Correspondence 0001680359-24-000231 from Dimensional ETF Trust (CIK 0001816125)
Dimensional ETF Trust (CIK 0001816125)
Date: Aug. 5, 2024 · CIK: 0001816125 · Accession: 0001680359-24-000231
AI Filing Summary & Sentiment
File numbers found in text: 333-239440, 811-23580
Letter
Via EDGAR Division of Investment Management Washington, D.C. 20549-9303 Re: Dimensional ETF Trust File Nos. 333-239440 and 811-23580
Dear Ms. Rowland:
On behalf of Dimensional ETF Trust (the “Registrant”), the following are the responses to the Staff’s comments conveyed with regard to Post-Effective Amendment Nos. 26/30 to the Registration Statement of the Registrant (the “Amendment”), filed with the U.S. Securities and Exchange Commission (the “SEC”) on May 29, 2024, pursuant to the Investment Company Act of 1940, as amended (the “1940 Act”), and Rule 485(a)(2) under the Securities Act of 1933, as amended (the “1933 Act”), for the purposes of registering the Dimensional US Vector Equity ETF, Dimensional International Vector Equity ETF, and Dimensional Emerging Markets ex China Core Equity ETF (each, a “Portfolio” and, collectively, the “Portfolios”).
Each SEC Staff comment is summarized below, followed by the Registrant’s response to the comment. Capitalized terms not otherwise defined in this letter have the meanings assigned to the terms in the Amendment. The Registrant understands that the Registrant and management are responsible for the accuracy and adequacy of the disclosures notwithstanding any review comment or action of the Staff of the SEC. The Registrant further acknowledges that, to the extent disclosure appears multiple times throughout the Amendment, any comment with regard to such disclosure applies equally throughout.
1.
Comment. Please file your responses to the Staff’s comments on EDGAR at least 5 days in advance of the effective date.
Response. The Registrant confirms it will file responses to the Staff’s comments on EDGAR 5 days in advance of the effective date.
2.
Comment. Per Rule 313 of Regulation S-T, please update the ticker symbol for each Portfolio on EDGAR when available.
Response. The Registrant will update EDGAR accordingly.
U.S. Securities and Exchange Commission
August 5, 2024
Page 2
Summary Prospectus
(Dimensional US Vector Equity ETF)
3.
Comment. Please revise the disclosure to clarify that the securities that the Portfolio invests in are selected from the U.S. Universe.
Response. The Registrant has revised the disclosure as follows:
The US Vector Equity ETF is designed to purchase a broad and diverse group of equity securities within a market capitalization weighted universe (e.g., the larger the company, the greater the proportion of the universe it represents) of U.S. operating companies (the “U.S. Universe”). The Portfolio invests in companies of all sizes, with strongly increased exposure to smaller capitalization, lower relative price and higher profitability companies as compared to their representation in the U.S. Universe. The Advisor generally defines the U.S. Universe as a market capitalization weighted set (e.g., the larger the company, the greater the proportion of the U.S. Universe it represents) of U.S. operating companies listed on a securities exchange in the United States that is deemed appropriate by the Advisor.
4.
Comment. Please describe the specific criteria that the Advisor uses to determine that an investment is economically tied to the U.S. Please also include a definition of a U.S. company for purposes of the Portfolio’s policy to invest at least 80% of its net assets in equity securities of U.S. companies. The Staff’s view is that U.S. companies could be companies that are organized in the U.S., that maintain a principal place of business in the U.S., or securities that are listed and traded principally in the U.S.
Response. The Registrant has revised disclosure as follows:
As a non-fundamental policy, under normal circumstances, the US Vector Equity ETF will invest at least 80% of its net assets in equity securities of U.S. companies. The Advisor generally defines a U.S. operating company as one that is listed and principally traded on a securities exchange in the United States that is deemed appropriate by the Advisor.
5.
Comment. With respect to the Portfolio’s 80% policy, please revise the policy in the Prospectus to note that it applies to the value of the Portfolio’s net assets, plus the amount of any borrowings for investment purposes.
