Dimensional plots another mutual fund-to-ETF conversion

Dimensional Fund Advisors plans to revamp an $8.4 billion mutual fund into an ETF, the seventh such conversion for the Austin, Texas-based company.

A filing with the Securities and Exchange Commission on Monday shows that the company plans to convert its tax-managed U.S. market value II portfolio to the Dimensional US Marketwide Value ETF. The conversion is expected to take place on or around May 6, according to the filing.

A spokesperson for Dimensional did not immediately respond to a request for comment.

DFA previously made one of the first and largest conversions, taking on four mutual funds with about $29 billion combined in ETFs last June. The company converted two more later in 2021 and launched three US equity ETFs last month.

The Tax-Managed US Marketwide Value Fund II has returned about 12.3% on an annualized basis over the past three years, according to Morningstar data. Other large value funds returned around 13.1% over this period, with the Morningstar US Large Mid Broad Value Index returning around 14.3%.

Dimensional’s push into ETFs followed the launch of Avantis by American Century in 2019, a small company run and staffed by many former DFA managers and employees.

JP Morgan, Franklin Templeton and Harbor Capital are among the other companies planning or executing mutual fund-to-ETF conversions. Guinness Atkinson was the first to do so, turning two strategies into new vehicles last year.

Dolores W. Simon