Dimensional ETF Trust - Dimensional Emerging Markets High Profitability ETF (DEHP)

Overview

The Dimensional Emerging Markets High Profitability ETF (DEMP) seeks long-term capital appreciation by investing in a broad range of companies in emerging markets that are characterized by high profitability. It emphasizes companies with higher profitability relative to their book value.

Reputation and Reliability

Dimensional Fund Advisors (DFA) is a well-regarded firm known for its systematic, factor-based investing approach and strong focus on academic research.

Management Expertise

DFA's management team has extensive experience in applying rigorous, research-driven investment strategies.

Goal

To achieve long-term capital appreciation by investing in a portfolio of emerging market companies with high profitability.

Investment Approach and Strategy

Strategy: The ETF does not track a specific index. It uses a systematic, factor-based approach focusing on profitability and value.

Composition The ETF primarily holds stocks of companies located in emerging market countries, selected based on their profitability relative to book value.

Market Share: Data not available.

Total Net Assets (AUM): 950000000

Key Competitors

• iShares MSCI Emerging Markets ETF (EEM)
• Vanguard FTSE Emerging Markets ETF (VWO)
• Schwab Emerging Markets Equity ETF (SCHE)

Competitive Landscape

The emerging markets ETF space is highly competitive, with several large players offering broad market exposure. DEMP differentiates itself through its emphasis on high profitability, potentially leading to higher returns but also potentially deviating from broad market performance. Advantages include its factor-based approach; disadvantages may include higher tracking error relative to standard market-cap weighted ETFs.

Historical Performance: Historical performance data is readily available from financial data providers but will vary based on the time period selected.

Benchmark Comparison: Comparison against a broad emerging markets index (e.g., MSCI Emerging Markets Index) reveals DEMP's outperformance or underperformance based on its profitability factor tilt.

Expense Ratio: 0.32

Average Trading Volume

Average trading volume provides insight into how easily shares can be bought and sold without significantly affecting the price.

Bid-Ask Spread

The bid-ask spread, typically a small percentage, indicates the difference between the highest price a buyer is willing to pay and the lowest price a seller is willing to accept.

Market Environment Factors

Economic growth rates in emerging markets, currency fluctuations, geopolitical events, and global trade policies influence DEMP's performance.

Growth Trajectory

DEMP's growth is tied to the performance of its underlying holdings and the overall attractiveness of its factor-based strategy. Changes in strategy may be implemented periodically based on DFA's research.

Competitive Edge

DEMP's competitive advantage lies in its systematic, factor-based approach specifically targeting high profitability. DFA's rigorous research process and commitment to implementing academic findings provide a differentiated investment strategy. This allows DEMP to potentially outperform traditional market-cap weighted emerging markets ETFs by capturing the premium associated with profitable companies. However, factor-based investing can also lead to periods of underperformance relative to the broader market.

Volatility

Historical volatility measures how much DEMP's price has fluctuated over time, indicating its risk level.

Market Risk

Emerging markets investments are subject to political instability, currency risks, and regulatory changes. Factor-based strategies can also experience periods of underperformance.

Ideal Investor Profile

The ideal investor is one seeking long-term capital appreciation with a tolerance for higher risk and volatility associated with emerging markets and factor-based investing.

Market Risk

DEMP is more suited for long-term investors who understand and accept the potential for periods of underperformance relative to the broad market in exchange for the potential to capture the profitability premium.

The Dimensional Emerging Markets High Profitability ETF offers a focused approach to emerging markets investing by targeting companies with high profitability. Backed by Dimensional Fund Advisors' research-driven investment process, DEMP aims to provide long-term capital appreciation, though it comes with higher risk and potential volatility. It suits investors with a long-term horizon and a willingness to accept deviations from broad market performance. Its factor-based strategy seeks to outperform traditional market-cap weighted indexes, making it an option for those seeking targeted exposure to emerging market companies with strong fundamentals.

Data Sources:

• Dimensional Fund Advisors Website
• ETF.com
• Morningstar

Disclaimers:

The information provided is for informational purposes only and should not be considered investment advice. Investors should conduct their own research and consult with a financial advisor before making any investment decisions. Market share data may not be readily available and is subject to change.