DFA ETFs Offer a Range of Investment Options

DFA ETFs provide a convenient way to invest in a variety of asset classes, including US equity, international equity, and fixed income.

One notable feature of DFA ETFs is their low cost, with expense ratios ranging from 0.06% to 0.20%.

Investors can choose from a range of investment options, including the DFA US Core Equity 1 Portfolio, which tracks the Russell 3000 Index.

These ETFs are designed to be long-term investments, allowing investors to benefit from the power of compounding over time.

Dimensional Fund Advisors (DFA) started in 1981 and spent many years focusing on traditional mutual funds.

DFA's consistent, academia-derived strategies have been refined over the course of 40 years.

They aim to focus on capturing the Market, Size, Value, and Profitability factor premia while maintaining portfolio diversification across cap sizes and geographies as well as minimizing turnover, trading costs, and tax impact.

DFA's co-founder David Booth was also heavily involved in pioneering index funds, and their Board of Directors includes famous names like Eugene Fama, Kenneth French, and Myron Scholes.

Dimensional Fund Advisors (DFA) has been around since 1981, but it wasn't until the 2010s that they started seeing outflows from their mutual funds.

DFA's entry into ETFs was a direct result of these outflows, which were a strong incentive to explore new avenues of business.

The SEC's rule 6c-11, also known as the "ETF rule", granted blanket exemptive relief, allowing companies to use active management in their ETFs.

This regulatory change was a game-changer for DFA, enabling them to expand their business and take advantage of a new market.

DFA's funds are designed to provide broad, diversified market exposure with targeted, evidence-based factor exposure, all at a relatively low cost.

Their managers assemble funds based on a systematic compilation of a rigidly defined group of stocks with particular characteristics.

DFA has been converting their mutual funds to ETFs recently, and simultaneously lowering fees.

Dimensional Fund Advisors (DFA) has been a pioneer in factor-based investing, with a 40-year history of refining its strategies.

DFA's funds are more index-y than traditional actively managed funds, with a systematic approach to compiling a rigidly defined group of stocks with particular characteristics.

Their Board of Directors includes famous names like Eugene Fama, Kenneth French, and Myron Scholes, who have contributed to the development of factor-based investing.

DFA's ETFs aim to focus on capturing the Market, Size, Value, and Profitability factor premia, while maintaining portfolio diversification across cap sizes and geographies.

By targeting specific factors, DFA's ETFs aim to boost expected returns and manage risk more effectively, all at a relatively low cost.

DFA's consistent, academia-derived strategies have been refined over the course of 40 years, making them a gold standard for data-driven factor tilts.

Dimensional's funds were previously unavailable to DIY retail investors, but their launch of ETFs has made them accessible to a wider audience.

DFA's ETFs have been converted from some of their tax-managed mutual funds, which were previously unavailable to retail investors.

Dimensional's ETF landscape can be confusing to navigate, but breaking down the ETFs into parent categories can make it more understandable.

DFA's ETFs are for equities, and they have released several new ETFs for retail investors, which we'll discuss below.

The Dimensional U.S. Core Equity Market ETF (DFAU) tracks the performance of the Dimensional U.S. Core Equity Market Index.

This index includes large, mid, and small-cap stocks, providing broad exposure to the U.S. equity market. The ETF employs a systematic approach to capture market premiums.

Dimensional Fund Advisors focuses on factors such as size, value, and profitability when constructing their portfolios, aiming to capture higher expected returns over the long term.

The Dimensional U.S. Core Equity Market ETF (DFAU) has outperformed the S&P 500 index with lower volatility since January 2021.

In its pursuit of broad U.S. market exposure, DFAU has a unique investment philosophy that focuses on factors such as size, value, and profitability. This factor-based approach aims to capture higher expected returns over the long term.

DFAU's expense ratio is a relatively low 0.12%. This is a significant advantage for investors looking to minimize costs.

Dimensional's approach to investing is systematic and relies on research-driven strategies. This is evident in DFAU's construction of the Dimensional U.S. Core Equity Market Index, which includes large, mid, and small-cap stocks.

