inside dimensional 2019

I N S I D E D I M E N S I O N A L 2 0 1 9

AMERICAS

Austin, Charlotte, Santa Monica, Toronto, VancouverEUROPE

London, Amsterdam, BerlinASIA PACIFIC

Sydney, Melbourne, Singapore, Hong Kong, Tokyo

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Welcome to Inside Dimensional. Since 1981, we have focused on bringing the great ideas in finance to life for investors. Within, you’ll find a behind-the-scenes look at the people of Dimensional, who are hard at work every day to give our clients an outstanding investment experience.

LETTER FROM THE CO-CEOS 4

BY THE NUMBERS 7

OUR PEOPLE

Board of Directors 9

Investment Committee 14

Portfolio Management 16

Trading 20

Research 22

Global Client Group 32

Technology 38

Investment Operations 40

Finance and Accounting 52

Marketing 54

Corporate Services 68

Human Resources 70

Legal 72

Compliance 74

IN THE MEDIA 10

FROM THE CHAIRMAN

Conversations Matter 25

SPOTL IGHT

Implementing the Great Ideas in Finance 43

Applying Financial Science to Retirement Investing 59

AROUND THE GLOBE

Australia 80

Japan 82

Asia ex Japan 84

EMEA 86

Canada 88

“Dimensional” refers to the Dimensional separate but affiliated entities generally, rather than to one particular entity. These entities are Dimensional Fund Advisors LP, Dimensional Fund Advisors Ltd., DFA Australia Limited, Dimensional Fund Advisors Canada ULC, Dimensional Fund Advisors Pte. Ltd., Dimensional Japan Ltd., and Dimensional Hong Kong Limited. Dimensional Hong Kong Limited is licensed by the Securities and Futures Commission to conduct Type 1 (dealing in securities) regulated activities only and does not provide asset management services.

“Our People” pages as of December 31, 2018.

L E T T E R F R O M T H E C O - C E O S

Left to right: GERARD K. O’REILLY, DAVE BUTLER

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For nearly 40 years, Dimensional has put the interests of clients at the center of everything we do. Our unique view of markets and

approach to investing are grounded in rigorous academic research and expert

implementation. We help clients pursue higher expected returns without

having to worry about the latest headlines. Our track record is a testament

to the impressive body of work our people have helped us achieve.

As a company, we continue to attract many of the most talented professionals

in the industry. Our people bring our culture of excellence, collaboration,

and innovation to life. The investments we make in people create better

opportunities for them and better experiences for our clients.

Inside Dimensional showcases the teams and individuals who are driving

our company forward. We invite you to learn more.

DAVE BUTLER Co-Chief Executive Officer

GERARD K. O’REILLY Co-Chief Executive Officer and Chief Investment Officer

L E T T E R F R O M T H E C O - C E O S

Left to right: GERARD K. O’REILLY, DAVE BUTLER

BY THE NUMBERS as of December 31, 2018

37Y E A R S S I N C E

F O U N D I N G

$517BA S S E T S U N D E R M A N A G E M E N T

1,300+E M P L O Y E E S

13G L O B A L O F F I C E S

AUSTINEstablished 2006

AMSTERDAMEstablished 2010

BERLINEstablished 2010

CHARLOTTE Established 2015

HONG KONGEstablished 2018

LONDONEstablished 1986

MELBOURNEEstablished 2013

SANTA MONICAEstablished 1985

SINGAPOREEstablished 2013

SYDNEYEstablished 1994

TOKYOEstablished 2013

TORONTOEstablished 2013

VANCOUVEREstablished 2003

25Ireland-registered and launched UCITS

17Open-end mutual funds in Canada

22Managed investment schemes registered in Australia

7UK-registered UCITS

128US-registered mutual funds199

I N V E S T M E N T V E H I C L E S


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O U R P E O P L E

BOARD OF DIRECTORS

Left to right:

JOHN “MAC” MCQUOWN Director

KENNETH FRENCH Director, Consultant, and Co-Chair of the Investment Research Committee

EUGENE FAMA Nobel laureate, Director, and Consultant

DAVE BUTLER Director

GERARD K. O’REILLY Director

DAVID BOOTH Chairman

“Director” refers to a member of the Board of Directors of the general partner of Dimensional Fund Advisors LP.

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I N T H E M E D I A

Dimensional’s fixed income

offering was featured in

Financial Advisor IQ, a

daily online industry news

service. The article described

Dimensional’s market-based

investment approach, recent

asset growth, and industry

ranking, while quoting analysts

and advisors on aspects of the

firm’s fixed income strategies.

“Rising volatility in stocks is sending ripples to conservative investors who count on bonds for protection in times like these. One fixed income alternative that’s seeing a big jump in money flows so far this year are the strategies offered by Dimensional Fund Advisors.”

FINANCIAL ADVISOR IQ, FEBRUARY 28, 2018

Each year, the Eddy Awards

recognize outstanding

communications efforts by plan

sponsors and service providers.

In 2018, Dimensional received

the award for its campaign

to educate employees on

the benefits of using a

health savings account.

“Dimensional Fund Advisors (HealthSavings Administrators) placed first in the retirement health care savings category for corporate plans with fewer than 1,000 participants.”

PENSIONS & INVESTMENTS, MARCH 19, 2018

Barron’s featured the results

of Dimensional’s analysis of

momentum-style mutual funds.

The study looked at US funds

with at least a three-year track

record through 2017 and found

that almost all underperformed

the Russell 3000 Index after

fees. The funds’ high turnover

and trading costs from

frequent trading offset the

benefits of capturing the

expected premium.

“Transaction costs can make matters worse for momentum funds. Most investors know that momentum stocks tend to have high returns, but many might not be aware that they come with high turnover as well.”

BARRON’S, NOVEMBER 21, 2018

How DFA Is Poised to Navigate Heightened Market Risks

P&I Announces 2018 Eddy Award Winners

“Momentum Investing”Was a Winner Until the Stock Market’s Stars Went Cold

Dimensional published a study

on the relative performance

of small vs. large company

stocks, which Institutional

Investor covered on the day

it was released. The paper

explored whether a decline

in the number of listed

stocks in the market affected

the size premium.

“In a study released today, Dimensional Fund Advisors found that the decline in the number of public listings has not affected the size factor. ‘We believe investors should continue to expect a positive size premium over the long term,’ the authors wrote.”

INSTITUTIONAL INVESTOR, MAY 15, 2018

Do Small Caps Still Outperform Large?

MEDIA HIGHLIGHTS FROM 2018

This Fiduciary Focus column

encouraged US retirement plan

advisors to offer income-focused

target date strategies in their

plan investment options. The

article, written by W. Scott Simon,

highlighted the importance that

Dimensional places on planning

for retirement income rather

than just saving for the future.

“The aim of this is to give every plan participant the best chance possible of maintaining a smoother, more certain and sufficient inflation-adjusted standard of living in retirement.”

MORNINGSTAR, OCTOBER 31, 2018

Revisiting Target Date Retirement Income Funds

In his Masters in Business

podcast, Bloomberg columnist

Barry Ritholtz interviewed

Dave Butler about his athletic

experiences, the arc of his

Dimensional career, the

evolution of the financial

advice industry, and his role

as Co-CEO.

“I joined a mission rather than a job—and it was a passion for all of us. We thought that we could change the way financial services were delivered in the country.

“We’ve never worried about goals or getting to a certain size. If we do the right thing and do it well, the success—or whatever might come from it—will happen on its own.”

BLOOMBERG, JULY 13, 2018

Dave Butler Discusses Finance and Basketball

Barron’sBloomberg

“At Dimensional, people are always trying to figure out the best answer to a question, rather than trying to promote their answer. The result is better solutions than any one of us could have arrived at by ourselves.”

