Imperial County Employees Retirement System

Transcription

1 Imperial County Employees Retirement System November 20, 2013 Ted Randall, Portfolio Manager and Vice President Ted Simpson, CFA, Vice President This information is provided for registered investment advisors and institutional investors, and is not intended for public use. Dimensional Fund Advisors LP is an investment advisor registered with the Securities and Exchange Commission. Consider the investment objectives, risks, and charges and expenses of the Dimensional funds carefully before investing. For this and other information about the Dimensional funds, please read the prospectus carefully before investing. Prospectuses are available by calling Dimensional Fund Advisors collect at (512) or at Dimensional funds are distributed by DFA Securities LLC. #

2 Agenda 1. Dimensional 2. Investment Climate 3. Investment Philosophy 4. Emerging Markets Value Strategy 5. Characteristics and Performance 6. Appendix

3 Dimensional

4 Firm Update As of September 30, 2013 Organizational Updates 750 employees firmwide; approximately 430 in Austin headquarters $315 billion in assets under management Upcoming Events Institutional Annual Symposium: February 3-5th (Austin) Recently Published Articles Applying Direct Profitability to Value Stocks explores how the direct profitability measure could be applied to small and large cap value strategies in developed markets Profitability and Expected Returns delves into recent research and practical application of the relationship between direct profitability and expected returns From Premium to Dimension: Raising the Bar on Research examines how Dimensional evaluates and applies academic research to real-world portfolios Income-Based Savings Rates shows that a saving guideline incorporating information about household income as it changes over time can improve retirement success rate 3 #

5 Advantages of Using Dimensional Focused Global Experience Investment management is our primary business Dimensional is owned primarily by current or former employees and directors Trading offices in Austin, Santa Monica, London, Sydney, Singapore, and Tokyo give us 24-hour trading capability Over 30 years providing value-added strategies for institutional investors Investment Committee members average 19 years of investment experience Scientific Orientation Investment philosophy rooted in rigorous academic research Research focuses on the sources of risk and return, and minimizing systemic frictions Strong ties to academic community and interaction with respected financial economists Rationally Structured Process Broadly diversified and consistent exposure to asset classes worldwide Process-driven approach using quantitative and qualitative screens Implementation using cutting-edge execution with flexible and cost-conscious trading 4 #

6 Global Investment Team, One Dynamic Process Investment Personnel Client Service Founded in 1981 Vancouver London Amsterdam Berlin Santa Monica Austin Tokyo $315B in global AUM Singapore Sydney 750 employees globally Dimensional Fund Advisors LP founded in Global AUM and number of employees as of September 30, Locations with offices operated by Dimensional. Dimensional refers to the Dimensional entities generally, rather than to one particular entity. These entities are Dimensional Fund Advisors LP, Dimensional Fund Advisors Ltd., DFA Australia Limited, Dimensional Fund Advisors Canada ULC, Dimensional Fund Advisors Pte. Ltd., and Dimensional Japan Ltd. 5

7 Leading Financial Economists and Researchers Academics on Dimensional s Board of Directors Eugene Fama, PhD, Nobel laureate University of Chicago Kenneth French, PhD Dartmouth College Academics on Dimensional s Mutual Funds Board of Directors George Constantinides, PhD University of Chicago John Gould, PhD University of Chicago Edward Lazear, PhD Stanford University Roger Ibbotson, PhD Yale University Myron Scholes, PhD, Nobel laureate Stanford University Abbie Smith, PhD University of Chicago Academics Providing Ongoing Consulting Services to Dimensional Robert Merton, PhD, Nobel laureate Massachusetts Institute of Technology Sunil Wahal, PhD Arizona State University Jonathan Lewellen, PhD Dartmouth College Leaders of Dimensional s Internal Research Staff Eduardo Repetto, PhD, Director, Co-Chief Executive Officer, and Chief Investment Officer Gerard O Reilly, PhD, Head of Research James Davis, PhD, Vice President Marlena Lee, PhD, Vice President Savina Rizova, PhD, Vice President Stanley Black, PhD Wes Crill, PhD Tu Nguyen, CFA, PhD Massi De Santis, PhD Ronnie Shah, PhD Dave Twardowski, PhD Yusun Samuel Wang, PhD As of April 24, #

8 Focused Execution Eduardo Repetto, 1 Director, Co-Chief Executive Officer, and Chief Investment Officer David Booth, 1 Chairman and Co-Chief Executive Officer Stephen Clark, 1 Head of Institutional, North America, and Senior Portfolio Manager Gerard O Reilly, 1 Head of Research # Portfolio Management Joseph Chi, 1 Co-Head of Portfolio Management Jed Fogdall, 1 Co-Head of Portfolio Management Robert Deere, 1 Investment Director and Senior Portfolio Manager Karen Umland, 1 Senior Portfolio Manager US Equity Portfolio Management Portfolio Managers: Iwona Hill, David Kershner, Lukas Smart, Brian Walsh Investment Associates: Joshua Clifford, Greg Folan, Sunil Suri Fixed Income Portfolio Management David Plecha, 1 Senior Portfolio Manager Joseph Kolerich, 1 Senior Portfolio Manager Portfolio Managers: Alexander Fridman, Didier Haenecour, Alan Hutchison, Damien Koch, Travis Meldau, Pamela Noble, Gillian Wilson Investment Associates: Yan Luo, David Shao, Polly Weiss As of October 14, Investment Committee Member. Graham Lennon, Head of International Portfolio Management and Senior Portfolio Manager Stephen Garth, Portfolio Manager Grady Smith, Senior Portfolio Manager International Equity Portfolio Management Arthur Barlow, Managing Director and Senior Portfolio Manager Akbar Ali, Senior Portfolio Manager Portfolio Managers: Marcus Axthelm, Murray Cockerell, Paul Foley, Kotaro Hama, Stephen Hughes, Arun Keswani, Nathan Lacaze, John Law, Robert Ness, Daniel Ong, Allen Pu, Stephen Quance, Ted Randall, Joel Schneider, Bhanu Singh, David Surridge, Adam Ward, Craig Wright Investment Associates: Emily Cornell, Damian Dormer, Mitchell Firestein, Krati Gokharu Edward Grace, Joe Hohn, Alexander Moore, Mary Phillips, Slava Platkov, David Quinn, Jim Whittington, Alex Yaftali Portfolio Analysts: Sue Enay-Billups, Shane Padden, Kristin Raassum Trading Henry Gray, 1 Head of Global Equity Trading John Romiza, Head of International Equity Trading Jason Lapping, Head of Asia Pacific Trading Global Equity Trading Senior Traders: Mark Butterworth, Christian Gunther, Carl Snyder, Ryan Wiley, Sam Willis Traders: Matthew Fuentes, William Letheren, Richard Mar, Erhan Oktay, Chris Rink, James Simpson, Jonathan Smith, Le Tran, Scott Van Pelt, David Vrolyk Fixed Income Trading David LaRusso, Senior Trader Kipp Cummins, Trader Claudette Higdon, Trader 7

