Fellow Shareholders
Market Environment
Global interest rates declined throughout the world in 1993, and, excluding
the rise in the U.S. market, the final quarter was no exception. The currency
markets were again volatile, particularly within the Exchange Rate Mechanism
(ERM). Overall, the yen was the strongest currency in 1993, but it weakened in
the final quarter as the U.S. dollar took over as the favoured currency.
European currencies also weakened versus the dollar, particularly the
high-yielding Italian lira and Spanish peseta.
The scenario of contracting or feeble economic growth combined with
benign inflation fueled the global bond rally. The fourth quarter reductions
in short-term rates (outside the U.S.) resulted in yields falling across all
maturities on the yield curve. The U.S. market experienced a significant
reversal in the fourth quarter. Ten-year yields rose nearly 50 basis points
(one-half of one percentage point) as signs of an accelerating economy emerged
when consumer spending maintained the momentum which developed in the third
quarter. The strength in consumer expenditures exceeded market forecasts,
especially for auto and housing sales, and the market sold off (yields rose
and prices declined) on concerns that the higher economic recovery rate would
lead to a rise in interest rates and a reversal of the good inflation numbers.
European economies have suffered under high real (inflation adjusted)
interest rates which have curtailed investment plans. This situation finally
led to sharp declines in short-term interest rates and substantial price
increases during 1993. The German market led the way in the final quarter
based on an improvement in inflation plus evidence that the economy was
failing to rebound convincingly which allowed the Bundesbank to reduce
official short-term rates by 70 basis points.
Although the German bond market appreciated nicely, the other European
markets performed even better. The weakness of the deutschemark in foreign
exchange markets
World Government Bond
Market Performance
Periods Ended 12/31/93
3 Months 12 Months
__________________ __________________
In Local In U.S. In Local In U.S.
Currency Dollars Currency Dollars
_______ _______ _______ _______
Australia 2.39% 7.80% 18.00% 16.21%
Belgium 7.36 4.82 14.86 5.63
Canada 4.95 5.88 16.05 11.42
Denmark 4.09 0.77 21.42 12.14
France 4.01 0.24 21.09 13.10
Germany 3.87 - 2.30 15.06 7.31
Italy 4.15 - 3.31 31.89 14.04
Japan 4.97 - 0.25 13.63 27.12
The Netherlands 4.18 - 1.55 17.25 9.84
Spain 6.09 - 2.17 31.36 5.55
Sweden 5.62 2.81 20.69 2.47
United Kingdom 7.15 5.86 22.00 19.45
United States - 0.19 - 0.19 10.06 10.06
Source: J. P. Morgan
increased speculation that other European central bankers would take the
opportunity to reduce their rates independently. Yield considerations
dominated everyone's thinking, temporarily overshadowing domestic factors.
This was most noticeable in Belgium where investors overlooked news that
long-awaited cuts in social security spending would not be as large as
anticipated. Better than expected inflation numbers in The Netherlands also
failed to entice investors into the Dutch market. After initially trading
well, Denmark's bond market lost ground due solely to typical year-end
liquidity pressures, while the French market was cheered by the successful
conclusion to the recent GATT negotiations and closed at virtually a zero
spread differential to Germany. Yields in the UK gilt market fell across the
board as investors digested the extent of the fiscal tightening proposed by
the government and the continuing good news on inflation.
The Japanese bond market also performed strongly with 10-year yields
falling over one-half percentage point during the fourth quarter. Further
signs of a weak economy, particularly in consumer spending, added to the
bullish sentiment. The government's inability to pass another fiscal package
led to the belief that any economic recovery would be deferred.
In the currency markets, the yen was supported for much of 1993 by
Japan's huge trade surplus, an appreciation at first encouraged by the U.S.
Administration in an effort to cause the Japanese Government to open up its
domestic markets to foreign competition and reduce Japan's competitive
advantage. As the currency threatened to break the (yen)100 level, however,
the U.S. authorities were satisfied and encouraged a more stable currency.
The dollar strengthened versus European currencies on the combination of
stronger U.S. growth and a narrowing in the interest rate differential between
the U.S. and Europe.
Short-Term Global Income Fund
Performance Comparison
Periods Ended 12/31/93
3 Months 12 Months
______________________
Short-Term Global
Income Fund 2.25% 7.87%
Lipper Short World
Multi-Market
Income Funds Average 1.26 5.41
The Fund's exposure continued to be concentrated on short maturity
European bonds, where the reduction in rates continued to push prices of these
bonds higher. Within Europe the portfolio was split between the "core" markets
and the higher-yielding markets of Spain, Italy and Sweden. Italian bonds
proved the best performers. Following a sharp rise in yields and decline in
prices during November, investors took advantage of the lower prices and a
better tone in the foreign exchange value of the lira. All the European bond
exposure was hedged back into U.S. dollars, so the Fund's principal value did
not suffer from the dollar's strength.
Positions in dollar-related markets remained constant. In the U.S.,
concern that the Fed might tighten led to a low exposure (5%). However, good
fundamentals in Canada and Australia caused us to maintain 11% and 6% of
assets in these markets, respectively. The Fund also kept a small 2.5%
position in Mexico where the NAFTA vote underpinned the peso.
Global Government Bond Fund
Performance Comparison
Periods Ended 12/31/93
3 Months 12 Months
_________________________
Global Government
Bond Fund 0.54% 11.15%
J.P. Morgan Global
Government Bond Index
(unhedged) 0.24 12.27
J.P. Morgan Global
Government Bond Index
(fully hedged) 2.06 12.16
This Fund's performance over the last quarter was somewhat disappointing
both in absolute terms and relative to the hedged index. In absolute terms,
the weak performance of the U.S. Treasury market and the strength of the U.S.
dollar provided a negative contribution. In relative terms, the strength of
the dollar during the quarter undermined the performance in the local markets.
The exposure in the U.S. bond market was primarily at the longer end of
the yield curve. Concern that the Fed might raise rates to counter any
inflationary spike led us to avoid securities with shorter maturities. In
Europe, the emphasis was on intermediate bonds in "core" and higher-yielding
markets, in the latter case Italy in particular. In Japan, we concentrated on
the longer end of the market, because Japanese short rates at below 3% offered
little value and domestic institutions appeared to be keen buyers of the
longer end, pushing yields down and prices up.
