Larry Swedroe: Diversifying Through Reinsurance And Marketplace Lending Interval Funds

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Larry Swedroe: Diversifying Through Reinsurance And Marketplace Lending Interval Funds

Post by Random Walker » Mon Jul 09, 2018 10:16 am

http://www.aaii.com/journal/article/div ... rval-funds

Good article describing the diversification benefits to a portfolio of alternative lending and reinsurance. For those interested, Larry goes into more detail in his 2018 edition of Reducing The Risk Of Black Swans.

Dave

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Re: Larry Swedroe: Diversifying Through Reinsurance And Marketplace Lending Interval Funds

Post by golfCaddy » Mon Jul 09, 2018 6:24 pm

Reinsurance is interesting because natural disasters should theoretically be uncorrelated with everything else. LENDX has several issues. The prospectus reports an eye-popping 4.57% EXPENSE RATIO. From the article: For example, LendingClub, the largest U.S. platform, had shifted from 100% retail funding in 2008 to 84% institutional funding by 2015. At some point does all the new money flooding into P2P lending drive down returns? Many LC investors, on this forum, have reported declining returns.

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Re: Larry Swedroe: Diversifying Through Reinsurance And Marketplace Lending Interval Funds

Post by willthrill81 » Mon Jul 09, 2018 6:40 pm

I think that diversification can be a great strategy. But as they say, the devil is in the details. In particular, it seems that many of the diversification routes that Larry has been suggesting have high expenses relative to indexed stock and bond funds. That being said, I don't really care about expenses per se; I care about my returns. You certainly do get what you don't pay for when it comes to indexed stock and bond funds, but the same might not be true or even possible with some of these other diverse asset classes.

I'm curious but not holding my breath.

In discussing diversification, I wonder whether anyone here invests in catastrophe bonds. If you want an asset class whose returns are almost entirely uncorrelated with anything else, that seems to be a great choice.
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Re: Larry Swedroe: Diversifying Through Reinsurance And Marketplace Lending Interval Funds

Post by UniversityEmployee9 » Mon Jul 09, 2018 7:48 pm

These alternative investments are really interesting to me but how do us mere mortals get access to them?

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Re: Larry Swedroe: Diversifying Through Reinsurance And Marketplace Lending Interval Funds

Post by willthrill81 » Mon Jul 09, 2018 7:53 pm

UniversityEmployee9 wrote:
Mon Jul 09, 2018 7:48 pm
These alternative investments are really interesting to me but how do us mere mortals get access to them?
Often, a rather pricey adviser is the only option. For those of us that don't already employ the services of one, that represents another layer of added cost for this diversification.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

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Re: Larry Swedroe: Diversifying Through Reinsurance And Marketplace Lending Interval Funds

Post by UniversityEmployee9 » Mon Jul 09, 2018 7:54 pm

willthrill81 wrote:
Mon Jul 09, 2018 7:53 pm
UniversityEmployee9 wrote:
Mon Jul 09, 2018 7:48 pm
These alternative investments are really interesting to me but how do us mere mortals get access to them?
Often, a rather pricey adviser is the only option. For those of us that don't already employ the services of one, that represents another layer of added cost for this diversification.
Yeah, that's what I've found. I suppose if we wait long enough maybe some ETFs will be created for some of these things one day.

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Re: Larry Swedroe: Diversifying Through Reinsurance And Marketplace Lending Interval Funds

Post by willthrill81 » Mon Jul 09, 2018 8:04 pm

UniversityEmployee9 wrote:
Mon Jul 09, 2018 7:54 pm
willthrill81 wrote:
Mon Jul 09, 2018 7:53 pm
UniversityEmployee9 wrote:
Mon Jul 09, 2018 7:48 pm
These alternative investments are really interesting to me but how do us mere mortals get access to them?
Often, a rather pricey adviser is the only option. For those of us that don't already employ the services of one, that represents another layer of added cost for this diversification.
Yeah, that's what I've found. I suppose if we wait long enough maybe some ETFs will be created for some of these things one day.
That's possible, but it may take a long time. To my understanding, the reinsurance and peer-to-peer lending areas, while in the billions of dollars in value, are relatively tiny in the financial sphere. Not many investors are clamoring to buy into them, and, consequently, few firms are likely to offer funds for them. And those that do likely won't be nearly as low-cost as those in more traditional asset classes (e.g. LENDX).

Each investor must ask him/herself what price they are willing to pay for diversification beyond the 'traditional' asset classes. Additional diversification seems to nearly always come with a price tag: more money, more time, or both.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

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Re: Larry Swedroe: Diversifying Through Reinsurance And Marketplace Lending Interval Funds

Post by jhfenton » Mon Jul 09, 2018 8:57 pm

willthrill81 wrote:
Mon Jul 09, 2018 7:53 pm
Often, a rather pricey adviser is the only option. For those of us that don't already employ the services of one, that represents another layer of added cost for this diversification.
+1 I also like the idea idea of reinsurance and alternative lending in principle, but both the direct costs of the investments and the indirect advisor costs make them non-starters.

I might have explored direct P2P lending a few years ago, but Ohio has never approved it for investors. (And now the institutionalization appears to have driven down profits.)

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Re: Larry Swedroe: Diversifying Through Reinsurance And Marketplace Lending Interval Funds

Post by willthrill81 » Mon Jul 09, 2018 9:13 pm

jhfenton wrote:
Mon Jul 09, 2018 8:57 pm
I might have explored direct P2P lending a few years ago, but Ohio has never approved it for investors. (And now the institutionalization appears to have driven down profits.)
When I started an account with Lending Club back in 2013, I got 10% nominal returns. Granted, that was much higher than average, but I really did my homework to invest in the most profitable notes that I could. I put it a more significant though still tiny portion of my portfolio in another account in late 2016, and my returns are around 4.5% using exactly the same criteria as before. That's not a terrible return, but reduced returns compared to earlier years seems to be a common trend. I don't intend on strengthening my P2P position going forward unless something changes.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

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Re: Larry Swedroe: Diversifying Through Reinsurance And Marketplace Lending Interval Funds

Post by marcopolo » Mon Jul 09, 2018 10:00 pm

Random Walker wrote:
Mon Jul 09, 2018 10:16 am
http://www.aaii.com/journal/article/div ... rval-funds

Good article describing the diversification benefits to a portfolio of alternative lending and reinsurance. For those interested, Larry goes into more detail in his 2018 edition of Reducing The Risk Of Black Swans.

