Key Differences Between Our Short-Term Fixed Income Products

While our short-term fixed income funds strive to generate income, there are some important distinctions. The table below compares some of the key differences between our short-term fixed income funds.

Short-Term Fixed Income Key Differences
	Prime Reserve* (PRRXX)	Ultra Short-Term Bond Fund (TRBUX)	Short-Term Bond Fund (PRWBX)
Investors looking for potential…
Income	Lowest	Lower	Moderate
Stability
Fund Features
Offers checkwriting
Unlimited trading frequency
Available as brokerage sweep
Fund details
Asset class	Money market	Bond	Bond
Seeks…	Preservation of capital; liquidity; and, consistent with these, the highest possible current income.	Highest level of income commensurate with liquidity and minimal fluctuations in principal value.	Highest level of income commensurate with liquidity and minimal fluctuations in principal value.
Expense ratio	0.56%1	0.35%2	0.53%1
Typical holding maturities	Less than 13 months	Approximately 1.5 years	Approximately 3 years
Duration range	0.1 to 0.2 years	0.75 to 1.0 years	1.5 to 2.3 years
Credit quality	Must be rated between AAA and AA	Investment Grade	Investment Grade
Risk/return potential3	Lowest	Lower	Moderate
Net asset value (NAV)	Stable at $1*	Fluctuates	Fluctuates
Invests in, but not limited to,
U.S. Treasury and agency issues
Corporate debt
Certificates of deposit
Mortgage-backed securities
Emerging markets debt
Foreign currency
Comparative fund risks
Credit risk	Lowest	Low	Moderate
Interest rate risk	Lower	Low	Moderate
Liquidity risk	Lowest	Low	Moderate

*An investment in a money market fund is not insured or guaranteed by the FDIC or any other government agency. Although a money market fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in a money market fund.

¹As of fiscal year-end 5/31/2012.

²Note about the Ultra Short-Term Bond Fund's expense ratio: The fund's estimated expense ratio as of its inception date on 12/3/2012 was 0.61%. To protect the interests of shareholders, T. Rowe Price will waive its fees and/or bear any expenses that would cause the fund's expense ratio to exceed 0.35%. This contractual expense limitation expires on 9/30/2015.

³Funds are placed in general risk/return categories based on their past performance or, for newer funds, the performance of the types of securities in which they invest. There is no assurance past trends will continue.

Duration: The average time (expressed in years) needed for an investor to receive the present value of the future cash flows on a fixed income investment. It is used to measure a bond or bond fund's sensitivity to interest rate changes. For example, a fund with a duration of six years would fall about 6% in price in response to a one-percentage-point rise in interest rates, and vice versa.