Mintos Auto Invest
If you are familiar with the P2P marketplace Mintos, you might have heard about the Mintos Auto Invest: a feature which allows investors like you to define and automate your investment strategy.
To put it simply, you set up your criteria and the Mintos Auto Invest does exactly what it says on the tin: automatically investing your funds. The tool invests depending on the settings you establish and the available loans that match your criteria.
You can set up multiple criteria: loan term, loan type and interest rate being the most important ones.
Here are three main reasons why you should use the Mintos’s auto invest tool instead of investing manually:
- You can create a well-diversified portfolio
- You have better control over your investments
- You save time as the auto invest tool invests your funds automatically
Mintos Auto Invest: A Step-By-Step Guide
In this tutorial, we will give you a quick step-by-step guide to show you how to set up your Mintos Auto Invest. We will go through every detail to make you aware of how the tool works and where you should be putting your money.
Keep reading to the end of this article to learn about our advanced Mintos Auto Invest strategies.
Note that at any given time, you should do your own due diligence about loan originators and countries you want to invest in. Mintos doesn't do a proper job in monitoring loan orinators, which is why many of them got suspended.
Define Your Investment Strategy
Before you even begin setting up your Mintos Auto Invest, you need to have an investment strategy in place. You should be able to answer at least the following basic questions, and your answers will help you define the strategy you should use to set up your auto investment:
- How long do you want to have your money invested?
- How fast do you need to access your investments?
- How much return do you expect on your investments?
While we will guide you through all of the settings, please note that every investor will have answered the above questions differently, resulting in a different strategy. We’ll just be running you through our experience and advice, but please do be aware that it’s perfectly fine to set up your auto invest tool according to your own preferences.
For example, if you're hoping to have quick access to your money, your investment strategy will likely differ from someone's who expects to leave their investment for a number of years. You will want to invest in different loan types with various loan periods to get that desired liquidity in your portfolio.
How to Set Up Your Mintos Auto Invest
Right, let’s run through exactly how to set up your Mintos Auto Invest:
Want to set up your auto invest so that you can invest your funds automatically? Navigate to your primary menu and click on ‘Invest’ and choose ‘Auto Invest’ in your secondary menu.
In order to create your auto invest preferences, click on ‘Create new Auto Invest strategy’.
In the next window, you will see three ‘automated’ strategies. Do not invest in those but click on ‘Custom Strategy’ instead.
The goal is to get more control over your investment. Those ‘Mintos Investment Strategies’ are simple products for investors who don’t bother setting up their own strategy.
So, after you’ve done that, you are ready to define your own Mintos Auto Invest strategy.
How exciting is this?
When defining your strategy, first, you need to choose the currency you want to invest in. On Mintos, you can invest in loans in 12 currencies. This feature doesn’t bring much value though, as the availability of loans in currencies other than the euro is very limited. So, by default, you will invest in EUR.
Next, you will be asked to invest on either the primary market or on the secondary market.
The primary market lists all newly originated loans, while the secondary market lists loans from investors trying to sell their investments.
If it’s your first time investing, you will probably want to invest on the primary market. Below, you will see the first set of criteria to define:
- Buyback guarantee
- Loan types
- Loan originators
On the right-hand side, you will see a counter. Click on ‘Show matching loans’ to show the number of loans that match your criteria.
You can also click on ‘Show loan distribution’ to see how those loans are distributed across loan originators, countries and loan types. This is more useful for advanced investors whose priority is diversification.
At this point, it’s important to learn a bit more about the loans listed on Mintos.
But first, we need to give you some background information about the platform as a whole, so you have a better understanding of the type of investments you’ll be investing in. The good news is that you can find most of the information without leaving Mintos’s website.
👉 If you want to skip this next section about Mintos investments, just click here.
About Mintos: Understanding Mintos’s Investments
Before you start defining your Mintos Auto Invest criteria, we recommend you have a look at Mintos’s statistics and Mintos’s loan originator rating page. You can find links to these pages in the footer of the Mintos’s website.
Mintos Statistics will give you a good idea about the most popular loan types as well as the most popular loan originators on Mintos.
The pie chart on the left in the image above shows you that most of the loans on Mintos are either personal or short-term loans(less than 3 months). The chart on the right shows you that most of the loans on Mintos were originated by loan originators such as Finko (grey) and secondly Sun Finance (green).
This charts essentially show investors that Mintos isn’t quite the ‘allrounder’ that it’s marketed to be. The truth is, vast amounts of loans are payday or consumer loans. If your goal is to invest in property-backed loans, you are much better off investing on one of the P2P real estate platforms.
Another important point to mention is that this data is historical. It is more relevant to look at the current data which you can find directly under the ‘loan counter’ within your Mintos Auto Invest. Just click on ‘view all loans’ to get the following charts:
Now, when looking at the image above, the data shows that the most popular loans currently available on Mintos are personal loans originated by the loan originator Kredit Pintar, who only funds loans in the Philippines and Indonesia.
