Are You Thinking About Munis?
Have you defined your needs and objectives? In Rochester, our fund managers are keenly aware that the population of retail and institutional investors seeking tax-free income has varied financial needs and objectives. When high-net-worth investors and millennials consider municipal bonds and municipal bond funds, we believe they may be choosing the asset class for different reasons.
While tax exemption may be the main selling point for high-net-worth investors, among others, younger investors may be motivated by the role that municipals play in community-building. In certain interest rate cycles, the nominal yield on municipal paper has even been a draw for foreign investors, who do not qualify for the favorable tax treatment available to U.S. taxpayers who invest.
Are You Looking To The Long Term?
We believe investors benefit when they have a clear understanding of which investment categories and products match their long-term goals and their personal tolerance for risk. A knowledgeable financial advisor can sort through the seemingly endless array of investment choices and, for a fee, help you create and implement a comprehensive and sound financial plan. If your advisor recommends municipal bond fund investments, he or she can help you select Oppenheimer Rochester municipal funds. The key is to select funds with objectives that are well aligned with your own.
Are You Investing With Proven Teams?
We bring years of experience to the process of building and shaping the portfolios of the Oppenheimer Rochester municipal bond funds that we manage. Our team traces its roots to the 1983 establishment of The Rochester Funds, a professional money management firm that offered a handful of independent mutual funds. In 1996, OppenheimerFunds, which managed several municipal bond funds itself, acquired the Rochester, New York-based firm.
Now as then, our team believes that investors are more likely to reach their goals for tax-free income from well-designed and carefully researched fixed income products. Today’s muni investors, we note, continue to seek the competitive levels of tax-free income that our value-oriented, research-intensive, and security-specific strategies have historically been able to deliver.
We Employ A Proven Approach
For investors facing an overwhelming blizzard of financial information, our approach to fund management should feel like a perfectly crisp breeze. That’s because our team – which set out more than 30 years ago to create significant shareholder value – has ventured off the well-worn path others follow.
While others lean on macro-economic computer models, we champion the Rochester Way, a research-intensive approach for scouring the market and searching for individual bond offerings with an appealing set of credit characteristics.
Our team works to identify market inefficiencies and then invests thoughtfully, always seeking to maintain a diverse set of municipal bond portfolios. Our research process gives us the confidence to accumulate bonds with varying maturities, coupons, and quality levels, and our portfolios have always been designed to offer attractive tax-free income with mitigated risk.
Professional investment management, as most investors recognize, remains the greatest advantage of mutual fund investing. In Rochester, we are committed to transforming this advantage into solid outcomes and believe that our experience and our research-driven wealth of knowledge make all the difference.
Our family of municipal bond funds has been designed accordingly. Whether an investor prefers high yield, AMT-free, or single-state strategies – or some combination thereof – our funds have what it takes, we believe, to support each investor’s unique set of financial goals.
These four high yield funds are designed to deliver highly competitive, yield-driven total returns throughout the United States and all four generate income exempt from federal personal income taxes; the California and New York funds are also exempt from state and, where applicable, local personal income taxes in the named state. These funds offer us the broadest investment discretion and may be suitable for investors with a higher risk tolerance and a willingness to experience higher volatility. The purchase of below-investment-grade issues, which is restricted to a specific percentage of fund assets at the time of purchase, is 25% for the funds for California and New York investors and 35% for Oppenheimer Rochester Short Duration High Yield Municipal Fund. Oppenheimer Rochester High Yield Municipal Fund intends to hold no more than 70% of assets in below-investment-grade securities. Oppenheimer Rochester Short Duration High Yield Municipal Fund seeks an average effective maturity (AEM) of 5 years or less, while the other three high yield funds do not have AEM targets.
- Oppenheimer Rochester Short Duration High Yield Fund1
- Oppenheimer Rochester High Yield Municipal Fund
- Oppenheimer Rochester California Municipal Fund
- Oppenheimer Rochester Fund Municipals (for New York investors)
Our AMT-free funds are designed for the millions of investors who find themselves paying – or at risk of paying – the alternative minimum tax. The net investment income from these two funds is typically exempt from federal personal income taxes and will not increase a taxpayer’s AMT exposure. Income from our AMT-free fund for New Yorkers is also exempt from state and local income taxes, where applicable. The funds may each invest up to 25% of total assets in below-investment-grade securities, or “junk” bonds; the percentage of assets is measured at the time of purchase as is the credit quality of the securities. Neither fund has a target for average effective maturity (AEM).
- Oppenheimer Rochester AMT-Free Municipal Fund
- Oppenheimer Rochester AMT-Free New York Municipal Fund (for New York taxpayers)
Our single-state funds are designed to provide attractive yield-driven returns and income distributions that are exempt from federal, state and, where applicable, local personal income taxes in the named state. The single-state funds primarily hold investment-grade securities. The purchase of below-investment-grade issues, which is restricted to a specific percentage of fund assets at the time of purchase, is 15% for the California and New York limited term funds and 25% for the rest of the single-state funds. Each of the limited term funds has an average effective maturity of 3-7 years or less.
- Oppenheimer Rochester Limited Term California Municipal Fund
- Oppenheimer Rochester New Jersey Municipal Fund
- Oppenheimer Rochester Limited Term New York Municipal Fund
- Oppenheimer Rochester Pennsylvania Municipal Fund
- ^Before June 1, 2017, this Fund was known as Oppenheimer Rochester Limited Term Municipal Fund, and the purchase of below-investment-grade securities was restricted to 5% of its assets at time of purchase. On June 1, 2017, the Fund changed its investment strategy from a limited term investment-grade municipal bond strategy to a short term high yield municipal bond strategy. Past performance, therefore, is not indicative of future results. Investors are encouraged to review the Fund’s prospectus and summary prospectus for additional details.
Fixed-income investing entails credit and interest rate risks (when interest rates rise, bond/fund prices generally fall). A portion of a municipal bond fund’s distributions may be subject to tax and may increase taxes for investors subject to federal alternative minimum tax; however, income distributions from the two AMT-free funds will not increase an investor’s exposure to AMT. Capital gains distributions are taxable as capital gains.