9 Dimensional Global Investment Solutions $315 billion in global AUM as of September 30, 2013 US $94.6 All Cap Core $28.5 All Cap Value $4.2 Large Cap Value $14.7 Large Cap $5.3 SMID Cap Value $8.9 Small Cap Value $14.8 Small Cap $13.0 Micro Cap $5.2 Global Equity $15.5 All Cap $6.7 Large Cap $5.8 SMID Cap $0.5 Small Cap $2.6 Emerging Markets $58.4 All Cap Core $17.0 Value $30.2 (in billions) Fixed Income $69.6 US $39.3 US Tax-Exempt $2.6 Non-US & Global $24.7 Inflation-Protected $3.0 Developed ex-us $69.0 All Cap Core $16.1 All Cap Value $5.8 Large Cap Value $16.1 Large Cap $5.7 Small Cap Value $12.5 Large Cap $7.1 Small Cap $4.1 Other $8.3 Real Estate $7.3 Commodities $0.7 Global Asset Allocation 1 $7.5 Other 3% US Equities 30% Fixed Income 22% Developed ex-us Equities 22% Emerging Markets 19% Global Equity 5% Small Cap $12.7 Dimensional refers to the Dimensional entities generally, rather than to one particular entity. These entities are Dimensional Fund Advisors LP, Dimensional Fund Advisors Ltd., DFA Australia Limited, Dimensional Fund Advisors Canada ULC, Dimensional Fund Advisors Pte. Ltd., and Dimensional Japan Ltd. 1. Global asset allocation assets are for information only; these assets are primarily an aggregate of underlying funds and are not counted in totals. All assets in US dollars. Numbers may not total 100% due to rounding. 8 #

10 Investment Climate

11 Investment Climate Emerging Markets As of September 30, 2013 EMERGING MARKETS EQUITY CLIMATE 15% 10% 5% 0% -5% MSCI Emerging Markets Growth MSCI Emerging Markets Value Influenced by the strong performance of Chinese and Korean stocks, emerging Asia provided the largest impact to performance for the index during the quarter. Currency effects were minimal during the quarter, adding only 0.13% to US dollar returns. -10% -15% 9/30/ /31/2012 3/31/2013 6/30/2013 9/30/2013 There was a negative size premium for the quarter with small caps underperforming large caps by 2.48%. 1 20% 15% 10% 5% MSCI Emerging Markets Small Growth MSCI Emerging Markets Small Value Value stocks outperformed growth stocks for the quarter as measured by indices. Large cap value stocks outperformed large growth; however, the effect was the reverse in small caps. 0% -5% -10% 9/30/ /31/2012 3/31/2013 6/30/2013 9/30/ Difference between MSCI Emerging Markets Small and MSCI Emerging Markets Large. Performance is shown in USD net dividends and is based on MSCI Emerging Markets Growth Index, MSCI Emerging Markets Value, MSCI Emerging Markets Small Growth, and MSCI Emerging Markets Small Value. MSCI data copyright MSCI 2013, all rights reserved. Indices are not available for direct investment. Their performance does not reflect the expenses associated with the management of an actual portfolio. Past performance is not a guarantee of future results. 10

12 Investment Climate Emerging Markets As of September 30, 2013 EMERGING MARKET COUNTRY RETURNS Egypt Poland South Korea Czech Republic Russia China Colombia South Africa Brazil Taiwan Morocco Mexico Malaysia Hungary Peru Thailand Philippines Chile India Turkey Indonesia Quarter Change 1-Year Change Egypt was the best-performing country for the quarter. Egyptian stocks rose following the oust of Egyptian President Morsi. Indonesia, which reported a record high current account deficit, was the worstperforming market as the rupiah declined sharply. -30% -20% -10% 0% 10% 20% Country returns are shown in USD net dividends and are based on MSCI Emerging Markets IMI Index. MSCI data copyright MSCI 2013, all rights reserved. Indices are not available for direct investment. Their performance does not reflect the expenses associated with the management of an actual portfolio. Past performance is not a guarantee of future results. 11

13 Investment Climate Emerging Markets As of September 30, 2013 GIC SECTOR COMPOUND RETURNS Energy Quarter Change 1-Year Change Strong performance from Gazprom, CNOOC, and Petrobras helped lead Energy stocks to record the highest sector performance for the quarter. Materials Information Technology Consumer Discretionary REITs, the smallest sector in the emerging markets index by weight, was the worst-performing sector for the quarter. Industrials Healthcare Telecommunication Services Financials Utilities Consumer Staples REITs -15% -10% -5% 0% 5% 10% 15% GIC sector returns are shown in USD net dividends and are based on MSCI Emerging Markets IMI Index. MSCI data copyright MSCI 2013, all rights reserved. Indices are not available for direct investment. Their performance does not reflect the expenses associated with the management of an actual portfolio. Past performance is not a guarantee of future results. 12

14 Investment Philosophy

15 Dimensions of Expected Returns Expected returns are driven by prices investors pay and cash flows they expect to receive Market Beta (Equity Premium) Company Size Market Cap (Small Cap Premium) Relative Price 1 Price-to-Book (Value Premium) Expected Profitability Direct Profitability 2 (Profitability Premium) To be considered a dimension of expected return, a premium must be: Sensible Persistent across time periods Pervasive across markets Robust to alternative specifications Cost-effective to capture in well-diversified portfolios 1. Relative Price is the price of a security as it compares to another. 2. Operating income before depreciation and amortization minus interest expense scaled by book. Direct profitability is a measure of current profitability, based on information from individual companies income statements. 14 #

16 Dimensions of Expected Returns Illustrative index performance US Large Capitalization Stocks US Small Capitalization Stocks Non-US Developed Markets Stocks Emerging Markets Stocks High Relative Price Fama/French US Large Growth Research Index Fama/French US Small Growth Research Index Fama/French International Growth Index Fama/French Emerging Markets Growth Index Low Relative Price Fama/French US Large Value Research Index Fama/French US Small Value Research Index Fama/French International Value Index Fama/French Emerging Markets Value Index Small Dimensional International Small Cap Index Fama/French Emerging Markets Small Cap Index Benchmark S&P 500 Index CRSP 6-10 Index MSCI World ex US Index MSCI Emerging Markets Index Low Profitability Dimensional US Large Low Profitability Index Dimensional US Small Low Profitability Index Dimensional International Low Profitability Index Dimensional Emerging Markets Low Profitability Index High Profitability Dimensional US Large High Profitability Index Dimensional US Small High Profitability Index Dimensional International High Profitability Index Dimensional Emerging Markets High Profitability Index Benchmark S&P 500 Index CRSP 6-10 Index MSCI World ex US Index MSCI Emerging Markets Index Annualized compound returns (%) in US dollars. Indices are not available for direct investment. Their performance does not reflect the expenses associated with the management of an actual portfolio. Past performance is not a guarantee of future results. Index returns are not representative of actual portfolios and do not reflect costs and fees associated with an actual investment. Actual returns may be lower. See Index Descriptions in the appendix for descriptions of Dimensional and Fama/French index data. The S&P data are provided by Standard & Poor s Index Services Group. MSCI data copyright MSCI 2013, all rights reserved. 15 #

