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July 1, 2000
FUND PROFILE
T. ROWE PRICE
Global Bond Fund
A worldwide income fund seeking high income and capital growth through foreign
and U.S. fixed-income securities.
This profile summarizes key information about the fund that is included in the
fund's prospectus. The fund's prospectus includes additional information about
the fund, including a more detailed description of the risks associated with
investing in the fund that you may want to consider before you invest. You may
obtain the prospectus and other information about the fund at no cost by calling
1-800-638-5660, or by visiting our Web site at www.troweprice.com.
TROWEPRICELOGO
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What is the fund's objective?
The fund seeks high current income and, secondarily, capital appreciation and
protection of principal by investing primarily in high-quality foreign and
U.S. government bonds.
What is the fund's principal investment strategy?
The fund will normally invest at least 65% of its total assets in
high-quality bonds issued or guaranteed by the U.S. or foreign governments or
their agencies and by foreign authorities, provinces, and municipalities.
Corporate bonds may also be purchased. The fund may invest up to 20% of total
assets in below-investment-grade, high-risk bonds. These may include emerging
market bonds and bonds in default or with the lowest credit rating.
To reduce the effect of interest rate changes on the fund's share price, the
weighted average maturity of the portfolio is likely to average around five
to seven years, although this may vary according to our interest rate
outlook. The fund may also hold securities with maturities longer or shorter
than five or seven years. The fund has wide flexibility to purchase and sell
currencies in an effort to profit from currency trends and reduce the impact
of currency fluctuations on the share price.
Investment decisions are based on fundamental market factors, such as yield
and credit quality differences among bonds as well as demand and supply
trends and currency values. The fund generally invests in countries where the
combination of fixed-income returns and currency exchange rates appears
attractive, or, if the currency trend is unfavorable, where Price-Fleming
believes the currency risk can be minimized through hedging. The fund sells
holdings for a variety of reasons, such as to adjust a portfolio's average
maturity or quality, to shift assets into higher-yielding securities, or to
alter geographic or currency exposure.
Further information about the fund's investments, including a review of
market conditions and fund strategies and their impact on performance, is
available in the annual and semiannual shareholder reports. To obtain free
copies of either of these documents, call 1-800-638-5660.
What are the main risks of investing in the fund?
The fund is subject to the usual risks of fixed-income investing as well as
the special risks of international investing.
. Interest rate risk This refers to the decline in bond prices that usually
accompanies a rise in interest rates. Longer-maturity bonds typically suffer
greater declines than those with shorter maturities.
. Credit risk This is the chance that any fund holding could have its credit
rating downgraded, or that a bond issuer will default (the failure of an
issuer to
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make timely payments of interest or principal), potentially reducing the
fund's income level and share price. The risk of default is much greater for
the emerging market bonds in the fund's portfolio.
. Nondiversified risk Because it is nondiversified, the fund can invest more
of its assets in a smaller number of issuers than diversified funds. This
could result in greater potential losses than funds investing in a broader
variety of issues.
. Currency risk This is the risk of a decline in the value of a foreign
currency versus the U.S. dollar, which reduces the dollar value of securities
denominated in that currency. The overall impact on the fund's holdings can
be significant and long-lasting, depending on the currencies represented in
the portfolio, how each one appreciates or depreciates in relation to the
U.S. dollar, and whether currency positions are hedged. We may actively
manage currency risk in the fund in an effort to reduce the negative impact
of a strong dollar. Currency trends are unpredictable, and to the extent the
fund purchases and sells currencies, it will also be subject to the risk that
its trading strategies, including efforts at hedging, will not succeed.
Furthermore, hedging costs can be significant and reduce fund net asset
value, and many emerging market currencies cannot be effectively hedged.
. Emerging market risk The fund's investments in emerging markets are subject
to abrupt and severe price declines. The economic and political structures of
developing nations, in most cases, do not compare favorably with the U.S. or
other developed countries in terms of wealth and stability, and their
financial markets often lack liquidity. Some countries have legacies of
hyperinflation and currency devaluations versus the dollar (which adversely
affects returns to U.S. investors).
