Minafi's Take on FCDSX vs VRCCX
Here's an in depth look at the differences between Fidelity® Series International Credit Fund ($FCDSX) and Invesco Balanced-Risk Retirement 2020 Fund Class CX ($VRCCX).
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.
- fcdsx
- Mutual Fund
- Bond
- International
Fidelity® Series International Credit Fund
Expenses: 0.01% (Better than 1% of similar funds)
This is an OK choice for a International Bond fund. See why »
- vrccx
- Mutual Fund
- Allocation
- Target-Date
Invesco Balanced-Risk Retirement 2020 Fund Class CX
Expenses: 1.00% (Better than 0% of similar funds)
This is a bad choice for a Target-Date Allocation fund. See why »
Both $FCDSX and $VRCCX 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.
| FCDSX | VRCCX | |
|---|---|---|
| Market Score | 2.4 /10 | 1.8 /10 |
| Category Score | 10.0 /10 | 5.0 /10 | Total | 12.4 | 6.8 |
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: $FCDSX
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, FCDSX has an expense ratio of 0.01% while VRCCX has an expense ratio of 1.00%.
Winner: $FCDSX
Fund Size Comparison
Both FCDSX and VRCCX have a similar number of assets under management. FCDSX has 113 Million in assets under management, while VRCCX has 42.7 Million.
Minafi categorizes both of these funds as small funds. Fund size 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.
Winner: tie
Which Should You Choose? FCDSX or VRCCX?
Comparing these two funds isn't an apples to apples comparison. FCDSX is a Bond International fund, while VRCCX is a Allocation Target-Date 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 FCDSX a score of 70 and VRCCX a score of 16.
Winner: Neither, I'd research more funds if you're looking to invest for retirement.