DFAC

About DFAC

Dimensional Fund Advisors LP’s (the “Advisor”) tax managementstrategies for the US Core Equity 2 ETF are designed to maximize the after tax value of a shareholder’sinvestment. Generally, the Advisor buys and sells securities for the Portfolio with the goals of: (i)delaying and minimizing the realization of net capital gains (e.g., selling stocks with capital lossesto offset gains, realized or anticipated); and (ii) maximizing the extent to which any realized net capitalgains are long-term in nature (i.e., taxable at lower capital gains tax rates).Toachieve the US Core Equity 2 ETF’s investment objective, the Advisor implements an integrated investmentapproach that combines research, portfolio design, portfolio management, and trading functions. As furtherdescribed below, the Portfolio’s design emphasizes long-term drivers of expected returns identifiedby the Advisor’s research, while balancing risk through broad diversification across companies andsectors. The Advisor’s portfolio management and trading processes further balance those long-term drivers of expectedreturns with shorter-term drivers of expected returns and trading costs.TheUS Core Equity 2 ETF is designed to purchase a broad and diverse group of equity securities within amarket capitalization weighted universe (e.g., the larger the company, the greater the proportion ofthe universe it represents) of U.S. operating companies listed on a securities exchange in the UnitedStates that have been authorized for investment by the Advisor’s Investment Committee (the “U.S.Universe”). The Portfolio invests in companies of all sizes, with meaningfully increased exposure tosmaller capitalization, lower relative price, and higher profitability companies as compared to theirrepresentation in the U.S. Universe. The Portfolio’s meaningfully increasedexposure to smaller capitalization, lower relative price, and higher profitability companies may be achievedby decreasing the allocation of the Portfolio’s assets to larger capitalization, higher relative price,or lower profitability companies relative to their weight in the U.S. Universe. An equity issuer is consideredto have a high relative price (i.e., a growth stock) primarily because it has a high price in relationto its book value. An equity issuer is considered to have a low relative price (i.e., a value stock)primarily because it has a low price in relation to its book value. In assessing relative price, theAdvisor may consider additional factors such as price to cash flow or price to earnings ratios. An equityissuer is considered to have high profitability because it has high earnings or profits from operationsin relation to its book value or assets. The criteria the Advisor uses for assessing relative price andprofitability are subject to change from time to time.As a non-fundamental policy,under normal circumstances, the US Core Equity 2 ETF will invest at least 80% of its net assets in equitysecurities of U.S. companies. The Advisor generally defines a U.S. company as one that is listed andprincipally traded on a securities exchange in the United States that is deemed appropriate by the Advisor.TheAdvisor may also increase or reduce the US Core Equity 2 ETF’s exposure to an eligible company, orexclude a company, based on shorter-term considerations, such as a company’s price momentum, short-runreversals, and investment characteristics. In assessing a company’s investment characteristics, theAdvisor considers ratios such as recent changes in assets divided by total assets. The criteria the Advisoruses for assessing a company’s investment characteristics are subject to change from time to time.In addition, the Advisor seeks to reduce trading costs using a flexible trading approach that looks foropportunities to participate in the available market liquidity, while managing turnover and explicittransaction costs.The US Core Equity 2 ETF may purchase or sell futures contractsand options on futures contracts for U.S. equity securities and indices, to increase or decrease equitymarket exposure based on actual or expected cash inflows to or outflows from the Portfolio.TheUS Core Equity 2 ETF may lend its portfolio securities to generate additional income.TheUS Core Equity 2 ETF is an actively managed exchange-traded fund and does not seek to replicate the performanceof a specific index and may have a higher degree of portfolio turnover than such index funds.