Dimensional Investing is about implementing the great ideas in finance for our clients.

Dimensional* at a Glance
As of September 30, 2020

Years since founding

In firmwide assets
under management,
USD (in billions)

Employees in 13 global offices

Investment philosophy

01

An enduring belief in the

Power of  Markets

Capital Markets Have Rewarded
Long-Term Investors
Growth of $1 USD, Jan. 1926–Dec. 2019

In USD. Indices are not available for direct investment. Their performance does not reflect the expenses associated with the management of an actual portfolio. US Small Cap is the CRSP 6–10 Index; US Large Cap is the S&P 500 Index. Treasury Bills is the IA SBBI US 30 Day TBill TR USD, provided by Ibbotson Associates via Morningstar Direct. Long-Term Government Bonds is the IA SBBI US LT Govt TR USD, provided by Ibbotson Associates via Morningstar Direct. US Inflation is measured as changes in the US Consumer Price Index. US Consumer Price Index data is provided by the US Department of Labor Bureau of Labor Statistics. CRSP data is provided by the Center for Research in Security Prices, University of Chicago. The S&P data is provided by S&P Dow Jones Indices LLC. Past performance is no guarantee of future results.

At Dimensional, our investment approach is based on a belief in markets.

Rather than attempting to predict the future or outguess others, we draw information about expected returns from the market itself—leveraging the collective knowledge of its millions of buyers and sellers as they set security prices.

Trusting markets to do what they do best—drive information into prices—frees us to spend time where we believe we have an advantage, namely in how we interpret the research, how we design and manage portfolios, and how we service our clients. We take a less subjective, more systematic approach to investing—an approach we can implement consistently and investors can understand and stick with, even in challenging market environments.

How Many Funds Outperformed Benchmarks?
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Only 17% of equity and fixed income funds that were around at the start of 2000 outperformed their respective benchmarks 20 years later. Over the same period, 81% of Dimensional’s equity and fixed income funds beat their benchmarks. The figures are drawn from a selected universe of industry and Dimensional funds available in the US. Please refer to the disclosure for more details.

Data Sample
US-domiciled, non-Dimensional open-end mutual fund data provided by Morningstar. Dimensional fund data is provided by the fund accountant. Beginning sample includes funds as of January 1, 2000. The number of beginning funds is 4,601 for the industry and 27 for Dimensional. Dimensional subadvised funds and funds whose access is or previously was limited to certain investors are also excluded. Index funds, load-waived funds and funds of funds are excluded from the industry sample.

Methodology
Surviving funds are those with return observations for every month of the sample period. Each fund is evaluated relative to its primary prospectus benchmark. Where the full series of primary prospectus benchmark returns is unavailable, non-Dimensional funds are instead evaluated relative to their Morningstar category index. Outperformers are funds that survived the 20-year period and whose cumulative net return over the period exceeded that of their respective benchmark. We aggregate funds with multiple share classes to the strategy level.

Morningstar Categories
Equity fund sample includes the following Morningstar historical categories: Diversified Emerging Markets, Europe Stock, Foreign Large Blend, Foreign Large Growth, Foreign Large Value, Foreign Small/ Mid Blend, Foreign Small/Mid Growth, Foreign Small/Mid Value, Global Real Estate, Japan Stock, Large Blend, Large Growth, Large Value, Mid-Cap Blend, Mid-Cap Growth, Mid-Cap Value, Miscellaneous Region, Pacific/Asia ex-Japan Stock, Real Estate, Small Blend, Small Growth, Small Value, World Large Stock, and World Small/Mid Stock. Fixed income fund sample includes the following Morningstar historical categories: Corporate Bond, High Yield Bond, Inflation-Protected Bond, Intermediate Core Bond, Intermediate Core-Plus Bond, Intermediate Government, Long Government, Muni California Intermediate, Muni California Long, Muni Massachusetts, Muni Minnesota, Muni National Intermediate, Muni National Long, Muni National Short, Muni New Jersey, Muni New York Intermediate, Muni New York Long, Muni Ohio, Muni Pennsylvania, Muni Single State Intermediate, Muni Single State Long, Muni Single State Short, Muni Target Maturity, Short Government, Short-Term Bond, Target Maturity, Ultrashort Bond, World Bond, and World Bond-USD Hedged.

Index Data Sources
Index data provided by Bloomberg Barclays, MSCI, Russell, FTSE Fixed Income LLC, and S&P Dow Jones Indices LLC. Bloomberg Barclays data provided by Bloomberg. MSCI data © MSCI 2020, all rights reserved. Frank Russell Company is the source and owner of the trademarks, service marks, and copyrights related to the Russell Indexes. FTSE fixed income indices © 2020 FTSE Fixed Income LLC. All rights reserved. S&P data © 2020 S&P Dow Jones Indices LLC, a division of S&P Global. All rights reserved.

David Booth
David Booth
Founder and Executive Chairman
“The number of managers that can successfully pick stocks are fewer than you’d expect by chance. So, why even play that game? You don’t need to.”

