Page 20 - Investment Advisor - December 2023

POrTFOlIO PerSPecTIveS

“The evolving value proposition of real reason for Dimensional’s success many more mutual funds than ETFs,
advisors is fantastic for investors, and has always been substance, not style. as the firm started offering mutual
selling ‘access to DFA’ is done. You still They’ve delivered on their core prom- funds four decades ago. Nonetheless,
want an advisor/financial planner with ise of smarter, low-cost pseudo-passive he added, “advisors can fill out an
immense investment expertise, you just investing, which remains a pretty unique asset allocation with a lot of confi-
want that expertise to be manifested via niche,” one also occupied by Avantis, dence for investors” with the firm’s
a simple, elegant portfolio of well-engi- which was founded by Dimensional’s ETF offerings.
neered, low cost funds,” Miller posted. former co-CEO and chief investment Dimensional launched its ETFs in
The new World Equity ETF gives officer, Nadig said. response to advisor requests, he said
investors exposure to the entire global Miller noted that when Dimensional in an interview. “They wanted one
stock market and could constitute a cli- launched mutual funds decades ago, the more tool in addition to Dimensional
ent’s entire stock portfolio, he noted in firm decided to sell them only through mutual funds.”
the interview. Many advisors, wirehous- approved advisors who attended their On the legacy mutual fund side, “our
es and brokerages place 100 or more conferences. This exclusivity was a big approach has always been about arm-
funds in client portfolios, which doesn’t part of the firm’s success, he said. ing great advisors with the tools and
add value, is confusing and “makes peo- DFA wanted long-term, sticky rela- resources they need to make great deci-
ple feel dumb,” he said. tionships to guard against investors sions for investors,” and the firm’s con-
being negatively affected by money mov- ferences and other resources that are
secret sauce ing too quickly in and out of its mutual important to its advisor relationships
Dave Nadig, ETF expert and financial funds, Miller explained. ETFs generally remain intact “regardless of the wrap-
futurist at Vetta Fi, says investors no offer lower costs, tax advantages and per,” Skaff added.
longer have to use advisors to access more flexible trading than traditional The uptake in Dimensional ETFs
Dimensional investments because they mutual funds, as they trade like stocks. has been “fantastic,” and those funds
can buy effectively the same assets avail- For advisors, trading ETFs means they now have about $100 billion in assets
able in mutual funds through ETFs. have to participate in the market, where- under management, he said. The
“For a long time, Dimensional’s hook as mutual fund trades come only at the firm guides investors to work with
to advisors was exclusivity, and advisors market day’s end, Miller noted. “That approved advisors and doesn’t pro-
diligently went to Texas to get trained has changed the landscape of what kind mote its ETF offerings to the public,
on the Dimensional way. As the ETF of advisor people want,” as they need Skaff added.
lineup continues to expand, it becomes one who knows how to engage with the “Our objective was always to be in
harder and harder to argue there’s any market and execute trades, he said. service of financial advisors to do good
exclusivity left,” although there’s some, work for investors,” he said. Dimensional
as not every Dimensional strategy is in Popular demand has a list of other potential ETF cat-
an ETF, Nadig explained. Bryce Skaff, co-head of Dimensional’s egories to offer in the future, Skaff said.
“But it’s worth pointing out that the global client group, noted that DFA has —dinah Wisenberg Brin

to see Crashes Coming, look

Backward: Housel

“ he lack of bear markets is actu- determine what’s ahead, delve deeply

into the past.
ally what plants the seeds for
Based on that, he says: “If you were
Tthe next bear market,” Morgan
Housel, financial writer and partner a really honest money manager, you
in The Collaborative Fund, said in a would tell your clients to make sure
recent interview. In his new book, to expect to lose a third or more of
“Same as Ever: A Guide to What Never their money several times in a decade.
Changes,” Housel maintains that to … A market fall of 20% has historically

18 Investment AdvIsor December 2023 | ThinkAdvisor.com