A strong management team and sound investment process underpin Dimensional US Small Cap ETF's Morningstar Medalist Rating of Gold. The portfolio maintains a sizable cost advantage over competitors, priced within the cheapest fee quintile among peers.  

 The strategy’s management team earns an Above Average People Pillar rating. The strategy merits an Above Average Process Pillar rating.  The strategy's parent organization earns the firm a High Parent Pillar rating. People, Process and Parent Pillar ratings for this strategy are indirectly assigned by a Morningstar analyst rather than algorithmically derived. Please see the notes following each pillar section for more details. The details of assigning methods can be found in each pillar section.

Analyst Rating

Onto Innovation

Fabrinet

Comfort Systems USA

Abercrombie & Fitch

Universal Forest Products

Applied Industrial Technologies

MSA Safety

Ensign Group

Commercial Metals

FTI Consulting

Dimensional effectively manages trading costs while delivering a well-diversified portfolio of profitable companies trading at reasonable valuations. It earns an Above Average Process Pillar rating.

Note: The Process Pillar rating and analysis are indirectly assigned by an analyst. When an analyst covers a vehicle that follows a given strategy (as codified by Morningstar’s StrategyID data point) Morningstar maps the covered vehicle’s Process Pillar to any other uncovered vehicles that follow the same strategy (that is, share the same StrategyID). This ensures that the analyst’s view is leveraged whenever available and promotes consistency when assigning Process Pillar ratings to vehicles that follow the same strategy.

Above Average

Process

DFA's multimanager team structure and strong supporting infrastructure support an Above Average People Pillar rating. The three named managers on this fund collaborate with the firm's trading desks to execute this strategy in the most cost-effective way possible. And spreading management responsibilities across several managers reduces the impact of personnel turnover when it does occur.

For the U.S. fund, Jed Fogdall is the longest-tenured manager. He started at DFA as a portfolio manager in 2004 and has helped manage this fund since February 2012. Fogdall heads DFA's global portfolio management team and chairs the firm's investment committee.

Joel Schneider and Marc Leblond also serve as managers on this fund. Schneider has been with DFA for close to a decade and is the firm's deputy head of portfolio management in its Austin office. Leblond is a relative newcomer. He has been with DFA since 2015 and became a named portfolio manager on this fund in February 2020.

In Europe, Nathan Lacaze is the lead portfolio manager who oversees the day-to-day management and is also involved in the design and implementation of new strategies. Lacaze has almost 20 years of experience at DFA, starting as a trading assistant in 2004. In 2007, he was approved by the then Financial Services Authority to undertake the CF30 function. In 2010, he was promoted to portfolio manager, in 2012 to vice president, and in 2014 to senior portfolio manager.

This team executes strategies built by DFA's research department, which is helped by a number of prominent academics who serve as consultants. The team vets the latest research and pursues only strategies that it finds sensible, robust, persistent, and cost-effective.

Note: The People Pillar rating and analysis are indirectly assigned by an analyst. When an analyst covers a vehicle that follows a given strategy (as codified by Morningstar’s StrategyID data point), Morningstar maps the covered vehicle’s People Pillar ratings to any other uncovered vehicles that follow the same strategy (that is, share the same StrategyID). This ensures that the analyst’s view is leveraged whenever available and promotes consistency when assigning People Pillar ratings to vehicles that follow the same strategy.

People

Dimensional’s mutual fund business has faced some tough challenges over the past few years. Despite large and persistent outflows, the firm has remained steadfast in its philosophy and responded in a way that benefits clients while improving its competitiveness. Dimensional maintains its High Parent Pillar rating.

More than $80 billion left Dimensional’s mutual funds between 2020 and 2022, but its response to the turmoil has been admirable. The firm started reducing fees in early 2020, and it continued the effort with three additional rounds of cuts.

Dimensional’s endeavor into exchange-traded funds was the biggest step it took to shore up its business. The firm converted seven tax-managed mutual funds to ETFs between mid-2021 and mid-2022. Along the way, it launched an additional two dozen that largely follow the same strategies underpinning the existing mutual funds. The firm also reinvested in its separate accounts platform by bolstering the technology used to manage these portfolios. The effort was aimed at improving operational efficiencies.

These measures appear to be paying off. The firm’s new ETFs have proved popular among its clients. In 2022, they brought in enough new money to nearly offset the outflows from its mutual funds. The separate account platform’s operational improvements, along with the new ETF lineup’s tax efficiency, should benefit clients and strengthen the firm’s prospects.

High

Parent

Dimensional US Small Cap ETF

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News for Dimensional US Small Cap ETF ETF (DFAS)