Fiscal Year End
|| Muni National Interm
The fund seeks the highest level of income exempt from federal income taxes consistent with moderate price fluctuation.
The fund invests primarily in investment-grade tax exempt securities. There are no maturity limitations on individual securities, but the fundís weighted average effective maturity will normally range between five and 10 years. At least 90% of the fundís portfolio will consist of investment-grade, tax-exempt securities rated in the four highest credit categories by at least one national rating agency or the equivalent by T. Rowe Price when other ratings are not available. To enhance income, we may invest up to 10% of the fundís total assets in below- investment-grade bonds.
The fund may be appropriate for investors who want higher income than what is generated by a money market or short-term bond fund, can tolerate some price fluctuation, and can meet the $25,000 minimum for initial purchases. The Summit Municipal Intermediate Fund may be more appropriate than a taxable intermediate-term bond fund if the Summit Fundís tax-free yield is higher than the after-tax yield on a taxable intermediate-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 not appropriate 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-term bond funds but lower than that of long-term bond funds. Its share price should fluctuate less than that of a long-term bond fund. 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's own obligations (if any). Lower expenses enable the fund to pay higher dividends.