Dimensional launches ETFs in Australia

Actively managed exchanged traded fund (ETF) global asset manager, Dimensional Fund Advisors, has announced the launch of ETFs in the Australian market to ease the access to its systematic investment approach.

Initially, Dimensional will offer three actively managed core equity strategies in a “dual-access” structure under which investors can access a fund through both ASX-listed and unlisted distribution channels.

This will include the Australian Core Equity, Global Core Equity (Unhedged) and Global Core Equity (AUD Hedged).

These strategies – which are among the firm’s most popular – provide broad exposure to the Australian and other developed equity markets, while emphasising the known drivers of higher expected return in small caps, value stocks and more profitable companies, the company said.

The firm has described its systematic investing or factor-based investing as a rules-based approach to managing money which replaces the subjectivity of traditional active management with quantitative research while avoiding the rigidities of indexing through an active but process-driven pursuit of higher expected returns.

“We’ve been offering our systematic investment approach through financial intermediaries for nearly a quarter of century in Australia,” Bhanu Singh, Dimensional Australia’s chief executive, said.

“By launching ETFs, we are expanding their choices in how they access our investment expertise on behalf of their clients.”

Dimensional was founded in the US in 1981 and has been in Australia since 1994. The firm manages more than $900 billion for investors globally, including more than $38bn for clients in Australia and New Zealand. Its clients are financial intermediaries like advisers, brokers and super funds.

Dimensional entered the ETF market in the US in November 2020 following a regulatory change.

Since then, the firm has said it has experienced significant growth, becoming the largest issuer of actively managed ETFs globally.

At the moment, it offers more than 30 ETFs in the US with approximately $US100 billion in assets.

“Our success in the US and our discussions with local clients tell us that some prefer the flexibility that ETFs offer,” Nathan Krieger, who heads Dimensional’s client group in Australia, said.

“It just gives advisers and other intermediaries more ways to access what we do. And we always start with client need.”