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Rating:DFA's Booth Looks to Asia, Not ETFs, for Growth Not Rated 5.0 Email Routing List Email & Route  Print Print
Monday, April 30, 2012

DFA's Booth Looks to Asia, Not ETFs, for Growth

News summary by MFWire's editors

Asia and DC I-O are two hot buttons for Dimensional Fund Advisors (DFA) [profile] founder and CEO David Booth. Reuters' Jessica Toonkel interviewed Booth at Tiburon's CEO Summit held in New York City two weeks ago.

Booth told the news service that DFA executives have yet to decide on an exact location in Asia for the offices. The expansion comes on the heels of DFA's expansion into Germany. Earlier it opened offices in Australia, Canada, Chile, England and the Netherlands.

The other major initiative, Booth told the news service, is a tool for employers with 401(k) plans which will automatically assign assets and contributions based on factors like amount willing to be paid per paycheck and amount they hope to get when they retire. According to Booth, their goal is to make 401(k) funds like defined benefit plans. The tool rolled out last summer.

"Right now everyone has moved to target date funds, and those have turned out to be a disaster," Reuters quoted Booth as saying. He added that: "The fact of the matter is most people are like me and don't look under the hood."

The mutual fund firm's selectivity in which advisors it works with (they must apply and pass a training regime), as well as its quasi-passive approach, has worked for it through the years, according to the report.

DFA operates on the framework that all markets are efficient. Morningstar data shows that out of the firm's 40 funds with 10-year track records, 34 made it to the top half of their categories. And of DFA funds with a five-year track record, more than half are in the top half for their categories.

Booth said that he has no interest in bringing ETFs to DFA's door in Austin.

"We have thought about it but I don't see a compelling reason for intraday liquidity," he said. 

Edited by: HFD

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