T. Rowe Price launches two tax-free municipal ETFs

T. Rowe Price introduced two active, tax-exempt municipal bond ETFs in November: the T. Rowe Price Long Municipal Income ETF (TMNL) and the T. Rowe Price Short Municipal Income ETF (TMNS). As of April 30, T. Rowe Price reported yields to maturity of 4.65% for TMNL and 4.35% for TMNS. Expense ratios are 26 basis points for TMNL and 18 basis points for TMNS.

TMNL invests primarily in municipal bonds with a weighted average maturity typically greater than 10 years. The fund may include certain derivatives and holds a mix of general obligation bonds, revenue bonds and private activity bonds. TMNL may allocate up to 25% of its portfolio to below-investment-grade securities.

TMNS targets shorter-dated municipal debt with maturities of five years or less. The fund selects municipal securities to fit a shorter maturity profile and seeks to provide tax-exempt income with lower duration than longer-maturity muni funds.

Both ETFs are actively managed and use fundamental issuer research to evaluate credit quality, interest-rate risk and the economic outlook. Portfolio managers select individual bonds and set sector and credit allocations within each fund’s stated maturity framework.

T. Rowe Price describes the ETFs as options for investors seeking federal tax-exempt income with distinct maturity profiles. The funds expand the firm’s lineup of municipal bond ETFs and are intended for use in taxable accounts where investors seek federally tax-exempt income.

Performance figures and yields to maturity reflect T. Rowe Price data through April 30 and may change with market conditions.