PROFESSOR KENNETH FRENCH Director, Consultant, and Co-Chair of the Investment Research Committee

SANTA MONICA

AUSTIN

CHARLOTTE

LONDON

TOKYO

SINGAPORE

SYDNEY

PORTFOLIO MANAGEMENT

TRADING

25RESEARCH

INVESTMENT TEAM

27 Portfolio Management

04 Trading

08 Research


02 Trading


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05 Trading

06 Research


05 Trading

06 Research


02 Trading

27 Research


07 Trading

55 Research

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O U R P E O P L E

INVESTMENT COMMIT TEE

DAVID BOOTH Executive Chairman and Founder

JOSEPH KOLERICH Senior Portfolio Manager

STEVE CL ARK President, Dimensional International

SAVINA RIZOVA Co-Head of Research

ALLEN PU Deputy Head of Portfolio Management, North America

JOEL SCHNEIDER Deputy Head of Portfolio Management, North America and Corporate Governance Committee Chair

K AREN UML AND Senior Portfolio Manager



DAVE PLECHA Head of Global Fixed Income

RYAN WILEY Head of Global Equity Trading

MARY PHILLIPS Deputy Head of Portfolio Management, North America

JED FOGDALL Investment Committee Chair

Head of GlobalPortfolio Management

ROBERT DEERE Senior Investment Director

Investment Committee as of February 28, 2019.

O U R P E O P L E

TOKYO

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Global Leadership

JED FOGDALL Head of Global Portfolio Management

PORTFOLIO MANAGEMENT

SYDNEY

17SINGAPORE

07

LONDON

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AUSTIN

59CHARLOTTE

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159 PORTFOLIO MANAGEMENT PROFESSIONALS WORLDWIDE

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LUK AS SMART Senior Portfolio Manager

AUSTIN

PAUL FOLEY Senior Portfolio Manager

LONDON

JOEL KIM Senior Portfolio Manager

LONDON

KOTARO HAMA Senior Portfolio Manager

TOKYO

ROB NESS Senior Portfolio Manager

SYDNEY

ROBERT DEERE Senior Investment Director

SANTA MONICA

MITCHELL FIRESTEIN Senior Portfolio Manager

SANTA MONICA

GRADY SMITH Senior Portfolio Manager

SANTA MONICA

DANIEL ONG Senior Portfolio Manager

SANTA MONICA

WILL COLLINS-DEAN Senior Portfolio Manager

AUSTIN

K AREN UML AND Senior Portfolio Manager

SANTA MONICA

JOSEPH HOHN Senior Portfolio Manager

AUSTIN

ARUN KESWANI Senior Portfolio Manager

AUSTIN

JOSEPH KOLERICH Senior Portfolio Manager

AUSTIN

MARY PHILLIPS Deputy Head of Portfolio Management, North America

DAVE PLECHAHead of Global Fixed Income

ALLEN PUDeputy Head of Portfolio Management, North America

NATHAN L ACAZEHead of Portfolio Management, EMEA and Co-CEO, Dimensional Fund Advisors Ltd.

JOEL SCHNEIDERDeputy Head of Portfolio Management, North America

BHANU SINGH Head of Portfolio Management, Asia Pacific

Leadership as of February 28, 2019.

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“At Dimensional, we don’t jump on every new thing that comes along. We’re looking for robustness—academic research that will stand up over a long period of time.”

PROFESSOR EUGENE FAMA Nobel laureate, Director, and Consultant

O U R P E O P L E

Global Leadership

SYDNEY

05SINGAPORE

02

LONDON

05CHARLOTTE

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07

SANTA MONICA

04

JASON L APPING Head of International Equity Trading

RYAN WILEY Head of Global Equity Trading

25 TRADING PROFESSIONALS WORLDWIDETRADING

DAVID L ARUSSO Senior Trader

AUSTIN

MARK BUT TERWORTH Senior Trader

LONDON

CHRISTOPHER RINK Senior Trader

AUSTIN

SAM WILLIS Senior Trader

SYDNEY

POLLY WEISS Senior Trader

CHARLOTTE

DAVID VROLYK Senior Trader

SYDNEY

CHRISTIAN GUNTHER Senior Trader

AUSTIN

SCOT T VAN PELT Senior Trader

AUSTIN

LE TRAN Senior Trader

SANTA MONICA

CHRISTINE IVANICK Senior Trader

CHARLOTTE

WILL LETHEREN Senior Trader

LONDON

JAMES SIMPSON Senior Trader

LONDON

JONATHAN SMITH Senior Trader

SINGAPORE

O U R P E O P L E

Global Leadership

MARLENA LEE, PhD Co-Head of Research

SAVINA RIZOVA, PhD Co-Head of Research

PETE DILL ARD Chief Data Officer and Head of Investment Analytics and Data

AUSTIN

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SANTA MONICA

08CHARLOTTE

27 LONDON

06

SYDNEY

06

102 RESEARCH PROFESSIONALS WORLDWIDE

19 PhDs

RESEARCH

NAMIKO SAITO, PhD Strategy Research

SANTA MONICA

WES CRILL, PhD Investment Research

AUSTIN

WEI DAI, PhD Investment Research

AUSTIN

STANLEY BL ACK, PhD Strategy Research

AUSTIN

JOSEPH RUZICK A Investment Analytics and Data

AUSTIN

STACY BARTLE Investment Analytics and Data

AUSTIN

BL AKE TATSUTA Investment Analytics and Data

AUSTIN

NIGEL WALKER Investment Analytics and Data

LONDON

ANGELIQUE PALUMBO Investment Analytics and Data

SYDNEY

DAVE T WARDOWSKI, PhD Strategy Research

SANTA MONICA

MARK KRASNIEWSKI Investment Analytics and Data

CHARLOTTE

PHILIPP MEYER-BRAUNS, PhD Investment Research

AUSTIN

PHIL MCINNIS Head of Portfolio Solutions

AUSTIN


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Conversations Matter

F R O M T H E C H A I R M A N

“Delivering personalized solutions is highly connected with listening. Good advice starts with honest conversations.”


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Conversations Matter

When people think of Dimensional, they often think of our numbers. But early on, we realized that words are just as important.

We started the firm around a need that wasn’t being met.

The plan was to invest in small cap stocks to offer diversification

benefits for institutional investors, who held almost exclusively

large cap stocks in their portfolios. As you can imagine, our first

challenge was convincing clients that this idea—investing broadly

in small companies—was sensible and could be implemented.

We’d never done it. No one had.

So you might say that our business was built on conversations.

Conversations MatterF R O M T H E C H A I R M A N

People don’t trust numbers alone. They trust people and the ideas behind those numbers.

The market quickly tested us. For our first nine years, small

caps underperformed large caps more than they ever had in the

historical data. But we did what we said we would do—deliver

the returns of small companies. We communicated openly with

our clients, who understood that markets ebb and flow and that

having a diversified portfolio continued to make intuitive sense.

Our clients stayed with us. This experience taught us that, even when

numbers are disappointing, conversations form the foundation of trust.

Almost four decades later, we have a lot of numbers to be proud of. But

instead of relying solely on charts and data to back up our strategies, we

continue to lead with conversations. Numbers are necessary, but they’re not

enough. People don’t trust numbers alone. They trust people and the ideas

behind those numbers.

We often find ourselves asking, “How can we help our institutional clients

and financial advisors with their conversations?” After all, we’re in the same

business: creating meaningful relationships that help people “win” through

investing—whatever winning means to them. Each year, we strive to find

new ways to help our clients gain a deeper understanding of what we’re

doing and do better for investors.

There’s a space between the moment when clients consider an idea and

make a choice. A conversation serves as the bridge. Conversations can

address important questions: How are clients feeling? What are their goals?

How do our ideas correspond with their values? We doubt many investors

choose whom they work with based on Fama/French factors. Factors alone

are not transformative—ideas are. Conversations matter.

2828 29

The market quickly tested us. For our first nine years, small caps

underperformed large caps more than they ever had in the historical

data. But we did what we said we would do—deliver the returns of small

companies. We communicated openly with our clients, who understood that

markets ebb and flow and that having a diversified portfolio continued to

make intuitive sense.

Our clients stayed with us. This experience taught us that even when

numbers are disappointing, conversations form the foundation of trust.

