Dimensional Fund Advisors has announced that the firm intends to merge eight of its US equity ETFs into ETF share classes of the firm’s funds with similar investment strategies.
As part of this merger and the resulting efficiencies of scale, the firm announced fee reductions across these funds.
Dimensional was the first active manager to receive ETF share class exemptive relief, in 2025, and launched the industry’s first active ETF share class earlier this year with Dimensional’s US Micro Cap ETF (DFMC), which is an ETF share class of the firm’s first fund.
Gerard O’Reilly, Co-CEO and Co-CIO, says: “We have long championed broader availability of ETF share classes, recognizing the potential tax efficiency, cost savings, and economies of scale this structure can offer investors. The future of Dimensional’s fund offering is one where mutual funds and ETFs coexist, offering investors the benefits of dual access points to Dimensional’s robust research and implementation. ETF share classes simplify allocation decisions by making investment philosophy the primary consideration when selecting investments, not fund wrappers.”
Announced mergers
| Acquiring Multi-Class Fund | Target ETF | ||
| Mutual Fund Ticker | Mutual Fund Name | ETF Ticker | ETF Name |
| DFEOX | US Core Equity 1 Portfolio (I) | DCOR | US Core Equity 1 ETF |
| DFQTX | US Core Equity 2 Portfolio (I) | DFAC | US Core Equity 2 ETF |
| DFVEX | US Vector Equity Portfolio (I) | DXUV | US Vector Equity ETF |
| DURPX | US High Relative Profitability Portfolio | DUHP | US High Profitability ETF |
| DFSTX | US Small Cap Portfolio (I) | DFAS | US Small Cap ETF |
| DFFVX | US Targeted Value Portfolio (I) | DFAT | US Targeted Value ETF |
| DFSVX | US Small Cap Value Portfolio (I) | DFSV | US Small Cap Value ETF |
| DFREX | Real Estate Securities Portfolio (I) | DFAR | US Real Estate ETF |
The fund mergers bring together approximately USD250 billion in assets—USD100 billion in ETFs and USD150 billion in mutual funds—into funds that will offer both mutual fund and ETF share classes.
The firm writes that adding ETF share classes to funds can allow investors to better prioritize what matters most to long-term outcomes: choosing an investment strategy they can stick with. Investors can have ETF and mutual fund access points to a single fund, while also benefitting from the flexibility to convert from the mutual fund class to the ETF class.
Following the fund mergers, Dimensional expects that the ETF share classes will be listed with the same ticker as the prior, standalone ETF. For example, Dimensional writes that its US Core Equity ETF, the world’s largest active ETF by AUM, will maintain its ticker, DFAC. Dimensional’s ETF assets under management are approximately USD290 billion.
Announced fee reductions
As a result of the efficiencies created by merging these assets, Dimensional also announced targeted management fee and expense reductions of 9 per cent on an asset-weighted basis, effective November 1, 2026.3
| Current Expenses, Institutional Class | Announced Expense Limitation Amounts | ||||
| Fund | Gross Expense Ratio | Net Expense Ratio | Institutional Class | ETF Class | % Reduction |
| US Core Equity 1 Portfolio4 | 0.15% | 0.15% | 0.14% | 0.14% | 7% |
| US Core Equity 2 Portfolio4 | 0.19% | 0.18% | 0.17% | 0.17% | 6% |
| US Vector Equity Portfolio4 | 0.24% | 0.24% | 0.22% | 0.22% | 8% |
| US High Relative Profitability Portfolio4 | 0.23% | 0.22% | 0.17% | 0.17% | 23% |
| US Small Cap Portfolio4 | 0.28% | 0.27% | 0.25% | 0.25% | 7% |
| US Targeted Value Portfolio4 | 0.30% | 0.29% | 0.26% | 0.26% | 10% |
| US Small Cap Value Portfolio | 0.31% | 0.31% | 0.27% | 0.27% | 13% |
