MDIV vs OCIO Fund Comparison

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

Group Created with Sketch.

Minafi's Take on MDIV vs OCIO

Here's an in depth look at the differences between First Trust Multi-Asset Diversified Income Index Fund ($MDIV) and ClearShares OCIO ETF ($OCIO).

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.

46% FI Score
  • mdiv
  • ETF
  • Allocation
  • All-In-One

First Trust Multi-Asset Diversified Income Index Fund

Expenses: 0.73% (Better than 1% of similar funds)

This is a bad choice for a All-In-One Allocation fund. See why »

48% FI Score
  • ocio
  • ETF
  • Allocation
  • All-In-One

ClearShares OCIO ETF

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

This is a bad choice for a All-In-One Allocation fund. See why »

Both $MDIV and $OCIO 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

Both of these funds are Allocation All-In-One funds – which means they're likely both investing in about the same investments behind the scenes.

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.

MDIV OCIO
Market Score 4.8 /10 2.1 /10
Category Score 5.0 /10 5.0 /10
Total 9.8 7.1

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 MDIV is 0.0/10, while OCIO has a diversification score of 8.4/10.

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

Winner: $MDIV

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, MDIV has an expense ratio of 0.73% while OCIO has an expense ratio of 0.67%. In this case, both of these funds have a similar fee.

Winner: $OCIO (barely)

Fund Size Comparison

Both MDIV and OCIO have a similar number of assets under management. MDIV has 476 Million in assets under management, while OCIO has 105 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? MDIV or OCIO?

Since both of these funds are Allocation All-In-One funds, you'll most likely only need to invest in one of these funds – not both. Running both of these funds through Minafi's FI Score algorithm, gives MDIV a score of 46 and OCIO a score of 48.

Since both of these have a similar FI Score, the difference between these two if minimal. A higher FI Score doesn't mean future growth will be higher, but it does mean that it better fits criteria for a good fund. Neither of these funds has an FI Score above 90 – which is a red flag. I'd look into more funds to find one with a higher FI Score.

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

$MDIV

First Trust Multi-Asset Diversified Income Index Fund

46

Read More
Ratings
Rating Type Rating
Diversification Score 0 /10
Expense Ratio Score 6 /10
Expense Rating 3 /10
Market Score 5 /10
Category Score 5 /10
Overview
Overview Details
Fund Type ETF
Inception Date Aug-13-2012
Exchange NASDAQ
Expense Ratio 0.730%
Net Assets 476 Million
Yield 7.83%
Holdings
Description Info
Market Allocation
Category All-In-One
Sectors
  • Basic Materials 1.05%
  • Communication Services 2.08%
  • Consumer Cyclicals 3.87%
  • Consumer Defensive 4.24%
  • Energy 34.45%
  • Financial Services 16.84%
  • Healthcare 1.66%
  • Industrials 5.25%
  • Real Estate 27.45%
  • Technology 0.85%
  • Utilities 2.25%
Regions
  • North America 98.32%
  • United Kingdom 1.68%

$OCIO

ClearShares OCIO ETF

48

Read More
Ratings
Rating Type Rating
Diversification Score 8 /10
Expense Ratio Score 7 /10
Expense Rating 3 /10
Market Score 2 /10
Category Score 5 /10
Overview
Overview Details
Fund Type ETF
Exchange NYSE ARCA
Expense Ratio 0.670%
Net Assets 105 Million
Yield 3.13%
Holdings
Description Info
Market Allocation
Category All-In-One
Sectors
  • Basic Materials 3.98%
  • Communication Services 9.08%
  • Consumer Cyclicals 10.25%
  • Consumer Defensive 8.80%
  • Energy 3.60%
  • Financial Services 14.86%
  • Healthcare 13.49%
  • Industrials 10.26%
  • Real Estate 4.39%
  • Technology 17.67%
  • Utilities 3.62%
Regions
  • Africa/Middle East 0.97%
  • Asia Developed 3.18%
  • Asia Emerging 5.25%
  • Australasia 1.60%
  • Europe Developed 10.52%
  • Europe Emerging 0.47%
  • Japan 5.98%
  • Latin America 0.80%
  • North America 67.56%
  • United Kingdom 3.68%

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