BW Online | November 18, 2002 | Averse to Stock Picking? Consider This

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NOVEMBER 18, 2002

BARKER.ONLINE
By Robert Barker

Averse to Stock Picking? Consider This

BW's Robert Barker fills inquiring readers in on the specific funds he used to create an interesting portfolio

Robert Barker covers personal finance for BusinessWeek

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Sometimes BusinessWeek readers demand more detail than a magazine printed on 10.5 x 8-inch piece of glossy paper permits. And that's just one of the ways that BusinessWeek Online often rides to the rescue. In this case, what prompted readers' demand was a table appearing in the Nov. 18 issue's Barker Portfolio ("So You Think Stock Picking Is a Fool's Game"). The gist of it was to compare the costs of building a globally diversified portfolio of the sort that a financial adviser might put together for you using mutual funds from Dimensional Fund Advisors.

Never heard of DFA? It's a brainy, 21-year-old Santa Monica (Calif.) firm that runs most of its $32 billion in assets for giant pension funds. It does, however, also take some money indirectly from individual investors who hire one of about 500 select investment advisers who can buy shares in DFA funds on a "wholesale basis.

HYPOTHETICAL EXERCISE. In my view, DFA does a good job, yet many people (myself included) don't want to hire an investment adviser. So I wondered whether it would be possible to approximate a DFA portfolio using other, more commonly available vehicles.

That's why I went window shopping, if you will, for a hypothetical portfolio and posted the results in the table that appeared in the magazine. It shows the costs of using DFA (including the typical fee of an independent adviser) vs. using exchange-traded funds from Barclays Global Investors or traditional mutual funds from Vanguard Group.

What the table didn't show was precisely which funds I picked from each firm -- prompting several reader inquiries. Here, then, is a companion table showing all the funds:

U.S. Stocks
Asset Class	% of Portfolio	DFA Fund (Symbol)	Barclays iShare (Symbol)	Vanguard Fund (Symbol)


Large Cap Market	12%	Enhanced U.S. Large Company (DFELX)	S&P 500 Index (IVV)	500 Index (VFINX)

Large Cap Value	12%	U.S. Large Cap Value (DFLVX)	S&P 500/Barra Value Index (IVE)	Value Index (VIVAX)

Small Cap Market	6%	U.S. Micro Cap (DFSCX)	S&P SmallCap 600 Index (IJR)	Small-Cap Index (NAESX)

Small Cap Value	6%	U.S. Small Cap Value (DFSVX)	S&P SmallCap 600/Barra Value Index (IJS)	Small-Cap Value Index (VISVX)

Real Estate Stocks	6%	Real Estate Securities (DFREX)	Cohen & Steers Realty Majors Index (ICF)	REIT Index (VGSIX)

International Stocks

Large Cap Value	6%	Int'l Value (DFIVX)	MSCI EAFE Index (EFA)	Developed Market Index (VDMIX)

Small Cap Market	3%	Int'l Small Company (DFISX)	MSCI Emerging Markets Index**	Emerging Markets Index (VEIEX)

Small Cap Value	3%	Int'l Small Cap Value (DISVX)

Emerging Markets Large	2%	Emerging Markets (DFEMX)

Emerging Markets Value	2%	Emerging Markets Value (DFEVX)

Emerging Markets Small	2%	Emerging Markets Small Cap*


Fixed Income

One-Year	10%	One-Year (DFIHX)		Short-Term Federal (VSGBX)

Two-Year Global	10%	Two-Year Global (DFGFX)	Lehman 7-10 Year Treasury Bond (IEF)	Intermediate-Term Treasury (VFITX)

Five-Year Government	10%	Five-Year Government (DFFGX)	Lehman 1-3 Year Treasury Bond (SHY)

Five-Year Global	10%	Five-Year Global (DFGBX)

*No ticker symbol assigned
**Still in registration with the Securities & Exchange Commission
Data: Company reports, BusinessWeek Online

Barker covers personal finance in his Barker Portfolio column for BusinessWeek

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