Almost four decades later, we have a lot of numbers to be proud of. But

instead of relying solely on charts and data to back up our strategies, we

continue to lead with conversations. Numbers are necessary, but they’re not

enough. People don’t trust numbers alone. They trust the people, the stories,

and the ideas behind those numbers.

F R O M T H E C H A I R M A N Conversations Matter

We often find ourselves asking, “How can we help our institutional clients

and financial advisors with their conversations?” After all, we’re in the same

business: creating meaningful relationships that help people “win” through

investing—whatever winning means to them. Each year, we strive to find

new ways to help our clients gain a deeper understanding of what we’re

doing and do better for investors.

There’s a space between the moment when clients consider an idea and

make a choice. A conversation serves as that bridge. Where are they?

What are their goals? How do our ideas correspond with their values?

We doubt many investors choose whom they work with based on

Fama/French factors. Factors alone are not transformative—ideas are.

Conversations matter.

Like other areas in your life, your philosophy can guide you in your investment journey.

VALUES

Do the right thing

Do it the right way

Do it right now

CHALLENGES

Noise

Complexity

Anxiety

By viewing markets differently, you can live better now.

A TRANSFORMED INVESTOR

Make informed choices

Embrace uncertainty

Control what can be controlled

Monitor outcomes

A GOOD EXPERIENCE

Trust

Sense of accomplishment

Advocacy

Investing is a lifelong journey

DIMENSIONAL INVESTING

Financial science

Sensible approach

Implementation

Track record

PROFESSIONAL ADVICE

Listening

Candor

Solutions

Preparation

F R O M T H E C H A I R M A N

At the end of the day, our “product” is trust.

We know there is more than one way to have a conversation about what we

do. Each client has different experiences, needs, and goals. Talking about

what’s important to them is the first step in figuring out how we can help.

People don’t like feeling that they’re being sold something. Instead of trying

to sell people on Dimensional, we share our view of markets and the ways

we implement the great ideas of finance. We’re in the business of providing

solutions, not products.

Recently, we’ve been pulling together small groups of clients and employees

to have conversations about what the Dimensional philosophy means to

them and how our story connects with theirs. Something as simple as a

quotation—or even a single word—can spark a conversation. We’ve seen

people share stories that reveal their feelings and motivations in ways they

couldn’t identify if asked directly. These “aha” moments are some of the

most rewarding parts of the service we provide. And they’re a reminder of

the values we have in common.

At the end of the day, our “product” is trust.

One measure of trust is seeing what clients do when results are

disappointing. During the 2008 global financial crisis, when so many

professional money managers had net outflows, we attracted net inflows.

Many of the institutional investors and financial advisors we work with

had prepared themselves and their clients for the ups and downs of the

market, and they stayed invested. Our clients understand that it’s okay to

be disappointed with investment returns, but it’s not okay to be surprised.

After all these years, we’ve learned that when you build enduring trust,

you lay the foundation for a great business.

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University of Chicago Honors David Booth

In November 2018, David Booth became the 23rd recipient of the

University of Chicago Medal, which was established to recognize

distinguished service of the highest order to the university by an

individual. The award coincided with the 10-year anniversary of the

renaming of the University of Chicago Graduate School of Business

to Chicago Booth.

David’s connections to the University of Chicago run deep. He earned

his MBA in 1971 and was a research assistant to Chicago professor

Eugene Fama. The training David received and relationships he built

with leading academics during his time at the university laid the

foundation for Dimensional’s view of markets and approach to

investment research and implementation.

David has been a significant supporter of the University of Chicago for

decades. He currently serves on the university’s Board of Trustees, is a

member of the Board of Overseers for the Becker Friedman Institute

for Research in Economics, and is a lifetime member of the Booth

School of Business advisory council. He has contributed to the funding

of several professorships as well as the construction of the Charles M.

Harper Center—which houses Chicago Booth’s full-time MBA and PhD

programs, research centers, and institutes—and, in 2008, made the

largest gift ever to a business school.

The University of Chicago Medal adds to an impressive list of awards and

recognition David has received in recent years for his contributions to

financial theory, research, and asset management. Forbes named him to

its Money Masters list of the most powerful people in finance, Institutional

Investor recognized David with a Lifetime Achievement Award, and

Investment News presented David with its Icons and Innovators Award.

O U R P E O P L E

MARK GOCHNOUR Head of Global Client Services

CARLO VENES Co-Head of Global Client Group

BRYCE SK AFF Co-Head of Global Client Group

GLOBAL CLIENT GROUP

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Independent Advisor GroupERIK TOT TEN

JAY TOT TEN

Client Relationship GroupBEN WALKER

GRIFFIN WATKINS

Enterprise GroupSCOT T BOSWORTH

Bank Trust GroupPAUL LEHMAN

InstitutionalDOUG BYRKIT

JIM CHARLES

TED SIMPSON

Broker-Dealer Advisor GroupMITCHELL SCHORR

National Relationship Group

JOEL HEFNER

Subadvisory GroupROSE COOKE

Financial Institutions GroupED FOLEY

Retirement ServicesROBYN ALCORTA

TIM KOHN

ASHISH SHRESTHA

Consultant RelationsCRAIG HORVATH

“Providing great client experiences has always been, and will continue to be, why we do what we do.”


O U R P E O P L E

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514 GLOBAL CLIENT GROUP PROFESSIONALS WORLDWIDEGLOBAL CLIENT GROUP

Global ex US Client Groups

BRADLEY STEIMAN Financial Advisors, Canada

MART YN CHAPPELL Wealth Management, UK

DAVID JONES Advisor Group, UK and Ireland

ERIK VAN HOUWELINGEN European Client Group

JOEL TEASDEL Financial Advisors, Asia ex Japan

KEVIN K ANDASAMY Institutions, Australia and New Zealand

NATHAN KRIEGER Financial Advisors, Australia and New Zealand

JOHN ALKIRE Japan Client Group

Global Client Services

L ANA BERGSTEIN Client Onboarding

JAKE DEKINDER Advisor Communications

DAWN EICKS Events

KEVIN HIGHT Client Group Operations

DAVID K AVANAUGH Client Group Operations

K AHNE KRAUSE Advisor Communities

BRYAN LUBWAMA Learning and Development

ALYSON MCDONALD Subadvisory

CECELIA KHOR WONG Client Reporting

03

49LONDON

05BERLIN

AMSTERDAM

10MELBOURNE

24SYDNEY

SINGAPORE

10215SANTA

MONICA

TORONTO

08

AUSTIN

06VANCOUVER

73CHARLOTTE

102 TOKYO

0603HONG KONG

3736

“A good investment philosophy should be empirically testable. Operating totally on belief is a risky way to go.”


O U R P E O P L E

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Our cybersecurity group employs a multilayered framework of controls designed to guard against an attack, detect and assess a system breach, and shut it down quickly and without impact to our operations.

MICHAEL HOLMES Chief Technology Officer

Managing global cyber risks

Dimensional, like any company, faces an array of information security risks.

In a world where cyber operators are conjuring new ways to breach an

organization’s digital and human networks, we work to understand their

methods, maintain strong defenses, and be ready with an effective response.

Our cybersecurity group employs a multilayered framework of controls

designed to guard against an attack, detect and assess a system breach,

and shut it down quickly and without impact to our operations or clients.

The entire organization is involved in the effort to prevent intrusions. We

emphasize employee training and work with service providers that perform

critical functions for the firm.

We recognize that the threat may come from an amateur hacker or a criminal

enterprise. We participate in forums and industry conferences to discuss

existing and emerging threats, and we interact with other organizations and

industries to gain a deep understanding of best practices for dealing with

these threats.

We embrace our responsibility to maintain strong cyber defenses as a part

of our commitment to clients.

