NSR Platform has an incredibly powerful back-testing and strategy builder tool to allow our self-directed clients to test and deploy their own custom strategies.
Simply put, back-testing allows you to set one or more parameters/filters to analyze the past performance of only those loans which match your specifications.
To navigate to the Strategy Builder tool, simply login to your NSR Platform account, then click on the "Analytics" drop-down menu.
From there, select either the Lending Club or Prosper links.
For this demonstration, we'll look at the Lending Club Strategy Builder tool. You can add criteria by selecting them from the left-hand side of the screen.
Once you've adjusted all the filters that you want to use in your strategy, click on the "Update Results" button. To save this filter for future use in either back-testing or auto-investing, make sure to also click "Save Strategy"
Once you click Save Strategy, you'll be prompted to name the filter for future reference. Be sure to click the "Save" button once more.
When you return to the results, you'll notice a summarized table at the top, titled "All Matching Loans" This chart gives an overall picture of the historical performance of all loans matching your filter criteria. For this example, the historical ROI (return on investment) for this strategy is 9.25%, the average interest rate is 18.58%, and the average loss rate is 8.75%.
Additionally, the total principal value of all loans matching this strategy's parameters is about $2.467 billion or 132,627 total loans, each with an average age of 20.69 months.
On the right side of the results section, you can see the "Average Daily Volume" which shows a estimated calculation of the volume of new loans that will match your strategy - based on recent loan listing data. If this number is below 10, it is typically too restrictive that there may not be sufficient number of loans available to invest in. Here was see it is about 55 loans in the fractional pool (for retail investors).
In the tables below the "All Matching Loans" table, you'll find an easy-to-view breakdown of the same metrics (ROI, principal value, total loans, etc.) but displayed against a comparison of variables such as Credit Grade, Loan Purpose, Issue Date, or FICO Score Range. This breakdown can allow you to see ways to further optimize your strategy for better returns or more loans to choose from. You can learn how to customize this view here.
