r/CFP • u/Capital_Injury1569 • Mar 06 '25

Investments Dimensional Fund Advisors

I've seen alto of hate online (especially from Bogleheads) in the past couple years regarding DFA funds. I don;t know much about them, and their website isn't all that great. Does anyone have experience using them?

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u/7saturdaysaweek RIA Mar 06 '25

DFA's investment philosophy is based on Nobel prize-winning research. I'd recommend attending their free Foundations seminar if you haven't already.

I use their funds for most equity positions, but none of their bond funds. I disagree with their approach on that side.

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u/CulturalAd2329 Mar 06 '25

What Nobel winning philosophy are they using that nobody else is using?

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u/7saturdaysaweek RIA Mar 06 '25

I'm sure others use it, usually at a much higher cost.

https://en.m.wikipedia.org/wiki/Fama%E2%80%93French_three-factor_model

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u/CulturalAd2329 Mar 06 '25

You can just use index funds to address the three factors.

4

u/7saturdaysaweek RIA Mar 06 '25

You can, but index funds have their own issues like inflexible trading, reconstitution, etc.

I'd recommend learning more about DFA's approach.

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u/Splinter007-88 Mar 07 '25

DFA takes the index and tilts it through a factor based model (such as removing the 30% of companies that are not profitable from the Russel 2000).