Investment objective & strategy
As of April 24, 2025 · prospectusObjective. The fund seeks to provide a high level of income exempt from federal income taxes.
Strategy. The fund normally invests at least 80% of its net assets (plus any borrowings for investment purposes) in securities whose interest is free from federal income taxes, and normally at least 80% of the funds income will be exempt from federal income taxes. However, up to 20% of the funds income could be derived from securities subject to the alternative minimum tax. Any derivatives that provide exposure to the investment focus suggested by the funds name, or to one or more market risk factors associated with the investment focus suggested by the funds name, are counted (as applicable) toward compliance with the funds 80% investment policy. The fund may invest in securities rated in any rating category, but generally seeks … The fund normally invests at least 80% of its net assets (plus any borrowings for investment purposes) in securities whose interest is free from federal income taxes, and normally at least 80% of the funds income will be exempt from federal income taxes. However, up to 20% of the funds income could be derived from securities subject to the alternative minimum tax. Any derivatives that provide exposure to the investment focus suggested by the funds name, or to one or more market risk factors associated with the investment focus suggested by the funds name, are counted (as applicable) toward compliance with the funds 80% investment policy. The fund may invest in securities rated in any rating category, but generally seeks higher-yielding municipal bonds, including those that are rated below investment grade (BB and lower, or an equivalent rating) by credit rating agencies or, if unrated, deemed by the adviser to be of comparable credit quality, known as junk bonds. Although the fund may purchase securities of any maturity, the fund normally maintains a weighted average effective maturity of between three and 10 years. Targeting within this range of effective maturity gives the portfolio manager additional flexibility. From time to time, the fund may invest a significant portion of its assets in sectors with special risks, such as health care, transportation, utilities, or private activity bonds.
Top holdings
As of Feb. 28, 2026 · N-PORT| Security | Ticker | Value | % of fund |
|---|---|---|---|
| RESTRUCTURED-SER A-2- | PRCGEN | $2.87M | 1.57% |
| STATE OF NEW JERSEY 5.0% 06-15-42 | — | $2.68M | 1.47% |
| MET WASHINGTON DC ARPTS AUTH ARPT SYS REVENUE | — | $1.66M | 0.91% |
| Rockdale (County of), GA Development Authority (Pratt Paper (GA), LLC), Series 2018, Ref. RB | ROCDEV | $1.55M | 0.85% |
| MD HEFA 5% 7/1/2038 | — | $1.52M | 0.84% |
| TOBACCO SETTLEMENT FING CORP N TOBGEN 06/46 FIXED 5 | — | $1.50M | 0.82% |
| RESTRUCTURED-SER A-2 | PRCGEN | $1.42M | 0.78% |
| CHARLOTTE-MECKLENBURG NC HOSPAUTH HLTH CARE SYS REVENUE | — | $1.40M | 0.77% |
| OH BUCGEN 5 06/01/2055 | BUCGEN | $1.40M | 0.76% |
| Puerto Rico Commonwealth Aqueduct & Sewer Authority, Series A | PRCUTL | $1.33M | 0.73% |
Portfolio moves
Nov 30, 2025 → Feb 28, 2026How many positions this fund opened, exited, grew, trimmed, or left unchanged between its two most recent N-PORT snapshots — net changes between point-in-time reports, not a trade log.
Similar funds
Funds whose portfolios most overlap this one, by weight| Fund | Overlap | Net exp. |
|---|---|---|
| T. Rowe Price Tax-Free High Yield Fund · PRFHX, PATFX, PTYIX | 16% | 0.50% |
| Bridge Builder Municipal High-Income Bond Fund · BBMHX | 15% | 0.16% |
| T. Rowe Price Tax-Free Income Fund, Inc. · PRTAX, PATAX, TFILX | 9% | 0.35% |
Advisers
| Firm | Role |
|---|---|
| T. Rowe Price Associates, Inc. | Adviser |
Footnotes
- Expense ratio as of April 24, 2025, from the fund's prospectus.
- Net assets and holdings count as of February 28, 2026, from the fund's N-PORT filing.
- Total return for calendar year 2025, before tax and after fund expenses. Computed by compounding the twelve monthly total returns the fund reported in its SEC N-PORT filings for 2025 (the latest prospectus does not yet chart this year).
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