Why We Refined It
Our investment model continues to centre around Dimensional’s academically grounded, evidence-based framework, a structure we have trusted for over 14 years.
However, to reflect the pace of innovation and opportunity in sectors like AI, robotics, and genomic technologies, we have introduced a modest allocation to ARK Invest.
This is not a reinvention. It is a refinement.
ARK offers thematic, high-conviction exposure to transformative innovation. Dimensional provides disciplined, factor-based diversification. Fidelity and UBS contribute broad, low-cost market access. Together, these elements form a modernised, balanced structure.
The Questions Being Asked
Is there stock duplication between the funds?
We have run a detailed stock overlap analysis. It is modest and intentional.
Across all equity holdings, the combined exposure to ARK’s top 10 names is just 2.69%. Dimensional specifically holds 0.64% of ARK’s top names. UBS FTSE RAFI holds only 0.58% in overlapping stocks.
Fidelity and UBS share some mega-cap exposure, but their methodologies differ. Most overlap occurs in global giants like Apple, Nvidia and Microsoft, and is the kind of exposure we want across different sleeves. Diversification is not about avoiding duplication entirely. It is about how each sleeve weights that exposure.
Why make changes now?
Our investment committee reviews the evolution of equity markets each year. We have seen persistent strength in innovation-driven sectors, and a well-timed, proportionate shift helps ensure portfolios remain aligned with macro trends while preserving our evidence-based core.
Does ARK’s higher ongoing charge drag overall costs up?
Not materially. The portfolio remains highly efficient.
- 70 model: 0.30% weighted OCF
- 80 model: 0.33%
- 90 model: 0.34%
This is thanks to reintroducing Fidelity and UBS and capping ARK’s weighting at 5 to 10% depending on risk tier.
What is the risk of thematic exposure crowding out the rest?
Very low. ARK’s position has been scaled proportionally.
- 70 model: 5%
- 80 model: 7.5%
- 90 model: 10%
ARK’s high active share means minimal duplication. And Dimensional’s factor sleeves maintain deep value, small-cap, and profitability exposure, unaffected by thematic shifts.
Has ESG been overlooked in this update?
Quite the opposite. We have added the Dimensional Global Core Equity Low Carbon ESG fund. This preserves core market exposure while favouring more sustainable companies, without compromising diversification or cost.
How do the other adjusted allocations work?
- Dimensional bond sleeves: two ultra-short, high-grade bond funds provide stability with reduced interest rate sensitivity, scaling with equity across the 70, 80 and 90 models
- Factor exposure: remains consistent across risk tiers, with Global Small, US Small, Value and Targeted Value each holding strong tilts
- Emerging markets: held constant at 5% Core and 5% Targeted Value
- Broad index exposure: Fidelity World and UBS RAFI balance cost, beta and weighting methodology
- Cash: 2.5% across all templates for liquidity
What the Model Is Built to Deliver
The new structure blends:
- Proven academic discipline from Dimensional
- Access to global innovation via ARK
- Efficient market capture through Fidelity and UBS
- Clear ESG options via Low Carbon Core
- A total cost model under 0.35%
The result strengthens long-term performance potential while honouring everything we believe in: evidence, diversification, innovation, and low cost.
If you would like to explore your portfolio tier or ask anything further, we are always happy to have that conversation.
Contact us today or call 0345 200 4041 to arrange a free consultation.
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