OIGAX: What Factors Have Supported Its Strong Performance?



The Oppenheimer International Growth Fund’s composition

The Oppenheimer International Growth Fund – Class A (OIGAX) has been in existence since March 1996. At the end of January 2016, the fund was managing assets worth $20.8 billion and these were spread across 106 holdings.

Consumer discretionary stocks formed 22.4% of the fund’s assets and made up the largest sector of investment as of the end of December. The industrials and information technology sectors followed, forming a combined 37% of the portfolio. The fund was not invested in the utilities sector. 78.6% of the fund’s assets were invested in European equities, followed by 9.4% in the Asia-Pacific region.

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Continental Aktiengesellschaft is the fund’s single-largest holding, forming 1.8% of the fund’s December 2015 assets. US-based cruise operator Carnival (CCL), Netherlands-based Heineken (HEINY), UK-based Vodafone Group (VOD) and BT Group (BT), and Spain’s Grifols (GRFS) are among the top 20 holdings of the fund.

Returns of the Oppenheimer International Growth Fund

The Class A shares of the Oppenheimer International Growth Fund (OIGAX) posted negative returns in the one-year period ended January 2016. However, it had a positive 2015 and was one of the four funds in this review to have gained last year. From a purely NAV (net asset value) return standpoint, the OIGAX stood first in the aforementioned period and third in 2015 among the nine funds in this review.

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Standard deviation

Standard deviation is used for assessing risks associated with an investment. Simply put, it measures the deviation of a series of returns from the average. A wide deviation reflects a high fluctuation in the returns, resulting in a higher risk, and vice versa.

For the one-year period ended January 2016, the standard deviation for the OIGAX stood at 15.0%. Meanwhile, the arithmetic average of the standard deviation of all funds in this review was 14.5%. Excluding the OIGAX, the average was 14.4%. Therefore, the returns of the fund were much more volatile than the average return of the peer group.

Sharpe ratio

For realized returns, the Sharpe ratio assesses the average return on a risk-free asset or security over total risk as represented by a standard deviation. The higher the Sharpe ratio, the better the risk-adjusted performance.

The Sharpe ratio for the OIGAX for the one-year period ended January 2016 stood at -0.01 , which was the best ratio among the funds in this review, and at 0.42 for 2015—the second best for that period.

A note for investors

The OIGAX has emerged as a strong performer for all the periods under review. Quantitatively, its metrics are top-notch, making it a compelling contender for your shortlist of funds from the international category. The volatility of its returns is on the higher side, but so far, its returns have made up for it. Investors should be careful about the high volatility, though, because if the returns generation ability takes a hit, it can sharply drag down its risk-adjusted performance. Let’s move to the next fund in this review: the T. Rowe Price International Stock Fund (PRITX).


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