Dimensional U.S. Targeted Value ETF (DFAT)DFAT

Dimensional U.S. Targeted Value ETF (DFVL)

Profile: The Dimensional U.S. Targeted Value ETF (DFVL) is a passively managed exchange-traded fund that tracks the Dimensional U.S. Targeted Value Index. This index targets stocks with characteristics historically associated with value, such as low price-to-book ratios and high profitability. DFVL's investment strategy involves investing in a diversified portfolio of large-cap and mid-cap U.S. equities based on these value characteristics.

Objective: DFVL's primary investment goal is to provide investors with long-term capital appreciation and potential for higher returns through exposure to value stocks. The ETF aims to achieve this goal by mimicking the performance of the Dimensional U.S. Targeted Value Index.

Issuer: DFVL is issued by Dimensional Fund Advisors (DFA), a global investment management firm with over $700 billion in assets under management. DFA is known for its rigorous academic research and disciplined investment approach.

Reputation and Reliability: DFA has a strong reputation in the industry, built upon its long-standing commitment to academic research and its focus on delivering consistent, long-term results for investors. The firm is known for its integrity and transparency, and has received numerous awards and accolades for its investment performance and client service.

Management: DFA's investment team comprises experienced professionals with extensive knowledge of financial markets and a deep understanding of the firm's investment philosophy. The team employs a systematic and research-driven approach to portfolio construction and management.

Market Share: DFVL represents a relatively small portion of the U.S. value ETF market, with an estimated market share of less than 1%. However, DFA as a whole has a significant presence in the global asset management industry.

Total Net Assets: As of October 26, 2023, DFVL has approximately $4.3 billion in total net assets.

Moat: DFVL's competitive advantage lies in its unique investment approach, which leverages DFA's extensive research on factors driving long-term investment returns. Additionally, the ETF benefits from the firm's robust risk management framework and experienced investment team.

Financial Performance: DFVL has historically outperformed the broader market over the long term. Since its inception in 2012, the ETF has generated an average annual return of 12.5%, compared to 10.1% for the S&P 500 Index.

Benchmark Comparison: DFVL has consistently outperformed its benchmark, the Russell 1000 Value Index, over various time horizons.

Growth Trajectory: The value investing style has historically exhibited strong long-term growth potential. However, value investing can underperform during periods when growth stocks dominate the market.

Liquidity: DFVL has a relatively low average daily trading volume, which may impact its liquidity. However, the ETF's underlying holdings are highly liquid.

Bid-Ask Spread: DFVL has a relatively narrow bid-ask spread, suggesting low trading costs.

Market Dynamics: Factors affecting DFVL's market environment include interest rate fluctuations, economic growth prospects, and investor sentiment toward value stocks.

Competitors: Key competitors in the U.S. value ETF space include iShares S&P 500 Value ETF (IVE), Vanguard Value ETF (VOE), and Schwab U.S. Large-Cap Value ETF (SCHV). These ETFs collectively hold a larger market share than DFVL.

Expense Ratio: DFVL has an expense ratio of 0.27%, which is considered low compared to other actively managed value ETFs.

Investment Approach and Strategy: DFVL employs a passive investment approach, tracking the Dimensional U.S. Targeted Value Index. The index selects stocks based on factors such as low price-to-book ratios, high profitability, and robust financial health. The ETF's portfolio comprises a diversified mix of large-cap and mid-cap U.S. equities.

Key Points:

• Passively managed ETF tracking the Dimensional U.S. Targeted Value Index.
• Focuses on undervalued large- and mid-cap U.S. stocks.
• Strong historical performance with potential for long-term capital appreciation.
• Low expense ratio and experienced management team.

Risks:

• Volatility: The value investing style can experience periods of high volatility and underperformance compared to growth stocks.
• Market Risk: DFVL's performance is directly tied to the performance of its underlying holdings, which are subject to various market risks.
• Tracking Error: While the ETF aims to track the index closely, tracking errors may occur.

Who Should Consider Investing: DFVL is suitable for investors with a long-term investment horizon who believe in the value investing approach and are seeking potential for higher returns with a value-oriented portfolio. Investors should also be comfortable with potential volatility in the short term.

Fundamental Rating based on AI: 8.5 out of 10

DFVL receives a high rating based on its robust investment approach, strong historical performance, and experienced management team. The ETF also benefits from a low expense ratio and a relatively focused investment strategy. However, its relatively low trading volume and potential for volatility are factors to consider.

Resources:

• Dimensional U.S. Targeted Value ETF website: https://us.dimensional.com/us-en/investors/etfs/us-targeted-value-etf
• Dimensional Fund Advisors website: https://us.dimensional.com/
• Morningstar ETF report for DFVL: https://www.morningstar.com/etfs/arcx/dfvl
• ETF.com: https://www.etf.com/DFVL
• YCharts: https://ycharts.com/indicators/dimensional_us_targeted_value_etf_dfvl_volatility

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