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Going Their Own Way

Going Their Own Way

With academia on its side, DFA is aggressive– even arrogant– in its defense of passive investing.

By Raymond Fazzi

Few investment companies have enjoyed the degree of success marketing their mutual funds through independent financial advisors that Dimensional Fund Advisors (DFA) has. Then again, few mutual fund companies are as out of the mainstream as DFA.

It is, in essence, a company that prides itself on being a maverick. You barely hear anything from this company because it spends next to nothing on marketing and does not sell directly to individual investors.

At its Santa Monica, Calif., headquarters, investment research and trading are not the stuff of smoke-filled rooms and harried equity analysts.

They are instead research and theory emanating from the subdued halls of academia. Two Nobel laureate economists have been affiliated with the company, and one of them, former Long Term Capital Management partner Myron Scholes, sits on the company’s mutual fund board.

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