The Dimensional Emerging Core Equity Market ETF (DFAE) also employs Dimensional's approach, but with a focus on Emerging Markets. DFAE has the highest expense ratio of the three at 0.35%.

Investing in international markets can be a great way to diversify your portfolio.

The Dimensional International Core Equity Market ETF (DFAI) is a good option for those looking for factor exposure outside the U.S. It takes a similar approach to DFAU, but for Developed Markets outside the U.S.

DFAI has an expense ratio of 0.18%, which is relatively low compared to other international funds.

You may also consider a simpler, cheaper international equities fund like VXUS from Vanguard if you're content with factor exposure in U.S. stocks.

For more aggressive factor tilts among developing countries, Dimensional's Emerging Markets Core Equity 2 ETF (DFEM) is a good choice, but be aware that it has a higher fee of 0.39%.

The Dimensional International Core Equity 2 ETF (DFIC) is the equivalent of DFAC for ex-US Developed Markets and has a fee of 0.23%.

If you're looking for a more cost-effective option, you may want to consider the fee of each fund before making a decision.

DFEV, the Dimensional Emerging Markets Value ETF, offers ultra-targeted factor exposure in Emerging Markets. It has a fee of 0.43%.

The fund is designed to provide exposure to Emerging Markets through a value tilt, which can be beneficial in certain market conditions.

Developed Markets are highly correlated to the U.S., making Emerging Markets an attractive addition to a US-heavy portfolio.

DFEV has a more focused approach than Dimensional's other Emerging Markets ETFs, such as DFAE and DFEM.

Dimensional Fund Advisors (DFA) offers 38 active ETFs, which held over $133 billion in assets as of April. This represents over 20% of all active ETF assets.

DFA has experienced significant growth, with an organic growth rate of 40% over the past year. This outpaces JPMorgan's rate of 37% growth and First Trust's 21% growth.

DFA's suite of active ETFs is known for providing broad, diversified market exposure with targeted, evidence-based factor exposure. They aim to capture the Market, Size, Value, and Profitability factor premia while maintaining portfolio diversification.

Their proprietary, robust implementation of factor targeting has been refined over 40 years, making them a gold standard in the industry.

Dimensional Fund Advisors (DFA) has been around since 1981, and its co-founder David Booth was also heavily involved in pioneering index funds.

DFA's funds are technically actively managed, but they're more index-y than traditional active management. They assemble funds based on a systematic compilation of a rigidly defined group of stocks with particular characteristics.

The key to DFA's success lies in their proprietary, robust, and impressive implementation of factor targeting. This is a different feat compared to identifying a factor, and it's what sets DFA apart from other investment firms.

DFA's consistent, academia-derived strategies have been refined over the course of 40 years. They aim to capture the Market, Size, Value, and Profitability factor premia while maintaining portfolio diversification.

Dimensional has released new ETFs for retail investors, and they've also converted several tax-managed mutual funds to ETFs. This makes their ETF landscape more accessible to individual investors.

DFA's funds focus on capturing specific factor premia, such as Value and Profitability, while minimizing turnover and trading costs. This approach has made them a gold standard for data-driven factor tilts.

Their Board of Directors includes famous names like Eugene Fama, Kenneth French, and Myron Scholes, which speaks to the credibility and expertise behind DFA's investment strategies.

DFA's ETFs are designed to provide broad, diversified market exposure with targeted factor exposure, all at a relatively low cost. This makes them an attractive option for investors looking to manage risk and boost expected returns.

DFUS is a Dimensional ETF that used to be DTMEX, the Tax-Managed US Equity Portfolio.

It provides similar exposure to DFAU, but at a slightly lower fee of 0.11%.

Dimensional Fund Advisors, the company behind DFUS, was founded in 1981 and has been converting its mutual funds to ETFs, including this one.

DFUS is a great option for investors looking for a low-cost, tax-efficient way to invest in the US equity market.

The ETF has a long history, with its predecessor DTMEX being a tax-managed mutual fund that was popular among investors.

