Is Oakmark Investor (OAKMX) a Strong Mutual Fund Pick Right Now?
If you have been looking for All Cap Value funds, a place to start could be Oakmark Investor (OAKMX). OAKMX carries a Zacks Mutual Fund Rank of 2 (Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
Zacks categorizes OAKMX as All Cap Value, which is a segment packed with options. All Cap Value mutual funds, as the name suggests, invest across the cap spectrum in small-cap, mid-cap, and large-cap companies. However, in practice, these funds generally end up focusing on larger companies thanks to their percentage of assets. Regardless, these funds look for value positions, targeting firms whose share prices do not reflect their full worth, as well as low P/E Ratios and high dividend yields.
History of Fund/Manager
Oakmark is based in Kansas City, MO, and is the manager of OAKMX. Since Oakmark Investor made its debut in August of 1991, OAKMX has garnered more than $10.17 billion in assets. William C. Nygren is the fund's current manager and has held that role since March of 2000.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund has delivered a 5-year annualized total return of 8.62%, and is in the top third among its category peers. If you're interested in shorter time frames, do not dismiss looking at the fund's 3-year annualized total return of 15.66%, which places it in the top third during this time-frame.
When looking at a fund's performance, it is also important to note the standard deviation of the returns. The lower the standard deviation, the less volatility the fund experiences. Over the past three years, OAKMX's standard deviation comes in at 14.2%, compared to the category average of 9.67%. The fund's standard deviation over the past 5 years is 13.63% compared to the category average of 9.61%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
One cannot ignore the volatility of this segment, however, as it is always important for investors to remember the downside to any potential investment. OAKMX lost 49.41% in the most recent bear market and outperformed its peer group by 0.03%. These results could imply that the fund is a better choice than its peers during a sliding market environment.
Nevertheless, investors should also note that the fund has a 5-year beta of 1.17, which means it is hypothetically more volatile than the market at large. Because alpha represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which is the S&P 500 in this case, one should pay attention to this metric as well. OAKMX has generated a negative alpha over the past five years of -3.2, demonstrating that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Expenses
For investors, taking a closer look at cost-related metrics is key, since costs are increasingly important for mutual fund investing. Competition is heating up in this space, and a lower cost product will likely outperform its otherwise identical counterpart, all things being equal. In terms of fees, OAKMX is a no load fund. It has an expense ratio of 0.85% compared to the category average of 1.14%. From a cost perspective, OAKMX is actually cheaper than its peers.
This fund requires a minimum initial investment of $1,000, while there is no minimum for each subsequent investment.
Bottom Line
Overall, Oakmark Investor ( OAKMX ) has a high Zacks Mutual Fund rank, strong performance, average downside risk, and lower fees compared to its peers.
Want even more information about OAKMX? Then go over to Zacks.com and check out our mutual fund comparison tool, and all of the other great features that we have to help you with your mutual fund analysis for additional information. Zacks provides a full suite of tools to help you analyze your portfolio - both funds and stocks - in the most efficient way possible.
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