UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act File Number: 811-03894
T. Rowe Price Short-Term Bond Fund, Inc.
(Exact name of registrant as specified in charter)
100 East Pratt Street, Baltimore, MD 21202
(Address of principal executive offices)
David Oestreicher
100 East Pratt Street, Baltimore, MD 21202
(Name and address of agent for service)
Registrant’s telephone number, including area code: (410) 345-2000
Date of fiscal year end: May 31
Date of reporting period: May 31, 2024
Item 1. Reports to Shareholders
(a) Report pursuant to Rule 30e-1
Annual Shareholder Report
May 31, 2024
Ultra Short-Term Bond Fund
Z Class (TRZWX)
This annual shareholder report contains important information about Ultra Short-Term Bond Fund (the "fund") for the period of June 1, 2023 to May 31, 2024. You can find the fund’s prospectus, financial information on Form N-CSR (which includes required tax information for dividends), holdings, proxy voting information, and other information atwww.troweprice.com/prospectus. You can also request this information without charge by contacting T. Rowe Price at 1-800-638-5660 or info@troweprice.com or contacting your intermediary.
What were the fund costs for the last year? (based on a hypothetical $10,000 investment)
| Costs of a $10,000 investment | Costs paid as a percentage of a $10,000 investment | |
|---|---|---|
| Ultra Short-Term Bond Fund - Z Class | $0 | 0.00% |
What drove fund performance during the past 12 months?
The shorter-maturity U.S. investment-grade bond market generated positive returns over the 12-month period ended May 31, 2024, largely lifted by declining interest rates and tighter credit spreads near the end of 2023. Corporate bonds and securitized credit generated positive excess returns during the rally and the broader reporting period.
The fund’s out-of-benchmark allocations to securitized sectors (residential mortgage-backed securities, asset-backed securities (ABS), and commercial mortgage-backed securities), overweight to investment-grade corporate bonds, and underweight to U.S. Treasuries aided relative performance versus its style-specific benchmark, the Bloomberg Short-Term Government/Corporate Index. Security selection among investment-grade corporate bonds also contributed.
Positioning on the yield curve hindered relative performance. Specifically, an overweight to the two-year key rate detracted as the yield on the two-year U.S. Treasury note ended the period higher.
The fund’s allocation to investment-grade corporate debt decreased over the reporting period but continued to represent the portfolio’s largest absolute and relative position. As corporate bond valuations tightened early in the period, we focused on additions in ABS, and our allocation to the ABS sector ended notably higher. Within the sector, the analyst team identified a variety of opportunities among automotive and industrial equipment securities.
While we are primarily a cash bond manager, we occasionally employ the limited use of derivatives in our strategy for hedging purposes. Derivatives may include futures and options, as well as credit default and interest rate swaps. During the reporting period, our use of derivatives, particularly U.S. Treasury futures, contributed modestly to absolute performance.
How has the fund performed?
Cumulative Returns of a Hypothetical $10,000 Investment as of May 31, 2024
| Z Class | Regulatory Benchmark | Strategy Benchmark | |
|---|---|---|---|
| 2/22/21 | 10,000 | 10,000 | 10,000 |
| 2/28/21 | 10,002 | 9,989 | 9,999 |
| 5/31/21 | 10,011 | 9,975 | 10,005 |
| 8/31/21 | 10,038 | 10,138 | 10,007 |
| 11/30/21 | 10,023 | 10,077 | 10,006 |
| 2/28/22 | 9,991 | 9,725 | 9,990 |
| 5/31/22 | 9,922 | 9,154 | 9,990 |
| 8/31/22 | 9,913 | 8,970 | 9,990 |
| 11/30/22 | 9,922 | 8,783 | 10,032 |
| 2/28/23 | 10,100 | 8,779 | 10,135 |
| 5/31/23 | 10,225 | 8,958 | 10,252 |
| 8/31/23 | 10,402 | 8,863 | 10,386 |
| 11/30/23 | 10,571 | 8,887 | 10,535 |
| 2/29/24 | 10,772 | 9,071 | 10,674 |
| 5/31/24 | 10,945 | 9,075 | 10,812 |
202405-3565004, 202407-3567309
F1419-052 7/24
Average Annual Total Returns
| 1 Year | Since Inception 2/22/2021 | |
|---|---|---|
| Ultra Short-Term Bond Fund (Z Class) | 7.04% | 2.80% |
| Bloomberg U.S. Aggregate Bond Index (Regulatory Benchmark) | 1.31 | - 2.93 |
| Bloomberg Short-Term Government/Corporate Index (Strategy Benchmark) | 5.46 | 2.42 |
The preceding line graph shows the value of a hypothetical $10,000 investment in the fund over the past 10 fiscal year periods or since inception (for funds lacking 10-year records). The fund’s performance information included in the line graph and table above is compared with a regulatory required index that represents an overall securities market (Regulatory Benchmark). In addition, the line graph and table may also include one or more indexes that more closely aligns to the fund's investment strategy (Strategy Benchmark(s)). Due to new SEC Rules on shareholder reporting the fund adopted a new broad-based securities market index, referred to as the Regulatory Benchmark. Market index returns do not include expenses, which are deducted from fund returns. The fund's total return figures reflect the reinvestment of dividends and capital gains, if any. Neither the fund’s returns nor the index returns reflect the deduction of taxes that a shareholder would pay on fund distributions or redemptions of fund shares. The fund’s past performance is not a good predictor of the fund’s future performance. Updated performance information can be found at www.troweprice.com.
What are some fund statistics?
Fund Statistics
| Total Net Assets (000s) | $2,258,094 |
| Number of Portfolio Holdings | 416 |
| Investment Advisory Fees Paid (000s) | $3,300 |
| Portfolio Turnover Rate | 82.0% |
What did the fund invest in?
Credit Quality Allocation* (as a % of Net Assets)
| AAA Rated | 30.1% |
| AA Rated | 6.2 |
| A Rated | 18.9 |
| BBB Rated | 32.1 |
| Not Rated | - 3.2 |
| U.S. Treasury Securities | 3.3 |
| Reserves | 12.6 |
*Credit ratings for the securities held in the Fund are provided by Moody’s, Standard & Poor’s, and Fitch and are converted to the Standard & Poor’s nomenclature. A rating of AAA represents the highest-rated securities, and a rating of D represents the lowest rated securities. If the ratings agencies differ, the highest rating is applied to the security. If a rating is not available, the security is classified as Not Rated. The rating of the underlying investment vehicle is used to determine the creditworthiness of credit default swaps and sovereign securities. The Fund is not rated by any agency.
Top Ten Holdings (as a % of Net Assets)
| U.S. Treasury Bills | 2.9% |
| Verus Securitization Trust | 1.9 |
| Santander Drive Auto Receivables Trust | 1.9 |
| Exeter Automobile Receivables Trust | 1.9 |
| Octane Receivables Trust | 1.8 |
| Enterprise Fleet Financing | 1.5 |
| Targa Resources | 1.2 |
| Edison International | 1.2 |
| Conagra Brands | 1.2 |
| Structured Agency Credit Risk Debt Notes | 1.0 |
If you invest directly with T. Rowe Price, you can elect to receive future shareholder reports or other important documents through electronic delivery by enrolling at www.troweprice.com/paperless. If you invest through a financial intermediary such as an investment advisor, a bank, retirement plan sponsor or a brokerage firm, please contact that organization and ask if it can provide electronic delivery.
Bloomberg does not accept any liability for any errors or omissions in the indexes or data, and hereby expressly disclaim all warranties of originality, accuracy, completeness, timeliness, merchantability and fitness for a particular purpose. No party may rely on any indexes or data contained in this communication. Visit www.troweprice.com/en/us/market-data-disclosures for additional legal notices & disclaimers.
Ultra Short-Term Bond Fund
Z Class (TRZWX)
T. Rowe Price Investment Services, Inc.
100 East Pratt Street
Baltimore, MD 21202
Annual Shareholder Report
May 31, 2024
Ultra Short-Term Bond Fund
I Class (TRSTX)
This annual shareholder report contains important information about Ultra Short-Term Bond Fund (the "fund") for the period of June 1, 2023 to May 31, 2024. You can find the fund’s prospectus, financial information on Form N-CSR (which includes required tax information for dividends), holdings, proxy voting information, and other information atwww.troweprice.com/prospectus. You can also request this information without charge by contacting T. Rowe Price at 1-800-638-5660 or info@troweprice.com or contacting your intermediary.
What were the fund costs for the last year? (based on a hypothetical $10,000 investment)
| Costs of a $10,000 investment | Costs paid as a percentage of a $10,000 investment | |
|---|---|---|
| Ultra Short-Term Bond Fund - I Class | $21 | 0.20% |
What drove fund performance during the past 12 months?
The shorter-maturity U.S. investment-grade bond market generated positive returns over the 12-month period ended May 31, 2024, largely lifted by declining interest rates and tighter credit spreads near the end of 2023. Corporate bonds and securitized credit generated positive excess returns during the rally and the broader reporting period.
The fund’s out-of-benchmark allocations to securitized sectors (residential mortgage-backed securities, asset-backed securities (ABS), and commercial mortgage-backed securities), overweight to investment-grade corporate bonds, and underweight to U.S. Treasuries aided relative performance versus its style-specific benchmark, the Bloomberg Short-Term Government/Corporate Index. Security selection among investment-grade corporate bonds also contributed.
Positioning on the yield curve hindered relative performance. Specifically, an overweight to the two-year key rate detracted as the yield on the two-year U.S. Treasury note ended the period higher.
The fund’s allocation to investment-grade corporate debt decreased over the reporting period but continued to represent the portfolio’s largest absolute and relative position. As corporate bond valuations tightened early in the period, we focused on additions in ABS, and our allocation to the ABS sector ended notably higher. Within the sector, the analyst team identified a variety of opportunities among automotive and industrial equipment securities.
While we are primarily a cash bond manager, we occasionally employ the limited use of derivatives in our strategy for hedging purposes. Derivatives may include futures and options, as well as credit default and interest rate swaps. During the reporting period, our use of derivatives, particularly U.S. Treasury futures, contributed modestly to absolute performance.
How has the fund performed?
Cumulative Returns of a Hypothetical $500,000 Investment as of May 31, 2024
| I Class | Regulatory Benchmark | Strategy Benchmark | |
|---|---|---|---|
| 7/6/17 | 500,000 | 500,000 | 500,000 |
| 8/31/17 | 501,296 | 508,001 | 501,061 |
| 11/30/17 | 503,453 | 505,225 | 502,200 |
| 2/28/18 | 505,761 | 496,943 | 503,530 |
| 5/31/18 | 507,612 | 499,953 | 505,967 |
| 8/31/18 | 511,954 | 502,670 | 508,753 |
| 11/30/18 | 514,303 | 498,444 | 511,399 |
| 2/28/19 | 518,165 | 512,695 | 515,166 |
| 5/31/19 | 525,245 | 531,952 | 518,895 |
| 8/31/19 | 530,020 | 553,804 | 522,775 |
| 11/30/19 | 532,331 | 552,233 | 525,615 |
| 2/29/20 | 537,552 | 572,591 | 528,899 |
| 5/31/20 | 537,370 | 582,038 | 532,256 |
| 8/31/20 | 546,241 | 589,654 | 533,014 |
| 11/30/20 | 549,285 | 592,456 | 533,343 |
| 2/28/21 | 551,549 | 580,513 | 533,681 |
| 5/31/21 | 552,827 | 579,681 | 533,968 |
| 8/31/21 | 552,886 | 589,157 | 534,097 |
| 11/30/21 | 551,832 | 585,623 | 534,027 |
| 2/28/22 | 549,787 | 565,164 | 533,178 |
| 5/31/22 | 545,781 | 532,020 | 533,162 |
| 8/31/22 | 544,997 | 521,310 | 533,171 |
| 11/30/22 | 545,250 | 510,431 | 535,400 |
| 2/28/23 | 554,794 | 510,219 | 540,927 |
| 5/31/23 | 561,370 | 520,619 | 547,159 |
| 8/31/23 | 570,814 | 515,090 | 554,341 |
| 11/30/23 | 579,788 | 516,453 | 562,293 |
| 2/29/24 | 591,734 | 527,195 | 569,670 |
| 5/31/24 | 600,884 | 527,416 | 577,033 |
202405-3565004, 202407-3567309
F1104-052 7/24
Average Annual Total Returns
| 1 Year | 5 Years | Since Inception 7/6/2017 | |
|---|---|---|---|
| Ultra Short-Term Bond Fund (I Class) | 7.04% | 2.73% | 2.70% |
| Bloomberg U.S. Aggregate Bond Index (Regulatory Benchmark) | 1.31 | - 0.17 | 0.78 |
| Bloomberg Short-Term Government/Corporate Index (Strategy Benchmark) | 5.46 | 2.15 | 2.10 |
The preceding line graph shows the value of a hypothetical $500,000 investment in the fund over the past 10 fiscal year periods or since inception (for funds lacking 10-year records). The fund’s performance information included in the line graph and table above is compared with a regulatory required index that represents an overall securities market (Regulatory Benchmark). In addition, the line graph and table may also include one or more indexes that more closely aligns to the fund's investment strategy (Strategy Benchmark(s)). Due to new SEC Rules on shareholder reporting the fund adopted a new broad-based securities market index, referred to as the Regulatory Benchmark. Market index returns do not include expenses, which are deducted from fund returns. The fund's total return figures reflect the reinvestment of dividends and capital gains, if any. Neither the fund’s returns nor the index returns reflect the deduction of taxes that a shareholder would pay on fund distributions or redemptions of fund shares. The fund’s past performance is not a good predictor of the fund’s future performance. Updated performance information can be found at www.troweprice.com.
What are some fund statistics?
Fund Statistics
| Total Net Assets (000s) | $2,258,094 |
| Number of Portfolio Holdings | 416 |
| Investment Advisory Fees Paid (000s) | $3,300 |
| Portfolio Turnover Rate | 82.0% |
What did the fund invest in?
Credit Quality Allocation* (as a % of Net Assets)
| AAA Rated | 30.1% |
| AA Rated | 6.2 |
| A Rated | 18.9 |
| BBB Rated | 32.1 |
| Not Rated | - 3.2 |
| U.S. Treasury Securities | 3.3 |
| Reserves | 12.6 |
*Credit ratings for the securities held in the Fund are provided by Moody’s, Standard & Poor’s, and Fitch and are converted to the Standard & Poor’s nomenclature. A rating of AAA represents the highest-rated securities, and a rating of D represents the lowest rated securities. If the ratings agencies differ, the highest rating is applied to the security. If a rating is not available, the security is classified as Not Rated. The rating of the underlying investment vehicle is used to determine the creditworthiness of credit default swaps and sovereign securities. The Fund is not rated by any agency.
Top Ten Holdings (as a % of Net Assets)
| U.S. Treasury Bills | 2.9% |
| Verus Securitization Trust | 1.9 |
| Santander Drive Auto Receivables Trust | 1.9 |
| Exeter Automobile Receivables Trust | 1.9 |
| Octane Receivables Trust | 1.8 |
| Enterprise Fleet Financing | 1.5 |
| Targa Resources | 1.2 |
| Edison International | 1.2 |
| Conagra Brands | 1.2 |
| Structured Agency Credit Risk Debt Notes | 1.0 |
If you invest directly with T. Rowe Price, you can elect to receive future shareholder reports or other important documents through electronic delivery by enrolling at www.troweprice.com/paperless. If you invest through a financial intermediary such as an investment advisor, a bank, retirement plan sponsor or a brokerage firm, please contact that organization and ask if it can provide electronic delivery.
Bloomberg does not accept any liability for any errors or omissions in the indexes or data, and hereby expressly disclaim all warranties of originality, accuracy, completeness, timeliness, merchantability and fitness for a particular purpose. No party may rely on any indexes or data contained in this communication. Visit www.troweprice.com/en/us/market-data-disclosures for additional legal notices & disclaimers.
Ultra Short-Term Bond Fund
I Class (TRSTX)
T. Rowe Price Investment Services, Inc.
100 East Pratt Street
Baltimore, MD 21202
Annual Shareholder Report
May 31, 2024
Ultra Short-Term Bond Fund
Investor Class (TRBUX)
This annual shareholder report contains important information about Ultra Short-Term Bond Fund (the "fund") for the period of June 1, 2023 to May 31, 2024. You can find the fund’s prospectus, financial information on Form N-CSR (which includes required tax information for dividends), holdings, proxy voting information, and other information atwww.troweprice.com/prospectus. You can also request this information without charge by contacting T. Rowe Price at 1-800-638-5660 or info@troweprice.com or contacting your intermediary.
What were the fund costs for the last year? (based on a hypothetical $10,000 investment)
| Costs of a $10,000 investment | Costs paid as a percentage of a $10,000 investment | |
|---|---|---|
| Ultra Short-Term Bond Fund - Investor Class | $32 | 0.31% |
What drove fund performance during the past 12 months?
The shorter-maturity U.S. investment-grade bond market generated positive returns over the 12-month period ended May 31, 2024, largely lifted by declining interest rates and tighter credit spreads near the end of 2023. Corporate bonds and securitized credit generated positive excess returns during the rally and the broader reporting period.
The fund’s out-of-benchmark allocations to securitized sectors (residential mortgage-backed securities, asset-backed securities (ABS), and commercial mortgage-backed securities), overweight to investment-grade corporate bonds, and underweight to U.S. Treasuries aided relative performance versus its style-specific benchmark, the Bloomberg Short-Term Government/Corporate Index. Security selection among investment-grade corporate bonds also contributed.
Positioning on the yield curve hindered relative performance. Specifically, an overweight to the two-year key rate detracted as the yield on the two-year U.S. Treasury note ended the period higher.
The fund’s allocation to investment-grade corporate debt decreased over the reporting period but continued to represent the portfolio’s largest absolute and relative position. As corporate bond valuations tightened early in the period, we focused on additions in ABS, and our allocation to the ABS sector ended notably higher. Within the sector, the analyst team identified a variety of opportunities among automotive and industrial equipment securities.
While we are primarily a cash bond manager, we occasionally employ the limited use of derivatives in our strategy for hedging purposes. Derivatives may include futures and options, as well as credit default and interest rate swaps. During the reporting period, our use of derivatives, particularly U.S. Treasury futures, contributed modestly to absolute performance.
How has the fund performed?
Cumulative Returns of a Hypothetical $10,000 Investment as of May 31, 2024
| Investor Class | Regulatory Benchmark | Strategy Benchmark | |
|---|---|---|---|
| 2014 | 10,000 | 10,000 | 10,000 |
| 2014 | 10,011 | 10,090 | 10,005 |
| 2014 | 10,004 | 10,192 | 10,009 |
| 2015 | 10,025 | 10,318 | 10,014 |
| 2015 | 10,044 | 10,303 | 10,023 |
| 2015 | 10,046 | 10,247 | 10,027 |
| 2015 | 10,047 | 10,291 | 10,033 |
| 2016 | 10,052 | 10,473 | 10,048 |
| 2016 | 10,141 | 10,612 | 10,069 |
| 2016 | 10,191 | 10,859 | 10,092 |
| 2016 | 10,224 | 10,514 | 10,106 |
| 2017 | 10,260 | 10,621 | 10,133 |
| 2017 | 10,321 | 10,780 | 10,148 |
| 2017 | 10,364 | 10,912 | 10,180 |
| 2017 | 10,408 | 10,852 | 10,203 |
| 2018 | 10,435 | 10,674 | 10,230 |
| 2018 | 10,494 | 10,739 | 10,280 |
| 2018 | 10,563 | 10,798 | 10,336 |
| 2018 | 10,611 | 10,707 | 10,390 |
| 2019 | 10,712 | 11,013 | 10,466 |
| 2019 | 10,837 | 11,426 | 10,542 |
| 2019 | 10,934 | 11,896 | 10,621 |
| 2019 | 10,978 | 11,862 | 10,679 |
| 2020 | 11,083 | 12,299 | 10,745 |
| 2020 | 11,076 | 12,502 | 10,814 |
| 2020 | 11,256 | 12,666 | 10,829 |
| 2020 | 11,315 | 12,726 | 10,836 |
| 2021 | 11,358 | 12,470 | 10,843 |
| 2021 | 11,381 | 12,452 | 10,848 |
| 2021 | 11,378 | 12,655 | 10,851 |
| 2021 | 11,375 | 12,579 | 10,850 |
| 2022 | 11,307 | 12,140 | 10,832 |
| 2022 | 11,221 | 11,428 | 10,832 |
| 2022 | 11,224 | 11,198 | 10,832 |
| 2022 | 11,203 | 10,964 | 10,878 |
| 2023 | 11,396 | 10,960 | 10,990 |
| 2023 | 11,527 | 11,183 | 11,116 |
| 2023 | 11,718 | 11,064 | 11,262 |
| 2023 | 11,899 | 11,094 | 11,424 |
| 2024 | 12,141 | 11,324 | 11,574 |
| 2024 | 12,326 | 11,329 | 11,723 |
202405-3565004, 202407-3567309
F188-052 7/24
Average Annual Total Returns
| 1 Year | 5 Years | 10 Years | |
|---|---|---|---|
| Ultra Short-Term Bond Fund (Investor Class) | 6.92% | 2.61% | 2.11% |
| Bloomberg U.S. Aggregate Bond Index (Regulatory Benchmark) | 1.31 | - 0.17 | 1.26 |
| Bloomberg Short-Term Government/Corporate Index (Strategy Benchmark) | 5.46 | 2.15 | 1.60 |
The preceding line graph shows the value of a hypothetical $10,000 investment in the fund over the past 10 fiscal year periods or since inception (for funds lacking 10-year records). The fund’s performance information included in the line graph and table above is compared with a regulatory required index that represents an overall securities market (Regulatory Benchmark). In addition, the line graph and table may also include one or more indexes that more closely aligns to the fund's investment strategy (Strategy Benchmark(s)). Due to new SEC Rules on shareholder reporting the fund adopted a new broad-based securities market index, referred to as the Regulatory Benchmark. Market index returns do not include expenses, which are deducted from fund returns. The fund's total return figures reflect the reinvestment of dividends and capital gains, if any. Neither the fund’s returns nor the index returns reflect the deduction of taxes that a shareholder would pay on fund distributions or redemptions of fund shares. The fund’s past performance is not a good predictor of the fund’s future performance. Updated performance information can be found at www.troweprice.com.
What are some fund statistics?
Fund Statistics
| Total Net Assets (000s) | $2,258,094 |
| Number of Portfolio Holdings | 416 |
| Investment Advisory Fees Paid (000s) | $3,300 |
| Portfolio Turnover Rate | 82.0% |
What did the fund invest in?
