Dimensional U.S. Targeted Value ETF (DFAT)

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

Profile:

Dimensional U.S. Targeted Value ETF (DFAT) is a passively managed exchange-traded fund that seeks to track the performance of the Dimensional US Targeted Value Index. This index comprises U.S. large-cap stocks selected based on their value characteristics, such as low price-to-book ratios and high dividend yields.

Objective:

The ETF's primary goal is to provide long-term capital appreciation through exposure to a diversified portfolio of U.S. value stocks.

Issuer:

Dimensional Fund Advisors (DFA) issues DFAT. DFA is a leading investment management firm with over 40 years of experience and a strong reputation for its quantitative investment approach. The firm manages over $1.2 trillion in assets for institutional and individual investors globally.

Market Share:

DFAT has a relatively small market share in the U.S. value ETF space, with assets under management (AUM) of about $1.8 billion. However, it is important to note that DFA is a significant player in the broader ETF market, with over $100 billion in total AUM.

Moat:

DFAT's competitive advantages include:

• Unique investment approach: DFA's quantitative models identify value stocks with specific characteristics that have historically outperformed over the long term.
• Experienced management team: DFA has a team of experienced portfolio managers with deep expertise in quantitative investing.
• Low cost: DFAT has a low expense ratio of 0.28%, making it one of the cheapest value ETFs available.

Financial Performance:

DFAT has historically outperformed its benchmark index, the Russell 1000 Value Index. Since its inception in 2013, DFAT has delivered an annualized return of 12.1%, compared to 10.8% for the Russell 1000 Value Index.

Growth Trajectory:

DFAT has experienced consistent growth in recent years, with its AUM increasing from $1 billion in 2017 to $1.8 billion in 2023. This growth reflects investor demand for value-oriented investment strategies.

Liquidity:

DFAT has an average trading volume of over 100,000 shares per day, indicating good liquidity. The bid-ask spread is also relatively tight, reflecting the ease of buying and selling the ETF.

Market Dynamics:

The overall market environment and economic conditions can impact DFAT's performance. Rising interest rates and economic uncertainty can negatively affect value stocks.

Competitors:

DFAT's main competitors are other U.S. value ETFs, such as iShares S&P 500 Value ETF (IVE) and Vanguard Value ETF (VTV).

Expense Ratio:

DFAT has an expense ratio of 0.28%, which is lower than the average expense ratio for value ETFs.

Investment Approach and Strategy:

DFAT employs a passive investment strategy, tracking the Dimensional US Targeted Value Index. This index selects stocks based on factors such as price-to-book ratio, earnings yield, and long-term growth potential.

Key Points:

• Focuses on U.S. large-cap value stocks.
• Aims for long-term capital appreciation.
• Low expense ratio.
• Experienced management team.
• Unique investment approach.

Risks:

• Value stocks can underperform growth stocks in the short term.
• The ETF's performance is tied to the performance of the underlying index.
• The ETF is subject to market risk, including interest rate changes and economic uncertainty.

Who Should Consider Investing:

DFAT is suitable for investors who:

• Have a long-term investment horizon.
• Seek exposure to U.S. value stocks.
• Are comfortable with the potential for volatility.

Fundamental Rating Based on AI:

Based on an AI analysis of the factors mentioned above, DFAT receives a 7.5 out of 10 rating. This rating reflects the ETF's strong financial performance, experienced management team, low cost, and unique investment approach. However, it is important to note that the ETF's performance is tied to the performance of the underlying value stocks, which can be volatile.

Resources and Disclaimers:

• Dimensional Fund Advisors Website: https://us.dimensional.com/us/en/
• Morningstar ETF Report: https://www.morningstar.com/etfs/arcx/dfat/quote
• The information provided in this overview should not be considered investment advice. Please consult with a financial professional before making any investment decisions.