DFAX

About DFAX

Dimensional Fund Advisors LP’s (the “Advisor”) tax managementstrategies for the World ex U.S. Core Equity 2 ETF are designed to maximize the after tax value of ashareholder’s investment. Generally, the Advisor buys and sells securities for the Portfolio with thegoals of: (i) delaying and minimizing the realization of net capital gains (e.g., selling stocks withcapital losses to offset gains, realized or anticipated); and (ii) maximizing the extent to which anyrealized net capital gains are long-term in nature (i.e., taxable at lower capital gains tax rates).Toachieve the World ex U.S. Core Equity 2 ETF’s investment objective, the Advisor implements an integratedinvestment approach that combines research, portfolio design, portfolio management, and trading functions.As further described below, the Portfolio’s design emphasizes long-term drivers of expected returnsidentified by the Advisor’s research, while balancing risk through broad diversification acrosscompanies and sectors. The Advisor’s portfolio management and trading processes further balance thoselong-term drivers of expected returns with shorter-term drivers of expected returns and trading costs.TheWorld ex U.S. Core Equity 2 ETF is designed to purchase a broad and diverse group of equity securitieswithin a market capitalization weighted universe (e.g., the larger the company, the greater the proportionof the universe it represents) of non-U.S. companies associated with countries with developed and emergingmarkets that have been authorized for investment by the Advisor’s Investment Committee (the “Non-U.S.Universe”). The Portfolio invests in companies of all sizes, with meaningfullyincreased exposure to smaller capitalization, lower relative price, and higher profitability companiesas compared to their representation in the Non-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 Non-U.S. Universe. An equity issueris considered to have a high relative price (i.e., a growth stock) primarily because it has a high pricein relation to its book value. An equity issuer is considered to have a low relative price (i.e., a valuestock) primarily because it has a low price in relation to its book value. In assessing relative price,the Advisor may consider additional factors such as price to cash flow or price to earnings ratios. Anequity issuer 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. The Advisor determines company size on a countryor region specific basis and based primarily on market capitalization.TheWorld ex U.S. Core Equity 2 ETF intends to purchase securities of companies associated with developedmarket and emerging market countries, which may include frontier markets (emerging market countries inan earlier stage of development), that the Advisor has designated as approved markets. As a non-fundamentalpolicy, under normal circumstances, the Portfolio will invest at least 80% of its net assets in non-U.S.equity securities and/or investments that provide exposure to non-U.S. securities. The Portfolio intendsto invest its assets to gain exposure to at least three different countries, excluding the United States.The Advisor may also increase or reduce the World ex U.S. Core Equity 2 ETF’sexposure to an eligible company, or exclude a company, based on shorter-term considerations, such asa company’s price momentum, short-run reversals, and investment characteristics. In assessing a company’sinvestment characteristics, the Advisor considers ratios such as recent changes in assets divided bytotal assets. The criteria the Advisor uses for assessing a company’s investment characteristics aresubject to change from time to time. In addition, the Advisor seeks to reduce trading costs using a flexibletrading approach that looks for opportunities to participate in the available market liquidity, whilemanaging turnover and explicit transaction costs.The World ex U.S. Core Equity2 ETF may gain exposure to non-U.S. securities by purchasing equity securities in the form of depositaryreceipts, which may be listed or traded outside the issuer’s domicile country. The Portfolio may alsoinvest in China A-shares (equity securities of companies listed in China) and variable interest entities(special structures that utilize contractual arrangements to provide exposure to certain Chinese companies).The Portfolio may purchase or sell futures contracts and options on futures contracts for foreign orU.S. equity securities and indices, to increase or decrease equity market exposure based on actual orexpected cash inflows to or outflows from the Portfolio. Because many of the Portfolio’s investmentsmay be denominated in foreign currencies, the Portfolio may enter into foreign currency exchange transactions,including foreign currency forward contracts, in connection with the settlement of foreign securitiesor to transfer cash balances from one currency to another currency.The World ex U.S. CoreEquity 2 ETF may lend its portfolio securities to generate additional income.TheWorld ex U.S. Core Equity 2 ETF is an actively managed exchange-traded fund and does not seek to replicatethe performance of a specific index and may have a higher degree of portfolio turnover than such indexfunds.