Credit Quality Allocation* (as a % of Net Assets)
| AAA Rated | 30.1% |
| AA Rated | 6.2 |
| A Rated | 18.9 |
BBB Rated | 32.1 |
| Not Rated | - 3.2 |
| U.S. Treasury Securities | 3.3 |
| Reserves | 12.6 |
*Credit ratings for the securities held in the Fund are provided by Moody’s, Standard & Poor’s, and Fitch and are converted to the Standard & Poor’s nomenclature. A rating of AAA represents the highest-rated securities, and a rating of D represents the lowest rated securities. If the ratings agencies differ, the highest rating is applied to the security. If a rating is not available, the security is classified as Not Rated. The rating of the underlying investment vehicle is used to determine the creditworthiness of credit default swaps and sovereign securities. The Fund is not rated by any agency.
Top Ten Holdings (as a % of Net Assets)
| U.S. Treasury Bills | 2.9% |
| Verus Securitization Trust | 1.9 |
| Santander Drive Auto Receivables Trust | 1.9 |
| Exeter Automobile Receivables Trust | 1.9 |
| Octane Receivables Trust | 1.8 |
| Enterprise Fleet Financing | 1.5 |
| Targa Resources | 1.2 |
| Edison International | 1.2 |
| Conagra Brands | 1.2 |
| Structured Agency Credit Risk Debt Notes | 1.0 |
If you invest directly with T. Rowe Price, you can elect to receive future shareholder reports or other important documents through electronic delivery by enrolling at www.troweprice.com/paperless. If you invest through a financial intermediary such as an investment advisor, a bank, retirement plan sponsor or a brokerage firm, please contact that organization and ask if it can provide electronic delivery.
Bloomberg does not accept any liability for any errors or omissions in the indexes or data, and hereby expressly disclaim all warranties of originality, accuracy, completeness, timeliness, merchantability and fitness for a particular purpose. No party may rely on any indexes or data contained in this communication. Visit www.troweprice.com/en/us/market-data-disclosures for additional legal notices & disclaimers.
Ultra Short-Term Bond Fund
Investor Class (TRBUX)
T. Rowe Price Investment Services, Inc.
100 East Pratt Street
Baltimore, MD 21202
Item 1. (b) Notice pursuant to Rule 30e-3.
Not applicable.
Item 2. Code of Ethics.
The registrant has adopted a code of ethics, as defined in Item 2 of Form N-CSR, applicable to its principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. A copy of this code of ethics is filed as an exhibit to this Form N-CSR. No substantive amendments were approved or waivers were granted to this code of ethics during the period covered by this report.
Item 3. Audit Committee Financial Expert.
The registrant’s Board of Directors has determined that Mr. Paul F. McBride qualifies as an audit committee financial expert, as defined in Item 3 of Form N-CSR. Mr. McBride is considered independent for purposes of Item 3 of Form N-CSR.
Item 4. Principal Accountant Fees and Services.
(a) – (d) Aggregate fees billed for the last two fiscal years for professional services rendered to, or on behalf of, the registrant by the registrant’s principal accountant were as follows:
| 2024 | 2023 | |||||||||||||
Audit Fees | $33,841 | $33,192 | ||||||||||||
Audit-Related Fees | - | - | ||||||||||||
Tax Fees | - | - | ||||||||||||
All Other Fees | - | - | ||||||||||||
Audit fees include amounts related to the audit of the registrant’s annual financial statements and services normally provided by the accountant in connection with statutory and regulatory filings. Audit-related fees include amounts reasonably related to the performance of the audit of the registrant’s financial statements and specifically include the issuance of a report on internal controls and, if applicable, agreed-upon procedures related to fund acquisitions. Tax fees include amounts related to services for tax compliance, tax planning, and tax advice. The nature of these services specifically includes the review of distribution calculations and the preparation of Federal, state, and excise tax returns. All other fees include the registrant’s pro-rata share of amounts for agreed-upon procedures in conjunction with service contract approvals by the registrant’s Board of Directors/Trustees.
(e)(1) The registrant’s audit committee has adopted a policy whereby audit and non-audit services performed by the registrant’s principal accountant for the registrant, its investment adviser, and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant require pre-approval in advance at regularly scheduled audit committee meetings. If such a service is required between regularly scheduled audit committee meetings, pre-approval may be authorized by one audit committee member with ratification at the next scheduled audit committee meeting. Waiver of pre-approval for audit or non-audit services requiring fees of a de minimis amount is not permitted.
(2) No services included in (b) – (d) above were approved pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.
(f) Less than 50 percent of the hours expended on the principal accountant’s engagement to audit the registrant’s financial statements for the most recent fiscal year were attributed to work performed by persons other than the principal accountant’s full-time, permanent employees.
(g) The aggregate fees billed for the most recent fiscal year and the preceding fiscal year by the registrant’s principal accountant for non-audit services rendered to the registrant, its investment adviser, and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant were $1,230,000 and $1,521,000, respectively.
(h) All non-audit services rendered in (g) above were pre-approved by the registrant’s audit committee. Accordingly, these services were considered by the registrant’s audit committee in maintaining the principal accountant’s independence.
(i) Not applicable.
(j) Not applicable.
Item 5. Audit Committee of Listed Registrants.
Not applicable.
Item 6. Investments.
(a) Not applicable. The complete schedule of investments is included in Item 7 of this Form N-CSR.
(b) Not applicable.
Item 7. Financial Statements and Financial Highlights for Open-End Management Investment Companies.
(a – b) Report pursuant to Regulation S-X.
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troweprice.com
.
T.
ROWE
PRICE
TRBUX
Ultra
Short-Term
Bond
Fund
–
.
TRSTX
Ultra
Short-Term
Bond
Fund–
.
I Class
TRZWX
Ultra
Short-Term
Bond
Fund–
.
Z Class
T.
ROWE
PRICE
Ultra
Short-Term
Bond
Fund
Go
Paperless
Going
paperless
offers
a
host
of
benefits,
which
include:
Timely
delivery
of
important
documents
Convenient
access
to
your
documents
anytime,
anywhere
Strong
security
protocols
to
safeguard
sensitive
data
Waive
your
account
service
fee
by
going
paperless.*
To
Enroll:
˃
If
you
invest
directly
with
T.
Rowe
Price,
go
to
troweprice.com/paperless
.
If
you
invest
through
a
financial
intermediary
such
as
an
investment
advisor,
a
bank,
or
a
brokerage
firm,
please
contact
that
organization
and
ask
if
it
can
provide
electronic
documentation.
Log
in
to
your
account
at
troweprice.com
for
more
information.
*
An
account
service
fee
will
be
charged
annually
for
each
T.
Rowe
Price
mutual
fund
account
unless
you
meet
criteria
for
a
fee
waiver.
Go
to
troweprice.com/personal-investing/
help/fees-and-minimums.html
to
learn
more
about
this
account
service
fee,
including
other
ways
to
waive
it.
T.
ROWE
PRICE
Ultra
Short-Term
Bond
Fund
Financial
Highlights
3
For
a
share
outstanding
throughout
each
period
Investor
Class
..
Year
..
..
Ended
.
5/31/24
5/31/23
5/31/22
5/31/21
5/31/20
NET
ASSET
VALUE
Beginning
of
period
$
4
.94
$
4
.96
$
5
.09
$
5
.02
$
5
.03
Investment
activities
Net
investment
income
(1)(2)
0
.23
0
.13
0
.04
0
.06
0
.12
Net
realized
and
unrealized
gain/loss
0
.10
0
.01
(3)
(
0
.11
)
0
.08
(
0
.01
)
Total
from
investment
activities
0
.33
0
.14
(
0
.07
)
0
.14
0
.11
Distributions
Net
investment
income
(
0
.23
)
(
0
.14
)
(
0
.04
)
(
0
.06
)
(
0
.12
)
Net
realized
gain
—
(
0
.02
)
(
0
.02
)
(
0
.01
)
—
Total
distributions
(
0
.23
)
(
0
.16
)
(
0
.06
)
(
0
.07
)
(
0
.12
)
NET
ASSET
VALUE
End
of
period
$
5
.04
$
4
.94
$
4
.96
$
5
.09
$
5
.02
T.
ROWE
PRICE
Ultra
Short-Term
Bond
Fund
Financial
Highlights
4
For
a
share
outstanding
throughout
each
period
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Investor
Class
..
Year
..
..
Ended
.
5/31/24
5/31/23
5/31/22
5/31/21
5/31/20
Ratios/Supplemental
Data
Total
return
(2)(4)
6
.92
%
2
.73
%
(
1
.41
)
%
2
.75
%
2
.21
%
Ratios
to
average
net
assets:
(2)
Gross
expenses
before
waivers/payments
by
Price
Associates
0
.33
%
0
.33
%
0
.36
%
0
.45
%
0
.44
%
Net
expenses
after
waivers/
payments
by
Price
Associates
0
.31
%
0
.31
%
0
.33
%
0
.35
%
0
.35
%
Net
investment
income
4
.63
%
2
.61
%
0
.72
%
1
.12
%
2
.34
%
Portfolio
turnover
rate
82
.0
%
38
.5
%
56
.2
%
45
.8
%
69
.8
%
Net
assets,
end
of
period
(in
millions)
$1,344
$1,459
$2,409
$4,169
$1,869
0
%
0
%
0
%
0
%
0
%
(1)
Per
share
amounts
calculated
using
average
shares
outstanding
method.
(2)
Includes
the
impact
of
expense-related
arrangements
with
Price
Associates.
(3)
The
amount
presented
is
inconsistent
with
the
fund's
aggregate
gains
and
losses
because
of
the
timing
of
sales
and
redemptions
of
fund
shares
in
relation
to
fluctuating
market
values
for
the
investment
portfolio.
(4)
Total
return
reflects
the
rate
that
an
investor
would
have
earned
on
an
investment
in
the
fund
during
each
period,
assuming
reinvestment
of
all
distributions,
and
payment
of
no
redemption
or
account
fees,
if
applicable.
T.
ROWE
PRICE
Ultra
Short-Term
Bond
Fund
Financial
Highlights
5
For
a
share
outstanding
throughout
each
period
I
Class
..
Year
..
..
Ended
.
5/31/24
5/31/23
5/31/22
5/31/21
5/31/20
NET
ASSET
VALUE
Beginning
of
period
$
4
.95
$
4
.97
$
5
.10
$
5
.03
$
5
.04
Investment
activities
Net
investment
income
(1)(2)
0
.24
0
.14
0
.04
0
.06
0
.12
Net
realized
and
unrealized
gain/loss
0
.10
—
(3)
(
0
.11
)
0
.09
(
0
.01
)
Total
from
investment
activities
0
.34
0
.14
(
0
.07
)
0
.15
0
.11
Distributions
Net
investment
income
(
0
.24
)
(
0
.14
)
(
0
.04
)
(
0
.07
)
(
0
.12
)
Net
realized
gain
—
(
0
.02
)
(
0
.02
)
(
0
.01
)
—
Total
distributions
(
0
.24
)
(
0
.16
)
(
0
.06
)
(
0
.08
)
(
0
.12
)
NET
ASSET
VALUE
End
of
period
$
5
.05
$
4
.95
$
4
.97
$
5
.10
$
5
.03
T.
ROWE
PRICE
Ultra
Short-Term
Bond
Fund
Financial
Highlights
6
For
a
share
outstanding
throughout
each
period
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
I
Class
..
Year
..
..
Ended
.
5/31/24
5/31/23
5/31/22
5/31/21
5/31/20
Ratios/Supplemental
Data
Total
return
(2)(4)
7
.04
%
2
.86
%
(
1
.27
)
%
2
.88
%
2
.31
%
Ratios
to
average
net
assets:
(2)
Gross
expenses
before
waivers/payments
by
Price
Associates
0
.20
%
0
.19
%
0
.22
%
0
.32
%
0
.33
%
Net
expenses
after
waivers/
payments
by
Price
Associates
0
.20
%
0
.19
%
0
.19
%
0
.23
%
0
.25
%
Net
investment
income
4
.75
%
2
.74
%
0
.87
%
1
.20
%
2
.47
%
Portfolio
turnover
rate
82
.0
%
38
.5
%
56
.2
%
45
.8
%
69
.8
%
Net
assets,
end
of
period
(in
thousands)
$914,377
$932,780
$1,288,432
$855,064
$263,120
0
%
0
%
0
%
0
%
0
%
(1)
Per
share
amounts
calculated
using
average
shares
outstanding
method.
(2)
Includes
the
impact
of
expense-related
arrangements
with
Price
Associates.
(3)
Amounts
round
to
less
than
$0.01
per
share.
(4)
Total
return
reflects
the
rate
that
an
investor
would
have
earned
on
an
investment
in
the
fund
during
each
period,
assuming
reinvestment
of
all
distributions,
and
payment
of
no
redemption
or
account
fees,
if
applicable.
T.
ROWE
PRICE
Ultra
Short-Term
Bond
Fund
Financial
Highlights
7
For
a
share
outstanding
throughout
each
period
Z
Class
(1)
..
Year
..
..
Ended
.
2/22/21
(1)
Through
5/31/21
5/31/24
5/31/23
5/31/22
NET
ASSET
VALUE
Beginning
of
period
$
4
.95
$
4
.97
$
5
.09
$
5
.10
Investment
activities
Net
investment
income
(2)(3)
0
.25
0
.15
0
.05
0
.02
Net
realized
and
unrealized
gain/loss
0
.09
—
(4)
(
0
.10
)
(
0
.01
)
(5)
Total
from
investment
activities
0
.34
0
.15
(
0
.05
)
0
.01
Distributions
Net
investment
income
(
0
.25
)
(
0
.15
)
(
0
.05
)
(
0
.02
)
Net
realized
gain
—
(
0
.02
)
(
0
.02
)
—
Total
distributions
(
0
.25
)
(
0
.17
)
(
0
.07
)
(
0
.02
)
NET
ASSET
VALUE
End
of
period
$
5
.04
$
4
.95
$
4
.97
$
5
.09
T.
ROWE
PRICE
Ultra
Short-Term
Bond
Fund
Financial
Highlights
8
For
a
share
outstanding
throughout
each
period
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Z
Class
(1)
..
Year
..
..
Ended
.
2/22/21
(1)
Through
5/31/21
5/31/24
5/31/23
5/31/22
Ratios/Supplemental
Data
Total
return
(3)(6)
7
.04
%
3
.05
%
(
0
.89
)
%
0
.11
%
Ratios
to
average
net
assets:
(3)
Gross
expenses
before
waivers/payments
by
Price
Associates
0
.19
%
0
.19
%
0
.25
%
0
.33
%
(7)
Net
expenses
after
waivers/payments
by
Price
Associates
0
.00
%
0
.00
%
0
.00
%
0
.00
%
(7)
Net
investment
income
4
.95
%
3
.03
%
1
.06
%
1
.13
%
(7)
Portfolio
turnover
rate
82
.0
%
38
.5
%
56
.2
%
45
.8
%
Net
assets,
end
of
period
(in
thousands)
$99
$97
$97
$100
0
%
0
%
0
%
0
%
(1)
Inception
date
(2)
Per
share
amounts
calculated
using
average
shares
outstanding
method.
(3)
Includes
the
impact
of
expense-related
arrangements
with
Price
Associates.
(4)
Amounts
round
to
less
than
$0.01
per
share.
(5)
The
amount
presented
is
inconsistent
with
the
fund's
aggregate
gains
and
losses
because
of
the
timing
of
sales
and
redemptions
of
fund
shares
in
relation
to
fluctuating
market
values
for
the
investment
portfolio.
(6)
Total
return
reflects
the
rate
that
an
investor
would
have
earned
on
an
investment
in
the
fund
during
each
period,
assuming
reinvestment
of
all
distributions,
and
payment
of
no
redemption
or
account
fees,
if
applicable.
Total
return
is
not
annualized
for
periods
less
than
one
year.
(7)
Annualized
T.
ROWE
PRICE
Ultra
Short-Term
Bond
Fund
May
31,
2024
9
Portfolio
of
Investments
‡
Par/Shares
$
Value
(Amounts
in
000s)
‡
ASSET-BACKED
SECURITIES
25.7%
Auto
Backed
11.9%
Ally
Auto
Receivables
Trust
Series
2023-A,
Class
A2
6.15%,
1/17/34 (1)
2,691
2,695
Ally
Auto
Receivables
Trust
Series
2023-A,
Class
B
6.01%,
1/17/34 (1)
3,714
3,717
ARI
Fleet
Lease
Trust
Series
2023-B,
Class
A2
6.05%,
7/15/32 (1)
4,165
4,179
Bayview
Opportunity
Master
Fund
VII
Series
2024-CAR1,
Class
A,
FRN
SOFR30A
+
1.10%,
6.424%,
12/26/31 (1)
2,873
2,881
CarMax
Auto
Owner
Trust
Series
2020-4,
Class
B
0.85%,
6/15/26
1,125
1,095
CarMax
Auto
Owner
Trust
Series
2023-3,
Class
A2B,
FRN
SOFR30A
+
0.60%,
5.924%,
11/16/26
1,949
1,951
CarMax
Auto
Owner
Trust
Series
2023-3,
Class
A3
5.28%,
5/15/28
1,660
1,657
CarMax
Auto
Owner
Trust
Series
2024-1,
Class
A3
4.92%,
10/16/28
5,410
5,368
Carvana
Auto
Receivables
Trust
Series
2021-N4,
Class
B
1.24%,
9/11/28
1,914
1,803
Carvana
Auto
Receivables
Trust
Series
2023-N1,
Class
A
6.36%,
4/12/27 (1)
4,373
4,381
Carvana
Auto
Receivables
Trust
Series
2023-N3,
Class
A
6.41%,
9/10/27 (1)
2,875
2,883
Carvana
Auto
Receivables
Trust
Series
2023-P3,
Class
A2
6.09%,
11/10/26 (1)
5,133
5,138
Carvana
Auto
Receivables
Trust
Series
2024-N1,
Class
A3
5.60%,
3/10/28 (1)
2,840
2,832
Drive
Auto
Receivables
Trust
Series
2020-2,
Class
D
3.05%,
5/15/28
299
298
T.
ROWE
PRICE
Ultra
Short-Term
Bond
Fund
10
Par/Shares
$
Value
(Amounts
in
000s)
Drive
Auto
Receivables
Trust
Series
2024-1,
Class
B
5.31%,
1/16/29
5,440
5,406
Enterprise
Fleet
Financing
Series
2023-2,
Class
A2
5.56%,
4/22/30 (1)
8,477
8,461
Enterprise
Fleet
Financing
Series
2023-3,
Class
A2
6.40%,
3/20/30 (1)
9,280
9,372
Enterprise
Fleet
Financing
Series
2024-1,
Class
A2
5.23%,
3/20/30 (1)
7,025
6,984
Enterprise
Fleet
Financing
Series
2024-2,
Class
A2
5.74%,
12/20/26 (1)
8,125
8,138
Exeter
Automobile
Receivables
Trust
Series
2022-3A,
Class
B
4.86%,
12/15/26
3,250
3,243
Exeter
Automobile
Receivables
Trust
Series
2022-5A,
Class
B
5.97%,
3/15/27
2,720
2,718
Exeter
Automobile
Receivables
Trust
Series
2023-1A,
Class
B
5.72%,
4/15/27
8,978
8,969
Exeter
Automobile
Receivables
Trust
Series
2023-3A,
Class
B
6.11%,
9/15/27
12,335
12,342
Exeter
Automobile
Receivables
Trust
Series
2023-4A,
Class
B
6.31%,
10/15/27
3,315
3,324
Exeter
Automobile
Receivables
Trust
Series
2024-2A,
Class
B
5.61%,
4/17/28
11,200
11,182
Ford
Credit
Auto
Lease
Trust
Series
2023-A,
Class
B
5.29%,
6/15/26
4,690
4,669
Ford
Credit
Auto
Lease
Trust
Series
2023-B,
Class
B
6.20%,
2/15/27
3,685
3,717
Ford
Credit
Auto
Owner
Trust
Series
2020-1,
Class
B
2.29%,
8/15/31 (1)
5,075
4,952
Ford
Credit
Floorplan
Master
Owner
Trust
Series
2023-1,
Class
B
5.31%,
5/15/28 (1)
4,495
4,449
T.
ROWE
PRICE
Ultra
Short-Term
Bond
Fund
11
Par/Shares
$
Value
(Amounts
in
000s)
Ford
Credit
Floorplan
Master
Owner
Trust
Series
2023-1,
Class
D
6.62%,
5/15/28 (1)
805
808
Ford
Credit
Floorplan
Master
Owner
Trust
Series
2024-1,
Class
B
5.48%,
4/15/29 (1)
3,225
3,222
GM
Financial
Automobile
Leasing
Trust
Series
2022-2,
Class
B
4.02%,
5/20/26
6,700
6,648
GM
Financial
Automobile
Leasing
Trust
Series
2023-2,
Class
B
5.54%,
5/20/27
3,920
3,913
Hyundai
Auto
Lease
Securitization
Trust
Series
2024-A,
Class
A3
5.02%,
3/15/27 (1)
5,240
5,208
Hyundai
Auto
Lease
Securitization
Trust
Series
2024-A,
Class
B
5.35%,
5/15/28 (1)
3,335
3,317
JPMorgan
Chase
Bank
Series
2021-1,
Class
B
0.875%,
9/25/28 (1)
77
77
JPMorgan
Chase
Bank
Series
2021-2,
Class
B
0.889%,
12/26/28 (1)
1,793
1,769
JPMorgan
Chase
Bank
Series
2021-3,
Class
B
0.76%,
2/26/29 (1)
2,655
2,586
Navistar
Financial
Dealer
Note
Master
Owner
Trust
Series
2024-1,
Class
A
5.59%,
4/25/29 (1)
4,300
4,299
Navistar
Financial
Dealer
Note
Master
Owner
Trust
II
Series
2023-1,
Class
A
6.18%,
8/25/28 (1)
5,575
5,607
Octane
Receivables
Trust
Series
2023-1A,
Class
A
5.87%,
5/21/29 (1)
1,812
1,812
Octane
Receivables
Trust
Series
2023-1A,
Class
B
5.96%,
7/20/29 (1)
3,904
3,896
Octane
Receivables
Trust
Series
2023-3A,
Class
A2
6.44%,
3/20/29 (1)
16,858
16,945
Octane
Receivables
Trust
Series
2023-3A,
Class
B
6.48%,
7/20/29 (1)
5,610
5,653
T.
