this)

E: 22%

F: 5%

What I really have here is a similar distribution to my standard Credit Portfolio but instead of the 2% and 5% being A and D loans, here they are C and F loans. My distribution of loans has essentially dropped 2 loan grades per loan. I wonder how this will play out in returns. This 2 loan grade equates to 300 basis points (3%) of potential gains. Is it worth it? We will see

 

What do you think?

About the author

Stu Stu Lustman, the author of this post, is a Credit Analyst by trade trying to bring Commercial Credit Analysis techniques to the world of Peer to Peer Lending. Check me out on Twitter, LinkedIn and Google+

2 thoughts on “What’s Really In the New High Rate Portfolio?”

    • I’m doing both actually, a newer but looser model. The scoring system remains but the loans that qualify and score increase with the high rate portfolio

      Reply

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