17 Return Premium Return Premium Return Premium Yearly Observations of Premiums Emerging markets ---Average Within 2% of Average MARKET PREMIUM 80% 60% 40% 20% 0% -20% -40% -60% % VALUE PREMIUM 60% 40% 20% 0% 7.06% -20% SIZE PREMIUM 40% 20% 0% 2.29% -20% Emerging Markets Market Premium: Fama/French Emerging Markets Index minus One-Month US Treasury Bills. Emerging Markets Value premium: Fama/French Emerging Markets Value Index minus Fama/French Emerging Markets Growth Index. Emerging Markets Size Premium: Fama/French Emerging Markets Small Cap Index minus Fama/French Emerging Markets Index. Emerging Markets returns are simulated by Fama/French from IFC and Bloomberg data and are freefloat weighted. In US dollars. Indices are not available for direct investment. Their performance does not reflect the expenses associated with the management of an actual portfolio. Past performance is no guarantee of future results. 16 #

18 Return Premium Return Premium Return Premium 5-Year Moving Average of Premiums Emerging markets ---Annual Average Within 2% of Average MARKET PREMIUM 40% 30% 20% 10% 0% -10% % VALUE PREMIUM 20% 10% 7.06% 0% -10% SIZE PREMIUM 10% 0% 2.29% -10% Emerging Markets Market Premium: Fama/French Emerging Markets Index minus One-Month US Treasury Bills. Emerging Markets Value premium: Fama/French Emerging Markets Value Index minus Fama/French Emerging Markets Growth Index. Emerging Markets Size Premium: Fama/French Emerging Markets Small Cap Index minus Fama/French Emerging Markets Index. Emerging Markets returns are simulated by Fama/French from IFC and Bloomberg data and are freefloat weighted. In US dollars. Indices are not available for direct investment. Their performance does not reflect the expenses associated with the management of an actual portfolio. Past performance is no guarantee of future results. 17 #

19 Emerging Markets Value Strategy

20 Emerging Markets Value Portfolio Access to dimensions of higher expected returns Dimensional s emerging markets strategies are built on specific principles. Targeting the factors that generate higher expected returns: Market exposure Size exposure Relative price exposure Broad diversification across and within countries Disciplined and transparent stock selection process Low costs Countries and names as of September 30, Holdings are subject to change. 19 #

21 Dynamic Investment Process An integrated approach to adding value The Market Use information in prices and fundamental data to pursue higher expected returns. Portfolio Structure Identify the dimensions of expected returns and consider the interactions among premiums, diversification, and costs. Implementation Maintain strategy focus while balancing tradeoffs among competing premiums and use a flexible process to help control costs

22 Country Weight Targets As of September 30, 2013 EMERGING MARKETS VALUE PORTFOLIO Dimensional Targets (buys capped at 15.0%) China 15.0% South Korea 15.0% Taiwan 14.8% Brazil 10.2% South Africa 8.3% India 6.3% Russia 5.7% Mexico 5.5% Malaysia 4.5% Thailand 3.1% Indonesia 2.8% Turkey 1.9% Poland 1.9% Chile 1.8% Colombia 1.1% Philippines 1.0% Hungary 0.5% Czech Republic 0.5% Dimensional s capped free-float adjusted market cap targets: Maintain limits on singlecountry exposure. Mitigate single-country risk. An event in one country can have a negative impact on the whole portfolio. Provide broad country diversification. 21 #

23 SMALL LARGE Strategy Construction Emerging Markets Value Portfolio as of September 30, 2013: single-country example ELIGIBLE SOUTH KOREA MARKET SORTED BY SIZE AND RELATIVE PRICE Largest $187.4B VALUE GROWTH Approximately 180 Value Companies A single-country example: South Korea (797 eligible companies) Size range: total market > $50 million Relative price range: lowest 25% of universe by price-to-book Smallest $50MM 25% of market cap P/B ratios < 1.04 Relative price break closely monitored and regularly updated Total Market Cap (millions) 1 Price-to-Book 2 Emerging Markets Value Portfolio $27, MSCI Emerging Markets Index $46, Weighted average. 2. Aggregate. Holdings are subject to change. MSCI data copyright MSCI 2013, all rights reserved. 22 #

24 Portfolio Construction: Improving Expected Returns Refining the universe Asset Class Exclusions REITs Investment funds Highly regulated utilities Pricing Exclusions Recent IPO Extreme Small Growth Share classes with foreign restrictions or with significant premiums Extreme financial distress or bankruptcy Merger or target of acquisition Trading Exclusions Exchange history Insufficient liquidity Limited operating history Insufficient float Listing requirements Note: These exclusion rules seek to exclude from purchase securities Dimensional determines to fall within these exclusions. 23 #

25 R E L A T I V E R E T U R N Managing Momentum We incorporate momentum when making buy and sell decisions NEGATIVE MOMENTUM POSITIVE MOMENTUM PAST TODAY FUTURE PAST TODAY FUTURE Stock returns may exhibit momentum: Stocks with large relative underperformance tend to have negative excess returns in the next period. Stocks with large relative outperformance tend to have positive excess returns in the next period. Delay buys of securities otherwise eligible for purchase. Delay sells of securities otherwise eligible for sale. Charts for illustrative purposes only. 24 #

26 Trading Costs Matter Our approach helps minimize the total costs of trading Trading Costs = Explicit Costs + Implicit Costs Commissions, Custody Fees, Exchange Fees Bid/Offer Spread, Market Impact Low turnover by design keeps overall trading costs down. We deal with explicit costs by keeping commissions as low as possible without sacrificing overall execution. Implicit costs can be hidden, and potentially large. We apply a trading philosophy that emphasizes patience and flexibility. 25 #

27 Trading Emerging Markets Stocks Can Be Costly Providing liquidity gives Dimensional an advantage EMERGING MARKETS (20 emerging markets) Market Cap Range ($ millions) Names Percent of Market Cap Average Bid/Ask Spread (%) Average Daily Trading Volume per Issue ($) Initiating trades is usually more expensive for small cap stocks than for large cap stocks. > 5, ,092,644 1,500 5, ,373, , ,261, ,572, ,009 Source: Dimensional Fund Advisors LP. Data as of December 31, The bid/ask spread is generally regarded as an indication of the cost of liquidity. 26 #

28 Dimensional s Progressive Approach to Trading Trading utilizes technology and internal resources to maximize opportunities and control costs Quarterly: January 2006 March 2013 PERCENTAGE OF DIMENSIONAL S GLOBAL TRADE VALUE BY BROKER TYPE High Touch Low Touch Direct Market Access 100% 50% Trading and portfolio management desks placed strategically to cover the global equity markets. Traders use Direct Market Access (DMA), when available, to maintain full control of trading process and reduce commissions. 0% Source: Dimensional. Chart data based on all equity agency trades, globally. 27 #

29 Integrated Portfolio Implementation Efficiently balancing expected premiums with the costs of turnover on a daily basis We continuously evaluate the portfolio: Buy/sell decisions consider expected daily premiums versus transactions costs. Spread trading over time to minimize market impact. Process built to focus on higher expected returns every day while considering costs. 28 #

