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  • Contingent Redemption Fee

    T. Rowe Price maintains a Redemption Fee Policy to help protect mutual funds and the funds' shareholders from short-term trading, which can disrupt a fund's investment program and create additional costs for long-term shareholders. Redemption fees are paid to the fund to deter this kind of trading activity.

    What is a Redemption Fee?

    A redemption fee is a charge that some funds collect from shareholders to discourage short-term trading or early withdrawals (also known as market timing). Market timing can have a negative effect on a fund's long-term investors. Short-term trading generally involves shareholders who purchase and then redeem shares in a short period of time (often between 30 days and one year). A redemption fee is typically used to defray fund costs associated with a shareholder's redemption and is paid directly to the fund, not to a broker. The SEC generally limits redemption fees to 2%.

    The T. Rowe Price redemption fee is charged as a percentage of the amount redeemed on shares held for less than the required holding period. The trade day after the trade date of your purchase is considered Day 1 for purposes of computing the holding period. For example, if the fund you invest in requires a holding period of 90 days or less and charges 2% for shares held less than 91 days, then you will be charged 2% of the share price on that day using the "first-in, first-out" method. If the share price is $10.00 and you redeemed 100 shares, then you will be charged $20 for the early redemption based on the earliest shares purchased.

    What is T. Rowe Price's Redemption Fee Policy?

    Subject to the exceptions described below, all persons holding shares of a T. Rowe Price fund that imposes a redemption fee are subject to the fee, whether the person is holding shares directly with a T. Rowe Price fund, through a retirement plan for which T. Rowe Price serves as recordkeeper, or indirectly through an intermediary, such as a broker, bank, investment adviser, recordkeeper for retirement plan participants, or any other third party.

    Which Funds are Subject to the Redemption Fee?

    The following T. Rowe Price funds assess a fee on redemptions (including exchanges), which reduces the proceeds from such redemptions by the amounts indicated:

    T. Rowe Price Funds With Redemption Fees
    Fund Redemption Fee Holding Period
    Africa & Middle East 2% 90 days or less
    Diversified Small-Cap Growth 1% 90 days or less
    Emerging Europe 2% 90 days or less
    Emerging Markets Bond 2% 90 days or less
    Emerging Markets Corporate Bond 2% 90 days or less
    Emerging Markets Local Currency Bond 2% 90 days or less
    Emerging Markets Stock 2% 90 days or less
    Equity Index 500 0.5% 90 days or less
    European Stock 2% 90 days or less
    Extended Equity Market Index 0.5% 90 days or less
    Floating Rate 2% 90 days or less
    Global Infrastructure 2% 90 days or less
    Global Large-Cap Stock 2% 90 days or less
    Global Real Estate 2% 90 days or less
    Global Stock 2% 90 days or less
    High Yield 2% 90 days or less
    International Bond 2% 90 days or less
    International Discovery 2% 90 days or less
    International Equity Index 2% 90 days or less
    International Growth & Income 2% 90 days or less
    International Stock 2% 90 days or less
    Japan 2% 90 days or less
    Latin America 2% 90 days or less
    New Asia 2% 90 days or less
    Overseas Stock 2% 90 days or less
    Real Assets 2% 90 days or less
    Real Estate 1% 90 days or less
    Small-Cap Value 1% 90 days or less
    Spectrum International 2% 90 days or less
    Tax-Efficient Equity 1% less than 365 days
    Tax-Free High Yield Fund 2% 90 days or less
    Total Equity Market Index 0.5% 90 days or less
    U.S. Bond Enhanced Index 0.5% 90 days or less
    How Does the Redemption Fee Work?

    When an investor sells shares of a fund that assesses a redemption fee, T. Rowe Price will use the "first-in, first-out" method to determine the holding period for the shares sold. Under this method, the trade date of redemption or exchange will be compared with the earliest purchase date of shares held in the account. The day after the date of your purchase is considered Day 1 for purposes of computing the holding period. A redemption fee will be charged on shares sold on or before the end of the required holding period. For example, if you have shares in a fund with a 90-day holding period and you redeem your shares on or before the 90th day from Day 1, you will be assessed the redemption fee.

    If you purchase shares through an intermediary, consult your intermediary to determine how the holding period will be applied.

    Are Any Transactions Not Subject to the Redemption Fee Policy?

    The T. Rowe Price funds will not assess a redemption fee with respect to certain transactions. As of the date of this prospectus, the following shares of T. Rowe Price funds will not be subject to redemption fees:

    • Shares redeemed via an automated, systematic withdrawal plan;
    • Shares redeemed through or used to establish certain rebalancing or asset allocation programs or fund-of-funds products, if approved in writing by T. Rowe Price;
    • Shares purchased by the reinvestment of dividends or capital gain distributions;1
    • Shares converted from one share class to another share class of the same fund;1
    • Shares redeemed by a fund (e.g., for failure to meet account minimums or to cover other account fees);
    • Shares purchased by rollover and changes of account registration within the same fund;1
    • Shares redeemed to return an excess contribution in an individual retirement account;
    • Shares of T. Rowe Price funds purchased by certain other T. Rowe Price funds or accounts managed by T. Rowe Price (please note that other shareholders of the T. Rowe Price fund are still subject to the policy);
    • Shares that are redeemed in-kind;
    • Shares transferred to T. Rowe Price or a third-party intermediary acting as a service provider when the age of the shares cannot be determined systematically;1 and
    • Shares redeemed in retirement plans or other products that restrict trading to no more frequently than once per quarter, if approved in writing by T. Rowe Price.
    1 Subsequent exchanges of these shares into funds that assess redemption fees will subject such shares to the fee.
    I Hold Shares in a Retirement Plan. Does the Redemption Fee Apply?

    If shares are held in a retirement plan, redemption fees generally will be assessed on shares redeemed by exchange only if they were originally purchased by exchange. However, redemption fees may apply to transactions other than exchanges depending on how shares of the plan are held at T. Rowe Price or how the fees are applied by your plan's recordkeeper. To determine which of your transactions are subject to redemption fees, you should contact T. Rowe Price or your plan recordkeeper.

    I Hold Shares Through an Intermediary. Does the Redemption Fee Apply?

    If your shares are held through an intermediary in an omnibus account, T. Rowe Price relies on the intermediary to assess the redemption fee on underlying shareholder accounts. T. Rowe Price seeks to identify intermediaries establishing omnibus accounts and to enter into agreements requiring the intermediary to assess the redemption fees. There are no assurances that T. Rowe Price will be successful in identifying all intermediaries or that the intermediaries will properly assess the fees. Certain intermediaries may not apply the exemptions previously listed to the redemption fee policy; all redemptions by persons trading through such intermediaries may be subject to the fee. Certain intermediaries may exempt transactions not listed from redemption fees, if approved by T. Rowe Price. Persons redeeming shares through an intermediary should check with their respective intermediary to determine which transactions are subject to the fees.

    Who Should I Call If I Have a Question About the Redemption Policy?

    Please call customer service at 1-800-225-5132 to discuss any questions or concerns you have regarding this policy.

    Also see Excessive and Short-Term Trading Policy