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This report is authorized for distri-bution only to shareholders and to
others who have received a copy of the prospectus of the T. Rowe Price Short-
Term Global Income Fund and/or the T. Rowe Price Global Government Bond Fund.
GLOBAL INCOME
FUNDS JUNE 30, 1995
STG/GGB
Fellow Shareholders
Throughout the first half of 1995, the prospect of a slowdown in global
economies and benign inflation led to higher bond prices and lower yields.
The bull market in fixed income securities produced excellent returns for the
first six months of the year.
Bond markets experienced two distinct periods during the first half.
The first quarter was characterized by currency turbulence following the
devaluation of the Mexican peso. Most major foreign currencies rose versus
the U.S. dollar, largely accounting for the positive returns for U.S.
investors. In the second quarter, currency markets stabilized, enabling
emerging markets to recover. Investors became more comfortable with the risks
associated with emerging markets, allowing them to reverse their first
quarter losses and enjoy substantial returns over the past three months.
MARKET ENVIRONMENT
Early in the year, investors anticipated further rises in short-term interest
rates in the U.S. and in Europe. However, following strong U.S. GDP growth in
the fourth quarter of 1994, economic data came in weaker than expected.
Interest rate-sensitive areas were sluggish, indicating that the Federal
Reserve's series of rate hikes had begun to slow growth.
Slowing growth led to a major sentiment change among U.S. investors,
who suddenly grew more concerned about a possible recession than about
inflationary growth. The ensuing bond rally spilled over to other developed
and emerging markets. By midyear, these markets had already begun to factor
in reductions in key short-term interest rates in the major economies.
In Japan, economic growth receded after the Kobe earthquake,
increasing demand for bonds among Japanese investors despite their low
nominal yields. While European bonds underperformed U.S. and Japanese bonds,
they nevertheless responded well to expectations of slower growth and to
rising demand from domestic investors.
The sharpest performance turnaround by far came from emerging
markets. After the peso devaluation at the start of the year, all emerging
markets suffered the consequences of the Mexican disaster. However, this was
a clear case of adversity creating opportunity. Political problems in Brazil
and Argentina were resolved favorably, and Poland achieved investment-grade
status with one of the major rating agencies. As a consequence of the savage
price declines of the first quarter, investors were given the opportunity to
participate in improving credits at attractive yield and price levels.
Bond Market Performance
Total Returns
3 Months Ended 6/30/95
______________________________
In Local In U.S.
Currency Dollars
_______ _______
Australia 5.86% 2.31%
Belgium 4.51 3.21
Canada 5.29 7.51
Denmark 3.82 4.30
France 3.48 2.38
Germany 2.57 1.41
Italy 5.87 9.76
Japan 6.17 8.04
Netherlands 3.60 2.21
Spain 4.27 8.50
Sweden 4.00 5.27
United Kingdom 2.54 0.15
United States 5.82 5.82
Source: J. P. Morgan
PORTFOLIO REVIEWS
SHORT-TERM GLOBAL INCOME FUND
Your fund enjoyed positive returns over the first six months of the year,
slightly edging out the benchmark index although it trailed in the second
quarter. Performance was aided by our low-risk approach in terms of currency
and credit exposure, allowing the fund to minimize the effects of the
sell-off in emerging market bonds earlier this year.
Performance Comparison
Periods Ended 6/30/95
3 Months 6 Months
_____________________
Short-Term Global
Income Fund 1.72% 3.22%
Lipper Short World
Multi-Market
Income Funds Average 3.31 3.09
We increased exposure to U.S. dollar-
denominated bonds to 44% of the portfolio in the second quarter, from 34% at
the end of March. Slower economic growth led to soaring U.S. bond prices,
which spilled over to European and other world markets as investors
anticipated lower
Geographical Diversification*
Short-Term Global Income Fund
Based on Net Assets as of 6/30/95
Other and Reserves
11%
Canada
7%
United States
44%
Australia
4%
Europe
34%
*Based on the currency denomination of the fund's securities.
Does not include the effects of forward currency contracts and currency
exposure from hybrid instruments.
interest rates in the months ahead. The exceptions in Europe were Spain,
Sweden, and Italy, where short-term rates were lifted to combat inflation.
However, your fund's low exposure to these markets resulted in only a minimal
negative impact on its short-maturity portfolio.
GLOBAL GOVERNMENT BOND FUND
Your fund delivered an outstanding return for the first six months of the
year. The major portion of the return resulted from currency appreciation in
the first quarter. The fund lagged the benchmark indexes in the second
quarter because of our relatively high weighting in European bonds compared
with strongly performing U.S. bonds. Emerging markets, which posted negative
results for the first quarter, also rebounded strongly in the second.
Performance Comparison
Periods Ended 6/30/95
3 Months 6 Months
_____________________
Global Government
Bond Fund 4.25% 12.40%
J.P. Morgan Global
Government Bond Index
(unhedged) 5.08 15.56
J.P. Morgan Global
Government Bond Index
(fully hedged) 5.06 9.82
Your fund's exposure to Japanese yen- denominated bonds increased
slightly to 15% from 13% at the end of March. Japanese
bonds were up a strong 8% in dollar terms in the second quarter. Long-term
bonds denominated in U.S. dollars accounted for 26% of holdings and in
European currencies 35%. (See pie chart on the following page.) The fund
benefited from the declining dollar following the Mexican collapse and from
investors' desire to increase bond holdings because of slower economic
growth. This led to strong performance across maturities in most markets.
