Harris Associates L.P., adviser to the Oakmark Funds and an affiliate of Natixis Investment Managers, announced the launch of the Oakmark Bond Fund. The Fund seeks to maximize both current income and total return by investing in a diversified portfolio of bonds and fixed income securities.
The Bond Fund is the firm’s first solely dedicated fixed income product and will serve as an additional way investors can access Oakmark’s value investment capabilities.
“This is an exciting opportunity to extend the Oakmark investment philosophy into the fixed income arena,” said Co-Portfolio Manager Adam Abbas. “At a time when technical and other non-fundamental factors increasingly influence debt security prices, we aim to provide our investors a vehicle that will capture fundamental opportunities using a long-term, intrinsic value approach to credit investing.”
The Fund is designed to be a diversified and opportunistic fixed income offering. The investment strategy will focus on bottom-up, individual security selection and leverage Harris Associates’ equity research capabilities across the firm.
”Harris Associates has a long history of successful value investing based on extensive security research. The Oakmark Bond Fund will emphasize bottom-up issuer level research, leveraging the fixed income team and the equity group,” said Co-Portfolio Manager Colin Hudson. “In addition to traditional credit fundamentals, the investment framework will rely on incorporating the firm’s internally calculated total business value to more accurately price credit risk.”
The Oakmark Bond Fund will be managed by Adam Abbas and Colin Hudson. They have a combined 38 years of investment experience and are co-portfolio managers of the Oakmark Equity and Income Fund.
Mr. Abbas joined Harris Associates in 2018 and is the co-head of fixed income. Before starting at Harris Associates, he was a lead portfolio manager at KVK Credit Opportunity Fund LP. Prior to that, Mr. Abbas was a portfolio manager at Driehaus Capital Management, a senior research analyst at Neuberger Berman/Lehman Brothers and an analyst at Huron Consulting Group. He is a graduate of Northwestern University and the University of Chicago.
Mr. Hudson joined Harris Associates in 2005 and is the co-head of fixed income. Before starting at Harris Associates, he was the director of research at Hilliard, Lyons Asset Management. Prior to that, Mr. Hudson was an investment analyst at Wallington Asset Management. He is a graduate of DePauw University and Indiana University.
The Fund is offered through the Advisor Share Class (OAYCX), Institutional Share Class (OANCX) and R6 Share Class (OAZCX). More information about the Oakmark Bond Fund is available at oakmark.com.
ABOUT OAKMARK AND HARRIS ASSOCIATES
The Oakmark Funds are a mutual fund family that utilizes a long-term value investment approach. Oakmark’s investment philosophy centers on the belief that superior long-term results can be achieved through investing in companies priced at a significant discount to what Harris Associates believes is a company’s intrinsic value, with strong growth prospects and owner-oriented management teams. Oakmark’s assets under management totaled approximately $51 billion as of March 31, 2023.
Harris Associates L.P., a Chicago-based investment management firm founded in 1976, serves as the adviser to the Oakmark Funds. Harris Associates also manages U.S., international and global portfolios for institutional and high-net-worth investors worldwide. Including Oakmark, assets under management at Harris Associates totaled approximately $99 billion as of March 31, 2023. More information about Harris Associates is available at harrisassoc.com.
The Oakmark Bond Fund invests primarily in a diversified portfolio of bonds and other fixed-income securities. These include, but are not limited to, investment grade corporate bonds; U.S. or non-U.S.-government and government-related obligations (such as, U.S. treasury securities); below investment-grade corporate bonds; agency mortgage backed-securities; commercial mortgage- and asset-backed securities; senior loans (such as, leveraged loans, bank loans, covenant lite loans, and/or floating rate loans); assignments; restricted securities (e.g., Rule 144A securities); and other fixed and floating rate instruments. The Fund may invest up to 20% of its assets in equity securities, such as common stocks and preferred stocks. The Fund may also hold cash or short-term debt securities from time to time and for temporary defensive purposes.
Under normal market conditions, the Fund invests at least 25% of its assets in investment-grade fixed-income securities and may invest up to 35% of its assets in below investment-grade fixed-income securities (commonly known as “high-yield” or “junk bonds”).
Fixed income risks include interest-rate and credit risk. Typically, when interest rates rise, there is a corresponding decline in bond values. Credit risk refers to the possibility that the bond issuer will not be able to make principal and interest payments.
Bond values fluctuate in price so the value of your investment can go down depending on market conditions.
