When Morningstar announced its 2025 Awards for Investing Excellence, one name stood out: Dimensional Fund Advisors. The prestigious "Exemplary Stewardship" award recognizes firms that demonstrate exceptional commitment to serving investors' best interests — and for Index Fund Advisors (IFA), this recognition validates a 26-year history of independently advising clients to primarily invest in Dimensional funds.

What Makes This Award Significant

Morningstar's Awards^* for Investing Excellence represent the industry's highest honor for asset management firms. To qualify for the Exemplary Stewardship award, firms must maintain an "Above Average" or "High" Parent Pillar rating — a measure of how well they care for investors' capital. Dimensional stands among just 12 firms worldwide that hold Morningstar's coveted "High" rating.

As Morningstar noted, the firm, which was founded in 1981, "has stayed true to its academic roots" with systematically constructed portfolios that favor factors research finds attractive, including smaller-capitalization stocks and value orientation. But perhaps most importantly, Morningstar highlighted Dimensional's dedication to investor education and helping clients maintain long-term perspectives.

When market conditions challenged the firm in the late 2010s as clients pulled money from mutual funds, Dimensional responded by cutting fees, launching tax-efficient ETFs (which now account for nearly a third of its AUM), and reducing account minimums — all without compromising its core philosophy.

A Partnership Rooted in Scientific Discovery

For IFA founder Mark Hebner, this award validates Dimensional's long-standing commitment to principles that also align with IFA's evidence-based approach. The story began with a chance visit to Dimensional's Santa Monica office years ago, when Hebner was researching how to invest properly after discovering how poorly his own portfolio had performed.

"One of the guys came from the back and took me back to his office," Hebner recalls in a video describing IFA's origins. "I'll never forget he started pulling paper out of his printer and started drawing bell-shaped curves and teaching me about the science of investing. I was just blown away. I said this is what people have to hear about."

That moment crystallized Hebner's vision for IFA. As a scientist by background who had built a nuclear pharmacy business across the country, he immediately recognized the parallel between evidence-based medicine and evidence-based investing. "Right away I could see the correlation between that medical article in the journal and the Journal of Finance," he explains. "We've got evidence-based, peer-reviewed data here from which you can draw your conclusions."

This scientific approach became IFA's foundation. Hebner instituted a "no believe" policy at his firm, requiring advisors to show clients data rather than make claims based on gut feelings or market predictions. "I ban the word ‘believe' in my office," he says. "My advisors aren't allowed to say, ‘I believe this is going to happen.' Instead, he asks them to show the client the academic research, show them the data, and let them develop their own confidence in that data."

Leadership Through Innovation

Dimensional's co-CEOs Gerard O'Reilly and David Butler have led the firm's evolution while maintaining its academic foundation. "We are honored to receive an award that highlights the value we bring to investors," said O'Reilly in Dimensional's announcement of the award. "At Dimensional, we implement financial science through low-cost, broadly diversified portfolios with a flexible approach to implementation that we have been fine-tuning for more than four decades."

Under their leadership, Dimensional has become the one of the largest ETF issuers, managing approximately $200 billion in ETF assets. The firm pioneered converting mutual funds to ETFs at scale and developed custom methodologies enabling low-cost, tax-efficient daily rebalancing. They also lead the industry in seeking regulatory relief to offer ETF share classes, with the longest-pending application among over 60 firms managing more than $25 trillion in combined assets.

"We continue to prioritize serving the financial professionals and investors that place trust in us while staying true to the principles on which the firm was founded," Butler emphasized.

The Bigger Picture: Science vs. Speculation

Like Dimensional, Mark Hebner is deeply committed to investor education. He's written an award-winning book, Index Funds: The 12-Step Recovery Program, and his firm's website features hundreds of articles, as well as videos, charts and academic papers.

He is also a contributor to Tune Out The Noise, an online documentary commissioned by Dimensional Fund Advisors, which charts the evolution of academic finance.

"I don't want people to think of this like a religious movement," Hebner explains. "People often say advisors come to Dimensional conferences and drink the Kool-Aid. I tell everybody it's just the opposite. We're coming here to avoid a leap of faith that people normally put in these stock market gurus."

This evidence-based approach resonates with Dimensional's own philosophy. Over its history, five Nobel laureates have worked with or consulted for the firm: Merton Miller, Myron Scholes, Robert Merton, Eugene Fama, and Douglas Diamond. Their involvement underscores the academic rigor underlying Dimensional's investment methodology.

Recognition Well Deserved

Reflecting on the Morningstar award, Hebner recently commented on LinkedIn: "For over 26 years I have been teaching investors what Dimensional taught me. They have provided IFA's clients an exemplary investing experience. In my opinion, Dimensional offers a combination of resources, values, and integrity that is exceptional in the industry. In our experience, Dimensional's contributions to evidence-based investing have significantly benefited many investors, even if their name isn't widely known."

This recognition comes at a time when investors face increasing noise from market forecasts, stock-picking hype, and complex products promising outsized returns. In our opinion, Dimensional's award serves as a reminder that successful long-term investing often requires the discipline to ignore such distractions and trust in systematic, evidence-based approaches.

For those interested in learning more about evidence-based investing principles, IFA's educational resources, including the Tune Out The Noise documentary, provide comprehensive insights into building rational investment strategies based on academic research rather than speculation.

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ROBIN POWELL is the Creative Director at Index Fund Advisors (IFA). He is also a financial journalist and the Editor of The Evidence-Based Investor. This article reflects IFA's investment philosophy and is intended for informational purposes only.

Footnote:

*The Morningstar award reflects their independent review of Dimensional's practices during a specific time period; however, it should not be construed as an endorsement or guarantee of future performance results.

Disclosure:

This article reflects the opinions and perspectives of Index Fund Advisors (IFA) and is intended for informational purposes only. IFA has a business relationship with Dimensional Fund Advisors (DFA) and incorporates their funds into client portfolios. Statements regarding DFA, their strategies, or their achievements are based on IFA's interpretations and experiences and should not be construed as guarantees, endorsements, or recommendations. Investors should always seek personalized financial advice based on their own goals, risk tolerance, and unique circumstances.

Past performance is not indicative of future results, and all investments carry risks, including the potential loss of principal. Dimensional Fund Advisors' methodologies and strategies, while rooted in academic theories, do not eliminate risks or guarantee outcomes. References to Morningstar awards are provided for informational purposes only and should not be interpreted as endorsements or assurances of future performance.

This article may include third-party research or studies. While such information has been presented accurately to the best of IFA's ability, it is not exhaustive, and results may vary based on differing methodologies or timeframes. Evidence-based investing reflects an academic, historical approach, but all investment outcomes remain uncertain and are affected by market conditions and individual circumstances.  Readers are encouraged to consult updated research and official sources before making investment decisions.