January 14, 2025

Savina Rizova of Dimensional Fund Advisors - It’s All About Research: The Latest Trends, How to Get the Best Data and Why It’s So Important

56 minutes

Today, Rusty and Robyn are joined by Savina Rizova, Co-Chief Investment Officer and Global Head of Research at Dimensional Fund Advisors. Savina Rizova is Co-Chief Investment Officer and Global Head of Research at Dimensional Fund Advisors LP. She was named Co-CIO in 2024 and serves in that role alongside Gerard O’Reilly, who is also Co-Chief Executive Officer. As Co-CIO, Savina helps lead a team of more than 300 investment professionals across six countries. She is also Chair of the Investment Research Committee and a member of the Investment Committee.

Since joining Dimensional’s Research department in 2004, Savina has worked closely with leading academics, collaborating on research, co-authoring papers, and partnering with Dimensional’s broader investment team to implement robust research in live portfolios. She has helped drive innovation across Dimensional’s product offering, including the development, launch, and rapid growth of Dimensional exchange-traded funds (ETFs), the expanded separately managed accounts (SMAs) offering, and model portfolios. She was instrumental in expanding the Research team to more than 100 specialists in investment research, strategy research, and analytics and data.

Savina was recognized as one of Barron’s 100 Most Influential Women in US Finance in 2022 and 2023. She holds a PhD in finance and an MBA from the University of Chicago Booth School of Business. She also earned a BA in economics and mathematics from Dartmouth College, where she was a research assistant to Professor Kenneth French.

Key Takeaways

[03:44] - What motivated Savina’s transition from the academic world to the finance industry and how has her academic background shaped her approach to research?
[07:18] - What does Savina’s day-to-day look like at Dimensional Fund Advisors and how does she balance innovation with maintaining Dimensional’s core investment philosophy?
[11:57] - How does Savina translate complex, academic findings into actionable insights for advisors and investors?
[15:57] - What are some essential research insights that every financial advisor should understand to better serve their clients when building portfolios?
[18:27] - How does Dimensional identify and prioritize areas of research that could significantly impact their investment strategies?
[21:13] - Does Savina believe the notion of market efficiency still holds as strongly today as it did when Dimensional was founded, or are there nuances that researchers have uncovered in recent years?
[23:46] - Emerging areas of research that may play a larger role in Dimensional’s strategies in the future
[26:15] - Have there been any recent research findings that challenge Dimensional’s long-term assumptions or that led to a change in their overall investment strategy?
[28:20] - How has the explosion of big data and AI changed the research landscape at Dimensional?
[31:37] - How is Dimensional using machine learning to enhance its research and investment processes, if at all?
[33:16] - What are the biggest opportunities and challenges for investment research in the coming decade?
[34:30] - What are the most rewarding and challenging aspects of leading a global research team at Dimensional?
[36:40] - As Co-CIO, how has the investment offering from Dimensional evolved in recent years?
[42:37] - What steps can we take, as an industry, to encourage more women to explore careers in research and finance?
[44:12] - What is currently Savina’s favorite investment idea?

Quotes

[17:27] - "The majority of active managers underperform their benchmarks. So, that’s another key takeaway - don’t underestimate how difficult it is, and impossible systematically, to outguess market prices. [However], if you want to outperform markets, you don’t have to do that. You can seek to outperform markets by focusing on what you mentioned earlier. [Having an] evidence-based approach [and] premiums that are motivated by a robust [research]. ” ~ Savina Rizova

[22:57] - "The one thing many people misunderstand is: market efficiency is a model of how to think about the world or investing. Every model, by default, is wrong [and] is not an accurate description of reality. What is useful about models, is they help you organize how you think about [the world] and how you behave.” ~ Savina Rizova

Links

Savina Rizova on LinkedIn
Dimensional Fund Advisors
“My Way” by Frank Sinatra

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Disclosure(s) - Orion Portfolio Solutions, LLC, an Orion Company, is a registered investment advisor.

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