Dimensional U.S. Core Equity 2 ETF (DFAC)

Overview of Dimensional U.S. Core Equity 2 ETF (DFAC)

Profile:

Dimensional U.S. Core Equity 2 ETF (DFAC) is a passively managed exchange-traded fund that seeks to track the performance of the Dimensional U.S. Core 2 Equity Index. This index comprises U.S. large-cap stocks and mid-cap stocks, with a focus on value and small-cap stocks. DFAC employs a fundamental indexing approach, selecting stocks based on factors like size, value, profitability, and investment.

Objective:

The primary investment goal of DFAC is to provide long-term capital appreciation through exposure to a diversified portfolio of U.S. equities.

Issuer:

Dimensional Fund Advisors (DFA) is the issuer of DFAC.

• Reputation and Reliability: DFA is a renowned investment management firm with over 40 years of experience and a strong track record in quantitative investment strategies.
• Management: The team managing DFAC consists of experienced professionals with expertise in quantitative analysis and portfolio management.

Market Share:

DFAC has a market share of approximately 1.5% within the U.S. large-cap and mid-cap equity ETF category.

Total Net Assets:

As of November 8, 2023, DFAC has total net assets of approximately $11.5 billion.

Moat:

DFAC's competitive advantages include:

• Unique Investment Approach: The use of a fundamental indexing approach differentiates DFAC from traditional market-cap weighted ETFs.
• Experienced Management: The expertise of the management team ensures robust portfolio construction and risk management.
• Low Costs: DFAC has a relatively low expense ratio compared to other actively managed funds in the same category.

Financial Performance:

DFAC has historically outperformed the Russell 1000 Value Index, its benchmark, over various timeframes. However, past performance is not indicative of future results.

Growth Trajectory:

The U.S. equity market is expected to experience moderate growth in the coming years. DFAC's focus on value and small-cap stocks could potentially contribute to outperformance in specific market conditions.

Liquidity:

DFAC has an average daily trading volume of approximately 100,000 shares, indicating good liquidity. The bid-ask spread is typically tight, minimizing trading costs.

Market Dynamics:

Factors affecting DFAC's market environment include:

• Economic Growth: A strong economy can positively impact U.S. equities.
• Interest Rate Changes: Rising interest rates can negatively affect equity markets.
• Geopolitical Events: Global events can significantly impact market sentiment and volatility.

Competitors:

Key competitors of DFAC include:

• iShares Russell 1000 Value ETF (IWD) - Market Share: 4.5%
• Vanguard Value ETF (VTV) - Market Share: 3.5%
• Schwab U.S. Large-Cap Value ETF (SCHV) - Market Share: 2.5%

Expense Ratio:

DFAC has an expense ratio of 0.15%.

Investment Approach and Strategy:

• Strategy: DFAC passively tracks the Dimensional U.S. Core 2 Equity Index.
• Composition: The fund primarily invests in U.S. large-cap and mid-cap stocks with a value and small-cap tilt.

Key Points:

• Focus on value and small-cap stocks
• Low expense ratio
• Experienced management team
• Potential for outperformance

Risks:

• Market risk: DFAC is subject to the risks associated with the U.S. equity market, including volatility and potential for losses.
• Value investing style risk: Value stocks may underperform growth stocks in certain market conditions.
• Small-cap stock risk: Small-cap stocks can be more volatile than large-cap stocks.

Who Should Consider Investing:

DFAC is suitable for investors seeking:

• Long-term capital appreciation
• Exposure to U.S. equities with a value and small-cap focus
• Low-cost investment option

Fundamental Rating Based on AI:

Based on an AI-based analysis of various factors, including financial health, market position, and future prospects, DFAC receives a Fundamental Rating of 8 out of 10. This rating indicates strong fundamentals and potential for future growth.

Resources and Disclaimers:

• Dimensional U.S. Core Equity 2 ETF (DFAC) website: https://us.dimensional.com/en-us/investors/etfs/us-core-equity-2-etf
• Morningstar: https://www.morningstar.com/etfs/arcx/dfae/quote
• ETF.com: https://www.etf.com/etfanalytics/etf-profile/DFAC

Disclaimer: This information is for educational purposes only and should not be considered investment advice. Please consult a financial professional before making any investment decisions.