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DFA Funds Explained

financial planning taxes

By: Hamilton Financial Planning

Have you ever wondered –

  1. What exactly is a DFA fund?  
  2. Why are DFA funds unique?
  3. Why are DFA funds considered to be a prime source of investment?
  4. Do I need DFA funds in my investment portfolio?

DFA is the acronym for Dimensional Financial Advisors and in one word – YES – all investors benefit from having DFA funds in their portfolio.  The percentage of DFA funds in a portfolio depends on individual goals, age, obligations, and both short and long term desires.

Dimensional Financial Advisors funds are totally unique to the marketplace for a few key reasons:

  • DFA funds are not sold on the open market; ergo the public does not have access to DFA funds.
  • DFA investments can only be purchased through a pre-screened, vetted, appointed and authorized DFA financial, investment and wealth manager.
  • DFA funds are commission-free, low cost, very diversified, and tax-efficient.
  • DFA funds provide a much broader and deeper coverage of the global markets than other mutual funds. Investing in global markets is the natural protection from economic and political upheaval in any one country that can result in a destabilized market.  

Remember the old adage about never putting your eggs all in one basket? Diversification and global investments protects you and your future.

  • DFA funds provide investors with the opportunity to invest to a greater degree in high priced markets due to the number of investors under the umbrella fund. Likewise, the number of investors in each DFA fund lessens the impact of a temporary negative market.

The over-riding reason for investing in DFA funds is they are economically, systematically and scientifically determined to be highly diversified and risk tolerant investments. After all, one of DFA founders, Eugene Fama, is a Nobel Prize winner in Economic Science

  • DFA funds are formulated and purchased on sound economic reasoning to maximize investments and returns over the long haul.

In other words, open market mutual funds are created and purchased based on trends and subjective to decisions of the investment companies and advisors offering them.  DFA funds are not.

The inborn and non-negotiable requirement for being an authorized and registered DFA financial planner in order to purchase DFA funds automatically eliminates any possibility of traders risking your money with the purchase of trend-sensitive or subjective gains investments.

Hamilton Financial Planning has been an authorized Dimensional Financial Advisors funds financial, investment, and wealth planning firm for three years and counting. We intimately understand the benefits of having DFA funds in portfolios for investors at all stages of building wealth.

If you are interested in learning more about and benefiting from ownership of Dimensional Financial Advisors funds, read our blog “What Dimensional Fund Advisor Managers Has to Offer You” and then give us a call.


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