207 TECHNOLOGY PROFESSIONALS WORLDWIDE

GLOBAL TECHNOLOGY TEAM

AUSTIN

LEE ESKRIDGE Technology Services

BRANDON HINES Information Security

JON NELSON Client Systems

JULIE SAFT Technology Planning and Strategy

GARRET JONES Architecture and Infrastructure

TECHNOLOGY

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207 TECHNOLOGY PROFESSIONALS WORLDWIDE

GLOBAL TECHNOLOGY TEAM

AUSTIN

LEE ESKRIDGE Technology Services

BRANDON HINES Information Security

JON NELSON Client Systems

JULIE SAFT Technology Planning and Strategy

GARRET JONES Architecture and Infrastructure

O U R P E O P L E

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Extending the global service model

The daily operations of a fund company are complex, dynamic, and

resource-intensive. Most of the work occurs behind the scenes and

includes shareholder servicing, transaction processing, global custody,

fund administration, and reporting.

Our Investment Operations group is global. It oversees these functions

through our offices in North America, Europe, and the Asia-Pacific region.

We work closely with many best-in-class third-party service providers,

which have expertise and people in each of the regions where we invest

and offer the resources to support our regional and global operations.

This combination of in-house and third-party experts allows us to improve

efficiencies and scalability while reducing costs.

Producing a high standard of work is important to us, which is why we

incorporate frequent vendor contact, reporting, extensive training, and

comprehensive service reviews into our process. We also benefit from

providers’ local market knowledge, which helps us find new, creative

ways to meet the challenges of global growth.

By effectively partnering with vendors, we can reduce expenses for our

clients and fund shareholders, increase global scalability, and improve client

service delivery—all in an effort to provide a better client experience and

higher returns for shareholders.

INVESTMENT OPERATIONS

RICHARD EUSTICE Head of Global Investment Operations

By effectively partnering with vendors, we can reduce expenses for our clients and fund shareholders, increase global scalability, and improve client service delivery.

35 INVESTMENT OPERATIONS PROFESSIONALS WORLDWIDE

GLOBAL INVESTMENT OPERATIONS TEAM

AUSTIN

SCOT T K AUP Investment Operations, North America

FRANK L AO Investment Operations, North America

BRUCE SIMMONS Global Middle Office

TINA WILLIAMS Investment Operations, North America

LONDON

ANDRIES DIENER Investment Operations, EMEA

RHODA L AWRENCE Investment Operations, EMEA

SYDNEY

CAROLIN GHALI Investment Operations, Australia


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Implementing the Great Ideas in Finance

S P O T L I G H T

“Not all academic research is useful for clients. We want good ideas that we can structure and implement as strategies.”


Implementing the Great Ideas in Finance

45

Every investment manager has access to the same academic studies. The difference comes down to determining what can be useful for investors and how to apply those insights in live strategies.

At Dimensional, we’ve been implementing the great ideas

in finance for nearly 40 years. Our investment approach is

grounded in economic theory and backed by decades of

leading academic research.

Implementing the Great Ideas in FinanceS P O T L I G H T

46 47

What started in 1981 still holds true today—every dollar invested has financial science at its core.

LEADING THE TRANSFORMATIONThe field of finance has undergone a transformation since the early

1960s, when computers made it possible to process large amounts of

data for academics to study. Until then, simple things we take for granted

today—like calculating a rate of return or comparing performance across

strategies—weren’t available. Computers also enabled new theories and

models to be tested and helped organize the data.

Leading academics dug in and produced groundbreaking work on

fundamental concepts like asset pricing, risk, and diversification that

would later be recognized with the Nobel Prize in Economic Sciences.

Several of these academics were involved with Dimensional in its early

days and remain closely involved today.

Dimensional’s founders were connected to this movement in academia and

paved new paths applying these insights to real-world investing. To this day,

Dimensional’s investment team keeps abreast of academic research from

all around the world, and we’ve chosen to partner with some of the best

researchers in the field doing pioneering work. Our investment team sets

a high bar for research and its application because we want to pursue only

those insights that we firmly believe can benefit investors.

What started in 1981 with the first assets entrusted to Dimensional

still holds true today—every dollar invested has financial science at its

core. Our culture of research, rigor, and the pursuit of truth that led to

a transformation in the field of finance—and inspired the launch of the

firm—continues to propel Dimensional forward in service of clients.

STARTING WITH THE MARKETHistory has shown capital markets have rewarded long-term investors.

Staying disciplined, particularly in tough times, takes having an investment

framework. Our framework centers on market prices. Prices are updated in

real time, all the time, and represent the most complete prediction of the

future available to us.

Many studies highlight the challenges and costs for investors looking for

“mistakes” in prices. Academics have long documented that there’s no

compelling evidence to suggest that trying to find mistakes in markets has

yielded better investment outcomes. This supports our belief that market

prices are the best model we have for understanding expected returns.

We think you can have higher returns than the market without having to

outguess it by using the market as a starting point and building from there.

Prices are updated in real time, all the time, and represent the most complete prediction of the future available to us.

Merton Miller University of Chicago

Independent Director, Dimensional US Mutual Funds, 1981–2000

Nobel laureate, 1990

Eugene Fama University of Chicago

Director and Consultant, Dimensional


Robert Merton MIT

Resident Scientist, Dimensional Holdings, Inc.


Kenneth French Dartmouth College

Director, Consultant, and Co-Chair of the Investment Research Committee, Dimensional

Robert Novy-Marx University of Rochester

Consultant, Dimensional

A heritage of leading research

Myron Scholes Stanford University

Independent Director, Dimensional US Mutual Funds


Markets Process Information Daily

PRICES

Dimensions Drive Returns

Implementation Sets Us Apart

Implementing the Great Ideas in FinanceS P O T L I G H T

4948

PUTTING FINANCIAL SCIENCE TO WORKModern finance has led to many breakthroughs. Effectively using these

insights requires organizing research in a meaningful way. One way we

categorize research is by time horizon. Does the research provide insights

about expected returns over the next minute, the next month, or many

years down the line? Thinking in terms of time horizons helps us increase

expected returns and manage risk each day.

We categorize differences in company size, relative price, or profitability as

long-term drivers—or dimensions—because these expected returns have

tended to persist over many years. For example, a small company trading

at a relatively low price with high profitability has a higher expected return

than a large company trading at a higher price with low profitability.

While long-term drivers impact our strategic allocations, we use a daily

process to add value in other ways. Some variables have information over

the next few days or months, so we account for them when generating buy

and sell orders. We also identify more buy and sell candidates with similar

expected returns than we need each day in an effort to keep trading costs

low. Our process affords us flexibility, unlike many index fund managers

who are constrained in what securities to hold and when to trade them.

THE PURSUIT OF MOREA well-diversified market portfolio can be a good portfolio for many

investors. And while Dimensional seeks to outperform a market portfolio

in many ways, returns are noisy and there can be periods of time when

a particular driver doesn’t deliver. We account for this when designing

strategies. Our goal is to help investors benefit from dimensions when

they are realized and offer marketlike returns when they fall flat. We are

also candid about the range of potential outcomes. Markets may be

disappointing at times, but we don’t want investors to be surprised.

Our team processes millions of datapoints each day to help ensure portfolio

decisions are based on current and useful information. In addition, we carefully

manage responsibilities like corporate actions—such as stock splits, mergers,

or spinoffs—to make the most of the securities owned. By starting with the

market and adding value through robust daily processes, our goal is to help

minimize risk and increase the likelihood of a good outcome.

DELIVERING RESULTSWhen considering Dimensional or any money manager, it’s helpful to

evaluate how well they’ve performed—not just in one or two handpicked

strategies but across a broad range and over the longest time period

available. Did they deliver what they said they’d deliver? Did they remain

consistent in their approach? Have their solutions survived the test of time?

And why should you have confidence they can repeat any success?

We apply one philosophy and have strategies dating back decades—several

that have been serving investors for almost 40 years. Through time, we’ve

experienced a wide range of market conditions, and clients have stayed

with us. A track record this long is revealing and reinforces the importance

of having an investment philosophy you can stick with.

We recognize that every dollar invested with us represents the hard

work, savings, and dreams of investors all around the world. To deliver

a better investment experience, we use our accumulated expertise,

judgment, and skill to pull the right levers at the right time. That’s the

Dimensional difference.