Dave
Didn't we already beat this to death here:
viewtopic.php?f=10&t=243434&hilit=LENDX

And here:
viewtopic.php?f=10&t=239399&p=3750928&h ... X#p3744052


and here:
viewtopic.php?t=240842

Is there something new to consider?

I am sure you mean well, but after a while it just starts to feel like a marketing campaign.
Once in a while you get shown the light, in the strangest of places if you look at it right.

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Re: Larry Swedroe: Diversifying Through Reinsurance And Marketplace Lending Interval Funds

Post by Random Walker » Mon Jul 09, 2018 11:04 pm

Not at all a marketing campaign. If I “market” anything, I’d say it’s portfolio efficiency. There is no doubt that lack of portfolio efficiency is a real cost, and that is excluding the behavioral errors one sets himself up for with an inefficient portfolio. I have clearly said many times something to the effect that I believe the best and cheapest diversifier to an equity heavy portfolio is high quality, relatively short, bonds. From there, steps towards improved portfolio efficiency yield decreasing marginal improvement at increasing marginal cost. Each investor needs to decide where to draw the line. Some may draw it at adding bonds to a TSM portfolio, some may draw it at tilting to SV and decreasing overall equity allocation, and some may go so far as to add alternatives. I think discussion of more efficient portfolios and what price to pay for them is highly valuable. Nothing at all wrong for someone to take a much less expensive and much more simple approach, but the decision to do that is so much better if it is informed with knowledge of alternative options and the trade offs involved. If one learns about these alternatives now during a great equity bull and actively and intelligently decides against them now, then perhaps he is better equipped to stick with his simple and inexpensive TSM portfolio when things get rough.

Dave

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Re: Larry Swedroe: Diversifying Through Reinsurance And Marketplace Lending Interval Funds

Post by Dead Man Walking » Tue Jul 10, 2018 12:41 am

The returns for the two reinsurance funds mentioned in the article were significantly different in the three years that were cited.

Pioneer fund (XISLX)
2015: 9.90%
2016: 8.00%
2017: -6.30%

Stone Ridge fund (SRRIX)
2015: 7.90%
2016: 6.40%
2017: -11.40%

These returns suggest that Pioneer was better than Stone Ridge at assessing risk.

I'm not comfortable investing in reinsurance funds due to climate change. I've learned not to fight mother nature.

DMW

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Re: Larry Swedroe: Diversifying Through Reinsurance And Marketplace Lending Interval Funds

Post by nedsaid » Tue Jul 10, 2018 10:16 am

willthrill81 wrote:
Mon Jul 09, 2018 9:13 pm
jhfenton wrote:
Mon Jul 09, 2018 8:57 pm
I might have explored direct P2P lending a few years ago, but Ohio has never approved it for investors. (And now the institutionalization appears to have driven down profits.)
When I started an account with Lending Club back in 2013, I got 10% nominal returns. Granted, that was much higher than average, but I really did my homework to invest in the most profitable notes that I could. I put it a more significant though still tiny portion of my portfolio in another account in late 2016, and my returns are around 4.5% using exactly the same criteria as before. That's not a terrible return, but reduced returns compared to earlier years seems to be a common trend. I don't intend on strengthening my P2P position going forward unless something changes.
This is my concern about alternatives as the big institutions essentially financialize these asset classes. Pretty much, lots of money floods in and depresses returns for everyone.

Reminds me of David Swenson at Yale who had great success with alternatives but he was early to the party. Other endowments attempting to follow Swenson's strategies did not enjoy his results.
A fool and his money are good for business.

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Re: Larry Swedroe: Diversifying Through Reinsurance And Marketplace Lending Interval Funds

Post by nedsaid » Tue Jul 10, 2018 10:20 am

Random Walker wrote:
Mon Jul 09, 2018 11:04 pm
Not at all a marketing campaign. If I “market” anything, I’d say it’s portfolio efficiency. There is no doubt that lack of portfolio efficiency is a real cost, and that is excluding the behavioral errors one sets himself up for with an inefficient portfolio. I have clearly said many times something to the effect that I believe the best and cheapest diversifier to an equity heavy portfolio is high quality, relatively short, bonds. From there, steps towards improved portfolio efficiency yield decreasing marginal improvement at increasing marginal cost. Each investor needs to decide where to draw the line. Some may draw it at adding bonds to a TSM portfolio, some may draw it at tilting to SV and decreasing overall equity allocation, and some may go so far as to add alternatives. I think discussion of more efficient portfolios and what price to pay for them is highly valuable. Nothing at all wrong for someone to take a much less expensive and much more simple approach, but the decision to do that is so much better if it is informed with knowledge of alternative options and the trade offs involved. If one learns about these alternatives now during a great equity bull and actively and intelligently decides against them now, then perhaps he is better equipped to stick with his simple and inexpensive TSM portfolio when things get rough.

Dave
Larry definitely believes in these products as he has put down a serious amount of his own money to buy into these. So he is definitely eating his own cooking.

There is a search for other sources of return as a lot of experts believe that future returns from stocks and bonds will be subdued compared to historical rates of return. My view is that the US Stock Market isn't as expensive as many of us here believe. It seems that there is a bit of future expected return panic going on and I am not so sure that is justified.
A fool and his money are good for business.

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Re: Larry Swedroe: Diversifying Through Reinsurance And Marketplace Lending Interval Funds

Post by Random Walker » Tue Jul 10, 2018 10:55 am

nedsaid wrote:
Tue Jul 10, 2018 10:16 am

This is my concern about alternatives as the big institutions essentially financialize these asset classes. Pretty much, lots of money floods in and depresses returns for everyone.
I agree that financialization is a big concern as well, but when there is a strong risk story behind a premium, then a rational market should perhaps cut the premium but not eliminate it.

Dave

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Re: Larry Swedroe: Diversifying Through Reinsurance And Marketplace Lending Interval Funds

Post by nedsaid » Tue Jul 10, 2018 11:10 am

Random Walker wrote:
Tue Jul 10, 2018 10:55 am
nedsaid wrote:
Tue Jul 10, 2018 10:16 am

This is my concern about alternatives as the big institutions essentially financialize these asset classes. Pretty much, lots of money floods in and depresses returns for everyone.
I agree that financialization is a big concern as well, but when there is a strong risk story behind a premium, then a rational market should perhaps cut the premium but not eliminate it.

