You may have noticed that on Friday, June 11, 2021 Dimensional Fund Advisors converted a few of their mutual funds into Exchange Traded Funds, or ETFs. Because many of our allocations hold these funds, I wanted to explain why these changes are beginning to take place and the benefit this may have for your portfolio. Specifically, the two funds converted are TA US Core Equity 2 (ticker: DFTCX) and the Tax-Managed US Targeted Value Portfolio (ticker: DTMVX) and this may be relevant for your portfolio as these funds are already held inside many taxable accounts.
DFA has sound reasons for making these changes and we expect to see further conversions in the future. Primarily, ETFs provide enhanced tax efficiency and overall lower costs to our clients. Additional advantages of ETFs in your portfolio include:
  • ETFs have no ongoing trading costs, where mutual funds do. In short, this conversion to ETFs has no trading cost to you.
  • The conversion of mutual funds to ETFs is, for the most part, a tax-free event. The exception would be for partial shares of previously held mutual funds, which will create a small capital gain for less than the price of a single share that was held in the account.
  • Dimensional ETFs will maintain lower costs consistent with Dimensional’s investment philosophy. This will result in an overall reduced management fee for these converted funds.
  • Mutual funds can distribute a capital gain whether you sell shares or not.  With an ETF, capital gains are only realized when each account holder sells shares. This is allowing for even more tax efficiency inside your portfolio.
 Overall, I’m very excited to see DFA moving into the ETF space and I look forward to additional ETFs in the future. If you have any questions, specifically around your portfolio & the ETF changes or any investment strategy need, please do not hesitate to call my office.

Meet With Your Advisor

It is important to let us know when you have any changes in your investment objectives or financial circumstances. It is also important to review your account beneficiaries each year to make sure that no personal changes need to be made and the primary and contingent beneficiary designations are up to date and accurate. To notify us about any such changes that have occurred since we last met with you, please contact our office and schedule a meeting with your advisor.

We look forward to helping you stay on course.

 

Greg Feese, CRPC®
Financial Advisor

PR Wealth Management Group, Inc. a Registered Investment Advisor, doing business as Legacy Wealth Management Group of Las Vegas, LLC.  PR Wealth Management Group, Inc. only transacts business in states where it is properly registered or notice filed, or excluded or exempted from registration requirements. PR Wealth Management Group, Inc. and Legacy Wealth Management Group of Las Vegas, LLC. are not affiliated companies. The home office is located at 990 Avenue of the Cities, Suite 4., East Moline, IL. 61244. The Las Vegas branch is located at 8235 S. Eastern Ave. Suite 160., Las Vegas, NV. 89123. Before making investment decisions please call our office at 702.545.0680 to receive a copy of PR Wealth’s Advisory Agreement and Form ADV Part 2A, which includes PR Wealth’s fee schedule. This information is intended to serve as a basis for further discussion with your professional advisors. Although great effort has been taken to provide accurate numbers and explanations, this information should not be relied upon for making investment decisions. Web: www.Legacywmglv.com

Legacy Wealth Management Group

Greg Feese CRPC®, Investment Advisor Representative.  Advisory Services offered through PR Wealth Management Group, Inc., a Registered Investment Advisor. PR Wealth Management Group, Inc., a Registered Investment Adviser, doing business as Legacy Wealth Management Group of Las Vegas, LLC.  PR Wealth Management Group, Inc. only transacts business in states where it is properly registered or notice filed, or excluded or exempted from registration requirements. This is not a solicitation for sale of securities in any jurisdiction.. The investment advisory representatives referred to on this site may only transact business, effect transactions in securities, or render personalized investment advice for compensation, in compliance with state registration requirements, or an applicable exemption or exclusion.

© 2018 Legacy Wealth Management Group Las Vegas LLC.

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