Technology

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

Having trouble finding a Non US - Equity fund? Oppenheimer Developing Markets A (ODMAX) is a potential starting point. ODMAX has 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 is a part of the Invesco family of funds, a company based out of Kansas City, MO. Since Oppenheimer Developing Markets A made its debut in November of 1996, ODMAX has garnered more than $4.75 billion in assets. The fund's current manager, Justin Leverenz, has been in charge of the fund since May of 2007.

Performance

Obviously, what investors are looking for in these funds is strong performance relative to their peers. ODMAX has a 5-year annualized total return of 2.39% and is in the bottom 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 7.6%, 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 ODMAX over the past three years is 13.49% compared to the category average of 10.27%. Looking at the past 5 years, the fund's standard deviation is 14.55% compared to the category average of 10.53%. This makes the fund more volatile than its peers over the past half-decade.

Risk Factors

One cannot ignore the volatility of this segment, however, as it is always important for investors to remember the downside to any potential investment. ODMAX lost 57.31% in the most recent bear market and outperformed its peer group by 1%. This could mean that the fund is a better choice than comparable funds during a bear market.

Even still, the fund has a 5-year beta of 0.89, so investors should note that it is hypothetically less volatile than the market at large. 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. The fund has produced a negative alpha over the past 5 years of -6.33, which shows that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.

Expenses

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, ODMAX is a load fund. It has an expense ratio of 1.28% compared to the category average of 1.24%. So, ODMAX is actually more expensive than its peers from a cost perspective.

This fund requires a minimum initial investment of $1,000, while there is no minimum for each subsequent investment.

Bottom Line

Overall, Oppenheimer Developing Markets A ( ODMAX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively weak performance, average downside risk, and higher fees, Oppenheimer Developing Markets A ( ODMAX ) looks like a good potential choice for investors right now.

Your research on the Non US - Equity segment doesn't have to stop here. You can check out all the great mutual fund tools we have to offer by going to www.zacks.com/funds/mutual-funds to see the additional features we offer 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.


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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.

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