Dimensional Debuts Large Cap Value, Real Estate ETFs

December 07, 2022

Dimensional Fund Advisors, which manages $70 billion in exchange-traded funds, sought to round out its portfolio of offerings with the debut of a pair of funds that cover large cap value and global real estate. 

Austin, Texas-based Dimensional issued the Dimensional US Large Cap Value ETF (DFLV), with $4.9 million in assets, and the Dimensional Global Real Estate ETF (DFGR), with $5 million in assets. Both are actively managed. Dimensional administers 30 ETFs. 

DFGR’s price was little changed at $24.83 on volume of less than 5,000 shares on the NYSE Arca, according to Yahoo Finance; no activity was displayed for DFLV. DFLV comes with an expense ratio of 0.22%, while DFGR charges an expense ratio of 0.24%. Both list on the NYSE Arca.  

Dimensional, which manages the bulk of its $540 billion in assets in mutual funds and target retirement investments, is expanding into the faster-growing ETF industry, which provides investors with liquidity and tax benefits not available to other products. Dimensional, founded in 1981, and which issued its first ETF in November 2020, has pulled in more than $22 billion in flows so far this year, according to ETF.com data. 

The Funds 

DFGR weights its holdings by market capitalization and invests in companies in emerging and developed markets that are involved the real estate industry, including REITs, the company said in a statement. The fund has the discretion to tweak the weight of holdings or exclude a company entirely based on a variety of criteria, including factor exposures, according to the prospectus.  

DFLV uses the traditional systematic Dimensional investment approach to equities that favors companies that tilt smaller in size and that have lower-priced shares and higher profitability relative to their peers, its prospectus says. At launch, according to the Dimensional website, the fund’s top three holdings included Exon Mobil Corp. (4.59%), JP Morgan Chase & Co. (3.76%) and Chevron Corp. (3.37%).  

The Dimensional lineup of mutual funds includes two large-cap value funds that have expense ratios of 0.22% and 0.14%. The fund will compete with the $101.6 billion Vanguard Value ETF (VTV), the largest of the 33 large cap value ETFs currently trading on U.S. markets.  

The issuer also offers a global real estate mutual fund, which comes with an expense ratio of 0.24%, the same price as the newly launched ETF. Out of the dozen global real estate ETFs available to U.S. investors, the largest is the $2.9 billion iShares Global REIT ETF (REET), which launched in 2014 and has an expense ratio of 0.14%  

 

Contact Heather Bell at [email protected] 

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