DFUS
Dimensional U.S. Equity ETF
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DFUS seems like a better solution (than VTSAX) to avoid trillion-dollar IPOs that want to sneak into Index Funds. Got any other solutions?
PSA: Don't be a bag holder for SpaceX and AI companies
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The index inclusion issue with mega-cap IPOs is real and worth thinking about. DFUS and similar Dimensional funds use a profitability and value screen that naturally limits this exposure, which appeals to people who are bothered by buying something at any price just because it got big enough. In my experience the fee difference from VTSAX is modest and the factor tilts have long-term historical support. Whether the IPO-exclusion effect is worth it is harder to measure, but the underlying portfolio construction philosophy is sound.
DFUS is a good replacement to VTI for right now, since VTI will include SpaceX in the first 5 days
DFUS (none), DFAU (light), DFAC (aggressive), AVUS (moderate)
I think you're right. A previous comment also mentioned DFUS does not tilt. Do you know of any funds that do?
That's the whole premise behind looking for funds like DFUS/DFAS, which are based on fundamentals instead of blinding following market cap.
Given DFUS has a ER of 0.09%, it’s more of a nothing burger when other funds have an ER of 0-0.03%.
Your right! DFUS seem to have very minimal value tilt (if any). Do you know where to find exact numbers? Maybe DFAC is a better solution?
DFUS, unlike many other DFA funds, DOES NOT VALUE TILT.
There's a couple options depending on what brokerage you use. Just do VT (Weighted world fund) if you want a one stop shop or VTI/VXUS (Total US/Total International) or whatever equivalent ticker at a 75/25% ratio if you want a US home bias tilt. There's also an argument for a 80/20 ratio of something like VOO + AVUV if you want to tilt to small cap value but have a majority of your holdings in the SP500 if you believe in the value premium model. International allocation is optional but recommended just for diversification and to avoid currency risk in a single country. Anywhere from 15-35% is fine. Doing pure SP500 is also fine. Want to avoid trash small cap growth companies and rugpull IPOs? DFUS is an active managed total US fund but with a very low 0.09% ER vs 0.03% VTI which is insignificant. As long as it beats VTI by 0.06% a year which so far it has then it's worth. Nobody knows the future though. Boomer index investing is boring and has low consistent returns, but you also won't fuck yourself trying to beat the market. Consider slowly adding like 10% bonds depending on your age too.
I am actually just switching future purchases away from QQQ and VTI Sp500 (VOO and IVV and DFUS) they are all supposed to not buy SpaceX until approx 12 months after ipo. We will see - news media and social media have both gone back and forth on if sp500 will or won't buy it before the 12 month rule - but that still keeps going back and forth as of today.
DFUS would be the most similar to vti as it has very minimal tilts to small and value , it just has profitabilty filter. DFAC and AVUS are a lot more tilted to small and value in hopes to out perform the index.
DFUS has a 12 month wait policy before adding an IPO.
Schwab's FNDX or DFUS.
DFUS is an actively managed sp500 fund - (0.09 exp ratio) It's a good alternative that should not add SpaceX and openAI until they show 4 qtrs of profitability
I agree, it's not a good decision. I got out of index-tracking funds and into DFUS (except where I had substantial gains I didn't want to realize) as a result. But I don't think it's actionable fraud.
For that reason, VOO is a slightly safer option than VTI. VTI tracks the CRSP which announced changes to their inclusion criteria to benefit SpaceX. VOO tracks the S&P500 which has not announced plans to change its inclusion criteria. However there is a proposal to do so. The ramifications would be changing the inclusion timeline from 12 months to 6. Still shitty that they're considering it at all, but it's better than reducing it to only 15 days. DFUS basically is the same as VOO/VTI and it is not changing its inclusion criteria.
DFUS and other Dimensional Funds products are very openly not-this.
