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If you have been looking for Muni - Bonds funds, a place to start could be Oppenheimer Rochester High Yield Municipals A (ORNAX - Free Report) . ORNAX bears a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
ORNAX is one of many Muni - Bonds funds to choose from. Muni - Bonds funds invest in debt securities issued by states and local municipalities, which are typically used to pay for infrastructure construction, schools, and other government functions. These securities can be backed by taxes (revenue bonds), but others are known as " general obligation " and are not necessarily backed by a defined source. These bonds are especially attractive because of their inherent tax benefits.
History of Fund/Manager
ORNAX finds itself in the Oppenheimer family, based out of Denver, CO. Oppenheimer Rochester High Yield Municipals A made its debut in October of 1993, and since then, ORNAX has accumulated about $3.35 billion in assets, per the most up-to-date date available. The fund's current manager, Scott S. Cottier, has been in charge of the fund since September of 2002.
Performance
Investors naturally seek funds with strong performance. This fund has delivered a 5-year annualized total return of 7.79%, and is in the top third among its category peers. If you're interested in shorter time frames, do not dismiss looking at the fund's 3-year annualized total return of 7.95%, which places it in the top third during this time-frame.
When looking at a fund's performance, it is also important to note the standard deviation of the returns. The lower the standard deviation, the less volatility the fund experiences. The standard deviation of ORNAX over the past three years is 5.34% compared to the category average of 6.94%. Over the past 5 years, the standard deviation of the fund is 4.87% compared to the category average of 7.11%. This makes the fund less volatile than its peers over the past half-decade.
Bond Duration
Modified duration is a measure of a given bond's interest rate sensitivity, so when judging how fixed income securities will respond in a shifting rate environment, it is an excellent figure to look at.
If you believe interest rates will rise, this is an important factor to look at. ORNAX has a modified duration of 8.64, which suggests that the fund will decline 8.64% for every hundred-basis-point increase in interest rates.
Income
It is important to consider the fund's average coupon because income is often a big reason for purchasing a fixed income security. This metric calculates the fund's average payout in a given year. For example, this fund's average coupon of 6.21% means that a $10,000 investment should result in a yearly payout of $621.
If you are looking for a strong level of current income, a higher coupon is a good choice, though it could pose a reinvestment risk; these risks can occur if rates are lower in the future when compared to the initial purchase date of the bond.
Since income is just one part of the bond picture, investors need to consider risk relative to broad benchmarks. ORNAX carries a beta of 1.14, meaning that the fund is more volatile than a broad market index of fixed income securities. With this in mind, it has a positive alpha of 3.74, which measures performance on a risk-adjusted basis.
Ratings
Investors should also consider a bond's rating, which is a grade ( 'AAA' to 'D' ) given to a bond that indicates its credit quality. With this letter scale in mind, ORNAX has 24.53% in high quality bonds rated at least 'AA' or higher, while its junk bond component-bonds rated 'BB' or below-is at 21.25%. This means that the fund has an average quality of BBB, and focuses on medium quality securities.
However, it is worth noting that 35 % of the bonds in this fund are not ranked, so take the average quality level with a bit of caution.
Expenses
Costs are increasingly important for mutual fund investing, and particularly as competition heats up in this market. And all things being equal, a lower cost product will outperform its otherwise identical counterpart, so taking a closer look at these metrics is key for investors. In terms of fees, ORNAX is a load fund. It has an expense ratio of 0.78% compared to the category average of 0.85%. So, ORNAX is actually cheaper than its peers from a cost perspective.
This fund requires a minimum initial investment of $1,000, while there is no minimum for each subsequent investment.
Bottom Line
Overall, Oppenheimer Rochester High Yield Municipals A ( ORNAX ) has a high Zacks Mutual Fund rank, strong performance, average downside risk, and lower fees compared to its peers.
Your research on the Muni - Bonds segment doesn't have to stop here. You can check out all the great mutual fund tools we have to offer by going to www.zacks.com/funds/mutual-funds to see the additional features we offer as well for additional information. Want to learn even more? We have a full suite of tools on stocks that you can use to find the best choices for your portfolio too, no matter what kind of investor you are.