Response. The Registrant believes that the addition of this language in the Prospectus would be confusing for investors. Since the Portfolio does not currently intend to borrow money for investment purposes, as noted on page 5 of the SAI, the Registrant believes that including such language in the Prospectus may mislead investors into believing that the Portfolio borrows money to use for investment. The Portfolio, however, includes this language in the disclosure regarding the 80% policy on page 3 of the SAI. If the Portfolio were to change its policy with respect to borrowing for investment purposes in the future, it would make the relevant changes to the disclosure regarding the 80% policy in the Prospectus.
6.
Comment. Please supplementally confirm whether the derivatives in which the
U.S. Securities and Exchange Commission
August 5, 2024
Page 3
Portfolio invests will be counted towards the 80% policy.
Response. The Registrant supplementally confirms that derivatives may be counted toward the Portfolio’s 80% policy to the extent they have economic characteristics similar to the securities included within that policy, in accordance with current and future regulatory guidance and requirements under Rule 35d-1.
7.
Comment. Please consider adding a portfolio turnover risk as a principal risk in light of the statement that the Portfolio may have a higher degree of portfolio turnover than index funds.
Response. The Registrant respectfully declines to revise the disclosure. Due to the Portfolio’s active investment strategy, it will engage in more frequent trading of portfolio securities as compared to index portfolios; however, at this time, the Registrant does not anticipate high portfolio turnover being a principal risk of the Portfolio.
8.
Comment. Please tailor the “Derivatives Risk” to include risks specific to the derivatives utilized by the Portfolio.
Response. The Registrant supplementally confirms that the “Derivatives Risk” is appropriately tailored to the derivative instruments utilized by the Portfolio.
9.
Comment. When available, please supplementally provide the Staff with the broad-based securities index that the Portfolio will include in the “Performance Table” section of the Prospectus.
Response. The Registrant confirms supplementally that, currently, it is anticipated that the broad-based securities index to be utilized by the Portfolio is the Russell 3000 Index.
10.
Comment. With respect to the “Investment Advisor/Portfolio Management” section of the Prospectus, if applicable, please add that the individuals listed are “jointly and primarily” responsible for leading the day-to-day management of the Portfolio.
Response. The Registrant respectfully declines to revise the disclosure and notes that Item 5(b) of Form N-1A only requires that the Portfolio “state the name, title, and length of service” of the persons who are primarily responsible for the day-to-day management of the fund’s portfolio. The Registrant has previously revised this disclosure in response to SEC comments and believes the current disclosure satisfies the requirements of Item 5(b) of Form N-1A.
Summary Prospectus
(Dimensional International Vector Equity ETF)
11.
Comment. Please revise the disclosure to clarify that the securities that the Portfolio invests in are selected from the International Universe.
Response. The Registrant has revised the disclosure as follows:
U.S. Securities and Exchange Commission
August 5, 2024
Page 4
The International Vector Equity ETF is designed to purchase a broad and diverse group of equity securities within a market capitalization weighted universe (e.g., the larger the company, the greater the proportion of the universe it represents) of non-U.S. companies associated with developed markets that have been authorized for investment by the Advisor’s Investment Committee (the “International Universe”). The Portfolio invests in companies of all sizes, with strongly increased exposure to smaller capitalization, lower relative price, and higher profitability companies as compared to their representation in the International Universe. For purposes of this Portfolio, the Advisor defines the International Universe as a market capitalization weighted set (e.g., the larger the company, the greater the proportion of the International Universe it represents) of non-U.S. companies associated with developed markets that have been authorized for investment by the Advisor’s Investment Committee.
12.
Comment. Please clarify what associated with developed markets means in the following disclosure:
For purposes of this Portfolio, the Advisor defines the International Universe as a market capitalization weighted set (e.g., the larger the company, the greater the proportion of the International Universe it represents) of non-U.S. companies associated with developed markets that have been authorized for investment by the Advisor’s Investment Committee.
