Dimensional Fund Advisors
The latest research and outlooks in the ProAllocate library
- Equities
Should Politics Drive Your Portfolio Decisions?
Dimensional argues nearly a century of S&P 500 data shows no reliable link between which party controls Congress and stock returns, since markets price in election expectations well before votes are cast. It concludes investors should stay diversified and disciplined rather than adjust portfolios for midterm outcomes.
- Equities
Q&A on Profit Growth and Expected Returns
Dimensional's Namiko Saito and Stanley Black present new research showing recent profit growth predicts future profitability and stock returns, complementing current profitability as a signal. The firm will combine profit growth with current profitability across its equity strategies to improve expected-return forecasts without materially raising turnover.
- Wealth Management
Simple Wealth Management Solutions for Corporate Executives
A podcast episode examines whether corporate executives face unique financial management challenges despite their wealth, and argues financial professionals can help address issues like equity compensation, taxes and retirement planning.
- Equities
Is This a Good Place for Active Management?
Dimensional argues that despite perceptions that thinner analyst coverage creates stock-picking opportunities, active managers have largely failed to outperform in small-cap, non-US, and emerging-market equities over 20 years. It suggests systematic equity strategies may offer more reliable outcomes than traditional stock picking in these less-traded markets.
- Fixed Income
The Hidden Costs of Index Reconstitution: Bond Edition
Dimensional Fund Advisors finds that corporate bond index reconstitutions cause price pressure around credit downgrades and upgrades, imposing a hidden 3–8 bps annual cost on index funds. The firm argues flexible rebalancing or systematic active management can preserve indexing's benefits while reducing this cost.
- Wealth Management
Don’t Let These Financial Headlines Frighten You
The Informed Investor podcast argues that alarming financial headlines are crafted to attract attention rather than offer sound guidance, urging investors not to let sensational news drive investment decisions.
- Equities
Who Controls Congress? Stocks May Not Care
The article argues that long-term equity market performance has been positive regardless of which party controls the US Congress, suggesting investors should avoid repositioning portfolios based on election outcomes.
- Equities
Is This a Good Time for Active Management?
Dimensional finds high cross-sectional dispersion does not improve active managers' odds of beating benchmarks, with underperformance slightly worse in high-dispersion months over 2006-2025. It argues active management's edge may instead lie in better trade execution during volatile periods.
- Equities
Here’s Why Index Funds Are Missing Out on Gains
A podcast episode argues that index funds' low fees mask hidden costs from annual index reconstitutions, and suggests a diversified strategy with daily rebalancing can reduce these costs for investors.