Prosper Newsletter: Portfolio ROI Falls

Prosper sent out a monthly newsletter that hit my email box today. The most astounding thing has been the rather notable fall in the portfolio ROI.

I had a hard time believing that the conservative portfolio estimated return had dropped to 5.10%. I remember the heady days of 8% anticipated returns with the Conservative portfolio. With Bankrate showing some 3-year CDs offering 4.45%, what exactly is the attraction? I cannot see the added risk of the Prosper lending market being worth about a half a percent, especially when the principle is not guaranteed and there's no way to get the money out (yet) if you need it.

Only Prosper could pinpoint what's driving this, but several rate cuts and banks desperately competing for high quality borrowers probably isn't helping.