5 min readBy Ron Koren ETF Insider
How does the DFAT ETF work?
The DFAT ETF is a specialized investment fund that focuses on a specific sector. This exchange-traded fund offers investors exposure to a range of companies in this sector.
Dimensional Fund Advisors LP (the Advisor) employs tax management strategies for the US Targeted Value ETF to optimize the after-tax value of shareholders' investments. These strategies include minimizing net capital gains realization and maximizing the proportion of long-term capital gains. The Advisor combines research, portfolio design, management, and trading to achieve the ETF's investment objective, emphasizing long-term expected returns while maintaining diversification. The US Targeted Value ETF primarily invests in lower relative price stocks with higher profitability among U.S. small and mid-cap companies, utilizing a market capitalization-weighted approach.
Dimensional Fund Advisors LP (the Advisor) employs tax management strategies for the US Targeted Value ETF with the aim of maximizing the after-tax value for shareholders. These strategies involve buying and selling securities in a way that delays and minimizes the realization of net capital gains while also maximizing the extent to which any realized gains are taxed at lower capital gains rates. The investment approach combines research, portfolio design, portfolio management, and trading functions to achieve the ETF's objective. The US Targeted Value ETF, which follows a market capitalization-weighted approach, typically invests in a diverse range of readily marketable securities of U.S. small and mid-cap companies that the Advisor identifies as lower relative price stocks with higher profitability. The ETF places emphasis on certain stocks that exhibit characteristics such as lower relative price and higher profitability, as compared to their representation in the small- and mid-cap value segment of the U.S. market. Under normal circumstances, the US Targeted Value ETF invests at least 80% of its net assets in securities of U.S. companies, primarily focusing on those with smaller market capitalizations. The Advisor's investment decisions may also consider shorter-term factors like price momentum and investment characteristics when determining exposure to eligible companies. Additionally, the ETF may utilize futures contracts and options on futures contracts for U.S. equity securities and indices to adjust its equity market exposure based on cash flows.
Dimensional Fund Advisors LP employs tax-efficient strategies in managing the US Targeted Value ETF. This ETF aims to maximize after-tax returns for shareholders by carefully buying and selling securities within the portfolio to minimize net capital gains realization and optimize the tax treatment of gains. The investment approach integrates research, portfolio design, management, and trading functions to emphasize long-term drivers of expected returns while maintaining broad diversification across companies and sectors. DFAT also focuses on lower relative price stocks with higher profitability, primarily from small and mid-cap U.S. companies. While not tied to a specific index, this actively managed ETF aims to outperform through these strategic tax and investment strategies.
The correlation aspect of Dimensional Fund Advisors LP's US Targeted Value ETF (DFAT) is essential for investors seeking to understand its performance within the U.S. equity market. DFAT's correlation with the broader market depends on the selection of lower relative price stocks with higher profitability, emphasizing factors such as market capitalization, price to cash flow, and price to earnings ratios. To delve deeper into these correlations and gain valuable insights into DFAT's performance, investors can utilize the ETF Insider web app, which offers a user-friendly interface for visualizing correlations, identifying overlaps, and making informed investment decisions.
The DFAT Sector comprises a diversified portfolio of U.S. small and mid-cap companies that are considered lower relative price stocks with higher profitability. The investment strategy of Dimensional Fund Advisors LP's US Targeted Value ETF (DFAT) aims to maximize after-tax value for shareholders. The fund follows an integrated investment approach that combines extensive research, portfolio design, management, and trading functions to identify and invest in companies that exhibit strong profitability and lower relative price, emphasizing long-term expected returns while maintaining broad diversification across sectors and industries. Additionally, DFAT may utilize futures contracts, options on futures, and securities lending to manage portfolio risk and generate additional income, making it an actively managed ETF with potential for higher turnover compared to index-tracking funds.
While specific details about the exposure of the Dimensional Fund Advisors LP''s US Targeted Value ETF (DFAT) are not available, investors can leverage the ETF Insider web app to gain comprehensive insights into its markets, regions, and sectors exposure. ETF Insider offers a user-friendly visualization tool to explore DFAT''s holdings, uncover any overlaps or correlations, and access in-depth data for a more informed investment strategy. Whether you''re looking to understand its market capitalization or assess its sector diversification, ETF Insider provides the necessary tools to make well-informed decisions when investing in DFAT or any other US ETFs.
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5 min readThe DFAT ETF is a specialized investment fund that focuses on a specific sector. This exchange-traded fund offers investors exposure to a range of companies in this sector.
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