“Dimensional Fund Advisors continues to be an outstanding steward of its shareholders’ capital. … Co-CEOs David Butler and Gerard O’Reilly oversee a strong culture focused on market efficiency and transaction cost management.”
A story by Morningstar published January 28, 2020, “The Best Fund Companies and Their Ratings,” lists the firms that serve investors best in the long run. Only five firms met their standards for High, Best in Class rating: American Funds, Dimensional Fund Advisors (DFA), Dodge & Cox, T. Rowe Price, and Vanguard.
We’ve known for a long time and have been promoting the best value two of the funds on this list, specifically, offer investors, Vanguard and Dimensional Fund Advisors.
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The Best In Class
At this point, only five firms have met our lofty standards for a High Parent rating: American Funds, DFA, Dodge & Cox, T. Rowe Price, and Vanguard. Here are some excerpts from our analysts’ takes on each firm:
Vanguard by Alec Lucas: Vanguard gained its stature by following Jack Bogle’s playbook: pairing relatively predictable strategies, both passive and active, with minimal costs. That’s enriched Vanguard’s investors, and those outside its flock who have benefited from industrywide fee compression. While Vanguard’s passive business now faces stiff price competition from its biggest rivals, inflows into its U.S. strategies still dominate.
DFA by Daniel Sotiroff: Dimensional Fund Advisors continues to be an outstanding steward of its shareholders’ capital. … Co-CEOs David Butler and Gerard O’Reilly oversee a strong culture focused on market efficiency and transaction cost management.
Dimensional’s investment strategies are rooted in research from the top minds in financial academia. These same researchers use a rigorous vetting process when developing new strategies or modifying existing ones. Proposals must be exploitable in a well-diversified, low-turnover, and cost-effective manner. Changes to existing strategies and the introduction of new funds are rare when they do occur.
The fund company behind your funds is a critical piece to your investment success. It pays to seek out the best. Here’s a summary table of ratings:
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Source: The Best Mutual Funds and Their Ratings