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Shares I love: WealthNavi

WealthNavi has grown its assets under management to ¥500bn (£3.32bn) in five years
Shares I love: WealthNavi
  • WealthNavi offers robo-advisory services through a mobile app
  • It launched five years ago, since when its assets under management have grown to ¥500bn

Hisashi Arakawa, co-manager of Aberdeen Japan Investment Trust (AJIT), explains why he invests in robo-adviser WealthNavi (JAP: 7342).

"We invested in fintech group WealthNavi via its initial public offering (IPO) in December 2020. WealthNavi offers robo-advisory services through a mobile app, helping its users invest and manage their money. At that time, we saw a lot of potential in WealthNavi, which targets a growing segment of relatively young Japanese who are tech savvy and looking to invest excess savings, given that interest rates are ultra-low. We also liked that the company has a first-mover advantage, supported by operational knowhow and an app that is easy to use. 

"For us, management calibre counts. Before and after the IPO, we had met WealthNavi’s chief executive Kazuhisa Shibayama, who impressed us with his enthusiasm and entrepreneurial spirit. He started WealthNavi in 2015, after he discovered the financial disparity between his relatives in Japan, whose assets were mainly in cash, and those in the US who invested in equities and were much better off. His ambition is to persuade younger people in Japan to invest more to supplement their public pensions, rather than hoard cash.

"WealthNavi remains the largest robo-adviser in Japan. In just five years since it launched its service, assets under management have grown to ¥500bn (£3.32bn) as of July this year. Pleasingly, its stock price has more than tripled since the IPO.”

WealthNavi’s total revenue increased from ¥1.55bn in 2019 to ¥2.52bn in 2020, an increase of 62 per cent. Net income improved from a loss of ¥2.06bn to a smaller loss of ¥1bn.

Aberdeen Japan Investment Trust had 1.3 per cent of its assets in WealthNavi at the end of its last financial year, 31 March 2021. It had 9.5 per cent of its assets in financial companies at the end of May.