How we build


Investing makes it possible for many of us to achieve important lifetime goals, such as retirement. That’s why we believe a better wealth experience requires a consistent investment approach based on financial science and grounded in real-world results.
Our Asset Class Investing philosophy is based on almost nine decades of data, analysis and research, insights from behavioral finance and close relationships with leading academics.

How We Build Asset Class Investing Portfolios

Our strong belief in the power of markets to create long-term wealth frees us to think differently about investing. We don’t follow fads or relegate our clients’ futures to guesswork and speculation.

Instead, our Investment Committee builds portfolios that aim to capture the returns of global stock and bond markets and help investors reach their long-term goals. Since trading, fees and expenses can have a real impact on performance, all Strategic Wealth Management portfolios are managed to help control risks, control costs and minimise taxes.

There are four key concepts which play a vital role in the construction and management of our portfolios. 


1. Let Markets Work for You

We believe

Instead of trying to beat the market, let the long-term growth potential of markets around the world work for you. Over time, stocks have significantly outperformed inflation – as well as bonds. Yet most active money managers have consistently failed to outperform. This is why we only use strategic Asset Class investments – which let markets work for you by focusing on delivering market returns.

How we know

$1 invested in the U.S. Stock market in 1802 grew to $1.03 million by 2014. That’s the power of free markets, powered by human innovation.

Fig 1.
Markets have been significant generators of long-term wealth for investors



Active money managers have a poor track record when it comes to outperforming the market reliably and predictably.


Fig 2.
Instead of trying to beat the market, Asset Class funds focus on capturing market rates of return




2. Put Science on your side

We Believe

Financial science gives us the knowledge and tools to address the "investment problem." Our Investment Committee builds portfolios with focused exposure to key “factors” of returns, such as company size, relative price (value), profitability and momentum. This factor exposure largely determines a portfolio's risk and return. Working with your advisor, we then recommend how much exposure to these factors is right for you.

How we know

Great thinkers and economists, have provided us with powerful insights into how portfolios should be constructed.

Landmark research by Professors Ken French and Eugene Fama Sr., identified two equity risk factors — small companies and value companies — that investors should expect to be compensated for over the long term. Further research also identified additional factors of return, including profitability and momentum.

Fig 3.
We apply — and continuously test — academic research to address the investing problem



Fig 4.
Greater potential risk = Greater expected long-term returns



3. Manage Risks

We believe

Risk can't be eliminated, but it can be managed – even potentially reduced – through our prudent approach:

We diversify globally (NZ makes up less than 0.15% of world market capitlisation)

We invest in thousands of securities to reduce company-specific risk

We combine Asset Classes that respond differently to various market conditions

We invest in high-quality, short-term bonds to provide income and help smooth out dramatic ups and downs

How we know

Investing in only one country means unnecessary risk as well as missing a world of potential opportunities. 

Fig 5.
Own Great Companies around the World



These Asset Class returns show no reliable pattern. But a globally-diversified portfolio offers potentially more consistent returns with less risk. Our portfolios have over 8,000 securities in 45 countries and 35 currencies.


4. Invest for the Long Term

We believe

A long-term perspective is one of the most important ingredients of portfolio success. But the powerful emotions we experience when markets move up and down can get in our way. That's why we incorporate the latest behavioral research to help you make better decisions and stay on track. We also rebalance your portfolio periodically to keep it aligned with your goals. You don’t have to go it alone. Work with an experienced advisor from our team who has a legal and ethical duty to always put you first.

How we know

Panic, fear and trying to outguess the market have led the average stock investor to underperform. the S&P 500 by almost 50%. This is where the guidance of your Financial Advisor can make all the difference.

Fig 6.
Patience, discipline and your Financial Advisor can help you stay on track