DFUS - DFUS Vs. SPY: Holding Broader ETF Doesn't Really Make A Difference Right Now

2024-05-05 23:28:13 ET

Summary

• Dimensional U.S. Equity ETF has a long history, but may not outperform the SPY due to various reasons listed here.
• DFUS has a wide spread into small and mid-cap securities, but this hasn't made a significant difference in its performance compared to the SPY.
• The likelihood of a major rotation out of tech and into other sectors is low, making the SPY a better option for long-term capital appreciation and total return.

One of the biggest advantages of older ETFs is also a major disadvantage. On the one hand, it's easy to look at various time frames to see when it outperformed the market; this gives you opportunities to look for similar signals in the future. Ironically, that's also a drawback because too much historical evidence can create an inherent bias in your analysis. The fund in question is the Dimensional U.S. Equity ETF ( DFUS ), and for these reasons, I'm going to spend very little time on analyzing this 23-year-old fund's historical performance and dedicate more space for a forward look....

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