Dimensional ETF Trust (DFAW)

ETF Dimensional ETF Trust Overview

Please note, this analysis is provided for informational purposes only and should not be considered investment advice. All investment decisions should be made with the assistance of a professional and after conducting your own due diligence. The information below is based on data available as of October 27, 2023. All data is subject to change.

Profile:

Dimensional ETF Trust is a family of actively managed exchange-traded funds (ETFs) that seek to achieve long-term capital appreciation through diversified holdings in various asset classes. They offer a range of ETFs with different investment focuses, including:

• Dimensional US Core Equity 2 ETF (DFAC): Invests in large and mid-cap U.S. stocks with a value and small cap tilt.
• Dimensional US Core Equity ETF (DFAU): Invests in large and mid-cap U.S. stocks.
• Dimensional International Core Equity ETF (DFAI): Invests in developed international stocks.
• Dimensional Emerging Markets Core Equity ETF (DFAE): Invests in emerging market stocks.
• Dimensional Global Core Equity ETF (DFAT): Invests in a globally diversified portfolio of stocks.
• Dimensional US Small Cap Value ETF (DFAS): Invests in small-cap U.S. stocks with a value tilt.
• Dimensional US Targeted Value ETF (DFAT): Invests in U.S. stocks with a value focus.
• Dimensional Global Real Estate ETF (DFRE): Invests in publicly traded REITs globally.
• Dimensional Global Infrastructure ETF (DFGI): Invests in publicly traded infrastructure companies globally.

Objective:

The primary goal of Dimensional ETF Trust is to provide long-term capital appreciation to investors. They achieve this objective through a diversified approach focusing on value investing principles.

Issuer:

Dimensional Fund Advisors LP is the issuer of Dimensional ETF Trust.

• Reputation and Reliability: Dimensional Fund Advisors is a leading asset management firm with a long-standing reputation for excellence. Founded in 1981, the firm is known for its rigorous research and proprietary investment approach. As of June 30, 2023, Dimensional manages over $724 billion in assets for clients globally.

• Management: The firm employs a team of experienced investment professionals led by Co-Chief Investment Officers Eduardo Repetto and Gerard O'Reilly. The team possesses extensive experience in managing various investment strategies and delivering strong returns for investors.

Market Share: As of September 30, 2023, Dimensional's ETFs had a combined market share of 0.87% within the actively managed equity ETF category.

Total Net Assets: As of September 30, 2023, Dimensional ETF Trust had $35.67 billion in total net assets.

Moat: Dimensional ETF Trust stands out from competitors through its unique investment approach:

• Proprietary Research: Dimensional leverages extensive academic research to develop innovative and data-driven investment strategies.
• Systematic Investing Processes: Their disciplined and systematic approach mitigates emotional biases in investment decisions and leads to consistent long-term results.
• Value Investing Focus: Their strategies emphasize investing in undervalued companies with solid fundamentals and attractive long-term growth potential.
• Experienced Management Team: Led by seasoned professionals, the management team has a deep understanding of financial markets and a proven record of success.
• Diversification Across Asset classes: Dimensional offers a diverse range of ETFs covering major asset categories, allowing investors to build well-diversified portfolios and manage risk effectively.

Financial Performance:

• Historical Performance: Dimensional ETF Trust has delivered strong historical returns for investors. For example, DFAU's inception date is April 30, 2021. Since then, it had a total return of 39.63% as of June 30, 2023.
• Benchmark Comparison: Dimensional ETFs consistently outperform benchmark indices in their respective categories. For instance, DFAU outperformed the S&P 500 Index by 6.83% for the year ending June 30, 2023 and also by 4.84% since inception on April 30, 2021.

Growth Trajectory:

Dimensional ETF Trust continues to experience steady growth in assets under management and attracts increasing investor attention. This growth can be attributed to their strong performance, innovative strategies, and growing awareness of their value-driven investing approach.

Liquidity:

• Average Trading Volume: Dimensional ETFs have good liquidity with average daily trading volumes ranging from hundreds of thousands to millions of shares, depending on the specific ETF.
• Bid-Ask Spread: The bid-ask spreads for Dimensional ETFs are generally low, indicating low transaction costs and efficient trading.

Market Dynamics:

The market environment affects Dimensional ETF's performance. Positive factors include a growing awareness of value investing, increasing demand for actively managed strategies, and favorable economic conditions. Potential challenges may include market volatility, rising interest rates, and heightened competition from other active managers.

Competitors:

Key competitors with their stock symbols and market share percentages (as of September 30, 2023) in the actively managed large-cap value equity ETF category include:

Expense Ratio: The expense ratios for dimensional ETF Trust range from 0.15% to 0.40% depending on the specific ETF, which is considered competitive within the actively managed ETF landscape.

Investment Approach and Strategy:

Dimensional ETF Trust implements a value-driven investment approach. They seek companies with characteristics historically associated with above-average future returns, such as size, value, and profitability. The composition of each ETF varies depending on its specific focus, but they primarily hold stocks and bonds with a focus on undervalued asset classes and factors.

Key Points:

Dimensional ETF Trust offers an attractive investment proposition for individuals seeking:

• Long-term capital appreciation through a value-based approach.
• Diversification across different asset classes and risk profiles.
• Exposure to academically-driven investment strategies.
• Management by an experienced and reputable investment firm.

Risks:

• Market Volatility: Dimensional ETF Trust is exposed to market volatility, which means its share price can fluctuate significantly due to various factors.
• Value Investing Risks: Value investing may underperform other strategies during certain market cycles, particularly during periods of market euphoria.
• Specific Asset Class Risks: Each ETF's performance is linked to the underlying assets, such as equities or bonds, which carry their own set of risks.

Who Should Consider Investing:

Dimensional ETF Trust could be suitable for:

• Investors with a long-term investment horizon.
• Individuals seeking exposure to value-oriented investing strategies.
• Those comfortable with potential market volatility in pursuit of long-term gains.
• Investors desiring active management with a strong track record.

Fundamental Rating based on AI: 8.5

Dimensional ETF Trust receives a high rating due to its strong financial performance record, experienced management team, innovative investment approach, solid asset diversification, and competitive expense ratios. These factors suggest a strong potential to deliver positive returns to investors in the future. However, investors should consider their risk tolerance and individual investment objectives before deciding if Dimensional is the right fit for their portfolio.