[Finatext Holdings Co., Ltd.] Smart Plus adds Japanese stock portfolio to “IFA Leading Managed Account,” a discretionary investment management service jointly developed with IFA Leading
Finatext Holdings Co., Ltd. Press release: November 12, 2024 Smart Plus adds Japanese stock portfolio to IFA Leading Managed Account, a discretionary investment management service jointly developed with IFA Leading ~ Our services that combine asset management with donations and social contributions are popular. Assets under custody exceeded 7 billion yen in about 2 months from the start of the service ~
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application of unique strategies and the development of self-branded services. ・Digital Wealth Manager details:
https://smartplus-sec.com/digital-wealth-manager/ ■Characteristics of the newly added “Quality Portfolio” and “Value Portfolio”
https://prcdn.freetls.fastly.net/release_image/12138/442/12138-442-cb87149443460744a5066bf608d3c588-613×246.png [Japanese stock investment policy] Investment philosophy and investment approach IMA believes that the key to asset formation is to appropriately respond to financial market uncertainties and enjoy the risk premium inherent in diverse asset classes. In investing in Japanese stocks, we evaluate the intrinsic value of companies and focus on investing in companies with long-term growth and sustainable competitive advantages. Our Japanese stock investment employs two independent investment strategies: Value (undervalued stocks) investment strategy: Utilizes the residual income model
(Edwards-Bell-Ohlson model) to invest in companies that are
undervalued relative to their intrinsic value Quality investment strategy: We invest in companies with high capital efficiency (ROE: return on equity, etc.) and superior competitive advantages. Value stock and quality stock investment strategies each use different approaches to evaluating corporate value. 1. Value stock (undervalued stock) investment strategy We select companies that are undervalued relative to their intrinsic value by evaluating their undervaluedness using a residual profit model and evaluating their profitability, financial soundness, and operating efficiency using multiple financial evaluations. In the residual profit model, the residual profit of a company whose ROE (Return on Equity) exceeds the cost of shareholders’ equity (the yield demanded by shareholders) is positive. In other words, the residual profit model evaluates that companies that have achieved ROE that exceeds the cost of shareholders’ equity over the long term have high intrinsic value (theoretical stock price). We select undervalued stocks by evaluating whether the intrinsic value (theoretical stock price) evaluated using the residual profit model is higher than the actual stock price as “undervalued degree (undervalued degree = current stock price ÷ theoretical stock price)” . For example, if the undervaluation level is less than 1, the current stock price is judged to be undervalued compared to the theoretical stock price. 2. Quality stock investment strategy A quality stock investment strategy invests in companies with high capital efficiency and competitive advantages. In particular, we aim for companies with an ROE of 8% or higher. A level of ROE of 8% is generally considered to be the minimum investment yield expected by the stock market, and an ROE of 8% or higher indicates that there is a high possibility that a company is generating returns that exceed the cost of capital. is shown. In support of this, several empirical analyzes targeting the domestic stock market have pointed out that when ROE reaches a level of approximately 8% or higher, the correlation with PBR (price-to-book ratio) tends to become stronger. I am. In addition, companies with excellent capital efficiency are said to have the following desirable characteristics when making investments. ・ High capital efficiency :Companies with high ROE efficiently utilize the capital entrusted to them by shareholders and generate high profits. This shows that the company is using its capital effectively. ・ Sustaining competitive advantage : Companies that maintain high ROE have a strong business model, unique technology, brand power, or market share, and have a sustainable competitive advantage. After selecting the companies for our value stock investment strategy and quality stock investment strategy, we perform a detailed financial evaluation to improve the accuracy of our investment decisions. Specifically, we evaluate companies on nine criteria from the three perspectives of
profitability, financial soundness, and sales efficiency, and invest in companies with high scores. Profitability evaluation 1. Is ROA positive? 2. Is the operating cash flow positive? 3. Has ROA improved this year compared to the previous year? 4. Does operating cash flow exceed net income? Financial soundness assessment 5. Has the long-term debt ratio decreased in this fiscal year compared to the previous year? 6. Has the current ratio increased compared to the previous year? 7. No new shares have been issued (number of shares has not increased compared to the previous year) Sales efficiency evaluation 8. Has the gross profit margin increased this year compared to the previous year? 9. Has the current year’s capital turnover improved compared to the previous year? In addition to the evaluation indicators listed above, we also refer to various financial indicators as reference values. In addition to these quantitative evaluations, we conduct qualitative judgments on companies selected through the above process based on the House View macro scenario, which is IFA Leading’s official view