Info about upcoming conversion of DFA's US Tax-Managed mutual funds to ETFs
- Tax-Managed US Equity Portfolio - converting to Dimensional US Equity ETF
- T.A. US Core Equity 2 Portfolio - converting to Dimensional US Core Equity 2 ETF
- Tax-Managed US Small Cap Portfolio - converting to Dimensional US Small Cap ETF
- Tax-Managed US Targeted Value Portfolio - converting to Dimensional US Targeted Value ETF
The conversion from mutual funds to ETFs will be organized as a tax-free event for US tax purposes so we anticipate no taxes related to the conversion of full shares. There may be some cases where fractional shares are held in the mutual fund and at the current time, ETF shares are not issued in fractional shares. In this case, mutual fund shares will be redeemed and paid out which may result in a very small taxable event. For example, if a fractional share of $25 was held and redeemed, the relevant tax rate would be applied to the capital gain portion of this single fractional share resulting in total taxes paid of less than $25.
The conversion is expected to take place in June. After the conversion, the mutual funds will no longer exist and any new investment in these particular strategies will be into the ETFs. Again, in the coming weeks you may receive information notifying you of this change and providing additional details about the conversion. We are happy to answer any questions you may have about this or any other items with your planning.
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