DFAU vs HEGD

DFAUADimensional US Core Equity Market ETF

HEGDCSwan Hedged Equity US Large Cap ETF

In short

DFAU Active management priced like an index fund. Dimensional spreads across roughly 2,400 US stocks, then tilts the weights toward value, profitability and momentum instead of simply mirroring the Russell 3000.

HEGD Always invested, always hedged: HEGD owns S&P 500 exposure with long-dated puts sitting under it at all times, funded partly by selling shorter options. Standing coverage, not a seasonal reset, for 0.87% a year.

Stated mandate

DFAU Seeks long-term capital appreciation. It uses an integrated research, portfolio-design, management, and trading process to build a broadly diversified portfolio of U.S. companies while balancing long-term return drivers, risk, shorter-term considerations, and trading costs.

HEGD The Fund seeks long-term capital appreciation while reducing overall market risk through a hedged U.S. large-cap equity strategy.

Why people hold it

• DFAU Charges 0.12% a year, well under the 0.65% median for active US equity funds and the cheapest of the top-graded names in its group (AVLC, DFAC, FELC).
• Holds roughly 2,400 US companies, so no single name steers the fund. Whole-market coverage, not a concentrated bet.
• Active without the stock-picking drama: it leans weights toward value, profitability and momentum, using the Russell 3000 as its reference point rather than a rigid rulebook.
• A multi-billion-dollar fund that trades actively, and one of the strongest overall implementations in its active US equity peer group.

• HEGD No outcome period to track. The put hedge stays on and gets rolled by the managers, so there is no annual reset date or day-one entry math like buffer funds ask of you.swanglobalinvestments.comswanglobalinvestments.com 2
• The dampening shows up in the data: one of the lower-risk profiles among actively managed US large-cap ETFs, which is the whole point of paying for a hedge.
• Not a 2020 invention. Randy Swan has run this defined-risk approach since 1997; the ETF wrapper arrived in 2020 with the equity sleeve in plain S&P 500 index ETFs.sec.govswanglobalinvestments.com

Worth knowing

• DFAU Those tilts cut both ways: results can drift from a plain Russell 3000 fund for long stretches, in either direction.
• No published index behind it. The trade-off for flexibility is that you're buying Dimensional's process, not a public set of rules you can check line by line.
• Distributions land quarterly, not monthly, and the mandate is long-term capital appreciation rather than income.

• HEGD 0.87% a year, no waiver trimming it, sits above the typical active US large-cap fee. Hedged-equity peer JHDG runs 0.49% net of a waiver through July 31, 2027.
• Hedges cost money. Swan's own shareholder reports are blunt that the fund is unlikely to capture a full up market, since the puts drag when stocks climb.sec.govsec.gov 2
• Income is incidental: distributions are annual. And you own a short list of ETFs and options rather than hundreds of individual stocks.

Full DFAU profile⁠

Full HEGD profile⁠