Dave
In my mind, you want a good behavioral (human behavior/human nature) aspect to your explanation for market premiums. Over longer periods of time, humans do what humans do. Pretty much, as a group, we can't resist the greed and fear cycles. Human nature doesn't change and humans make the same behavioral errors over and over but perhaps in different ways each time.

If there isn't a good behavioral component to a risk premium, that risk premium likely will not persist over time. The exception might be limits to arbitrage like trying to short smaller and less traded stocks. If you believe in behavioral explanations, pretty much you believe that all you need to capture these risk premiums is great patience. You know that the greed/fear cycles will work in your favor, you just don't know when.
A fool and his money are good for business.

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Re: Larry Swedroe: Diversifying Through Reinsurance And Marketplace Lending Interval Funds

Post by Random Walker » Tue Jul 10, 2018 11:19 am

Nedsaid,
I agree human behavior doesn’t change, and I like behavioral stories + limits to arbitrage as well as risk explanations. I’ve become a big fan of value because there are both very good risk and behavioral explanations behind it.

Dave

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Re: Larry Swedroe: Diversifying Through Reinsurance And Marketplace Lending Interval Funds

Post by nedsaid » Tue Jul 10, 2018 11:31 am

Random Walker wrote:
Tue Jul 10, 2018 11:19 am
Nedsaid,
I agree human behavior doesn’t change, and I like behavioral stories + limits to arbitrage as well as risk explanations. I’ve become a big fan of value because there are both very good risk and behavioral explanations behind it.

Dave
I am not saying to put the markets on the couch so to speak. Certainly the quants can explain why certain things work and can put a risk story about it. But evaluation of risk to me seems to have a human nature explanation to it.

Value persists because low expectations are easier to beat than higher expectations. A risk story of higher leverage and more volatile earnings also works as an explanation.

Size persists because of the expectations effect and the fact that smaller companies get less attention from analysts and investors than large companies. It is also common sense that smaller companies have more growth potential than larger companies. You can make a good risk argument here as well as smaller companies are not as well established and are more vulnerable to downturns to the economy. In other words, larger companies tend to have more resources to weather bad times.

Quality persists because market participants value consistency and that is consistency of earnings. Market participants also value strong balance sheets, that is lower leverage. Humans like consistency and strength.

Low volatility seems to be in the spot between Value and Quality. You have consistent earnings but with lower growth rates than Quality. Expectations are low but not as low as for Value.

Momentum is sort of like Newtonian physics. What is in motion tends to stay in motion. Momentum is a measure of investor enthusiasm, what I would call the bandwagon effect. So what is in motion and indeed picking up speed is hard to stop but when it stops, look out.

So I think there are good arguments from both a behavioral and a risk perspective. It isn't all of one and none of the other.
A fool and his money are good for business.

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Re: Larry Swedroe: Diversifying Through Reinsurance And Marketplace Lending Interval Funds

Post by nisiprius » Tue Jul 10, 2018 2:27 pm

Could those of you who use advisors find out if you can buy Stone Ridge funds through your advisor? What I am curious to know is whether they are available through most good, big advisors, or whether they are hard to get even if you have an advisor.
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Re: Larry Swedroe: Diversifying Through Reinsurance And Marketplace Lending Interval Funds

Post by larryswedroe » Tue Jul 10, 2018 2:36 pm

To be helpful re Lendx and Expense ratio

As I have pointed out many times the SEC unfortunately has very dumb rules about what should be in the ER. Example if you own a loan like LENDX does and someone performs the servicing the SEC requires you to show that as expense (instead of lower interest income) but if you own the same asset in form of ABS then it's not in the ER, as Vanguard fund that owns MBS would have. There are other dumb things.

The "true" expense ratio, management fees and custodial fees, etc is 1.94%. But the fund does not apply the fee to the leveraged assets. Which means the fund holds about $140 of assets on which investors are earning returns, but are paying fees on only 100. So if you pay $1.94 on 140 of assets one way to think about the expense ratio you are being charged by the fund is about 1.4, not 1.94. Note the alternative River North looks cheaper at 1.5%, but it charges on the leveraged assets, so the equivalent would be bit over 2%.

Helps to have the full information when making judgments/decisions.

Given that Stone Ridge is running in effect a bank, not buying and index of securities, and the critical nature of the due diligence and monitoring, while I certainly would like to see lower fees, it seems reasonable to me and the expected net returns look attractive relative to the risks IMO. Note since inception (June 2016) the fund has far outperformed high quality intermediate Treasuries like a Vanguard intermediate Treasury fund that might be considered an alternative.

On another front we spent over three years doing due diligence on SR before approving them. So we could understand all the issues and learn their culture. We are almost done with our due diligence on River North and Pioneer which are possible alternatives. But we take our time.

As always if anyone has any questions can contact me directly

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Re: Larry Swedroe: Diversifying Through Reinsurance And Marketplace Lending Interval Funds

Post by UniversityEmployee9 » Tue Jul 10, 2018 3:57 pm

Thanks for the input, Larry! Loved your most recent book. At 28, I think I found your book and advice just in time to really make a huge difference in my long term returns.

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Re: Larry Swedroe: Diversifying Through Reinsurance And Marketplace Lending Interval Funds

Post by golfCaddy » Tue Jul 10, 2018 5:40 pm

1.49% of the ER is the cost of borrowed funds, so it might be reasonable to exclude that from the ER. However, if you want to compare its performance to that of a mutual fund, comparing a bond fund leveraged 40% to LENDX is closer to a fair comparison. Comparing an unleveraged bond fund to a 40% leveraged LENDX, gives LENDX an unfair advantage in performance comparisons. Larry Swedroe made a comparison to a Treasury fund, above. Bonds don't have any loan servicing costs. If you want to compare LENDX to a true bond fund, it's reasonable to still count the loan servicing costs as part of the LENDX ER.

Then, there's the question of risk. Were there any real funds around during to experience the 2007-2009 stock market crash and the subsequent increase in unemployment? If there weren't real funds, were there indices, which tracked the asset classes LENDX invests in?
Last edited by golfCaddy on Tue Jul 10, 2018 6:32 pm, edited 1 time in total.

