OppenheimerFunds had a spectacular year in 1997. Despite turmoil in some markets, its varied array of global mutual funds racking up enough big gains to win the top performance rating in its group from Morningstar, the fund evaluation service.
"This victory is a bit of a surprise," said Morningstar in noting the No. 1 performance. "Oppenheimer is the invisible fund family. Maybe that should change."
Oppenheimer is hardly a newcomer to global investing. Its flagship Global Fund A, in existence since 1969, was the eighth-largest of its kind at the end of 1997, with some $3.6 billion of assets.
But its investment sheen is newly won. "I think we were a sort of one- product company until now," said William Wilby, senior vice president and director of international investing. "Now we have a more diversified product. We offer a global value product, Quest; a global growth and income fund; an international growth fund; an international small-cap offering;and an emerging-markets fund."
In the specialized language of the fund world, a global fund includes U.S. and foreign investments, while an international fund has only foreign investments. The Morningstar rankings combine both types.
A big part of Oppenheimer's recent success came from dodging the Asian bullet. In Japan, for example, half of its investment was in a single stock, Nintendo, which Mr. Wilby said rose about 50% in yen terms, against a decline of about 20% for the Japanese market as a whole.
Mr. Wilby attributed Oppenheimer's overall success to its investment strategy, which identifies industry groups whose share of gross national product is rising. "Revenues of companies in the industry will rise faster than those of the average company," he said.
"We have eight themes, and they don't change very often," Mr. Wilby said. The themes: health care and biotechnology; capital market development; emerging consumer markets; infrastructure spending; telecommunications and media; efficiency enhancement; corporate restructurings; and natural resources.
"Within these themes, we identify companies in good businesses at good prices," he said. "We look worldwide for these companies, with no particular preferences."
While Oppenheimer maintains geographic diversification, it concentrates its investments in just 10 to 15 stocks, making large investments in each. While it seeks to be in all major geographic regions, it has no constraints on country weights, Mr. Wilby explained.
