Waddell & Reed

Fund Detail

WRA Municipal Bond Fund
Class A Shares

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Fund Facts
Ticker Symbol UNMBX
CUSIP 930057450
Fund Code 760
Fund Type Fixed Income Funds
Fund Inception 11/5/1976
Class Inception 11/5/1976
Fiscal Year End September
Dividends Paid Monthly
Fund Assets (as of 8/31/2014) $862.0 mil
Total Holdings (as of 8/31/2014) 302
Lipper Category General Municipal Debt Funds
Morningstar Category Muni National Long
Benchmarks S&P Municipal Bond Index TR
Daily Prices
as of 9/16/2014
Net Asset Value (NAV) $7.55
NAV Change ($) $0.00
NAV Change (%) 0.00%
Weekly NAV Change ($) $0.00
Weekly NAV Change (%) 0.00%
Public Offering Price (POP) $7.89
Historical Prices & Distributions
Please select a date
Fund Description
Fund Objective
To seek to provide the level of current income consistent with preservation of capital and that is not subject to Federal income tax.

Investment Approach
Our investment approach uses a cautious top-down management style that seeks to de-emphasize aggressive interest-rate bets in favor of opportunities presented by the shape and slope of the yield curve, while keeping overall Fund duration relatively neutral to our benchmark. Prudent diversification between sectors, states, security structures, positions and ratings categories is strongly emphasized, with the goal of reducing overall risk and performance volatility.
Morningstar Style Box
Source: Morningstar
Returns and Expenses

Data quoted is past performance and current performance may be lower or higher. Past performance is no guarantee of future results. Investment return and principal value of an investment will fluctuate, and shares, when redeemed, may be worth more or less than their original cost.

Performance at NAV does not include the effect of sales charges. Class A shares, including sales charges, reflects the maximum applicable front-end sales load.

Monthly Rates of Return Average Annual Total Returns
as of 8/31/2014
  YTD 1yr 3yr 5yr 10yr Life
Fund at NAV 6.97% 8.46% 4.79% 5.37% 4.52% 5.91%
Fund with 4.25% sales charge 2.44% 3.86% 3.30% 4.47% 4.07% 5.79%
S&P Municipal Bond Index TR 7.75% 10.55% 5.19% 5.65% 4.82% N/A
Quarterly Rates of Return Average Annual Total Returns
as of 6/30/2014
  YTD 1yr 3yr 5yr 10yr Life
Fund at NAV 5.42% 4.13% 5.15% 5.64% 4.72% 5.90%
Fund with 4.25% sales charge 0.95% -0.28% 3.63% 4.72% 4.26% 5.78%
S&P Municipal Bond Index TR 6.09% 6.09% 5.51% 6.09% 5.00% N/A
Lipper General Municipal Debt Funds 6.62% 6.08% 5.70% 6.13% 4.23% N/A
Expense Ratios
as of 1/31/2014
Net 0.89%
Gross 0.89%
12-Month Trailing Distribution Yield
as of 8/31/2014
NAV 3.30%
With sales charge 3.16%
Annualized 30-Day SEC Yield
as of 8/31/2014
Subsidized 1.51%
Unsubsidized 1.47%
Growth of a $10,000 Investment
through 8/31/2014
 Municipal Bond A
 S&P Municipal Bond Index TR

Assumes an investment over 10 years or life of the share class, reinvestment of dividends and capital gains, and does not include the effect of sales charges or taxes.

Ratings and Rankings
Lipper Rankings
as of 8/31/2014
Category: General Municipal Debt Funds
  Rank Percentile
1 Year 227 / 260 87
3 Year 173 / 235 74
5 Year 123 / 209 59
10 Year 46 / 161 29

Rankings are based on average annual total returns, but do not consider sales charges.

Morningstar Ratings
as of 8/31/2014
Category: Muni National Long
Overall (out of 236 Muni National Long)
3 Year (out of 236 Muni National Long)
5 Year (out of 213 Muni National Long)
10 Year (out of 174 Muni National Long)

Ratings are based on risk-adjusted returns.

Holdings
Portfolio Composition
(as a % of net assets as of 8/31/2014)
Revenue Bonds 61.23%
Insured Bonds 15.18%
Cash and Cash Equivalents 13.70%
General Obligation Bonds 8.36%
Prerefunded/ETM 1.52%
Quality
(as a % of bond holdings as of 8/31/2014)
AAA 4.6 %
AA 34.4 %
A 33.6 %
BBB 18.6 %
BB 2.5 %
CCC 0.9 %
Non-Rated 5.3 %

Quality: Our preference is to always use ratings obtained from Standard & Poor's. For securities not rated by Standard & Poor's, ratings are obtained from Moody's. We do not evaluate these ratings, but simply assign them to the appropriate credit quality category as determined by the rating agency.

Maturity
(as a % of bond holdings as of 8/31/2014)
<1 Year 13.2 %
1-5 Years 8.8 %
5-10 Years 10.1 %
10-20 Years 36.0 %
>20 Years 3.2 %
Average Maturity 14.02 years
Effective Duration 6.58 years

Average maturity and effective duration include bonds, cash and cash equivalents.

