OAKCX.
I'm going to liquidate a couple of tiny bond ETF holdings. Considering redeploying into OAKCX.
What shouldn't I like about this fund? It's rather new. $1M (yes) in AUM. Started-up in January of 2022. Listed as "Core-plus."
The mini-canned interview on the Oakmark website tells me the Managers utilize a combination of Quant and Quality in choosing what to acquire. And HARRIS is involved, somehow. Sub-advisors? I dunno.
https://oakmark.com/our-funds/oakmark-bond/Up +4.04% since inception on 1/28/22.
Ork! M* performance statistics do not match what their own chart tells me. Figures, eh?
WSJ website shows -13% in share price since inception, but that excludes dividends.
WSJ: YTD +1.68%.
Can't find apples to apples anywhere. Crud.
Comments
YTD: 1.86%
1 year: -1.45%
Since inception: -5.92%
(Mousing over perfomance barchart on Oakmark site)
Why chase new bond funds from Harris?
OAKCX, Inception 1/28/22
M* shows 1/28/22-6/29/23 -7.99%
Yahoo Finance Adjusted-Prices 1/31/22-6/29/23 -9.02% (It doesn't accept prior dates)
StockCharts - OAKCX not recognized
”Oakmark Bond Fund earns an Average Process Pillar rating. The investment strategy as stated in the fund's prospectus is as follows: The investment seeks to maximize both current income and total return, consistent with prudent investment and principal protection management. The fund invests primarily in a diversified portfolio of bonds and other fixed-income securities. Under normal market conditions, and it invests at least 25% of its assets in investment-grade fixed-income securities and may invest up to 35% of its assets in below investment-grade fixed-income securities (commonly known as "high-yield" or "junk bonds").
“The main contributor to the rating is the firm's five-year retention rate of 82% over the period. Management team experience, which averages 16 years at this fund, also supports the rating. Lastly, the process is limited by the parent firm's five-year risk-adjusted success ratio of 47%. The measure indicates the percentage of a firm's funds that survived and outperformed their respective category's median Morningstar Risk-Adjusted Return for the period. The parent's subpar success ratio suggests that the firm could do better across its fund lineup.
“This strategy has a 3.7% 12-month yield, higher than its average peer's 3.4%. Typically, higher yields come at the cost of higher credit risk. Rated on Jun 23, 2023 Published on Jun 23, 2023”
* AUM rarely bothers me unless below 50 M putting a fund at risk of closure. All else being equal I prefer smaller AUMs.
If it's me, looking at this fund's performance since inception, and knowing that I've never been interested in owning ANY Oakmark bond fund (see YBB's comments) since starting to invest in 1980, my question would be,
"What should I like about this fund?"
And my answer would be,
"Nothing."
AUM=96.6 million
Performance YTD in category Percentile Rank = 79 and lagging. One year is in the top 10, not bad.
I would use a generic fund like DODIX.
As Trader, I can find much better options but none are in the Intermediate Core-Plus Bond category.
That’s because bond funds are nearly impossible to compare. Too many moving parts: Credit quality, average duration, average maturity, countries & regions included, dollar hedged or non-hedged (if outside the U.S.) Throw into that sauce the manger’s philosophy, his / her appetite for risk, prior experience and their overall view of the domestic or global macro picture. One big attribute you do have control over is the ER. That’s a bigger factor with fixed income funds than with stock funds generally because the expected return is lower and that ER takes a bigger bite out of the expected return. That .74% doesn’t look cheap on the surface, but I don’t know enough about how the fund invests to say it’s out of line. hedging / short selling / use of leverage / investing in lower quality bonds all cost more (if it so engages). International investing, if included, also increases cost.
Look for a website that shows things like average duration and the dispersion among credit qualities ranging from AAA (government backed) all the way down to C (in default). Tells you a lot about the risk (and is one good way to compare different funds). I think M* will display that if you click the “holdings” tab. And I’m pretty sure Fido’s website will as well.
Past performance? Was that during the 30+ year bond bull market dating back to Paul Volker? Or are we talking about the bear market of the past 2 years when when rates stabilized and than spiked sharply? Or maybe we’re looking at some “combo” performance figure including portions of both the bull and bear markets …
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@Crash said, ”And HARRIS is involved, somehow. Sub-advisors?”
Harris Associates, Chicago, operates the Oakmark Funds. I believe Harris was independent at one time. For many years now it has been owned by the giant NATIXIS of France. Nothing wrong with Natixis. Well regarded, but a bit pricey. Many of their funds are front-loaded. I’ve owned some funds under the Natixis umbrella over the years - most recently GATEX, which I sold more than a year ago.
”Harris Associates L.P. is a Chicago-based investment company that manages $86 billion[1] in assets as of September 30, 2022. Harris manages long-only U.S. equity, international equity, and global equity strategies which are offered through its mutual fund company, the Oakmark Funds, and other types of vehicles. Harris is wholly owned by Natixis Investment Managers, an American-French financial services firm that is principally owned by BPCE. Harris Associates retains full control of investment decisions, investment philosophy, and day-to-day operations.”
Wikipedia: https://en.wikipedia.org/wiki/Harris_Associates
I don't really want to buy the same things in the taxable portfolio that I already own in the tax-sheltered portfolio; that's why I was looking at OAKCX. It would have been a new fund for me, entirely.
I'm with TRP brokerage. They don't want to deal with other fund families' funds unless you throw a minimum of $5k into it, to start. That's double the usual threshold. Stinky poopy.
I already own some TRP junk: TUHYX and PRCPX. The former is much bigger than the latter. About double. And both are doing surprisingly well in my opinion, of late. TUHYX has an ETF version, but the numbers are not so good as the other two OEFs. Perhaps I'll choose one of those two, and grow it as a separate sleeve, in the taxable account.
I went looking at one of my old standby funds, on my long-term watch-list: DODIX, suggested above. Can't even get past the "Kaptcha" stupidity. Something is blocking the words which tell me which stoopid pictures to click on. I could call. But when these outfits make it so damn difficult to get hold of basic information, they can just go screw. There's no security involved, protecting anyone's account. It's just a request for info. Jayzuz.
A 5K minimum is a lot for those of us that throw nickles around like man-hole covers.
But M* home bias for IL is genuine. It's mostly OK with IL and Chicago bonds. M* also didn't lift a finger a few years ago when IL 529 was being mismanaged by OppenheimerFunds. I actually asked several M* authors to comment on that fiasco, but not a word out of M* on that. I suspect that M* Founder and Exec Chairman Joe Mansueto is well connected locally and likes his good local billionaire reputation.
https://en.wikipedia.org/wiki/Joe_Mansueto
So much about bonds / bond funds relates to the macro winds. Get some heavy inflation and sharply rising rates over a multi-year span and they’ll stagnate or tank. To the contrary, in the event of a deep recession - or depression - they should excel as interest rates plummet. (“Ya pays your money and ya takes your chances.”)
Yogi’s above mention of Oppenheimer funds is a good reminder of what can happen to a “high returning” bond fund (reaching for yield) when managers over-reach and make bad macro calls as well. That’s why simply comparing performance for 1, 3, 5 years isn’t enough. How did they achieve those numbers? What risks were undertaken?