AS OF3 DEC 200 FIGURES SHOWN IN U.S. DOLLARS Total Global Fixed Income: $6,95.9 million Absolute Return Assets : $.2 million Investment Approach Designed to generate absolute positive returns by investing primarily in an actively managed portfolio of global fixed income securities, combining relative value positions, sector allocation, and security selection. - Exposure to a broad spectrum of fixed income markets, currencies, and sectors - Prudent cash management - Rigorous risk management Target value added: 200 basis points per annum above -month Libor over full economic cycle. Target average tracking error: between 200 basis points and 400 basis points per annum. Alpha generation classified under four main performance activities: Expected contribution to value added - Currency Management 70 basis points - Country/Duration Management 70 basis points - Sub-Investment Grade Allocation/Security Selection 40 basis points - Investment Grade Allocation/Security Selection 20 basis points Total 200 basis points Portfolio Construction Currency limit: maximum 40% overall net long currency positions Total weighted duration between -3 years and +3 years Total corporate bond allocation: maximum 30% Sub-investment grade allocation: maximum 20% Asset-backed securities allocation: maximum 20% Average credit quality: A- or better Portfolio Management Team Ian Kelson (London) 29 years of investment experience; 0 years with T. Rowe Price. BA, Kings College, Cambridge MSc, London School of Economics Christopher J. Rothery (London) 23 years of investment experience; 6 years with T. Rowe Price. London Guildhall University Ju Yen Tan (London) 4 years of investment experience; 6 years with T. Rowe Price. MEE, Oxford University Andrew J. Keirle (London) 4 years of investment experience; 5 years with T. Rowe Price. BSc (Econ), University of Wales Joseph K. Lynagh, CFA (Baltimore) 6 years of investment experience; 20 years with T. Rowe Price. MSF, Loyola College Includes a sub-fund of the T. Rowe Price Funds SICAV. No separate accounts are currently managed in this strategy. Benchmark Libor -month
AS OF3 DEC 200 Portfolio Characteristics Commitments Associated with Derivative Financial Instruments Global Fixed Income Portfolio Characteristics Absolute Return Representative Portfolio 3 Effective Duration 0.30 Years Yield to Maturity 2.60% Number of Issues 88 Average Quality AAA Duration is a measure of a bond s sensitivity to interest rates. Effective duration takes into account call features and sinking fund payments that may shorten a bond s life. 2 The calculation for yield to maturity includes coupon income and any capital gains or losses that would be realized by holding a bond to maturity. The timing of cash flows is considered, and it is assumed that coupon payments can be reinvested at an interest rate equal to the yield to maturity. Yield to maturity on an account is a weighted average of the yield to maturity on each bond held in the portfolio. Credit Quality Analysis (Moody s Investors Service 4 ) Currency Derivative Commitment 64.% Interest Rate Derivative Commitment 22.3 Credit Derivative Commitment 0.0 The commitment approach to monitor derivatives exposure is based on converting a derivative financial instrument into an equivalent position on the underlying asset and then representing the value of the underlying asset position as a percentage of the fund s total net assets. Sector Diversification Global Fixed Income Absolute Return Representative Portfolio 3 Global Fixed Income Absolute Return Representative Portfolio 3 Not Rated 2.% Below Investment Grade 4.5% A 2.3% BBB 7.6% Cash 5.0% Equity (ishares) 4.6% AAA 69.7% Equity (ishares) Covered Bonds 4.6%.3% Credit (including High Yield) 9.% Agency 0.8% Treasury and Quasi Treasury 20.9% Cash and Cash Equivalents 63.3% AA 4.% 3 The representative portfolio is an account in the composite we believe most closely reflects current portfolio management style for the strategy. However, in this instance, the representative portfolio is the only account we managed in this style at the end of the reporting period. Please see the GIPS Disclosure page for additional information on the composite. Supplemental information. 4 Where Moody s ratings are unavailable, Standard & Poor s ratings are used. Numbers may not total due to rounding.
