DFAC vs FCTE

DFACADimensional US Core Equity 2 ETF

FCTECSMI 3Fourteen Full-Cycle Trend ETF

In short

DFAC Dimensional's whole-market workhorse: roughly 2,600 US stocks in one ticker, run by managers who weigh federal tax consequences before they trade, at a fee closer to index funds than to active ones.

FCTE Most active large-cap funds hold hundreds of names. FCTE holds about 20, pulled from the S&P 500 by a quality screen and then trend and momentum rules that get rerun every month. A concentrated, high-turnover swing at the index it measures itself against.

Stated mandate

DFAC The fund seeks long-term capital appreciation while considering federal income-tax implications in its investment decisions.

FCTE The Fund seeks long-term capital appreciation by identifying and holding stocks that the Adviser believes can outperform the S&P 500.

Why people hold it

• DFAC 0.17% a year for an actively run fund, well under the median fee among active US equity ETFs.
• About 2,600 US stocks under one ticker, so it holds the market broadly rather than a narrow slice of it.
• Federal income-tax implications sit inside the stated objective, not in a footnote, so they factor into what managers buy and sell.
• A multi-billion-dollar fund with a track record running back to 2007 and one of the strongest implementations in its peer group.

• FCTE Roughly 20 equally weighted S&P 500 stocks, re-screened monthly on quality, trend and momentum. Genuine concentration, not a core index fund wearing an active label.3fourteensmi.comsec.gov
• The wrapper does real work: the issuer notes this is typically a high-turnover strategy, and the ETF structure can limit the capital gains that holding those 20 stocks directly would kick off.3fourteensmi.com
• The mandate is plain-spoken. US stocks the adviser believes can beat the S&P 500, drawn from the S&P 500, benchmarked against it. No ambiguity about what you are buying.3fourteensmi.com
• Run jointly by 3Fourteen Research and SMI Advisory Services, whose co-portfolio manager has helped steer the SMI fund family since it launched in 2005.3fourteensmi.com

Worth knowing

• DFAC Actively managed, so there's no published index to check it against. Holdings and tilts shift at the managers' discretion.
• Dimensional's own DFAU runs a US core equity mandate for 0.12%, a slightly lighter fee for a similar shelf.
• All stocks, all US: the mandate is capital appreciation from equities, so it takes the market's full swings, and cash arrives quarterly.

• FCTE At 0.85% a year it sits above the typical active US equity fund's 0.65%, and far above the cheapest systematic peers in the group (DFAU at 0.12%, DYNF at 0.26%).
• Twenty names means one stock can swing the fund, and the monthly re-screen means today's lineup may not be next quarter's. Volatility comes with the concentration.3fourteensmi.com
• It opened in July 2024, so a strategy named for the full cycle has not yet lived through one, and shares trade thinly. Limit orders are your friend.

Full DFAC profile⁠

Full FCTE profile⁠