$DFUS. Dimensional funds S&P 500 fund, higher ER than VOO (0.09 vs 0.03), but doesn't have to buy SpaceStuff AI etc at IPO price, I believe more strict inclusion criteria. Check out Ben Felix, he's got some pretty good evidence based content.
since this is an investing sub, can u share ideas on how u intend to have index exposure that excludes spacex? DFUS? Daily proportional manual short of spacx shares?
Can you describe what this says since it was deleted? I’ve been slowly shifting from VTI to DFUS, and have been playing around with rebalancing to larger mid-small cap positions as well as some momentum indexes that stock pick vs. include the full market. Still holding some VTI to see how it compared with DFUS through this drama.
DFUS carries sp500 but won't add new companies(like SpaceX/openAI etc) for a year
They can and they might end up adding them. But DFA (the investment group behind DFUS), does not buy IPOs. They actually wait for about a year or longer and make sure the business is profitable, which is what the S&P did before they decided to change their rules before this exception. DFA believes the same thing John Bogle believed in, you can’t beat the market, however they wanted to improve upon indexing by saving investors money through systematic changes. For example, it’s notoriously known in the finance world that there’s lots of liquidity in the market during index rebalancing, and these add up to hidden costs to investors. DFA is basically indexing, without announcing when they rebalance and have a smoother transition. That’s just one of their changes. I’d recommend you’d do more research into it and inform yourself better before making any investment changes :)
Question, couldn’t DFUS theoretically add spaceX anyway?
QQQ/QQQM will add in 15 days. VTI will add in 5 days. VOO/SPY will include in about 6 months instead of 1 year and will take away the profitability requirement. If you want a broad US market index fund that will not buy SpaceX at IPO you can get DFUS ETF. This is not investment advice or an endorsement. (Disclaimer: I’m invest 50% into VTI and 50% into DFUS for this exact reason).
For US I personally prefer AVUS or DFUS, but yeah, that would work.
DFAC, DFUS, AVUS - broad market funds that actually enforce rules like a 12 month lockout for new IPOs
Within 3 weeks of the SpaceX IPO, an enormous fraction of most index funds’ holdings will be devoted to SpaceX, at which point the price will surge and then fall off a cliff when early investors time their exit liquidity. Your best option is to put your money somewhere that won’t forcibly include SpaceX. Some index funds, like DFUS, have strict limits on how long a stock is publicly traded before they include it. DFUS for example waits 12 months.
I’m not opposed to owning Space X or any other company but want some time for price discovery before it moves into the index. It’s why I like DFUS. They don’t have to buy it immediately.
It’s why I diversified to VTI and DFUS. DFUS is a good hold for the forced buying reason.
Buy low-fee actively managed funds that have a profitability factor. Avantis (AVUS, AVEG, AVTM, ...) and Dimensional (DFUS, ...) are good. Avoid passively managed funds weighed on market cap like VOO, SPY, QQQ, etc.
If you really feel like you should there is Dimensional/Avantis funds like DFUS, AVUS, etc that bar IPOs for the first 12 months
DFUS https://youtu.be/lMdGA0ePXzI
DFUS DFAC look into dimensional funds, they do broad market indices with some additional rules like a strict 12 month lockout for new ipos
DFUS is the general consensus.
DFUS does this. AVUS also I think.
not the OP, but it sounds a lot like DFUS.
DFUS will avoid that shit.
DFUS + AVUV (I’ve watched too much Ben Felix to not have small cap value)
DFUS + AVUV (I’ve watched too much Ben Felix lol)
Thank you That was what my research indicated as well DFUS is a clear replacement for VTI No obvious replacement for VXUS or VT without making meaningful factor tilts or buying a few different funds to approximate it
I've seen DFUS being floated as an alternative.
Index funds track the index. If they don't buy, then they're not doing what the fund is designed to do. Now if your question is "why doesn't someone make something which operates mostly like and index fund, but tries to avoid these problems", well that does exist (e.g. DFUS). That involves some trust in the managers of those funds, though.
