New Fundrise Performance Track Record Tool To Boost Transparency

Fundrise is a leading real estate investing platform today with over 220,000 clients and $2.5+ billion in assets under management. The firm recently launched a new performance track record tool to boost transparency for individual investors.

With stock market volatility back and negative real mortgage rates, my focus is moving towards capital preservation and investing in diversified real estate funds. The 10-year bond yield's recent move below 1.4% is a good tailwind for real estate demand.

Fundrise is a proud sponsor of Financial Samurai. Here is their guest post explaining their latest innovation.

New Fundrise Performance Track Record Tool

For all the innovations in investing brought by fintech, the salient question for most savvy investors really hasn’t changed. And that is: What’s the return on my investment going to look like?

Investment firms can’t predict the future, of course. We’ve all read those disclaimers about the limitations of “past performance.” Typically, a finance firm will give you some information about what’s happened in the past and leave it there. And like most firms, that’s what we already offered: data on average historical returns.

We took that data to a new level, unveiling a tool that lets Fundrise members see the actual performance of individual clients in real-time.

Instead of rolling up all individual client accounts into a single, blanket “x%” figure, our tool unrolls our overall performance figure. It lets you view returns for every individual who’s ever invested in Fundrise.

These aren’t accounts we’ve selected to share — they are auto-populated by the tool, which includes every single Fundrise client portfolio that fits the parameters of the chart.

Real-Time Returns Of Fundrise Client Accounts

Real-Time Returns Of Fundrise Client Accounts

Illustrative screenshot captured on 12/17/2021. View the full, interactive tool at Fundrise Track Record. Learn more about the assumptions in this section at the bottom of this article,1 or view our full disclosure.

As you use the tool, you can click on each point and see key information about the specific investor that dot represents.

The tool is automated and updates itself every day. That means the figures you see more accurately represent investor experiences—not just a snapshot of a quarter but everyday ups and downs.

While there are certain times of the year when account values are more likely to change from one day to the next due to events like dividend distributions, the real-time nature of the tool means you don’t have to wait for us to release new “platform average” calculations to assess how investors performed.

Fundrise Performance: Individual Client Snapshot Example

Here’s a randomly sampled profile of one such investor, within a standard deviation of the average for someone who’s been on our platform for two years. We blurred out their cumulative return percentage so we could show you the capabilities of our tool, without using a single data point that might mislead you on what returns are like.

(Full cumulative return data is visible through the tool on our site)

As far as we know, no other investment platform offers this level of granularity into their real investors’ ongoing portfolio performance.

This is what “radical transparency” actually looks like. Not a slogan, but real data to inform decision-making.

You can explore the interactive tool for yourself here. The tool is for those with a Fundrise account, but opening an account is free, no investment required.

(Note that when you load the page, the tool’s default view is partially condensed, to exclude any extreme outliers—on the positive end—to make the chart easier to read. To fully expand the chart, click the plus sign icon in the top left corner.)

Why Return Averages Don't Provide The Best Picture

When you look at the historical returns for a fund or index or portfolio, the traditional, single-figure percentage is no doubt useful. Averages give you a sense of the overall trends.

Take a look at this chart of asset class returns published by BlackRock. It displays the performance of eight key indices over the course of twenty years. You may have to zoom in to see the return averages more clearly.

Asset class returns by year from 2001 - 2020

Source: “Asset class returns,” BlackRock.

While this presentation and format do convey one powerful message — the importance of diversification, as individual indices yo-yo wildly up and down the rankings from year to year — no single number can possibly give you much sense of any individual investor’s experience, especially from one year to the next.

The average can’t quite help you envision what your personal experience as an investor could be. Spending time with our scatter plot puts individuals at the center of the story.

By focusing on individual returns, the scatter plot also provides a level of accuracy that sometimes gets obscured when the focus is on an average. For more information, here is a Fundrise overview we did on Financial Samurai as well.

Averages Can Be Misleading

Averages can be a good way to measure trends, but they can also easily mislead true performance. That’s because outliers can skew the numbers.

Think about income. Stephanie Coontz illustrated this particularly well in a piece years ago for the New York Times: Imagine Warren Buffett and Oprah moved to a small town in Ohio where there are just 7,878 households and average income the was $46,341. Add those two super-rich people to the mix and suddenly household income rises 62%, to $75,263. No one feels any richer, of course.

Better to see how each household is doing, right?

That’s why in real estate, we often talk about median home prices. To get rid of the outliers.

The average sales price for a block of traditional middle-family homes can be completely skewed by the mansion on the corner.

Strong Correlation With Returns And Time On Platform

The scatter plot makes it easy to see an important phenomenon we’ve written about before: Fundrise investors’ annual returns have historically been highly correlated to their time on the platform.

It’s typical for our investors not only to accumulate more returns over time (as would be true of any platform with consistently positive returns), but the rate of return tends to increase for the average investor each year.

The track record tool makes this simple to track. It represents all of the separate data points according to their time on the platform. Just looking at the averages for each year marked on the chart, consider the growth from year to year. As of writing, the track record tool provides the following figures:

Fundrise Returns And Years On Platform - Strong Fundrise performance over time

As you can see, from years 1 through 5, the rate at which our investors’ accounts are growing is increasing with direct correlation to their time on the platform.

