DFAC vs SECT

DFACADimensional US Core Equity 2 ETF

SECTCMain Sector Rotation 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.

SECT Rather than picking stocks, SECT rents whole sectors through sector ETFs, tilting toward the ones its managers judge undervalued. The stated aim: outperform the S&P 500 in rising markets while limiting losses when markets decline.

Stated mandate

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

SECT The Fund seeks to outperform the S&P 500 during rising markets while limiting losses when markets decline.

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.

• SECT One of the longer-running active sector-rotation ETFs, trading since 2017, with a record that spans the 2020 crash and the 2022 bear market.sec.gov
• 0.69% net of a waiver through March 31, 2027 (0.73% gross), and that cap covers the underlying sector ETFs' fees too, so fund-of-funds costs don't quietly stack on top.sec.gov
• A multi-billion-dollar fund that trades at moderate volume, so entering and exiting is rarely the hard part for retail-size orders. Pays quarterly.

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.

• SECT The fee sits near the typical active US equity fund, but well above index-style peers in the group such as DFAU (0.12%) and AVLC (0.15%).
• Results ride on a short list of sector calls, so the portfolio can look very different from the S&P 500 in either direction.sec.gov
• The prospectus notes higher portfolio turnover can mean higher transaction costs and bigger tax bills for shares held in a taxable account.sec.gov

Full DFAC profile⁠

Full SECT profile⁠