The Right Building Blocks

About Dimensional and Their Nobel Prize-winning Research

At MoneyOwl, we believe in helping our clients to achieve a successful investment experience. To do this, it is important for us to work with partners who share our investment philosophy, such as Dimensional Fund Advisors (DFA).  

Who is Dimensional?

Dimensional Financial Advisors (DFA) is a global asset management firm, headquartered in Austin, Texas. Founded on time-tested evidence-based strategies of broad diversification, low cost and rejection of market-timing in stock selection.

As of 31 March 2020, the firm manages US$454 billion for investors worldwide, and has 13 offices around the globe, across North America, Europe, and Asia.  

Today, Dimensional is one of the largest fund companies in the U.S.

Why Dimensional?

Research-centric

What makes Dimensional stand out is the scientific process behind their investment strategies of pursuing higher expected returns. These strategies are built around the pioneering research of Nobel prize-winning economists like Professor Eugene Fama and Kenneth French, who sit on its Board of Directors. This means that through working with Dimensional, we are also working with the best academics who laid the foundation of what we know about the markets today.  

 

Their work demonstrated how stocks of smaller companies, those trading at low PricetoBook value and those belonging to profitable companies show better performance in the long run. Dimensional employs tilts to these dimensions of higher expected returns for its funds to deliver better performance over the long term while tracking close to its benchmark. 

No stock-picking

Dimensional is a firm advocate of the Efficient Market Hypothesis. This means they believe that prices reflect all available market information and thus, it would be very difficult to profit from timing the market. Research has shown that active management and stock picking has consistently resulted in poorer investment returns over the long term, due in part to higher management fees imposed on clients. 

Therefore, instead of trying to outguess the market, Dimensional takes on a more patient approach to trading, which means holding a diversified range of stocks in a particular asset class, and only buying or selling when conditions are favourable. This helps to lower turnover costs while providing opportunities for benchmark outperformance.  

Low Costs

Unlike most mutual funds, Dimensional does not make its funds available directly to individual retail investors. Instead, to ensure investors fully understand its investment philosophy, the funds are only available through financial advisors which have been approved by DFA.

This not only prevents investors from making damaging changes to their investment plan based on short term market noise but also minimises turnover for the fund and cuts down on marketing expenses,  All these translate to lower fund fees for investors.

While the total expense ratios for active funds could be as high as 1.79% p.a., our Dimensional fund fees average less than 0.4% p.a.

Dimensional’s SGD funds for retail investors were registered in 2018. There is strong alignment between Dimensional and MoneyOwl’s investment philosophies, regarding the keys to a successful investing experience.

MoneyOwl will be using Dimensional funds to construct our 5 portfolios.

Historical Performance of USD Share Class of Dimensional Funds

Below is the historical performance of the USD share class of the three Dimensional funds making up our portfolios.

Dimensional Global Core Equity

Fund Performance (as of December 2019)

                
Performance
Fund/Benchmark 1 Year 3 Years 5 Years 10 Years Since Fund Inception Inception Date
Dimensional Global Core Equity Fund (USD, Acc.), net of fees 26.55% 11.04% 7.99% 9.02% 8.32% Oct-08
MSCI World Index (net div.) 27.67% 12.57% 8.74% 9.47% - -
Disclaimer:
USD fund performance was presented as the SGD fund was only registered with the Singapore Regulator in 2018. USD fund experience is not indicative of SGD fund experience.
Past Performance should also not be taken as an indication of future performance.
"Since Fund Inception" represents the first full month since inception.

Dimensional Global Short Fixed Income

Fund Performance (as of December 2019)

                
Performance
Fund/Benchmark 1 Year 3 Years 5 Years 10 Years Since Fund Inception Inception Date
Dimensional Global Short Fixed Income Fund (USD, Acc.), net of fees 4.05% 2.52% 2.25% 2.72% 2.82% Nov-08
FTSE World Government Bond Index 1 - 5 Years (hedged to USD) 3.86% 2.37% 1.92% 1.85% - -
Disclaimer:
USD fund performance was presented as the SGD fund was only registered with the Singapore Regulator in 2018. USD fund experience is not indicative of SGD fund experience.
Past Performance should also not be taken as an indication of future performance.
"Since Fund Inception" represents the first full month since inception.

Dimensional Emerging Market Large Cap Core Equity

Fund Performance (as of December 2019)

                
Performance
Fund/Benchmark 1 Year 3 Years Since Fund Inception Inception Date
Dimensional Emerging Markets Large Cap Core Equity Fund (USD, Acc.), net of fees 16.88% 10.57% 9.95% Mar-16
MSCI Emerging Markets Index (net div.) 18.42% 11.57% - -
Disclaimer:
USD fund performance was presented as the SGD fund was only registered with the Singapore Regulator in 2018. USD fund experience is not indicative of SGD fund experience.
Past Performance should also not be taken as an indication of future performance.
"Since Fund Inception" represents the first full month since inception.

Dimensional Global Core Fixed Income Fund

Fund Performance (as of December 2019)

                
Performance
Fund/Benchmark 1 Month 3 Months 6 Months 1 Year Since Fund Inception Inception Date
Dimensional Global Core Fixed Income Fund (USD, Acc.), net of fees -0.27% -0.45% 2.13% 9.44% 9.44% Jan-19
Bloomberg Barclays Global Aggregate (hedged to USD) -0.21% -0.49% 2.09% 8.22% - -
Disclaimer:
USD fund experience is not indicative of SGD fund experience.
Past Performance should also not be taken as an indication of future performance.
"Since Fund Inception" represents the first full month since inception.