Dimensional Fund Advisors (DFA)

Ferguson Asset Management, Inc. uses Fidelity Investments as our custodian to hold all the client assets that we manage. Through Fidelity, our client’s portfolios have access to thousands of investment vehicles including stocks, mutual funds and bonds.

A Strategic Approach to Funds

In making our choices, we are well aware that more than 90% of mutual fund managers under perform the benchmark indices they strive to meet or beat. For individual investors, the historical returns are even less than the 12,000 professionally mismanaged “beat the market” funds.

A well-informed and educated investor understands that trying to beat the market is an ego thing. If the overwhelming number of professionals can’t do it, what should part-time, under-informed investors expect? The answer is they should expect even less return.

DFA philosophy is: Markets are efficient, and risk and return are related.

Dimensional Funds

Dimensional Funds are different from conventional mutual or index funds. Dimensional Funds have created their own indices that are designed to capture the returns of a specific asset class, whereas index funds merely replicate traditional market indices.

Dimensional Board members include some of the nation’s most distinguished and recognized academicians, including the Nobel Laureate economists Myron Scholes and Merton Miller. Our role, as advisors, is to provide clients a successful investment experience. To that end, we employ DFA mutual funds.

Dimensional Fund Advisors is an $177 Billion as of March 2010 family of funds designed to meet the needs of professional investors at low cost. Investors utilize DFA funds through a select group of approved, fee-only advisors, and a Who’s Who of over 200 public, corporate, Taft-Hartley, and nonprofit organizations. These include the Maryland State Retirement System, California Public Employees Retirement System, Citigroup, Pepsi, Pfizer, Cornell University, and the Salvation Army.

Fergurson Asset Management is an approved DFA advisor

Ferguson Asset Management is one of these select fee-only advisors. We receive no financial support from DFA or commissions. Our role is combining various asset classes into a balanced portfolio based on understanding our clients risk preferences, tax affairs, family desires, and lifetime financial objectives. The relationship between Dimensional and Ferguson Asset Management reflects our shared views about how capital markets work and how best to provide clients with a successful investment experience.

Dimensional has 35 value-added funds that we incorporate into asset allocation strategies designed specifically for each client. These strategies have outperformed their benchmarks. DFA funds have provided these increased returns through innovative trading strategies, low turnover, low expenses, and portfolio engineering.