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
Short Duration Income Fund
This annual shareholder report contains important information about Short Duration Income 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 |
|---|
| Short Duration Income Fund - I Class | $31 | 0.30% |
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 emerging markets debt and securitized sectors—asset-backed securities (ABS), collateralized loan obligations (CLOs), commercial mortgage-backed securities, and residential mortgage-backed securities—aided relative performance versus its style-specific benchmark, the Bloomberg 1–3 Year U.S. Corporate Bond Index. Security selection among investment-grade and high yield corporate bonds further added to relative gains. Additionally, the portfolio’s slightly shorter-than-benchmark average duration position helped relative performance as U.S. Treasury note and bond yields ended the period higher.
Out-of-benchmark holdings of U.S. Treasuries hindered performance relative to the fund’s style-specific benchmark, as corporate credit spreads tightened.
The fund’s allocation to corporate debt decreased but continued to represent the portfolio’s largest absolute position. As corporate bond valuations tightened early in the period, we focused on additions in ABS. We also added CLOs during the period as spreads tightened elsewhere in fixed income markets.
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 Treasury futures, detracted modestly from 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 |
|---|
| 12/8/20 | 500,000 | 500,000 | 500,000 |
| 2/28/21 | 504,292 | 491,107 | 501,375 |
| 5/31/21 | 506,334 | 490,403 | 502,782 |
| 8/31/21 | 508,512 | 498,419 | 503,129 |
| 11/30/21 | 505,104 | 495,429 | 500,247 |
| 2/28/22 | 498,217 | 478,121 | 493,805 |
| 5/31/22 | 488,450 | 450,082 | 487,789 |
| 8/31/22 | 482,725 | 441,022 | 483,898 |
| 11/30/22 | 478,221 | 431,818 | 482,548 |
| 2/28/23 | 484,094 | 431,639 | 485,408 |
| 5/31/23 | 489,706 | 440,437 | 491,543 |
| 8/31/23 | 494,685 | 435,759 | 495,415 |
| 11/30/23 | 502,230 | 436,913 | 503,510 |
| 2/29/24 | 512,176 | 446,000 | 511,526 |
| 5/31/24 | 518,523 | 446,187 | 517,174 |
202405-3565004, 202407-3567307
Average Annual Total Returns
| 1 Year | Since Inception 12/8/2020 |
|---|
| Short Duration Income Fund (I Class) | 5.88% | 1.05% |
| Bloomberg U.S. Aggregate Bond Index (Regulatory Benchmark) | 1.31 | |
| Bloomberg 1-3 Year U.S. Corporate Bond Index (Strategy Benchmark) | 5.21 | 0.98 |
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?
| Total Net Assets (000s) | $54,942 |
| Number of Portfolio Holdings | 381 |
| Investment Advisory Fees Paid (000s) | $(165) |
| Portfolio Turnover Rate | 88.7% |
What did the fund invest in?
Credit Quality Allocation* (as a % of Net Assets)
| AAA Rated | 18.5% |
| AA Rated | 10.2 |
| A Rated | 17.9 |
| BBB Rated | 23.0 |
| BB Rated and Below | 6.9 |
| Not Rated | 5.7 |
| U.S. Treasury Securities | 14.3 |
| U.S. Government Agency Securities | 4.1 |
| Reserves | -0.6 |
*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 Notes | 13.3% |
| Federal National Mortgage Assn. | 2.0 |
| Federal Home Loan Banks | 1.2 |
| U.S. Treasury Inflation-Indexed Notes | 1.0 |
| Octane Receivables Trust | 1.0 |
| UMBS | 1.0 |
| Crown Castle | 1.0 |
| VF | 0.9 |
| Ford Credit Auto Lease Trust | 0.9 |
| Verus Securitization Trust | 0.8 |
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.
Short Duration Income Fund
I Class (TSIDX)
T. Rowe Price Investment Services, Inc.
100 East Pratt Street
Baltimore, MD 21202
Annual Shareholder Report
May 31, 2024
Short Duration Income Fund
This annual shareholder report contains important information about Short Duration Income 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 |
|---|
| Short Duration Income Fund - Investor Class | $42 | 0.41% |
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 emerging markets debt and securitized sectors—asset-backed securities (ABS), collateralized loan obligations (CLOs), commercial mortgage-backed securities, and residential mortgage-backed securities—aided relative performance versus its style-specific benchmark, the Bloomberg 1–3 Year U.S. Corporate Bond Index. Security selection among investment-grade and high yield corporate bonds further added to relative gains. Additionally, the portfolio’s slightly shorter-than-benchmark average duration position helped relative performance as U.S. Treasury note and bond yields ended the period higher.
Out-of-benchmark holdings of U.S. Treasuries hindered performance relative to the fund’s style-specific benchmark, as corporate credit spreads tightened.
The fund’s allocation to corporate debt decreased but continued to represent the portfolio’s largest absolute position. As corporate bond valuations tightened early in the period, we focused on additions in ABS. We also added CLOs during the period as spreads tightened elsewhere in fixed income markets.
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 Treasury futures, detracted modestly from 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 |
|---|
| 12/8/20 | 10,000 | 10,000 | 10,000 |
| 2/28/21 | 10,083 | 9,822 | 10,028 |
| 5/31/21 | 10,121 | 9,808 | 10,056 |
| 8/31/21 | 10,162 | 9,968 | 10,063 |
| 11/30/21 | 10,091 | 9,909 | 10,005 |
| 2/28/22 | 9,951 | 9,562 | 9,876 |
| 5/31/22 | 9,753 | 9,002 | 9,756 |
| 8/31/22 | 9,637 | 8,820 | 9,678 |
| 11/30/22 | 9,544 | 8,636 | 9,651 |
| 2/28/23 | 9,659 | 8,633 | 9,708 |
| 5/31/23 | 9,779 | 8,809 | 9,831 |
| 8/31/23 | 9,865 | 8,715 | 9,908 |
| 11/30/23 | 10,013 | 8,738 | 10,070 |
| 2/29/24 | 10,209 | 8,920 | 10,231 |
| 5/31/24 | 10,332 | 8,924 | 10,343 |
202405-3565004, 202407-3567307
Average Annual Total Returns
| 1 Year | Since Inception 12/8/2020 |
|---|
| Short Duration Income Fund (Investor Class) | 5.66% | 0.95% |
| Bloomberg U.S. Aggregate Bond Index (Regulatory Benchmark) | 1.31 | |
| Bloomberg 1-3 Year U.S. Corporate Bond Index (Strategy Benchmark) | 5.21 | 0.98 |
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?
| Total Net Assets (000s) | $54,942 |
| Number of Portfolio Holdings | 381 |
| Investment Advisory Fees Paid (000s) | $(165) |
| Portfolio Turnover Rate | 88.7% |
What did the fund invest in?
Credit Quality Allocation* (as a % of Net Assets)
| AAA Rated | 18.5% |
| AA Rated | 10.2 |
| A Rated | 17.9 |
| BBB Rated | 23.0 |
| BB Rated and Below | 6.9 |
| Not Rated | 5.7 |
| U.S. Treasury Securities | 14.3 |
| U.S. Government Agency Securities | 4.1 |
| Reserves | -0.6 |
*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 Notes | 13.3% |
| Federal National Mortgage Assn. | 2.0 |
| Federal Home Loan Banks | 1.2 |
| U.S. Treasury Inflation-Indexed Notes | 1.0 |
| Octane Receivables Trust | 1.0 |
| UMBS | 1.0 |
| Crown Castle | 1.0 |
| VF | 0.9 |
| Ford Credit Auto Lease Trust | 0.9 |
| Verus Securitization Trust | 0.8 |
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.
Short Duration Income Fund
Investor Class (TSDLX)
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.
Financial
Highlights
Portfolio
of
Investments
Financial
Statements
and
Notes
Additional
Fund
Information
Financial
Statements
and
Other
Information
For
more
insights
from
T.
Rowe
Price
investment
professionals,
go
to
troweprice.com
.
T.
ROWE
PRICE
TSDLX
Short
Duration
Income
Fund
–
.
TSIDX
Short
Duration
Income
Fund–
.
I Class
T.
ROWE
PRICE
Short
Duration
Income
Fund
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T.
ROWE
PRICE
Short
Duration
Income
Fund
For
a
share
outstanding
throughout
each
period
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Investor
Class
(1)
..
Year
..
..
Ended
.
12/8/20
(1)
Through
5/31/21
5/31/24
5/31/23
5/31/22
NET
ASSET
VALUE
Beginning
of
period
$
9.23
$
9.51
$
10.05
$
10.00
Investment
activities
Net
investment
income
(2)(3)
0.44
0.31
0.17
0.07
Net
realized
and
unrealized
gain/loss
0.07
(0.29)
(0.53)
0.05
Total
from
investment
activities
0.51
0.02
(0.36)
0.12
Distributions
Net
investment
income
(0.44)
(0.30)
(0.17)
(0.07)
Net
realized
gain
—
—
(0.01)
—
Total
distributions
(0.44)
(0.30)
(0.18)
(0.07)
NET
ASSET
VALUE
End
of
period
$
9.30
$
9.23
$
9.51
$
10.05
Ratios/Supplemental
Data
Total
return
(3)(4)
5.66%
0.26%
(3.64)%
1.21%
Ratios
to
average
net
assets:
(3)
Gross
expenses
before
waivers/payments
by
Price
Associates
1.01%
1.05%
0.97%
1.32%
(5)
Net
expenses
after
waivers/payments
by
Price
Associates
0.41%
0.40%
0.40%
0.40%
(5)
Net
investment
income
4.76%
3.30%
1.72%
1.47%
(5)
Portfolio
turnover
rate
88.7%
96.9%
60.1%
24.7%
Net
assets,
end
of
period
(in
thousands)
$33,978
$29,420
$31,100
$42,912
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)
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.
(5)
Annualized
T.
ROWE
PRICE
Short
Duration
Income
Fund
For
a
share
outstanding
throughout
each
period
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
I
Class
(1)
..
Year
..
..
Ended
.
