Dimensional Receives SEC Approval for ETF Share Classes
Dimensional Fund Advisors, the largest active ETF issuer in the US, has received approval from the US Securities and Exchange Commission (SEC) for exemptive relief to offer exchange-traded fund (ETF) and mutual fund share classes. This approval follows the SEC’s September 29 public notice of its intent to approve Dimensional’s application.
Dimensional offers many transparent, diversified, and low-cost funds that may be well suited to the ETF share class structure. Since launching its first systematic active ETFs in 2020, Dimensional has refined its use of ETF custom create and redeem baskets in pursuit of more efficient and flexible rebalancing. These custom baskets can help improve tax efficiency and reduce portfolio transaction costs. With ETF share classes, these benefits can also be shared by mutual fund investors.
Shareholders in an ETF share class can benefit from the daily cash flows from shareholders in the mutual fund. Cash flows can be used for portfolio rebalancing while allowing for additional flexibility in the use of custom create and redeem baskets. This flexibility can lower total portfolio transaction costs. ETF share classes also can benefit from the existing broad base of investors in Dimensional’s mutual funds and the benefits of scale that generally come with well-established funds including diversification, reduced expenses, and the potential for increased securities lending.
Gerard O’Reilly, Dimensional Co-CEO and Co-CIO, said, “The joining of mutual funds and ETFs through share classes represents a significant enhancement in how millions of Americans can access financial markets in the future. Share classes allow investors to choose the investment strategy that best suits their needs as a first-order consideration, and then select their ideal wrapper to access that strategy, while broadening benefits of increased tax efficiency and reduced costs from scale.”
“Dimensional is dedicated to giving financial professionals more tools to align strategies with fund formats that meet investor needs,” said Dave Butler, Dimensional Co-CEO. “We appreciate the SEC leadership and staff for enabling this advancement for our investors, which will increase optionality and support enhanced client solutions.”
Since initially filing for exemptive relief in July 2023, Dimensional has worked closely with the firm’s ETF and mutual fund boards and with fund service providers to prepare for approval. The firm filed on October 9 to add ETF share classes to 13 of its US equity funds. The selected funds represent a generally comprehensive list of Dimensional’s US equity mutual fund offerings and, because there are fewer service providers to coordinate, were the most operationally straightforward for adding ETF share classes. Dimensional will continue to work with its fund boards to determine subsequent candidates for ETF share classes, but the funds included in our initial filing are:
- US Large Company Portfolio
- US Large Cap Equity Portfolio
- US Small Cap Value Portfolio
- US Targeted Value Portfolio
- US Core Equity 1 Portfolio
- US Core Equity 2 Portfolio
- US Vector Equity Portfolio
- US Small Cap Portfolio
- US Micro Cap Portfolio
- US High Relative Profitability Portfolio
- DFA Real Estate Securities Portfolio
- US Large Cap Growth Portfolio
- US Small Cap Growth Portfolio
Dimensional’s strategies go beyond indexing by using a flexible, daily approach to implementation while retaining many of the advantages of passive investing, including low fees and broad diversification. Dimensional launched its first ETFs in November 2020, following the release of the SEC’s “ETF Rule” (Rule 6c-11). This regulatory change permitted Dimensional to bring the consistent investment process the firm has refined and advanced for more than 40 years to ETFs. As of September 30, 2025, Dimensional has 41 ETFs with over $225 billion in assets under management, and the firm continues to build its suite alongside its mutual fund and separately managed account offerings.
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ABOUT DIMENSIONAL FUND ADVISORS
Dimensional has been applying financial science to investing since 1981. The firm is driven by an evidence-based approach, Nobel Prize-winning insights, and decades of expertise working to outperform benchmarks and peers while maintaining low costs and diversification. Dimensional goes where the science leads, continually innovating to improve outcomes for investors. Dimensional is headquartered in Austin, Texas, and has 15 global offices across North America, Europe, Asia Pacific, and Australia. As of September 30, 2025, the firm manages $915 billion for investors worldwide. For more information, please visit dimensional.com.
Disclosures
Dimensional Fund Advisors LP is an investment advisor registered with the Securities and Exchange Commission. Consider the investment objectives, risks, and charges and expenses of the Dimensional funds carefully before investing. For this and other information about the Dimensional funds, please read the prospectus carefully before investing. Prospectuses are available by calling Dimensional Fund Advisors collect at (512) 306-7400 or at dimensional.com. Dimensional funds are distributed by DFA Securities LLC.
With respect to the 13 US equity funds Dimensional has filed prospectus amendments to offer ETF share classes: The information contained in this material is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This material and the prospectus are not an offer to sell these securities and are not soliciting an offer to buy these securities in any state where the offer or sale is not permitted. Additional information on the 13 Dimensional US equity funds can be found in red herring prospectus (002-73948/811-03258) and red herring prospectus (033-33980/811-06067).
This information is not meant to constitute investment advice, a recommendation of any securities product or investment strategy (including account type), or an offer of any services or products for sale, nor is it intended to provide a sufficient basis on which to make an investment decision. Investors should consult with a financial professional regarding their individual circumstances before making investment decisions.
Risks include loss of principal and fluctuating value. Investment value will fluctuate, and shares, when redeemed, may be worth more or less than original cost. There is no guarantee strategies will be successful. Diversification neither assures a profit nor guarantees against loss in a declining market.
ETFs trade like stocks, fluctuate in market value, and may trade either at a premium or discount to their net asset value. ETF shares trade at market price and are not individually redeemable with the issuing fund, other than in large share amounts called creation units. ETFs are subject to risk similar to those of stocks, including those regarding short-selling and margin account maintenance. Brokerage commissions and expenses will reduce returns.
Investment products: • Not FDIC Insured • Not Bank Guaranteed • May Lose Value
Dimensional Fund Advisors does not have any bank affiliates.