30 Dimensional s Value Added through Trading Third-party trade cost analysis results across all segments of the market One Year Ending March 31, 2013 ITG POST-TRADE ANALYTICS TM ALPHA CAPTURE SM Trading Costs (gain/loss) Strategy Median Peer Dimensional Dimensional Rank 1 US Large Cap Trading -21 bps +35 bps 100% US Small Cap Trading -62 bps +84 bps 100% All Developed Markets Trading 2-47 bps +80 bps 100% All Emerging Markets Trading -59 bps +84 bps 100% Past performance is no guarantee of future results. The performance returns calculated for the Dimensional strategies already reflect trading costs. bps (basis point) One hundredth of a percentage point (0.01%). ITG ALPHA CAPTUREsm is a service mark of the Investment Technology Group, Inc. companies. 1. Percent of peer universe Dimensional outperforms in terms of trading costs. 2. US trading included in results only for portfolios with global mandates. The information on this slide was provided by Investment Technology Group solely for Dimensional and not for any other third party. These materials are highly confidential and are not to be copied, displayed, or transmitted in any form without the prior written permission of Investment Technology Group. 29 #

31 Characteristics and Performance

32 Characteristics As of September 30, 2013 MARKET CHARACTERISTICS EMERGING MARKETS VALUE PORTFOLIO MSCI Emerging Markets Index Total Value of Eligible Universe (millions) $987,383 $3,691,409 Number of Holdings 2, SIZE CHARACTERISTICS Wtd. Average Market Cap (millions) $27,099 $46,140 Median Market Cap (millions) $340 $5,180 VALUATION CHARACTERISTICS Aggregate Price-to-Book Wtd. Average Dividend-to-Price 2.55% 2.38% Holdings are subject to change. MSCI data copyright MSCI 2013, all rights reserved. 31 #

33 Sector Allocations As of September 30, 2013 PORTFOLIO WEIGHTS (%) EMERGING MARKETS VALUE PORTFOLIO MSCI Emerging Markets Index Financials Energy Materials Industrials Information Technology Consumer Discretionary Consumer Staples Utilities Telecommunication Services Health Care REITs Other 0.0 Numbers may not total 100% due to rounding. Sectors defined by MSCI. MSCI data copyright MSCI 2013, all rights reserved. The REITs industry, a member of the Financials sector, is shown separately to illustrate its exclusion from certain funds. 32 #

34 Country Allocations As of September 30, 2013 PORTFOLIO WEIGHTS (%) EMERGING MARKETS VALUE PORTFOLIO MSCI Emerging Markets Index REGIONAL SNAPSHOT South Korea China Taiwan Brazil South Africa Mexico India Russia Malaysia Thailand Turkey Indonesia Poland Chile Philippines Hungary Colombia Czech Republic Peru 0.4 Egypt 0.2 Morocco 0.1 Asia Pacific Latin America Europe Africa Emerging Markets Value Portfolio 63.0% MSCI Emerging Markets Index 62.0% 19.6% 20.2% 10.3% 10.1% 7.1% 7.7% Holdings are subject to change. Numbers may not total 100% due to rounding. MSCI data copyright MSCI 2013, all rights reserved. 33 #

35 Performance As of October 31, 2013 Annualized Returns 1 (%) Year to Date 1 Year 3 Years 5 Years 10 Years Since 2/07 Account Inception Since 5/98 Portfolio Inception EMERGING MARKETS VALUE PORTFOLIO MSCI Emerging Markets Index (net dividends) MSCI Emerging Markets Index (gross dividends) MSCI Emerging Markets Value Index (net dividends) Calendar Year Returns (%) EMERGING MARKETS VALUE PORTFOLIO MSCI Emerging Markets Index (net dividends) MSCI Emerging Markets Index (gross dividends) MSCI Emerging Markets Value Index (net dividends) Account Value EMERGING MARKETS VALUE PORTFOLIO $34,246,303 Performance data shown represents past performance and is no guarantee of future results. Current performance may be higher or lower than the performance shown. The investment return and principal value of an investment will fluctuate so that an investor s shares, when redeemed, may be worth more or less than their original cost. To obtain the most current month-end performance data, visit 1. Returns for periods shorter than one year are not annualized. Portfolio inception returns are from the first full month. MSCI data copyright MSCI 2013, all rights reserved. Indices are not available for direct investment. See Appendix: Standardized Performance Data & Disclosures to learn how to obtain complete information on performance, investment objectives, risks, advisory fees, and expenses of Dimensional s funds. 34 #

36 Emerging Markets Environment MSCI Emerging Markets IMI Index (net dividends) YEAR TO DATE: OCTOBER 31, 2013 Value Neutral Growth Large 3.01% -2.42% 10.34% Mid -2.13% -1.28% -1.55% Small 1.59% 1.99% 8.44% 1 YEAR AS OF OCTOBER 31, 2013 Value Neutral Growth Large 7.33% 4.28% 15.13% Mid 6.24% 4.63% 3.82% Small 11.15% 8.66% 12.29% Large cap is defined as approximately the largest 70% of total US market capitalization; Mid cap is approximately the next 20%; and Small cap is approximately the bottom 10%. Growth is defined as approximately the bottom 25% of securities based on book-to-market; neutral is approximately the next 50%; and value is approximately the highest 25% of securities based on book-to-market. MSCI data copyright MSCI 2013, all rights reserved. Indices are not available for direct investment. Their performance does not reflect the expenses associated with the management of an actual portfolio. 35

37 Fees Net Expense Ratio 1 Total (Gross) Expense Ratio 1 Management Fee Emerging Markets Value Portfolio Actual fees as of October 31, #

38 Appendix

39 Standardized Performance Data & Disclosures Performance data shown represents past performance. Past performance is no guarantee of future results, and current performance may be higher or lower than the performance shown. The investment return and principal value of an investment will fluctuate so that an investor s shares, when redeemed, may be worth more or less than their original cost. To obtain performance data current to the most recent month end, access our website at Consider the investment objectives, risks, and charges and expenses of the Dimensional funds carefully before investing. For this and other information about the Dimensional funds, please read the prospectus carefully before investing. Prospectuses are available by calling Dimensional Fund Advisors collect at (512) or at Dimensional funds are distributed by DFA Securities LLC. Dimensional Fund Advisors LP is an investment advisor registered with the Securities and Exchange Commission. Risks include loss of principal and fluctuating value. Investment value will fluctuate, and shares, when redeemed, may be worth more or less than original cost. Small and micro cap securities are subject to greater volatility than those in other asset categories. International and emerging markets investing involves special risks such as currency fluctuation and political instability. Investing in emerging markets may accentuate these risks. Sector-specific investments focus on a specific segment of the market, which can increase investment risks. Fixed income securities are subject to increased loss of principal during periods of rising interest rates. Fixed-income investments are subject to various other risks, including changes in credit quality, liquidity, prepayments, call risk and other factors. Municipal securities are subject to the risks of adverse economic and regulatory changes in their issuing states. Real estate investment risks include changes in real estate values and property taxes, interest rates, cash flow of underlying real estate assets, supply and demand, and the management skill and creditworthiness of the issuer. Sustainability funds use environmental and social screens that may limit investment opportunities for the fund. Commodities include increased risks, such as political, economic, and currency instability, and may not be suitable for all investors. The Portfolio may be more volatile than a diversified fund because the Portfolio invests in a smaller number of issuers and commodity sectors. The fund prospectuses contain more information about investment risks. 38 #

