Semiannual Report
Global Stock Fund
April 30, 1996
T. Rowe Price
REPORT HIGHLIGHTS
o During its first four months of operation, your fund made a good start
with a return of 8.9% compared with the benchmark's 6.7%.
o Our broad country weightings in the portfolio helped performance, but a
greater contribution was made by individual stock selection where
attractive growth stocks added value.
o The U.S. stock market made further progress. Japan exhibited signs of a
modest recovery, and economic growth remains very strong in many of the
smaller markets of Asia.
o Our investment strategy so far has been to underweight two of the major
markets - the U.S. and Japan - and overweight Europe and Southeast Asia.
o We continue to have confidence in Southeast Asia based on the region's
high growth and attractive valuations. We also think Latin America
deserves its place in the portfolio because of ongoing financial
reforms.
Fellow Shareholders
In welcoming you as the initial shareholders of the T. Rowe Price Global Stock
Fund, I am pleased to report on the fund's investment activities since
commencing operations on December 29, 1995. Our fund made a good start with a
return since inception of 8.9% compared with a return of 6.7% from the Morgan
Stanley Capital International World Index over the same period.
PERFORMANCE REVIEW
Our broad country weightings, on which I comment in more detail later, helped
the return, but a greater contribution came from our stock selection where our
bias toward attractively priced growth stocks also added value.
Performance Comparison
12/29/95
to
Period Ended 4/30/96 4/30/96
_____________________________________________________________________________
Global Stock Fund 8.90%
MSCI World Index 6.66
MARKET ENVIRONMENT
The period under review was favorable for world stock markets. The U.S. market
made further progress, although it showed clear signs of deceleration after
its outstanding performance in 1995. Corporate earnings seem to be coming
through well, but there is some uncertainty as to the durability of this long
period of slow growth and low inflation that has been so beneficial for U.S.
capital markets. This uncertainty caused a rise in long-term interest rates,
which in turn gave the stock market pause for thought.
In Europe, the economic cycle is well behind that of the U.S.; activity was
very dull in most countries and, led by Germany, interest rates continued to
fall. Turning to the Far East, we saw further signs of a modest recovery in
Japan, but economic growth remained very strong in the smaller economies of
the Pacific. The stock markets of Latin America performed well as confidence
returned following the peso crisis of over a year ago. Thus, the broad picture
was one of moderate economic growth with interest rates that were at least
stable or likely to fall further.
Market Performance
Four Months Local Local Currency U.S.
Ended 4/30/96 Currency vs. U.S. Dollars Dollars
_____________________________________________________________________________
France 17.1% - 5.5% 10.6%
Germany 8.4 - 6.7 1.2
Hong Kong 12.0 - 0.1 12.0
Italy 11.7 1.4 13.3
Japan 7.8 - 1.5 6.1
Mexico 12.2 3.8 16.4
Netherlands 14.1 - 6.6 6.6
Norway 14.2 - 4.0 9.6
Switzerland 11.2 - 7.6 2.8
United Kingdom 5.6 - 3.4 2.1
United States 7.4 - 7.4
Source: Randall-Helms Database
In the currency markets, the U.S. dollar continued the recovery that began
late last year. It performed well against the hard currencies of central
Europe and even made further progress against the yen. Interestingly, the
strength of the U.S. dollar has not materially affected the fund's total
return even though a large proportion of the portfolio is denominated in yen
and European currencies. The reason is that multinational companies are
usually well represented in stock market indices and their stocks are
frequently favored when the local currency weakens. We have seen this
phenomenon in both Europe and Japan this year, but the converse has perhaps
been true in the U.S. where the strength of the dollar has clouded the
prospects for a number of U.S. multinationals.
INVESTMENT REVIEW
The United States
The U.S. stock market continued to perform well in early 1996, assisted by
solid earnings from U.S. companies and by strong cash flow from investors into
the equity markets. On the negative side, long-term interest rates rose
dramatically in the last four months and are now near 7% after starting the
year around 6%. This has stretched equity valuations even further.
During the first quarter of 1996, the U.S. economy rebounded from a weak
fourth quarter to post strong real GDP growth of 2.8%. Retail activity was
buoyant and inventories seemed to be in better shape than in 1995. In
addition, unemployment fell modestly and consumer confidence lifted.
Against this background, interest-sensitive and defensive stocks
underperformed the markets and many cyclical sectors - retail, airlines,
chemicals, energy and mining - outperformed them. Although your fund focuses
more on growth businesses and strong managements, we were able to participate
somewhat in the performance of the cyclical sectors by owning several strong
companies within them. Technology had a mixed quarter as strong secular demand
was tempered by slightly weaker cyclical demand. This caused problems for
suppliers as inventories were adjusted. Your fund consolidated technology
positions in strong companies with attractive long-term prospects like
Microsoft, Oracle Systems, and Intel.
Overall, we continue to own and build positions in companies that can continue
to generate cash and grow in a maturing U.S. economy. In addition, we look for
the vision and wisdom to deploy that cash to add to shareholder value. Our
larger holdings in the U.S. fit this criteria. They include Federal Home Loan
Mortgage, General Electric, Columbia/HCA Healthcare, Danaher, and Philip
Morris.
