14 DFA ETFs (Dimensional Fund Advisors) for Factor Tilts

Investors rejoice. DFA funds are now available to retail investors in the form of ETFs. Here we’ll explore the best ETFs offered by Dimensional Fund Advisors.
// TIMESTAMPS:
00:00 - Intro - Dimensional Fund Advisors (DFA)
02:21 - Core Equity Market ETFs
02:41 - DFAU
03:19 - DFAI
03:47 - DFAE
04:09 - Tax-Managed Mutual Funds To ETFs Conversion
04:30 - DFUS
04:46 - DFAS
05:06 - DFAT
05:48 - DFIV
06:03 - Core Equity 2 ETFs
06:24 - DFAC
06:51 - DFIC
07:01 - DFEM
07:15 - DFAX
07:43 - Concentrated Targeting
07:59 - DFSV
08:29 - DISV
08:45 - DFEV
08:55 - Conclusion & Outro
// SUMMARY:
Mutual funds have begun migrating to ETF equivalents, even across traditional brokers like Fidelity and Schwab. Perhaps the most anticipated has been Dimensional Fund Advisors (DFA).
In a nutshell, DFA offers funds that provide broad, diversified market exposure with targeted, evidence-based factor exposure in order to both manage risk more effectively and boost expected returns, all at a relatively low cost. While they are technically actively managed, they are more index-y than the true “active” we usually think of. DFA managers are assembling funds based not on an arbitrary selection of stocks, but rather a systematic compilation of a rigidly defined group of stocks with particular characteristics. They have been converting their mutual funds to ETFs recently and simultaneously lowering fees.
Dimensional Fund Advisors, founded in 1981, led the way in implementing factor-based funds. Its co-founder David Booth was also heavily involved in pioneering index funds. Their Board of Directors includes famous names like Eugene Fama, Kenneth French, and Myron Scholes. Merton Miller was one of the original founding board members.
DFA has long been the gold standard for data-driven factor tilts (e.g. Value and Profitability), used by many asset management firms like Buckingham Strategic Wealth and PWL Capital. Previously, Dimensional’s funds were unavailable to DIY retail investors, which is why their launch of ETFs is so exciting.
Recall from my separate post on factor investing that the key is the implementation of factor targeting, which is altogether a different feat compared to the identification of a factor. The appeal of Dimensional is their proprietary, robust, impressive implementation.
So far DFA has released quite a few new ETFs for retail investors, which we’ll discuss below, but they’ve also converted several of their tax-managed mutual funds to ETFs as well.
In this video I go over:
DFAU
DFAI
DFAE
DFUS
DFAS
DFAT
DFIV
DFAC
DFIC
DFEM
DFAX
DFSV
DISV
DFEV
Read the blog post here: www.optimizedportfolio.com/df...
#dimensionalfundadvisors #dfa #etfs
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[@OptimizedPortfolio]

What do you think of DFA and their new ETF lineup?

[@nightgallery161]

Can you tell me which has the stronger value tilt. DFAC or AVUS?

[@OptimizedPortfolio]

@@nightgallery161 Great question, Brandon. Looks like they're very close but AVUS is slightly higher on Value but slightly lower on Size and Profitability.

[@muffemod]

Slow transition to migrate from MF to ETFs. Should have done them all in one fell swoop.

[@Seoulsearch616]

Great to know about, thank you! I subscribe to dozens of financial channels and haven't heard anyone else talking about this. Thanks for covering the lesser known offerings!

[@OptimizedPortfolio]

Sure thing. Thanks for watching!

[@stefanball5029]

I currently own DFSV and DISV in my Roth and taxable. I'm considering adding DFEV in the future

[@OptimizedPortfolio]

Awesome!

[@kronak8033]

Great content, thank you. Helps clarify things a lot.

[@OptimizedPortfolio]

Thanks! Glad it helped.

[@Kenster-man]

Nice overview! Btw --- Dimensional just filed with the SEC to launch their US Large Cap Vector Equity ETF --- 0.22% expense ratio. Their Vector series is similar to their Core Equity series holding a large basket of stocks but heavily overweighting the value and smaller-sized stocks. So their Vector funds are like Core Equity funds on steriods.

[@OptimizedPortfolio]

Thanks!

[@mangoh69]

Good video! All I want is a global 5-factor ETF (comparable to $VT). Minor feedback: would love to see the actual factor loadings when you're covering each security (rather than using qualitative descriptions).

[@OptimizedPortfolio]

Thanks! Have you looked at AVGE? Good suggestion! I think most of my audience are novices so they might be lost but maybe I could do a separate video with the details for the die-hards.

[@NATOnova]

great overview as always! im a fan of dimensional products and I slightly prefer them over the very similar avantis funds, although they are a bit more expensive.

[@OptimizedPortfolio]

Thanks, Christian!

[@cheeveka3]

I really like these ETF’s because they save us a lot expenses while being exposed to DFA factoring. I’ve seen e advisors fees can be really high which can reduce returns.

[@health_and_finance]

Yes, I own 35% DFUV, 35% DFSV, 12% DFIV, 12% DISV, 6% DFEV. It's an All World Value Portfolio.

[@OptimizedPortfolio]

Awesome! Thanks for sharing.

[@NATOnova]

great portfolio

[@UtiliTerran]

Awesome. I think the big question most people are going to be interested in is, "how do these ultra-targeted ETFs compare to Avantis equivalents?"

