Process / 
Portfolio Management

Prudent investing is a rational process. It involves deciding how much risk to take, then choosing asset classes to match an investor's preferred risk-return tradeoff. We manage a broad range of strategies to meet the needs of investors with diverse investment goals.

Dimensional manages strategies with these core beliefs in mind: Securities are fairly priced in liquid and competitive markets, diversification is essential, and investing involves trading off risks and costs with expected returns. These time-tested principles have guided our approach for more than three decades. By focusing on what matters, Dimensional focuses your efforts.

Dimensional structures strategies based on academic research rather than on speculation or commercial indexes. Small cap strategies target smaller stocks more consistently. Value strategies target value returns with greater focus. As a result, investors can achieve more consistent portfolio structure.

Dimensional Management Compared to Traditional Portfolio Management

 

DIMENSIONAL TRADITIONAL ACTIVE
MANAGEMENT
INDEX
MANAGEMENT

Believes that, in liquid markets, prices reflect all available information

Attempts to identify mispricing in securities on a consistent basis

Allows commercial benchmarks to define strategy

Focuses strategies on the dimensions of higher expected returns

Often relies on forecasting techniques to pick securities and/or time markets

Tethered to a benchmark, reducing flexibility

Seeks to add value through portfolio design and implementation

Generates higher expenses, trading costs, and excess risk

Accepts lower returns and increased trading costs in favor of tracking