Origins of Modern Finance (01:27)
Early academic work in portfolio theory, capital structure, and asset pricing laid the foundation for an investment paradigm shift beginning in the 1950s. With the University of Chicago playing a lead role, the old approach of subjective investing gave way to scientific analysis and implementation.
The Birth of Indexing (01:52)
Indexing was a natural outgrowth of the early work in efficient markets. The implications of the research were clear—if you cannot beat the market, you should own it. Prior to founding Dimensional, Rex Sinquefield and David Booth both pioneered the first index strategies at other firms.
Founding Dimensional (03:18)
Rex and David had the same idea at the same moment in history—to offer diversified exposure to the small cap stock universe. At first, Dimensional experienced industry resistance and business challenges. But as the idea took root, Dimensional gained a reputation for offering innovative, low-cost investment strategies backed by the research and credibility of respected financial economists.
The Value of Implementation (02:40)
Dimensional has always excelled at implementation. Many academics and professionals believed that the small cap premium could not be captured due to high trading costs. But the firm didn’t approach the task in a conventional way. Dimensional’s philosophy enables flexible portfolio design and patient trading—key ingredients in managing costs to deliver higher returns.
Dimensions of Returns (03:44)
The groundbreaking research of Eugene Fama and Kenneth French documented the size and value effects among stock returns and created a powerful framework to understand the risk and return dynamics within a portfolio. Dimensional seized upon their research and advanced a revolutionary idea through portfolio design and implementation.
A Changing World (03:49)
Dimensional’s ideas work in markets around the globe. As more people have awakened to this potential, the firm has responded by offering its strategies worldwide. Today, an international team of professionals delivers leading-edge products that implement Dimensional’s way of investing.
Firm Foundations (03:21)
Dimensional’s principled approach reflects the values of its founders. There is a consistency in how the firm treats clients and manages money. The firm is also a nice place to work—a place where bright people can challenge the status quo, combining common sense with high-end intellect.
Our Fundamental Beliefs (04:07)
Dimensional believes in markets and is passionate about following a rational investment process. There’s a strong ethic to apply the best thinking to solve problems and to do the right thing for clients. The firm was the first to bring the rigors of science to investment management; and while the details may change, Dimensional’s core philosophy remains the same.