The fund's objective is to provide a high level of income exempt from federal income taxes.
The fund will invest at least 80% of its total assets in investment-grade bonds rated from AAA to BBB by at least one national rating agency or rated the equivalent by T. Rowe Price if other ratings are not available. To enhance income, we may invest up to 20% of the fund's total assets in noninvestment-grade "junk" bonds. We may buy securities of any maturity, and the weighted average maturity is expected to exceed 15 years but may be less than that when, in the judgment of the portfolio manager, a shorter weighted average maturity is in the best interest of the fund.
The fund may be appropriate for investors who want higher income than what is generated by a money market or shorter-term bond fund, can meet the $25,000 minimum for initial purchases, and can tolerate potentially substantial price fluctuation. Investors in the fund should have a relatively long time horizon to ride out the ups and downs of interest rate cycles. The Summit Municipal Income Fund may be more appropriate than a taxable long-term bond fund if the Summit Fundís tax-free yield is higher than the after-tax yield on a taxable long-term bond fund. The higher your tax bracket, the more likely a tax-free fund is appropriate. However, if you are subject to the alternative minimum tax (AMT), you may wish to check the fundís AMT exposure. The fund is inappropriate for tax-deferred accounts, such as IRAs.
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The fund is subject to the usual risks of fixed-income investing, including interest rate risk, credit risk, and political risk. Interest rate risk is the decline in bond prices that accompanies a rise in the overall level of interest rates. Credit risk is the chance that any of the fund's holdings will have their credit ratings downgraded or will default (fail to make scheduled interest or principal payments), potentially reducing the fund's income level and share price. Political risk is the chance that a significant restructuring of federal income tax rates or even serious discussion on the topic in Congress could cause municipal bond prices to fall.
The fund's income level should generally be above that of money market and short- and intermediate-term bond funds, but its share price will fluctuate more. By focusing on investment-grade securities, the fund's credit risk should be reduced. The income dividends you receive from the funds should be exempt from federal income taxes, and your state may not tax that portion of each fund's income earned on the state's own obligations (if any). Lower expenses enable the funds to pay higher dividends.
* Funds are placed in general risk/return categories based on their 10-year standard deviation
(as of December 2015) or, for newer funds, the standard deviation of the types of securities
in which they invest. There is no assurance past trends will continue.
See Glossary for additional details on all data elements.
The mutual funds referred to in this website are offered and sold only to persons residing in the United States and are offered by prospectus only. The prospectuses include investment objectives, risks, fees, expenses, and other information that you should read and consider carefully before investing. Download a prospectus.