1981 - A New Dimension of Investing

David Booth

David Booth earned his MBA from the University of Chicago in 1971, where he studied under great economic minds like Eugene Fama and Merton Miller. Booth suspected many investors were unaware of the benefits of size risk exposures. In 1981, Booth and Rex Sinquefield, along with guidance from Eugene Fama, founded Dimensional Fund Advisors, a highly regarded mutual fund company that applies passive asset class strategies to its wide range of funds. Many of Dimensional’s funds capture tilts toward factors such as size, value, and profitability. Long-term exposure to these factors has produced above-market returns since 1928.1 Dimensional was one of the first fund companies to educate its clients and advisors about the direct relationship between specific risks and their expected returns. Booth’s initiative has paid off.  Dimensional is regarded by independent investment advisors as a top mutual fund company with assets of $577 billion as of December 2017. Booth continues the advancement of investing science through generous donations. Most notably, in 2008, he gave $300 million to the University of Chicago’s School of Business, the largest gift in the University’s history and the largest gift to any business school. In recognition of this gift, the University of Chicago’s business school was renamed Chicago Booth School of Business. Subsequently, four Nobel Prizes in Economic Sciences have been awarded to current and former faculty members of the Booth School of Business — Thomas Sargent in 2011, Eugene Fama and Lars Peter Hansen in 2013, and most recently, Richard Thaler in 2017.

    -1 Eugene Fama, Kenneth French, "The Cross-Section of Expected Stock Returns," The Journal of Finance, Vol 47, No. 2, June 1992.
Step 2David BoothDimensional Fund AdvisorsRex SinquefieldUniversity of Chicago