For the last two decades we have trusted the majority of client equity assets to DFA. When we heard that the former co-CEO of DFA was launching a new fund, we were very interested to learn why.

Eduardo Repetto, former Chief Investment Officer, retired as co-CEO and co-CIO from DFA in 2017 after 17 years. He was enjoying life in Santa Monica when American Century called, asking if he would be interested in building a team to become “DFA 2.0.” Eduardo began building his team, mostly of tenured DFA employees, to fulfill his goal of the perfectly optimized investment portfolio. Since opening their doors 3 years ago, they have crossed $28 billion in assets under management and are currently one of the fastest growing ETF issuers in the industry.

Modern research suggests that moving beyond pure size and value metrics is meaningful when it comes to increasing the expected return of the portfolio. Ground-breaking research from Robert Novy Marx, published in 2013, suggests that “value” needs to be more than just book value of the firm in relation to its current market price. Relying solely on the balance sheet for determining value ignores the income statement and the cash flow statement.

Most modern indexes don’t meaningfully incorporate the profitability metric in their weightings so they are not differentiating between a profitable and unprofitable company. Research from Robert Novy Marx suggests that adding the profitability metric to the index formation increased the realized returns by approximately 1.74% per year over an index that does not take the underlying profitability of the company into consideration.

As fiduciaries, we are always thinking of ways to improve client performance, that is why we are incorporating Avantis in our lineup of top-quality money managers after thorough due diligence and observation of strong growth and performance. Avantis’s unique ability to utilize a “joint metric” of adjusted book-to-market (balance sheet) and cash-based operating profitability (cash flows) simultaneously should provide our clients with higher expected returns.


Avantis is an independent, sub-brand of American Century Investments. American Century is a privately held investment company founded in 1958 with more than 1,400 employees worldwide managing over $215 billion in assets.

American Century is majority owned by Stowers Institute for Medical Research, a non-profit biomedical research organization that has received nearly $2 billion in dividend payments from ACI since 2000. For every dollar of profit earned by ACI, 40 cents goes to the biomedical research organization.

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