Dimensional Investing in an Active ETF Structure
Dimensional recently announced plans to add to our investment offering by launching three new actively managed exchange traded funds (ETFs) that will offer broadly diversified, all cap core exposure to US, non-US developed, and emerging markets. The new ETFs, planned for later this year, will be managed in accordance with the same investment philosophy, research, and systematic investing approach as our existing portfolios, but in an actively managed, transparent ETF structure.
Dimensional has a long track record of delivering our investment strategies in different types of vehicles and account structures, among them mutual funds, separate accounts, and commingled trusts. Our goal with any vehicle is to determine how to add value in a manner consistent with our core tenets within the rules and parameters of that vehicle type. We prefer to give our clients the choice in how they access our investment expertise if we believe we can offer a similar investment experience independent of the vehicle type.
Many considerations went into our decision to offer actively managed ETFs. This article focuses on the ETF Rule (“the Rule”) adopted by the US Securities and Exchange Commission (SEC) in September 2019, which streamlines regulations governing most ETFs and allows for greater flexibility in their day-to-day management. We believe that this improved flexibility, along with the technology and processes we already have in place, will be beneficial in allowing us to bring our investment philosophy and approach to an active ETF format.
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Robert J. Pyle, CFP®, CFA is president of Diversified Asset Management, Inc. (DAMI). DAMI is licensed as an investment adviser with the State of Colorado Division of Securities, and its investment advisory representatives are licensed by the State of Colorado. DAMI will only transact business in other states to the extent DAMI has made the requisite notice filings or obtained the necessary licensing in such state. No follow up or individualized responses to persons in other jurisdictions that involve either rendering or attempting to render personalized investment advice for compensation will be made absent compliance with applicable legal requirements, or an applicable exemption or exclusion. It does not constitute investment or tax advice. To contact Robert, call 303-440-2906 or e-mail info@diversifiedassetmanagement.com.
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