How Dimensional Fund Advisors Really Earn Better Returns


Dimensional Fund Advisors is as popular as hemp in a commune of hippies.

According to Investment News, a 2014 survey said DFA’s investors were more loyal than investors with any other firm.

One reason is that the mutual fund company has posted strong performances. Bloomberg reports that nearly 90 percent of DFA funds with a 15-year track record beat their benchmarks. 

AssetBuilder regularly updates a series of DFA fund returns. 

They compare them to Vanguard’s funds. Their results often humble those of the indexing giant.

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Andrew Hallam

I’m a financial columnist for Canada’s national paper, The Globe and Mail, as well as for AssetBuilder, a financial service firm based in Texas. I’m also the author of Millionaire Teacher: The Nine Rules of Wealth You Should Have Learned in School (2nd Ed. Wiley 2017) and The Global Expatriate’s Guide To Investing: From Millionaire Teacher to Millionaire Expat (Wiley 2015). My mission is to educate, motivate and inspire people on basic retirement planning and best practices for investing, using evidence-based strategies. I'm happy to comment on your questions. However, please read the Terms of Use, Privacy Policy and the Comments Policy.

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4 Responses

  1. Barry says:

    Hi Andrew

    There are many that point out that Listed Investment Companies in Australia have consistently outperformed the accumulation iinx (growth+dividends).

    Have you looked at these at all?


    • Hi Barry,

      Because they are managed, they will generally equal the performance of the Australian index over a 20 year horizon, discounting survivorship bias. After fees and survivorship bias, they won’t, on aggregate, beat the Australian stock market long term.


    • That said Barry, because they are managed with extremely low expense ratios, they will earn very close to the market’s return…unlike most of Australia’s actively managed unit trusts. You’re essentially getting active management for the price of an index fund. But always remember William Sharpe’s principle, in his paper, the Arithmetic of Active Management.

  2. Barry says:

    On the positive side

    I think that with a four fund portfolio of Australian Bonds, World (ex US), US and an Australian Index that I too can outperform the ASX All Ordinaries Accumulation Index

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