Having trouble finding a Large Cap Blend fund? DFA Tax-Managed US Equity is a potential starting point. DTMEX has a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
DTMEX is classified in the Large Cap Blend segment by Zacks, which is an area full of potential. Targeting companies with market caps of more than $10 billion, Large Cap Blend mutual funds offer a stable investment choice; these funds are perfect for investors with a " buy and hold " mindset. Since blended funds mix large, more established firms into their portfolios, investors are exposed to both value and growth opportunities.
History of Fund/Manager
Dimensional is based in Austin, TX, and is the manager of DTMEX. The DFA Tax-Managed US Equity made its debut in October of 2001 and DTMEX has managed to accumulate roughly $3.03 billion in assets, as of the most recently available information. The fund is currently managed by a team of investment professionals.
Performance
Of course, investors look for strong performance in funds. This fund in particular has delivered a 5-year annualized total return of 15.61%, and is in the top third among its category peers. But if you are looking for a shorter time frame, it is also worth looking at its 3-year annualized total return of 11.19%, which places it in the top third during this time-frame.
When looking at a fund's performance, it is also important to note the standard deviation of the returns. The lower the standard deviation, the less volatility the fund experiences. Compared to the category average of 10.49%, the standard deviation of DTMEX over the past three years is 10.25%. Over the past 5 years, the standard deviation of the fund is 9.78% compared to the category average of 9.9%. This makes the fund less volatile than its peers over the past half-decade.
Risk Factors
Investors should always remember the downsides to a potential investment, and this segment carries some risks one should be aware of. DTMEX lost 49.5% in the most recent bear market and outperformed its peer group by 0.17%. These results could imply that the fund is a better choice than its peers during a sliding market environment.
Investors should note that the fund has a 5-year beta of 1.03, so it is likely going to be as volatile as the market at large. Alpha is an additional metric to take into consideration, since it represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which in this case, is the S&P 500. The fund has produced a negative alpha over the past 5 years of -0.49, which shows that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Holdings
Investigating the equity holdings of a mutual fund is also a valuable exercise. This can show us how the manager is applying their stated methodology, as well as if there are any inherent biases in their approach. For this particular fund, the focus is largely on equities that are traded in the United States.
Right now, 81.51% of this mutual fund's holdings are stocks, which have an average market capitalization of $153.58 billion. The fund has the heaviest exposure to the following market sectors:
- Technology
- Finance
- Industrial Cyclical
Turnover is 2%, which means this fund makes fewer trades than the average comparable fund.
Expenses
Costs are increasingly important for mutual fund investing, and particularly as competition heats up in this market. And all things being equal, a lower cost product will outperform its otherwise identical counterpart, so taking a closer look at these metrics is key for investors. In terms of fees, DTMEX is a no load fund. It has an expense ratio of 0.22% compared to the category average of 1%. So, DTMEX is actually cheaper than its peers from a cost perspective.
This fund requires a minimum initial investment of $0, while there is no minimum for each subsequent investment.
Bottom Line
Overall, DFA Tax-Managed US Equity has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, this fund looks like a good potential choice for investors right now.
For additional information on the Large Cap Blend area of the mutual fund world, make sure to check out www.zacks.com/funds/mutual-funds. There, you can see more about the ranking process, and dive even deeper into DTMEX too for additional information. Want to learn even more? We have a full suite of tools on stocks that you can use to find the best choices for your portfolio too, no matter what kind of investor you are.
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Is DFA Tax-Managed US Equity (DTMEX) a Strong Mutual Fund Pick Right Now?
Having trouble finding a Large Cap Blend fund? DFA Tax-Managed US Equity is a potential starting point. DTMEX has a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
DTMEX is classified in the Large Cap Blend segment by Zacks, which is an area full of potential. Targeting companies with market caps of more than $10 billion, Large Cap Blend mutual funds offer a stable investment choice; these funds are perfect for investors with a " buy and hold " mindset. Since blended funds mix large, more established firms into their portfolios, investors are exposed to both value and growth opportunities.
History of Fund/Manager
Dimensional is based in Austin, TX, and is the manager of DTMEX. The DFA Tax-Managed US Equity made its debut in October of 2001 and DTMEX has managed to accumulate roughly $3.03 billion in assets, as of the most recently available information. The fund is currently managed by a team of investment professionals.
Performance
Of course, investors look for strong performance in funds. This fund in particular has delivered a 5-year annualized total return of 15.61%, and is in the top third among its category peers. But if you are looking for a shorter time frame, it is also worth looking at its 3-year annualized total return of 11.19%, which places it in the top third during this time-frame.
When looking at a fund's performance, it is also important to note the standard deviation of the returns. The lower the standard deviation, the less volatility the fund experiences. Compared to the category average of 10.49%, the standard deviation of DTMEX over the past three years is 10.25%. Over the past 5 years, the standard deviation of the fund is 9.78% compared to the category average of 9.9%. This makes the fund less volatile than its peers over the past half-decade.
Risk Factors
Investors should always remember the downsides to a potential investment, and this segment carries some risks one should be aware of. DTMEX lost 49.5% in the most recent bear market and outperformed its peer group by 0.17%. These results could imply that the fund is a better choice than its peers during a sliding market environment.
Investors should note that the fund has a 5-year beta of 1.03, so it is likely going to be as volatile as the market at large. Alpha is an additional metric to take into consideration, since it represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which in this case, is the S&P 500. The fund has produced a negative alpha over the past 5 years of -0.49, which shows that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Holdings
Investigating the equity holdings of a mutual fund is also a valuable exercise. This can show us how the manager is applying their stated methodology, as well as if there are any inherent biases in their approach. For this particular fund, the focus is largely on equities that are traded in the United States.
Right now, 81.51% of this mutual fund's holdings are stocks, which have an average market capitalization of $153.58 billion. The fund has the heaviest exposure to the following market sectors:
Turnover is 2%, which means this fund makes fewer trades than the average comparable fund.
Expenses
Costs are increasingly important for mutual fund investing, and particularly as competition heats up in this market. And all things being equal, a lower cost product will outperform its otherwise identical counterpart, so taking a closer look at these metrics is key for investors. In terms of fees, DTMEX is a no load fund. It has an expense ratio of 0.22% compared to the category average of 1%. So, DTMEX is actually cheaper than its peers from a cost perspective.
This fund requires a minimum initial investment of $0, while there is no minimum for each subsequent investment.
Bottom Line
Overall, DFA Tax-Managed US Equity has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, this fund looks like a good potential choice for investors right now.
For additional information on the Large Cap Blend area of the mutual fund world, make sure to check out www.zacks.com/funds/mutual-funds. There, you can see more about the ranking process, and dive even deeper into DTMEX too for additional information. Want to learn even more? We have a full suite of tools on stocks that you can use to find the best choices for your portfolio too, no matter what kind of investor you are.