Envestio is finally adding a feature to improve their platform usability and to facilitate successful investments for all their investors: Auto Invest.
Auto Invest is basically a standard feature on most p2p investment platforms but has been missing on Envestio so far. Investors had to log in every time a new investment project started and had to invest manually. Since the projects are often filled within an hour or so, many investors missed out. This situation will hopefully improve now.
It’s noteworthy that the minimum investment that can be placed through the Auto Invest is 100 EUR. For investors with relatively small investment volumes it will take a while to accumulate this amount through interest and loan repayments. Amounts below 100 EUR can still be invested manually.
You can find the Auto Invest option under the Investments tab in your Envestio account.
The setting up is fairly simple.
Besides the type of investment project (real estate, energy, etc), the key settings are the investment volume per loan and the ranges for desired interest rate and loan duration. If you want to invest a specific amount per project you can set the MIN and MAX investment amount to the same value (e.g. MIN = 100 EUR and MAX = 100 EUR will invest exactly 100 EUR per project). Same for the other parameters. Pretty straightforward.
Also, you can define an upper investment limit for you Auto Invest rule. Auto Invest will then stop investing once this limit has been reached. Or, you check Invest all funds available which is probably what you’ll want to do if you have only one Auto Invest rule.
Keep the diversification high
An important setting is the Invest in multiple active loans from same originators option. This directly touches the diversification of your portfolio. Investing into multiple loans from the same originator will decrease your diversification and at least theoretically increase your risk. See below screenshot for an example of a multiple loan (Phase 1 and 2 of the same investment project). I’d leave this option unchecked.
Speaking of risk management: Envestio’s buyback guarantee of course applies also to loans placed buy the Auto Invest ( https://blog.envestio.com/how-safe-investments-in-envestio-are/ ).
Of course, you can set up multiple Auto Invest rules for different purposes or different loan types. Just be careful that the rules don’t overlap since Auto Invest will then probably invest into the same loan twice (once for each rule). It’s not a smart Auto Invest….. so you’ll need to set your rules properly. If you set up multiple Auto Invest rules you will also need to set an investment limit for each rule.
I think that placing manual investments on Envestio will become next to impossible. The Auto Invest will just be so much faster in placing investments than you or I with logging in after receiving the notification email fro a new project. At least for the attractive projects with high yield and short duration I expect this to happen.