Top 10 Holdings
(as a % of net assets as of 8/31/2014)
TX Tpk Auth, Cent TX Tpk Sys, First Tier Rev Bonds, Ser 2002A, 0.00% 8/15/2026TX Tpk Auth, Cent TX Tpk Sys, First Tier Rev Bonds, Ser 2002A (Insured by BHAC), 0.0%, 8/15/2026 1.9%
North TX Twy Auth, Sys Rev Rfdg Bonds, Ser 2008D, 0.0%, 1/1/2030North TX Twy Auth, Sys Rev Rfdg Bonds, Ser 2008D, 0.0%, 1/1/2030 1.6%
Philadelphia, PA, GO Rfdg Bonds, Ser 2008A, 5.25%, 12/15/2024Philadelphia, PA, GO Rfdg Bonds, Ser 2008A (Insured by AGM), 5.3%, 12/15/2024 1.4%
NJ Econ Dev Auth, Sch Fac Constr Rfdg Notes (SIFMA Index Notes), Ser 2013I, 1.7%, 3/1/2028 1.4%
Util Debt Securitization Auth, Restructuring Bonds, Ser 2013TE, 5.0%, 12/15/2031 1.2%
WA Pub Power Supply Sys, Nuclear Proj No. 1, Rfdg Rev Bonds, Ser 1989B, 7.13%, 7/1/2016WA Pub Power Supply Sys, Nuclear Proj No. 1, Rfdg Rev Bonds, Ser 1989B, 7.1%, 7/1/2016 1.1%
CA Various Purp GO Rfdg Bonds, 5.0%, 2/1/2033 1.1%
PA Tpk Comsn, Tpk Sub Rev Bonds, Ser 2010B-2, 0.0%, 12/1/2028 1.1%
IL GO Bonds, Ser 2012A, 4.0%, 1/1/2023 1.0%
Bay Area Toll Auth, San Francisco Bay Area Toll Bridge Rev Bonds, Ser 2008 G-1, 1.2%, 4/1/2045 1.0%
Total Portfolio Holdings
(updated quarterly, upon availability)

View | Download (as of 6/30/2014)

Risk Factors: As with any mutual fund, the value of the Fund's shares will change, and you could lose money on your investment. An investment in the Fund is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. These and other risks are more fully described in the fund's prospectus. Not all funds or fund classes may be offered at all broker/ dealers.

Pricing: All prices and year-to-date returns are based on closing quotes unless noted, as supplied to the NASDAQ by 6:00 p.m. Eastern time.

Stylebox: The Morningstar Fixed Income style box reveals a fund’s investment style. The vertical axis shows the credit quality of the bonds owned and the horizontal axis shows interest rate sensitivity as measured by a bond’s effective duration. Morningstar seeks credit rating information from fund companies on a periodic basis (e.g., quarterly). In compiling credit rating information, Morningstar instructs fund companies to only use ratings that have been assigned by a Nationally Recognized Statistical Rating Organization (NRSRO). If two NRSROs have rated a security, fund companies are to report the lowest rating; if three or more NRSROs have rated the same security differently, fund companies are to report the rating that is in the middle. Credit quality breakdowns are shown for corporate-bond holdings and depict the quality of bonds in the underlying portfolio. The report shows the percentage of fixed-income securities that fall within each credit quality rating as assigned by an NRSRO. Bonds not rated by an NRSRO are included in the not rated (NR) category. Please note: Morningstar, Inc. is not itself an NRSRO nor does it issue a credit rating on the fund. An NRSRO rating on a fixed-income security can change from time-to-time. For credit quality, Morningstar combines the credit rating information provided by fund companies with an average default rate calculation to come up with a weighted-average credit quality. The weighted-average credit quality is currently a letter that roughly corresponds to the scale used by a leading NRSRO. Bond funds are assigned a style box placement of “low,” “medium,” or “high” based on their average credit quality. Funds with a low credit quality are those whose weighted-average credit quality is determined to be less than “BBB-;” medium are those less than “AA-,” but greater or equal to “BBB-;” and high are those with a with a weighted-average credit quality of “AA-” or higher. When classifying a bond portfolio, Morningstar first maps the NRSRO credit ratings of the underlying holdings to their respective default rates (as determined by Morningstar’s analysis of actual historical default rates). Morningstar then averages these default rates to determine the average default rate for the entire bond fund. Finally, Morningstar maps this average default rate to its corresponding credit rating along a convex curve. For interest-rate sensitivity, Morningstar obtains from fund companies the average effective duration. Generally, Morningstar classifies a fixed-income fund’s interest-rate sensitivity based on the effective duration of the Morningstar Core Bond Index (MCBI), which is currently three years. The classification of Limited will be assigned to those funds whose average effective duration is between 25% to 75% of MCBI’s average effective duration; funds whose average effective duration is between 75% to 125% of the MCBI will be classified as Moderate; and those that are at 125% or greater of the average effective duration of the MCBI will be classified as Extensive.

