All Cap Value fund seekers should not consider taking a look at Oakmark Investor (OAKMX) at this time. OAKMX possesses a Zacks Mutual Fund Rank of 4 (Sell), which is based on nine forecasting factors like size, cost, and past performance.
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
OAKMX finds itself in the Oakmark family, based out of Kansas City, MO. Since Oakmark Investor made its debut in August of 1991, OAKMX has garnered more than $9.03 billion in assets. The fund is currently managed by William C. Nygren who has been in charge of the fund since March of 2000.
Of course, investors look for strong performance in funds. OAKMX has a 5-year annualized total return of 6.4% 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 8.99%, 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 9.98%, the standard deviation of OAKMX over the past three years is 15.86%. Over the past 5 years, the standard deviation of the fund is 15.06% compared to the category average of 10.14%. This makes the fund more volatile than its peers over the past half-decade.
It's always important to be aware of the downsides to any future investment, so one should not discount the risks that come with this segment. In OAKMX's case, the fund lost 49.41% 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.
Investors should note that the fund has a 5-year beta of 1.2, 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. The fund has produced a negative alpha over the past 5 years of -4.84, which shows that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
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 primarily on equities that are traded in the United States.
The mutual fund currently has 94.13% of its holdings in stocks, which have an average market capitalization of $144.51 billion. The fund has the heaviest exposure to the following market sectors:
- Industrial Cyclical
With turnover at about 58%, this fund is making fewer trades than its comparable peers.
As competition heats up in the mutual fund market, costs become increasingly important. Compared to its otherwise identical counterpart, a low-cost product will be an outperformer, all other things being equal. Thus, taking a closer look at cost-related metrics is vital for investors. In terms of fees, OAKMX is a no load fund. It has an expense ratio of 0.91% compared to the category average of 1.09%. So, OAKMX is actually cheaper than its peers from a cost perspective.
While the minimum initial investment for the product is $1,000, investors should also note that there is no minimum for each subsequent investment.
Overall, Oakmark Investor ( OAKMX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, Oakmark Investor ( OAKMX ) looks like a somewhat weak choice for investors right now.
For additional information on the All Cap Value area of the mutual fund world, make sure to check out www.zacks.com/funds/mutual-funds. There, you can see more about the ranking process, and dive even deeper into OAKMX too 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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