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Is ORNAX a Strong Bond Fund Right Now?

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If you have been looking for Mutual Fund Bond 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 various forecasting factors like size, cost, and past performance.

History of Fund/Manager

ORNAX finds itself in the Invesco family, based out of Kansas City, MO. The Oppenheimer Rochester High Yield Municipals A made its debut in October of 1993 and ORNAX has managed to accumulate roughly $3.94 billion in assets, as of the most recently available information. The fund's current manager is a team of investment professionals.

Performance

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 3.72% and is in the top third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 3.54%, 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. ORNAX's standard deviation over the past three years is 10.12% compared to the category average of 13.61%. Over the past 5 years, the standard deviation of the fund is 9.77% compared to the category average of 13.4%. This makes the fund less volatile than its peers over the past half-decade.

With a beta of 1.32, this fund is more volatile than a broad market index of fixed income securities. Taking this into account, ORNAX has a positive alpha of 1.48, 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 29.28% 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 41 % of the bonds in this fund are not ranked, so take the average quality level with a bit of caution.

Expenses

As competition heats up in the mutual fund market, costs become increasingly important. Compared to its otherwise identical counterpart, a low-cost product will be an outperformer, all other things being equal. Thus, taking a closer look at cost-related metrics is vital for investors. In terms of fees, ORNAX is a load fund. It has an expense ratio of 0.72% compared to the category average of 0.78%. 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.

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 lower fees, Oppenheimer Rochester High Yield Municipals A ( ORNAX ) looks like a good potential choice for investors right now.

For additional information on the Mutual Fund Bond area of the mutual fund world, make sure to check out www.zacks.com/funds/mutual-funds. There, you can see more about the ranking process, and dive even deeper into ORNAX too 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.


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