I have 2/3 of my portfolio invested in several Dimensional Funds through a 3rd party. The performance in 2020 was disappointing with a flat return. The long term performance of the equity funds are all 5-10% with low expense ratios. Wondering if anyone else has Dimensional Funds in their portfolio?
Dimensional Funds
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They were one of the fund families offered in my wife's 401k. Dimensional funds was one of the few in her plan that had international funds. I had a small position in an emerging market fund. Disappointing returns. I did not like it.
Lsbcal
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Are you paying an advisor to access DFA funds? What is the advisors take?
That appears to be the standard model. If so you could do (1) check Bogleheads for advise on people who have had this situation, (2) go with a fund company like Vanguard and use their low cost advisors eventually learning to do the investing yourself.
Personally I don't think DFA through an advisor is worth it unless perhaps the advisor offers more service like tax and estate planning. Even then I choose to do it myself.
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OldShooter
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
DFA funds have been available only through advisors. They have a pretty good story about using academic research, broad funds aka indexing, how they trade to reduce market impact of fund decisions, and availability of specialized funds to use for tilts. Overall I think it's quite a good company.
I did a couple of experiments, one about $100K and one about $300K, using an FA who agreed to a 50bps fee. The first one was a sort of middle-of-the-road portfolio that produced middle-of-the-road gains. Slightly less than an index fund benchmark that I use. My conclusion was that returns were good enough that this guy and DFA might be a good choice for someone who wanted hands-off management and valued the non-investment aspects of an FA relationship.
My second experiment was a more aggressive portfolio, basically a worldwide small cap and emerging markets tilt vs my other investments. That one did not go so well and produced about a 10% loss.
Both experiments were unfair to the extent I only ran them for a couple of years. Five to ten years would be a better duration. My only defense is that 10 years won't give me much subsequent time to take advantage of what an experiment teaches me.
Based on researching this I think that the advisors that DFA approves are probably above average in quality. Also note that just having access to DFA funds doesn't mean those are the only funds the advisors use. So ... if I felt that I or someone needed the full financial advisor package, not just an investment advisor, I'd probably start by talking to DFA-approved advisors.
All that said, I recall seeing or reading an interview with David Booth, the president, who inkled that they were considering offering some DFA ETFs. A quick search just now says it is happening: https://us.dimensional.com/about-us/media-center/announcement-11-17-20 So there's a way to examine the DFA secret sauce without paying advisor fees.
I did a couple of experiments, one about $100K and one about $300K, using an FA who agreed to a 50bps fee. The first one was a sort of middle-of-the-road portfolio that produced middle-of-the-road gains. Slightly less than an index fund benchmark that I use. My conclusion was that returns were good enough that this guy and DFA might be a good choice for someone who wanted hands-off management and valued the non-investment aspects of an FA relationship.
My second experiment was a more aggressive portfolio, basically a worldwide small cap and emerging markets tilt vs my other investments. That one did not go so well and produced about a 10% loss.
Both experiments were unfair to the extent I only ran them for a couple of years. Five to ten years would be a better duration. My only defense is that 10 years won't give me much subsequent time to take advantage of what an experiment teaches me.
Based on researching this I think that the advisors that DFA approves are probably above average in quality. Also note that just having access to DFA funds doesn't mean those are the only funds the advisors use. So ... if I felt that I or someone needed the full financial advisor package, not just an investment advisor, I'd probably start by talking to DFA-approved advisors.
All that said, I recall seeing or reading an interview with David Booth, the president, who inkled that they were considering offering some DFA ETFs. A quick search just now says it is happening: https://us.dimensional.com/about-us/media-center/announcement-11-17-20 So there's a way to examine the DFA secret sauce without paying advisor fees.
I do value the advice provided by my advisor but have concluded the cost is tough to justify. After reading the recommended Bogleheads Guide to Investing I have decided to cut the ties. All these funds are held at Fidelity and I can’t get anyone to answer a phone call. Unfortunately our local office has closed. I’m looking for advice on how I go about transferring these DF into low cost index funds on my own. Some are in a taxable account and I don’t want to create a bigger issue.
Lsbcal
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Probably Fidelity would be reachable by email? Probably just requires some patience in these times.
