Dimensional Fund Advisors Puts Academic Theory Into Practice
Austin, Texas-based investment firm Dimensional Fund Advisors has hit a speed bump. So far this year, many of its equity funds have dramatically underperformed the S&P 500. But that doesn't faze chairman David Booth.
By Jayne Jung
Dimensional Fund Advisors has hit a speed bump. So far this year many of the Austin, Texasbased investment firms equity funds have dramatically underperformed the Standard & Poors 500 Index, which had fallen more than 10 percent as of September 22. That doesnt faze David Booth, Dimensionals chairman and co-CEO. Booth says his 600-person shop, which manages $214 billion in equity, fixed-income and other strategies, wont go changing.
Dimensionals poor 2011 performance shows that investors cant reliably outwit the market, says head of research Gerard OReilly. Thats no surprise coming from a firm whose board includes University of Chicago economist Eugene Fama, father of the Efficient Market Hypothesis. Booth, 64, has applied academic research to the investment world since he launched the first passive....