Wednesday, February 16, 2011

Dimensional Funds Ranked Number One by Barron's

The February 15 Edition of Barron's Magazine, noted that Dimensional Fund Advisors (DFA) was ranked #1 in  US Equities in the Barron's/Lipper ratings. DFA attributed the continued success of its funds to low trading, wide diversification, and a continued focus on value investing.

Interestingly enough, Dimensional Funds are not offered through the mainstream retail stock brokerage outlets. In its attempt to shave costs and increase returns to customers, Dimensional has decided that most, if not all, of its funds will carry no 12b-1 fee and will not pay a commission to selling brokers. And, despite the fact that Dimensional Funds are some of the best performing and lowest cost funds in the country...stock brokers will not and cannot offer them. In fact, only 15% or so of investment management companies in the United States are approved by Dimensional to offer their funds. (Full disclosure- Blue Haven Capital is an approved Dimensional Fund Advisor Firm).

Dimensional Funds are similar, but not identical, to index funds. The fund's expenses are often lower than even some of the best known low cost funds in the industry...and that attention to expenses pays off. Hats off to a firm that operates much quieter (and much cheaper) than its competition.

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