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.

See Our Principles and Strategies

CLEAR FEE STRUCTURE ALIGNS CLIENT INTERESTS

We believe in simple, transparent pricing. Our standard fee is a flat 1% annually—no hidden charges.

For qualified clients, we also offer a performance-based option: 0% management fee, 6% hurdle, and 25% of gains above 6%.

See Our Fee Structure

CLIENT ACCOUNTS
ACCESS

Separately Managed Account (SMA) clients receive instant online and mobile access to their portfolios, including real-time account information, statements, and trade confirmations.

Traditional 1% fee accounts are managed through Altruist.
Performance-based 0/6/25 accounts are managed via Interactive Brokers (IBKR).

INVESTMENT PRINCIPLE

Not All RIAs Are the Same

Every Registered Investment Advisor (RIA) brings a unique approach to investing. It’s important to understand these differences and choose a firm whose philosophy aligns with your goals.

At HY Financial, we do things differently:

Unlike many RIAs—especially those aligned with traditional financial planning—HY Financial does not outsource investment decisions to third-party managers or mutual funds. That means:

No double layers of fees
No hidden incentives or commissions
Direct access to your portfolio manager—not a middleman
Clear alignment of interests

We manage your money directly. This hands-on approach allows us to maintain full control over your portfolio and stay accountable for performance. We take pride in the results we deliver.

Our Focus: Valuation and Competitive Advantage

Our investment strategy is built on two foundational principles:

Valuation – determining whether an asset is fairly or attractively priced
Competitive Advantage – assessing whether a company has durable strengths that support long-term growth

Our ideal investment is simple: buy a strong business at a fair or discounted price, and hold it over the long term.

Taking Advantage of Market Inefficiencies

While our primary strategy is grounded in fundamentals, we occasionally take advantage of market inefficiencies. For instance, the widely used Black-Scholes-Merton model—introduced in 1973—remains the standard for pricing options, despite known limitations.

When opportunities arise due to mispricing or outdated assumptions, we may selectively implement options strategies to generate bonus returns. However, we approach these strategies conservatively and limit our exposure due to their inherent risks. Clients may also opt out of options exposure entirely, based on personal preference or risk tolerance.

A Long-Term Investment Mindset

Our approach is rooted in a long-term horizon. While short-term market movements are inevitable, we focus on sustained growth and compounding returns over time.

We typically only sell when:

There is a significant change in a company’s fundamentals or the broader economic cycle, or
A materially better investment opportunity presents itself

Otherwise, we believe in holding quality businesses and letting time do the work.

Our portfolios are concentrated but well-diversified, typically consisting of fewer than 20 high-conviction holdings—each selected for its long-term value potential.

A New Chapter: AI-Enhanced Investing

In December 2024, founder Yuan He launched None Zero Sum Technologies, LLC (N0S.Tech) to integrate AI and machine learning into investment strategy development. Leaving his role as COO at NetMind.ai, Yuan committed full-time to HY Financial and N0S.Tech to drive innovation and elevate portfolio performance.

Today, we combine principled, value-driven investing with AI-enhanced tools to better navigate market complexity—and deliver meaningful results for our clients. Find out more at N0S.Tech.

HOW WE TRADE - WE EAT OUR OWN COOKING

At HY Financial, we believe in putting our capital where our convictions are. That’s how we created our Portfolios—so our clients benefit from the same strategies and holdings used by our founder. In short: we eat our own cooking.

A Two-Portfolio Approach: Tailored to You

Each client’s assets are allocated across two core portfolios, customized based on their Investment Policy Statement, which reflects their risk tolerance, time horizon, and financial goals:

The OneOnian Portfolio – Actively managed to pursue higher returns
The Defensive Portfolio – Passively managed and built for stability and capital preservation

Before allocating between the two portfolios, we tailor the structure to fit your individual risk profile and investment objectives—ensuring a personalized and balanced portfolio built around your needs.

The OneOnian Portfolio

The OneOnian Portfolio is based on the founder’s personal investment strategy and is known as the OneOnian Portfolio. This portfolio is fully flexible, allowing investments across all asset classes and sectors. It is actively managed based on evolving insights and conviction. Launched in late 2006, the OneOnian Portfolio is the longest continuously managed account at HY Financial and serves as a clear, transparent benchmark of our long-term investment strategy and performance. You can view its history and methodology [here].

For example:
If the OneOnian Portfolio is valued at $500,000 and holds $50,000 in Google (10%), then a client with $200,000 in the Risky Portfolio would also have $20,000 (10%) allocated to Google—mirroring conviction-weighted positioning.

Aligned with You—By Design

Nearly 80% of Yuan He’s personal liquid assets are invested in the same two portfolios available to clients: the OneOnian Portfolio (Flat Fee Portfolio) and the AI-enhanced Portfolio (0/6/25 Portfolio) leveraging the AI technology powered by N0S.Tech.

These portfolios are managed using a model-based trading system and an average-account approach, which means Yuan He’s personal investments generally follow the same strategies, holdings, and trade timing as client accounts.

While personal and client portfolios are managed with the same methodology, actual results may vary due to differences in investment timing, cash flows, and client-specific allocations.

This structure reflects our core philosophy: we eat our own cooking—we invest alongside our clients and follow the same principles we recommend to them.

TRANSPARENT, ALIGNED FEE STRUCTURE

At HY Financial, we believe in keeping things simple, transparent, and aligned with your success.

For traditional clients—including individuals, small businesses, and tax-deferred accounts such as retirement plans—we charge a flat 1% annual management fee based on assets under management (AUM), billed quarterly.

In select cases—particularly for new clients—we may waive our management fee if two conditions are met:
(1) your annual return falls below 6%, and
(2) we fail to outperform the S&P 500 by at least 6% on a relative basis. For example, if the S&P 500 returns -5%, and our strategy delivers less than +1% (i.e., not preserving capital by a 6% margin or more).

This discretionary policy reflects our core principle: we only earn when we deliver value. Fee waivers are not guaranteed and are assessed case by case, at our sole discretion. Performance is measured on a rolling four-quarter basis, and fees are evaluated at the end of each quarter.

For long-term clients whose results have consistently exceeded fees paid, this waiver typically does not apply.

For Qualified Clients Only: AI-Driven Strategy with N0S.Tech

Qualified Clients—defined by the SEC as individuals with a net worth exceeding $2.2 million (excluding their primary residence), or with at least $1.1 million in assets under management with the adviser—can access our advanced AI-powered investment strategy through a strategic partnership with N0S.Tech. This strategy integrates:

AI-assisted asset selection
Event-driven analysis
Algorithmic execution

Together, these elements form a data-driven, adaptive investment process designed to capture opportunity and manage risk in dynamic markets.

Due to the nature of algorithmic strategies, the portfolio may involve a higher volume of transactions, which can support performance under certain conditions but may also lead to increased trading costs. As always, results may vary, and past performance is not a guarantee of future results.

This strategy is offered under a 0/6/25 performance-based fee model:

0% management fee
6% hurdle rate — you keep the first 6% of annual returns
25% performance fee on gains above 6%

This structure aligns our success directly with yours—we are rewarded only when your portfolio performs beyond the threshold.

Independent. Fiduciary. Focused on You.

HY Financial operates as a fully independent, fiduciary firm. We do not receive compensation from banks, broker-dealers, or insurance companies. All of our compensation comes solely from our clients, allowing us to focus entirely on your financial well-being—with no conflicts of interest and no outside incentives.