Advatanges of using DFA Mutual funds in a client's investment portfolio.

1. Advantages of DFA Institutional Funds
More consistent 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.
DFA is famous (in institutional circles) for their discount block (large transaction) trading. The
reduced trading costs translate to better investment returns.
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.
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.
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.
Low turnover: The average turnover of DFA funds in only 10% 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.
Innovation: DFA is considered the world leader in developing investment products and
strategies based on academic research. DFA is affiliated with some of the world’s top
academics such as Eugene Fama, Ken French, George Constantinides, John Gould,
Roger Ibbotson, Donald Keim, Robert Merton, Myron Scholes, Abbie Smith and
Marvin Zonis.
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