Dimensional Fund Advisors (DFA) ETF Lineup Keeps Expanding

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.