We reduced the portfolio's exposure to the dollar at the beginning of
the quarter, but its strength led us to increase the hedges back
into the U.S. currency later in the period. This unfortunately was a partial
contributor to the Fund's underperformance.
While the Fund's prospectus states the Fund will normally hedge
approximately 50% of its non-dollar holdings back to the U.S. dollar, we
advised shareholders in the September report that the Fund's Board of
Directors had approved a change. Hedges back to the dollar now vary depending
on market conditions.
Investment Outlook
Although global economic growth is likely to accelerate in 1994 from its tepid
pace in 1993, we believe the scenario for non-U.S. fixed-income investments
remains attractive. The intermediate end of the U.S. market, which saw yields
rise a half percentage point in the last quarter, could rise further if the
Federal Reserve takes pre-emptive action to counteract any rise in inflation.
A rise in short rates may not hurt the long end of the market, where real
yields remain fair value, so we expect the yield curve to flatten.
In Europe, short-term interest rates should continue to fall in 1994.
Although the markets are now becoming more bullish on expectations for
declines, we think the market still underestimates the likely trough in rates
and the potential for rates to stay at low levels. The squeeze on real incomes
in Germany and continued corporate restructuring in Europe suggest that growth
will disappoint once again and will not put upward pressure on rates,
particularly in light of the high unemployment in much of Continental Europe.
Although no early economic recovery is foreseen, the bottom in the
Japanese interest rate cycle is expected to occur in mid-1994.
As interest rate differentials between the United States and Europe
continue to narrow during 1994, attention in the foreign exchange markets will
likely switch to growth prospects and political developments. The U.S. dollar
looks to be a beneficiary in this environment, and we anticipate a modest
rally over 1994 for the currency, particularly against the yen where the
protection of a huge trade surplus is likely to begin to erode. German
elections could cause nervousness from time to time, compounding the pressure
emanating from the weak growth picture in Europe.
With stable to falling rates called for in most major bond markets,
returns should continue to be favourable in 1994.
Respectfully submitted,
David P. Boardman
Executive Vice President
January 28, 1994
Officers and Directors
M. David Testa, Chairman
Martin G. Wade, President/Director
David P. Boardman, Executive Vice President
Leo C. Bailey, Director
Anthony W. Deering, Director
Donald W. Dick, Jr., Director
Addison Lanier, Director
Christopher D. Alderson, Vice President
Peter B. Askew, Vice President
Richard J. Bruce, Vice President
Robert P. Campbell, Vice President
Mark J. T. Edwards, Vice President
John R. Ford, Vice President
Henry H. Hopkins, Vice President
Robert C. Howe, Vice President
Stephen Ilott, Vice President
George A. Murnaghan, Vice President
James S. Riepe, Vice President
Christopher Rothery, Vice President
Charles H. Salisbury, Jr., Vice President
James B. M. Seddon, Vice President
Charles P. Smith, Vice President
Benedict R. F. Thomas, Vice President
Peter Van Dyke, Vice President
David J. L. Warren, Vice President
William F. Wendler II, Vice President
Edward A. Wiese, Vice President
Lenora V. Hornung, Secretary
Carmen F. Deyesu, Treasurer
David S. Middleton, Controller
Officers and Directors
Statistical Highlights
T. Rowe Price Short-Term Global Income Fund / December 31, 1993
Key Statistics*
Dividend Yield Periods Ended 12/31/93
_________________________ ______________________
7 Days 6.24%
3 Months 6.26
12 Months 6.99
Dividend Per Share
_________________________
3 Months $0.08
12 Months 0.32
Change in Per-Share Value
_________________________
From Sept. 30, 1993 to Dec. 31, 1993
(From $4.79 to $4.82) 0.63%
From Dec. 31, 1992 to Dec. 31, 1993
(From $4.78 to $4.82) 0.84%
Net Assets $97.1 Million
*Dividends earned and reinvested for the periods indicated are annualized and
divided by the average daily net asset values per share for the same period.
Income return and principal value represent past performance and will vary.
Shares may be worth more or less at redemption than at original purchase.
Maturity Diversification
Percent of Net Assets
Range 12/31/92 9/30/93 12/31/93
_______________________ _______ _______ _______
Short-Term
(0 to 1 Year) 18% 18% 21%
Short Intermediate-
Term (1+ to 5 Years) 79 80 79
Long Intermediate-
Term (5+ to 10 Years) 3 2 0
Long-Term
(over 10 Years) 0 0 0
Weighted Average
Maturity (Years) 1.9 2.6 2.6
Quality Diversification
Percent of Net Assets
RPFI Quality Rating* 12/31/92 9/30/93 12/31/93
_______________________ _______ _______ _______
1 31% 44% 38%
2 60 49 54
3 5 4 6
4 & below 4 3 2
Weighted Average Quality 2.0 1.7 1.7
*On a scale of 1 to 10, with Grade 1 representing highest quality.
Geographical Diversification
Net
Portfolio Holdings - Currency
Country/Currency Local Market Terms Exposure
______________ _________________ ________
United States 9.0% 94.8%
Mexico 2.5 2.5
Germany 3.8 1.7
Greece 1.5 1.5
Canada 10.7 1.4
Australia 6.0 1.2
Denmark 4.2 0.8
United Kingdom 5.3 0.4
Italy 8.9 0.4
Ireland 5.2 0.1
Netherlands 4.1 (0.1)
Sweden 8.8 (0.4)
European Currency Unit 3.2 (0.8)
Belgium 3.8 (1.4)
France 9.4 (2.2)
Spain 8.8 (4.3)
Total 95.2 95.6
Other Assets Less Liabilities 4.8 4.4
Net Assets 100.0% 100.0%
Holdings expressed in local market terms have been adjusted to reflect
currency holdings and the use of currency hedges (forward currency exchange
contracts) to produce the net currency exposure of the portfolio.
Statistical Highlights
T. Rowe Price Global Government Bond Fund / December 31, 1993
Key Statistics*
Dividend Yield Periods Ended 12/31/93
_________________________ ______________________
7 Days 5.18%
3 Months 5.18
12 Months 5.71
Dividend Per Share
_________________________
3 Months $0.14
12 Months 0.56
Change in Per-Share Value
_________________________
From Sept. 30, 1993 to Dec. 31, 1993
(From $10.44 to $10.08) - 3.45%
From Dec. 31, 1992 to Dec. 31, 1993
(From $9.85 to $10.08) 2.34%
Net Assets $48.8 Million
*Dividends earned and reinvested for the periods indicated are annualized and
divided by the average daily net asset values per share for the same period.