12/8/20
(1)
Through
5/31/21
5/31/24
5/31/23
5/31/22
NET
ASSET
VALUE
Beginning
of
period
$
9.22
$
9.51
$
10.05
$
10.00
Investment
activities
Net
investment
income
(2)(3)
0.45
0.32
0.19
0.07
Net
realized
and
unrealized
gain/loss
0.08
(0.30)
(0.54)
0.06
Total
from
investment
activities
0.53
0.02
(0.35)
0.13
Distributions
Net
investment
income
(0.45)
(0.31)
(0.18)
(0.08)
Net
realized
gain
—
—
(0.01)
—
Total
distributions
(0.45)
(0.31)
(0.19)
(0.08)
NET
ASSET
VALUE
End
of
period
$
9.30
$
9.22
$
9.51
$
10.05
Ratios/Supplemental
Data
Total
return
(3)(4)
5.88%
0.26%
(3.53)%
1.27%
Ratios
to
average
net
assets:
(3)
Gross
expenses
before
waivers/payments
by
Price
Associates
0.94%
0.97%
0.93%
1.49%
(5)
Net
expenses
after
waivers/payments
by
Price
Associates
0.30%
0.30%
0.29%
0.29%
(5)
Net
investment
income
4.86%
3.41%
1.98%
1.57%
(5)
Portfolio
turnover
rate
88.7%
96.9%
60.1%
24.7%
Net
assets,
end
of
period
(in
thousands)
$20,964
$18,914
$17,250
$251
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)
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.
(5)
Annualized
T.
ROWE
PRICE
Short
Duration
Income
Fund
May
31,
2024
Par/Shares
$
Value
(Amounts
in
000s)
‡
ASSET-BACKED
SECURITIES
28.5%
Car
Loan
9.1%
Ally
Auto
Receivables
Trust
Series 2023-A,
Class
B
6.01%,
1/17/34 (1)
81
81
AmeriCredit
Automobile
Receivables
Trust
Series 2020-2,
Class
D
2.13%,
3/18/26
120
118
Avis
Budget
Rental
Car
Funding
AESOP
Series 2019-3A,
Class
B
2.65%,
3/20/26 (1)
150
147
Avis
Budget
Rental
Car
Funding
AESOP
Series 2020-1A,
Class
B
2.68%,
8/20/26 (1)
100
96
Avis
Budget
Rental
Car
Funding
AESOP
Series 2022-5A,
Class
C
6.24%,
4/20/27 (1)
100
99
Avis
Budget
Rental
Car
Funding
AESOP
Series 2023-2A,
Class
C
6.18%,
10/20/27 (1)
100
99
Bayview
Opportunity
Master
Fund
VII
Series 2024-CAR1,
Class
C,
FRN
SOFR30A
+
1.50%,
6.824%,
12/26/31 (1)
233
233
CarMax
Auto
Owner
Trust
Series 2020-3,
Class
C
1.69%,
4/15/26
50
50
CarMax
Auto
Owner
Trust
Series 2022-4,
Class
D
8.08%,
4/16/29
200
208
CarMax
Auto
Owner
Trust
Series 2023-1,
Class
A2A
5.23%,
1/15/26
52
52
CarMax
Auto
Owner
Trust
Series 2023-2,
Class
D
6.55%,
10/15/29
135
137
Enterprise
Fleet
Financing
Series 2021-2,
Class
A2
0.48%,
5/20/27 (1)
7
6
Enterprise
Fleet
Financing
Series 2021-3,
Class
A2
0.77%,
8/20/27 (1)
10
10
Enterprise
Fleet
Financing
Series 2022-2,
Class
A2
4.65%,
5/21/29 (1)
30
30
T.
ROWE
PRICE
Short
Duration
Income
Fund
Par/Shares
$
Value
(Amounts
in
000s)
‡
Enterprise
Fleet
Financing
Series 2023-2,
Class
A2
5.56%,
4/22/30 (1)
221
221
Exeter
Automobile
Receivables
Trust
Series 2022-1A,
Class
C
2.56%,
6/15/28
177
175
Exeter
Automobile
Receivables
Trust
Series 2022-4A,
Class
D
5.98%,
12/15/28
45
45
Exeter
Automobile
Receivables
Trust
Series 2023-1A,
Class
A3
5.58%,
4/15/26
25
25
Ford
Credit
Auto
Lease
Trust
Series 2022-A,
Class
C
4.18%,
10/15/25
255
253
Ford
Credit
Auto
Lease
Trust
Series 2023-A,
Class
C
5.54%,
12/15/26
230
229
Ford
Credit
Floorplan
Master
Owner
Trust
Series 2023-1,
Class
D
6.62%,
5/15/28 (1)
145
145
Ford
Credit
Floorplan
Master
Owner
Trust
Series 2024-1,
Class
B
5.48%,
4/15/29 (1)
100
100
GM
Financial
Automobile
Leasing
Trust
Series 2022-2,
Class
C
4.33%,
5/20/26
85
84
GM
Financial
Automobile
Leasing
Trust
Series 2022-3,
Class
C
5.13%,
8/20/26
245
243
GM
Financial
Automobile
Leasing
Trust
Series 2024-2,
Class
B
5.56%,
5/22/28
125
125
GM
Financial
Consumer
Automobile
Receivables
Trust
Series 2020-3,
Class
C
1.37%,
1/16/26
30
30
GM
Financial
Consumer
Automobile
Receivables
Trust
Series 2020-4,
Class
C
1.05%,
5/18/26
50
49
GM
Financial
Consumer
Automobile
Receivables
Trust
Series 2023-1,
Class
B
5.03%,
9/18/28
35
35
GM
Financial
Consumer
Automobile
Receivables
Trust
Series 2023-3,
Class
C
5.92%,
2/16/29
45
46
T.
ROWE
PRICE
Short
Duration
Income
Fund
Par/Shares
$
Value
(Amounts
in
000s)
‡
GMF
Floorplan
Owner
Revolving
Trust
Series 2023-1,
Class
B
5.73%,
6/15/28 (1)
230
230
JPMorgan
Chase
Bank
Series 2021-2,
Class
D
1.138%,
12/26/28 (1)
39
38
Navistar
Financial
Dealer
Note
Master
Owner
Trust
Series 2024-1,
Class
C
6.13%,
4/25/29 (1)
35
35
Navistar
Financial
Dealer
Note
Master
Owner
Trust
II
Series 2023-1,
Class
A
6.18%,
8/25/28 (1)
173
174
Nissan
Auto
Lease
Trust
Series 2023-A,
Class
A2A
5.10%,
3/17/25
26
26
Santander
Bank
-
SBCLN
Series 2021-1A,
Class
C
3.268%,
12/15/31 (1)
67
66
Santander
Bank
Auto
Credit-Linked
Notes
Series 2023-B,
Class
D
6.663%,
12/15/33 (1)
250
250
Santander
Consumer
Auto
Receivables
Trust
Series 2021-AA,
Class
D
1.57%,
1/15/27 (1)
100
95
Santander
Consumer
Auto
Receivables
Trust
Series 2021-CA,
Class
C
2.97%,
6/15/28 (1)
118
115
Santander
Retail
Auto
Lease
Trust
Series 2021-C,
Class
D
1.39%,
8/20/26 (1)
350
349
Santander
Retail
Auto
Lease
Trust
Series 2022-B,
Class
A3
3.28%,
11/20/25 (1)
43
43
Santander
Retail
Auto
Lease
Trust
Series 2022-B,
Class
B
3.85%,
3/22/27 (1)
30
30
U.S.
Bank
Series 2023-1,
Class
B
6.789%,
8/25/32 (1)
194
195
Wheels
Fleet
Lease
Funding
1
Series 2024-1A,
Class
A1
5.49%,
2/18/39 (1)
100
100
World
Omni
Auto
Receivables
Trust
Series 2020-C,
Class
C
1.39%,
5/17/27
85
84
5,001
T.
ROWE
PRICE
Short
Duration
Income
Fund
Par/Shares
$
Value
(Amounts
in
000s)
‡
Other
Asset-Backed
Securities
18.4%
Allegro
IX
Series 2018-3A,
Class
B1R,
CLO,
FRN
3M
TSFR
+
1.85%,
7.177%,
10/16/31 (1)
250
250
Amur
Equipment
Finance
Receivables
IX
Series 2021-1A,
Class
D
2.30%,
11/22/27 (1)
260
254
Amur
Equipment
Finance
Receivables
X
Series 2022-1A,
Class
C
2.37%,
4/20/28 (1)
150
143
Amur
Equipment
Finance
Receivables
XI
Series 2022-2A,
Class
A2
5.30%,
6/21/28 (1)
59
59
Amur
Equipment
Finance
Receivables
XIII
Series 2024-1A,
Class
B
5.37%,
1/21/31 (1)
100
99
Apidos
Xxv
Series 2016-25A,
Class
A1R2,
CLO,
FRN
3M
TSFR
+
1.15%,
6.475%,
10/20/31 (1)
234
235
Barings
Series 2018-4A,
Class
BR,
CLO,
FRN
3M
TSFR
+
1.80%,
7.129%,
10/15/30 (1)
250
251
BlueMountain
Series 2016-3A,
Class
A1R2,
CLO,
FRN
3M
TSFR
+
1.20%,
6.522%,
11/15/30 (1)
232
232
CIFC
Funding
Series 2021-4A,
Class
A,
CLO,
FRN
3M
TSFR
+
1.312%,
6.64%,
7/15/33 (1)
250
250
CyrusOne
Data
Centers
Issuer
I
Series 2024-1A,
Class
A2
4.76%,
3/22/49 (1)
30
28
CyrusOne
Data
Centers
Issuer
I
Series 2024-2A,
Class
A2
4.50%,
5/20/49 (1)
135
124
DB
Master
Finance
Series 2019-1A,
Class
A2II
4.021%,
5/20/49 (1)
90
87
Dell
Equipment
Finance
Trust
Series 2024-1,
Class
D
6.12%,
9/23/30 (1)
100
100
DLLAD
Series 2023-1A,
Class
A2
5.19%,
4/20/26 (1)
66
66
DLLAD
Series 2023-1A,
Class
A3
4.79%,
1/20/28 (1)
52
51
T.