Friendship ended With VTI. Now DFUS or AVUS is my best friend.
Point taken but also DFUS also has exclusion criteria beyond tax optimization that may be attractive separately from an investors interest in factor titlting
DCOR or DFAC for tax advantaged account, DFUS for taxable. See my other comment above.
Having talked to mongstradamus before, he also holds AVUV, and the reason he uses DFUS instead of VTI is for the tax-awareness and the exclusion of zombie small cap growth rather than the very minor factor tilt in it.
I understand that. He said DFUS is his core holding in his IRA. My post was to inform that DFAU or DFAC might be more appropriate in a tax advantaged account. The managers of DFUS might make a less desirable investment decision in order to minimize taxes than the managers of DFAU or DFAC. For example, the factors indicate selling a stock, but DFUS will hold it longer to shift from short term capital gain to long term capital gain. Or tax loss harvesting when it might not be the best investment decision.
He means he doesn't want to realize a taxable event by selling his VTI in his taxable brokerage account to replace it with DFUS.
DFUS is just the ETF of a mutual fund that is much older. My comparison is between that mutual fund and the index otherwise we would only be going off a few years of performance.
After all these years though these no brainer strategies DFUS uses is not even beating its index. It's easy to talk about investing ideas that are surely better historically but applied in real life it never works as well going forward.
As someone else pointed out, DFUS is exactly the kind of thing you are looking for, a fund that seeks the efficiency of total market indexes while utilizing their own discretion in exclusion criteria. It is somewhere in a grey area in between activrly managed funds and indexes. It would be interesting if more managers sought this kind of model
DFUS is their “tax managed” ETF. One of it’s objectives is to minimize Fed taxes. It’s factor tilts is similar to DFAU with light factor tilts, DFAC has more aggressive tilts.
While its not an index fund , dimensional etfs don't allow ipos for first year if memory serves me correct. I personally like DFUS its basically vti without ipos for first year and the junk small cap growth companies. They filter for profitability but I am not sure its based off of P/E ratio or anything like that.
If you need the money in 12 months buy a CD. If you actually mean decades long investing, global cap weighted equity exposure is an effective/super simple way to do it. VT gets you there. VTI/DFUS for US equities and then VXUS for international if you want to put your thumb on the scale for US/Int exposure also works.
OK, but DFUS and AVUS are mentioned all over the the internet in regards to the SpaceX IPO. If you are not a bot then I must surmise that you are then not dedicated enough to browsing Reddit and the internet. Have you considered dropping some of your time consuming hobbies?
DFUS or AVUS for the exit liquidity issue.
You can also just invest in broad market ETFs that don't add IPOs for at least many months, and only if theyare expected to deliver good returns. DFUS is an example
I believe Dimensional and presumably Avantis "index" funds wait 1 year before purchasing IPOs. They're kind of un-indexed index funds where they mostly behave like index funds but they rebalance to match the index less often. This is what I heard from that one youtuber at least, and it seems reasonable. DFUS is the one that most index-like, whereas DCOR and DFAC have more and more tilts. I personally use DCOR, which is still pretty index-like but it looks like it under-weights inflated stuff like Tesla, which also makes me feel better.
Dimensional doesn't have a direct analog for VOO/SPY. DFVX is probably the most similar, but it uses a severely trimmed-down (only 300 or so companies) subset of the Russell 1000 instead of the SP500, so it's not really apples to apples. Its company weighting also differs substantially from a true index, with a few big names like Nvidia and Apple, for example, only having a fraction of their market weight in representation. The most index-like Dimensional US ETF would probably be to use DFUS as a stand-in for VTI. If you really want an "active" index that applies some modest filters while still remaining largely true to market cap, maybe look at AVLC from Avantis. It also roughly uses the Russell 1000, but holds 700 or so companies at market weights that feel a lot less like stock picking.
