Some investors like to break down their portfolio into several different asset and sub-asset classes. One long-standing example of the “slice-and-dice” is the “Ultimate Buy-and-Hold Portfolio” recommended by Paul Merriman (see pie chart; expanded labels below). You don’t need to hold every one of these asset classes, but when held in combination they historically offer a higher return with lower volatility.

  • S&P 500 (US Large Cap Blend)
  • US Large Value
  • US Small
  • US Small Value
  • US REIT
  • International Large Cap Blend
  • International US Large Value
  • International Small
  • International Small Value
  • Emerging Markets
  • Short-term/Intermediate-term Bonds

For a long time, Dimensional Fund Advisors (DFA) offered some of the best lower-cost mutual funds tracking these types of sub-asset classes, but they also required you to invest through a DFA-affiliated financial advisor (and pay the accompanying management fees). Eventually, some former DFA executives and employees broke off and started Avantis ETFs, which are available to any investor with a brokerage accounts and offered a good DFA alternative. Avantis’ assets under management have been growing…

Lo and behold, DFA has just announced a big expansion of their DFA ETF lineup. Competition works!

Newly-listed DFA Bond ETFs

  • Dimensional Core Fixed Income ETF (DFCF)
  • Dimensional Short-Duration Fixed Income ETF (DFSD)
  • Dimensional National Municipal Bond ETF (DFNM)
  • Dimensional Inflation-Protected Securities ETF (DFIP)

Future DFA Equity ETFs

  • International Core Equity 2 ETF
  • Emerging Markets Core Equity 2 ETF
  • US Small Cap Value ETF
  • International Small Cap ETF
  • International Small Cap Value ETF
  • Emerging Markets Value ETF
  • US High Profitability ETF
  • International High Profitability ETF
  • Emerging Markets High Profitability ETF
  • US Real Estate ETF

Existing DFA ETFs

  • Dimensional US Core Equity Market ETF (DFAU)
  • Dimensional International Core Equity Market ETF (DFAI)
  • Dimensional Emerging Core Equity Market ETF (DFAE)
  • Dimensional US Core Equity 2 ETF (DFAC)
  • Dimensional US Equity ETF (DFUS)
  • Dimensional US Small Cap ETF (DFAS)
  • Dimensional US Targeted Value ETF (DFAT)
  • Dimensional International Value ETF (DFIV)
  • Dimensional World ex US Core Equity 2 ETF (DFAX)

Some of the confusing names are a result of these ETFs being conversions from the old mutual fund versions. Even though I try to keep things relatively simple and humble, I welcome these new investment options to the competitive marketplace along with their reasonably-low expense ratios. I may even switch my TIPS holdings to the DFA TIPS ETF (DFIP), as it is cheaper than the iShares TIPS Bond ETF (TIP).

I use Vanguard for my “core” index funds, but about 10% of my total portfolio is split between US Small Value and International/Emerging Small Value stocks. I recently bought/rebalanced into some of the new Avantis International Small Cap Value ETF (AVDV), but will keep an eye on the new DFA version. I suppose they could be a tax-loss harvesting ETF pair, but I have them inside a tax-sheltered account.

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Dimensional Fund Advisors (DFA) ETF Lineup Keeps Expanding from My Money Blog.


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