Income return and principal value represent past performance and will vary.
Shares may be worth more or less at redemption than at original purchase.
Maturity Diversification
Percent of Net Assets
Range 12/31/92 9/30/93 12/31/93
_______________________ _______ _______ _______
Short-Term
(0 to 1 Year) 4% 4% 6%
Short Intermediate-
Term (1+ to 5 Years) 42 40 38
Long Intermediate-
Term (5+ to 10 Years) 54 48 45
Long-Term
(over 10 Years) 0 8 11
Weighted Average
Maturity (Years) 5.5 7.8 7.5
Quality Diversification
Percent of Net Assets
RPFI Quality Rating* 12/31/92 9/30/93 12/31/93
_______________________ _______ _______ _______
1 70% 80% 74%
2 30 20 26
Weighted Average Quality 2.0 1.2 1.3
*On a scale of 1 to 10, with Grade 1 representing highest quality.
Geographical Diversification
Net
Portfolio Holdings - Currency
Country/Currency Local Market Terms Exposure
______________ _________________ ________
United States 28.9% 62.8%
Germany 7.9 7.8
Italy 7.5 7.5
United Kingdom 6.6 5.2
Japan 12.0 5.1
Canada 5.1 4.5
Denmark 3.8 3.8
France 10.0 2.8
Australia 1.0 1.0
Netherlands 6.2 0.9
Sweden 3.4 0.1
Belgium 2.5 (1.2)
Spain 3.0 (2.4)
Total 97.9 97.9
Other Assets Less Liabilities 2.1 2.1
Net Assets 100.0% 100.0%
Holdings expressed in local market terms have been adjusted to reflect
currency holdings and the use of currency hedges (forward currency exchange
contracts) to produce the net currency exposure of the portfolio.
Chart 1 - T. Rowe Price Short-Term Global Income Fund
Total Return Performance
Periods ended December 31, 1993
1 Year Since Inception 6/30/92*
________ ________________________
7.87% 5.01%
*Average Annual Compound Total Return
Income return and principal value represent past performance and will vary.
Shares may be worth more or less at redemption than at original purchase.
Chart 2 - T. Rowe Price Global Government Bond Fund
Total Return Performance
Periods ended December 31, 1993
1 Year Since Inception 12/28/90*
________ ________________________
11.15% 8.51%
*Average Annual Compound Total Return
Income return and principal value represent past performance and will vary.
Shares may be worth more or less at redemption than at original purchase.
Investment Records
Per-Share Data
The following tables show the investment records of one share purchased at the
original offering prices of $5.00 for the T. Rowe Price Short-Term Global
Income Fund, and $10.00 for the T. Rowe Price Global Government Bond Fund.
Over the time periods covered in each table, interest rates have been
volatile. The results shown should not be considered a representation of the
dividend income or capital gain or loss which may be realized from an
investment made in the Funds today.
T. Rowe Price Short-Term Global Income Fund
Capital With With Dividends
Year Net Asset Income Gain Dividends and Capital Gains
Ended Value Dividends Distributions** Reinvested Reinvested
______ ________ ________ _______________ _________ ________________
1992* $4.78 $0.20 $0.0137 $4.97 $4.99
1993 4.82 0.32 5.37 5.38
Total $0.52 $0.0137
* From inception 6/30/92 to 12/31/92.
** Includes short-term capital gain of $0.0137 in 1992.
T. Rowe Price Global Government Bond Fund
Capital With With Dividends
Year Net Asset Income Gain Dividends and Capital Gains
Ended Value Dividends Distributions** Reinvested Reinvested
______ ________ ________ _______________ _________ ________________
1991* 10.30 $0.77 11.13 11.13
1992 9.85 0.76 $0.01 11.48 11.49
1993 10.08 0.56 0.28 12.42 12.77
Total $2.09 $0.29
* From inception 12/28/90 to 12/31/90.
** Includes short-term capital gain of $0.07 in 1993.
Portfolio of Investments! (Value in thousands)
T. Rowe Price Short-Term Global Income Fund / December 31, 1993
AUSTRALIA - 6.0%
Value
________
GOVERNMENT BONDS
AUD 4,000,000 Commonwealth of Australia,
12.50%, 9/15/97. . . . . . $ 3,293
3,400,000 South Australia Financial
Authority, 13.00%,
7/15/95. . . . . . . . . . 2,563
Total Australia 5,856
BELGIUM - 3.8%
GOVERNMENT BONDS
BEL 25,000,000 Obligation Lineaire,
10.00%, 4/5/96 . . . . . . 751
95,000,000 Obligation Lineaire,
9.25%, 1/2/98. . . . . . . 2,936
Total Belgium 3,687
