On Thursday, Dimensional Fund Advisors released a pair of new vector ETFs.
These funds are the Dimensional International Vector Equity ETF (DXIV) and the Dimensional US Vector Equity ETF (DXUV). Both funds seek to earn long-term capital appreciation through their respective strategies.
Disciplined Portfolio Construction
Each of the new Dimensional funds uses an investment approach that combines a wide variety of factors. These factors include research, portfolio management and design, and trading functions. In doing so, DXIV and DXUV aim to generate risk-balanced long-term return and diversification.
Both funds seek to use a market-cap-weighted universe to buy into a diversified group of equity securities. While the funds intend to invest in companies of various sizes, DXIV and DXUV intend to have stronger exposure to small-caps.
The funds may reduce large-cap exposure to provide more small-cap space within the portfolio. As an additional factor, both funds seek assets with lower relative prices and higher profitability compared to their peers.
DXUV operates with a net expense ratio of 0.28%. The fund intends to invest a wide majority of its assets in equity securities of U.S. companies.
An International Option
Meanwhile, DXIV invests in companies in developed markets outside of the United States. The fund has a net expense ratio of 0.34%.
Traditionally, DXIV intends to invest at least 40% of its assets in at least three non-U.S. countries, if not more. To gain exposure to approved markets, the fund may invest in depositary receipts.
With two new funds entering the market, Dimensional Fund Advisors now has 40 ETFs available in the United States. In total, these funds represent over $150 billion in assets under management.
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