Dimensional Fund Advisors (DFA) is expected to roll out the DFA Commodity Strategy by year-end, according to a report by Morningstar Advisor on Monday, August 23. Morningstar noted that DFA had registered with the Securities and Exchange to launch the new product on August 16.
In the filing, DFA said the fund will charge a 0.41% expense ratio, and indicated that a fee waiver will limit expenses to 0.55%. The fund will be available to investors only through DFA-approved financial advisors.
DFA’s David Plecha and Stephen Clark will manage the fund, investing in various commodity-linked derivative instruments. The fund will also hold a portfolio of short-term investment-grade (with ratings BBB and higher) government and corporate bonds in order to hedge away all foreign currency exposure.
Morningstar said that at present, the cheapest diversified commodities fund is the institutional share class of the PIMCO Commodity Real Return Strategy, with a 0.74% expense ratio. The least expensive diversified ETF is UBS E-TRACS DJ-UBS Commodity Index, at 0.50%.