on economic and financial markets. When making qualitative judgments, we refer to various sensitivities calculated using the macro factor model. [Quality Portfolio] The Quality Portfolio consists of approximately 20 stocks selected using the F-score*2. We aim to earn income by selecting stocks that take into account capital efficiency and dividend yield as well as companies with excellent decline resistance and quality. ・Using F-score to select companies with excellent decline resistance and quality We use the F-Score, an index that scores profitability, financial soundness, and efficiency on nine items, to select companies with excellent decline resistance and quality. We also emphasize past drawdowns (the amount of decline from high prices) to control downside risk. ・Aim to earn income by considering capital efficiency and dividend yield It has been pointed out that companies with high capital efficiency indicators such as expected return on equity (ROE) tend to have high long-term stock returns. In addition to the above-mentioned
indicators, we aim to obtain value and income by looking forward to stable price movements and considering high expected dividend yields. [Value Portfolio] Value Portfolio selects inexpensive and high-quality companies through a combination of residual profit model*3 and F-score. We also make qualitative judgments on the selected companies based on IFA Leading’s house view of economic and financial markets. ・Combine residual profit model and F-score to select high-quality companies A residual profit model is used to calculate the theoretical stock price of companies included in the TOPIX 500 index, and companies whose theoretical stock price exceeds their actual stock price are judged to be undervalued stocks. For companies judged to be undervalued stocks, we further select high-quality companies by using the F-score. ・Qualitative judgment based on house view Qualitative judgments are made on selected companies based on the House View macro scenario, which is IFA Leading’s official view on economic and financial markets. For qualitative judgments, various sensitivities are calculated and referenced using IFA Leading’s macro factor model. *1 Reference: IFA Leading adopts Smart Plus’ discretionary investment service platform Digital Wealth Manager and starts offering “IFA Leading Managed Account” (August 16, 2024) *2 F-score: A stock selection method devised by Professor Piotroski of Stanford
University. The F-Score is a quality index that evaluates a company’s profitability, financial soundness, and efficiency using nine items, and the higher the score, the stronger the company’s financial foundation. Many empirical analyzes have reported that each strategy has the effect of increasing returns. *3 Residual profit model: An evaluation method that calculates the true value of a company by evaluating the expected value of future excess profits as the present value in addition to the company’s equity capital. Contract period Period from conclusion of contract until grounds for cancellation arise Contract conclusion date: The date of agreement with the customer Operation start date When the customer sets up the investment course and increases the amount after depositing money into the securities account Investment target Domestic listed Japanese stocks (excluding ETFs) Portfolio All 2 strategies eligible for NISA growth investment quota [Quality Portfolio] [Value Portfolio] Review of asset allocation ratio As a general rule, once a quarter (the frequency of review may change depending on market trends, such as when there are sudden market changes) Rebalance Rebalance at the appropriate time. Through rebalancing, we strive to maintain an optimal portfolio according to the client’s assets. Fee 1.0% per year (1.1% including tax) on the deposit balance Increase You can increase the amount at any time. Amount: 10,000 yen or more ■About the donation function of “IMA” “IMA” has introduced a system in which a portion of the fees paid by customers is returned to customers as “donation points.” Until now, there have been schemes in the world to donate a portion of investment profits and trust fees, but there are cases where the recipient of the donation can be selected by an organization designated by the financial institution or by the customer themselves, but there are very limited options. I was there. By partnering with three donation platforms, IMA’s donation function allows customers to select and donate to the fields and organizations they are interested in from among over 4,000 organizations. Additionally, if you are unsure about where to donate, we have a system in place where IFA Leading advisors can help you choose an organization and assist you with the procedures. ■About IFA Leading Co., Ltd. IFA Leading is an independent financial advisor (IFA) corporation established in June 2022 with the vision of “realizing a prosperous world born from a new ‘circulation of money'” and aiming to transform financial services in Japan. . As of May 2024, about two years after the service began, the total assets under custody exceeded 40 billion yen. In providing financial services, we place the utmost importance on transparency in asset management, and in addition to adopting a balance-linked fee model, which is still under development in Japan, we also provide long-term support for asset formation. , we practice a “goal-based approach” in which asset management professionals work with clients to uncover their potential goals. To achieve this, we pursue optimal solutions and provide lifelong advice, intermediation of products, and post-operation support related to general assets such as securities, insurance, and real estate. Company name: IFA Leading Co., Ltd. Location: 2F Defense First Building, 2-8-9 Ebisu Minami, Shibuya-ku, Tokyo Representative: Representative Director Manabu Hasegawa Established: May 2021 Business details: Financial products
