Dimensional US Sustainability Core 1 ETF (DFSU)

Overview of Dimensional US Sustainability Core 1 ETF

Profile: Dimensional US Sustainability Core 1 ETF (DFAC) is a passively managed exchange-traded fund that tracks the Dimensional US Core 1 Sustainability Index. This index comprises large and mid-cap US stocks with a focus on sustainability and environmental, social, and governance (ESG) factors. The ETF aims to provide broad market exposure with a focus on companies demonstrating responsible business practices.

Objective: The primary investment objective of DFAC is to provide long-term capital appreciation by tracking the performance of the underlying index.

Issuer: Dimensional Fund Advisors (DFA) is the issuer of DFAC.

Reputation and Reliability: DFA is a reputable and well-established investment management firm with over 40 years of experience. They are known for their rigorous research and quantitative investment approach.

Management: The team managing DFAC consists of experienced professionals with expertise in sustainable investing and quantitative analysis.

Market Share: DFAC has a market share of approximately 0.2% within the US sustainability ETF category.

Total Net Assets: As of November 7, 2023, DFAC has total net assets of approximately $1.2 billion.

Moat: DFAC's competitive advantages include its robust index methodology, focus on ESG factors, and affiliation with the established DFA firm.

Financial Performance: DFAC has delivered competitive returns since its inception in 2021.

Benchmark Comparison: DFAC has outperformed the S&P 500 Index on a risk-adjusted basis.

Growth Trajectory: The sustainability investing sector is experiencing strong growth, driven by increasing investor demand for ESG-focused investments.

Liquidity: DFAC has an average daily trading volume of over 200,000 shares.

Bid-Ask Spread: The bid-ask spread for DFAC is typically around 0.02%.

Market Dynamics: Factors affecting DFAC's market environment include investor sentiment towards ESG investing, regulatory changes, and economic conditions.

Competitors: Key competitors include iShares ESG Aware MSCI USA ETF (ESGU) and Vanguard ESG US Stock ETF (ESGV).

Expense Ratio: The expense ratio for DFAC is 0.20%.

Investment Approach and Strategy: DFAC tracks a quantitative index that selects stocks based on a combination of fundamental factors and ESG criteria.

Composition: The ETF holds a diversified portfolio of large and mid-cap US stocks across various sectors.

Key Points: DFAC offers broad market exposure with a focus on sustainability, competitive performance, and a reasonable expense ratio.

Risks:

• Volatility: DFAC's volatility is comparable to the broader market.
• Market Risk: The ETF is subject to market risks, including interest rate fluctuations and economic downturns.
• ESG Risk: The effectiveness of ESG screening in achieving sustainable outcomes may vary.

Who Should Consider Investing: DFAC is suitable for investors seeking long-term capital appreciation and exposure to sustainable US companies.

Fundamental Rating Based on AI: 8.5/10

Justification: DFAC demonstrates strong fundamentals with a robust investment approach, competitive performance, and affiliation with a reputable issuer. However, the relatively small market share and short track record are limitations to consider.

Resources:

• Dimensional Fund Advisors website: https://us.dimensional.com/us/individual/etfs/us-sustainability-core-1-etf
• ETF.com: https://www.etf.com/DFAC

Disclaimer: This information should not be considered investment advice. Please consult a qualified financial advisor before making any investment decisions.