It’s certainly worth doing your own due diligence about Kredit Pintar so you know what you are funding. In fact, this applies to any loan originator you’re considering investing in, but more about this later.
Loan performance is certainly a great indicator that will help you exclude certain loan types, countries or loan originators. Just look at the rows like ‘default’ or ‘bad debt’ and exclude them from your auto invest strategy. Remember that, again, this is historical data...
To get more accurate data, you can download Mintos’s loan book and find out the current performance of the loans by individual loan originators. You will find all this information on Mintos’s statistics page.
Mintos Loan Originator Rating
Mintos is one of the most transparent companies we’ve had the joy to review (and yes, we really do enjoy reviewing P2P lending sites!). Head over to our guide about how to conduct due diligence about a P2P lending platform to learn that Mintos does a lot of things right.
One of the resources you can and should use is the ‘Mintos Loan Originator Rating’. Find the dedicated page and have a look at individual loan originators.
Not only can you get a brief overview of the average interest rate, but you can also see the ratings the loan company received from Mintos.
Recently Mintos also added a red alert icon to indicate when a loan originator is under review and the possibility of being downgraded is very real. Unfortunately, this data isn’t available in your Mintos Auto Invest which is why you need to look here.
Mintos Ratings Explained
Mintos rates their loan originators based on the financial situation and loan performance of the company. Many loan originators are regularly reviewed (currently even more often as usual due to volatile market conditions). The scale goes from A+ (rather safe) to D (risky).
It is important to note that Mintos isn’t always the fastest when it comes to updating these ratings, which is why you should do your own due diligence, as opposed to relying solely on the Mintos’s ratings.
Details About Loan Originators
When you click on ‘Details’ within the loan originator page, you’ll have access to some additional information about every loan originator, such as whether:
- The company offers a group guarantee (typically provided by the larger parent company)
- The company offers interest on delayed payments (that can be up to 60 days of an interest-free period until the buyback guarantee kicks in)
- The company pays out penalty fees for delayed payments
- The company has a long grace period (the grace period is the number of days before the loan is flagged as delayed)
The above list includes multiple factors that you can consider when choosing which loan originators should be excluded from your Mintos Auto Invest strategy.
Note that if you want to get even more information about an individual loan originator, just click on their Mintos profile and you’ll find additional data. You can look at factors such as Skin in the Game, date since the company joined Mintos, loan portfolio or the company’s financial reports.
Alright… that was a lot to take in. If you don’t want to spend that much time defining your strategy, you can simply copy ours here.
It’s important, however, that you understand the strategy, as it will have an impact on the yields, the safety, as well as the liquidity of your investments.
After you have defined the countries and loan originators that you want to invest in, it’s time to choose the interest rate and loan term.
Choosing Interest Rates and Loan Terms
The grey bars in the image above represent the number of available loans within your selection. The most important two factors here are:
- Choosing the minimum interest you want to earn
- Choosing the maximum time you want to lock your investments
If you are just starting out, we recommend keeping your portfolio liquid and setting the maximum loan amount to six months. As you gain experience with Mintos, you can extend it as you wish/feel comfortable. In terms of interest, we aim to set it at a minimum of 12%. You can also click on ‘the available loan report’ which gives you a good overview of the loans currently available in each currency based on the Mintos rating.
Note, that the auto invest tool will only work when there are enough available loans that match your criteria. You should check your Mintos account at least once a month for uninvested funds. If your auto invest tool isn’t working, you might need to lower the minimum interest rate to increase the availability of loans.
Defining Your Portfolio Size
At this point, there are a few more criteria to define before you activate your Mintos Auto Invest strategy.
In this last section, you will define the portfolio size. The number you choose is essentially the maximum amount that Mintos Auto Invest will invest on your part, and the system won’t execute any more investment orders once you’ve reached this limit.
Additionally, you will also need to set up the minimum and maximum investment amount per loan.
New investors usually choose €10 for both fields as this helps to achieve a better diversification even with a smaller investment amount.
As you get more familiar with Mintos, you might want to increase the minimum investment amount to €15 or €20.
On the right-hand side, you’ll notice a tickbox with the option to either reinvest your interest or not. Tick ‘YES’ to reinvest, and no if you don’t want to reinvest your interest. Reinvesting your interest in the same loan multiple times (by ticking ‘YES’) means you could benefit from the compound interest effect.
Not reinvesting this interest (ticking ‘NO’) does not help your diversification efforts.
Tick ‘YES’ for diversification across loan originators. If you click on ‘diversification settings’, you can set up the distribution of your investments across individual loan originators.
