Dimensional Debuts 4 Bond ETFs

November 16, 2021

[Editor's Note: This article has been updated.]

Dimensional Fund Advisors is rolling out a quartet of fixed income ETFs alongside its current stable of equity funds carrying a combined $43 billion in assets.

The four funds debuted on the NYSE Arca Monday. Each has a fee waiver of 1 basis point applied for the first full year of trading.

 

Ticker Fund Expense Ratio Benchmark
DFCF Dimensional Core Fixed Income ETF 0.19% Bloomberg Barclays U.S. Aggregate Bond Index
DFSD Dimensional Short-Duration Fixed Income ETF 0.18% ICE BofA 1-5 Year US Corporate & Government Index
DFIP Dimensional Inflation-Protected Securities ETF 0.11% Bloomberg Barclays U.S. TIPS Index
DFNM Dimensional National Municipal Bond ETF 0.18% S&P Intermediate Term National AMT-Free Municipal Bond Index

 

The new funds are active angles on asset classes covered by the most popular fixed income ETFs on the market. They share target benchmarks with multibillion-dollar funds like the iShares Core U.S. Aggregate Bond ETF (AGG), the Vanguard Short-Term Corporate Bond ETF (VCSH), the Schwab U.S. TIPS ETF (SCHP) and the iShares National Muni Bond ETF (MUB).

They also correspond with four Dimensional mutual funds in strategy and benchmark, along with sharing the same group of six portfolio managers. Those four mutual funds carry nearly $18.25 billion in combined assets.

Doug Longo, Dimensional’s head of fixed income strategists, said the funds are being launched in response to demand from asset allocators seeking positions that aim to provide better return than passively following an index.

While Dimensional became the 12th-largest ETF issuer in the U.S. by assets with its mutual fund conversions during the summer, Longo said it didn’t make sense to convert fixed income mutual fund assets because existing clients were happy with that structure.

“We have a situation where if clients really want to have their entire model in mutual funds, they have the ability to do that,” he explained. “If they want to use ETFs in their models, they have the ability to do that as well.”

Contact Dan Mika at [email protected], and follow him on Twitter

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