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Is ORNAX a Strong Bond Fund Right Now?

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Having trouble finding a Mutual Fund Bond fund? Oppenheimer Rochester High Yield Municipals A (ORNAX - Free Report) is a potential starting point. ORNAX holds a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.

History of Fund/Manager

Invesco is responsible for ORNAX, and the company is based out of Kansas City, MO. Oppenheimer Rochester High Yield Municipals A debuted in October of 1993. Since then, ORNAX has accumulated assets of about $4.72 billion, according to the most recently available information. The fund is currently managed by a team of investment professionals.

Performance

Of course, investors look for strong performance in funds. This fund has delivered a 5-year annualized total return of 7.08%, and it sits 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 8.36%, 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. Compared to the category average of 12.47%, the standard deviation of ORNAX over the past three years is 8.52%. Looking at the past 5 years, the fund's standard deviation is 7.52% compared to the category average of 10.41%. This makes the fund less volatile than its peers over the past half-decade.

With a beta of 0.95, this fund is less volatile than a broad market index of fixed income securities. Taking this into account, ORNAX has a positive alpha of 2.27, 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 31.77% in high quality bonds rated at least 'AA' or higher. The fund has an average quality of BBB, and focuses on medium quality securities.

However, it is worth noting that 38 % 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 0.95% compared to the category average of 0.80%. So, ORNAX is actually more expensive than its peers from a cost perspective.

This fund requires a minimum initial investment of $1,000, and each subsequent investment should be at least $50.

Bottom Line

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 higher fees, this fund looks like a good potential choice for investors right now.

Don't stop here for your research on Mutual Fund Bond funds. We also have plenty more on our site in order to help you find the best possible fund for your portfolio. Make sure to check out www.zacks.com/funds/mutual-funds for more information about the world of funds, and feel free to compare ORNAX to its peers as well for additional information. Zacks provides a full suite of tools to help you analyze your portfolio - both funds and stocks - in the most efficient way possible.


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