Unconventional Wisdom

The DFA Academic Feedback Loop

  

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Dimensional Fund Advisors (DFA) has long been known for its deep working relationships with many of the world's leading financial economists.  The body of work produced by these academic leaders has been recognized as some of the most important research into capital market behavior in the modern era. 

As practicioners, one of the many advantages we have as a result of our association with Dimensional Fund Advisors (DFA) is the ability to participate in the "academic feedback loop": 

• Academic leaders in the field of asset pricing find new sources of risk and return in advance of the industry.
  
  
• Dimensional engineers strategies and brings client feedback to these financial economists and researchers for further testing and enhancements.
  
  
• Empirical research becomes more relevant to practical investing, and practical investing is backed by solid theory and economic knowledge.

This process allows practioners, like us, to influence the development of new strategies at DFA.  There have been many examples of the feedback loop in action, including the launch of DFA's core funds and the recent additions to DFA's fixed income strategies.  DFA commits substantial resources to this process and the results benefit our clients.