40 Standardized Performance Data & Disclosures As of September 30, 2013 Average Annual Total Returns (%) Symbol 1 Year 5 Years 10 Years Since Inception Net Expense Ratio 1 (%) Total (Gross) Expense Ratio 1 (%) Management Fee Inception Date US Equity Portfolios US Core Equity 1 Portfolio 2 DFEOX /15/2005 US Core Equity 2 Portfolio 2 DFQTX /15/2005 US Vector Equity Portfolio 2 DFVEX /30/2005 US Micro Cap Portfolio DFSCX /23/1981 US Small Cap Portfolio DFSTX /19/1992 US Small Cap Value Portfolio DFSVX /2/1993 US Small Cap Growth Portfolio 2,3 DSCGX /20/2012 US Targeted Value Portfolio 2 DFFVX /23/2000 US Large Cap Value Portfolio DFLVX /19/1993 US Large Cap Growth Portfolio 2,3 DUSLX /20/2012 US Large Company Portfolio 2 DFUSX /23/1999 Enhanced US Large Company Portfolio DFELX /2/1996 Non-US Equity Portfolios International Core Equity Portfolio 2 DFIEX /15/2005 International Vector Equity Portfolio 2 DFVQX /14/2008 International Small Company Portfolio 2 DFISX /30/1996 International Small Cap Value Portfolio DISVX /29/1994 International Small Cap Growth Portfolio 2,3 DISMX /20/2012 International Value Portfolio DFIVX /15/1994 International Large Cap Growth Portfolio 2,3 DILRX /20/2012 Large Cap International Portfolio DFALX /17/1991 Emerging Markets Core Equity Portfolio 2 DFCEX /5/2005 Emerging Markets Small Cap Portfolio DEMSX /5/1998 Emerging Markets Value Portfolio DFEVX /1/1998 Emerging Markets Portfolio DFEMX /25/1994 World ex US Value Portfolio 2 DFWVX /23/2010 World ex US Targeted Value Portfolio 2,3 DWUSX /1/2012 World ex US Core Equity Portfolio 2,3 DFWIX /9/2013 Global Portfolios Global Allocation 25/75 Portfolio 2 DGTSX /24/2003 Global Allocation 60/40 Portfolio 2 DGSIX /24/2003 Global Equity Portfolio 2 DGEIX /24/2003 Selectively Hedged Global Equity Portfolio 2 DSHGX /14/ Actual fees as of October 31, The net expense ratio applies to the indicated funds and takes into account a contractual management fee waiver and expense reimbursement agreement that currently is scheduled to remain in place through 2/28/2014. Please refer to the prospectus for more complete information on advisory fees, expense reimbursements, and other expenses. 3. Anticipated expenses for the full fiscal year. 39 #

41 Standardized Performance Data & Disclosures As of September 30, 2013 Average Annual Total Returns (%) Symbol 1 Year 5 Years 10 Years Since Inception Net Expense Ratio 1 (%) Total (Gross) Expense Ratio 1 (%) Management Fee Inception Date Tax Managed Portfolios 3 Tax-Managed US Small Cap Portfolio DFTSX /15/1998 After Taxes on Distributions After Taxes on Distributions and Sale of Fund Shares Tax-Managed US Targeted Value Portfolio DTMVX /11/1998 After Taxes on Distributions After Taxes on Distributions and Sale of Fund Shares Tax-Managed US Equity Portfolio 2 DTMEX /25/2001 After Taxes on Distributions After Taxes on Distributions and Sale of Fund Shares Tax-Managed US Marketwide Value Portfolio DTMMX /14/1998 After Taxes on Distributions After Taxes on Distributions and Sale of Fund Shares Tax-Managed International Value Portfolio DTMIX /16/1999 After Taxes on Distributions After Taxes on Distributions and Sale of Fund Shares TA US Core Equity 2 Portfolio 2,3 DFTCX /4/2007 After Taxes on Distributions After Taxes on Distributions and Sale of Fund Shares TA World ex US Core Equity Portfolio 2,3 DFTWX /6/2008 After Taxes on Distributions After Taxes on Distributions and Sale of Fund Shares Real Estate Portfolios Real Estate Securities Portfolio 2,4 DFREX /5/1993 International Real Estate Securities Portfolio 2 DFITX /1/2007 Global Real Estate Securities Portfolio 2,4 DFGEX /4/2008 Social and Sustainability Portfolios US Sustainability Core 1 Portfolio 2 DFSIX /12/2008 International Sustainability Core 1 Portfolio 2 DFSPX /12/2008 US Social Core Equity 2 Portfolio 2 DFUEX /1/2007 International Social Core Equity Portfolio 5 DSCLX /1/2012 Emerging Markets Social Core Equity Portfolio 2 DFESX /31/ Actual fees as of October 31, 2012, with the exception of the Real Estate Securities Portfolio and Global Real Estate Securities Portfolio. 2. The net expense ratio applies to the indicated funds and takes into account a contractual management fee waiver and expense reimbursement agreement that currently is scheduled to remain in place through 2/28/2014. Please refer to the prospectus for more complete information on advisory fees, expense reimbursements, and other expenses. 3. Assumed highest marginal tax rate in effect for capital gains and ordinary income. Income from funds managed for tax efficiency may be subject to an alternative minimum tax and/or any applicable state and local taxes. 4. The Management Fees and Total (Gross) Expense ratios have been adjusted to reflect the estimated management fee to be paid by the portfolios for the fiscal year ended 10/31/2013 as a result of a management fee decrease from 0.30% to 0.17% for the Real Estate Securities Portfolio, and 0.35% to 0.27% for the Global Real Estate Securities Portfolio, effective February 28, Anticipated expenses for the first full fiscal year. 40 #