ROWE
PRICE
Ultra
Short-Term
Bond
Fund
12
Par/Shares
$
Value
(Amounts
in
000s)
Santander
Bank
Auto
Credit-Linked
Notes
Series
2022-B,
Class
B
5.721%,
8/16/32 (1)
963
962
Santander
Bank
Auto
Credit-Linked
Notes
Series
2023-B,
Class
B
5.64%,
12/15/33 (1)
730
727
Santander
Drive
Auto
Receivables
Trust
Series
2020-4,
Class
E
2.85%,
4/17/28 (1)
7,000
6,791
Santander
Drive
Auto
Receivables
Trust
Series
2022-6,
Class
B
4.72%,
6/15/27
10,350
10,271
Santander
Drive
Auto
Receivables
Trust
Series
2023-1,
Class
B
4.98%,
2/15/28
3,385
3,362
Santander
Drive
Auto
Receivables
Trust
Series
2023-3,
Class
A3
5.61%,
10/15/27
3,115
3,112
Santander
Drive
Auto
Receivables
Trust
Series
2023-4,
Class
A2
6.18%,
2/16/27
4,691
4,699
Santander
Drive
Auto
Receivables
Trust
Series
2024-1,
Class
B
5.23%,
12/15/28
14,965
14,899
SBNA
Auto
Lease
Trust
Series
2024-A,
Class
A4
5.24%,
1/22/29 (1)
3,105
3,093
SBNA
Auto
Lease
Trust
Series
2024-B,
Class
A3
5.56%,
11/22/27 (1)
3,210
3,210
SBNA
Auto
Lease
Trust
Series
2024-B,
Class
A4
5.55%,
12/20/28 (1)
3,155
3,161
SBNA
Auto
Receivables
Trust
Series
2024-A,
Class
A3
5.32%,
12/15/28 (1)
4,470
4,453
SFS
Auto
Receivables
Securitization
Trust
Series
2023-1A,
Class
A2B,
FRN
SOFR30A
+
0.80%,
6.123%,
3/22/27 (1)
1,896
1,900
U.S.
Bank
Series
2023-1,
Class
B
6.789%,
8/25/32 (1)
4,001
4,014
269,218
Collateralized
Debt
Obligation
7.4%
AllegroX
Series
2018-3A,
Class
A1R,
CLO,
FRN
3M
TSFR
+
1.23%,
6.557%,
10/16/31 (1)
11,250
11,258
T.
ROWE
PRICE
Ultra
Short-Term
Bond
Fund
13
Par/Shares
$
Value
(Amounts
in
000s)
Apidos
XVIII
Series
2018-18A,
Class
AR,
CLO,
FRN
3M
TSFR
+
1.15%,
6.475%,
10/22/30 (1)
8,671
8,675
Apidos
Xxv
Series
2016-25A,
Class
A1R2,
CLO,
FRN
3M
TSFR
+
1.15%,
6.475%,
10/20/31 (1)
10,682
10,694
Atrium
XIII
Series
13A,
Class
AR,
CLO,
FRN
3M
TSFR
+
1.15%,
6.476%,
11/21/30 (1)
10,535
10,539
BlueMountain
Series
2016-3A,
Class
A1R2,
CLO,
FRN
3M
TSFR
+
1.20%,
6.522%,
11/15/30 (1)
10,560
10,575
Crown
Point
Series
2018-7A,
Class
AR,
CLO,
FRN
3M
TSFR
+
1.23%,
6.556%,
10/20/31 (1)
11,200
11,186
Marathon
Static
Series
2022-18A,
Class
A1R2,
CLO,
FRN
3M
TSFR
+
1.15%,
6.475%,
7/20/30 (1)
7,954
7,934
Marble
Point
XII
Series
2018-1A,
Class
A,
CLO,
FRN
3M
TSFR
+
1.272%,
6.599%,
7/16/31 (1)
3,574
3,576
Marble
Point
XIV
Series
2018-2A,
Class
A12R,
CLO,
FRN
3M
TSFR
+
1.20%,
6.525%,
1/20/32 (1)
13,488
13,514
Northwoods
Capital
XIV-B
Series
2018-14BA,
Class
AR,
CLO,
FRN
3M
TSFR
+
1.25%,
6.574%,
11/13/31 (1)
5,150
5,165
Octagon
Investment
Partners
39
Series
2018-3A,
Class
AR,
CLO,
FRN
3M
TSFR
+
1.15%,
6.475%,
10/20/30 (1)
10,434
10,451
OZLM
Funding
II
Series
2012-2A,
Class
A1A2,
CLO,
FRN
3M
TSFR
+
1.20%,
6.53%,
7/30/31 (1)
3,741
3,747
OZLM
XXI
Series
2017-21A,
Class
A1R,
CLO,
FRN
3M
TSFR
+
1.15%,
6.475%,
1/20/31 (1)
4,951
4,963
Romark
Series
2018-2A,
Class
A1R,
CLO,
FRN
3M
TSFR
+
1.14%,
7/25/31 (1)
11,200
11,200
Symphony
Static
I
Series
2021-1A,
Class
A,
CLO,
FRN
3M
TSFR
+
1.092%,
6.415%,
10/25/29 (1)
9,313
9,312
Symphony
XVI
Series
2015-16A,
Class
ARR,
CLO,
FRN
3M
TSFR
+
1.20%,
6.523%,
10/15/31 (1)
10,435
10,422
T.
ROWE
PRICE
Ultra
Short-Term
Bond
Fund
14
Par/Shares
$
Value
(Amounts
in
000s)
THL
Credit
Wind
River
Series
2015-1A,
Class
A1R3,
CLO,
FRN
3M
TSFR
+
1.20%,
6.525%,
10/20/30 (1)
9,107
9,135
TIAA
Series
2016-1A,
Class
ARR,
CLO,
FRN
3M
TSFR
+
1.25%,
6.575%,
7/20/31 (1)
11,045
11,073
Voya
Series
2018-3A,
Class
A1R2,
CLO,
FRN
3M
TSFR
+
1.20%,
6.529%,
10/15/31 (1)
4,040
4,044
167,463
Equip
Lease
Heavy
Duty
1.2%
Amur
Equipment
Finance
Receivables
XIII
Series
2024-1A,
Class
A2
5.38%,
1/21/31 (1)
4,875
4,856
Auxilior
Term
Funding
Series
2023-1A,
Class
A2
6.18%,
12/15/28 (1)
4,295
4,308
Dell
Equipment
Finance
Trust
Series
2024-1,
Class
A3
5.39%,
3/22/30 (1)
2,195
2,196
DLLAD
Series
2024-1A,
Class
A2
5.50%,
8/20/27 (1)
3,280
3,279
MMAF
Equipment
Finance
Series
2020-BA,
Class
A5
0.85%,
4/14/42 (1)
2,400
2,292
MMAF
Equipment
Finance
Series
2023-A,
Class
A2
5.79%,
11/13/26 (1)
6,086
6,087
Octane
Receivables
Trust
Series
2024-1A,
Class
A2
5.68%,
5/20/30 (1)
2,705
2,703
Post
Road
Equipment
Finance
Series
2024-1A,
Class
A2
5.59%,
11/15/29 (1)
1,065
1,064
Verdant
Receivables
Series
2024-1A,
Class
A2
5.68%,
12/12/31 (1)
710
710
27,495
Home
Equity
Loans
Backed
0.3%
Citigroup
Mortgage
Loan
Trust
Series
2020-EXP2,
Class
A3,
CMO,
ARM
2.50%,
8/25/50 (1)
5,622
4,656
Citigroup
Mortgage
Loan
Trust
Series
2020-EXP2,
Class
A4,
CMO,
ARM
2.50%,
8/25/50 (1)
1,359
1,121
5,777
T.
ROWE
PRICE
Ultra
Short-Term
Bond
Fund
15
Par/Shares
$
Value
(Amounts
in
000s)
Other
Asset-Backed
Securities
4.2%
Dell
Equipment
Finance
Trust
Series
2023-2,
Class
A3
5.65%,
1/22/29 (1)
8,985
8,984
DLLAD
Series
2023-1A,
Class
A2
5.19%,
4/20/26 (1)
2,518
2,512
Hilton
Grand
Vacations
Trust
Series
2018-AA,
Class
A
3.54%,
2/25/32 (1)
334
328
Hilton
Grand
Vacations
Trust
Series
2019-AA,
Class
A
2.34%,
7/25/33 (1)
373
357
HPEFS
Equipment
Trust
Series
2021-2A,
Class
D
1.29%,
3/20/29 (1)
5,700
5,633
HPEFS
Equipment
Trust
Series
2022-1A,
Class
B
1.79%,
5/21/29 (1)
6,000
5,958
HPEFS
Equipment
Trust
Series
2022-1A,
Class
D
2.40%,
11/20/29 (1)
3,200
3,097
HPEFS
Equipment
Trust
Series
2022-2A,
Class
C
4.43%,
9/20/29 (1)
5,354
5,288
HPEFS
Equipment
Trust
Series
2023-2A,
Class
B
6.25%,
1/21/31 (1)
2,415
2,432
Kubota
Credit
Owner
Trust
Series
2023-2A,
Class
A3
5.28%,
1/18/28 (1)
2,555
2,550
M&T
Equipment
Notes
Series
2023-1A,
Class
A2
6.09%,
7/15/30 (1)
2,453
2,453
M&T
Equipment
Notes
Series
2023-1A,
Class
A3
5.74%,
7/15/30 (1)
4,135
4,131
MVW
Series
2020-1A,
Class
A
1.74%,
10/20/37 (1)
38
36
MVW
Series
2021-1WA,
Class
A
1.14%,
1/22/41 (1)
2,056
1,914
Navient
Private
Education
Refi
Loan
Trust
Series
2021-CA,
Class
A
1.06%,
10/15/69 (1)
9,972
8,738
T.
ROWE
PRICE
Ultra
Short-Term
Bond
Fund
16
Par/Shares
$
Value
(Amounts
in
000s)
Nelnet
Student
Loan
Trust
Series
2021-DA,
Class
AFL,
FRN
1M
TSFR
+
0.804%,
6.125%,
4/20/62 (1)
3,382
3,346
Octane
Receivables
Trust
Series
2021-2A,
Class
A
1.21%,
9/20/28 (1)
2,264
2,221
Octane
Receivables
Trust
Series
2022-1A,
Class
A2
4.18%,
3/20/28 (1)
1,706
1,692
Octane
Receivables
Trust
Series
2023-2A,
Class
A2
5.88%,
6/20/31 (1)
5,780
5,783
Santander
Bank
Series
2021-1A,
Class
B
1.833%,
12/15/31 (1)
607
601
Santander
Bank
Auto
Credit-Linked
Notes
Series
2022-A,
Class
B
5.281%,
5/15/32 (1)
3,353
3,343
Santander
Bank
Auto
Credit-Linked
Notes
Series
2023-A,
Class
B
6.493%,
6/15/33 (1)
1,945
1,949
Santander
Retail
Auto
Lease
Trust
Series
2022-A,
Class
B
1.61%,
1/20/26 (1)
7,555
7,440
SFS
Auto
Receivables
Securitization
Trust
Series
2024-1A,
Class
A3
4.95%,
5/21/29 (1)
4,810
4,765
Sierra
Timeshare
Receivables
Funding
Series
2019-3A,
Class
A
2.34%,
8/20/36 (1)
1,589
1,571
Sierra
Timeshare
Receivables
Funding
Series
2020-2A,
Class
A
1.33%,
7/20/37 (1)
98
94
Verdant
Receivables
Series
2023-1A,
Class
A2
6.24%,
1/13/31 (1)
4,933
4,934
Verizon
Master
Trust
Series
2024-1,
Class
A1A
5.00%,
12/20/28
2,005
1,994
94,144
Student
Loans
0.7%
Navient
Private
Education
Loan
Trust
Series
2016-AA,
Class
A2A
3.91%,
12/15/45 (1)
4,497
4,418
Navient
Private
Education
Refi
Loan
Trust
Series
2020-DA,
Class
A
1.69%,
5/15/69 (1)
456
417
T.
ROWE
PRICE
Ultra
Short-Term
Bond
Fund
17
Par/Shares
$
Value
(Amounts
in
000s)
Navient
Private
Education
Refi
Loan
Trust
Series
2020-FA,
Class
A
1.22%,
7/15/69 (1)
1,879
1,696
Navient
Private
Education
Refi
Loan
Trust
Series
2021-GA,
Class
A
1.58%,
4/15/70 (1)
9,546
8,288
SMB
Private
Education
Loan
Trust
Series
2019-A,
Class
A2A
3.44%,
7/15/36 (1)
1,232
1,186
16,005
Total
Asset-Backed
Securities
(Cost
$584,500)
580,102
CERTIFICATES
OF
DEPOSITS
0.3%
Banking
0.3%
Intesa
Sanpaolo,
6.10%
7,675
7,677
7,677
Total
Certificates
of
Deposits
(Cost
$7,675)
7,677
CONVERTIBLE
BONDS
0.2%
MISCELLANEOUS
0.2%
Miscellaneous
0.2%
Meituan,
Zero
Coupon,
4/27/27
4,700
4,429
Total
Miscellaneous
4,429
Total
Convertible
Bonds
(Cost
$4,408)
4,429
CORPORATE
BONDS
51.9%
Advertising
0.9%
WPP
Finance
2010,
3.75%,
9/19/24
19,500
19,341
19,341
Aerospace
&
Defense
0.4%
Boeing,
4.875%,
5/1/25
4,650
4,597
Boeing,
6.259%,
5/1/27 (1)
3,865
3,888
8,485
Automotive
3.6%
Daimler
Truck
Finance
North
America,
FRN,
SOFR
+
0.75%,
6.102%,
12/13/24 (1)
3,143
3,149
Ford
Motor
Credit,
3.664%,
9/8/24
2,700
2,680
T.
ROWE
PRICE
Ultra
Short-Term
Bond
Fund
18
Par/Shares
$
Value
(Amounts
in
000s)
Ford
Motor
Credit,
4.134%,
8/4/25
4,750
4,660
Ford
Motor
Credit,
4.389%,
1/8/26
8,152
7,940
Ford
Motor
Credit,
4.687%,
6/9/25
2,000
1,975
Ford
Motor
Credit,
5.125%,
6/16/25
2,000
1,985
Hyundai
Capital
America,
1.65%,
9/17/26 (1)
6,120
5,600
Hyundai
Capital
America,
1.80%,
10/15/25 (1)
7,540
7,149
Hyundai
Capital
America,
5.25%,
1/8/27 (1)
2,220
2,207
Hyundai
Capital
America,
5.50%,
3/30/26 (1)
1,610
1,607
Kia,
2.375%,
2/14/25
1,900
1,856
LeasePlan,
2.875%,
10/24/24 (1)
11,800
11,670
Nissan
Motor,
3.522%,
9/17/25 (1)
5,955
5,769
Nissan
Motor
Acceptance,
1.125%,
9/16/24 (1)
1,109
1,093
Volkswagen
Group
of
America
Finance,
4.625%,
11/13/25 (1)
4,520
4,458
Volkswagen
Group
of
America
Finance,
5.80%,
9/12/25 (1)
5,700
5,708
Volkswagen
Group
of
America
Finance,
6.00%,
11/16/26 (1)
11,380
11,508
81,014
Banking
17.2%
ABN
AMRO
Bank,
VR,
6.339%,
9/18/27 (1)(2)
4,000
4,048
Australia
&
New
Zealand
Banking
Group,
4.40%,
5/19/26 (1)
8,355
8,159
Banco
Bilbao
Vizcaya
Argentaria,
VR,
5.862%,
9/14/26 (2)
11,200
11,203
Banco
Santander,
VR,
5.552%,
3/14/28 (2)
3,800
3,765
Bank
of
Montreal,
FRN,
SOFRINDX
+
0.32%,
5.675%,
7/9/24
10,000
9,976
Barclays,
4.375%,
1/12/26 (3)
800
784
Barclays,
5.20%,
5/12/26
7,805
7,699
Barclays,
VR,
5.304%,
8/9/26 (2)
8,300
8,251
Barclays,
VR,
5.674%,
3/12/28 (2)
2,035
2,032
BPCE,
4.50%,
3/15/25 (1)
11,881
11,727
BPCE,
VR,
1.652%,
10/6/26 (1)(2)
1,229
1,159
CaixaBank,
VR,
6.684%,
9/13/27 (1)(2)
11,450
11,642
Capital
One
Financial,
3.75%,
7/28/26
1,950
1,880
Capital
One
Financial,
VR,
2.636%,
3/3/26 (2)
7,060
6,880
Citigroup,
4.40%,
6/10/25
17,400
17,183
Cooperatieve
Rabobank,
3.75%,
7/21/26
1,920
1,846
Cooperatieve
Rabobank,
4.375%,
8/4/25
4,965
4,875
Danske
Bank,
VR,
5.427%,
3/1/28 (1)(2)
4,425
4,417
Danske
Bank,
VR,
6.466%,
1/9/26 (1)(2)
12,695
12,696
Deutsche
Bank,
4.50%,
4/1/25
15,940
15,701
Discover
Bank,
2.45%,
9/12/24
13,392
13,265
Emirates
NBD
Bank,
2.625%,
2/18/25
6,400
6,252
Fifth
Third
Bank,
3.85%,
3/15/26
15,655
15,126
Fifth
Third
Bank,
VR,
5.852%,
10/27/25 (2)
2,950
2,941
Goldman
Sachs
Group,
FRN,
SOFR
+
0.50%,
5.851%,
9/10/24
10,000
9,999
HDFC
Bank,
5.686%,
3/2/26
8,500
8,511
T.
ROWE
PRICE
Ultra
Short-Term
Bond
Fund
19
Par/Shares
$
Value
(Amounts
in
000s)
HSBC
Holdings,
4.375%,
11/23/26
7,600
7,381
HSBC
Holdings,
VR,
5.597%,
5/17/28 (2)
5,600
5,619
Huntington
Bancshares,
2.625%,
8/6/24
3,775
3,750
Huntington
National
Bank,
VR,
5.699%,
11/18/25 (2)
7,745
7,717
ING
Groep,
VR,
6.083%,
9/11/27 (2)
3,845
3,888
Intesa
Sanpaolo,
7.00%,
11/21/25 (1)
2,491
2,516
Lloyds
Banking
Group,
4.45%,
5/8/25
4,771
4,724
Lloyds
Banking
Group,
4.50%,
11/4/24
2,050
2,035
Lloyds
Banking
Group,
VR,
2.438%,
2/5/26 (2)
12,665
12,383
Mitsubishi
UFJ
Financial
Group,
VR,
5.063%,
9/12/25 (2)
11,165
11,138
Mitsubishi
UFJ
Financial
Group,
VR,
5.719%,
2/20/26 (2)
4,310
4,297
NatWest
Group,
4.80%,
4/5/26
4,577
4,517
NatWest
Markets,
FRN,
SOFR
+
0.53%,
5.891%,
8/12/24 (1)
6,315
6,315
NatWest
Markets,
FRN,
SOFR
+
1.45%,
6.805%,
3/22/25 (1)
2,483
2,501
PNC
Bank,
4.20%,
11/1/25
5,948
5,819
PNC
Financial
Services
Group,
VR,
5.30%,
1/21/28 (2)
1,745
1,734
PNC
Financial
Services
Group,
VR,
5.812%,
6/12/26 (2)
4,980
4,988
PNC
Financial
Services
Group,
VR,
6.615%,
10/20/27 (2)
5,000
5,115
Santander
Holdings
USA,
3.244%,
10/5/26
5,750
5,414
Societe
Generale,
4.25%,
4/14/25 (1)
500
491
Societe
Generale,
4.25%,
8/19/26 (1)
2,440
2,346
Societe
Generale,
FRN,
SOFR
+
1.05%,
6.407%,
1/21/26 (1)
10,000
10,011
Societe
Generale,
VR,
5.519%,
1/19/28 (1)(2)
4,375
4,318
Standard
Chartered,
4.30%,
2/19/27 (1)
3,464
3,343
Standard
Chartered,
FRN,
SOFR
+
0.93%,
6.294%,
11/23/25 (1)
(3)
5,000
5,005
Standard
Chartered,
VR,
3.971%,
3/30/26 (1)(2)
800
786
Standard
Chartered,
VR,
5.688%,
5/14/28 (1)(2)
1,205
1,201
Standard
Chartered,
VR,
6.187%,
7/6/27 (1)(2)
5,800
5,846
Toronto-Dominion
Bank,
FRN,
SOFR
+
0.35%,
5.701%,
9/10/24
10,000
9,969
Truist
Financial,
FRN,
SOFR
+
0.40%,
5.751%,
6/9/25
10,445
10,445
U.S.
Bancorp,
VR,
5.727%,
10/21/26 (2)
6,535
6,547
UBS,
5.00%,
7/9/27
3,450
3,394
UBS
Group,
VR,
2.593%,
9/11/25 (1)(2)
7,750
7,683
UBS
Group,
VR,
6.327%,
12/22/27 (1)(2)
5,700
5,795
Wells
Fargo,
VR,
5.707%,
4/22/28 (2)
6,480
6,524
387,572
Building
Products
0.1%
Owens
Corning,
5.50%,
6/15/27
2,360
2,367
2,367
Cable
Operators
0.7%
Charter
Communications
Operating,
4.908%,
7/23/25
1,314
1,300
Charter
Communications
Operating,
6.15%,
11/10/26
5,650
5,687
T.
ROWE
PRICE
Ultra
Short-Term
Bond
Fund
20
Par/Shares
$
Value
(Amounts
in
000s)
Cox
Communications,
3.15%,
8/15/24 (1)
7,900
7,854
14,841
Chemicals
1.0%
Celanese
U.S.
Holdings,
1.40%,
8/5/26
4,298
3,920
International
Flavors
&
Fragrances,
1.23%,
10/1/25 (1)
3,107
2,926
LG
Chem,
4.375%,
7/14/25
7,610
7,499
MEGlobal
Canada,
5.00%,
5/18/25
8,850
8,753
23,098
Consumer
Products
0.5%
LG
Electronics,
5.625%,
4/24/27 (1)
6,740
6,772
Mattel,
3.375%,
4/1/26 (1)
5,675
5,413
12,185
Drugs
0.8%
BNP
Paribas,
4.375%,
9/28/25 (1)
11,650
11,421
BNP
Paribas,
VR,
2.219%,
6/9/26 (1)(2)
1,685
1,625
Perrigo
Finance
Unlimited,
3.90%,
12/15/24
679
670
Viatris,
1.65%,
6/22/25
5,207
4,983
18,699
Electric
Utilities
0.4%
GS
Caltex,
1.625%,
7/27/25
9,450
9,032
9,032
Energy
2.9%
Abu
Dhabi
National
Energy,
4.375%,
6/22/26
8,900
8,749
APA
Infrastructure,
4.20%,
3/23/25 (1)
5,000
4,940
DCP
Midstream
Operating,
5.375%,
7/15/25
10,562
10,522
Energy
Transfer,
5.75%,
4/1/25
10,300
10,287
EQT,
3.125%,
5/15/26 (1)
2,000
1,899
Occidental
Petroleum,
5.50%,
12/1/25
2,145
2,134
Occidental
Petroleum,
5.875%,
9/1/25
4,778
4,778
Occidental
Petroleum,
8.50%,
7/15/27
2,100
2,250
SA
Global
Sukuk,
1.602%,
6/17/26
9,450
8,790
Sabine
Pass
Liquefaction,
5.875%,
6/30/26
931
934
TER
Finance
Jersey,
Series
21,
Zero
Coupon,
1/2/25 (1)(4)
3,000
2,887
Western
Midstream
Operating,
3.10%,
2/1/25
6,623
6,491
64,661
Financial
3.5%
AerCap
Ireland
Capital,
1.65%,
10/29/24
7,230
7,113
Aldar
Sukuk,
4.75%,
9/29/25
8,830
8,723
Ally
Financial,
5.125%,
9/30/24
6,400
6,377
Bank
Mandiri
Persero,
5.50%,
4/4/26
9,000
8,990
CNO
Financial
Group,
5.25%,
5/30/25
8,012
7,962
General
Motors
Financial,
5.40%,
5/8/27
2,325
2,317
General
Motors
Financial,
FRN,
SOFR
+
0.62%,
5.976%,
10/15/24
15,000
14,998
T.
