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DFA vs. Vanguard

 

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We are often asked which mutual funds we recommend in various asset classes.  After applying our stringent selection criteria, it often comes down to Vanguard and DFA mutual funds.

For more information on The Vanguard Group, see here.

For more information on Dimensional Fund Advisors (DFA), see here.

While Vanguard’s funds are among the very best available (principally due to their extremely low fees), some funds from DFA are, in some ways, superior.

The table below compares DFA funds with Vanguard funds in each of several asset classes.  For each asset class, DFA’s fund is listed along with Vanguard’s fund.  Each entry includes the fund name, NASDAQ symbol, and expense ratio.  For each asset class, there is also a brief analysis of the relevant differences between the two offerings.  Within each asset class, we tried to assess which offering is “better” – DFA’s or Vanguard’s (or any other fund).  We have highlighted the preferred fund in each case by bolding and italicizing its information.

Note that “better” refers to our expectation of which fund will be a better holding in the long term.  In making such a determination, we take into account not only expected long-term performance, but also long-term expected risk/volatility and any trading restrictions imposed by the funds.  For more information on the criteria we use to judge mutual funds, see here.

Asset Class

DFA

Vanguard

Analysis

Money Market N/A

Vanguard Federal Money Market Fund Admiral Shares (VMFXX)

E/R: 0.11%

DFA does not have an offering in this asset class.

Short Term US Bonds DFA Short-Term Government Portfolio (DFFGX)

E/R: 0.16%

Vanguard Short-Term Corporate Bond Index Fund Admiral Shares (VSCSX)

E/R: 0.07%

See our detailed discussion of the leading options for this asset class here.

Short Term Global Bonds

DFA Five-Year Global Fixed Income Portfolio (DFGBX)

E/R: 0.20%

or

DFA Short-Term Extended Quality Portfolio (DFEQX)

E/R: 0.18%

or

DFA Two-Year Global Fixed Income Portfolio (DFGFX)

E/R: 0.16%

or

DFA Short-Duration Fixed Income ETF (DFSD)

E/R: 0.16%

N/A Vanguard does not have an offering in this asset class.

See our detailed discussion of the leading options for this asset class here.

Short Term Tax-Exempt Bonds

DFA Short-Term Municipal Bond Portfolio (DFSMX)

E/R: 0.18%

Vanguard Limited-Term Tax-Exempt Fund Admiral Shares (VMLUX)

E/R: 0.12%

See our detailed discussion of the leading options for this asset class here.

Inflation-Protected Securities

DFA Inflation-Protected Securities Portfolio (DIPSX)

E/R: 0.11%

or

DFA Inflation Protected Securities ETF (DFIP)

E/R: 0.11%

Vanguard Inflation-Protected Securities Fund Admiral Shares (VAIPX)

E/R: 0.10%

See our detailed discussion of the leading options for this asset class here.

Balanced Funds     See our detailed discussion of the leading options for this asset class here.

Large Cap

DFA Enhanced US Large Company Portfolio (DFELX)

E/R: 0.15%

Vanguard Large-Cap Index Fund Admiral Shares (VLCAX)

E/R: 0.08%

See our detailed discussion of the leading options for this asset class here.

Tax-Managed Large Cap

DFA US Equity ETF (DFUS)

E/R: 0.09%

Vanguard Tax-Managed Capital Appreciation Fund Admiral Shares (VTCLX)

E/R: 0.11%

See our detailed discussion of the leading options for this asset class here.

The DFA fund isn't really a "large-cap" fund — it is an all-market fund.

Large Cap Value

DFA U.S. Large Cap Value Portfolio (DFLVX)

E/R: 0.21%

Vanguard U.S. Value Factor ETF (VFVA)

E/R: 0.13%

See our detailed discussion of the leading options for this asset class here.

Our first choice here is the Invesco S&P 500 Value with Momentum ETF (SPVM).  It has an E/R of 0.39%.

Tax-Managed Large Cap Value

DFA US Marketwide Value ETF (DFUV)

E/R: 0.22%

Vanguard U.S. Value Factor ETF (VFVA)

E/R: 0.13%

See our detailed discussion of the leading options for this asset class here.

Our first choice here is the Invesco S&P 500 Value with Momentum ETF (SPVM).  It has an E/R of 0.39%.