02

Applying insights from

FINANCIAL SCIENCE

Breakthroughs in Modern Finance
  • 1966Efficient Market Hypothesis
     
    Efficient Market Hypothesis
    Eugene Fama
    Nobel laureate, 2013
    Professor, University of Chicago
    Eugene Fama’s efficient market hypothesis marks a pivotal moment for modern finance. The essence of the argument can be described by the simple statement that security prices reflect all available information.
  • 1973Intertemporal CAPM
     
    Intertemporal CAPM
    Robert Merton
    Nobel laureate, 1997
    Professor, MIT
    The ICAPM set up a theoretical framework for how multiple sources of risk could arise. It expanded on the one-period CAPM model where the only priced risk was market beta.
  • 1981Small Cap Investing
     
    Small Cap Investing
    Dimensional Fund Advisors
    David Booth, Founder
    and Executive Chairman
    Dimensional pioneers small cap investing with the launch of its first strategy, which offers investors diversified, efficient access to small company stocks.
    1981 Dimensional Founded
  • 1983Term Structure
     
    Term Structure
    Eugene Fama
    Nobel laureate, 2013
    Professor, University of Chicago
    Research shows implied forward interest rates provide information on expected term premiums in fixed income.
  • 1992Value Breakthrough
     
    Value Breakthrough
    Eugene Fama
    Nobel laureate, 2013
    Professor, University of Chicago
    Kenneth French
    Professor, Dartmouth College
    Eugene Fama and Kenneth French develop the three-factor asset pricing model, which identifies market, size, and price (value) factors as the principal drivers of equity returns.
  • 2012Profitability
     
    Profitability
    Eugene Fama
    Nobel laureate, 2013
    Professor, University of Chicago
    Kenneth French
    Professor, Dartmouth College
    Robert Novy-Marx
    Professor, University of Rochester
    A body of academic research led to identifying profitability as a dimension of higher expected returns that can be pursued across equity markets.
  • Today
     
     
    Dimensional’s Research and Investment teams draw insight from academia, but what sets us apart is how we interpret, test, and apply that research to practical investment solutions for our clients.
  • Tomorrow
    ...
     
    Dimensional was built around a set of ideas bigger than the firm itself. With a confidence in markets, deep connections to the academic community, and a focus on implementation, we go where the science leads, and continue to pursue new insights, both large and small, that can benefit our clients.

Eugene Fama and Kenneth French are members of the Board of Directors of the general partner of, and provide consulting services to, Dimensional Fund Advisors LP. Robert Merton and Robert Novy-Marx provide consulting services to Dimensional Fund Advisors LP.

Dimensional’s investment approach is grounded in economic theory and backed by decades of empirical research.

Our internal team of researchers works closely with leading financial economists to better understand where returns come from.

Research has shown that securities offering higher expected returns share certain characteristics, which we call dimensions. To be considered a dimension, these characteristics must be sensible, persistent over time, pervasive across markets, and cost-effective to capture.

The Evolution of Indexing and Dimensional
Eugene Fama
Eugene Fama
Nobel laureate, 2013 Professor, University of Chicago; Dimensional Director; Consultant, Dimensional Fund Advisors LP
“We’re very careful in looking at new research that comes along and making sure it’s robust.”

Understanding what drives returns is the starting point. From here, we focus on fine-tuning our method of capturing them.

We structure broadly diversified portfolios that emphasize the dimensions of higher expected returns, while addressing the tradeoffs that arise when executing portfolios.

Every day our portfolio managers and traders seek to balance costs against expected returns and diversification. We work for the slightest expected gain, as every incremental improvement can add up over time.

The Gap Between Reality and a Model
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Limitations of the Model False Positives Insights MODEL REALITY
Academic models provide useful insight, but they are incomplete. It’s in the gap between reality and a model where sound judgment and experience matter. Play Watch Dimensional Stories: Models
(03:07)
Gerard-O'Reilly
Gerard O'Reilly
Co-Chief Executive Officer and Chief Investment Officer
“The nuance and expertise is where you take knowledge and information and implement it in a real test, not in the backtest.”

A Foundation Built on Great Ideas

03

A commitment

TO OUR CLIENTS

Dimensional Investing is about providing a successful investment experience.

That means more than just returns. It means offering peace of mind because investors know that a transparent approach backed by decades of research is powering every decision.

Markets go up and they go down. The goal of Dimensional Investing is to help people be prepared, so they can stick with their plan.

At the Heart of
Dimensional Investing
Dave Butler
DAVE BUTLER
Co-Chief Executive Officer
“The client experience has always been, and will continue to be, why we do what we do.”

*“Dimensional” refers to the Dimensional separate but affiliated entities generally, rather than to one particular entity. These entities are Dimensional Fund Advisors LP, Dimensional Fund Advisors Ltd., DFA Australia Limited, Dimensional Fund Advisors Canada ULC, Dimensional Fund Advisors Pte. Ltd., Dimensional Ireland Limited, Dimensional Japan Ltd., and Dimensional Hong Kong Limited. Dimensional Hong Kong Limited is licensed by the Securities and Futures Commission to conduct Type 1 (dealing in securities) regulated activities only and does not provide asset management services. 

Dimensional Fund Advisors LP is an investment advisor registered with the Securities and Exchange Commission. Consider the investment objectives, risks, and charges and expenses of the Dimensional funds carefully before investing. For this and other information about the Dimensional funds, please read the prospectus carefully before investing. Prospectuses are available by calling Dimensional Fund Advisors collect at (512) 306-7400 or at us.dimensional.com. Dimensional funds are distributed by DFA Securities LLC.  Nothing on this website shall constitute or serve as an offer to sell products or services in any country or jurisdiction by any Dimensional global firm. For informational purposes only. All information is given in good faith and without warranty and should not be considered investment advice or an offer of any security for sale.


Eugene Fama is a member of the Board of Directors of the general partner of, and provides consulting services to, Dimensional Fund Advisors LP.

Research Dimensional Fund Advisors and DFA Securities with FINRA's BrokerCheck.

Profitability is a measure of current profitability, based on information from individual companies’ income statements