Forum Archive Index - February 2003

[Travis Morien <travismorien@yahoo.com>]

--- "tennyson@caverock.net.nz"
<tennyson@caverock.net.nz> wrote:
> 
> Travis has mentioned the somewhat 'unconventional'
> fund managers 
> Dimensional on ths forum.   Unconventional in that
> they aim to 
> simply buy cheap assets and make money as those
> asset values 
> rebound, and unconventional in the sense that
> backtesting has shown 
> that this is one of the few ways to consistantly
> outperform the 
> market.

DFA offer passively managed funds that buy stocks with
low price to book ratios, the bottom 30%.  Their funds
have performed exceptionally well and indeed the index
they try to replicate has outperformed the All Ords by
more than 5%pa since Jan 1980.  (Though the actual
fund hasn't been around that long of course, it has
performed remarkably well in the time that it has
actually been available to the public.)

I do a lot of direct stock investing but DFA's value
funds (Australian and GLobal versions) make up the
core of the portfolio if I'm using managed funds.

US site is www.dfaus.com
Australian site is dfafunds.com.au

I don't know of an NZ wing yet, they are still
considered quite small, but this is early days.  
> 
> I believe they are a US based outfit, although they
> do seem to have 
> funds that cover a wide variety of world markets.  I
> know of at least 
> one agent in Australia, but does anyone deal with
> these funds in New 
> Zealand?

There are about 200 accredited DFA advisers in
Australia.  Unlike any other fund manager that I know
of they screen  advisers very carefully.

Experience with a normal BDM (Business Development
Manager).  "Is there anything I can do to help you
sell our product?  Would you like us to help you set
up a seminar?  Can I have a hundred prospectuses
mailed to you straight away?  If I get your lawn mowed
will that give you more time to sell our product?"

But with DFA its somewhat different: a two hour
grilling to make sure I was technically competant and
familiar with the latest academic research into
managed funds and asset class investing.  Most
advisers that approach DFA are rejected.

Travis
www.travismorien.com



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