The Dimensional Difference

Dimensional’s approach is rooted in groundbreaking research by academics such as Eugene Fama of the University of Chicago and Kenneth French of Dartmouth College. Their work challenged traditional views of investing by showing how markets behave, how risk is priced, and which factors drive expected returns. Their research demonstrated that focusing on certain dimensions of the market — such as value, size, profitability, and momentum — can provide higher expected returns than traditional strategies built on stock picking and market timing.

Dimensional funds are passively managed but systematically structured, meaning they are designed to capture the returns of specific asset classes while keeping costs low and turnover minimal. These funds avoid marketing-related expenses such as 12b-1 fees, and their management fees are often lower than those of comparable mutual funds and ETFs. The result is a straightforward, cost-efficient way for investors to gain exposure to thousands of securities across the globe.

A Smarter Approach Than Traditional Indexing

Traditional managers fall into two broad camps: active managers and passive indexers.

Active managers attempt to outperform the market by identifying mispriced securities or timing trades. While this can sometimes generate short-term gains, it often leads to higher costs, poor diversification, and inconsistent results.

Traditional index funds seek to track a benchmark exactly, which can create predictable trading patterns around index rebalancing dates. These predictable trades can be exploited by other market participants, leading to hidden costs for investors.

Dimensional takes a third path. Rather than tracking an index rigidly, Dimensional targets an entire asset class. This “price-seeking” approach gives traders flexibility to buy and sell when market conditions are favorable and to avoid forced trades when they are not. By gradually introducing new securities into a portfolio and removing others over time, Dimensional minimizes trading costs and reduces the momentum-driven price swings that can occur in traditional index funds.

This flexibility allows Dimensional to maintain broader diversification, more precise exposure to key risk factors, and lower overall transaction costs — all of which contribute to higher expected returns for investors.

Managing Costs With Precision

Every basis point matters. Trading costs, bid/ask spreads, and market impact can significantly erode gross returns if not carefully managed. Dimensional addresses these issues through careful portfolio design and patient, price-sensitive trading.

The firm avoids hard-to-trade securities and maintains a broad list of substitute holdings to ensure trades can be executed efficiently. By trading opportunistically and only when conditions are favorable, Dimensional avoids the hidden costs that arise when other managers are forced to act on a rigid schedule.

The result is a disciplined, cost-controlled process that benefits investors over time. By staying focused on prices, not predictions, Dimensional brings both academic rigor and practical expertise to every trade, helping clients capture more of the returns that global markets have to offer.

Why We Choose Dimensional

Dimensional’s funds fit seamlessly into Cardiff Park’s evidence-based investment philosophy. Together, we help clients build portfolios that are globally diversified, low cost, and designed to capture the long-term rewards of disciplined investing.

Our relationship with Dimensional is built on a shared commitment to research, transparency, and client-first values. There are no hidden incentives or commissions — only a focus on delivering reliable strategies that serve our clients’ best interests.

Learn More About Us

Cardiff Park Advisors is based in Carlsbad, California, about 25 miles north of San Diego, with an additional office in San Marcos. We work with clients across the United States and internationally.

When you’re ready to take the next step, we offer a complimentary consultation. Please complete the Connect Form below — in the footer — and we’ll follow up to schedule a conversation.

To learn more, visit www.cardiffpark.com, review our Form ADV Brochure on the SEC’s website (ADV Part 2A), email us at jgorlow@cardiffpark.com, or call 760-635-7526.