. Other risks of foreign investing Other risks result from the varying stages
of economic and political development of foreign countries, the differing
regulatory environments, trading days, and accounting standards of non-U.S.
markets, and higher transaction costs. Government interference in capital
markets, such as capital or currency controls, nationalization of companies
or industries, expropriation of assets, or imposition of punitive taxes would
also hurt the fund.
. Derivatives risk To the extent the fund uses these instruments, it may be
exposed to additional volatility and potential losses.
As with any mutual fund, there can be no guarantee the fund will achieve its
objective.
. The fund's share price may decline, so when you sell your shares, you may
lose money. An investment in the fund is not a deposit of a bank and is not
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insured or guaranteed by the Federal Deposit Insurance Corporation or any
other government agency.
How can I tell if the fund is appropriate for me?
Consider your investment goals, your time horizon for achieving them, and
your tolerance for the inherent risk of fixed-income investing. If you are
willing to accept the special risks associated with international investing
and the general risks of investing in bonds to achieve current income and
potential capital growth, this fund could be appropriate for you.
The fund can be used in both regular and tax-deferred accounts, such as IRAs.
. The fund should not represent your complete investment program or be used
for short-term trading purposes.
How has the fund performed in the past?
The bar chart showing calendar year returns and the average annual total
return table indicate risk by illustrating how much returns can differ from
one year to the next and over time. Fund past performance is no guarantee of
future returns.
The fund can also experience short-term performance swings, as shown by the
best and worst calendar quarter returns during the years depicted in the
chart.
LOGO
<TABLE>
<CAPTION>
Calendar Year Total Returns
"91" "92" "93" "94" "95" "96" "97" "98" "99"
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<S> <C> <C> <C> <C> <C> <C> <C> <C>
11.31 3.26 11.15 -3.05 18.13 6.59 1.61 11.93 -6.69
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</TABLE>
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Quarter ended Total return
Best quarter 3/31/95 7.82%
Worst quarter 3/31/99 -4.93%
<TABLE>
Table 1 Average Annual Total Returns
<CAPTION>
Periods ended 06/30/2000
Since Inception
1 year 5 years (12/31/1990)
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<S> <C> <C> <C>
Global Bond Fund 0.49% 3.28% 5.32%
J.P. Morgan Global Bond Index Plus 3.04 3.97 ---
J.P. Morgan Global Gov't. Bond Index
(unhedged) 2.70 3.74 7.02
Lipper Global Income Funds Average 1.73 4.67 5.64
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</TABLE>
These figures include changes in principal value, reinvested dividends, and
capital gain distributions, if any.
What fees or expenses will I pay?
The fund is 100% no load. There are no fees or charges to buy or sell fund
shares, reinvest dividends, or exchange into other T. Rowe Price funds. There
are no 12b-1 fees.
<TABLE>
Table 2 Fees and Expenses of the Fund
<CAPTION>
Annual fund operating expenses
(expenses that are deducted from fund assets)
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<S> <C>
Management fee 0.67%/a/
Other expenses 0.85%
Total annual fund operating
expenses 1.52%/a/
Fee waiver/reimbursement
Net expenses 1.00%
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</TABLE>
/a/Price-Fleming is contractually obligated to waive its fees and bear any
expenses to the extent such fees or expenses would cause the fund's ratio of
expenses to average net assets to exceed the indicated percentage limitation.
Fees waived or expenses paid or assumed are subject to reimbursement to
Price-Fleming by the fund through the indicated reimbursement date, but no
reimbursement will be made if it would result in the fund's expense ratio
exceeding its specified limit. A summary of the fund's expense limitation and
the periods for which it is effective is set forth below:
<TABLE>
<CAPTION>
<C> <C> <C> <S>
Limitation Period Expense Ratio Limitation Reimbursement Date
1/1/99-
1.00% 12/31/02
</TABLE>
Previously, the fund operated under a 1.00% expense ratio limitation that
expired December 31, 1998. Fees waived or expenses assumed under this
agreement are subject to reimbursement to Price-Fleming by the fund whenever
the fund's expense ratio is below 1.00%. However, no reimbursement will be
made after December 31, 2000, or if it would result in the expense ratio
exceeding 1.00%.
