To a certain subset of passive investors, DFA funds used to be the only way to get "proper" exposure to small-cap and microcap stocks. If you were going to slice & dice a portfolio, DFA was the best & cheapest carving knife.
Unfortunately they zealously protect their brand by setting a high bar for financial advisers and by making themselves only available through them. This has spawned a cottage industry of analysts & investors attempting to reproduce DFA funds without getting into a legal hassle.
Now a MarketWatch writer is claiming that ETFs have replicated DFA funds, presumably at a lower expense than you'd pay to an adviser:
ETFs challenge another index-fund icon - MarketWatch
(P.S.: If you're going to list a ticker that includes a colon followed by the capital letter "D", then check the "Disable smilies in text" box in "Miscellaneous Options" of the "Additional Options" of the post software...)
Unfortunately they zealously protect their brand by setting a high bar for financial advisers and by making themselves only available through them. This has spawned a cottage industry of analysts & investors attempting to reproduce DFA funds without getting into a legal hassle.
Now a MarketWatch writer is claiming that ETFs have replicated DFA funds, presumably at a lower expense than you'd pay to an adviser:
ETFs challenge another index-fund icon - MarketWatch
Have any of you tried to replicate your own asset allocation with ETFs instead of with DFA funds?DFA Funds are great. Their small and micro cap funds DFA U.S. 9-10 Small Company Portfolio (USFSCX) , The DFA U.S. Small Company Portfolio (USFSTX) and DFA U.S. Small Cap Value Portfolio (USFSVX) have made investors about 10% yearly, compounded for about 20 years.
But low-cost ETFs now occupy every asset category offered by DFA. Investors who felt locked into a DFA set of products, are now able to build their own portfolios without going to a DFA adviser.
Moreover, DFA doesn’t always win in every asset class. Over the last five years in emerging markets equities, for example Vanguard MSCI Emerging Markets ETF (US:VWO) has outperformed DFA’s Emerging Markets Portfolio (USFEMX). DFA U.S. Small Cap Value has strong competition from iShares SmallCap 600 Value Index Fund (US:IJS).
(P.S.: If you're going to list a ticker that includes a colon followed by the capital letter "D", then check the "Disable smilies in text" box in "Miscellaneous Options" of the "Additional Options" of the post software...)
Last edited: