The fund seeks to provide investors with high income along with the potential for some capital appreciation.
The fund uses an asset allocation strategy to build a broadly diversified portfolio of domestic and foreign debt instruments, including government and corporate bonds, mortgage-backed, commercial mortgage-backed and asset-backed securities, along with preferred stocks. The fund can invest up to 65% of assets in noninvestment-grade (high-yield) securities and up to 50% in non-U.S. dollar denominated foreign securities, including those from emerging market countries. There are no maturity restrictions, but the portfolio's weighted average maturity is expected to be between four and 15 years.
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The fund's flexible approach lets it seek out opportunities for high income in many places, domestic and overseas, including both high-yield and foreign securities. The portfolio will include a large number of different bonds across various market sectors to reduce the impact of any single holding on the fund's performance. Since the fund has a fairly long average maturity, it offers higher yield potential than money market or shorter-term bond funds but with more volatility.
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. High-yield bonds carry greater default risk than higher-rated bonds along with greater liquidity risk. To the extent the fund holds foreign bonds, it will be subject to special risks, including potentially adverse political and economic developments overseas, greater volatility, lower liquidity, and the possibility that foreign currencies will decline against the dollar. The fund's investments in emerging markets are subject to the risk of abrupt and severe price declines.
**This chart displays relative risk of each U.S. mutual fund listed using standard deviation of returns. Those values are provided in the bars at the top of the chart.
Methodology: We evaluate the standard deviation and its resulting placement within a specific risk/return category on an annual basis. A fund is generally placed in a risk/return category based on the 10-year standard deviation of its performance.
If a fund is less than 10 years old, the actual fund performance history is supplemented with the primary prospectus benchmark history to obtain a full 10-year history, or longest time period available up to 10 years.
For an Asset Allocation fund with less than 10 years of performance history, sub-strategy returns are used.
When a sub-strategy is less than 10 years old, the actual sub-strategy performance history is supplemented with benchmark history to obtain a full 10-year history, or longest time period available up to 10 years.
Risk return categories overlap; a fund with a standard deviation in the overlap between two categories, denoted by a plus (+), is placed so that its risk categorization is better aligned with anticipated return characteristics an investor may experience going forward at the discretion of T Rowe Price.
When a fund has a cash-like benchmark, denoted by a double plus (++), its standard deviation is estimated using only available fund returns. If the fund is less than 10 years old, benchmark returns are not used to obtain a full 10-year history because they would artificially suppress the volatility estimate.
All investments are subject to market risk, including the possible loss of principal. Standard deviation of returns, a measure of price volatility, is one measure of risk. Please consult the funds' prospectuses for a more complete discussion of the funds' risks.
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.