Is Oakmark International Investor (OAKIX) a Strong Mutual Fund Pick Right Now?
There are plenty of choices in the Non US - Equity category, but where should you start your research? Well, one fund that may not be worth investigating is Oakmark International Investor (OAKIX). OAKIX carries a Zacks Mutual Fund Rank of 4 (Sell), which is based on nine forecasting factors like size, cost, and past performance.
We classify OAKIX in the Non US - Equity category, which is an area rife with potential choices. Investing in companies outside the United States is how Non US - Equity funds set themselves apart, since global funds tend to keep a good portion of their portfolio stateside. Many of these funds like to allocate across emerging and developed markets, and will often focus on all cap levels.
History of Fund/Manager
Oakmark is based in Kansas City, MO, and is the manager of OAKIX. Oakmark International Investor made its debut in September of 1992, and since then, OAKIX has accumulated about $14.92 billion in assets, per the most up-to-date date available. David G. Herro is the fund's current manager and has held that role since September of 1992.
Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund carries a 5-year annualized total return of 1.63%, 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 6.87%, which places it in the middle 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 10.12%, the standard deviation of OAKIX over the past three years is 15.78%. Over the past 5 years, the standard deviation of the fund is 16.5% compared to the category average of 10.41%. This makes the fund more volatile than its peers over the past half-decade.
Investors cannot discount the risks to this segment though, as it is always important to remember the downside for any potential investment. In OAKIX's case, the fund lost 54.94% in the most recent bear market and outperformed its peer group by 4%. This could mean that the fund is a better choice than comparable funds during a bear market.
Investors should not forget about beta, an important way to measure a mutual fund's risk compared to the market as a whole. OAKIX has a 5-year beta of 1.08, which means it is likely to be more 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. With a negative alpha of -9.01, managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
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, OAKIX is a no load fund. It has an expense ratio of 1.03% compared to the category average of 1.20%. So, OAKIX is actually cheaper than its peers from a cost perspective.
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 International Investor ( OAKIX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively weak performance, worse downside risk, and lower fees, Oakmark International Investor ( OAKIX ) looks like a somewhat weak choice for investors right now.
For additional information on this product, or to compare it to other mutual funds in the Non US - Equity, 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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