Analyzing the Oppenheimer Main Street Fund’s Retail Exposure


Nov. 23 2015, Published 11:08 a.m. ET

YTD performance

The Oppenheimer Main Street Fund-Class A (MSIGX) returned 4.9% for the YTD (year-to-date) period ending November 19, 2015. Meanwhile, its benchmark, the S&P 500, returned 1.1% in the same period. The S&P 500 Consumer Discretionary Index, which comprises companies included in the S&P 500 Index that are part of the consumer discretionary sector, returned 11.3% for the YTD period ending November 19, 2015. The S&P 500 Consumer Staples Index returned 0.3% in the same period.

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MSIGX’s retail exposure

The fund has 21.1% of its net assets invested in retail with consumer staples and consumer discretionary forming 10.8% and 10.3% of the fund’s assets, respectively, as of September 2015. Meanwhile, the consumer discretionary and consumer staples sectors form 13.2% and 9.7%, respectively, of its benchmark, the S&P 500.

Personal disposable income growth

Personal disposable income is the amount of money available for an individual to spend or save after tax has been paid. An increase in disposable income will increase consumer spending, which in turn increases the revenue of retail companies. Buying power increases with growth in disposable income, but buying power is negatively impacted by inflation. The inflation rate in September remained at 0% compared to the previous year. The US Bureau of Economic Analysis reported a month-over-month growth of 0.1% in September, which fell compared to growth of 0.4% in August and 0.4% in July.

The MSIGX, which has 21.6% of its portfolio invested in retail, will be negatively impacted by falling month-over-month growth in personal income, which decreases the buying power of the consumer.

MSIGX’s retail stocks

As of September 2015, MSIGX’s investment in retail companies includes Mondelez International (MDLZ), which makes up 3.4% of the fund’s portfolio, Philip Morris International (PM) with a 2.9% weight, PepsiCo (PEP) with a 2.5% weight, and Home Depot (HD) with a 1.9% weight for the period ending September 2015.


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