Chart 1 - Geographic Diversification
Latin America
Stock markets here have performed strongly since the beginning of the year. In
Brazil, a sharp fall in inflation, combined with strong economic growth, led
to rising confidence together with a high rating for President Cardoso in the
opinion polls. With economic policy remaining on track and the trade account
in moderate surplus, the Brazilian currency remained steady with positive
implications for both inflation and interest rates.
In Mexico, the stock market blazed ahead with the first signs of economic
recovery and, with the peso now more stable, there was increasing confidence
that interest rates could fall. We were overweighted in the region relative to
the benchmark, which helped boost the return.
The Far East
In Japan the economy began to make steady progress, although the pace was very
modest compared with previous recoveries. Most important, the consumer showed
signs of life and department store sales were again positive year-on-year
after almost four years of decline. Capital expenditure, usually a major
contributor to Japan's economic strength, also looked better.
The major topic of discussion during the quarter was the continuing debate
about who should pay for the failed housing loan companies. In the Diet
(Japan's parliament), the debate remained intense, but the banks have already
shown their hand by announcing write-offs of large tranches of bad debt.
Doubtless this debate will rumble on for some time, but, by allowing the yield
curve to remain steep, the authorities have provided an attractive environment
for the banks to earn their way out of their current difficulties.
_____________________________________________________________________________
YOUR PORTFOLIO WAS UNDERWEIGHTED IN JAPAN LARGELY BECAUSE WE AVOIDED INTEREST
RATE-SENSITIVE AND MATURE SECTORS THAT REMAIN A LARGE PART OF THE INDEX.
Your portfolio was underweighted in Japan largely because we avoided interest
rate-sensitive and mature sectors that remain a large part of the index. We
also focused on the technology sector, where many Japanese companies were
leaders in their field and their overseas business was helped by recent yen
weakness.
Regarding Southeast Asia, a number of markets performed well since the
beginning of the year, and it does look as though this part of the world is at
last recovering from the long hangover that followed the exuberant party of
1993. One of the countries that led the way with a return close to 20% was
Malaysia, where we had holdings, but Hong Kong was held back by U.S. interest
rate concerns.
In Singapore, the economy continues to decelerate with exports affected by
slowing electronics demand worldwide. Corporate results were somewhat
disappointing especially in the manufacturing and ship repair sector. However,
helped by slower economic growth, the outlook for interest rates improved and
this helped the property and banking sector where our portfolio has important
positions. Foreign investors had become excessively gloomy about Malaysia late
last year, but confidence brightened at the prospect of achieving a soft
landing for the economy. We remain confident about this country with its
abundance of natural resources, stable politics, and sensible economic
policies and their focus on steady infrastructure spending.
Europe
In Europe the broad picture is one of very dull economic activity, but central
banks continued to ease monetary policy.
In Germany interest rates have fallen again and this, together with a weaker
currency, will be good news for an economy that has suffered from high wage
costs and a strong deutschemark for some time now. Our weighting in this
market remained low and was biased toward the health care sector, with major
positions in Bayer, Gehe, and Rhoen Klinikum.
Industry Diversification
Percent of
Net Assets
4/30/96
_____________________________________________________________________________
Services 21.0%
Consumer Goods 20.1
Finance 15.7
Capital Equipment 14.8
Energy 8.9
Materials 5.5
Multi-Industry 2.6
Other and Reserves 11.4
_____________________________________________________________________________
Total 100.0%
Monetary easing in Germany was good news for France. After an uncertain start,
there were signs that the Chirac administration was coming to grips with the
country's fiscal problems, and this revived foreign interest in the stock
market. Core holdings in our French portfolio include Eaux Cie Generale, a
conglomerate based on water services, LVMH, luxury goods, and Carrefour, the
supermarket chain.
The Netherlands stock market performed well, led by steady growers such as our
publishers Elsevier and Wolters Kluwer. Royal Dutch Petroleum - the
portfolio's largest holding - recently came to life following a strong first
quarter's earnings report.
In the U.K., the economy slowed down in late 1995 and this revived optimism
that interest rates could fall again. Sterling weakened against the dollar,
focusing attention on the large multinationals that dominate the index. The
U.K. is our largest country position in Europe. Not only is it Europe's
largest stock market but it is also attractive due to the range of
well-managed multinational companies listed there. Examples of these include
pharmaceutical companies Glaxo Wellcome and Smithkline Beecham, publisher Reed
International, and oil major Shell Transport & Trading.
Turning to the smaller markets, in Italy both the market and the currency
performed well. Following the elections in April, the prime minister-designate
made encouraging statements about fiscal reform and returning the lira to the
European monetary system. Spain also did well on the back of elections, and a
dull market in Switzerland was enlivened by the strong performance of
pharmaceutical companies Ciba-Geigy and Sandoz, both holdings in the
portfolio, which announced a merger.
