Mintos Auto Invest | Here is my Mintos Strategy
If you are just starting out investing on Mintos you might be wondering how to set up the Mintos Auto Invest function so you don’t need to waste time and invest manually.
I’ve been investing on Mintos since July 2017 with annual returns of more than 10% (10.15% to be specific) and no default loans (so far). Find out what I think about the platform as well as my Mintos review here.
Choosing the best investment strategy isn’t always easy and setting up your Auto Invest on Mintos might be quite challenging if you are just starting out with P2P lending. I mean, who knows what’s the best Auto Invest settings?
In this post, I will help you understand the Mintos Auto Invest so you can make educated decisions and invest into loans, that suit your investment strategy. I will be also sharing my Mintos Auto Invest strategy that generates me stable returns of more than 10% every year.
I will also explain step by step the process of setting up your Mintos Auto Invest that will help save your time and lower the risk of default.
Define your Mintos Auto investment strategy
“Defining my investment strategy?” Let’s just give me your Mintos Auto Invest strategy … you might be thinking.
Note, that having an investment strategy is extremely important. Not only it allows you to have clear goals but also lowers the risk of default, meaning you have a clear vision that is defining your investment decisions.
Long Story Short, you should think about the following when investing on Mintos or any other P2P lending site.
- How much do you want to invest?
- How long do you want to invest?
- What’s your expected return?
- What’s your risk profile?
Investment period: When do you plan to withdraw your money? Maybe you are saving up for a specific purchase. Choosing shorter loan periods allows you to access your money faster if you don’t want to deal with secondary market sell-offs.
Interest: Most investors on Mintos try to get the high-interest loans. That makes complete sense, however, you should also be looking at the loan originators that lists those loans. Higher interest is always connected to higher risks. Keep that in mind.
Risk: Mintos Auto Invest allows you to follow different strategies. You can choose loan originators according to the Mintos rating (suboptimal). You can also only invest in loans with a buyback guarantee and hope that the loan originator can keep that promise and buy back your investment if the borrower is late with its payments for more than 60 days.
Now you should have an idea of what to think about when setting up your Mintos Auto Invest strategy.
Let’s have a look at how you can let Mintos invest for you – right, I am talking about the Mintos Auto Invest options.
Mintos Auto Invest – Custom Strategy
Most of the Mintos investors, me included, set up their Auto Invest individually using the Custom Strategies. You can reach the option by choosing Invest in the top bar menu and clicking on Auto Invest and Create New Auto Invest strategy.
You will have the option to choose between the:
- Mintos Investment Strategies
- Mintos Custom Strategy
The Mintos Auto Invest custom strategy allows you to choose loans based on currency, market, loan originator, rating, loan type, country, buyback guarantee, loan period, investment amount as well as further diversification options.
Meaning you are in full control where your money is being invested (if you set it up in a right way). An amazing tool, if you ask me.
Now, how to set up your Mintos Auto Invest? What’s the best strategy for you?
Ideally, you set up your Mintos Auto Invest based on your defined strategy – or at least have it in mind when defining your criteria.
My Mintos Auto Invest Strategy
Setting up the Mintos Auto Invest might be overwhelming for investors that are just starting out investing in P2P loans.
When it comes to setting up the Auto Invest I am aiming to decrease the time spent on this task while diversifying as much as I can to lower the potential risk.
Obviously, there is no way to eliminate the risk completely. My strategy, however, helps me generate on average more than 10% interest on my investments on Mintos every year.
Copy my Mintos Auto Invest Settings
If you are too busy and don’t want to spend too much time on setting up your Auto Invest you can simply copy my settings.
I do not guarantee the exact same results as the performance of my portfolio depends on many external factors (which change constantly).
Here are my settings:
Most loans on the Mintos platform are listed in Euros. I also suggest you transfer funds to Mintos in EUR to avoid currency exchange fees. If you don’t have a Euro account yet, you can open one within minutes via Transferwise or Revolut.
Market: Primary (for my first Auto Invest portfolio)
The primary market is listing all the new loans rather than loans that are being resold by other investors on the secondary market.
Loan Originators / Ratings / Buyback:
I am excluding all loan originators that don’t offer buyback and have a lower rating than B. This is rather suboptimal as the Mintos’ rating shouldn’t be the only metric to look at. You can certainly analyse every single loan originator since Mintos doesn’t do a very good job in monitoring. I tend to exclude loan originators primarily by excluding countries.
Currently, I am investing only in the following countries:
Bulgaria, Czech Republic, Denmark, Estonia, Finland, Latvia, Lithuania, Poland, Romania, Spain
This choice is rather a personal preference. I am quite familiar with the loan niche in several countries as well as the practices by debt collectors or loan companies and the reasons why people get loans. I am also aware that the risk in Romania, Bulgaria or Spain might be slightly higher especially during an economical downturn.
