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In designing your portfolios, we are free to choose from among thousands of mutual funds, stocks, and bonds. We recommend a core portfolio of no-load asset class funds, index funds, or Exchange Traded Funds (ETF's).
It has been shown that such funds in general outperform actively managed funds, have low costs, and are tax efficient.
What is it that makes DFA funds different? Although they are passively managed, they offer superior returns and lower risks than conventional index funds.
Each DFA fund is designed to capture the returns of a specific asset class, whereas index funds merely replicate market indexes.
Our investment philosophy is summarized in Larry Swedroe’s book The Only Guide to A Winning Investment Strategy.
We are one of a few select advisors who can use the funds of Dimensional Fund Advisors (DFA). DFA is an institutional investment manager that serves more than 350 corporations, college endowments, government organizations, and charitable foundations.
Its directors and board members include some of the world's most distinguished academic theorists, including Nobel Laureates Robert Merton and Myron Scholes.
In order to maintain their low-cost structure, DFA funds are available only to institutions and a select group of fee-only investment advisors.
They are not available to the general public, retail brokers, or most other investment advisors.
Conventional index funds use indexes that are designed as benchmarks with no regard for returns, costs, and risks.
Institutional asset class funds are designed for investments with a focus on returns and low risks. DFA holds most stocks in a clearly defined asset class.
They are the only pure asset class funds available.
For the five years ending on 1/8/05 such a portfolio provided an average annual return of about 11.5%.
The Vanguard S&P Index Fund over the same period had an average loss of 2.7.
We aim always to have a return higher than the S&P.
We hope to achieve this through good diversification. The S&P is not diversified; it consists primarily of large cap US stocks.
Past performance is no guarantee of future results. We cannot time or forecast the market.
All investments are risky.
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