Oakmark is a mutual fund company, not a single fund
Oakmark is the name of an investment company that manages multiple mutual funds. When you hear "Oakmark," you are hearing the brand name of the firm — similar to how Vanguard or Fidelity are company names. The actual funds you can invest in are called things like Oakmark Fund, Oakmark Select Fund, Oakmark International Fund, and Oakmark Equity and Convertible Fund. Each one is a separate mutual fund with its own holdings, fees, and investment strategy.
Oakmark was founded in 1987 and is based in Chicago. The company is known for a value investing approach, meaning the fund managers look for stocks they believe are trading below what they are actually worth. This is different from funds that track an index or use other strategies. If you own an Oakmark mutual fund, you own a piece of a pool of money that a team of managers invests according to that value philosophy.
Key Takeaways
- Oakmark is a mutual fund company that runs several different funds, each with its own name, strategy, and fee structure.
- All Oakmark funds use a value investing approach, but they differ in what types of stocks they hold — some focus on large U.S. companies, others on smaller companies or international stocks.
- You buy shares in a specific Oakmark fund through a brokerage account, and the price per share changes daily based on the value of the stocks the fund holds.
- Oakmark funds charge expense ratios (annual fees) that vary by fund, and some have minimum investment amounts that range from $1,000 to $2,500 for individual investors.
The different Oakmark funds and what they invest in
Oakmark operates several distinct funds, and the name tells you something about where the money goes. Oakmark Fund, the original and largest, invests in large U.S. companies that the managers believe are undervalued. Oakmark Select Fund is smaller and more concentrated, holding fewer stocks but in the same value style. Oakmark International Fund invests in stocks outside the United States, applying the same value philosophy to foreign companies.
There is also Oakmark Equity and Convertible Fund, which mixes stocks with convertible bonds — a type of bond that can be converted into stock. Each fund has a different risk profile and is designed for different investor goals. Before you invest in any Oakmark fund, you need to know which specific fund you are buying into, because they behave differently and charge different fees.
How Oakmark funds charge fees
Like all mutual funds, Oakmark funds charge an expense ratio — an annual percentage fee taken from the fund's assets to pay for management, administration, and other costs. This fee is deducted automatically and does not show up as a separate bill. The expense ratio varies by fund. For example, Oakmark Fund's expense ratio is different from Oakmark Select Fund's, and both differ from the International Fund.
You should also know whether a fund has a load — an upfront sales charge when you buy in. Some Oakmark funds are no-load, meaning you pay no sales commission. Others may have loads depending on how you purchase them. Check the fund's prospectus or fact sheet before you invest to see the exact fees. Over time, even a small difference in fees can affect how much money you have, so it is worth comparing.
Minimum investments and how to buy Oakmark funds
Most Oakmark funds have a minimum initial investment, typically between $1,000 and $2,500 for individual investors. Some brokerages may waive or lower this minimum if you set up automatic monthly contributions. You cannot buy Oakmark funds directly from Oakmark itself — you buy them through a brokerage account, which can be at a bank, an online broker like Fidelity or Charles Schwab, or a financial advisor's firm.
When you buy a mutual fund share, you get one share price for the entire day, calculated after the market closes. This is different from stocks, where the price changes throughout the day. If you buy an Oakmark fund at 2 p.m., you will pay the closing price from that day, not the price at 2 p.m. The same rule applies when you sell — you get the closing price on the day you place the order.
Oakmark funds versus index funds and other strategies
Oakmark funds are actively managed, meaning a team of people makes decisions about which stocks to buy and sell. This is different from an index fund, which simply holds all the stocks in a particular index like the S&P 500 and does not try to beat the market. Active management costs more — Oakmark's expense ratios are higher than most index funds — and there is no may provide that the managers will outperform the index.
Some investors prefer active management because they believe skilled managers can find undervalued stocks and earn better returns. Others prefer index funds because they cost less and have a long track record of matching market performance. This is a choice you make based on your own beliefs about investing and your tolerance for fees. Oakmark's value approach has worked well in some periods and underperformed in others, just like any active strategy.
What to check before you invest in an Oakmark fund
Before you buy any Oakmark fund, read the fund's prospectus — a legal document that describes the fund's strategy, risks, fees, and past performance. The prospectus will tell you the expense ratio, any loads, the minimum investment, and what types of stocks the fund holds. You can find this on Oakmark's website or through your brokerage.
Also look at the fund's fact sheet, which is a shorter summary of the same information. Check how long the current manager has been running the fund, because past performance depends partly on who is making the decisions. Look at how the fund performed in different market conditions — up markets and down markets — to understand its risk. Past performance does not predict future results, but it can show you how the fund has behaved historically.
Frequently Asked Questions
Is Oakmark a good mutual fund to invest in?
Whether Oakmark is right for you depends on your goals, risk tolerance, and beliefs about active management. Oakmark funds have outperformed in some periods and underperformed in others. Read the prospectus, compare the fees to index funds, and consider whether you want to pay for active management. If you are unsure, talk to a financial advisor.
Can I buy Oakmark funds directly from Oakmark?
No. You must buy Oakmark funds through a brokerage account — a bank, online broker, or financial advisor. You cannot purchase directly from the Oakmark company. Most major brokerages offer Oakmark funds, and many do not charge a transaction fee to buy them.
What is the difference between Oakmark Fund and Oakmark Select Fund?
Oakmark Fund is the original, larger fund that holds many stocks. Oakmark Select Fund is smaller and more concentrated, holding fewer stocks that the managers believe are the most undervalued. Select Fund is riskier because it is less diversified, but it may outperform in some markets. Both use the same value investing philosophy.
Do Oakmark funds have sales charges?
Some Oakmark funds are no-load, meaning no upfront sales charge. Others may have loads depending on how you purchase them and which share class you choose. Check the prospectus or ask your broker before you invest. Over time, loads and high expense ratios can significantly reduce your returns.
How often do Oakmark funds distribute dividends or capital gains?
Most Oakmark funds distribute dividends and capital gains once a year, usually in December. You can choose to reinvest these distributions back into the fund or take them as cash. Check the fund's prospectus for the exact distribution schedule, as it can vary by fund.