written by reader Dimensional Fund Advisors

By Anonymous Questions, January 13, 2014

Anyone have an opinion on Dimensional Fund Advisors? Any input would be appreciated! Thanks!

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Todd Moerman, Integrity Investment AdvisorsAdam S. Drake, CFA Recent comment authors

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Adam S. Drake, CFA

Dimensional Fund Advisors (DFA), overall, offers some excellent, low-cost mutual funds. The firm is known for applying academic research to its investment strategy. The funds are index-like, meaning they follow broad asset classes without individual stock picking. They do not, however, follow well know indexes like S&P or Russell. One limitation is that their funds can only be bought or sold through financial advisors that have been approved to work with DFA. I’ve been working with DFA funds for about 9 years.

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Todd Moerman, Integrity Investment Advisors

Here is some detailed information about Dimensional (DFA) vs. Vanguard. Both are great companies with different philosophies about how to build portfolios. DFA funds are no-load (commission-free), low cost, very diversified, and tax-efficient. They provide a much broader and deeper coverage of the global markets than other mutual funds. DFA currently manages about $332 Billion in assets. DFA funds focus on “factor investing”. They have enhanced the 3 factor model into the 4 factor model (market factor (beta), small cap factor, value factor and direct profitability factor). They also use momentum as a trading strategy. This is very different than… Read More »

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