To support the economy, the Fed kept its fed funds target rate in the 0.00% to 0.25% range and it has stated that short-term rates will remain low as long as the national unemployment rate remains above 6.5% and inflation is projected to be no more than 2.5%. Such a target would imply an unchanged funds rate until late 2014 or early 2015, given the current pace of job growth. As a result of the zero interest rate policy, New York municipal money market interest rates were little changed in the first quarter.
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, 2013, 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%, 0.28%, and 1.08% for the 1-, 5-, and 10-year periods, respectively, as of March 31, 2013. The fund's expense ratio was 0.66% as of its fiscal year ended February 29, 2012. The fund's seven-day simple annualized yield as of March 31, 2013, was 0.01%. Its seven-day simple annualized yield without waiver was −0.37%.* 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.
Benchmark Definitions
Barring a change in Fed policy, or a major credit event in Europe, we expect interest rates to be little changed in the near term. Therefore, we are comfortable with maintaining a target weighted average maturity at the long end of our permissible range. 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 fund. Fortunately, New York is a very high-quality issuer, unlike some of its peers. We have significant exposure to high-quality general obligation, hospital, and university securities.
Although New York is one of the stronger states from a credit perspective, municipal money market funds continue to operate in an extremely challenging investment environment. Interest rates, and therefore shareholder income, remains near zero. We believe that the municipal market remains high quality and that a rebounding economy will improve the near-term prospects of many of the state's issuers. As always, our primary goal is principal preservation. Liquidity and principal stability remain fundamental needs for shareholders, and we are focused on managing the fund with those needs in mind.
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