December 2, 2013 Comments (0) Blog, Securities Fraud

Recovery of Oppenheimer Rochester Virginia Municipal Bond Fund Losses

(Last Updated On: July 17, 2015)

Have you suffered losses from your investment in the Oppenheimer Rochester Virginia Municipal Bond Fund?  If so, the securities attorneys of The White Law Group may be able to help you recover your losses through a FINRA arbitration claim against the brokerage firm that recommended the investment to you.

According to reports, several of Oppenheime rFunds’ municipal bond funds have been rocked by big bets on Puerto Rican debt.  For example, the $125 million Oppenheimer Rochester Virginia Municipal Bond Fund (ORVAX) is down more than 15% this year, ranking it dead last among single-state municipal bond funds municipal bond funds and second-worst among all municipal bond funds.

The losses could come as a shock to Virginia-based investors in the fund, given that the state isn’t facing any particular debt problems.

The main culprit behind the fund’s underperformance appears to have been its big bet on Puerto Rican bonds, which have tremendously underperformed the broad municipal bond market.  The S&P Municipal Bond Puerto Rico Index was down 21% year-to-date through Oct. 10, 2013 (1,900 basis points worse than the S&P Municipal Bond Index).

According to Morningstar, Inc., the Oppenheimer Rochester Virginia Municipal Bond Fund held 33% of its assets in Puerto Rican debt as of Aug. 31.

The Oppenheimer Rochester Virginia Municipal Bond Fund is not the only Oppenheimer Municipal Bond Fund to make a significant bet on Puerto Rican debt.  The following Oppenheimer Municipal Bond funds also appear to have invested assets in Puerto Rican bonds :

OPNYX – Oppenheimer Rochester® AMT-Free New York Municipal Fund

ORAZX – Oppenheimer Rochester® Arizona Municipal Fund

RMUNX – Oppenheimer Rochester® Fund Municipals

ORMDX – Oppenheimer Rochester® Maryland Municipal Fund

ORMIX – Oppenheimer Rochester® Michigan Municipal Fund

ONJAX – Oppenheimer Rochester® New Jersey Municipal Fund

OPNCX – Oppenheimer Rochester® North Carolina Municipal Fund

ORVAX – Oppenheimer Rochester® Virginia Municipal Fund

Puerto Rico bonds carry higher yields because of the risks surrounding the territory’s pension deficits and slow economic growth. That leads to higher yields and potentially higher returns.

Brokerage firms are required to perform due diligence on any investment they recommend.  They are also required to insure that any recommendation is suitable in light of the client’s age, investment experience, net worth, and investment objectives.  Given that most municipal bond investors are risk adverse, risky bets on Puerto Rican debt likely made these funds unsuitable for many investors.

If you suffered losses in the Oppenheimer Rochester Virginia Municipal Bond Fund and would like to discuss your litigation options, please call the securities attorneys of The White Law Group for a free consultation.

The White Law Group is a national securities fraud, securities arbitration, and investor protection law firm with offices in Chicago, Illinois and Boca Raton, Florida.

For more information on the firm, visit http://www.whitesecuritieslaw.com.

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