INVESTMENT POLICY AND OUTLOOK
Our opening strategy for the portfolio has been to underweight the two major
markets of the index - the U.S. and Japan - and to counterbalance this by
overweighting Europe and Southeast Asia. We also have significant
overweightings in Latin America, but these markets are a small component of
the index and our positions are not large in absolute terms.
Our thinking behind this strategy is that the U.S. market, which performed
outstandingly well in 1995, is now likely to mark time especially if long
interest rates continue to rise. Indeed, we lowered our weighting somewhat
further in February as valuations continued to look stretched. In Japan, the
economy is now recovering steadily, but valuations already discount a strong
increase in corporate earnings and rising interest rates may well hamper
progress. In Europe we have a more helpful mix of improving economies and
falling interest rates, and we can find quality growth companies with
reasonable valuations. Our confidence in Southeast Asia is based on high
growth that is still attractively valued. Despite their volatile nature, the
Latin American markets deserve their place, given their economic potential and
their commitment to financial reform.
This broad strategy served the fund well in its opening months, and we are
hopeful that it will continue to do so in the future.
Respectfully submitted,
Martin G Wade
President
May 24, 1996
Revisiting the Case for International Equity Investing
Chart 2 - Correlation of Returns
Over the past 15 years, a growing number of U.S. investors have added
international stocks to their portfolios, mixing domestic and foreign stocks
in the pursuit of higher overall returns with lower volatility. In recent
months, however, some naysayers have questioned the benefits of international
diversification. Some claim that the era of higher international returns is
over, citing the recent superior performance of U.S. stocks. Others point to
short periods when U.S. and international markets moved in tandem, so-called
"high correlation," as proof that foreign stocks no longer offer adequate
diversification.
On the contrary, performance and correlation, when viewed over the long term,
reinforce the case for international diversification. For instance, although
U.S. stocks have recently outperformed, foreign stocks have outpaced them in
seven of the last 12 years. (We used the MSCI Europe, Australia, and Far East
Index - EAFE - to measure foreign stocks and the Standard & Poor's 500 Stock
Index for domestic equities.)
Furthermore, correlations have remained low over the long term. The chart
shows the correlation of various foreign markets to the U.S. over two 10-year
periods. A measurement of 100% would indicate that foreign stocks moved in the
same direction as U.S. stocks all of the time. The overall correlation of
foreign stocks has actually declined: from 1981 through 1990, the EAFE and the
S&P 500 moved in the same direction 41% of the time, but from 1986 through
1995, the correlation dropped to 34%. Correlations declined in the
Netherlands, Germany, and Japan and rose only modestly in the U.K. and Hong
Kong.
Inevitably, there are short periods when foreign markets move with the U.S.
market, usually when the latter is experiencing significant volatility. In
general, however, foreign markets follow their own path depending mostly on
the unique fundamentals of each country. In our opinion, the case for
international diversification remains solid. Foreign stocks may be poised to
regain leadership because many international economies are at earlier stages
of expansion than the U.S. economy. If correlations remain low over the long
term, as we expect, diversifying into foreign stocks could continue to be an
effective way to limit risk and enhance returns.
T. Rowe Price Global Stock Fund
Portfolio Highlights
TWENTY-FIVE LARGEST HOLDINGS
Percent of
Net Assets
4/30/96
_____________________________________________________________________________
Royal Dutch Petroleum, Netherlands 1.6%
Eaux Cie Generale, France 1.1
Federal Home Loan Mortgage, United States 1.0
Elsevier, Netherlands 1.0
General Electric, United States 1.0
_____________________________________________________________________________
Astra, Sweden 0.9
Mitsubishi Heavy Industries, Japan 0.9
Nestle, Switzerland 0.9
Nippon Denso, Japan 0.9
Nomura Securities, Japan 0.9
_____________________________________________________________________________
Carrefour, France 0.8
Columbia/HCA Healthcare, United States 0.8
Canon, Japan 0.8
NEC, Japan 0.8
Internationale Nederlanden Groep, Netherlands 0.8
_____________________________________________________________________________
BBC Brown Boveri, Switzerland 0.8
Philip Morris, United States 0.8
Sumitomo Electric, Japan 0.7
Matsushita Electric Industrial, Japan 0.7
Norsk Hydro, Norway 0.7
_____________________________________________________________________________
LVMH, France 0.7
Polygram, Netherlands 0.7
Mitsui Fudosan, Japan 0.7
Nippon Steel, Japan 0.7
National Westminster Bank, United Kingdom 0.7
_____________________________________________________________________________
Total 21.4%
T. Rowe Price Global Stock Fund
Unaudited
Financial Highlights For a share outstanding throughout the period
12/29/95
to
4/30/96
NET ASSET VALUE
Beginning of period $ 10.00
Investment activities
Net investment income 0.03*
Net realized and unrealized gain (loss) 0.86
Total from investment activities 0.89
NET ASSET VALUE
End of period $ 10.89
Ratio/Supplemental Data
Total return 8.9%*
Ratio of expenses to average net assets 1.30%!*
Ratio of net investment income to average net assets 1.43%!*
Portfolio turnover rate 50.6%!
