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Is Oppenheimer Gold & Special Mineral A (OPGSX) a Strong Mutual Fund Pick Right Now?


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On the lookout for a Sector - Precious Metal fund? Starting with Oppenheimer Gold & Special Mineral A OPGSX is one possibility. OPGSX has a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.

Objective

OPGSX is classified in the Sector - Precious Metal segment by Zacks, an area full of potential. Sector - Precious Metal mutual funds normally invest in stocks focused on the mining and production of precious metals such as gold, silver, platinum, and palladium. Often times, stocks here trade as leveraged bets of the underlying commodity, so they are tied to the prices of the metal, and can be quite volatile, too.

History of Fund/Manager

Oppenheimer is based in Denver, CO, and is the manager of OPGSX. Oppenheimer Gold & Special Mineral A made its debut in July of 1983, and since then, OPGSX has accumulated about $553.98 million in assets, per the most up-to-date date available. The fund is currently managed by Shanquan Li who has been in charge of the fund since July of 1997.

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 -9.97%, 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 10.24%, 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 OPGSX over the past three years is 37.2% compared to the category average of 13.75%. Looking at the past 5 years, the fund's standard deviation is 37.29% compared to the category average of 37.79%. This makes the fund less volatile than its peers over the past half-decade.

Risk Factors

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 the most recent bear market, OPGSX lost 45.9% and underperformed comparable funds by 9.84%. This means that the fund could possibly be a worse choice than its peers during a down market environment.

Even still, the fund has a 5-year beta of 0.1, so investors should note that it is hypothetically 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. With a negative alpha of -5.34, managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.

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, OPGSX is a load fund. It has an expense ratio of 1.15% compared to the category average of 1.38%. Looking at the fund from a cost perspective, OPGSX 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 Gold & Special Mineral A has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, this fund looks like a good potential choice for investors right now.

For additional information on this product, or to compare it to other mutual funds in the Sector - Precious Metal, make sure to go to www.zacks.com/funds/mutual-funds 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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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.



This article appears in: Investing , Mutual Funds
Referenced Symbols: OPGSX


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