The mutual funds managed by Dimensional Canada are available only to Canadian residents, through representatives authorized by us and affiliated with approved registered dealers.
The general investment approach and strategies we use to manage our core equity funds are described below. Specific information about the individual funds discussed can be found in the prospectus.
We believe that it is impossible to predict what will happen with interest rates in the future. As a result, we diversify broadly and manage portfolios that follow "variable maturity" and constant maturity strategies.
To maximize expected returns, we choose shorter maturities in flat or inverted yield curve environments and longer maturities in upwardly sloped curves. Maturities are shifted in response to changes in the current yield curve. A variable approach also allows us to tilt this portfolio toward countries with higher expected returns based on the expected return matrix generated for each eligible country.
For investors willing to risk additional volatility in pursuit of higher expected returns, the DFA Investment Grade Fixed Income Fund includes some issuers whose credit quality is in the lower portion of the investment grade range and bonds whose maturities may be longer than five years. This fund follows a constant maturity approach that approximates the average maturity of the DEX Universe Bond Index.
The general investment approach and strategies we use to manage our core equity funds are described below. Specific information about the individual funds discussed can be found in the prospectus.
Overview
Relative performance in fixed income is largely driven by two dimensions: bond maturity and credit quality. Bonds that mature farther in the future are subject to the risk of unexpected changes in interest rates. Bonds with lower credit quality are subject to the risk of default. Extending bond maturities and reducing credit quality increases potential returns.We believe that it is impossible to predict what will happen with interest rates in the future. As a result, we diversify broadly and manage portfolios that follow "variable maturity" and constant maturity strategies.
Two Fixed Income Approaches
For investors seeking to keep their bond portfolio short and high in quality, the DFA Five-Year Global Fixed Income Fund targets highly rated debt issuers with maturities of up to five years. This fund follows the variable maturity approach developed by Professor Eugene Fama that uses the current yield curve to determine optimal maturities and holding periods.To maximize expected returns, we choose shorter maturities in flat or inverted yield curve environments and longer maturities in upwardly sloped curves. Maturities are shifted in response to changes in the current yield curve. A variable approach also allows us to tilt this portfolio toward countries with higher expected returns based on the expected return matrix generated for each eligible country.
For investors willing to risk additional volatility in pursuit of higher expected returns, the DFA Investment Grade Fixed Income Fund includes some issuers whose credit quality is in the lower portion of the investment grade range and bonds whose maturities may be longer than five years. This fund follows a constant maturity approach that approximates the average maturity of the DEX Universe Bond Index.
Currency Hedging
Currency exposure tends to increase the volatility of an international fixed income portfolio. To reduce this volatility, we hedge currency exposure in our global bond portfolios. This enables us to gain the benefits that come from diversifying across many countries without measurably increasing currency risk.
Commissions, trailing commissions, management fees, and expenses all may be associated with investment in the funds. Please read the prospectus before investing. Mutual funds are not guaranteed; their values change frequently and past performance may not be repeated.