Large Cap Momentum N/A Vanguard U.S. Momentum Factor ETF (VFMO)

E/R: 0.13%

DFA does not have an offering in this asset class.

Our first choice here is the Invesco S&P 500 Momentum Portfolio ETF (SPMO).  It has an E/R of 0.15%.

Tax-Managed Large Cap Momentum N/A Vanguard U.S. Momentum Factor ETF (VFMO)

E/R: 0.13%

DFA does not have an offering in this asset class.

Our first choice here is the Invesco S&P 500 Momentum Portfolio ETF (SPMO).  It has an E/R of 0.15%.

Small Cap

DFA U.S. Microcap Portfolio (DFSCX)

E/R: 0.40%

Vanguard Small Cap Index Fund Admiral Shares (VSMAX)

E/R: 0.08%

See our detailed discussion of the leading options for this asset class here.

Our first choice here is the Bridgeway Ultra-Small Company Market Fund (BRSIX).  It has an E/R of 0.77%.

Tax-Managed Small Cap

DFA US Small Cap ETF (DFAS)

E/R: 0.26%

Vanguard Tax-Managed Small Cap Fund Admiral Shares (VTMSX)

E/R: 0.12%

See our detailed discussion of the leading options for this asset class here.

Our first choice here is the iShares Microcap Index Fund (IWC).  It has an E/R of 0.60%.

Small Cap Value

DFA U.S. Small Cap Value Portfolio (DFSVX)

E/R: 0.30%

Vanguard Small Cap Value Index Fund Admiral Shares (VSIAX)

E/R: 0.08%

See our detailed discussion of the leading options for this asset class here.

Our first choice here is the Invesco S&P SmallCap Value with Momentum ETF (XSVM).  It has an E/R of 0.36%.

Tax-Managed Small Cap Value

DFA US Small Cap Value ETF (DFSV)

E/R: 0.31%

Vanguard Small Cap Value Index Fund Admiral Shares (VSIAX)

E/R: 0.08%

See our detailed discussion of the leading options for this asset class here.

Our first choice here is the Invesco S&P SmallCap Value with Momentum ETF (XSVM).  It has an E/R of 0.36%.

Small Cap Momentum N/A N/A Neither DFA nor Vanguard has an offering in this asset class.

Our first choice here is the Invesco S&P SmallCap Momentum ETF (XSMO, E/R: 0.37%).

Tax-Managed Small Cap Momentum N/A N/A Neither DFA nor Vanguard has an offering in this asset class.

Our first choice here is the Invesco S&P SmallCap Momentum ETF (XSMO, E/R: 0.37%).

Foreign Developed Markets Large Cap

DFA Large Cap International Portfolio (DFALX)

E/R: 0.17%

Vanguard Developed Markets Index Fund Admiral Shares (VTMGX)

E/R: 0.09%

See our detailed discussion of the leading options for this asset class here.

Our first choice here is the AQR International Momentum Style Fund (AIMOX).  It has an expense ratio of 0.55%.

Tax-Managed Foreign Developed Markets Large Cap

N/A

Vanguard Developed Markets Index Fund Admiral Shares (VTMGX)

E/R: 0.09%

DFA does not have an offering in this asset class.

See our detailed discussion of the leading options for this asset class here.

Foreign Developed Markets Large Cap Value

DFA International Value Portfolio (DFIVX)

E/R: 0.28%

Vanguard International Value Fund (VTRIX)

E/R: 0.38%

See our detailed discussion of the leading options for this asset class here.

Tax-Managed Foreign Developed Markets Large Cap Value

DFA International Value ETF (DFIV)

E/R: 0.27%

N/A

Vanguard does not have an offering in this asset class.

See our detailed discussion of the leading options for this asset class here.

Foreign Developed Markets Large Cap Momentum N/A N/A Neither DFA nor Vanguard has an offering in this asset class.

Our first choice here is the iShares MSCI International Developed Momentum Factor ETF (IMTM).  It has an E/R of 0.30%.

Tax-Managed Foreign Developed Markets Large Cap Momentum N/A N/A Neither DFA nor Vanguard has an offering in this asset class.

Our first choice here is the iShares MSCI International Developed Momentum Factor ETF (IMTM).  It has an E/R of 0.30%.

