Dimensional unveils ETF first for Aussie investors

Dimensional, touted as the world’s largest issuer of active exchange traded funds (ETFs), has launched its first ETF products for the Australian market.

The US-headquartered global asset manager will offer local investors three ETF strategies – among its most popular, it said: the Australian Core Equity, Global Core Equity (Unhedged) and Global Core Equity (AUD Hedged).

The three funds promise to provide broad exposure to the Australian and other developed equity markets, Dimensional said, while emphasising known drivers of higher expected return in small caps, value stocks and more profitable companies.

Based on popular demand from intermediaries, the funds will be made available in a “dual-access” structure, enabling investors to access the funds through both Australian Securities Exchange-listed (ASX-listed) and unlisted distribution channels.

Dimensional boasts that its active ETFs employ a systematic investing or factor-based investing approach, a “rules-based approach” to managing money.

“It replaces the subjectivity of traditional active management with quantitative research and avoids the rigidities of indexing through an active but process-driven pursuit of higher expected returns,” the firm said in a statement.

Bhanu Singh, chief executive for Dimensional Australia, said its “systematic investment approach” has been available to Australian investors through financial intermediaries for nearly a quarter of a century.

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

Dimensional entered the ETF market in the US in November 2020 following a regulatory change, and has since become the largest issuer of actively managed ETFs globally.

The firm now offers more than 30 ETFs in the US with approximately US$100 billion (AU$151 billion) in assets.

Dimensional was founded in the US in 1981 and established its first base in Australia in 1994. The firm manages more than AU$900 billion for investors globally, including more than AU$38 billion for clients in Australia and New Zealand, among which include financial intermediaries such as advisers, brokers and super funds.