Yep, another good choice is VTV - vanguard value index fund ETF There are others that do similar things, like DFUS
The floats on these IPOs are likely small (\~5%), so your exposure would be small too. Worst case maybe \~0.5% of your portfolio goes into these mega IPOs, which even with a 50% drop would only mean about a \~0.25% hit overall. That said, switching to DFUS isn’t a bad option.
Don’t quote me because I read late in the night but someone mentioned DFUS could possibly be a way.
Get out of any etfs / mutual funds based on the Nasdaq (QQQ, VTI etc). Elon forced a rule change so he could [dump his bags on retail passive investors](https://finance.yahoo.com/news/new-rule-could-fast-track-spacex-ipo-for-nasdaq-index-inclusion-172327734.html). He’s also rolled up a bunch of other BS into SpaceX basically doing the same thing (xAI, Twitter, buying fucking cyber trucks). If you want to stick with Nasdaq without the IPO retail bag holding consider DFUS or something that does add the IPOs with the new rule change. Some other discussion here: https://www.reddit.com/r/investing/comments/1sd0x3g/avoid_fast_track_ipos_while_keeping_broad_passive/?solution=b01a01fb9983307db01a01fb9983307d&js_challenge=1&token=bbbe4bf1c9a2b5160829c4be34da5861b0f0cec01367a79087a4f23d0743f855
just so the numbers are visible: DFUS = 0.32 expense ratio; 10.6x higher than VTI
I second DFUS, that is what I hold for a total US market fund.
Consider switching from VTI to DFUS by Dimensional Funds. One of their principles is to not add IPOs within the first 12 months because there’s empirical research showing IPOs underperform in the initial period. Otherwise DFUS intends to more or less replicate broad US index funds, but with various tweaks that aim to modestly outperform it (such as the waiting period for IPOs). Avantis may have a similar ETF offering, but I’m personally only familiar with Dimensional
I would not touch them with a ten foot pole. Fees are ridiculous, the tax-loss harvesting opportunities dry up over time, and you are stuck with a portfolio of nonsense. This just way over complicates something that should be simple. You can invest in low-cost, low turnover, broadly diversified index funds and use the dividends to pay taxes. I would split it into broad US funds and international -- you can get the foreign tax credit for dividends paid out of international funds -- and leave it alone. If you are interested in tax loss harvesting, you can do that on your own without paying fees. Turn off dividend reinvesting so that you don't run into wash sale problems. Sell at a loss, and take the funds you get from the sale and buy something similar but not identical. Example: your VTI has posted losses. Sell the lots with significant losses and use the proceeds to buy DFUS or AVUS or SCHX. I love Fidelity but they are selling you a product designed to help them more than it will help you IMO. If the market helps out, you could be looking at retirement in 7 - 10 years if 2 million is your goal.
Ayyyy another dimensional user. I’ve got DFAU instead. I think mine just has slightly more of a factor tilt than DFUS, but this type of stuff is also why I’m with them.
Dimensional has funds that do this. I use DFUS which tracks the Russell 3000 total US index, but there is an additional waiting period after a stock gets added to the index before the fund buys in. This is specifically done so you aren't buying IPO stocks while the rest of the funds are rushing into them. They have other that do this for the S&P 500 as well, but I wanted total a US index.
I was looking at the DFUS ETF as an alternative to holding VTI.
I'm strongly contemplating replacing my current VTI holdings with DFUS. At the very least I set my accounts to stop auto-investing in VTI and buy other ETFs that hopefully aren't subjected to the 15 days fast track rule.
The DFUS fund from dimensional tracks pretty closely to a total market fund but delays IPOs to prevent this adverse selection that regular index funds fall victim to.
