T. Rowe Price Associates Inc., which manages a family of 50 mutual funds, is adding six more to its brood.
The Baltimore-based company yesterday began offering a new group of fixed-income funds for wealthier investors. The new Summit funds require a minimum initial investment of $25,000.
In return for the high balance requirement, the no-load Summit funds will offer lower-than-average annual fees, according to a T. Rowe Price spokeswoman, Jane White. While the company's average bond fund charges annual fees of about 0.80 percent of assets under management, the Summit funds' fees will range from 0.45 percent to 0.60 percent, Ms. White said.
Money magazine reported last year that the average taxable bond fund charged annual fees of 1.03 percent, compared with 0.69 percent for tax-exempt bonds, and 0.60 percent for money market funds.
Lower expenses are more important to investors in bond funds because the expenses usually represent a higher proportion of the funds' total returns than with stock funds.
Summit customers won't have to pay more for various services, such as check-writing privileges, or switching money between funds, the company said.
The Summit family will include three tax-free funds -- municipal money market; municipal intermediate; and municipal income -- and three taxable funds, including cash reserves; limited-term bonds; and a fund that invests in securities of the General National Mortgage Association (Ginnie Mae).