Dimensional US Core Equity 1 ETF (DCOR)DCOR

Dimensional US Core Equity 1 ETF (DFAC)

Profile:

Dimensional US Core Equity 1 ETF (DFAC) is a passively managed exchange-traded fund that tracks the Dimensional US Core Equity 1 Index. The ETF focuses on large-cap U.S. stocks with a value tilt, meaning it prioritizes companies with lower valuations relative to their earnings and book value. DFAC employs a quantitative approach to stock selection, analyzing factors like profitability, size, value, and financial health.

Objective:

DFAC's primary objective is to provide long-term capital appreciation through exposure to the U.S. equity market. The ETF seeks to achieve this by tracking the performance of the Dimensional US Core Equity 1 Index.

Issuer:

The issuer of DFAC is Dimensional Fund Advisors LP (DFA), a leading asset manager with over $760 billion in assets under management as of August 31, 2023. DFA is known for its academic-based investment approach and its focus on providing low-cost investment solutions for institutional and individual investors.

Reputation and Reliability:

DFA has a solid reputation in the industry, having received numerous awards for its performance and client service. The firm is known for its transparency and commitment to long-term investing.

Management:

DFA's management team includes experienced investment professionals with deep expertise in quantitative analysis and portfolio construction. The team is led by David G. Booth, the firm's chairman and CEO, who is a renowned economist and has been with DFA since its inception in 1981.

Market Share:

DFAC has a market share of approximately 0.65% in the large-cap blend ETF category, according to Morningstar data as of September 30, 2023.

Total Net Assets:

As of September 30, 2023, DFAC has approximately $2.94 billion in total net assets.

Moat:

DFAC's competitive advantages include its access to DFA's proprietary research and investment models, its low-cost structure, and its experienced management team. Additionally, DFAC's value-oriented approach provides a unique proposition for investors seeking alternative strategies within the U.S. large-cap equity space.

Financial Performance:

Since its launch in February 2015, DFAC has delivered an annualized total return of approximately 10.27%, outperforming the S&P 500 Index by 1.52% over the same period.

Benchmark Comparison:

DFAC has consistently outperformed the S&P 500 Index on a risk-adjusted basis since its inception. The ETF's Sharpe Ratio, a measure of risk-adjusted return, is higher than that of the S&P 500 Index, indicating that DFAC has generated higher returns with lower volatility.

Growth Trajectory:

DFAC has experienced steady growth in assets under management since its launch. This growth can be attributed to the ETF's strong performance, low fees, and increasing investor demand for alternative investment strategies.

Liquidity:

DFAC has an average daily trading volume of approximately 200,000 shares, making it a relatively liquid ETF. The ETF also has a tight bid-ask spread, indicating low trading costs.

Market Dynamics:

Factors affecting DFAC's market environment include:

• Economic growth: A strong economy typically supports large-cap stocks, which can benefit DFAC.
• Interest rates: Rising interest rates can make alternative investment strategies like value stocks less attractive, potentially impacting DFAC.
• Market volatility: Increased market volatility can lead to higher trading costs and make it more challenging for DFAC's value-based approach to outperform.

Competitors:

Key competitors of DFAC include:

• iShares CORE S&P 500 (IVV)
• Vanguard S&P 500 ETF (VOO)
• SPDR S&P 500 ETF (SPY)

Expense Ratio:

DFAC has an expense ratio of 0.06%, making it a low-cost ETF.

Investment Approach and Strategy:

DFAC employs a quantitative indexing approach to track the Dimensional US Core Equity 1 Index. The index is constructed using a combination of factors, including profitability, size, value, and financial health. The ETF holds a diversified portfolio of approximately 500 large-cap U.S. stocks.

Key Points:

• DFAC is a passively managed ETF that tracks the Dimensional US Core Equity 1 Index.
• The ETF focuses on large-cap U.S. stocks with a value tilt.
• DFAC’s issuer, Dimensional Fund Advisors LP, has a strong reputation and is known for its academic-based investment approach.
• DFAC has outperformed the S&P 500 Index on both an absolute and risk-adjusted basis since its launch.
• DFAC is a low-cost ETF with an expense ratio of 0.06%.

Risks:

The main risks associated with DFAC include:

• Market risk: The value of DFAC's holdings can fluctuate with the overall market, potentially leading to losses.
• Value investing risk: Value stocks can underperform growth stocks, especially during periods of strong economic growth.
• Quantitative investing risk: Quantitative models may not accurately predict future market performance.

Who Should Consider Investing:

DFAC is a suitable option for investors seeking:

• Exposure to large-cap U.S. stocks with a value tilt.
• A low-cost and passively managed investment.
• An alternative to traditional market capitalization-weighted index funds.

Fundamental Rating Based on AI:

Based on an AI-based analysis of DFAC's fundamentals, the ETF receives a rating of 8 out of 10. This rating considers factors like financial performance, market position, and future prospects. DFAC scores highly in terms of its strong track record, experienced management team, low fees, and unique investment approach. However, the ETF's exposure to value stocks could be a potential risk factor for investors with a shorter time horizon.

Resources and Disclaimers

Data Sources:

• Dimensional Fund Advisors LP
• Morningstar
• Bloomberg

Disclaimer:

The information provided in this analysis should not be considered investment advice. All investment decisions should be made with the assistance of a professional financial advisor who can consider your индивидуаль circumstances.