Dimensional US Small Cap Value ETF

DFSV

Market cap $6.84B

CALF: Strategy Change Impact Still Positive For These Small/Mid-Cap Cash Cows

Small-cap value stocks are knocking the cover off the ball this year. It's an investing combination that rewards over the long term.

DFA Dimensional US Small Cap Value ETF offers diversified, rules-based exposure to US small-cap value stocks with a disciplined selection process. DFSV's active approach emphasizes low price-to-book ratios, excludes unprofitable firms, and maintains low turnover, resulting in a portfolio of over 1,000 holdings with a $3.8B average market cap. DFSV has outperformed the Russell 2000 Value Index on a risk-adjusted basis, and the ETF may do even better if interest rate cuts slow down in 2026.

Dimensional US Small Cap Value ETF offers diversified, value-focused exposure to small-cap U.S. stocks, emphasizing low valuations and profitability. DFSV trades at a significant discount to the Russell 2000 and peers, with sector tilts toward financials and energy, and away from tech and healthcare. The fund has outperformed the Russell 2000 over three years, but carries higher volatility and downside risk typical of small caps.

Little-known China AI startup DeepSeek sent fear rippling throughout the markets this week by announcing major strides in its large language model technology at just a fraction of the cost of what many experts thought possible. That sparked a mini-collapse among big-cap tech stocks like Microsoft, Google, and Nvidia, which tumbled 20% at its low.

Every new year brings with it a new opportunity to stop for a moment, take stock of where we currently sit, revisit resolutions, and refresh outlooks.

The Dimensional US Small Cap Value ETF mitigates risks by focusing on profitable small-cap stocks, unlike the Russell 2000, which includes many unprofitable companies. Profitability is crucial for small-cap stocks; profitable stocks in the Russell 2000 have significantly higher returns than unprofitable ones. DSFV uses multiple value metrics (price to book, price to cash flow, price to earnings) and blends systematic and discretionary approaches to optimize performance.

DFSV offers exposure to small-cap value stocks with a focus on long-term returns and broad diversification. Since its inception, DFSV has been outperforming the Russell 2000 Value Index and Russell 3000. Current market conditions and the market's high valuation pose risks, making this ETF a good defensive vehicle.

It's midsummer, and U.S. small-caps have finally showed up in a big way. You could say it's been a long time coming.

Small-cap passive averages are stagnant due to "zombie companies" with high debt and low margins. Dimensional US Small Cap Value ETF is an actively managed fund with diversified holdings and a value tilt. The DFSV ETF has outperformed passive funds like iShares Russell 2000 Value ETF and benefits from Dimensional's factor-based investing expertise.