Dimensional folds eight ETFs into $250B multi-class funds

Dimensional Fund Advisors announced it will fold eight U.S. equity ETFs into ETF share classes of existing mutual funds with similar strategies, consolidating roughly $250 billion in assets. The firm said the reorganization and related fee changes take effect on Nov. 1, 2026.

About $100 billion of assets currently held in standalone ETFs and about $150 billion in mutual fund assets will be combined into multi-share-class funds that offer both mutual fund and ETF access. Dimensional said investors will be able to convert from a mutual fund share class to an ETF share class and that ETF share classes are expected to trade under the same tickers used by the prior standalone ETFs; for example, the U.S. Core Equity ETF will retain the DFAC ticker.

The eight portfolios cover U.S. core equity (two separate core portfolios), vector equity, high relative profitability, small-cap, small-cap value, targeted value and real estate securities. Dimensional said the restructured funds will centralize portfolio management while keeping both distribution formats available to investors.

Dimensional said the consolidation will produce operational scale and cost efficiencies that allow targeted reductions in management fees and expense limits. On an asset-weighted basis, the firm projected an average fee reduction of about 9 percent. Net expense ratios for ETF share classes are projected to range near 0.14 percent to 0.27 percent.

Several individual funds will see larger percentage declines. The U.S. High Relative Profitability portfolio is scheduled for a 23 percent reduction in fees. The U.S. Small Cap Value and U.S. Targeted Value portfolios are slated to see reductions in the low double digits. Other examples include the U.S. Core Equity portfolios moving from net expense ratios near 0.15–0.18 percent to about 0.14–0.17 percent and the U.S. Vector Equity portfolio falling from about 0.24 percent to 0.22 percent.

Dimensional noted it launched an active ETF share class earlier this year with its U.S. Micro Cap ETF (DFMC) and was the first active manager to receive exemptive relief for ETF share classes in 2025. The firm’s ETF assets under management are about $290 billion.

Gerard O’Reilly, co-CEO and co-CIO of Dimensional, commented: “We have long championed broader availability of ETF share classes, recognizing the potential tax efficiency, cost savings, and economies of scale this structure can offer investors. The future of Dimensional’s fund offering is one where mutual funds and ETFs coexist, offering investors the benefits of dual access points to Dimensional’s research and implementation. ETF share classes simplify allocation decisions by making investment philosophy the primary consideration when selecting investments, not fund wrappers.”