Dimensional Investing is about implementing the great ideas in finance for our clients.

Dimensional Global Firms* at a Glance
As of 30 September 2019

Years since founding

In firmwide assets
under management,
USD (in billions)

Employees in 13 global offices

Investment philosophy

01

An enduring belief in the

Power of  Markets

Capital Markets Have Rewarded
Long-Term Investors
Growth of $1 USD, Jan. 1970–Dec. 2018

In US dollars. Indices are not available for direct investment. Their performance does not reflect the expenses associated with the management of an actual portfolio. World Equities is the MSCI World Index (gross div.). Treasury Bills is the IA SBBI US 30 Day TBill TR USD, provided by Ibbotson Associates via Morningstar Direct. Long-Term Government Bonds is the IA SBBI US LT Govt TR USD, provided by Ibbotson Associates via Morningstar Direct. US Inflation is measured as changes in the US Consumer Price Index. US Consumer Price Index data is provided by the US Department of Labor Bureau of Labor Statistics. MSCI World Index data provided by MSCI. Past performance is no guarantee of future results.

At Dimensional, our investment approach is based on a belief in markets.

Rather than attempting to predict the future or outguess others, we draw information about expected returns from the market itself—leveraging the collective knowledge of its millions of buyers and sellers as they set security prices.

Trusting markets to do what they do best—drive information into prices—frees us to spend time where we believe we have an advantage, namely in how we interpret the research, how we design and manage portfolios, and how we service our clients. We take a less subjective, more systematic approach to investing—an approach we can implement consistently and investors can understand and stick with, even in challenging market environments.

   Embrace Market Pricing

The market is an effective information-processing machine. Each day, the world equity markets process billions of dollars in trades between buyers and sellers—and the real-time information they bring helps set prices.

In SGD. Source: Dimensional, using data from Bloomberg LP. Includes primary and secondary exchange trading volume globally for equities. ETFs and funds are excluded. Daily averages were computed by calculating the trading volume of each stock daily as the closing price multiplied by shares traded that day. All such trading volume is summed up and divided by 252 as an approximate number of annual trading days.

David Booth
David Booth
Founder and Executive Chairman
“The number of managers that can successfully pick stocks are fewer than you’d expect by chance. So, why even play that game? You don’t need to.”

02

Applying insights from

FINANCIAL SCIENCE

Breakthroughs in Modern Finance
  • 1966Efficient Market Hypothesis
     
    Efficient Market Hypothesis
    Eugene Fama
    Nobel laureate, 2013
    Professor, University of Chicago
    Eugene Fama’s efficient market hypothesis marks a pivotal moment for modern finance. The essence of the argument can be described by the simple statement that security prices reflect all available information.
  • 1973Intertemporal CAPM
     
    Intertemporal CAPM
    Robert Merton
    Nobel laureate, 1997
    Professor, MIT
    The ICAPM set up a theoretical framework for how multiple sources of risk could arise. It expanded on the one-period CAPM model where the only priced risk was market beta.
  • 1981Small Cap Investing
     
    Small Cap Investing
    Dimensional Fund Advisors
    David Booth, Founder
    and Executive Chairman
    Dimensional pioneers small cap investing with the launch of its first strategy, which offers investors diversified, efficient access to small company stocks.
    1981 Dimensional Fund Advisors LP Founded
  • 1983Term Structure
     
    Term Structure
    Eugene Fama
    Nobel laureate, 2013
    Professor, University of Chicago
    Research shows implied forward interest rates provide information on expected term premiums in fixed income.
  • 1992Value Breakthrough
     
    Value Breakthrough
    Eugene Fama
    Nobel laureate, 2013
    Professor, University of Chicago
    Kenneth French
    Professor, Dartmouth College
    Eugene Fama and Kenneth French develop the three-factor asset pricing model, which identifies market, size, and price (value) factors as the principal drivers of equity returns.
  • 2012Profitability
     
    Profitability
    Eugene Fama
    Nobel laureate, 2013
    Professor, University of Chicago
    Kenneth French
    Professor, Dartmouth College
    Robert Novy-Marx
    Professor, University of Rochester
    A body of academic research led to identifying profitability as a dimension of higher expected returns that can be pursued across equity markets.
  • Today
     
     
    Dimensional’s Research and Investment teams draw insight from academia, but what sets us apart is how we interpret, test, and apply that research to practical investment solutions for our clients.
  • Tomorrow
    ...
     
    Dimensional was built around a set of ideas bigger than the firm itself. With a confidence in markets, deep connections to the academic community, and a focus on implementation, we go where the science leads, and continue to pursue new insights, both large and small, that can benefit our clients.

*“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., Dimensional Ireland Limited, Dimensional Japan Ltd., and Dimensional Hong Kong Limited. Dimensional Hong Kong Limited is licensed by the Securities and Futures Commission to conduct Type 1 (dealing in securities) regulated activities only and does not provide asset management services.

