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 According to Forbes magazine, Oakmark Mutual Funds had some of the best performing mutual funds in 2005. Oakmark's stated philosophy is to invest in value - that' something we like to hear. In terms of size, Oakmark is perhaps the smallest family of mutual funds reviewed to day, with an offering of only seven funds.
Oakmark Family of Mutual Funds
As mentioned, Oakmark's philosophy is one of value investing. Which means they are assembling mutual funds that consist of companies they believe are substantially undervalued. 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. What they wind up with is around 125 - 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 and Traditional IRAs as investment accounts for their mutual funds. They've also got a relationship with Harris Associates, which provides investment advice to wealthy individuals and institutional investors.
Oakmark Fee Structures and Returns
Morningstar ratings indicate that the expense ratios for funds at Oakmark are below average for both their domestic (1.20%) and international (1.34%) stock funds. The focus at Oakmark is clearly with stocks, with nearly 83% 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 November 2007, the average return for an Oakmark mutual fund over the last five years was 15.59% and 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 outstanding performers. Keep in mind that Oakmark only has seven funds, so to see such good performance 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 $14 billion in assets, this is the largest fund reviewed. As the name implies, the strategy is one of generating income. Over 54% of the fund's stock assets are invested in the manufacturing sector, with the energy industry (21%) leading the way. Top holdings include US Treasury Notes (5.125%) and XTO Energy. This no-load mutual fund has a minimum investment of $1,000 and an expense ratio of 0.86%. The average return for this fund over the last five years is 12.89% as of November 2007.
- Oakmark International Small Cap I (OAKEX) - This is the smallest fund of the three with a little over $1.3 billion in assets under management. The fund's focus is on small cap companies of foreign nations. The fund's investment emphasis is in the services sector (47.5%) and in particular the business services industry (15.89%). Top holdings include Julius Baer Holding Ltd., Benfield Grp Ltd. and MDS, Inc. The fund is currently closed to new investors and that's unfortunate because the average return for this fund over the last five years was 24.67%. (November 2007)
- Oakmark Global I (OAKGX) - The final mutual fund from Oakmark has just over $3 billion in assets and as the name states, the fund is comprised of global stocks. The fund is fairly evenly spread across the manufacturing and services sectors, however, nearly 20% of assets are in consumer goods. Top holdings include GlaxoSmithKline, Oracle Corporation, and XTO Energy, Inc. This no-load mutual fund has a minimum investment of $1,000 and an expense ratio of 1.18%. And this fund is another good performer when it comes to average return over the last five years at 20.30%. (November 2007)
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