Fund Rationale: Dimensional Emerging Markets Large Cap Core Equity Fund

Dimensional Emerging Markets Large Cap Core Equity Fund
SGD Institutional Class Accumulation Shares (ISIN: IE00BF20LB02)
Fund Manager Page


Introductory information
The Dimensional Emerging Markets Large Cap Core Equity Fund (the "Fund”) aims to maximise total returns in Singapore Dollar terms over the longer term by investing in the Emerging Markets. The Fund applies a dynamic implementation process that integrates advanced research, methodical portfolio design, and careful execution, while balancing risks, costs, and other tradeoffs that may impact performance. The Fund is benchmarked against the MSCI Emerging Markets Index (net div., SGD). The Fund is suitable for investors who have a long-term investment horizon and want diversified exposure to Emerging Markets with a higher risk-reward profile.

The Fund is an Irish domiciled UCITS fund, and the inception date of the SGD share class was 25 July 2017. Fund assets across all share classes total SGD 809.7m as of 30 April 2020.


The Fund invests in ordinary shares, preference shares, and depository receipts of larger-sized companies based in or which trade in emerging market countries, or have at least 50% of their assets in emerging markets, which may include frontier markets (emerging market countries in an earlier stage of development). Securities are considered large-cap stocks primarily based on market capitalisation, and the eligible universe of securities that the Fund intends to invest in will generally comprise 80% to 90% of each approved market. In-line with Dimensional Funds investment philosophy of generally overweighting the traditional proven factors of returns, within the universe of eligible companies, the Fund will have greater exposure in shares of smaller sized, value, and profitable companies. As of 31 June 2020, the Fund has a price to book of 1.3x and a weighted average market capitalisation of SGD 106.7bn across 1031 holdings. It has 36.55% exposure in China, followed by 15.65% in Taiwan, and 13.45% in South Korea.


Background information and cost
The Fund has a net underlying fund management fee of 39bps per annum (0.39% p.a.) and a net total expense ratio of 44bps per annum (0.44% p.a.) as of 29 April 2020. As the fund scales, Dimensional and Endowus will continue to reduce the fees paid by the client for the underlying fund. Endowus do not charge an upfront sales charge or any other fees, other than the all-in Access Fee.

Dimensional Investment Advisors are a global investment firm guided by deep convictions about the power of capital markets. They are a leader in applying advanced financial science to equity and fixed income investment strategies. By employing a rigorous and systematic investment approach, Dimensional seek to capture what the market offers in all its dimensions. For more than 30 years, Dimensional have translated research into real-world investment solutions for clients. Their clients include financial advisors, pension funds, retirement plans, college savings plans, insurance companies, endowments and foundations, and sovereign wealth funds. Dimensional manages USD 514bn firm-wide as of 30 June 2020.


Selection criteria for Endowus
Endowus have selected the Dimensional Emerging Markets Large Cap Core Equity Fund for its broadly diversified portfolio of high quality equities in Emerging Markets, and its ability to capture the growth potential of emerging markets for a slightly higher level of risk for returns over the long-term. Research by academics show that tilts in equities towards value, size and profitability are pervasive and proven factors that add statistically significant positive returns above the market at an efficient cost. This is often known as smart beta or passive plus as it provides the overall broad exposure to markets capturing the total market returns but the tilts provide additional smart excess returns that are systematically harvested over the long-term by Dimensional's disciplined and well-researched investment process, rather than as a result of active management. We have reviewed many funds that purport to have smart beta or factor-based investing, but our analysis shows that Dimensional consistently delivers better returns through long cycles and under all market conditions versus peers.

Updated by Endowus: 24 Sept 2020

** Disclaimer
Past performance should not be taken as an indication or guarantee of future performance and no representation or warranty, express or implied, is made regarding future performance. Any opinions expressed reflect a judgment at the original date of publication by us and are subject to change without notice.

The prospectus, profile statement, product highlight sheet, fund factsheet or other offer or product documents may contain references about the expected risk tolerance of their target investors. These are in no way indicative of how we at Endowus have assessed your risk tolerance based on your stated objectives and financial situation. Endowus accepts no responsibility for investment decisions made in response to the expected risk tolerance levels mentioned in the product or offer documents.