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Re: Larry Swedroe: Diversifying Through Reinsurance And Marketplace Lending Interval Funds

Post by larryswedroe » Tue Jul 10, 2018 6:27 pm

golf caddy
Two points for you
First it makes no sense to include the servicing fee at all. As I pointed out if held in security form it would be excluded, just as Vanguard bond funds that include MBS don't show the servicing fee as fund expense. It's just dumb SEC rule and obviously inconsistent. And irrelevant in terms of returns. The fund in both cases is buying a NET return (after servicing fee). And investors earn the net yield.

Second re leverage. What you want to consider is the volatility of the fund and how leverage impacts it. We think vol of LENDX is about 5 (being conservative) which is about same as 5 year high quality bonds. The difference is that LENDX has much shorter duration but adds bit of leverage. So you get about same vol overall between the two. Hence why IMO that is a reasonable comparison. It trades of credit risk (more) for inflation risk (way less). Depends on which risks you want to take, Or could compare it to say floating rate note funds in vol as they often add bit of leverage. But I would not buy floating rate note funds

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Re: Larry Swedroe: Diversifying Through Reinsurance And Marketplace Lending Interval Funds

Post by golfCaddy » Tue Jul 10, 2018 6:52 pm

Second re leverage. What you want to consider is the volatility of the fund and how leverage impacts it. We think vol of LENDX is about 5 (being conservative) which is about same as 5 year high quality bonds.
1. Stock crashes are correlated with high unemployment, although there's some debate about the direction of causality. What would volatility have been like during the 2007-2009 crash and subsequent rise in unemployment?
2. How does LENDX value its assets? Are the daily values based on models or actual quotes? How often do the assets trade? How stale is the pricing? How much does that smooth returns?

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Re: Larry Swedroe: Diversifying Through Reinsurance And Marketplace Lending Interval Funds

Post by larryswedroe » Tue Jul 10, 2018 7:14 pm

golf caddy
Happen to answer any questions, just email me at lswedroe@bamadvisor.com
Also note that I only mentioned intermediate treasury as the typical fund used for fixed income. Obviously one should adjust for risks. With that said, vol of the two funds IMO is very similar, at least expected.
Larry

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Re: Larry Swedroe: Diversifying Through Reinsurance And Marketplace Lending Interval Funds

Post by stlutz » Tue Jul 10, 2018 10:49 pm

This is the problem I have with the marketing of these funds on BH. On one hand, when we are talking about returns, we have the statement,
I agree that financialization is a big concern as well, but when there is a strong risk story behind a premium, then a rational market should perhaps cut the premium but not eliminate it.
But then when we are talking about risk:
We think vol of LENDX is about 5 (being conservative) which is about same as 5 year high quality bonds. The difference is that LENDX has much shorter duration but adds bit of leverage. So you get about same vol overall between the two. Hence why IMO that is a reasonable comparison.
and
I sold ALL my CDs to invest.
(viewtopic.php?t=204480#p3136049)

So, when return is the subject, there is a risk premium. When risk is the subject, peer-to-peer lending is equivalent to a Treasury note or a CD.

Note that Stone Ridge does not make this claim the fund prospectus. They state--actually more like yell--that this fund is "risky".

To expound on that a little further, this statement is not really true:
Given that Stone Ridge is running in effect a bank
The difference between Stone Ridge and a bank is that banks can create money out of thin air. If there are creditworthy borrowers who want loans, banks do not have constraints on making such loans.

That means P2P is left with loans that banks don't want to make, which are more likely (though not always) to be ones that involve more risk. That doesn't make P2P lending a bad investment; it does make it a riskier one and the potential investor should weigh that risk when making the investment.

Again, *Stone Ridge* says LENDX is a risky investment. I would listen to them and only invest if you understand that.

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Re: Larry Swedroe: Diversifying Through Reinsurance And Marketplace Lending Interval Funds

Post by Dead Man Walking » Wed Jul 11, 2018 12:20 am

larryswedroe wrote:
Tue Jul 10, 2018 2:36 pm
On another front we spent over three years doing due diligence on SR before approving them. So we could understand all the issues and learn their culture. We are almost done with our due diligence on River North and Pioneer which are possible alternatives. But we take our time.
I have invested in several actively managed funds over the years. Many Bogleheads would classify my pursuit of active funds as performance chasing; however, I did my due diligence and actually read the prospectus and tried to understand the culture of the fund company. I didn't always select the best performing fund. I chose the fund which had the objective that I was seeking. I have achieved slightly better returns than a total market fund, which was my objective.

My previous post in this thread pointed out that the Pioneer fund outperformed the Stone Ridge fund. Your firm is doing its due diligence by investigating other funds. Determining the best actively managed fund that meets your objectives is difficult and time consuming. That is why Bogleheads advocate passive investing and using index funds. Index funds don't seem to be an option when investing in these alternatives. Good luck with your due diligence investigation.

DMW

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Re: Larry Swedroe: Diversifying Through Reinsurance And Marketplace Lending Interval Funds

Post by larryswedroe » Wed Jul 11, 2018 7:49 am

I just couldn't resist, It's this kind of post that is why I left, Absolute nonsense and typical of that poster as I have pointed out to him many times. One of the main reasons I won't get into debates any longer. Though will occasionally post to correct misunderstandings.

"So, when return is the subject, there is a risk premium. When risk is the subject, peer-to-peer lending is equivalent to a Treasury note or a CD."

First, I only mentioned the intermediate Treasury or CD not as a benchmark per se but as the typical asset (the alternative I would recommend) in a 60/40 portfolio or most portfolios. There are very different risks as anyone would know who has read what I've written on LENDX, which has included several articles which have been posted here by others. The trade offs are big risk premium, say 5%, and reduced duration/inflation risk in return for increased economic cycle risk. So increasing one risk (and giving up some liquidity and decreasing another). With LENDX you also lose the left tail protection that high quality fixed income provides. So up to investor to decide if good trade off.

I also note that the volatility of the two is expected to be about the same, say 5. So that is one measure of risk.
LENDX is not a substitute for high quality fixed income, but an alternative. In fact as I have written we recommend LENDX as alternative to equity for those with higher equity allocations and investors with low equity allocations CONSIDER it as alternative to fixed income.

Note the servicing fee is an expense in the same way trading costs and commissions are expenses but SEC does not require funds to show them as expense ratios. And one advantage of Stone Ridge is their size allows them to negotiate lower servicing fees than competitors in the space.