[@OptimizedPortfolio]

Indeed. Generally speaking, I think for most of those comparisons, the not-so-exciting conclusion is going to be that they're extremely similar products, it's hard or impossible to objectively prefer one over the other, and the Avantis one should be slightly cheaper, which was basically the summary of my comparison of DFSV and AVUV: www.optimizedportfolio.com/dfsv-vs-avuv/

[@UtiliTerran]

@@OptimizedPortfolio Excellent. FWIW I use the Aventis ETFs to construct a 60/40 US/Int 'Ben Felix'-style factor portfolio and add 10% Long/extended-term treasuries per your Ginger Ale portfolio.

[@OptimizedPortfolio]

@@UtiliTerran Excellent!

[@jorgemenendez2122]

Nice work, is there an equivalent for fund DEMSX which has a good long-term streak, thx!!!

[@craig3899]

Thanks for the video. Just a question unrelated to this one are you still using leveraged upro/tmf 60/40 with the way that tmf has dropped with equities? And if not is it maybe the perfect time for investors to implement this now? Thanks

[@OptimizedPortfolio]

Thanks for watching, Craig! Still got my little bucketed Hedgefundie experiment running, yep. Impossible to say whether or not it's a good time to get in it. With interest rates being high that means the cost of that leverage is high as well. I try to remember to update its performance quarterly since I started on this page (scroll down to the Performance section): www.optimizedportfolio.com/hedgefundie-adventure/

[@NATOnova]

any thoughts on DISV vs AVDV? AVDV unless I did my analysis wrong, AVDV has slightly higher factor loadings as well as having 0.15% less expense ratio.

[@OptimizedPortfolio]

You're correct. In the short lifespan thus far AVDV appears to win out on most dimensions.

[@daveschmarder-1950]

Good overview. I never considered DFA as it was behind the adviser paywall. I've shed all but one active mutual fund in my taxable account due to those capital gain distributions. I'm fully invested in ETFs now and I'm not presently considering purchasing DFA ETFs. When I have an opening for another investment, I would definitely consider one of these ETFs from DFA.

[@OptimizedPortfolio]

Thanks for sharing, Dave!

[@unlistedvideorepository]

Any view on owning DFAC/DFIEX together with VTSAX/VTIAX? Benign overlap?

[@jierenzheng7670]

Thanks for the video, may I know if they have ireland domiciled ETFs?

[@OptimizedPortfolio]

I'm not sure.

[@Compounddeznuts]

The fees are a lot lower then I thought so that’s good

[@OptimizedPortfolio]

Indeed. And Avantis has lower fees across the board for similar products. Video on those coming soon.

[@grigorirasputin425]

@@OptimizedPortfolio looking forward to that. Great content, love your channel

[@OptimizedPortfolio]

@@grigorirasputin425 Thanks Grigori! :)

[@Bleys0072]

It's interesting that while (until now) Dimensional hasn't offered a product to retail investors, now that they have it sounds like there's little reason to switch from Avantis to Dimensional? Though to be fair, AVUV and AVDV don't cover off emerging markets.

[@OptimizedPortfolio]

Great point. Hadn't really considered it like that. I think you're right though. At this point I think it just comes down to personal preference of provider based on intangibles and maybe a consideration of the small differences in fees. Glass half full, you can use the various pairs for tax loss harvesting. And Avantis has their new AVES for Emerging Markets, as well as their broader AVEM.

[@janshuster1426]

​@@OptimizedPortfolio I haven't sorted thru these funds yet to compare them ( and I find the DFA fund list confusing ) but which provider tends to have higher volume. Edit: Now that I finished this video I understand DFA's lineup. I could not find this information on their website. I don't know why they don't make it easier to understand the difference between their funds. Thanks.

[@jtsandig]

I don't think avantis has a factor tilted total international fund so I'll work in DFAX. Avantis seems cheaper for the rest of the funds with similar tilts so that seems to be my preference

[@OptimizedPortfolio]

So Avantis do have separate funds for Emerging and Developed Markets but yea they don't have a global ex-US. They also have AVGE which is total world. Video on Avantis funds coming soon.

[@ia6723]

If I already have AVGE+AVUV+AVDV+AVES, do I need any of the ETF that mentioned in your video?

[@OptimizedPortfolio]

No

[@ia6723]

@@OptimizedPortfolio thank you!

[@dsicario]

Now how about a compare and contrast between similar DFA and Avantis? :)

[@OptimizedPortfolio]

Good suggestion, David! I'll do one sometime soon for DFSV and AVUV (targeted small cap value): www.optimizedportfolio.com/dfsv-vs-avuv/ Generally speaking, I think for most of those comparisons, the not-so-exciting conclusion is going to be that they're extremely similar products, it's hard or impossible to objectively prefer one over the other, and the Avantis one should be slightly cheaper.

[@dsicario]

@@OptimizedPortfolio A compare and contrast for those who like to nerd out on this kind of stuff :) Thanks for the link, I missed that article. Does your site have an RSS feed or plan one?

[@OptimizedPortfolio]

@@dsicario Yea I've always slacked on sending an email out when a new post goes up. I usually use Reddit and Twitter for those updates if you want to follow there. But yes, RSS feed would be here: www.optimizedportfolio.com/feed/

[@janshuster1426]

They have at least 31 ETFs all together.

[@OptimizedPortfolio]

Yep

[@rajraghavan3927]

Speaking so fast robs one of credibility, from the expression, "be wary of fast talking sales people"....

[@OptimizedPortfolio]

What?