Although U.S. economic signals were mixed during the period, many investors appeared willing to attribute it to the unusually cold and snowy winter in the Northeast. All money market instruments continue to be tied to the fed funds target rate of 0.00% to 0.25%. However, mixed signals from the Fed make it unclear how soon the central bank would want to begin to raise short-term rates. New short-term security issuance continues to be constrained, perpetuated by a supply/demand imbalance. The low-rate environment of the past few years has encouraged municipal issuers to borrow for longer periods to lock in favorable financing costs.
The New York Tax-Free Money Fund returned 0.00% in the quarter compared with 0.00% for the Lipper New York Tax-Exempt Money Market Funds Average. For the 12 months ended March 31, 2014, the fund returned 0.01% versus 0.01% for the Lipper New York Tax-Exempt Money Market Funds Average. The fund's average annual total returns were 0.01%, 0.02%, and 1.03% for the 1-, 5-, and 10-year periods, respectively, as of March 31, 2014. The fund's expense ratio was 0.68% as of its fiscal year ended February 28, 2013. The fund's seven-day simple annualized yield as of March 31, 2014, was 0.01%. Its seven-day simple annualized yield without waiver was −0.43%.* The fund's yield more closely reflects its current earnings than the total return.
For up-to-date standardized total returns, including the most recent month-end performance, please click on the Performance tab, above.
Current performance may be lower or higher than the quoted past performance,
which cannot guarantee future results. Return and yield will vary.
An investment in money market funds is not insured or guaranteed by the FDIC
or any other government agency. Although the fund seeks to preserve the value
of your investment at $1.00 per share, it is possible to lose money by investing in the fund.
*In an effort to maintain a zero or positive net yield for the fund, T. Rowe Price has voluntarily waived all or a portion of the management fee it is entitled to receive from the fund. A fee waiver has the effect of increasing the fund's net yield. The 7-day yield without waiver represents what the yield would have been if we were not waiving our management fee. This voluntary waiver is in addition to any contractual expense ratio limitation in effect for the fund and may be amended or terminated at any time without prior notice. Please see the prospectus for more details.
At this point, the portfolio is maintaining a target weighted average maturity of 50 to 55 days, which is at the long end of our permissible range. Credit quality plays a major role in the management of the fund, and we continue to favor guaranteed housing finance, special tax revenue, higher education revenue, and transportation revenue debt. We also have a significant allocation to high-quality prerefunded bonds, which are escrowed in U.S. Treasury debt.
Maintaining a high credit quality profile with respect to municipal issuers and the banks that provide liquidity support is a key focus in the management of the New York Tax-Free Money Fund. While the longer-term muni market will likely continue to react to the prospects for Fed tapering, the municipal money markets should remain anchored by the federal funds target rate. As always, we remain committed to managing a high-quality diversified portfolio with our primary focus on liquidity and stability of principal.