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Re: Larry Swedroe: Diversifying Through Reinsurance And Marketplace Lending Interval Funds

Post by nedsaid » Wed Jul 11, 2018 8:37 am

Another thing to point out is that recommendations for alternatives are limited to 20% of a portfolio. In a 60% stock/40% bond portfolio, 10% could come from the stock side and 10% from the bond side. A reworked portfolio would be 50% stocks/30% bonds/20% alternatives. Larry and his firm have been recommending that the alternatives be split four ways: alternative lending, reinsurance, portfolio insurance, and a factor fund that uses leverage and shorts. So LENDX would be 5% of a portfolio. As far as liquidity, at least 80% of the portfolio is liquid and the rest semi-liquid. When looked in that context, the risks of alternative lending don't look so wild.
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Re: Larry Swedroe: Diversifying Through Reinsurance And Marketplace Lending Interval Funds

Post by Whakamole » Wed Jul 11, 2018 9:13 am

nedsaid wrote:
Wed Jul 11, 2018 8:37 am
Another thing to point out is that recommendations for alternatives are limited to 20% of a portfolio. In a 60% stock/40% bond portfolio, 10% could come from the stock side and 10% from the bond side. A reworked portfolio would be 50% stocks/30% bonds/20% alternatives. Larry and his firm have been recommending that the alternatives be split four ways: alternative lending, reinsurance, portfolio insurance, and a factor fund that uses leverage and shorts. So LENDX would be 5% of a portfolio. As far as liquidity, at least 80% of the portfolio is liquid and the rest semi-liquid. When looked in that context, the risks of alternative lending don't look so wild.
Would 5% of a portfolio make a difference?

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Re: Larry Swedroe: Diversifying Through Reinsurance And Marketplace Lending Interval Funds

Post by nedsaid » Wed Jul 11, 2018 9:20 am

Whakamole wrote:
Wed Jul 11, 2018 9:13 am
nedsaid wrote:
Wed Jul 11, 2018 8:37 am
Another thing to point out is that recommendations for alternatives are limited to 20% of a portfolio. In a 60% stock/40% bond portfolio, 10% could come from the stock side and 10% from the bond side. A reworked portfolio would be 50% stocks/30% bonds/20% alternatives. Larry and his firm have been recommending that the alternatives be split four ways: alternative lending, reinsurance, portfolio insurance, and a factor fund that uses leverage and shorts. So LENDX would be 5% of a portfolio. As far as liquidity, at least 80% of the portfolio is liquid and the rest semi-liquid. When looked in that context, the risks of alternative lending don't look so wild.
Would 5% of a portfolio make a difference?
Well, you would have 5% of each of the four recommended alternative funds, giving you a total of 20%. This is a conservative approach, a lot of people would squawk if the percentage of alternatives got to be a third or a half of a portfolio. The alternatives would be looked at as a whole. But yes, a 5% allocation to one fund will probably not make much of a difference in performance or risk. However, you aren't buying just one alternative fund but four.

I am not a client of Buckingham nor do I own any of these alternative investments. They are worth consideration, one drawback is that they require advisor access. Thus you have two layers of fees. So I have decided for now not to go this route. There are alternative investments that can be purchased without an advisor but LENDX and the Re-Insurance Fund recommended by Larry do require an advisor to access.
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Re: Larry Swedroe: Diversifying Through Reinsurance And Marketplace Lending Interval Funds

Post by Random Walker » Wed Jul 11, 2018 9:29 am

The alternatives are truly alternatives to both stocks and bonds. They are different animals. But one needs to take from either stocks or bonds to create their position in the typical portfolio. These alternatives have equity like expected returns with about half the volatility of equity and no correlation to either stocks or bonds. So if one takes from equity to create the position, portfolio expected return stays about constant, portfolio volatility should decrease, portfolio Sharpe ratio should increase. If one takes from bonds, portfolio expected return increases, portfolio volatility increases to lesser extent, portfolio Sharpe ratio should also increase. Of course one can take a bit from both stocks and bonds to create the position as well.

When on creates an alternative position in a portfolio, he needs to appreciate where he is creating the position from, and how he expects to change the overall portfolio characteristics. When Larry made the comparison to intermediate bonds, it was basically an example of how the portfolio would have been affected if the investor had created the position from bonds.

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Re: Larry Swedroe: Diversifying Through Reinsurance And Marketplace Lending Interval Funds

Post by packer16 » Wed Jul 11, 2018 5:18 pm

I agree with the concept but the IMO the cost of using the suggested implementation was too high for my opinion of the expected performance. We had a thread about a year ago about alternatives with a number of suggested alternative funds held by some folks here (QSPIX, LENDX & SRRIX) and some I have researched & held (STOR, TSLX, BIP and Ocean Yield). The second group was based upon groups of high cash flowing alternative assets (NNN real estate, asset-based debt, infrastructure & ship leasing), sort of like bonds, with low expense ratios and diversified portfolios. I know one-year is too short a period to make a conclusion but since that thread here are the results:

Average of QSPIX (2.1%), LENDX (6.7%) & SRRIX (-12.6%) performance: -1.3%. Average of low cost alternatives (STOR or BNL (32.1%/10.2%), TSLX (-2.8%), BIP (4.4%) & OCY (17.0%)) performance: 12.7%/9.6% (using BNL vs. STOR). IMO a good portion of the difference is due to the higher cost of some of the alternatives in the first group versus the second group. This is just a small snapshot & we will see where we will end up in 5 or 10 years.

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Re: Larry Swedroe: Diversifying Through Reinsurance And Marketplace Lending Interval Funds

Post by larryswedroe » Wed Jul 11, 2018 8:52 pm

one other thought to add that again showing people make statements they have no clue about but speak as if they do, making declarative statements such as "That means P2P is left with loans that banks don't want to make, which are more likely (though not always) to be ones that involve more risk."

this is exactly the opposite of the truth. The P2P lenders are taking away large market share from the banks, disintermediating them because they don't have the branch infrastructure and regulatory issues, and can charge lower rates. Taking much business away from high cost credit cards for example. The average credit score is in excess of 700 and banks "kill" for those type loans.

