Dimensional Fund Advisors Launches Bond ETFs

Dimensional Fund Advisors, whose 34 U.S. exchange-traded funds hold $96.1 billion, launched three new global fixed-income ETFs on Wednesday as U.S. Treasury yields decline from October highs. 

The launch of the Dimensional Global Core Plus Fixed Income ETF (DFGP), the Dimensional Global ex-US Core Fixed Income ETF (DFGX) and the Dimensional Global Credit ETF (DGCB) are the final three in a series of seven launches from the firm since the beginning of September. Dimensional now has nearly $100 billion across its roster of 38 ETFs. 

About three-quarters of all ETF launches in the U.S. this year were active funds, with a record-breaking 309 having debuted this year as of the beginning of November, according to Morningstar Direct. Flows into active funds have also been strong this year.

Dimensional ETFs Benefit From Surge in Active Fund Interest

Dimensional has been a major beneficiary in this surge of interest in active funds, having received about $22 billion in net inflows in 2023 according to the firm. That’s more than one-third of the total $58 billion in inflows its ETFs have gathered since Dimensional’s ETF business started in November 2020. 

The three new funds, which invest in fixed-income securities from around the world, may be launching at a time when the bond market is changing gears. After rising continuously since this April, the yield on the 10-Year Treasury has fallen to 4.67% since it peaked around 5% in mid-October, according to data from the St. Louis Federal Reserve. 

According to Bloomberg, traders aren’t pricing in any more rate hikes this year and are predicting that this may be the peak of the current rate hikes.  

However, DFA may not be concerned about the short-term market environment into which it’s launching these funds. The firm’s founder and Chairman, David Booth, wrote in The Business Times in February that there is sparse evidence that investors trying to time the market will be consistently successful.  

Contact Gabe Alpert at [email protected]