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| SEC Comments and Related Responses |
March 15, 2018
Mr. David Manion
Division of Investment Management
U.S. Securities and Exchange Commission
Office of Disclosure
100 F Street, N.E.
Washington, D.C. 20549-4644
Re: Funds Listed in Appendix
Dear Mr. Manion:
This letter responds to the Securities and Exchange Commission (SEC) staff’s review comments discussed with Alan Dupski and Susan Silva on January 22, 2018, related to the annual reports and prospectuses of the referenced T. Rowe Price funds (Price Funds).
| 1. | Staff Comment:The staff noted that certain funds—Institutional Global Focused Growth Equity Fund, Institutional Emerging Markets Equity Fund, and Global Stock Fund—had at least one sector comprising 25% or greater of the fund at October 31, 2017, where the prospectus did not contain industry or sector concentration risk disclosure for that specific sector (i.e., financials). Please consider expanding this disclosure in the prospectus to consider additional sector concentrations. Management Response:We are evaluating our industry- and sector-specific risk disclosure across all of our funds’ prospectuses and enhancing the disclosure as necessary. During each fund’s annual prospectus update, we will review the fund’s most current holdings information and add appropriate industry- or sector-specific risk disclosure. We recently completed the annual prospectus updates for the Institutional Global Focused Growth Equity, Institutional Emerging Markets Equity, and Global Stock Funds. As part of these updates, we reviewed each fund’s sector exposure at December 31, 2017, and added sector-specific strategy and risk disclosure to each fund’s prospectus. |
| 2. | Staff Comment:In a previous review (November 9, 2016), the staff noted that at May 31, 2016, the Short-Term Bond Fund held 21% of its net assets in asset-backed securities; however, the fund’s prospectus did not indicate that asset-backed securities were a principal investment strategy. In the firm’s response to that comment, TRP stated that “we intend to revise the prospectus to include asset-backed securities as a principal investment strategy with accompanying risk disclosure during the fund’s next annual prospectus update.” At May 31, 2017, 22% of the fund’s net assets were held in asset-backed securities. The current prospectus does not indicate that asset-backed securities are a principal investment strategy. Please disclose asset-backed securities as a principal investment strategy in accordance with the prior response. Management Response:We recently filed a supplement to the fund’s current prospectus to clarify that asset-backed securities are considered part of the fund’s principal investment strategies. The prospectus already included appropriate risk disclosure relating to asset-backed securities. | |
| 3. | Staff Comment:The staff understands that the directors’ fees may not be presented in the financial statements due to the financial statements being presented in thousands and fees for an individual fund rounding to zero. However, please discuss why directors’ fees are not disclosed in the Related Party Transactions footnote. Management Response:Our policy is to separately disclose directors’ fees and any associated amounts payable, only to the extent such amount rounds to $1,000 or greater. To the extent that a balance is less than $500, we do not believe that it warrants disclosure in the notes to financial statements. | |
| 4. | Staff Comment:With respect to a fund-of-funds (FOF), for any underlying fund that is greater than 25% of the FOF’s net assets, please consider disclosing where a shareholder may obtain the financial statements of the underlying fund. Management Response:We have considered the staff’s comment and will add disclosure to the Portfolio of Investments for each applicable FOF as to where a shareholder may obtain the financial statements of the underlying fund(s) as soon as practicable, but no later than the May 31, 2018, annual reports. | |