Best wishes
Larry

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Re: Larry Swedroe: Diversifying Through Reinsurance And Marketplace Lending Interval Funds

Post by stlutz » Wed Jul 11, 2018 10:16 pm

one other thought to add that again showing people make statements they have no clue about but speak as if they do, making declarative statements such as "That means P2P is left with loans that banks don't want to make, which are more likely (though not always) to be ones that involve more risk."

this is exactly the opposite of the truth. The P2P lenders are taking away large market share from the banks, disintermediating them because they don't have the branch infrastructure and regulatory issues, and can charge lower rates. Taking much business away from high cost credit cards for example. The average credit score is in excess of 700 and banks "kill" for those type loans.
The typical person on this forum (who lenders kill for), when they want to borrow money, will take out some type of home equity loan. These provide a low rate for the borrower and low risk for the bank. Banks like to lend to people who can demonstrate that they don't need the money.

People who need the money may have very high credit scores, but they are still higher risk customers.

A bank operating as a bank with the exact same loan portfolio as Lending Club or Prosper would be considered a very risky bank. And yes, regulators won't allow them to do that.

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Re: Larry Swedroe: Diversifying Through Reinsurance And Marketplace Lending Interval Funds

Post by stlutz » Wed Jul 11, 2018 11:53 pm

When I buy a CD from the bank, my principal and earned interest are guaranteed, not only by the bank but by the US government. If I buy a Treasury bond, I can be super-highly confident of getting paid back as well.

The next level of risk in fixed income would be municipal bonds. Default rates are extremely low here, but they aren't zero either.

Then there are corporate bonds. Across the board, corporate defaults average about 1.5% per year.

High-yield/speculative/"junk" bonds have higher default rates than those, averaging a little over 4% per year. Note that these are default rates--part of that money is usually recovered post default.

Default rates on P2P loans are higher than these figures. Moreover, the risk of P2P loans shows up at the "wrong time" as Larry used to say.

Stone Ridge describes it this way in their annual report:
An investment in the Fund involves a high degree of risk. It is possible that investing in the Fund may result in a loss of some or all of the amount invested. The value of the Fund’s investments in whole loans and other alternative lending-related securities, such as shares, certificates, notes or other securities representing an interest in and the right to receive principal and interest payments due on whole loans or fractions of whole loans, is entirely dependent on the borrowers’ continued and timely payments. The Fund generally will need to rely on the efforts of the platforms, servicers or their designated collection agencies to collect on defaulted loans and there is no guarantee that such parties will be successful in their efforts to collect on loans. Even if a loan in which the Fund has investment exposure is secured, there can be no assurance that the collateral will, when recovered and liquidated, generate sufficient (or any) funds to offset any losses associated with the defaulting loan. Although the Fund conducts diligence on the platforms, the Fund generally does not have the ability to independently verify the information provided by the platforms, other than payment information regarding loans and other alternative lending-related securities owned by the Fund, which the Fund will
observe directly as payments are received. The default history for alternative lending borrowing arrangements is limited and future defaults may be higher than historical defaults.
Now, this doesn't make P2P lending a bad investment at all. These notes pay higher interest rates to compensate for the risk. The corporate high yield ETF (HYG) has an SEC yield of 5.8% currently. P2P loans have higher rates than this.

As to whether investors are getting enough compensation for the risk they are bearing, I honestly don't know. I haven't opined on that and am not doing so now. Right now I don't think high yield bonds offer high enough yields to compensate for the additional risk. That has been different at various times in the past and likely will be again in the future. I am open to investing in HY bonds; I choose not to right now. If there was an P2P fund/ETF that I could easily invest in, I'd be open to it as well. But I would do so based on a clear understanding of where such a fund lies in the risk continuum--i.e. riskier than HY corporate debt.

Now, Dave and Larry haven't talked so directly about "risk" but instead about "volatility". Assets that are illiquid always appear less volatile. I own individual Treasury bonds and some individual muni bonds. The day-to-day price volatility of the Treasuries is higher than the munis. That is because Treasuries trade a lot; the munis I hold trade now and then. On the other days Fidelity relies on evalulated pricing to value them, which tends to smooth out the differences.

If bunches of P2P loans were lumped together into single securities that traded frequently like most corporate bonds, that liquidity would make them appear to have a lot more day-to-day volatility.

In short, the lower volatility that less liquid investments often have is not an indication of lower risk; it's an indication of hidden risk.

Any investment can be an "alternative" to a Treasury bond. If I sold all of my Treasury ETFs to buy stocks, I would be very up front that I had dramatically increased the risk of my portfolio. In these threads on alternatives, the implication is always offered that they are more like bonds in terms of risk than stocks. Stone Ridge and stlutz disagree with that.

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Re: Larry Swedroe: Diversifying Through Reinsurance And Marketplace Lending Interval Funds

Post by larryswedroe » Fri Jul 13, 2018 12:19 pm

Sorry but just had to post this, once again showing how people post without actually knowing what they are talking about yet making very declarative statements. I just received an email today from Stone Ridge with a new paper entitled An Alternative to Bonds in a Modern Portfolio, and of course LENDX is listed along with with the explanations

And yet the poster states Stone Ridge does not agree that LENDX is an alternative to bonds.

What's missing from the author's post is obviously he has never talked with Stone Ridge, at least that is my assumption, nor does he consider what is written in things like prospectuses and annual reports is written by the attorneys to minimize the risks of lawsuits.

As I noted I've fully explained all of the risks of the fund including economic cycle risks, correlation with UE, and illiquidity, With the trade off being a large expected premium for those risks and greatly reduced inflation risk relative to bonds. And at least one measure of risk, an important one is volatility, and the volatility of the fund is expected to be similar to that of intermediate Treasuries which is about one-quarter of that of equity portfolios. So to say LENDX is more equity like than bond like to me seems to be a mistake. Clearly not a substitute for safe bonds, but a good alternative if can take the risks.

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Re: Larry Swedroe: Diversifying Through Reinsurance And Marketplace Lending Interval Funds

Post by willthrill81 » Fri Jul 13, 2018 3:20 pm

larryswedroe wrote:
Fri Jul 13, 2018 12:19 pm
So to say LENDX is more equity like than bond like to me seems to be a mistake. Clearly not a substitute for safe bonds, but a good alternative if can take the risks.
:thumbsup

My five years of experience in directly investing in P2P loans corroborates with this. I'm not very pleased with my returns over the past 20 months (4.5%), but it's still far more bond-like than equity-like.

Consumer credit is an asset class that has been around for decades and has been shown to be a remarkably stable asset class. Even during the last recession, credit card issuers and P2P note holders were still, in aggregate, in the black.