Response. The Registrant revised the disclosure in the “Principal Investment Strategies” section as follows:
The International Vector Equity ETF will purchase securities of companies associated with developed market countries that the Advisor has designated as approved markets for investment. To determine whether a company is associated with a developed market country, the Advisor will consider various factors, such as where the company is organized or maintains its principal place of business, the principal trading market of the company, what government, agency or instrumentality issued or guaranteed the security, where the company’s revenues or profits are derived, and whether the company is in the Portfolio’s benchmark.
13.
Comment. Please include the following disclosure from the Portfolio’s “Additional Information on Investment Objectives and Policies” section in the Portfolio’s “Principal Investment Strategies” section:
Under normal market conditions, the International Vector Equity ETF intends to invest at least 40% of its assets in three or more non-U.S. countries by investing in securities of companies associated with such countries.
Alternatively, the Staff believes the Portfolio could also satisfy the requirement to invest its assets in investments that are tied economically to a number of countries throughout the world by
U.S. Securities and Exchange Commission
August 5, 2024
Page 5
including disclosure noting that it invests: (1) a majority of its assets in issuers that are organized or located outside the U.S. or that do a substantial amount of business outside the US; or (2) an amount outside the U.S. that is within 5% of the U.S. exposure included in a broad-based global index.
Response. The Registrant has incorporated the applicable disclosure from the Portfolio’s “Additional Information on Investment Objectives and Policies” section into the Portfolio’s “Principal Investment Strategies” section.
14.
Comment. Please confirm whether the derivatives that the Portfolio will invest in will provide the Portfolio with exposure to U.S. companies. If so, please comment supplementally on how this U.S. exposure would be consistent with the Portfolio’s international investment strategy.
Response. The Registrant notes that the Portfolio’s principal investment strategies and investments do not provide exposure to the U.S. As noted in the disclosure, the Portfolio may have limited exposure to the U.S. through its investment in certain derivatives or other investments for collateral and cash management purposes. The Registrant, however, believes the use of such investments for limited time periods and purposes is appropriately disclosed and beneficial to shareholders (i.e., as opposed to holding cash or more expensive and/or less liquid non-U.S. alternatives) and does not impair the Portfolio’s ability to achieve its investment objective or principal investment strategies.
15.
Comment. Please consider adding a portfolio turnover risk as a principal risk in light of the statement that the Portfolio may have a higher degree of portfolio turnover than index funds.
Response. The Registrant respectfully declines to revise the disclosure. Due to the Portfolio’s active investment strategy, it will engage in more frequent trading of portfolio securities as compared to index portfolios; however, at this time, the Registrant does not anticipate high portfolio turnover being a principal risk of the Portfolio.
16.
Comment. Please tailor the “Derivatives Risk” to include risks specific to the derivatives utilized by the Portfolio.
Response. The Registrant supplementally confirms that the “Derivatives Risk” is appropriately tailored to the derivative instruments utilized by the Portfolio.
17.
Comment. Please add a depositary receipt risk to the “Principal Risks” in the Portfolio’s Summary Prospectus.
Response. The Registrant respectfully declines to revise the disclosure and notes that the “Foreign Securities and Currencies Risk” in the Portfolio’s Summary Prospectus addresses the risks related to investments in depositary receipts.
U.S. Securities and Exchange Commission
August 5, 2024
Page 6
18.
Comment. When available, please supplementally provide the Staff with the broad-based securities index that the Portfolio will include in the “Performance Table” section of the Prospectus.
Response. The Registrant confirms supplementally that, currently, it is anticipated that the broad-based securities indices to be utilized by the Portfolio is the MSCI World ex USA IMI Index (net dividends).
19.
Comment. With respect to the “Investment Advisor/Portfolio Management” section of the Prospectus, if applicable, please add that the individuals listed are “jointly and primarily” responsible for leading the day-to-day management of the Portfolio.
