Newspaper Article – Bay group secures access to US fund

Bay group secures access to US fund

By Patrick O’Sullivan
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IN A coup for Hawke’s Bay, wealth and risk management specialist Stewart Group is now an asset consultant for Fidelity Life’s KiwiSaver schemes that include Texas-based Dimensional Funds Advisors’ (DFA) funds.

Dimensional is the eighth-largest funds adviser in the United States.

“The Asset Class Conservative Kiwi Fund Asset with Dimensional’s strategies are unique, giving everyday investors the opportunity to have engineering from the best minds in modern finance within their own New Zealand-based investment,” company director Nicholas Stewart said.

Once KiwiSaver members join the Fidelity KiwiSaver Scheme they can tailor their investment profile by blending holdings across up to four funds.

The biggest drawcard is expected to be the option of moving to the Asset Class Conservative Kiwi Fund and/or the Asset Class Growth Kiwi Fund and having their KiwiSaver contributions invested mainly in DFA (Australia) funds.

“We believe fund performance is a result of market performance, not manager stock election or market timing.” Nicholas Stewart, company director

“Dimensional funds are generally not accessible to mum and dad investors because the minimum investment level is too high and they are not open to the public,” Stewart said.

“There are only a small number of DFA-accredited New Zealand financial advisers offering Dimensional funds – and none in the KiwiSaver market.”

The Asset Class Funds will not charge performance fees.

“We believe fund performance is a result of market performance, not manager stock selection or market timing.”

Stewart said KiwiSaver funds were closing because providers were seeking increased economies of scale “to make more money”. “We came about this not to make a dollar, we came about this because we wanted to do the best for our clients. And that’s rather unique.”

Stewart met DFA director and Ivy League professor Ken French 11 years ago while Stewart was 25-year-old graduate on holiday from his job at a merchant bank.

French’s academic research has become the basis upon which Stewart bases investment strategies.

“I was in Canada skiing with a girlfriend and her family’s wealth was managed by Dimensional,” Stewart said.

Photo caption – PARTNERSHIP: The United State’s eighth-largest funds advisor has a link with Hawke’s Bay. Pictured with Stewart Group’s father-and-son directors Nick and Donald Stewart is Dimensional Funds Advisors director and Ivy League professor Ken French.   PHOTO/SUPPLIED