Benefits of diversification
Diversification — equally spreading an investment across many Notes — is a driving force in receiving solid returns. As of May 24, 2013, over 99% of investors with 100 or more Notes and with no single Note accounting for more than 2.5% of their total investment, have positive returns.
Having a well–diversified account limits the impact of any single loss on the overall returns of a portfolio. Owning more Notes of relatively equal size reduces volatility and has historically produced results closer to expectations.
On the other hand, less diversified accounts, those with less than a 100 Notes and with Notes that are larger than 2.5% of their total investment, have higher volatility in their returns. More importantly this group has many more accounts with negative returns.
Consider how diversification will play a key roll in providing solid returns as you begin to build out a well diversified portfolio of Notes.
How you can diversify.
Browse Notes, and pick the borrowers you want to invest in one by one, for maximum control. You will find credit and loan information in each listing and you can even ask a borrower questions for additional diligence.
Use our portfolio tool.
You can use our portfolio tool to help you develop a diversified portfolio in seconds. The greater the number of different borrowers you invest in, the greater your diversification.
Lending Club Notes are offered by prospectus filed with the SEC. Please consider the risks of investing.