CANADA - 10.7%
GOVERNMENT BONDS
CAD 3,300,000 Government of Canada,
10.00%, 3/1/95 . . . . . . 2,652
3,350,000 Government of Canada,
6.25%, 9/15/95 . . . . . . 2,602
4,000,000 Province of Alberta,
10.625%, 2/14/96 . . . . . 3,352
2,252,000 Province of British Columbia,
9.60%, 9/12/94 . . . . . . 1,762
Total Canada 10,368
DENMARK - 4.2%
GOVERNMENT BONDS
DKK 4,000,000 Kingdom of Denmark,
9.00%, 11/15/95. . . . . . 620
9,000,000 Kingdom of Denmark,
9.00%, 11/15/96. . . . . . 1,439
12,000,000 Kingdom of Denmark,
9.00%, 11/15/98. . . . . . 2,005
Total Denmark 4,064
EUROPEAN CURRENCY UNIT - 3.2%
GOVERNMENT BONDS
XEU 1,650,000 European Economic
Community,
8.625%, 12/15/97 . . . . . 2,038
875,000 United Kingdom Treasury,
8.00%, 1/23/96 . . . . . . 1,025
Total European Currency Unit 3,063
FRANCE - 9.4%
GOVERNMENT BONDS
FRF 12,500,000 Bons du Tresor Annuel,
8.00%, 10/12/94. . . . . . $ 2,146
7,500,000 Bons du Tresor Annuel,
9.00%, 11/12/95. . . . . . 1,353
2,500,000 Bons du Tresor Annuel,
8.00%, 5/12/98 . . . . . . 470
27,500,000 Obligation Assimilable
du Tresor, 8.50%,
6/25/97. . . . . . . . . . 5,151
Total France 9,120
GERMANY-3.8%
GOVERNMENT BONDS
DEM 2,200,000 Bundesrepublic,
8.50%, 4/22/96 . . . . . . 1,360
2,600,000 Bundesrepublic,
6.50%, 5/20/98 . . . . . . 1,577
1,250,000 Bundesrepublic,
6.75%, 7/20/98 . . . . . . 766
Total Germany 3,703
GREECE-1.5%
SHORT-TERM INVESTMENTS
GRD 180,000,000 Bankers Trust, Six Month
Note, 21.00%, 5/4/94 . . . 716
183,750,000 Chase Manhattan Bank,
Fixed Deposit,
23.00%, 1/31/94. . . . . . 736
Total Greece 1,452
IRELAND - 5.2%
GOVERNMENT BOND
IEP 3,305,000 Republic of Ireland,
8.75%, 7/27/97 . . . . . . 5,071
ITALY - 8.9%
GOVERNMENT BONDS
ITL 4,350,000,000 Buoni del Tesoro Poliennali,
12.00%, 10/1/95. . . . . . 2,678
1,000,000,000 Buoni del Tesoro Poliennali,
9.00%, 10/1/96 . . . . . . 595
3,850,000,000 Buoni del Tesoro Poliennali,
12.00%, 1/1/97 . . . . . . 2,445
1,000,000,000 Buoni del Tesoro Poliennali,
12.00%, 9/1/97 . . . . . . 643
ITALY (cont'd)
ITL 1,750,000,000 Buoni del Tesoro Poliennali,
10.00%, 8/1/98 . . . . . . $ 1,082
1,250,000,000 Buoni del Tesoro Poliennali,
9.00%, 10/1/98 . . . . . . 751
8,194
HYBRID INSTRUMENT
500,000,000 # Nordic Investment Bank
Structured Note,
11.00%, 5/10/94. . . . . . 416
Total Italy 8,610
MEXICO - 2.5%
SHORT-TERM INVESTMENTS
MXN 1,790,000 Banco Nacional de Mexico
Medium-Term Note,
14.397%, 8/1/94. . . . . . 540
6,115,030 Mexican Cetes Treasury
Bills, 10.96% - 14.261%,
1/20/94 - 6/16/94. . . . . 1,923
Total Mexico 2,463
NETHERLANDS - 4.1%
GOVERNMENT BONDS
NLG 1,700,000 Government of Netherlands,
6.50%, 10/1/94 . . . . . . 882
5,750,000 Government of Netherlands,
6.50%, 7/15/98 . . . . . . 3,130
Total Netherlands 4,012
SPAIN - 8.8%
GOVERNMENT BONDS
ESP 150,000,000 Bonos del Estado,
12.00%, 7/15/94. . . . . . 1,066
500,000,000 Bonos del Estado,
11.40%, 7/15/95. . . . . . 3,663
250,000,000 Bonos del Estado,
13.45%, 4/15/96. . . . . . 1,944
200,000,000 Bonos del Estado,
11.60%, 1/15/97. . . . . . 1,536
50,000,000 Bonos del Estado,
11.00%, 6/15/97. . . . . . 384
Total Spain 8,593
SWEDEN - 8.8%
GOVERNMENT BONDS
SEK 30,000,000 Kingdom of Sweden,
10.75%, 1/23/97. . . . . . $ 4,030
33,000,000 Statens Bostadsfinansier,
12.50%, 1/23/97. . . . . . 4,550
Total Sweden 8,580
UNITED KINGDOM - 5.3%
GOVERNMENT BONDS
GBP 500,000 European Investment Bank,
10.00%, 2/3/97 . . . . . . 830
1,400,000 United Kingdom Treasury,
8.75%, 9/1/97. . . . . . . 2,284
3,114
CORPORATE BOND
1,300,000 Abbey National,
7.75%, 6/23/98 . . . . . . 2,048
Total United Kingdom 5,162
UNITED STATES - 9.0%
GOVERNMENT BONDS
USD 1,500,000 United States Treasury
Notes, 4.25%,
8/31/94. . . . . . . . . . 1,507
2,500,000 United States Treasury
Notes, 4.125%,
5/31/95. . . . . . . . . . 2,505
700,000 United States Treasury
Notes, 5.375%,
5/31/98. . . . . . . . . . 709
4,721
SHORT-TERM INVESTMENT
3,961,000 BMW US Capital, Commercial
Paper, 3.20%, 1/3/94 . . . 3,960
Total United States 8,681
Total Investments in Securities -
95.2% of Net Assets (Cost-$95,108) $92,485
The accompanying notes are an integral part of these financial statements.
