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The Advantages of DFA Institutional Funds

Cash Flows

Retail mutual funds are subject to more erratic deposits and withdrawals which causes increased costs for long term shareholders due to increased trading activity.

Expense Ratios

DFA has very low expense ratios similar to index funds, which on average, saves 1% per year in reduced expenses compared to actively managed retail funds.

Low Turnover

The average turnover of DFA funds in only 11% compared to 65% for actively managed retail funds. This results in lower trading and taxation costs to the investor.

Tax Controls

DFA has been the world leader in developing strategies and mutual funds to limit the costs of taxation for investors. Reduced taxation means better bottom line returns for investors.

Asset Class Definition

DFA funds more precisely define their market segments; large vs. small companies, value vs. growth, etc. This results in better asset allocation controls and ultimately better returns.

Trading Acumen

Since DFA constructs their funds from scratch, they are not subject to the immediacy of trading requirements for traditional index funds. This results in better opportunities to make trades on a more favorable price basis. DFA is famous in institutional circles for their discount block (large transaction) trading. The reduced trading costs translate to better investment returns.

Limited Access

DFA fund access is limited to investment advisors who have received specialized training from DFA.

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