15/05/17

Warning: Get Your Money Out Of Bond Funds [feedly]



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Warning: Get Your Money Out Of Bond Funds
// Silver For The People

investmentresearchdynamics.com / Dave Kranzler / 

Whenever I constructed a "difficult to sell" muni deal, I could count on the Rochester Family of Funds[Oppenheimer's Rochester muni fund complex] to buy the deal if there was some "juice" in the yield. After all its other peoples money right? – an email from a multi-decade muni bond professional to IRD this a.m.

IRD warned about Oppenheimer's exposure to Puerto Rico in July 2015

Puerto Rico officially filed bankruptcy and it appears that Oppenheimer Funds will be taking it on the chin to the tune of at least $2.1 billion in losses.  Oppenheimer was the biggest bagholder of PR bonds.  In July 2015, Investment Research Dynamics issued this warning about leaving money in Oppenheimer bond funds:

The Oppenheimer Funds mutual fund complex is the largest bagholder of Puerto Rico's debt. including $4.4 billion of uninsured bonds. Not including tobacco bonds, insured debt and pre-funded bonds, as much as 13%  of some of Oppenheimer's bond funds' total holding holdings are in Puerto Rico bonds.  Oppenheimer Will Be A Bagholder

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