OUTLOOK
The strong performance of foreign bonds
has justified the positive view we have taken since late last year, and our
outlook remains
Geographical Diversification*
Global Government Bond Fund
Based on Net Assets as of 6/30/95
Other and Reserves
20%
Australia
4%
United States
26%
Japan
15%
Europe
35%
*Based on the currency denomination of the fund's securities.
Does not include the effects of forward currency contracts and currency
exposure from hybrid instruments.
essentially positive for the remainder of 1995. However, the picture is more
clouded than it was six months ago, and we would introduce a note of caution
to our generally optimistic view. We would be surprised to see bond returns
in the second half of the year match those in the first.
At current levels of inflation, bonds offer reasonable valuations
compared with stocks. Also, anticipated inflation levels and economic
policies in most international markets do not appear to be a serious threat
to fixed income markets at this time. On the currency front, we do not expect
a return of the extreme volatility seen earlier this year.
The main note of caution stems from our view that U.S. bonds are not
likely to repeat their performance of recent months. Their recent impressive
rally could make them susceptible to disappointment should future economic
activity be stronger than investors expect. Poor returns in the U.S. could
have a dampening effect elsewhere, since foreign markets sometimes follow the
U.S. lead even though their economic fundamentals may be different.
Europe offers the best prospects, with a combination of attractive
valuations and pro-tective measures in place against inflation. We expect
Japanese bonds to perform steadily in the absence of serious inflation, but
there is some risk that the government could resort to inflationary measures
in an effort to revive the economy.
All in all, the months ahead should provide opportunities for
investors in global fixed income markets, with perhaps more moderate returns
over the next six months than we have enjoyed so far this year.
Respectfully submitted,
Peter B. Askew
Executive Vice President
July 19, 1995 Portfolio Highlights
T. Rowe Price Short-Term Global Income Fund / June 30, 1995
Key Statistics
Dividend Yield* Periods Ended 6/30/95
_________________________ ____________________
SEC 30-Day 5.97%
3 Months 5.96
6 Months 6.49
Dividend Per Share
_________________________
3 Months $0.06
6 Months 0.14
Change in Price Per Share
_________________________
3 Months (From $4.37 to $4.38) $0.01
6 Months (From $4.38 to $4.38) --
Average Annual Compound Total Return
__________________________________
1 Year 3.65%
Since Inception (6/30/92) 2.55
Total Net Assets $44.6 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.
Investment 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
Range Percent of Net Assets
_____________________ ____________________
Short-Term
(0 to 1 year) 28%
Short Intermediate-
Term (1+ to 5 years) 60
Long Intermediate-
Term (5+ to 10 years) 12
Long-Term
(over 10 years) --
Weighted Average
Maturity 2.8 yrs.
Weighted Average
Duration 0.9 yrs.
Quality Diversification
RPFI Quality Rating* Percent of Net Assets
______________________ ______________________
1 29%
2 39
3 28
4 1
5 and below 3
Weighted Average Quality 2.1
*On a scale of 1 to 10, with Grade 1 representing highest quality.
Portfolio Highlights
T. Rowe Price Global Government Bond Fund / June 30, 1995
Key Statistics
Dividend Yield* Periods Ended 6/30/95
_________________________ ____________________
SEC 30-Day 5.89%
3 Months 5.84
6 Months 6.11
Dividend Per Share
_________________________
3 Months $0.14
6 Months 0.29
Change in Price Per Share
_________________________
3 Months (From $9.79 to $10.06) $0.27
6 Months (From $9.22 to $10.06) 0.84
Average Annual Compound Total Return
__________________________________
1 Year 12.49%
Since Inception (12/28/90) 7.64%
Total Net Assets $28.8 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.
Investment 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
Range Percent of Net Assets
_____________________ ____________________
Short-Term
(0 to 1 year) 19%
Short Intermediate-
Term (1+ to 5 years) 20
Long Intermediate-
Term (5+ to 10 years) 51
Long-Term
(over 10 years) 10
Weighted Average
Maturity 7.7 yrs.
Weighted Average
Duration 4.7 yrs.
Quality Diversification
RPFI Quality Rating* Percent of Net Assets
______________________ ______________________
1 59%
2 35
3 4
4 --
5 and below 2
Weighted Average Quality 1.5
*On a scale of 1 to 10, with Grade 1 representing highest quality.