ROWE
PRICE
Short
Duration
Income
Fund
Par/Shares
$
Value
(Amounts
in
000s)
‡
Driven
Brands
Funding
Series 2019-2A,
Class
A2
3.981%,
10/20/49 (1)
96
91
Elara
HGV
Timeshare
Issuer
Series 2019-A,
Class
A
2.61%,
1/25/34 (1)
48
46
FirstKey
Homes
Trust
Series 2020-SFR2,
Class
D
1.968%,
10/19/37 (1)
225
211
FOCUS
Brands
Funding
Series 2017-1A,
Class
A2II
5.093%,
4/30/47 (1)
93
90
Hardee's
Funding
Series 2020-1A,
Class
A2
3.981%,
12/20/50 (1)
242
217
Hilton
Grand
Vacations
Trust
Series 2018-AA,
Class
C
4.00%,
2/25/32 (1)
72
70
Hilton
Grand
Vacations
Trust
Series 2019-AA,
Class
B
2.54%,
7/25/33 (1)
61
58
Hilton
Grand
Vacations
Trust
Series 2023-1A,
Class
C
6.94%,
1/25/38 (1)
77
78
Home
Partners
of
America
Trust
Series 2022-1,
Class
D
4.73%,
4/17/39 (1)
96
90
HPEFS
Equipment
Trust
Series 2023-2A,
Class
D
6.97%,
7/21/31 (1)
100
101
Madison
Park
Funding
XXIV
Series 2016-24A,
Class
CR2,
CLO,
FRN
3M
TSFR
+
2.05%,
7.377%,
10/20/29 (1)
250
250
Madison
Park
Funding
XXIX
Series 2018-29A,
Class
BR,
CLO,
FRN
3M
TSFR
+
1.80%,
7.127%,
10/18/30 (1)
250
250
Marble
Point
XII
Series 2018-1A,
Class
A,
CLO,
FRN
3M
TSFR
+
1.272%,
6.599%,
7/16/31 (1)
205
205
Marble
Point
XIV
Series 2018-2A,
Class
A12R,
CLO,
FRN
3M
TSFR
+
1.20%,
6.525%,
1/20/32 (1)
246
247
MMAF
Equipment
Finance
Series 2020-A,
Class
A3
0.97%,
4/9/27 (1)
93
89
T.
ROWE
PRICE
Short
Duration
Income
Fund
Par/Shares
$
Value
(Amounts
in
000s)
‡
MVW
Series 2021-1WA,
Class
C
1.94%,
1/22/41 (1)
38
35
MVW
Series 2021-2A,
Class
C
2.23%,
5/20/39 (1)
97
89
MVW
Series 2023-1A,
Class
C
6.54%,
10/20/40 (1)
146
145
Northwoods
Capital
XIV-B
Series 2018-14BA,
Class
AR,
CLO,
FRN
3M
TSFR
+
1.25%,
6.574%,
11/13/31 (1)
250
251
Oaktree
Series 2022-2A,
Class
A1R,
CLO,
FRN
3M
TSFR
+
1.55%,
6.879%,
7/15/33 (1)
250
250
OCP
Series 2014-7A,
Class
A1RR,
CLO,
FRN
3M
TSFR
+
1.382%,
6.706%,
7/20/29 (1)
126
126
OCP
Series 2017-13A,
Class
A2R,
CLO,
FRN
3M
TSFR
+
1.812%,
7.14%,
7/15/30 (1)
250
250
Octagon
Investment
Partners
29
Series 2016-1A,
Class
AR,
CLO,
FRN
3M
TSFR
+
1.442%,
6.765%,
1/24/33 (1)
250
250
Octagon
Investment
Partners
39
Series 2018-3A,
Class
AR,
CLO,
FRN
3M
TSFR
+
1.15%,
6.475%,
10/20/30 (1)
229
230
Octane
Receivables
Trust
Series 2021-2A,
Class
A
1.21%,
9/20/28 (1)
17
17
Octane
Receivables
Trust
Series 2022-1A,
Class
B
4.90%,
5/22/28 (1)
150
148
Octane
Receivables
Trust
Series 2022-2A,
Class
A
5.11%,
2/22/28 (1)
37
37
Octane
Receivables
Trust
Series 2022-2A,
Class
C
6.29%,
7/20/28 (1)
200
200
Octane
Receivables
Trust
Series 2023-1A,
Class
A
5.87%,
5/21/29 (1)
48
48
Octane
Receivables
Trust
Series 2024-1A,
Class
A2
5.68%,
5/20/30 (1)
100
100
T.
ROWE
PRICE
Short
Duration
Income
Fund
Par/Shares
$
Value
(Amounts
in
000s)
‡
OZLM
Funding
II
Series 2012-2A,
Class
A1A2,
CLO,
FRN
3M
TSFR
+
1.20%,
6.53%,
7/30/31 (1)
214
215
Planet
Fitness
Master
Issuer
Series 2018-1A,
Class
A2II
4.666%,
9/5/48 (1)
194
190
Post
Road
Equipment
Finance
Series 2024-1A,
Class
C
5.81%,
10/15/30 (1)
100
100
Progress
Residential
Trust
Series 2020-SFR2,
Class
A
2.078%,
6/17/37 (1)
199
192
Romark
Series 2018-2A,
Class
A2R,
CLO,
FRN
3M
TSFR
+
1.65%,
7/25/31 (1)(2)
250
250
Sabey
Data
Center
Issuer
Series 2020-1,
Class
A2
3.812%,
4/20/45 (1)
35
34
Sabey
Data
Center
Issuer
Series 2021-1,
Class
A2
1.881%,
6/20/46 (1)
100
91
SCF
Equipment
Leasing
Series 2023-1A,
Class
A3
6.17%,
5/20/32 (1)
235
239
SEB
Funding
Series 2024-1A,
Class
A2
7.386%,
4/30/54 (1)
85
85
Sierra
Timeshare
Receivables
Funding
Series 2019-3A,
Class
A
2.34%,
8/20/36 (1)
13
12
Sierra
Timeshare
Receivables
Funding
Series 2020-2A,
Class
B
2.32%,
7/20/37 (1)
64
62
Sierra
Timeshare
Receivables
Funding
Series 2021-1A,
Class
B
1.34%,
11/20/37 (1)
59
56
Sierra
Timeshare
Receivables
Funding
Series 2021-1A,
Class
C
1.79%,
11/20/37 (1)
20
19
Sierra
Timeshare
Receivables
Funding
Series 2021-2A,
Class
A
1.35%,
9/20/38 (1)
62
59
Symphony
Static
I
Series 2021-1A,
Class
C,
CLO,
FRN
3M
TSFR
+
2.112%,
7.435%,
10/25/29 (1)
250
250
T.
ROWE
PRICE
Short
Duration
Income
Fund
Par/Shares
$
Value
(Amounts
in
000s)
‡
Symphony
XXIII
Series 2020-23A,
Class
BR,
CLO,
FRN
3M
TSFR
+
1.862%,
7.19%,
1/15/34 (1)
250
250
TCI-Flatiron
Series 2018-1A,
Class
BR,
CLO,
FRN
3M
TSFR
+
1.662%,
6.986%,
1/29/32 (1)
250
250
THL
Credit
Wind
River
Series 2015-1A,
Class
A1R3,
CLO,
FRN
3M
TSFR
+
1.20%,
6.525%,
10/20/30 (1)
201
202
TIAA
Series 2016-1A,
Class
ARR,
CLO,
FRN
3M
TSFR
+
1.25%,
6.575%,
7/20/31 (1)
250
251
Tricon
Residential
Trust
Series 2024-SFR2,
Class
A
4.75%,
6/17/40 (1)
100
97
Trinitas
VI
Series 2017-6A,
Class
ARRR,
CLO,
FRN
3M
TSFR
+
1.33%,
1/25/34 (1)(2)
250
250
Verdant
Receivables
Series 2023-1A,
Class
A2
6.24%,
1/13/31 (1)
93
93
Verdant
Receivables
Series 2024-1A,
Class
A2
5.68%,
12/12/31 (1)
100
100
Voya
Series 2018-3A,
Class
BR2,
CLO,
FRN
3M
TSFR
+
1.80%,
7.129%,
10/15/31 (1)
250
250
10,095
Student
Loan
1.0%
Navient
Private
Education
Loan
Trust
Series 2020-A,
Class
A2A
2.46%,
11/15/68 (1)
52
49
Navient
Private
Education
Refi
Loan
Trust
Series 2019-A,
Class
A2A
3.42%,
1/15/43 (1)
26
25
Navient
Private
Education
Refi
Loan
Trust
Series 2019-D,
Class
A2A
3.01%,
12/15/59 (1)
69
66
Navient
Private
Education
Refi
Loan
Trust
Series 2019-GA,
Class
A
2.40%,
10/15/68 (1)
47
44
SMB
Private
Education
Loan
Trust
Series 2016-C,
Class
A2A
2.34%,
9/15/34 (1)
6
6
SMB
Private
Education
Loan
Trust
Series 2017-B,
Class
B
3.50%,
12/16/41 (1)
150
140
T.
ROWE
PRICE
Short
Duration
Income
Fund
Par/Shares
$
Value
(Amounts
in
000s)
‡
SMB
Private
Education
Loan
Trust
Series 2020-A,
Class
A2A
2.23%,
9/15/37 (1)
96
90
SMB
Private
Education
Loan
Trust
Series 2021-A,
Class
A2A1,
FRN
1M
TSFR
+
0.844%,
6.161%,
1/15/53 (1)
142
140
560
Total
Asset-Backed
Securities
(Cost
$15,680)
15,656
BANK
LOANS
1.1%
(3)
Capital
Goods
0.4%
LTI
Holdings,
FRN,
1M
TSFR
+
3.50%,
8.944%,
9/6/25
212
208
208
Communications
0.3%
Altice
France,
FRN,
1M
USD
LIBOR
+
4.00%,
9.584%,
8/14/26
80
64
Clear
Channel
International,
7.50%,
4/1/27 (4)
20
20
CSC
Holdings,
FRN,
1M
USD
LIBOR
+
2.50%,
7.931%,
4/15/27
80
62
146
Consumer
Non-Cyclical
0.2%
Bausch
+
Lomb,
FRN,
1M
TSFR
+
3.25%,
8.67%,
5/10/27
129
128
128
Insurance
0.2%
Asurion,
FRN,
1M
TSFR
+
3.25%,
8.694%,
12/23/26
135
134
134
Total
Bank
Loans
(Cost
$641)
616
CORPORATE
BONDS
36.5%
Banking
10.7%
American
Express,
VR,
5.645%,
4/23/27 (5)
200
201
Banco
de
Bogota,
6.25%,
5/12/26
200
198
Banco
Santander,
2.746%,
5/28/25
200
194
Banco
Santander
Mexico
Institucion
de
Banca
Multiple
Grupo
Financiero
Santand,
5.375%,
4/17/25
150
149
Bank
of
America,
VR,
5.08%,
1/20/27 (5)
150
149
Bank
of
Montreal,
5.30%,
6/5/26
200
200
Bank
of
the
Philippine
Islands,
2.50%,
9/10/24
200
198
Banque
Federative
du
Credit
Mutuel,
4.935%,
1/26/26 (1)
200
198
Barclays,
VR,
5.304%,
8/9/26 (5)
200
199
Barclays,
VR,
7.325%,
11/2/26 (5)
200
203
CaixaBank,
VR,
6.208%,
1/18/29 (1)(5)
200
203
Capital
One
Financial,
VR,
5.70%,
2/1/30 (5)
35
35
T.
