Stewart Group has been providing advice for over 36 years. This month we are celebrating 20 of those years spent in partnership with Dimensional Fund Advisors (DFA).

In our humble opinion DFA are the best service provider in the business. They have a long history of rigorously applying academic research to practical investing – which matches our own investment philosophy. They’re well known for their prowess; 4 of 5 Nobel prize winners in economics won their prizes whilst working at DFA.

I first came across DFA through my friend’s father, who suggested I meet with his adviser in Toronto, Canada. It turned out to be the most valuable 90-minute session of my life. In the end this adviser complimented me on my financial planning and industry knowledge, but said I needed to sharpen up on my implementation... a classic back-handed compliment, but certainly a motivational one!

I was given two names on paper (these were the early days of the internet) for DFA’s fledgling Australian office, to make contact on my return home to NZ.

Of course, to meet their high standards, we had to prove ourselves first. DFA put us through 18 months’ worth of hoops before we could invest, including me jumping on a plane to Sydney to meet the team and be grilled in person. While their new investor process isn’t quite as tough now, their dedication, innovation and scientific methodology remain unparalleled (and are a huge asset to us as in partnership).

The rest, as they say, was history.

At Stewart Group, we believe that to invest successfully requires a properly constructed, straightforward and rigorous investment philosophy. Our philosophy adopts the popular Modern Portfolio Theory which is based on the following principles:

·         Markets are efficient and investors are rational;

·         Risk and return are related;

·         Diversification is imperative; and

·         Portfolio structure determines the performance

This is supported by a body of academic evidence and governs how we construct client portfolios.

Partnering with DFA’s best in class specialists has allowed us access to experts in the industry, their best-in-class research, and their proven methodology.

On top of that, DFA’s patented investment methodology has also been instrumental in our ethical & sustainable investment journey. Our investments are overlaid with DFA’s specific environmental and social screens, to build diversified, cost-effective sustainability strategies to pursue higher returns while applying certain environmental criteria that matter the most. Read more about our commitment to ethical practice on our Simply Sustainable™ page.

We are so pleased to be able to provide world-class, evidence-based solutions for our clients as a result of our ongoing partnership with DFA. Here’s to 20 years... and many more!

Keep an eye out for more in coming months: We look forward to sharing with you a short film on DFA’s journey in finance and how this careful oath has yielded results for their investors. This will be available later this year or early 2024.

by Nick Stewart (CEO and Financial Adviser at Stewart Group)