U.S. Markets closed

Is Oppenheimer Developing Markets A (ODMAX) a Strong Mutual Fund Pick Right Now?

Zacks Equity Research
Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.

Any investors hoping to find a Non US - Equity fund could think about starting with Oppenheimer Developing Markets A (ODMAX). ODMAX holds a Zacks Mutual Fund Rank of 2 (Buy), which is based on nine forecasting factors like size, cost, and past performance.

Objective

ODMAX is classified in the Non US - Equity area by Zacks, and this segment is full of potential. Non US - Equity funds focus their investments on companies outside of the United States, which is an important distinction since global mutual funds tend to keep a sizable portion of their portfolio based in the United States. Most of these funds will allocate across emerging and developed markets, and can often extend across cap levels too.

History of Fund/Manager

ODMAX finds itself in the Oppenheimer family, based out of Denver, CO. Oppenheimer Developing Markets A debuted in November of 1996. Since then, ODMAX has accumulated assets of about $4.96 billion, according to the most recently available information. Justin Leverenz is the fund's current manager and has held that role since May of 2007.

Performance

Investors naturally seek funds with strong performance. This fund in particular has delivered a 5-year annualized total return of 3.44%, and is in the middle 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 11.34%, 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 9.89%, the standard deviation of ODMAX over the past three years is 12.31%. Looking at the past 5 years, the fund's standard deviation is 14.33% compared to the category average of 9.82%. 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. In the most recent bear market, ODMAX lost 57.32% and outperformed its peer group by 1.14%. This might suggest that the fund is a better choice than its peers during a bear market.

Investors should note that the fund has a 5-year beta of 0.9, so it is likely going to be less 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. ODMAX's 5-year performance has produced a negative alpha of -5.46, which means 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, ODMAX is a load fund. It has an expense ratio of 1.28% compared to the category average of 1.21%. Looking at the fund from a cost perspective, ODMAX is actually more expensive 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 Developing Markets A ( ODMAX ) has a high Zacks Mutual Fund rank, similar performance, average downside risk, and higher fees compared to its peers.

Don't stop here for your research on Non US - Equity 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 ODMAX to its peers as well for additional information. If you are more of a stock investor, make sure to also check out our Zacks Rank, and our full suite of tools we have available for novice and professional investors alike.


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Get Your Free (ODMAX): Fund Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research