DES vs IHF Fund Comparison

A comparison between DES and IHF based on their expense ratio, growth, holdings and how well they match their benchmark performance.

Group Created with Sketch.

Minafi's Take on DES vs IHF

Here's an in depth look at the differences between WisdomTree U.S. SmallCap Dividend Fund ($DES) and iShares U.S. Healthcare Providers ETF ($IHF).

To start off, here's a look at the basics of each fund. Keep an eye on the FI Score. That's a custom score from 0 to 100 that we generate based on how good this fund is for the casual investor. Most investors only need a handful of total funds in their portfolio. The higher the score, the more likely this is one of those few. Score alone isn't enough! Keep reading on to see how different (or perhaps similar) these two funds are.

66% FI Score
  • des
  • ETF
  • US Stocks
  • Small Value

WisdomTree U.S. SmallCap Dividend Fund

Expenses: 0.38% (Better than 1% of similar funds)

This is an OK choice for a Small Value US Stocks fund. See why »

62% FI Score
  • ihf
  • ETF
  • Sector Equity
  • Healthcare

iShares U.S. Healthcare Providers ETF

Expenses: 0.43% (Better than 1% of similar funds)

This is an OK choice for a Healthcare Sector Equity fund. See why »

Both $DES and $IHF are categorized as ETFs. ETFs have an added bonus over mutual funds of being more widely available. Mutual funds are often limited to only the issuing investment brokerage. Since these are both ETFs, you may be able to find these at a wider number of investment apps and websites.

The biggest disadvantage of ETFs is that some platforms only allow you to purchase ETFs in whole shares. So if an ETF is going for $75, you may need to invest in increments of $75. Most 401(k)'s allow for investing down to the penny, but you'll want to verify your platform allows for "fractional ETF Shares".

To learn more about the difference between these two, you can read about the difference between ETFs and Mutual Funds.

When evaluating a fund, the first things I look at are:

  • What it invests in
  • How much it charges in fees
  • How large the fund is

Let's look into these criteria one by one and see if either of these funds stands out.

Fund Holdings Comparison

Minafi's FI Score algorithm takes into account the category and market. The more niche a fund is, the lower the score. This doesn't mean it's a worse fund, but it does mean you should stop and make sure this a fund you need to diversify your portfolio.

DES IHF
Market Score 8.1 /10 5.0 /10
Category Score 5.0 /10 0.0 /10
Total 13.1 5.0

A score of 10 means this is a solid market and category that almost every investor will want to have investments in. The lower the score, the more specific the investment. These scores are based on when most investors would add these funds to their portfolio. A score of 10 means that this fund (or one like it) belongs in a three-fund portfolio. The lower the score, the farther down in your portfolio a fund would go.

For each fund we've created a "diversification score" – a metric to indicate how closely each funds asset allocation matches it's benchmark. For example, an S&P 500 fund would have a diversification score of 10 if it's fully in line with the actual S&P 500.

The diversification score for DES is 3.0/10, while IHF has a diversification score of 9.9/10.

In other words, IHF more closely matches it's benchmark.

Winner: $DES

Fee Comparison

Fees are one of the biggest killers of portfolio growth. The difference between a 2% fee and a 0.04% fee over 30 years can result in your portfolio having half the total value!

If you're just getting started investing and learning how fees impact your portfolio, I'd encourage you to read through my free investment course (specifically '2.2 - All About Fees') where I go over all the different types of fees you can be charged and how to lower them.

For these two funds, DES has an expense ratio of 0.38% while IHF has an expense ratio of 0.43%. In this case, both of these funds have a similar fee.

Winner: $DES (barely)

Fund Size Comparison

One place these two funds differ is in their total assets under management. This is a good indication of how many other investors trust this fund. A large fund by itself doesn't mean it's a good fund, but it is one thing to consider when figuring out how to choose the right fund.

In the case of these two funds, DES is a large fund with 1.35 Billion in assets under management. IHF, on the other hand, is a medium fund with 961 Million in assets under management.

Winner: $DES, WisdomTree U.S. SmallCap Dividend Fund

Which Should You Choose? DES or IHF?

Comparing these two funds isn't an apples to apples comparison. DES is a US Stocks Small Value fund, while IHF is a Sector Equity Healthcare fund.

If you're aiming to build a diversified, low-fee, tax-optimized portfolio you likely won't be choosing between these two funds since they're different enough.

Running both of these funds through Minafi's FI Score algorithm, gives DES a score of 66 and IHF a score of 62.

Winner: Neither, I'd research more funds if you're looking to invest for retirement.

$DES

WisdomTree U.S. SmallCap Dividend Fund

66

Read More
Ratings
Rating Type Rating
Diversification Score 3 /10
Expense Ratio Score 9 /10
Expense Rating 6 /10
Market Score 8 /10
Category Score 5 /10
Overview
Overview Details
Fund Type ETF
Inception Date Jun-16-2006
Exchange NYSE ARCA
Expense Ratio 0.380%
Net Assets 1.35 Billion
Yield 3.96%
Holdings
Description Info
Market US Stocks
Category Small Value
Sectors
  • Basic Materials 8.42%
  • Communication Services 4.18%
  • Consumer Cyclicals 6.84%
  • Consumer Defensive 6.98%
  • Energy 5.65%
  • Financial Services 27.24%
  • Healthcare 2.52%
  • Industrials 14.83%
  • Real Estate 14.29%
  • Technology 3.37%
  • Utilities 5.68%
Regions
  • Latin America 0.28%
  • North America 99.72%

$IHF

iShares U.S. Healthcare Providers ETF

62

Read More
Ratings
Rating Type Rating
Diversification Score 10 /10
Expense Ratio Score 8 /10
Expense Rating 6 /10
Market Score 5 /10
Category Score 0 /10
Overview
Overview Details
Fund Type ETF
Inception Date May-1-2006
Exchange NYSE ARCA
Expense Ratio 0.430%
Net Assets 961 Million
Yield 0.67%
Holdings
Description Info
Market Sector Equity
Category Healthcare
Sectors
  • Basic Materials 0.00%
  • Communication Services 0.00%
  • Consumer Cyclicals 0.00%
  • Consumer Defensive 0.00%
  • Energy 0.00%
  • Financial Services 0.17%
  • Healthcare 99.83%
  • Industrials 0.00%
  • Real Estate 0.00%
  • Technology 0.00%
  • Utilities 0.00%
Regions
  • Latin America 0.13%
  • North America 99.87%

Adam says: Learn how to confidently invest for retirement!

Join the Minafi Investor Bootcamp to see how.

This 10-course bootcamp starts at only $10 for everything!

Minafi - The intersection of FI, minimalism & mindfulness.

Don't miss out on new posts, courses, interactive articles and more!

Join & Get Your First Course Free

© 2024   Adam Fortuna

Site Map
Triangle Graduation Cap Angle Down Book regular Phone laptop regular fire regular fire regular search regular Acorn duotone Seedling duotone thumbs down duo