[Asia Economy Reporter Hwang Yoon-joo] NH Investment & Securities announced on the 9th that it has launched the beta service of ‘NH Direct Indexing,’ the first of its kind among securities firms. Direct indexing is characterized by enabling ‘personalized portfolio investment,’ where investors create their own indices based on market indices.
NH Direct Indexing is available through NH Investment & Securities’ MTS (QV, Namu), and the released version is a beta version. The official version, which includes trading functions, is scheduled to be launched in February. NH Direct Indexing is a new investment platform that allows investors to directly modify various market indices according to their investment goals and preferences to create their own unique indices.
Although direct indexing is a service NH Investment & Securities is pioneering for the first time in the domestic financial investment industry, it is already actively offered by major financial firms such as Morgan Stanley and BlackRock in the United States. The NH Direct Indexing service starts by selecting market representative indices like KOSPI and KOSDAQ or various thematic iSelect indices developed in-house by NH Investment & Securities.
It is possible to simply track the selected index as is, or adjust the weightings of the stocks within the index to create a ‘personalized index.’ To customize your own index, you apply your desired investment strategies such as themes, sectors, or styles to the selected representative index and adjust the weightings accordingly.
For example, if you select the ‘secondary battery’ theme, one of the investment strategies provided by the solution, you can build your own portfolio reflecting stocks related to secondary batteries. Additionally, you can add, exclude, or adjust the weight of specific individual stocks within the created index, supporting the creation of personalized indices.
The newly launched NH Direct Indexing beta version allows users to create their own indices and check the historical performance of the indices they have created. It also features a Leader Board function where users can compare their indices with those created by other investors and share returns, enabling a diverse investment experience.
The official version, launching in February, will allow users to contract portfolios composed of their own indices and invest in them in practice, as well as provide functions to monitor management status and perform rebalancing. NH Investment & Securities expects to meet the needs of investors who want to take the lead in their investments through the direct indexing service.
Lee Seung-ah, Head of the Product Solution Division, said, "Through this beta version of direct indexing, we plan to collect feedback from customers and employees and reflect it in the official version. In the future, we plan to expand the service to include overseas stock investment, portfolio refinement based on fractional trading, and tax-saving strategies in preparation for the introduction of financial investment income tax."
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