cldrunner wrote:I don't think so!!
Well, this thread is over a year old but I found it interesting how returns have come full circle. It looks to me like the Vanguard Funds are actually performing very well against the DFA funds. Returns are posted on Scott Burns Asset Builder website. Interesting how Scott Burns calls the DFA Funds "Smart Funds" while the "dumb Vanguard funds
" are actually doing just as well or better in most categories. This does not even include using the Admiral Shares for the lower cost and higher returns....I wonder if many DFA Advisors are changing a few of their DFA Funds over to Vanguard???
I guess we are referring to short term returns in this post? I doubt the long term results have changed much with the addition/deletion of one year since 2011. I know this much, if an investment advisor advises their client to sell an investment based on a short term (lets say 3 year) result, you should fire that advisor. Short term results are all but meaningless, and receive far more attention than they should on this site. Discipline is the name of the game, and at no time is it needed more than when your well thought out long term investment selection goes through a short bout of underperformance (or negative returns). Unfortunately, most react to this underperformance as a sign that there is something wrong with their choice, and instead jump to another investment that has done better and also on the cusp of underperformance as the merry-go-round never stops.
But I am not even sure that is the case (that short term DFA returns have been poor, or "come full circle" compared to Vanguard). Granted, Vanguard is deficient in a few key asset class categories that make DFA vs Vanguard comparisons difficult, and many of DFAs asset class funds have stronger exposures to small and value stocks, but we can try--and the value factor globally hasn't been strong the last few years, so that should wash out in the comparisons. Here are the 3 year return differences across various equity and fixed income asset classes:
DFA Enhanced US Large Co Fund = +29.7%
Vanguard S&P 500 Index Fund = +28.5%
DFA US Large Value Fund = +35.4%
Vanguard Value Index Fund = +28.4%
DFA US Small Cap Fund = +38.9%
Vanguard Small Cap Index = +37.6%
DFA US Small Value Fund = +38.7%
Vanguard Small Cap Value Index = +36.8%
DFA Int'l Value Fund = +26.8%
Vanguard Int'l Value Fund = +22.1%
DFA Int'l Small Cap Fund = +28.0%
Vanguard Int'l Explorer = +26.9%
DFA Emerging Markets = +33.2%
DFA Emerging Value = +37.1%
DFA Emerging Small = +41.9%
Vanguard Emerging Markets Index = +32.1%
DFA 5YR Global = +5.3%
Vanguard ST Bond Index = +4.0%
DFA Inflation Protected Bond = +11.7%
Vanguard TIPS Fund = +10.7%
So I see a couple of +1%s, +1.5%s, +2%s, and an outlier or two of +5% advantage of DFA over Vanguard. But the 1-2% advantage seems to be holding in the short run, even during a period where value hasn't beaten growth and DFA should do very poorly given their stronger value exposure.
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