Q. I invested in Oppenheimer Global Opportunities Fund about a year ago and it performed nicely. What’s the outlook for this fund?
R.P., Burbank
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A. Although it travels to the beat of a different drum, it is worth owning.
Portfolio manager Frank Jennings over the past decade has produced remarkable returns by going his own way and sticking with his convictions. He was early to grasp the potential of Sirius Satellite and Advanced Micro Devices, and his fund benefited.
The $4.5 billion Oppenheimer Global Opportunities Fund (OPGIX) is up 21.5 percent over the past 12 months to rank in the top 4 percent of world stock funds. Its three-year annualized return of 25 percent puts it in the top 1 percent of its peers.
“This is an unorthodox, aggressive, go-anywhere fund looking for big ideas and trends, whether economic, demographic or sociological,” said Dan Lefkovitz, analyst with Morningstar Inc. in Chicago. “Currency hedging last year provided big gains.”
Taking big bets leads to volatility, and his confidence in selections means Jennings holds on for the long term. That means Oppenheimer Global Opportunities isn’t the broad-based, diversified exposure most investors want in a core holding, though it can be a fine complement to existing holdings.
“With the great long-term record has come serious peaks and valleys because Jennings is not playing the next quarter,” Lefkovitz said. “But his record justifies committing at least a portion of your portfolio to his fund.”
More than half the fund’s holdings are in the U.S. and another one-third in the United Kingdom and elsewhere in Western Europe. Japan is the only other large concentration. One-fourth of the fund is in health care. Technology hardware, business services and industrial materials are its other significant groups.
Largest stock holdings are AMD, Nektar Therapeutics and AMR in this country and ABB in Switzerland. Other significant holdings are Continental Airlines, Biosite, Palm and Oakley in the United States; Bayer in Germany; and Sanofi-Synthelabo in France.
This 5.75 percent “load” (sales charge) fund requires a $1,000 minimum initial investment and has a 1.16 percent annual expense ratio.
Q. I’m leaving my current company and will be asking to have my 401(k) account moved into an individual retirement account. How does this work and who contacts who?
D.R., via the Internet
A. You should receive a notice from the company before you leave that asks what you want done with your 401(k).
You generally have a few options: (1) leave the money in the company’s plan; (2) roll the money into an IRA; (3) take the cash; or (4) have the money transferred into the plan of your new employer.
“The employer will have forms for you to fill out, or you can instead have an IRA provider contact the employer to facilitate the transfer process,” said David Wray, president of the Chicago-based Profit Sharing/401(k) Council of America. “Starting either way is fine, but if you’re not leaving the money with your former employer, the best thing to do is a direct transfer to avoid taxes and penalties.”
If you don’t do direct transfer between the two, the employer must withhold 20 percent that you won’t get back until you file income taxes for that year. You also have 60 days to get the money into your new account after receiving it or you’ll have to pay ordinary income tax on it plus a 10 percent penalty if you’re under 59 1/2.
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Andrew Leckey is a Tribune Media Services columnist. E-mail him at [email protected].