ROWE
PRICE
Short
Duration
Income
Fund
Par/Shares
$
Value
(Amounts
in
000s)
‡
Capital
One
Financial,
VR,
6.312%,
6/8/29 (5)
225
229
Danske
Bank,
VR,
5.427%,
3/1/28 (1)(5)
200
200
Fifth
Third
Bancorp,
2.375%,
1/28/25
25
24
Fifth
Third
Bank,
VR,
5.852%,
10/27/25 (5)
250
249
HDFC
Bank,
5.686%,
3/2/26
200
200
HSBC
Holdings,
VR,
5.597%,
5/17/28 (5)
200
201
Huntington
National
Bank,
VR,
5.699%,
11/18/25 (5)
250
249
JPMorgan
Chase,
VR,
5.04%,
1/23/28 (5)
95
94
Lloyds
Banking
Group,
4.50%,
11/4/24
200
198
Lloyds
Banking
Group,
VR,
5.462%,
1/5/28 (5)
200
199
NatWest
Group,
VR,
7.472%,
11/10/26 (5)
200
205
PNC
Financial
Services
Group,
VR,
4.758%,
1/26/27 (5)
120
119
PNC
Financial
Services
Group,
VR,
5.30%,
1/21/28 (5)
30
30
PNC
Financial
Services
Group,
VR,
5.671%,
10/28/25 (5)
135
135
Santander
Holdings
USA,
VR,
6.124%,
5/31/27 (5)
20
20
Societe
Generale,
2.625%,
10/16/24 (1)
200
198
Societe
Generale,
VR,
5.519%,
1/19/28 (1)(5)
200
197
Standard
Chartered,
VR,
5.688%,
5/14/28 (1)(5)
200
199
Standard
Chartered,
VR,
6.17%,
1/9/27 (1)(5)
200
201
Truist
Financial,
VR,
6.047%,
6/8/27 (5)
200
201
U.S.
Bancorp,
VR,
5.384%,
1/23/30 (5)
30
30
UBS
Group,
VR,
4.488%,
5/12/26 (1)(5)
200
198
Wells
Fargo,
VR,
4.54%,
8/15/26 (5)
150
148
5,851
Basic
Industry
1.7%
Celanese
U.S.
Holdings,
6.05%,
3/15/25
42
42
Indorama
Ventures
Global
Services,
4.375%,
9/12/24
200
197
LG
Chem,
4.375%,
7/14/25
200
197
Nutrien,
4.90%,
3/27/28
50
49
POSCO,
5.625%,
1/17/26 (1)
200
200
Sasol
Financing
USA,
4.375%,
9/18/26
260
244
Westlake,
0.875%,
8/15/24
25
25
954
Brokerage
Asset
Managers
Exchanges
0.5%
LPL
Holdings,
5.70%,
5/20/27
50
50
LPL
Holdings,
6.75%,
11/17/28
45
47
LSEGA
Financing,
1.375%,
4/6/26 (1)
200
186
283
Capital
Goods
0.9%
BAE
Systems,
5.00%,
3/26/27 (1)
200
198
Boeing,
6.259%,
5/1/27 (1)
55
55
Carrier
Global,
5.80%,
11/30/25
70
71
Owens
Corning,
5.50%,
6/15/27
50
50
T.
ROWE
PRICE
Short
Duration
Income
Fund
Par/Shares
$
Value
(Amounts
in
000s)
‡
Regal
Rexnord,
6.05%,
2/15/26
75
75
Republic
Services,
4.875%,
4/1/29
20
20
469
Communications
3.0%
American
Tower,
3.55%,
7/15/27
200
190
Axian
Telecom,
7.375%,
2/16/27
200
195
Clear
Channel
Outdoor
Holdings,
5.125%,
8/15/27 (1)
30
28
Crown
Castle,
5.00%,
1/11/28
175
172
Crown
Castle,
5.60%,
6/1/29
105
106
PT
Tower
Bersama
Infrastructure,
4.25%,
1/21/25
200
197
Sable
International
Finance,
5.75%,
9/7/27 (1)
200
191
SBA
Tower
Trust,
6.599%,
1/15/28 (1)
115
117
Take-Two
Interactive
Software,
5.00%,
3/28/26
150
149
Townsquare
Media,
6.875%,
2/1/26 (1)
165
161
Warnermedia
Holdings,
3.755%,
3/15/27
155
147
1,653
Consumer
Cyclical
4.1%
Advance
Auto
Parts,
5.90%,
3/9/26
140
140
Allied
Universal
Holdco,
6.625%,
7/15/26 (1)
6
6
Carnival,
7.625%,
3/1/26 (1)
145
146
CEC
Entertainment,
6.75%,
5/1/26 (1)
75
74
Daimler
Truck
Finance
North
America,
5.00%,
1/15/27 (1)
150
149
Daimler
Truck
Finance
North
America,
5.15%,
1/16/26 (1)
150
149
Ford
Motor
Credit,
5.125%,
6/16/25
200
198
Ford
Motor
Credit,
6.798%,
11/7/28
200
207
General
Motors
Financial,
5.40%,
4/6/26
155
154
General
Motors
Financial,
5.40%,
5/8/27
80
80
General
Motors
Financial,
5.55%,
7/15/29
45
45
Hyundai
Capital
America,
5.50%,
3/30/26 (1)
80
80
Hyundai
Capital
America,
5.65%,
6/26/26 (1)
200
200
Hyundai
Capital
America,
6.25%,
11/3/25 (1)
50
50
Life
Time,
5.75%,
1/15/26 (1)
76
75
Marriott
International,
4.90%,
4/15/29
21
21
O'Reilly
Automotive,
5.75%,
11/20/26
30
30
Tapestry,
7.05%,
11/27/25
20
20
VF,
2.40%,
4/23/25
150
145
VF,
2.80%,
4/23/27
100
91
Volkswagen
Group
of
America
Finance,
6.00%,
11/16/26 (1)
200
202
2,262
Consumer
Non-Cyclical
2.7%
Brunswick,
0.85%,
8/18/24
115
114
Campbell
Soup,
5.20%,
3/19/27
60
60
CHS,
8.00%,
3/15/26 (1)
59
59
T.
ROWE
PRICE
Short
Duration
Income
Fund
Par/Shares
$
Value
(Amounts
in
000s)
‡
CSL
Finance,
3.85%,
4/27/27 (1)
25
24
HCA,
5.25%,
4/15/25
200
199
Hikma
Finance
USA,
3.25%,
7/9/25
200
193
Icon
Investments
Six,
5.809%,
5/8/27
200
202
IQVIA,
6.25%,
2/1/29
65
66
Legacy
LifePoint
Health,
4.375%,
2/15/27 (1)
140
132
Mattel,
5.875%,
12/15/27 (1)
150
149
Solventum,
5.45%,
2/25/27 (1)
105
105
Teva
Pharmaceutical
Finance
Netherlands
III,
3.15%,
10/1/26
185
172
1,475
Electric
2.2%
AES,
3.30%,
7/15/25 (1)
100
97
American
Electric
Power,
5.20%,
1/15/29
105
104
American
Electric
Power,
5.699%,
8/15/25
90
90
Constellation
Energy
Generation,
3.25%,
6/1/25
200
195
DTE
Energy,
STEP,
4.22%,
11/1/24
65
64
Engie
Energia
Chile,
4.50%,
1/29/25
200
199
NRG
Energy,
3.75%,
6/15/24 (1)
150
150
Pacific
Gas
&
Electric,
3.50%,
6/15/25
100
98
PacifiCorp,
5.10%,
2/15/29
30
30
Southern,
STEP,
4.475%,
8/1/24
125
125
Vistra
Operations,
5.125%,
5/13/25 (1)
58
58
1,210
Energy
2.5%
Columbia
Pipelines
Holding,
6.055%,
8/15/26 (1)
5
5
Continental
Resources,
3.80%,
6/1/24
50
50
Crescent
Energy
Finance,
9.25%,
2/15/28 (1)
120
127
Diamondback
Energy,
5.20%,
4/18/27
40
40
Enbridge,
5.90%,
11/15/26
60
61
Enbridge,
6.00%,
11/15/28
50
51
Energy
Transfer,
2.90%,
5/15/25
100
97
GS
Caltex,
1.625%,
7/27/25
200
191
Medco
Oak
Tree,
7.375%,
5/14/26
200
202
ONEOK,
5.55%,
11/1/26
60
60
Southwestern
Energy,
8.375%,
9/15/28
175
180
TER
Finance
Jersey,
Series 21,
Zero
Coupon,
1/2/25 (1)(4)
100
96
Williams,
5.30%,
8/15/28
200
200
1,360
Finance
Companies
1.4%
AerCap
Ireland
Capital,
1.65%,
10/29/24
215
211
AerCap
Ireland
Capital,
6.10%,
1/15/27
150
152
Avolon
Holdings
Funding,
3.95%,
7/1/24 (1)
100
100
Avolon
Holdings
Funding,
6.375%,
5/4/28 (1)
115
117
T.
