Dimensional Emerging Markets Sustainability Core 1 ETF

Dimensional Emerging Markets Sustainability Core 1 ETF (DFSE) is an actively managed fund. As of July 31, 2026, it held about 3,710 emerging market stocks, led by Taiwan Semiconductor Manufacturing, SK hynix and Samsung Electronics. It leans toward smaller, cheaper and more profitable companies. It also trims or excludes companies with high carbon emissions or large fossil fuel reserves. Its 0.41% expense ratio is above the 0.25% average of similar funds.

• Over the year to Oct 27, 2026, DFSE returned +9.4%, 6th of 9 among similar funds.
• Its worst full calendar year was 2024 (+6.9%); its best was 2025 (+28.2%).
• The deepest fall in its price history was 19.8% (Oct 4, 2024 to Apr 8, 2025), recovered by Jun 9, 2025.

As of Jul 31, 2026, the fund held 3,710 securities; the ten largest made up 23.74% of assets.

• Over the three months to Jul 31, 2026, investors added a net $12.1M (creations minus redemptions, per the N-PORT report).
• Monthly total returns reported for that quarter: +6.60%, -2.37%, -3.33%.

DFSE does not track an index. Dimensional Fund Advisors starts with emerging market companies in countries its Investment Committee has approved. These can include frontier markets, which are countries at an earlier stage of development. Each company's starting weight follows its market value, so bigger companies count for more. The fund owns companies of all sizes but leans moderately toward smaller companies, value stocks (shares priced low compared with the company's book value, its accounting net worth) and highly profitable firms. Managers can also adjust positions for short-term signals such as price momentum.

The sustainability rules focus on carbon. Dimensional ranks companies on the potential emissions from their fossil fuel reserves and on carbon intensity, which means emissions relative to the size of the business. It compares them with the broad market and with sector peers, and generally underweights or excludes the worst-ranked companies. As of July 31, 2026, the portfolio held 3,710 companies, with 26% of assets in Taiwan and 19% in South Korea.

Trading is flexible. It looks for available market liquidity while keeping turnover and costs in check, and portfolio turnover was 13%. The fund may own China A-shares, depositary receipts and variable interest entities (contract-based structures that give exposure to some Chinese companies). It may use futures to manage cash coming in and out, and it lends securities for extra income.

• DFSE charges 0.41% a year, versus an average of 0.25% for the similar funds below (8th of 9, cheapest first).
• Of that, 0.35% is the management fee; the rest covers other fund expenses.
• The fee includes a 0.03% waiver from the adviser, which may end.
• Using the prospectus's standard example, $10,000 invested would cost about $42 in the first year and $552 over 10 years (assuming a 5% annual return).

It adds emerging market stocks with a carbon screen, but it swings more than the broad market, has a short track record and puts much of its money in Taiwan and South Korea.

DFSE could add emerging market stocks to a portfolio built mostly on US shares. It is volatile, and much of the fund sits in Asian technology companies. It launched on November 1, 2022, so it has no record through the 2008 crisis, the 2020 COVID crash or the 2022 bear market. Its weakest calendar year was 2024, which was still a 7.19% gain. Its deepest drop was 19.8%, from October 4, 2024, to April 8, 2025, and it had recovered by June 9, 2025. A few years of history may not show how far emerging markets can fall. That matters for anyone who may need to sell in a bad year. The yield was 2.09% as of October 27, 2026, paid quarterly. In the SEC's standard $10,000 example, costs are $42 after one year and $552 after 10 years. Past results don't predict the future, and a plan should look at the whole portfolio, not one fund.

Matched by holdings overlap from the latest N-PORT reports.