| 5. | Staff Comment:Certain funds have a high concentration of affiliated ownership, for example the Spectrum Funds held a significant percentage (81%) of Emerging Markets Local Currency Bond Fund at December 31, 2016. Please consider disclosing in the summary prospectus and statutory prospectus the significant concentration of ownership. Management Response:We recognize that funds with a concentrated set of beneficial owners could experience considerable cash outflows from redemptions by a single or small number of shareholders, which in turn could hamper a fund’s management and investment decisions. However, since the concentrated beneficial owner in this instance is an affiliated T. Rowe Price fund, we believe that those risks are mitigated and have not been a factor in the past. The Spectrum Funds are a suite of affiliated FOFs that normally invest in a variety of other T. Rowe Price funds, including, among others, the Emerging Markets Local Currency Bond Fund. If any of the Spectrum Funds were to significantly reduce or increase their allocation to an underlying fund, the underlying fund and the top-level Spectrum Fund would work together to implement this allocation change so as to not disrupt the underlying fund’s investment decisions or disadvantage the underlying fund’s other shareholders. The underlying fund would have ample notice of the change and would be able to adjust its investment decisions accordingly. Therefore, we do not intend to add disclosure on risks associated with a significant concentration of ownership to this fund’s prospectus at this time. | |
| 6. | Staff Comment:The staff noted that the Price Funds with expenses subject to recapture disclose the gross total amount subject to recapture; however, the disclosure does not include an aging schedule, disclosing the amount recapturable by fiscal year. Please refer to the minutes of the AICPA Investment Companies Expert Panel meeting held May 22, 2013, specifically item III.5.a.viii (excerpt provided below), and please include this disclosure in future filings. | |
Finally, the SEC staff has been asking for enhanced disclosure of the terms of the recoupment agreement and a chart explicitly describing the amount of the expenses subject to recoupment, the expense ratio and distribution rates at which the adviser can recoup the waived or reimbursed expenses and the expiration date of the recoupable amount. Disclosure of these types of arrangements should be included in various documents such as the registration statement, the financial statements and marketing materials, specifically where references to distribution rates/yields and distributions are made. | ||
Management Response:We are not aware of any authoritative rule or guidance requiring disclosure of fee waiver recapture amounts based on an aging schedule and believe our current disclosure is appropriate. |
If you have any additional questions or would like to discuss any response, please contact me (410-345-5738, cathy_mathews@troweprice.com), Alan Dupski (410-577-5143, alan_dupski@troweprice.com), or Brian Poole (410-345-6646, brian_poole@troweprice.com).
Respectfully,
Catherine D. Mathews
Treasurer, TRP Funds
| cc: | Betsy Johnson – Partner, PricewaterhouseCoopers LLP |
| Darrell Braman – Managing Counsel, TRP | |
| John Gilner – Chief Compliance Officer, TRP | |
| Alan Dupski – Group Manager, TRP |
Appendix
| Series | File Number | Registrant Name | Series Name | FYE |
| Identifier | ||||
| S000001490 | 811-02958 | TRP International Funds | TRP Emerging Markets Bond Fund | 12/31/2016 |
| S000037100 | 811-02958 | TRP International Funds | TRP Emerging Markets Corporate Bond Fund | 12/31/2016 |
| S000032784 | 811-02958 | TRP International Funds | TRP Emerging Markets Local Currency Bond Fund | 12/31/2016 |
| S000047982 | 811-02958 | TRP International Funds | TRP Global High Income Bond Fund | 12/31/2016 |
| S000047983 | 811-02958 | TRP International Funds | TRP Global Unconstrained Bond Fund | 12/31/2016 |