ROWE
PRICE
Short
Duration
Income
Fund
Par/Shares
$
Value
(Amounts
in
000s)
‡
GATX,
5.40%,
3/15/27
40
40
Navient,
5.00%,
3/15/27
85
81
OneMain
Finance,
3.50%,
1/15/27
85
78
779
Financial
Other
0.7%
Emaar
Sukuk,
3.635%,
9/15/26
200
191
EMG
SUKUK,
4.564%,
6/18/24
200
200
391
Industrial
Other
0.7%
Albion
Financing
1,
6.125%,
10/15/26 (1)
200
198
Bidvest
Group
U.K.,
3.625%,
9/23/26
200
186
384
Insurance
2.7%
Athene
Global
Funding,
1.716%,
1/7/25 (1)
225
219
Athene
Global
Funding,
5.684%,
2/23/26 (1)
230
229
CNO
Global
Funding,
1.65%,
1/6/25 (1)
150
146
CNO
Global
Funding,
1.75%,
10/7/26 (1)
150
137
Corebridge
Financial,
3.65%,
4/5/27
200
191
Corebridge
Global
Funding,
5.20%,
1/12/29 (1)
40
40
Humana,
1.35%,
2/3/27
70
63
Humana,
5.75%,
3/1/28
25
25
Jackson
National
Life
Global
Funding,
5.50%,
1/9/26 (1)
175
174
Jackson
National
Life
Global
Funding,
5.60%,
4/10/26 (1)
250
250
1,474
Natural
Gas
0.4%
Engie,
5.25%,
4/10/29 (1)
200
199
NiSource,
5.25%,
3/30/28
25
25
224
Real
Estate
Investment
Trusts
0.6%
MPT
Operating
Partnership,
5.00%,
10/15/27 (6)
95
77
MPT
Operating
Partnership,
5.25%,
8/1/26 (6)
115
104
Park
Intermediate
Holdings,
7.50%,
6/1/25 (1)
95
95
Service
Properties
Trust,
4.75%,
10/1/26
69
65
341
Technology
1.4%
Atlassian,
5.25%,
5/15/29
40
40
CA
Magnum
Holdings,
5.375%,
10/31/26
200
191
Foundry
JV
Holdco,
5.90%,
1/25/30 (1)
200
203
Micron
Technology,
5.375%,
4/15/28
150
150
SK
Hynix,
6.25%,
1/17/26 (1)
200
202
786
Transportation
0.3%
Penske
Truck
Leasing,
5.35%,
1/12/27 (1)
40
40
T.
ROWE
PRICE
Short
Duration
Income
Fund
Par/Shares
$
Value
(Amounts
in
000s)
‡
Penske
Truck
Leasing,
5.75%,
5/24/26 (1)
105
105
145
Total
Corporate
Bonds
(Cost
$20,088)
20,041
FOREIGN
GOVERNMENT
OBLIGATIONS
&
MUNICIPALITIES
2.5%
Government
Sponsored
0.4%
MEGlobal
Canada,
5.00%,
5/18/25
200
198
198
Owned
No
Guarantee
2.1%
Axiata,
4.357%,
3/24/26
200
196
Bank
Mandiri
Persero,
5.50%,
4/4/26
200
200
Bank
Negara
Indonesia
Persero,
3.75%,
3/30/26
200
192
DAE
Funding,
1.55%,
8/1/24
200
198
QNB
Finance,
1.375%,
1/26/26
200
187
State
Bank
of
India,
1.80%,
7/13/26
200
185
1,158
Total
Foreign
Government
Obligations
&
Municipalities
(Cost
$1,373)
1,356
NON-U.S.
GOVERNMENT
MORTGAGE-BACKED
SECURITIES
8.8%
Collateralized
Mortgage
Obligations
3.6%
Barclays
Mortgage
Loan
Trust
Series 2021-NQM1,
Class
A3,
CMO,
ARM
2.189%,
9/25/51 (1)
62
54
Bellemeade
Re
Series 2022-1,
Class
M1B,
CMO,
ARM
SOFR30A
+
2.15%,
7.474%,
1/26/32 (1)
300
302
COLT
Mortgage
Loan
Trust
Series 2020-3,
Class
A1,
CMO,
ARM
1.506%,
4/27/65 (1)
12
11
Connecticut
Avenue
Securities
Trust
Series 2021-R01,
Class
1M2,
CMO,
ARM
SOFR30A
+
1.55%,
6.874%,
10/25/41 (1)
194
195
Deephaven
Residential
Mortgage
Trust
Series 2021-1,
Class
A3,
CMO,
ARM
1.128%,
5/25/65 (1)
21
20
Flagstar
Mortgage
Trust
Series 2019-1INV,
Class
A11,
CMO,
ARM
1M
TSFR
+
1.064%,
5.50%,
10/25/49 (1)
15
14
T.
ROWE
PRICE
Short
Duration
Income
Fund
Par/Shares
$
Value
(Amounts
in
000s)
‡
Flagstar
Mortgage
Trust
Series 2020-1INV,
Class
A11,
CMO,
ARM
1M
TSFR
+
0.964%,
6.00%,
3/25/50 (1)
27
25
Freddie
Mac
Whole
Loan
Securities
Trust
Series 2017-SC02,
Class
M1,
CMO,
ARM
3.869%,
5/25/47 (1)
160
153
JPMorgan
Mortgage
Trust
Series 2019-INV2,
Class
A3,
CMO,
ARM
3.50%,
2/25/50 (1)
76
68
New
Residential
Mortgage
Loan
Trust
Series 2021-NQ1R,
Class
A3,
CMO,
ARM
1.198%,
7/25/55 (1)
50
44
OBX
Trust
Series 2019-EXP3,
Class
1A9,
CMO,
ARM
3.50%,
10/25/59 (1)
114
101
OBX
Trust
Series 2019-INV1,
Class
A3,
CMO,
ARM
4.50%,
11/25/48 (1)
25
24
OBX
Trust
Series 2019-INV2,
Class
A25,
CMO,
ARM
4.00%,
5/27/49 (1)
41
37
OBX
Trust
Series 2020-EXP1,
Class
2A1B,
CMO,
ARM
1M
TSFR
+
0.864%,
6.189%,
2/25/60 (1)
68
65
OBX
Trust
Series 2023-NQM10,
Class
A2,
CMO,
STEP
6.92%,
10/25/63 (1)
91
92
Radnor
RE
Series 2021-2,
Class
M1A,
CMO,
ARM
SOFR30A
+
1.85%,
7.174%,
11/25/31 (1)
10
10
Starwood
Mortgage
Residential
Trust
Series 2020-INV1,
Class
A3,
CMO,
ARM
1.593%,
11/25/55 (1)
19
17
Structured
Agency
Credit
Risk
Debt
Notes
Series 2021-DNA5,
Class
M2,
CMO,
ARM
SOFR30A
+
1.65%,
6.974%,
1/25/34 (1)
55
55
Structured
Agency
Credit
Risk
Debt
Notes
Series 2023-HQA3,
Class
A1,
CMO,
ARM
SOFR30A
+
1.85%,
7.174%,
11/25/43 (1)
98
99
Structured
Agency
Credit
Risk
Debt
Notes
Series 2024-HQA1,
Class
A1,
CMO,
ARM
SOFR30A
+
1.25%,
6.574%,
3/25/44 (1)
148
148
Verus
Securitization
Trust
Series 2019-4,
Class
A1,
CMO,
STEP
3.642%,
11/25/59 (1)
6
6
T.
ROWE
PRICE
Short
Duration
Income
Fund
Par/Shares
$
Value
(Amounts
in
000s)
‡
Verus
Securitization
Trust
Series 2019-INV3,
Class
A3,
CMO,
ARM
4.10%,
11/25/59 (1)
76
73
Verus
Securitization
Trust
Series 2020-1,
Class
A3,
CMO,
STEP
3.724%,
1/25/60 (1)
62
60
Verus
Securitization
Trust
Series 2021-2,
Class
A3,
CMO,
ARM
1.545%,
2/25/66 (1)
124
108
Verus
Securitization
Trust
Series 2023-8,
Class
A2,
CMO,
STEP
6.664%,
12/25/68 (1)
104
104
Verus
Securitization
Trust
Series 2023-INV3,
Class
A2,
CMO,
ARM
7.33%,
11/25/68 (1)
110
111
1,996
Commercial
Mortgage-Backed
Securities
5.1%
Alen
Mortgage
Trust
Series 2021-ACEN,
Class
A,
ARM
1M
TSFR
+
1.264%,
6.581%,
4/15/34 (1)
100
91
BANK
Series 2019-BN23,
Class
A1
1.975%,
12/15/52
1
1
Benchmark
Mortgage
Trust
Series 2024-V6,
Class
A1
5.568%,
10/15/28
97
97
BFLD
Series 2019-DPLO,
Class
D,
ARM
1M
TSFR
+
1.954%,
7.271%,
10/15/34 (1)
100
100
BX
Commercial
Mortgage
Trust
Series 2024-MDHS,
Class
B,
ARM
1M
TSFR
+
1.841%,
7.191%,
5/15/41 (1)
200
200
BX
Trust
Series 2021-ARIA,
Class
C,
ARM
1M
TSFR
+
1.76%,
7.077%,
10/15/36 (1)
160
158
CD
Mortgage
Trust
Series 2016-CD1,
Class
B,
ARM
3.077%,
8/10/49
100
76
Citigroup
Commercial
Mortgage
Trust
Series 2013-375P,
Class
B,
ARM
3.518%,
5/10/35 (1)
150
144
Citigroup
Commercial
Mortgage
Trust
Series 2016-C1,
Class
AS
3.514%,
5/10/49
200
189
Cold
Storage
Trust
Series 2020-ICE5,
Class
A,
ARM
1M
TSFR
+
1.014%,
6.334%,
11/15/37 (1)
98
98
T.
