Dimensional Fund Advisors, L.P. (branded Dimensional abbreviated DFA) is a private investment firm headquartered in

Austin, Texas Austin is the capital city of the U.S. state of Texas, as well as the county seat, seat and largest city of Travis County, Texas, Travis County, with portions extending into Hays County, Texas, Hays and Williamson County, Texas, Williamson co ...

. Dimensional was founded in

Chicago (''City in a Garden''); I Will , image_map = , map_caption = Interactive Map of Chicago , coordinates = , coordinates_footnotes = , subdivision_type = Country , subdivision_name ...

in 1981 by David Booth,

Rex Sinquefield Rex Andrew Sinquefield (; born September 7, 1944) is an American businessman, investor, and philanthropist who has been called an "index-fund pioneer" for creating the first passively managed index fund open to the general public Sinquefield wa ...

and Larry Klotz. The company has affiliates within 13 offices in the U.S., Canada, U.K., Germany, Netherlands, Australia, Singapore, and Japan. Dimensional maintains U.S. offices in

Charlotte, North Carolina Charlotte ( ) is the most populous city in the U.S. state of North Carolina. Located in the Piedmont region, it is the county seat of Mecklenburg County. The population was 874,579 at the 2020 census, making Charlotte the 16th-most populo ...

and

Santa Monica, California Santa Monica (; Spanish language, Spanish: ''Santa Mónica'') is a city in Los Angeles County, California, Los Angeles County, situated along Santa Monica Bay on California's South Coast (California), South Coast. Santa Monica's 2020 United Sta ...

and has affiliate offices globally. The company is owned by its employees, board members and outside investors. The company’s founders studied at the

University of Chicago The University of Chicago (UChicago, Chicago, U of C, or UChi) is a private research university in Chicago, Illinois. Its main campus is located in Chicago's Hyde Park neighborhood. The University of Chicago is consistently ranked among the b ...

under

Eugene Fama Eugene Francis "Gene" Fama (; born February 14, 1939) is an American economist, best known for his empirical work on portfolio theory, asset pricing, and the efficient-market hypothesis. He is currently Robert R. McCormick Distinguished Servic ...

and

Kenneth French Kenneth Ronald "Ken" French (born March 10, 1954) is the Roth Family Distinguished Professor of Finance at the Tuck School of Business, Dartmouth College. He has previously been a faculty member at MIT, the Yale School of Management, and the Uni ...

. DFA's investment strategy is based on application of the

efficient market hypothesis The efficient-market hypothesis (EMH) is a hypothesis in financial economics that states that asset prices reflect all available information. A direct implication is that it is impossible to "beat the market" consistently on a risk-adjusted bas ...

. Dimensional was one of the earliest firms to offer

passive investing Passive management (also called passive investing) is an investing strategy that tracks a market-weighted index or portfolio. Passive management is most common on the equity market, where index funds track a stock market index, but it is becoming ...

and "runs the oldest small-cap index fund" in the United States. However, DFA's versions of

index funds An index fund (also index tracker) is a mutual fund or exchange-traded fund (ETF) designed to follow certain preset rules so that the fund can a specified basket of underlying investments.Reasonable Investor(s), Boston University Law Review, avail ...

skew towards smaller company stocks and

value stocks Value investing is an investment paradigm that involves buying securities that appear underpriced by some form of fundamental analysis. The various forms of value investing derive from the investment philosophy first taught by Benjamin Graham ...

, and thus operate differently from most index funds which are weighted by market capitalization. This strategy results in regulators, such as the SEC, and some analysts describing the funds as

actively managed Active management (also called ''active investing'') is an approach to investing. In an actively managed portfolio of investments, the investor selects the investments that make up the portfolio. Active management is often compared to passive man ...

. The company offers equity and fixed income mutual funds and

Exchange-traded funds An exchange-traded fund (ETF) is a type of investment fund and exchange-traded product, i.e. they are traded on stock exchanges. ETFs are similar in many ways to mutual funds, except that ETFs are bought and sold from other owners throughout the ...

. In 2009, Dimensional acquired SmartNest, a retirement planning computer software company. Researcher

Robert C. Merton Robert Cox Merton (born July 31, 1944) is an American economist, Nobel Memorial Prize in Economic Sciences laureate, and professor at the MIT Sloan School of Management, known for his pioneering contributions to continuous-time finance, especia ...

left SmartNest's board after the purchase and became a Resident Scientist at Dimensional. In November 2020, the company announced it was abandoning its strictly advisor-access only mutual fund business model by offering openly-accessed exchange-traded funds.

References

External links

Official siteFama/French ForumDavid Booth Interviews
{{Major asset management companies Investment management companies of the United States Financial services companies established in 1981 Companies based in Austin, Texas