In fact, Morningstar categorizes DFQTX as a mid-cap fund. "There are a lot of subtleties in DFA funds that aren't captured by Morningstar's analysis," Bowes said.

In fixed income, he prefers an exchange-traded note. That's the iShares GS Connect S&P Commodity ETN (NYSE: GSC). But his firm also utilizes the iPath S&P GSCI Total Return Index ETN (NYSE: GSP). Both are indexed to the same Goldman Sachs benchmark. "GSC has a little more flexibility in the way it trades futures contracts," Bowes said. "But for tax-loss harvesting purposes, we have no problem using GSP."

For international real estate investment trusts, he likes the iShares S&P World ex-US Property Index (NYSE: WPS). In domestic REITs, he prefers the Vanguard REIT Index ETF (AMEX: VNQ). "We didn't change our allocation to REITS last year because of trouble in housing markets," Bowes said. "We don't make changes to asset allocations based on market conditions."

The primary driver for making tweaks to portfolios is life-changing events experienced by clients, he said. Another reason is an ability to gain access to new and interesting parts of the market. Also, if global market caps swing one way or another to a great degree, he'll consider adjusting allocations.

"We increased our allocation to international from 30% to 40% of overall equities in 2006 based on a review of global market capitalization," Bowes said.

For a standard 60% stocks allocation, he would have about 30% of assets in U.S. equities. Another 20% or so goes into foreign stocks. Bowes divvies up the rest between small chunks of domestic real estate, international real estate and commodities.

With bond allocations, he spreads client assets between a pair of mutual funds: the Vanguard Treasury Inflation-Protected Securities fund (VIPSX) and the Vanguard Short-Term Investment Grade Fund (VFSTX). Bowes also likes DFA Two-Year Global Fixed-Income Fund (DFGFX) for international fixed-income exposure.

"DFA bond funds are active in the sense that they make yield-curve adjustments," he said. "But they aren't going to make any sector or credit quality bets."

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