***SPONSORED STATMENT Identifying investment opportunities in Europe

While the economic and policy environment in Europe remains uncertain, European equity portfolio managers at T. Rowe Price believe the recent market correction has resulted in an increasing number of attractive investment opportunities.

Since the eurozone debt crisis ignited nearly two years ago, a series of mini-crises has periodically rattled global financial markets.

Markets have recently performed poorly as liquidity and solvency concerns have broadened across the eurozone.

The situation remains fluid as the scope and scale of potential policy responses are considered.

Markets are likely to continue to be volatile until greater clarity emerges both as to their form and their likely chances of success.

At T. Rowe Price, a global investment management organisation with 359.3bn€ in assets under management as of 30 June 2011, our European equity portfolio managers continue to monitor the situation in the eurozone as it unfolds.

However, despite ongoing market uncertainty, our global research team continues to uncover attractive investment opportunities.

We are reassured that many European companies currently have stronger fundamentals than they did in the 2008 financial crisis and are better positioned to withstand a heightened economic slowdown.

Corporate balance sheets are more robust and inventory levels are typically constrained in most industries, limiting the scope for a repeat of the marked de-stocking we saw in the last crisis.

The management teams of the companies we are invested in typically reduced costs and protected returns adroitly a few years ago, and they have since stewarded their operations more conservatively than was witnessed prior to the last slowdown.

We are approaching European financials with caution, given the interdependence of many banks with the troubled sovereigns and economies in the eurozone.

We have reduced our overall exposure to this sector, concentrating our holdings in those entities that have good access to both capital and liquidity, and we are also more exposed to attractive growth opportunities, both in Scandinavia and in emerging markets.

We have continued to focus on identifying high-quality companies with strong balance sheets and management teams, operating in structurally attractive industries.

The recent heightened uncertainty has materially lowered European market valuations across the board in a somewhat indiscriminate manner.

As a result, many companies we are seeking are now valued more attractively than they were only a few months ago.

This is particularly significant considering that many of Europe’s leading companies generate a significant portion of their revenues outside the continent.

We believe these companies with broader international exposure will be better able to maintain long-term growth.

Overall, T. Rowe Price’s global research team continues to find meaningful opportunities for thoughtful, bottom-up stock s­election – even during this time of market instability.

Although uncertainty will remain a feature of markets and the path forward will not be smooth, ­continued dispersion of company fundamentals should provide attractive opportunities through this period of volatility.

We remain focused on uncovering quality companies with durable business models and robust financial structures to provide value for our clients.

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