History of Changes to the IFA Indexes and Portfolios
1. November 2002: Due to the high similarity of the
1999 versions of index portfolios 95 and 100 to index portfolio 90, the
95 and 100 portfolios were moderately modified in November 2002 to have
higher exposure to small and value equities throughout the world. According
to the extensive research of Eugene Fama, Kenneth French and Jim Davis,
utilizing data from the Center for Research of Security Prices (CRSP)
over a 68 year period from July 1929 to June 1997, this change has higher
risk and return expectations than the previous versions of 95 and 100.
Covariances, and Average Returns: 1929-1997)
The overall impact of these changes to the returns is small. To illustrate, the 79-year average annualized returns for Portfolios 5, 50, and 100 changed as follows:
4. January 2008: On January 1, 2008, DFA enacted a “soft close” of two of its funds. This meant that existing investors were able to add to their current positions, but new investors were not able to purchase positions in these funds. At that point, IFA stopped using the DFA U.S. Micro Cap Portfolio or the DFA U.S. Small Cap Value Portfolio for new investors (or for new non-taxable accounts added by existing investors).
Beginning on June 3, 2008, IFA started using the DFA Global Real Estate fund in place of the U.S. Real Estate fund for new clients. Historical returns for the IFA Real Estate Index were not changed.
The historical monthly returns of the fifteen IFA indexes and the twenty IFA index portfolios were reconstructed in January of 2008 to address the following issues:
The overall impact of these changes for 80 years is shown in the table below:
Average Annualized Returns from 1/1928 to 12/2007:
The overall impact of these changes for 50 years is shown in the table below:
Average Annualized Returns from 1/1957 to 12/2007:
All new tables and charts updated after January 1, 2008 will be based
on the updated data series.
5. November 2012: IFA changed the allocations and the historical returns for its socially responsible portfolios to reflect the introduction of the DFA International Social Core Equity Portfolio (DSCLX). Prior to this, the international developed equity asset class was unavailable in a socially responsible implementation. As the table below shows, clients who were invested in the old allocation from the time it became available (January 2008) likely did better than they would have done with the new allocation. The difference is not statistically significant, and it is IFA’s advice that going forward having an exposure to international developed equities will provide a substantial diversification benefit to socially responsible investors.
6. September 2013 IFA introduced the New IFA Index Portfolios which use the same equity allocation as Index Portfolio 100. Index Portfolio 100 was held the same as it has been since 2000 and became the only 100 percent equity portfolio in the NEW Index Portfolios. The four fixed income indexes (25% each) remain the same as they have been since 2000 and will make up the fixed income allocation of all IFA index portfolios in the allocation equal to 100-New IP#. The name of each portfolio will now equate to the percentage of equities in the portfolio. For example, the new Index Portfolio 60 will be 60% equities and 40% fixed income.