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Is ORNAX a Strong Bond Fund Right Now?
If you have been looking for Muni - Bonds funds, a place to start could be Oppenheimer Rochester High Yield Municipals A (ORNAX - Free Report) . ORNAX bears a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
ORNAX is one of many Muni - Bonds funds to choose from. Muni - Bonds funds invest in debt securities issued by states and local municipalities, which are typically used to pay for infrastructure construction, schools, and other government functions. These securities can be backed by taxes (revenue bonds), but others are known as " general obligation " and are not necessarily backed by a defined source. These bonds are especially attractive because of their inherent tax benefits.
History of Fund/Manager
ORNAX finds itself in the Oppenheimer family, based out of Denver, CO. Oppenheimer Rochester High Yield Municipals A made its debut in October of 1993, and since then, ORNAX has accumulated about $3.35 billion in assets, per the most up-to-date date available. The fund's current manager, Scott S. Cottier, has been in charge of the fund since September of 2002.
Performance
Investors naturally seek funds with strong performance. This fund has delivered a 5-year annualized total return of 7.79%, and is in the top third among its category peers. If you're interested in shorter time frames, do not dismiss looking at the fund's 3-year annualized total return of 7.95%, which places it in the top third during this time-frame.
When looking at a fund's performance, it is also important to note the standard deviation of the returns. The lower the standard deviation, the less volatility the fund experiences. The standard deviation of ORNAX over the past three years is 5.34% compared to the category average of 6.94%. Over the past 5 years, the standard deviation of the fund is 4.87% compared to the category average of 7.11%. This makes the fund less volatile than its peers over the past half-decade.
Bond Duration
Modified duration is a measure of a given bond's interest rate sensitivity, so when judging how fixed income securities will respond in a shifting rate environment, it is an excellent figure to look at.
If you believe interest rates will rise, this is an important factor to look at. ORNAX has a modified duration of 8.64, which suggests that the fund will decline 8.64% for every hundred-basis-point increase in interest rates.
Income
It is important to consider the fund's average coupon because income is often a big reason for purchasing a fixed income security. This metric calculates the fund's average payout in a given year. For example, this fund's average coupon of 6.21% means that a $10,000 investment should result in a yearly payout of $621.
If you are looking for a strong level of current income, a higher coupon is a good choice, though it could pose a reinvestment risk; these risks can occur if rates are lower in the future when compared to the initial purchase date of the bond.
Since income is just one part of the bond picture, investors need to consider risk relative to broad benchmarks. ORNAX carries a beta of 1.14, meaning that the fund is more volatile than a broad market index of fixed income securities. With this in mind, it has a positive alpha of 3.74, which measures performance on a risk-adjusted basis.
Ratings
Investors should also consider a bond's rating, which is a grade ( 'AAA' to 'D' ) given to a bond that indicates its credit quality. With this letter scale in mind, ORNAX has 24.53% in high quality bonds rated at least 'AA' or higher, while its junk bond component-bonds rated 'BB' or below-is at 21.25%. This means that the fund has an average quality of BBB, and focuses on medium quality securities.
However, it is worth noting that 35 % of the bonds in this fund are not ranked, so take the average quality level with a bit of caution.
Expenses
Costs are increasingly important for mutual fund investing, and particularly as competition heats up in this market. And all things being equal, a lower cost product will outperform its otherwise identical counterpart, so taking a closer look at these metrics is key for investors. In terms of fees, ORNAX is a load fund. It has an expense ratio of 0.78% compared to the category average of 0.85%. So, ORNAX is actually cheaper than its peers from a cost perspective.
This fund requires a minimum initial investment of $1,000, while there is no minimum for each subsequent investment.
Bottom Line
Overall, Oppenheimer Rochester High Yield Municipals A ( ORNAX ) has a high Zacks Mutual Fund rank, strong performance, average downside risk, and lower fees compared to its peers.
Your research on the Muni - Bonds segment doesn't have to stop here. You can check out all the great mutual fund tools we have to offer by going to www.zacks.com/funds/mutual-funds to see the additional features we offer as well for additional information. Want to learn even more? We have a full suite of tools on stocks that you can use to find the best choices for your portfolio too, no matter what kind of investor you are.