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Author: indexnovice Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 39286  
Subject: Dimensional Funds Date: 9/17/2003 12:37 PM
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Hello,

I've been reading a lot about Dimensional Funds (Dimensional Fund Advisors) and what I read suggests that investing in Dimensional passive funds is a better bet than the Vanguard portfolio of passive funds. My questions:

1) Has anybody invested in them and if so, your experiences?
2) Unfortunately, Dimensional requires that I go through a registered money manager ($$$ fees). I am trying to find someone with a low fee structure. Any comments here?

Would appreciate any comments you might have on Dimensional.

Thanks in advance.
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Author: elvistmf Big red star, 1000 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 26940 of 39286
Subject: Re: Dimensional Funds Date: 9/17/2003 12:47 PM
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Sounds like a not-so-hidden load to me.
Run!

My "Elvis Fund" has beaten the S+P500 since its inception (minutes ago). My scheme (scam) is that the fund always beats the S+P500, but the maintenance fees are always 110% of this same number. If you strictly look only at the chart "Returns vs. S+P500" it's great. Just don't look at your monthly statement.

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Author: Foolferlove Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 26941 of 39286
Subject: Re: Dimensional Funds Date: 9/17/2003 1:52 PM
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Hi indexnovice, welcome to the Fool!

I have the utmost respect for DFA and their funds. Their research is good, their funds are well thoughtout, and they really seem to be out to educate people as well.

But the problem I have is that, as you mentioned, you have to pay an advisor a fee to get access to DFA funds. Typically this fee is 1% yearly of assets. This fee over time can amount to huge numbers of dollars. It's like adding 1% to the expense ratio or each one of your funds.

There are some index funds companies out there that also have a great selection of low cost funds, Vanguard, for example. While they may not have every option or every asset class sliced "perfectly" like DFA, there is generally no asset allocation that you could not impliment with Vanguard's funds.

So the question is: Is it worth it to pay 1% just so that you can gain access to DFA? I would say no. I just don't think that the difference between the funds at DFA and the funds at Vanguard are that great. Ask yourself if you would invest in the DFA funds if they all had expense ratios of 1.3% vs. Vanguards .3% (just for an example).

Again, I highly respect the people at DFA and their work, but don't think the benefits are worth 1%. Now IF, and ONLY IF, you had independently decided that you needed an advisor to manage your money for you ANYWAY, well, then it may make sense to choose one with access to DFA.

There a little bit of discussion of DFA here (and also a good free site for investing and index fund information):

http://nofeeboards.com/boards/viewtopic.php?t=817&highlight=dfa



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Author: CABob Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 26942 of 39286
Subject: Re: Dimensional Funds Date: 9/17/2003 4:58 PM
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I do not have any direct experience but the following link is to an article which suggests the DFA is better than Vanguard.
http://www.investorsolutions.com/NewsletterGate.cfm?Mem=256&Cnt=167&NID=60&Track=Art&Link=art_100_Percent_Index_Funds_100_Percent_Of_The_Time.cfm
Remember, however, that the article is written by a financial advisor that sells DFA funds. A number of people I respect have the highest regard for DFA but they are not in universal agreement that the quality of DFA funds warrants the expenses of the financial planner that you must use.
You might also peruse the Vanguard Diehard forum at M* at http://socialize.morningstar.com/NewSocialize/asp/AllConv.asp?forumId=F100000015 There are a number of knowledgeable folks there including some financial advisors and DFA is often discussed.

HTH, Bob




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Author: Fred272 Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 26943 of 39286
Subject: Re: Dimensional Funds Date: 9/17/2003 5:58 PM
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Just a thought.U mite go 2 Fund Advice.com That,s Paul Merrimans site and he deals with DFA.I believehis cost is like 1%Of your investment.He also deal,s with Van. good luck.
A reader

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Author: banjoman One star, 50 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 26944 of 39286
Subject: Re: Dimensional Funds Date: 9/17/2003 9:51 PM
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I did some research on this. If you are investing a small amount of money (less than $150,000), you'll pay about the same amount everywhere. Index Fund Advisors (http://www.ifa.tv/Admin/fees.asp) has an account minimum of $25,000 and charges 0.9% for small accounts. Most other places charge 1%.

If you have a larger account, you should check out Evanson (http://www.evansonasset.com/index.cfm?Page=11), who charges a flat fee of $1500-$3000 per year (no minimum, though they recommend $500,000) or Portfolio Solutions (0.25%/year with $500,000 minimum).

Unfortunately, for small accounts, I suspect the fees will eat up any advantage provided by the DFA funds.

Don

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Author: yahooross Two stars, 250 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 26945 of 39286
Subject: Re: Dimensional Funds Date: 9/18/2003 10:53 AM
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Thanks for the reply, banjoman.
Unfortunately, I suppose by the time I can use Evanson or Portfolio solutions, the taxes on selling my shares and buying DFA funds will make it too expensive.

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Author: ataloss Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 26947 of 39286
Subject: Re: Dimensional Funds Date: 9/18/2003 7:46 PM
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If I win the lottery I will have Bill Bernstein manage my money (10 Million minimum!!)

http://www.efficientfrontier.com/

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