I like that LENDX doesn't carry the platform risk of direct investment in P2P notes, but the fees involved in just getting access to it (I'm a DIY investor) dissuade me from it. It is my suspicion that over time, we'll see more funds target consumer credit and, in turn, see lower returns for investors.
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Re: Larry Swedroe: Diversifying Through Reinsurance And Marketplace Lending Interval Funds

Post by stlutz » Fri Jul 13, 2018 9:00 pm

I generally view the value of the these threads as a way to illuminate different ways of evaluating an investment, so allow me to ask for a clarification from Larry/Dave/willthrill or whoever wants to opine.

I proposed that the best way to compare the risk of otherwise similar fixed income investments is to look at the likelihood of not getting paid what you were promised. Based on that criteria, I'm proposing the following rank of riskiness from lowest to highest:

1) a 3 year treasury note
2) a collection of 3 year investment-grade muni bonds
3) a collection of 3 year investment-grade corporate bonds
4) a collection of 3 year high-yield corporate bonds
5) a collection of 3 year P2P personal loans.
...
85) lending the money to my stoned nephew.

Larry Swedroe has proposed multiple times that the riskiness of such investments is best evaluated based on annual standard deviation. Based on that, I think the rank would be something like:

1) a collection of 3 year investment-grade muni bonds
2) a 3 year treasury note
3) a collection of 3 year P2P personal loans.
4) a collection of 3 year investment-grade corporate bonds
5) a collection of 3 year high-yield corporate bonds

That's a reasonable way of looking at it. Is that in fact the way you would rank them Larry? And I am curious what others think as well and why.

And, to repeat myself, I am focusing solely on the risk side of the equation here. I haven't opined in any of these threads whether the risk is "worth it". That's just my general approach to assessing an investment--get a clear understanding of the risk first and then evaluate the return next.

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Re: Larry Swedroe: Diversifying Through Reinsurance And Marketplace Lending Interval Funds

Post by willthrill81 » Fri Jul 13, 2018 9:11 pm

stlutz wrote:
Fri Jul 13, 2018 9:00 pm
I generally view the value of the these threads as a way to illuminate different ways of evaluating an investment, so allow me to ask for a clarification from Larry/Dave/willthrill or whoever wants to opine.

I proposed that the best way to compare the risk of otherwise similar fixed income investments is to look at the likelihood of not getting paid what you were promised. Based on that criteria, I'm proposing the following rank of riskiness from lowest to highest:

1) a 3 year treasury note
2) a collection of 3 year investment-grade muni bonds
3) a collection of 3 year investment-grade corporate bonds
4) a collection of 3 year high-yield corporate bonds
5) a collection of 3 year P2P personal loans.
...
85) lending the money to my stoned nephew.

Larry Swedroe has proposed multiple times that the riskiness of such investments is best evaluated based on annual standard deviation. Based on that, I think the rank would be something like:

1) a collection of 3 year investment-grade muni bonds
2) a 3 year treasury note
3) a collection of 3 year P2P personal loans.
4) a collection of 3 year investment-grade corporate bonds
5) a collection of 3 year high-yield corporate bonds

That's a reasonable way of looking at it. Is that in fact the way you would rank them Larry? And I am curious what others think as well and why.

And, to repeat myself, I am focusing solely on the risk side of the equation here. I haven't opined in any of these threads whether the risk is "worth it". That's just my general approach to assessing an investment--get a clear understanding of the risk first and then evaluate the return next.
Larry is more qualified to answer this than I am, but from what I've seen and experienced, I'd say that a well diversified portfolio of P2P loans is close to the same risk as investment grade corporate bonds. Consumer credit, in general, is far less volatile than high-yield bonds. The former was in the black in 2008, whereas Vanguard's high-yield bond fund returned -21% that year.
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Re: Larry Swedroe: Diversifying Through Reinsurance And Marketplace Lending Interval Funds

Post by stlutz » Fri Jul 13, 2018 9:18 pm

Sorry but just had to post this, once again showing how people post without actually knowing what they are talking about yet making very declarative statements. I just received an email today from Stone Ridge with a new paper entitled An Alternative to Bonds in a Modern Portfolio, and of course LENDX is listed along with with the explanations

And yet the poster states Stone Ridge does not agree that LENDX is an alternative to bonds.

What's missing from the author's post is obviously he has never talked with Stone Ridge, at least that is my assumption, nor does he consider what is written in things like prospectuses and annual reports is written by the attorneys to minimize the risks of lawsuits.
So you're saying I should be more inclined to invest because you say that the folks at Stone Ridge don't believe the stuff they write? I truly think they are honest folks. I don't quite get why you're always trying to convince me that the opposite is true.

Any investment firm has people whose job is risk management. I'm sure Buckingham has such people. For many firms, those people are lawyers but sometimes they aren't. Lawyers evaluate risk for a living. And sure, no investment ever gets made if you only listen to lawyers. Conversely, investment managers focus on return. They have a tendency to underestimate risk. And there is generally a tension between the return-seeking portions of a firm and the risk-managing roles. There should be.

So, perhaps a more precise way for me to put it is that the people that Stone Ridge pay to evaluate risk say that LENDX is quite risky. I'm confident they would not go on and on about it for page after page in their reports if they also had a short-term Treasury bond fund.

Now, Stone Ridge also makes it very clear that they think that the expected rewards of P2P loans make the risk "worth it". I have no objection to them saying that either.

What they write is very clear. If I do not know much about an investment (as you claim I don't), I always like to go to the prospectus and the annual reports and study those documents to learn more. You've made it clear that you think this is a bad approach. That's fine. I don't intend to change my approach.
Last edited by stlutz on Fri Jul 13, 2018 9:28 pm, edited 1 time in total.

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Re: Larry Swedroe: Diversifying Through Reinsurance And Marketplace Lending Interval Funds

Post by stlutz » Fri Jul 13, 2018 9:27 pm

...but from what I've seen and experienced, I'd say that a well diversified portfolio of P2P loans is close to the same risk as investment grade corporate bonds. Consumer credit, in general, is far less volatile than high-yield bonds. The former was in the black in 2008, whereas Vanguard's high-yield bond fund returned -21% that year.
Thanks for the reply! And your point is fair.

My perspective is that it can be difficult to evaluate the riskiness of an asset that prices every day vs. one that does not. The actual performance of high yield bonds in 2008 from a book value perspective (i.e. interest paid and principal returned minus defaults) was not near as bad as the market performance was.

