Dimensional Fund Advisors
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| Dimensional Fund Advisors | |
|---|---|
| Type | Private |
| Founded | 1981 |
| Headquarters | Santa Monica |
| Key people | David Booth, President & CEO |
| Industry | Finance |
| Products | Money Manager and Investment Firm |
| Employees | Approx. 500 |
| Website | www.dimensional.com |
Dimensional Fund Advisors is an investment firm headquartered in Santa Monica, California with regional offices in Sydney, London, Vancouver, Los Angeles, Austin and Chicago. The company was founded in 1981 by David Booth and Rex Sinquefield, both M.B.A. graduates of the University of Chicago where much fundamental economics research has been done.
DFA's objective is to use the insights of Modern Portfolio Theory to produce more efficient investment vehicules. The company's board of directors includes Myron Scholes and Robert C. Merton, both of whom won the Nobel Prize for economics. The late Merton Miller, another Nobel laureate, was also on the board of directors.
The company rejects stock-picking and market timing – largely discredited by Modern Portfolio Theory – and uses an enhanced form of indexing to design portfolios and limit trading costs.[1] Their investment philosophy emphasizes five "dimensions" that determine investment results – hence the firm's name. For example, one of their stock funds might overweight small-cap stocks and value stocks, to emphasize the dimensions of "size" and "price."
Dimensional manages $160 billion of funds as of 2008, which are not offered directly to the public, but only to institutional investors and registered investment advisers. The company is owned by its employees, board members and a number of outside investors, which as of 2005 was reported to include Governor Arnold Schwarzenegger of California.[2] See [3]
[edit] See also
- Enhanced indexing
- Efficient market hypothesis
- Kenneth French, Eugene Fama, and Roger G. Ibbotson are also on DFA's Board of Directors
[edit] Notes
- ^ "The New Indexing," an article by Eugene Fama on DFA's site: http://www.dfaus.com/library/articles/new_indexing/
- ^ The truth about Arnold, by Peter Byrne. salon.com, February 15 2005; see also Schwarzenegger’s Next Goal on Dogged, Ambitious Path, by Bernard Weinraub and Charlie LeDuff. New York Times, August 17, 2003.
- ^ "The Evolution of an Investor", by Michael Lewis. "Portfolio Magazine", December 2007.