Average commission rate paid $ 0.0400
Net assets, end of period (in thousands) $ 9,587
* Excludes expenses in excess of a 1.30% voluntary expense limitation in
effect through 10/31/97.
! Annualized.
The accompanying notes are an integral part of these financial statements.
T. Rowe Price Global Stock Fund
Unaudited April 30, 1996
Portfolio of Investments Shares/Par Value
In thousands
ARGENTINA 0.4%
Common Stocks 0.4%
Banco de Galicia Buenos Aires (Class B) ADR (USD) 164 $ 4
Banco Frances del Rio de la Plata ADR (USD) 144 4
Telefonica de Argentina (Class B) ADR (USD) 570 16
YPF Sociedad Anonima (Class D) ADR (USD) 400 9
_____________________________________________________________________________
Total Argentina (Cost $33) 33
AUSTRALIA 1.2%
Common Stocks 1.1%
Amco 1,000 7
Australia Gas & Light 3,052 13
Broken Hill Proprietary 900 14
Coca Cola Amatil 400 4
Howard Smith 1,000 6
Lend Lease 600 9
National Australia Bank 1,000 9
News Corporation 800 5
Publishing and Broadcasting 1,400 6
Tabcorp Holdings 2,500 10
Westpac Banking 1,200 6
WMC 1,500 11
Woodside Petroleum 1,000 6
_____________________________________________________________________________
106
Preferred Stocks 0.1%
Sydney Harbour Casino Holdings * 3,000 4
_____________________________________________________________________________
4
_____________________________________________________________________________
Total Australia (Cost $104) 110
AUSTRIA 0.0%
Common Stocks 0.0%
Flughafen Wien 30 2
_____________________________________________________________________________
Total Austria (Cost $2) 2
BELGIUM 0.5%
Common Stocks 0.5%
Generale Banque 20 7
Kredietbank 105 $ 30
UCB 9 15
_____________________________________________________________________________
Total Belgium (Cost $49) 52
BRAZIL 0.6%
Preferred Stocks 0.6%
Cia Energetica Minas Gerias (144a) ADR (USD) * 150 4
Telecomunicacoes Brasileiras ADR (USD) 755 41
Usiminas ADS (USD) 1,257 14
_____________________________________________________________________________
Total Brazil (Cost $59) 59
CANADA 0.2%
Common Stocks 0.2%
Alcan Aluminum 440 14
Macmillan Bloedel 200 3
Royal Bank of Canada 70 1
_____________________________________________________________________________
Total Canada (Cost $19) 18
CHILE 0.3%
Common Stocks 0.3%
Chile Fund (USD) 230 6
Chilectra (144a) ADR (USD) 200 11
Enersis ADS (USD) 350 10
_____________________________________________________________________________
Total Chile (Cost $26) 27
CHINA 0.2%
Common Stocks 0.2%
Huaneng Power International (Class N) ADR (USD) * 1,100 16
_____________________________________________________________________________
Total China (Cost $18) 16
DENMARK 0.1%
Common Stocks 0.1%
Den Danske Bank 50 3
Tele Danmark (Class B) 30 2
Unidanmark (Class A) 50 2
_____________________________________________________________________________
Total Denmark (Cost $8) 7
FINLAND 0.1%
Common Stocks 0.1%
Nokia (Class A) 130 $ 5
_____________________________________________________________________________
Total Finland (Cost $5) 5
FRANCE 4.9%
Common Stocks 4.9%
Accor 46 6
Carrefour 103 81
Castorama Dubois 27 5
Chargeurs 27 7
Cie de St. Gobain 132 16
Eaux Cie Generale 957 104
Ecco 82 19
Elf Aquitaine 322 24
Lapeyre 114 6
LVMH 271 69
Pinault Printemps 122 37
Poliet 203 21
Rexel 60 14
Television Francaise 523 57
Total (Class B) 153 10
_____________________________________________________________________________
Total France (Cost $434) 476
GERMANY 2.4%
Common Stocks 2.4%
Allianz Holdings 18 31
Altana 8 5
Bayer 146 47
Deutsche Bank 520 25
Gehe 57 33
Mannesmann 15 5
Rhoen Klinikum 47 6
Schering 344 25
Siemens 40 22
Veba 288 14
Volkswagen 57 $ 19
_____________________________________________________________________________
Total Germany (Cost $230) 232
HONG KONG 2.6%
Common Stocks 2.6%
Dao Heng Bank Group 4,000 15
First Pacific 24,000 32
Guangdong Investment 18,000 11
Guangzhou Investment 60,000 15
Guoco Group 4,000 20
Hong Kong Land Holdings (USD) 16,000 34
Hopewell Holdings 42,000 26
Hutchison Whampoa 5,000 31
New World Development 5,000 23
Swire Pacific (Class A) 2,000 17
Wharf Holdings 6,000 22
_____________________________________________________________________________
Total Hong Kong (Cost $256) 246