Statement of Net Assets! (Value in thousands)
T. Rowe Price Global Government Bond Fund / December 31, 1993
AUSTRALIA - 1.0%
Value
________
GOVERNMENT BOND
AUD 750,000 Commonwealth of Australia,
6.25%, 3/15/99 . . . . . . $ 509
BELGIUM - 2.5%
GOVERNMENT BOND
BEL 40,000,000 Obligation Lineaire,
9.25%, 1/2/98. . . . . . . 1,236
CANADA - 5.1%
GOVERNMENT BONDS
CAD 1,150,000 Government of Canada,
6.00%, 2/1/96. . . . . . . 891
1,500,000 Government of Canada,
7.25%, 6/1/03. . . . . . . 1,185
500,000 Province of British Columbia,
7.75%, 6/16/03 . . . . . . 398
Total Canada 2,474
DENMARK - 3.8%
GOVERNMENT BONDS
DKK 5,000,000 Kingdom of Denmark,
9.00%, 11/15/95. . . . . . 775
5,000,000 Kingdom of Denmark,
9.00%, 11/15/98. . . . . . 836
1,500,000 Kingdom of Denmark,
8.00%, 5/15/03 . . . . . . 250
Total Denmark 1,861
FRANCE - 10.0%
GOVERNMENT BONDS
FRF 14,000,000 Bons du Tresor Annuel,
8.50%, 11/12/97. . . . . . 2,648
9,500,000 Obligation Assimilable
du Tresor, 8.125%,
5/25/99. . . . . . . . . . 1,826
2,000,000 Obligation Assimilable
du Tresor, 8.50%,
4/25/03. . . . . . . . . . 407
Total France 4,881
GERMANY - 7.9%
GOVERNMENT BONDS
DEM 1,660,000 Bundesobligation,
8.25%, 7/21/97 . . . . . . 1,053
DEM 4,200,000 Bundesrepublic,
8.375%, 5/21/01. . . . . . $ 2,820
Total Germany 3,873
ITALY - 7.5%
GOVERNMENT BONDS
ITL 1,500,000,000 Buoni del Tesoro Poliennali,
12.00%, 1/1/97 . . . . . . 952
1,000,000,000 Buoni del Tesoro Poliennali,
12.00%, 9/1/97 . . . . . . 643
1,950,000,000 Buoni del Tesoro Poliennali,
11.50%, 3/1/98 . . . . . . 1,252
1,000,000,000 Buoni del Tesoro Poliennali,
10.00%, 8/1/98 . . . . . . 618
3,465
HYBRID INSTRUMENT
250,000,000 # Nordic Investment Bank
Structured Note,
11.00%, 5/10/94. . . . . . 208
Total Italy 3,673
JAPAN - 12.0%
GOVERNMENT BONDS
JPY 270,000,000 International Bank for
Reconstruction &
Development,
6.75%, 3/15/00 . . . . . . 2,903
50,000,000 International Bank for
Reconstruction &
Development,
4.50%, 3/20/03 . . . . . . 490
50,000,000 Obligation Lineaire,
6.875%, 7/9/01 . . . . . . 546
3,939
CORPORATE BOND
175,000,000 Japan Development Bank,
6.50%, 9/20/01 . . . . . . 1,890
Total Japan 5,829
NETHERLANDS - 6.2%
GOVERNMENT BONDS
NLG 2,400,000 Government of Netherlands,
6.50%, 7/15/98 . . . . . . 1,306
3,000,000 Government of Netherlands,
7.50%, 11/15/99. . . . . . 1,719
Total Netherlands 3,025
SPAIN - 3.0%
GOVERNMENT BOND
ESP 190,000,000 Bonos del Estado,
11.00%, 6/15/97. . . . . . $ 1,456
SWEDEN - 3.5%
GOVERNMENT BOND
SEK 12,500,000 Kingdom of Sweden,
10.75%, 1/23/97. . . . . . 1,679
UNITED KINGDOM - 6.6%
GOVERNMENT BONDS
GBP 500,000 United Kingdom Treasury,
12.25%, 3/26/99. . . . . . 947
480,000 United Kingdom Treasury,
7.00%, 11/6/01 . . . . . . 754
978,000 United Kingdom Treasury,
6.75%, 11/26/04. . . . . . 1,519
Total United Kingdom 3,220
UNITED STATES - 28.8%
GOVERNMENT BONDS
USD 3,530,000 U.S. Treasury Bonds,
7.125%, 2/15/23. . . . . . 3,817
325,000 U.S. Treasury Notes,
4.125%, 5/31/95. . . . . . 326
1,400,000 U.S. Treasury Notes,
5.25%, 7/31/98 . . . . . . 1,407
850,000 U.S. Treasury Notes,
6.375%, 1/15/99. . . . . . 892
1,370,000 U.S. Treasury Notes,
6.375%, 8/15/02. . . . . . 1,429
3,000,000 U.S. Treasury Notes,
6.25%, 2/15/03 . . . . . . 3,100
10,971
CORPORATE BOND
1,500,000 Bellsouth
Telecommunications,
5.25%, 6/8/98. . . . . . . 1,502
SHORT-TERM INVESTMENT
1,550,000 BMW US Capital, Commercial
Paper, 3.20%, 1/3/94 . . . 1,550
Total United States 14,023
Total Investments in Securities -
97.9% (Cost-$47,412) $ 47,739
Other Assets Less Liabilities - 2.1% 1,019
Net Assets Consisting of:
Accumulated net investment income
- net of distributions . . . . $ 7
Accumulated realized gains/losses
- net of distributions . . . . 48
Unrealized appreciation of
investments . . . . . . . 396
Paid-in-capital applicable to
4,837,595 shares of $0.01 par
value capital stock outstanding;
1,000,000,000 shares of the
Corporation authorized . . . . 48,307
______
Net Assets - 100.0% $48,758
_______
_______
Net Asset Value Per Share $ 10.08
______
______
! Listed by currency denomination
# A structured medium-term note with a fixed coupon. The principal
repayment value is inversely linked to ten times the yield movement
of Buoni del Tesoro Poliennali, 11.50%, 3/1/96 (BTP). The note
includes a put option to limit the Fund's loss to par.
(AUD) Australian dollar denominated
(BEL) Belgian franc denominated
(CAD) Canadian dollar denominated
(DEM) German deutschemark denominated
(DKK) Danish krone denominated
(ESP) Spanish peseta denominated
(FRF) French franc denominated
(GBP) British sterling denominated
(GRD) Greek drachma denominated
(IEP) Irish punt denominated
(ITL) Italian lira denominated
(JPY) Japanese yen denominated
(MXN) Mexican peso denominated
(NLG) Dutch guilder denominated
(SEK) Swedish krona denominated
(USD) U.S. dollar denominated
(XEU) European currency unit
The accompanying notes are an integral part of these financial statements.
Statement of Assets and Liabilities
T. Rowe Price Short-Term Global Income Fund / December 31, 1993
Amounts in Thousands
_______________________
ASSETS
Investments in securities at value
(Cost - $ 95,108) . . . . . . . . . . $ 92,485
Interest receivable . . . . . . . . . . 3,817
Other assets. . . . . . . . . . . . . . 2,684
__________
Total assets. . . . . . . . . . . . . . $ 98,986
LIABILITIES. . . . . . . . . . . . . . . 1,868
__________
Net Assets Consisting of:
Accumulated net investment income
- net of distributions. . . . . . . . . 179
Accumulated realized gains/losses
- net of distributions. . . . . . . . . 324
Unrealized depreciation of investments . (2,126)
Paid-in-capital applicable to 20,154,762
shares of $0.01 par value capital stock
outstanding; 1,000,000,000 shares of
the Corporation authorized 98,741
__________
NET ASSETS $ 97,118
_________
_________
NET ASSET VALUE PER SHARE $4.82
_____
_____
The accompanying notes are an integral part of these financial statements.
