Dimensional Fund Advisors

Last updated
Dimensional Fund Advisors
Company type Private
Industry Finance
Founded1981;43 years ago (1981)
Founders David G. Booth
Rex Sinquefield
Headquarters Austin, Texas, United States
Key people
 David G. Booth
(Executive Chairman)
Dave Butler
(Co-CEO)
Gerard K. O'Reilly
(Co-CEO)
ProductsMoney Management and Investment
AUM Increase2.svg $677 billion (Dec 31, 2023) [1]
Number of employees
1,600+ (2023) [2]
Website www.dimensional.com

Dimensional Fund Advisors, L.P. (branded Dimensional abbreviated DFA [3] ) is a privately-owned investment firm headquartered in Austin, Texas. Dimensional was founded in Brooklyn [4] in 1981 by David Booth, Rex Sinquefield and Larry Klotz. The company has affiliates within 15 offices in the U.S., Canada, U.K., Germany, Netherlands, Australia, Singapore, and Japan. [5] Dimensional maintains additional U.S. offices in Charlotte, North Carolina and Santa Monica, California and has affiliate offices globally. The company is owned by its employees, board members and outside investors.

The company’s founders studied at the University of Chicago under Eugene Fama. Kenneth French is co-chair of the firm's investment research committee. [6] DFA's investment strategy is based on application of the efficient market hypothesis. [7] Dimensional was one of the earliest firms to offer passive investing and "runs the oldest small-cap index fund" in the United States. [8] However, DFA's versions of index funds have the flexibility to trade daily [9] and skew towards smaller company stocks and value stocks. Thus they operate differently from most index funds which rebalance on specific dates and are weighted by market capitalization. [10] This strategy results in regulators, such as the SEC, [11] and some analysts [12] [13] [14] describing the funds as actively managed. The company offers equity and fixed income mutual funds, Exchange-traded funds, separately managed accounts, and model portfolios.

In 2009, Dimensional acquired SmartNest, a retirement planning computer software company. [15] Researcher Robert C. Merton left SmartNest's board after the purchase and became a Resident Scientist at Dimensional. [16] [17] [18]

In November 2020, the company announced it was augmenting its strictly advisor-access [19] and institutional [20] only mutual fund business model by offering openly-accessed exchange-traded funds. [21] [22] [23] [24]

Related Research Articles

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VanEck is an American investment management firm headquartered in New York City. The firm is primarily engaged in issuing exchange-traded fund (ETF) products although it also deals with mutual funds and separately managed accounts for institutional investors. It was a pioneer of investing in foreign growth stocks as well as gold investing.

References

  1. ↑ "Dimensional Investing" . Retrieved 2024-01-25.
  2. ↑ "Dimensional: About Us".
  3. ↑ "FORM N-CSR CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES: DFA INVESTMENT DIMENSIONS GROUP INC". sec.gov. Retrieved 20 March 2021.
  4. ↑ "David Booth: Biography".
  5. ↑ "Dimensional: About Us".
  6. ↑ "Kenneth French: Bio".
  7. ↑ "Dimensional Investing | Dimensional Fund Advisors". Dimensional. Retrieved 2018-11-09.
  8. ↑ William J. Bernstein (2002). The Four Pillars of Investing: Lessons for Building a Winning Portfolio. McGraw-Hill, ISBN   0071385290, p. 103
  9. ↑ "Dimensional Fund Advisors Lists Active Exchange-Traded Funds".
  10. ↑ John Rekenthaler (Nov 25, 2020) DFA Is Paying the Price for Its Conviction. Morningstar.com, accessed 19 March 2021
  11. ↑ "Registration statement - DIMENSIONAL ETF TRUST". SECURITIES AND EXCHANGE COMMISSION. 16 November 2020.
  12. ↑ "DFAU ETF Report". etf.com. Retrieved 20 March 2021.
  13. ↑ Liu, Evie (18 November 2020). "Another Fund Manager Enters the World of Exchange-Traded Funds. What's Behind the Trend". Barrons.
  14. ↑ Lydon, Tom (December 28, 2020). "The ETF-Mutual Fund Tide is Turning: DFAI and DFAU Switching Sides".
  15. ↑ Inklebarger, Timothy (2009-12-02). "Dimensional adds retirement planning software firm". Pensions & Investments. Retrieved 2013-05-12.
  16. ↑ "Curriculum Vitae". www.robertcmerton.com. Robert C Merton. Retrieved 2021-01-20.
  17. ↑ "Robert Merton". Becker Friedman Institute.
  18. ↑ "Next Generation Retirement Planning" (PDF).
  19. ↑ "Work With Us: Financial Advisors".
  20. ↑ "Work With Us: Institutions".
  21. ↑ "Why Dimensional Fund Advisors is converting six of its mutual funds to the ETF format". CNBC. December 2020. Retrieved 24 February 2021.
  22. ↑ "DFA Takes The Stage With ETFs". etf.com. Retrieved 24 February 2021.
  23. ↑ "Dimensional Fund ETFs Launch as Quant Plans to Convert Mutual Funds". Bloomberg News . 18 November 2020. Retrieved 24 February 2021.
  24. ↑ Johnson, Steve (23 November 2020). "Mutual fund conversions to ETFs set to gather momentum, experts say". Financial Times.
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