ROWE
PRICE
Short
Duration
Income
Fund
Par/Shares
$
Value
(Amounts
in
000s)
‡
Cold
Storage
Trust
Series 2020-ICE5,
Class
C,
ARM
1M
TSFR
+
1.764%,
7.084%,
11/15/37 (1)
147
147
Commercial
Mortgage
Trust
Series 2014-UBS2,
Class
B
4.701%,
3/10/47
17
16
Commercial
Mortgage
Trust
Series 2017-PANW,
Class
D,
ARM
3.935%,
10/10/29 (1)
109
97
Eleven
Madison
Mortgage
Trust
Series 2015-11MD,
Class
A,
ARM
3.555%,
9/10/35 (1)
170
162
Federal
Home
Loan
Mortgage
Multifamily
Structured
PTC
Series K060,
Class
A1
2.958%,
7/25/26
71
69
Federal
Home
Loan
Mortgage
Multifamily
Structured
PTC
Series K084,
Class
A2,
ARM
3.78%,
10/25/28
250
239
Federal
Home
Loan
Mortgage
Multifamily
Structured
PTC
Series K085,
Class
A2,
ARM
4.06%,
10/25/28
106
102
HILT
Commercial
Mortgage
Trust
Series 2024-ORL,
Class
C,
ARM
1M
TSFR
+
2.44%,
7.74%,
5/15/37 (1)
105
105
JPMorgan
Chase
Commercial
Mortgage
Securities
Trust
Series 2018-WPT,
Class
BFL,
ARM
1M
TSFR
+
1.489%,
6.812%,
7/5/33 (1)
59
52
JPMorgan
Chase
Commercial
Mortgage
Securities
Trust
Series 2020-609M,
Class
B,
ARM
1M
TSFR
+
2.134%,
7.451%,
10/15/33 (1)
100
93
LSTAR
Commercial
Mortgage
Trust
Series 2015-3,
Class
B,
ARM
3.117%,
4/20/48 (1)
92
90
MARQ
Trust
Series 2024-HOU,
Class
B,
ARM
1M
TSFR
+
2.091%,
7.41%,
6/15/29 (1)
100
100
MED
Commercial
Mortgage
Trust
Series 2024-MOB,
Class
A,
ARM
1M
TSFR
+
1.592%,
6.908%,
5/15/41 (1)
100
100
Morgan
Stanley
Bank
of
America
Merrill
Lynch
Trust
Series 2015-C24,
Class
AS,
ARM
4.036%,
5/15/48
190
182
SDR
Commercial
Mortgage
Trust
Series 2024-DSNY,
Class
B,
ARM
1M
TSFR
+
1.741%,
7.041%,
5/15/39 (1)
100
100
2,808
T.
ROWE
PRICE
Short
Duration
Income
Fund
Par/Shares
$
Value
(Amounts
in
000s)
‡
Residential
Mortgage
0.1%
Finance
of
America
HECM
Buyout
Series 2022-HB2,
Class
A1A,
ARM
4.00%,
8/1/32 (1)
53
53
53
Total
Non-U.S.
Government
Mortgage-Backed
Securities
(Cost
$5,041)
4,857
U.S.
GOVERNMENT
&
AGENCY
MORTGAGE-BACKED
SECURITIES
4.1%
U.S.
Government
Agency
Obligations
3.7%
Federal
Home
Loan
Mortgage,
UMBS
6.00%,
2/1/53
-
4/1/54
382
385
Federal
National
Mortgage
Assn.,
UMBS
4.50%,
10/1/37
225
220
5.50%,
8/1/53
-
3/1/54
369
363
6.00%,
7/1/53
-
8/1/53
355
357
6.50%,
1/1/54
178
181
UMBS,
TBA (7)
5.00%,
6/1/54
285
274
5.50%,
6/1/54
275
271
2,051
U.S.
Government
Obligations
0.4%
Government
National
Mortgage
Assn.
6.00%,
2/20/40
-
12/20/40
200
208
208
Total
U.S.
Government
&
Agency
Mortgage-Backed
Securities
(Cost
$2,265)
2,259
U.S.
GOVERNMENT
AGENCY
OBLIGATIONS
(EXCLUDING
MORTGAGE-BACKED)
15.5%
Government
Sponsored
1.2%
Federal
Home
Loan
Banks,
5.00%,
2/28/25
630
628
628
U.S.
Treasury
Obligations
14.3%
U.S.
Treasury
Inflation-Indexed
Notes,
2.375%,
10/15/28
546
552
U.S.
Treasury
Notes,
4.125%,
6/15/26
270
266
U.S.
Treasury
Notes,
4.25%,
1/31/26
255
252
U.S.
Treasury
Notes,
4.375%,
8/15/26
500
495
U.S.
Treasury
Notes,
4.50%,
11/15/25
685
680
U.S.
Treasury
Notes,
4.50%,
3/31/26
1,155
1,147
T.
ROWE
PRICE
Short
Duration
Income
Fund
Par/Shares
$
Value
(Amounts
in
000s)
‡
U.S.
Treasury
Notes,
4.625%,
2/28/25 (8)
200
199
U.S.
Treasury
Notes,
4.625%,
2/28/26
350
348
U.S.
Treasury
Notes,
4.625%,
10/15/26 (8)
195
194
U.S.
Treasury
Notes,
4.875%,
4/30/26
850
850
U.S.
Treasury
Notes,
5.00%,
9/30/25
1,015
1,014
U.S.
Treasury
Notes,
5.00%,
10/31/25
1,875
1,873
7,870
Total
U.S.
Government
Agency
Obligations
(Excluding
Mortgage-Backed)
(Cost
$8,512)
8,498
SHORT-TERM
INVESTMENTS
5.2%
Commercial
Paper
3.6%
4(2)
3.6%(9)
Crown
Castle,
5.88%,
7/9/24
250
248
Harley
Davidson
Financial
Services,
5.975%,
6/7/24
300
300
International
Flavors
&
Fragrances,
6.075%,
6/24/24
300
299
Ovintiv
Canada,
6.108%,
6/20/24
300
299
Targa
Resources,
6.04%,
7/10/24
300
298
VF,
6.456%,
7/23/24
250
248
Walgreens
Boots
Alliance,
6.432%,
7/1/24
300
298
1,990
Money
Market
Funds
1.6%
T.
Rowe
Price
Government
Reserve
Fund,
5.39% (10)(11)
868
868
868
Total
Short-Term
Investments
(Cost
$2,858)
2,858
SECURITIES
LENDING
COLLATERAL
0.3%
INVESTMENTS
IN
A
POOLED
ACCOUNT
THROUGH
SECURITIES
LENDING
PROGRAM
WITH
STATE
STREET
BANK
AND
TRUST
COMPANY 0.3%
Money
Market
Funds 0.3%
T.
Rowe
Price
Government
Reserve
Fund,
5.39% (10)(11)
179
179
Total
Investments
in
a
Pooled
Account
through
Securities
Lending
Program
with
State
Street
Bank
and
Trust
Company
179
Total
Securities
Lending
Collateral
(Cost
$179)
179
T.
ROWE
PRICE
Short
Duration
Income
Fund
(Amounts
in
000s,
except
for
contracts)
OPTIONS
PURCHASED 0.0%
Exchange-Traded
Options
Purchased
0.0%
Description
Contracts
Notional
Amount
$
Value
U.S.
Treasury
5-Year
Notes
Futures,
Call,
6/21/24
@
$107.50 (12)
38
4,020
2
Total
Options
Purchased
(Cost
$8)
2
Total
Investments
in
Securities
102.5%
of
Net
Assets
(Cost
$56,645)
$
56,322
‡
Par/Shares
and
Notional
Amount
are
denominated
in
U.S.
dollars
unless
otherwise
noted.
(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
$24,845
and
represents
45.2%
of
net
assets.
(2)
All
or
a
portion
of
this
loan
is
unsettled
as
of
May
31,
2024.
The
interest
rate
for
unsettled
loans
will
be
determined
upon
settlement
after
period
end.
(3)
Bank
loan
positions
may
involve
multiple
underlying
tranches.
In
those
instances,
the
position
presented
reflects
the
aggregate
of
those
respective
underlying
tranches
and
the
rate
presented
reflects
the
weighted
average
rate
of
the
settled
positions.
(4)
See
Note
2.
Level
3
in
fair
value
hierarchy.
(5)
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.
(6)
See
Note
4
.
All
or
a
portion
of
this
security
is
on
loan
at
May
31,
2024.
(7)
See
Note
4
.
To-Be-Announced
purchase
commitment.
Total
value
of
such
securities
at
period-end
amounts
to
$545
and
represents
1.0%
of
net
assets.
(8)
At
May
31,
2024,
all
or
a
portion
of
this
security
is
pledged
as
collateral
and/
or
margin
deposit
to
cover
future
funding
obligations.
(9)
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
$1,990
and
represents
3.6%
of
net
assets.
(10)
Seven-day
yield
(11)
Affiliated
Companies
(12)
Non-income
producing
T.
ROWE
PRICE
Short
Duration
Income
Fund
.
.
.
.
.
.
.
.
.
.
1M
TSFR
One
month
term
SOFR
(Secured
overnight
financing
rate)
1M
USD
LIBOR
One
month
USD
LIBOR
(London
interbank
offered
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
CMO
Collateralized
Mortgage
Obligation
FRN
Floating
Rate
Note
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.
TBA
To-Be-Announced
UMBS
Uniform
Mortgage-Backed
Securities
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
Short
Duration
Income
Fund
(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:
Markit
CDX.NA.IG-S42,
5
Year
Index),
Receive
1.00%
Quarterly,
Pay
upon
credit
default,
6/20/29
816
20
16
4
Total
Centrally
Cleared
Credit
Default
Swaps,
Protection
Sold
4
Total
Centrally
Cleared
Swaps
4
Net
payments
(receipts)
of
variation
margin
to
date
(4)
Variation
margin
receivable
(payable)
on
centrally
cleared
swaps
$
—
**
Includes
interest
purchased
or
sold
but
not
yet
collected
of
$1.
T.
ROWE
PRICE
Short
Duration
Income
Fund
FUTURES
CONTRACTS
($000s)
Expiration
Date
Notional
Amount
Value
and
Unrealized
Gain
(Loss)
Short,
8
U.S.
Treasury
Notes
five
year
contracts
9/24
(846)
$
(2)
Short,
8
U.S.
Treasury
Notes
ten
year
contracts
9/24
(870)
1
Long,
76
U.S.
Treasury
Notes
two
year
contracts
9/24
15,481
6
Short,
5
Ultra
U.S.
Treasury
Notes
ten
year
contracts
9/24
(560)
2
Net
payments
(receipts)
of
variation
margin
to
date
(3)
Variation
margin
receivable
(payable)
on
open
futures
contracts
$
4
T.
ROWE
PRICE
Short
Duration
Income
Fund
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%
$
—
$
—
$
37++
Totals
$
—#
$
—
$
37+
Supplementary
Investment
Schedule
Affiliate
Value
05/31/23
Purchase
Cost
Sales
Cost
Value
05/31/24
T.
Rowe
Price
Government
Reserve
Fund,
5.39%
$
145
¤
¤
$
1,047
Total
$
1,047^
#
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
$37
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
$1,047.
T.
