Build Dimensional Fund Advisors Investment Portfolios With ETFs

Build the Dimensional Fund Advisor (DFA) portfolios with ETFs.
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What are the Dimensional Fund Advisors (DFA) portfolios?

The 5 DFA portfolios go all the way from holding 100% bonds to being fully exposed to equities at 100%. DFA’s portfolios are low- to high-risk portfolios and can be built with 4 – 15 ETFs.

For the past 10 years, the Dimensional Fund Advisors Model Portfolios 100% Stocks have has returned 9.23 with a standard deviation of 16.89.

The dividend yield is 2.47%. The 30 year return is 9.56%. Last year it returned 7.7%.

What is the historical return for Dimensional Fund Advisors Investment portfolios?

Here is the historical return for DFA model portfolios when using our time series.

Data was last updated on October 1, 2021 at 04:21 a.m. ET

NameAsset class countYear to dateReturn in 202010 year returnCAGR since 1989 (%)Risk levelExpense ratio
Dimensional Fund Advisors Model Portfolios 0% Stocks Fixed4-1.58%6.212.554.4410.06%
Dimensional Fund Advisors Model Portfolios 20% Stocks Conservative151.71%6.514.015.7210.08%
Dimensional Fund Advisors Model Portfolios 40% Stocks Moderate155.00%6.815.46.8810.10%
Dimensional Fund Advisors Model Portfolios 60% Stocks Normal158.28%7.116.737.9120.12%
Dimensional Fund Advisors Model Portfolios 80% Stocks Agressive1511.57%7.418.018.8130.14%
Dimensional Fund Advisors Model Portfolios 100% Stocks Equity1114.86%7.79.239.5630.16%

How do the Dimensional Fund Advisors portfolios compare to the best portfolios?

Below you can see the returns of the best portfolios that we have benchmarked.

NameSee PortfolioYear to dateReturn in 202010 year returnCAGR since 1989 (%)Draw Down
Premium Portfolio15.92%18.2913.8410.77-37.63%
Premium Portfolio8.30%18.118.6311.14-44.87%
Premium Portfolio13.48%19.712.8410.49-32.77%
Premium Portfolio20.78%3.198.5210.59-36.46%
Premium Portfolio20.17%3.668.6210.48-36.35%
Premium Portfolio15.18%21.0313.7810.83-37.00%
Premium Portfolio19.24%8.711.5610.65-35.26%
Premium Portfolio15.41%7.488.3910.64-37.91%
Premium Portfolio16.16%5.3610.8811.23-35.43%
Premium Portfolio20.81%3.4210.2110.47-40.85%

What is Dimensional Fund Advisors?

Dimensional Fund Advisors DFA is one of the most respected fund managers. They have Nobel laureates on their investment committee board.

Dimensional Fund Advisors (DFA) is a hugely successful mutual fund provider ($660 billion AUM). They provide access to their funds only through investment advisors. This means you cannot buy them through your brokerage.

We can however replicate the model portfolios using ETFs from iShares ETFs or Vanguard ETFs.

Description for Dimensional Fund Advisors Investment Portfolios

The Dimensional Fund Advisors methodology is weighted towards value and small-cap. This is no surprise as two of the investment committee members of DFA are Eugene Fama and Kenneth French. They pioneered the model for describing asset class premia.

Value and small-cap are two asset classes that have the highest historical returns. The impact on investing by Fama cannot be understated and is eloquently detailed in The Myth of the Rational Market by Justin Fox.

DFA is the room filled with the people that invented modern finance.

We regularly see a comparison between DFA and Vanguard. Some are firm believers in DFA funds, while others are advocating Vanguard funds.

The issue stems from the fact that in some years, DFA funds have better returns, while in other years, Vanguard funds have higher returns.

If you want to dive deeper into this issue, see the below articles as a starting point:

https://dfavsvanguard.com

https://www.altruistfa.com/dfavanguard.htm

https://www.ifa.com/articles/vanguard_dimensional_through_statistical_lens

https://andrewhallam.com/2018/05/the-dimensional-fund-advisors-versus-vanguard-battle/

DFA funds have higher expense ratios than Vanguard funds.

“The number of managers that can successfully pick stocks are fewer than you’d expect by chance. So, why even play that game? You don’t need to.”

– David Booth, Founder and Executive Chairman, DFA

The model portfolios as a template

The investment portfolios by Dimensional Fund Advisors serve as a starting point for portfolios creation by the advisors that use DFA funds. They are templates.

If you see an advisory firm that uses the DFA funds, there’s an excellent chance that the portfolios used are very similar to the DFA investment portfolios that we display on this page.

In particular, you can spot DFA portfolio inspiration if the portfolios contain the following asset classes:

A giveaway is the inclusion of the following asset classes:

  • 2 Year Global Fixed Income
  • 5 Year Global Fixed Income
  • Emerging Markets Value
  • International Small Cap Value

We very rarely see these asset classes apart from DFA-inspired portfolios.

How do you build Dimensional Fund Advisors Investment Portfolios With ETFs?

Here is how you build DFA portfolios with ETFs.

NameLarge Cap BlendLarge Cap ValueSmall Cap BlendSmall Cap ValueInternational DevelopedInternational Small CapInternational Small ValueInternational ValueEmerging MarketsEmerging Markets Small CapEmerging Markets ValueInter-term TreasuriesShort Term Bonds Two Year Global BondsFive Year Global Bond
Dimensional Fund Advisors Model Portfolios 0% Stocks Fixed25.00%25.00%25.00%25.00%
Dimensional Fund Advisors Model Portfolios 20% Stocks Conservative4.00%4.00%2.00%2.00%2.00%1.00%1.00%2.00%0.60%0.80%0.60%20.00%20.00%20.00%20.00%
Dimensional Fund Advisors Model Portfolios 40% Stocks Moderate8.00%8.00%4.00%4.00%4.00%2.00%2.00%4.00%1.20%1.60%1.20%15.00%15.00%15.00%15.00%
Dimensional Fund Advisors Model Portfolios 60% Stocks Normal12.00%12.00%6.00%6.00%6.00%3.00%3.00%6.00%1.80%2.40%1.80%10.00%10.00%10.00%10.00%
Dimensional Fund Advisors Model Portfolios 80% Stocks Agressive16.00%16.00%8.00%8.00%8.00%4.00%4.00%8.00%2.40%3.20%2.40%5.00%5.00%5.00%5.00%

Just below you can see which ETFs you need to buy to gain exposure to a particular asset class.

Resources for Dimensional Fund Advisors Investment Portfolios

We display a few providers on portfolioeinstein.com that uses the template offered by DFA. These include:

Learn about DFA here (super intro to what investing is right on the front page).

They also have a youtube channel. It is updated regularly.

Suggestions for your next steps

Finding the correct portfolio is hard. Maintaining your portfolio is also daunting. If you are still in doubt about which portfolio to choose, we suggest you read our article How To Invest Money: 5 Simple Steps That Work For Anyone

If you have already committed to a portfolio – good for you! If you need help maintaining the portfolio you will find our rebalance worksheet useful. Rebalancing your portfolio lowers your risk and may provide higher returns in the long run. It is completely FREE.

You can find the rebalance worksheet in our article Here Is The Most Easy To Use Portfolio Rebalance Tool.

Rebalancing lowers your portfolio risk and may increase your returns.


If you want access to our high-performing portfolios then you need to take a look at the premium portfolios. This is a paid product that gives you the 59 best-performing portfolios since 1989. The portfolios represent a great opportunity for you to have a shot at increasing the returns of your portfolio.

Portfolioeinstein Premium Portfolios
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