5 Oppenheimer Mutual Funds to Power Your Portfolio

Advertisement

In mid-May, the International Customer Management Institute announced its 2014 Global Contact Center award winners. Oppenheimer Funds won in the best large contact center category over six other organizations, including Wells Fargo (WFC). Good customer service is a huge part of any successful business; mutual funds are no different.

oppenheimer-funds-mutual-fundsReaching out to potential clients, especially millennials, to help them understand the ins and outs of financial planning is critical to gaining their trust. Although good customer service doesn’t guarantee good financial advice, it’s indicative of a caring organization.

With that in mind, here are five mutual funds to own that are managed by Oppenheimer Funds:

Oppenheimer Funds — Domestic Equity

oppenheimer-funds-mutual-fundsWhenever I recommend multiple mutual funds from a particular fund company, I always try to ensure that there’s some sort of asset allocation plan in place so that if anyone were to go out and actually buy those funds, their portfolio would be appropriately diversified. Because I believe the global equity mutual funds offered by Oppenheimer Funds to be superior to their domestic equity mutual fund counterparts, I’m going to get a little unconventional here.

Instead of going with a large-cap mutual fund for the domestic equity portion of the portfolio, I’ve chosen the Oppenheimer Funds Main Street Small- & Mid-Cap Fund (OPMSX), which invests in small- and mid-cap companies. As of the end of March, OPMSX had 74 holdings invested across $3.8 billion in total net assets. The median market cap of its 74 holdings is $7.1 billion, making it more of a mid-cap mutual fund than small-cap.

According to Oppenheimer Funds, 93% of holdings in OPMSX differ from its benchmark — the Russell Midcap Index — making it truly an actively managed mutual fund. With an annual expense ratio of 1.10% (or $110 per $10,000 invested), you have active management for a reasonable price.

Oppenheimer Funds — Global Equity

oppenheimer-funds-mutual-fundsRated five stars by Morningstar, the Oppenheimer Funds International Growth Fund (OIGAX) has lit it up the last 18 years with George Evans at the controls since the very beginning. Oppenheimer Funds’ global equity team consists of eight portfolio managers with 184 years of combined experience along with seven analysts providing first-rate research. It’s not surprising why Oppenheimer Funds’ global mutual funds are so highly rated.

Evans and Robert Dunphy utilize MANTRA, an acronym that stands for mass affluence, new technology, restructuring and aging. Looking for foreign businesses that fit into one or more of these four criteria, the managers want companies that will grow at a pace faster than the world GDP and that possess sustainable competitive advantages. It sounds very simple, but let me assure you — it’s not. It requires a great deal of number crunching, combined with experienced intuition. For this reason, I view its annual expense ratio of 1.15% as a real bargain when it comes to global equity mutual funds.

Of all the good things OIGAX has going for it, I have to say its annual turnover of 12% is the one that really stands out. Turning its entire portfolio just once every eight years? You can’t do that without consistency of management. I’d invest on that information alone.

Oppenheimer Funds — Fixed Income

oppenheimer-funds-mutual-fundsWarren Buffett recommends that the average investor stick 10% of their portfolio in short-term government bonds and the rest in a low-cost index mutual fund. Well, if you’re reading this article you’re likely not a passive investor so I’m going to focus on the first part of his advice and recommend a fixed-income mutual fund that follows his short-term philosophy.

The mutual fund that fits the bill is the Oppenheimer Funds Limited-Term Government Fund (OPGVX), which invests in short-term bonds issued by the U.S. government and its agencies. Peter Strzalkowski has managed the $1.4 billion mutual fund since April 2009. The average duration of its 500-plus holdings is 1.98 years with a monthly yield of 1.73%.

If you invested $10,000 in the fund at inception in March 1986, you would have $42,007 as of the end of March. That’s not going to make you rich, but it can provide makeshift capital when the stock markets aren’t doing well and a premature sale of stock would be detrimental to your future wealth.

Oppenheimer Funds — Alternative

oppenheimer-funds-mutual-fundsWhile Oppenheimer Funds offers 12 different mutual funds catering to investors looking for alternative investments that tend not to be correlated to stock markets, I’m going to be somewhat conservative, opting for the Oppenheimer Funds Global Real Estate Fund (OGRAX). The devil you know is sometimes better than the devil you don’t. I definitely follow real estate far more closely than commodities and currencies.

OGRAX is managed by Cornerstone Real Estate Advisers LLC on Oppenheimer Funds’ behalf. Cornerstone manages or services $42 billion in global real estate assets for many companies including Oppenheimer. The company is just over a year old, and two CFAs from Cornerstone (David Wharmby and Henry Burgers) are interested in high quality real estate companies across the globe. With over 60% of the real estate market cap outside the U.S. it’s incumbent upon them to seek opportunities wherever they’re at regardless of geography. Currently, approximately 53% of its 71 holdings are located in the Americas, with the remainder spread across Asia and Europe.

Although untested, I do believe that Cornerstone and Oppenheimer Funds will succeed with this particular mutual fund because it follows an all-cap philosophy that will definitely outperform over time.

Oppenheimer Funds — Multi Asset

oppenheimer-funds-mutual-fundsMost of the multi-asset mutual funds offered by Oppenheimer Funds are basically fund-of funds, which isn’t a bad thing in itself. But because I’m trying to assemble a group of five mutual funds that wouldn’t look out of place in someone’s portfolio, it makes sense to go with a fund full of stocks and/or bonds. For this reason I’ve chosen the Oppenheimer Funds Global Allocation Fund (QVGIX).

This fund invests in multiple asset classes in various parts of the world providing the ultimate in diversification. While Morningstar considers its net expense ratio of 1.27% to be above average, I have to take exception with its conclusion. If you consider that 26% of the portfolio is invested in fixed-income investments, which I’ll assign an expense ratio of 0.8% (the same as OPGVX), the remaining 74% invested in equities comes with an expense ratio of 1.44%.

While that’s higher than the two equity funds recommended earlier, it’s no more expensive than OGRAX. More importantly, it provides an even split between U.S. and Non-U.S. stocks while also delivering a good chunk of fixed-income at the same time. If you want a single, balanced fund and nothing else, this is a good alternative.

As of this writing, Will Ashworth did not own a position in any of the aforementioned securities.

Will Ashworth has written about investments full-time since 2008. Publications where he’s appeared include InvestorPlace, The Motley Fool Canada, Investopedia, Kiplinger, and several others in both the U.S. and Canada. He particularly enjoys creating model portfolios that stand the test of time. He lives in Halifax, Nova Scotia.


Article printed from InvestorPlace Media, https://investorplace.com/2014/06/oppenheimer-funds-mutual-funds/.

©2024 InvestorPlace Media, LLC