Number 1 Fund Family – Dimensional Fund Advisors
We were so excited to read in this weekend’s Barron’s magazine that Dimensional Fund Advisors was the number 1 ranked mutual fund family in the world! While DFA might have been a secret to many investors, our clients at CJM have known for some time now the significant advantage of following the DFA investment philosophy which utilizes a passive approach based on very specific ideologies: markets work, diversification is key, risk and return are related and portfolio structure explains performance.
All this is rooted in a deep mindset that always focuses on keeping costs and fees at a minimum. As the article states:
The privately held firm (Arnold Schwarzenegger is an investor) also is known for keeping a lid on costs that can rob shareholders of performance points, steering clear of some foreign markets where it doesn’t believe funds can get a fair shake on prices. DFA’s strong equity performance carried the day: It finished first in U.S. equities… DFA’s low-turnover system also doesn’t run up huge brokerage commissions and it also uses strategies, like lending out its portfolio securities to other firms, to generate income. It sometimes will buy proxies, like futures and options on futures contracts for U.S. equities and indexes, to give itself exposure to areas without paying up to buy the shares. The micro-cap fund sticks to the smallest 4% of domestic stocks (it is long 2,279 names) and tries to trade them discreetly to avoid roiling an illiquid market.
View the complete list of the top 57 mutual funds ranked by Barron’s and Lipper.
Click to View Listing at Barron's
Here is an excerpt from the Barron’s article, “Of course, it’s impossible to time stock- and bond-market changes and the strategy that’s paid off for the best big fund families — as well as investors — is a diversified one. Our No. 1, DFA, is a global asset manager that oversees $206.5 billion in all and owns a mind-boggling 13,000 stocks, or about 70% of the world’s publicly listed equities. Because DFA’s investment process is purely quantitative, it doesn’t have the option of succumbing to fear in the face of adversity…”
For more information on DFA contact us.
About Charles Massimo
Recognized as industry expert and guest speaker at national industry conferences, Charles Massimo is a published author and media subject expert on topics ranging from wealth/asset management to investment and financial planning for high net worth families.