| S000001489 | 811-02958 | TRP International Funds | TRP International Bond Fund | 12/31/2016 |
| S000002089 | 811-05986 | TRP Index Trust, Inc. | TRP Equity 500 Index Fund | 12/31/2016 |
| S000002090 | 811-05986 | TRP Index Trust, Inc. | TRP Extended Equity Market Index Fund | 12/31/2016 |
| S000051326 | 811-05986 | TRP Index Trust, Inc. | TRP Mid-Cap Index Fund | 12/31/2016 |
| S000051327 | 811-05986 | TRP Index Trust, Inc. | TRP Small-Cap Index Fund | 12/31/2016 |
| S000002091 | 811-05986 | TRP Index Trust, Inc. | TRP Total Equity Market Index Fund | 12/31/2016 |
| S000029428 | 811-22410 | TRP Real Assets Fund, Inc. | TRP Real Assets Fund, Inc. | 12/31/2016 |
| S000036336 | 811-22620 | TRP Multi-Sector Account Portfolios | TRP Emerging Markets Corporate Multi-Sector Account Portfolio | 12/31/2016 |
| S000036337 | 811-22620 | TRP Multi-Sector Account Portfolios | TRP Emerging Markets Local Multi-Sector Account Portfolio | 12/31/2016 |
| S000036339 | 811-22620 | TRP Multi-Sector Account Portfolios | TRP High Yield Multi-Sector Account Portfolio | 2/28/2017 |
| S000036340 | 811-22620 | TRP Multi-Sector Account Portfolios | TRP Investment-Grade Corporate Multi-Sector Account Portfolio | 2/28/2017 |
| S000036341 | 811-22620 | TRP Multi-Sector Account Portfolios | TRP Mortgage-Backed Securities Multi-Sector Account Portfolio | 2/28/2017 |
| S000036338 | 811-22620 | TRP Multi-Sector Account Portfolios | TRP Floating Rate Multi-Sector Account Portfolio | 2/28/2017 |
| S000013369 | 811-21919 | TRP Limited Duration Inflation Focused Bond Fund, Inc. | TRP Limited Duration Inflation Focused Bond Fund | 5/31/2017 |
| S000002141 | 811-03894 | TRP Short-Term Bond Fund, Inc. | TRP Short-Term Bond Fund | 5/31/2017 |
| S000039055 | 811-03894 | TRP Short-Term Bond Fund, Inc. | TRP Ultra Short-Term Bond Fund | 5/31/2017 |
| S000002115 | 811-21149 | TRP Retirement Funds | TRP Retirement 2005 Fund | 5/31/2017 |
| S000002109 | 811-21149 | TRP Retirement Funds | TRP Retirement 2010 Fund | 5/31/2017 |
| S000002116 | 811-21149 | TRP Retirement Funds | TRP Retirement 2015 Fund | 5/31/2017 |
| S000002111 | 811-21149 | TRP Retirement Funds | TRP Retirement 2020 Fund | 5/31/2017 |
| S000002117 | 811-21149 | TRP Retirement Funds | TRP Retirement 2025 Fund | 5/31/2017 |
| S000002112 | 811-21149 | TRP Retirement Funds | TRP Retirement 2030 Fund | 5/31/2017 |
| S000002118 | 811-21149 | TRP Retirement Funds | TRP Retirement 2035 Fund | 5/31/2017 |
| S000002113 | 811-21149 | TRP Retirement Funds | TRP Retirement 2040 Fund | 5/31/2017 |
| S000002110 | 811-21149 | TRP Retirement Funds | TRP Retirement 2045 Fund | 5/31/2017 |
| S000014996 | 811-21149 | TRP Retirement Funds | TRP Retirement 2050 Fund | 5/31/2017 |
| S000014997 | 811-21149 | TRP Retirement Funds | TRP Retirement 2055 Fund | 5/31/2017 |
| S000045512 | 811-21149 | TRP Retirement Funds | TRP Retirement 2060 Fund | 5/31/2017 |
| S000002114 | 811-21149 | TRP Retirement Funds | TRP Retirement Balanced Fund | 5/31/2017 |
| S000050882 | 811-21149 | TRP Retirement Funds | TRP Retirement Balanced I Fund–I Class | 5/31/2017 |
| S000050878 | 811-21149 | TRP Retirement Funds | TRP Retirement I 2005 Fund–I Class | 5/31/2017 |
| S000050883 | 811-21149 | TRP Retirement Funds | TRP Retirement I 2010 Fund–I Class | 5/31/2017 |
| S000050884 | 811-21149 | TRP Retirement Funds | TRP Retirement I 2015 Fund–I Class | 5/31/2017 |
| S000050885 | 811-21149 | TRP Retirement Funds | TRP Retirement I 2020 Fund–I Class | 5/31/2017 |
| S000050886 | 811-21149 | TRP Retirement Funds | TRP Retirement I 2025 Fund–I Class | 5/31/2017 |
| S000050887 | 811-21149 | TRP Retirement Funds | TRP Retirement I 2030 Fund–I Class | 5/31/2017 |
| S000050888 | 811-21149 | TRP Retirement Funds | TRP Retirement I 2035 Fund–I Class | 5/31/2017 |
| S000050889 | 811-21149 | TRP Retirement Funds | TRP Retirement I 2040 Fund–I Class | 5/31/2017 |
| S000050890 | 811-21149 | TRP Retirement Funds | TRP Retirement I 2045 Fund–I Class | 5/31/2017 |
| S000050879 | 811-21149 | TRP Retirement Funds | TRP Retirement I 2050 Fund–I Class | 5/31/2017 |