Response. The Registrant respectfully declines to revise the disclosure and notes that Item 5(b) of Form N-1A only requires that the Portfolio “state the name, title, and length of service” of the persons who are primarily responsible for the day-to-day management of the fund’s portfolio. The Registrant has previously revised this disclosure in response to SEC comment
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CORRESP
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filename1.htm
Dimensional
August 5, 2024
Via EDGAR
Emily Rowland
U.S. Securities and Exchange Commission
Division of Investment Management
100 F Street, N.E.
Washington, D.C. 20549-9303
Re:
Dimensional ETF Trust
File Nos. 333-239440 and 811-23580
Dear Ms. Rowland:
On behalf of Dimensional ETF Trust (the “Registrant”), the following are the responses to the Staff’s comments conveyed with
regard to Post-Effective Amendment Nos. 26/30 to the Registration Statement of the Registrant (the “Amendment”), filed with the U.S. Securities and Exchange Commission (the “SEC”) on May 29, 2024, pursuant to the Investment Company Act of 1940, as
amended (the “1940 Act”), and Rule 485(a)(2) under the Securities Act of 1933, as amended (the “1933 Act”), for the purposes of registering the Dimensional US Vector Equity ETF, Dimensional International Vector Equity ETF, and Dimensional Emerging
Markets ex China Core Equity ETF (each, a “Portfolio” and, collectively, the “Portfolios”).
Each SEC Staff comment is summarized below, followed by the Registrant’s response to the comment. Capitalized terms not
otherwise defined in this letter have the meanings assigned to the terms in the Amendment. The Registrant understands that the Registrant and management are responsible for the accuracy and adequacy of the disclosures notwithstanding any review comment
or action of the Staff of the SEC. The Registrant further acknowledges that, to the extent disclosure appears multiple times throughout the Amendment, any comment with regard to such disclosure applies equally throughout.
1.
Comment. Please file your responses to the Staff’s comments on EDGAR at least 5 days in advance of the effective date.
Response. The Registrant confirms it will file responses to the Staff’s comments on EDGAR 5 days in advance of the effective date.
2.
Comment. Per Rule 313 of Regulation S-T, please update the ticker symbol for each Portfolio on EDGAR when available.
Response. The Registrant will update EDGAR accordingly.
U.S. Securities and Exchange Commission
August 5, 2024
Page 2
Summary Prospectus
(Dimensional US Vector Equity ETF)
3.
Comment. Please revise the disclosure to clarify that the securities that the Portfolio invests in are selected from the U.S. Universe.
Response. The Registrant has revised the disclosure as follows:
The US Vector Equity ETF is designed to purchase a broad and diverse group of equity securities within a market capitalization weighted universe (e.g., the larger the company, the greater the proportion of the universe it represents) of U.S. operating companies (the “U.S. Universe”). The Portfolio invests in companies of all sizes, with strongly increased exposure to smaller capitalization, lower relative price and higher profitability companies as compared to their
representation in the U.S. Universe. The Advisor generally defines the U.S. Universe as a market capitalization weighted set (e.g., the larger the company, the greater the proportion of the U.S. Universe
it represents) of U.S. operating companies listed on a securities exchange in the United States that is deemed appropriate by the Advisor.
4.
Comment. Please describe the specific criteria that the Advisor uses to determine that an investment is economically tied to the U.S. Please also
include a definition of a U.S. company for purposes of the Portfolio’s policy to invest at least 80% of its net assets in equity securities of U.S. companies. The Staff’s view is that U.S. companies could be companies that are organized in the
U.S., that maintain a principal place of business in the U.S., or securities that are listed and traded principally in the U.S.
Response. The Registrant has revised disclosure as follows:
As a non-fundamental policy, under normal circumstances, the US Vector Equity ETF will invest at least 80% of its net assets in equity securities of U.S.
companies. The Advisor generally defines a U.S. operating company as one that is listed and principally traded on a securities exchange in the United States that is deemed
appropriate by the Advisor.
5.
Comment. With respect to the Portfolio’s 80% policy, please revise the policy in the Prospectus to note that it applies to the value of the
Portfolio’s net assets, plus the amount of any borrowings for investment purposes.