Improving Transparency And Trust

Our hope with the track record tool is that not only will it help you figure out what your returns will look like — but it will answer a bigger question on some new investors’ minds: “What would it mean to take the leap and invest with Fundrise?”

For starters, it means investing with a platform committed to transparency. It’s that commitment to open information that’s led us to:

1) Publishing communications about every individual investment property on our platform;

2) Discussing our investment strategies publicly at times like the beginning of the COVID pandemic

3) Lower the barrier to entry for our starter portfolio to $10, so that, now, anybody can invest in real estate.

Get started today and picture your future with us.

Sign Up Here For Fundrise


1 This chart is intended to provide transparency for prospective clients, and other interested parties, into how the accounts of our other clients have performed.

As shown in great detail in the “Client Track Record” chart, individual results and performance may and will vary greatly. Past performance is not indicative of future results. All investments involve risks and may result in partial or total loss.

Each data point included in the “Client Track Record” chart represents the cumulative time-weighted returns, calculated using the Modified Dietz method, of an individual client account of Fundrise Advisors over the period beginning on the first day that such account became a shareholder in one or more of the sponsored programs, and ending yesterday, or in cases where the account was fully redeemed, the last day that such account held shares. This data captures inputs specific to each individual client shown, including fees charged, redemption penalties, and investment decisions by the applicable individual such as plan selected, dividend reinvestment, auto-investment, and manual investments.

The performance calculations do not include the performance of project dependent notes, investments in Rise Companies itself (the “Fundrise iPO”), or the Fundrise Opportunity Fund.

The “Client Track Record” chart does not represent the individual performance of any specific investment program (e.g., an eREIT) sponsored by Rise Companies. Fundrise Performance is a FS original post.

About The Author

9 thoughts on “New Fundrise Performance Track Record Tool To Boost Transparency”

  1. Hi Sam, I finally jumped into Fundrise. First foray into real estate. I am thinking longer term, wanted to diversify my investments (too much stock market exposure), and thinking this will be equally lucrative to renting out a townhouse without the headaches. For now, I plan to reinvest the dividends and pump some of my wife’s pay into the platform every month. Thanks for your guidance on this matter throughout your blog.

  2. Samurai

    The write-up emphasizes that “the rate at which our investors’ accounts are growing is increasing with direct correlation to their time on the platform,” but couldn’t you just read that as the best returns were for those who joined the platform in the first year or two, and they have steadily gotten worse the most recent years?

    That’s what I’ve noticed with all these “crowd-sourced” or “peer-to-peer” investing programs. The first couple years are decent, then they get noticed more widely and everyone joins up and the quality of the investment offerings get worse and worse just to fill the demand.

    And while this is something of an alternative asset, those returns after a 6 year bull run in pretty much everything is very meh. I’m bullish on real estate, but I have a hard time envisioning a better run for RE than the last 5+ years and yet these returns lose to a simple balanced 60/40 fund by roughly 30% over the shown 6 year period. It obviously gets crushed (doubled) by VTSAX.

    1. Yes. Those who invested earlier have a higher compound rate of return. I think that’s the same for most investments.

      And Fundrise’s CEO explicitly said in their 3Q2021 update the gains are outsized and unlikely to be repeated. And I believe him, because my 2022 real estate prediction calls for half the price appreciation as in 2021.

      But I’m still bullish on real estate and expect 8-10% median single family price growth in 2022.

  3. Fundrise (FR) seems pretty cool and transparent. Couple of questions:

    1. What’s the best way to handle this investment in relation tax filing purpose? Does FR send some kinda tax document? Is there a difference between holding short term (up to 3 years) vs long term (>3 years or more)? Do we need to pay tax on Gains to Federal, State and Local?

    2. Can someone share their experience on withdrawing their investment from FR? For example, how long does it take or how much % allowed to withdraw per each request etc.,

  4. Fundrise (FR) seems pretty cool and transparent. Couple of questions:

    1. What’s the best way to handle this investment in relation tax filing purpose? Does FR send some kinda tax document? Is there a difference between holding short term (up to 3 years) vs long term (>3 years or more)? Do we need to pay tax on Gains to Federal, State and Local?

    2. Can someone share their experience on withdrawing their investment from FR? For example, how long does it take or how much % allowed to withdraw per each request etc.,

  5. Oh wow that’s pretty sweet. Haven’t seen something like that before that shows real time data of an existing client base’s returns. Love the transparency. The older I get the more and more I like allocating to REC versus self managed rental property for investing. Especially with all the crazy weather we’ve been having with rain and wind storms. Mother nature can be so darn rough on houses.

  6. I’ve invested about $50k in FR this year and have been happy with website, app and transparency. Not as strong of returns as rentals I’ve bought myself but still strong returns and zero effort vs a lot of effort for rentals.

  7. Very cool tool. Now if only we could get that for 100’s of millions of various and sundry investment accounts globally, we might learn some very interesting things about how people invest the way they do and why.

Leave a Comment

Your email address will not be published. Required fields are marked *