Portfolio of Investments
T. Rowe Price Short-Term Global Income Fund / June 30, 1995 (Unaudited)
VALUES IN THOUSANDS)
AUSTRALIA -- 4.4%
Value
______
GOVERNMENT BOND
AUD 2,500,000 Commonwealth of Australia,
12.50%, 9/15/97................................................ $ 1,934
AUSTRIA -- 3.5%
GOVERNMENT BOND
ATS 15,000,000 Republic of Austria,
7.00%, 2/14/00................................................. 1,573
BELGIUM -- 1.6%
GOVERNMENT BOND
BEL 20,000,000 Obligation Lineaire,
7.00%, 4/29/99................................................. 717
CANADA -- 6.7%
GOVERNMENT BONDS
CAD 2,500,000 Government of Canada,
8.00%, 3/15/97................................................. 1,850
1,500,000 Province of Alberta,
10.625%, 2/14/96............................................... 1,115
TOTAL CANADA 2,965
DENMARK -- 3.6%
GOVERNMENT BONDS
DKK 4,000,000 Kingdom of Denmark,
9.00%, 11/15/95................................................ 746
5,000,000 Kingdom of Denmark,
6.00%, 12/10/99................................................ 865
TOTAL DENMARK 1,611
EUROPEAN CURRENCY UNIT -- 3.1%
GOVERNMENT BONDS
XEU 650,000 European Economic
Community, 8.625%, 12/15/97.................................... 897
375,000 United Kingdom Treasury,
8.00%, 1/23/96................................................. 503
TOTAL EUROPEAN CURRENCY UNIT 1,400
FRANCE -- 3.5%
GOVERNMENT BOND
FRF 7,500,000 Bons du Tresor Annuel,
9.00%, 11/12/95................................................ $1,557
GERMANY -- 2.4%
CORPORATE BOND
DEM 1,500,000 Midland International
Finance, FRN, 4.6875%, 6/30/98.................................. 1,077
IRELAND -- 1.8%
GOVERNMENT BOND
IEP 500,000 Republic of Ireland,
8.00%, 10/18/00................................................ 798
NETHERLANDS -- 1.5%
GOVERNMENT BOND
NLG 1,000,000 Government of
Netherlands, 6.75%, 10/1/98.................................... 663
SPAIN -- 3.0%
GOVERNMENT BOND
ESP 162,500,000 Bonos del Estado,
11.00%, 6/15/97................................................ 1,342
UNITED KINGDOM -- 9.9%
CORPORATE BONDS
GBP 800,000 Abbey National,
7.75%, 6/23/98................................................. 1,254
1,000,000 Alliance & Leicester, FRN,
6.6875%, 1/19/98............................................... 1,588
1,000,000 Royal Bank of Scotland Group,
6.8125%, 5/15/05............................................... 1,552
TOTAL UNITED KINGDOM.............................................. 4,394
UNITED STATES -- 49.8%
GOVERNMENT BONDS
USD 321,428 Banco Central de Brazil,
FRN, 7.25%, 10/15/99. $288
1,000,000 Hydro Quebec, FRN,
6.0625%, 7/31/02............................................... 972
1,000,000 Province of Nova Scotia, FRN,
6.375%, 5/12/99................................................ 999
1,000,000 Province of Ontario, FRN,
6.125%, 8/17/99................................................ 996
633,600 Republic of Argentina,
BOTE 1, FRN, 6.0833%, 5/31/96.................................. 621
1,500,000 United States Treasury
Notes, 6.875%, 10/31/96........................................ 1,520
1,500,000 United States Treasury
Notes, 6.875%, 2/28/97......................................... 1,525
6,921
CORPORATE BONDS
500,000 Abbey National Treasury
Services, FRN, 5.875%, 3/10/99................................. 499
500,000 Banco Latino Americano
Expo, FRN, 6.50%, 10/2/95...................................... 499
611,600 Banco Nacional Desernvolv,
6.00%, 9/15/96................................................. 596
1,750,000 BankAmerica Corporation,
FRN, 6.1875%, 3/15/99......................................... 1,745
1,000,000 Commerzbank Overseas
Finance, FRN, 5.9375%, 11/30/98............................... 998
1,000,000 Compagnie Financie, FRN,
6.25%, 8/25/01................................................. 1,000
1,000,000 First USA Credit Card Master
Trust, FRN, 6.2425%, 6/17/02................................... 1,000
1,000,000 Halifax Building Society, FRN,
5.9375%, 9/8/99................................................ 1,001
USD 1,000,000 Indover Bank, FRN,
6.8625%, 10/26/97............................................. $1,004
1,000,000 Landesbank Rheinland-Pfalz,
FRN, 6.375%, 3/25/98.......................................... 1,001
1,000,000 New Zealand Dairy
Board, FRN, 6.4375%, 4/5/99................................... 1,003
10,346
HYBRID INSTRUMENTS
500,000 Bank of Scotland Treasury
Services Singapore Dollar
Linked Note, Zero Coupon,
5/3/96: Principal repayment
value linked to the
performance of the
Singapore dollar.................................................. 486
564,960 Morgan Guaranty Polish
Zloty Linked Note, Zero
Coupon, 10/11/95: Principal
repayment value linked to
the performance of the
Polish zloty........................................................531
