Dimensional Fund Advisors (DFA) 2002 HBS Case Study Analysis

This case study analyzes Dimensional Fund Advisors (DFA), examining their approach to adding value for investors through strategies like reducing transaction costs, discounted stock purchases, and absorbing selling demand. The analysis covers their marketing strategy, the relevance of Fama-French findings, and the concept of 'beta is dead.' It explores similarities and differences with Frazzini and Pedersen's 'betting against beta,' and evaluates market efficiency. The case study delves into DFA's trading strategies, risk management, stock buying/selling methods, and the impact of market conditions. It further assesses the influence of illiquidity on their marketing strategy, competitive advantages, and the emulation challenges faced by competitors. Finally, it examines DFA's tax-managed strategies and their potential for success, including whether strategy modification is needed, supported by the provided reference materials.