Tax-free municipal bonds produced gains in the first quarter but lagged taxable bonds. Munis benefited from a rally in Treasuries, as longer-term interest rates declined amid slowing U.S. economic growth, low inflation, attractive yields relative to sovereign debt in developed non-U.S. countries, and a belief that the Federal Reserve will not raise short-term interest rates hastily or rapidly. In the muni market, lower-quality, longer-maturity revenue bonds generally outperformed higher-quality, shorter-maturity issues and general obligation debt, as investors continued to seek attractive yields in the ongoing low-rate environment.
The Summit Municipal Intermediate Fund returned 0.80% in the quarter compared with 0.84% for the Barclays Intermediate Competitive (1−17 yr maturity) Bond Index and 0.65% for the Lipper Intermediate Municipal Debt Funds Average. For the 12 months ended March 31, 2015, the fund returned 5.16% versus 4.89% for the Barclays Intermediate Competitive (1−17 yr maturity) Bond Index and 4.24% for the Lipper Intermediate Municipal Debt Funds Average. The fund's average annual total returns were 5.16%, 4.38%, and 4.43% for the 1-, 5-, and 10-year periods, respectively, as of March 31, 2015. The fund's expense ratio was 0.50% as of its fiscal year ended October 31, 2014.
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The fund's duration and weighted average maturity were little changed during the quarter, but we have been decreasing exposure to bonds maturing in five to 10 years in favor of shorter and longer maturities. There was also very little change to the fund's overall credit quality profile. About three-quarters of the fund's assets are invested in securities rated AA and A. In terms of sector performance, revenue bonds modestly outperformed local and state general obligations. While we still prefer revenue bonds in general, we are finding value in other segments.
We believe that the municipal bond market remains a high-quality market that offers good opportunities for long-term investors seeking tax-free income. While fundamentals are sound overall and technical support should persist, there could be hurdles later in 2015. In particular, with the Fed preparing to tighten monetary policy, we are mindful that rising rates would likely weaken the appetite for bonds with higher interest rate risk. In addition, while we believe that many states deserve high credit ratings and will be able to continue servicing their debts, we have some longer-term concerns about significant funding shortfalls for pensions and other post-employment benefit obligations in some jurisdictions. Ultimately, we believe T. Rowe Price's independent credit research is our greatest strength and will remain an asset for our investors.