ITALY 1.2%
Common Stocks 1.2%
Assicurazioni Generali 1,000 25
Banca Fideuram 7,000 12
ENI * 1,000 4
Italgas 3,600 12
Rinascente 1,000 7
Stet 7,000 24
Telecom Italia 3,000 6
Telecom Italia Mobile * 12,000 27
_____________________________________________________________________________
Total Italy (Cost $105) 117
JAPAN 15.0%
Common Stocks 15.0%
Amada 1,000 12
Canon 4,000 80
Daiichi Pharmaceutical 3,000 50
Daiwa House 1,000 16
DDI 3 $ 26
East Japan Railway 10 53
Fanuc 1,000 44
Hitachi 2,000 22
Ito-Yokado 1,000 59
Kokuyo 2,000 55
Komatsu 3,000 29
Komori 1,000 27
Makita 1,000 16
Marui 2,000 44
Matsushita Electric Industrial 4,000 71
Mitsubishi 1,000 14
Mitsubishi Heavy Industries 10,000 89
Mitsui Fudosan 5,000 66
Murata Manufacturing 1,000 39
NEC 6,000 76
Nippon Denso 4,000 87
Nippon Steel 18,000 65
Nippon Telephone & Telecom 4 31
Nomura Securities 4,000 87
Pioneer Electronic 1,000 22
Sankyo 2,000 49
Sekisui Chemical 1,000 13
Sekisui House 1,000 12
Sharp 1,000 17
Shin-Etsu Chemical 1,000 22
Sony 300 20
Sumitomo 2,000 24
Sumitomo Electric 5,000 72
Teijin 1,000 5
Toppan Printing 2,000 29
_____________________________________________________________________________
Total Japan (Cost $1,366) 1,443
MALAYSIA 1.6%
Common Stocks and Rights 1.6%
Affin Holdings 11,200 28
Berjaya Sports Toto 5,000 16
MBF Capital 3,000 4
Multi-Purpose Holdings 9,000 $ 16
Renong 9,000 16
Renong, rights cv. into loan stock * 600 0
Renong, rights cv. into warrants * 375 0
Tanjong 2,000 8
Technology Resources Industries 12,000 41
United Engineers 4,000 27
_____________________________________________________________________________
Total Malaysia (Cost $147) 156
MEXICO 0.9%
Common Stocks 0.9%
Cemex ADS (USD) 2,000 16
Cifra (Class B) ADR (USD) * 12,090 16
Grupo Televisa GDR (USD) * 463 14
Kimberly-Clark Mexico (Class A) 190 4
Panamerican Beverages (Class A) (USD) 335 15
Telefonos de Mexico (Class L) ADS (USD) 680 23
_____________________________________________________________________________
Total Mexico (Cost $82) 88
NETHERLANDS 5.5%
Common Stocks 5.5%
ABN Amro Holdings 140 7
Ahold 118 6
CSM 228 11
Elsevier 6,300 95
Fortis AMEV 120 8
Internationale Nederlanden Groep 940 73
Koninklijke PTT Nederland 158 6
Nutricia 100 11
Polygram 1,145 68
Royal Dutch Petroleum 1,060 151
Unilever 251 34
Wolters Kluwer 560 61
_____________________________________________________________________________
Total Netherlands (Cost $507) 531
NEW ZEALAND 0.4%
Common Stocks 0.4%
Carter Holt Harvey 3,300 $ 8
Fernz 1,400 4
Fletcher Challenge Building * 250 1
Fletcher Challenge Energy * 250 1
Fletcher Challenge Paper * 500 1
Fletcher Challenge, Forests Division 8,000 10
Telecom Corporation of New Zealand 2,800 12
_____________________________________________________________________________
Total New Zealand (Cost $37) 37
NORWAY 1.2%
Common Stocks 1.2%
Norsk Hydro 1,540 70
Orkla (Class A) 983 48
_____________________________________________________________________________
Total Norway (Cost $113) 118
PORTUGAL 0.5%
Common Stocks 0.5%
Jeronimo Martins 564 45
_____________________________________________________________________________
Total Portugal (Cost $36) 45
SINGAPORE 1.4%
Common Stocks 1.4%
DBS Land 2,500 10
Development Bank of Singapore 1,000 13
Far East Levingston Shipbuilding 1,000 6
Fraser & Neave 1,000 11
Jurong Shipyard 1,000 6
Keppel 1,000 9
Overseas Union Bank 4,000 31
Singapore Land 2,000 14
Singapore Press 600 11
United Overseas Bank 2,000 20
_____________________________________________________________________________
Total Singapore (Cost $130) 131
SOUTH KOREA 0.2%
Common Stocks 0.2%
Samsung Electronic GDR, 1/2 voting (USD) 250 $ 19
_____________________________________________________________________________
Total South Korea (Cost $13) 19
SPAIN 1.7%
Common Stocks 1.7%
Argentaria Banca de Espana 210 8
Banco Popular Espanol 167 28
Banco Santander 620 29
Centros Comerciales Pryca 130 3
Empresa Nacional de Electricidad 300 19
Gas Natural 27 5
Iberdrola 2,352 23
Repsol 1,260 46
_____________________________________________________________________________
Total Spain (Cost $159) 161
SWEDEN 1.7%
Common Stocks 1.7%
