- Dimensional Fund Advisors
-
Dimensional Fund Advisors 
Type Private Industry Finance Founded 1981 Headquarters Austin, TX Key people David G. Booth, Co-CEO
Eduardo Repetto, Co-CEOProducts Money Manager and Investment Firm Employees Approx. 500 Website www.dimensional.com Dimensional Fund Advisors (DFA or Dimensional) is an investment firm headquartered in Austin, Texas with regional offices in Amsterdam, Berlin, London, Santa Monica, Sydney, and Vancouver. The company was founded in 1981 by David G. Booth and Rex Sinquefield, both graduates of the University of Chicago Booth School of Business.
DFA's objective is to "deliver the performance of capital markets and increase returns through state-of-the-art portfolio design and trading."[1] The company's board of directors includes Myron Scholes who won the Nobel Prize for economics. The late Merton Miller, another Nobel laureate, was also on the board of directors, as was Robert C. Merton before he became the company's Resident Scientist[2]. Other directors include leading economists such as George Constantinides, Eugene Fama, Kenneth French, and Roger G. Ibbotson. DFA hosts a forum where Eugene Fama and Kenneth French express their opinions on topics related to finance and current events.[3] This website is called the Fama/French Forum.
The company rejects stock-picking and market timing and utilizes enhanced indexing to design portfolios and limit trading costs.[4] 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 has more than $206.35 billion under management as of 31 December 2010[update]. Its mutual funds are not offered directly to the public, but only to institutional investors and through approved fee-only Registered Investment Advisors. 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.[5] [6]
On November 6, 2008, the University of Chicago Graduate School of Business announced a $300 million dollar gift from David Booth in the form of cash and the income stream from DFA stock. The school was renamed the University of Chicago Booth School of Business.[7][8]
On December 2, 2009, Dimensional announced the acquisition of SmartNest, a retirement planning computer software company. The technology offered by SmartNest was developed by Harvard Business School professor Robert C. Merton, who left the company's board after the purchase to became Resident Scientist.[9]
See also
- Enhanced indexing
- Efficient market hypothesis
Notes
- ^ DFA's home page: http://www.dfaus.com
- ^ Dimensional Bio Page: http://www.dfaus.com/library/bios/robert_merton/
- ^ http://www.dimensional.com/famafrench/
- ^ "The New Indexing," an article by Eugene Fama, Jr. on DFA's site: http://www.dfaus.com/2009/05/the-new-indexing.html
- ^ 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.
- ^ Associated Press, Alum gives U of Chicago $300M for business school
- ^ The University of Chicago Booth School of Business
- ^ http://www.pionline.com/article/20091202/DAILYREG/912029990
External links
Categories:- Investment management companies of the United States
- Mutual fund families
- Companies established in 1981
- Companies based in Austin, Texas
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