Booth’s Dimensional ETFs Hit $1 Billion Mark in Just Four Months
(Bloomberg) -- Dimensional Fund Advisors hit a key milestone only four months after the quant giant’s debut in the $5.9 trillion exchange-traded fund industry.
The Austin, Texas-based firm founded by David Booth has amassed more than $1 billion for its three active equity ETFs, which started trading in the fourth quarter, according to data compiled by Bloomberg. Just this year, the trio has attracted $607 million in inflows, with the Dimensional US Core Equity Market ETF (ticker DFAU) taking in more than half of that haul.
After announcing plans to enter the ETF arena last June, the firm has aggressively targeted the industry. Its lineup is expected to more than double in June, with the planned conversion of four equity mutual funds into ETFs -- a move that would make Dimensional only the second issuer to execute such a switch. The early success is unsurprising as the company has already established a strong distribution channel through its mutual-fund business, according to WallachBeth Capital.
“I was expecting them to reach $1 billion in such a short amount of time,” said Mohit Bajaj, director of ETFs for WallachBeth. “They have an excellent distribution network, so I am thinking their wholesalers are pitching ETFs too.”
DFAU has rallied 6.4% year-to-date, while the Dimensional International Markets Core ETF (ticker DFAI) and the Dimensional Emerging Core Equity Market ETF (ticker DFAE) have climbed 5.4% and 4%, respectively. That performance comes at a relatively low cost -- the ETFs carry expense ratios between 0.12% to 0.35% -- relative to the largest active ETF. Cathie Wood’s $21 billion ARK Innovation ETF (ticker ARKK) charges 0.75%.
While Dimensional missed out on being the first issuer to convert a mutual fund into an ETF -- Guinness Atkinson nabbed that crown this week -- it’ll by far be the biggest. The planned $26 billion switch will vault Dimensional up the ETF ranks to become one of the 12 largest issuers in the U.S., according to Bloomberg Intelligence.
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