Asea (Class A) 200 21
Astra (Class B) 2,040 90
Atlas Copco (Class B) 800 15
Electrolux (Class B) 700 35
Sandvik (Class B) 280 6
_____________________________________________________________________________
Total Sweden (Cost $154) 167
SWITZERLAND 2.6%
Common Stocks 2.6%
BBC Brown Boveri 60 72
Ciba-Geigy 9 11
Nestle 80 89
Roche Holdings 5 39
Sandoz 10 11
Schweizerische Bankgesellschaft 30 30
_____________________________________________________________________________
Total Switzerland (Cost $244) 252
THAILAND 0.5%
Common Stocks 0.5%
Advanced Information Service 300 $ 5
Bangkok Bank 1,500 22
Bank of Ayudhya 400 2
Land & Houses 220 3
Siam Cement 100 5
Siam Commercial Bank 800 12
Thai Farmers Bank 300 4
_____________________________________________________________________________
Total Thailand (Cost $54) 53
UNITED KINGDOM 8.8%
Common Stocks 8.8%
Abbey National 3,000 26
Argos 1,800 17
Argyll Group 6,000 30
Asda Group 19,000 32
BAA 1,000 8
British Gas 5,000 18
British Petroleum 3,000 27
Cable & Wireless 1,000 8
Cadbury Schweppes 3,000 23
Caradon 3,000 10
Coats Viyella 4,000 11
Compass Group 3,000 25
David S. Smith 5,000 23
Electrocomponents 2,000 12
GKN 1,000 15
Glaxo Wellcome 2,000 24
Grand Metropolitan 2,000 13
Guinness 4,100 30
Heywood Williams Group 1,000 4
Hillsdown Holdings 3,000 8
John Laing (Class A) 3,000 14
Kingfisher 3,400 30
Ladbroke Group 5,000 15
London Electricity 2,650 33
National Grid Group 5,000 $ 16
National Westminster Bank 7,000 65
Rank Organisation 1,000 8
Reed International 3,000 51
Rolls Royce 3,000 11
RTZ 2,000 31
Sears 3,000 5
Shell Transport & Trading 4,000 53
Smithkline Beecham 6,000 63
T & N 7,000 19
Tomkins 7,000 29
United Newspapers 3,400 35
_____________________________________________________________________________
Total United Kingdom (Cost $826) 842
UNITED STATES 31.9%
Common Stocks 32.0%
ACE Limited 1,400 62
Adobe Systems 200 9
ADT * 3,700 63
AirTouch Communications * 1,300 41
Allied Signal 700 41
American Home Products 300 32
Apria Healthcare * 700 24
Atlantic Richfield 300 35
AutoZone * 800 29
Bank of Boston 800 39
Bay Networks * 900 28
BellSouth 700 28
BJ Services 400 15
Boston Scientific * 1,100 47
Browning-Ferris 200 6
Ceridian * 600 29
Chase Manhattan 700 48
Coltec Industries * 2,000 26
Columbia/HCA Healthcare 1,500 80
COMPAQ Computer * 500 23
ContiFinancial * 1,000 32
Cooper Cameron * 500 $ 23
Corning 1,600 56
Corporate Express * 600 22
CUC International * 300 10
Danaher 1,500 59
Delta 300 24
Disney 500 31
Duracell International 400 18
Electronic Arts * 700 19
Emerson Electric 500 42
Exide 1,600 45
Federal Home Loan Mortgage 1,200 100
First Data 600 46
First USA 300 17
First USA Paymentech * 1,300 57
Gaylord Entertainment 1,000 26
General Electric 1,200 93
General Nutrition * 1,000 19
Great Lakes Chemical 800 55
Halliburton 200 11
Heartport * 1,000 36
Helmerich & Payne 200 7
Hubbell (Class B) 700 45
Informix * 600 16
Intel 500 34
Johnson & Johnson 100 9
Jones Apparel Group * 600 31
Kimberly-Clark 500 36
Maxim Integrated Products * 900 31
MCI 1,100 32
Microsoft * 500 57
Millipore 500 21
Newell 1,400 40
Norwest 1,000 36
Nucor 200 11
Oracle Systems * 1,200 40
PacifiCare Health Systems (Class B) * 400 34
Partnerre 1,300 $ 37
PepsiCo 800 51
Pfizer 800 55
Philip Morris 800 72
Procter & Gamble 700 59
Promus Hotel * 900 26
Quorum Health Group * 2,200 56
Revco * 1,200 28
Revlon (Class A) * 500 14
Royal Caribbean Cruises 600 17
Salomon 1,400 57
Sara Lee 1,300 40
St. John Knits 200 12
Sybase * 1,100 30
Telephone and Data Systems 1,000 46
Time Warner 1,000 41
Toys "R" Us * 1,200 33
Travelers/Aetna Property Casualty (Class A) * 1,000 28
TriMas 1,100 26
Tyco Laboratories 700 27
United HealthCare 1,100 64
UNUM 500 30
USX-Marathon 2,700 59
Viacom (Class A) * 300 12
Viacom (Class B) * 1,100 45
Wal-Mart 800 19
Warnaco Group 1,400 37
Xilinx * 300 11
_____________________________________________________________________________
3,058
Options Purchased 0.0%
First USA Paymentech, contracts (for 100 shares each),
European-Style Put, 6/28/96 at $41.23 13 2
Heartport, contracts (for 100 shares each),
European-Style Put, 8/02/96 at $35.60 10 2
_____________________________________________________________________________
4
