mintos auto invest strategy

I received a lot of questions about my Mintos Auto Invest strategy on and on how to pick the right loan originators on the platform, so it’s about time I addressed this in a bit more detail.

In this post, we’re going to talk about:

  • Why you should have a pre-defined strategy when investing on Mintos, so that a large chunk of your money doesn’t end up invested in a single loan originator
  • How I struggled with this in the past, which is also why I haven’t felt comfortable with sharing my Auto Invest settings regularly, as I was changing them all the time
  • Why I’m not a fan of the strategies Mintos offers by default
  • What loan originators to invest in and which ones to avoid
  • And lastly, I’ll show you my Auto Invest settings in detail.

Before we continue, a quick disclaimer: These are just my own settings and the way I look at investing on Mintos, it doesn’t mean they’re perfect and of course you’re more than welcome to do things differently.

Why Our Investment Strategy On Mintos Matters

Here are a few things we are trying to achieve:

Goal #1: Decent Returns For The Risk

Of course, we would like to see solid returns, but those returns should be adequate for the risk we are taking when investing.

For example, taking on more risk to invest our money into loans from a loan originator with a weak rating, at 14% interest per year might not be worth it compared to investing at let’s say 13% per year into a loan originator with a good rating and audited financial statements.

Goal #2: Diversification

We want to be diversified over a large number of loans, from different loan originators in numerous countries, to try and reduce our risk in case there are problems in one country or with one loan originator.

Goal #3: Max. 10-15% Exposure To A Single Loan Originator

In order to achieve a certain degree of diversification, we want to limit our exposure to each loan originator to a maximum of 10-15% of our portfolio.

Goal #4: Automation

At the same time, we don’t want to waste our valuable time buying loans manually, but instead have the Auto Invest do it for us.

My Mintos Auto Invest Experience Struggle

mintos oct 2020
My Mintos account

I’ll be honest, this has always been an area I’ve struggled with on Mintos. I’ve changed my Auto Invest strategies around a lot, which is which is why I haven’t talked about my own Mintos settings too often, compared to all the other platforms.

I started with a single Auto Invest back in 2018 and shortly after I added another one, as I noticed the first one wasn’t grabbing the highest interest loans that were available of the same loan originator.

Inevitably, at some point I had several Auto Invests running on the platform at once, each with different interest rates and diversification settings.

As a result, in 2019 I ended up with too much of my portfolio in single loan originators like Capital Service, which is a Polish loan originator that is facing difficulties and where my funds are in recovery at the moment.

Then, for a period of a few months, I switched to a different strategy: I set up a separate Auto Invest for each loan originator individually. Since that was too much effort, I stopped after a while.

One problem with these changes was that I was never starting from zero. Instead, my money was almost already fully invested whenever I was changing something.

As a result, here is the main issue I was facing: While you’re able to look at your entire portfolio of investments on Mintos to see how you’re allocated, there is no way to actually set a platform-wide maximum you want to invest into any specific loan originator.

Sadly, every Auto Invest is treated as its own portfolio, making proper diversification way more difficult than it should be. Especially if you’re after the highest interest rate each loan originator offers on the platform.

Now you may understand why you haven’t seen too many posts from me on the subject. I simply didn’t feel like I was the right person to give advice on this topic.

Luckily, over the past few weeks I created a simplified custom strategy that I’m finally satisfied with. I’m happy to share that with you in this post.

Before I show you how I set it up, let’s have a look at the pre-made investment strategies that Mintos offers.

Mintos Investment Strategies: Should You Use Them?

mintos auto invest strategy 2020

In addition to the Custom strategy, which is the one I’m using, you’re presented with these three options on Mintos:

  • Diversified
  • Conservative
  • High-yield

To me these three strategies have some major issues:

We are unable to choose the loan originators we want to buy loans from and exclude the ones we don’t want to invest in. We also can’t define how much of our portfolio we want to invest into each.

Mintos also doesn’t let us to set a minimum interest rate of let’s say 11% per year. As a result, we could be buying some loans with an annual interest rate of 6%, to give you an example. Most of us would likely would never buy these manually.

To make things worse, there is no way to set a maximum loan duration we’re comfortable with, so we could end up investing into loans with long loan durations of six years or more.