500m+D A T A P O I N T S P R O C E S S E D D A I LY

6.5kA V E R A G E T R A D E S D A I LY

47C O U N T R I E S I N V E S T E D I N

199I N V E S T M E N T V E H I C L E S

By the numbers as of December 31, 2018

Continuous focus on higher expected returns in equity markets

Intraday Provide traders flexibility across names and time to minimize execution costs.

Participate in the natural liquidity of the market.

Trading Costs

Short TermBalance long- and short-term premiums and costs when making buy, sell, or hold decisions.

Spread turnover across names and time.

MomentumSecurities Lending

Long Term Use current data to assess differences in long-term expected returns each day.

Company SizeRelative PriceProfitability

Thinking in terms of time horizons helps us increase expected returns and manage risk each day.

5150

“We earn trust because the foundation of the firm is built on data, independent thinking, honest and open implementation, adaptivity, and making adjustments as we discover more. Top-notch academic research is the underpinning of Dimensional.”

JOHN “MAC” MCQUOWN Director

O U R P E O P L E

5352

By helping manage the funds’ operating costs and taxes, Finance works to improve the investor experience through lower costs and tax-aware investment management.

GREGORY K. HINKLE Chief Financial Officer and Treasurer

Managing costs and taxes in Dimensional funds

An important part of supporting Dimensional’s investment teams

is helping to minimize both operating and tax costs in an effort to

maximize returns for shareholders.

Finance closely monitors fund charges with the objective of giving

shareholders the best value for the services provided to the funds.

Total expense ratios are reviewed frequently so the overall expense

structure and arrangements help meet the expectations for the

investment strategy of each fund.

Given the various complex global tax environments in which we operate,

Finance applies differing methodologies as dictated by the respective

market. For certain funds, this approach includes working closely with

Portfolio Management to ensure the funds are managed with tax and

reporting considerations in mind. We may also work with local tax advisors

and custodians in an effort to minimize withholding taxes and secure the

maximum benefits available under pertinent tax treaties. After each

fund’s tax year is over, the Finance team is responsible for properly

reporting fund distributions and providing tax information to investors.

By helping manage the funds’ operating costs and taxes, Finance works

to improve the investor experience through lower costs and tax-aware

investment management.

42 FINANCE AND ACCOUNTING PROFESSIONALS WORLDWIDE

GLOBAL FINANCE AND ACCOUNTING TEAM

AUSTIN

CHRISTINE HO Vice President

JOY LOPEZ Vice President

MARK REGIER Vice President

MICHAEL ROCQUE Vice President

JAY TAYLOR Vice President

CRAIG WRIGHT Vice President

LONDON

KRISTEN SMITH Vice President

ANTHONY ROSSDALE Vice President

SYDNEY

CHRIS RIDDELL Vice President

FINANCE AND ACCOUNTING

O U R P E O P L E

5554

Sharing Dimensional perspectives

At Dimensional, we use the science of investing to help improve people’s

lives. From conducting rigorous research to designing new solutions, we are

passionate about providing our clients with strategies and resources that

position them for success. In recent years, clients around the world have

been asking us to advocate more vocally for our shared views on investing.

To better support our clients, the advisors we work with, and the investors

they serve, we recently introduced a new blog, Dimensional Perspectives,

in certain regions. The blog features Dimensional’s research and insights,

with topics ranging from a transformed investor’s view of market volatility

to tuning out the media noise so people can focus on actions that can help

improve their investment outcomes. Blog posts can be easily shared through

social media platforms like LinkedIn, Twitter, and Facebook, allowing clients

to communicate their views on investing more broadly.

We want to shape the public conversation around investing in ways that are

beneficial for clients and investors—reinforcing key principles that can lead

people to a better investment experience. As David Booth says, “The set

of ideas around which we’ve built the firm are bigger than the firm itself.”

We’re pleased to share these perspectives with the world.

We want to shape the public conversation around investing in ways that are beneficial for clients and investors.

K AREN DOL AN Head of Global Marketing

MARKETING

93 MARKETING PROFESSIONALS WORLDWIDE

GLOBAL MARKETING TEAM

AUSTIN

DJ ADHIK ARI Marketing Operations

ROBERT DINTZNER Client Marketing

DARCY KELLER Corporate Communications

KIM KISER Creative

TIM LUYET Digital

CHARLOTTE

BEN ABELON Production

LONDON

ANDREW WEBB Global Services

SYDNEY

GREG OSWEILER Global Services

5756

“We’ve always had a culture of ideas. People can share ideas and act on them—and, if the ideas are good, they become a part of our business and culture.”


Applying Financial Science to Retirement Investing

S P O T L I G H T

“The principles of finance and the findings of finance work everywhere, across time and space.”

PROFESSOR ROBERT C. MERTON Nobel laureate and Resident Scientist

Applying Financial Science to Retirement Investing

61

1980

1985

1990

1995

2000

2005

2010

2015 2017

7.5M$0.2T

$0.5T

$0.9T

$3.0T

$3.7T

$4.6T

$4.8T

$6.1T

$6.5T

20M

53M

67M

74M

88M96M

42M

Over the past decade, the rising popularity of defined

contribution (DC) plans has provided additional opportunities

for investors to save for retirement through their employer-

sponsored plans. These participants want access to low-cost,

well-diversified strategies that focus on providing better outcomes.

Dimensional is bringing the rigors of financial science to this

marketplace. Guided by Robert C. Merton, our Resident Scientist,

we are breaking new ground in how people invest for retirement.

Sources: The US Retirement Market, Investment Company Institute, First Quarter 2018.

Investment Company Institute, US Department of Labor, Cerulli Associates. At the end of 2017, employer-sponsored DC plans—which include 401(k) plans, 403(b) plans, 457 plans, the federal Thrift Savings Plan (TSP), and other private-sector DC plans—held an estimated $7.7 trillion in assets. With $5.3 trillion at year-end 2017, 401(k) plans held the largest share of employer-sponsored DC plan assets, while 403(b) plans held another $1 trillion. In addition, 457 plans and the federal TSP held a total of $900 billion. Other private-sector DC plans without 401(k) features held the remaining $500 billion.

$7.7 TRILLION IN ASSETS

98 MILLION PARTICIPANTS

1980–2017 (US)

The DC plan is now the most popular US retirement savings vehicle. Nearly 80% of full-time workers have access to a plan, and 90% of large-company employees participate.

Growth of DC plan assets and participants

Applying Financial Science to Retirement InvestingS P O T L I G H T

62 63

TIM KOHN Head of Defined Contribution Services

“Dr. Merton’s work is the North Star in Dimensional’s efforts to develop innovative, outcome-oriented retirement solutions.”

Merton meets often with academics, governments, and retirement plan sponsors to discuss current research and retirement issues.

THE LIFE AND WORK OF ROBERT C. MERTON Professor Robert C. Merton has spent much of his academic career working

on issues related to lifecycle investing, including research on retirement

income planning. For many years, he served as an Independent Director

on Dimensional’s US mutual fund board. In 2010, he left the board to join

the firm as Resident Scientist.

Merton is now conducting ongoing research on strategies to help people

integrate their financial needs over their lifetime. One of the foundational

concepts he has championed is the need to think about retirement investing

relative to an income goal, as opposed to simply accumulating an account

balance or nest egg. Merton is considered a global expert on finance and

speaks frequently to academic and professional groups in North America,

Europe, and Asia.

ROBERT C. MERTON

NOBEL PRIZE IN ECONOMIC SCIENCES 1997

PROFESSOR School of Management Distinguished Professor of Finance at the Massachusetts Institute of Technology

PROFESSOR EMERITUS Harvard University

RESIDENT SCIENTIST Dimensional Holdings, Inc.

CAREER CONTRIBUTIONS

Finance Theory

Lifecycle and Retirement Finance

Optimal Portfolio Selection

Capital Asset Pricing

Pricing of Derivative Securities

Applying Financial Science to Retirement InvestingS P O T L I G H T

6564

THOUGHT LEADERSHIP Our goal is to bring Dimensional Investing to more people, including

participants in company-sponsored retirement plans across the US. Today,

a plan sponsor’s challenge involves not only investments but also other key

aspects of an employee’s retirement, such as financial wellness, participant

communications, fiduciary considerations, health care funding, and outcomes-

based investing. This is one reason why Dimensional provides industry

thought leadership to retirement professionals.

