Dimensional ETF Trust - Dimensional Emerging Markets Core Equity 2 ETF (DFEM)

Overview

The Dimensional Emerging Markets Core Equity 2 ETF (DFEM) provides broad exposure to emerging market equities, seeking long-term capital appreciation by investing in a diverse portfolio of companies across multiple countries and sectors. The ETF emphasizes a core equity strategy, aiming to capture the overall performance of emerging markets while employing a systematic, factor-based approach.

Reputation and Reliability

Dimensional Fund Advisors is a well-regarded investment firm known for its evidence-based investment approach and focus on systematic, factor-based strategies.

Management Expertise

Dimensional has a strong management team with extensive experience in quantitative investing and portfolio management.

Goal

The ETF aims for long-term capital appreciation by investing in a broad and diverse portfolio of emerging market equities.

Investment Approach and Strategy

Strategy: The ETF does not track a specific index but employs a systematic, factor-based strategy that emphasizes companies with smaller market capitalization, lower relative price, and higher profitability within the emerging markets universe.

Composition The ETF primarily holds stocks of companies located in emerging market countries.

Market Share: DFEM has a moderate market share within the emerging markets equity ETF category.

Total Net Assets (AUM): 337000000

Key Competitors

• Vanguard FTSE Emerging Markets ETF (VWO)
• iShares Core MSCI Emerging Markets ETF (IEMG)
• Schwab Emerging Markets Equity ETF (SCHE)

Competitive Landscape

The emerging markets ETF industry is highly competitive, with several large players offering broad market exposure. DFEM differentiates itself with its factor-based approach, which may offer potentially higher returns compared to passive, market-cap-weighted ETFs. However, its expense ratio is often higher than those of the largest competitors, and its active strategy introduces the risk of underperformance relative to the broader market.

Historical Performance: Historical performance data is available from the fund's inception date and should be consulted to understand the ETF's track record.

Benchmark Comparison: The ETF's performance should be compared to a broad emerging markets index, such as the MSCI Emerging Markets Index, to assess its relative performance.

Expense Ratio: 0.32

Average Trading Volume

The average trading volume of DFEM indicates a moderate level of liquidity.

Bid-Ask Spread

The bid-ask spread for DFEM is generally competitive, reflecting reasonable trading costs.

Market Environment Factors

Economic growth rates in emerging markets, commodity prices, currency fluctuations, and geopolitical events can significantly impact the performance of DFEM.

Growth Trajectory

The growth trajectory of DFEM will depend on its ability to attract and retain assets, as well as the performance of the underlying emerging markets it invests in. Dimensional may make adjustments to the factor weights in the strategy, which may influence the ETF's holdings and performance.

Competitive Edge

DFEM's competitive advantage lies in its systematic, factor-based investment approach, which aims to outperform traditional market-cap-weighted indices. The ETF benefits from Dimensional's research and expertise in factor investing. By targeting companies with smaller market capitalization, lower relative price, and higher profitability, the ETF seeks to capture potential excess returns. Dimensional's disciplined investment process and focus on cost-effective implementation also contribute to its competitive edge. The multifactor model may potentially offer downside protection and outperformance over long periods.

Volatility

Emerging markets are generally more volatile than developed markets, so DFEM can experience higher volatility.

Market Risk

DFEM is subject to market risk, which is the risk that the overall market declines and the ETF's value decreases.

Ideal Investor Profile

The ideal investor for DFEM is someone seeking long-term capital appreciation through exposure to emerging market equities and willing to accept a moderate to high level of risk.

Market Risk

DFEM is suitable for long-term investors with a diversified portfolio and a tolerance for volatility. It may also appeal to passive index followers willing to accept slightly higher fees and active management in exchange for potential outperformance.

Dimensional Emerging Markets Core Equity 2 ETF (DFEM) provides access to a broad range of emerging market equities using a systematic, factor-based strategy. It seeks long-term capital appreciation and aims to outperform traditional market-cap-weighted indices by targeting companies with specific characteristics such as smaller size, lower relative price and high profitability. DFEM is suitable for investors seeking exposure to emerging markets, comfortable with moderate to high volatility, and willing to pay a higher expense ratio for potential outperformance. The ETF's success depends on the effectiveness of Dimensional's investment approach and the overall performance of emerging market economies.

• VWO
• IEMG
• SCHE
• SPEM
• EEM
• DEM

Data Sources:

• Dimensional Fund Advisors website
• ETF.com
• Morningstar

Disclaimers:

The data provided is for informational purposes only and should not be considered investment advice. Past performance is not indicative of future results. Consult with a qualified financial advisor before making any investment decisions.