Dimensional Fund Advisors provide key investment solutions for our portfolios.
Dimensional are an investment manager who focus on applying the latest in investment research to investment solutions. Indeed, perhaps the strongest example of this in action is the fact that they have two Nobel prize winners on their board.
The basis of their investment approach lies in the fact that research consistently shows that 'small' companies and 'value' companies have a higher expected investment return over time. Dimensional build portfolios of small and value companies that have consistently ouperformed the simple index.
For example, over the 5 years to the end of August 2006 the index return has been 13.8% a year, the Dimensional Australian Value Trust has returned 19.3% a year and the Dimensional Small Companies Trust has returned 18.54% a year.
An article of mine published in Alan Kohler's Eureka Report and available here provides more information on Dimensional. The website for Dimensional Fund Advisors is available here. There is plenty of excellent information about their investment approach at this site.