42 Standardized Performance Data & Disclosures As of September 30, 2013 Average Annual Total Returns (%) Symbol 1 Year 5 Years 10 Years Since Inception Net Expense Ratio 1 (%) Total (Gross) Expense Ratio 1 (%) Management Fee Inception Date Fixed Income Portfolios One-Year Fixed Income Portfolio DFIHX /25/1983 Two-Year Global Fixed Income Portfolio DFGFX /9/1996 Short-Term Government Portfolio 2,3 DFFGX /1/1987 Five-Year Global Fixed Income Portfolio DFGBX /6/1990 Intermediate Government Fixed Income Portfolio DFIGX /19/1990 Inflation-Protected Securities Portfolio 2 DIPSX /18/2006 Short-Term Municipal Bond Portfolio 2 DFSMX /20/2002 Intermediate-Term Municipal Bond Portfolio 2 DFTIX /1/2012 California Short-Term Municipal Bond Portfolio 2 DFCMX /2/2007 California Intermediate-Term Municipal Bond Portfolio 2 DCIBX /29/2011 Selectively Hedged Global Fixed Income Portfolio 2 DFSHX /9/2008 World ex US Government Fixed Income Portfolio 2 DWFIX /6/2011 Short-Term Extended Quality Portfolio 2 DFEQX /4/2009 Intermediate-Term Extended Quality Portfolio 2 DFTEX /20/2010 Investment Grade Portfolio 2 DFAPX /7/2011 Commodities Portfolio Commodity Strategy Portfolio 2 DCMSX /9/ Actual fees as of October 31, The net expense ratio applies to the indicated funds and takes into account a contractual management fee waiver and expense reimbursement agreement that currently is scheduled to remain in place through 2/28/2014. Please refer to the prospectus for more complete information on advisory fees, expense reimbursements, and other expenses. 3. Formerly the Five-Year Government Portfolio. 41 #

43 Index Descriptions Dimensional US Small Low Profitability Index was created by Dimensional in January 2013 and represents an index consisting of US small cap companies. It is compiled by Dimensional. Small is defined as the bottom 10% of the US total market capitalization. Within small cap companies, Dimensional sorts stocks into three profitability groups from high to low. Each group represents 1/3 of the market cap of small caps. The index represents the returns of the low profitability group. It is rebalanced once per year. Dimensional US Small High Profitability Index was created by Dimensional in January 2013 and represents an index consisting of US small cap companies. It is compiled by Dimensional. Small is defined as the bottom 10% of the US total market capitalization. Within small cap companies, Dimensional sorts stocks into three profitability groups from high to low. Each group represents 1/3 of the market cap of small caps. The index represents the returns of the high profitability group. It is rebalanced once per year. Dimensional US Large Low Profitability Index was created by Dimensional in January 2013 and represents an index consisting of US large cap companies. It is compiled by Dimensional. Large is defined as the top 90% of the US total market capitalization. Within large cap companies, Dimensional sorts stocks into three profitability groups from high to low. Each group represents 1/3 of the market cap of large caps. The index represents the returns of the low profitability group. It is rebalanced once per year. Dimensional US Large High Profitability Index was created by Dimensional in January 2013 and represents an index consisting of US large cap companies. It is compiled by Dimensional. Large is defined as the top 90% of the US total market capitalization. Within large cap companies, Dimensional sorts stocks into three profitability groups from high to low. Each group represents 1/3 of the market cap of large caps. The index represents the returns of the high profitability group. It is rebalanced once per year. Dimensional International Small Cap Index was created in 2004 and is compiled by Dimensional. The bottom 10% of market capitalization is included from each Country. Countries are market cap weighted subject to a 50% cap. Before 1970, the index is 50% UK and 50% Japan. Dimensional International Low Profitability Index was created by Dimensional in January 2013 and represents a portfolio consisting of non-us Developed companies. It is compiled by Dimensional. Dimensional sorts stocks into three profitability groups from high to low (each representing one-third of the market capitalization). The index represents the returns of the low-profitability group. The index is rebalanced twice per year. Dimensional International High Profitability Index was created by Dimensional in January 2013 and represents a portfolio consisting of non-us Developed companies. It is compiled by Dimensional. Dimensional sorts stocks into three profitability groups from high to low (each representing one-third of the market capitalization). The index represents the returns of the high-profitability group. The index is rebalanced twice per year. Dimensional Emerging Markets Low Profitability Index was created by Dimensional in April 2013 and represents a portfolio consisting of emerging markets companies and is compiled by Dimensional. Dimensional sorts stocks into three profitability groups from high to low(each representing one-third of the market capitalization). The index represents the returns of the low profitability group. It is rebalanced twice per year. Dimensional Emerging Markets High Profitability Index was created by Dimensional in April 2013 and represents a portfolio consisting of emerging markets companies and is compiled by Dimensional. Dimensional sorts stocks into three profitability groups from high to low (each representing one-third of the market capitalization). The index represents the returns of the high profitability group. It is rebalanced twice per year. The Dimensional Indices have been retrospectively calculated by Dimensional Fund Advisors LP and did not exist prior to their index inceptions dates. Accordingly, the results shown during the periods prior to each Index s index inception date do not represent actual returns of the Index. Other periods selected may have different results, including losses. Backtested index performance is hypothetical and is provided for informational purposes only to indicate historical performance had the index been calculated over the relevant time periods. Backtested performance results assume the reinvestment of dividends and capital gains. Methodology used for computing profitability premiums: Dimensional controls for relative price (BtM) and size (market cap) when computing the annualized compound returns for high and low profitability stocks in US and non-us developed markets and controls only for relative price in emerging markets. Profitability is measured as operating income before depreciation and amortization minus interest expense, scaled by book. Dimensional Index Data compiled by Dimensional from CRSP, Compustat, and Bloomberg. 42

44 Index Descriptions Fama/French US Large Growth Research Index: Provided by Fama/French from CRSP securities data. Includes the upper-half range in market cap and the lower 30% in book-to-market of NYSE securities (plus NYSE Amex equivalents since July 1962 and Nasdaq equivalents since 1973). Fama/French US Large Value Research Index: Provided by Fama/French from CRSP securities data. Includes the upper-half range in market cap and the upper 30% in book-to-market of NYSE securities (plus NYSE Amex equivalents since July 1962 and Nasdaq equivalents since 1973). Fama/French US Small Growth Research Index: Provided by Fama/French from CRSP securities data. Includes the lower-half range in market cap and the lower 30% in book-to-market of NYSE securities (plus NYSE Amex equivalents since July 1962 and Nasdaq equivalents since 1973). Fama/French US Small Value Research Index: Provided by Fama/French from CRSP securities data. Includes the lower-half range in market cap and the upper 30% in book-to-market of NYSE securities (plus NYSE Amex equivalents since July 1962 and Nasdaq equivalents since 1973). Fama/French International Growth Index: 2008 present: Provided by Fama/French from Bloomberg securities data. Simulated strategy of MSCI EAFE countries in the lower 30% book-to-market range : Provided by Fama/French from MSCI securities data. Fama/French Emerging Markets Growth Index : 2009 present: Provided by Fama/French from Bloomberg securities data. Simulated strategy using IFC investable universe countries. Companies in the lower 30% book-to-market range; companies weighted by float-adjusted market cap; countries weighted by country float-adjusted market cap; rebalanced monthly : Provided by Fama/French from IFC securities data. IFC data provided by International Finance Corporation. Fama/French Emerging Markets Value Index: 2009 present: Provided by Fama/French from Bloomberg securities data. Simulated strategy using IFC investable universe countries. Companies in the upper 30% book-to-market range; companies weighted by float-adjusted market cap; countries weighted by country float-adjusted market cap; rebalanced monthly : Provided by Fama/French from IFC securities data. IFC data provided by International Finance Corporation. Fama/French Emerging Markets Small Cap Index: 2009 present: Provided by Fama/French from Bloomberg securities data. Simulated strategy using IFC investable universe countries. Companies in the bottom 30% of aggregate market cap; companies weighted by float-adjusted market cap; countries weighted by country float-adjusted market cap; rebalanced monthly : Provided by Fama/French from IFC securities data. IFC data provided by International Finance Corporation. Fama/French International Value Index: 2008 present: Provided by Fama/French from Bloomberg securities data. Simulated strategy of MSCI EAFE countries in the upper 30% book-to-market range : Provided by Fama/French from MSCI securities data. The results shown during the periods prior to each Index s index inception date do not represent actual returns of the Index. Other periods selected may have different results, including losses. Backtested index performance is hypothetical and is provided for informational purposes only to indicate historical performance had the index been calculated over the relevant time periods. Backtested performance results assume the reinvestment of dividends and capital gains. 43

