Investment Product and Service Launches

Art by Jackson Epstein

Dimensional Fund Advisors Converts Several Mutual Funds into Active ETFs

Dimensional Fund Advisors has extended its exchange-traded fund (ETF) offering by converting four U.S. tax-managed mutual funds into active, transparent ETFs listed on the New York Stock Exchange (NYSE).

The four newly listed ETFs are part of the firm’s plan to convert six tax-managed mutual funds into ETFs, which offer investors an additional tool to manage capital gains, supporting the funds’ goal of delivering higher after-tax returns by minimizing tax impact. Dimensional plans to convert two additional non-U.S. market tax-managed mutual funds to ETFs in September.

Dimensional says it is one of the first asset managers to convert mutual funds into ETFs. With the launch of the firm’s first three ETFs and the conversion of these four mutual funds, Dimensional becomes one of the largest active ETF issuers in the industry, with more than $30 billion in combined ETF assets under management (AUM), placing the firm in the top 10% of all ETF issuers across both active and passive offerings.

“We expect to have a full lineup of ETFs to offer clients alongside our mutual fund offerings and expanded separately managed accounts platform,” says Dimensional co-CEO and Chief Investment Officer (CIO) Gerard O’Reilly. “Our strategies offer the benefits of indexing—such as low costs, low turnover and high diversification—paired with the advantages of flexible implementation that provide a continuous focus on higher expected returns and robust risk management.”

“For four decades, we have focused on empowering investment professionals, so they can deliver their clients the best investment experience,” adds Dimensional co-CEO Dave Butler. “The solutions we are bringing to the ETF marketplace will further that mission, offering more ability to customize and tailor investments to clients’ specific needs and preferences.”

The new listings follow Dimensional’s launch of three core equity market ETFs last year. Dimensional investment strategies seek to harness a consistent, broadly diversified and systematic approach that aims to outperform the market without outguessing the market. Strategies within Dimensional’s suite of ETFs have varying tilts from market weights to securities that offer higher expected returns, such as small cap, value and high profitability securities.

Investment Metrics Launches Factor Analysis Platform

Investment Metrics has launched DeltaZoom to help institutional investors, advisers and asset managers better understand style factor changes within portfolios. DeltaZoom is a new module within Portfolio Analyzer, a factor analysis platform, that brings efficiency and accuracy in analyzing and identifying the causes of portfolio factor exposure changes.

The tool enables asset owners and consultants to save time by instantly isolating and understanding the changes that matter the most to them across factors. More than 10 early-adopter clients currently use DeltaZoom to quickly investigate how market movements, trading decisions and factor changes impact their portfolios. 

“HSBC Global Asset Management routinely needed to understand why manager exposures changed as part of the investment review process and DeltaZoom allows us to do this quickly and with granularity that allows us to get the heart of a change,” says Tobias Goetzinger, global head of portfolio analytics from HSBC Global Asset Management.

“With demands for transparency growing across the industry, it’s critical that asset managers, consultants and asset owners can analyze portfolios and gain insights as efficiently as possible,” says Brent Burns, CEO of Investment Metrics. “In the past, teams could take weeks to complete this type of analysis manually. DeltaZoom transforms this process into seconds, showing instantaneously what causes a portfolio to take on a new factor exposure. Our commitment to continued innovation of the Style Analytics platform enables us to offer the institutional investment community this groundbreaking tool that is leading the industry in portfolio and factor analysis.”