PERIODS ENDED 3 DEC 200 Currency Exposure & Duration Contribution Currency Exposure % of Representative Portfolio United States dollar 88.7% Mexico 0.8 Dollar Bloc Subtotal 89.4 Euro -4.5 Norwegian krone.5 Polish zloty 0.8 Swedish krona.5 European Subtotal -0.7 Japanese yen -3.0 Chinese renminbi 3.0 Singapore dollar.5 South Korean won.5 Far East Subtotal 3.0 Chilean peso 0.8 Egyptian pound 3.0 Indian rupee.5 Philippine peso.5 Russian ruble.5 Emerging Markets Subtotal 8.3 Total 00.0% Duration Contribution United States dollar 0.04 Years Australian dollar -0.0 Canadian dollar 0.5 Mexican peso 0.5 Dollar Bloc Subtotal 0.34 Euro -0.2 European Subtotal -0.2 Brazilian real 0.08 Egyptian pound 0.0 South African rand 0.08 Emerging Markets Subtotal 0.6 Total 0.30 Years Top Holdings % of Representative Cash Equivalent 2 Holdings Maturity Date Portfolio % of Representative Long Term Holdings Coupon Maturity Date Portfolio Baptist Mem HSP Txb CP 7 Jan 20 2.2% Houston Util SR B- CP 0 Jan 20 2.2 Providence Hlth Sr 08A Txbl Cp 22 Feb 20 2.2 Jupiter Sec LLC 4/2 44A Feb 20 2.3 United States 0.875% 3 Jan 20 4.0 Canada 3.750% Jun 209 2.% European Investment Bank 6.500 7 Aug 209 2.0 ishares Euro Corp Bond FD 4.6 Mexico 8.500 3 Dec 208.4 South Africa 6.750 3 Mar 202. The representative portfolio is an account in the composite we believe most closely reflects current portfolio management style for the strategy. However, in this instance, the representative portfolio is the only account we managed in this style at the end of the reporting period. Please see the GIPS Disclosure page for additional information on the composite. The specific securities identified and described above do not represent all of the securities purchased, sold, or recommended for clients in the composite, and no assumptions should be made that the securities identified and discussed were or will be profitable. Supplemental information. 2 Classification for securities with a maturity of less than one year. Numbers may not total due to rounding.
PERIODS ENDED 3 DEC 200 FIGURES SHOWN IN U.S. DOLLARS Performance Annualized Three One Since Inception Months Year 30 Jun 2009 Global Fixed Income Absolute Return Composite (Gross of Fees) 0.29%.47%.77% Global Fixed Income Absolute Return Composite (Net of Fees) 0.9.07.37 Libor -month 0.06 0.27 0.27 Net of fees performance reflects the deduction of the highest applicable management fee ( Model Net Fee ) that would be charged based on the fee schedule appropriate to you for this mandate, without the benefit of breakpoints. Please be advised that the composite may include other investment products that are subject to management fees that are inapplicable to you but are in excess of the Model Net Fee. Therefore, the actual performance of all the portfolios in the composite on a net fee basis will be different and may be lower than the Model Net Fee performance. However, such Model Net Fee performance is intended to provide the most appropriate example of the impact management fees would have by applying management fees relevant to you to the gross performance of the composite. Past performance cannot guarantee future results. Supplemental information. See GIPS Disclosure for additional performance information.
Fee Schedule Global Fixed Income Absolute Return Composite As of Current 3 Dec 200 Quarter End Figures Shown in U.S. Dollars The Global Fixed Income Absolute Return Composite seeks to provide positive absolute return by investing primarily in an actively managed global portfolio of fixed income securities. The strategy may make enhanced use of derivative instruments including, but not limited to, bond futures, forward rate notes, forward foreign exchange contracts (including non-deliverable forwards), fixed interest warrants, interest rate futures, options on interest rate futures, convertible bonds, options on bond futures, currency options, and OTC swaps, including interest rate swaps and credit default swaps as well as swap indices. (Created June 2009) First $50 million Next $50 million Next $50 million Above $250 million Minimum separate account size 40 basis points 35 basis points 30 basis points 27.5 basis points $50 million
GIPS Disclosure Global Fixed Income Absolute Return Composite Period Ended December 3, 200 Figures Shown in U S Dollar 2009² 200 Gross Annual Returns (%).9.47 Net Annual Returns (%)¹ 0.99.07 Month Libor in USD (%) 0.3 0.27 Composite Dispersion N/A N/A Comp. Assets (Millions)..2 # of Accts. in Comp. Total Firm Assets (Billions) 66.6 84. ¹Reflects deduction of highest applicable fee schedule without benefit of breakpoints. Investment return and principal value will vary. Past performance cannot guarantee future results. See below for further information related to net of fee calculations. ²June 30, 2009 through December 3, 2009. T. Rowe Price International, Inc. ("TRPI") has prepared and presented this report in compliance with Global Investment Performance Standards (GIPS ). TRPI has been verified for the 0-year period ended June 30, 200 by KPMG LLP. A copy of the verification report is available upon request. TRPI is a U.S. registered investment management firm and holds itself out as such to potential clients for GIPS purposes. TRPI further defines itself under GIPS as a discretionary investment manager providing services primarily to institutional clients with regard to various mandates, including the non-u.s. and certain global strategies of T. Rowe Price Global Investment Services Limited ( TRPGIS ), an investment manager registered with the FSA and other regulatory bodies. The TRPGIS strategies were included in the TRPI firm definition effective January, 2009 as a result of an internal reorganization. Management believes this change represents the most appropriate Firm definition. The firm has not included any non-fee paying portfolios in its composites. Non-fee paying portfolios are included in the firm s total assets. The minimum asset level for equity portfolios to be included in composites is $5 million. Prior to January 2002, the minimum asset level for composite inclusion was $ million. The minimum asset level for fixed income and asset allocation portfolios to be included in composites is $0 million. Prior to October 2004, the minimum asset level for composite inclusion was $5 million, and prior to January 2002, the minimum asset level for composite inclusion was $ million. Valuations are computed and performance reported in U.S. dollars. Gross performance returns are presented before