DFA Mutual Funds vs Retail Mutual Funds

How do DFA's institutional mutual funds differ from traditional retail mutual funds when in the areas we mentioned earlier?

  • Performance. DFA's portfolios are designed to capture very specific dimensions of risk in the markets and have done so exceptionally well since their inception.
  • Fees. DFA mutual fund management fees are amongst the lowest in the financial services industry.
  • Style Drift. Because DFA's funds are quantitatively managed, there is no chance for style drift in these funds. Only stocks that have the intended characteristics qualify for inclusion in these portfolios.
  • Unpredictable Cash Flows. Because DFA's funds are only available to institutional investors and investors working through approved DFA advisors, investors gain the advantage of having predictable positive cash flows into their funds. Unlike retail mutual funds, DFA's funds tend to have steady positive net inflows at all times, even during market corrections.
  • Tax-Management. Most of DFA's portfolios are offered in both taxable and tax-managed versions. The tax-managed versions aim to reduce or eliminate year-to-year capital gains distributions for investors who own shares in taxable accounts. By utilizing these funds, we can effectively turn our taxable accounts into tax-deferred accounts.

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