Response. The Registrant believes that the addition of this language in the Prospectus would be confusing for investors. Since the Portfolio does
not currently intend to borrow money for investment purposes, as noted on page 5 of the SAI, the Registrant believes that including such language in the Prospectus may mislead investors into believing that the Portfolio borrows money to use for
investment. The Portfolio, however, includes this language in the disclosure regarding the 80% policy on page 3 of the SAI. If the Portfolio were to change its policy with respect to borrowing for investment purposes in the future, it would
make the relevant changes to the disclosure regarding the 80% policy in the Prospectus.
6.
Comment. Please supplementally confirm whether the derivatives in which the
U.S. Securities and Exchange Commission
August 5, 2024
Page 3
Portfolio invests will be counted towards the 80% policy.
Response. The Registrant supplementally confirms that derivatives may be counted toward the Portfolio’s 80% policy to the extent they have economic
characteristics similar to the securities included within that policy, in accordance with current and future regulatory guidance and requirements under Rule 35d-1.
7.
Comment. Please consider adding a portfolio turnover risk as a principal risk in light of the statement that the Portfolio may have a higher degree
of portfolio turnover than index funds.
Response. The Registrant respectfully declines to revise the disclosure. Due to the Portfolio’s active investment strategy, it will engage in more
frequent trading of portfolio securities as compared to index portfolios; however, at this time, the Registrant does not anticipate high portfolio turnover being a principal risk of the Portfolio.
8.
Comment. Please tailor the “Derivatives Risk” to include risks specific to the derivatives utilized by the Portfolio.
Response. The Registrant supplementally confirms that the “Derivatives Risk” is appropriately tailored to the derivative instruments utilized by the
Portfolio.
9.
Comment. When available, please supplementally provide the Staff with the broad-based securities index that the Portfolio will include in the
“Performance Table” section of the Prospectus.
Response. The Registrant confirms supplementally that, currently, it is anticipated that the broad-based securities index to be utilized by the
Portfolio is the Russell 3000 Index.
10.
Comment. With respect to the “Investment Advisor/Portfolio Management” section of the Prospectus, if
applicable, please add that the individuals listed are “jointly and primarily” responsible for leading the day-to-day management of the Portfolio.
Response. The Registrant respectfully declines to revise the disclosure and notes that Item 5(b) of Form N-1A only requires that the Portfolio
“state the name, title, and length of service” of the persons who are primarily responsible for the day-to-day management of the fund’s portfolio. The Registrant has previously revised this disclosure in response to SEC comments and believes
the current disclosure satisfies the requirements of Item 5(b) of Form N-1A.
Summary Prospectus
(Dimensional International Vector Equity ETF)
11.
Comment. Please revise the disclosure to clarify that the securities that the Portfolio invests in are
selected from the International Universe.
Response. The Registrant has revised the disclosure as follows:
U.S. Securities and Exchange Commission
August 5, 2024
Page 4
The International Vector Equity ETF is designed to purchase a broad and diverse group of equity securities within a market capitalization weighted universe (e.g., the larger the company, the greater the proportion of the universe it represents) of non-U.S. companies associated with developed markets that have been authorized for investment by the Advisor’s Investment Committee (the “International Universe”). The Portfolio invests in companies of all sizes, with
strongly increased exposure to smaller capitalization, lower relative price, and higher profitability companies as compared to their representation in the International Universe. For purposes of this
Portfolio, the Advisor defines the International Universe as a market capitalization weighted set (e.g., the larger the company, the greater the proportion of the International Universe it represents) of non-U.S. companies associated with
developed markets that have been authorized for investment by the Advisor’s Investment Committee.
12.
Comment. Please clarify what associated with developed
markets means in the following disclosure:
For purposes of this Portfolio, the Advisor defines the International Universe as a market capitalization weighted set (e.g., the larger the company, the
greater the proportion of the International Universe it represents) of non-U.S. companies associated with developed markets that have been authorized for investment by the Advisor’s Investment Committee.