management and all other fees, where applicable, but after trading expenses. Net of fees performance reflects the deduction of the highest applicable management fee ("Model Net Fee") that would be charged based on the fee schedule appropriate to you for this mandate, without the benefit of breakpoints. Please be advised that the composite may include other investment products that are subject to management fees that are inapplicable to you but are in excess of the Model Net Fee. Therefore, the actual performance of all the portfolios in the composite on a net fee basis will be different, and may be lower, than the Model Net Fee performance. However, such Model Net Fee performance is intended to provide the most appropriate example of the impact management fees would have by applying management fees relevant to you to the gross performance of the composite. Gross and net performance returns are presented net of nonreclaimable withholding taxes. Dispersion is measured by the standard deviation across asset-weighted portfolio returns represented within a composite for the full year. Dispersion is not calculated for the composites in which there are five or fewer portfolios. Supplemental performance history may be presented. Additional information regarding the firm's policies and procedures for calculating and reporting performance results is available upon request. Dividend income is recorded on the ex-dividend date and interest income is recorded on the accrual basis. Withholding taxes, whether or not refundable, are accrued for equity securities at the time of dividend accrual and, where applicable, are accrued daily for fixed income securities. Where capital gains taxes apply, aggregate security value is reduced to net realizable value, considering holding periods, potential loss carry-forwards, and other relevant factors that may vary from country to country. Some accounts may trade futures and options, potentially high-risk derivatives. Futures and options contracts may be bought or sold for any number of reasons, including managing exposure to changes in securities prices and foreign currencies, as an efficient means of adjusting overall exposure to certain markets, in an effort to enhance income, as a cash management tool, or to protect the value of portfolio securities. Purchases and sales of futures and options are only affected in accordance with individual client portfolio guidelines and generally represent less than 0% of a portfolio. Benchmarks are taken from published sources and may have different calculation methodologies, pricing times, and foreign exchange sources from the composite. Composite policy requires the temporary removal of any portfolio incurring a client initiated significant cash inflow or outflow greater than or equal to 5% of portfolio assets. The temporary removal of such an account occurs at the beginning of the measurement period in which the significant cash flow occurs and the account re-enters the composite on the last day of the current month after the cash flow. Additional information regarding the treatment of significant cash flows is available upon request. These results are intended to be used in the institutional market only. Consultants are advised to use this data in accordance with SEC guidelines. Past performance does not guarantee future results. Investment return and principal will vary. Where lawfully permitted, persons may access T. Rowe Price mutual fund information and T. Rowe Price Funds SICAV information at www.troweprice.com. A complete list and description of all of the Firm's composites and/or a presentation that adheres to the GIPS standards are available upon request. Additional information regarding the firm's policies and procedures for calculating and reporting performance results is available upon request. This material is not to be distributed or disseminated without the express written consent of TRPI.
Additional Disclosure Issued in Japan by T. Rowe Price International Ltd, Tokyo Branch ( TRPILTB ) (KLFB Registration No. 445 (Financial Instruments Service Provider), JSIAA Membership No. 0-062), located at NBF Hibiya Building 20F, -7, Uchisaiwai-cho -chome, Chiyoda-ku, Tokyo 00-00. This material is intended for use by professional investors only and may not be disseminated without the prior approval of TRPILTB. Issued in Canada by T. Rowe Price (Canada), Inc. T. Rowe Price (Canada), Inc. enters into written delegation agreements with affiliates to provide investment management services. T. Rowe Price (Canada), Inc. is not registered to provide investment management business in all Canadian provinces. Our investment management services are only available to select clients in those provinces where we are able to provide such services. This material is intended for use by accredited investors only. Issued in Australia by T. Rowe Price International Ltd ( TRPIL ), Level 50, Governor Phillip Tower, Farrer Place, Suite 50B, Sydney, NSW 2000, Australia. TRPIL is exempt from the requirement to hold an Australian Financial Services license ( AFSL ) in respect of the financial services it provides in Australia. TRPIL is authorised and regulated by the UK Financial Services Authority (the FSA ) under UK laws, which differ from Australian laws. This material is not intended for use by Retail Clients, as defined by the FSA, or as defined in the Corporations Act (Australia), as appropriate. Issued in New Zealand by T. Rowe Price International Ltd ( TRPIL ). TRPIL is authorised and regulated by the UK Financial Services Authority under UK laws, which differ from New Zealand laws. This material is intended only for use by persons who are not members of the public, by virtue of section 3(2)(a)(ii) of the Securities Act 978 and is not intended for public distribution nor as a solicitation for investments from members of the public. This material may not be redistributed without prior written consent from TRPIL. Issued outside of the USA, Japan, Canada, Australia, and New Zealand by T. Rowe Price International Ltd, 60 Queen Victoria Street, London EC4N 4TZ, which is authorised and regulated by the UK Financial Services Authority (the FSA ). This material is not intended for use by Retail Clients, as defined by the FSA. T. Rowe Price, Invest With Confidence and the Bighorn Sheep logo are registered trademarks of T. Rowe Price Group, Inc. in the United States, European Union, Australia, Canada, Japan, and other countries. This material was produced in the United Kingdom.