Having trouble finding an Allocation Balanced fund? Well, Oakmark Equity and Income Investor (OAKBX) would not be a good potential starting point right now. OAKBX carries a Zacks Mutual Fund Rank of 4 (Sell), which is based on nine forecasting factors like size, cost, and past performance.
OAKBX is one of many Zacks' Allocation Balanced mutual funds to pick from. Allocation Balanced funds seek to invest in a balance of asset types, like stocks, bonds, and cash, though including precious metals or commodities is not unusual; these funds are mostly categorized by their respective asset allocation. Investors utilize Allocation Balanced funds as a way to get a good start with diversified mutual funds, as well as for core holdings in a portfolio of funds.
History of Fund/Manager
OAKBX is a part of the Oakmark family of funds, a company based out of Kansas City, MO. The Oakmark Equity and Income Investor made its debut in November of 1995 and OAKBX has managed to accumulate roughly $5.50 billion in assets, as of the most recently available information. A team of investment professionals is the fund's current manager.
Investors naturally seek funds with strong performance. This fund carries a 5-year annualized total return of 5.72%, and it sits in the bottom third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 2.19%, which places it in the bottom 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, OAKBX's standard deviation comes in at 15.04%, compared to the category average of 13.47%. The standard deviation of the fund over the past 5 years is 12.57% compared to the category average of 11.71%. This makes the fund more volatile than its peers over the past half-decade.
Investors should not forget about beta, an important way to measure a mutual fund's risk compared to the market as a whole. OAKBX has a 5-year beta of 0.8, which means it is likely to be less volatile than the market average. 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. OAKBX has generated a negative alpha over the past five years of -5.17, demonstrating that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
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, OAKBX is a no load fund. It has an expense ratio of 0.83% compared to the category average of 0.89%. OAKBX is actually cheaper than its peers when you consider factors like cost.
Investors should also note that the minimum initial investment for the product is $1,000 and that each subsequent investment has no minimum amount.
Overall, Oakmark Equity and Income Investor ( OAKBX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively weak performance, average downside risk, and lower fees, Oakmark Equity and Income Investor ( OAKBX ) looks like a somewhat weak choice for investors right now.
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