Your account will be reviewed up to four times per day, as soon as new loans are listed, with the goal of placing orders and deploying your cash as quickly as possible to match your investment criteria. Depending on the factors below, your funds may be invested very quickly or it may take an extended period of time for all of your cash to be deployed.
The time required to deploy your cash using Automated Investing depends on:
1. The percentage of your account balance held in cash relative to other Automated Investing users.
Automated Investing prioritizes placing orders for investor accounts with the highest proportionate percentages of available cash. As borrowers pay off their loans, you receive monthly principal and interest payments, which means you may accumulate a cash balance. Automated Investing will attempt to reinvest this available cash balance. However, due to the potentially continuous monthly inflow of borrower payments coupled with inventory constraints, it’s realistic to expect there may be some amount of cash in your account at times.
2. Availability of loan inventory on the platform.
Automated Investing reviews accounts and may attempt to place orders up to four times a day, as soon as new loans are listed. When Automated Investing attempts to place an order for your account, your account is prioritized the same way as other investors who are placing orders at that loan listing period. Automated Investing doesn’t solve for limited inventory.
Automated Investing will not fund the last remaining Notes of any given loan listing in order to leave inventory available for investors who place orders manually. In addition, Automated Investing will not place orders when there are only a limited number of loans listed on the platform. At any given time, there may be loan listings meeting your investment criteria that Automated Investing will not select due to these constraints. Automated Investing users may browse loans and place orders manually at any time.
3. Your investment criteria.
Limiting investment criteria to be concentrated on Note grades with high demand (e.g., loans with C, D, and E grades if such grades are in high demand) may increase the time Automated Investing takes to invest your capital. Some Note grade/term combinations are rare, like Notes with A grades and 60-month terms. You may want to review LendingClub’s historical inventory when determining your investment criteria.*
A note on allocations by loan grade:
Should your Automated Investing criteria include an allocation of certain loan grade(s), the allocation you select will apply to your overall portfolio on a go-forward basis. Automated Investing does not sell Notes to rebalance a portfolio; it only places orders for Notes listed on the LendingClub platform according to an investor’s investment criteria. Depending on your existing holdings and your available cash, it may not be possible or may take an extended period of time for Automated Investing to approach your investment allocation.
Consider this example: Assume an investor holds only A and B grade Notes, but later sets their investment criteria to an allocation of 100% E grade Notes. Automated Investing will place an order for E grade Notes only, but will be unable to reach the investor’s new investment allocation as long as there are still A and B grade Notes in the account that were previously purchased.*
Click here to log in to your account and enroll in Automated Investing.
* This information is not intended to be investment advice. You should consult your financial advisor if you have any questions or need additional information.