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WRA Municipal Bond Fund

  • $7.47 NAV as of 1/13/2017
  • ($-0.01) / -0.13% Daily NAV Change
  • 0.57% YTD (NAV)

Summary

Overview

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

MOD
Medium
Source: Morningstar

Portfolio Management

Bryan J. Bailey, CFA

  • Waddell & Reed Investment Management Company
  • 16 Years with Fund
  • 28 Years in Industry
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Bryan Bailey is a senior vice president for Waddell & Reed Investment Management Company. He graduated in 1985 with a BS in business from Indiana University and earned an MBA in financial management/statistics in 1993 from the University of Chicago Graduate School of Business. Prior to joining Waddell & Reed, he was affiliated with Prudential Insurance and Financial Services in Indianapolis and was a municipal bond trader, underwriter and marketing specialist for Edward D. Jones & Company in St. Louis. Mr. Bailey joined Waddell & Reed in July 1993 as a municipal bond trader. He was appointed vice president and assistant portfolio manager of the Waddell & Reed Advisors Municipal Bond Fund in January 1999; he became portfolio manager of the Fund in June 2000. Mr. Bailey is a Chartered Financial Analyst. He is a member of the Association for Investment Management and Research (AIMR), and the Kansas City Society of Financial Analysts.

Growth of a $10,000 Investment
through 12/31/2016

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.

Documents

Perspectives

Quarterly Fund Commentary

Daily Prices as of 1/13/2017

Net Asset Value (NAV) $7.47
Daily NAV Change ($) ($-0.01) -0.13%
Weekly NAV Change ($) $0.02 0.27%
Public Offering Price (POP) $7.47

Fund Facts

Ticker Symbol WBMBX
CUSIP 930057443
Fund Code 160
Fund Type Fixed Income Funds
Fund Inception 11/5/1976
Class Inception 10/5/1999
Fiscal Year End September
Dividends Paid Monthly
Fund Assets (as of 12/31/2016) $843.7 mil
Total Equity Holdings (as of 12/31/2016) 12
Total Holdings (as of 12/31/2016) 290
Portfolio Turnover Rate (as of 9/30/2016) 5%
Lipper Category General Municipal Debt Funds
Morningstar Category Muni National Long
Benchmark S&P Municipal Bond Index TR

Performance

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 B shares, including sales charge, reflects the applicable contingent deferred sales charge (CDSC), which declines from 5% at the time of purchase to zero at the beginning of the seventh year.

Monthly Rates of Return

Average Annual Total Returns as of 12/31/2016
(Returns for periods of less than 1-yr are not annualized)
 
Fund with maximum 5.00% CDSC -4.17% -4.17% 2.00% 2.01% 3.50% 3.95%
Fund at NAV -0.26% -0.26% 2.96% 2.20% 3.50% 3.95%
Lipper General Municipal Debt Funds 0.04% 0.04% 4.29% 3.48% 3.58%
S&P Municipal Bond Index TR 0.77% 0.77% 4.39% 3.55% 4.20%

Quarterly Rates of Return

Average Annual Total Returns as of 12/31/2016
(Returns for periods of less than 1-yr are not annualized)
 
Fund with maximum 5.00% CDSC -4.17% -4.17% 2.00% 2.01% 3.50% 3.95%
Fund at NAV -0.26% -0.26% 2.96% 2.20% 3.50% 3.95%
Lipper General Municipal Debt Funds 0.04% 0.04% 4.29% 3.48% 3.58%
S&P Municipal Bond Index TR 0.77% 0.77% 4.39% 3.55% 4.20%

Calendar Year Return

  2012
Class B 6.73 -4.29 7.55 1.73 -0.26
S&P Municipal Bond Index TR 7.32 -2.56 9.24 3.22

Morningstar Ratings as of 12/31/2016 Morningstar Logo

Category: Muni National Long
Ratings are based on risk-adjusted returns
Overall out of 144
3 Year out of 144
5 Year out of 130
10 Year out of 102

