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Is Oakmark Select Investor (OAKLX) a Strong Mutual Fund Pick Right Now?

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Any investors hoping to find a Mutual Fund Equity Report fund might consider looking past Oakmark Select Investor (OAKLX - Free Report) . OAKLX has a Zacks Mutual Fund Rank of 5 (Strong Sell), which is based on nine forecasting factors like size, cost, and past performance.

History of Fund/Manager

Oakmark is based in Kansas City, MO, and is the manager of OAKLX. Oakmark Select Investor debuted in November of 1996. Since then, OAKLX has accumulated assets of about $1.63 billion, according to the most recently available information. The fund's current manager, William C. Nygren, has been in charge of the fund since November of 1996.

Performance

Of course, investors look for strong performance in funds. This fund in particular has delivered a 5-year annualized total return of 7.35%, and is in the bottom 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 15.26%, 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. The standard deviation of OAKLX over the past three years is 25.66% compared to the category average of 16.35%. Over the past 5 years, the standard deviation of the fund is 23.56% compared to the category average of 14.62%. This makes the fund more volatile than its peers over the past half-decade.

Risk Factors

With a 5-year beta of 1.28, 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. OAKLX's 5-year performance has produced a negative alpha of -7.35, which means managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.

Holdings

Examining 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 largely on equities that are traded in the United States.

The mutual fund currently has 92% of its holdings in stocks, which have an average market capitalization of $275.01 billion. The fund has the heaviest exposure to the following market sectors:

  1. Finance
  2. Technology
  3. Non-Durable
  4. Other
With turnover at about 38%, this fund makes fewer trades than the average comparable fund.

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, OAKLX is a no load fund. It has an expense ratio of 0.98% compared to the category average of 1.10%. Looking at the fund from a cost perspective, OAKLX is actually cheaper than its peers.

Investors need to be aware that with this product, the minimum initial investment is $1,000; each subsequent investment has no minimum amount.

Bottom Line

Overall, Oakmark Select Investor ( OAKLX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively weak performance, worse downside risk, and lower fees, Oakmark Select Investor ( OAKLX ) looks like a somewhat weak choice for investors right now.

Don't stop here for your research on Mutual Fund Equity Report 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 OAKLX to its peers 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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