Founded in 1981, Dimensional Fund Advisors (DFA) has a long history of applying academic research to practical investing. Dimensional offers a full range of equity and fixed income strategies designed to target higher expected returns.
AT A GLANCE
As of 12/31/2020
Dimensional Perspectives
ABOUT THE FIRM
Dimensional is a global investment firm that has been serving investors for more than 35 years.
A DIFFERENT APPROACH TO INVESTING
A strong belief in markets frees Dimensional to think differently about investing.
Index fund managers aim to match index returns, accepting portfolio management and trading constraints that can increase costs.
Traditional managers and quants may rely on predictions or backtested simulations to find mispriced securities or time markets.
Dimensional believes investors can have a successful investment experience without having to outguess the market. The firm trusts market prices and applies a scientific, transparent, and process-driven investment approach to pursue higher expected returns.
PUTTING RESEARCH INTO PRACTICE
Dimensional identifies compelling research and applies it to practical investing.
Dimensional has forged deep working relationships with top academics in finance.
Nobel laureate Eugene Fama, fellow researcher Kenneth French, and other leading academics are directors and consultants to the firm.
A scientific perspective guides the firm’s culture, philosophy, and investment approach.
“The research is out there for anybody to access. What distinguishes Dimensional is the way we implement the ideas.”
David Booth
A CLEAR VIEW OF EXPECTED RETURNS
Decades of research and rigorous testing underpin Dimensional’s approach to pursuing higher expected returns.
Dimensional believes security prices contain reliable information about expected returns.
The firm draws insights from research and prices to emphasize market areas—or dimensions—that drive returns.
Equity dimensions with higher expected returns are small, value, and high profitability companies. Fixed income dimensions are term, credit, and currency.
Dimensional targets these dimensions in low-cost, broadly diversified strategies.
A DYNAMIC INVESTMENT PROCESS
Dimensional’s goal is to add value over benchmarks and peers through an integrated and robust process.
Expert implementation sets Dimensional apart. The firm applies financial science in real-world portfolios through a process that integrates:
RESEARCH Gain a better understanding of expected returns by evaluating and testing empirical research
PORTFOLIO DESIGN Increase expected returns while allowing for robust risk and cost management
PORTFOLIO MANAGEMENT Use current market information to balance tradeoffs between competing premiums and costs
TRADING Reduce trading costs by employing a flexible approach to participate in available market liquidity
TRACK RECORD
Dimensional has a long history managing time-tested investment strategies for clients.