Lipper Ranking through 12/31/2016 Lipper Logo

Category: General Municipal Debt Funds
 
Rankings are based on average annual total returns, but do not consider sales charges.
1 Year 166/262 64
3 Year 207/230 90
5 Year 189/205 92
10 Year 101/152 67

Expense Ratios as of 1/31/2016

Net 1.82%
Gross 1.82%

5-Year Standard Deviation as of 12/31/2016

S&P Municipal Bond Index TR 3.75

5-Year MPT* Statistics as of 12/31/2016

*Modern Portfolio Theory
Alpha -0.81
Beta 0.85
R-Squared 95.49
Sharpe Ratio 0.64
Capture Ratio Upside: 76.84%
Downside: 91.95%

Distributions

Historical Prices Inception 10/5/1999

1/3/2017 $7.43 NO NO
1/4/2017 $7.44 NO NO
1/5/2017 $7.45 NO NO
1/6/2017 $7.45 NO NO
1/9/2017 $7.45 NO NO
1/10/2017 $7.46 NO NO
1/11/2017 $7.47 NO NO
1/12/2017 $7.48 YES YES
1/13/2017 $7.47 NO NO

Historical Distributions Inception 10/5/1999

1/12/2017 $0.002 Long: $0.000 Short: $0.000 $7.48 1/12/2017
12/8/2016 $0.0317 Long: $0.000 Short: $0.000 $7.42 12/8/2016
11/10/2016 $0.01 Long: $0.000 Short: $0.000 $7.56 11/10/2016
10/13/2016 $0.011 Long: $0.000 Short: $0.000 $7.62 10/13/2016
9/15/2016 $0.01 Long: $0.000 Short: $0.000 $7.67 9/15/2016
8/11/2016 $0.012 Long: $0.000 Short: $0.000 $7.7 8/11/2016
7/14/2016 $0.013 Long: $0.000 Short: $0.000 $7.72 7/14/2016
6/16/2016 $0.009 Long: $0.000 Short: $0.000 $7.72 6/16/2016
5/12/2016 $0.01 Long: $0.000 Short: $0.000 $7.68 5/12/2016
4/14/2016 $0.011 Long: $0.000 Short: $0.000 $7.66 4/14/2016
3/10/2016 $0.011 Long: $0.000 Short: $0.000 $7.59 3/10/2016
2/11/2016 $0.012 Long: $0.000 Short: $0.000 $7.67 2/11/2016
1/14/2016 $0.002 Long: $0.000 Short: $0.000 $7.62 1/14/2016
12/10/2015 $0.0263 Long: $0.000 Short: $0.000 $7.57 12/10/2015
11/12/2015 $0.011 Long: $0.000 Short: $0.000 $7.5 11/12/2015
10/15/2015 $0.01 Long: $0.000 Short: $0.000 $7.54 10/15/2015
9/10/2015 $0.012 Long: $0.000 Short: $0.000 $7.48 9/10/2015
7/16/2015 $0.011 Long: $0.000 Short: $0.000 $7.49 7/16/2015
6/11/2015 $0.011 Long: $0.000 Short: $0.000 $7.49 6/11/2015
5/14/2015 $0.011 Long: $0.000 Short: $0.000 $7.52 5/14/2015
4/16/2015 $0.01 Long: $0.000 Short: $0.000 $7.61 4/16/2015
3/12/2015 $0.012 Long: $0.000 Short: $0.000 $7.59 3/12/2015
2/12/2015 $0.011 Long: $0.000 Short: $0.000 $7.62 2/12/2015
1/15/2015 $0.002 Long: $0.000 Short: $0.000 $7.68 1/15/2015
12/11/2014 $0.0173 Long: $0.000 Short: $0.000 $7.59 12/11/2014
11/13/2014 $0.014 Long: $0.000 Short: $0.000 $7.57 11/13/2014
10/16/2014 $0.014 Long: $0.000 Short: $0.000 $7.65 10/16/2014
9/11/2014 $0.014 Long: $0.000 Short: $0.000 $7.55 9/11/2014
8/14/2014 $0.013 Long: $0.000 Short: $0.000 $7.52 8/14/2014
7/10/2014 $0.015 Long: $0.000 Short: $0.000 $7.43 7/10/2014
6/12/2014 $0.014 Long: $0.000 Short: $0.000 $7.49 6/12/2014
5/15/2014 $0.013 Long: $0.000 Short: $0.000 $7.53 5/15/2014
4/10/2014 $0.014 Long: $0.000 Short: $0.000 $7.42 4/10/2014
3/13/2014 $0.015 Long: $0.000 Short: $0.000 $7.4 3/13/2014
2/13/2014 $0.014 Long: $0.000 Short: $0.000 $7.34 2/13/2014
1/16/2014 $0.004 Long: $0.000 Short: $0.000 $7.3 1/16/2014
12/12/2013 $0.0363 Long: $0.000 Short: $0.000 $7.23 12/12/2013
11/14/2013 $0.013 Long: $0.000 Short: $0.000 $7.29 11/14/2013
10/10/2013 $0.012 Long: $0.000 Short: $0.000 $7.25 10/10/2013
9/12/2013 $0.014 Long: $0.000 Short: $0.000 $7.2 9/12/2013
8/15/2013 $0.013 Long: $0.000 Short: $0.000 $7.27 8/15/2013
7/11/2013 $0.012 Long: $0.000 Short: $0.000 $7.4 7/11/2013
6/13/2013 $0.013 Long: $0.000 Short: $0.000 $7.57 6/13/2013
5/16/2013 $0.012 Long: $0.000 Short: $0.000 $7.74 5/16/2013
4/11/2013 $0.011 Long: $0.000 Short: $0.000 $7.73 4/11/2013
3/14/2013 $0.013 Long: $0.000 Short: $0.000 $7.69 3/14/2013
2/14/2013 $0.012 Long: $0.000 Short: $0.000 $7.74 2/14/2013
1/10/2013 $0.001 Long: $0.000 Short: $0.000 $7.74 1/10/2013

