facebookWhy are the DFA funds offered by Endowus and Moneyowl rated as large cap blend in the Morningstar style box? - Seedly

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Anonymous

01 Nov 2020

Robo-Advisors

Why are the DFA funds offered by Endowus and Moneyowl rated as large cap blend in the Morningstar style box?

I understood DFA funds to be a small cap value titled focussed; however when I looked at the ones offered by Moneyowl and Endowus, the seem to be rated as large cap blend by Morningstar. Am I missing something here; could someone please explain. Thank you.

Discussion (1)

What are your thoughts?

Endowus

Endowus

01 Nov 2020

Hi Anon,

This is a great question! DFA funds have a small-cap, value and profitability tilt, not focus.

What you would realise is that the top 10 holdings of some of the broad-based DFA funds such as DImensional World Equity Fund or Dimensional Global Core Equity Fund are still made up of the top US companies, just that the percentage is lower than the equivalent MSCI All Country World Index (MSCI ACWI) or (MSCI World Index).

The bulk of the holding is still made of large-cap growth companies, just that there is a tilt.

You can check out the definition of how Morningstar Style box defines the funds here. Hope that explains!

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