ROWE
PRICE
Ultra
Short-Term
Bond
Fund
21
Par/Shares
$
Value
(Amounts
in
000s)
LPL
Holdings,
5.70%,
5/20/27
4,380
4,393
QNB
Finance,
1.375%,
1/26/26
9,555
8,919
Synchrony
Financial,
4.25%,
8/15/24
3,810
3,791
Western
Union,
1.35%,
3/15/26
5,865
5,435
79,018
Food
Processing
0.5%
Campbell
Soup,
5.30%,
3/20/26
10,865
10,841
10,841
Food/Tobacco
0.8%
Imperial
Brands
Finance,
3.125%,
7/26/24 (1)
4,200
4,179
Imperial
Brands
Finance,
4.25%,
7/21/25 (1)
14,560
14,294
18,473
Foreign
Govt
&
Muni
(Excl
Canadian)
0.3%
Pelabuhan
Indonesia
Persero,
4.875%,
10/1/24
5,800
5,785
5,785
Forest
Products
0.4%
Celulosa
Arauco
y
Constitucion,
4.50%,
8/1/24
10,000
9,995
9,995
Health
Care
1.9%
HCA,
5.25%,
6/15/26
10,880
10,812
HCA,
5.375%,
2/1/25
5,450
5,423
Highmark,
1.45%,
5/10/26 (1)
12,754
11,708
Icon
Investments
Six,
5.809%,
5/8/27
9,574
9,647
Solventum,
5.45%,
2/25/27 (1)
6,005
5,990
43,580
Insurance
3.6%
Athene
Global
Funding,
5.684%,
2/23/26 (1)
4,995
4,981
Athene
Global
Funding,
FRN,
SOFRINDX
+
0.715%,
6.07%,
1/7/25 (1)
9,850
9,865
Brighthouse
Financial
Global
Funding,
1.75%,
1/13/25 (1)
5,000
4,871
CNO
Global
Funding,
1.65%,
1/6/25 (1)
2,966
2,888
CNO
Global
Funding,
1.75%,
10/7/26 (1)
4,895
4,462
Corebridge
Financial,
3.50%,
4/4/25
10,330
10,136
Equitable
Financial
Life
Global
Funding,
1.40%,
7/7/25 (1)
5,684
5,427
Equitable
Financial
Life
Global
Funding,
5.50%,
12/2/25 (1)
11,911
11,878
First
American
Financial,
4.60%,
11/15/24
9,173
9,110
Voya
Financial,
3.65%,
6/15/26
17,754
17,098
80,716
Manufacturing
1.6%
FMC,
3.20%,
10/1/26
14,739
13,934
POSCO,
5.625%,
1/17/26
5,500
5,502
VF,
2.40%,
4/23/25
17,729
17,142
36,578
T.
ROWE
PRICE
Ultra
Short-Term
Bond
Fund
22
Par/Shares
$
Value
(Amounts
in
000s)
Metals
&
Mining
0.0%
Freeport-McMoRan,
5.00%,
9/1/27
883
869
869
Other
Telecommunications
0.4%
Axiata,
4.357%,
3/24/26
8,820
8,661
8,661
Pharmaceuticals
0.7%
Bayer
U.S.
Finance
II,
4.25%,
12/15/25 (1)
15,160
14,766
14,766
Real
Estate
Investment
Trust
Securities
2.5%
Brixmor
Operating
Partnership,
3.65%,
6/15/24
605
604
Brixmor
Operating
Partnership,
3.85%,
2/1/25
16,000
15,796
Brixmor
Operating
Partnership,
4.125%,
6/15/26
1,900
1,844
CubeSmart,
4.00%,
11/15/25
3,075
2,995
Healthcare
Realty
Holdings,
3.50%,
8/1/26
6,253
5,935
Kilroy
Realty,
3.45%,
12/15/24
13,122
12,944
Kilroy
Realty,
4.375%,
10/1/25
5,074
4,960
Scentre
Group
Trust
1,
3.50%,
2/12/25 (1)
10,550
10,382
55,460
Retail
0.8%
Advance
Auto
Parts,
5.90%,
3/9/26
3,070
3,074
Walgreens
Boots
Alliance,
3.80%,
11/18/24
15,350
15,161
18,235
Services
0.5%
CDW,
5.50%,
12/1/24
11,075
11,033
Nature
Conservancy,
Series
A,
0.625%,
7/1/24
650
648
11,681
Transportation
0.5%
GATX,
5.40%,
3/15/27
3,230
3,224
Penske
Truck
Leasing,
1.70%,
6/15/26 (1)
4,239
3,912
Penske
Truck
Leasing,
2.70%,
11/1/24 (1)
2,519
2,487
Penske
Truck
Leasing,
3.95%,
3/10/25 (1)
2,900
2,862
12,485
Transportation
Services
0.3%
HPHT
Finance,
2.875%,
11/5/24
7,278
7,191
7,191
Utilities
2.8%
Ameren,
3.65%,
2/15/26
2,185
2,115
Constellation
Energy
Generation,
3.25%,
6/1/25
6,437
6,291
Edison
International,
3.55%,
11/15/24
17,615
17,434
NRG
Energy,
3.75%,
6/15/24 (1)
670
669
Pacific
Gas
&
Electric,
4.95%,
6/8/25
9,900
9,796
Southern,
STEP,
4.475%,
8/1/24
8,315
8,298
T.
ROWE
PRICE
Ultra
Short-Term
Bond
Fund
23
Par/Shares
$
Value
(Amounts
in
000s)
Southwestern
Electric
Power,
Series
K,
2.75%,
10/1/26
3,700
3,471
Vistra
Operations,
3.55%,
7/15/24 (1)
14,655
14,618
62,692
Wireless
Communications
2.3%
American
Tower,
1.60%,
4/15/26
12,295
11,450
Crown
Castle,
1.05%,
7/15/26
4,605
4,213
Crown
Castle,
1.35%,
7/15/25
4,850
4,624
Crown
Castle,
4.45%,
2/15/26
9,500
9,327
Crown
Castle
Towers,
3.663%,
5/15/25 (1)
1,500
1,467
PT
Tower
Bersama
Infrastructure,
4.25%,
1/21/25
5,550
5,476
Rogers
Communications,
3.625%,
12/15/25
5,000
4,841
Sprint,
7.625%,
3/1/26
11,141
11,419
52,817
Total
Corporate
Bonds
(Cost
$1,170,659)
1,171,138
FOREIGN
GOVERNMENT
OBLIGATIONS
&
MUNICIPALITIES
0.5%
Foreign
Govt
&
Muni
(Excl
Canadian)
0.5%
Japan
Treasury
Discount
Bill,
0.04%,
8/5/24
(JPY)
1,746,600
11,105
11,105
Total
Foreign
Government
Obligations
&
Municipalities
(Cost
$11,204)
11,105
MUNICIPAL
SECURITIES
0.0%
Illinois
0.0%
Chicago
Transit
Auth.
Capital
Grant
Receipts
Revenue,
5.00%,
6/1/25
100
101
Total
Municipal
Securities
(Cost
$102)
101
NON-U.S.
GOVERNMENT
MORTGAGE-BACKED
SECURITIES
10.2%
Commercial
Mortgage
Backed
Securities
1.2%
CAMB
Commercial
Mortgage
Trust
Series
2019-LIFE,
Class
B,
ARM
1M
TSFR
+
1.547%,
6.864%,
12/15/37 (1)
9,750
9,741
CAMB
Commercial
Mortgage
Trust
Series
2019-LIFE,
Class
C,
ARM
1M
TSFR
+
1.747%,
7.064%,
12/15/37 (1)
1,727
1,725
T.
ROWE
PRICE
Ultra
Short-Term
Bond
Fund
24
Par/Shares
$
Value
(Amounts
in
000s)
Cold
Storage
Trust
Series
2020-ICE5,
Class
A,
ARM
1M
TSFR
+
1.014%,
6.334%,
11/15/37 (1)
6,793
6,782
MARQ
Trust
Series
2024-HOU,
Class
A,
ARM
1M
TSFR
+
1.591%,
6.91%,
6/15/29 (1)
2,140
2,135
SDR
Commercial
Mortgage
Trust
Series
2024-DSNY,
Class
A,
ARM
1M
TSFR
+
1.392%,
6.692%,
5/15/39 (1)
6,665
6,671
27,054
Commercial
Mortgage-Backed
Securities
2.2%
Austin
Fairmont
Hotel
Trust
Series
2019-FAIR,
Class
A,
ARM
1M
TSFR
+
1.097%,
6.414%,
9/15/32 (1)
9,525
9,517
BX
Commercial
Mortgage
Trust
Series
2020-VKNG,
Class
A,
ARM
1M
TSFR
+
1.044%,
6.361%,
10/15/37 (1)
3,800
3,791
BX
Trust
Series
2021-ARIA,
Class
A,
ARM
1M
TSFR
+
1.014%,
6.331%,
10/15/36 (1)
3,100
3,073
Commercial
Mortgage
Trust
Series
2014-CR21,
Class
A3
3.528%,
12/10/47
482
473
Commercial
Mortgage
Trust
Series
2014-UBS6,
Class
A5
3.644%,
12/10/47
5,200
5,130
Fontainebleau
Miami
Beach
Trust
Series
2019-FBLU,
Class
A
3.144%,
12/10/36 (1)
8,905
8,727
GS
Mortgage
Securities
Trust
Series
2021-ROSS,
Class
A,
ARM
1M
TSFR
+
1.264%,
6.581%,
5/15/26 (1)
3,314
3,079
JPMorgan
Chase
Commercial
Mortgage
Securities
Trust
Series
2020-609M,
Class
A,
ARM
1M
TSFR
+
1.734%,
7.051%,
10/15/33 (1)
9,870
9,575
ONE
Mortgage
Trust
Series
2021-PARK,
Class
A,
ARM
1M
TSFR
+
0.814%,
6.131%,
3/15/36 (1)
7,110
6,923
50,288
Whole
Loans
Backed
6.8%
Angel
Oak
Mortgage
Trust
Series
2019-5,
Class
A1,
CMO,
ARM
2.593%,
10/25/49 (1)
755
729
Angel
Oak
Mortgage
Trust
Series
2021-2,
Class
A1,
CMO,
ARM
0.985%,
4/25/66 (1)
4,460
3,684
T.
ROWE
PRICE
Ultra
Short-Term
Bond
Fund
25
Par/Shares
$
Value
(Amounts
in
000s)
BINOM
Securitization
Trust
Series
2021-INV1,
Class
A1,
CMO,
ARM
2.034%,
6/25/56 (1)
9,218
7,940
COLT
Mortgage
Loan
Trust
Series
2020-3,
Class
A1,
CMO,
ARM
1.506%,
4/27/65 (1)
833
789
Connecticut
Avenue
Securities
Series
2017-C05,
Class
1ED3,
CMO,
ARM
SOFR30A
+
1.314%,
6.638%,
1/25/30
64
64
Connecticut
Avenue
Securities
Series
2018-C03,
Class
1EB2,
CMO,
ARM
SOFR30A
+
0.964%,
6.288%,
10/25/30
705
707
Connecticut
Avenue
Securities
Series
2018-C03,
Class
1ED2,
CMO,
ARM
SOFR30A
+
0.964%,
6.288%,
10/25/30
350
350
Connecticut
Avenue
Securities
Series
2024-R02,
Class
1M1,
CMO,
ARM
SOFR30A
+
1.10%,
6.424%,
2/25/44 (1)
3,515
3,521
Connecticut
Avenue
Securities
Trust
Series
2023-R05,
Class
1M1,
CMO,
ARM
SOFR30A
+
1.90%,
7.224%,
6/25/43 (1)
4,717
4,775
Deephaven
Residential
Mortgage
Trust
Series
2021-1,
Class
A1,
CMO,
ARM
0.715%,
5/25/65 (1)
4,117
3,809
Galton
Funding
Mortgage
Trust
Series
2019-2,
Class
A21,
CMO,
ARM
4.00%,
6/25/59 (1)
232
210
Galton
Funding
Mortgage
Trust
Series
2020-H1,
Class
A2,
CMO,
ARM
2.413%,
1/25/60 (1)
2,610
2,410
GS
Mortgage-Backed
Securities
Trust
Series
2020-NQM1,
Class
A1,
CMO,
ARM
1.382%,
9/27/60 (1)
787
723
Imperial
Fund
Mortgage
Trust
Series
2021-NQM2,
Class
A1,
CMO,
ARM
1.073%,
9/25/56 (1)
7,854
6,365
Morgan
Stanley
Residential
Mortgage
Loan
Trust
Series
2024-NQM2,
Class
A1,
CMO,
STEP
6.386%,
5/25/69 (1)
5,071
5,071
New
Residential
Mortgage
Loan
Trust
Series
2023-NQM1,
Class
A1A,
CMO,
STEP
6.864%,
10/25/63 (1)
5,134
5,180
NLT
Trust
Series
2021-INV2,
Class
A1,
CMO,
ARM
1.162%,
8/25/56 (1)
14,867
12,195
T.
ROWE
PRICE
Ultra
Short-Term
Bond
Fund
26
Par/Shares
$
Value
(Amounts
in
000s)
OBX
Trust
Series
2018-EXP1,
Class
2A1,
CMO,
ARM
1M
TSFR
+
0.964%,
6.289%,
4/25/48 (1)
27
27
OBX
Trust
Series
2019-EXP3,
Class
2A1,
CMO,
ARM
1M
TSFR
+
1.014%,
6.339%,
10/25/59 (1)
128
127
OBX
Trust
Series
2020-EXP1,
Class
1A8,
CMO,
ARM
3.50%,
2/25/60 (1)
648
564
OBX
Trust
Series
2020-EXP3,
Class
1A8,
CMO,
ARM
3.00%,
1/25/60 (1)
3,593
3,074
OBX
Trust
Series
2020-INV1,
Class
A11,
CMO,
ARM
1M
TSFR
+
1.014%,
6.00%,
12/25/49 (1)
470
442
OBX
Trust
Series
2023-NQM10,
Class
A1,
CMO,
STEP
6.465%,
10/25/63 (1)
8,714
8,735
OBX
Trust
Series
2024-NQM7,
Class
A1,
CMO,
STEP
6.243%,
3/25/64 (1)
3,240
3,247
Progress
Residential
Trust
Series
2020-SFR1,
Class
A
1.732%,
4/17/37 (1)
1,473
1,465
Progress
Residential
Trust
Series
2020-SFR2,
Class
A
2.078%,
6/17/37 (1)
4,673
4,502
Sequoia
Mortgage
Trust
Series
2018-CH1,
Class
A1,
CMO,
ARM
4.00%,
3/25/48 (1)
165
150
SG
Residential
Mortgage
Trust
Series
2019-3,
Class
A1,
CMO,
ARM
2.703%,
9/25/59 (1)
25
25
Starwood
Mortgage
Residential
Trust
Series
2020-INV1,
Class
A1,
CMO,
ARM
1.027%,
11/25/55 (1)
2,429
2,242
Starwood
Mortgage
Residential
Trust
Series
2021-2,
Class
A1,
CMO,
ARM
0.943%,
5/25/65 (1)
1,927
1,743
Structured
Agency
Credit
Risk
Debt
Notes
Series
2021-DNA3,
Class
M1,
CMO,
ARM
SOFR30A
+
0.75%,
6.074%,
10/25/33 (1)
888
887
Structured
Agency
Credit
Risk
Debt
Notes
Series
2022-DNA2,
Class
M1A,
CMO,
ARM
SOFR30A
+
1.30%,
6.624%,
2/25/42 (1)
2,684
2,690
T.
ROWE
PRICE
Ultra
Short-Term
Bond
Fund
27
Par/Shares
$
Value
(Amounts
in
000s)
Structured
Agency
Credit
Risk
Debt
Notes
Series
2022-DNA5,
Class
M1A,
CMO,
ARM
SOFR30A
+
2.95%,
8.28%,
6/25/42 (1)
5,475
5,643
Structured
Agency
Credit
Risk
Debt
Notes
Series
2023-HQA3,
Class
A1,
CMO,
ARM
SOFR30A
+
1.85%,
7.174%,
11/25/43 (1)
2,292
2,321
Structured
Agency
Credit
Risk
Debt
Notes
Series
2024-DNA2,
Class
A1,
CMO,
ARM
SOFR30A
+
1.25%,
6.574%,
5/25/44 (1)
4,125
4,130
Structured
Agency
Credit
Risk
Debt
Notes
Series
2024-HQA1,
Class
A1,
CMO,
ARM
SOFR30A
+
1.25%,
6.574%,
3/25/44 (1)
7,614
7,616
Towd
Point
Mortgage
Trust
Series
2017-3,
Class
A1,
CMO,
ARM
2.75%,
7/25/57 (1)
25
25
Towd
Point
Mortgage
Trust
Series
2017-4,
Class
A1,
CMO,
ARM
2.75%,
6/25/57 (1)
114
109
Towd
Point
Mortgage
Trust
Series
2017-5,
Class
A1,
CMO,
ARM
1M
TSFR
+
0.714%,
6.039%,
2/25/57 (1)
61
62
Verus
Securitization
Trust
Series
2019-4,
Class
A1,
CMO,
STEP
3.642%,
11/25/59 (1)
818
793
Verus
Securitization
Trust
Series
2019-INV2,
Class
A1,
CMO,
ARM
3.913%,
7/25/59 (1)
226
222
Verus
Securitization
Trust
Series
2019-INV3,
Class
A1,
CMO,
ARM
3.692%,
11/25/59 (1)
627
608
Verus
Securitization
Trust
Series
2020-2,
Class
A1,
CMO,
ARM
3.226%,
5/25/60 (1)
187
185
Verus
Securitization
Trust
Series
2020-4,
Class
A1,
CMO,
STEP
1.502%,
5/25/65 (1)
721
684
Verus
Securitization
Trust
Series
2020-INV1,
Class
A1,
CMO,
ARM
2.977%,
3/25/60 (1)
6
6
Verus
Securitization
Trust
Series
2021-1,
Class
A1,
CMO,
ARM
0.815%,
1/25/66 (1)
4,612
4,037
Verus
Securitization
Trust
Series
2021-2,
Class
A1,
CMO,
ARM
1.031%,
2/25/66 (1)
3,881
3,370
T.
ROWE
PRICE
Ultra
Short-Term
Bond
Fund
28
Par/Shares
$
Value
(Amounts
in
000s)
Verus
Securitization
Trust
Series
2021-R1,
Class
A1,
CMO,
ARM
0.82%,
10/25/63 (1)
1,597
1,463
Verus
Securitization
Trust
Series
2021-R3,
Class
A1,
CMO,
ARM
1.02%,
4/25/64 (1)
6,830
6,093
Verus
Securitization
Trust
Series
2023-3,
Class
A1,
CMO,
STEP
5.93%,
3/25/68 (1)
7,748
7,707
Verus
Securitization
Trust
Series
2023-8,
Class
A1,
CMO,
STEP
6.259%,
12/25/68 (1)
2,267
2,268
Verus
Securitization
Trust
Series
2023-INV3,
Class
A1,
CMO,
ARM
6.876%,
11/25/68 (1)
4,045
4,075
Verus
Securitization
Trust
Series
2024-1,
Class
A1,
CMO,
STEP
5.712%,
1/25/69 (1)
9,774
9,690
Verus
Securitization
Trust
Series
2024-INV1,
Class
A1,
CMO,
STEP
6.116%,
3/25/69 (1)
2,500
2,493
Vista
Point
Securitization
Trust
Series
2020-2,
Class
A1,
CMO,
ARM
1.475%,
4/25/65 (1)
2,011
1,832
153,874
Total
Non-U.S.
Government
Mortgage-Backed
Securities
(Cost
$241,759)
231,216
U.S.
GOVERNMENT
&
AGENCY
MORTGAGE-BACKED
SECURITIES
0.0%
U.S.
Government
Agency
Obligations
0.0%
Federal
Home
Loan
Mortgage,
CMO,
ARM,
SOFR30A
+
0.464%,
5.788%,
2/15/45
160
155
Federal
National
Mortgage
Assn.,
CMO,
ARM,
SOFR30A
+
0.514%,
5.838%,
1/25/45
128
124
Total
U.S.
Government
&
Agency
Mortgage-Backed
Securities
(Cost
$288)
279
U.S.
GOVERNMENT
AGENCY
OBLIGATIONS
(EXCLUDING
MORTGAGE-BACKED)
3.3%
U.S.
Treasury
Obligations
3.3%
U.S.
Treasury
Bills,
5.267%,
9/19/24 (5)
30,075
29,602
U.S.
Treasury
Bills,
5.292%,
6/11/24
5,600
5,593
T.
ROWE
PRICE
Ultra
Short-Term
Bond
Fund
29
Par/Shares
$
Value
(Amounts
in
000s)
U.S.
Treasury
Bills,
5.292%,
6/25/24
5,600
5,582
U.S.
Treasury
Bills,
5.306%,
7/23/24
12,390
12,299
U.S.
Treasury
Bills,
5.319%,
7/9/24
5,600
5,570
U.S.
Treasury
Bills,
5.332%,
8/20/24
5,650
5,586
U.S.
Treasury
Notes,
4.625%,
11/15/26
7,400
7,377
U.S.
Treasury
Notes,
4.875%,
11/30/25
3,330
3,323
74,932
Total
U.S.
Government
Agency
Obligations
(Excluding
Mortgage-Backed)
(Cost
$74,966)
74,932
SHORT-TERM
INVESTMENTS
8.1%
Commercial
Paper
8.1%
4(2)
6.3%(6)
Bacardi-Martini,
5.845%,
7/18/24
13,700
13,593
Canadian
Natural
Resources,
5.874%,
6/25/24
18,450
18,379
Conagra
Brands,
5.653%,
6/3/24
12,900
12,894
Conagra
Brands,
5.764%,
6/13/24
13,600
13,572
Crown
Castle,
5.88%,
7/9/24
4,235
4,208
Edison
International,
5.503%,
6/3/24
9,900
9,896
Gotham
Funding,
5.312%,
6/3/24
2,000
1,999
Harley-Davidson
Financial
Services,
6.049%,
6/4/24
11,100
11,093
International
Flavors
&
Fragrances,
6.077%,
6/24/24
16,900
16,838
Targa
Resources,
5.803%,
6/3/24
6,100
6,097
Targa
Resources,
6.039%,
7/8/24
13,000
12,918
Targa
Resources,
6.04%,
7/10/24
9,100
9,039
VF,
6.456%,
7/23/24
5,210
5,168
Walgreens
Boots
Alliance,
6.432%,
7/1/24
4,900
4,873
140,567
Non-4(2)
1.8%
Energy
Transfer
Operating
L
P,
5.653%,
6/3/24
19,000
18,991
Ovintiv,
6.07%,
6/17/24
3,700
3,689
Ovintiv
Canada,
6.108%,
6/20/24
18,500
18,439
41,119
Total
Commercial
Paper
181,686
T.
