The following video by one of our peers at IFA does an outstanding job of explaining how Dimensional Fund Advisors’ methodology captures more of the 3 factors that drive higher expected returns. (Click HERE to see what the 3 Factor Model is)
When compared to Vanguard and other index fund providers of traditional index funds and ETF’s, DFA has outperformed over the long run. This video does a great job explaining why this outperformance was more than luck and is explainable. I think this video shows why we use DFA over other methodologies, and why we feel Dimensional’s methodology offers higher long term returns than Vanguard’s indexing methodology.
Enjoy!