My Auto Invest interest rate slider is currently set from 12% to 20% as I aim to get the most return for my investments.
I set up the max. loan period to 12 months. The loan period equals the time I am ready to lock my capital within Mintos. I can sell my investments on the secondary market if I need to do so. This comes however usually with a discount from the investor’s side. To avoid any loss in returns I rather invest in loans with the max. duration of 12 months.
This means that if I need to withdraw money from Mintos I would wait for max. 12 months to retrieve all the payments back to my account. For short-term investments, I use the P2P lending site Peerberry.
Name: Primary Market – Choose a name that best describes your portfolio
Portfolio Size: Choose the max. investment amount which you want to invest through the Auto Invest (I have recently lowered my
Investment in one loan: Choose the amount you want to invest into one loan (the minimum amount is €10)
Do you want to reinvest: yes – Reinvest your returns to benefit from the compound interest effect
Include loans already invested in: no – this will only harm your diversification efforts
Diversify across loan originators: yes – ideally you diversify across multiple loan originators (only choose no if there aren’t enough loans to invest in)
This fully customizable Mintos Auto Invest strategy is the best option for investors who want to be somehow in control of their portfolio. It’s great for investors who prioritize diversification as well as time efficiency. It doesn’t mean its the best setting for you.
I suggest, to review your Mintos Auto Invest every few months and adjust the settings as there are more and more options added to the Auto Invest that will not activate unless you do so manually. Also, you might want to adjust the settings based on external factors that affect the overall economy i.e. Brexit or Coronavirus. Making assumptions on how those external factors will affect your portfolio is quite challenging, however, it’s something to bear in mind as well.
My Mintos Auto Invest Strategy in 7 Steps
🚀 Limit the choice of loan originators
Choose loan originators with the best ratings. While there is no guarantee that the Mintos ratings are always accurate, it's one of the indicators that you should consider when defining your Mintos strategy.
🚀 Limit the choice of countries
Avoid countries where the debt collection may be too difficult or where you believe that new regulations will negatively affect the loan originators or borrowers.
🚀 Choose a short loan period
Access your money fast. Invest in loans under 12 months to avoid sell-offs on the secondary market.
🚀 Invest in loans with Buyback Guarantee
Secure your investments with a Buyback Guarantee. In this case, the loan originator (or the company backing the loan originator) will repurchase your claim right after 60 days of delayed payment.
🚀 Don't invest in the same loan twice
Diversify across all available loans. Investing in the same loan harms your diversification.
🚀 Reinvest your returns
Benefit from the compound interest effect and reinvest your returns on Mintos
🚀 Invest with the minimum amount
Invest only €10 to diversify as much as possible and lower your risk of default.
Minimize risks and diversify your portfolio
Before I close up with this section I should mention how you can minimize the risks by choosing the right loan originators (companies that list their loans on Mintos).
At the end of the day, you don’t want to invest in loans of companies that will be hard to retrieve right?
There are two ways to go about it. First, you look into the Mintos Statistic and look at default loans or loans that led to bad debt (could not be retrieved anymore).
Have a look at the Mintos Statistic
You can also just exclude loans that offer no buyback without other adjustments. Why? Because you won’t find any loans with buyback in the statistic that defaulted.
The only reason why you would want to exclude parameters individually would be the potentially higher amount of available loans that you can invest in.
Analyze Mintos Ratings
Researching loan originators and trying to estimate the risk alone is a very time-consuming task. In many cases, it is hard to find accurate information about the loan originator in the English language. Relying solely on Mintos is not optimal either as they won’t naturally say “Do not invest in this Loan Originator” as this would harm their business. I hope that their monitoring will improve in the future so investors can have more accurate data in order to create their own strategies.
Invest in loan originators that pay out interest on delayed payments
If you want to receive interest on your delayed payment you should choose only those loan originators that pay it out. There is plenty of loan companies on Mintos that don’t do this. The disadvantage for you is that your money won’t earn you anything during the “delayed” period.
You can access this information when clicking on Loan Originators in the footer menu on Mintos. Choose the company and view more details.
Mintos Auto Invest | Secondary Market
Until now we have been talking about using the Mintos Auto Invest to invest on the primary market, meaning newly listed loans.
Since the beginning of 2019 Mintos is offering an Auto Invest for loans listed on the secondary market.
Some investors speculate and use this option to increase returns while investing in discounted loans.
If an investor decides to withdraw money from Mintos while his investments are not yet fully retrieved, the investor can sell those on the secondary market for a discounted price.
Users who set up the Auto Invest for the secondary market will be prioritized as compared to investors who invest manually on the secondary market.
I have tested the Auto Invest for the secondary market and I have decided to stop the portfolio as I haven’t noticed any benefit in it. You will fill your portfolio with a lot of delayed loans, for which you in most cases, won’t receive the accrued interest.
