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7. DFA's small-stock funds managed to outperform small-stock indexes and most other small cap funds. What...

7. DFA's small-stock funds managed to outperform small-stock indexes and most other small cap funds. What are the main reasons for them to be able to do so? (2)

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Answer #1

There are many reasons for DFA's small stock fund managed to perform small stock indexes and other small cap funds are as follows:

1. Invest in emerging market

2. Don't trade much which save trading cost.

3. Invest for long term

4. Don't invest in red hot stock which already given maximum return.

5. Invest on real driver of returns: for stock it is invest in vlaue stock rather than growth stock

6. Balanced portfolio rather than trying to guess which asset class will outperform

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