Dimensional Fund Advisors, 2002
Dimensional Fund Advisors, 2002
1. What is DFA’s business strategy? What do you think of the firm? Are the DFA people really believe in efficient markets?
Dimensional Fund Advisors (DFA) primarily focuses on the investment of small stock funds. DFA’s business strategies are as following: * DFA was dedicated to the principle that the stock market was efficient. * DFA believes the value of sound academic research. * DFA believes the ability of skilled traders to contribute to a fund’s profits even when the investment was inherently passive. * DFA’s core competitiveness is its ability to get discount and reduce market affection when buying a big block of shares.
In our opinion, DFA is a very insightful company. Its business philosophy is quite efficient and unique. It is not a pure actively or passively managed fund but something in between. It believes market efficiency while not only focusing on build a passively managed index fund, it
Its business strategy makes sense, and that could be proved by its steady growth and strong profits. And with this strategy, it could pursue high-net-worth individuals, in addition to institutions, as clients through registered investment advisors (RIAs), which were a crucial conduit enabling DFA to reach the market without advertisement.
Although DFA is dedicated to the principle of efficient market, but to some extent, the DFA people do not totally believe it. According to the efficient market hypothesis, when market efficiency is strong-form, stocks always trade at their fair value on stock exchanges and technical analysis, fundamental analysis and insider trading analysis are all fruitless. But DFA was not simply an index fund manager, it believed in the value of sound academic research and skilled traders’ contribution. Because DFA used the found that small size and high B/M ratio stocks had higher expected returns, its small-stock fund outperformed most small-stock benchmarks.
2. Do the
1. What is DFA’s business strategy? What do you think of the firm? Are the DFA people really believe in efficient markets?
Dimensional Fund Advisors (DFA) primarily focuses on the investment of small stock funds. DFA’s business strategies are as following: * DFA was dedicated to the principle that the stock market was efficient. * DFA believes the value of sound academic research. * DFA believes the ability of skilled traders to contribute to a fund’s profits even when the investment was inherently passive. * DFA’s core competitiveness is its ability to get discount and reduce market affection when buying a big block of shares.
In our opinion, DFA is a very insightful company. Its business philosophy is quite efficient and unique. It is not a pure actively or passively managed fund but something in between. It believes market efficiency while not only focusing on build a passively managed index fund, it
Its business strategy makes sense, and that could be proved by its steady growth and strong profits. And with this strategy, it could pursue high-net-worth individuals, in addition to institutions, as clients through registered investment advisors (RIAs), which were a crucial conduit enabling DFA to reach the market without advertisement.
Although DFA is dedicated to the principle of efficient market, but to some extent, the DFA people do not totally believe it. According to the efficient market hypothesis, when market efficiency is strong-form, stocks always trade at their fair value on stock exchanges and technical analysis, fundamental analysis and insider trading analysis are all fruitless. But DFA was not simply an index fund manager, it believed in the value of sound academic research and skilled traders’ contribution. Because DFA used the found that small size and high B/M ratio stocks had higher expected returns, its small-stock fund outperformed most small-stock benchmarks.
2. Do the