US strategy a winner: Stewart Financial Group

Nick (left) and Donald Stewart (right) with Dimensional director and Ivy League professor Ken French at the launch of Dimensional's KiwiSaver Asset Class products in February. PHOTO/LYNDA FORREST

Stewart Financial Group has assisted in the launch of another product based on the investing strategy of Dimensional Fund Advisors, a US wholesale fund management firm with about $400 billion invested globally.

Stewart this year introduced Dimensional to New Zealand, becoming a consultant/adviser for Dimensional's KiwiSaver Asset Class products, available through government default provider Grosvenor.

Stewart Group has since worked with Smartshares, a member of the NZX Group, and Dimensional to build a NZ Core Equity strategy for Core Equity's unlisted unit trust.

Director Nick Stewart said the strategy sought to add value by using a systematic and academically grounded investment strategy.

"It's low-cost, totally fee transparent, and you get Dimensional's technology in the New Zealand market," he said.

"These guys are the leaders in financial innovation and to be able to get the benefit of that in New Zealand is really special.

"These funds that are neither index nor traditionally active are what is growing globally.

"They seek to beat the market without out-guessing the market, yet there are few in New Zealand. To have a fund run by one of the best in the world is great.

"Evidence has proved that managers who seek to add value by finding mispriced stocks or making forecasts don't beat the market long term."

With the inclusion of the NZ Core Equity Trust, the Asset Class Kiwisaver Funds were now 100 per cent managed or submanaged by Dimensional, he said.

"Now it's 100 per cent Dimensional under the bonnet."