Minafi's Take on UCI vs USCI
Here's an in depth look at the differences between UBS ETRACS CMCI Total Return ETN ($UCI) and United States Commodity Index Fund, LP ($USCI).
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.
- uci
- ETF
- Commodities
- Broad
UBS ETRACS CMCI Total Return ETN
Expenses: 0.55% (Better than 1% of similar funds)
This is a bad choice for a Broad Commodities fund. See why »
- usci
- ETF
- Commodities
- Broad
United States Commodity Index Fund, LP
Expenses: 1.10% (Better than 0% of similar funds)
This is a bad choice for a Broad Commodities fund. See why »
Both $UCI and $USCI 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 Commodities Broad 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.
| UCI | USCI | |
|---|---|---|
| Market Score | 0.8 /10 | 4.9 /10 |
| Category Score | 0.0 /10 | 0.0 /10 | Total | 0.8 | 4.9 |
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: $USCI
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, UCI has an expense ratio of 0.55% while USCI has an expense ratio of 1.10%.
Winner: $UCI
Fund Size Comparison
Both UCI and USCI have a similar number of assets under management. UCI has 8.14 Million in assets under management, while USCI has 126 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? UCI or USCI?
Since both of these funds are Commodities Broad 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 UCI a score of 35 and USCI a score of 30.
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.