Options Written (0.1%)
First USA Paymentech, contracts (for 100 shares each),
European-Style Call, 6/28/96 at $41.23 13 $ (5)
Heartport, contracts (for 100 shares each),
European-Style Call, 8/02/96 at $35.60 10 (3)
_____________________________________________________________________________
(8)
_____________________________________________________________________________
Total United States (Cost $2,873) 3,054
Short-term Investments 10.2%
Commercial Paper 10.2%
Barnett Banks, 5.32%, 5/15/96 $ 200,000 199
Countrywide Funding, 5.33%, 6/11/96 200,000 199
Preferred Receivables Funding, 5.30%, 6/06/96 200,000 199
Investments in Commercial Paper through a
joint account 5.36 - 5.37%, 5/01/96 381,285 381
_____________________________________________________________________________
Total Short-Term Investments (Cost $978) 978
Total Investments in Securities
98.8% of Net Assets (Cost $9,067) $ 9,475
Other Assets Less Liabilities 112
NET ASSETS $ 9,587
* Non-income producing
USD U.S. dollar
144a Security was purchased pursuant to Rule 144a under the Securities Act
of 1933 and may not be resold subject to that rule except to
qualified institutional buyers - total of such securities at April
30, 1996 amounts to 0.16% of net assets.
The accompanying notes are an integral part of these financial statements.
T. Rowe Price Global Stock Fund
Unaudited April 30, 1996
Statement of Assets and Liabilities
In thousands
Assets
Investments in securities, at value (cost $9,067) $ 9,475
Other assets 1,351
Total assets 10,826
Liabilities
Payable for investment securities purchased 603
Other liabilities 636
Total liabilities 1,239
NET ASSETS $ 9,587
Net Assets Consist of:
Accumulated net investment income - net of distributions $ 26
Accumulated net realized gain/loss - net of distributions 83
Net unrealized gain (loss) 403
Paid-in-capital applicable to 879,924 shares of
$0.01 par value capital stock outstanding;
2,000,000,000 shares of the Corporation authorized 9,075
NET ASSETS $ 9,587
NET ASSET VALUE PER SHARE $ 10.89
The accompanying notes are an integral part of these financial statements.
T. Rowe Price Global Fund
Unaudited
Statement of Operations
In thousands
12/29/95
to
4/30/96
Investment Income
Income
Dividend (net of foreign taxes of $4) $ 38
Interest 12
Total income 50
Expenses
Custody and accounting 39
Shareholder servicing 12
Legal and audit 6
Registration 2
Directors 2
Prospectus and shareholder reports 1
Miscellaneous 3
Reimbursed by Manager (41)
Total expenses 24
Net investment income 26
Realized and Unrealized Gain (Loss)
Net realized gain (loss)
Securities 104
Foreign currency transactions (21)
Net realized gain (loss) 83
Change in net unrealized gain or loss
Securities 408
Other assets and liabilities
denominated in foreign currencies (5)
Change in net unrealized gain or loss 403
Net realized and unrealized gain (loss) 486
INCREASE (DECREASE) IN NET
ASSETS FROM OPERATIONS $ 512
The accompanying notes are an integral part of these financial statements.
T. Rowe Price Global Fund
Unaudited
Statement of Changes in Net Assets
In thousands
12/29/95
to
4/30/96
Increase (Decrease) in Net Assets
Operations
Net investment income $ 26
Net realized gain (loss) 83
Change in net unrealized gain or loss 403
Increase (decrease) in net assets from operations 512
Capital share transactions*
Shares sold 9,327
Shares redeemed (252)
Increase (decrease) in net assets from capital
share transactions 9,075
Net Assets
Increase (decrease) during period 9,587
Beginning of period -
End of period $ 9,587
*Share information
Shares sold 904
Shares redeemed (24)
Increase (decrease) in shares outstanding 880
The accompanying notes are an integral part of these financial statements.
T. Rowe Price Global Stock Fund
Unaudited April 30, 1996
Notes to Financial Statements
Note 1 - Significant Accounting Policies
T. Rowe Price International Funds, Inc. (the Corporation) is registered under
the Investment Company Act of 1940. The Global Stock Fund (the fund), a
diversified, open-end management investment company, is one of the portfolios
established by the Corporation and commenced operations on December 29, 1995.