ROWE
PRICE
Ultra
Short-Term
Bond
Fund
30
Par/Shares
$
Value
(Amounts
in
000s)
Money
Market
Funds
0.0%
T.
Rowe
Price
Government
Reserve
Fund,
5.39% (7)(8)
2
2
Total
Money
Market
Funds
2
Total
Short-Term
Investments
(Cost
$181,702)
181,688
SECURITIES
LENDING
COLLATERAL
0.0%
INVESTMENTS
IN
A
POOLED
ACCOUNT
THROUGH
SECURITIES
LENDING
PROGRAM
WITH
JPMORGAN
CHASE
BANK 0.0%
Money
Market
Funds 0.0%
T.
Rowe
Price
Government
Reserve
Fund,
5.39% (7)(8)
406
406
Total
Investments
in
a
Pooled
Account
through
Securities
Lending
Program
with
JPMorgan
Chase
Bank
406
INVESTMENTS
IN
A
POOLED
ACCOUNT
THROUGH
SECURITIES
LENDING
PROGRAM
WITH
STATE
STREET
BANK
AND
TRUST
COMPANY 0.0%
Money
Market
Funds 0.0%
T.
Rowe
Price
Government
Reserve
Fund,
5.39% (7)(8)
376
376
Total
Investments
in
a
Pooled
Account
through
Securities
Lending
Program
with
State
Street
Bank
and
Trust
Company
376
Total
Securities
Lending
Collateral
(Cost
$782)
782
(Amounts
in
000s,
except
for
contracts)
OPTIONS
PURCHASED 0.0%
OTC
Options
Purchased
0
.0
%
Counterparty
Description
Contracts
Notional
Amount
$
Value
Citibank
Credit
Default
Swap
Protection
Bought
(Relevant
Credit:
Markit
CDX.
NA.IG-S42,
5
Year
Index,
6/20/29),
Pay
1%
Quarterly,
Receive
upon
credit
default,
6/19/24
@
0.65%* (9)
1
113,000
8
T.
ROWE
PRICE
Ultra
Short-Term
Bond
Fund
31
(Amounts
in
000s,
except
for
contracts)
Counterparty
Description
Contracts
Notional
Amount
$
Value
Citibank
Credit
Default
Swap
Protection
Bought
(Relevant
Credit:
Markit
CDX.
NA.IG-S42,
5
Year
Index,
6/20/29),
Pay
1%
Quarterly,
Receive
upon
credit
default,
6/19/24
@
0.70%* (9)
1
113,000
7
Total
Options
Purchased
(Cost
$116)
15
Total
Investments
in
Securities
100.2%
of
Net
Assets
(Cost
$2,278,161)
$
2,263,464
‡
Par/Shares
and
Notional
Amount
are
denominated
in
U.S.
dollars
unless
otherwise
noted.
*
Exercise
Spread
(1)
Security
was
purchased
pursuant
to
Rule
144A
under
the
Securities
Act
of
1933
and
may
be
resold
in
transactions
exempt
from
registration
only
to
qualified
institutional
buyers.
Total
value
of
such
securities
at
period-end
amounts
to
$1,041,208
and
represents
46.1%
of
net
assets.
(2)
Security
is
a
fix-to-float
security,
which
carries
a
fixed
coupon
until
a
certain
date,
upon
which
it
switches
to
a
floating
rate.
Reference
rate
and
spread
are
provided
if
the
rate
is
currently
floating.
(3)
See
Note
4
.
All
or
a
portion
of
this
security
is
on
loan
at
May
31,
2024.
(4)
See
Note
2.
Level
3
in
fair
value
hierarchy.
(5)
At
May
31,
2024,
all
or
a
portion
of
this
security
is
pledged
as
collateral
and/
or
margin
deposit
to
cover
future
funding
obligations.
(6)
Commercial
paper
exempt
from
registration
under
Section
4(2)
of
the
Securities
Act
of
1933
and
may
be
resold
in
transactions
exempt
from
registration
only
to
dealers
in
that
program
or
other
"accredited
investors".
Total
value
of
such
securities
at
period-end
amounts
to
$140,567
and
represents
6.2%
of
net
assets.
(7)
Seven-day
yield
(8)
Affiliated
Companies
(9)
Non-income
producing
1M
TSFR
One
month
term
SOFR
(Secured
overnight
financing
rate)
3M
TSFR
Three
month
term
SOFR
(Secured
overnight
financing
rate)
ARM
Adjustable
Rate
Mortgage
(ARM);
rate
shown
is
effective
rate
at
period-end.
The
rates
for
certain
ARMs
are
not
based
on
a
published
reference
rate
and
spread
but
may
be
determined
using
a
formula
based
on
the
rates
of
the
underlying
loans.
CLO
Collateralized
Loan
Obligation
T.
ROWE
PRICE
Ultra
Short-Term
Bond
Fund
32
.
.
.
.
.
.
.
.
.
.
CMO
Collateralized
Mortgage
Obligation
FRN
Floating
Rate
Note
JPY
Japanese
Yen
OTC
Over-the-counter
SOFR
Secured
overnight
financing
rate
SOFRINDX
SOFR
(Secured
overnight
financing
rate)
Index
SOFR30A
30-day
Average
SOFR
(Secured
overnight
financing
rate)
STEP
Stepped
coupon
bond
for
which
the
coupon
rate
of
interest
adjusts
on
specified
date(s);
rate
shown
is
effective
rate
at
period-end.
USD
U.S.
Dollar
VR
Variable
Rate;
rate
shown
is
effective
rate
at
period-end.
The
rates
for
certain
variable
rate
securities
are
not
based
on
a
published
reference
rate
and
spread
but
are
determined
by
the
issuer
or
agent
and
based
on
current
market
conditions.
T.
ROWE
PRICE
Ultra
Short-Term
Bond
Fund
33
(Amounts
in
000s)
SWAPS
0.0%
Description
Notional
Amount
$
Value
Initial
$
Value
Unrealized
$
Gain/(Loss)
CENTRALLY
CLEARED
SWAPS
0.0%
Credit
Default
Swaps,
Protection
Sold
0.0%
Protection
Sold
(Relevant
Credit:
Devon
Energy,
Baa2*),
Receive
1.00%
Quarterly,
Pay
upon
credit
default,
6/20/24
*
10,000
25
19
6
Protection
Sold
(Relevant
Credit:
Hess,
Baa3*),
Receive
1.00%
Quarterly,
Pay
upon
credit
default,
6/20/24
*
10,000
25
53
(
28
)
Total
Centrally
Cleared
Credit
Default
Swaps,
Protection
Sold
(
22
)
Total
Centrally
Cleared
Swaps
(
22
)
Net
payments
(receipts)
of
variation
margin
to
date
22
Variation
margin
receivable
(payable)
on
centrally
cleared
swaps
$
—
*
Credit
ratings
as
of
May
31,
2024.
Ratings
shown
are
from
Moody’s
Investors
Service
and
if
Moody’s
does
not
rate
a
security,
then
Standard
&
Poor’s
(S&P)
is
used.
Fitch
is
used
for
securities
that
are
not
rated
by
either
Moody’s
or
S&P.
T.
ROWE
PRICE
Ultra
Short-Term
Bond
Fund
34
(Amounts
in
000s)
FORWARD
CURRENCY
EXCHANGE
CONTRACTS
Counterparty
Settlement
Receive
Deliver
Unrealized
Gain/(Loss)
State
Street
8/5/24
USD
11,359
JPY
1,746,600
$
141
Net
unrealized
gain
(loss)
on
open
forward
currency
exchange
contracts
$
141
T.
ROWE
PRICE
Ultra
Short-Term
Bond
Fund
35
FUTURES
CONTRACTS
($000s)
Expiration
Date
Notional
Amount
Value
and
Unrealized
Gain
(Loss)
Short,
253
Three
Month
SOFR
Futures
contracts
9/24
(59,876)
$
262
Short,
22
U.S.
Treasury
Long
Bond
contracts
9/24
(2,553)
19
Short,
663
U.S.
Treasury
Notes
five
year
contracts
9/24
(70,143)
25
Short,
157
U.S.
Treasury
Notes
ten
year
contracts
9/24
(17,081)
27
Short,
655
U.S.
Treasury
Notes
two
year
contracts
9/24
(133,426)
(
63
)
Short,
45
Ultra
U.S.
Treasury
Notes
ten
year
contracts
9/24
(5,041)
17
Long,
200
Three
Month
SOFR
Futures
contracts
3/25
47,515
(
245
)
Short,
200
Three
Month
SOFR
Futures
contracts
3/26
(47,893)
252
Net
payments
(receipts)
of
variation
margin
to
date
(
577
)
Variation
margin
receivable
(payable)
on
open
futures
contracts
$
(
283
)
T.
ROWE
PRICE
Ultra
Short-Term
Bond
Fund
36
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
AFFILIATED
COMPANIES
($000s)
The
fund
may
invest
in
certain
securities
that
are
considered
affiliated
companies.
As
defined
by
the
1940
Act,
an
affiliated
company
is
one
in
which
the
fund
owns
5%
or
more
of
the
outstanding
voting
securities,
or
a
company
that
is
under
common
ownership
or
control.
The
following
securities
were
considered
affiliated
companies
for
all
or
some
portion
of
the
year
ended
May
31,
2024.
Net
realized
gain
(loss),
investment
income,
change
in
net
unrealized
gain/loss,
and
purchase
and
sales
cost
reflect
all
activity
for
the
period
then
ended.
Affiliate
Net
Realized
Gain
(Loss)
Change
in
Net
Unrealized
Gain/Loss
Investment
Income
T.
Rowe
Price
Government
Reserve
Fund,
5.39%
$
—
$
—
$
—
++
Totals
$
—
#
$
—
$
—
+
Supplementary
Investment
Schedule
Affiliate
Value
05/31/23
Purchase
Cost
Sales
Cost
Value
05/31/24
T.
Rowe
Price
Government
Reserve
Fund,
5.39%
$
677
¤
¤
$
784
Total
$
784
^
#
Capital
gain
distributions
from
underlying
Price
funds
represented
$0
of
the
net
realized
gain
(loss).
++
Excludes
earnings
on
securities
lending
collateral,
which
are
subject
to
rebates
and
fees
as
described
in
Note
4
.
+
Investment
income
comprised
$0
of
dividend
income
and
$0
of
interest
income.
¤
Purchase
and
sale
information
not
shown
for
cash
management
funds.
^
The
cost
basis
of
investments
in
affiliated
companies
was
$784.
T.
ROWE
PRICE
Ultra
Short-Term
Bond
Fund
May
31,
2024
Statement
of
Assets
and
Liabilities
37
($000s,
except
shares
and
per
share
amounts)
Assets
Investments
in
securities,
at
value
(cost
$2,278,161)
$
2,263,464
Interest
receivable
14,421
Receivable
for
shares
sold
2,916
Unrealized
gain
on
forward
currency
exchange
contracts
141
Cash
121
Foreign
currency
(cost
$5)
5
Other
assets
43
Total
assets
2,281,111
Liabilities
Payable
for
investment
securities
purchased
18,210
Payable
for
shares
redeemed
3,261
Obligation
to
return
securities
lending
collateral
782
Investment
management
fees
payable
304
Variation
margin
payable
on
futures
contracts
283
Due
to
affiliates
21
Payable
to
directors
1
Other
liabilities
155
Total
liabilities
23,017
Commitments
and
Contingent
Liabilities
(note
6
)
NET
ASSETS
$
2,258,094
T.
ROWE
PRICE
Ultra
Short-Term
Bond
Fund
May
31,
2024
Statement
of
Assets
and
Liabilities
38
($000s,
except
shares
and
per
share
amounts)
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Net
Assets
Consist
of:
Total
distributable
earnings
(loss)
$
(
60,189
)
Paid-in
capital
applicable
to
447,876,876
shares
of
$0.01
par
value
capital
stock
outstanding;
6,000,000,000
shares
of
the
Corporation
authorized
2,318,283
NET
ASSETS
$
2,258,094
NET
ASSET
VALUE
PER
SHARE
Investor
Class
(Net
assets:
$1,343,618;
Shares
outstanding:
266,654,048)
$
5.04
I
Class
(Net
assets:
$914,377;
Shares
outstanding:
181,203,220)
$
5.05
Z
Class
(Net
assets:
$99;
Shares
outstanding:
19,608)
$
5.04
T.
ROWE
PRICE
Ultra
Short-Term
Bond
Fund
Statement
of
Operations
39
($000s)
Year
Ended
5/31/24
Investment
Income
(Loss)
Income
Interest
$
111,008
Securities
lending
19
Other
3
Total
income
111,030
Expenses
Investment
management
3,596
Shareholder
servicing
Investor
Class
$
1,964
I
Class
113
2,077
Prospectus
and
shareholder
reports
Investor
Class
108
I
Class
31
139
Custody
and
accounting
253
Registration
87
Legal
and
audit
39
Proxy
and
annual
meeting
31
Directors
8
Miscellaneous
22
Waived
/
paid
by
Price
Associates
(
296
)
Total
expenses
5,956
Net
investment
income
105,074
T.
ROWE
PRICE
Ultra
Short-Term
Bond
Fund
Statement
of
Operations
40
($000s)
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Year
Ended
5/31/24
Realized
and
Unrealized
Gain
/
Loss
–
Net
realized
gain
(loss)
Securities
(
13,672
)
Futures
10,132
Swaps
(
1,081
)
Options
written
(
303
)
Forward
currency
exchange
contracts
2,325
Foreign
currency
transactions
171
Net
realized
loss
(
2,428
)
Change
in
net
unrealized
gain
/
loss
Securities
44,923
Futures
535
Swaps
1,424
Options
written
113
Forward
currency
exchange
contracts
(
293
)
Change
in
net
unrealized
gain
/
loss
46,702
Net
realized
and
unrealized
gain
/
loss
44,274
INCREASE
IN
NET
ASSETS
FROM
OPERATIONS
$
149,348
T.
ROWE
PRICE
Ultra
Short-Term
Bond
Fund
Statement
of
Changes
in
Net
Assets
41
($000s)
Year
.
.
.
.
.
.
.
.
.
.
.
.
.
.
Ended
.
.
.
.
.
.
.
.
.
.
.
.
.
.
5/31/24
5/31/23
Increase
(Decrease)
in
Net
Assets
Operations
Net
investment
income
$
105,074
$
77,900
Net
realized
loss
(
2,428
)
(
32,647
)
Change
in
net
unrealized
gain
/
loss
46,702
21,614
Increase
in
net
assets
from
operations
149,348
66,867
Distributions
to
shareholders
Net
earnings
Investor
Class
(
63,461
)
(
55,203
)
I
Class
(
42,342
)
(
33,631
)
Z
Class
(
5
)
(
3
)
Decrease
in
net
assets
from
distributions
(
105,808
)
(
88,837
)
Capital
share
transactions
*
Shares
sold
Investor
Class
443,341
697,788
I
Class
308,544
479,797
Distributions
reinvested
Investor
Class
63,157
54,647
I
Class
38,314
30,130
Shares
redeemed
Investor
Class
(
648,586
)
(
1,688,262
)
I
Class
(
382,346
)
(
857,597
)
Decrease
in
net
assets
from
capital
share
transactions
(
177,576
)
(
1,283,497
)
T.
ROWE
PRICE
Ultra
Short-Term
Bond
Fund
Statement
of
Changes
in
Net
Assets
42
($000s)
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Year
.
.
.
.
.
.
.
.
.
.
.
.
.
.
Ended
.
.
.
.
.
.
.
.
.
.
.
.
.
.
5/31/24
5/31/23
Net
Assets
Decrease
during
period
(
134,036
)
(
1,305,467
)
Beginning
of
period
2,392,130
3,697,597
End
of
period
$
2,258,094
$
2,392,130
*Share
information
(000s)
Shares
sold
Investor
Class
88,726
141,730
I
Class
61,609
97,228
Distributions
reinvested
Investor
Class
12,632
11,110
I
Class
7,648
6,114
Shares
redeemed
Investor
Class
(
129,955
)
(
342,815
)
I
Class
(
76,516
)
(
174,012
)
Decrease
in
shares
outstanding
(
35,856
)
(
260,645
)
T.
ROWE
PRICE
Ultra
Short-Term
Bond
Fund
NOTES
TO
FINANCIAL
STATEMENTS
43
T.
Rowe
Price
Short-Term
Bond
Fund,
Inc.
(the
corporation) is
registered
under
the
Investment
Company
Act
of
1940
(the
1940
Act).
The
Ultra
Short-
Term
Bond
Fund
(the
fund)
is a
diversified, open-end
management
investment
company
established
by
the
corporation. The
fund
seeks
a
high
level
of
income
consistent
with
minimal
fluctuation
in
principal
value
and
liquidity.
The
fund
has three classes
of
shares:
the
Ultra
Short-Term
Bond
Fund
(Investor
Class),
the
Ultra
Short-Term
Bond
Fund–I
Class
(I
Class)
and
the
Ultra
Short-Term
Bond
Fund–Z
Class
(Z
Class).
I
Class
shares
require
a
$500,000
initial
investment
minimum,
although
the
minimum
generally
is
waived
or
reduced
for
financial
intermediaries,
eligible
retirement
plans,
and
certain
other
accounts.
The
Z
Class
is
only
available
to
funds
advised
by
T.
Rowe
Price
Associates,
Inc.
and
its
affiliates
and
other
clients
that
are
subject
to
a
contractual
fee
for
investment
management
services. Each
class
has
exclusive
voting
rights
on
matters
related
solely
to
that
class;
separate
voting
rights
on
matters
that
relate
to
all
classes;
and,
in
all
other
respects,
the
same
rights
and
obligations
as
the
other
classes.
NOTE
1
-
SIGNIFICANT
ACCOUNTING
POLICIES
Basis
of
Preparation
The fund
is
an
investment
company
and
follows
accounting
and
reporting
guidance
in
the
Financial
Accounting
Standards
Board
(FASB)
Accounting
Standards
Codification
Topic
946
(ASC
946).
The
accompanying
financial
statements
were
prepared
in
accordance
with
accounting
principles
generally
accepted
in
the
United
States
of
America
(GAAP),
including,
but
not
limited
to,
ASC
946.
GAAP
requires
the
use
of
estimates
made
by
management.
Management
believes
that
estimates
and
valuations
are
appropriate;
however,
actual
results
may
differ
from
those
estimates,
and
the
valuations
reflected
in
the
accompanying
financial
statements
may
differ
from
the
value
ultimately
realized
upon
sale
or
maturity.
Investment
Transactions,
Investment
Income,
and
Distributions
Investment
transactions
are
accounted
for
on
the
trade
date
basis.
Income
and
expenses
are
recorded
on
the
accrual
basis.
Realized
gains
and
losses
are
reported
on
the
identified
cost
basis. Premiums
and
discounts
on
debt
securities
are
amortized
for
financial
reporting
purposes. Paydown
gains
and
losses
are
recorded
as
an
adjustment
to
interest
income. Income
tax-related
interest
and
penalties,
if
incurred,
are
recorded
as
income
tax
expense. Dividends
received
from other
investment
companies are
reflected
as
dividend income;
capital
T.
ROWE
PRICE
Ultra
Short-Term
Bond
Fund
44
gain
distributions
are
reflected
as
realized
gain/loss. Dividend
income and
capital
gain
distributions
are
recorded
on
the
ex-dividend
date. Earnings
on
investments
recognized
as
partnerships
for
federal
income
tax
purposes
reflect
the
tax
character
of
such
earnings. Non-cash
dividends,
if
any,
are
recorded
at
the
fair
market
value
of
the
asset
received. Proceeds
from
litigation
payments,
if
any,
are
included
in
either
net
realized
gain
(loss)
or
change
in
net
unrealized
gain/loss
from
securities. Distributions
to
shareholders
are
recorded
on
the
ex-dividend
date. Income
distributions,
if
any, are
declared
by
each
class daily
and
paid
monthly. A
capital
gain
distribution,
if
any, may
also
be
declared
and
paid
by
the
fund
annually.
Currency
Translation
Assets,
including
investments,
and
liabilities
denominated
in
foreign
currencies
are
translated
into
U.S.
dollar
values
each
day
at
the
prevailing
exchange
rate,
using
the
mean
of
the
bid
and
asked
prices
of
such
currencies
against
U.S.
dollars
as
provided
by
an
outside
pricing
service.
Purchases
and
sales
of
securities,
income,
and
expenses
are
translated
into
U.S.
dollars
at
the
prevailing
exchange
rate
on
the
respective
date
of
such
transaction.
The
effect
of
changes
in
foreign
currency
exchange
rates
on
realized
and
unrealized
security
gains
and
losses
is
not
bifurcated
from
the
portion
attributable
to
changes
in
market
prices.
Class
Accounting
Shareholder
servicing,
prospectus,
and
shareholder
report
expenses
incurred
by
each
class
are
charged
directly
to
the
class
to
which
they
relate.
Expenses
common
to
all
classes
and
investment
income
are
allocated
to
the
classes
based
upon
the
relative
daily
net
assets
of
each
class’s
settled
shares;
realized
and
unrealized
gains
and
losses
are
allocated
based
upon
the
relative
daily
net
assets
of
each
class’s
outstanding
shares.
Capital
Transactions
Each
investor’s
interest
in
the
net
assets
of the
fund
is
represented
by
fund
shares. The
fund’s
net
asset
value
(NAV)
per
share
is
computed
at
the
close
of
the
New
York
Stock
Exchange
(NYSE),
normally
4
p.m.
ET,
each
day
the
NYSE
is
open
for
business.
However,
the
NAV
per
share
may
be
calculated
at
a
time
other
than
the
normal
close
of
the
NYSE
if
trading
on
the
NYSE
is
restricted,
if
the
NYSE
closes
earlier,
or
as
may
be
permitted
by
the
SEC.
Purchases
and
redemptions
of
fund
shares
are
transacted
at
the
next-computed
NAV
per
share,
after
receipt
of
the
transaction
order
by
T.
Rowe
Price
Associates,
Inc.,
or
its
agents.
T.