Statement of Operations
T. Rowe Price Global Income Funds / Year Ended December 31, 1993
Short-Term Global
Global Government
Income Fund Bond Fund
___________ ___________
Amounts in Thousands
_____________________
INVESTMENT INCOME
Interest income. . . . . . . . . . . . $ 5,829 $ 3,563
Expenses
Investment management fees . . . . . . 342 269
Custodian and accounting fees
& expenses. . . . . . . . . . . . . 168 147
Shareholder servicing fees
& expenses. . . . . . . . . . . . . 134 119
Registration fees & expenses. . . . . 49 43
Legal & auditing fees . . . . . . . . 24 21
Prospectus & shareholder reports. . . 16 13
Directors' fees & expenses. . . . . . 7 7
Miscellaneous expenses. . . . . . . . 13 12
_______ _______
Total expenses 753 631
_______ _______
Net investment income 5,076 2,932
REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS
Net realized gain (loss)
Securities. . . . . . . . . . . . . . (1,900) 1,039
Currencies and forward currency
exchange contracts. . . . . . . . . 3,648 514
_______ _______
Net realized gain. . . . . . . . . . . 1,748 1,553
Change in unrealized appreciation or
depreciation. . . . . . . . . . . . (1,111) 998
_______ _______
Net gain on investments. . . . . . . . 637 2,551
_______ _______
INCREASE IN NET ASSETS FROM OPERATIONS $ 5,713 $ 5,483
_______ _______
_______ _______
The accompanying notes are an integral part of these financial statements.
<TABLE>
Statement of Changes in Net Assets
T. Rowe Price Global Income Funds
<CAPTION>
Short-Term Global Income Fund Global Government Bond Fund
_____________________________ ___________________________
From June 30, 1992
Year Ended (Commencement Year Ended December 31,
December 31, of Operations) to ________________________
1993 December 31, 1992 1993 1992
____________ _________________ ____________ ___________
Amounts in Thousands Amounts in Thousands
_________________________________ ________________________
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations
Net investment income . . . . . . . . . . $ 5,076 $ 1,953 $ 2,932 $ 4,274
Net realized gain (loss) on
investments . . . . . . . . . . . . . . 1,748 (1,066) 1,553 (73)
Change in unrealized appreciation
or depreciation of investments. . . . . (1,111) (1,015) 998 (2,064)
________ ________ ________ ________
Increase (decrease) in net assets
from operations . . . . . . . . . . . . 5,713 (128) 5,483 2 ,137
________ ________ ________ ________
Distributions to shareholders
Net investment income . . . . . . . . . . (5,076) (1,953) (2,932) (4,274)
Net realized gain on investments. . . . . - (190) (1,327) (54)
________ ________ ________ ________
Decrease in net assets from
distributions to shareholders . . . . . (5,076) (2,143) (4,259) (4,328)
________ ________ ________ ________
Capital share transactions
Sold. . . . . . . . . . . . . . . . . . 72,691 105,555 22,506 58,294
Distributions reinvested. . . . . . . . . 4,294 1,732 3,535 3 ,443
Redeemed. . . . . . . . . . . . . . . . . (46,801) (38,719) (32,053) (45,775)
________ ________ ________ ________
Increase (decrease) in net assets
from capital share transactions . . . . 30,184 68,568 (6,012) 15,962
________ ________ ________ ________
Total increase (decrease) . . . . . . . . 30,821 66,297 (4,788) 13,771
NET ASSETS
Beginning of period . . . . . . . . . . . 66,297 - 53,546 39,775
________ ________ ________ ________
End of period . . . . . . . . . . . . . . $ 97,118 $ 66,297 $ 48,758 $ 53,546
________ ________ ________ ________
________ ________ ________ ________
Share transactions
Sold. . . . . . . . . . . . . . . . . . . 15,118 shs. 21,549 shs. 2,190 shs. 5,790 shs.
Distributions reinvested. . . . . . . . . 893 360 346 344
Redeemed. . . . . . . . . . . . . . . . . (9,735) (8,031) (3,132) (4,563)
________ ________ ________ ________
Net increase (decrease) in shares
outstanding . . . . . . . . . . . . . . 6,276 13,878 (596) 1,571
<FN>
The accompanying notes are an integral part of these financial statements.
</TABLE>
Notes to Financial Statements
T. Rowe Price Global Income Funds / December 31, 1993
Note 1 - Significant Accounting Policies
T. Rowe Price International Funds, Inc. (the Corporation) is registered under
the Investment Company Act of 1940. The Global Government Bond Fund (the
Government Fund) and the Short-Term Global Income Fund (the Short-Term Fund),
non-diversified, open-end management investment companies, are two of the
portfolios established by the Corporation.
A) Valuation - Debt securities are generally traded in the over-the-counter
market and are valued at a price deemed best to reflect fair value as quoted
by dealers who make markets in these securities or by an independent pricing
service.
For purposes of determining each Fund's net asset value per share, all
assets and liabilities initially expressed in foreign currencies are converted
into U.S. dollars at the mean of the bid and offer prices of such currencies
against U.S. dollars quoted by a major bank.
Assets and liabilities for which the above valuation procedures are
inappropriate or are deemed not to reflect fair value are stated at fair value
as determined in good faith by or under the supervision of the officers of
each Fund, as authorized by the Board of Directors.
B) Currency translation - Foreign currency amounts are translated into U.S.
dollars at prevailing exchange rates as follows: assets and liabilities at the
rate of exchange at the end of the respective period, purchases and sales of
securities and income and expenses at the rate of exchange prevailing on the
dates of such transactions.
C) Discounts and Premiums - Discounts and premiums on debt securities are
amortized for both financial and tax reporting purposes.
D) Other - Income and expenses are recorded on the accrual basis. Investment
transactions are accounted for on the trade date. Realized gains and losses
are reported on an identified cost basis. Distributions to shareholders are
recorded by each Fund on the ex-dividend date. Income and capital gain
distributions are determined in accordance with federal income tax regulations
which may differ from generally accepted accounting principles.
E) Accounting Change - Effective as of the beginning of the year, each Fund
adopted a recently issued accounting standard related to shareholder
distributions. This change resulted in a reclassification to paid-in-capital
of permanent differences between tax and financial reporting of net investment
income and net realized gains/losses. The cumulative effect as of December 31,
1992, was as follows:
Government Short-Term
Fund Fund
___________ ___________
Accumulated net
investment income
- net of distributions - $172,000
Accumulated net
realized gains/losses
- net of distributions $373,000 (168,000)
Paid-in-capital (373,000) (4,000)
The results of operations, shareholder distributions and net assets were not
affected by this change.