Valuation
Equity securities listed or regularly traded on a securities exchange
(including Nasdaq) are valued at the last quoted sales price at the time the
valuations are made. A security which is listed or traded on more than one
exchange is valued at the quotation on the exchange determined to be the
primary market for such security. Other equity securities and those listed
securities that are not traded on a particular day are valued at a price
within the limits of the latest bid and asked prices deemed by the Board of
Directors, or by persons delegated by the Board, best to reflect fair value.
In the absence of a last sale price, purchased and written options are valued
at the latest bid and asked prices, respectively.
Short-term debt securities are valued at their cost which, when combined with
accrued interest, approximates fair value.
For purposes of determining the 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 the
fund, as authorized by the Board of Directors.
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.
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 the identified cost basis. Dividend income and distributions to
shareholders are recorded by the 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.
Note 2 - Investment Transactions
Consistent with its investment objective, the fund engages in the following
practices to manage exposure to certain risks or enhance performance. The
investment objective, policies, program, and risk factors of the fund are
described more fully in the fund's prospectus and Statement of Additional
Information.
Commercial Paper Joint Account
The fund, and other affiliated funds, may transfer uninvested cash into a
commercial paper joint account, the daily aggregate balance of which is
invested in high-grade commercial paper. All securities purchased by the
joint account satisfy the fund's criteria as to quality, yield, and liquidity.
Options
Call and put options give the holder the right to purchase or sell,
respectively, a security at a specified price on a certain date. Risks arise
from possible illiquidity of the options market and from movements in security
values. Options are reflected in the accompanying Portfolio of Investments at
market value.
Other
Purchases and sales of portfolio securities, other than short-term securities,
aggregated $8,796,000 and $811,000, respectively, for the period ended April
30, 1996.
Note 3 - Federal Income Taxes
No provision for federal income taxes is required since the fund intends to
qualify as a regulated investment company and distribute all of its taxable
income.
At April 30, 1996, the aggregate cost of investments for federal income tax
and financial reporting purposes was $9,067,000 and net unrealized gain
aggregated $408,000, of which $506,000 related to appreciated investments and
$98,000 to depreciated investments.
Note 4 - Related Party Transactions
The 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 the fund and the Manager provides
for an annual investment management fee. The fee is computed daily and paid
monthly, and consists of an Individual Fund Fee equal to 0.35% of average
daily net assets 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 April 30, 1996, and
for the period then ended, the effective annual Group Fee rate was 0.33%. The
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 management agreement, the Manager is
required to bear any expenses through October 31, 1997, which would cause the
fund's ratio of expenses to average net assets to exceed 1.30%. Thereafter,
through October 31, 1999, the 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 the fund's ratio
of expenses to average net assets to exceed 1.30%. Pursuant to this
agreement, $12,000 of management fees were not accrued by the fund for the
period ended April 30, 1996, and $41,000 of other expenses were borne by the
Manager.
In addition, the fund has entered into agreements with Price Associates and
two wholly owned subsidiaries of Price Associates, pursuant to which the fund
receives certain other services. Price Associates computes the daily share
price and maintains the financial records of the fund. T. Rowe Price Services,
Inc., is the fund's transfer and dividend disbursing agent and provides
shareholder and administrative services to the fund. T. Rowe Price Retirement
Plan Services, Inc., provides subaccounting and recordkeeping services for
certain retirement accounts invested in the fund. The fund incurred expenses
pursuant to these related party agreements totaling approximately $39,000 for
the period ended April 30, 1996, of which $7,000 was payable at period-end.
During the period ended April 30, 1996, the fund, in the ordinary course of
business, paid commissions of $1,000 to, and placed security purchase and sale
orders aggregating $319,000 with, certain affiliates of the Manager in
connection with the execution of various portfolio transactions.
For yield, price, last transaction, and current balance, 24 hours, 7 days a
week, call:
1-800-638-2587 toll free
625-7676 Baltimore area
For assistance with your existing fund account, call:
Shareholder Service Center
1-800-225-5132 toll free
625-6500 Baltimore area
T. Rowe Price
100 East Pratt Street
Baltimore, Maryland 21202
This report is authorized for distribution only to shareholders and to others
who have received a copy of the prospectus of the T. Rowe Price Global Stock
Fund.
Invest With Confidence(registered trademark)
T.Rowe Price
T. Rowe Price Investment Services, Inc., Distributor REPTGLS 4/30/96
Chart 1 - Geographic Diversification - A pie chart showing geographic
diversification of net assets as of 4/30/96: United States 32%; Europe 31%;
Japan 15%; Far East 8%; Latin America 2%; Other and Reserves 12%.
Chart 2 - Correlation of Returns - a bar chart showing the correlation of
total returns of various international countries with the U.S. stock market
from 1981-1990 and from 1986-1995.
Footnote: Percentage of time that foreign markets moved in the same direction
as the U.S. market. Sources: Morgan Stanley Capital International indexes,
Standard & Poor's 500 Stock Index, and Frank Russell Company.
