A Little Known $12b ETF Just Ripped 31% Higher

"International equity markets delivered a surprise performance in 2025, with developed markets outside the U.S. catching up after years of lagging American stocks. The Dimensional International Core Equity Market ETF (NYSEARCA:DFAI) exemplifies this shift, gaining 31% over the past year while maintaining its disciplined factor-based approach. As investors look toward 2026, the question is whether its momentum can continue amid shifting global dynamics."

"DFAI serves as a core international equity holding for developed market exposure beyond U.S. borders. Unlike passive index funds that mirror market-cap weights, Dimensional applies a systematic factor tilt toward smaller-cap stocks, value characteristics, and higher profitability companies. The fund holds over 3,800 securities with its largest position, ASML Holding, representing less than 1% of assets. This extreme diversification reduces single-stock risk while the factor tilts aim to capture higher expected returns over time."

"DFAI's 31% gain slightly lagged the Vanguard FTSE Developed Markets ETF (NYSEARCA:VEA)'s 36% return but outpaced the iShares MSCI EAFE ETF's 32% over the same period. Over five years DFAI delivered 66% total returns versus 58% for VEA, suggesting the factor tilts provide long-term alpha. The fund's 0.18% expense ratio undercuts most international equity competitors, and its 5% portfolio turnover minimizes tax drag."

DFAI gained 31% in 2025 and paid $0.93 per share in dividends, a 17.5% increase that added roughly 3% to total returns. The ETF serves as a core developed-market holding outside the U.S., applying systematic factor tilts toward smaller-cap stocks, value characteristics, and higher profitability companies. The fund holds over 3,800 securities, with its largest position under 1% (ASML Holding), and geographic exposure tilts heavily toward Canada alongside European blue chips such as Novartis and Banco Bilbao Vizcaya. Over five years DFAI returned 66% versus 58% for VEA; the 0.18% expense ratio and 5% turnover aim to enhance net, long-term returns.

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