- Why Dimensional
The Real Estate Securities Portfolio is market-cap weighted and broadly diversified across different US property types. Investments are made in all eligible, publicly traded REITs. The stocks in the portfolio represent over $100 billion in market capitalization and pro-rata ownership of several thousand properties.
The management of this portfolio is similar to our other portfolios. From a design perspective, we target a broad set of securities in the asset class and strive to be fully invested. During implementation, we are cognizant of the costs to the investors. These include costs that are difficult to quantify, such as market impact, as well as the factors going into the final expense ratio, such as transaction and management fees. We do not bear the high costs that many active managers incur, such as those caused by high turnover or cash drag, nor are we forced to execute trades around index reconstitutions.
On a regular basis, we review all eligible companies to ensure that their principal line of business is real estate related. We do not purchase prison REITs. Our screening process also excludes REITs that are in extreme financial difficulty, are involved in a merger or consolidation, or are the subject of an acquisition that could result in a company no longer being principally in the real estate business.
Dimensional's International Real Estate Securities Portfolio offers exposure to real estate securities in non-US countries and provides a complement to Dimensional's existing US real estate securities fund as well as the opportunity for additional investment diversification.
The Portfolio generally uses a market-cap weighted approach and invests in non-US REITs and companies Dimensional considers to be REIT-like entities. Securities eligible for purchase will generally not be purchased in Dimensional's existing non-US equity strategies.
The Global Real Estate Securities Portfolio seeks to capture global real estate returns through a fund-of-funds approach, owning shares of the Real Estate Securities Portfolio and the International Real Estate Securities Portfolio. This streamlined approach is intended to address the needs of investors who would otherwise purchase two separate real estate portfolios and determine the appropriate allocation to each.
Through its underlying funds, the Global Real Estate Securities Portfolio will generally purchase REITs and companies considered to be REIT-like entities in US, non-US developed, and emerging markets countries.
The principal risks of investing in these portfolios may include any of the following: fund of funds risk, market risk, foreign securities and currencies risk, small company risk, risk of concentrating in the real estate industry, real estate investment risk, foreign securities and currencies risk, small company risk, and emerging markets risk. These risks are fully described in the prospectus in the section entitled "Principal Risks."