DFMC vs TSME

DFMCAU.S. Micro Cap Portfolio ETF

TSMECThrivent Small-Mid Cap Equity 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.

TSME Active stock picking pointed at the part of the US market where it still has room to work: small and mid caps, run by Thrivent's own managers since 2022 and priced at the going rate for active equity rather than a premium.

Stated mandate

DFMC The Portfolio seeks long-term capital appreciation.

TSME The Fund seeks long-term capital growth.

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.

• TSME A live stock picker, not an index clone, working in US small and mid caps. The cheap leaders in its active-equity cohort (DFAU, AVLC) mostly fish in large caps.
• The 0.65% expense ratio sits right at the median for active US equity funds, so the active mandate does not come with a surcharge versus the active field.
• Portfolio construction and staying power both hold up in a crowded active-equity field, placing the fund in the upper half of its peer group.
• Trading friction is mild for an active fund, so buying and selling costs less than it does on thinly traded small-cap products.

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.

• TSME Small and mid caps swing harder than large caps, and the mandate keeps the fund parked there through the rough stretches.
• Against index-style large-cap peers such as DFAU at 0.12%, the 0.65% fee is a wide gap that the stock picking has to work against.
• Launched in 2022, so the track record is short and payouts arrive once or twice a year rather than monthly.

Full DFMC profile⁠

Full TSME profile⁠