Having trouble finding a Muni - Bonds fund? Oppenheimer Rochester High Yield Municipals A (
ORNAX Quick Quote ORNAX - Free Report) is a potential starting point. ORNAX possesses 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
Invesco is based in Kansas City, MO, and is the manager of ORNAX. Oppenheimer Rochester High Yield Municipals A debuted in October of 1993. Since then, ORNAX has accumulated assets of about $4.38 billion, according to the most recently available information. The fund's current manager is a team of investment professionals.
Obviously, what investors are looking for in these funds is strong performance relative to their peers. ORNAX has a 5-year annualized total return of 7.87% and it sits in the top third among its category peers. But if you are looking for a shorter time frame, it is also worth looking at its 3-year annualized total return of 9.12%, 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 8.64% compared to the category average of 12.32%. Looking at the past 5 years, the fund's standard deviation is 7.58% compared to the category average of 10.42%. This makes the fund less volatile than its peers over the past half-decade.
With a beta of 0.9, this fund is less volatile than a broad market index of fixed income securities. Taking this into account, ORNAX has a positive alpha of 2.96, which measures performance on a risk-adjusted basis.
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 19.05% in medium quality bonds, with ratings of 'A' to 'BBB'. The fund has an average quality of BBB, and focuses on medium quality securities.
However, it is worth noting that 44 % of the bonds in this fund are not ranked, so take the average quality level with a bit of caution.
For investors, taking a closer look at cost-related metrics is key, since costs are increasingly important for mutual fund investing. Competition is heating up in this space, and a lower cost product will likely outperform its otherwise identical counterpart, all things being equal. In terms of fees, ORNAX is a load fund. It has an expense ratio of 0.70% compared to the category average of 0.80%. Looking at the fund from a cost perspective, ORNAX is actually cheaper than its peers.
Investors should also note that the minimum initial investment for the product is $1,000 and that each subsequent investment needs to be at $50.
Overall, Oppenheimer Rochester High Yield Municipals A ( ORNAX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, Oppenheimer Rochester High Yield Municipals A ( ORNAX ) looks like a good potential choice for investors right now.
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