4.9 in World Bond
U.S. News evaluated 87 World Bond Funds. Our list highlights the top-rated funds for long-term investors based on the ratings of leading fund industry researchers.
| Scorecard | |
|---|---|
| Morningstar | 4 / 5 Stars |
| Lipper | 4 4 1 4 2 |
| Zacks Investment Research | 4 (Sell) |
| Standard & Poor's | 3 / 5 Stars |
| TheStreet.com | E- (Sell) |
Fund Overview
The Oppenheimer International Bond Fund is a flexible global bond fund with a steady track record.
As of April 04, 2012, the fund has assets totaling $12.66 billion. Its portfolio consists largely of bonds issued by foreign governments and corporations.
In 2009--well before the debt crisis blew up--the fund benefited from some opportunistic moves in Europe, as yields in Italy, Greece, and Spain became particularly attractive relative to Germany. But as spreads normalized later in the year, the fund sold off some of these positions and returned to its normal weighting, which in the eurozone favors countries like Germany and France. Meanwhile, the fund has maintained its preference for emerging markets, focusing on those that have high real rates of interest. Among emerging markets, management has shown enthusiasm for Brazil. While exposure to emerging markets has generally helped returns, it weighed on performance in 2008 as the downturn extended its reach to all corners of the market. The fund has returned 1.87 percent over the past year and 9.45 percent over the past three years.
Over time, the fund has stayed nimble and enjoyed solid returns. In particular, it has benefited from its flexible approach. Aside from strong bond picks, it also makes notable use of complex currency bets. Management relies on a complex set of indicators to decide on currency weightings and makes currency moves separate from decisions on bond holdings. "The fund . . . takes on substantial developed and emerging-markets currency risk and makes substantial use of derivatives to take currency and country exposures," says Morningstar. The fund has returned 6.60 percent over the past five years and 10.56 percent over the past decade.
| Trailing Returns | Updated 03.31.2012 |
|---|---|
| Year to date | 3.0% |
| 1 Year | 1.9% |
| 3 Years (Annualized) | 9.5% |
| 5 Years (Annualized) | 6.6% |
| 10 Years (Annualized) | 10.6% |
Investment Strategy
According to the fund's prospectus, "In selecting securities, the fund's portfolio manager evaluates the overall investment opportunities and risks in individual national economies. The portfolio manager analyzes the business cycle in developed countries, and analyzes political factors and exchange rates in emerging market countries. The portfolio manager currently focuses on the following factors, which may vary in particular cases and may change over time: Opportunities for higher yields than are available in U.S. markets [and] opportunities in investments denominated in foreign currencies that compare favorably to the U.S. dollar."
Role in Portfolio
Morningstar calls it a "supporting player."
Fund Opinion
The fund's Value Line Overall Rank, a measure of risk-adjusted performance and relative growth in fund returns, is 4 on a scale of 1 to 5, with 1 being the best and 5 the worst.
Value Line 2012-03-09
Management
Arthur Steinmetz has been a manager since 2004, and Sara Zervos came on board in 2009.
Morningstar gives this fund a stewardship rating of B on a scale of A to F. "This fund's expenses are reasonable, but a lack of manager investment, among other weaknesses, keeps it from an above-average grade," Morningstar says.
Morningstar
In the annual Lipper/Barron's Fund Families Survey for 2009, Oppenheimer ranks seventh out of 61 fund families surveyed.
Lipper
Performance
The fund has returned 1.87 percent over the past year, 9.45 percent over the past three years, 6.60 percent over the past five years, and 10.56 percent over the past decade.
Hypothetical Growth of $10,000
Updated 03.31.2012
The fund's Value Line Growth Persistence rank, which awards funds that consistently outperform their broad universes, is 4 for one year, 3 for five years, and 1 for 10 years. Scores are on a 1 to 5 scale, with 1 being the best and 5 the worst.
Value Line 2012-03-09
Holdings
The fund invests in debt from around the globe. Management tends to hold debt in countries with high real rates of interest.
Asset Allocation
| % Long | % Short | % Net | |
|---|---|---|---|
| Cash | 10.58 | 0.05 | 10.53 |
| Stocks | 0.0 | 0.0 | 0.0 |
| Bonds | 3.48 | 0.0 | 3.48 |
| Other | 7.37 | 1.89 | 5.48 |
| Foreign Bonds | 80.73 | 0.14 | 80.59 |
| Foreign Stocks | 0.02 | 0.11 | -0.09 |
| Convertible | 0.0 | 0.0 | 0.0 |
| Preferred | 0.0 | 0.0 | 0.0 |
Updated 02.29.2012
Top Holdings
Performance as of 03.31.2012
Portfolio as of 02.29.2012
| % Net Assets | |
|---|---|
| Japan(Govt Of) 0.5% | 5.84 |
| Japan(Govt Of) 2.1% | 4.99 |
| Oppenheimer Institutional Money Market E | 4.83 |
| Japan(Govt Of) 1.3% | 3.11 |
| Turkey Govt Bond | 2.93 |
Fees
Oppenheimer International Bond Fund has an expense ratio of 0.98 percent.
Risk
According to the fund's prospectus, "The fund is designed primarily for investors seeking total return over the long term and some income from a fund that invests mainly in foreign debt securities. Those investors should be willing to assume the risks of short-term share price fluctuations of a fund that focuses on debt investments in foreign securities, particularly those in emerging markets."
The fund's Value Line Risk Rank, a measure of volatility, is 5 on a scale of 1 to 5, with 1 being the least volatile and 5 the most.
Value Line 2012-03-09
