DFA vs. Vanguard
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 our 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% |
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% |
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 U.S. 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 0.13%. |
| 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 0.13%. |
| 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 Invesco S&P International Developed Momentum Portfolio ETF (IDMO). It has an expense ratio of 0.25%. |
| Tax-Managed Foreign Developed Markets Large Cap |
DFA International Core Equity Market ETF (DFAI) E/R: 0.18% |
Vanguard Developed Markets Index Fund Admiral Shares (VTMGX) E/R: 0.09% |
DFA does not have an offering in this asset class. The Vanguard fund isn't really tax-managed. However, the existence of an ETF share class makes it quite a bit more capital-gains tax-efficient than it would otherwise be. 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: 0.43% |
Vanguard International Value Fund (VTRIX) E/R: 0.46% |
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: 0.35% |
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 Invesco S&P International Developed Momentum Portfolio ETF (IDMO). It has an E/R of 0.25%. |
| 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 Invesco S&P International Developed Momentum Portfolio ETF (IDMO). It has an E/R of 0.25%. |
| 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 |
DFA Emerging Core Equity Market ETF (DFAE) E/R: 0.35% |
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% |
| Foreign Emerging Market Large Cap Value |
DFA Emerging Markets Value Portfolio (DFEVX) E/R: 0.45% or DFA Emerging Markets Value ETF (DFEV) E/R: 0.45% |
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. See our detailed discussion of the leading options for this asset class here. |
| 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. |
| Global REITs |
DFA Global Real Estate Securities Portfolio (DFGEX) E/R: 0.24% |
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. |
| 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
- If you are managing your investments yourself, 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 in).
- If 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.
- For assistance in making the decision as to whether or not you should hire an investment advisor, see here.
This web page contains the current opinions of Eric E. Haas at the time it is written—and such opinions are subject to change without notice. This web page is intended to serve two purposes:
- To educate the public; and
- To 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 buying—and 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.