A reporter for the
New York Times
recently interviewed DFA’s co-CEO
and founder, David Booth, about the firm’s excellent reputation in
promoting good corporate governance through its proxy voting and its
belief that markets produce better outcomes for investors than active
management does.
The article, titled “Challenging Management (but Not the Market),”
offers a good summary of DFA’s approach and is generally well writ
–
ten. However, the reporter deviated from his main themes at one point
to compare DFA’s fund performance and expense ratios to those of the
Vanguard Group. His explanation of performance was so misleading
and inaccurate that it warrants a proper response. Before that, how
–
ever, let’s review in a little more detail the core differences between
the two fund companies.
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