Hi Malcolm,
Firstly, we wouldn’t consider these for our Growth Portfolio as it’s an Australian focused portfolio which holds ASX listed Shares within the ASX200 and REITs, while it can hold domestically focussed ETFs.
Dimensional Fund Advisors (DFA) and Arrowstreet are two established global equity managers offering different approaches to international share investing. Both use systematic investment strategies, but there are important differences in their geographic exposure, management fees and investment approach.
- Arrowstreet Global Equity Fund (MAQ0464AU unhedged / MAQ0079AU hedged): An actively managed global equity fund investing across developed and emerging markets, using quantitative research to identify opportunities and outperform the MSCI All Country World ex Australia Index. It has an impressive long-term record, but its management fee of 1.28% p.a. is relatively expensive, placing greater pressure on the manager to consistently outperform.
- Dimensional Global Core Equity (DGCE unhedged / DFGH hedged): Invests across developed markets, excluding Australia, with a systematic preference for smaller, cheaper and more profitable companies. Its management fee was reduced to 0.30% p.a. in October 2025, making it a significantly cheaper alternative to Arrowstreet. The fund is available through both ASX-listed active ETFs and direct managed-fund investment.
- Hedged versus unhedged: We generally favour unhedged international equities for long-term Australian investors, as a weaker AUD can cushion portfolio losses during periods of global market stress. However, investors concerned about a strengthening AUD could consider hedged exposure, or a combination of the two.
Both are credible global equity managers, but we favour Dimensional’s DGCE as a core international holding, given its diversified exposure, disciplined investment process and significantly lower fees. Arrowstreet is a reasonable complementary holding, particularly for investors seeking emerging-market exposure, but its higher cost needs to be justified by sustained outperformance. For investors choosing just one, we prefer Dimensional on cost and simplicity.
Note MM International Portfolio compares favourably over the last 3-years having delivered +18.23% pa.
