Oppenheimer Bond Fund Losses

OppenheimerFunds‘ bond funds had a brutal year in 2008. As you can see in the table at the bottom of this post, their performance, in a word, was abysmal. But as distressing as the funds’ losses were, perhaps even more disappointing was Oppenheimer’s lack of candor in communicating to their fund shareholders just what sort of strategies they were using — strategies that led directly to the staggering losses the funds endured.

Oppenheimer’s Core Bond fund — presumably suited to serve as an investor’s core bond holding — lost nearly 36 percent last year. But that return looks stellar compared to their high yield Champion Income fund, which was off more than 78 percent.

Together, Oppenheimer’s taxable bond funds lost 24 percent in 2008, earning them an average rank in the bottom quartile of their Morningstar categories. Their municipal bond funds did even worse, falling by an average of 32 percent for the year.