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Invesco Emerging Markets Flexible Bond Fund Invesco Oppenheimer Global Unconstrained Bond Fund Invesco Oppenheimer Preferred Securities and Income Fund Invesco Oppenheimer SteelPath MLP & Energy Infrastructure Fund Invesco Oppenheimer SteelPath Panoramic https://www.sec.gov/Archives/edgar/data/826644/000119312519249342/d807534d497.htm
Sorry if I’m stating the obvious here. As most folks know, Invesco recently acquired Oppenheimer. So there’s a lot of overlap in their current lineup. They’re likely in the process of weeding out the weakest funds.
As a long time Oppenheimer investor, I’ve been treated well so far in all of this. Actually, the new (Invesco) frequent trading policy seems a lot more lenient than under Oppenheimer. No longer a 30-day “lockout” re exchanges as under Oppenheimer. They do have some strict trading restrictions for very large transactions (in dollar terms), but so far seem inclined not to mess much with the little guy.
As always, thanks to @TheShadow for keeping us informed.
I was thinking the same thing with overlap, but I am just reporting the obvious for the benefit of other posters/readers. You would be surprised how many people are unaware of changes or do not read the supplements provided by mutual fund companies when received.
We all look at different things and have our own biases, which is my way of saying that what follows are my less than complimentary thoughts about Rochester and Steelpath (two of Oppenheimer's acquisitions, including some of the terminated funds above). So the comments aren't about all of Oppenheimer's funds, just a couple of significant segments.
Rochester funds often show up at the top of muni fund performance screens. In a category of funds that should be sedate, these are high octane funds without adequate warning labels. From Oppenheimer's own PR: "Unlike many of its competitors, the team chooses to invest across the entire credit spectrum and its historic results have often been driven by the high levels of tax-free yield that non-rated and below-investment-grade securities have offered." http://www.mfwire.com/article.asp?storyID=21319&template=article&bhcp=1
The lack of warning labels has landed these funds in hot water.
Shareholders accused OppenheimerFunds, a New York-based unit of Massachusetts Mutual Life Insurance Co, of misleading them about the safety of six funds, ignoring the funds’ stated objectives and risk guidelines, and inflating asset values. ...
The six funds were: AMT-Free Municipals, Rochester Fund Municipals, Rochester AMT-Free New York Municipal, New Jersey Municipal, Pennsylvania Municipal and Rochester National Municipals.
Rochester National specialized in high-yield securities, and remains one of the biggest funds in its class, with about $5.7 billion of assets as of July 31.
The other five funds were designed to preserve shareholder principal by investing in high-quality securities.
According to Morningstar Inc, the six funds’ Class A shares fell between 29 percent and 48.9 percent in 2008, ranking near the bottom of their respective categories.
SteelPath strike me as a way to vitiate the tax advantages of MLPs (in the pursuit of simplicity), leaving no compelling reason to invest in them.
Once MLPs are wrapped in a mutual fund or an ETF, their distributions are taxed at the fund's corporate rate, and what is left is paid to shareholders as a distribution. That payment then is taxed as dividend income, thereby effectively nullifying the main reason for investing in an MLP in the first place.
I'd guess it's more a combination of small size and poor performance that's driving the closures. Oppenheimer created its own MLP fund ILPAX a couple of years after acquiring Steelpath, and it's still a tiny fund. But it's been doing better than the similarly microscopic OMLPX, which Oppenheimer is shuttering. https://news.morningstar.com/fund-category-returns/energy-limited-partnership/$FOCA$LP.aspx
Invesco is leaving in place its two non-MLP infractructure funds, one home grown (GIZAX), and one from Oppenheimer (OQGAX). So there seems to be more considerations than just overlap in doing this housecleaning. Also given Oppenheimer could have merged funds together and shielded investors from tax consequences of liquidation if it felt the closed funds overlapped enough with the surviving funds.
All valid comments by @msf & @carew388 above. Oppenheimer became the poster child for bad faith investment management re the monies investors had entrusted to some of their bond funds when things went south in 2008. Their high income fund may have set some kind of “record” for year-over-year losses. A real shame. As I recall, there were some successful lawsuits.
