Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.
As an investor in Oakmark funds for the past 20 years or so, specifically the international funds, I am not happy to hear this. Both OAKIX and OAKEX performance has suffered recently and I am fairly certain that asset bloat with OAKIX at 23.5 billion AUM and OAKEX at 2.4 billion AUM has been a factor on this poor performance. OAKEX in particular hasn't beaten it arrivals for last 1 yr, 3 yr, 5yr , or 10 yr periods. But I believed in the management and stuck with them all the years albeit cutting back on my exposure to OAKEX to about 25% of my original investment. But I think this may finally bring me to sell the remaining holdings in the fund. I originally invested in OAKEX to get small cap international value/blend exposure which was not offered in my 401K selections which only had foreign LC and Emerging Market as investment options. But now I believe their are several better options in the SC International arena. Funds such as ICMIX, ISMRX, and SBSHX all appear to be more compelling options in the international SC area with ICMIX probably being the standout option IMHO. So while I am glad that Oakmark believes that have some many good investment options, I am saying good bye to at least to OAKEX. So be warned since I am planning on selling OAKEX next year they probably return to stellar performance against their peers - just my luck. Disclosure I currently own 4 Oakmark funds - OAKLX, OAKWX, OAKIX, and OAKEX.
They seem generally high-beta relative to their categories, which loses my interest immediately. Recent mediocre performance (2- and 3- M* rated) With high E/Rs. -- And so they are allowing to give them my money? Well, yippee!!
With the proliferation of low-cost, foreign-ETF vehicles, these things hold no particular attraction for me. I see no particular reason to help pay for David Herro's next Alfa Romeo or Lamborghini.
As an investor in Oakmark funds for the past 20 years or so, specifically the international funds, I am not happy to hear this. Both OAKIX and OAKEX performance has suffered recently and I am fairly certain that asset bloat with OAKIX at 23.5 billion AUM and OAKEX at 2.4 billion AUM has been a factor on this poor performance. OAKEX in particular hasn't beaten it arrivals for last 1 yr, 3 yr, 5yr , or 10 yr periods. But I believed in the management and stuck with them all the years albeit cutting back on my exposure to OAKEX to about 25% of my original investment. But I think this may finally bring me to sell the remaining holdings in the fund. I originally invested in OAKEX to get small cap international value/blend exposure which was not offered in my 401K selections which only had foreign LC and Emerging Market as investment options. But now I believe their are several better options in the SC International arena. Funds such as ICMIX, ISMRX, and SBSHX all appear to be more compelling options in the international SC area with ICMIX probably being the standout option IMHO. So while I am glad that Oakmark believes that have some many good investment options, I am saying good bye to at least to OAKEX. So be warned since I am planning on selling OAKEX next year they probably return to stellar performance against their peers - just my luck. Disclosure I currently own 4 Oakmark funds - OAKLX, OAKWX, OAKIX, and OAKEX.
I'm not that familiar with Intrepid... What is it that you like so much about them, other than performance?
I am a longer-term owner of OAKEX (as well as OAKBX). I bought OAKEX at a time when it was one of the few international small cap funds still opened. It has consistently underwhelmed. I do believe OAKIX has done much better relative to its peer group.
Yeah, there's a bit of funky stuff going on at Oakmark in recent memory -- like the sort-of-closing then the "...whoops, its not closed after all" event with OAKBX. Big fan of McGregor, but that was a head-scratcher. There's been a few others. Not sure what is up with this (although arguably international is still undervalued relative to domestic).
Took a shot at ISMRX shortly after it was mentioned by David. Hanging on to all my Grandeur Peak funds, but sold Matthews Small Asian because of overlap.
I believe Snowball has written extensively about their virtues.
He's featured ICMAX (April, 2016) and ICMUX (Mar. 2014), also adding a piece this month about ICMAX.
The firm is doing a conference call Aug. 4. You can submit questions in advance.
