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INVESTMENT MANAGEMENT
Founded in 2011, HY Financial has developed our business by reaching out, nurturing and maintaining close, trusting relationships with each client. We deeply understand that your investment is one of your most important resources, therefore, we approach our role in managing them with a deep sense of responsibility.
INDEPENDENT REGISTERED INVESTMENT ADVISOR
We are an independent IRA. Our independence gives us the freedom. Since we do not make any commission based on transactions nor receive any outside fees, you can be sure that we only make sound investment decisions that contribute the most to your investment portfolio. In addition, you talk directly to the fund manager at HY Financial, not a middleman who will allocate your money to a third party.
CLEAR FEE STRUCTURE ALIGNS CLIENT INTERESTS
We have a simple, transparent, and easy to understand fee structure. We charge only a flat annual fee which equals 1% of the value of assets under our management. In the past, we have not charged any fee when the annual return rate was below 6%*. Because we believe we have to earn your business and help you increase your wealth before we should get paid.
CLIENT ACCOUNT
NETX INVESTOR
Separately Management Account (SMA) through BNY Mellon's Pershing Flagship Platform. NetXInvestor offers instant online and mobile access to account information and view statements and trade confirmations online. Access quotes and news from leading sources—plus research on thousands of stocks, options and mutual funds.
INVESTMENT PRINCIPLE
Not all RIAs are the same. Each advisor has his or her unique investment strategies. It is important that you understand the differences and work with the one most suitable for you.
At HY Financial, we focus on building two core competence areas: valuation and competitive advantage analysis. Simply put, valuation tells us whether the asset is worth the price; and competitive advantage analysis tells us whether the asset will grow in the future. Our ideal investment is to pay a discount or fair price for a company that will continue to grow over a long time horizon.
Sometime we will also take advantage of inefficiencies which are developed through market conditions and prevalent financial models. Did you know that the standard pricing model for options is called Black-Scholes-Merton Model and was first published in 1973? The model has some inefficiencies but because no one has invented anything better, the Black-Scholes model is still the gold-standard in option pricing today. These inefficiencies do not happen all the time, but when they do, we would take advantage of them and give ourselves a nice little bonus return. However, even in the most favorable conditions, we will limit our exposure in the option markets due to the potential nature of these financial instruments. Clients can opt out of our Option investments in their portfolios.
Another characteristic of our investment principles is that we focus our return over a long-term time horizon. Our short-term gains or losses are significantly less than our long term or unrealized gains or losses. Our ideal holding horizon is indefinite. However, we believe that there are two main reasons for selling. One is when the broader multi-years economic cycle or the company’s specific condition changes; The other is when there is a significant better investment opportunity. Other times we like to sit and hold. Our typical holdings consist of less than 20 well-diversified and well-selected stocks.
HOW WE TRADE - WE EAT OUR OWN COOKING
We created HY Financial Investment Management Portfolios, so you can benefit from the Founder’s personal investment strategies and selections. That is why at HY Financial, we eat our own cooking.
Your investment at HY Financial is allocated into two portfolios - defensive portfolio and risky portfolio. We determine the appropriate allocation between the two portfolios based on your Investment Policy Statement which includes your risk tolerance and investment objectives. Once we have adjusted your individual risk tolerance and financial objectives through allocations between the risky and the defensive portfolios, you will have a balanced investment portfolio tailored to you.
The risky portfolio is an active managed portfolio. Its holding mirrors what we hold in our own portfolio. The Founder of HY Financial has more than 80% of his personal liquid asset in the risky portfolio that we like to call it the OneOnian Portfolio. The percentage of holdings in your risky portfolio will mirror closely to the OneOnian holdings percentages. For example, if OneOnian has $500,000 total equity and invests in $50,000 in GOOGLE, we will allocate your $200,000 risky portfolio to invest $20,000 in GOOGLE. In essence, we are eating our own cooking.
The risky portfolio can invest in all available securities. Your defensive portfolio will be managed separately based on your Investment Policy Statement. The defensive portfolio mainly invests in low volatile and low risk assets like bond and certain defensive ETFs.
We take pride in our investment selections and investment returns. How we trade is considerably different than your typical RIA, especially with those that associated with Financial Planning. In comparison, other RIAs allocate your assets to mutual funds or other funds that are managed by a third party. In essence, your management fee is compounded. You are paying a management fee to your RIA and another set of fee to the fund managers. More importantly, you are talking to a middleman. Here at HY Financial you talk directly to the fund manager.
The OneOnian Portfolio was established in late 2006. It is the longest continuous account at HY Financial. Since all clients' risky portfolios imitate the allocation of the OneOnian Portfolio, it is a good representation of our past performance. You can view OneOnian Portfolio here.
CLEAR FEE STRUCTURE
We have a simple, transparent and easy to understand fee structures. We charge an annual fee equivalent to 1% of the value of assets under management (AUM). The fee is charged on a quarterly basis at a rate of 0.25% AUM. In the past, however, we have not charged any fee when the annual return rate was below 6%. This practice is exercised at our discretion. The annual return rate is based on the previous four quarters and assessed at each quarter.
HY Financial does not work for, receive money from, or pay money to banks, broker-dealers, or insurance companies. All the money we received and earned comes from you, the clients, without exception. Be confident that we don’t have any hidden fees and our process is fully transparent.