I’ve not been much impressed over the years with Oppenheimer’s offerings. I started a small IRA with them in the mid 90s after they introduced one of the first commodities funds. Soared like an eagle for a few years before crashing and burning (now closed). The initial investment has grown decently over those 20-25 years. I do use their OPGSX, OREAX and OQGAX (which msf mentioned). While the last one hasn’t done well since they acquired it a couple years ago, it had a stellar record, as I recall, before that time.
What prompted me to post here again is that I think I’ve actually uncovered a pretty competive offering while digging through Invesco’s lineup. It’s their ultra-short OSDAX which is offered at no-load and carries a .29 ER. Miracle of miracles! It’s rare that these guys can top the offering of TRP in any category. Price’s (very similar) ultra-short, TRBUX, actually carries a higher ER. I’ve shifted a bit into OSDAX in part because it would facilitate doing a transfer at some future point from Invesco to T. Rowe.
PS - It strikes me that the low fees on OSDAX may amount to somewhat of a “loss leader” for them. If you move no-load money from it into another of their funds, you’re likely to pay a load for whatever you choose to go into.
Per Yahoo Finance BBBMX and TRBUX have better 3 and 5 year returns than OSDAX. Sorry, I can't post numbers as my internet access frequently drops due to router issues!
@BenWP: Yes. In high school I had the 1977 Twins in a dice and player card league. Great offense and horrible pitching resulted in too many exciting/aggravating games!
I checked OSDAX summary prospectus at the Invesco website and as of 8/31/19 3 year rtn was 1.76 and 5 year rtn 1.30. Vanguard surprisingly was the only brokerage I found that offered the fund;it was unavailable at Fidelity,Schwab and E-Trade.
That latter page can be used to compare OSDAX with other funds. I input TRBUX and it gave 3 and 5 year annual returns of 2.37% and 1.78% also as of 8/31/19.
Flipping back to the Daily tab, the TRBUX figures are 2.33% and 1.80%, confirming hank's figures for that fund (give or take a day).
One can tell that Marketwatch (with Lipper data) has the wrong figures for OSDAX by checking the figures for OSDYX (the ERs are comparable, 0.25% for Y vs 0.33% for A). For the Y shares, Marketwatch reports 3 and 5 year annual returns of 1.85% and 1.4% respectively.
Yeah - Checking M* I get figures (for OSDAX) at or close to msf & Carew388. (1.78 @3 years and 1.33 @5). Sorry for the misstatement. Now, if somebody can explain to me how Lipper could screw up those numbers, I’d feel better. Have used the MW / Lipper data for years and never encountered a problem like that.
As far as Invesco closing, I’m new there, having transferred in thru the merger with Oppenheimer. I’ve been critical of Oppenheimer for years, due to higher fees and their horrible ‘07-‘09 performance. But, as I said earlier, I’ve had a relatively small % of assets with them since around ‘95. I’ve always invested directly with the houses rather than thru a brokerage. Old school I guess. So yes, I’d miss them if they closed completely. I like and use 3 of their specialty funds. With those types of funds, the ability to move in and out nearly at will is helpful. That said, as I simplify things and move monies to TRP (a process already in progress) $$ will be coming out of Invesco.
Comments
As a long time Oppenheimer investor, I’ve been treated well so far in all of this. Actually, the new (Invesco) frequent trading policy seems a lot more lenient than under Oppenheimer. No longer a 30-day “lockout” re exchanges as under Oppenheimer. They do have some strict trading restrictions for very large transactions (in dollar terms), but so far seem inclined not to mess much with the little guy.
As always, thanks to @TheShadow for keeping us informed.
I was thinking the same thing with overlap, but I am just reporting the obvious for the benefit of other posters/readers. You would be surprised how many people are unaware of changes or do not read the supplements provided by mutual fund companies when received.