Most investors that earn good returns from buying and selling on the secondary market do so by investing manually during a period where many investors panic and sell off their investments with huge discounts.
My Mintos Auto Invest is not working – what to do?
If you are investing in P2P loans for a while you will at some point be in the situation where there are no loans at the platform to invest into.
You will notice this if you have available funds in your account while your Auto Invest is activated.
The reason why your Auto Invest is not working is due to the limits you set up in your Auto Invest. Click on your Auto Invest (edit) and scroll down to the terms of loans.
If you don’t see any charts like here, there are currently no loans that match your criteria.
There are a few options to go about it:
- Adjust your Auto Invest settings, include other loan originators and expand the range of interest rate as well as the loan period.
- Do nothing and wait until new loans will be listed that match your criteria
- Create an Invest & Access portfolio that invests for you and diversifies your investment across all available loans with buyback. (not recommended for higher investment amounts)
- Withdraw the balance and invest it on another platform such as PeerBerry or EstateGuru.
Sometimes the Mintos Auto Invest doesn’t work because there is a problem with the algorithm. The best way to get guidance on what to do is to get in touch with Mintos Support via their chat.
Mintos Investment Strategies – who is that for?
I have been wondering the same for a while now and came to the conclusion that the Mintos Investment Strategies must for extremely lazy investors that don’t care about their diversification.
You can choose between three strategies:
- Short-term strategy from 7% p.a. with a loan period from 0 – 3 months
- Diversified strategy from 8,5% p.a. with a loan period up to 25 months
- Secured strategy from 7% p.a. with a loan period up to 40 months
Don’t get fooled by the names. All of the investment strategies invest also in loans without the buyback guarantee.
Personally I am not a huge fan of this option. The only benefit I see is that it’s faster than setting up your Mintos Auto Invest by yourself. Also, it looks a lot like Mintos was trying to get more investors that would invest in longer loans.
With the new Invest & Access feature the Mintos Auto Invest Strategies are obsolete anyway, as the Invest & Access strategy invests only in loans with a buyback guarantee. You can also withdraw the money faster as you don’t need to sell them off manually on the secondary market. Too good to be true? While this tool offers great liquidity during normal market conditions, it’s completely useless during an economic downturn, where majority of the investors are looking to exit their investments.
Mintos Auto Invest Strategy | Final Thoughts
There is currently no other P2P platform that offers such a well developed Auto Invest as Mintos.
The Mintos Auto Invest allows you to invest in P2P loans without any time investment (this is useful during normal market conditions where the economy is booming).
It’s the perfect tool for investors who prefer the passive and automated investment strategy. Note, however, that the return from Mintos is subject to the availability of loans. If there aren’t enough loans available on Mintos, your Auto Invest strategy won’t work. I suggest keeping an eye on it and login into your dashboard at least once a month and check whether everything works and adjust your settings if required.
I believe that Mintos is a good P2P lending site. There are, however, some drawbacks as well. Mintos likes to amend statistical data to make them appear “nicer”. Also the way how they change their terms and conditions as it suits them is something I dislike. It’s always good to keep an eye on the performance of your portfolio, read the latest news from the industry and evaluate what kind of effect it might have on your investments.
Thank you very much for the information. Really helpful!
You’re welcome Daniel, at the moment the Auto Invest feature doesn’t serve much purpose. The only way to avoid cash drag is to invest via Invest & Access if you want to keep your investment on Mintos.
So you would recommend to only use Invest & Access and to exclude Auto Invest? Or should I use a combination of both?
if the Auto Invests works, I would only use that as you have more control over your diversification. Due to the high amount of investors and the low supply of loans in the last few months, I could not invest in any proper loans with the Auto Invest.
Also note, that the pool of loans is the same for both tools and the Invest and Access tool has a higher preference over the investors that use Auto Invest. That means that the majority of loans will be financed through the Invest and Access and the rest through Auto Invest.
In order to avoid cash drag, I temporarily disabled the Auto Invest and shifted some of my money to the Invest and Access. Some of my investments I diversified across EstateGuru and PeerBerry.
I wouldn’t, however, suggest using the Invest and Access as the primary P2P investment strategy – you have no control over your investments. With the Auto Invest you can at least define some of the criteria by yourself.
one question: why didn’t you include UK into portfolio? do they have bad reputation in loan collecting?
thanks! Nothing particular. At the time I updated my Mintos Auto Invest there weren’t any interesting loans from the UK (I think that’s the reason). I don’t believe that they would have a bad reputation in loan collecting. Note, that the Mintos Auto Invest strategy isn’t always “accurate” as their availability of loans vary all the time. At the moment I shifted the portfolio to the Invest and Access as well as other platforms such as PeerBerry and EstateGuru.
Thanks for the tip on Interest on delayed payment, it was something i was overlooking while i invested. easy but its an very important tip, thanks
Yes, most investors don’t pay attention to this. You are welcome.