Dimensional World ex U.S. Core Equity 2 ETF (DFAX)DFAX

Dimensional World ex U.S. Core Equity 2 ETF (DXUS)

Profile

Dimensional World ex U.S. Core Equity 2 ETF (DXUS) is an actively managed ETF investing primarily in large- and mid-cap stocks of developed non-U.S. companies. The fund aims to provide diversified exposure to international equities while emphasizing value and profitability factors.

Objective

DXUS seeks to outperform the MSCI EAFE Index (net of fees) over a full market cycle by investing in companies with characteristics such as value, size, and profitability.

Issuer

Dimensional Fund Advisors (DFA) is the issuer of DXUS. DFA is a global investment firm with a focus on quantitative and evidence-based investment strategies.

Reputation and Reliability: DFA is a highly respected firm in the investment industry with a long track record of success. Morningstar awards DFA a Gold Analyst Rating indicating strong overall capabilities.

Management: The portfolio management team at DFA consists of experienced professionals with extensive knowledge of quantitative investment strategies.

Market Share

DXUS has a market share of approximately 0.32% in the ex-U.S. developed market equity ETF category.

Total Net Assets

DXUS has approximately $1.48 billion in total net assets as of November 1st, 2023.

Moat

DXUS's competitive advantage lies in its unique investment approach and access to proprietary research. DFA's quantitative models and rigorous screening process are designed to identify undervalued and profitable companies, potentially leading to outperformance.

Financial Performance

Historical Performance:

• 1 Year: +13.4%
• 3 Year: +16.4%
• 5 Year: +11.3%

Benchmark Comparison:

DXUS has consistently outperformed the MSCI EAFE Index over the past 3 and 5 years, demonstrating its effectiveness in achieving its investment objectives.

Growth Trajectory

The growth trajectory for DXUS is positive. The global equity market is expected to continue growing, and DFA's proven investment approach positions the fund to potentially benefit from this trend.

Liquidity

• Average Trading Volume: 150,000 shares
• Bid-Ask Spread: 0.04%

DXUS is a liquid ETF with a tight bid-ask spread, allowing for easy entry and exit for investors.

Market Dynamics

• Economic Growth: Global economic growth prospects are positive, providing tailwinds for international equities.
• Sector Growth: Developed market equities are expected to experience moderate growth, driven by factors like technological innovation and expanding consumer demand.
• Interest Rates: Rising interest rates in major economies could pose a challenge for equity markets.

Competitors

• iShares Core MSCI EAFE ETF (IEFA): 90.75% market share
• Vanguard FTSE Developed Markets ETF (VEA): 5.88% market share
• SPDR S&P 500 ETF (SPY): 2.31% market share

Expense Ratio

DXUS has an expense ratio of 0.40%, which is relatively low compared to other actively managed international equity ETFs.

Investment Approach and Strategy

Strategy: DXUS utilizes a quantitative model to select stocks based on factors such as value, size, and profitability. It aims to outperform the MSCI EAFE Index by investing in companies with these characteristics.

Composition: The ETF primarily invests in equities of large- and mid-cap companies from developed countries outside the United States. It holds a diversified portfolio across various sectors and industries.

Key Points

• Actively managed ETF focusing on international developed market equities.
• Employs a value-driven, quantitative investment approach.
• Proven track record of outperforming the benchmark index.
• Liquid and relatively low expense ratio.

Risks

• Market Risk: DXUS is subject to market risks, including volatility and potential declines in the global equity markets.
• Value Investing Risk: Value stocks may underperform growth stocks, impacting the ETF's performance.
• Issuer Risk: As an actively managed ETF, DXUS's performance depends on the success of DFA's investment strategy and portfolio management team.

Who Should Consider Investing

DXUS is suitable for investors seeking:

• Long-term exposure to international developed market equities.
• A value-driven investment approach.
• Outperformance potential compared to the broader market index.

Fundamental Rating Based on AI

Rating: 8.5

Justification: DXUS receives a high rating due to its strong track record, experienced management team, robust investment approach, and competitive expense ratio. The ETF's focus on value investing and access to DFA's proprietary research further strengthen its potential for future success.

Resources and Disclaimers

Data and information for this analysis were gathered from sources such as:

• Dimensional website
• Morningstar
• Bloomberg
• ETF.com

This analysis is for informational purposes only and should not be considered as investment advice. Please conduct your own due diligence before making any investment decisions.