ROWE
PRICE
Short
Duration
Income
Fund
May
31,
2024
Statement
of
Assets
and
Liabilities
($000s,
except
shares
and
per
share
amounts)
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Assets
Investments
in
securities,
at
value
(cost
$56,645)
$
56,322
Interest
receivable
397
Receivable
for
investment
securities
sold
80
Receivable
for
shares
sold
35
Due
from
affiliates
16
Variation
margin
receivable
on
futures
contracts
4
Other
assets
24
Total
assets
56,878
Liabilities
Payable
for
investment
securities
purchased
1,622
Obligation
to
return
securities
lending
collateral
179
Investment
management
fees
payable
13
Payable
for
shares
redeemed
9
Other
liabilities
113
Total
liabilities
1,936
Commitments
and
Contingent
Liabilities
(note
6
)
NET
ASSETS
$
54,942
Net
Assets
Consist
of:
Total
distributable
earnings
(loss)
$
(3,777)
Paid-in
capital
applicable
to
5,907,676
shares
of
$0.01
par
value
capital
stock
outstanding;
6,000,000,000
shares
authorized
58,719
NET
ASSETS
$
54,942
NET
ASSET
VALUE
PER
SHARE
Investor
Class
(Net
assets:
$33,978;
Shares
outstanding:
3,653,234)
$
9.30
I
Class
(Net
assets:
$20,964;
Shares
outstanding:
2,254,442)
$
9.30
T.
ROWE
PRICE
Short
Duration
Income
Fund
Year
Ended
5/31/24
Investment
Income
(Loss)
Income
Interest
$
2,558
Dividend
37
Securities
lending
3
Total
income
2,598
Expenses
Investment
management
144
Shareholder
servicing
Investor
Class
$
29
I
Class
6
35
Prospectus
and
shareholder
reports
Investor
Class
10
I
Class
3
13
Custody
and
accounting
194
Registration
50
Legal
and
audit
39
Miscellaneous
18
Waived
/
paid
by
Price
Associates
(309)
Total
expenses
184
Net
investment
income
2,414
T.
ROWE
PRICE
Short
Duration
Income
Fund
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
(510)
Futures
(309)
Swaps
(25)
Options
written
10
Net
realized
loss
(834)
Change
in
net
unrealized
gain
/
loss
Securities
1,173
Futures
35
Swaps
11
Change
in
net
unrealized
gain
/
loss
1,219
Net
realized
and
unrealized
gain
/
loss
385
INCREASE
IN
NET
ASSETS
FROM
OPERATIONS
$
2,799
T.
ROWE
PRICE
Short
Duration
Income
Fund
Statement
of
Changes
in
Net
Assets
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Year
.
.
.
.
.
.
.
.
.
.
.
.
.
.
Ended
.
.
.
.
.
.
.
.
.
.
.
.
.
.
5/31/24
5/31/23
Increase
(Decrease)
in
Net
Assets
Operations
Net
investment
income
$
2,414
$
1,581
Net
realized
loss
(834)
(1,768)
Change
in
net
unrealized
gain
/
loss
1,219
314
Increase
in
net
assets
from
operations
2,799
127
Distributions
to
shareholders
Net
earnings
Investor
Class
(1,485)
(977)
I
Class
(921)
(582)
Decrease
in
net
assets
from
distributions
(2,406)
(1,559)
Capital
share
transactions
*
Shares
sold
Investor
Class
11,735
13,697
I
Class
9,290
9,222
Distributions
reinvested
Investor
Class
604
367
I
Class
803
486
Shares
redeemed
Investor
Class
(8,036)
(14,842)
I
Class
(8,181)
(7,514)
Increase
in
net
assets
from
capital
share
transactions
6,215
1,416
Net
Assets
Increase
(decrease)
during
period
6,608
(16)
Beginning
of
period
48,334
48,350
End
of
period
$
54,942
$
48,334
*Share
information
(000s)
Shares
sold
Investor
Class
1,269
1,479
I
Class
1,001
996
Distributions
reinvested
Investor
Class
65
40
I
Class
87
53
Shares
redeemed
Investor
Class
(869)
(1,601)
I
Class
(885)
(812)
Increase
in
shares
outstanding
668
155
T.
ROWE
PRICE
Short
Duration
Income
Fund
NOTES
TO
FINANCIAL
STATEMENTS
T.
Rowe
Price
Short-Term
Bond
Fund,
Inc. (the
corporation) is
registered
under
the
Investment
Company
Act
of
1940
(the
1940
Act).
The
Short
Duration
Income
Fund
(the
fund)
is a
diversified, open-end
management
investment
company
established
by
the
corporation.
The
fund
seeks
to
provide
income
consistent
with
limited
fluctuation
in
principal
value
and
liquidity.
The
fund
has two classes
of
shares:
the
Short
Duration
Income
Fund
(Investor
Class)
and
the
Short
Duration
Income
Fund–I
Class
(I
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. Each
class
has
exclusive
voting
rights
on
matters
related
solely
to
that
class;
separate
voting
rights
on
matters
that
relate
to
both
classes;
and,
in
all
other
respects,
the
same
rights
and
obligations
as
the
other
class.
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. Inflation
adjustments
to
the
principal
amount
of
inflation-indexed
bonds
are
reflected
as
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
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
T.
ROWE
PRICE
Short
Duration
Income
Fund
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. 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.
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.
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
T.
ROWE
PRICE
Short
Duration
Income
Fund
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
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.
T.
ROWE
PRICE
Short
Duration
Income
Fund
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.
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;
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.
T.
ROWE
PRICE
Short
Duration
Income
Fund
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):
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
($000s)
Level
1
Level
2
Level
3
Total
Value
Assets
Fixed
Income
Securities
1
$
—
$
32,626
$
—
$
32,626
Bank
Loans
—
596
20
616
Corporate
Bonds
—
19,945
96
20,041
Short-Term
Investments
868
1,990
—
2,858
Securities
Lending
Collateral
179
—
—
179
Options
Purchased
2
—
—
2
Total
Securities
1,049
55,157
116
56,322
Swaps*
—
4
—
4
Futures
Contracts*
9
—
—
9
Total
$
1,058
$
55,161
$
116
$
56,335
Liabilities
Futures
Contracts*
$
2
$
—
$
—
$
2
1
Includes
Asset-Backed
Securities,
Foreign
Government
Obligations
&
Municipalities,
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.
T.
ROWE
PRICE
Short
Duration
Income
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:
($000s)
Location
on
Statement
of
Assets
and
Liabilities
Fair
Value*
Assets
Interest
rate
derivatives
Futures,
Securities^
$
11
Credit
derivatives
Centrally
Cleared
Swaps
4
^
,*
Total
$
15
^
,*
Liabilities
Interest
rate
derivatives
Futures
$
2
Total
$
2
*
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.
T.
ROWE
PRICE
Short
Duration
Income
Fund
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
exchange-traded
and/or
centrally
cleared
derivative
contracts,
such
as
futures,
exchange-traded
options,
and
centrally
cleared
swaps.
Counterparty
risk
on
such
derivatives
is
minimal
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.
^
Options
purchased
are
reported
as
securities
and
are
reflected
in
the
accompanying
Portfolio
of
Investments.
($000s)
Location
of
Gain
(Loss)
on
Statement
of
Operations
Securities^
Options
Written
Futures
Swaps
Total
Realized
Gain
(Loss)
Interest
rate
derivatives
$
(34)
$
10
$
(309)
$
—
$
(333)
Foreign
exchange
derivatives
(6)
—
—
—
(6)
Credit
derivatives
—
—
—
(25)
(25)
Total
$
(40)
$
10
$
(309)
$
(25)
$
(364)
Change
in
Unrealized
Gain
(Loss)
Interest
rate
derivatives
$
(4)
$
—
$
35
$
—
$
31
Credit
derivatives
—
—
—
11
11
Total
$
(4)
$
—
$
35
$
11
$
42
^
Options
purchased
are
reported
as
securities.
T.
ROWE
PRICE
Short
Duration
Income
Fund
Collateral may
be
in
the
form
of
cash
or
debt
securities
issued
by
the
U.S.
government
or
related
agencies.
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.
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.
This
ability
is
subject
to
the
liquidity
of
underlying
positions. As
of
May
31,
2024,
securities
valued
at $120,000
had
been
posted
by
the
fund
for
exchange-traded
and/or
centrally
cleared
derivatives.
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
23%
and
32%
of
net
assets.
T.
ROWE
PRICE
Short
Duration
Income
Fund
Options
The
fund
is
subject
to interest
rate
risk
and
foreign
currency
exchange
rate
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
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,
currency
options
give
the
holder
the
right,
but
not
the
obligation,
to
buy
and
sell
currency
at
a
specified
exchange
rate;
although
certain
currency
options
may
be
settled
by
exchanging
only
the
net
gain
or
loss
on
the
contract.
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. 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
currency
values;
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
8%
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
T.
ROWE
PRICE
Short
Duration
Income
Fund
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
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 $816,000
(1.5%
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
T.
ROWE
PRICE
Short
Duration
Income
Fund
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
4%
of
net
assets.
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.
Emerging
and
Frontier
Markets
The fund
invests,
either
directly
or
through
investments
in
other
T.
Rowe
Price
funds,
in
securities
of
companies
located
in,
issued
by
governments
of,
or
denominated
in
or
linked
to
the
currencies
of
emerging
and
frontier
market
countries.
Emerging
markets,
and
to
a
greater
extent
frontier
markets, tend
to
have
economic
structures
that
are
less
diverse
and
mature,
less
developed
legal
and
regulatory
regimes,
and
political
systems
that
are
less
stable,
than
those
of
developed
countries.
These
markets
may
be
subject
to
greater
political,
economic,
and
social
uncertainty
and
differing
accounting
standards
and
regulatory
environments
that
may
potentially
impact
the
fund’s
ability
to
buy
or
sell
certain
securities
or
repatriate
proceeds
to
U.S.
dollars.
Emerging
markets
securities
exchanges
are
more
likely
to
experience
delays
with
the
clearing
and
settling
of
trades,
as
well
as
the
custody
of
holdings
by
local
banks,
agents,
and
depositories.
Such
securities
are
often
subject
to
greater
price
volatility,
less
liquidity,
and
higher
rates
of
inflation
than
U.S.
securities.
Investing
in
frontier
markets
is
typically
significantly
riskier
than
investing
in
other
countries,
including
emerging
markets.
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.
T.
ROWE
PRICE
Short
Duration
Income
Fund
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.
