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 According to Forbes magazine, Oakmark Mutual Funds had some of the best performing mutual funds back in 2005. Oakmark's stated philosophy is to invest in value. That's an investment attitude we follow too. In terms of size, Oakmark is perhaps the smallest family of mutual funds reviewed to date, with an offering of only seven funds.
Oakmark Family of Mutual Funds
As mentioned, Oakmark's philosophy is one of value investing. This means the fund managers at Oakmark believe they are assembling mutual funds that consist of companies the market has been ignoring. That also means the kinds of companies you'll find in the Oakmark family of mutual funds are those they believe offer the investor long term value. If you're into market timing and short-term plays, these are not the funds you'll want in your investment portfolio.
The process Oakmark goes through in selecting securities is worth mentioning. They first take the entire "universe" of stocks and apply a series of investment screens. Next, they apply their value standards against the companies passing the initial screen. At the end of the screening process, they wind up with around 125 to 150 securities that are now eligible for consideration by their fund managers.
In addition to standard mutual fund investing, Oakmark gives investors the ability to consolidate and apply for Roth IRA accounts as well as Traditional IRAs as investment accounts for their mutual funds. They also have a relationship with Harris Associates, which provides investment advice to wealthy individuals and institutional investors.
Oakmark Fee Structures and Returns
Morningstar ratings indicate the expense ratios for funds at Oakmark are Average for both their domestic (1.25%) and international (1.37%) stock funds. The focus at Oakmark is clearly stocks, with nearly 50% of assets invested in domestic stock and international securities.
The minimum investment for Oakmark mutual funds is $1,000, and 100% of their funds are no-load mutual funds. As of May 2011, the average return for an Oakmark mutual fund over the last five years was 5.95%, which is an impressive achievement that appears to be aligned with the company's investment strategy.
Top Rated Funds at Oakmark
When we look at Oakmark, one thing really stands out. All three of their top rated funds are strong performers. Keep in mind that Oakmark only has seven funds, so to see good performance in these three funds tells us that their strategy of focusing on value is paying off. With that introduction, here are the top three performing mutual funds from Oakmark.
- Oakmark Equity Income I (OAKBX) - with nearly $21 billion in assets, this is the largest Oakmark fund reviewed. As the name implies, the strategy is one of generating income. The fund's assets are invested in the industrials, healthcare, and consumer defensive sectors of the economy. Top holdings include Cenovus Energy, Inc., Nestle SA ADR, and General Dynamics. This no-load mutual fund has a minimum investment of $1,000, and an expense ratio of 0.79%. The average return for this fund over the last five years is 6.97%. (May 2011)
- Oakmark International I (OAKIX) - with nearly $9 billion in assets, the fund's focus is on large cap companies of foreign nations. The fund's investment emphasis is on the financial services and consumer cylical sectors of the economy. Top holdings include Daiwa Securities Co., Ltd., Credit Suisse Group, and Rohm Co., Ltd. The fund is currently open to new investors, with a minimum investment of only $1,000. The average return for this fund over the last five years was 5.04%. (May 2011)
- Oakmark I (OAKMX) - the final mutual fund from Oakmark has just over $4.3 billion in assets. The fund's investment strategy is large blend, with investments spread across the consumer cyclical, financial services and technology sectors of the economy. Top holdings include Comcast Corporation, Texas Instruments, Inc., and TE Connectivity Ltd. This no-load mutual fund has a minimum investment of $1,000, and an expense ratio of 1.11%. This fund is another solid performer, with an average return over the last five years of 5.16%. (May 2011)
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