In the US and Canada, we produce DC Dimensions, Dimensional’s semiannual

magazine for retirement industry professionals. We also feature retirement

research and explore related topics in issue briefs and research papers, at

Dimensional-sponsored conferences, such as our DC Annual Conference

at the University of Chicago, and through industry events and webcasts.

GLOBAL OUTREACH People everywhere face the same challenges in planning and saving for

their nonworking years. Dimensional recognizes the global significance of

retirement investing, and we want to make our research and ideas accessible

to people across countries and cultures.

Although countries have different laws and pension structures, our

goals-based approach to retirement investing has universal application,

and we are committed to adapting these ideas to help clients around

the world.

ASHISH SHRESTHA Vice President, Retirement Services

“Working with financial advisors, Dimensional provides leading-edge tools, research, and solutions designed to maximize the chances of retirement success.”DC Dimensions features

retirement-focused articles from industry experts and Dimensional thought leaders. The semiannual publication has been twice-recognized for excellence in plan sponsor communications.

Leading Thinkers. Leading-Edge Solutions.

DC DIMENSIONSWINTER 2019

12 Advisor Focus: How to Ease DC Pain Points

14 Provider Spotlight: How Tech Benefits Small-Plan Market

20 Legal Update: A Fiduciary Perspective on Collective Investment Trusts

Robert C. Merton and the Science of FinanceFrom his pioneering work on optimal portfolio selection to options pricing and retirement security, the Nobel laureate continues to seek remedies for complex financial problems.

PAGE 16

The Distribution DecisionThree experts discuss how plan participants should convert their savings into income once they retire.

2017

Defined contribution structures make up a considerable portion of retirement assets relative to defined benefit plans in several regions. Dimensional is well positioned to advise clients in the US and globally as they design next-generation offerings.

Defined Benefit Defined Contribution

Source: Global Pension Assets Study 2018, Willis Towers Watson.

19%UK

87%AUSTRALIA

60%UNITED STATES

6%NETHERLANDS

5%CANADA

4%JAPAN

Defined benefit/defined contribution asset split per market

S P O T L I G H T

6766

Teaming up with retirement professionals worldwide

Dimensional seeks out opportunities to discuss research, industry

trends, and best practices with retirement plan groups outside the US.

For example, we hosted a conference for the Australian Institute of

Superannuation Trustees (AIST), a not-for-profit organization representing

the Australian retirement plan sector. Superannuation funds are

Australia’s version of US corporate and public-sector retirement plans.

“We want to help Australians become more engaged in saving for retirement—which can lead to a better retirement outcome and quality of life for them.”

KELLY SMITH Former General Manager, Administration and Insurance, HESTA, Melbourne, Australia

O U R P E O P L E

6968

Video technology has raised our standard for teamwork and communication and is now an essential component of office design.

STEPHEN JONES Head of Global Corporate Services

Creating a visual presence

Video communication is a standard tool for getting work done at

Dimensional. The primary avenue is internal videoconferencing through

nearly 150 connection points across all our offices. The systems are fully

integrated and easy to use, and they currently support about 2,750 video

conference meetings each month. At any time, employees across the

world can meet face to face. Video enables a degree of communication,

productivity, and rapport not possible over the telephone.

We are also using advanced video feeds to enhance the audience experience

at Dimensional events. The high-speed connection enables us to remotely

feature Dimensional thought leaders, academics, and industry experts. The

live video is high definition and seamless.

Additionally, we operate digital broadcast studios in several offices to reach

a worldwide audience. Our Global Client Group uses webcasting to conduct

educational sessions, provide quarterly updates, host study groups, and

feature Dimensional research and strategies.

Video technology has raised our standard for teamwork and communication

and is now an essential component of office design.

53 CORPORATE SERVICES PROFESSIONALS WORLDWIDE

GLOBAL CORPORATE SERVICES TEAM

AUSTIN

K AREN HERNANDEZ Business Services

SCOT T HESS Broadcast Services

ANDREA SANCHEZ Realty and Facilities

CHARLOTTE

TIM WATERS Head of Corporate Services

LONDON

TIM SPEARMAN Corporate Services, EMEA

CORPORATE SERVICES

O U R P E O P L E

7170

Talent development at Dimensional

In Human Resources, one of our top priorities is ensuring Dimensional

will have the right people and skills in place to serve clients now and in

the future. This effort involves evaluating organizational talent and providing

a framework for people to learn and grow while supporting Dimensional’s

values and mission.

While training is a key aspect of our talent development efforts, our offering

also includes programs designed to orient new hires, evaluate and assess

potential and performance, drive engagement, and continually encourage

employees to improve their skills and leadership abilities. We strive to offer

the resources to help everyone take ownership of their professional growth.

Constructive conversations known as Talent Talks play a central role in

employee development. Designed to keep individuals focused on key

priorities, these talks enable employees and managers to discuss goals,

progress, impact, and opportunities. We also consult with managers to

determine the best ways to develop and motivate talent and identify

important employee attributes that can guide departmental recruitment.

As Dimensional keeps growing, we will focus on maximizing each employee’s

potential and providing opportunities for continued career success. By

offering a broad selection of services and encouraging professional growth

and manager communication, we are empowering people to shape their

future within the organization while supporting the overall client-oriented

mission of the firm.

We strive to offer the resources to help everyone take ownership of their professional growth.

A ARON M. MARCUS Head of Global Human Resources

HUMAN RESOURCES

46 HUMAN RESOURCES PROFESSIONALS WORLDWIDE

GLOBAL HUMAN RESOURCES TEAM

AUSTIN

DANIELL A DEL VENTO Global Human Resources Business Partners

OLIVER ROWE Global Human Resources Operations

STACEY WINNING Global Recruiting and Development

SANTA MONICA

JULIET LEE Global Employee Relations

O U R P E O P L E

7372

Our firm and Legal team have been navigating a constantly evolving nexus of international laws and rules.

CATHERINE NEWELL General Counsel

Dimensional’s expanding global footprint

Even before Dimensional expanded its business in recent years by opening

several regional offices—including Hong Kong in 2018—our firm and Legal

team have been navigating a constantly evolving nexus of international

laws and rules.

For any of Dimensional’s commingled funds to access local markets,

the Legal team works with a project team that includes participants

from Portfolio Management, Trading, and other groups. Initially, we collect

and provide advice on a variety of issues. For example, different jurisdictions

can have vastly different requirements for investment management activities,

such as reporting the aggregate holdings of a particular issuer’s securities,

registering for permission to trade on local country exchanges, and

maintaining relationships with custodians and other core service providers.

As our global office footprint expands, we must provide legal expertise on

more topics. We are regularly asked to provide advice on investment advisor

and commingled fund licenses and registrations, distribution arrangements,

and local real estate and employment law implications.

We meet these challenges by hiring talented attorneys and support staff

specializing in those areas, while relying on a network of trusted external

counsel and remaining vigilant in the face of change.

40 LEGAL PROFESSIONALS WORLDWIDE

GLOBAL LEGAL TEAM

AUSTIN

VALERIE BROWN Deputy General Counsel

CAROLYN O Deputy General Counsel, Funds

BRIAN PITRE Counsel

LONDON

JOHN BOYD Lead European Counsel

SYDNEY

ANDREW KUO Corporate Counsel

LEGAL

O U R P E O P L E

7574

We have built a system of controls that should help Dimensional meet regulatory standards for communications while telling our story to the world.

CHRISTOPHER CROSSAN Global Chief Compliance Officer

Supporting Dimensional’s global communications effort

Dimensional produces a large volume of electronic and printed content.

These materials include slides, research papers, brochures, videos, web

pages, conference presentations, webcasts, fund overviews, and reports.

One of our main roles is to review these materials, as well as other firm

messaging, to ensure compliance with regulations that govern advisory

and fund communications.

