Minafi's Take on IJJ vs PUI
Here's an in depth look at the differences between iShares S&P Mid-Cap 400 Value ETF ($IJJ) and Invesco DWA Utilities Momentum ETF ($PUI).
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.
- ijj
- ETF
- US Stocks
- Mid-Cap Value
iShares S&P Mid-Cap 400 Value ETF
Expenses: 0.25% (Better than 1% of similar funds)
This is an OK choice for a Mid-Cap Value US Stocks fund. See why »
- pui
- ETF
- Sector Equity
- Utilities
Invesco DWA Utilities Momentum ETF
Expenses: 0.60% (Better than 1% of similar funds)
This is a bad choice for a Utilities Sector Equity fund. See why »
Both $IJJ and $PUI 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.
| IJJ | PUI | |
|---|---|---|
| Market Score | 8.3 /10 | 3.5 /10 |
| Category Score | 5.0 /10 | 0.0 /10 | Total | 13.3 | 3.5 |
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 IJJ is 6.5/10, while PUI has a diversification score of 6.7/10.
In other words, PUI more closely matches it's benchmark.
Winner: $IJJ
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, IJJ has an expense ratio of 0.25% while PUI has an expense ratio of 0.60%.
Winner: $IJJ
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, IJJ is a large fund with 4.38 Billion in assets under management. PUI, on the other hand, is a small fund with 84.2 Million in assets under management.
Winner: $IJJ, iShares S&P Mid-Cap 400 Value ETF
Which Should You Choose? IJJ or PUI?
Comparing these two funds isn't an apples to apples comparison. IJJ is a US Stocks Mid-Cap Value fund, while PUI is a Sector Equity Utilities 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 IJJ a score of 76 and PUI a score of 47.
Winner: Neither, I'd research more funds if you're looking to invest for retirement.