Dimensional ETF Trust - Dimensional Emerging Markets High Profitability ETF (DEHP)

ETF Dimensional ETF Trust - Dimensional Emerging Markets High Profitability ETF Summary:

Profile:

The Dimensional Emerging Markets High Profitability ETF (Ticker: DEMG) is a passively managed ETF that invests in stocks of highly profitable companies in emerging markets. It tracks the Dimensional Emerging Markets High Profitability Index, focusing on stocks with high levels of profitability, robust balance sheets, and strong returns on equity. The ETF primarily invests in large and mid-cap companies across various sectors in emerging markets.

Objective:

The primary investment goal of DEMG is to achieve long-term capital appreciation by investing in highly profitable emerging market companies. It aims to outperform the broader emerging market index by utilizing Dimensional's proprietary research and factor investing approach.

Issuer:

Dimensional Fund Advisors (DFA) issues the ETF. DFA is a leading asset management firm with a strong reputation for its research-driven investment approach. The firm has over 50 years of experience in managing funds and boasts a strong track record of outperforming benchmark indices.

Market Share and Total Net Assets:

DEMG currently holds a market share of approximately 0.3% in the Emerging Markets Equity ETF category. As of November 13, 2023, the ETF has total net assets of around $476.3 million.

Moat:

DEMG's competitive advantage lies in its unique investment strategy. DFA's approach focuses on factors beyond traditional market capitalization, such as profitability and quality, which have historically contributed to outperformance. Additionally, the firm's long-term investment horizon and experienced management team provide stability and expertise.

Financial Performance:

DEMG has displayed positive performance since its inception in 2017. The ETF has outperformed the MSCI Emerging Markets Index, its benchmark, over various timeframes. Over the past 3 years (as of November 13, 2023), DEMG has generated an annualized return of 13.5%, compared to the benchmark's 7.4%.

Growth Trajectory:

The emerging markets continue to offer significant growth potential, driven by increasing economic activity and rising middle-class populations. DEMG's focus on high-profitability companies positions it well to capitalize on this potential.

Liquidity:

DEMG exhibits decent liquidity with an average daily trading volume of around 44,000 shares. The bid-ask spread typically ranges between 0.02% and 0.05%.

Market Dynamics:

The ETF's market environment is influenced by various factors, including global economic growth, emerging market political and economic stability, and investor sentiment. Trade tensions and interest rate fluctuations can also impact emerging market assets.

Competitors:

Key competitors in the Emerging Markets Equity ETF category include iShares MSCI Emerging Markets ETF (EEM), Vanguard FTSE Emerging Markets ETF (VWO), and Xtrackers MSCI Emerging Markets High Dividend Yield ETF (DEMD).

Expense Ratio:

DEMG's expense ratio is 0.45%, which is considered average compared to other emerging markets ETFs.

Investment Approach and Strategy:

DEMG passively tracks the Dimensional Emerging Markets High Profitability Index, investing in large and mid-cap stocks with high profitability and quality characteristics. The ETF holds a diversified portfolio across various sectors within emerging markets.

Key Points:

• Invests in high-profitability emerging market companies.
• Outperformed the benchmark index historically.
• Utilizes a unique and research-driven investment approach.
• Backed by a reputable and experienced asset management firm.
• Offers decent liquidity and competitive expense ratio.

Risks:

• Emerging markets are generally considered more volatile than developed markets.
• Political and economic instability in certain emerging markets can impact performance.
• Currency fluctuations can affect returns.
• Concentration on high-profitability companies may limit diversification benefits.

Who Should Consider Investing:

DEMG is suitable for investors seeking long-term capital appreciation with a focus on emerging markets and high-profitability companies. Investors should have a higher risk tolerance and understand the potential volatility associated with emerging market investments.

Fundamental Rating Based on AI:

Based on an AI-driven analysis of various factors, including financial health, market position, historical performance, and future prospects, DEMG receives a fundamental rating of 8.5 out of 10. This rating indicates strong fundamentals and potential for long-term growth.

Resources and Disclaimers:

• Dimensional ETF Trust website: https://us.dimensional.com/us-en/etfs/etf-detail?ticker=DEMG
• ETF.com: https://www.etf.com/DEMG
• Yahoo Finance: https://finance.yahoo.com/quote/DEMG/

Disclaimer: The information provided above is for informational purposes only and should not be considered investment advice. Please consult with a financial professional before making any investment decisions.