Three Dimensional Fund Advisors ETFs that NYSE Arca announced as Monday launches are not new funds at all. Instead, they are existing ETFs that now trade as share classes of older Dimensional mutual funds, according to the firm.
DFA Dimensional US Core Equity 2 ETF is rated Hold due to insufficient differentiation versus total-market ETFs and higher fees. DFAC's systematic active approach tilts toward smaller-cap, lower-valuation, and higher-profitability stocks but overlaps heavily with market-cap-weighted peers. Recent outperformance over DFUS is attributed to temporary market factors, not sustainable structural advantages.
A “slow-moving avalanche” was a phrase thrown around at the ETF Exchange 2026 event earlier this year to describe the prospect of ETF share classes making their way through the market.
About a quarter of the way into 2026, Dimensional Fund Advisors (DFA) is already having a monumental year. The global investment firm just made history launching the first actively managed ETF share class last week.
2025 will go down as another year of record-breaking achievements for exchange-traded funds (ETFs). Among the past year's highlights was a record number of mutual funds converting to ETFs, as noted by Ben Johnson, Morningstar Head of Client Solutions, via a LinkedIn post.
The Dimensional U.S. Core Equity 2 ETF (NYSEARCA:DFAC) has delivered a 15% gain over the past year, essentially matching the S&P 500's return.
Dimensional US Core Equity 2 ETF offers broad, diversified US equity exposure with disciplined valuation screens and a tilt toward smaller companies. DFAC trades at a 15.6% P/E discount to the Russell 3000, but lags on growth and profitability, reflecting its conservative sector allocations. Performance is mid-range: DFAC underperforms the Russell 3000 and several peers, with higher volatility and steeper drawdowns in downturns.
The growth of active ETFs has propelled a wave of mutual fund-to-ETF conversions. Nearly 80% of all new product launches in both the third quarter and for the full year have been actively managed.
Dimensional U.S. Core Equity 2 ETF is an actively managed fund with a tilt to value and profitability. DFAC is cheaper than the Russell 3000 index regarding valuation ratios, and growth metrics are a bit better too. The Fund's performance has closely followed the benchmark, and compared to other factor-based ETFs, it has lagged behind some competitors.