Mutual Fund Expense Reductions

January 8, 2017      Editor
Mutual Fund Expense Reductions

Dimensional Fund Advisors, an institutional investment manager with more than $445 billion under management as of 9/30/16, has announced a reduction in expense caps and investment management fees for several funds in 2017. The majority of these funds are long-term holdings used within True Wealth Design client portfolios and were already low cost compared to other funds in similar categories. Clients will benefit even more from these lower fees.

Dimensional periodically evaluates investment management fees and overall expense ratios. We are please to see Dimensional pass these savings — an average 20% reduction — along to clients as economies of scale have continued to be realized.

Ten Funds have lower management fees and nine of those funds also have lower expense caps. While the reductions in investment management fees will be effective on February 28, 2017, when new prospectuses are filed, the expense cap reductions were effective January 1, 2017.

Management Fee and Expense Cap Reductions

Portfolio Name New Mgt. Fee Current Mgt. Fee New Expense Cap Current Net Expense Ratio1
Emerging Markets Core Equity Portfolio 0.47% 0.55% 0.54% 0.62%
Emerging Markets Portfolio2 0.42% 0.50% 0.49% 0.57%3
Emerging Markets Social Core Equity Portfolio 0.47% 0.55% 0.57% 0.65%
International Core Equity Portfolio 0.27% 0.35% 0.30% 0.38%
International Social Core Equity Portfolio 0.29% 0.37% 0.38% 0.46%
International Sustainability Core 1 Portfolio 0.30% 0.42% 0.38% 0.42%4
T.A. World Ex U.S. Core Equity Portfolio 0.32% 0.40% 0.39% 0.45%
World Ex U.S. Core Equity Portfolio 0.32% 0.40% 0.39% 0.47%
Large Cap International Portfolio 0.20% 0.25% 0.24% 0.29%
U.S. Sustainability Core 1 Portfolio5 0.23% 0.29% N/A 0.25%
1. Current Net Expense Ratio as of October 31, 2015 unless otherwise noted. The cap is expressed as a ratio of total operating expenses divided by the fund’s average net assets.
2. The Emerging Markets Portfolio is a feeder fund. Current Management Fee is presented net of the fee waiver for the fees paid to the advisor at the master level (10bps).
3. Current Net Expense Ratio for the Emerging Markets Portfolio is as stated in its prospectus dated 2/28/16. The Portfolio’s “management fee” and “total annual fund operating expenses” were adjusted to reflect the terms of the Portfolio’s new investment management agreement with Dimensional Fund Advisors LP that took effect July 21, 2015.
4. Current Net Expense Ratio for the International Sustainability Core 1 Portfolio is as stated in its prospectus dated 2/28/16. The Portfolio’s “annual fund operating expenses” table was adjusted to reflect an amendment to the Portfolios Fee Waiver and Expense Assumption Agreement with Dimensional Fund Advisors LP that took effect February 28, 2016.
5. Please note that the “U.S Sustainability Core 1 Portfolio” had its expense cap lowered to 0.25% during 2016. This expense cap will remain unchanged with this update since it was already reduced.