DFA One-Year Fixed Income Portfolio Institutional Class (DFIHX)

Overview

The fund is primarily engaged in the investment of high-quality fixed income securities with a maturity of one year or less from the settlement date. It focuses on providing investors with a secure platform to invest in a range of short-term financial instruments. The fund's strategy emphasizes diversification and risk management by investing in a wide array of instruments, including certificates of deposit, commercial paper, and more. Additionally, it has the authority to allocate a significant portion of its assets to U.S. government and agency securities, underscoring its commitment to safety and reliability. The use of futures contracts and options is also permitted, both for hedging purposes and other strategies, further highlighting the fund's sophisticated approach to managing interest rate exposure.

Products and Services

• Certificates of Deposit

  This short-term, interest-bearing investment is issued by banks and financial institutions. The fund invests in certificates of deposit as part of its strategy to ensure capital security and interest income, targeting those that mature in one year or less to align with its investment mandate.

• Commercial Paper

  An unsecured, short-term debt instrument issued by corporations, commercial paper represents another avenue through which the fund seeks to diversify its investment portfolio. These securities typically offer higher yields compared to treasury bills, reflecting a minimal but discernible increase in risk.

• Bankers' Acceptances

  A bankers' acceptance is a short-term credit investment created by a non-financial company but guaranteed by a bank. The fund includes these as part of its investment universe, utilizing them to gain exposure to commercial transactions and international trade financing, while still maintaining a focus on securities with short-term maturities.

• Notes and Bonds

  The fund allocates investments to notes and bonds that are due to mature in one year or less, ensuring adherence to its investment horizon. This category includes a range of debt securities, from corporate to government issues, allowing the fund to tailor its risk-return profile according to prevailing market conditions.

• U.S. Treasury Bonds, Bills, and Notes

  As a cornerstone of the fund's investment strategy, securities issued by the U.S. Treasury are heavily favored for their safety and liquidity. The fund is authorized to invest a substantial portion of its assets in these instruments, taking advantage of their risk-free status and the favorable treatment they receive under regulatory frameworks.

• Obligations of Federal Agencies and Instrumentalities

  This category includes securities issued by various agencies and instrumentalities of the U.S. government, such as Fannie Mae and Freddie Mac. These investments offer a balance between safety and yield, contributing to the fund's goals of capital preservation and income generation.

• Futures Contracts and Options on Futures Contracts

  To manage its exposure to interest rate volatility, the fund may engage in the purchase or sale of futures contracts and options on futures contracts. This strategy allows for both hedging against potential interest rate movements and the pursuit of additional gains through speculative positions, showcasing the fund's proactive approach to risk management.