Vanguard and Oakmark Reopen Good Funds

The year-long market turmoil has taken its toll on mutual funds, good and bad alike. Mutual fund companies saw their funds’ assets shrinking fast, not just because of the decline of the values of the fund’s holdings, but also the result of investors fleeing the fund when the performance suffers even if the fund is closed to new investors (for example, the Dodge & Cox funds I mentioned yesterday).

When the fund’s assets drop to the level that hampers the fund manager’s ability to make the investments he/she wants because of short of cash, the fund manager usually reopens the fund in order to get additional inflow of cash, as the Dodge & Cox Stock Fund (DODGX) did early this year. Recently, there are a few funds from Vanguard and Oakmark reopen to new investors (Morningstar):

  • Oakmark Equity and Income Fund (OAKBX): I have owned this fund for many year. Unlike other funds I own, OAKBX has been very consistant over the years, no huge ups or downs in returns (the fund has half of its assets invested in bonds and cash). So far this year, the fund is down 15%, much less than most of its peers. The fund has a 0.83% expense ratio (ER) and 2.45% yield. You need at least $1,000 to investment in OAKBX.
  • Vanguard International Explorer (VINEX): This fund has some pretty nice runs in the past few years, like most funds investing in emerging and developed markets. However, it looks like this year is going to be a disaster for VINEX as the fund has dropped nearly 50% as of now. At an ER of just 0.35%, you can be assured that the cost of owning the fund is low, like many other Vanguard fund. The fund has a yield of 4.98%, but you will have to have a minimum of $3,500 $25,000 to open an account.
  • Vanguard Precious Metals and Mining (VGPMX): I did a comparison between the actively managed funds I own and those low-cost, index funds from Vanguard early this year, and VGPMX is one of the Vanguard fund that I compared with my Tocqueville Gold Fund (TGLDX) in the precious metal fund category. 2008 is shaping up to be a very bad year for precious metal funds and funds like VGPMX and TGLDX are suffering huge losses. So far VGPMX has lost 64% of its value, compared to TGLDX’s 55%. Is it a good time to load up precious metal funds? I don’t know, but if you want to get your hands on VGPMX, now it’s time except you will have a deep pocket to buy this VGPMX because it requires $10,000 minimum. The ER is 0.28% and yield 4.78%.

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4 Responses to “Vanguard and Oakmark Reopen Good Funds”

  1. Andrew |  Nov 07, 2008 at 1:24 pm

    Looks like the newly reopened VINEX has a minimum of $25,000, not $3,500.

  2. Sun |  Nov 07, 2008 at 1:57 pm

    Andrew: Thanks for the correction. You are right, VINEX does need $25,000 minimum. I guess then this fund is out of the question for many investors because of the high minimum.