Dimensional ETF Trust - Dimensional Emerging Markets Core Equity 2 ETF (DFEM)

Overview

The Dimensional Emerging Markets Core Equity 2 ETF (DFEM) aims to provide long-term capital appreciation by investing in a broad and diverse portfolio of securities of companies located in emerging markets, focusing on companies with relatively higher profitability and lower relative price.

Reputation and Reliability

Dimensional Fund Advisors (DFA) is a well-regarded investment management firm known for its systematic, research-driven approach and low-cost strategies.

Management Expertise

DFA has a strong track record and deep expertise in quantitative investing, with a team of experienced portfolio managers and researchers.

Goal

To achieve long-term capital appreciation by investing in emerging market equities.

Investment Approach and Strategy

Strategy: The ETF does not track a specific index, but rather uses a flexible investment approach that emphasizes profitability and value characteristics in selecting securities.

Composition Primarily invests in a diversified portfolio of stocks from emerging market countries.

Market Share: DFEMu2019s market share in the emerging markets equity ETF sector is relatively small but growing.

Total Net Assets (AUM): 2328000000

Key Competitors

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

Competitive Landscape

The emerging markets equity ETF space is highly competitive, dominated by large, low-cost index trackers. DFEM differentiates itself through its factor-based approach, potentially leading to higher returns but also greater tracking error compared to traditional index funds. Its advantage lies in potentially superior long-term performance through smart beta strategies, while its disadvantage is a slightly higher expense ratio than some of its index-tracking competitors and potentially different performance patterns.

Historical Performance: Past performance is not indicative of future results. Refer to fund fact sheet.

Benchmark Comparison: Compare the ETFu2019s performance to its benchmark index to gauge its effectiveness.

Expense Ratio: 0.35

Average Trading Volume

The ETF's average daily trading volume is moderate, indicating sufficient liquidity for most investors.

Bid-Ask Spread

The bid-ask spread is generally competitive, reflecting adequate liquidity and trading efficiency.

Market Environment Factors

Emerging market growth, global trade policies, currency fluctuations, and commodity prices can significantly impact DFEMu2019s performance.

Growth Trajectory

The ETF's growth is dependent on its performance relative to competitors and the overall demand for emerging market equity exposure. Changes in strategy and holdings are minimal, and it emphasizes consistent factor exposure.

Competitive Edge

DFEM distinguishes itself with its systematic, factor-based approach, focusing on profitability and value. Dimensional's rigorous research and low-cost structure provide a competitive edge. Its flexible investment approach allows it to adapt to changing market conditions while maintaining its core principles. This combination of factors aims to deliver superior long-term risk-adjusted returns, appealing to investors seeking more than just passive index exposure.

Volatility

Emerging markets are inherently more volatile than developed markets. DFEM's volatility will reflect that, although factor tilts may reduce it.

Market Risk

Specific risks include economic and political instability in emerging market countries, currency risk, and potential regulatory changes that could negatively impact investments.

Ideal Investor Profile

Investors seeking long-term capital appreciation with a higher risk tolerance and a preference for factor-based investing may find DFEM suitable.

Market Risk

DFEM is best suited for long-term investors who understand and are comfortable with the risks and potential rewards of investing in emerging markets and a factor-based strategy.

The Dimensional Emerging Markets Core Equity 2 ETF (DFEM) offers exposure to emerging market equities through a factor-based approach that prioritizes profitability and value. It is managed by Dimensional Fund Advisors, known for its research-driven strategies. While it has a higher expense ratio than some index-tracking competitors, it aims to deliver superior long-term performance. DFEM is suitable for long-term investors seeking diversified emerging market exposure with a tolerance for higher volatility and potential tracking error. The total net assets are $2.328 billion.

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. Past performance is not indicative of future results. Investors should consult with a qualified financial advisor before making any investment decisions.