1,250,000 Swedish Export Credit Czech
Crown Linked Note, Zero
Coupon, 7/28/95: Principal
repayment value linked to
the performance of the
Czech crown and German deutschemark................................. 1,243
2,260
SHORT-TERM INVESTMENTS
703,000 Cargill Financial Services,
Commercial Paper, 6.10%, 7/3/95................................. 703
1,000,000 United States Treasury Bills,
6.144%, 8/3/95................................................. 995
1,000,000 United States Treasury Bills,
6.04%, 10/5/95................................................. 985
2,683
TOTAL UNITED STATES 22,210
T. Rowe Price Short-Term Global Income Fund / Portfolio of Investments
TOTAL INVESTMENTS IN SECURITIES --
94.8% OF NET ASSETS (COST $41,525)............................ $ 42,241
FORWARD CURRENCY EXCHANGE CONTRACTS
Unrealized
Counterparty Settlement Deliver Receive Gain (Loss)
___________ __________ _____________ ___________ ____________
Chase 7/7/95 CAD 1,741 USD 1,264 $(3)
Citibank 7/13/95 IEP 508 USD 826 (5)
Chase 7/17/95 ITL 1,230,033 USD 738 (12)
Chase 7/19/95 ESP 180,000 USD 1,478 (5)
Citibank 7/20/95 GBP 300 DEM 663 3
Chase 7/20/95 GBP 2,768 USD 4,436 34
Chase 7/20/95 XEU 1,098 USD 1,443 (18)
Chase 7/24/95 AUD 2,758 USD 1,985 28
Chase 8/8/95 BEL 20,822 USD 720 (12)
Chase 8/8/95 DEM 2,999 USD 2,172 (1)
Chase 8/8/95 FRF 9,883 USD 1,989 (46)
Chase 8/8/95 NLG 1,061 USD 672 (13)
Chase 8/16/95 DKK 9,908 USD 1,799 (34)
Citibank 8/24/95 CAD 3,993 USD 2,904 1
Chase 8/24/95 USD 1,121 CAD 1,547 4
Net unrealized gain (loss) on open forward currency exchange contracts..(79)
OTHER ASSETS LESS LIABILITIES .......................................... 2,417
________
NET ASSETS..............................................................$44,579
________
________
Portfolio of Investments
T. Rowe Price Global Government Bond Fund / June 30, 1995 (Unaudited)
(VALUES IN THOUSANDS)
AUSTRALIA -- 4.1%
Value
______
GOVERNMENT BONDS
AUD 1,150,000 Commonwealth of Australia,
6.25%, 3/15/99......................................... $763
600,000 Commonwealth of Australia,
9.00%, 9/15/04......................................... 422
TOTAL AUSTRALIA1,185
AUSTRIA -- 2.5%
GOVERNMENT BONDS
ATS 3,400,000 Republic of Austria,
7.00%, 2/14/00......................................... 357
3,500,000 Republic of Austria,
7.00%, 5/16/05......................................... 353
TOTAL AUSTRIA 710
CANADA -- 6.3%
GOVERNMENT BONDS
CAD 1,250,000 Government of Canada,
7.75%, 9/1/99........................................ 919
800,000 Government of Canada,
7.25%, 6/1/03........................................ 561
500,000 Government of Canada,
6.50%, 6/1/04........................................ 331
TOTAL CANADA 1,811
DENMARK -- 5.5%
GOVERNMENT BONDS
DKK 3,000,000 Kingdom of Denmark,
9.00%, 11/15/00........................................ 575
6,000,000 Kingdom of Denmark,
7.00%, 12/15/04........................................ 1,000
TOTAL DENMARK 1,575
FRANCE -- 4.4%
GOVERNMENT BOND
FRF 6,250,000 Obligation Assimilable du
Tresor, 7.50%, 4/25/05................................ 1,278
GERMANY -- 7.1%
GOVERNMENT BONDS
DEM 1,810,000 Bundesrepublic, 6.50%,
7/15/03................................................. $1,270
780,000 Bundesrepublic, 6.25%,
1/4/24.................................................. 477
400,000 Treuhandanstalt, 6.875%,
6/11/03................................................. 287
TOTAL GERMANY 2,034
IRELAND -- 1.9%
GOVERNMENT BOND
IEP 350,000 Republic of Ireland, 8.00%,
10/18/00................................................ 559
JAPAN -- 14.9%
GOVERNMENT BONDS
JPY 35,000,000 Government of Japan, 6.40%,
3/20/00................................................. 492
100,000,000 Government of Japan, 5.50%,
3/20/02................................................. 1,387
65,000,000 Government of Japan, 5.00%,
9/20/02................................................. 880
30,000,000 Government of Japan, 4.60%,
9/20/04................................................. 404
50,000,000 International Bank for
Reconstruction & Development, 4.50%,
6/20/00................................................. 658
35,000,000 International Bank for
Reconstruction & Development, 4.75%,
12/20/04................................................ 478
4,299
OPTION PURCHASED
30,000,000 *Government of Japan #174,
4.60%, 9/20/04, European-Style Put Option, expires
12/1/95................................................. 8
TOTAL JAPAN 4,307
T. Rowe Price Global Government Bond Fund / Portfolio of Investments
NETHERLANDS -- 4.2%
GOVERNMENT BONDS
NLG 1,000,000 Government of Netherlands,
7.75%, 3/1/05........................................ $ 677
765,000 Government of Netherlands,
8.25%, 2/15/07......................................... 533
TOTAL NETHERLANDS 1,210
