Trillions That Mutual Fund Has an ETF Now
Mar 26, 2026
Joel Schneider, deputy head of portfolio management at Dimensional Fund Advisors, explains why his firm launched the first ETF share class of an existing mutual fund. He discusses the hybrid single-portfolio, two-access-point structure, why they picked a 45-year-old microcap fund, tax-free conversions and tax-efficiency, and how this blueprint might shift trillions between mutual funds and ETFs.
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ETF Share Classes Collapse Mutual Fund ETF Divide
- ETF share classes let one underlying portfolio be accessed as both a mutual fund and an ETF without creating a separate fund.
- Dimensional launched the first non-Vanguard ETF share class after Vanguard's patent expired, unlocking similar pricing and format choice for investors.
Dimensional's One Portfolio Two Access Points Story
- Dimensional's ETF share class is literally the same portfolio with two access points: direct mutual-fund purchase and exchange-traded shares.
- Joel Schneider describes it as one pool of assets that amortizes costs and gives investors wrapper choice without changing strategy.
Convert Mutual Fund Shares Into ETF Shares Tax Free
- Convert mutual fund shares to ETF share classes in a tax-free manner to avoid realizing capital gains from selling.
- Joel Schneider highlights that this conversion removes the need to sell, realize gains, and buy the ETF separately.