What investment strategies does Dimensional Fund Advisors use?

Dimensional Fund Advisors (DFA) employs an evidence-based investment approach rooted in academic research. They aim to capture the dimensions of higher expected returns in the global markets while managing risks effectively. DFA utilizes a structured, rules-based methodology rather than relying on active management or speculative forecasts. This approach emphasizes factors like company size, relative price, and profitability, which historical data indicates can enhance portfolio performance over time. DFA's investment strategies are designed to deliver broad diversification, low trading costs, and tax efficiency. By adjusting portfolio allocation based on market conditions, DFA aims to help investors meet their long-term financial goals while discouraging short-term reactive decisions that may detract from overall performance.