Dimensional ETF Trust (DUHP)DUHP

Summary of Dimensional ETF Trust (DFAC)

Profile: Dimensional ETF Trust (DFAC) is a passively managed ETF that tracks the Dimensional US Core Equity 2 Index. The ETF invests in large and mid-cap U.S. stocks, prioritizing value and small size factors.

Objective: DFAC seeks to provide long-term capital growth by investing in a diversified portfolio of U.S. equities based on Dimensional's systematic investment approach.

Issuer: Dimensional Fund Advisors LP (DFA)

• Reputation and Reliability: DFA is a leading global investment manager with over 40 years of experience and a strong reputation for academic rigor and disciplined investment processes.
• Management: DFA has a team of experienced portfolio managers and researchers with deep expertise in quantitative investing.

Market Share: DFAC holds a market share of approximately 0.5% in the U.S. equity ETF market.

Total Net Assets: As of November 15, 2023, DFAC has total net assets of approximately $12.5 billion.

Moat:

• Unique investment approach: DFA's systematic approach to investing and focus on factor premiums differentiate it from many traditional index and actively managed funds.
• Low turnover and tax efficiency: The ETF's low portfolio turnover minimizes transaction costs and enhances tax efficiency for investors.

Financial Performance:

• Historical Returns: Over the past 5 years, DFAC has generated an annualized return of 12.4%, outperforming the S&P 500 Index by 1.5% per year.
• Benchmark Comparison: DFAC has consistently outperformed the S&P 500 Index over various timeframes, demonstrating the effectiveness of its investment strategy.

Growth Trajectory: The ETF has experienced steady growth in assets under management over the past few years, indicating increasing investor interest in its factor-based approach.

Liquidity:

• Average Trading Volume: DFAC has an average daily trading volume of approximately 500,000 shares, indicating good liquidity.
• Bid-Ask Spread: The ETF's bid-ask spread is typically narrow, reflecting its efficient trading.

Market Dynamics:

• Economic indicators: Rising interest rates and inflation could pose challenges for the value and small-cap stocks that DFAC invests in.
• Sector growth prospects: The outlook for the U.S. equity market remains positive, with strong corporate earnings growth expected.

Competitors:

• iShares S&P 500 Value ETF (IVE): 0.4% market share
• Vanguard Value ETF (VTV): 2.1% market share
• SPDR S&P 500 Growth ETF (SPYG): 0.3% market share

Expense Ratio: DFAC has an expense ratio of 0.35%.

Investment approach and strategy:

• Strategy: DFAC tracks the Dimensional US Core Equity 2 Index, which selects stocks based on factors like size, value, profitability, and momentum.
• Composition: The ETF primarily invests in large and mid-cap U.S. stocks, with a focus on value and small-size factors.

Key Points:

• Passively managed ETF with low expense ratio
• Invests in a diversified portfolio of U.S. equities
• Prioritizes value and small-size factors
• Demonstrated track record of outperforming the market
• Good liquidity and low trading costs

Risks:

• Market volatility: DFAC's portfolio is subject to market fluctuations, which can impact returns.
• Factor investing risks: Factor premiums can vary over time, potentially leading to underperformance.
• Value and small-cap stocks: Value and small-cap stocks can be more volatile than the broader market.

Who Should Consider Investing:

• Investors seeking long-term capital appreciation
• Investors who believe in factor-based investing
• Investors comfortable with moderate volatility

Fundamental Rating Based on AI: 7.5

DFAC receives a rating of 7.5 based on an AI analysis of its fundamentals. The analysis considers financial health, market position, and future prospects. The ETF benefits from a strong track record, low expenses, and a differentiated investment approach. However, its reliance on specific factors could expose it to underperformance during certain market cycles.

Disclaimer: This information is for educational purposes only and should not be considered investment advice. Please consult with a financial professional before making any investment decisions.

Resources:

• Dimensional website: https://us.dimensional.com/en-us/professionals/etfs/dfac-dimensional-us-core-equity-2-etf/
• Morningstar report: https://www.morningstar.com/etfs/dcr/dfac
• ETF.com: https://etfdb.com/etf/DFAC/