SPAIN -- 2.6%
GOVERNMENT BOND
ESP 90,000,000 Bonos del Estado, 11.45%,
8/30/98................................................ 743
SWEDEN -- 0.9%
GOVERNMENT BOND
SEK 2,700,000 Kingdom of Sweden, 6.00%,
2/9/05................................................. 267
UNITED KINGDOM -- 5.9%
GOVERNMENT BOND
GBP 1,000,000 United Kingdom Treasury,
9.75%, 8/27/02......................................... 1,700
UNITED STATES -- 40.1%
GOVERNMENT BONDS
USD 250,000 Republic of Argentina,
Par Bonds, FRN,
5.00%, 3/31/23......................................... 119
147,400 Republic of Argentina,
BOTE 1, FRN, 6.0833%,
5/31/96................................................ 144
339,500 Republic of Brazil IDU, FRN,
7.8125%, 1/1/01........................................ 274
250,000 Republic of Poland Discount
Bonds, FRN, 7.125%,
10/27/24............................................... 192
880,000 United States Treasury
Bonds, 7.125%, 2/15/23.................................. 928
700,000 United States Treasury
Bonds, 6.25%, 8/15/23.................................. 661
500,000 United States Treasury
Notes, 6.875%, 2/28/97.................................. 508
1,365,000 United States Treasury
Notes, 6.75%, 6/30/99.................................... 1,401
750,000 United States Treasury
Notes, 7.50%, 5/15/02.................................... 808
500,000 United States Treasury
Notes, 7.25%, 8/15/04.................................... 534
5,569
CORPORATE BOND
USD 500,000 First USA Credit Card Master
Trust, FRN, 6.2425%,
6/17/02.................................................. $ 500
OPTION PURCHASED
1,000,000 *U.S. dollar Call / Japanese yen
Put, expires 5/13/96.............................. 25
HYBRID INSTRUMENTS
350,000 Bank of Scotland Treasury
Services Singapore Dollar
Linked Note, Zero Coupon,
5/3/96: Principal repayment
value linked to the
performance of the
Singapore dollar................................................ 340
451,968 Morgan Guaranty Polish
Zloty Linked Note, Zero
Coupon, 10/11/95: Principal
repayment value linked to
the performance of the
Polish zloty.................................................... 425
500,000 Swedish Export Credit Czech
Crown Linked Note, Zero
Coupon, 7/28/95: Principal
repayment value linked to
the performance of the
Czech crown and
German deutschemark............................................. 497
1,262
SHORT-TERM INVESTMENTS
1,006,000 Cargill Financial Services,
Commercial Paper, 6.10%,
7/3/95................................................... 1,006
570,000 General Motors Acceptance
Corporation, Commercial
Paper, 6.00%, 7/17/95........................................... 568
1,000,000 New Center Asset Trust,
Commercial Paper, 6.30%,
7/3/95................................................... 1,000
1,600,000 Siemens Corporation,
Commercial Paper, 6.20%,
7/3/95................................................... 1,599
4,173
TOTAL UNITED STATES 11,529
TOTAL INVESTMENTS IN SECURITIES -- 100.4% OF NET ASSETS (COST
$28,003)........................................................ $28,908
FORWARD CURRENCY EXCHANGE CONTRACTS
Unrealized
Counterparty Settlement Deliver Receive Gain (Loss)
____________ ___________ ___________ __________ _________
Citibank 7/6/95 FRF 2,028 DEM 577 $(1)
Chase 7/7/95 CAD 800 GBP 363 (5)
Chase 7/7/95 JPY 24,512 DEM 400 (1)
JP Morgan 7/7/95 USD 2,344 JPY 200,000 19
Chase 7/10/95 ATS 3,468 USD 349 (7)
Chase 7/12/95 DEM 255 SEK 1,324 (3)
Citibank 7/12/95 SEK 1,324 DEM 254 2
Citibank 7/13/95 IEP 355 USD 578 (4)
Citibank 7/19/95 ESP 102,267 FRF 4,140 11
Chase 7/19/95 ESP 35,428 ITL 480,000 1
Chase 7/19/95 ESP 50,000 USD 411 (1)
Chase 7/19/95 ITL 354,762 DEM 300 1
Citibank 7/20/95 GBP 280 DEM 619 3
JP Morgan 7/20/95 GBP 140 DEM 306 (1)
Chase 7/20/95 GBP 342 USD 548 4
Citibank 7/24/95 AUD 1,248 USD 898 13
Chase 7/24/95 CAD 1,100 USD 797 (3)
JPMorgan 8/7/95 SEK 2,006 DEM 381 1
Citibank 8/16/95 DKK 1,234 USD 225 (4)
Citibank 12/15/95 USD 300 IDR 702,000 15
_____
Net unrealized gain (loss) on open forward currency
exchange contracts................................................ 40
OTHER ASSETS LESS LIABILITIES ..................................... (158)
________
NET ASSETS......................................................... $28,790
________
________
* Non-income producing
+ Listed by currency denomination
(ATS) Austrian schilling
(AUD) Australian dollar
(BEL) Belgian franc
(CAD) Canadian dollar
(DEM) German deutschemark
(DKK) Danish krone
(ESP) Spanish peseta
(FRF) French franc
(GBP) British sterling
(IDR) Indonesian rupia
(IEP) Irish punt
(ITL) Italian lira
(JPY) Japanese yen
(NLG) Dutch guilder
(SEK) Swedish krona
(USD) U.S. dollar
(XEU) European currency unit
The accompanying notes are an integral part of these financial statements.