And lastly, even with the High-yield strategy, Mintos is only saying that it’s going to invest into the top 60% interest rate loans on the platform. That in itself doesn’t really mean much. They’re still not promising that the strategy will actually buy the highest interest rate loans that are available from each loan originator.

Long story short, of course you’re free to play around with these strategies if you so choose, but if you’re anything like me and you prefer having more control over your investments, you should create a Custom strategy instead.

My Mintos Auto Invest Settings

mintos auto invest 2020 1

Alright, I figured it would likely be a good idea for me to show you how I set up my Mintos Auto Invest from scratch, so let’s have a look.

Setting Up A Custom Mintos Auto Invest strategy

We’re going to create a Custom strategy, as it allows us a lot more customization. We can choose which loan originators we want to buy loans from and which ones we want to exclude.

In addition, we’re able to set a minimum interest rate, a maximum loan duration and choose our own diversification settings.

Once again, please remember that these are simply my own settings. They’re not perfect and you’re more than welcome to do things differently.

Ok, let’s begin.

How To Choose Loan Originators On Mintos

First of all, we need to first decide the loan originators we want to buy loans from on the Mintos marketplace.

While Mintos has its own rating system, I prefer using this one from ExploreP2P. From their list, I decided to invest into loan originators with a minimum total score of 53.

Of course, you can choose to only invest into lending companies with a higher score, but personally I wanted to have a bit more diversification and a larger number of available loans to invest in.

Getting back to our Custom Auto Invest settings, we’re now going to remove all the loans without a buyback guarantee and deselect the loan originators with a total score below 53 points.

Here is my screen recording of this part (starting at 05:36 minutes), as it’s a lot easier for me to show you this on video:

Additionally, I also excluded these two loan originators from my list:

  • Everest Finanse, since loan originators that are only active in Poland seem to be a bit more likely to cause issues
  • Dinerito, as they pay no interest on delayed payments

Mintos Auto Invest: Interest, Term, Diversification

mintos interest rate loan term 2020

I chose a minimum interest rate of 11% per year, to get a good balance of available loans from a large enough number of loan originators and decent returns for the risk I’m taking with my investment.

As far as the loan term is concerned, I set a minimum of one month up to a maximum of 48 months (four years). In case we needed to access our money sooner, we would likely still be able to sell the majority our loans early via the Secondary Market for a small fee.

If you want Mintos to automatically reinvest the interest payments you receive, then you should set your portfolio size higher than the amount you’re planning to invest initially.

mintos autoinvest 2020

Next, I chose 10€ as minimum investment amount per loan, which is the smallest possible amount for the Primary Market.

As for the maximum per loan, I like to make that dependent on the total amount I’m investing on Mintos. I want to be diversified over at least 100 loans on each P2P platform (whenever possible), so for a 5.000€ investment, I would set the maximum at 50€/loan. If I was a new investor planning to invest 1.000€ on Mintos, then I would set the max. to 10€/loan.

Next up, we have another important step: Diversification settings. We now have to decide how we want our funds to be split up among the loan originators we chose beforehand.

To keep things simple, I set the maximum I want to be invested into each lending company like this:

  • 60+ rating: 15%
  • 53-59 rating: 10%

After applying these changes, you might notice that our total now shows a number above 100%, but that doesn’t matter much. The only thing we’re trying to achieve here is to limit our maximum exposure to each loan generator to 10 or 15%.

Then we hit save. At the time of writing, 44.219 loans across 12 loan originators match our Auto Invest criteria.

If you increase the minimum interest rate, you’re also going to decrease diversification by having a smaller number of loans and loan originators to invest in. That’s why I said the minimum to 11%, as I think it strikes a relatively good balance.

Alright, after clicking Save and Activate, we’re done! We created our new Custom strategy on Mintos. Don’t forget to change your strategy to top priority in case you had others set up already and you want to use the new one going forward.

I hope this short Mintos Auto Invest guide was helpful. If you’d like to support me and check out the platform for yourself, you can use this link.

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Video Of The Article

2 Comments

  1. Hello Angelo, thanks for the great video! Do you keep track of the evolution of your strategies in an Excel spreadsheet? If so, you could share its template? :p

    Thanks!

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