Waddell & Reed

Fund Detail

WRA Municipal High Income Fund
Class A Shares

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Fund Facts
Ticker Symbol UMUHX
CUSIP 930057419
Fund Code 762
Fund Type Fixed Income Funds
Fund Inception 1/21/1986
Class Inception 1/21/1986
Fiscal Year End September
Dividends Paid Daily, Paid Monthly
Fund Assets (as of 9/30/2014) $810.7 mil
Total Holdings (as of 9/30/2014) 244
Portfolio Turnover Rate (as of 6/30/2014) 6%
Lipper Category High Yield Municipal Debt Funds
Morningstar Category High Yield Muni
Benchmarks Barclays HY Muni TR USD
Daily Prices
as of 10/20/2014
Net Asset Value (NAV) $4.96
NAV Change ($) $0.00
NAV Change (%) 0.00%
Weekly NAV Change ($) $0.00
Weekly NAV Change (%) 0.00%
Public Offering Price (POP) $5.18
Historical Prices & Distributions
Please select a date
Fund Description
Fund Objective
To seek to provide a high level of current income that is not subject to Federal income tax.

Investment Approach
We invest in a wide range of industries that issue tax-exempt debt. There are two components to our investment process: macro- economic analysis and security selection. Our views on interest rates largely determines our portfolio decisions on duration and how to structure the portfolio to achieve a given duration target. We diversify by sector and holdings within a sector.
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 9/30/2014
  YTD 1yr 3yr 5yr 10yr Life
Fund at NAV 10.77% 11.03% 6.37% 6.31% 5.37% 6.64%
Fund with 4.25% sales charge 5.96% 6.25% 4.84% 5.39% 4.91% 6.48%
Barclays HY Muni TR USD 12.48% 11.96% 8.16% 8.13% 5.78% N/A
Lipper High Yield Municipal Debt Funds 11.88% 12.09% 6.78% 6.17% 4.29% N/A
Quarterly Rates of Return Average Annual Total Returns
as of 9/30/2014
  YTD 1yr 3yr 5yr 10yr Life
Fund at NAV 10.77% 11.03% 6.37% 6.31% 5.37% 6.64%
Fund with 4.25% sales charge 5.96% 6.25% 4.84% 5.39% 4.91% 6.48%
Barclays HY Muni TR USD 12.48% 11.96% 8.16% 8.13% 5.78% N/A
Lipper High Yield Municipal Debt Funds 11.88% 12.09% 6.78% 6.17% 4.29% N/A
Expense Ratios
as of 1/31/2014
Net 0.91%
Gross 0.91%
12-Month Trailing Distribution Yield
as of 9/30/2014
NAV 4.92%
With sales charge 4.71%
Annualized 30-Day SEC Yield
as of 9/30/2014
Subsidized 3.32%
Unsubsidized 3.29%
Growth of a $10,000 Investment
through 9/30/2014
 Municipal High Income A
 Barclays HY Muni TR USD

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 9/30/2014
Category: High Yield Municipal Debt Funds
  Rank Percentile
1 Year 90 / 133 68
3 Year 71 / 113 63
5 Year 36 / 95 38
10 Year 4 / 62 7

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

Morningstar Ratings
as of 9/30/2014
Category: High Yield Muni
Overall (out of 152 High Yield Muni)
3 Year (out of 152 High Yield Muni)
5 Year (out of 132 High Yield Muni)
10 Year (out of 89 High Yield Muni)

Ratings are based on risk-adjusted returns.

Holdings
Portfolio Composition
(as a % of net assets as of 9/30/2014)
Revenue Bonds 86.48%
General Obligation Bonds 6.46%
Cash and Cash Equivalents 6.42%
Insured Bonds 0.46%
Prerefunded/ETM 0.19%
Quality
(as a % of bond holdings as of 9/30/2014)
AA 2.6 %
A 10.9 %
BBB 27.8 %
BB 7.5 %
B 4.4 %
CCC 1.8 %
Non-Rated 44.9 %

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 9/30/2014)
<1 Year 4.9 %
1-5 Years 0.7 %
5-10 Years 2.6 %
10-20 Years 21.6 %
>20 Years 70.2 %
Average Maturity 21.84 years
Effective Duration 7.95 years

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

Top 10 Holdings
(as a % of net assets as of 9/30/2014)
VA Small Business Fin Auth, Sr Lien Rev Bonds (Elizabeth River Crossing Opco LLC Proj), Ser 2012, 5.5%, 1/1/2042 1.5%
LA Pub Fac Auth, Solid Waste Disp Fac Rev Bonds (LA Pellets, Inc. Proj), Ser 2013B, 10.5%, 7/1/2039 1.5%
TX Private Activity Bond Surface Trans Corp., Sr Lien Rev Bonds (North Tarrant Express Managed Lanes Proj), Ser 2009, 6.9%, 12/31/2039 1.4%
Grand Prkwy Trans Corp., First Tier Toll Rev Bonds, Ser 2013A, 5.5%, 4/1/2053 1.4%
La Paz Cnty, AZ, Indl Dev Auth, Indl Dev Rev Sr Lien, Imperial Rgnl Detention Fac Proj, 7.8%, 10/1/2039 1.3%
MI Fin Auth, Sr Edu Fac Rev Bonds (St. Catherine of Siena Academy Proj), Ser 2010A, 8.5%, 10/1/2045 1.2%
The Indl Dev Auth of Mohave Cnty, Correctional Fac Contract Rev Bonds (Mohave Prison, LLC Expansion Proj), Ser 2008, 8.00%, 5/1/2025Indl Dev Auth of Mohave Cnty, Correctional Fac Contract Rev Bonds (Mohave Prison LLC Expansion Proj), Ser 2008, 8.0%, 5/1/2025 1.1%
AZ Hlth Fac Auth, Rev Bonds (Banner Hlth), Ser 2007B, 1.0%, 1/1/2037 1.1%
Cent Plains Enrg Proj, Gas Proj Rev Bonds (Proj No. 3), Ser 2012, 5.3%, 9/1/2037 1.1%
PR Elec Power Auth, Power Rev Bonds, Ser 2013A, 7.0%, 7/1/2043 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: Barclays Municipal High Yield is an unmanaged index made up of bonds that are non-investment grade, unrated, or rated below Ba1 by Moody’s Investors Service with a remaining maturity of at least one year. 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.

Please remember that an investment in a mutual fund involves risk. Investment return and principal value of a mutual fund investment will fluctuate, and shares, when redeemed, may be worth more or less than their original cost.

YTD Prices can be updated 3 to 4 hours after the Daily Pricing information which can result in mismatching data.

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