Eugene Fama and Kenneth French are members of the Board of Directors of the general partner of, and provide consulting services to, Dimensional Fund Advisors LP. Robert Merton and Robert Novy-Marx provide consulting services to Dimensional Fund Advisors LP.

Dimensional’s investment approach is grounded in economic theory and backed by decades of empirical research.

Our internal team of researchers works closely with leading financial economists to better understand where returns come from.

Research has shown that securities offering higher expected returns share certain characteristics, which we call dimensions. To be considered a dimension, these characteristics must be sensible, persistent over time, pervasive across markets, and cost-effective to capture.

The Evolution of Indexing and Dimensional
Eugene Fama
Eugene Fama
Nobel laureate, 2013 Professor, University of Chicago; Dimensional Director; Consultant, Dimensional Fund Advisors LP
“We’re very careful in looking at new research that comes along and making sure it’s robust.”

Understanding what drives returns is the starting point. From here, we focus on fine-tuning our method of capturing them.

We structure broadly diversified portfolios that emphasize the dimensions of higher expected returns, while addressing the tradeoffs that arise when executing portfolios.

Every day our portfolio managers and traders seek to balance costs against expected returns and diversification. We work for the slightest expected gain, as every incremental improvement can add up over time.

The Gap Between Reality and a Model
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Limitations of the Model False Positives Insights MODEL REALITY
Academic models provide useful insight, but they are incomplete. It’s in the gap between reality and a model where sound judgment and experience matter. Play Watch Dimensional Stories: Models
(03:15)
Gerard-O'Reilly
Gerard O'Reilly
Co-Chief Executive Officer and Chief Investment Officer
“The nuance and expertise is where you take knowledge and information and implement it in a real test, not in the backtest.”

A Foundation Built on Great Ideas

03

A commitment

TO OUR CLIENTS

The Global Financial Crisis and Its Aftermath
A key to a good long-term investment experience is being able to stay with your investment philosophy, even during tough times. During the rocky 2008–2012 period, many investors sold their equity funds. Within the Dimensional Global Firms*, equity funds had inflows throughout the period, which could suggest that in aggregate investors were prepared to withstand the market’s movements in order to pursue long-term results.
Equity Flows Mobile/Tablet

In USD. MSCI World Index data provided by MSCI. Dimensional Global Equity Flows include flows from all comingled funds with the exception of Balanced, Target Date, and Fixed Income funds. Additionally, the funds include only those with one of the following legal entities: DFA Investment Dimensions Group Inc., DFA Participating Group Trust, DFA International Group Trust, Dimensional Emerging Markets Value Fund, DFA Investment Trust Company, Dimensional Investment Group Inc., DFA Australia Trust, Dimensional Funds plc (Ireland), Dimensional Fund Advisors Canada Inc., Dimensional Funds ICVC (UK), and Dimensional Funds plc II (Ireland). A flow is any trade that is a purchase, sell, exchange purchase, exchange sell, dividend, long-term capital gain, or short-term capital gain. This excludes any flows from other DFA mutual funds. Each flow is converted to USD on the trade date using WM Reuters London Close FX rates. For illustrative purposes only.

Dimensional Investing is about providing a successful investment experience.

That means more than just returns. It means offering peace of mind because investors know that a transparent approach backed by decades of research is powering every decision.

Markets go up and they go down. The goal of Dimensional Investing is to help people be prepared, so they can stick with their plan.

AT THE HEART OF
DIMENSIONAL INVESTING
Dave Butler
DAVE BUTLER
Co-Chief Executive Officer
“The client experience has always been, and will continue to be, why we do what we do.”

*“Dimensional Global Firms” 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., Dimensional Ireland Limited, Dimensional Japan Ltd., and Dimensional Hong Kong Limited. Dimensional Hong Kong Limited is licensed by the Securities and Futures Commission to conduct Type 1 (dealing in securities) regulated activities only and does not provide asset management services. Dimensional Directors refers to a member of the Board of Directors of the general partner of Dimensional Fund Advisors LP.

This material is deemed to be issued by Dimensional Fund Advisors Pte. Ltd., which is regulated by the Monetary Authority of Singapore and holds a capital markets services license for fund management. This advertisement has not been reviewed by the Monetary Authority of Singapore. 

None of the other Dimensional Global Firms are currently licensed by, registered with, or supervised by the Monetary Authority of Singapore. Nothing on this website shall constitute or serve as an offer to sell products or services in any country or jurisdiction by any Dimensional Global Firm. For informational purposes only. All information is given in good faith and without warranty and should not be considered investment advice or an offer of any security for sale.

Robert Merton, Ken French, Eugene Fama and Robert Novy-Marx provide consulting services to an affiliate of Dimensional Fund Advisors Pte. Ltd. Ken French and Eugene Fama also serve on the board of directors of the general partner of an affiliate of Dimensional Fund Advisors Pte. Ltd.

Profitability is a measure of current profitability, based on information from individual companies’ income statements