- Tuesday 18 November 2025
When a client holds a meaningful amount of stock in their employer, vested, unvested or both, it naturally creates concentration risk. For many of our clients in the Tech sector, that exposure is already substantial before we even begin constructing the pension or investment portfolio.
In that context, a traditional market-cap index fund (such as Vanguard Global Equity or the S&P 500) may not add the type of diversification that’s actually needed. These indices are heavily weighted toward the same large Tech companies that already feature prominently in your personal holdings. This is why we often lean toward portfolios built with Dimensional Fund Advisors (DFA).
DFA portfolios include a broader mix of global companies, with deliberate emphasis on areas of the market that behave differently from large-cap Tech including smaller companies, value companies, and companies with strong profitability characteristics. These “factors” are backed by decades of academic research and provide additional sources of long-term return that don’t simply mirror the performance of the big Tech sector. In practical terms, this means your pension or investment portfolio is not just an extension of your employer stock. Instead, it becomes a genuine counterbalance to it.
It’s important to note that this isn’t about choosing DFA instead of Vanguard. We use both, depending on what’s most appropriate for your situation. But for clients already heavily exposed to their employer or their sector, a DFA allocation helps spread risk more effectively and creates a more resilient long-term structure. Ultimately, our goal is simple: to build a portfolio that complements, rather than duplicates the wealth you already hold, helping ensure your long-term plan is better protected against the ups and downs of a single company or sector.
Click Here to read our FAQ: DFA vs. Vanguard (When You Hold Employer Stock)
