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Fund Spy

Discipline Gives DFA Its Edge

Focus and low costs set Dimensional apart.

Morningstar recently issued a new Stewardship Grade for DFA. The firm's overall grade--which considers corporate culture, fund board quality, fund manager incentives, fees, and regulatory history--is a B. What follows is Morningstar's analysis of the firm's corporate culture, for which DFA receives a B. This text, as well as analytical text on the other four Stewardship Grade criteria, is available to subscribers of Morningstar's software for advisors and institutions: Morningstar Advisor Workstation(SM), Morningstar Office(SM), and Morningstar Direct(SM).

DFA has become one of the largest mutual fund companies after years of explosive growth, in part because of its low costs, strong performance, and the growing acceptance of passively managed strategies. Its singularity of purpose, discipline both in managing its funds and in qualifying the financial advisors who use those funds, and low-cost structure have contributed to a clear identity--both inside and outside the firm.