Note 2 - Financial Instruments
As a part of its investment program, each Fund utilizes forward currency
exchange contracts. The nature and risk of these contracts and the reasons for
using them are set forth more fully in each Fund's Prospectus and Statement of
Additional Information.
At December 31, 1993, each Fund had entered into various forward currency
exchange contracts under which it is obligated to exchange currencies at
specified future dates. Risks arise from the possible inability of
counterparties to meet the terms of their contracts and from movements in
currency values. Outstanding contracts at December 31, 1993, are as follows:
Notes to Financial Statements (Cont'd)
Government Fund
_________________________________________________________________
Contract to Unrealized
_____________________________________ Appreciation
Receive Deliver (Depreciation)
Settlement _________________ ___________________ _______________
Date Amounts in Thousands
________ _____________________________________________________
1/20/94 USD 3,414 JPY 375,000 USD 53
1/24/94 USD 678 GBP 460 USD (1)
1/24/94 USD 504 CAD 676 USD (6)
1/24/94 CAD 335 USD 250 USD 3
1/24/94 USD 2,587 NLG 4,993 USD 25
1/25/94 USD 1,713 SEK 13,759 USD 70
1/25/94 USD 2,762 DEM 4,740 USD 44
1/25/94 DEM 4,600 BEL 101,085 USD (146)
1/25/94 BEL 35,825 USD 982 USD 4
1/25/94 USD 3,557 FRF 20,900 USD 35
1/25/94 USD 2,633 ESP 373,519 USD 35
Short-Term Fund
_________________________________________________________________
Contract to Unrealized
_____________________________________ Appreciation
Receive Deliver (Depreciation)
Settlement _________________ __________________ _______________
Date Amounts in Thousands
________ _____________________________________________________
1/13/94 USD 9,011 CAD 11,931 USD 6
1/18/94 USD 2,059 DEM 3,512 USD 44
1/18/94 USD 11,196 ESP 1,555,480 USD 365
1/18/94 USD 4,032 IEP 2,886 USD (23)
1/18/94 USD 3,854 XEU 3,426 USD 44
1/20/94 USD 5,119 BEL 183,727 USD 62
1/20/94 USD 8,332 ITL 14,169,073 USD 102
1/24/94 GBP 644 DKK 6,509 USD (6)
1/24/94 GBP 325 FRF 2,860 USD (3)
1/24/94 GBP 593 IEP 626 USD (2)
1/24/94 USD 10,893 FRF 63,950 USD 116
1/24/94 USD 7,035 GBP 4,789 USD (29)
1/24/94 USD 8,918 SEK 74,930 USD (30)
1/26/94 USD 2,310 DKK 15,603 USD 20
1/31/94 USD 750 ESP 105,698 USD 16
2/2/94 USD 4,077 NLG 7,849 USD 54
2/15/94 USD 4,554 AUD 6,901 USD (124)
4/5/94 USD 1,210 ESP 174,422 USD -
Net unrealized appreciation related to these contracts, included in the
accompanying financial statements, was as follows:
Government Short-Term
Fund Fund
__________ __________
Appreciated Contracts $ 269,000 $ 829,000
Depreciated Contracts (153,000) (217,000)
_________ _________
Net Unrealized
Appreciation $ 116,000 $ 612,000
_________ _________
_________ _________
Purchases and sales of portfolio securities for the Government Fund,
other than short-term and U.S. Government securities, aggregated $68,339,000
and $76,085,000, respectively, for the year ended December 31, 1993. Purchases
and sales of U.S. Government securities for the Government Fund aggregated
$23,186,000 and $35,030,000. Purchases and sales of portfolio securities for
the Short-Term Fund, other than short-term and U.S. Government securities,
aggregated $87,824,000 and $55,375,000, respectively, for the year ended
December 31, 1993.
Note 3 - Federal Income Taxes
No provision for federal income taxes is required since each Fund intends to
continue to qualify as a regulated investment company and distribute all of
its taxable income.
The Short-Term Fund has unused realized capital loss carryforwards for
federal income tax purposes of $149,000 at December 31, 1993, which expire
through 2001.
At December 31, 1993, the aggregate cost
of investments for the Government and Short-Term Funds for federal income tax
and financial reporting purposes was $47,412,000 and $95,108,000,
respectively.
Net unrealized appreciation (depreciation) related to these investments was as
follows:
Government Short-Term
Fund Fund
_____________ _____________
Appreciated Investments $ 1,254,000 $ 510,000
Depreciated Investments (927,000) (3,133,000)
___________ ___________
Net Unrealized
Appreciation
(Depreciation) $ 327,000 $(2,623,000)
___________ ___________
___________ ___________
Note 4 - Related Party Transactions
Each Funds is managed by Rowe Price-Fleming International, Inc.
(Price-Fleming) which is owned by T. Rowe Price Associates, Inc. (Price
Associates), Robert Fleming Holdings Limited, and Jardine Fleming Holdings
Limited under a joint venture agreement. The investment management agreement
between each Fund and Price-Fleming (the Manager) provides for an annual
investment management fee, computed daily and paid monthly, consisting of an
Individual Fund Fee equal to 0.35% of average net assets for the Government
Fund and 0.25% of average net assets for the Short-Term Fund, and a Group Fee.
The Group Fee is based on the combined assets of certain mutual funds
sponsored by the Manager or Price Associates (the Group). The Group Fee rate
ranges from 0.48% for the first $1 billion of assets to 0.31% for assets in
excess of $34 billion. The effective annual Group Fee rate at December 31,
1993, and for the year then ended was 0.35%. Each Fund pays a pro rata portion
of the Group Fee based on the ratio of the Fund's net assets to those of the
Group.
