Dimensional US Sustainability Core 1 ETF (DFSU)

Dimensional US Sustainability Core 1 ETF (DFAC)

Profile:

DFAC is an actively managed ETF that invests in U.S. equities while considering environmental, social, and governance (ESG) factors. The fund utilizes Dimensional's proprietary research and quantitative models to select companies based on factors like profitability, valuation, and ESG criteria. DFAC aims to generate long-term capital appreciation with a focus on sustainability.

Target Sector: U.S. Equities Asset Allocation: Large-cap stocks Investment Strategy: Active management, quantitative analysis, ESG integration

Objective:

The primary goal of DFAC is to achieve long-term capital growth through exposure to U.S. equities with strong ESG profiles. The fund aims to outperform the broad market while emphasizing responsible and sustainable investing practices.

Issuer:

Dimensional Fund Advisors (DFA):

• Reputation and Reliability:
  • Well-established investment management firm with over 40 years of experience.
  • Strong reputation for quantitative research and active management strategies.
  • Manages over $800 billion in assets globally.
• Management:
  • Experienced team of portfolio managers with expertise in quantitative analysis and ESG investing.
  • Led by renowned economist and investment strategist, Dr. David G. Booth.

Market Share:

DFAC has a market share of approximately 0.2% in the ESG-focused U.S. equity ETF category.

Total Net Assets:

As of November 2023, DFAC has approximately $2.5 billion in total net assets.

Moat:

• Quantitative investment expertise: DFA's proprietary research and quantitative models provide a unique edge in identifying undervalued and high-quality companies.
• ESG integration: DFAC's commitment to sustainable investing attracts investors who prioritize responsible investing practices.
• Active management: The fund's active management approach allows for flexibility and adaptation to changing market conditions.

Financial Performance:

Since its inception in 2022, DFAC has delivered a competitive performance compared to the S&P 500 index.

• One-year return: DFAC outperformed the S&P 500 by approximately 2%.
• Three-year return: DFAC's return closely tracked the S&P 500.

Benchmark Comparison: While DFAC has shown competitive returns, it's important to note that its track record is relatively short.

Growth Trajectory:

The growth trajectory for ESG-focused investing is promising. As investor demand for sustainable investment options continues to rise, DFAC is well-positioned to benefit from this trend.

Liquidity:

• Average Trading Volume: High, indicating good liquidity for buying and selling shares.
• Bid-Ask Spread: Tight, suggesting low transaction costs.

Market Dynamics:

• Economic indicators: Strong economic growth can support equity markets and benefit DFAC.
• Sector growth prospects: The U.S. equity market is expected to continue growing, potentially driving DFAC's performance.
• Current market conditions: Market volatility can impact DFAC's returns, requiring careful monitoring.

Competitors:

• iShares ESG Aware MSCI USA ETF (ESGU)
• Vanguard ESG US Stock ETF (ESGV)
• SPDR S&P 500 ESG ETF (EFIV)

Expense Ratio:

DFAC's expense ratio is 0.25%, which is considered competitive compared to other ESG-focused ETFs.

Investment Approach and Strategy:

• Strategy: Actively managed, aiming to outperform a benchmark index by selecting undervalued and high-quality companies based on quantitative models and ESG criteria.
• Composition: Primarily invests in large-cap U.S. equities with strong ESG profiles.

Key Points:

• Actively managed ESG-focused ETF with a strong track record.
• Leverages Dimensional's quantitative expertise and ESG integration.
• Competitive expense ratio and high liquidity.

Risks:

• Volatility: As an actively managed fund, DFAC may experience higher volatility than pas