45 Summary of Portfolio Risk Controls Provides diversification and broad oversight with minimal style drift Emerging Markets Strategies Concentration Risk Implementation Risk Operational Risk Style Risk Highly diversified across countries Country diversification leads to diversification across multiple currencies Countries generally capped at 15% at point of purchase Sector target weights typically capped at their approximate weight in a broadly diversified, sector-neutral universe plus an additional 10% Industry groups generally capped at 25% Guidelines target a maximum 5% per issue at time of purchase Team managed Approved exchanges only; ongoing evaluation of listing requirements, liquidity, and settlement mechanism Charles River customized Order Management System Comprehensive pre- and post-trade compliance Independent accountant, custodian bank, and auditors Independent mid-office in charge of trade processing Independent SAS 70 Level II audit performed annually Firm and subsidiary regulators include SEC, FINRA, FSA, ASIC, BCSC, MSC, BaFin, and OSC Monitor characteristics of individual securities and overall strategy to prevent style drift Dimensional s Investment Committee is responsible for creating investment guidelines specific to each portfolio. The Investment Committee considers the investment objectives and limitations set forth in each portfolio s governing agreements when addressing risk, and investment guidelines may be distinct between Dimensional-managed portfolios. 44 #

46 Attribution Analysis by Size Emerging Markets Value Portfolio vs. MSCI Emerging Markets Index (net dividends) 1 Year as of October 31, 2013 MCap Range Portfolio Average Weights Benchmark Average Weights Portfolio Return Benchmark Return Portfolio Allocation Portfolio Composition Interaction Total Largest 16% 28% 4.90% 7.05% (0.00%) (0.24%) (0.06%) (0.31%) 2 17% 30% 2.37% 7.38% (0.11%) (0.85%) (0.02%) (0.98%) 3 36% 35% 10.35% 5.35% (0.01%) 1.73% (0.06%) 1.66% 4 11% 5% 9.80% 8.97% 0.13% 0.16% (0.01%) 0.28% Smallest 20% 1% 13.11% 16.88% 1.77% (0.65%) 0.00% 1.12% Other Country 0% 1% % (13.73%) 0.21% 0.01% (0.01%) 0.21% Cash 1% 0.09% 0.01% 0.00% 0.01% Estimated Total 100% 100% 8.49% 6.49% 1.99% 0.16% (0.16%) 2.00% Expenses and Fees (0.55%) (0.55%) Other 0.07% 0.04% 0.03% Total 8.01% 6.53% 1.48% The above market cap ranges represent dynamic size ranges from largest to smallest stocks (lowest to highest number of buckets) and change over time. The ranges in millions (USD) for the month ending 10/31/13 are: (Large) > 50,000; (2) 50,000 14,498; (3) 14,498 3,256; (4) 3,256 1,590; and (Small) < 1,590. Performance data shown represents past performance and is no guarantee of future results. Current performance may be higher or lower than the performance shown. The investment return and principal value of an investment will fluctuate so that an investor s shares, when redeemed, may be worth more or less than their original cost. To obtain the most current month-end performance data, visit Holdings are subject to change. MSCI data copyright MSCI 2013, all rights reserved. See Appendix: Standardized Performance Data & Disclosures to learn how to obtain complete information on performance, investment objectives, risks, advisory fees, and expenses of Dimensional s funds. 45

47 Attribution Analysis by Price-to-Book Emerging Markets Value Portfolio vs. MSCI Emerging Markets Index (net dividends) 1 Year as of October 31, 2013 P/B Percentile Portfolio Average Weights Benchmark Average Weights Portfolio Return Benchmark Return Portfolio Allocation Portfolio Composition Interaction Total Growth % 23% (1.18%) 11.31% (1.01%) (0.17%) 0.01% (1.18%) % 24% 9.83% 4.69% 0.43% 0.08% (0.04%) 0.48% % 25% 8.89% 4.23% 0.24% 0.67% (0.05%) 0.85% Value % 26% 8.57% 7.12% 0.48% 1.21% (0.06%) 1.63% Other Country 0% 1% % (13.73%) 0.21% 0.01% (0.01%) 0.21% Cash 1% 0.09% 0.01% 0.00% 0.01% Estimated Total Expenses and Fees 100% 100% 8.49% 6.49% 0.36% 1.80% (0.16%) 2.00% (0.55%) (0.55%) Other 0.07% 0.04% 0.03% Total 8.01% 6.53% 1.48% Performance data shown represents past performance and is no guarantee of future results. Current performance may be higher or lower than the performance shown. The investment return and principal value of an investment will fluctuate so that an investor s shares, when redeemed, may be worth more or less than their original cost. To obtain the most current month-end performance data, visit Holdings are subject to change. MSCI data copyright MSCI 2013, all rights reserved. See Appendix: Standardized Performance Data & Disclosures to learn how to obtain complete information on performance, investment objectives, risks, advisory fees, and expenses of Dimensional s funds. 46

48 Attribution Analysis by Sector (GICS) Emerging Markets Value Portfolio vs. MSCI Emerging Markets Index (net dividends) 1 Year as of October 31, 2013 Sector Portfolio Average Weights Benchmark Average Weights Portfolio Return Benchmark Return Portfolio Allocation Portfolio Composition Interaction Total Consumer Discretionary 6% 8% 5.91% 13.19% (0.11%) (0.42%) 0.01% (0.53%) Consumer Staples 6% 9% 5.44% 5.05% 0.07% 0.05% (0.01%) 0.12% Energy 16% 12% (1.30%) (0.23%) (0.22%) (0.01%) (0.04%) (0.27%) Financials 34% 27% 13.22% 9.72% 0.37% 1.17% (0.05%) 1.49% Health Care 1% 1% 26.73% 12.71% (0.05%) 0.07% 0.00% 0.02% Industrials 12% 6% 12.76% 5.46% (0.06%) 0.80% (0.01%) 0.73% Information Technology 7% 14% 21.40% 21.31% (0.98%) (0.03%) 0.02% (0.99%) Materials 15% 10% 1.02% (7.92%) (0.65%) 1.43% (0.06%) 0.72% REITs 0% 0% (2.99%) 4.35% 0.00% 0.00% 0.00% 0.01% Telecommunications Services 1% 8% 18.25% 2.88% 0.25% 0.20% (0.00%) 0.45% Utilities 2% 3% (1.61%) 0.18% 0.09% (0.04%) (0.01%) 0.05% Other Industry 0% (12.35%) 0.00% (0.01%) (0.00%) Other Country 0% 1% % (13.73%) 0.21% 0.01% (0.01%) 0.21% Cash 1% 0.09% 0.01% 0.00% 0.01% Estimated Total 100% 100% 8.49% 6.49% (1.07%) 3.23% (0.16%) 2.00% Expenses and Fees (0.55%) (0.55%) Other 0.07% 0.04% 0.03% Total 8.01% 6.53% 1.48% Performance data shown represents past performance and is no guarantee of future results. Current performance may be higher or lower than the performance shown. The investment return and principal value of an investment will fluctuate so that an investor s shares, when redeemed, may be worth more or less than their original cost. To obtain the most current month-end performance data, visit Holdings are subject to change. Sectors defined by MSCI. MSCI data copyright MSCI 2013, all rights reserved. REITs are an industry subsector of Financials. They are included to illustrate the potential impact of their portfolio exclusion. See Appendix: Standardized Performance Data & Disclosures to learn how to obtain complete information on performance, investment objectives, risks, advisory fees, and expenses of Dimensional s funds. 47

