Dimensional Fund Advisors has expanded its European Ucits ETF range with the launch of two actively managed core equity strategies, listed in London and Frankfurt.
The new funds – US Core Equity Market Ucits ETF and Global ex US Core Equity Market Ucits ETF– aim to provide diversified exposure to developed markets while maintaining low costs comparable to passive strategies. The ETFs are listed in pounds and dollars on the London Stock Exchange and in euros in Frankfurt, and are registered for distribution across several European markets, including Germany, the Netherlands and the UK.
The ETFs are actively managed, focusing on higher-return stocks. They don’t track an index and can rebalance daily while keeping tracking error relatively low.
The US Core Equity Market Ucits ETF carries an ongoing charges figure (OCF) of 0.15%, while the Global ex-US version has an OCF of 0.20%, placing both in line with many large-cap passive funds despite their broader investment universe.
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The funds span all market caps but exclude stocks with weaker return characteristics, including low-profitability growth firms. They can also adjust trading timing to manage costs and respond to market momentum, particularly around index rebalancing periods.
Nathan Lacaze, co-CEO, Dimensional Fund Advisors Ltd., said: “An increasing number of institutions and advisors are turning to Dimensional’s systematic active solutions as replacements for rigid index funds. Index funds imperfectly track indices that are imperfect proxies of the market. Some investors are asking, why not introduce some flexibility and spend a small amount of tracking error to enhance returns?’”
