Small Cap. DFSVX. and DFSCX. (DFA Company)

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Wezzley77
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Joined: Wed Dec 06, 2017 7:17 pm
Location: Memphis, TN

Small Cap. DFSVX. and DFSCX. (DFA Company)

Post by Wezzley77 » Thu Jun 14, 2018 7:49 pm

Hello. In constructing my taxable portfolio ( 25% Emerging Markets 25%S&P 500 25%International and 25% Small Cap) I have leaned through my mothers advisor. (Creative Planning) that they use these funds for small cap investments and that they are only accessible through institutions so there is not public trading and few other reasons.


Im technically a client myself of Creative Planning for bringing my mom aboard. I currently have no assets under their management as I am maxing out 401 k and Roth IRA. ( All VT ) for Roth but am now looking into starting taxable.

So my question is. Is there any a time where the access to specific institution funds out weighs the cost of having them manage a taxable account?? I know how this will more than likely get answered by most but I have to ask. Ive looks in Vanguard and cannot get these, I know Vo and couple others would be ok for my small cap portion.

Anybody familiar with DFA or own these funds? thanks in Advance!

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whodidntante
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Re: Small Cap. DFSVX. and DFSCX. (DFA Company)

Post by whodidntante » Thu Jun 14, 2018 8:11 pm

You can get access to DFA with different fee structures if you shop around. I have seen access for a flat fee of $1,000 per year, which is not terrible for a large portfolio. You will also generally have to pay $10-$50 fee to the broker for each purchase transaction, though sometimes selling is free. DFA is an excellent choice to put academic research into practice, and they are the factor investing trailblazers, but these days DFA has serious competition from Blackrock, Goldman, Vanguard, USAA, and a few other ETF issuers.

In addition to lower overall costs, these ETFs will be more tax efficient than a mutual fund as a general rule, because they can shed appreciated shares through the redemption process instead of distributing capital gains to you. I generally find that DFA access is not worth paying for, and I have not paid for it myself. DFA has some funds that haven't been matched exactly with ETFs, but that is not enough to make me pay for access. I currently own a large position in one DFA fund through my 401k, and I have owned a large position in another DFA fund in the past.

livesoft
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Re: Small Cap. DFSVX. and DFSCX. (DFA Company)

Post by livesoft » Thu Jun 14, 2018 8:18 pm

My spouse will have these funds available in her 401(k) next month, so that's another way to get them and perhaps someone else pay any advisory fees. Probably not really worth it because one can find non-DFA ETF equivalents pretty readily. Check out posts by "Robert T" for more info.
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heyyou
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Re: Small Cap. DFSVX. and DFSCX. (DFA Company)

Post by heyyou » Fri Jun 15, 2018 2:20 am

You can see the size and value components of any combination of funds in a Morningstar Xray 3x3 grid. Put the whole portfolio into the Xray analyzer, note the numbers, then subtract the two DFA funds. Also run the Xray of the combo of the two DFA funds.

Add back various quantities of funds that are available, to see if you can duplicate the original portfolio. Instead of all equal slices, you might need to add extra (more than 25%) of Vanguard's Small Cap Value fund to equal the 25% combined contribution of the two DFA funds' numbers. Look at a Total Market fund plus some extra Small Value instead of precisely 25% 500 index plus exactly 25% in the two DFA funds. The stock market will not notice that your portfolio has unequal components from the original one, if the size and value exposures are kept somewhat similar.

Bridgeway was a fund company that offered more focused small cap funds than Vanguard. For initial screening, just compare the prospective funds with the Xray of the combined DFSVX and DFSCX. I doubt that you will find two other funds that are each very similar to their DFA counterparts. You might need 20% of one and 10% of another to match the DFA combo.

On the Xray, I add the numbers across each line, and down each line just to see the relative size and value exposures of similar portfolios.

Wezzley77
Posts: 43
Joined: Wed Dec 06, 2017 7:17 pm
Location: Memphis, TN

Re: Small Cap. DFSVX. and DFSCX. (DFA Company)

Post by Wezzley77 » Fri Jun 15, 2018 8:01 pm

Thanks guys for reply’s! Very informative and helpful. Some sharp people in here making a difference. Appreciate your time!

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