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WRA Municipal Bond Fund

  • $7.43 NAV as of 12/9/2016
  • ($0.00) / 0.00% Daily NAV Change
  • 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.

Perspectives

Quarterly Fund Commentary

Daily Prices as of 12/9/2016

Net Asset Value (NAV) $7.43
Daily NAV Change ($) ($0.00) 0.00%
Weekly NAV Change ($) $0.03 0.41%
Public Offering Price (POP) $7.43

Fund Facts

Ticker Symbol WYMBX
CUSIP 930057427
Fund Code 761
Fund Type Fixed Income Funds
Fund Inception 11/5/1976
Class Inception 6/10/2016
Fiscal Year End September
Dividends Paid Monthly
Fund Assets (as of 11/30/2016) $858.0 mil
Total Equity Holdings
Total Holdings (as of 11/30/2016) 296
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.

Class Y shares are not subject to sales charges.

Monthly Rates of Return

Average Annual Total Returns as of 11/30/2016
(Returns for periods of less than 1-yr are not annualized)
  YTD 1YR 3YR 5YR 10YR LIFE
Fund at NAV
Lipper General Municipal Debt Funds -0.85% -0.09% 3.91% 3.73% 3.46%
S&P Municipal Bond Index TR -0.22% 0.48% 3.94% 3.74% 4.07% -3.39%

Quarterly Rates of Return

Average Annual Total Returns as of 9/30/2016
(Returns for periods of less than 1-yr are not annualized)
  YTD 1YR 3YR 5YR 10YR LIFE
Fund at NAV
Lipper General Municipal Debt Funds 3.99% 5.77% 5.71% 4.74% 4.09%
S&P Municipal Bond Index TR 4.21% 5.84% 5.69% 4.67% 4.68% 0.90%

Calendar Year Return

  2011 2012 2013 2014 2015
S&P Municipal Bond Index TR 10.64 7.32 -2.56 9.24 3.22

Morningstar Ratings as of 11/30/2016 Morningstar Logo

Category: Muni National Long
Ratings are based on risk-adjusted returns
Overall out of 146
3 Year out of 146
5 Year out of 134
10 Year out of 105

Expense Ratios as of 6/10/2016

Net 0.72%
Gross 0.72%

5-Year Standard Deviation as of

S&P Municipal Bond Index TR 3.80

Distributions

Historical Prices Inception 6/10/2016

Date Price Dividend Reinvest Date Capital Gain Reinvest Date
12/1/2016 $7.40 NO NO
12/2/2016 $7.40 NO NO
12/5/2016 $7.41 NO NO
12/6/2016 $7.43 NO NO
12/7/2016 $7.47 NO NO
12/8/2016 $7.43 YES YES
12/9/2016 $7.43 NO NO

Historical Distributions Inception 6/10/2016

Ex-date Income Capital Gains Reinvest Gains Payment Date
12/8/2016 $0.0377 Long: $0.000 Short: $0.000 $7.43 12/8/2016
11/10/2016 $0.018 Long: $0.000 Short: $0.000 $7.57 11/10/2016
10/13/2016 $0.017 Long: $0.000 Short: $0.000 $7.62 10/13/2016
9/15/2016 $0.019 Long: $0.000 Short: $0.000 $7.68 9/15/2016
8/11/2016 $0.018 Long: $0.000 Short: $0.000 $7.71 8/11/2016
7/14/2016 $0.017 Long: $0.000 Short: $0.000 $7.72 7/14/2016
6/16/2016 $0.017 Long: $0.000 Short: $0.000 $7.73 6/16/2016

*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.

Annualized 30-Day SEC Yield as of 11/30/2016

Subsidized - NAV 1.32%
Unsubsidized - NAV 1.29%

Portfolio

Top 10 Holdings as a % of net assets 11/30/2016

TX Tpk Auth, Cent TX Tpk Sys, First Tier Rev Bonds, Ser 2, 8/15/2026 2.00%
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 1.65%
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 1.34%
Util Debt Securitization Auth, Restructuring Bonds, Ser 2013TE, 5.0%, 12/15/2031 1.13%
NYC Muni Water Fin Auth, Water and Sewer Sys Second Gen R, 5.0%, 6/15/2037 1.11%
NY State Hsng Fin Agy, Riverside Ctr 2 Hsng Rev Bonds, Ser 2013A-2 (GTD by Bank of America N.A.), 0.6%, 12/7/2016 1.07%
CA Various Purp GO Rfdg Bonds, 5.0%, 2/1/2033 1.03%
Bay Area Toll Auth, San Francisco Bay Area Toll Bridge Rev Bonds, Ser 2008 G-1, 1.7%, 4/1/2045 0.99%
Maricopa Cnty Indl Dev Auth, Rev Bonds (Banner Hlth), Ser, 4.0%, 1/1/2038 0.98%
Metro WA DC Arpt Auth, Dulles Toll Road, Second Sr Lien Rev Bonds, Ser 2009C, 10/1/2041 0.95%

Maturity
as a % of fixed income assets as of 10/31/2016

<1 Year 12.7%
1-5 Years 17.8%
5-10 Years 11.4%
10-20 Years 33.4%
>20 Years 24.6%
Average Maturity 11.68 years
Effective Duration 5.30 years

Fixed Income Country Allocation
as a % of bond holdings as of 11/30/2016

United States 100.0%

Quality
as a % of fixed income assets as of 11/30/2016

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 9.10%
AAA 5.60%
AA 46.10%
A 21.50%
BBB 15.10%
BB 2.20%
B 0.40%

Portfolio Composition
as a % of net assets as of 11/30/2016

Revenue Bonds 54.04%
Insured Bonds 16.67%
Cash and Cash Equivalents 12.96%
Prerefunded/ETM 9.19%
General Obligation Bonds 7.14%

Documents

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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.

When a fund's share class has less than a year of performance to report, the returns shown are cumulative.

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.

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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