\t\t\t\tOppenheimer Champion Income Fund (OPCHX; OCHBX; OCHCX; OCHNX; OCHYX) plummeted 82% overall making it the worst performing taxable high yield bond fund of 2008. The investors believed they were in a conservative high yield fund when in fact they were exposed to illiquid derivatives and high risk mortgage backed securities. The collapse eliminated approximately $2 billion over the course of 15 months. <\/p>\n
Investors who purchased this fund were clients of UBS, Citigroup Smith Barney, Wachovia, Linsco Private Ledger LPL, Merrill Lynch, UBS, ING, and Stifel Nichols among others. Many investors who were sold conservative high yield bond funds were shocked to learn that they had losses of 40% to 80% of their principal. With slightly higher risk than a CD, this gave investors a one to two percent higher rate of return. Now, these conservative investors will need nearly 5 years of income just to recover. Meanwhile due to the inverse relationship between interest rates and bonds, high quality bonds have risen in value.<\/p>\n
The Oppenheimer Rochester National Municipal Bond Fund (ORNAX; ORNBX; ORNCX) lost approximately 60% of its $4 billion in assets. The fund violated its investment ratio in illiquid securities and failed to disclose risk factors associated with the overconcentration of municipal bonds that could become illiquid quickly. <\/p>\n