Dimensional's Mutual Fund to ETF Conversion, Midyear Outlook & More

·2-min read


In this episode of ETF Spotlight, I speak with Wes Crill, Head of Investment Strategies, and Nicole Hunter, Head of Capital Markets, at Dimensional Fund Advisors. DFA, the $660 billion quant pioneer, was among the first companies to apply academic research to practical investing.

DFA funds were earlier available to investors only through financial advisers that were vetted by the firm. Last month, the asset manager converted four of its tax-managed mutual funds with about $30 billion of assets into ETFs and became one of the top 15 ETF issuers. With Dimensional US Core Equity Market ETF (DFAU) and International Core Equity Market ETF (DFAI) that were launched last year, they now offer seven ETFs that enable retail investors to access DFA’s investing strategies without an advisor.

We talk about the ETF conversions and midyear investment outlook.

In addition to the Dimensional US Equity ETF (DFUS),  US Core Equity 2 ETF (DFAC), US Small Cap ETF (DFAS) and US Targeted Value ETF (DFAT) that were converted recently, the firm  has applied for at least two more conversions. We discuss why these funds were selected for conversion and what it means for the $21 trillion mutual fund industry.

Dimensional has long been a pioneer in value and small cap Investing. Earlier this year, we saw value outperforming growth, and small caps outperforming large caps by a significant margin. However, investors have returned to large cap, growth-oriented stocks in the past few weeks.

How should investors position their portfolios for the rest of 2021?

Game Stop (GME) and AMC Entertainment (AMC), the poster-children of this year’s meme stock mania, were part of the Russell 2000 value index despite their insane surge. While GameStop joined the Russell 1000 Index of large cap stocks recently, AMC remains in the small cap index, despite having a market cap of over $20 billion. What should investors know about such quirks of indexing?

Tune in to the podcast to learn more.

Make sure to be on the lookout for the next edition of the ETF Spotlight and remember to subscribe! If you have any comments or questions, please email podcast@zacks.com.

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GameStop Corp. (GME) : Free Stock Analysis Report
AMC Entertainment Holdings, Inc. (AMC) : Free Stock Analysis Report
Dimensional International Core Equity Market ETF (DFAI): ETF Research Reports
Dimensional US Core Equity Market ETF (DFAU): ETF Research Reports
Dimensional Emerging Core Equity Market ETF (DFAE): ETF Research Reports
Dimensional U.S. Core Equity 2 ETF (DFAC): ETF Research Reports
Dimensional U.S. Small Cap ETF (DFAS): ETF Research Reports
Dimensional U.S. Targeted Value ETF (DFAT): ETF Research Reports
Dimensional U.S. Equity ETF (DFUS): ETF Research Reports
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