Rochester funds often show up at the top of muni fund performance screens. In a category of funds that should be sedate, these are high octane funds without adequate warning labels. From Oppenheimer's own PR: "Unlike many of its competitors, the team chooses to invest across the entire credit spectrum and its historic results have often been driven by the high levels of tax-free yield that non-rated and below-investment-grade securities have offered."
http://www.mfwire.com/article.asp?storyID=21319&template=article&bhcp=1
The lack of warning labels has landed these funds in hot water. Reuters, Aug 29, 2013, OppenheimerFunds settles crisis-era muni fund lawsuits for $89.5 mln
SteelPath strike me as a way to vitiate the tax advantages of MLPs (in the pursuit of simplicity), leaving no compelling reason to invest in them. https://www.investmentnews.com/article/20130414/REG/130419957/mlps-in-mutual-funds-pose-hazards
I'd guess it's more a combination of small size and poor performance that's driving the closures. Oppenheimer created its own MLP fund ILPAX a couple of years after acquiring Steelpath, and it's still a tiny fund. But it's been doing better than the similarly microscopic OMLPX, which Oppenheimer is shuttering.
https://news.morningstar.com/fund-category-returns/energy-limited-partnership/$FOCA$LP.aspx
Invesco is leaving in place its two non-MLP infractructure funds, one home grown (GIZAX), and one from Oppenheimer (OQGAX). So there seems to be more considerations than just overlap in doing this housecleaning. Also given Oppenheimer could have merged funds together and shielded investors from tax consequences of liquidation if it felt the closed funds overlapped enough with the surviving funds.
Invesco fund lineup
Related (another tiny MLP fund at the bottom of the performance rankings):
James Alpha MLP Portfolio to cease selling of shares
https://mutualfundobserver.com/discuss/discussion/52746/james-alpha-mlp-portfolio-to-cease-selling-of-shares
I’ve not been much impressed over the years with Oppenheimer’s offerings. I started a small IRA with them in the mid 90s after they introduced one of the first commodities funds. Soared like an eagle for a few years before crashing and burning (now closed). The initial investment has grown decently over those 20-25 years. I do use their OPGSX, OREAX and OQGAX (which msf mentioned). While the last one hasn’t done well since they acquired it a couple years ago, it had a stellar record, as I recall, before that time.
What prompted me to post here again is that I think I’ve actually uncovered a pretty competive offering while digging through Invesco’s lineup. It’s their ultra-short OSDAX which is offered at no-load and carries a .29 ER. Miracle of miracles! It’s rare that these guys can top the offering of TRP in any category. Price’s (very similar) ultra-short, TRBUX, actually carries a higher ER. I’ve shifted a bit into OSDAX in part because it would facilitate doing a transfer at some future point from Invesco to T. Rowe.
PS - It strikes me that the low fees on OSDAX may amount to somewhat of a “loss leader” for them. If you move no-load money from it into another of their funds, you’re likely to pay a load for whatever you choose to go into.
3 years: OSDAX: 3.33% TRBUX: 2.32%
5 years: OSDAX: 2.48% TRBUX: 1.80%
http://financials.morningstar.com/fund/purchase-info.html?t=OSDAX®ion=usa&culture=en-US
Legacy M* OSDAX performance page. Click on "Monthly" tab to get performance figures as of 8/31/19 (confirming carew388's numbers).
http://performance.morningstar.com/fund/performance-return.action?t=OSDAX®ion=usa&culture=en-US
That latter page can be used to compare OSDAX with other funds. I input TRBUX and it gave 3 and 5 year annual returns of 2.37% and 1.78% also as of 8/31/19.
Flipping back to the Daily tab, the TRBUX figures are 2.33% and 1.80%, confirming hank's figures for that fund (give or take a day).
One can tell that Marketwatch (with Lipper data) has the wrong figures for OSDAX by checking the figures for OSDYX (the ERs are comparable, 0.25% for Y vs 0.33% for A). For the Y shares, Marketwatch reports 3 and 5 year annual returns of 1.85% and 1.4% respectively.
As far as Invesco closing, I’m new there, having transferred in thru the merger with Oppenheimer. I’ve been critical of Oppenheimer for years, due to higher fees and their horrible ‘07-‘09 performance. But, as I said earlier, I’ve had a relatively small % of assets with them since around ‘95. I’ve always invested directly with the houses rather than thru a brokerage. Old school I guess. So yes, I’d miss them if they closed completely. I like and use 3 of their specialty funds. With those types of funds, the ability to move in and out nearly at will is helpful. That said, as I simplify things and move monies to TRP (a process already in progress) $$ will be coming out of Invesco.