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Is Oppenheimer SteelPath MLP Income A (MLPDX) a Strong Mutual Fund Pick Right Now?

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If investors are looking at the Sector - Energy fund category, Oppenheimer SteelPath MLP Income A (MLPDX - Free Report) could be a potential option. MLPDX possesses a Zacks Mutual Fund Rank of 2 (Buy), which is based on nine forecasting factors like size, cost, and past performance.

Objective

MLPDX is one of many Sector - Energy funds to choose from. Sector - Energy mutual funds are comprised of various changing and hugely important industries throughout the massive global energy sector. Even though clean energy is beginning to pick up steam, oil and gas companies have the highest exposure, but carbon-based fuels will be the biggest group of assets in these funds.

History of Fund/Manager

Invesco is based in Kansas City, MO, and is the manager of MLPDX. Oppenheimer SteelPath MLP Income A debuted in April of 2010. Since then, MLPDX has accumulated assets of about $1.42 billion, according to the most recently available information. The fund is currently managed by Stuart Cartner who has been in charge of the fund since April of 2010.

Performance

Of course, investors look for strong performance in funds. This fund has delivered a 5-year annualized total return of -3.85%, and is 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 0.26%, 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. Compared to the category average of 11.63%, the standard deviation of MLPDX over the past three years is 15.49%. The standard deviation of the fund over the past 5 years is 19.82% compared to the category average of 12.31%. This makes the fund more volatile than its peers over the past half-decade.

Risk Factors

Investors cannot discount the risks to this segment though, as it is always important to remember the downside for any potential investment.

Investors should note that the fund has a 5-year beta of 1.05, so it is likely going to be 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. Over the past 5 years, the fund has a negative alpha of -11.73. This means that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.

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, MLPDX is a load fund. It has an expense ratio of 1.39% compared to the category average of 1.48%. From a cost perspective, MLPDX is actually cheaper than its peers.

Investors should also note that the minimum initial investment for the product is $1,000 and that each subsequent investment has no minimum amount.

Bottom Line

Overall, Oppenheimer SteelPath MLP Income A ( MLPDX ) has a high Zacks Mutual Fund rank, strong performance, worse downside risk, and lower fees compared to its peers.

Your research on the Sector - Energy segment doesn't have to stop here. You can check out all the great mutual fund tools we have to offer by going to www.zacks.com/funds/mutual-funds to see the additional features we offer as well for additional information. Want to learn even more? We have a full suite of tools on stocks that you can use to find the best choices for your portfolio too, no matter what kind of investor you are.


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