Fiscal Year End
The fund's objective is to seek a high level of income exempt from federal income tax by investing primarily in long-term, low- to upper-medium-quality municipal securities.
The fund invests a substantial portion of assets in below-investment-grade municipal or "junk" bonds and may buy bonds in default as long as they do not exceed 10% of assets. The fundís weighted average maturity is expected to exceed 10 years.
Investors whose income tax level enables them to benefit from tax-exempt income. Not appropriate for tax-deferred retirement plans, such as IRAs. Some income may be subject to state and local taxes and the federal alternative minimum tax.
Click on the risk/reward spectrum below to view the funds in that category
The Tax-Free High Yield Fund has the highest potential for current income and capital appreciation of all of the T. Rowe Price federal tax-free funds. It offers the potential for a high level of tax-exempt income and some capital appreciation by investing in below-investment-grade bonds. These bonds tend to offer higher yields to compensate for a greater default risk.
Yield and share price will vary with interest rate changes. Investors should note that if interest rates rise significantly from current levels, bond fund total returns will decline and may even turn negative in the short term. In addition to their sensitivity to interest rates, high-yield bonds carry a significant level of credit risk.