In 2018, we reviewed more than 5,000 pieces worldwide. Reviewing

and tracking the content are complex tasks involving multiple audiences

and regulatory jurisdictions around the world. Our regional Compliance

teams work closely to share their local expertise and specializations that

help Dimensional adapt the content for each region.

Today, we can manage an increasing workload because of our advanced

review infrastructure and process. About four years ago, we implemented

a web-based recordkeeping system that enables us to more efficiently

review content, keep detailed records, and respond quickly to requests

from regulators. We have also improved review efficiency by embedding

Compliance staff in the sales groups. By providing real-time guidance to

the people who are communicating with clients, our team can identify and

address regulatory or compliance issues before the final review process,

which can save time. This consultative approach has also led to better

communication among teams.

Growth brings the need to communicate with more people. We have built

a system of controls that should help Dimensional meet regulatory standards

for communications while telling our story to the world.42 COMPLIANCE

PROFESSIONALS WORLDWIDE

GLOBAL COMPLIANCE TEAM

AUSTIN

SELW YN NOTELOVITZ Deputy Chief Compliance Officer

LONDON

PAUL O’DONOVAN Head of Compliance, EMEA

SINGAPORE

RANDY OLSON Head of Compliance and Operations, Asia ex Japan

SYDNEY

RODNEY MAIR Head of Compliance, Australia

COMPLIANCE

I N S I D E D I M E N S I O N A L 2 0 1 9I N S I D E D I M E N S I O N A L 2 0 1 9

7776

“The research is out there for anybody to access. What distinguishes Dimensional is the way we implement the ideas.”


Dimensional Around the Globe

“Through our offices around the world, Dimensional serves a diverse group of clients. Whether the client is a small institution, advisory firm, or large asset owner, our focus is the same—to deliver an outstanding investment experience.”

STEVE CL ARK President, Dimensional International

A R O U N D T H E G L O B E

80

The world moves our way

In the past year, Australia’s wealth management industry came under intense

public scrutiny as the Hayne Royal Commission released its findings.

The Commission pointed out conflicts of interest inherent in vertically

integrated organizations that manage funds, provide investment advice,

and control broad distribution channels. It determined that such conflicts

can be, and have been, detrimental to investors’ wealth and need to be

better managed and monitored—or eliminated entirely.

In many ways, the industry is trending toward what Dimensional has

always practiced. Since offering our first funds in Australia and New Zealand

nearly 20 years ago, we have emphasized putting investors first.

This is not a radical idea: Determine what investors need, show them

how they can pursue those goals, and do everything possible to get

them there using efficient, transparent investment strategies.

In a rapidly evolving market, asset owners are looking for asset managers

who can help them solve complex problems in innovative ways—for

example, by designing systematic investment strategies to meet their

needs, incorporating sustainability measures in a thoughtful and

transparent way, or managing income-focused strategies for members

who are saving for retirement.

Since our founding, Dimensional has emphasized the importance

of offering thought leadership, adapting to evolving markets and

regulations, and providing excellent client service. Put simply, we

believe in a client-centric approach.

We are pleased to see the world moving toward our way of thinking

and investing.

GLENN CRANE Chief Executive Officer and Chairman, DFA Australia Limited

AUSTRALIA

CLIENT GROUP LEADERSHIP

KEVIN K ANDASAMY Institutions, Australia and New Zealand

NATHAN KRIEGER Financial Advisors, Australia and New Zealand

SYDNEY

MELBOURNE

AUSTRALIA

EMPLOYEES

105


82

TOKYO

A new approach for Japanese investors

As investors in this region search for strategies that can deliver

higher-than-market returns, we have seen systematic, value-added

approaches gain greater acceptance.

Such strategies can robustly accommodate the capital requirements

of banks and insurance companies, which can lower monitoring costs

and reduce the probability of unexpected outcomes. Moreover, strategies

that are well diversified, transparent, and prudently managed can help

investors adopt appropriate return expectations, which may encourage

them to remain disciplined, even in tough times. This helps not only smaller

investors saving for retirement, or who are consuming in retirement, but

also large institutions to have more successful investment outcomes.

We believe that our research focus and consultative style, which bring

together global and local academics, intermediaries, and regulators, are

leading to a gradual but significant change in how the people of Japan

approach building long-term wealth.

JAPAN

JOHN ALKIRE Chief Executive Officer, Dimensional Japan Ltd.


K AZUYO K AWABATA Institutions, Japan

SEIICHIRO KUBO Institutions, Japan

NAOTO TAKEYAMA Institutions, Japan

JAPAN

EMPLOYEES

12


84

Challenges and opportunities

Investors in Asia need high-quality asset management solutions to help them

grow their savings and keep pace with advancing economies. A challenge

for asset managers is to meet those needs in a region comprising different

markets, cultures, and regulators.

We have seen many investment professionals and asset owners express

a desire to develop deep, long-lasting relationships with asset managers,

built around close consultation, a consistent message, and a systematic

and flexible investment framework.

Dimensional has long been a thought leader in research-driven investing

and best practices around the delivery of investment advice. Since

entering this region in 2013, we have shared our investment approach

with many leading institutional investors and financial advisors and have

been pleased with their favorable response. In 2018, we had more than

30 employees servicing these clients in our Singapore and Hong Kong offices.

Since our founding, Dimensional has been at the forefront of developing

leading investment management solutions with intermediaries and institutions.

We are excited to continue that journey in the Asia ex Japan region.

ASIA EX JAPAN

PENG CHEN, PhD Chief Executive Officer, Dimensional Fund Advisors Pte. Ltd. and Dimensional Hong Kong Limited (Asia ex Japan)


JOEL TEASDEL Financial Advisors, Asia ex Japan

HONG KONG

SINGAPORE

ASIA EX JAPAN

EMPLOYEES

32


86

Servicing clients across the EMEA region

Investors in the EMEA region have assets comparable in size to those

in the US, and we believe this robust market can continue to benefit from

Dimensional’s way of investing. With many languages, cultures, currencies,

and regulators, the EMEA market is complex and requires a thoughtful

strategy to best serve those investors.

Since being appointed Co-CEOs of Dimensional Fund Advisers Ltd. (DFAL)

in July 2018, we have focused on enhancing how we service our existing

clients and introduce our investment approach to countries and distribution

channels that are less familiar with Dimensional. We have also worked hard

to try to ensure that it will be business as usual for our clients in the region

regardless of the ultimate outcome of Brexit, which may take many years to

be realized.

On a personal note, Art Barlow, who most recently was the Managing

Director of DFAL, retired at the end of 2018 after 28 years of service with

Dimensional. So many people have enjoyed working with Art over the

years, and on their behalf, we thank him for his commitment, hard work,

and dedication to our clients.

NATHAN L ACAZE Co-Chief Executive Officer, Dimensional Fund Advisors Ltd.

EMEA

JOHN S. ROMIZA Co-Chief Executive Officer, Dimensional Fund Advisors Ltd.


TIM BROWN UK Institutional and Consultant Relations, EMEA

MART YN CHAPPELL Wealth Management, UK

ERIK VAN HOUWELINGEN European Client Group

DAVID JONES Advisor Group, UK and Ireland

LONDON

AMSTERDAM

BERLINEMEA

EMPLOYEES

144


88

CANADA

BRADLEY STEIMAN Head of Canadian Financial Advisor Services, Dimensional Fund Advisors Canada ULC (Dimensional Canada)

Putting clients first at the heart of Canadian reforms

For several years, the Canadian financial services industry has been rolling

out regulations designed to protect retail clients. The effort has centered

on the Client Relationship Model 2 (CRM2), which generally directs how

investment dealers and advisors disclose fees and performance to investors.

The model had its second year of full implementation in 2018.

During the year, the Canadian Securities Administrators amended their

proposed regulations dealing with advisor-client relationships and mutual

fund compensation. These reforms are intended to help improve client

engagement and better manage conflicts of interest.

Many of the institutions and financial advisors who work with Dimensional

have long embraced the principles driving the reforms. We believe the right

model for wealth management and investing starts with a client-centric view

around advice combined with a systematic investment approach.

