T. Rowe Price Ultra Short-Term Bond ETF

T. Rowe Price Ultra Short-Term Bond ETF (TBUX) is an actively managed fund that holds short-term, investment-grade bonds: corporate debt, short-term company IOUs, Treasuries, and mortgage- and asset-backed securities. It aims to pay more income than cash while its price moves very little. Its deepest drop since its 2021 launch was 1.8%. Its 0.17% yearly fee is below the 0.21% average of similar funds, but Vanguard's VUSB charges 0.10%.

• Over the year to Oct 27, 2026, TBUX returned +4.0%, 1st of 8 among similar funds.
• Its 5-year annualized return was +4.2%.
• Its worst full calendar year was 2022 (-0.1%); its best was 2023 (+6.4%).
• The deepest fall in its price history was 1.8% (Nov 4, 2021 to Jun 28, 2022), recovered by Jan 12, 2023.

As of Aug 31, 2026, the fund held 646 securities; the ten largest made up 9.31% of assets.

The bonds mature in 5.3 years on average (weighted by size), with an average coupon of 3.86%.

• Over the three months to Aug 31, 2026, investors added a net $372.4M (creations minus redemptions, per the N-PORT report).
• Monthly total returns reported for that quarter: +0.27%, +0.34%, +0.37%.

TBUX does not track an index. T. Rowe Price's portfolio managers choose the bonds. At least 80% of net assets goes into bonds. Every security must be rated investment grade when bought, meaning in one of the four highest credit rating categories from at least one rating agency. The fund does not have to sell a bond that is later downgraded. A single bond can mature in up to five years, but the dollar-weighted average effective maturity is normally kept at 1.5 years or less. That short average limits how much prices fall when interest rates rise.

Buying decisions follow the managers' views on interest rates, the economy, and bond prices, yields and credit quality. If they expect rates to fall, they may buy longer-dated bonds. If they expect rates to rise, they shift shorter. Portfolio turnover was 77.5%, so holdings change often. As of August 31, 2026, the fund held 646 securities, and the top 10 made up just 9.31% of assets. Company debt made up 90.53%, with 5.46% in US Treasuries.

The fund also uses derivatives, which are contracts whose value depends on another asset. Interest rate futures adjust duration, which measures how sensitive the fund is to rate changes. Credit default swap indexes manage credit risk. Currency forwards protect bonds priced in other currencies, such as a Japanese Treasury bill it held. Derivatives made up about 0.05% of assets as of August 31, 2026.

• TBUX charges 0.17% a year, versus an average of 0.21% for the similar funds below (3rd of 8, cheapest first).
• Using the prospectus's standard example, $10,000 invested would cost about $17 in the first year and $217 over 10 years (assuming a 5% annual return).

It aims for steady income with very small price swings, so it may suit money set aside for near-term spending rather than long-term growth.

TBUX launched in September 2021, so it has no record from the 2008 financial crisis or the 2020 COVID crash. In the 2022 bear market, rising rates pushed bond prices down. TBUX fell 1.6% at its worst and had recovered by January 2023. Its deepest drop overall was 1.8%, and it took about 6.5 months to recover. Its worst calendar year was 2022, at -0.12%. For someone who has to sell shares in a bad year, that history points to small losses, but not zero.

The fund pays income monthly. Its trailing 12-month yield was 4.74% as of October 27, 2026. Payouts would likely shrink if short-term rates fall. The SEC's standard example puts the cost at $17 for the first year on $10,000. The fund offers little long-term growth. Past results don't predict the future, and a plan should look at the whole portfolio, not one fund.

Matched by bond funds with the closest average maturity and issuer mix (N-PORT).