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Fund Rationale: Dimensional Global Core Equity Fund

Dimensional Global Core Equity Fund
SGD Institutional Class Accumulation Shares (ISIN: IE00BF20L879)

Introductory information
The Dimensional Global Core Equity Fund (“the Fund”) aims to maximise total returns in Singapore Dollar terms over the longer term by investing in the Developed 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 inception date of the SGD share class was 25 July 2017. The Fund is benchmarked against the MSCI World Index (net div., SGD). The Fund is suitable for investors who have a long-term investment horizon and want diversified exposure to Developed Markets with a higher risk-reward profile. 

Characteristics
The Fund invests in a portfolio of companies listed on the principal stock exchanges in developed countries around the world. In line with Dimensional Funds investment philosophy of generally overweighting the traditional proven factors of returns, the portfolio is overweight in shares of smaller sized, value, and profitable companies. As of 3 June 2020, the Fund is allocated to 63.27% in the US, followed by 9.10% in Japan, and 4.75% in the United Kingdom. It has a price to book of 1.91x and a weighted average market cap of S$257.6 billion across 7,847 holdings.

Background information and cost
The Fund has an underlying fund management fee of 25bps per annum (0.25% p.a.) and a total expense ratio of 30bps per annum (0.30% p.a.) as of 30 June 2020. Endowus does not charge an upfront sales charge or any other fees, other than the all-in Access Fee. 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 S$5.2 billion as of 30 April 2020.

Dimensional is 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 seeks to capture what the market offers in all its dimensions. For more than 30 years, Dimensional has 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 $514 bn firmwide as of June 30, 2020.

Selection criteria for Endowus
Endowus has selected the Dimensional Global Core Equity Fund for truly passive and broadly diversified exposure, and its ability to capture the dimensions of returns from developed markets over the long term. It is the most broadly diversified portfolio for Developed Markets exposure available in Singapore with 7,823 stocks compared to the equivalent developed market index which is the MSCI World Index with 1,640 stocks.

Research by academics and practitioners show that tilts in equities towards value, size and profitability are pervasive 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 developed markets, capturing the total market returns but the tilts provide additional smart excess returns that are systematically harvested over the long-term rather than as a result of active management of funds or stock selection. This smart excess return can be consistently captured by Dimensional’s disciplined and well-researched investment process, and their efficient and low-cost implementation expertise that has been refined over the years. While we have reviewed many funds that purport to have smart beta or active tilts or factor-based investing, our analysis shows that Dimensional consistently delivers better returns through the long cycles and under all market conditions versus other peers or passive products such as ETFs.  It is also the most cost and tax-efficient exposure to global developed markets.  

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.