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Dimensional Lowers U.S. Mutual Fund Management Fees

It’s an excellent way to start a new month ­­— lower investment management fees on mutual funds where your hard-earned dollars are invested! Effective Feb. 28, Dimensional Fund Advisors reduced management fees across 33 equity mutual funds, representing a 15% reduction on an asset-weighted basis1 on those funds. At AMDG Financial, we use nine of these funds to invest our clients’ assets. The table below highlights the funds we use and how much their fees are reduced.

Fund Name

Management fee prior to February 28, 2021 in basis points

Management fee effective February 28, 2021 in basis points

% Reduction

Emerging Markets Core Equity Portfolio

42

33

21%

Global Allocation 60/40 Portfolio

20

19

5%

Global Equity Portfolio

23

20

13%

International Core Equity Portfolio

24

20

17%

DFA International Small Cap Value Portfolio

60

45

25%

International Vector Equity Portfolio

42

35

17%

US Core Equity 2 Portfolio

17

16

6%

US Large Cap Value Portfolio*

23

19

17%

US Targeted Value Portfolio

33

30

9%

Effective Feb. 28, 2021, the total management fee limit in the Portfolio’s permanent fee waiver will be reduced to correspond to the reductio of the Portfolio’s investment management fee. Source: Dimensional Fund Advisors

In a recent announcement, Gerard O’Reilly, co-chief executive officer and chief investment officer of Dimensional, said, “For nearly 40 years, Dimensional has refined, enhanced and advanced its investment solutions, systems and processes and sought to pass those efficiencies and benefits back to clients.”

Q4 2020 Market Review

Dimensional also announced in November that it would be launching six new actively managed, tax-efficient exchange-traded funds (ETFs) and converting six tax-managed mutual funds into those new ETFs this year. As we reported in our blog at that time, this is also good news for AMDG Financial clients, because the ETFs enable them to maintain a tax-efficient investing strategy at a lower cost.

This isn’t the first time that Dimensional has lowered fees. Those of you who attended the company’s latest Investor Symposium may recall that controlling costs is one of three goals Dimensional seeks when designing its portfolios (the other two are increasing expected returns and managing risks). Dimensional also maintains flexibility in executing trades to help reduce its trading costs. As a result, the company has been able to lower its fees regularly over the years.

If you have questions about the fees associated with your portfolio, or on the new ETFs being offered by Dimensional, please feel free to contact us anytime. As always, it’s a pleasure to serve you.

1 Assets used to calculate the weighted average reductions were based on Fund Fiscal 2020 YTD average assets through 9/30/2020.

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