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Example. The following table gives you a rough idea of how expense ratios
may translate into dollars and helps you to compare the cost of investing in
this fund with that of other funds. Although your actual costs may be higher
or lower, the table shows how much you would pay if operating expenses remain
the same, the expense limitation currently in place is not renewed, you
invest $10,000, earn a 5% annual return, and hold the investment for the
following periods:
<TABLE>
<CAPTION>
1 year 3 years 5 years 10 years
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<S> <C> <C> <C>
$102 $429 $780 $1,768
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</TABLE>
Who manages the fund?
The fund is managed by Rowe Price-Fleming International, Inc., a joint
venture between T. Rowe Price Associates, Inc. ("T. Rowe Price") and the
London-based Robert Fleming Holdings, Ltd. ("Flemings"). Flemings
includes Robert Fleming and Jardine Fleming. Established in 1979,
Price-Fleming manages investments for individual and institutional accounts,
including 12 no-load mutual funds sold directly to the public. On April 11,
2000, T. Rowe Price entered into an agreement with Flemings and certain of
its subsidiaries (collectively "Fleming Companies") to purchase the Fleming
Companies' 50% interest in Price-Fleming. As a result of this purchase,
shareholders will be asked to approve a new investment management agreement
for the fund.
The fund has an Investment Advisory Group with day-to-day responsibility for
managing the funds. The advisory group consists of Peter Askew, who joined
Price-Fleming in 1988 and has been managing multicurrency fixed-income
portfolios since 1976; Michael Conelius, who joined T. Rowe Price in 1988 and
Price-Fleming in 1995, and has been managing investments since 1992; and
Christopher Rothery, who joined Price-Fleming in 1994 and has been managing
multicurrency fixed-income portfolios since 1988.
Note: The following questions and answers about buying and selling shares and
services do not apply to employer-sponsored retirement plans. If you are a
participant in one of these plans, please call your plan's toll-free number for
additional information.
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How can I purchase shares?
Fill out the New Account Form and return it with your check in the postpaid
envelope. The minimum initial purchase is $2,500 ($1,000 for IRAs and gifts
or transfers to minors). The minimum subsequent investment is $100 ($50 for
IRAs, gifts or transfers to minors, or Automatic Asset Builder). You can also
open an account by bank wire, by exchanging from another T. Rowe Price fund,
or by transferring assets from another financial institution.
How can I sell shares?
You may redeem or sell any portion of your account on any business day.
Simply write to us or call. You can also access your account at any time via
Tele*Access /(R)/ or our Web site. We offer convenient exchange among our
entire family of domestic and international funds. Restrictions may apply in
special circumstances, and some redemption requests need a signature
guarantee. A $5 fee is charged for wire redemptions under $5,000.
When will I receive income and capital gain distributions?
The fund distributes income monthly and net capital gains, if any, at
year-end. For regular accounts, income and short-term gains are taxable at
ordinary income rates, and long-term gains are taxable at the capital gains
rate. Distributions are reinvested automatically in additional shares unless
you choose another option, such as receiving a check. Distributions paid to
IRAs and employer-sponsored retirement plans are automatically reinvested.
What services are available?
A wide range, including but not limited to:
. retirement plans for individuals and large and small businesses;
. automated information and transaction services by telephone or computer;
. electronic transfers between fund and bank accounts;
. automatic investing and automatic exchange;
. brokerage services; and
. asset manager accounts.
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FUND PROFILE
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T. Rowe Price Associates, Inc.
100 East Pratt Street
Baltimore, MD 21202
www.troweprice.com
LOGO
RPS F51-035
T. Rowe Price Investment Services, Inc., Distributor
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