intermediary business, life insurance agency business, non-life insurance agency business, real estate transaction business, investment advisory and agency business Registration number: Financial products intermediary company Kanto Local Finance Bureau (Kinnaka) No. 959 Financial Instruments Trading Business (Investment Advice/Agency) Director Kanto Finance (Kinjin) No. 3422 Real estate transaction business Governor of Tokyo (1) No. 109710 URL:
https://ifa-leading.com/ ■About Finatext Group and Smart Plus Co., Ltd. Finatext Group is a fintech company group whose mission is to “reinvent finance as a service” and realize embedded finance by providing next-generation financial infrastructure. “Finatext Co., Ltd.” reviews the ideal state of financial services from the user’s perspective and develops new financial services together with partner businesses; “Nowcast Co., Ltd.” provides alternative data analysis services; and “Smart Co., Ltd.” provides a securities business platform. We have operating companies such as “Smart Plus Small Amount and Short Term Insurance Co., Ltd.”, which offers
next-generation digital insurance, and aim to create “a world in which finance is more closely connected to people’s lives.” Image
URL: https://prcdn.freetls.fastly.net/release_image/12138/442/12138-442-4cdee12ac17a99cd010a0f87030adfbd-1300×500.png Company name: Finatext Holdings Co., Ltd. Representative: Ryota Hayashi, Representative Director, President and CEO Securities code: TSE Growth Market 4419 Established: December 2013 Address: 9th floor, Sumitomo Fudosan Kudan Building, 1-8-10 Kudankita, Chiyoda-ku, Tokyo Official website: https://hd.finatext.com/ Smart Plus Co., Ltd. Smart Plus Co., Ltd. is a fintech company that supports businesses to provide securities services to their own customers, centered on the securities business platform “BaaS: Brokerage as a Service.” At Finatext Group, which realizes embedded finance by providing next-generation financial infrastructure, we are responsible for the financial infrastructure business in the securities field.
https://prcdn.freetls.fastly.net/release_image/12138/442/12138-442-75b14f61c32450eb0c607b5a4e4c99e8-1200×630.png Company name: Smart Plus Co., Ltd. Financial Instruments Business Operator Kanto Local Finance Bureau (Kinsho) No. 3031 Representative: Noriko Kobayashi, Representative Director Head office location: 9th floor, Sumitomo Fudosan Kudan Building, 1-8-10 Kudankita, Chiyoda-ku, Tokyo Established: March 2017 Business content: Financial products trading business Member associations: Japan Securities Dealers Association, Type II Financial Instruments Association, Japan Investment Advisors Association URL: https://smartplus-sec.com/ Trade name, etc.: Smart Plus Co., Ltd. Financial instruments business operator: Kanto Local Finance Bureau (Kinsho) No. 3031 Member associations: Japan Securities Dealers Association, Japan Investment Advisors Association, Type 2 Financial Instruments Business
Association ■Notes regarding account opening and transactions ・When making a transaction using Smart Plus, you may be required to pay certain fees and expenses for each product. – When trading stocks, you may incur losses due to a decline in stock prices. In addition, losses may be incurred due to deterioration of the issuing company’s financial condition, such as bankruptcy. Investment trust transactions may also result in losses due to declines in base prices, etc. ・For foreign securities transactions involving foreign exchange
transactions, in addition to the above, you may incur losses due to exchange rate fluctuations. ・For leveraged and inverse ETFs, there may be a difference between the target underlying index and the reference price due to various operational costs, etc., and in the medium to long term, this discrepancy may become large, and the compound interest effect may reduce profits. It may be difficult to obtain. ・When opening various accounts with our company, there will be a screening prescribed by our company. ・When individual stocks are displayed or mentioned in materials, etc., they are posted for illustrative purposes only, and are not intended to be a solicitation or recommendation to buy or sell such stocks. ・When making a transaction, please carefully read the pre-contract documents, prospectus, other documents, contracts, etc. issued by our company. ■Notes regarding discretionary investment contracts ・When you conclude a discretionary investment contract with Smart Plus, you may be required to pay certain fees and expenses. ・Investments are managed based on discretionary investment contracts that the Company concludes with customers, and the investment principal is not guaranteed, and all profits and losses from investment belong to the customers. ・As the investment targets are domestic and foreign securities with price fluctuations, losses may occur due to fluctuations in indicators such as stock prices, interest rates, currency prices, etc., or changes in the issuer’s credit status, etc., and the investment principal may be lost. There is a risk of interruption. ・Before applying for a discretionary investment contract, please carefully read and understand the pre-contract documents and terms and conditions before applying. ・Cooling-off (Article 37-6 of the Financial Instruments and Exchange Act) does not apply to discretionary investment contracts. ・The past performance results displayed do not guarantee future performance results.