Wealth

DFAC: The product of the shift from mutual funds to ETFs

  Dimensional US Core Equity 2 ETF is a stock fund. It was established on June 14, 2021. Less than two years ago, it can be described as a rookie in the ETF industry. Listed on the growth board market, trading code DFAC; as of June 17, 2022 (that is, the ETF has just been established for one year), the scale is US$13.2 billion, ranking only 92nd in the US ETF industry, but it is its issuance Dimensional Fund Advisors LP’s largest ETF. According to data from www.etfchannel.com, as of February 1, 2023, the size of Dimensional US Core Equity 2 ETF was US$18.056 billion, an increase of US$4.856 billion or 36.79% compared to nine months ago. It should be noted that the predecessor of Dimensional US Core Equity 2 ETF was a closed-end mutual fund, and the above-mentioned establishment date of June 14, 2021 was when the issuer, Dimensional Fund Advisors LP, converted the fund from a closed-end mutual fund to an exchange-traded fund (ETF) date.
  In terms of past performance, in the past 1 month, 2 months, 3 months and 52 weeks, the returns of Dimensional US Core Equity 2 ETF were 8.15%, 1.78%, 7.49% and -5.03%, respectively. The performance is like a roller coaster.
  In terms of industry allocation, as of January 30, 2023, the five major industries of Dimensional US Core Equity 2 ETF are technology, financial services, industry, health care, and cyclical consumption, with allocation ratios of 20.61%, 16.70%, and 13.68% respectively. %, 13.07% and 10.72%. The most direct reflection of the industry configuration is in the heavy holdings of individual stocks. During the same period, the top ten heavy holdings of Dimensional US Core Equity 2 ETF were Apple, Microsoft, Exxon Mobil, Amazon, Johnson & Johnson, Berkshire Hasa Wei B shares, JP Morgan Chase, UnitedHealth Group, VISA A shares and Alphabet A shares have market values ​​of US$833 million, US$642 million, US$201 million, US$190 million, US$176 million, US$161 million and US$157 million respectively USD, USD 152 million, USD 143 million and USD 139 million, the investment proportions are 4.70%, 3.62%, 1.14%, 1.07%, 0.99%, 0.91%, 0.89%, 0.86%, 0.81% and 0.78% respectively.
  So, which institutions are holding Dimensional US Core Equity 2 ETF? According to data from the website www.holdingschannel.com, as of the beginning of February 2023, a total of 535 hedge funds held Dimensional US Core Equity 2 ETF, among which the top holding institutions include Forum Financial Management LP, Buckingham Strategic Wealth LLC, Eninvestnet Asset Management Inc, LPL Financial LLC, Plancorp LLC, Buckingham Strategic Partners, SJS Investment Consulting Inc, GreenSpring Advisors LLC, Commonwealth Equity Services LLC, and HighTower Advisors LLC, holders of Dimensional US Core as of September 30, 2022 Equity 2 ETF positions range in value from $142 million to around $500 million.
  According to public information, Dimensional Fund Advisors LP was established in 1981 and is headquartered in Austin, Texas. It was founded by David Booth with an initial capital of only US$63.7 million. It focuses on mutual fund investment and is good at mining market data and based on Detailed analysis of market data to build systematic, non-subjective portfolios and strategies with a management size of approximately US$380 billion. In addition, in the past 25 years, only two companies in the U.S. fund industry have received net capital inflows every year, one of which is Vanguard Fund, and the other is Dimensional Fund Advisors LP.
  In the past few years, the biggest move of Dimensional Fund Advisors LP has been to continuously transform its mutual fund products into ETFs. In June 2021, Dimensional Fund Advisors LP converted its four equity mutual funds into ETFs. The assets under management of these four mutual funds totaled US$28.8 billion, which also made Dimensional Fund Advisors LP the largest U.S. fund by assets. One of the top 10 ETF issuers, ranking No. 8, including Dimensional US Core Equity 2 ETF, its predecessor is TAUS Core Equity 2 Portfolio; the other three are The Dimensional US Equity ETF (DFUS), The Dimensional US Small Cap ETF (DFAS) and The Dimensional US Targeted Value ETF, these three mutual funds are for the purpose of tax incentives, but after Biden took office, the US government introduced a policy that families with an annual income of more than 1 million US dollars need to pay Capital gains taxes have nearly doubled, so mutual funds no longer have a tax advantage, said Graed O’Reilly, co-CEO of Dimensional Fund Advisors LP, “because there’s some uncertainty about the overall tax situation going forward, if we Looking to improve the ability to manage capital gains through physical creation and redemption, ETFs provide an alternative that will be more efficient in the future.”

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