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January 1, 2001
FUND PROFILE
T. ROWE PRICE
European Stock Fund
A stock fund seeking long-term capital growth through investments primarily in
companies domiciled in Europe.
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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FUND PROFILE
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What is the fund's objective?
The fund seeks long-term growth of capital through investments primarily in
the common stocks of European companies. Current income is a secondary
objective.
What is the fund's principal investment strategy?
Normally, at least five countries will be represented in the portfolio. The
fund expects to invest substantially all of its assets in the countries
listed below, as well as others as their markets develop:
. Primary Emphasis: Austria, Denmark, Finland, France, Germany, Ireland,
Italy, Luxembourg, Netherlands, Norway, Portugal, Spain, Sweden, Switzerland,
and United Kingdom.
. Others: Belgium, Czech Republic, Greece, Hungary, Israel, Poland, and
Turkey.
Selection of common stocks reflects a growth style. T. Rowe Price
International, Inc. ("T. Rowe Price International") employs in-depth
fundamental research in an effort to identify companies capable of achieving
and sustaining above-average, long-term earnings growth. We seek to purchase
such stocks at reasonable prices in relation to present or anticipated
earnings, cash flow, or book value, and valuation factors often influence our
allocations among large-, mid-, or small-cap shares.
While we invest with an awareness of the global economic backdrop and our
outlook for individual countries, bottom-up stock selection is the focus of
our decision-making. Country allocation is driven largely by stock selection,
though we may limit investments in markets that appear to have poor overall
prospects.
In selecting stocks, we generally favor companies with one or more of the
following characteristics:
. leading market position;
. attractive business niche;
. strong franchise or natural monopoly;
. technological leadership or proprietary advantages;
. seasoned management;
. earnings growth and cash flow sufficient to support growing dividends; and
. healthy balance sheet with relatively low debt.
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FUND PROFILE
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We also seek to take advantage of opportunities arising from such trends as
privatization, the reduction of trade barriers, progress toward economic and
monetary union, and the potential growth of the emerging economies of Eastern
Europe.
Normally, the fund invests primarily (at least 65% of total assets) in common
stocks. To a lesser extent, the fund may also purchase other securities,
including futures and options, in keeping with the fund's objective.
The fund may sell securities for a variety of reasons, such as to secure
gains, limit losses, or redeploy assets into more promising opportunities.
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 any of these documents, call 1-800-638-5660.
What are the main risks of investing in the fund?
As with all stock funds, this fund's share price can fall because of weakness
in one or more of its primary equity markets, a particular industry, or
specific holdings. Stock markets can decline for many reasons, including
adverse political or economic developments, changes in investor psychology,
or heavy institutional selling. The prospects for an industry or company may
deteriorate because of a variety of factors, including disappointing earnings
or changes in the competitive environment. In addition, our assessment of
companies held in the fund may prove incorrect, resulting in losses or poor
performance even in rising markets.
Funds that invest overseas generally carry more risk than funds that invest
strictly in U.S. assets. Even investments in countries with highly developed
economies are subject to significant risks. Some particular risks affecting
this fund include the following:
. Currency risk This refers to 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 a 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. Under normal conditions,
the fund does not engage in extensive foreign currency hedging programs.
Further, exchange rate movements are unpredictable and it is not possible to
effectively hedge the currency risks of many developing countries.
. Geographic risk Funds that are less diversified across geographic regions,
countries, industries, or individual companies are generally riskier than
more diversified funds. The economies and financial markets of certain
regions,
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including Europe, can be highly interdependent and may decline at the same
time regardless of circumstances within particular countries or companies.
. Emerging market risk To the extent the fund invests in emerging markets, it
is subject to greater risk than a fund investing only in developed markets.
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.
Fund performance will likely be negatively affected by portfolio exposure to
nations in the midst of hyperinflation, currency devaluation, trade
disagreements, sudden political upheaval, or interventionist government
policies. Significant buying or selling actions by a few major investors may
also heighten the volatility of emerging markets. These factors make
investing in such countries significantly riskier than in other countries and
any one of them could cause the fund's share price to decline.
. Other risks of foreign investing Other risks result from the varying stages
of economic and political development, the differing regulatory environments,
trading days, and accounting standards, and higher transaction costs of
non-U.S. markets. Investments outside the United States could be subject to
actions such as capital or currency controls, nationalizing a company or
industry, expropriating assets, or imposing punitive taxes which would have
an adverse effect on the fund.
. While certain countries have made progress in economic growth,
liberalization, fiscal discipline, and political and social stability, there
is no assurance these trends will continue.
. Futures/options risk To the extent the fund uses futures and options, it is
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
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 common stock and international
investments. If you seek the long-term capital appreciation potential of
growth stocks in Europe, or want to diversify your domestic stock portfolio
by adding foreign investments, and are comfortable with the risks that
accompany foreign investments, the fund could be an appropriate part of your
overall investment strategy.
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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>
7.31 -5.56 27.24 4.06 21.86 25.87 17.01 25.82 19.70
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</TABLE>
Quarter ended Total return
Best quarter 12/31/99 20.48%
Worst quarter 9/30/98 -14.01%
<TABLE>
Table 1 Average Annual Total Returns
<CAPTION>
Periods ended 12/31/2000
1 year 5 years 10 years
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<S> <C> <C> <C> <S>
European Stock Fund -6.66% 15.67% 12.97%
MSCI Europe Index -8.14 15.75 13.92
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Lipper European Region Funds -6.19 15.58 12.33
Average
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</TABLE>
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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 0.82%/ // /
Other expenses 0.23%
Total annual fund operating 1.05%/ // /
expenses
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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, you invest $10,000, you earn a 5% annual return, and you 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>
$107 $334 $579 $1,283
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</TABLE>
Who manages the fund?
T. Rowe Price International is responsible for the selection and management
of the fund's portfolio investments. The company, a wholly owned subsidiary
of T. Rowe Price Associates, is the successor to Rowe Price-Fleming
International ("Price-Fleming"), a joint venture established in 1979 between
T. Rowe Price Associates and Robert Fleming Holdings ("Flemings"). In 2000,
T. Rowe Price became the sole owner of Rowe Price-Fleming and renamed the
company T. Rowe Price International. The U.S. office of T. Rowe Price
International is located at 100 East Pratt Street, Baltimore, Maryland 21202.
Offices are also located in London, Tokyo, Singapore, Hong Kong, Buenos
Aires, and Paris.
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The fund has an Investment Advisory Group that has day-to-day responsibility
for managing the portfolio and developing and executing its investment
program. The advisory group consists of John R. Ford, who joined Price-
Fleming in 1982 and has 20 years of experience with the Fleming Group in
research and portfolio management; Robert Revel-Chion, who joined
Price-Fleming in 1998 and has 11 years of experience in investment management
(four years of which were within the Fleming Group); and James B.M. Seddon,
who joined Price-Fleming in 1987 and has 13 years of experience in portfolio
management.
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.
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 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;
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. 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 F79-035
T. Rowe Price Investment Services, Inc., Distributor
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