LMBS vs WFDMX Fund Comparison

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

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Minafi's Take on LMBS vs WFDMX

Here's an in depth look at the differences between First Trust Low Duration Opportunities ETF ($LMBS) and Wells Fargo Target 2030 Fund - Class C ($WFDMX).

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.

61% FI Score
  • lmbs
  • ETF
  • Bond
  • High Yield Bond

First Trust Low Duration Opportunities ETF

Expenses: 0.67% (Better than 1% of similar funds)

This is an OK choice for a High Yield Bond Bond fund. See why »

27% FI Score
  • wfdmx
  • Mutual Fund
  • Allocation
  • Target-Date

Wells Fargo Target 2030 Fund - Class C

Expenses: 1.39% (Better than 0% of similar funds)

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

$LMBS is classified as an ETF while $WFDMX is classified as a Mutual Fund. Even though one of these is a mutual fund and the other is an ETF, that doesn't matter too much for their holdings. Both ETFs and mutual funds are just containers to hold lots of investments inside of them.

The biggest differences between these two is where they may be offered. ETFs are more widely availble from a larger number of investment apps and websites. Mutual funds, on the other hand, are generally offered by the platform they're issued by (Fidelity funds on Fidelity, Vanguard funds on Vanguard). Usually 401(k)'s will offer both ETFs and Mutual Funds. If you're investing outside of a 401(k), I'd recommend you verify the fees associated with ETF and mutual fund transactions. Some platforms charge an additional fee to purchase a mutual fund.

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.

LMBS WFDMX
Market Score 9.1 /10 5.3 /10
Category Score 0.0 /10 5.0 /10
Total 9.1 10.3

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: $WFDMX

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, LMBS has an expense ratio of 0.67% while WFDMX has an expense ratio of 1.39%.

Winner: $LMBS

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, LMBS is a large fund with 5.41 Billion in assets under management. WFDMX, on the other hand, is a medium fund with 473 Million in assets under management.

Winner: $LMBS, First Trust Low Duration Opportunities ETF

Which Should You Choose? LMBS or WFDMX?

Comparing these two funds isn't an apples to apples comparison. LMBS is a Bond High Yield Bond fund, while WFDMX 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 LMBS a score of 61 and WFDMX a score of 27.

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

$LMBS

First Trust Low Duration Opportunities ETF

61

Read More
Ratings
Rating Type Rating
Expense Ratio Score 8 /10
Expense Rating 3 /10
Market Score 9 /10
Category Score 0 /10
Overview
Overview Details
Fund Type ETF
Inception Date Nov-4-2014
Exchange NASDAQ
Expense Ratio 0.670%
Net Assets 5.41 Billion
Yield 2.20%
Holdings
Description Info
Market Bond
Category High Yield Bond
Sectors
  • Basic Materials 0.00%
  • Communication Services 0.00%
  • Consumer Cyclicals 0.00%
  • Consumer Defensive 0.00%
  • Energy 0.00%
  • Financial Services 0.00%
  • Healthcare 0.00%
  • Industrials 0.00%
  • Real Estate 0.00%
  • Technology 0.00%
  • Utilities 0.00%

$WFDMX

Wells Fargo Target 2030 Fund - Class C

27

Read More
Ratings
Rating Type Rating
Expense Ratio Score 1 /10
Expense Rating 0 /10
Market Score 5 /10
Category Score 5 /10
Overview
Overview Details
Fund Type Mutual Fund
Inception Date Mar-1-1994
Exchange NMFQS
Expense Ratio 1.390%
Net Assets 473 Million
Yield 1.32%
Holdings
Description Info
Market Allocation
Category Target-Date
Sectors
  • Basic Materials 4.87%
  • Communication Services 8.04%
  • Consumer Cyclical 8.52%
  • Consumer Defensive 10.42%
  • Energy 3.84%
  • Financial Services 15.09%
  • Healthcare 15.28%
  • Industrials 12.88%
  • Real Estate 6.90%
  • Technology 9.64%
  • Utilities 4.51%
Regions
  • Africa/Middle East 0.23%
  • Asia Developed 3.33%
  • Asia Emerging 3.89%
  • Australasia 2.30%
  • Europe Developed 10.41%
  • Europe Emerging 0.60%
  • Japan 6.85%
  • Latin America 0.79%
  • North America 67.11%
  • United Kingdom 4.51%

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