*Special Dividend The table includes the daily prices at NAV (net asset value) for the history of this fund's selected share class. NAV is the amount per share you would receive if you sold shares that day.

12-Month Trailing Dist. Yield as of 12/31/2016

NAV 1.92%
With Sales Charge 1.92%

Annualized 30-Day SEC Yield as of 12/31/2016

Subsidized - NAV 0.53%
Unsubsidized - NAV 0.50%

Portfolio

Top 10 Holdings as a % of net assets 12/31/2016

TX Tpk Auth, Cent TX Tpk Sys, First Tier Rev Bonds, Ser 2, 8/15/2026 2.08%
North TX Twy Auth, Sys Rev Rfdg Bonds, Ser 2008D, 1/1/2030 North TX Twy Auth, Sys Rev Rfdg Bonds, Ser 2008D, 0.0%, 1/1/2030 1.74%
Philadelphia, PA, GO Rfdg Bonds, Ser 2008A (Insured by AGM), 5.3%, 12/15/2024 Philadelphia, PA, GO Rfdg Bonds, Ser 2008A, 5.25%, 12/15/2024 1.36%
Util Debt Securitization Auth, Restructuring Bonds, Ser 2013TE, 5.0%, 12/15/2031 1.18%
NYC Muni Water Fin Auth, Water and Sewer Sys Second Gen R, 5.0%, 6/15/2037 1.15%
CA Various Purp GO Rfdg Bonds, 5.0%, 2/1/2033 1.07%
Bay Area Toll Auth, San Francisco Bay Area Toll Bridge Rev Bonds, Ser 2008 G-1, 1.8%, 4/1/2024 1.01%
Maricopa Cnty Indl Dev Auth, Rev Bonds (Banner Hlth), Ser, 4.0%, 1/1/2038 1.01%
Metro WA DC Arpt Auth, Dulles Toll Road, Second Sr Lien Rev Bonds, Ser 2009C, 10/1/2041 0.99%
Malayan Banking Berhad (GTD by Wells Fargo Bank N.A.), 0.6%, 1/25/2017 0.95%

