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

Mutual Fund Report for OAKLX

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This story originally appeared on Zacks

Mutual Fund Equity Report fund seekers should not consider taking a look at Oakmark Select Investor (OAKLX) at this time. OAKLX possesses a Zacks Mutual Fund Rank of 4 (Sell), which is based on nine forecasting factors like size, cost, and past performance.

- Zacks

History of Fund/Manager

OAKLX finds itself in the Oakmark family, based out of Kansas City, MO. Oakmark Select Investor debuted in November of 1996. Since then, OAKLX has accumulated assets of about $1.94 billion, according to the most recently available information. William C. Nygren is the fund's current manager and has held that role since November of 1996.

Performance

Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund has delivered a 5-year annualized total return of 10.13%, and it sits 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 17.39%, 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, OAKLX's standard deviation comes in at 27.53%, compared to the category average of 16.46%. Looking at the past 5 years, the fund's standard deviation is 22.88% compared to the category average of 13.55%. This makes the fund more volatile than its peers over the past half-decade.

Risk Factors

With a 5-year beta of 1.35, 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 has generated a negative alpha over the past five years of -10.67, demonstrating that 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 principally on equities that are traded in the United States.

Right now, 87.7% of this mutual fund's holdings are stocks, with an average market capitalization of $337 billion. The fund has the heaviest exposure to the following market sectors:

  1. Finance
  2. Other
  3. Technology
  4. Non-Durable

Turnover is 20%, which means this fund makes fewer trades than comparable funds.

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, OAKLX is a no load fund. It has an expense ratio of 0.98% compared to the category average of 1.13%. Looking at the fund from a cost perspective, OAKLX 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, Oakmark Select Investor ( OAKLX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, worse downside risk, and lower fees, this fund 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. And don't forget, Zacks has all of your needs covered on the equity side too! Make sure to check out Zacks.com for more information on our screening capabilities, Rank, and all our articles as well.



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