Building Portfolios Designed for the Long Term
Like bridge engineers, Oppenheimer Rochester’s portfolio managers build for the long term.
Whether the work involves spanning distances or spanning time, these roles require expertise, drive, grit and confidence in their tried-and-true approaches. Seasoned engineers and portfolio managers know that few rewards are risk-free and that tenacity, focus and patience can transform their hard work into endeavors capable of making a meaningful difference in the lives of the people and communities they serve.
Milestones will be met, they know, even as preferred outcomes may be obscured or delayed. Those with extensive experience have seen ugly stretches of time eventually give way to beautiful results, and they rely on that knowledge to press on.
At Oppenheimer Rochester, which has pursued yield-driven total returns for nearly 30 years, 2015 represented another year of industry-leading dividend yields. Investors seeking competitive levels of tax-free income received monthly dividend distributions throughout 2015, a fact that may have been obscured given the degree to which the Federal Reserve’s deliberations and developments in the Commonwealth of Puerto Rico were front and center.
As was true at year-end 2014, an Oppenheimer Rochester fund was ranked first at year-end 2015 in 12-month distribution yield at net asset value (NAV) in 16 of the 17 Lipper municipal bond fund categories in which our funds compete. As of December 31, 2015, the 12-month distribution yields at NAV of our funds’ Class A shares all delivered top-half results, with 19 finishing in the top quartile, 18 in the top decile and 13 in the top 5% of their categories.
We believe these results speak to the power of investing in the Rochester Way: We champion a value-oriented, research-intensive and security-specific approach to generate long-term total returns derived primarily from tax-free income, and we offer a set of 20 funds designed to meet the diverse financial objectives and needs of fixed-income investors.
Past performance is no guarantee of future results. Fixed income investing entails credit and interest rate risks. Interest rate risk is the risk that rising interest rates, or an expectation of rising interest rates in the near future, will cause the values of a Fund’s investments to decline. Risks associated with rising interest rates are heightened given that rates in the U.S. are at, or near, historic lows. When interest rates rise, bond prices fall and a fund’s share price can fall. Municipal bonds are subject to default on income and principal payments. Further, a portion of some funds’ distributions may be taxable and may increase alternative minimum tax (AMT) for investors subject to that tax; distributions from net realized capital gains are taxable as capital gains.
The funds invest in below-investment-grade debt securities, which may entail greater credit risks, as described in each fund’s prospectus. These securities (sometimes called “junk bonds”) may be subject to greater price fluctuations and risks of loss of income and principal than investment-grade municipal securities. The funds may invest substantially in municipal securities within a single state or related to similar type projects, which can increase volatility and exposure to regional issues. The funds may also invest substantially in Puerto Rico and other U.S. territories, commonwealths and possessions, and could be exposed to their local political and economic conditions. Deterioration of the Puerto Rico economy could have an adverse impact on Puerto Rican bonds and on the performance of the Rochester municipal funds that hold them.