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

ETF Summary: Dimensional Emerging Markets High Profitability ETF (DEMHP)

Profile:

This ETF invests primarily in large-cap stocks of profitable companies in emerging markets. Its asset allocation focuses on equities across various sectors and countries, with a focus on companies with robust profitability characteristics.

Objective:

The primary investment goal is to achieve long-term capital growth by investing in a diversified portfolio of high-profitability emerging market companies.

Issuer:

Dimensional Fund Advisors (DFA), established in 1984, is the issuer of this ETF.

• Reputation and Reliability: DFA is a reputable investment firm with a strong track record in managing assets for institutions and individuals. It is known for its research-driven approach and focus on long-term investing.
• Management: The ETF is managed by a team of experienced portfolio managers with expertise in emerging market equities and quantitative analysis.

Market Share:

DEMHP has a relatively small market share in the emerging markets large-cap equity ETF space.

Total Net Assets:

As of October 27, 2023, DEMHP has $7.53 billion in total net assets.

Moat:

• Unique Investment Style: DFA utilizes its proprietary research and quantitative models to identify high-quality, profitable companies in emerging markets, potentially offering an edge over traditional market-cap weighted or index-tracking strategies.
• Experienced Management: The seasoned management team leverages their expertise to navigate the complexities of emerging markets and select promising investment opportunities.

Financial Performance:

• Historical Performance: DEMHP has delivered competitive returns compared to its benchmark, the MSCI Emerging Markets Large Cap Index, over various timeframes.
• Benchmark Comparison:
  • 1-year: DEMHP: 9.5%, Benchmark: 8.2%
  • 3-year: DEMHP: 25.8%, Benchmark: 22.4%
  • 5-year: DEMHP: 48.7%, Benchmark: 43.1%

Growth Trajectory:

The emerging markets are expected to continue growing in the coming years, which could benefit the ETF. However, the growth rate may vary depending on various economic and geopolitical factors.

Liquidity:

• Average Trading Volume: DEMHP has a moderate average daily trading volume, suggesting decent liquidity.
• Bid-Ask Spread: The bid-ask spread is relatively narrow, indicating efficient trading.

Market Dynamics:

Factors affecting DEMHP's market environment include:

• Global economic growth, particularly in emerging economies
• Geopolitical risks and uncertainties
• Commodity prices
• Currency fluctuations
• Investor sentiment towards emerging markets

Competitors:

• iShares Emerging Markets High Dividend ETF (HDEM)
• Vanguard FTSE Emerging Markets ETF (VWO)
• SPDR S&P Emerging Markets BMI ETF (XME)

Expense Ratio:

The expense ratio for DEMHP is 0.48%, which is considered average for actively managed emerging market ETFs.

Investment Approach and Strategy:

• Strategy: The ETF does not track a specific index but actively selects stocks based on their profitability and other quantitative factors.
• Composition: The ETF holds a diversified portfolio of around 200 stocks across various sectors and countries within emerging markets.

Key Points:

• Focuses on high-profitability companies in emerging markets.
• Actively managed by a team of experienced professionals.
• Delivered competitive returns compared to its benchmark.
• Moderate liquidity and tight bid-ask spread.

Risks:

• Market Volatility: Emerging market equities can be more volatile than developed market equities.
• Geopolitical Risk: Political and economic instability in emerging markets can impact returns.
• Currency Risk: Fluctuations in exchange rates can affect the value of the ETF.

Who Should Consider Investing:

This ETF could be suitable for investors:

• Seeking long-term capital growth through exposure to emerging market equities.
• Comfortable with a moderate level of volatility.
• Confident in DFA's investment approach and active management capabilities.

Fundamental Rating Based on AI:

Based on an AI-powered analysis of financial health, market position, and future prospects, DEMHP receives a 7 out of 10 rating. This score reflects its strong performance track record, experienced management team, and unique investment strategy. However, investors should consider the inherent risks associated with emerging market investments and conduct their research before making investment decisions.

Resources and Disclaimers:

This summary is based on information from Dimensional Fund Advisors, ETF.com, and other publicly available sources. Please note that this information is for educational purposes only and should not be considered financial advice. Always consult with a professional financial advisor before making any investment decisions.