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Rating:Dimensional Fund Advisors Launches Equal-Weighted Funds Not Rated 0.0 Email Routing List Email & Route  Print Print
Thursday, March 09, 2006

Dimensional Fund Advisors Launches Equal-Weighted Funds

by: Marie Glancy

Dimensional Fund Advisors of Santa Monica, one of the faster-growing fund firms targeted at advisors, has expanded its range of products with four new, equal-weighted equity funds.

The company, which managed approximately $86 billion in assets as of December 31, announced the addition of the funds on Thursday. Indexed and advisor-focused, all four fit Dimensional's typical fund profile.

US Core Equity 1, US Core Equity 2, and International Core Equity funds are designed to cover the market in a style similar to previously available indexed funds from Dimensional. However, these new offerings, by weighting stocks more evenly across asset classes, give investors a means of tilting towards the small-cap and value stock end of the market. US Vector Equity applies the same core equity methodology as the other three funds, but provides a somewhat more targeted focus on small-cap and value risk securities.

David Booth, Dimensional's co-founder and CEO, pointed out in a press release that equally weighting stocks is not unusual in traditional indexed investing.

"However," he went on, "we have always sought to add value relative to traditional benchmarks by targeting key risk factors with greater precision and avoiding unnecessary trading and reconstitution costs."

Booth co-founded Dimensional Fund Advisors with Rex Sinquefield, who is still a director, in 1981. From the beginning, the firm has sought to incorporate academic research into its investment practices. Dimensional remains closely connected to the University of Chicago's Graduate School of Business and other research hubs.

Its new equity strategies reflect a model developed by Chicago's Eugene Fama, and Kenneth French from Dartmouth's Tuck School of Business. Both are consultants for Dimensional, and French is the firm's head of investment policy. 

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