Statement of Assets and Liabilities
T. Rowe Price Global Income Funds / June 30, 1995 (Unaudited)
(IN THOUSANDS)
Short-Term Global
Global Government
Income Fund Bond Fund
___________ ___________
ASSETS
Investments in securities, at value
(cost $41,525 and $28,003)...................... $ 42,241 $ 28,908
Cash and foreign currencies..................... 1,233 2,822
Other assets..................................... 1,410 2,226
__________ __________
Total assets..................................... 44,884 33,956
__________ __________
LIABILITIES
Payable for investment securities purchased...... -- 4,680
Other liabilities................................ 305 486
__________ __________
Total liabilities................................ 305 5,166
__________ __________
NET ASSETS....................................... $ 44,579 $ 28,790
__________ __________
__________ __________
NET ASSETS CONSIST OF:
Accumulated net investment income -
net of distributions............................ $ (269) $ 169
Accumulated net realized gain/loss -
net of distributions............................ (3,571) (1,611)
Net unrealized gain (loss)....................... 644 1,050
Paid-in-capital applicable to 10,179,761 and 2,861,245 shares
of $0.01 par value capital stock outstanding;
2,000,000,000 shares of the Corporation
authorized..................................... 47,775 29,182
__________ __________
NET ASSETS....................................... $ 44,579 $ 28,790
__________ __________
NET ASSET VALUE PER SHARE........................ $ 4.38 $ 10.06
__________ __________
__________ __________
The accompanying notes are an integral part of these financial statements.
Statement of Operations
T. Rowe Price Global Income Funds / Six Months Ended June 30, 1995 (Unaudited)
(IN THOUSANDS)
Short-Term Global
Global Government
Income Fund Bond Fund
___________ ___________
INVESTMENT INCOME
Interest income..................................... $ 1,805 $ 1,225
__________ __________
Expenses
Investment management............................. 74 30
Custody and accounting............................ 73 66
Shareholder servicing............................. 52 45
Registration...................................... 19 16
Legal and audit................................... 11 13
Prospectus and shareholder reports................ 4 23
Directors......................................... 3 3
Miscellaneous..................................... 7 6
__________ __________
Total expenses.................................... 243 202
__________ __________
Net investment income............................... 1,562 1,023
__________ __________
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Securities........................................ (2,253) 558
Futures........................................... - 3
Options........................................... - (10)
Foreign currency transactions..................... (406) 245
__________ __________
Net realized gain (loss).......................... (2,659) 796
__________ __________
Change in net unrealized gain or loss on:
Securities........................................ 2,607 1,959
Options........................................... - (8)
Other assets and liabilities denominated in
foreign currencies................................ (1) 171
__________ __________
Change in net unrealized gain or loss............. 2,606 2,122
__________ __________
Net realized and unrealized gain (loss)............. (53) 2,918
__________ __________
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS... $ 1,509 $ 3,941
__________ __________
__________ __________
The accompanying notes are an integral part of these financial statements.
Statement of Changes in Net Assets
T. Rowe Price Global Income Funds (Unaudited)
(IN THOUSANDS)
Short-Term Global Income Fund Global Government Bond Fund
_______________________ ______________________
Six Months Year Ended Six Months Year Ended
Ended December 31, Ended December 31,
June 30, 1995 1994 June 30, 1995 1994
_______________________ ______________________
INCREASE (DECREASE) IN NET
ASSETS FROM
Operations
Net investment income............ $1,562 $5,365 $1,023 $2,440
Net realized gain (loss)......... (2,659) (8,334) 796 (2,353)
Change in net unrealized gain
or loss......................... 2,606 164 2,122 (1,468)
______ ______ ______ ______
Increase (decrease) in net assets
from operations................. 1,509 (2,805) 3,941 (1,381)
______ ______ ______ ______
Distributions to shareholders
Net investment income............ (1,562) (1,030) (1,023) (2,291)
Net realized gain................ - - - (96)
Tax return of capital............ - (4,335) - (149)
______ ______ ______ ______
Decrease in net assets from
distributions.................... (1,562) (5,365) (1,023) (2,536)
______ ______ ______ ______
Capital share transactions*
Shares sold...................... 3,183 58,079 2,324 16,507
Distributions reinvested......... 1,123 4,367 695 1,804
Shares redeemed.................. (16,048) (95,020) (13,663) (26,636)
______ ______ ______ ______
Increase (decrease) in net assets
from capital share transactions.. (11,742) (32,574) (10,644) (8,325)
______ ______ ______ ______
Increase (decrease) in net assets. (11,795) (40,744) (7,726) (12,242)
NET ASSETS
Beginning of period.............. 56,374 97,118 36,516 48,758
______ ______ ______ ______
End of period.................... $44,579 $56,374 $28,790 $36,516
______ ______ ______ ______
______ ______ ______ ______
*Share information
Shares sold..................... 728 12,427 240 1,708
Distributions reinvested........ 257 955 71 188
Shares redeemed................ (3,668) (20,674) (1,411) (2,773)
______ ______ ______ ______
Increase (decrease) in shares
outstanding..................... (2,683) (7,292) (1,100) (877)
______ ______ ______ ______
______ ______ ______ ______
The accompanying notes are an integral part of these financial statements.
