Did Oppenheimer’s Core Plus funds rise or fall in 2008?

By Felix Salmon
December 23, 2009
Mish has found something very odd indeed from Oppenheimer Funds. Its Fixed Income Core Plus strategy was marketed to the Illinois Bright Start college savings plan, with disastrous results: parents thought they were making a conservative investment for imminent college-tuition needs, bechmarked to the Barclays aggregate index, which rose more than 5% in 2008. Instead, they wound up in a crazy leveraged vehicle with total losses of 38% in 2008 and more in 2009.

" data-share-img="" data-share="twitter,facebook,linkedin,reddit,google" data-share-count="true">

Mish has found something very odd indeed from Oppenheimer Funds. Its Fixed Income Core Plus strategy was marketed to the Illinois Bright Start college savings plan, with disastrous results: parents thought they were making a conservative investment for imminent college-tuition needs, bechmarked to the Barclays aggregate index, which rose more than 5% in 2008. Instead, they wound up in a crazy leveraged vehicle with total losses of 38% in 2008 and more in 2009.

But at Oppenheimer’s website, the information on the Core Plus fund shows positive returns for both 2008 and the year to date. It’s all very odd, and makes it seem that the college fund investments were invested in something enormously different from Oppenheimer’s own Core Plus fund. Either that, or Oppenheimer is calculating its fund returns in a very odd manner. Can anybody get to the bottom of this?

Update: Mystery solved! There are two Oppenheimers. There’s Oppenheimer Funds, which sold the disastrous investment to Illinois; its Core Bond Fund did indeed plunge in value in 2008. And then there’s Oppenheimer Investment Management, which Mish linked to, which also has a Core bond fund, but which is not part of Oppenheimer Funds at all; instead it’s an affiliate of Oppenheimer & Co, the boutique where Meredith Whitney used to work.

4 comments

We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/

Eh, bait and switch?

Posted by Uncle_Billy | Report as abusive

The same type of fund was at issue in Oregon in 2008/early 2009:

http://uk.reuters.com/article/idUKN13390 95220090413

Posted by blakegoud | Report as abusive

Just to amplify Felix, Oppenheimer Investment Management doesn’t actually run any ’40 Act mutual funds of any kind. The “core bond” strategy to which you refer is available only through separate accounts, etc.

Posted by fixedincome | Report as abusive

Undeniably believe that which you stated. Your favorite justification seemed to be on the web the easiest thing to be aware of. I say to you, I certainly get irked while people think about worries that they plainly don’t know about. You managed to hit the nail upon the top and also defined out the whole thing without having side-effects , people could take a signal. Will likely be back to get more. Thanks