One of the advantages of alternative investments (as well as residential real estate) is that they don't price every day and so the value updates only because of long-term fundamentals as opposed to rapidly changing perceptions of future fundamentals and comparisons vs. other investments. Whether this reduction in volatility equates to a reduction in overall risk is something that has, can, and will be debated.

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Re: Larry Swedroe: Diversifying Through Reinsurance And Marketplace Lending Interval Funds

Post by golfCaddy » Fri Jul 13, 2018 9:51 pm

willthrill81 wrote:
Mon Jul 09, 2018 6:40 pm
In discussing diversification, I wonder whether anyone here invests in catastrophe bonds. If you want an asset class whose returns are almost entirely uncorrelated with anything else, that seems to be a great choice.
It's an interesting concept? Are there any mutual funds invested primarily in cat bonds?

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Re: Larry Swedroe: Diversifying Through Reinsurance And Marketplace Lending Interval Funds

Post by willthrill81 » Fri Jul 13, 2018 10:22 pm

golfCaddy wrote:
Fri Jul 13, 2018 9:51 pm
willthrill81 wrote:
Mon Jul 09, 2018 6:40 pm
In discussing diversification, I wonder whether anyone here invests in catastrophe bonds. If you want an asset class whose returns are almost entirely uncorrelated with anything else, that seems to be a great choice.
It's an interesting concept? Are there any mutual funds invested primarily in cat bonds?
Larry Swedroe wrote in what I would call a cautiously optimistic manner about cat bonds here a couple of years back.

But to my knowledge, there are no funds out there that only invest in cat bonds. There are a few funds out there that invest in them as well as other asset classes like reinsurance. Perhaps institutions are afraid that there isn't a market for them. The big occasional losses in this market would be really off-putting to a lot of fixed income investors. I believe that as of now, direct investment in individual cat bonds is the retail investor's only choice.
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Re: Larry Swedroe: Diversifying Through Reinsurance And Marketplace Lending Interval Funds

Post by OldGuy101 » Sat Jul 14, 2018 5:36 pm

For you guys that are worrying about adding a 2nd tier to your investment costs, there are fee-only financial advisers out there that have access to DFA and Stoneridge finds. You just have to find them. IMO Larry gives great advice, but his firm charges too much.

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Re: Larry Swedroe: Diversifying Through Reinsurance And Marketplace Lending Interval Funds

Post by willthrill81 » Sat Jul 14, 2018 6:06 pm

OldGuy101 wrote:
Sat Jul 14, 2018 5:36 pm
For you guys that are worrying about adding a 2nd tier to your investment costs, there are fee-only financial advisers out there that have access to DFA and Stoneridge finds. You just have to find them. IMO Larry gives great advice, but his firm charges too much.
Any suggestions?
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

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Re: Larry Swedroe: Diversifying Through Reinsurance And Marketplace Lending Interval Funds

Post by golfCaddy » Sat Jul 14, 2018 7:19 pm

willthrill81 wrote:
Fri Jul 13, 2018 9:11 pm
Larry is more qualified to answer this than I am, but from what I've seen and experienced, I'd say that a well diversified portfolio of P2P loans is close to the same risk as investment grade corporate bonds. Consumer credit, in general, is far less volatile than high-yield bonds. The former was in the black in 2008, whereas Vanguard's high-yield bond fund returned -21% that year.
In the case of LC, across all vintages, their A-grade adjusted net annualized return is 4.68%. More recent vintages, 2015 Q1 and later, show a similar number 4.54%. Given TBM's 10-year return of 3.55% and current SEC yield of 3%, that works out to a spread of 1-2% above Vanguard's total bond market. Without leverage, the returns don't seem great before paying a company like Stone Ridge a 2% management fee. Larry's book reports increased creditor risk is not rewarded in P2P lending, with higher interest rates not compensating for increased default risk. However, this does not match LC's more recent data, showing an investment sweet spot for C-grade loans.

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Re: Larry Swedroe: Diversifying Through Reinsurance And Marketplace Lending Interval Funds

Post by larryswedroe » Sat Jul 14, 2018 7:37 pm

Another case of making statements which are false
One of the advantages of alternative investments (as well as residential real estate) is that they don't price every day
Stone Ridge products, as all the alts we use, price daily with Ernst and Young as the auditor

And fwiw, of course one should read a prospectus but understand the nature of the writing and its purpose.

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Re: Larry Swedroe: Diversifying Through Reinsurance And Marketplace Lending Interval Funds

Post by willthrill81 » Sat Jul 14, 2018 7:50 pm

golfCaddy wrote:
Sat Jul 14, 2018 7:19 pm
willthrill81 wrote:
Fri Jul 13, 2018 9:11 pm
Larry is more qualified to answer this than I am, but from what I've seen and experienced, I'd say that a well diversified portfolio of P2P loans is close to the same risk as investment grade corporate bonds. Consumer credit, in general, is far less volatile than high-yield bonds. The former was in the black in 2008, whereas Vanguard's high-yield bond fund returned -21% that year.
In the case of LC, across all vintages, their A-grade adjusted net annualized return is 4.68%. More recent vintages, 2015 Q1 and later, show a similar number 4.54%. Given TBM's 10-year return of 3.55% and current SEC yield of 3%, that works out to a spread of 1-2% above Vanguard's total bond market. Without leverage, the returns don't seem great before paying a company like Stone Ridge a 2% management fee. Larry's book reports increased creditor risk is not rewarded in P2P lending, with higher interest rates not compensating for increased default risk. However, this does not match LC's more recent data, showing an investment sweet spot for C-grade loans.
When I researched which factors were associated with the highest prior returns, E- and F- grade notes offered the highest net returns. F-grade notes are no longer being issued by LC, but E still are. My research suggested that there was indeed a return premium for taking credit risk. That may no longer be true though.
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Re: Larry Swedroe: Diversifying Through Reinsurance And Marketplace Lending Interval Funds

Post by Bodhi312 » Sat Jul 14, 2018 9:23 pm

OldGuy101 wrote:
Sat Jul 14, 2018 5:36 pm
For you guys that are worrying about adding a 2nd tier to your investment costs, there are fee-only financial advisers out there that have access to DFA and Stoneridge finds. You just have to find them. IMO Larry gives great advice, but his firm charges too much.
www.fplcapital.com

I’m a client of theirs, but have not invested in StoneRidge funds.

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