This is useful since certain loan originators have more loans listed on Mintos than others. For example, Finko and Mogo account for 30% of the loans on Mintos. That’s quite a chunk, considering there are 70 loan originators on the P2P marketplace.
If you tick ‘YES’, you will help distribute your investments more equally across loan originators. If you tick ‘NO’, the chances are high that most of your portfolio will be loans from two or three loan originators, and that’s quite risky.
After you’ve done this, you’re almost done setting up your Mintos auto investment strategy!
Click on ‘show matching loans’ on the right-hand side of the screen and if there are enough available loans, click ‘Save and Activate.
Congrats! Now, you’ve defined your first auto invest strategy!
If you’re uncertain about your selection, have a look at our Mintos strategy below. As we run through it, we explain our thought process behind choosing the bits we did, which might give you another alternative to consider.
Let’s jump right into it.
Our Mintos Auto Invest Strategy
Alright, ready for this? We will proceed exactly as we taught you above.
Our investment strategy for Mintos is as follows:
- All of our funds can be invested long-term
- Average interest should be around 11% in the long-term
- Our Mintos portfolio should be semi-liquid with maximum loan term of six months
To give you a bit more clarification: we have been investing on Mintos for more than two years now, and we aim to continue doing so. If we need to withdraw our funds, we shouldn’t have to wait longer than six months, and while we can exit our investments earlier, our primary goal is not to trade on the secondary market but invest long-term.
Mintos Auto Invest: Primary Market
As for the creation of this guide, we have the following Mintos Auto Invest setting:
- We invest in EUR on the primary market
- We ONLY invest in loans with the buyback guarantee
- We invest in the following countries: Bulgaria, Czech Republic, Denmark, Estonia, Finland, Latvia, Lithuania, Poland, Romania and Spain
- We invest in the following loan types: personal and short-term loans
- We invest in loan originators with ratings between A+ and B
- Our loan originator exclusion includes: Cash Credit due to no accrued interest for delayed payments
- Our interest rate: minimum 12%
- Our loan term: 0 - 6 months
- Do we want to reinvest? YES
- Include loans we already invested in?: NO
- Diversify across loan originators?: YES
- Maximum investment in one loan: €10
Now, let’s run through why we chose this criteria:
Our Thought Process Behind Our Excluded Countries
When excluding countries from our Mintos Auto Invest, we look at the political and economical situation of the country. The strength of their currency, unemployment rate, GDP growth and market regulations are some of further factors to take into consideration when evaluating which countries you should exclude from your strategy.
Like our Facebook page to get notified as we release more information about how to evaluate the country risk when it comes to P2P lending.
Our Thought Process Behind Our Rating Exclusion
Mintos’s rating should be only one of the metrics that you look at. There is no guarantee that a loan originator that had a rating of B or B+ might not face payment difficulties in the future.
You might as well limit the selection to only A or A-, however, this will significantly limit the amount of available loans which will harm your diversification. This number is also dependent on the countries you have excluded. The more countries and the more loan originators you exclude, the less available loans there are for you to invest in.
Thought Process Behind Our Excluded Loan Originators
After we excluded the countries and defined our Mintos rating criteria, we narrowed down the selection of loan originators from 70 to only 15 companies.
We use the following four methods to further minimize the risk connected to loan originators:
1. Check the ‘show all loan’ report from the auto invest settings to view the loans that are currently available (the chances are that out of the 15 loan originators, only a handful will have loans available in the countries you want to invest in).
2. Check Mintos’s blog for recent announcements about those loan originators. You can also look this information up on the detail page of every loan originator.
3. Click on the loan provider in the loan originator section and check whether the company has been active on Mintos for at least one year, and whether they submitted their latest financial reports (ideally these will be audited).
4. Go to the loan originator section, click on details and scroll down to the company and check whether they pay out accrued interest for delayed payments as well as whether they offer a group guarantee. A group guarantee isn’t necessarily a knock-out criteria, but it’s a nice bonus to have.
Tip: If you are an advanced investor, chances are high that you also invest on other P2P lending platforms such as Debitum Network, Lendermarket or Bondster. Note that some other platforms list the same loans from the same loan originators you’ll find on Mintos (for example Mikro Kapital can also be found on Debitum Network, Creditstar on Lendermarket, Kviku on Viventor, and Acema on Bondster). Keep that in mind when excluding loan originators. There aren’t many benefits to invest in loans from the same loan provider but on different P2P platforms.
If you haven’t found any suspicious information about the loan originator, you can leave your selection of the loan originators within the Mintos Auto Invest untouched.
In our case, we excluded Cash Credit as they don’t pay accrued interest for delayed payments.
If you have done the same, click on ‘show matching loans’ to see whether there are enough available loans that match your criteria.
Fill in the general information about your portfolio, accept the terms and conditions and activate your Mintos Auto Invest strategy.
