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Is Oakmark Investor (OAKMX) a Strong Mutual Fund Pick Right Now?
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If investors are looking at the All Cap Value fund category, Oakmark Investor (OAKMX - Free Report) could be a potential option. 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. Oakmark Investor made its debut in August of 1991, and since then, OAKMX has accumulated about $14 billion in assets, per the most up-to-date date available. William C. Nygren is the fund's current manager and has held that role since March of 2000.
Performance
Investors naturally seek funds with strong performance. This fund in particular has delivered a 5-year annualized total return of 16.09%, and it sits in the top third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 11.26%, 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. OAKMX's standard deviation over the past three years is 12.25% compared to the category average of 9.33%. Over the past 5 years, the standard deviation of the fund is 11.15% compared to the category average of 10.8%. 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 0.26%. This makes the fund a possibly better choice than its peers during a sliding market environment.
Nevertheless, with a 5-year beta of 1.11, the fund is likely to be more volatile than the market average. Alpha is an additional metric to take into consideration, since it represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which in this case, is the S&P 500. OAKMX has generated a negative alpha over the past five years of -1.19, demonstrating that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Holdings
Investigating the equity holdings of a mutual fund is also a valuable exercise. This can show us how the manager is applying their stated methodology, as well as if there are any inherent biases in their approach. For this particular fund, the focus is mostly on equities that are traded in the United States.
Right now, 89.85% of this mutual fund's holdings are stocks, which have an average market capitalization of $143.77 billion. The fund has the heaviest exposure to the following market sectors:
Finance
Technology
Industrial Cyclical
Other
Non-Durable
Turnover is about 19%, so those in charge of the fund make fewer trades than comparable funds.
Expenses
Costs are increasingly important for mutual fund investing, and particularly as competition heats up in this market. And all things being equal, a lower cost product will outperform its otherwise identical counterpart, so taking a closer look at these metrics is key for investors. In terms of fees, OAKMX is a no load fund. It has an expense ratio of 0.86% compared to the category average of 1.17%. From a cost perspective, OAKMX is actually cheaper than its peers.
While the minimum initial investment for the product is $1,000, investors should also note that each subsequent investment needs to be at least $100.
Bottom Line
Overall, Oakmark Investor has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, this fund looks like a good potential choice for investors right now.
Don't stop here for your research on All Cap Value funds. We also have plenty more on our site in order to help you find the best possible fund for your portfolio. Make sure to check out www.zacks.com/funds/mutual-funds for more information about the world of funds, and feel free to compare OAKMX to its peers as well for additional information. And don't forget, Zacks has all of your needs covered on the equity side too! Make sure to check out Zacks.com for more information on our screening capabilities, Rank, and all our articles as well.
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Is Oakmark Investor (OAKMX) a Strong Mutual Fund Pick Right Now?
If investors are looking at the All Cap Value fund category, Oakmark Investor (OAKMX - Free Report) could be a potential option. 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. Oakmark Investor made its debut in August of 1991, and since then, OAKMX has accumulated about $14 billion in assets, per the most up-to-date date available. William C. Nygren is the fund's current manager and has held that role since March of 2000.
Performance
Investors naturally seek funds with strong performance. This fund in particular has delivered a 5-year annualized total return of 16.09%, and it sits in the top third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 11.26%, 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. OAKMX's standard deviation over the past three years is 12.25% compared to the category average of 9.33%. Over the past 5 years, the standard deviation of the fund is 11.15% compared to the category average of 10.8%. 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 0.26%. This makes the fund a possibly better choice than its peers during a sliding market environment.
Nevertheless, with a 5-year beta of 1.11, the fund is likely to be more volatile than the market average. Alpha is an additional metric to take into consideration, since it represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which in this case, is the S&P 500. OAKMX has generated a negative alpha over the past five years of -1.19, demonstrating that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Holdings
Investigating the equity holdings of a mutual fund is also a valuable exercise. This can show us how the manager is applying their stated methodology, as well as if there are any inherent biases in their approach. For this particular fund, the focus is mostly on equities that are traded in the United States.
Right now, 89.85% of this mutual fund's holdings are stocks, which have an average market capitalization of $143.77 billion. The fund has the heaviest exposure to the following market sectors:
Turnover is about 19%, so those in charge of the fund make fewer trades than comparable funds.
Expenses
Costs are increasingly important for mutual fund investing, and particularly as competition heats up in this market. And all things being equal, a lower cost product will outperform its otherwise identical counterpart, so taking a closer look at these metrics is key for investors. In terms of fees, OAKMX is a no load fund. It has an expense ratio of 0.86% compared to the category average of 1.17%. From a cost perspective, OAKMX is actually cheaper than its peers.
While the minimum initial investment for the product is $1,000, investors should also note that each subsequent investment needs to be at least $100.
Bottom Line
Overall, Oakmark Investor has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, this fund looks like a good potential choice for investors right now.
Don't stop here for your research on All Cap Value funds. We also have plenty more on our site in order to help you find the best possible fund for your portfolio. Make sure to check out www.zacks.com/funds/mutual-funds for more information about the world of funds, and feel free to compare OAKMX to its peers as well for additional information. And don't forget, Zacks has all of your needs covered on the equity side too! Make sure to check out Zacks.com for more information on our screening capabilities, Rank, and all our articles as well.