Notes to Financial Statements
T. Rowe Price Global Income Funds / June 30, 1995 (Unaudited)
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
T. Rowe Price International Funds, Inc. (the Corporation) is registered under
the Investment Company Act of 1940. The Short-Term
Global Income Fund (the Short-Term Fund) and the Global Government Bond Fund
(the Government 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. Purchased options are valued at the latest bid price.
For purposes of determining each fund's net asset value per share,
the U.S. dollar value of all assets and liabilities initially expressed in
foreign currencies is determined by using 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 - Assets and liabilities are translated into U.S.
dollars at the prevailing exchange rate at the end of the reporting period.
Purchases and sales of securities and income and expenses are translated into
U.S. dollars at the prevailing exchange rate on the dates of such
transactions. The effect of changes in foreign exchange rates on realized
and unrealized security gains and losses is reflected as a component of such
gains and losses.
C) Premiums and Discounts - Premiums and discounts 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 and may differ from those determined in accordance with
generally accepted accounting principles. Unrealized gains and losses on
forward currency exchange contracts are included in Other assets and Other
liabilities, respectively, and in Change in net unrealized gain or loss in
the accompanying financial statements.
NOTE 2 - INVESTMENT TRANSACTIONS
Consistent with their investment objectives, the funds engage in the
following practices to manage exposure to certain risks and enhance
performance. The investment objective, policies, program, risk factors, and
following practices of each fund are described more fully in each fund's
Prospectus and Statement of Additional Information.
A) Emerging Markets - At June 30, 1995, each Fund held investments issued by
governments of emerging market countries or by companies located in emerging
markets. Each Fund also held investments whose value is linked to the
currencies of emerging market countries. Future economic or political
developments could adversely affect the liquidity or value, or both, of such
securities.
B) Forward Currency Exchange Contracts - At June 30, 1995, each fund was a
party to forward currency exchange contracts under which it is obligated to
exchange currencies
Notes to Financial Statements (Cont'd)
at specified future dates and exchange rates. Risks arise from the possible
inability of counterparties to meet the terms of their agreements and from
movements in currency values.
C) Options - Call and put options give the holder the right to purchase or
sell, respectively, a security or currency at a specified price on a certain
date. Risks arise from possible illiquidity of the options market and from
movements in security or currency values. Options are reflected in the
Government Fund's accompanying Portfolio of Investments at market value.
D) Other - Purchases and sales of portfolio securities, other than short-term
securities, for the six months ended June 30, 1995, were as follows:
Short-Term Government
Fund Fund
___________ ___________
U.S. Government
Securities
Purchases $3,999,000 $6,910,000
Sales 3,505,000 7,962,000
Other Portfolio Securities
Purchases 29,758,000 43,038,000
Sales 32,415,000 51,629,000
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 $745,000; $56,000 of which
expire in 2000, $93,000 in 2001 and $596,000 in 2002. The Government Fund
has unused realized capital loss carryforwards for federal income tax
purposes of $1,008,000, all of which expire in 2002. Each fund intends to
retain gains realized in future periods that may be offset by available
capital loss carryforwards.
At June 30, 1995, the aggregate cost of investments for the
Short-Term and Government funds for federal income tax and financial
reporting purposes was $41,525,000 and $28,003,000, respectively. Net
unrealized gain (loss) on investments was as follows:
Short-Term Government
Fund Fund
___________ ___________
Appreciated Investments $821,000 $995,000
Depreciated Investments (105,000) (90,000)
___________ ___________
Net Unrealized
Gain (Loss) $716,000 $905,000
__________ __________
__________ __________
NOTE 4 - RELATED PARTY TRANSACTIONS
Each fund is managed by Rowe Price-Fleming International, Inc. (the Manager),
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 the Manager
provides for an annual investment management fee, of which $9,000 and $3,000
was payable at June 30, 1995 by the Short-Term Fund and Government Fund,
respectively. The fee is computed daily and paid monthly, and consists of an
Individual Fund Fee equal to 0.25% of average daily net assets for the
Short-Term Fund and 0.35% of average daily net assets for the Government
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. At June 30, 1995, and
for the six months then ended, the effective annual Group Fee rate was 0.34%.
Each fund pays a pro rata share of the Group Fee based on the ratio of its
net assets to those of the Group.
Under the terms of the investment man-agement agreement, the Manager is
required to bear any expenses through
December 31, 1995 for the Short-Term Fund and through December 31, 1996 for
the Government Fund which would cause each fund's ratio of expenses to
average net assets to exceed 1.00% and 1.20%, respectively. Thereafter
through December 31, 1997 for the Short-Term Fund and December 31, 1998 for
the Government Fund, each fund is required to reimburse the Manager for these
expenses, provided that average net assets have grown or expenses have
declined sufficiently to allow reimbursement without causing each fund's
ratio of expenses to average net assets to exceed 1.00% and 1.20%,
respectively. Pursuant to these agreements, $71,000 and $87,000 of
management fees were not accrued by the Short-Term and Government funds for
the six months ended June 30, 1995. Pursuant to the above agreement,
$125,000 of unaccrued 1994 Short-Term Fund fees remain subject to
reimbursement through December 31, 1997. Additionally, $295,000 of unaccrued
1992-1993 Short-Term Fund fees and expenses are subject to reimbursement
through December 31, 1995. Pursuant to a previous agreement, $242,000 of
unaccrued 1993-1994 Government Fund fees remain subject to reimbursement
through December 31, 1996.
