Bond Trading at Dimensional:
Seeking an Edge for Better Execution
Dimensional uses a flexible trading approach that aims to
achieve better execution—and the results are a testament
to the value we deliver for clients.
Trade cost analysis from 2019 and 2020 shows that, on
average, Dimensional bought corporate bonds at lower
prices and sold them at higher prices than other market
participants trading in the same bonds just before and
after our trades.
Unlike strategies that may require trading in particular
securities at a specific time or price, Dimensional’s
systematic approach allows us to home in on bonds
with similar characteristics but that offer more desirable
The benefits of that approach—transacting at more
advantageous prices—are reflected in the returns investors
get. This is just one of many positive outcomes from our
dynamic investment process.
For 40 years, Dimensional has employed a systematic
and cost-effective approach to seek every bit of return we
can for our clients.
Includes TRACE-eligible (Trade Reporting and Compliance Engine) corporate bonds traded by Dimensional. Adjacent trades by other market
participants had the same direction as our trades (buys with buys, sells with sells) and were the most recent trade before and after our trades.
TRACE is a Financial Industry Regulatory Authority, Inc. (FINRA)-developed vehicle that facilitates mandatory reporting of over-the-counter
secondary market transactions in eligible fixed income securities. Data compiled by Dimensional. TRACE-eligible corporate bond trades from
January 1, 2019, to December 31, 2019, and from January 1, 2020, to December 31, 2020. Comparative trades (prior and post) are not filtered
on trade size. This could have a considerable effect on the relative trade prices.
One basis point (bps) = One hundredth of a percentage point (0.01%).
Past performance is no guarantee of future results. Investing risks include loss of principal and fluctuating value. There is no guarantee an investment strategy will be successful. The performance returns calculated
for the Dimensional strategies already reflect trading costs.
Dimensional Fund Advisors LP is an investment advisor registered with the Securities and Exchange Commission