We are excited to see a broader adoption of this perspective in Canada.


KEVIN MARTINO Institutions, Canada

VANCOUVER

TORONTO

CANADA

EMPLOYEES

14

I N S I D E D I M E N S I O N A L 2 0 1 9I N S I D E D I M E N S I O N A L 2 0 1 9

9190

“It’s 10% having a good idea and 90% implementing that idea and making it work. Dimensional has been making it work for decades.”

PROFESSOR ROBERT C. MERTON Nobel laureate and Resident Scientist

Eugene Fama and Ken French are members of the Board of Directors of the general partner of, and provide consulting services to, Dimensional Fund Advisors LP. John “Mac” McQuown is a member of the Board of Directors of the general partner of Dimensional Fund Advisors LP. Robert Merton is a consultant to Dimensional Fund Advisors LP.

“’Momentum Investing’ Was a Winner Until the Stock Market’s Stars Went Cold” reprinted with permission of Barron’s © 2019 Dow Jones & Company, Inc. All rights reserved worldwide.

This information is provided for educational purposes only and should not be considered investment advice or a solicitation to buy or sell securities. There is no guarantee an investing strategy will be successful. Investing risks include loss of principal and fluctuating value.

“Dimensional” refers to the Dimensional separate but affiliated entities generally, rather than to one particular entity. These entities are Dimensional Fund Advisors LP, Dimensional Fund Advisors Ltd., DFA Australia Limited, Dimensional Fund Advisors Canada ULC, Dimensional Fund Advisors Pte. Ltd., Dimensional Japan Ltd., and Dimensional Hong Kong Limited. Dimensional Hong Kong Limited is licensed by the Securities and Futures Commission to conduct Type 1 (dealing in securities) regulated activities only and does not provide asset management services.

US: Dimensional Fund Advisors LP is an investment advisor registered with the US Securities and Exchange Commission.

Canada: Published February 2019. These materials have been prepared by Dimensional Fund Advisors Canada ULC, manager of the Canadian Dimensional funds. This information is provided for educational purposes only and should not be construed as investment advice or an offer of any security for sale. The information provided in this paper has been compiled from sources believed to be reliable and current, but accuracy should be placed in the context of the underlying assumptions. Commissions, trailing commissions, management fees, and expenses all may be associated with mutual fund investments. Please read the prospectus before investing. Any indicated rates of return are the historical annual compounded total return including changes in share value and reinvestment of all dividends, and do not take into account sales, redemption, distribution, or optional charges or possible taxes payable by a security holder that would have reduced returns. Mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. To obtain further information regarding the Canadian Dimensional funds, please visit ca.dimensional.com.

Australia: This material has been prepared by Dimensional Fund Advisors LP and is provided in Australia by DFA Australia Limited (AFS License No. 238093, ABN 46 065 937 671). This material above is provided for information only. No account has been taken of the objectives, financial situation, or needs of any particular person. Accordingly, to the extent this material constitutes general financial product advice, investors should, before acting on the advice, consider the appropriateness of the advice, having regard to the investor’s objectives, financial situation, and needs. Any opinions expressed in this publication reflect our judgment at the date of publication and are subject to change. This is not an offer or recommendation to buy or sell securities or other financial products, nor a solicitation for deposits or other business, whether directly or indirectly.

For licensed or exempt financial advisors and institutional investors in Singapore: This document is deemed to be issued by Dimensional Fund Advisors Pte. Ltd., which holds a capital markets services license for fund management serving accredited and institutional investors as defined under the Singapore Securities and Futures Act.

This advertisement has not been reviewed by the Monetary Authority of Singapore and should not be forwarded to prospective investors. For use by institutional investors and licensed or exempt financial advisors only in Singapore for internal training and educational purposes and not for the purpose of inducing, or attempting to induce, such institutional investors or financial advisors to make an investment.

Not for use with the public. This information should not be considered investment advice or an offer of any security or fund for sale. All information is given in good faith and without any warranty and is not intended to provide professional, investment, or any other type of advice or recommendation and does not take into account the particular investment objectives, financial situation, or needs of individual recipients. Before acting on any information in this presentation, you should consider whether it is suitable for your particular circumstances and, if appropriate, seek professional advice. Dimensional Fund Advisors Pte. Ltd. does not accept any responsibility and cannot be held liable for any person’s use of or reliance on the information and opinions contained herein. Neither Dimensional Fund Advisors Pte. Ltd. nor its affiliates shall be responsible or held responsible for any content prepared by institutional investors or financial advisors.

For licensed financial advisors and institutional investors in Hong Kong: This document is deemed to be issued by Dimensional Hong Kong Limited (CE No. BJE760), which is licensed by the Securities and Futures Commission to conduct Type 1 (dealing in securities) regulated activities only and does not provide asset management services.

This document should not be forwarded to prospective investors. For use by licensed financial advisors and institutional investors who are “professional investors” (as defined in the Securities and Futures Ordinance [Chapter 571 of the Laws of Hong Kong] and its subsidiary legislation) only in Hong Kong. This document is provided solely for internal training and educational purposes and is not for the purpose of inducing, or attempting to induce, such financial advisors and institutional investors to make an investment nor for the purpose of providing investment advice. Not for use with the public.

Disclosures

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Unauthorized copying, reproducing, duplicating, or transmitting of this material are prohibited. This document and the distribution of this document are not intended to constitute and do not constitute an offer or an invitation to offer to the Hong Kong public to acquire, dispose of, subscribe for, or underwrite any securities, structured products, or related financial products or instruments nor investment advice thereto. Any opinions and views expressed herein are subject to change. Neither Dimensional Hong Kong Limited nor its affiliates shall be responsible or held responsible for any content prepared by financial advisors or institutional investors. Financial advisors in Hong Kong shall not actively market the services of Dimensional Hong Kong Limited or its affiliates to the Hong Kong public.

Japan: This is provided for informational purposes only and shall not constitute an offer to sell or the solicitation to buy securities or enter into investment advisory contracts. This document is deemed to be issued by Dimensional Japan Ltd. (DJL), which is regulated by the Financial Services Agency of Japan and is registered as a Financial Instruments Firm conducting Investment Management Business and Investment Advisory and Agency Business. DJL is an affiliate of Dimensional Fund Advisors LP. This material contained herein may not be reproduced, copied, modified, transferred, disclosed, or used in any way not expressly permitted by Dimensional Japan Ltd. in writing.

Dimensional Japan Ltd. Director of Kanto Local Financial Bureau (Financial Instruments firms) No. 2683 Membership: Japan Investment Advisers Association

Where issued by Dimensional Fund Advisors Ltd. (DFAL), 20 Triton Street, Regent’s Place, London, NW1 3BF:

DFAL is authorized and regulated by the Financial Conduct Authority (FCA). DFAL does not give financial advice. You are responsible for deciding whether an investment is suitable for your personal circumstances, and we recommend that a financial advisor helps you with that decision.

This document is provided for information purposes and intended for your use only. It does not constitute an invitation or offer to subscribe for or purchase any of the products or services mentioned. It is the responsibility of any persons wishing to make a purchase to inform themselves of and observe all applicable laws and regulations. Any entity responsible for forwarding this material to other parties takes responsibility for ensuring compliance with all financial promotion laws, rules, and regulations. It is not intended to provide a sufficient basis on which to make an investment decision. Information and opinions presented in this material have been obtained or derived from sources believed by DFAL to be reliable, but DFAL makes no representation as to their accuracy or completeness. DFAL has reasonable grounds to believe that all factual information herein is true as at the date of this document. DFAL accepts no liability for loss arising from the use of this material.

DFAL issues information and materials in English and may also issue information and materials in certain other languages. The recipient’s continued acceptance of information and materials from DFAL will constitute the recipient’s consent to be provided with such information and materials, where relevant, in more than one language.

RISKS Investment involves risks. The investment return and principal value of an investment may fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original value. Past performance is not a guarantee of future results. There is no guarantee strategies will be successful.

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