While continuing my reading, it seems like Dimensional Fund Advisors (DFA) mutual funds are the Porsche of index funds. They are sexy in that they index everything under the sun (including stuff Vanguard does not) such as having a SmallCap Emerging Markets fund. They are well-engineered, being based on the best academic research available and having famous professors Fama & French on their boards. DFA tries to take indexing to the next level. Finally, they are exclusive as their funds are only available through approved financial advisors. Of course, this also means you’ll also have to have at least $100,000 to play with and pay annual advisor fees. I believe this is to avoid the performance hit on their funds from any active trading by untrained investors.
I don’t know if the fees are worth it, but, just like a Porsche, I still have this mysterious instinctual urge to own some!
Here is another pretty good article about DFA funds from MSNBC, titled ‘DFA Funds Hard to Buy, Easy to Own‘. Does anyone out there own DFA funds? What kind of minimum balance requirements and annual fees does your broker charge?
By Jonathan Ping | Investing | 3/14/06, 7:54am