T. Rowe Price Maryland Tax-Free Money Fund (TMDXX)
Ticker Symbol:
TMDXX
Fund Status:
Open to new Retail investors  /  Open to subsequent Retail investments
Fund Management
Fund Manager
  • Joseph K. Lynagh, CFA
  • Managed Fund Since: 03/30/2001
  • Joined Firm On 05/14/1990*
  • B.S. and M.S., Loyola College, Baltimore, Maryland

*Firm refers to T. Rowe Price Associates and Affiliates
Quarterly Commentaries
as of 06/30/2015

Persistently low short-term interest rates continued to suppress income for investors in the Maryland Tax-Free Money Fund. However, for the first time since 2006, the possibility of higher rates looms on the investment horizon. Most market observers feel that the U.S. economy is now strong enough for the Fed to lift rates in 2015 despite the absence of inflation. While all money market rates remain closely tied to the Federal Reserve's federal funds target rate of 0.00% to 0.25%, some rates have started to increase in anticipation of a change in Fed policy.

The Maryland Tax-Free Money Fund returned 0.00% in the quarter compared with 0.00% for the Lipper Other States Tax-Exempt Money Market Funds Average. For the 12 months ended June 30, 2015, the fund returned 0.01% versus 0.02% for the Lipper Other States Tax-Exempt Money Market Funds Average. The fund's average annual total returns were 0.01%, 0.01%, and 0.91% for the 1-, 5-, and 10-year periods, respectively, as of June 30, 2015. The fund's expense ratio was 0.58% as of its fiscal year ended February 28, 2015. The fund's seven-day simple annualized yield as of June 30, 2015, was 0.01%. Its seven-day simple annualized yield without waiver was −0.51%.* 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

Maintaining high credit quality across municipal issuers and the banks that provide liquidity is the primary consideration for the Maryland Tax-Free Money Fund. Maryland's credit quality remains quite strong relative to other states. Continuing our policy of only investing in the most highly rated bonds, we have significant exposures to the health care (mostly hospitals), state and local general obligation, and housing revenue sectors. Many of our variable rate demand note holdings rely on higher-quality banks for credit enhancement, including Toronto Dominion Bank and Wells Fargo, while Fannie Mae and the Federal Home Loan Mortgage Corporation back many of our housing bonds.

The Fed has made it clear that it needs to see economic data showing a growing economy and the potential for inflation before it begins to raise short-term benchmark rates. A weaker-than-expected first quarter of 2015 has made the timing of any rate hike subject to broad uncertainty and speculation, though a late-2015 rate hike remains a possibility. While acknowledging the likelihood of rate increases, we also expect that the pace of rate hikes will be measured relative to historical cycles of monetary policy tightening, so we have kept the portfolio's weighted average maturity somewhat below the 60-day maximum. As always, we remain committed to managing a high-quality, diversified portfolio focused on liquidity and stability of principal, which we deem to be of the utmost importance to our shareholders.

See Glossary for additional details on all data elements.