On Tuesday, the Oakmark U.S. Large Cap ETF launched on the New York Stock Exchange.
The fund aims to offer long-term capital appreciation to its investors. OAKM has a net expense ratio of 0.59% following a fee waiver.
The Oakmark fund primarily invests its assets toward U.S. large-cap companies. Among U.S. large-caps, OAKM’s portfolio team uses a value-focused approach to choose its investments. The issuer’s in-house research team employs this bottom-up strategy on each company up for consideration.
The Oakmark Strategy
Oakmark’s philosophy on value investment has three key attributes. First, the firm aims to invest in businesses trading at a notable discount. By seeking undervalued companies, OAKM hopes to bolster its long-term return potential.
Second, OAKM’s portfolio team focuses on companies that are expected to build up shareholder value in the long run. As such, the fund specifically looks for companies that are in a good position to increase dividend yield and business value.
Lastly, Oakmark looks for companies with management teams whose values align with shareholders’. Company leadership that understands the importance of growing per-share value can create dynamic long-term returns.
Once a company reaches the issuer’s estimates for intrinsic value, OAKM will traditionally sell the stock. The fund expects to keep a relatively small portfolio of 40 or fewer stocks.
“The Oakmark brand is well-known by advisors favoring active management,” noted Todd Rosenbluth, head of research at VettaFi. “Natixis has increasingly been bringing fund family strategies into the ETF market. This is great to see.”
The Oakmark team has extensive experience piloting mutual fund strategies focused on capital appreciation. For example, the Oakmark Fund has offered a long-term large-cap strategy since 1991.
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