The fund purchases companies with at least a 20% discount to FV, holds 15-50 securities (currently 30), and, like the other funds at Intrepid, emphasizes absolute return and will hold cash when it cannot find suitable investments.
I spoke with Ben Franklin, PM of ICMIX, earlier this month about how the fund is presently constituted and about some of the portfolio holdings. While the product is an all-cap one, the market cap is currently <400m with 95% in small and micro cap international companies because those areas offer the best value, he says. Currently, 46% of the holding are in Europe. He's reduced cash from around 23% at the end of Q1 to 13% at the end of 2Q and apparently found some enduring values somewhere! (my opinion) especially when the domestic "EV/EBITDA multiple on the Russell 2000 Index is 20X, while it was closer to 12x at the prior two market peaks (March 2000 and July 2007," according to Jayme Wiggins at Intrepid.
Despite its all cap mandate, he expects that the fund will continue to emphasize international small cap value --the area he says that he came to prefer as a PM since joining Intrepid.
The fund complements other micro/small cap but dissimilar, distinctive funds that I own, e.g., GPMCX.
Selling OAKBX was good for my portfolio. M* had this to say about the fund very recently:
"Silver-rated Oakmark Equity & Income (OAKBX) has had only middling results since Ed Studzinski retired in late 2011…"
At the time of Mr. Studzinski's retirement, I commented here that I thought Oakmark was not "transparent" (to use some jargon) about the management change. I believe others have noted unusual manager changes at the company (Rob Taylor, for example). Now with Mr. Studzinski writing about the MF industry on our side of the street with more-than-healthy skepticism, I'm glad my previous decisions to sell several Oakmark funds were not wrong-headed.
Comments
-- And so they are allowing to give them my money? Well, yippee!!
With the proliferation of low-cost, foreign-ETF vehicles, these things hold no particular attraction for me. I see no particular reason to help pay for David Herro's next Alfa Romeo or Lamborghini.
Yeah, there's a bit of funky stuff going on at Oakmark in recent memory -- like the sort-of-closing then the "...whoops, its not closed after all" event with OAKBX. Big fan of McGregor, but that was a head-scratcher. There's been a few others. Not sure what is up with this (although arguably international is still undervalued relative to domestic).
The firm is doing a conference call Aug. 4. You can submit questions in advance.
The fund purchases companies with at least a 20% discount to FV, holds 15-50 securities (currently 30), and, like the other funds at Intrepid, emphasizes absolute return and will hold cash when it cannot find suitable investments.
I spoke with Ben Franklin, PM of ICMIX, earlier this month about how the fund is presently constituted and about some of the portfolio holdings. While the product is an all-cap one, the market cap is currently <400m with 95% in small and micro cap international companies because those areas offer the best value, he says. Currently, 46% of the holding are in Europe. He's reduced cash from around 23% at the end of Q1 to 13% at the end of 2Q and apparently found some enduring values somewhere! (my opinion) especially when the domestic "EV/EBITDA multiple on the Russell 2000 Index is 20X, while it was closer to 12x at the prior two market peaks (March 2000 and July 2007," according to Jayme Wiggins at Intrepid.
Despite its all cap mandate, he expects that the fund will continue to emphasize international small cap value --the area he says that he came to prefer as a PM since joining Intrepid.
The fund complements other micro/small cap but dissimilar, distinctive funds that I own, e.g., GPMCX.
http://www.intrepidcapitalfunds.com/media/pdfs/TWST061016.pdf
"Silver-rated Oakmark Equity & Income (OAKBX) has had only middling results since Ed Studzinski retired in late 2011…"
At the time of Mr. Studzinski's retirement, I commented here that I thought Oakmark was not "transparent" (to use some jargon) about the management change. I believe others have noted unusual manager changes at the company (Rob Taylor, for example).
Now with Mr. Studzinski writing about the MF industry on our side of the street with more-than-healthy skepticism, I'm glad my previous decisions to sell several Oakmark funds were not wrong-headed.