Foreign Developed Market Small Cap

DFA International Small Company Portfolio (DISMX)

E/R: 0.50%

Vanguard International Explorer Fund (VINEX)

E/R: 0.42%

See our detailed discussion of the leading options for this asset class here.

Foreign Developed Market Small Cap Value

DFA International Small Cap Value Portfolio (DISVX)

E/R: 0.44%

or

DFA International Small Cap Value ETF (DISV)

E/R: 0.42%

N/A

Vanguard does not have an offering in this asset class.

See our detailed discussion of the leading options for this asset class here.

Foreign Emerging Market Large Cap

DFA Emerging Markets Portfolio (DFEMX)

E/R: 0.36%

Vanguard FTSE Emerging Markets Index Fund Admiral Shares (VEMAX)

E/R: 0.14%

See our detailed discussion of the leading options for this asset class here.

Our preferred holding in this asset class is the VictoryShares Emerging Markets Value Momentum ETF (UEVM). E/R: 0.45%

Tax-Managed Foreign Emerging Market Large Cap N/A N/A Neither DFA nor Vanguard has an offering in this asset class.

Our preferred holding in this asset class is the VictoryShares Emerging Markets Value Momentum ETF (UEVM). E/R: 0.45%

Foreign Emerging Market Large Cap Value

DFA Emerging Markets Value Portfolio (DFEVX)

E/R: 0.44%

or

DFA Emerging Markets Value ETF (DFEV)

E/R: 0.43%

N/A

Vanguard does not have an offering in this asset class.

See our detailed discussion of the leading options for this asset class here.

Foreign Emerging Market Small Cap

DFA Emerging Markets Small Cap Portfolio (DEMSX)

E/R: 0.59%

N/A

Vanguard does not have an offering in this asset class.

See our detailed discussion of the leading options for this asset class here.

Foreign Emerging Market Small Cap Value DFA Emerging Markets Targeted Value Portfolio (DEMGX)

E/R: 0.66%

N/A Vanguard does not have an offering in this asset class.
US Real Estate Investment Trusts (REITs)

DFA Real Estate Securities Portfolio (DFREX)

E/R: 0.18%

or

DFA US Real Estate ETF (DFAR)

E/R: 0.19%

Vanguard Real Estate Index Fund Admiral Shares (VGSLX)

E/R: 0.10%

See our detailed discussion of the leading options for this asset class here.
Foreign REITs DFA International Real Estate Securities Portfolio (DFITX)

E/R: 0.27%

Vanguard Global ex-U.S. Real Estate Fund Admiral Shares (VGRLX)

E/R: 0.15%

See our detailed discussion of the leading options for this asset class here.

Commodity Futures

DFA Commodity Strategy Portfolio (DCMSX)

E/R: 0.30% 

Vanguard Commodity Strategy Fund Admiral Shares (VCMDX)

E/R: 0.20%

See our detailed discussion of the leading options for this asset class here.

Bottom Line

bulletFor those managing their own portfolio, we might strongly recommend one of Vanguard's balanced funds, in particular, one of their "LifeStrategy" or "Target Retirement" funds could serve as an "all-in-one" complete investment portfolio (i.e., for you to put all your money into).
 
bulletIf you are having your assets professionally managed, we would recommend (what we believe to be) "best-in-class" investments in each asset class.  Our current preferences for each asset class are listed in the table above.
 
bulletFor assistance in making the decision as to whether or not you should hire an investment advisor, see here.

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This web page contains the current opinions of Eric E. Haas at the time it is writtenand such opinions are subject to change without notice.  This web page is intended to serve two purposes:

bulletTo educate the public; and
bulletTo provide disclosure of Mr. Haas' opinions to prospective clients.  We believe that prospective clients are well-served by being made aware of what they are buyingand what they are buying is advice that is based on these opinions.

We believe the information provided here to be useful and accurate at the time it is written.  Information contained herein has been obtained from sources believed to be reliable, but is not guaranteed. 

No investor should invest solely on the basis of information listed here.  Before investing, it is important to consult each prospective investment's prospectus and consider both its risk/return characteristics and its effect on your overall portfolio.

This information is not intended to be a substitute for specific individualized tax, legal, or investment planning advice.  Where specific advice is necessary or appropriate, Altruist recommends consultation with a qualified tax adviser, CPA, financial planner, or investment adviser.  If you would like to discuss the rationale or support for any particular idea expressed on this web page, feel free to contact us.

 

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