Value Equities
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US Small Cap Strategy DFA US Value Fund Class A DFA US Value Fund Class F |
International Small Cap Strategy DFA International Value Fund Class A DFA International Value Fund Class F |
The mutual funds managed 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 international value equity funds are described below. Specific information about the individual funds discussed can be found in the prospectus.
Dimensional Canada's value strategies, which are based on the Fama/French research in cross-sectional variation in stock returns, are designed to capture the return premiums associated with high book-to-market (BtM) ratios. When assessing value, Dimensional Fund Advisors may also consider other factors such as a company's price-to-cash-flow ratio and price-to-earnings ratio. The criteria Dimensional Fund Advisors uses for assessing value may change from time to time.
US Value
Currently, to define the eligible buy list of stocks for the US Value Fund, Dimensional first ranks the total market universe by market cap and identifies those companies that fall within the defined size range. The resulting list of stocks is then ranked by BtM ratio, excluding firms with negative or zero book values, utilities, and others; and a BtM breakpoint is determined. Companies in the total market universe with a BtM ratio greater than the BtM breakpoint are generally eligible for purchase. A hold or buffer range of companies with BtM ratios outside the breakpoint is maintained to minimize turnover and transaction costs.
International Value
Research by Fama and French, as well as other academics, shows that the value effect observed in US markets is also present outside the US. Dimensional Canada's international value strategy seeks to provide consistent, targeted exposure to the value factor, while reducing the risk of single-country exposure. The firm uses efficient trading techniques to capture components of market risk while minimizing transaction costs.
Currently, the International Value Fund is authorized to invest in Australia, Austria, Belgium, Denmark, Finland, France, Germany, Greece, Hong Kong, Ireland, Italy, Japan, the Netherlands, New Zealand, Norway, Portugal, Singapore, Spain, Sweden, Switzerland, and the United Kingdom.
Dimensional first ranks the firms in each country or region by market cap and identifies those companies that fall within the defined size range. Each resulting list of stocks is then ranked by BtM ratio, excluding firms with negative or zero book values, utilities, and others; and a breakpoint is determined. Companies in each country with a BtM ratio greater than the country or regional BtM breakpoint are generally eligible for purchase. A hold or buffer range of companies with BtM ratios outside the breakpoint is maintained to minimize turnover and transaction costs.