Dimensional Fund Advisors has increased its local offering with three component funds explicitly targeting long-term premiums available from Australian and global value stocks, as well as global small caps.
The new strategies include the Dimensional Australian Value Trust (DAVA), the Dimensional Global Value Trust (DGVA), and the Dimensional Global Small Company Trust (DGSM).
According to the firm, they will supplement its first launch of three actively managed core equity strategies in an ETF wrapper last November.
As with the core funds, the new vehicles are available in a “dual-access” structure accessible through both ASX-listed and unlisted distribution channels.
“Our strategies offer the benefits of indexing – such as low costs, low turnover, and high diversification – paired with the advantages of flexible implementation that provide a continuous focus on higher expected returns,” Dimensional Australia’s chief executive, Bhanu Singh, said.
Dimensional’s first three local ETF offerings were the Australian Core Equity, Global Core Equity (Unhedged), and Global Core Equity (AUD Hedged), which provide broad exposure to the Australian and other developed equity markets.
According to the ETF provider, the new component strategies offer a more targeted approach to those individual premiums, and are poised to support investment professionals seeking to access the Dimensional’s systematic approach.
“Systematic investing or factor-based investing is a rules-based approach to managing money. It replaces the subjectivity of traditional active management with rigorous academic research and avoids the restrictions of indexing through an active but process-driven pursuit of higher expected returns,” the firm said.
“For four decades, we have focused on empowering investment professionals so they can deliver their clients the best investment experience,” Nathan Krieger, Dimensional’s Australian client group lead, said.
“We believe a rules-based investment approach can help deliver a more reliable and smoother markets experience for investors and can help to better address a variety of portfolio goals and aspirations.”
In November, Dimensional said it experienced “significant growth” since entering the US ETF market in 2020, now ranking as the largest issuer of actively managed ETFs in the world.
More than 35 ETFs are now offered by the firm in the US with approximately $220 billion in assets.
“Our success in the US and our discussions with local clients tell us that some prefer the flexibility that ETFs offer,” Krieger said at the time.
“It just gives advisers and other intermediaries more ways to access what we do. And we always start with client need.”
