The Hastings-based Stewart Group financial advisory firm has released a new suite of retail funds targeting investors in the ‘forgotten middle’ demographic.
Nick Stewart, Stewart Group head, said the new ACI funds, which tap into underlying Dimensional Fund Advisors (DFA) strategies, have been designed to suit clients with up to $250,000 to invest.
Stewart said financial advisers often struggled to serve the mid-range market with simple, tax-effective solutions outside of KiwiSaver.
“The tax reporting requirements for many investors with smaller sums is a deterrent,” he said. “And we find most advisers, including ourselves, don’t have an efficient small account solution… until now.”
Officially launched last week, and seeded by Stewart family and staff money, the ACI product set includes conservative and growth funds with a balanced strategy that blends the two (currently in 50/50 ratio). Fees range from 1.2 per for the conservative fund to 1.3 per cent for the growth option with a low minimum $50 investment threshold.
While the new portfolio investment entity (PIE) products mirror similar Stewart Group-managed strategies offered under the Asset Class badge inside the Booster KiwiSaver scheme, the ACI funds are issued by hosting firm Implemented Investment Solutions (IIS).
IIS (due to adopt the FundRock NZ brand this month in line with other companies in the group run by new owner, Apex) has appointed Adminis as custodian and administrator for the ACI funds with Public Trust as supervisor.
Like the Booster Asset Class range, the ACI funds invest into factor-based strategies offered by DFA Australia (including the global shares ‘sustainability’ PIEs also issued by IIS).
Stewart said the ACI funds would also include the ability to pay advice fees to third-party advisers.
But as well as anticipated demand for the ACI products from advisers, especially the contingent of DFA fans, the Stewart Group has inked a distribution agreement for the funds with a new national medical sector-based group due to go live this week.
It is understood the soon-to-launch organisation intends to promote a pre-funding product as an alternative, or supplement, to traditional health insurance.