Mintos Auto Invest: Secondary Market
Mintos also allows you to set up an auto invest strategy for the secondary market. There are two scenarios when you should consider investing on the secondary market.
- When the availability of loans on the primary market is too low, there’s risk of cash drag
- When the demand for withdrawing funds from Mintos is high, there’s risk of a bank run
The occurrence of each of the above situations requires different settings, as your investments goals vary. Let’s have a look into this...
Secondary market during cash drag: The goal is to make your money work for you. It can make sense to invest in loans with 0% - 10% premium. Note, however, that buying loans with premiums can backfire as some loan originators might repurchase the loan from you for the remaining principal, which can result in loss if you paid a premium price for it.
Secondary market strategy during a bank run: The goal is to buy loans with huge discounts so you can increase your yields.
Note that the outcomes of these strategies are highly dependent on how investors on Mintos behave.
Our Mintos strategy is rather conservative as there are currently enough loans available on the primary market. We generally do not invest on the secondary market. If you, however, decide to set up an auto invest strategy for the secondary market, there are a few things to consider.
You can set up a discount range of loans that you want to invest in. As you can see on the image above, you can only select loans that are being sold with a discount of 2% - 99%. (It’s completely up to you what range you will choose).
Usually investors that have a short-term loan do not offer a huge discount since the maturity of the loan will soon become overdue. That’s why you will find much more available loans with a loan maturity of 12 - 60 months on the secondary market.
Alternative Secondary Market Strategy
There is another way to make quick wins with the investments on the secondary market: you can buy loans at a discounted rate of 5% and try to sell them with a lower discount or for that same price. If you succeed, you can make a profit of minimum 4%.
In order for this to have an impact on your returns, you will need to increase the minimum investment amount per loan, as the number of discounted loans above 5% is quite low.
In fact, many investors followed this exact strategy as thousands of users fell into panic during the beginning of the COVID-19 outbreak which resulted in a large number of investments being sold with large discounts. Two weeks later, Mintos introduced a 0.85% fee for any sales on the secondary market, which lowers your possible returns.
Note that all secondary market strategies are short-term. Setting up an auto investment strategy and leaving it to run its course without any management probably won’t yield the expected results, as the functionality of this strategy is heavily dependent on the market situation. Many investors who want to capitalize from the sell-offs on the secondary market buy the investments manually, rather than using the auto invest tool for it.
Investors should be aware of the fact that Mintos has enabled the option to extend the loan term up to six times for 30 days. This means that even though user invest in loans with a loan period of six months, the borrower might increase the term up to 12 months and then if the borrower is delayed with their payments, it can take another 60 days until the buyback guarantee kicks in.
If you are trading on the secondary market, you can look this information up under the ‘payment schedule’ option of that individual loan.
The loan extensions had been automatically added to all loans on Mintos in reaction to the ‘moratorium’ (loan repayment holidays) introduced in many of the countries that Mintos’s loan originators operate.
These extensions caused rage among Mintos investors as even delayed loans of 60 days can be extended up to six times which extends the loan for many more loans than initially anticipated. This will have a significant impact on the liquidity of your investments.
What if Your Mintos Auto Invest is Not Working?
And, finally, let’s look at what you should do if the Mintos Auto Invest isn’t working. You have a few options to fix it, In most cases, the auto invest tool isn’t working because:
- there aren’t enough available loans
- you might have paused it accidentally
- you have reached the maximum portfolio size
In your Mintos Auto Invest click on ‘show matching loans’ to see whether there are enough available loans that match your criteria. If there aren’t any loans, you will need to adjust your Mintos Auto Invest setting accordingly.
You can do so by:
- Adding more loan originators
- Adding more countries
- Adjusting the rating
- Adding more loan types
- Making sure you invest in EUR
- Lowering the minimum interest rate
- Increasing the loan term
- Increasing the minimum investment amount
If you have made the changes, your Mintos Auto Invest should be working again. If it isn’t, you can initiate a chat with Mintos’s support and they will help troubleshoot the issue for you.
Another reason why there might not be enough available loans could be because most of the loans had been funded via Mintos’s Invest & Access tool, which sits higher than the auto investment tool in the priority of investments.
Mintos Auto Invest is a very useful tool that allows you to diversify your investments across different loan originators and countries. We hope that our in-depth guide has given you enough information to define your own Mintos Auto Invest strategy.
Note that while diversification is important, the most important thing to do is diversify across safe assets.
You can control the risks you take. For example, if you believe that the risk of investing in Zambia is higher than the risk involved with investing in Estonia, then you can exclude Zambia using the Mintos Auto Invest feature.
Currently, there are many available loans from loan originators with a proven track record and healthy loan performance which makes now the perfect opportunity to capitalize on Mintos. If you haven’t joined Mintos yet, make sure to read our Mintos review to learn even more about how Mintos works.