Any investors hoping to find a Muni - Bonds fund might consider looking past Invesco Rochester Muni Opps A (ORNAX Quick QuoteORNAX - Free Report) . ORNAX carries a Zacks Mutual Fund Rank of 5 (Strong Sell), which is based on various 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. The Invesco Rochester Muni Opps A made its debut in October of 1993 and ORNAX has managed to accumulate roughly $4.07 billion in assets, as of 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. ORNAX has a 5-year annualized total return of 1.74%, and is in the middle third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 5.74%, which places it in the middle third during this time-frame.

It is important to note that the product's returns may not reflect all its expenses. Any fees not reflected would lower the returns. Total returns do not reflect the fund's [%] sale charge. If sales charges were included, total returns would have been lower.

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. ORNAX's standard deviation over the past three years is 9.38% compared to the category average of 10.87%. Looking at the past 5 years, the fund's standard deviation is 9.26% compared to the category average of 11.86%. This makes the fund less volatile than its peers over the past half-decade.

Bond Duration

Modified duration is a measure of a specific bond's interest rate sensitivity, and is an excellent way to judge how fixed income securities will respond to a shifting rate environment.

For those that believe interest rates will rise, this is an important factor to consider. ORNAX has a modified duration of 10.06, which suggests that the fund will decline 10.06% for every hundred-basis-point increase in interest rates.

Income

We must remember to consider the fund's average coupon, as income is traditionally a big reason for purchasing a fixed income security. A fund's average coupon is simply its average payout in a given year. For example, this fund's average coupon of 5.8% means that a $10,000 investment should result in a yearly payout of $580.

For those seeking a strong level of current income, a higher coupon is typically good news. However, it could pose a reinvestment risk if rates are lower in the future when compared to the initial purchase date of the bond. Investors also need to consider risk relative to broad benchmarks, as income is only one part of the bond picture.

This fund has a beta of 1.02, meaning that it is more volatile than a broad market index of fixed income securities. Taking this into account, ORNAX has a positive alpha of 2.04, 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 23.24% in high quality bonds rated at least "AA" or higher, while 21.04% are of medium quality, 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 49% of the bonds in this fund are not ranked, so take the average quality level with a bit of caution.

Expenses

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 1.17% compared to the category average of 0.93%. Looking at the fund from a cost perspective, ORNAX is actually more expensive than its peers.

Investors need to be aware that with this product, the minimum initial investment is $1,000; each subsequent investment needs to be at least $50.

Fees charged by investment advisors have not been taken into consideration. Returns would be less if those were included.

Bottom Line

Overall, Invesco Rochester Muni Opps A ( ORNAX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, average downside risk, and higher fees, Invesco Rochester Muni Opps A ( ORNAX ) looks like a poor potential choice for investors right now.

This could just be the start of your research on ORNAX in the Muni - Bonds category. Consider going to www.zacks.com/funds/mutual-funds for additional information about this fund, and all the others that we rank as well for additional information. And don't forget, Zacks has all of your needs covered on the equity side too! Make sure to check out Zacks.com for more information on our screening capabilities, Rank, and all our articles as well.