Advancements in technology have undoubtedly made our lives easier, and automation, in particular, has completely changed the way we live and work. Businesses have been widely incorporating automation into their workflows to streamline tedious recruitment and accounting processes. Driverless vehicles are also making travel easier, with countries like Singapore testing out the technology in schools and tourist attractions, a testament to the shift in mindset towards incorporating automation into our daily lives.
Validus brings the convenience of automation to the investing space through the Auto-Invest feature on our platform. With Auto-Invest, investors can easily and effectively automate the allocation of their funds to grow and diversify their portfolios.
What Is Auto Invest?
Auto-Invest automatically allots available funds based on your preferences – optimising fund utilisation and maximising your ability to achieve your targeted returns across a diversified portfolio, without active monitoring and selection. This means that you can choose your exposure limit for each SME borrower, the product types that you want to invest in, and further calibrate interest rate bands to ensure your investment matches your risk appetite under our risk-based pricing model.
When a new facility becomes available on the platform, Auto-Invest places investors in a queue through “tokens”, representing increments of capital for investment. From this queue, tokens are automatically allocated from each investor towards fully funding a loan. Once the loan is filled, the funds will be deployed to the SME within 24 hours. In this way, Auto Invest will only engage when there are live facilities that meet your speciﬁc requirements to disburse funds to suitable SMEs.
Why Use Auto Invest?
If you are an investor who is thinking about growing your Validus portfolio, here are some key reasons to take advantage of the Auto Invest feature:
Intelligent and Fuss-Free
Unlike other asset classes where you have to monitor every few months, the Auto-Invest feature helps you to “set and forget”. This means that investors can automatically invest in SME loan facilities quickly and conveniently, according to their set preferences, without the need for close regular monitoring. With many investors juggling demands from career and family, Auto Invest saves time and removes a lot of legwork.
Tailored to Your Financial Plan
Auto-Invest also allows you to tailor your investment so that your portfolio allocation is in line with your financial goals. This means that your automated investments can be granularly customised to your specific investment needs. For example, you can overweight your investments into longer tenure products if you have a longer investment horizon and no immediate liquidity requirements, or into higher yield products if you are at a stage where your focus is high growth
Quick and Easy Diversification
With Auto-Invest, you can also diversify your portfolio by automating the management required to allocate to several opportunities at once. Diversification is crucial, as it creates in-built protective mechanisms against value at risk if one investment decision results in a risk to the portfolio. This creates the opportunity for scalable, risk-adjusted returns. You may also use the Validus investment diversification calculator to better picture how you can benefit from portfolio diversification.
How to Start Funding Through Auto Invest?
The entire sign up process can be completed online in about 10 minutes. Just follow four simple steps and you’re good to go. If you need any assistance, please reach out to your dedicated Relationship Manager.
Step 1: Enable Auto Invest
You can enable Auto-Invest by visiting the ‘Auto-Invest’ tab in your account.
Step 2: Set Your Concentration Preference
Choose to limit exposure to any particular SME borrower and Auto-Invest will keep your portfolio diversified as much or as little based on this. Once your limit has been reached for a specific SME, Auto-Invest will not commit additional funds until outstanding facilities from that SME have been repaid.
Step 3: Set Your Preferred Risk Level
Select the interest rate exposure on each facility type. A facility type that is unchecked means that Auto-Invest will not commit funds to any live facilities of that type.
Step 4: Save Your Settings
Save the changes and see them reflected in real-time. Auto-Invest will then engage whenever facilities are live on the platform that meet your specific criteria. If you wish to manually invest beyond your concentration setting or into a facility type not selected in Auto-Invest, you may still do so at any time independently, either through the ‘Live Facilities’ section in the platform or by contacting your RM when notified of a new facility.
Auto-Invest is a great solution for any investors keen on SME financing to keep in their toolbox. The automated management of investment and diversification means that you can capitalise on growing demand and unique market opportunities in the SME space more easily and effectively. Busy investors can, thus, gain exposure to the asset class for high yield and low volatility investing without spending too much time monitoring their investments. However, as with any investment, investors are always encouraged to do their research, understand the product and how it may add value to a portfolio and the risks involved.