T. Rowe Price Launches Ultra Short-Term Bond Fund.
New Fund Provides Investors with Alternative Short-Term Investment
BALTIMORE, Dec. 5, 2012 /PRNewswire/ —
T. Rowe Price
intr.v. trowed, trow·ing, trows
1. Archaic To think.
2. Obsolete To suppose.
[Middle English trowen, from Old English
) has introduced the Ultra Short-Term Bond Fund(TRBUX) for
investors. The new no-load mutual fund seeks to provide a high level of
income consistent with minimal fluctuations in principal value and
liquidity. The Ultra Short-Term Bond Fund offers a conservative
investment alternative for investors who want higher yields than a money
market fund and less volatility than short-term bond funds.
Ultra Short-Term Bond Fund Details
* The Ultra Short-Term Bond Fund fills the gap between money market
funds and traditional short-term bond funds in terms of a risk/reward
* The fund takes on slightly more credit and interest rate risk than
money market funds with greater return potential. Unlike money market
funds but similar to other bond funds, its net asset value can increase
or decrease as interest rates change, with the potential for principal
gains or losses. At the same time, the fund will be managed with an eye
toward reducing risks if rates rise.
* The Ultra Short-Term Bond Fund will invest in a highly
portfolio of shorter-term investment-grade corporate and government
securities, including mortgage- and asset-backed securities, money
market securities, and bank obligations.
** The new fund will invest in securities with an approximate
average maturity of 1.5 years or less, with a broader credit spectrum
that includes any investment-grade security rated
A medium grade assigned to a debt obligation by a rating agency to indicate an adequate ability to pay interest and repay principal. However, adverse developments are more likely to impair this ability than would be the case for bonds rated A and above.
or better. By
contrast, most money market fund investments tend to have average
maturities of three months or less and are typically rated AA or
* The bond fund will offer similar flexibility to the firm’s
money market products, allowing for check writing capabilities and no
* The fund is managed by Joseph K. Lynagh, who currently manages the
firm’s taxable and municipal money market portfolios and other cash
investments. Mr. Lynagh has 18 years of investment experience, all of
which have been with T. Rowe Price.
** Mr. Lynagh discusses his fund approach in this video.
* The net expense ratio for the fund is estimated to be 0.35%.
* The minimum initial investment in the Ultra Short-Term Bond Fund
is $2,500 or $1,000 for retirement plans or gifts or transfers to minors
Quote Joseph K. Lynagh, Portfolio Manager “Given the current
interest rate environment, this new fund is attractive for investors who
want to take on more risk for potentially greater yields, while still
providing a relatively safe place for cash investments. It may also be
useful for those who are invested in bond funds with longer maturities
but want to reduce the potential principal risk from rising interest
Investors can download a prospectus or obtain one by calling
1-800-541-8803. The prospectus includes investment objectives, risks,
fees, expenses, and other information that you should read and consider
carefully before investing. Advisors can learn more by calling
T. Rowe Price Investment Services, Inc., Distributor, T. Rowe Price
Investments in money market funds are not insured or guaranteed by
See Federal Deposit Insurance Corporation (FDIC).
or any other government agency. Although the funds seek to
preserve the value of your investment at $1.00 per share, it is possible
to lose money by investing in them.
About T. Rowe Price Founded in 1937, Baltimore-based T. Rowe Price
is a global investment management organization with $574.4 billion in
assets under management as of September 30, 2012. The organization
provides a broad array of mutual funds, subadvisory services, and
separate account management for individual and institutional investors,
retirement plans, and
. The company also offers
a variety of sophisticated investment planning and guidance tools. T.
Rowe Price’s disciplined, risk-aware investment approach focuses on
, style consistency, and fundamental research.
SOURCE T. Rowe Price