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Is Oppenheimer Gold & Special Mineral A (OPGSX) a Strong Mutual Fund Pick Right Now?

If you have been looking for Sector – Precious Metal funds, a place to start could be Oppenheimer Gold & Special Mineral A (OPGSX). OPGSX holds a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.

 

Objective

The world of Sector – Precious Metal funds is an area filled with options, such as OPGSX. Usually, Sector – Precious Metal mutual funds invest in stocks with a focus on the mining and production of precious metals like gold, silver, platinum, and palladium. Here, stocks often trade as leveraged bets of the underlying commodity, meaning they’re tied to the metal’s prices and can be volatile.

 

History of Fund/Manager

Invesco is based in Kansas City, MO, and is the manager of OPGSX. Since Oppenheimer Gold & Special Mineral A made its debut in July of 1983, OPGSX has garnered more than $1 billion in assets. The fund’s current manager, Shanquan Li, has been in charge of the fund since July of 1997.

 

Performance

Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund in particular has delivered a 5-year annualized total return of 14.88%, and it sits in the top third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 19.43%, which places it in the top third during this time-frame.

 

When looking at a fund’s performance, it is also important to note the standard deviation of the returns. The lower the standard deviation, the less volatility the fund experiences. Over the past three years, OPGSX’s standard deviation comes in at 32.36%, compared to the category average of 18.94%. Looking at the past 5 years, the fund’s standard deviation is 33.37% compared to the category average of 17.07%. This makes the fund more volatile than its peers over the past half-decade.

 

Risk Factors

Investors should note that the fund has a 5-year beta of 0.78, which means it is hypothetically less volatile than the market at large. Another factor to consider is alpha, as it reflects a portfolio’s performance on a risk-adjusted basis relative to a benchmark-in this case, the S&P 500. The fund has produced a positive alpha over the past 5 years of 6.33, which shows that managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.

 

Expenses

For investors, taking a closer look at cost-related metrics is key, since costs are increasingly important for mutual fund investing. Competition is heating up in this space, and a lower cost product will likely outperform its otherwise identical counterpart, all things being equal. In terms of fees, OPGSX is a load fund. It has an expense ratio of 1.07% compared to the category average of 1.37%. From a cost perspective, OPGSX is actually cheaper than its peers.

 

Investors need to be aware that with this product, the minimum initial investment is $1,000; each subsequent investment needs to be at least $50.

 

Bottom Line

Overall, Oppenheimer Gold & Special Mineral A ( OPGSX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, worse downside risk, and lower fees, this fund looks like a good potential choice for investors right now.

 

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