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We are privileged to work with Dimensional Fund Advisors, also known as DFA, since 2001. This affiliate/prof relationship affords us world-class access to scientific research, including that which identifies the specific components that comprises the history of market returns.
The DFA family of mutual funds provides investors with institutional money management grounded in decades of academic research, not Wall Street or Financial Media Hype.
DFA is an Institutional Mutual Fund Family, rooted in academia and committed to working only with advisors who understand and embrace long-term investing with clients–goal-oriented investing. DFA, the 8th largest Mutual Fund Family in the world, has created over 70 Institutional Mutual Funds that are effectively diversified in various markets–Large companies, Small Companies, Foreign Companies, Real Estate Investment Trusts, and the like.
Institutional Mutual Funds differ from Retail Mutual Funds in myriad ways, not the least of which is that Institutional Mutual Funds cost a LOT less; their expenses are razor thin, by comparison to their retail mutual fund counterparts. What that means to you is that instead of paying around 1.3-1.5% in retail mutual fund management fees & expenses, you’ll instead pay only .25% on average with a DFA Institutional Mutual Fund. You DO notice, do you not that the decimal in DFA’s expenses is to the LEFT of the number, right? Just checking, that you fully grasp the significant math difference in expenses.
Institutional Mutual Funds don’t carry ‘loads’ or extra marketing charges sometimes referred to as 12-b 1 fees, which can run upwards of 1/2-1% a year on a typical retail mutual fund. So, all this saved money that you didn’t pay out in expenses, instead reverts directly to YOUR BOTTOM LINE, and then compounds on itself to grow your money even faster.
There are a host of other major differences between Institutional Mutual Funds and Retail Mutual Funds which include enhanced tax efficiency options in Institutional funds as well as the avoidance of ‘herd mentality’ often present in Retail Mutual Funds. We’ll discuss ‘herd mentality’ and myriad other differences with you so you fully understand the beauty of doing business in Institutional Mutual Funds, and ESPECIALLY doing business with Dimensional Fund Advisors.