ITOT is the better U.S. stock fund than DFAC

iShares Core S&P Total U.S. Stock Market ETF, ITOT, is the better fund if you want the U.S. stock market. It charges 0.03% a year, and over the 10 years through Sept. 30, 2026, iShares reports it returned 14.67% a year, the same as the S&P Total Market Index.

Dimensional U.S. Core Equity 2 ETF, DFAC, charges 0.18%. For that same decade it shows 13.75% a year, the returns of the portfolio's mutual fund class.

The ETF class inherited that record. Dimensional Fund Advisors LP says in its Feb. 28, 2026 prospectus that the ETF class's returns can differ because the two classes' expenses differ.

Choose DFAC only if you want less of the largest stocks.

What you are actually buying

ITOT tracks the S&P Total Market Index, which covers U.S. stocks of every size. The fund started Jan. 20, 2004.

DFAC is not an index fund. Dimensional's prospectus says the portfolio buys U.S. companies of every size, then gives more weight to smaller companies, cheaper stocks and more profitable ones than they have in its starting list of U.S. companies.

The Portfolio invests in companies of all sizes, with meaningfully increased exposure to smaller capitalization, lower relative price and higher profitability companies as compared to their representation in the U.S. Universe.

That starting list is what the prospectus calls the U.S. Universe. A lower relative price means mainly a low share price compared with book value, the company's assets minus its debts.

The ticker was already trading. Dimensional created the ETF share class on Oct. 2 and listed it on Oct. 5. That morning, Dimensional said, the Depository Trust & Clearing Corp. would move the old standalone ETF's shares into the class.

The ticker stayed. The mutual fund class began Sept. 15, 2005.

Less of the largest stocks

In the latest holdings, ITOT's 10 largest companies are 35.2% of the fund. DFAC's are 27.7%.

Nvidia is 6.9% of ITOT and 5.4% of DFAC. Alphabet is 4.6% and 2.6%. Tesla is 1.4% and 0.2%.

The record through Sept. 30

These are average annual total returns through Sept. 30, 2026. ITOT and the S&P Total Market Index are from iShares. DFAC and the Russell 3000 Index, its benchmark, are from Dimensional.

The DFAC row is the mutual fund class, the record the ETF class inherited. Dimensional says the ETF class's returns can differ because the classes' expenses differ.

ITOT sat within 0.02 percentage points of its index in every window. DFAC beat the Russell 3000 by 0.13 percentage points over the year and lagged it by 1.76 percentage points a year over three years, 0.20 over five and 0.98 over 10.

Over three, five and 10 years the benchmarks were within 0.07 percentage points of each other. The funds were 1.83, 0.14 and 0.92 percentage points apart.

A $10,000 stake growing at those 10-year rates would have become about $39,310 in ITOT and $36,270 in the DFAC record, a gap of about $3,040. That is what the published rates produced, not a forecast.

The fee does not explain the gap

On $10,000, ITOT costs $3 a year. DFAC costs $18. A Sept. 25 supplement lowers the ETF class expense cap to 0.17% on Nov. 1, which would take that cost to $17.

Even after that cut, the fee does not account for a gap of about $3,040 over 10 years, or for trailing by 1.83 percentage points a year over three years.

If you want the U.S. stock market, buy ITOT.

If you want more of the smaller, cheaper and more profitable companies, DFAC is the fund that makes that bet.