DIMENSIONAL FUND ADVISERS – WHO ARE THEY AND WHY ARE THEY GOOD FOR CLIENTS?
Posted by Robert Wilcocks
I just googled Dimensional Fund Advisers which we think are the financial services industries best-kept secret, to see what people were saying about them recently. The top article, from Barrons website, I thought was a fantastic summary of why we use them in our portfolios. Which is because they have a proven track record of using facts (evidence), cutting through the BS (they don’t advertise, so can’t be accused of marketing spin like most fund managers – think of how many adverts you see for ‘Top 10 stocks to buy in 2016’, or a stockbroker who says, ‘my job is to time the next market crash, I have x and y strategy that will help me do it, and you’ll pay me Z to do it for you – and Z is usually high!). I digress – and also because they are really good at picking up what they call the extra ‘Dimensions’ of return that exist. This is the market return, plus small, value and profitable premiums. And they do it for us – and thus our clients – at low costs relative to other fund managers; indeed its institutional cost – which is industry gobbledegook for wholesale for large buyers.
Anyway, feel free to take a read and decide for yourself.
I know we are one of the good guys – We are only one of around 250 firms (source, DFA, 2015) in the UK, Europe, Middle East and Africa authorised to use DFA funds in our portfolios. Like DFA we too research and believe in independent, peer-reviewed, academic research as the best source of information when it comes to trying to identify and capture investment returns for our clients.
(Note Barrons is a US based website and DFA provides UK based, and different funds to the US, for UK consumers)