For Q4 Muni Investors, Challenging Times
- Even as many market uncertainties were resolved, prices remained pressured.
- Developments in Detroit and Puerto Rico and at the Fed were the subject of speculation.
- As muni yields rise, levels of tax-free income should hold greater appeal.
Despite the absence of many of the kinds of developments that have been known to create pressure on municipal bond prices, bonds defied investors’ hopes and continued to lose ground in the fourth quarter. Amid a variety of challenges –the ongoing (and, to our thinking, often hyperbolic) coverage of developments in Detroit and Puerto Rico, the continued push by issuers to refund earlier securities and “credit spread widening” – bond fund redemptions exceeded sales.
While we cannot predict what the New Year will bring, we hope it will provide many rewarding opportunities for investors seeking competitive levels of tax-free income.
Access our complete Q4 Rochester Muni Market Perspective for more information.
Fixed income investing entails credit and interest rate risks. 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. Certain Rochester funds may invest substantially in Puerto Rico and other U.S. territories, commonwealths and possessions, and could be exposed to their local political and economic conditions.
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Before investing in any of the Oppenheimer funds, investors should carefully consider a fund's investment objectives, risks, charges and expenses. Fund prospectuses and summary prospectuses contain this and other information about the funds, and may be obtained by asking your financial advisor, visiting oppenheimerfunds.com, or calling 1.800.CALL OPP (225.5677). Read prospectuses and summary prospectuses carefully before investing.
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