Dimensional's evidence-based approach to investing has made it a trusted name in the financial industry, and its ETF products are no exception.

DFUS is just one of many ETFs offered by Dimensional, which has a wide range of products available to investors.

Dimensional Fund Advisors is known for its evidence-based approach to investing, and its small cap ETFs are no exception. Dimensional offers a range of small cap ETFs that cater to different investment strategies.

One of the most popular small cap ETFs from Dimensional is the Dimensional U.S. Small Cap ETF (DFAS). This ETF was formerly known as the Tax-Managed US Small Cap Equity Portfolio (DFTSX) and has a lower expense ratio of 0.33%.

DFAS broadly covers the small cap space in the U.S. with a light Value tilt. This makes it a great option for investors looking to gain exposure to the small cap market.

For those wanting an ultra-targeted factor ETF from DFA for US small cap value stocks, the Dimensional US Small Cap Value ETF (DFSV) is the way to go. It has a fee of 0.31% and a mutual fund equivalent, DFSVX, that has been around since 1993.

DFSV is a newer ETF that launched in early 2022 and is considered the truest U.S. small cap value fund on the market.

The Dimensional International Value ETF (DFIV) is a great option for those looking to invest in international value stocks. It's formerly known as the Tax-Managed International Value Portfolio (DTMIX).

This ETF has a lower expense ratio of 0.35%, down from 0.50%.

The World Ex 2 fund is a great option for investors looking to diversify their portfolio globally. DFAX – Dimensional World ex U.S. Core Equity 2 ETF is the fund that captures both Developed and Emerging markets outside the U.S.

This fund has a lower fee compared to its predecessor, TA World ex US Core Equity Portfolio, with a fee reduction from 0.30% to 0.25%. With some simple math, you can see that DFIC + DFEM = DFAX, making it a convenient option for investors.

DFAX is a more aggressive factor tilt than the broader funds, making it suitable for dedicated factor investors who want broad core diversification.

The Dimensional U.S. Core Equity 2 ETF, DFAC, is a popular choice among investors, with its fee lowered to 0.19% from 0.23%. This ETF is more aggressive than its lighter counterparts, such as DFUS and DFAU.

DFAC has the most assets under management among the ETFs mentioned, thanks to its more aggressive factor tilts. This makes it a great option for investors looking for a more concentrated portfolio.

To get the most out of Dimensional ETFs, it's essential to consider your risk tolerance and investment goals carefully. By understanding your needs, you can use these ETFs to enhance diversification and complement your existing holdings.

You can buy DFA ETFs at any major broker, but I personally recommend M1 Finance for its zero trade commissions and zero account fees.

M1 Finance offers a user-friendly interface and mobile app, making it easy to navigate and manage your investments.

The broker also provides fractional shares, which allows you to buy a portion of a share, rather than a whole one, giving you more flexibility in your investments.

M1 Finance's dynamic rebalancing feature helps keep your portfolio in check, automatically adjusting your investments as needed to ensure your portfolio stays aligned with your goals.

I've written a comprehensive review of M1 Finance if you'd like to learn more about its features and benefits.

Dimensional ETFs can play a significant role in enhancing diversification in a portfolio.

By focusing on specific factors, such as size or value, Dimensional ETFs can provide exposure to asset classes with different risk and return characteristics compared to the broader market.

It's essential to carefully consider an investor's risk tolerance and investment goals before adding Dimensional ETFs to their portfolio.

Investors should also assess how Dimensional ETFs complement their existing holdings to ensure proper diversification.

Adding Dimensional ETFs to a portfolio can help investors achieve a more diversified mix of assets.

Dimensional Fund Advisors (DFA) has seen a significant influx of money into its active ETFs. As of the end of April, DFA's 38 active ETFs held $133 billion, which is over 20% of all active ETF assets.

DFA's growth has been remarkable, with an organic growth rate of 40% over the past year. This tops JPMorgan's rate of 37% growth and First Trust's 21% growth.

The firm's active ETFs have attracted a large amount of money, but a significant portion of it may be from investors simply moving their money from DFA's mutual funds.