ROWE
PRICE
Ultra
Short-Term
Bond
Fund
45
Indemnification
In
the
normal
course
of
business, the
fund
may
provide
indemnification
in
connection
with
its
officers
and
directors,
service
providers,
and/or
private
company
investments. The
fund’s
maximum
exposure
under
these
arrangements
is
unknown;
however,
the
risk
of
material
loss
is
currently
considered
to
be
remote.
NOTE
2
-
VALUATION
Fair
Value
The
fund’s
financial
instruments
are
valued
at
the
close
of
the
NYSE
and
are
reported
at
fair
value,
which
GAAP
defines
as
the
price
that
would
be
received
to
sell
an
asset
or
paid
to
transfer
a
liability
in
an
orderly
transaction
between
market
participants
at
the
measurement
date. The fund’s
Board
of
Directors
(the
Board)
has
designated
T.
Rowe
Price
Associates,
Inc.
as
the
fund’s
valuation
designee
(Valuation
Designee).
Subject
to
oversight
by
the
Board,
the
Valuation
Designee
performs
the
following
functions
in
performing
fair
value
determinations:
assesses
and
manages
valuation
risks;
establishes
and
applies
fair
value
methodologies;
tests
fair
value
methodologies;
and
evaluates
pricing
vendors
and
pricing
agents.
The
duties
and
responsibilities
of
the
Valuation
Designee
are
performed
by
its
Valuation
Committee. The
Valuation
Designee provides
periodic
reporting
to
the
Board
on
valuation
matters.
Various
valuation
techniques
and
inputs
are
used
to
determine
the
fair
value
of
financial
instruments.
GAAP
establishes
the
following
fair
value
hierarchy
that
categorizes
the
inputs
used
to
measure
fair
value:
Level
1
–
quoted
prices
(unadjusted)
in
active
markets
for
identical
financial
instruments
that
the
fund
can
access
at
the
reporting
date
Level
2
–
inputs
other
than
Level
1
quoted
prices
that
are
observable,
either
directly
or
indirectly
(including,
but
not
limited
to,
quoted
prices
for
similar
financial
instruments
in
active
markets,
quoted
prices
for
identical
or
similar
financial
instruments
in
inactive
markets,
interest
rates
and
yield
curves,
implied
volatilities,
and
credit
spreads)
Level
3
–
unobservable
inputs
(including
the Valuation
Designee’s assumptions
in
determining
fair
value)
Observable
inputs
are
developed
using
market
data,
such
as
publicly
available
information
about
actual
events
or
transactions,
and
reflect
the
assumptions
that
market
participants
would
use
to
price
the
financial
instrument.
Unobservable
inputs
are
those
for
which
market
data
are
not
available
and
are
developed
T.
ROWE
PRICE
Ultra
Short-Term
Bond
Fund
46
using
the
best
information
available
about
the
assumptions
that
market
participants
would
use
to
price
the
financial
instrument.
GAAP
requires
valuation
techniques
to
maximize
the
use
of
relevant
observable
inputs
and
minimize
the
use
of
unobservable
inputs.
When
multiple
inputs
are
used
to
derive
fair
value,
the
financial
instrument
is
assigned
to
the
level
within
the
fair
value
hierarchy
based
on
the
lowest-level
input
that
is
significant
to
the
fair
value
of
the
financial
instrument.
Input
levels
are
not
necessarily
an
indication
of
the
risk
or
liquidity
associated
with
financial
instruments
at
that
level
but
rather
the
degree
of
judgment
used
in
determining
those
values.
Valuation
Techniques
Debt
securities
generally
are
traded
in
the over-the-
counter
(OTC)
market
and
are
valued
at
prices
furnished
by
independent
pricing
services
or
by
broker
dealers
who
make
markets
in
such
securities.
When
valuing
securities,
the
independent
pricing
services
consider
factors
such
as,
but
not
limited
to,
the
yield
or
price
of
bonds
of
comparable
quality,
coupon,
maturity,
and
type,
as
well
as
prices
quoted
by
dealers
who
make
markets
in
such
securities.
Investments
in
mutual
funds
are
valued
at
the
mutual
fund’s
closing
NAV
per
share
on
the
day
of
valuation.
Listed
options,
and
OTC
options
with
a
listed
equivalent,
are
valued
at
the
mean
of
the
closing
bid
and
asked
prices
and
exchange-traded
options
on
futures
contracts
are
valued
at
closing
settlement
prices.
Futures
contracts
are
valued
at
closing
settlement
prices.
Forward
currency
exchange
contracts
are
valued
using
the
prevailing
forward
exchange
rate.
Swaps
are
valued
at
prices
furnished
by
an
independent
pricing
service
or
independent
swap
dealers.
Assets
and
liabilities
other
than
financial
instruments,
including
short-term
receivables
and
payables,
are
carried
at
cost,
or
estimated
realizable
value,
if
less,
which
approximates
fair
value.
Investments
for
which
market
quotations are
not
readily
available
or
deemed
unreliable
are
valued
at
fair
value
as
determined
in
good
faith
by
the
Valuation
Designee.
The
Valuation
Designee
has
adopted
methodologies
for
determining
the
fair
value
of
investments
for
which
market
quotations
are
not
readily
available
or
deemed
unreliable,
including
the
use
of
other
pricing
sources.
Factors
used
in
determining
fair
value
vary
by
type
of
investment
and
may
include
market
or
investment
specific
considerations.
The
Valuation
Designee typically
will
afford
greatest
weight
to
actual
prices
in
arm’s
length
transactions,
to
the
extent
they
represent
orderly
transactions
between
market
participants,
transaction
information
can
be
reliably
obtained,
and
prices
are
deemed
representative
of
fair
value.
However,
the
Valuation
Designee may
also
consider
other
valuation
methods
such
as
market-based
valuation
multiples;
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a
discount
or
premium
from
market
value
of
a
similar,
freely
traded
security
of
the
same
issuer;
discounted
cash
flows;
yield
to
maturity;
or
some
combination.
Fair
value
determinations
are
reviewed
on
a
regular
basis.
Because
any
fair
value
determination
involves
a
significant
amount
of
judgment,
there
is
a
degree
of
subjectivity
inherent
in
such
pricing
decisions. Fair
value
prices
determined
by
the
Valuation
Designee could
differ
from
those
of
other
market
participants,
and
it
is
possible
that
the
fair
value
determined
for
a
security
may
be
materially
different
from
the
value
that
could
be
realized
upon
the
sale
of
that
security.
Valuation
Inputs
The
following
table
summarizes
the
fund’s
financial
instruments,
based
on
the
inputs
used
to
determine
their
fair
values
on
May
31,
2024
(for
further
detail
by
category,
please
refer
to
the
accompanying
Portfolio
of
Investments):
($000s)
Level
1
Level
2
Level
3
Total
Value
Assets
Fixed
Income
Securities
1
$
—
$
902,164
$
—
$
902,164
Short-Term
Investments
2
189,363
—
189,365
Corporate
Bonds
—
1,168,251
2,887
1,171,138
Securities
Lending
Collateral
782
—
—
782
Options
Purchased
—
15
—
15
Total
Securities
784
2,259,793
2,887
2,263,464
Swaps*
—
6
—
6
Forward
Currency
Exchange
Contracts
—
141
—
141
Futures
Contracts*
602
—
—
602
Total
$
1,386
$
2,259,940
$
2,887
$
2,264,213
Liabilities
Swaps*
$
—
$
28
$
—
$
28
Futures
Contracts*
308
—
—
308
Total
$
308
$
28
$
—
$
336
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NOTE
3
-
DERIVATIVE
INSTRUMENTS
During
the
year ended
May
31,
2024,
the
fund
invested
in
derivative
instruments.
As
defined
by
GAAP,
a
derivative
is
a
financial
instrument
whose
value
is
derived
from
an
underlying
security
price,
foreign
exchange
rate,
interest
rate,
index
of
prices
or
rates,
or
other
variable;
it
requires
little
or
no
initial
investment
and
permits
or
requires
net
settlement.
The
fund
invests
in
derivatives
only
if
the
expected
risks
and
rewards
are
consistent
with
its
investment
objectives,
policies,
and
overall
risk
profile,
as
described
in
its
prospectus
and
Statement
of
Additional
Information.
The
fund
may
use
derivatives
for
a
variety
of
purposes
and
may
use
them
to
establish
both
long
and
short
positions
within
the
fund’s
portfolio.
Potential
uses
include
to
hedge
against
declines
in
principal
value,
increase
yield,
invest
in
an
asset
with
greater
efficiency
and
at
a
lower
cost
than
is
possible
through
direct
investment,
to
enhance
return,
or
to
adjust
portfolio
duration
and
credit
exposure.
The
risks
associated
with
the
use
of
derivatives
are
different
from,
and
potentially
much
greater
than,
the
risks
associated
with
investing
directly
in
the
instruments
on
which
the
derivatives
are
based.
The
fund
values
its
derivatives
at
fair
value
and
recognizes
changes
in
fair
value
currently
in
its
results
of
operations.
Accordingly,
the
fund
does
not
follow
hedge
accounting,
even
for
derivatives
employed
as
economic
hedges.
Generally,
the
fund
accounts
for
its
derivatives
on
a
gross
basis.
It
does
not
offset
the
fair
value
of
derivative
liabilities
against
the
fair
value
of
derivative
assets
on
its
financial
statements,
nor
does
it
offset
the
fair
value
of
derivative
instruments
against
the
right
to
reclaim
or
obligation
to
return
collateral.
The
following
table
summarizes
the
fair
value
of
the
fund’s
derivative
instruments
held
as
of
May
31,
2024,
and
the
related
location
on
the
accompanying
Statement
of
Assets
and
Liabilities,
presented
by
primary
underlying
risk
exposure:
1
Includes
Asset-Backed
Securities,
Convertible
Bonds,
Foreign
Government
Obligations
&
Municipalities,
Municipal
Securities,
Non-U.S.
Government
Mortgage-Backed
Securities,
U.S.
Government
&
Agency
Mortgage-Backed
Securities
and
U.S.
Government
Agency
Obligations
(Excluding
Mortgage-Backed).
*
The
fair
value
presented
includes
cumulative
gain
(loss)
on
open
futures
contracts
and
centrally
cleared
swaps;
however,
the
net
value
reflected
on
the
accompanying
Portfolio
of
Investments
is
only
the
unsettled
variation
margin
receivable
(payable)
at
that
date.
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($000s)
Location
on
Statement
of
Assets
and
Liabilities
Fair
Value*
Assets
Interest
rate
derivatives
Futures
$
602
Foreign
exchange
derivatives
Forwards
141
Credit
derivatives
Centrally
Cleared
Swaps,
Securities^
21
^
,*
Total
$
764
^
,*
Liabilities
Interest
rate
derivatives
Futures
$
308
Credit
derivatives
Centrally
Cleared
Swaps
28
Total
$
336
*
The
fair
value
presented
includes
cumulative
gain
(loss)
on
open
futures
contracts
and
centrally
cleared
swaps;
however,
the
value
reflected
on
the
accompanying
Statement
of
Assets
and
Liabilities
is
only
the
unsettled
variation
margin
receivable
(payable)
at
that
date.
^
Options
purchased
are
reported
as
securities
and
are
reflected
in
the
accompanying
Portfolio
of
Investments.
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Additionally,
the
amount
of
gains
and
losses
on
derivative
instruments
recognized
in
fund
earnings
during
the
year ended
May
31,
2024,
and
the
related
location
on
the
accompanying
Statement
of
Operations
is
summarized
in
the
following
table
by
primary
underlying
risk
exposure:
Counterparty
Risk
and
Collateral
The
fund
invests
in
derivatives
in
various
markets,
which
expose
it
to
differing
levels
of
counterparty
risk.
Counterparty
risk
on
exchange-traded
and
centrally
cleared
derivative
contracts,
such
as
futures,
exchange-traded
options,
and
centrally
cleared
swaps,
is
minimal
($000s)
Location
of
Gain
(Loss)
on
Statement
of
Operations
Securities^
Options
Written
Futures
Forward
Currency
Exchange
Contracts
Swaps
Total
Realized
Gain
(Loss)
Interest
rate
derivatives
$
(9)
$
(303)
$
10,132
$
—
$
—
$
9,820
Foreign
exchange
derivatives
—
—
—
2,325
—
2,325
Credit
derivatives
102
—
—
—
(1,081)
(979)
Total
$
93
$
(303)
$
10,132
$
2,325
$
(1,081)
$
11,166
Change
in
Unrealized
Gain
(Loss)
Interest
rate
derivatives
$
1
$
113
$
535
$
—
$
—
$
649
Foreign
exchange
derivatives
—
—
—
(293)
—
(293)
Credit
derivatives
(101)
—
—
—
1,424
1,323
Total
$
(100)
$
113
$
535
$
(293)
$
1,424
$
1,679
^
Options
purchased
are
reported
as
securities.
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because
the
clearinghouse
provides
protection
against
counterparty
defaults.
For
futures
and
centrally
cleared
swaps,
the
fund
is
required
to
deposit
collateral
in
an
amount
specified
by
the
clearinghouse
and
the
clearing
firm
(margin
requirement),
and
the
margin
requirement
must
be
maintained
over
the
life
of
the
contract.
Each
clearinghouse
and
clearing
firm,
in
its
sole
discretion,
may
adjust
the
margin
requirements
applicable
to
the
fund.
Derivatives,
such
as
non-cleared bilateral
swaps,
forward
currency
exchange
contracts,
and
OTC
options,
that
are
transacted
and
settle
directly
with
a
counterparty
(bilateral
derivatives)
may
expose
the
fund
to
greater
counterparty
risk.
To
mitigate
this
risk,
the
fund
has
entered
into
master
netting
arrangements
(MNAs)
with
certain
counterparties
that
permit
net
settlement
under
specified
conditions
and,
for
certain
counterparties,
also
require
the
exchange
of
collateral
to
cover
mark-to-market
exposure.
MNAs
may
be
in
the
form
of
International
Swaps
and
Derivatives
Association
master
agreements
(ISDAs)
or
foreign
exchange
letter
agreements
(FX
letters).
MNAs
provide
the
ability
to
offset
amounts
the
fund
owes
a
counterparty
against
amounts
the
counterparty
owes
the
fund
(net
settlement).
Both
ISDAs
and
FX
letters
generally
allow
termination
of
transactions
and
net
settlement
upon
the
occurrence
of
contractually
specified
events,
such
as
failure
to
pay
or
bankruptcy.
In
addition,
ISDAs
specify
other
events,
the
occurrence
of
which
would
allow
one
of
the
parties
to
terminate.
For
example,
a
downgrade
in
credit
rating
of
a
counterparty
below
a
specified
rating
would
allow
the
fund
to
terminate,
while
a
decline
in
the
fund’s
net
assets
of
more
than
a
specified
percentage
would
allow
the
counterparty
to
terminate.
Upon
termination,
all
transactions
with
that
counterparty
would
be
liquidated
and
a
net
termination
amount
settled.
ISDAs
typically
include
collateral
agreements
whereas
FX
letters
do
not.
Collateral
requirements
are
determined
daily
based
on
the
net
aggregate
unrealized
gain
or
loss
on
all
bilateral
derivatives
with
a
counterparty,
subject
to
minimum
transfer
amounts
that
typically
range
from
$100,000
to
$250,000.
Any
additional
collateral
required
due
to
changes
in
security
values
is
typically
transferred
the
next
business
day.
Collateral
may
be
in
the
form
of
cash
or
debt
securities
issued
by
the
U.S.
government
or
related
agencies,
although
other
securities
may
be
used
depending
on
the
terms
outlined
in
the
applicable
MNA.
Cash
posted
by
the
fund
is
reflected
as
cash
deposits
in
the
accompanying
financial
statements
and
generally
is
restricted
from
withdrawal
by
the
fund;
securities
posted
by
the
fund
are
so
noted
in
the
accompanying
Portfolio
of
Investments;
both
remain
in
the
fund’s
assets.
Collateral
pledged
by
counterparties
is
not
included
in
the
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52
fund’s
assets
because
the
fund
does
not
obtain
effective
control
over
those
assets.
For
bilateral
derivatives,
collateral
posted
or
received
by
the
fund
is
held
in
a
segregated
account
at
the
fund’s
custodian.
While
typically
not
sold
in
the
same
manner
as
equity
or
fixed
income
securities,
exchange-traded
or
centrally
cleared
derivatives
may
be
closed
out
only
on
the
exchange
or
clearinghouse
where
the
contracts
were
cleared,
and
OTC
and
bilateral
derivatives
may
be
unwound
with
counterparties
or
transactions
assigned
to
other
counterparties
to
allow
the
fund
to
exit
the
transaction.
This
ability
is
subject
to
the
liquidity
of
underlying
positions. As
of
May
31,
2024,
no
collateral
was
pledged
by
either
the
fund
or
counterparties for
bilateral
derivatives. As
of
May
31,
2024,
securities
valued
at $10,760,000
had
been
posted
by
the
fund
for
exchange-
traded
and/or
centrally
cleared
derivatives.
Forward
Currency
Exchange
Contracts
The
fund
is
subject
to
foreign
currency
exchange
rate
risk
in
the
normal
course
of
pursuing
its
investment
objectives.
It may use
forward
currency
exchange
contracts
(forwards)
primarily
to
protect
its
non-U.S.
dollar-denominated
securities
from
adverse
currency
movements
or
to
increase
exposure
to
a
particular
foreign
currency,
to
shift
the
fund’s
foreign
currency
exposure
from
one
country
to
another,
or
to
enhance
the
fund’s
return.
A
forward
involves
an
obligation
to
purchase
or
sell
a
fixed
amount
of
a
specific
currency
on
a
future
date
at
a
price
set
at
the
time
of
the
contract.
Although
certain
forwards
may
be
settled
by
exchanging
only
the
net
gain
or
loss
on
the
contract,
most
forwards
are
settled
with
the
exchange
of
the
underlying
currencies
in
accordance
with
the
specified
terms.
Forwards
are
valued
at
the
unrealized
gain
or
loss
on
the
contract,
which
reflects
the
net
amount
the
fund
either
is
entitled
to
receive
or
obligated
to
deliver,
as
measured
by
the
difference
between
the
forward
exchange
rates
at
the
date
of
entry
into
the
contract
and
the
forward
rates
at
the
reporting
date.
Appreciated
forwards
are
reflected
as
assets
and
depreciated
forwards
are
reflected
as
liabilities
on
the
accompanying
Statement
of
Assets
and
Liabilities.
When
a
contract
is
closed,
a
realized
gain
or
loss
is
recorded
on
the
accompanying
Statement
of
Operations.
Risks
related
to
the
use
of
forwards
include
the
possible
failure
of
counterparties
to
meet
the
terms
of
the
agreements;
that
anticipated
currency
movements
will
not
occur,
thereby
reducing
the
fund’s
total
return;
and
the
potential
for
losses
in
excess
of
the
fund’s
initial
investment.
During
the
year ended
May
31,
2024,
the
volume
of
the
fund’s
activity
in
forwards,
based
on
underlying
notional
amounts,
was
generally
between
0%
and
2%
of
net
assets.
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Futures
Contracts
The
fund
is
subject
to interest
rate
risk in
the
normal
course
of
pursuing
its
investment
objectives
and
uses
futures
contracts
to
help
manage
such
risk.
The fund
may
enter
into
futures
contracts
to
manage
exposure
to
interest
rate
and
yield
curve
movements,
security
prices,
foreign
currencies,
credit
quality,
and
mortgage
prepayments;
as
an
efficient
means
of
adjusting
exposure
to
all
or
part
of
a
target
market;
to
enhance
income;
as
a
cash
management
tool;
or
to
adjust
portfolio
duration
and
credit
exposure. A
futures
contract
provides
for
the
future
sale
by
one
party
and
purchase
by
another
of
a
specified
amount
of
a
specific
underlying
financial
instrument
at
an
agreed-
upon
price,
date,
time,
and
place.
The
fund
currently
invests
only
in
exchange-
traded
futures,
which
generally
are
standardized
as
to
maturity
date,
underlying
financial
instrument,
and
other
contract
terms.
Payments
are
made
or
received
by
the
fund
each
day
to
settle
daily
fluctuations
in
the
value
of
the
contract
(variation
margin),
which
reflect
changes
in
the
value
of
the
underlying
financial
instrument.
Variation
margin
is
recorded
as
unrealized
gain
or
loss
until
the
contract
is
closed.
The
value
of
a
futures
contract
included
in
net
assets
is
the
amount
of
unsettled
variation
margin;
net
variation
margin
receivable
is
reflected
as
an
asset
and
net
variation
margin
payable
is
reflected
as
a
liability
on
the
accompanying
Statement
of
Assets
and
Liabilities.
When
a
contract
is
closed,
a
realized
gain
or
loss
is
recorded
on
the
accompanying
Statement
of
Operations.
Risks
related
to
the
use
of
futures
contracts
include
possible
illiquidity
of
the
futures
markets,
contract
prices
that
can
be
highly
volatile
and
imperfectly
correlated
to
movements
in
hedged
security
values
and/or
interest
rates,
and
potential
losses
in
excess
of
the
fund’s
initial
investment.
During
the
year ended
May
31,
2024,
the
volume
of
the
fund’s
activity
in
futures,
based
on
underlying
notional
amounts,
was
generally
between
7%
and
12%
of
net
assets.
Options
The
fund
is
subject
to interest
rate
risk
and
credit
risk in
the
normal
course
of
pursuing
its
investment
objectives
and
uses
options
to
help
manage
such
risks.
The
fund
may
use
options
to
manage
exposure
to
security
prices,
interest
rates,
foreign
currencies,
and
credit
quality;
as
an
efficient
means
of
adjusting
exposure
to
all
or
a
part
of
a
target
market;
to
enhance
income;
as
a
cash
management
tool;
or
to
adjust
credit
exposure.
The
fund
may
buy
or
sell
options
that
can
be
settled
either
directly
with
the
counterparty
(OTC
option)
or
through
a
central
clearinghouse
(exchange-traded
option).
Options
are
included
in
net
assets
at
fair
value,
options
purchased
are
included
in
Investments
in
Securities,
and
options
written
are
separately
reflected
as
a
liability
on
the
accompanying
Statement
of
Assets
and
Liabilities.
Premiums
on
unexercised,
expired
options
are
recorded
as
realized
gains
or
losses
on
the
accompanying
Statement
of
Operations;
premiums
on
exercised
options
are
recorded
as
T.
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54
an
adjustment
to
the
proceeds
from
the
sale
or
cost
of
the
purchase.
The
difference
between
the
premium
and
the
amount
received
or
paid
in
a
closing
transaction
is
also
treated
as
realized
gain
or
loss
on
the
accompanying
Statement
of
Operations.
In
return
for
a
premium
paid,
call
and
put
options
on
futures
give
the
holder
the
right,
but
not
the
obligation,
to
purchase
or
sell,
respectively,
a
position
in
a
particular
futures
contract
at
a
specified
exercise
price.
In
return
for
a
premium
paid,
options
on
swaps
give
the
holder
the
right,
but
not
the
obligation,
to
enter
a
specified
swap
contract
on
predefined
terms.