Maturity
as a % of fixed income assets as of 12/31/2016

<1 Year 10.0%
1-5 Years 19.9%
5-10 Years 11.4%
10-20 Years 33.4%
>20 Years 25.3%
Average Maturity 11.71 years
Effective Duration 5.48 years

Fixed Income Country Allocation
as a % of bond holdings as of 12/31/2016

United States 100.0%

Quality
as a % of fixed income assets as of 12/31/2016

Quality: 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.
NonRated 9.00%
AAA 5.50%
AA 46.80%
A 21.60%
BBB 14.50%
BB 2.20%
B 0.40%

Portfolio Composition
as a % of net assets as of 12/31/2016

Revenue Bonds 55.63%
Insured Bonds 17.14%
Cash and Cash Equivalents 10.73%
Prerefunded/ETM 9.21%
General Obligation Bonds 7.29%

Documents

Select a document below to view or download.

Documents

The value of the Fund’s shares will change, and you could lose money on your investment. Fixed income securities are subject to interest rate risk and, as such, the net asset value of the fund may fall as interest rates rise. Investing in below investment grade securities may carry a greater risk of nonpayment of interest or principal than higher-rated bonds. The Fund may include a significant portion of its investments that will pay interest that is taxable under the Alternative Minimum Tax (AMT). Exempt-interest dividends the Fund pays may be subject to state and local income taxes. The portion of the dividends the Fund pays that is attributable to interest earned on U.S. government securities generally is not subject to those taxes, although distributions by the Fund to its shareholders of net realized gains on the sale of those securities are fully subject to those taxes. The municipal securities market generally, or certain municipal securities in particular, may be significantly affected by adverse political, legislative or regulatory changes or litigation at the Federal or state level. 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.

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.

Fee Waiver and/or Expense Reimbursement: Through January 31, 2018, Waddell & Reed Investment Management Company (WRIMCO), the Fund’s investment manager, Waddell & Reed, Inc. (Waddell & Reed), the Fund’s distributor, and / or Waddell & Reed Services Company, doing business as WI Services Company (WISC), the Fund’s transfer agent, have contractually agreed to reimburse sufficient management fees, 12b-1 fees and / or shareholder servicing fees to cap the total annual ordinary fund operating expenses as follows: Class A shares at 0.84%, Class B shares at 1.78%, Class C shares at 1.71%, and Class Y at 0.70%. Prior to that date, the expense limitation may not be terminated by WRIMCO, Waddell & Reed, WISC or the Board of Trustees.

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

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.

Alpha, Beta, R-Squared, Standard Deviation, Sharpe Ratio and Capture Ratio are 5 year statistics. Alpha is a measure of a fund's actual returns and expected performance, given its level of risk (as measured by beta). Beta reflects the sensitivity of the fund's return to fluctuations in the market index. R-squared indicates how much of a fund's fluctuations were attributable to movements in the fund's benchmark. Standard deviation is a measure of how volatile a fund's returns are. Sharpe ratio is a measure of a fund's risk-adjusted performance. Capture ratio reflects the annualized product of fund vs. index returns for all months in which the index had a positive return (upside capture) or negative return (downside capture).

The Morningstar RatingTM for funds, or "star rating", is calculated for managed products (including mutual funds, variable annuity and variable life subaccounts, exchange-traded funds, closed-end funds, and separate accounts) with at least a three-year history. Exchange-traded funds and open-ended mutual funds are considered a single population for comparative purposes. It is calculated based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a managed product's monthly excess performance, placing more emphasis on downward variations and rewarding consistent performance. The top 10% of products in each product 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. The Overall Morningstar Rating for a managed product is derived from a weighted average of the performance figures associated with its three-, five-, and 10-year (if applicable) Morningstar Rating metrics. The weights are: 100% three-year rating for 36-59 months of total returns, 60% five-year rating/40% three-year rating for 60-119 months of total returns, and 50% 10-year rating/30% five-year rating/20% three-year rating for 120 or more months of total returns. While the 10-year overall star rating formula seems to give the most weight to the 10-year period, the most recent three-year period actually has the greatest impact because it is included in all three rating periods.

Quality: 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.

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

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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