Very recently I found a great article through one of the passive investing LinkedIn groups I belong too. It’s about investing in DFA mutual funds and the Morningstar ratings.
I’ve known for nearly 10 years now that I’ve been using DFA mutual funds that there are a few reasons they don’t fit neatly into Morningstar’s rating systems. This article “Should You Invest In DFA Funds?” calls into question just how relevant Morningstar ratings can sometimes be. Keep in mind, Morningstar Star ratings are a measure of ACHIEVEMENT – NOT APTITUDE!
Ironically the question isn’t really should you invest in DFA funds but rather CAN you invest in DFA Funds? They’re not available at your local Schwab or Morgan Stanley as you might think. DFA Funds are implemented only by financial advisors who have been through their training program and generally are pure fee only financial advisors – primarily registered investment advisors. OR you could be an endowment or large institution – they generally have access to DFA funds due to their size and the consistent process they follow on their investment committee’s.