The
exercise
price
of
an
option
on
a
credit
default
swap
is
stated
in
terms
of
a
specified
spread
that
represents
the
cost
of
credit
protection
on
the
reference
asset,
including
both
the
upfront
premium
to
open
the
position
and
future
periodic
payments.
The
exercise
price
of
an
interest
rate
swap
is
stated
in
terms
of
a
fixed
interest
rate;
generally,
there
is
no
upfront
payment
to
open
the
position. Risks related
to
the
use
of
options
include
possible
illiquidity
of
the
options
markets;
trading
restrictions
imposed
by
an
exchange
or
counterparty;
possible
failure
of
counterparties
to
meet
the
terms
of
the
agreements;
movements
in
the
underlying
asset
values,
interest
rates
and
credit
ratings;
and,
for
options
written,
the
potential
for
losses
to
exceed
any
premium
received
by
the
fund.
During
the
year ended
May
31,
2024,
the
volume
of
the
fund’s
activity
in
options,
based
on
underlying
notional
amounts,
was
generally
between
0%
and
11%
of
net
assets.
Swaps
The
fund
is
subject
to
credit
risk in
the
normal
course
of
pursuing
its
investment
objectives
and
uses
swap
contracts
to
help
manage
such
risk.
The
fund
may
use
swaps
in
an
effort
to
manage
both
long
and
short
exposure
to
changes
in
interest
rates,
inflation
rates,
and
credit
quality;
to
adjust
overall
exposure
to
certain
markets;
to
enhance
total
return
or
protect
the
value
of
portfolio
securities;
to
serve
as
a
cash
management
tool;
or
to
adjust
portfolio
duration
and
credit
exposure.
Swap
agreements
can
be
settled
either
directly
with
the
counterparty
(bilateral
swap)
or
through
a
central
clearinghouse
(centrally
cleared
swap).
Fluctuations
in
the
fair
value
of
a
contract
are
reflected
in
unrealized
gain
or
loss
and
are
reclassified
to
realized
gain
or
loss
on
the
accompanying
Statement
of
Operations upon
contract
termination
or
cash
settlement.
Net
periodic
receipts
or
payments
required
by
a
contract
increase
or
decrease,
respectively,
the
value
of
the
contract
until
the
contractual
payment
date,
at
which
time
such
amounts
are
reclassified
from
unrealized
to
realized
gain
or
loss
on
the
accompanying
Statement
of
Operations.
For
bilateral
swaps,
cash
payments
are
made
or
received
by
the
fund
on
a
periodic
basis
in
accordance
with
contract
terms;
unrealized
gain
on
contracts
and
premiums
paid
are
reflected
as
assets
and
unrealized
loss
on
contracts
and
premiums
T.
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55
received
are
reflected
as
liabilities
on
the
accompanying
Statement
of
Assets
and
Liabilities.
For
bilateral
swaps,
premiums
paid
or
received
are
amortized
over
the
life
of
the
swap
and
are
recognized
as
realized
gain
or
loss
on
the
accompanying
Statement
of
Operations.
For
centrally
cleared
swaps,
payments
are
made
or
received
by
the
fund
each
day
to
settle
the
daily
fluctuation
in
the
value
of
the
contract
(variation
margin).
Accordingly,
the
value
of
a
centrally
cleared
swap
included
in
net
assets
is
the
unsettled
variation
margin;
net
variation
margin
receivable
is
reflected
as
an
asset
and
net
variation
margin
payable
is
reflected
as
a
liability
on
the
accompanying
Statement
of
Assets
and
Liabilities.
Credit
default
swaps
are
agreements
where
one
party
(the
protection
buyer)
agrees
to
make
periodic
payments
to
another
party
(the
protection
seller)
in
exchange
for
protection
against
specified
credit
events,
such
as
certain
defaults
and
bankruptcies
related
to
an
underlying
credit
instrument,
or
issuer
or
index
of
such
instruments.
Upon
occurrence
of
a
specified
credit
event,
the
protection
seller
is
required
to
pay
the
buyer
the
difference
between
the
notional
amount
of
the
swap
and
the
value
of
the
underlying
credit,
either
in
the
form
of
a
net
cash
settlement
or
by
paying
the
gross
notional
amount
and
accepting
delivery
of
the
relevant
underlying
credit.
For
credit
default
swaps
where
the
underlying
credit
is
an
index,
a
specified
credit
event
may
affect
all
or
individual
underlying
securities
included
in
the
index
and
will
be
settled
based
upon
the
relative
weighting
of
the
affected
underlying
security(ies)
within
the
index. Generally,
the
payment
risk
for
the
seller
of
protection
is
inversely
related
to
the
current
market
price
or
credit
rating
of
the
underlying
credit
or
the
market
value
of
the
contract
relative
to
the
notional
amount,
which
are
indicators
of
the
markets’
valuation
of
credit
quality.
As
of
May
31,
2024,
the
notional
amount
of
protection
sold
by
the
fund
totaled $20,000,000
(0.9%
of
net
assets),
which
reflects
the
maximum
potential
amount
the
fund
could
be
required
to
pay
under
such
contracts.
Risks
related
to
the
use
of
credit
default
swaps
include
the
possible
inability
of
the
fund
to
accurately
assess
the
current
and
future
creditworthiness
of
underlying
issuers,
the
possible
failure
of
a
counterparty
to
perform
in
accordance
with
the
terms
of
the
swap
agreements,
potential
government
regulation
that
could
adversely
affect
the
fund’s
swap
investments,
and
potential
losses
in
excess
of
the
fund’s
initial
investment.
During
the
year ended
May
31,
2024,
the
volume
of
the
fund’s
activity
in
swaps,
based
on
underlying
notional
amounts,
was
generally
between
0%
and
6%
of
net
assets.
T.
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56
NOTE
4
-
OTHER
INVESTMENT
TRANSACTIONS
Consistent
with
its
investment
objective, the
fund
engages
in
the
following
practices
to
manage
exposure
to
certain
risks
and/or
to
enhance
performance.
The
investment
objective,
policies,
program,
and
risk
factors
of the
fund
are
described
more
fully
in the
fund’s prospectus
and
Statement
of
Additional
Information.
Restricted
Securities
The
fund
invests
in
securities
that
are
subject
to
legal
or
contractual
restrictions
on
resale.
Prompt
sale
of
such
securities
at
an
acceptable
price
may
be
difficult
and
may
involve
substantial
delays
and
additional
costs.
Collateralized
Loan
Obligations
The
fund
invests
in
collateralized
loan
obligations
(CLOs)
which
are
entities
backed
by
a
diversified
pool
of
syndicated
bank
loans.
The
cash
flows
of
the
CLO
can
be
split
into
multiple
segments,
called
“tranches”
or
“classes”,
which
will
vary
in
risk
profile
and
yield.
The
riskiest
segments,
which
are
the
subordinate
or
“equity”
tranches,
bear
the
greatest
risk
of
loss
from
defaults
in
the
underlying
assets
of
the
CLO
and
serve
to
protect
the
other,
more
senior,
tranches.
Senior
tranches
will
typically
have
higher
credit
ratings
and
lower
yields
than
the
securities
underlying
the
CLO.
Despite
the
protection
from
the
more
junior
tranches,
senior
tranches
can
experience
substantial
losses.
Mortgage-Backed
Securities
The
fund
invests
in
mortgage-backed
securities
(MBS
or
pass-through
certificates)
that
represent
an
interest
in
a
pool
of
specific
underlying
mortgage
loans
and
entitle
the
fund
to
the
periodic
payments
of
principal
and
interest
from
those
mortgages.
MBS
may
be
issued
by
government
agencies
or
corporations,
or
private
issuers.
Most
MBS
issued
by
government
agencies
are
guaranteed;
however,
the
degree
of
protection
differs
based
on
the
issuer.
MBS are
sensitive
to
changes
in
economic
conditions
that
affect
the
rate
of
prepayments
and
defaults
on
the
underlying
mortgages;
accordingly,
the
value,
income,
and
related
cash
flows
from
MBS
may
be
more
volatile
than
other
debt
instruments.
Securities
Lending
The fund
may
lend
its
securities
to
approved
borrowers
to
earn
additional
income.
Its
securities
lending
activities
are
administered
by
a
lending
agent
in
accordance
with
a
securities
lending
agreement.
Security
loans
generally
do
not
have
stated
maturity
dates,
and
the
fund
may
recall
a
security
at
any
time.
The
fund
receives
collateral
in
the
form
of
cash
or
U.S.
government
securities.
Collateral
is
maintained
over
the
life
of
the
loan
in
an
amount
not
less
than
the
value
of
loaned
securities;
any
additional
collateral
required
due
to
T.
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Fund
57
changes
in
security
values
is
delivered
to
the
fund
the
next
business
day.
Cash
collateral
is
invested
in
accordance
with
investment
guidelines
approved
by
fund
management.
Additionally,
the
lending
agent
indemnifies
the
fund
against
losses
resulting
from
borrower
default.
Although
risk
is
mitigated
by
the
collateral
and
indemnification,
the
fund
could
experience
a
delay
in
recovering
its
securities
and
a
possible
loss
of
income
or
value
if
the
borrower
fails
to
return
the
securities,
collateral
investments
decline
in
value,
and
the
lending
agent
fails
to
perform.
Securities
lending
revenue
consists
of
earnings
on
invested
collateral
and
borrowing
fees,
net
of
any
rebates
to
the
borrower,
compensation
to
the
lending
agent,
and
other
administrative
costs.
In
accordance
with
GAAP,
investments
made
with
cash
collateral
are
reflected
in
the
accompanying
financial
statements,
but
collateral
received
in
the
form
of
securities
is
not.
At
May
31,
2024,
the
value
of
loaned
securities
was
$766,000,
including
securities
sold
but
not
yet
settled,
which
are
not
reflected
in
the
accompanying
Portfolio
of
Investments;
the
value
of
cash
collateral
and
related
investments
was
$782,000.
Other
Purchases
and
sales
of
portfolio
securities
other
than
in-kind
transactions,
if
any,
short-term and
U.S.
government
securities
aggregated $1,569,045,000 and
$1,732,832,000,
respectively,
for
the
year ended
May
31,
2024.
Purchases
and
sales
of
U.S.
government
securities
aggregated
$24,948,000 and
$50,430,000,
respectively,
for
the
year ended
May
31,
2024.
NOTE
5
-
FEDERAL
INCOME
TAXES
Generally,
no
provision
for
federal
income
taxes
is
required
since
the
fund
intends
to continue
to
qualify
as
a
regulated
investment
company
under
Subchapter
M
of
the
Internal
Revenue
Code
and
distribute
to
shareholders
all
of
its taxable
income
and
gains.
Distributions
determined
in
accordance
with
federal
income
tax
regulations
may
differ
in
amount
or
character
from
net
investment
income
and
realized
gains
for
financial
reporting
purposes.
The
fund
files
U.S.
federal,
state,
and
local
tax
returns
as
required.
The
fund’s
tax
returns
are
subject
to
examination
by
the
relevant
tax
authorities
until
expiration
of
the
applicable
statute
of
limitations,
which
is
generally
three
years
after
the
filing
of
the
tax
return
but
which
can
be
extended
to
six
years
in
certain
circumstances.
Tax
returns
for
open
years
have
incorporated
no
uncertain
tax
positions
that
require
a
provision
for
income
taxes.
T.
ROWE
PRICE
Ultra
Short-Term
Bond
Fund
58
Capital
accounts
within
the
financial
reporting
records
are
adjusted
for
permanent
book/tax
differences
to
reflect
tax
character
but
are
not
adjusted
for
temporary
differences.
The
permanent
book/tax
adjustments,
if
any,
have
no
impact
on
results
of
operations
or
net
assets.
The
tax
character
of
distributions
paid
for
the
periods
presented
was
as
follows:
At
May
31,
2024,
the
tax-basis
cost
of
investments
(including
derivatives,
if
any)
and
gross
unrealized
appreciation
and
depreciation
were as
follows:
At
May
31,
2024,
the
tax-basis
components
of
accumulated
net
earnings
(loss)
were
as
follows:
Temporary
differences
between
book-basis
and
tax-basis
components
of
total
distributable
earnings
(loss)
arise
when
certain
items
of
income,
gain,
or
loss
are
recognized
in
different
periods
for
financial
statement
purposes
versus
for
tax
purposes;
these
differences
will
reverse
in
a
subsequent
reporting
period.
The
temporary
differences
relate
primarily
to
the
deferral
of
losses
from
wash
($000s)
May
31,
2024
May
31,
2023
Ordinary
income
(including
short-term
capital
gains,
if
any)
$
105,808
$
80,097
Long-term
capital
gain
—
8,740
Total
distributions
$
105,808
$
88,837
($000s)
Cost
of
investments
$
2,278,233
Unrealized
appreciation
$
4,787
Unrealized
depreciation
(19,484)
Net
unrealized
appreciation
(depreciation)
$
(14,697)
($000s)
Overdistributed
ordinary
income
$
(6,040)
Net
unrealized
appreciation
(depreciation)
(14,697)
Loss
carryforwards
and
deferrals
(39,452)
Total
distributable
earnings
(loss)
$
(60,189)
T.
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PRICE
Ultra
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Bond
Fund
59
sales.
The
loss
carryforwards
and
deferrals
primarily
relate
to
capital
loss
carryforwards
and
straddle
deferrals.
Capital
loss
carryforwards
are
available
indefinitely
to
offset
future
realized
capital
gains.
NOTE
6
-
RELATED
PARTY
TRANSACTIONS
The
fund
is
managed
by
T.
Rowe
Price
Associates,
Inc.
(Price
Associates),
a
wholly
owned
subsidiary
of
T.
Rowe
Price
Group,
Inc.
(Price
Group). Price
Associates
has
entered
into
a
sub-advisory
agreement(s)
with
one
or
more
of
its
wholly
owned
subsidiaries,
to
provide
investment
advisory
services
to
the
fund. The
investment
management
agreement
between
the
fund
and
Price
Associates
provides
for
an
annual
investment
management
fee
equal
to 0.16%
of
the
fund’s
average
daily
net
assets.
The
fee
is
computed
daily
and
paid
monthly.
The Investor
Class is
subject
to
a
contractual
expense
limitation
through
the
expense
limitation
date
indicated
in
the
table
below.
This
agreement
will
continue
through
the
expense
limitation
date
indicated
in
the
table
below,
and
may
be
renewed,
revised,
or
revoked
only
with
approval
of
the
fund’s
Board.
During
the
limitation
period,
Price
Associates
is required
to
waive
or
pay
any
expenses
(excluding
interest;
expenses
related
to
borrowings,
taxes,
and
brokerage;
non-recurring,
extraordinary
expenses;
and
acquired
fund
fees
and
expenses)
that
would
otherwise
cause
the
class’s
ratio
of
annualized
total
expenses
to
average
net
assets
(net
expense
ratio)
to
exceed
its
expense
limitation.
The
class
is
required
to
repay
Price
Associates
for
expenses
previously
waived/paid
to
the
extent
the
class’s
net
assets
grow
or
expenses
decline
sufficiently
to
allow
repayment
without
causing
the
class’s
net
expense
ratio
(after
the
repayment
is
taken
into
account)
to
exceed
the
lesser
of:
(1)
the
expense
limitation
in
place
at
the
time
such
amounts
were
waived;
or
(2)
the
class’s
current
expense
limitation.
However,
no
repayment
will
be
made
more
than
three
years
after
the
date
of
a
payment
or
waiver.
The
I
Class
is
also
subject
to
an
operating
expense
limitation
(I
Class
Limit)
pursuant
to
which
Price
Associates
is
contractually
required
to
pay
all
operating
expenses
of
the
I
Class,
excluding
management
fees;
interest;
expenses
related
to
borrowings,
taxes,
and
brokerage; non-recurring,
extraordinary expenses; and
acquired
fund
fees
and
expenses, to
the
extent
such
operating
expenses,
on
an
annualized
basis,
exceed
the
I
Class
Limit. This
agreement
will
continue
through
the
expense
limitation
date
indicated
in
the
table
below,
and
may
be
renewed,
revised,
or
revoked
only
with
approval
of
the
fund’s
Board.
The
T.
ROWE
PRICE
Ultra
Short-Term
Bond
Fund
60
I
Class
is
required
to
repay
Price
Associates
for
expenses
previously
paid
to
the
extent
the
class’s
net
assets
grow
or
expenses
decline
sufficiently
to
allow
repayment
without
causing
the
class’s
operating
expenses
(after
the
repayment
is
taken
into
account)
to
exceed
the
lesser
of:
(1)
the
I
Class
Limit
in
place
at
the
time
such
amounts
were
paid;
or
(2)
the
current
I
Class
Limit.
However,
no
repayment
will
be
made
more
than
three
years
after
the
date
of
a
payment
or
waiver.
The
Z
Class
is
also
subject
to
a
contractual
expense
limitation
agreement
whereby
Price
Associates
has
agreed
to
waive
and/or
bear
all
of
the
Z
Class’
expenses
(excluding
interest;
expenses
related
to
borrowings,
taxes,
and
brokerage;
non-recurring,
extraordinary
expenses;
and
acquired
fund
fees
and
expenses)
in
their
entirety.
This
fee
waiver
and/or
expense
reimbursement
arrangement
is
expected
to
remain
in
place
indefinitely,
and
the
agreement
may
only
be
amended
or
terminated
with
approval
by
the
fund’s
Board.
Expenses
of
the
fund
waived/paid
by
the
manager
are
not
subject
to
later
repayment
by
the
fund.
Pursuant
to
these
agreements,
expenses
were
waived/paid
by
and/or
repaid
to
Price
Associates
during
the
year ended May
31,
2024
as
indicated
in
the
table
below.
Including
this
amount,
expenses
previously
waived/paid
by
Price
Associates
in
the
amount
of $879,000 remain
subject
to
repayment
by
the
fund
at
May
31,
2024.
Any
repayment
of
expenses
previously
waived/paid
by
Price
Associates
during
the
period
would
be
included
in
the
net
investment
income
and
expense
ratios
presented
on
the
accompanying
Financial
Highlights.
In
addition,
the
fund
has
entered
into
service
agreements
with
Price
Associates
and
two
wholly
owned
subsidiaries
of
Price
Associates,
each
an
affiliate
of
the
fund
(collectively,
Price).
Price
Associates
provides
certain
accounting
and
administrative
services
to
the
fund.
T.
Rowe
Price
Services,
Inc.
provides
shareholder
and
administrative
services
in
its
capacity
as
the
fund’s
transfer
and
dividend-disbursing
agent.
T.
Rowe
Price
Retirement
Plan
Services,
Inc.
provides
subaccounting
and
recordkeeping
services
for
certain
retirement
Investor
Class
I
Class
Z
Class
Expense
limitation/I
Class
Limit
0.31%
0.05%
0.00%
Expense
limitation
date
09/30/25
09/30/25
N/A
(Waived)/repaid
during
the
period
($000s)
$(296)
$—
$—
(1)
(1)
Amount
rounds
to
less
than
$1,000
T.
ROWE
PRICE
Ultra
Short-Term
Bond
Fund
61
accounts
invested
in
the
Investor
Class.
For
the
year
ended
May
31,
2024,
expenses
incurred
pursuant
to
these
service
agreements
were
$109,000
for
Price
Associates;
$354,000
for
T.
Rowe
Price
Services,
Inc.;
and
$5,000
for
T.
Rowe
Price
Retirement
Plan
Services,
Inc.
All
amounts
due
to
and
due
from
Price,
exclusive
of
investment
management
fees
payable,
are
presented
net
on
the
accompanying
Statement
of
Assets
and
Liabilities.
T.
Rowe
Price
Investment
Services,
Inc.
(Investment
Services)
serves
as
distributor
to
the
fund.
Pursuant
to
an
underwriting
agreement,
no
compensation
for
any
distribution
services
provided
is
paid
to
Investment
Services
by
the
fund
(except
for
12b-1
fees
under
a
Board-approved
Rule
12b-1
plan).
The fund
may
invest
its
cash
reserves
in
certain
open-end
management
investment
companies
managed
by
Price
Associates
and
considered
affiliates
of
the
fund:
the
T.
Rowe
Price
Government
Reserve
Fund
or
the
T.
Rowe
Price
Treasury
Reserve
Fund,
organized
as
money
market
funds
(together,
the
Price
Reserve
Funds).
The
Price
Reserve
Funds
are
offered
as
short-term
investment
options
to
mutual
funds,
trusts,
and
other
accounts
managed
by
Price
Associates
or
its
affiliates
and
are
not
available
for
direct
purchase
by
members
of
the
public.
Cash
collateral
from
securities
lending,
if
any,
is
invested
in
the
T.
Rowe
Price
Government
Reserve Fund. The
Price
Reserve
Funds
pay
no
investment
management
fees.
As
of
May
31,
2024,
T.
Rowe
Price
Group,
Inc.,
or
its
wholly
owned
subsidiaries,
owned
891,069
shares
of
the
Investor
Class,
representing
less
than
1%
of
the
Investor
Class's
net
assets,
and
19,608
shares
of
the
Z
Class,
representing
100%
of
the
Z
Class's
net
assets.
The fund may
participate
in
securities
purchase
and
sale
transactions
with
other
funds
or
accounts
advised
by
Price
Associates
(cross
trades),
in
accordance
with
procedures
adopted
by the
fund’s
Board
and
Securities
and
Exchange
Commission
rules,
which
require,
among
other
things,
that
such
purchase
and
sale
cross
trades
be
effected
at
the
independent
current
market
price
of
the
security.
During
the
year
ended
May
31,
2024,
the
fund
had
no
purchases
or
sales
cross
trades
with
other
funds
or
accounts
advised
by
Price
Associates.
T.
ROWE
PRICE
Ultra
Short-Term
Bond
Fund
62
NOTE
7
-
OTHER
MATTERS
Unpredictable environmental,
political,
social
and
economic
events,
including
but
not
limited
to,
environmental
or
natural
disasters,
war
and
conflict
(including
Russia’s
military
invasion
of
Ukraine
and
the
conflict
in
Israel,
Gaza
and
surrounding
areas),
terrorism,
geopolitical
developments
(including
trading
and
tariff
arrangements,
sanctions
and
cybersecurity
attacks),
and
public
health
epidemics
(including
the
global
outbreak
of
COVID-19)
and
similar
public
health
threats,
may
significantly
affect
the
economy
and
the
markets
and
issuers
in
which
a
fund
invests.
The
extent
and
duration
of
such
events
and
resulting
market
disruptions
cannot
be
predicted.
These
and
other
similar
events
may
cause
instability
across
global
markets,
including
reduced
liquidity
and
disruptions
in
trading
markets,
while
some
events
may
affect
certain
geographic
regions,
countries,
sectors,
and
industries
more
significantly
than
others,
and
exacerbate
other
pre-existing
political,
social,
and
economic
risks.
