FAOTX vs GUCAX Fund Comparison

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

Group Created with Sketch.

Minafi's Take on FAOTX vs GUCAX

Here's an in depth look at the differences between American Funds 2020 Target Date Retirement Fund® Class F-1 ($FAOTX) and AllianzGI Ultra Micro Cap Fund Class A ($GUCAX).

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.

70% FI Score
  • faotx
  • Mutual Fund
  • Allocation
  • Target-Date

American Funds 2020 Target Date Retirement Fund® Class F-1

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

This is an OK choice for a Target-Date Allocation fund. See why »

12% FI Score
  • gucax
  • Mutual Fund
  • US Stocks
  • Small Growth

AllianzGI Ultra Micro Cap Fund Class A

Expenses: 1.80% (Better than 0% of similar funds)

This is a bad choice for a Small Growth US Stocks fund. See why »

Both $FAOTX and $GUCAX are categorized as Mutual Funds. Mutual funds are often offered by 401(k) platforms and are essentially the same as ETFs. Mutual funds are generally offered by an investment platform – Fidelity has Fidelity mutual funds, Vanguard has Vanguard mutual funds. Mutual funds are ideal for retirement investing since you can invest any amount. That allows you to invest every last cent and benefit from the market.

The biggest disadvantage of mutual funds is that you're usually limited to the funds on your investment platform. If you're investing on Fidelity, you'll want to pick Fidelity mutual funds (or any ETF). Same with Vanguard. Some platforms offer mutual funds from other platforms, but they may charge a purchse or redemption fee. I'd recommend using the same platform as your funds – or stick to ETFs.

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.

FAOTX GUCAX
Market Score 9.4 /10 0.4 /10
Category Score 5.0 /10 5.0 /10
Total 14.4 5.4

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.

Winner: $FAOTX

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, FAOTX has an expense ratio of 0.38% while GUCAX has an expense ratio of 1.80%.

Winner: $FAOTX

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, FAOTX is a large fund with 16.4 Billion in assets under management. GUCAX, on the other hand, is a small fund with 9.89 Million in assets under management.

Winner: $FAOTX, American Funds 2020 Target Date Retirement Fund® Class F-1

Which Should You Choose? FAOTX or GUCAX?

Comparing these two funds isn't an apples to apples comparison. FAOTX is a Allocation Target-Date fund, while GUCAX is a US Stocks Small Growth 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 FAOTX a score of 70 and GUCAX a score of 12.

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

$FAOTX

American Funds 2020 Target Date Retirement Fund® Class F-1

70

Read More
Ratings
Rating Type Rating
Expense Ratio Score 6 /10
Expense Rating 6 /10
Market Score 9 /10
Category Score 5 /10
Overview
Overview Details
Fund Type Mutual Fund
Inception Date Feb-1-2007
Exchange NMFQS
Expense Ratio 0.380%
Net Assets 16.4 Billion
Yield 1.86%
Holdings
Description Info
Market Allocation
Category Target-Date
Sectors
  • Basic Materials 3.17%
  • Communication Services 8.88%
  • Consumer Cyclical 6.92%
  • Consumer Defensive 10.41%
  • Energy 4.43%
  • Financial Services 13.42%
  • Healthcare 17.70%
  • Industrials 9.22%
  • Real Estate 4.54%
  • Technology 15.54%
  • Utilities 5.78%
Regions
  • Africa/Middle East 0.13%
  • Asia Developed 3.12%
  • Asia Emerging 1.83%
  • Australasia 0.27%
  • Europe Developed 9.95%
  • Europe Emerging 0.25%
  • Japan 1.73%
  • Latin America 0.79%
  • North America 75.00%
  • United Kingdom 6.94%

$GUCAX

AllianzGI Ultra Micro Cap Fund Class A

12

Read More
Ratings
Rating Type Rating
Expense Ratio Score 2 /10
Expense Rating 0 /10
Market Score 0 /10
Category Score 5 /10
Overview
Overview Details
Fund Type Mutual Fund
Inception Date Jan-28-2008
Exchange NMFQS
Expense Ratio 1.800%
Net Assets 9.89 Million
Yield 0.00%
Holdings
Description Info
Market US Stocks
Category Small Growth
Sectors
  • Basic Materials 0.33%
  • Communication Services 7.81%
  • Consumer Cyclical 4.17%
  • Consumer Defensive 2.17%
  • Energy 0.19%
  • Financial Services 4.39%
  • Healthcare 50.46%
  • Industrials 10.34%
  • Real Estate 0.00%
  • Technology 20.14%
  • Utilities 0.00%
Regions
  • Europe Developed 0.76%
  • North America 98.97%
  • United Kingdom 0.27%

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