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Investment Strategy

Finansim's investment strategy is based on its long-term professional experience in advising private banking customers on their investment portfolios in Israel and abroad. The investment review process is regularly prepared, with updates from the world's leading sources of information.

Consideration of any investment is based on a long-term perspective and in accordance with economic prices of capital assets at any point in time.

Strategies and Products.

Anti-cyclical approach – during capital market downturns, the public avoids many investment channels. This creates an opportunity to buy assets at attractive and reasonable prices for long-term investors. Page 5 of 11


During downturns, there is greater market volatility, the economic parameters are unclear, and this is the time to consider asset acquisitions, while maintaining caution and conservatism. On the other hand, lower volatility, and a rush by the public to investments with much greater risk characteristics characterize boom periods. The economic data is good, but in many cases, the pricing of the capital assets is no longer attractive relative to potential risk. In these periods, we decide to sell, progressively, the investments that have exhausted their increases in value.

Risk diversification – today's investment world suffers from a long-term trend of rising global risks, as well as an increase in correlations between the varieties of investment options. We tend to operate in a wide range of investment channels in order to reduce risk. Alongside a combination of several forms of investment, we tend to have a proper dispersion in each investment channel through a number of financial assets (ETF's, tracker funds, mutual funds, etc.). Some of diversification of risk in investment portfolios relates to so-called alternative assets, such as hedge funds, real estate, and commodities.

Global outlook – the enormous supply of investment instruments exposed to foreign markets requires proven professionalism. A global investment portfolio is divided into three levels of diversification: geographical diversification, investment assets diversification, and currency distribution. Our expertise in global investment portfolio advice contributes to an increase in the total return of client portfolios along with reduced risk.

Identifying investment opportunities during a crisis - crisis periods could occur at global macro levels, and in particular, in a specific market or a particular stock. In many cases, a crisis causes institutional or private investors to "escape", a situation of crisis because of different interests or fear. A crisis creates a long-term opportunity. Occasionally, we identify crisis periods, as long-term and dangerous, but sometimes crisis periods are long-term investment opportunities.

Strategic thinking and limited actions - our experience over the years, and all financial studies show that any successful investing involves strategic thinking with respect to the weighting of investment vehicles over time. We concentrate every day on the appropriate weighting of each vehicle, and not on daily buying and selling. Any over-trading activity involves trading fees and incurs earlier than necessary tax payments.

Tax optimization – following on the 2010 reform of the personal management of provident funds and advanced training funds, we take advantage of tax benefits under these investment tracks to differentiate the types of assets acquired, compared to assets that are bought through a bank investment account and that incur full taxable capital gains. After choosing an investment, we decide where to place it – in a bank account / training fund / provident fund, and thus we can optimize tax benefits over time.

"Shopping" - part of a long-term investment is cost savings. This requires a daily review of price quotes from Israeli and foreign banks, as well as investment houses. When we want to consider, on behalf of our clients, which deposit to make, we request and compare interest rate quotes from various banks. When we want to buy ETF's we request quotes from the trading desks of investment houses. Thus, we act on foreign exchange costs, and on the justified costs of purchasing mutual funds.

Simplicity – with respect to all investment channels, we concentrate on a full understanding of the prospects for investment and investment risks. We refrain from recommending investments that involve any "over sophistication", and refrain from recommending products that are not understood, from the standpoint of complexity and inherent risks. 


Quality testing - a considerable part of our concerns when recommending mutual funds, hedge funds, investment managers is quality. We do not suffice with historical statistical measures (which are important), but rather undertake a qualitative examination of the investment managers (knowledge, experience, professionalism, perseverance, etc.)

Proactive investment portfolio advice - despite the fact that the financial world is very dynamic and full of information that is intensively received, it is very important to examine critically any economic information, and not to respond hastily to immediate events. It is very important to monitor constantly developments in the markets and to be available to any proposed investment, given that the investment has matured to become economically viable. Our investment staff constantly monitor our clients' investment portfolios and proactively approach them to update and change their portfolios, as required.

How Does it Work?

• Finansim's investment advisors analyze the overall investment structure for each client from the standpoint of each asset.

• After an analysis of the client's financial needs, the assets are divided according to targets and are tested by simulation under different market situations.

• Client accounts (at various banks) are scanned using a dedicated investment advice system. The advisors, on a daily basis, examine the client's investment portfolio and offer advice on assets that are appropriate for the chosen strategy.

