Dimensional Fund Advisors has launched a managed portfolio service (MPS), expanding its UK wealth offering with a range of model portfolios built from the firm’s own funds.
The service comprises 12 model portfolios spanning allocations from 100% equities to 100% fixed income in 20% increments. It is divided into six core portfolios, designed with modest outperformance expectations, and six core plus portfolios, which target higher potential outperformance alongside higher tracking error relative to the market.
The MPS carries a fee of 0.06%, on top of the ongoing charges of the underlying funds. The portfolios are initially being made available through the Transact platform from July.
The approach begins with broad global equity and bond markets before systematically increasing exposure to securities with higher expected returns while reducing or excluding those with lower expected return potential.
Within equities, portfolio construction considers factors such as company size, valuation, profitability and shorter-term return drivers. Fixed income allocations are managed by adjusting exposure to duration, credit and currencies according to expected returns and risk.
