Dimensional National Municipal Bond ETF

Dimensional National Municipal Bond ETF (DFNM) is an actively managed fund that holds investment-grade municipal bonds from across the US. Its goal is income that is exempt from federal income tax. It keeps its sensitivity to interest rates close to an intermediate-term muni index and spreads its money across about 1,200 bonds. It costs 0.17% a year. That is above the 0.14% average of similar funds and well above VTEB (0.03%) and MUB (0.05%).

• Over the year to Oct 27, 2026, DFNM returned +0.7%, 4th of 8 among similar funds.
• Its worst full calendar year was 2022 (-4.0%); its best was 2023 (+4.0%).
• The deepest fall in its price history was 7% (Dec 30, 2021 to Oct 31, 2022), recovered by Jul 12, 2024.

As of Jul 31, 2026, the fund held 1,198 securities; the ten largest made up 6.06% of assets.

The bonds mature in 8.8 years on average (weighted by size), with an average coupon of 4.73%.

• Over the three months to Jul 31, 2026, investors added a net $163.9M (creations minus redemptions, per the N-PORT report).
• Monthly total returns reported for that quarter: +0.24%, +0.48%, -1.21%.

DFNM does not track an index. Its manager, Dimensional Fund Advisors, picks the bonds. It chooses from investment-grade municipal bonds, which are loans to states, cities, counties, school districts, utilities and agencies that pay for things like schools, roads and water systems. At least 80% of net assets must be in bonds whose interest is exempt from federal income tax. That interest is not always exempt from state or local tax. The fund does not plan to buy bonds subject to the alternative minimum tax (AMT), a separate tax calculation that catches some higher earners.

The main rule is about duration, which measures how much a bond's price moves when interest rates change. DFNM keeps its average duration between one year below and half a year above the duration of the S&P Intermediate Term National AMT-Free Municipal Bond Index. That index's duration was about 5.36 years as of December 31, 2025. Within that range, the manager buys longer bonds when it expects them to pay enough extra yield. When it doesn't, it leans toward shorter bonds. Portfolio turnover was 42%.

As of July 31, 2026, the fund held 1,198 bonds. The 10 largest made up just 6.06% of assets. The three biggest were Hudson County, New Jersey (0.81%), Revere, Massachusetts (0.73%) and Somerville, Massachusetts (0.68%). The average maturity was 8.8 years. The fund may use futures, options and swaps, but it held none on that date.

• DFNM charges 0.17% a year, versus an average of 0.14% for the similar funds below (5th of 8, cheapest first).
• Of that, 0.16% is the management fee; the rest covers other fund expenses.
• The fee includes a 0.01% waiver from the adviser, which may end.
• Using the prospectus's standard example, $10,000 invested would cost about $17 in the first year and $229 over 10 years (assuming a 5% annual return).

The fund's stated goal is steady monthly income that is exempt from federal income tax, from a broad mix of investment-grade municipal bonds.

DFNM pays income monthly. Its yield over the past 12 months was 3.06% as of October 27, 2026. Because that interest is generally free of federal income tax, the benefit is biggest in a taxable account. Inside an IRA or 401(k), the tax break adds nothing. The fund launched in November 2021, so it has no record from the 2008 or 2020 crashes. It lost 4.02% in 2022 as interest rates jumped, its worst calendar year. Its deepest drop was about 7%, from December 30, 2021 to October 31, 2022. It took about 20 months after that low to recover, in July 2024. Anyone selling shares to cover spending in 2022 would have sold at a loss. Expenses are 0.17%, which is $17 in the first year on $10,000 in the SEC's standard example. Past results don't predict the future, and a plan should look at the whole portfolio, not one fund.

Matched by bond funds with the closest average maturity and issuer mix (N-PORT).