| S000050880 | 811-21149 | TRP Retirement Funds | TRP Retirement I 2055 Fund–I Class | 5/31/2017 |
| S000050881 | 811-21149 | TRP Retirement Funds | TRP Retirement I 2060 Fund–I Class | 5/31/2017 |
| S000041772 | 811-21149 | TRP Retirement Funds | TRP Target 2005 Fund | 5/31/2017 |
| S000041775 | 811-21149 | TRP Retirement Funds | TRP Target 2010 Fund | 5/31/2017 |
| S000041776 | 811-21149 | TRP Retirement Funds | TRP Target 2015 Fund | 5/31/2017 |
| S000041777 | 811-21149 | TRP Retirement Funds | TRP Target 2020 Fund | 5/31/2017 |
| S000041778 | 811-21149 | TRP Retirement Funds | TRP Target 2025 Fund | 5/31/2017 |
| S000041779 | 811-21149 | TRP Retirement Funds | TRP Target 2030 Fund | 5/31/2017 |
| S000041780 | 811-21149 | TRP Retirement Funds | TRP Target 2035 Fund | 5/31/2017 |
| S000041781 | 811-21149 | TRP Retirement Funds | TRP Target 2040 Fund | 5/31/2017 |
| S000041782 | 811-21149 | TRP Retirement Funds | TRP Target 2045 Fund | 5/31/2017 |
| S000041773 | 811-21149 | TRP Retirement Funds | TRP Target 2050 Fund | 5/31/2017 |
| S000041774 | 811-21149 | TRP Retirement Funds | TRP Target 2055 Fund | 5/31/2017 |
| S000045513 | 811-21149 | TRP Retirement Funds | TRP Target 2060 Fund | 5/31/2017 |
| S000018747 | 811-02958 | TRP International Funds | TRP Africa & Middle East Fund | 10/31/2017 |
| S000045439 | 811-02958 | TRP International Funds | TRP Asia Opportunities Fund | 10/31/2017 |
| S000001488 | 811-02958 | TRP International Funds | TRP Emerging Europe Fund | 10/31/2017 |
| S000001496 | 811-02958 | TRP International Funds | TRP Emerging Markets Stock Fund | 10/31/2017 |
| S000050390 | 811-02958 | TRP International Funds | TRP Emerging Markets Value Stock Fund | 10/31/2017 |
| S000001492 | 811-02958 | TRP International Funds | TRP European Stock Fund | 10/31/2017 |
| S000023645 | 811-02958 | TRP International Funds | TRP Global Growth Stock Fund | 10/31/2017 |
| S000001498 | 811-02958 | TRP International Funds | TRP International Value Equity Fund | 10/31/2017 |
| S000001497 | 811-02958 | TRP International Funds | TRP Global Stock Fund | 10/31/2017 |
| S000046336 | 811-02958 | TRP International Funds | TRP International Concentrated Equity Fund | 10/31/2017 |
| S000001491 | 811-02958 | TRP International Funds | TRP International Discovery Fund | 10/31/2017 |
| S000001487 | 811-02958 | TRP International Funds | TRP International Stock Fund | 10/31/2017 |
| S000001494 | 811-02958 | TRP International Funds | TRP Japan Fund | 10/31/2017 |
| S000001495 | 811-02958 | TRP International Funds | TRP Latin America Fund | 10/31/2017 |
| S000001493 | 811-02958 | TRP International Funds | TRP New Asia Fund | 10/31/2017 |
| S000014995 | 811-02958 | TRP International Funds | TRP Overseas Stock Fund | 10/31/2017 |
| S000021841 | 811-05833 | TRP Institutional International Funds, Inc. | TRP Institutional Africa & Middle East Fund | 10/31/2017 |
| S000029530 | 811-05833 | TRP Institutional International Funds, Inc. | TRP Institutional International Concentrated Equity Fund | 10/31/2017 |
| S000002098 | 811-05833 | TRP Institutional International Funds, Inc. | TRP Institutional Emerging Markets Equity Fund | 10/31/2017 |
| S000046349 | 811-05833 | TRP Institutional International Funds, Inc. | TRP Institutional Frontier Markets Equity Fund | 10/31/2017 |
| S000012706 | 811-05833 | TRP Institutional International Funds, Inc. | TRP Institutional Global Focused Growth Equity Fund | 10/31/2017 |
| S000023644 | 811-05833 | TRP Institutional International Funds, Inc. | TRP Institutional Global Growth Equity Fund | 10/31/2017 |
| S000037806 | 811-05833 | TRP Institutional International Funds, Inc. | TRP Institutional Global Value Equity Fund | 10/31/2017 |
| S000030204 | 811-05833 | TRP Institutional International Funds, Inc. | TRP Institutional International Core Equity Fund | 10/31/2017 |
| S000002097 | 811-05833 | TRP Institutional International Funds, Inc. | TRP Institutional International Growth Equity Fund | 10/31/2017 |
| *T. Rowe Price has been abbreviated as “TRP.” | ||||