Under the terms of the investment management agreement, the Manager is
required to bear any expenses through December 31, 1994 for the Government
Fund or through December 31, 1993 for the Short-Term Fund, which would cause
each Fund's ratio of expenses to average net assets to exceed 1.20% and 1.00%,
respectively. Thereafter, the Government and Short-Term Funds are required to
reimburse the Manager for these expenses, provided average net assets have
grown or expenses have declined sufficiently so as not to cause each Fund's
ratio of expenses to average net assets to exceed 1.20% and 1.00%,
respectively, in any month, and that no such reimbursement shall be made to
the Manager after December 31, 1996 for the Government Fund, or after December
31, 1995 for the Short-Term Fund. Pursuant to this agreement, $98,000 and
$109,000 of management fees were not accrued by the Government and Short-Term
Fund, respectively, for the year ended December 31, 1993. Pursuant to a
previous agreement, $388,000 in the Government Fund remains subject to
reimbursement through December 31, 1994. Additionally, $186,000 of unaccrued
fees and other expenses in the Short-Term Fund borne by the Manager in 1992
are subject to reimbursement through December 31, 1995. T. Rowe Price
Services, Inc. (TRPS) and Retirement Plan Services, Inc. (RPS) are wholly
owned subsidiaries of Price Associates. TRPS provides transfer and dividend
disbursing agent functions and shareholder services for all accounts. RPS
provides subaccounting and recordkeeping services for certain retirement
accounts invested in each Fund. Price Associates, under a separate agreement,
calculates the daily share price and maintains the financial records of each
Fund. For the year ended December 31, 1993, the Government and Short-Term
Funds incurred fees totalling approximately $200,000 and $207,000,
respectively, for these services provided by related parties. At December 31,
1993, these investment management and service fees payable were $42,000 and
$59,000, respectively.
<TABLE>
Financial Highlights
T. Rowe Price Global Income Funds
<CAPTION>
Short-Term Global Income Fund Global Government Bond Fund
_____________________________ ___________________________________
Year June 30, 1992 Year Ended December 28, 1990
Ended (Commencement Dec. 31, (Commencement
Dec. 31, of Operations) to _______________ of Operations) to
1993 December 31, 1992 1993 1992 December 31, 1991
_____________________________ ___________________________________
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD . . . . . . . . $ 4.78 $ 5.00 $ 9.85 $10.30 $10.00
______ ______ ______ ______ ______
Investment Activities
Net investment income . . . . . . . 0.32* 0.20* 0.56# 0.76# 0.77#
Net realized and unrealized
gain (loss) . . . . . . . . . . . 0.04 (0.21) 0.51 (0.44) 0.30
______ ______ ______ ______ ______
Total from Investment Activities . . 0.36 (0.01) 1.07 0.32 1.07
______ ______ ______ ______ ______
Distributions
Net investment income . . . . . . . (0.32) (0.20) (0.56) (0.76) (0.77)
Net realized gain . . . . . . . . . - (0.01) (0.28) (0.01) -
______ ______ ______ ______ ______
Total Distributions. . . . . . . . . (0.32) (0.21) (0.84) (0.77) (0.77)
______ ______ ______ ______ ______
NET ASSET VALUE, END OF PERIOD . . . $ 4.82 $ 4.78 $10.08 $ 9.85 $10.30
______ ______ ______ ______ ______
______ ______ ______ ______ ______
RATIOS/SUPPLEMENTAL DATA
Total Return . . . . . . . . . . . . 7.87% (0.22)% 11.15% 3.26% 11.31%
Ratio of Expenses to
Average Net Assets. . . . . . . . . 1.00* 1.00%!* 1.20%# 1.20%# 1.20%#
Ratio of Net Investment Income to
Average Net Assets. . . . . . . . . 6.74% 7.92%! 5.57% 7.51% 8.07%
Portfolio Turnover Rate. . . . . . . 92.9% 334.1%! 134.0% 236.6% 93.6%
Net Assets, End of Period
(in thousands). . . . . . . . . . . $97,118 $66,297 $48,758 $53,546 $39,775
Number of Shareholder Accounts,
End of Period . . . . . . . . . . . 5,000 4,000 3,000 4,000 2,000
<FN>
! Annualized
* Excludes expenses in excess of a 1.00% voluntary expense limitation in effect through December 31, 1993.
# Excludes expenses in excess of a 1.20% voluntary expense limitation in effect through December 31, 1994.
</TABLE>
Reports of Independent Accountants
To the Board of Directors of T. Rowe Price International Funds, Inc.
and the Shareholders of T. Rowe Price Short-Term Global Income Fund and
T. Rowe Price Global Government Bond Fund
We have audited the accompanying statement of assets and liabilities of T.
Rowe Price Short-Term Global Income Fund, including the portfolio of
investments, and the accompanying statement of net assets of T. Rowe Price
Global Government Bond Fund (two of the portfolios comprising the T. Rowe
Price International Funds, Inc.) as of December 31, 1993, and the related
statements of operations for the year then ended, the statement of changes in
net assets of T. Rowe Price Short-Term Global Fund for the year then ended and
for the period June 30, 1992 (commencement of operations) to December 31, 1992
and the Global Government Bond Fund for each of the two years in the period
then ended, and the financial highlights of the Short-Term Global Income Fund
for the year then ended and for the period June 30, 1992 (commencement of
operations) to December 31, 1992 and the Global Government Bond Fund for each
of the two years in the period then ended and for the period December 28, 1990
(commencement of operations) to December 31, 1991. These financial statements
and financial highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. Our procedures included confirmation of investments
owned as of December 31, 1993 by correspondence with the custodian and
brokers. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
T. Rowe Price Short-Term Global Income Fund and T. Rowe Price Global
Government Bond Fund as of December 31, 1993, the results of its operations,
the changes in its net assets and financial highlights for each of the
respective periods stated in the first paragraph in conformity with generally
accepted accounting principles.
COOPERS & LYBRAND
Baltimore, Maryland
January 19, 1994
Chart 1 - Short-Term Global Income Fund Performance Comparison
A line graph compares the 12/31/93 value of a hypothetical $10,000 investment
made in the Short-Term Global Income Fund at its inception (6/30/92) and a
similar investment made concurrently in the Salomon Brothers 1-3 Year Index.
At 12/31/93, the Fund investment would have been worth $10,787, the Index
investment would have been worth $10,605.
Chart 2 - Global Government Bolnd Fund Performance Comparison
A line graph compares the 12/31/93 value of a hypothetical $10,000 investment
made in the Global Government Bond Fund at its inception (12/31/90) and a
similar investment made concurrently in the J.P. Morgan Global Government Bond
Index. At 12/31/93, the Fund investment would have been worth $12,775, the
Index investment would have been worth $13,528.