DFUS is the VTI alternate and DFAW is the VT. Again lol I stated in the long form, the difference is negligible and not worth rebalancing a brokerage account or losing sleep over. If space x and open ai do collapse, markets fucked for a bit
DFUS/DFAX 65/35. Sleep well
I personally do 80/20 DFUS/DFAX as an alternative to VTI/VXUS. I believe DFUS is superior to VTI because it uses academically-informed flexible implementations like filtering out junky small caps and delaying investing in IPOs (there's a YT video by Ben Felix on this). These strategies should allow it to beat VTI in the long run (and it has so far since its 2021 inception). Similarly, I expect DFAX to beat VXUS in the long run. Outside the US, factor tilts have had superior performance to "vanilla" market cap weighting. This combined with the above-mentioned academically-informed flexible implementation should allow it to beat VXUS long term. After months of researching this topic, I came to the conclusion that this combo works best for me because of its simplicity and the fact that I don't have to worry about winning sectors/countries. Plus, there's a satisfaction in owning a part of 12,000+ companies worldwide.
Here are the big ones from Vanguard: Total World (VT), US (VTI), ex-US (VXUS), Developed markets ex-US (VEA), Emerging Markets (VWO). If you want to get really in the weeds, I believe that Dimensional and Avantis are worth the small increase in expense ratios for some small factor tilting, profitability screening, etc, so I incorporate several of their funds. DFUS, DFAW, DFAI, DFAE are Dimentional's equivalents to those Vanguard options I listed
I don't ever hold the same asset in two different accounts (if one of the accounts is a taxable brokerage account). I am too lazy and too paranoid about the IRS to have the possibility of a wash sale out there. If this were my account, I would use a different broad market fund in my Roth IRA, such as VTI, DFUS, SCHK, ITOT, or SPTM.
Stick it all in DFUS or VOO and enjoy being able to retire when you're 65 like people used to.
After being introduced to the “family trusted wealth manager” I gave my life savings to this very respectable firm. They slapped my personal money, my Roth IRA, my wife’s Roth IRA in DFIC, DFUS, DFAC. They suggested to go all in with all accounts in November 2021. Made no money for 2 years, then steadily underperformed the S&P500 when things picked back up in 2023 until 2025 when I fired them. I sold all that crap and put the money back in in April.
Correct - in a Roth there is not a taxable event. Re; DFUS - the spread is only a penny but if you are planning to acquire a significant percentage of the daily volume - you could potentially introduce a slight premium to the I-NAV.
I currently hold VTI as my US index fund in my Roth, and I want to switch it to DFUS. To my understanding, since it's in a Roth, selling the VTI won't trigger a taxable event. Should I have any bid/ask spread concerns over buying a large amount of DFUS all at once? Ex: should I buy the DFUS shares 50 at a time? 100? 300? The 30-day median bid/ask spread on their site is 0.03%, avg share volume 400k, etc. etc. Not sure if this is the right sub, Bogleheads might be better, but I figured this is more of a technical question.
DFAU is more like VTI, DFUS has a stronger tilt.
Thanks. It matches with what I have found so far, apart from DFAU which from what I understand has a very slight filter tilt and DFUS would be the closer equivalent to VTI, is that correct ? I'd already be covering factors for US with a 14% allocation to DFSV
Dividends are just a forced sale that causes tax drag. It’s not extra free income. Especially at your age a solid index fund portfolio will do far better. Just sell when you need money. The loss aversion works to your benefit. Also at your age I’d recommend VTI not VOO. There is a return premium on small cap stocks that will benefit you on a long time horizon. DFUS is another option: it excludes small cap growth stocks, which underperform. But there’s a lot more technical background there to wade through.
Dimensional has ETF versions of their mutual funds. You cna buy DFUS instead of DFUSX.
I love the self-confidence. You should trade crypto or something. The good thing is even you are saying "usually" because you know it's not true across the board, but just for future references, here are 3 examples of actively managed ETFs that are beating their index after fees. JPEF DFUS CGDV What's absolutely hilarious is that bond investing is one area where actively managed funds and ETFs are generally more successful in beating their index than equities.