If you've been stuck searching for Muni - Bonds funds, you might want to consider passing on by Invesco Rochester Muni Opps A (ORNAX) as a possibility. ORNAX possesses a Zacks Mutual Fund Rank of 5 (Strong Sell), which is based on various forecasting factors like size, cost, and past performance.

Objective

We classify ORNAX in the Muni - Bonds category, an area rife with potential choices. Muni - Bonds funds focus their investments on debt securities issued by state and local governments. These are typically used to pay for the construction of infrastructure, the operation of public schools, and other municipal functions. These securities can come in the form of revenue bonds, which are backed by taxes, as well as " general obligation " bonds that are not backed by a defined source. Investors are usually interested that come with most municipal bonds, which can be especially important for those in higher tax brackets.

History of Fund/Manager

ORNAX is a part of the Invesco family of funds, a company based out of Kansas City, MO. Invesco Rochester Muni Opps A made its debut in October of 1993, and since then, ORNAX has accumulated about $4.13 billion in assets, per the most up-to-date date available. 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 3.35% and is in the middle third among its category peers. If you're interested in shorter time frames, do not dismiss looking at the fund's 3 -year annualized total return of 2.46%, 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 10.67% compared to the category average of 12.78%. The fund's standard deviation over the past 5 years is 9.51% compared to the category average of 13.5%. This makes the fund less volatile than its peers over the past half-decade.

This fund has a beta of 1, meaning that it is volatile than a broad market index of fixed income securities. Taking this into account, ORNAX has a positive alpha of 3.05, 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 31.8% 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 42 % 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 1.23% compared to the category average of 0.92%. 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 considiration. 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.

For additional information on the Muni - Bonds 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. If you are more of a stock investor, make sure to also check out our Zacks Rank, and our full suite of tools we have available for novice and professional investors alike.

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This article originally published on Zacks Investment Research (zacks.com).

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