Dimensional Fund Advisors has quietly built one of the most respected investment firms in the world on the back of Nobel Prize-winning academic research. In this episode, Mitchell Sneddon sits down with Bhanu Singh, Australian CEO of Dimensional Fund Advisors and head of the world’s largest active ETF manager, to unpack the philosophy, factors and discipline behind the firm.
Bhanu walks through the legendary names on Dimensional’s board and advisory panel — Eugene Fama, Kenneth French, Robert Merton, Myron Scholes and Merton Miller — and explains how their work on efficient markets, the Fama-French factor model, options pricing and arbitrage shaped modern finance and indexing as we know it.
The Topics:
- How Dimensional translates academic research into real-world portfolios
- The five factors driving expected returns: market beta, size, value, profitability and investment
- Why market efficiency doesn’t mean passive indexing
- How Dimensional trades 95% of equities in-house using its proprietary tick database
- Why 80%+ of active managers underperform their benchmarks over the long run
- The truth about home bias, yield obsession and concentration risk in Australian portfolios
- Why thematic ETFs are often sold, not bought
- The cultural reason Dimensional has never closed a fund