• The advisors attend to the actual transaction, monitor the execution of the transaction, and check that the bank collects the transaction fee in accordance with the customer's bank status.

The Transition from a Traditional Investment Portfolio to a Sophisticated Investment Portfolio

An investment portfolio infrastructure is built using traditional investment assets - (government bonds / corporate bonds, shares, deposits, mutual funds / tracking funds, ETF's, etc.) These options are necessary but not sufficient to diversify the sources of return and to distribute risk. The transition to sophisticated investment vehicles (closed-end mutual funds, hedge funds, structured products, real estate, "real" (non-financial) investments) requires extensive professional experience and personal understanding, of many years in the field. Often an analysis of economic data is not sufficient, and there is a need to test the quality of management of all assets and cost structure.

The Transition from a Traditional Investment Portfolio to a Sophisticated Investment Portfolio is our Main Vehicle to Achieve Return and Risk Goals for our Clients over Time. 


Proactive Investment Advice for Managed Portfolios

Proactive investment advice for managed portfolios is designed to provide private investors with an optimized control mechanism when working with investment firms.

Our experienced and knowledgeable investment advisors build an investment strategy for each client, according to predefined needs, such as final use of the funds, a variety of investment risks, markets in Israel or abroad and so on.

After building the investment strategy, we advise the client on any appropriate investment firms in accordance with set goals. Opening a managed account with an investment house will be after the selection of a specific manager to manage the portfolio depending on experience and specialization.

The management fees payable to the investment house will be within the scope of Finansim's status with the investment house. After choosing an investment manager and investment policy, managed accounts are connected to a dedicated computer system for managing and monitoring the investment strategy, examining risk, and a daily analysis of securities transactions.

The system allows for an examination of the various accounts on a consolidated basis, and a comprehensive examination of strategy on a daily basis, providing alerts for risk management purposes.

Finansim's investment advisors consider developments in the markets and depending on market, developments (risks or opportunities) recommend its clients to expand or reduce the various risk components of managed portfolios.

With the client's consent, the portfolio managers are asked to act in accordance with current investment policy and the financial advisors follow-up on policy implementation. Page 8 of 11


Formulating a Strategy

Formulating an Investment Plan

Selecting Investment Houses

Fine-tuning Management Fees

Selecting an Investment Manager at the Investment House 


Daily Monitoring of the Investment House's Strategy

Connecting all managed accounts to one computer system for viewing accounts, individually or when consolidated.

With the client's consent, a notice to the investment house of a change in the risk components and confirmation of execution of change.

Daily consideration of strategy execution and identifying any consolidated exposure to all accounts, daily consideration of changes in the accounts, and a daily follow up on the investment strategy, monitoring account changes

Dynamic risk management in accordance with market developments.

  1. תאגיד בנקאי כמשמעותו בחוק הבנקאות רישוי, התשמ"א- 1981;

  2. חבר הבורסה לניירות ערך בתל אביב שאינו תאגיד בנקאי (חש"ב כמשמעותו בתקנון הבורסה)

  3. גוף הנתון לפיקוח והסדרה כ- dealer-broker בארצות הברית; או שהוא נתון לפיקוח והסדרה כ - firm investment או כ - institution credit הרשאים לספק investment 3 services תחת דירקטיבת ה- MiFID באחת מהמדינות החברות באיחוד האירופי; או שהוא firm investment או institution credit כהגדרתם בסעיף 2)1( ל - 600/2014 No Regulation, שמשרדיו הראשיים (office head (מצויים בממלכה המאוחדת )Kingdom United), ואשר רשאי תחת חלק A4 ל - Services Financial 2000 Act Markets and לבצע בממלכה המאוחדת פעילויות מפוקחות הנוגעות ל- או; Regulation No 600/2014 – ב כהגדרתם investment services and activities שהוא בנק בעל רישיון בשוויץ המורשה כדילר ניירות ערך )dealer securities )תחת הדינים השוויצרים, ובהתאם לדין על פיו הגוף האמור נתון להסדרה ופיקוח, לא יהיה בעובדה שהלקוח מצוי בישראל כדי לפגוע בחובותיו כלפי הלקוח


הגופים האמורים אינם מפוקחים על ידי הרשות לני"ע בישראל.

אין בהיתר משום הבעת דעה על טיבו של השירות הניתן בידי בעל ההיתר או על הסיכונים הכרוכים בו.

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