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Tell us who you are Institution Financial Adviser Retail Investor Funds All Funds Systematic Fixed Income Sustainability Insights About Us Our Company Our People Media Centre Investment Stewardship Log In -- Dimensional Investing is about implementing the great ideas in finance for our clients. Scroll Dimensional at a Glance As at 31 March 2021 40 Years since founding as of April 15, 2021 $637B In firmwide assets under management, USD (in billions) 1,400+ Employees in 13 global offices One Investment philosophy Why Investors Might Think Twice About Chasing the Biggest Stocks As companies grow into the largest firms, their returns can be impressive. In the decade after joining the Top 10, however, these stocks have generally lagged the market. Learn more Do Downturns Lead to Down Years? Volatility is a normal part of investing. Market tumbles may be scary, but they shouldn’t be surprising. Learn more To Bit or Not to Bit: What Should Investors Make of Bitcoin Mania? Bitcoin and other cryptocurrencies are receiving intense media coverage, prompting many investors to wonder whether these new types of electronic money deserve a place in their portfolios. Learn more Dimensional Celebrates 40 Years of Innovation Global investment leader draws on its past while looking to the future. Learn more David Booth on the Value of Flexibility Dimensional’s founder discusses the benefits of being firm in your investment philosophy, but flexible in your implementation. Learn more As Dimensional turns 40, Executive Chairman David Booth shares valuable lessons for every investor. Learn more As Dimensional turns 40, Executive Chairman David Booth shares valuable lessons for every investor. Learn more 01 An enduring belief in the Power of Markets Capital Markets Have Rewarded Long-Term Investors Growth of $1 USD, Jan. 1970–Dec. 2020 For illustrative purposes only. Indices are not available for direct investment, therefore their performance does not reflect the expenses associated with the management of an actual portfolio. Past performance is not a guarantee of future results. Performance may increase or decrease as a result of currency fluctuations. Source reference: In US dollars. World Equities is the MSCI World Index (gross div.). US Inflation is measured as changes in the US Consumer Price Index. US Consumer Price Index data is provided by the US Department of Labor Bureau of Labor Statistics. Treasury Bills is the IA SBBI US 30 Day TBill TR USD, provided by Ibbotson Associates via Morningstar Direct. Long-Term Government Bonds is the IA SBBI US LT Govt TR USD, provided by Ibbotson Associates via Morningstar Direct. MSCI World Index data provided by MSCI. At Dimensional, our investment approach is based on a belief in markets. Rather than attempting to predict the future or outguess others, we draw information about expected returns from the market itself—leveraging the collective knowledge of its millions of buyers and sellers as they set security prices. Trusting markets to do what they do best—drive information into prices—frees us to spend time where we believe we have an advantage, namely in how we interpret the research, how we design and manage portfolios, and how we service our clients. We take a less subjective, more systematic approach to investing—an approach we can implement consistently and investors can understand and stick with, even in challenging market environments. Learn More Embrace Market Pricing The market is an effective information-processing machine. Each day, the world equity markets process billions of dollars in trades between buyers and sellers—and the real-time information they bring helps set prices. In USD. Source: Dimensional, using data from Bloomberg LP. Includes primary and secondary exchange trading volume globally for equities. ETFs and funds are excluded. Daily averages were computed by calculating the trading volume of each stock daily as the closing price multiplied by shares traded that day. All such trading volume is summed up and divided by 252 as an approximate number of annual trading days. David Booth Founder and Executive Chairman “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 02 Applying insights from FINANCIAL SCIENCE Breakthroughs in Modern Finance 1966 Efficient Market Hypothesis Efficient Market Hypothesis Eugene Fama Nobel laureate, 2013 Professor, University of Chicago Eugene Fama’s efficient market hypothesis marks a pivotal moment for modern finance. The essence of the argument can be described by the simple statement that security prices reflect all available information. 1973 Intertemporal CAPM Intertemporal CAPM Robert Merton Nobel laureate, 1997 Professor, MIT The ICAPM set up a theoretical framework for how multiple sources of risk could arise. It expanded on the one-period CAPM model where the only priced risk was market beta. Robert Merton Nobel laureate, 1997 Professor, MIT 1981 Small Cap Investing Small Cap Investing Dimensional Fund Advisors David Booth, Founder and Executive Chairman Dimensional pioneers small cap investing with the launch of its first strategy, which offers investors diversified, efficient access to small company stocks. Dimensional Fund Advisors David Booth, Founder and Co-CEO 1981 Dimensional Fund Advisors LP Founded 1983 Term Structure Term Structure Eugene Fama Nobel laureate, 2013 Professor, University of Chicago Research shows implied forward interest rates provide information on expected term premiums in fixed income. -- Eugene Fama Nobel laureate, 2013 Professor, University of Chicago 1992 Value Breakthrough Value Breakthrough Eugene Fama Nobel laureate, 2013 Professor, University of Chicago Kenneth French Professor, Dartmouth College Eugene Fama and Kenneth French develop the three-factor asset pricing model, which identifies market, size and price (value) factors as the principal drivers of equity returns. Eugene Fama Nobel laureate, 2013 Professor, University of Chicago Kenneth French Professor, Dartmouth College 2012 Profitability Profitability Eugene Fama Nobel laureate, 2013 Professor, University of Chicago Kenneth French Professor, Dartmouth College Robert Novy-Marx Professor, University of Rochester A body of academic research led to identifying profitability as a dimension of higher expected returns that can be pursued across equity markets. Eugene Fama Nobel laureate, 2013 Professor, University of Chicago Kenneth French Professor, Dartmouth College Robert Novy-Marx Professor, University of Rochester Today Dimensional’s Research and Investment teams draw insight from academia, but what sets us apart is how we interpret, test and apply that research to practical investment solutions for our clients. Tomorrow ... Dimensional was built around a set of ideas bigger than the firm itself. With a confidence in markets, deep connections to the academic community and a focus on implementation, we go where the science leads, and continue to pursue new insights, both large and small, that can benefit our clients. “Dimensional” refers to the Dimensional separate but affiliated entities generally, rather than to one particular entity. These entities are Dimensional Fund Advisors LP, Dimensional Fund Advisors Ltd., DFA Australia Limited, Dimensional Fund Advisors Canada ULC, Dimensional Fund Advisors Pte. Ltd., Dimensional Ireland Limited, Dimensional Japan Ltd., and Dimensional Hong Kong Limited. Dimensional Hong Kong Limited is licensed by the Securities and Futures Commission to conduct Type 1 (dealing in securities) regulated activities only and does not provide asset management services. Eugene Fama and Kenneth French are members of the Board of Directors of the general partner of, and provide consulting services to, Dimensional Fund Advisors LP. Robert Merton and Robert Novy-Marx provide consulting services to Dimensional Fund Adviso...