In addition, each fund has entered into agreements with Price
Associates and two wholly owned subsidiaries of Price Associates, pursuant to
which each fund receives certain other services. Price Associates computes
the daily share price and maintains the financial records of each fund. T.
Rowe Price Services, Inc. is each fund's transfer and dividend disbursing
agent and provides shareholder and administrative services to the funds. T.
Rowe Price Retirement Plan Services, Inc. provides subaccounting and
recordkeeping services for certain retirement accounts invested in each fund.
The Short-Term and Government funds incurred expenses pursuant to these
related party agreements totaling approximately $99,000 and $87,000,
respectively, for the six months ended June 30, 1995, of which $21,000 and
$17,000, respectively, were payable at period-end.
Financial Highlights
T. Rowe Price Short-Term Global Income Fund (Unaudited)
For a share outstanding throughout each period
______________________________________________
June 30, 1992
Six Months Year Ended (Commencement of
Ended December 31, Operations) to
June 30, December 31,
1995 1994 1993 1992
______________________________________________
NET ASSET VALUE, BEGINNING OF PERIOD $4.38 $4.82 $4.78 $5.00
______ ______ ______ ______
Investment Activities
Net investment income......... 0.14* 0.30* 0.32* 0.20*
Net realized and unrealized gain (loss). -- (0.44) 0.04 (0.21)
______ ______ ______ ______
Total from Investment Activities......... 0.14 (0.14) 0.36 (0.01)
______ ______ ______ ______
Distributions
Net investment income................... (0.14) (0.06) (0.32) (0.20)
Net realized gain....................... -- -- -- (0.01)
Tax return of capital................... -- (0.24) -- --
______ ______ ______ ______
Total Distributions...................... (0.14) (0.30) (0.32) (0.21)
______ ______ ______ ______
NET ASSET VALUE, END OF PERIOD........... $4.38 $4.38 $4.82 $4.78
______ ______ ______ ______
______ ______ ______ ______
RATIOS/SUPPLEMENTAL DATA
Total Return............................. 3.22%* (2.92)%* 7.87%* (0.22)%*
Ratio of Expenses to Average Net Assets.. 1.00%*+ 1.00%* 1.00%* 1.00%*+
Ratio of Net Investment Income
to Average Net Assets................... 6.42%*+ 6.59%* 6.74%* 7.92%*+
Portfolio Turnover Rate.................. 179.7%+ 120.2% 92.9% 334.1%+
Net Assets, End of Period (in thousands). $44,579 $56,374 $97,118 $66,297
+ Annualized
* Excludes expenses in excess of a 1.00% voluntary expense limitation in
effect through December 31, 1995.
Financial Highlights
T. Rowe Price Global Government Bond Fund (Unaudited)
For a share outstanding throughout each period
______________________________________________
DEC. 28, 1990
Six Months Year Ended (Commencement of
Ended December 31, Operations) to
June 30, December 31,
1995 1994 1992 1991
______________________________________________
NET ASSET VALUE, BEGINNING OF PERIOD. $9.22 $10.08 $9.85 $10.30 $10.00
______ ______ ______ ______ ______
Investment Activities
Net investment income............... 0.29* 0.54* 0.56* 0.76* .77*
Net realized and unrealized
gain (loss)........................ 0.84 (0.84) 0.51 (0.44) .30
______ ______ ______ ______ ______
Total from Investment Activities..... 1.13 (0.30) 1.07 0.32 1.07
______ ______ ______ ______ ______
Distributions
Net investment income............... (0.29) (0.51) (0.56) (0.76) (0.77)
Net realized gain................... -- (0.02) (0.28) (0.01) --
Tax return of capital............... -- (0.03) -- -- --
______ ______ ______ ______ ______
Total Distributions.................. (0.29) (0.56) (0.84) (0.77) (0.77)
______ ______ ______ ______ ______
NET ASSET VALUE,
END OF PERIOD...................... $10.06 $9.22 $10.08 $9.85 $10.30
______ ______ ______ ______ ______
______ ______ ______ ______ ______
RATIOS/SUPPLEMENTAL DATA
Total Return......................... 12.40%* (3.06)%* 11.15%* 3.26%* 11.31%*
Ratio of Expenses to
Average Net Assets................. 1.20%*+ 1.20%* 1.20%* 1.20%* 1.20%*
Ratio of Net Investment Income
to Average Net Assets............... 6.06%*+ 5.57%* 5.57%* 7.51%* 8.07%*
Portfolio Turnover Rate.............. 338.6%+ 254.1% 134.0% 236.6% 93.6%
Net Assets, End of Period
(in thousands)..................... $28,790 $36,516 $48,758 $53,546 $39,775
+ Annualized.
* Excludes expenses in excess of a 1.20% voluntary expense limitation in
effect through December 31, 1996.