Response. The Registrant revised the disclosure in the “Principal Investment Strategies” section as follows:
The International Vector Equity ETF will purchase securities of companies associated with developed market countries that the Advisor has designated as
approved markets for investment. To determine whether a company is associated with a developed market country, the Advisor will consider various factors, such as where the
company is organized or maintains its principal place of business, the principal trading market of the company, what government, agency or instrumentality issued or guaranteed the security, where the company’s revenues or profits are
derived, and whether the company is in the Portfolio’s benchmark.
13.
Comment. Please include the following disclosure from the Portfolio’s “Additional Information on Investment
Objectives and Policies” section in the Portfolio’s “Principal Investment Strategies” section:
Under normal market conditions, the International Vector Equity ETF intends to invest at least 40% of its assets in three or more non-U.S. countries by
investing in securities of companies associated with such countries.
Alternatively, the Staff believes the Portfolio could also satisfy the requirement to invest its assets in investments that are tied economically to a
number of countries throughout the world by
U.S. Securities and Exchange Commission
August 5, 2024
Page 5
including disclosure noting that it invests: (1) a majority of its assets in issuers that are organized or located outside the U.S. or that do a
substantial amount of business outside the US; or (2) an amount outside the U.S. that is within 5% of the U.S. exposure included in a broad-based global index.
Response. The Registrant has incorporated the applicable disclosure from the Portfolio’s “Additional Information on Investment Objectives and
Policies” section into the Portfolio’s “Principal Investment Strategies” section.
14.
Comment. Please confirm whether the derivatives that the Portfolio will invest in will provide the
Portfolio with exposure to U.S. companies. If so, please comment supplementally on how this U.S. exposure would be consistent with the Portfolio’s international investment strategy.
Response. The Registrant notes that the Portfolio’s principal investment strategies and investments do not provide exposure to the U.S. As noted
in the disclosure, the Portfolio may have limited exposure to the U.S. through its investment in certain derivatives or other investments for collateral and cash management purposes. The Registrant, however, believes the use of such
investments for limited time periods and purposes is appropriately disclosed and beneficial to shareholders (i.e., as opposed to holding cash or more expensive and/or less liquid non-U.S. alternatives)
and does not impair the Portfolio’s ability to achieve its investment objective or principal investment strategies.
15.
Comment. Please consider adding a portfolio turnover risk as a principal risk in light of the statement
that the Portfolio may have a higher degree of portfolio turnover than index funds.
Response. The Registrant respectfully declines to revise the disclosure. Due to the Portfolio’s active investment strategy, it will engage in
more frequent trading of portfolio securities as compared to index portfolios; however, at this time, the Registrant does not anticipate high portfolio turnover being a principal risk of the Portfolio.
16.
Comment. Please tailor the “Derivatives Risk” to include risks specific to the derivatives utilized by the Portfolio.
Response. The Registrant supplementally confirms that the “Derivatives Risk” is appropriately tailored to the derivative instruments utilized by
the Portfolio.
17.
Comment. Please add a depositary receipt risk to the “Principal Risks” in the Portfolio’s Summary
Prospectus.
Response. The Registrant respectfully declines to revise the disclosure and notes that the “Foreign Securities and Currencies Risk” in the
Portfolio’s Summary Prospectus addresses the risks related to investments in depositary receipts.
U.S. Securities and Exchange Commission
August 5, 2024
Page 6
18.
Comment. When available, please supplementally provide the Staff with the broad-based securities index that the Portfolio will include in the
“Performance Table” section of the Prospectus.
Response. The Registrant confirms supplementally that, currently, it is anticipated that the broad-based securities indices to be utilized by the
Portfolio is the MSCI World ex USA IMI Index (net dividends).
19.
Comment. With respect to the “Investment Advisor/Portfolio Management” section of the Prospectus, if
applicable, please add that the individuals listed are “jointly and primarily” responsible for leading the day-to-day management of the Portfolio.
Response. The Registrant respectfully declines to revise the disclosure and notes that Item 5(b) of Form N-1A only requires that the Portfolio
“state the name, title, and length of service” of the persons who are primarily responsible for the day-to-day management of the fund’s portfolio. The Registrant has previously revised this disclosure in response to SEC comment