Investment News
In late 2009, two events occurred in the investment world, both of which we see as positive for you and your portfolio.
DFA mergers some funds
In November, Dimensional Fund Advisors (DFA) Canada carried out a merger of some of their funds, with the goal of reducing costs to unit holders.
The DFA US Vector Equity Fund was created as a result of the merger of the DFA US Value Fund and the DFA US Small Cap Fund. This new Fund invests primarily in common stocks of U.S. companies, but with a greater emphasis on small cap and value stocks than DFA’s US Core Equity Fund.
Similarly, the DFA International Vector Equity Fund was created by merging the DFA International Value Fund and the DFA International Small Cap Fund. This new Fund invests primarily in common stocks of non-Canadian and non-U.S. companies in both developed and emerging markets. The small cap and value tilts, as compared to the DFA International Core Equity Fund, are evident here as well.
Both new funds are expected to have lower management fees and transaction costs, resulting in savings for you and better portfolio diversification. DFA Canada absorbed the entire cost of these mergers, rather than passing them on to investors.
BlackRock Asset Management buys Barclays Global Investors
In December, New York-based BlackRock Asset Management bought Barclays Global Investors from Barclays Bank PLC. As a PWL client, you likely hold some iShares exchange traded funds, which were managed by Barclays. Although the iShares brand will be retained, the management of these funds will be transferred to BlackRock.
BlackRock is a leader in investment management, risk management, and advisory services for institutional and retail clients worldwide.
BlackRock was also mandated by the U.S. Government to workout the toxic assets it had taken charge of during the financial crisis.
We see the transfer of the iShares business as positive for you because of BlackRock’s reputation, and the fact that it is not involved in investment banking. You may recall that Barclays Bank acquired parts of the bankrupt investment
bank Lehman Brothers in 2009, in the wake of the 2008/09 financial crisis. In our opinion, this resulted in a conflict of interest which has now been resolved.