DFA funds offer low-cost, passive investment option

Most people have never heard of Dimensional Fund Advisors (DFA) and their mutual funds. One reason is that DFA funds are not available to the general public. Ra­ther, they’re available only to clients of a select group of independent fi­nancial advisors – including Mentor Capital Management – and to certain institutions.

Advisors are given access to DFA funds if they offer to their clients, as an option, a passive investment so­lution. Passive investing is an approach that acknowledges that markets generally are efficient, and that the most important investment decisions are made during the asset-allocation process.

DFA has been in existence for more than 25 years and manages more than $100 billion in assets. The group’s investment philosophy is based on a Nobel prize-winning approach rooted in rigorous academic and scientific research. This philosophy, put into practice, enables DFA to offer numerous mutual funds that provide what it believes to be the purest representation possible in certain asset classes – especially small-cap, micro-cap, and value – for bothdomestic and foreign stocks. In addition, DFA offers large-cap, tax-managed, and fixed-income funds as part of its passive strategy.

Studies have shown that expenses have a significant impact on an investor’s returns over the long run. DFA’s trading infra­structure enables it to minimize trading costs; as a result, its funds have expense ratios that are generally below industry averages.  Exchange-traded funds, which are also a passive investment choice, offer even lower expenses. These savings accrue directly to the investor’s return.

If you would like to learn more about Dimensional Fund Advisors, their investment philosophy, and their funds, give us a call, or visit their website athttp://www.dfaus.com/.