DFMC vs SMIG

DFMCAU.S. Micro Cap Portfolio ETF

SMIGBBahl & Gaynor Small/Mid Cap Income Growth ETF

In short

DFMC Dimensional's micro-cap workhorse: a systematic sweep of the smallest US listed companies, a strategy dating to 1981, now in an ETF wrapper. Not an index tracker, and it charges less than the typical active US equity fund.

SMIG Small caps are the market's dividend desert. SMIG hunts there anyway: an actively run book of about 60 small- and mid-cap companies chosen for rising dividend income and downside protection, with cash paid out monthly.

Stated mandate

DFMC The Portfolio seeks long-term capital appreciation.

SMIG The Fund pursues current and increasing dividend income, downside protection, and long-term capital growth. It is actively managed and normally commits at least 80% of net assets to small- and mid-capitalization companies.

Why people hold it

• DFMC Charges 0.43% a year, well under the median for active US equity funds, so the fee takes a smaller bite out of a hard-to-reach corner of the market.
• The strategy dates to 1981 and now runs as a multi-billion-dollar portfolio: an unusually long run for anything pointed at micro caps.
• Systematic rather than index-bound. Dimensional sifts the small end of the US market by its own rules instead of copying a published micro-cap benchmark.dimensional.com
• One of the stronger implementations among the active US equity funds we grade, with risk control and portfolio construction the standout pieces.

• SMIG Unusual mandate: at least 80% of net assets in small- and mid-cap companies, selected for current and increasing dividend income and downside protection, not just headline yield.
• Costs 0.60% a year, under the median for active US equity ETFs in its group, and distributions land monthly rather than quarterly.
• About 60 holdings, hand-picked. Every name has to earn its slot, which is the opposite of a closet index.
• Launched in 2021 and now a multi-billion-dollar fund that trades at moderate volume, one of the stronger showings among the active US equity ETFs we grade.

Worth knowing

• DFMC Thinly traded next to the big index names, so the cost of getting in and out can matter as much as the expense ratio, especially for larger orders.
• It costs more than Dimensional's broad-market siblings, DFAU at 0.12% and DFAC at 0.17%, which own far bigger, more liquid companies.
• Micro caps are the choppy end of the US market, and owning them is the entire job here. The mandate is long-term capital appreciation, not income.

• SMIG The prospectus benchmark is the S&P 500, a large-cap index, so headline comparisons pit this small/mid portfolio against a very different universe.
• Active stock picking has a price: 0.60% sits well above broad low-cost active peers such as DFAU (0.12%) and FELC (0.18%).
• Downside protection is a stated objective, not a mechanism. A concentrated book of roughly 60 small and mid caps can still move sharply on a few names.

Full DFMC profile⁠

Full SMIG profile⁠