Personal Finance

Is your bond fund invested in Puerto Rico?

Puerto Rico bonds: Beware these key dangers
Puerto Rico bonds: Beware these key dangers
Puerto Rico: New risk to financials?
Puerto Rico: New risk to financials?
Puerto Rico on brink of default?
Puerto Rico on brink of default?

Some of the top-performing municipal bond funds over the past five years have held huge stakes in Puerto Rican debt. Now that Puerto Rico's governor has said the island's roughly $72 billion in debts are "not payable" and asked for U.S. bankruptcy protection for the commonwealth, investors in those funds may take a big hit.

U.S. bond funds have an $11.3 billion total exposure to Puerto Rican debt as of June 29, according to mutual fund firm research Morningstar. (Tweet This) See a list of 20 bond funds with the most exposure to Puerto Rican debt below.

Since U.S. mutual funds are only required to disclose their holdings quarterly, the list from Morningstar is a snapshot and many of these fund either could have sold, or could be selling their Puerto Rican holdings.

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Yet one firm dominates Morningstar's list of funds with the highest exposure to Puerto Rican debt: OppenheimerFunds.

Sixteen of the 20 funds on Morningstar's list are members of the OppenheimerFunds' Rochester group, which describes as its strategy as venturing off "the well-worn path others follow" in tax-free municipal investing. These funds have consistently bested their muni bond peers over the past five years, but June has been brutal to them. Rochester Fund Municipals, the largest fund in the Rochester group with more than $1.3 billion in assets, had more than a quarter of its portfolio invested in Puerto Rican debt as of the end of May and experienced a 1.8 percent drop in net asset value on Monday.

"OppenheimerFunds Rochester and other creditors have offered Gov. Alejandro Garcia Padilla and Puerto Rico numerous creative and viable solutions to the current fiscal situation facing the island's public power authority. We strongly believe the commonwealth has the ability to provide essential services to its citizens, grow the economy and repay what bondholders are due.... We expect Puerto Rico to act within the tenets of the law, including the commonwealth's constitution, and are ready to defend the previously agreed to terms in each and every bond indenture," according to an OppenheimerFunds statement issued Tuesday. The company declined to comment further.

Read MoreInvestors scramble to avoid Puerto Rico losses

But the muni bond fund that has the biggest reported stake in Puerto Rican debt is not a part of OppenheimerFunds. That distinction goes to Franklin Double Tax-Free Income Fund, from Franklin Templeton Investments, which had more than 47 percent of its portfolio invested in the commonwealth's debt as of the end of March. That allocation is lower than it was a year ago when more than 61 percent of the fund was invested in Puerto Rican debt, according to mutual fund research company Lipper. This fund has been closed to new investors since August 2012.

A Franklin Templeton spokeswoman said that portfolio managers are analyzing an independent report on Puerto Rico's debt crisis written by Anne Krueger, a former IMF official, called "Puerto Rico – A Way Forward," that was released Monday and is "waiting to hear more from the governor on next steps."