Dimensional Australia bolsters ETF strategies
Dimensional Fund Advisors has expanded its range of exchange-traded funds (ETFs) in the Australian market with an additional three products.
Last November, the global asset manager launched three active ETFs in what was described as a very long-term strategic move for the firm Down Under.
The Australian Core Equity, Global Core Equity (Unhedged) and Global Core Equity (AUD Hedged) aim to provide broad exposure to the Australian and other developed equity markets, while emphasising the known drivers of higher expected return in small caps, value stocks and more profitable companies.
Dimensional Australia CEO Bhanu Singh told Money Management at the time: “This [launch] is a very long-term strategic move by Dimensional Australia to bring these access points to the market. Aussie equities and global equities are at the core of the portfolios clients have with us, so the next steps will be, as we see more interest from clients in different areas, we’ll be bringing more down the line.”
Following this strategic move, Dimensional has now announced the launch of three new ETF products available on the ASX: the Dimensional Australian Value Trust, the Dimensional Global Value Trust, and the Dimensional Global Small Company Trust.
These funds explicitly target long-term premiums available from Australian and global value stocks, as well as global small caps. Along with the core funds, the new vehicles are available in a “dual-access” structure accessible through both ASX-listed and unlisted distribution channels, the firm stated.
“These component strategies supplement the Australian and Global Core Equity ETFs launched last year and allow financial professionals to tailor asset allocations to meet a range of client needs,” Singh commented on the new ETFs.
“Our strategies offer the benefits of indexing – such as low costs, low turnover, and high diversification – paired with the advantages of flexible implementation that provide a continuous focus on higher expected returns.”
Dimensional takes a systematic or factor-based approach to investing, replacing the subjectivity of traditional active management with rigorous academic research. This avoids the restrictions of indexing through an active yet process-driven pursuit of higher expected returns, it explained.
Nathan Krieger, head of global client group at Dimensional Australia, remarked: “For four decades, we have focused on empowering investment professionals so they can deliver their clients the best investment experience.
“We believe a rules-based investment approach can help deliver a more reliable and smoother market experience for investors and can help to better address a variety of portfolio goals and aspirations.”
Dimensional was founded in the US in 1981 and entered the Australian market in 1994. It manages over $1.1 trillion for investors across the globe, including more than $50 billion for Australian and New Zealand clients.
Since joining the ETF market in November 2020, the asset manager now offers more than 35 ETFs in the US and six in Australia.
AUTHOR
Jasmine Siljic
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