Stylebox: The Morningstar Style Box reveals a fund’s investment style as of the date noted on this report. For fixed-income funds, the vertical axis shows the credit quality of the bonds owned and the horizontal axis shows interest rate sensitivity as measured by a bond’s effective duration. Morningstar seeks credit rating information from fund companies on a periodic basis (e.g., quarterly). In compiling credit rating information, Morningstar instructs fund companies to only use ratings that have been assigned by a Nationally Recognized Statistical Rating Organization (NRSRO). If two NRSROs have rated a security, fund companies are to report the lowest rating; if three or more NRSROs have rated the same security differently, fund companies are to report the rating that is in the middle. Credit quality breakdowns are shown for corporate-bond holdings and depict the quality of bonds in the underlying portfolio. The report shows the percentage of fixed-income securities that fall within each credit quality rating as assigned by an NRSRO. Bonds not rated by an NRSRO are included in the not rated (NR) category. PLEASE NOTE: Morningstar, Inc. is not itself an NRSRO nor does it issue a credit rating on the fund. An NRSRO rating on a fixed-income security can change from time-to-time. For credit quality, Morningstar combines the credit rating information provided by fund companies with an average default rate calculation to come up with a weighted-average credit quality. The weighted-average credit quality is currently a letter that roughly corresponds to the scale used by a leading NRSRO. Bond funds are assigned a style box placement of “low,” “medium,” or “high” based on their average credit quality. Funds with a low credit quality are those whose weighted-average credit quality is determined to be less than “BBB-;” medium are those less than “AA-,” but greater or equal to “BBB-;” and high are those with a with a weighted-average credit quality of “AA-” or higher. When classifying a bond portfolio, Morningstar first maps the NRSRO credit ratings of the underlying holdings to their respective default rates (as determined by Morningstar’s analysis of actual historical default rates). Morningstar then averages these default rates to determine the average default rate for the entire bond fund. Finally, Morningstar maps this average default rate to its corresponding credit rating along a convex curve. For interest-rate sensitivity, Morningstar obtains from fund companies the average effective duration. Generally, Morningstar classifies a fixed-income fund’s interest-rate sensitivity based on the effective duration of the Morningstar Core Bond Index (MCBI), which is currently three years. The classification of Limited will be assigned to those funds whose average effective duration is between 25% to 75% of MCBI’s average effective duration; funds whose average effective duration is between 75% to 125% of the MCBI will be classified as Moderate; and those that are at 125% or greater of the average effective duration of the MCBI will be classified as Extensive. For municipal bond funds, Morningstar also obtains from fund companies the average effective duration. In these cases, static breakpoints are utilized. These breakpoints are as follows: (i) Limited: 4.5 years or less; (ii) Moderate: more than 4.5 years but less than 7 years; and (iii) Extensive: more than 7 years. In addition for non-US taxable and non-US domiciled fixed income funds static duration breakpoints are used: (i) Limited: less than or equal to 3.5 years; (ii) Moderate: greater than 3.5 and less than or equal to 6 years; and (iii) Extensive: greater than 6 years.

Index Description: Standard & Poor's/Investortools Municipal Bond is an unmanaged index comprised of bonds held by managed municipal bond fund customers of Standard & Poor's Securities Pricing, Inc. that are priced daily. It is not possible to invest directly in an index.

Performance results for some funds may include the effect of expense reduction arrangements. If those arrangements had not been in place, the performance results would have been lower.

Unsubsidized yields reflect what the yield would have been without the effect of reimbursements and waivers. The adviser and its affiliates have or may voluntarily waive a portion of their fees (including, but not limited to, distribution and service (12b-1) fees) and reimburse certain expenses. There is no guarantee that the fund will avoid a negative yield. Such undertaking may be amended or withdrawn at any time.

30-Day SEC Yield: is calculated based on a formula mandated by the Securities and Exchange Commission (SEC) that calculates a fund's hypothetical annualized income, as a percentage of its assets. A security's income, for the purposes of this calculation, is based on the current market yield to maturity (in the case of bonds) or projected dividend yield (for stocks) of the fund's holdings over a trailing 30 day period. This hypothetical income will differ (at times, significantly) from the fund's actual experience; as a result, income distributions from the fund may be higher or lower than implied by the SEC yield.

12-Month Trailing Distribution Yield: at NAV refers to the 12-month historical cash flow paid over the past 12 months in dividends, divided by the past months ending NAV.

Morningstar Ratings: For each fund with at least a 3-year history, Morningstar calculates a risk-adjusted return measure that accounts for variation in a fund's monthly performance (including the effects of all sales charges), placing emphasis on downward variations and rewarding consistent performance. The top 10% of funds in each category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars and the bottom 10% receive 1 star. (Each share class is counted as a fraction of one fund and rated separately.) A fund's overall rating is derived from a weighted average of the 3-, 5- and 10-year (if applicable) rating metrics. Morningstar Rating is for the share classes specified; other classes may have different performance characteristics.

Information is subject to change and is not intended to represent any past or future investment recommendations.

Quality: Our preference is to always use ratings obtained from Standard & Poor's. For securities not rated by Standard & Poor's, ratings are obtained from Moody's. We do not evaluate these ratings, but simply assign them to the appropriate credit quality category as determined by the rating agency.

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