Dimensional Funds

Flat Fee Portfolios is proud to offer access to Dimensional Fund Advisors (DFA) as part of our low-cost, passive strategies.

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Dimensional Funds are built upon the academic research of Eugene Fama and Kenneth French.  DFA’s underlying philosophy is that markets work and that a relatively small number of factors drive investors’ returns from equities: market exposure, size premium, and a value premium.  With respect to these dimensions of return, the overall portfolio structure determines performance.

Dimensional Funds

Source: Dimensional Fund Advisors study (2002) of 44 institutional equity pension plans with $452 billion total assets. Factor analysis run over various time periods, averaging nine years. Total assets based on total plan dollar amounts as of year end 2001. Average explanatory power (R2) is for the Fama/French equity benchmark universe.

 

DFA’s research shows that over longer periods of time “value” stocks tends to outperform “growth” stocks and small companies tend to outperform larger ones. 

Dimensional Fund Advisors

DFA Funds

Periods based on rolling annualized returns. 715 total 25-year periods. 775 total 20-year periods. 835 total 15-year periods. 895 total 10-year periods. 955 total 5-year periods. Performance based on Fama/French Research Factors. Securities of small companies are often less liquid than those of large companies. As a result, small company stocks may fluctuate relatively more in price. Mutual funds distributed by DFA Securities LLC.


DFA Fund Advisors

Multifactor data provided by Fama/French. SmBand HmLresearch factors. Past performance is not a guarantee of future results. Values change frequently and past performance may not be repeated. There is always the risk that an investor may lose money. Securities of small firms are often less liquid than those of large companies. As a result, small company stocks may fluctuate relatively more in price. Even a long-term investment approach cannot guarantee a profit. Economic, political, and issuer-specific events will cause the value of securities, and the funds that own them, to rise or fall. Because the value of investments will fluctuate, there is a risk that investors will lose money.

 

DFA seeks to manage the portfolios in a passive manner.  They implement any changes to their portfolios by acting as a source of liquidity to the market.  As a result, trading activity, on average, produces a net benefit to the portfolio.  They also look to generate income for the portfolios through the lending of securities owned by the portfolios.  This benefits investors by reducing the net cost of DFA funds.

Passive investing with Dimensional Funds may be right for you if:

  • You have a long time horizon
  • You believe that value tends to outperform growth over time
  • You believe that small stocks tend to outperform large stocks over time
  • You believe traditional indexing strategies are an inefficient way to gain exposure to the factors that drive investment returns

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Please read the following important disclosures:

Pricing for accounts under $1,000,000.  The fee for accounts over $1,000,000 is a flat 0.24%.  Call to discuss pricing for endowments, trusts, and institutional accounts.

Flat Fee Portfolios is a dba of MACRO Consulting Group, LLC.

Advisory Services are offered through MACRO Consulting Group, LLC, a registered investment adviser with the Securities and Exchange Commission.  MACRO Consulting Group, LLC only transacts business in states where it is properly registered, or is excluded or exempted from registration requirements.

TD Ameritrade, Fidelity, Foliofn and LPL Financial are the firms that MACRO Consulting Group, LLC uses to custody our client assets.  TD Ameritrade, Fidelity, Foliofn and LPL Financial and MACRO Consulting Group are separate and unaffiliated firms and are not responsible for each other’s services or policies.  TD Ameritrade, Fidelity, Foliofn and LPL Financial do not endorse or recommend any advisor.

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Information on this web site is directed toward U.S. residents only.

 

TD Ameritrade, Inc. is the firm that we use to custody our client assets. TD Ameritrade and MACRO Consulting Group are separate and unaffiliated firms, and are not responsible for each other’s services or policies. TD Ameritrade does not endorse or recommend any advisor and the use of the TD Ameritrade logo does not represent the endorsement or recommendation of any advisor. Brokerage services provided by TD Ameritrade Institutional, Division of TD Ameritrade, Inc., member FINRA/SIPC/NFA. TD Ameritrade is a trademark jointly owned by TD Ameritrade IP Company, Inc. and The Toronto-Dominion Bank. Used with permission.