Oakmark Fund

Scorecard
5 / 5 Stars
Lipper
5 5 5 4 3
Zacks Investment Research
4 (Sell)
Standard & Poor's
5 / 5 Stars
TheStreet.com
A+ (Buy)

#20 in Large Blend

U.S. News evaluated 492 Large Blend Funds. Our list highlights the top-rated funds for long-term investors based on the ratings of leading fund industry researchers.

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Performance

The fund has returned 28.18 percent over the past year, 18.05 percent over the past three years, 25.46 percent over the past five years, and 8.90 percent over the past decade. 

Trailing Returns Updated 03.31.2014
Year to date 2.3%
1 Year 28.2%
3 Years (Annualized) 18.1%
5 Years (Annualized) 25.5%
10 Years (Annualized) 8.9%

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Summary

The Oakmark Fund, for better or worse, has rarely had a mediocre year.

As of April 22, 2014, the fund has assets totaling almost $13.44 billion invested in 56 different holdings. Its portfolio consists primarily of shares of large companies.

After rocketing to a 45 percent return in 2009, the fund slowed down quite a bit last year, underperforming both the S&P 500 and Morningstar's large-blend category. Still, the fund's stellar 2009, combined with some good defense in 2008, translated into top-notch trailing three-year returns as of the end of last year. One aspect that sets this fund apart is its focus on media companies. In particular, television companies such as Comcast, Viacom, and DirecTV all occupy spots in the fund's portfolio. Overall, management runs a moderately compact portfolio, but no one holding currently dominates. By spreading out the fund's assets relatively evenly, management avoids the pain that accompanies a large bet turning out poorly. The fund has returned 28.18 percent over the past year and 18.05 percent over the past three years.

Historically, this fund has tended toward the extremes, but it has rarely had a mediocre year. Since 2000, the fund has finished in the bottom 30 percent of its Morningstar category in five separate years. Meanwhile, it has finished in the top 15 percent four times. As of the end of the first quarter, the fund's trailing 10-year returns beat those of the S&P 500 by more than two percentage points per year. The fund has returned 25.46 percent over the past five years and 8.90 percent over the past decade. 

Investment Strategy

According to the fund's prospectus: "The Fund uses a value investment philosophy in selecting equity securities. This investment philosophy is based upon the belief that, over time, a company's stock price converges with the company's intrinsic or true business value. By 'true business value,' we mean an estimate of the price a knowledgeable buyer would pay to acquire the entire business. We believe that investing in securities priced significantly below their true business value presents the best opportunity to achieve the Fund's investment objective."

Role in Portfolio

Morningstar calls this a "core" holding. 

Management

William Nygren and Kevin Grant manage the fund.

Fees

Oakmark Fund has an expense ratio of 0.95 percent. 

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Risk

Like all stock funds, this one comes with some risks.

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Fund Opinions

The fund's Value Line Overall Rank, a measure of risk-adjusted performance and relative growth in fund returns, is 2 on a scale of 1 to 5, with 1 being the best and 5 the worst.

Value Line 2014-04-10

The fund's Value Line Growth Persistence rank, which awards funds that consistently outperform their broad universes, is 3 for one year, 2 for five years, and 2 for 10 years. Scores are on a 1 to 5 scale, with 1 being the best and 5 the worst.

Value Line 2014-04-10

The fund's Value Line Risk Rank, a measure of volatility, is 3 on a scale of 1 to 5, with 1 being the least volatile and 5 the most.

Value Line 2014-04-10

"[Fund manager Bill Nygren] is a thoughtful, long-term, shareholder-oriented investor. While we expect that the more concentrated Oakmark Select will outperform over long time periods, the fund can be volatile (on both the upside and the downside) as we have seen. For those investors who are uncomfortable with the potential volatility associated with a fund as concentrated as Oakmark Select, Oakmark Fund [symbol OAKMX] is an excellent vehicle for gaining access to Nygren's stock-picking skills."

Litman Gregory 2010-06-30