Dimensional Fund Advisors
Advanced Investment
Raphaël Le Hoang
1) DFA description and beliefs about efficient market Dimensional Investment Advisors (DFA) is a passive investment firm founded in 1981, headquartered in Santa Monica, California. The founders of the company, Booth and Rex Sinquefield, were two former students of the University of Chicago Graduate School of Business. Backed by their academic career, they were convinced that the market was efficient. Academic research, by such names as Fama and French, and traders' skills were their two mantras, making them a unique type of investment firm at that time. Their strategy was mainly based on investing in index funds, in small stocks (illiquid stocks) and high book value of equity to market value of equity ratio. The last two components were the so-‐called anomalies discovered by Fama and French in their famous article published in 1993, "Common risk factors in the returns in stocks and bonds". They found that small capitalizations tend to outperform large capitalizations (SMB), and that high BE/ME firms tend to outperform low BE/ME firms (HML).
As a fund, the clever trick
Raphaël Le Hoang
1) DFA description and beliefs about efficient market Dimensional Investment Advisors (DFA) is a passive investment firm founded in 1981, headquartered in Santa Monica, California. The founders of the company, Booth and Rex Sinquefield, were two former students of the University of Chicago Graduate School of Business. Backed by their academic career, they were convinced that the market was efficient. Academic research, by such names as Fama and French, and traders' skills were their two mantras, making them a unique type of investment firm at that time. Their strategy was mainly based on investing in index funds, in small stocks (illiquid stocks) and high book value of equity to market value of equity ratio. The last two components were the so-‐called anomalies discovered by Fama and French in their famous article published in 1993, "Common risk factors in the returns in stocks and bonds". They found that small capitalizations tend to outperform large capitalizations (SMB), and that high BE/ME firms tend to outperform low BE/ME firms (HML).
As a fund, the clever trick