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Dimensional and Vanguard Funds
Dimensional Origins - Learn about Dimensional Fund Advisors Mutual Funds
In this video, Founder and Executive Chairman David Booth and others talk about the firm’s founding and its close ties to the academic community.
Clarity's Low-Cost Investment Portfolios Include Mutual Funds from Dimensional Fund Advisors and the Vanguard Group
Dimensional Fund Advisors is a leading global investment firm that has been translating academic research into practical investment solutions since 1981. Guided by a strong belief in markets, Dimensional* builds and manages strategies to help clients pursue higher expected returns. The firm works closely with leading financial academics to identify new ideas that may benefit investors and applies a dynamic investment process that integrates advanced research with careful portfolio design and implementation, while balancing the investment tradeoffs that can impact returns.
Dimensional has a long history of putting financial science to work for clients. In 1981, the firm introduced its first strategy, a US small cap strategy, to help institutional investors diversify beyond large cap stocks. The launch coincided with research documenting the stronger performance of US small cap stocks. Over the years, Dimensional has created a full suite of global equity and fixed income strategies in response to new research and evolving client needs.
Dimensional is headquartered in Austin, Texas, and maintains trading offices in North America, Europe, and the Asia-Pacific region. As of December 31, 2018, Dimensional* manages $517 billion for investors worldwide.
*“Dimensional” refers to the Dimensional separate but affiliated entities generally, rather than to one particular entity. These entities are Dimensional Fund Advisors LP, Dimensional Fund Advisors Ltd., DFA Australia Limited, Dimensional Fund Advisors Canada ULC, Dimensional Fund Advisors Pte. Ltd., and Dimensional Japan Ltd.
Vanguard's founder and former chairman John C. Bogle is credited with the creation of the first index fund available to individual investors, and the popularization of index funds is driving costs down across the mutual fund industry. This phenomenon has been described as "The Vanguard Effect."
With its unique mutual structure of ownership by its shareholders, Vanguard does not have to answer to either the stock market or to a small group of private owners. This ownership structure allows Vanguard to run their funds "at cost" rather than having to build in a profit margin for the owners.
Aside from being the industry cost leader, Vanguard is an excellent provider of education to investors and is widely considered to be a thought leader in the industry. Vanguard has over forty years of experience managing index funds and is now the largest provider of mutual funds and the second largest provider of exchange-traded funds (ETFs) in the world. It now offers a suite of U.S. equity funds based on indexes from the Center for Research in Security Prices (CRSP) and its foreign equity index funds are based on FTSE indexes that include exposure to both small cap and value companies. Vanguard’s bond funds have some of the lowest costs available, which is especially important in today’s low yield environment.