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David Booth’s Dimensional is already the largest active ETF firm

(Bloomberg) — David Booth’s Dimensional Fund Advisors has seized the crown of largest active ETF manager 14 months after Quant entered the industry.

Supercharged by a series of unprecedented mutual fund conversions, assets in the firm’s 13 exchange-traded funds have soared to nearly $46 billion, surpassing First Trust’s $45 billion in actively managed funds, according to data from Bloomberg Intelligence. has done. Dimensional is on the verge of becoming one of the top 10 largest US issuers, including passively managed funds.

The rankings highlight the asset manager’s embrace of the $679 billion ETF structure since launching its first such fund in November 2020, a decision driven by customer demand from a roster that includes financial advisors, institutional investors and sovereign wealth funds. . After the quant firm’s first fund earned $1 billion in four months, Dimensional shot up the leaderboard by converting nearly $40 billion worth of mutual fund assets into ETFs, prompting Bloomberg Intelligence to expect a $1 trillion wave. have hope.

“95% of their assets are mutual fund conversions, so it’s impressive but not surprising, because they’ve brought in so many assets,” said James Seifert, Bloomberg Intelligence ETF analyst. “If they continue to do so, their growth is pretty much guaranteed.”

Many other fund managers have similar plans as the trend of conversion picks up. Franklin Templeton is flipping about $250 million worth of mutual fund assets into ETFs this year, while JPMorgan Asset Management plans to convert about $10 billion.

While conversions make up the bulk of Dimensional’s ETF assets, the volume-investing firm’s organic growth has also been impressive. Dimensional’s first four fixed-income funds already have assets of nearly $1 billion since their launch in November. The firm’s total ETF roster is also expected to expand to more than 20 this year, from 13 funds currently.

“DFAs have a very strong base of advisors and investors, which is likely to translate into ETFs to some extent,” Seifert said.

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