49 Attribution Analysis by Country Emerging Markets Value Portfolio vs. MSCI Emerging Markets Index (net dividends) 1 Year as of October 31, 2013 Country Portfolio Average Weights Benchmark Average Weights Portfolio Return Benchmark Return Portfolio Allocation Portfolio Composition Interaction Total Brazil 11% 12% (3.93%) (1.55%) 0.09% (0.22%) (0.05%) (0.18%) Chile 2% 2% (8.40%) (13.96%) 0.04% 0.10% (0.01%) 0.12% China 16% 19% 14.34% 9.30% (0.08%) 0.90% (0.03%) 0.79% Colombia 0% 1% (1.65%) (5.55%) 0.14% 0.00% (0.01%) 0.14% Czech Republic 0% 0% 3.87% 0.18% 0.00% 0.01% (0.00%) 0.01% Egypt 0% (3.33%) 0.05% (0.00%) 0.05% Hong Kong 0% % (0.00%) 0.01% 0.01% Hungary 1% 0% 13.99% (5.69%) (0.04%) 0.11% 0.00% 0.07% India 7% 7% (15.11%) 0.32% (0.01%) (1.17%) (0.01%) (1.20%) Indonesia 3% 3% (7.78%) (13.28%) (0.02%) 0.22% (0.00%) 0.20% Israel 0% 45.25% 0.00% 0.00% 0.00% Malaysia 4% 4% 13.06% 8.99% 0.00% 0.14% 0.01% 0.15% Mexico 7% 5% 12.61% 2.20% (0.06%) 0.76% (0.01%) 0.69% Morocco 0% 5.35% 0.00% 0.00% 0.00% Peru 1% (21.15%) 0.16% (0.01%) 0.16% Philippines 1% 1% 20.34% 20.71% 0.04% (0.00%) 0.00% 0.04% Poland 2% 2% 18.22% 22.13% (0.01%) (0.05%) (0.00%) (0.06%) Russia 4% 6% 6.95% 11.13% (0.03%) (0.10%) (0.01%) (0.14%) South Africa 7% 7% (1.29%) 5.49% (0.03%) (0.43%) (0.01%) (0.47%) South Korea 15% 15% 11.51% 11.32% 0.06% 0.01% (0.02%) 0.06% Taiwan 14% 11% 26.67% 18.79% 0.29% 0.91% 0.02% 1.21% Thailand 3% 3% 12.46% 9.89% 0.07% 0.07% (0.00%) 0.14% Turkey 3% 2% 7.28% (3.81%) (0.09%) 0.32% (0.01%) 0.22% Cash 1% 0.09% 0.01% 0.00% 0.01% Estimated Total 100% 100% 8.49% 6.49% 0.58% 1.57% (0.16%) 2.00% Expenses and Fees (0.55%) (0.55%) Other 0.07% 0.04% 0.03% Total 8.01% 6.53% 1.48% Performance data shown represents past performance and is no guarantee of future results. Current performance may be higher or lower than the performance shown. The investment return and principal value of an investment will fluctuate so that an investor s shares, when redeemed, may be worth more or less than their original cost. To obtain the most current month-end performance data, visit Holdings are subject to change. MSCI data copyright MSCI 2013, all rights reserved. See Appendix: Standardized Performance Data & Disclosures to learn how to obtain complete information on performance, investment objectives, risks, advisory fees, and expenses of Dimensional s funds. 48

50 Client Service Team Imperial County Employees Retirement System Stephen A. Clark Head of Institutional, North America, and Vice President 16 Years Investment Experience 12th Year with Firm Previous Employment: US Bancorp Piper Jaffray Education: MBA, University of Chicago Booth School of Business; BS, Bradley University Ted Simpson, CFA Vice President 11 Years Investment Experience 9th Year with Firm Previous Employment: Mattel, Salomon Brothers Education: MBA, Northwestern University; AB, Princeton University Kimsey Carpenter 5 Years Investment Experience 5th Year with Firm Education: BA, University of Florida Sharif Farag 9 Years Investment Experience 1st Year with Firm Previous Employment: BNP Paribas, The Atlantic Philanthropies, State Street Global Advisors Education: MBA, New York University; MSci, University College London Karla Pergande 12 Years Investment Experience 6th Year with Firm Previous Employment: Principal Financial Group, USI Securities Inc. Education: BA, Sarah Lawrence College in Liberal Arts Updated February 1,

51 Presenters Biographies Ted Randall Portfolio Manager and Vice President Ted Randall is a portfolio manager for Dimensional's US equity strategies. Ted previously led the Research group's trading support efforts and its management of security data. In this role, he designed portfolio management and trading applications to optimize the rebalancing and management of Dimensional portfolios. Ted joined Dimensional in 1996 as a trading assistant, a position in which he redesigned the firm's trade reconciliation systems and developed new portfolio management software tools. He spent two years as a computer consultant before returning to Dimensional in Ted earned his MBA from the Anderson School of Management at the University of California, Los Angeles, and holds a BS in business administration with a concentration in finance from the University of Southern California. Ted Simpson, CFA Vice President Ted Simpson, a vice president on the Institutional Services team, is responsible for developing and maintaining relationships with public pension funds, foundations, endowments, Taft-Hartley plan sponsors, and corporate pension and defined contribution plans. Since joining Dimensional in 2002, Ted has held a number of positions within the firm. He began as a marketing consultant before taking a leadership role in the firm's defined contribution market initiative. Later, Ted got involved with Dimensional's consultant relations effort and eventually helped manage the group. Most recently, he has shifted his attention to working directly with clients. Prior to joining Dimensional, Ted worked for Salomon Brothers, Legal & General, Mattel, Lion Nathan, and a fee-only RIA. He earned an MBA in marketing, strategy, and organizational behavior from the Kellogg School of Management at Northwestern University, and a BA in politics and economics from Princeton University. Ted is a CFA Charterholder and holds FINRA licenses 7 and