This is a quick update on my Lending Club account which I am using as part of the 2019 Grow Your Dough Challenge.
On May 7, 2019 Lending Club announced that they were going to stop offering Grade E Notes on the platform as of July 1. I had originally set up my note allocation to have 10% of the portfolio in Grade E notes. Today, I adjusted my allocation of notes in the portfolio among the A, B, and C note grades. The image below shows what the new custom mix looks like, with 16% in Grade A, 27% for Grade B, and 57% in Grade C. These are some odd numbers, but I fiddled around with the allocation percentages until I got the Average Historical Return as 6%. Putting higher percentages in Grade A and Grade B lowered the return, while adding 5% in Grade D and having 52% in Grade C showed the same return of 6%. I decided to not invest in Grade D at all to lower my risk of default further, while also having a negligible effect on my return.
You can see in the chart below the revised allocations shown with the diagonal stripes against my actual allocation in the solid color blocks that has already been distributed among notes/loans. I do have a couple of Grade E Notes in place right now and I am assuming these will just run their course. One is for a 36 month loan and the other is for a 60 month loan.
My $1000 investment has been growing steadily and my account currently has a value of $1046.24. If you are interested in opening your own Lending Club account, there is a Refer-A-Friend bonus for new Lending Club accounts, but the requirements to get the bonus are more rigid than some of the other investing platforms, so make sure you read the fine print. Note you must invest a minimum of $2500 to get the first-tier bonus of $25.