Dimensional Converts 2 More Funds

Dimensional Converts 2 More Funds

The two ETFs are tax managed like the previous mutual-fund-to-ETF conversions.

Reviewed by: Heather Bell
Edited by: Heather Bell

Today, Dimensional Fund Advisors converted two more of its mutual funds into ETFs. The Dimensional World ex U.S. Core Equity 2 ETF (DFAX) and the Dimensional International Value ETF (DFIV) represent roughly $8 billion in assets under management.

Both funds list on the NYSE Arca. DFIV is the more expensive of the two, with an expense ratio of 0.35%, while DFAX charges 0.31%.

Both of the newly converted funds are part of DFA’s actively managed family of tax-managed funds. DFAX focuses on non-U.S. markets, selecting securities based mainly on their value, size and profitability exposures. Meanwhile, DFIV looks to specifically target value companies. The two funds also take into account criteria like free float, momentum, trading strategies and liquidity, among other factors.

More Tax Efficient

In addition to launching three brand new ETFs, DFA previously converted four of its tax-managed mutual funds into ETFs in the wake of the ETF Rule, which allows for custom baskets for actively managed ETFs. The company said that with that rule change, the ETF structure was simply more tax efficient than mutual funds and therefore the most appropriate wrapper for a tax-managed strategy.

These latest conversions bring the total assets under management for the DFA family of nine equity ETFs to roughly $40 billion. The move means that DFA is now the 12th-largest ETF issuer in the U.S., after ARK and just above Global X.

The firm said in a press release about the conversions that it plans to launch fixed income ETFs later this year.

Contact Heather Bell at [email protected]

Heather Bell is a former managing editor of etf.com. She has also held editorial positions at Dow Jones Indexes and Lehman Brothers. Bell is a graduate of Dartmouth college and resides in the Denver area with her two dogs.