TBA
Purchase,
Sale
Commitments
and
Forward
Settling
Mortgage
Obligations
The
fund
enters
into
to-be-announced
(TBA)
purchase
or
sale
commitments
(collectively,
TBA
transactions),
pursuant
to
which
it
agrees
to
purchase
or
sell,
respectively,
mortgage-backed
securities
for
a
fixed
unit
price,
with
payment
and
delivery
at
a
scheduled
future
date
beyond
the
customary
settlement
period
for
such
securities.
With
TBA
transactions,
the
particular
securities
to
be
received
or
delivered
by
the
fund
are
not
identified
at
the
trade
date;
however,
the
securities
must
meet
specified
terms,
including
rate
and
mortgage
term,
and
be
within
industry-accepted
“good
delivery”
standards.
The
fund
may
enter
into
TBA
transactions
with
the
intention
of
taking
possession
of
or
relinquishing
the
underlying
securities,
may
elect
to
extend
the
settlement
by
“rolling”
the
transaction,
and/or
may
use
TBA
transactions
to
gain
or
reduce
interim
exposure
to
underlying
securities.
To
mitigate
counterparty
risk,
the
fund
has
entered
into
Master
Securities
Forward
Transaction
Agreements
(MSFTA)
with
counterparties
that
provide
for
collateral
and
the
right
to
offset
amounts
due
to
or
from
those
counterparties
under
specified
conditions.
Subject
to
minimum
transfer
amounts,
collateral
requirements
are
determined
and
transfers
made
based
on
the
net
aggregate
T.
ROWE
PRICE
Short
Duration
Income
Fund
unrealized
gain
or
loss
on
all
TBA
commitments
and
other
forward
settling
mortgage
obligations
with
a
particular
counterparty
(collectively,
MSFTA
Transactions).
At
any
time,
the
fund’s
risk
of
loss
from
a
particular
counterparty
related
to
its
MSFTA
Transactions
is
the
aggregate
unrealized
gain
on
appreciated
MSFTA
Transactions
in
excess
of
unrealized
loss
on
depreciated
MSFTA
Transactions
and
collateral
received,
if
any,
from
such
counterparty. As
of
May
31,
2024,
no
collateral
was
pledged
by
the
fund
or
counterparties
for
MSFTA
Transactions.
Bank
Loans
The
fund
invests
in
bank
loans,
which
represent
an
interest
in
amounts
owed
by
a
borrower
to
a
syndicate
of
lenders.
Bank
loans
are
generally
noninvestment
grade
and
often
involve
borrowers
whose
financial
condition
is
highly
leveraged.
The
fund
may
invest
in
fixed
and
floating
rate
loans,
which
may
include
senior
floating
rate
loans;
secured
and
unsecured
loans,
second
lien
or
more
junior
loans;
and
bridge
loans
or
bridge
facilities.
Certain
bank
loans
may
be
revolvers
which
are
a
form
of
senior
bank
debt,
where
the
borrower
can
draw
down
the
credit
of
the
revolver
when
it
needs
cash
and
repays
the
credit
when
the
borrower
has
excess
cash.
Certain
loans
may
be
“covenant-lite”
loans,
which
means
the
loans
contain
fewer
maintenance
covenants
than
other
loans
(in
some
cases,
none)
and
do
not
include
terms
which
allow
the
lender
to
monitor
the
performance
of
the
borrower
and
declare
a
default
if
certain
criteria
are
breached.
As
a
result
of
these
risks,
the
fund’s
exposure
to
losses
may
be
increased.
Bank
loans
may
be
in
the
form
of
either
assignments
or
participations.
A
loan
assignment
transfers
all
legal,
beneficial,
and
economic
rights
to
the
buyer,
and
transfer
typically
requires
consent
of
both
the
borrower
and
agent.
In
contrast,
a
loan
participation
generally
entitles
the
buyer
to
receive
the
cash
flows
from
principal,
interest,
and
any
fee
payments
on
a
portion
of
a
loan;
however,
the
seller
continues
to
hold
legal
title
to
that
portion
of
the
loan.
As
a
result,
the
buyer
of
a
loan
participation
generally
has
no
direct
recourse
against
the
borrower
and
is
exposed
to
credit
risk
of
both
the
borrower
and
seller
of
the
participation.
Bank
loans
often
have
extended
settlement
periods,
generally
may
be
repaid
at
any
time
at
the
option
of
the
borrower,
and
may
require
additional
principal
to
be
funded
at
the
borrowers’
discretion
at
a
later
date
(e.g.
unfunded
commitments
and
revolving
debt
instruments).
Until
settlement,
the
fund
maintains
liquid
assets
sufficient
to
settle
its
unfunded
loan
commitments.
The
fund
reflects
both
the
funded
portion
of
a
bank
loan
as
well
as
its
unfunded
commitment
in
the
Portfolio
of
Investments.
However,
if
a
credit
agreement
provides
no
initial
T.
ROWE
PRICE
Short
Duration
Income
Fund
funding
of
a
tranche,
and
funding
of
the
full
commitment
at
a
future
date(s)
is
at
the
borrower’s
discretion
and
considered
uncertain,
a
loan
is
reflected
in
the
Portfolio
of
Investments
only
if,
and
only
to
the
extent
that,
the
fund
has
actually
settled
a
funding
commitment.
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
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
$175,000;
the
value
of
cash
collateral
and
related
investments
was
$179,000.
Other
Purchases
and
sales
of
portfolio
securities
other
than
in-kind
transactions,
if
any,
short-term and
U.S.
government
securities
aggregated $26,173,000 and
$22,701,000,
respectively,
for
the
year ended
May
31,
2024.
Purchases
and
sales
of
U.S.
government
securities
aggregated
$22,255,000 and
$19,903,000,
respectively,
for
the
year ended
May
31,
2024.
T.
ROWE
PRICE
Short
Duration
Income
Fund
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.
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:
($000s)
May
31,
2024
May
31,
2023
Ordinary
income
(including
short-term
capital
gains,
if
any)
$
2,406
$
1,559
($000s)
Cost
of
investments
$
56,661
Unrealized
appreciation
$
206
Unrealized
depreciation
(523)
Net
unrealized
appreciation
(depreciation)
$
(317)
T.
ROWE
PRICE
Short
Duration
Income
Fund
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
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,
which
is
computed
daily
and
paid
monthly.
The
fee
is
determined
by
applying
a
group
fee
rate
to
the
fund’s
average
daily
net
assets.
The
group
fee
rate
is
calculated
based
on
the
combined
net
assets
of
certain
mutual
funds
sponsored
by
Price
Associates
(the
group)
applied
to
a
graduated
fee
schedule,
with
rates
ranging
from
0.48%
for
the
first
$1
billion
of
assets
to
0.260%
for
assets
in
excess
of
$845
billion. At
May
31,
2024,
the
effective
annual
group
fee
rate
was
0.29%.
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
($000s)
Overdistributed
ordinary
income
$
(9)
Net
unrealized
appreciation
(depreciation)
(317)
Loss
carryforwards
and
deferrals
(3,451)
Total
distributable
earnings
(loss)
$
(3,777)
T.
ROWE
PRICE
Short
Duration
Income
Fund
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
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.
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
and
remain
subject
to
repayment
by
the
fund.
Including these
amounts,
expenses
previously
waived/paid
by
Price
Associates
in
the
amount
of $901,000 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.
T.
ROWE
PRICE
Short
Duration
Income
Fund
In
addition,
the
fund
has
entered
into
service
agreements
with
Price
Associates
and
a
wholly
owned
subsidiary
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.
For
the
year
ended
May
31,
2024,
expenses
incurred
pursuant
to
these
service
agreements
were
$106,000
for
Price
Associates
and
$22,000
for
T.
Rowe
Price
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
1,975,000
shares
of
the
Investor
Class,
representing
54%
of
the
Investor
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
Investor
Class
I
Class
Expense
limitation/I
Class
Limit
0.40%
0.01%
Expense
limitation
date
09/30/25
09/30/25
(Waived)/repaid
during
the
period
($000s)
$(188)
$(121)
T.
ROWE
PRICE
Short
Duration
Income
Fund
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.
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
Short
Duration
Income
Fund
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
Short
Duration
Income
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
Short
Duration
Income
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
years
ended
May
31,
2024,
2023
and
2022,
and
for
the
period
December
8,
2020
(inception)
through
May
31,
2021
(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
years
ended
May
31,
2024,
2023
and
2022,
and
for
the
period
December
8,
2020
(inception)
through
May
31,
2021,
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
Short
Duration
Income
Fund
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
custodian,
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
Short
Duration
Income
Fund
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),
$2,372,000
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
Short
Duration
Income
Fund
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
Short
Duration
Income
Fund
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
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.
While
the
Board
did
not
review
information
regarding
T.
ROWE
PRICE
Short
Duration
Income
Fund
profits
realized
from
managing
the
fund
in
particular
because
the
fund
had
either
not
achieved
sufficient
portfolio
asset
size
or
not
recognized
sufficient
revenues
to
produce
meaningful
profit
margin
percentages,
the
Board
concluded
that
the
Adviser’s
profits
were
reasonable
in
light
of
the
services
provided
to
the
T.
Rowe
Price
funds.
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
for
investment
management
services
composed
of
a
group
fee
rate
based
on
the
combined
average
net
assets
of
most
of
the
T.
Rowe
Price
funds
(including
the
fund)
that
declines
at
certain
asset
levels
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.
The
group
fee
rate
decreases
as
total
T.
Rowe
Price
fund
assets
grow,
which
reduces
the
management
fee
rate
for
any
fund
that
has
a
group
fee
component
to
its
management
fee,
and
reflects
that
certain
resources
utilized
to
operate
the
fund
are
shared
with
other
T.
Rowe
Price
funds,
thus
allowing
shareholders
of
those
funds
to
share
potential
economies
of
scale.
The
fund’s
shareholders
benefit
from
potential
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
protect
shareholders
from
relatively
high
expenses
until
the
fund
reaches
greater
scale
and
mitigate
the
potential
for
an
increase
in
operating
expenses
above
a
certain
level
that
could
impact
shareholders.
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
T.
ROWE
PRICE
Short
Duration
Income
Fund
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
third
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
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.
T.
ROWE
PRICE
Short
Duration
Income
Fund
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).
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.
F1305-050
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.
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 Short Duration Income 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 | | |
