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Is Oppenheimer Global Fund A (OPPAX) a Strong Mutual Fund Pick Right Now?

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If you've been stuck searching for Global - Equity funds, you might want to consider passing on by Oppenheimer Global Fund A (OPPAX - Free Report) as a possibility. OPPAX bears a Zacks Mutual Fund Rank of 4 (Sell), which is based on nine forecasting factors like size, cost, and past performance.

Objective

We note that OPPAX is a Global - Equity option, an investment area loaded with different options. While Global - Equity mutual funds invest their assets in large markets--think the U.S., Europe, and Japan--they aren't limited by geography. Their investment technique is one that leverages the global economy in order to offer stable returns.

History of Fund/Manager

Invesco is based in Kansas City, MO, and is the manager of OPPAX. Oppenheimer Global Fund A debuted in December of 1969. Since then, OPPAX has accumulated assets of about $6.03 billion, according to the most recently available information. Rajeev Bahman is the fund's current manager and has held that role since August of 2004.

Performance

Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund in particular has delivered a 5-year annualized total return of 7.3%, and it sits in the top third among its category peers. But if you are looking for a shorter time frame, it is also worth looking at its 3-year annualized total return of 11.14%, 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, OPPAX's standard deviation comes in at 14.29%, compared to the category average of 10.07%. Looking at the past 5 years, the fund's standard deviation is 14.42% compared to the category average of 10.23%. 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. OPPAX lost 53.6% in the most recent bear market and underperformed its peer group by 1%. This might suggest that the fund is a worse choice than its peers during a bear market.

Nevertheless, investors should also note that the fund has a 5-year beta of 1.1, which means it is hypothetically more volatile than the market at large. 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. OPPAX has generated a negative alpha over the past five years of -3.9, demonstrating 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, OPPAX is a load fund. It has an expense ratio of 1.09% compared to the category average of 1.19%. From a cost perspective, OPPAX is actually cheaper than its peers.

While the minimum initial investment for the product is $1,000, investors should also note that there is no minimum for each subsequent investment.

Bottom Line

Overall, Oppenheimer Global Fund A ( OPPAX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, Oppenheimer Global Fund A ( OPPAX ) looks like a somewhat weak choice for investors right now.

This could just be the start of your research on OPPAXin the Global - Equity category. Consider going to www.zacks.com/funds/mutual-funds for additional information about this fund, and all the others that we rank as well for additional information. For analysis of the rest of your portfolio, make sure to visit Zacks.com for our full suite of tools which will help you investigate all of your stocks and funds in one place.


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