The
fund’s
performance
could
be
negatively
impacted
if
the
value
of
a
portfolio
holding
were
harmed
by
these
or
such
events.
Management
actively
monitors
the
risks
and
financial
impacts
arising
from
such
events.
T.
ROWE
PRICE
Ultra
Short-Term
Bond
Fund
63
REPORT
OF
INDEPENDENT
REGISTERED
PUBLIC
ACCOUNTING
FIRM
To
the
Board
of
Directors
of
T.
Rowe
Price
Short-Term
Bond
Fund,
Inc.
and
Shareholders
of
T.
Rowe
Price
Ultra
Short-Term
Bond
Fund
Opinion
on
the
Financial
Statements
We
have
audited
the
accompanying
statement
of
assets
and
liabilities,
including
the
portfolio
of
investments,
of
T.
Rowe
Price
Ultra
Short-Term
Bond
Fund
(one
of
the
funds
constituting
T.
Rowe
Price
Short-Term
Bond
Fund,
Inc.,
referred
to
hereafter
as
the
"Fund")
as
of
May
31,
2024,
the
related
statement
of
operations
for
the
year
ended
May
31,
2024,
the
statement
of
changes
in
net
assets
for
each
of
the
two
years
in
the
period
ended
May
31,
2024,
including
the
related
notes,
and
the
financial
highlights
for
each
of
the
periods
indicated
therein
(collectively
referred
to
as
the
“financial
statements”).
In
our
opinion,
the
financial
statements
present
fairly,
in
all
material
respects,
the
financial
position
of
the
Fund
as
of
May
31,
2024,
the
results
of
its
operations
for
the
year
then
ended,
the
changes
in
its
net
assets
for
each
of
the
two
years
in
the
period
ended
May
31,
2024
and
the
financial
highlights
for
each
of
the
periods
indicated
therein,
in
conformity
with
accounting
principles
generally
accepted
in
the
United
States
of
America.
Basis
for
Opinion
These
financial
statements
are
the
responsibility
of
the
Fund’s
management.
Our
responsibility
is
to
express
an
opinion
on
the
Fund’s
financial
statements
based
on
our
audits.
We
are
a
public
accounting
firm
registered
with
the
Public
Company
Accounting
Oversight
Board
(United
States)
(PCAOB)
and
are
required
to
be
independent
with
respect
to
the
Fund
in
accordance
with
the
U.S.
federal
securities
laws
and
the
applicable
rules
and
regulations
of
the
Securities
and
Exchange
Commission
and
the
PCAOB.
We
conducted
our
audits
of
these
financial
statements
in
accordance
with
the
standards
of
the
PCAOB.
Those
standards
require
that
we
plan
and
perform
the
audit
to
obtain
reasonable
assurance
about
whether
the
financial
statements
are
free
of
material
misstatement,
whether
due
to
error
or
fraud.
T.
ROWE
PRICE
Ultra
Short-Term
Bond
Fund
64
Our
audits
included
performing
procedures
to
assess
the
risks
of
material
misstatement
of
the
financial
statements,
whether
due
to
error
or
fraud,
and
performing
procedures
that
respond
to
those
risks.
Such
procedures
included
examining,
on
a
test
basis,
evidence
regarding
the
amounts
and
disclosures
in
the
financial
statements.
Our
audits
also
included
evaluating
the
accounting
principles
used
and
significant
estimates
made
by
management,
as
well
as
evaluating
the
overall
presentation
of
the
financial
statements.
Our
procedures
included
confirmation
of
securities
owned
as
of
May
31,
2024
by
correspondence
with
the
custodians,
transfer
agent
and
brokers;
when
replies
were
not
received
from
brokers,
we
performed
other
auditing
procedures.
We
believe
that
our
audits
provide
a
reasonable
basis
for
our
opinion.
/s/
PricewaterhouseCoopers
LLP
Baltimore,
Maryland
July
18,
2024
We
have
served
as
the
auditor
of
one
or
more
investment
companies
in
the
T.
Rowe
Price
group
of
investment
companies
since
1973.
REPORT
OF
INDEPENDENT
REGISTERED
PUBLIC
ACCOUNTING
FIRM
(continued)
T.
ROWE
PRICE
Ultra
Short-Term
Bond
Fund
65
TAX
INFORMATION
(UNAUDITED)
FOR
THE
TAX
YEAR
ENDED 5/31/24
We
are
providing
this
information
as
required
by
the
Internal
Revenue
Code.
The
amounts
shown
may
differ
from
those
elsewhere
in
this
report
because
of
differences
between
tax
and
financial
reporting
requirements.
For
shareholders
subject
to
interest
expense
deduction
limitation
under
Section
163(j),
$105,046,000
of
the
fund’s
income
qualifies
as
a
Section
163(j)
interest
dividend
and
can
be
treated
as
interest
income
for
purposes
of
Section
163(j),
subject
to
holding
period
requirements
and
other
limitations.
T.
ROWE
PRICE
Ultra
Short-Term
Bond
Fund
66
Approval
of
Investment
Management
Agreement
and
Subadvisory
Agreements
Each
year,
the
fund’s
Board
of
Directors
(Board)
considers
the
continuation
of
the
investment
management
agreement
(Advisory
Contract)
between
the
fund
and
its
investment
adviser,
T.
Rowe
Price
Associates,
Inc.
(Adviser),
as
well
as
the
investment
subadvisory
agreements
(Subadvisory
Contracts)
that
the
Adviser
has
entered
into
with
T.
Rowe
Price
International
Ltd
and
T.
Rowe
Price
Hong
Kong
Limited
(Subadvisers)
on
behalf
of
the
fund.
In
that
regard,
at
a
meeting
held
on
March
11–12,
2024
(Meeting),
the
Board,
including
all
of
the
fund’s
independent
directors
present
in
person
at
the
Meeting,
approved
the
continuation
of
the
fund’s
Advisory
Contract
and
Subadvisory
Contracts.
At
the
Meeting,
the
Board
considered
the
factors
and
reached
the
conclusions
described
below
relating
to
the
selection
of
the
Adviser
and
Subadvisers
and
the
approval
of
the
Advisory
Contract
and
Subadvisory
Contracts.
The
independent
directors
were
assisted
in
their
evaluation
of
the
Advisory
Contract
and
Subadvisory
Contracts
by
independent
legal
counsel
from
whom
they
received
separate
legal
advice
and
with
whom
they
met
separately.
In
providing
information
to
the
Board,
the
Adviser
was
guided
by
a
detailed
set
of
requests
for
information
submitted
by
independent
legal
counsel
on
behalf
of
the
independent
directors.
In
considering
and
approving
the
continuation
of
the
Advisory
Contract
and
Subadvisory
Contracts,
the
Board
considered
the
information
it
believed
was
relevant,
including,
but
not
limited
to,
the
information
discussed
below.
The
Board
considered
not
only
the
specific
information
presented
in
connection
with
the
Meeting,
but
also
the
knowledge
gained
over
time
through
interaction
with
the
Adviser
and
Subadvisers
about
various
topics.
The
Board
meets
regularly
and,
at
each
of
its
meetings,
covers
an
extensive
agenda
of
topics
and
materials
and
considers
factors
that
are
relevant
to
its
annual
consideration
of
the
renewal
of
the
T.
Rowe
Price
funds’
advisory
contracts,
including
performance
and
the
services
and
support
provided
to
the
funds
and
their
shareholders.
Services
Provided
by
the
Adviser
and
Subadvisers
The
Board
considered
the
nature,
quality,
and
extent
of
the
services
provided
to
the
fund
by
the
Adviser
and
Subadvisers.
These
services
included,
but
were
not
limited
to,
directing
the
fund’s
investments
in
accordance
with
its
investment
program
and
the
overall
management
of
the
fund’s
portfolio,
as
well
as
a
variety
of
related
activities
such
as
financial,
investment
operations,
and
administrative
services;
compliance;
maintaining
the
fund’s
records
and
registrations;
and
shareholder
communications.
The
Board
also
reviewed
the
background
and
experience
of
the
Adviser’s
and
Subadvisers’
senior
management
teams
and
investment
personnel
T.
ROWE
PRICE
Ultra
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Fund
67
involved
in
the
management
of
the
fund,
as
well
as
the
Adviser’s
compliance
record.
The
Board
concluded
that
the
information
it
considered
with
respect
to
the
nature,
quality,
and
extent
of
the
services
provided
by
the
Adviser
and
Subadvisers,
as
well
as
the
other
factors
considered
at
the
Meeting,
supported
the
Board’s
approval
of
the
continuation
of
the
Advisory
Contract
and
Subadvisory
Contracts.
Investment
Performance
of
the
Fund
The
Board
took
into
account
discussions
with
the
Adviser
and
detailed
reports
that
it
regularly
receives
throughout
the
year
on
relative
and
absolute
performance
for
the
T.
Rowe
Price
funds.
In
connection
with
the
Meeting,
the
Board
reviewed
information
provided
by
the
Adviser
that
compared
the
fund’s
total
returns,
as
well
as
a
wide
variety
of
other
previously
agreed-upon
performance
measures
and
market
data,
against
relevant
benchmark
indexes
and
peer
groups
of
funds
with
similar
investment
programs
for
various
periods
through
December
31,
2023.
Additionally,
the
Board
reviewed
the
fund’s
relative
performance
information
as
of
September
30,
2023,
which
ranked
the
returns
of
the
fund’s
Investor
Class
for
various
periods
against
a
universe
of
funds
with
similar
investment
programs
selected
by
Broadridge,
an
independent
provider
of
mutual
fund
data.
In
the
course
of
its
deliberations,
the
Board
considered
performance
information
provided
throughout
the
year
and
in
connection
with
the
Advisory
Contract
review
at
the
Meeting,
as
well
as
information
provided
during
investment
review
meetings
conducted
with
portfolio
managers
and
senior
investment
personnel
during
the
course
of
the
year
regarding
the
fund’s
performance.
The
Board
also
considered
relevant
factors,
such
as
overall
market
conditions
and
trends
that
could
adversely
impact
the
fund’s
performance,
the
length
of
the
fund’s
performance
track
record,
and
how
closely
the
fund’s
strategies
align
with
its
benchmarks
and
peer
groups.
The
Board
concluded
that
the
information
it
considered
with
respect
to
the
fund’s
performance,
as
well
as
the
other
factors
considered
at
the
Meeting,
supported
the
Board’s
approval
of
the
continuation
of
the
Advisory
Contract
and
Subadvisory
Contracts.
Costs,
Benefits,
Profits,
and
Economies
of
Scale
The
Board
reviewed
detailed
information
regarding
the
revenues
received
by
the
Adviser
under
the
Advisory
Contract
and
other
direct
and
indirect
benefits
that
the
Adviser
(and
its
affiliates,
including
the
Subadvisers)
may
have
realized
from
its
relationship
with
the
fund.
In
considering
soft-dollar
arrangements
pursuant
to
which
research
may
be
received
from
broker-dealers
that
execute
the
fund’s
portfolio
transactions,
the
Board
noted
that
during
2023
the
Adviser
paid
the
costs
of
research
services
for
all
client
accounts
that
it
advises,
including
the
T.
Rowe
Price
funds.
However,
effective
January
1,
2024,
the
Adviser
will
begin
using
brokerage
Approval
of
Investment
Management
Agreement
and
Subadvisory
Agreements
(continued)
T.
ROWE
PRICE
Ultra
Short-Term
Bond
Fund
68
commissions
in
connection
with
certain
T.
Rowe
Price
funds’
securities
transactions
to
pay
for
research
when
permissible.
The
Board
received
information
on
the
estimated
costs
incurred
and
profits
realized
by
the
Adviser
from
managing
the
T.
Rowe
Price
funds.
The
Board
also
reviewed
estimates
of
the
profits
realized
from
managing
the
fund
in
particular,
and
the
Board
concluded
that
the
Adviser’s
profits
were
reasonable
in
light
of
the
services
provided
to
the
fund.
The
Board
also
considered
whether
the
fund
benefits
under
the
fee
levels
set
forth
in
the
Advisory
Contract
or
otherwise
from
any
economies
of
scale
realized
by
the
Adviser.
Under
the
Advisory
Contract,
the
fund
pays
a
fee
to
the
Adviser
investment
management
services
based
on
the
fund’s
average
daily
net
assets
and
the
fund
pays
its
own
expenses
of
operations.
Under
each
Subadvisory
Contract,
the
Adviser
may
pay
the
Subadviser
up
to
60%
of
the
advisory
fees
that
the
Adviser
receives
from
the
fund.
Assets
of
the
fund
are
included
in
the
calculation
of
the
group
fee
rate,
which
serves
as
a
component
of
the
management
fee
for
many
other
T.
Rowe
Price
funds
and
declines
at
certain
asset
levels
based
on
the
combined
average
net
assets
of
most
of
the
T.
Rowe
Price
funds
(including
the
fund).
Although
the
fund
does
not
have
a
group
fee
component
to
its
management
fee,
its
assets
are
included
in
the
calculation
because
certain
resources
utilized
to
operate
the
fund
are
shared
with
other
T.
Rowe
Price
funds.
The
fund’s
shareholders
have
benefitted
from
reductions
to
the
fund’s
management
fee
and
also
benefit
from
potential
future
economies
of
scale
through
a
decline
in
certain
operating
expenses
as
the
fund
grows
in
size.
However,
the
fund
is
also
subject
to
contractual
expense
limitations
that
require
the
Adviser
to
waive
its
fees
and/or
bear
any
expenses
that
would
otherwise
cause
the
expenses
of
a
share
class
of
the
fund
to
exceed
a
certain
percentage
based
on
the
class’s
net
assets.
The
expense
limitations
mitigate
the
potential
for
an
increase
in
operating
expenses
above
a
certain
level
that
could
impact
shareholders.
The
fund
also
offers
a
Z
Class,
which
serves
as
an
underlying
investment
within
certain
T.
Rowe
Price
fund
of
funds
arrangements.
The
Adviser
waives
its
advisory
fee
on
the
Z
Class
and
waives
or
bears
the
Z
Class’s
other
operating
expenses,
with
certain
exceptions.
The
Board
considered
whether
the
advisory
fee
and
operating
expense
waivers
on
the
Z
Class
may
present
a
means
for
cross-
subsidization
of
the
Z
Class
by
other
share
classes
of
the
fund.
In
that
regard,
the
Board
noted
that
the
Z
Class
operating
expenses
are
largely
covered
by
the
all-inclusive
fees
charged
by
the
investing
T.
Rowe
Price
fund
of
funds
and
that
any
Z
Class
operating
expenses
not
covered
by
the
investing
T.
Rowe
Price
fund
of
funds’
fees
are
paid
by
the
Adviser
and
not
by
shareholders
of
any
other
share
class
of
the
fund.
Approval
of
Investment
Management
Agreement
and
Subadvisory
Agreements
(continued)
T.
ROWE
PRICE
Ultra
Short-Term
Bond
Fund
69
In
addition,
the
Board
noted
that
the
fund
potentially
shares
in
indirect
economies
of
scale
through
the
Adviser’s
and
Subadvisers’
ongoing
investments
in
their
business
in
support
of
the
T.
Rowe
Price
funds,
including
investments
in
trading
systems,
technology,
and
regulatory
support
enhancements,
and
the
ability
to
possibly
negotiate
lower
fee
arrangements
with
third-party
service
providers.
The
Board
concluded
that
the
advisory
fee
structure
for
the
fund
provides
for
a
reasonable
sharing
of
benefits
from
any
economies
of
scale
with
the
fund’s
investors.
Fees
and
Expenses
The
Board
was
provided
with
information
regarding
industry
trends
in
management
fees
and
expenses.
Among
other
things,
the
Board
reviewed
data
for
peer
groups
that
were
compiled
by
Broadridge,
which
compared:
(i)
contractual
management
fees,
actual
management
fees,
nonmanagement
expenses,
and
total
expenses
of
the
Investor
Class
of
the
fund
with
a
group
of
competitor
funds
selected
by
Broadridge
(Expense
Group)
and
(ii)
actual
management
fees,
nonmanagement
expenses,
and
total
expenses
of
the
Investor
Class
of
the
fund
with
a
broader
set
of
funds
within
the
Lipper
investment
classification
(Expense
Universe).
The
Board
considered
the
fund’s
contractual
management
fee
rate,
actual
management
fee
rate
(which
reflects
the
management
fees
actually
received
from
the
fund
by
the
Adviser
after
any
applicable
waivers,
reductions,
or
reimbursements),
operating
expenses,
and
total
expenses
(which
reflect
the
net
total
expense
ratio
of
the
fund
after
any
waivers,
reductions,
or
reimbursements)
in
comparison
with
the
information
for
the
Broadridge
peer
groups.
Broadridge
generally
constructed
the
peer
groups
by
seeking
the
most
comparable
funds
based
on
similar
investment
classifications
and
objectives,
expense
structure,
asset
size,
and
operating
components
and
attributes
and
ranked
funds
into
quintiles,
with
the
first
quintile
representing
the
funds
with
the
lowest
relative
expenses
and
the
fifth
quintile
representing
the
funds
with
the
highest
relative
expenses.
The
information
provided
to
the
Board
indicated
that
the
fund’s
contractual
management
fee
ranked
in
the
first
quintile
(Expense
Group),
the
fund’s
actual
management
fee
rate
ranked
in
the
first
quintile
(Expense
Group
and
Expense
Universe),
and
the
fund’s
total
expenses
ranked
in
the
fourth
quintile
(Expense
Group
and
Expense
Universe).
The
Board
also
reviewed
the
fee
schedules
for
other
investment
portfolios
with
similar
mandates
that
are
advised
or
subadvised
by
the
Adviser
and
its
affiliates,
including
separately
managed
accounts
for
institutional
and
individual
investors;
subadvised
funds;
and
other
sponsored
investment
portfolios,
including
collective
investment
trusts
and
pooled
vehicles
organized
and
offered
to
investors
outside
the
United
States.
Management
provided
the
Board
with
information
about
the
Adviser’s
responsibilities
and
services
provided
to
subadvisory
and
other
institutional
account
clients,
including
information
about
how
the
requirements
and
Approval
of
Investment
Management
Agreement
and
Subadvisory
Agreements
(continued)
T.
ROWE
PRICE
Ultra
Short-Term
Bond
Fund
70
economics
of
the
institutional
business
are
fundamentally
different
from
those
of
the
proprietary
mutual
fund
business.
The
Board
considered
information
showing
that
the
Adviser’s
mutual
fund
business
is
generally
more
complex
from
a
business
and
compliance
perspective
than
its
institutional
account
business
and
considered
various
relevant
factors,
such
as
the
broader
scope
of
operations
and
oversight,
more
extensive
shareholder
communication
infrastructure,
greater
asset
flows,
heightened
business
risks,
and
differences
in
applicable
laws
and
regulations
associated
with
the
Adviser’s
proprietary
mutual
fund
business.
In
assessing
the
reasonableness
of
the
fund’s
management
fee
rate,
the
Board
considered
the
differences
in
the
nature
of
the
services
required
for
the
Adviser
to
manage
its
mutual
fund
business
versus
managing
a
discrete
pool
of
assets
as
a
subadviser
to
another
institution’s
mutual
fund
or
for
an
institutional
account
and
that
the
Adviser
generally
performs
significant
additional
services
and
assumes
greater
risk
in
managing
the
fund
and
other
T.
Rowe
Price
funds
than
it
does
for
institutional
account
clients,
including
subadvised
funds.
On
the
basis
of
the
information
provided
and
the
factors
considered,
the
Board
concluded
that
the
fees
paid
by
the
fund
under
the
Advisory
Contract
are
reasonable.
Approval
of
the
Advisory
Contract
and
Subadvisory
Contracts
As
noted,
the
Board
approved
the
continuation
of
the
Advisory
Contract
and
Subadvisory
Contracts.
No
single
factor
was
considered
in
isolation
or
to
be
determinative
to
the
decision.
Rather,
the
Board
concluded,
in
light
of
a
weighting
and
balancing
of
all
factors
considered,
that
it
was
in
the
best
interests
of
the
fund
and
its
shareholders
for
the
Board
to
approve
the
continuation
of
the
Advisory
Contract
and
Subadvisory
Contracts
(including
the
fees
to
be
charged
for
services
thereunder).
Approval
of
Investment
Management
Agreement
and
Subadvisory
Agreements
(continued)
100
East
Pratt
Street
Baltimore,
MD
21202
T.
Rowe
Price
Investment
Services,
Inc.
Call
1-800-225-5132
to
request
a
prospectus
or
summary
prospectus;
each
includes
investment
objectives,
risks,
fees,
expenses,
and
other
information
that
you
should
read
and
consider
carefully
before
investing.
F188-050
7/24
Item 8. Changes in and Disagreements with Accountants for Open-End Management Investment Companies.
Not applicable.
Item 9. Proxy Disclosures for Open-End Management Investment Companies.
Not applicable.
Item 10. Remuneration Paid to Directors, Officers, and Others of Open-End Management Investment Companies.
Remuneration paid to Directors is included in Item 7 of this Form N-CSR.
Item 11. Statement Regarding Basis for Approval of Investment Advisory Contract.
If applicable, see Item 7.
Item 12. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.
Not applicable.
Item 13. Portfolio Managers of Closed-End Management Investment Companies.
Not applicable.
Item 14. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.
Not applicable.
Item 15. Submission of Matters to a Vote of Security Holders.
There has been no change to the procedures by which shareholders may recommend nominees to the registrant’s board of directors.
Item 16. Controls and Procedures.
(a) The registrant’s principal executive officer and principal financial officer have evaluated the registrant’s disclosure controls and procedures within 90 days of this filing and have concluded that the registrant’s disclosure controls and procedures were effective, as of that date, in ensuring that information required to be disclosed by the registrant in this Form N-CSR was recorded, processed, summarized, and reported timely.
(b) The registrant’s principal executive officer and principal financial officer are aware of no change in the registrant’s internal control over financial reporting that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.
Item 17. Disclosure of Securities Lending Activities for Closed-End Management Investment Companies.
Not applicable.
Item 18. Recovery of Erroneously Awarded Compensation.
Not applicable.
Item 19. Exhibits.
| (a)(1) | The registrant’s code of ethics pursuant to Item 2 of Form N-CSR is attached. | |
| (2) | Listing standards relating to recovery of erroneously awarded compensation: not applicable. | |
| (3) | ||
| (b) | ||
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| T. Rowe Price Ultra Short-Term Bond Fund | ||||
| By | /s/ David Oestreicher | |||
| David Oestreicher | ||||
| Principal Executive Officer | ||||
| Date | July 18, 2024 | |||
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
| By | /s/ David Oestreicher | |||
| David Oestreicher | ||||
| Principal Executive Officer | ||||
| Date | July 18, 2024 |
| ||
| By | /s/ Alan S. Dupski | |||
| Alan S. Dupski | ||||
| Principal Financial Officer | ||||
| Date | July 18, 2024 | |||