Harmoney

[Cool Bear]

Leesal have a very valid point on the XIRR for which I can give an example on an actual fund I have invested in Harmoney on behalf of a friend. It is just 3 months old and about $80k.

The first RAR from Harmoney is:
11.34% as shown in the attached screenshot.

When I calculate the XIRR, it is 20.5%. (note for Leesal, my method is just simply accounting for deposits - no withdrawals - and taking the ending o/s bal as cash return, no individual loans calculation).

However, when I remove the PP effect on the o/s balance of approx $1435.31. ((the difference between "Borrower Principal Amount" of $81435.31 and "Loan Investments (funded)" of $80,000.00)), the resulting XIRR is just 8.26%. The difference is of no surprise to me as I expected that. The month before (2 months in) it was something like 22% vs 4%.

As time goes by, the gap will narrow a lot. My 14+% RAR for my own investment (see post above) of about 3 years have an XIRR of 14.4% and XIRR (with PP removed) of 13.4%. For all these XIRR figures, I simply added back the tax paid to date as a lump sum figure to the o/s balance to enable comparison to Harmoney's RAR.

[Cool Bear]

Please note that the screenshot in the post above was taken on 7th January 2018, while the XIRR calculation was on 31 December 2017 when total interest received was just $1282.86