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October 1, 2000
FUND PROFILE
T. ROWE PRICE
Health Sciences Fund
An aggressive stock fund seeking long-term capital growth through investments
in companies expected to benefit from changes in the health care, medicine, or
life sciences fields.
TROWEPRICELOGO
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.
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FUND PROFILE
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What is the fund's objective?
The fund seeks long-term capital appreciation.
What is the fund's principal investment strategy?
We will invest at least 65% of total assets in the common stocks of companies
engaged in the research, development, production, or distribution of products
or services related to health care, medicine, or the life sciences
(collectively termed "health sciences"). While the fund can invest in
companies of any size, the majority of fund assets are expected to be
invested in large- and mid-capitalization companies.
We divide the health sciences sector into four main areas: pharmaceuticals,
health care services companies, products and devices providers, and
biotechnology firms. Our allocation among these four areas will vary
depending on the relative potential we see within each area and the outlook
for the overall health sciences sector.
The fund will use fundamental, bottom-up analysis that seeks to identify
high-quality companies and the most compelling investment opportunities. In
general, the fund will follow a growth investment strategy, seeking companies
whose earnings are expected to grow faster than inflation and the economy in
general. When stock valuations seem unusually high, however, a "value"
approach, which gives preference to seemingly undervalued companies, may be
emphasized.
While most assets will be invested in U.S. common stocks, other securities
may also be purchased, including foreign stocks, futures, and options, in
keeping with fund objectives.
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 either of these documents, call 1-800-638-5660.
What are the main risks of investing in the fund?
As with all equity funds, this fund's share price can fall because of
weakness in the broad market, a particular industry, or specific holdings.
The market as a whole can decline for many reasons, including adverse
political or economic developments here or abroad, 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 per-
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formance even in a rising market. Finally, the fund's investment approach
could fall out of favor with the investing public, resulting in lagging
performance versus other types of stock funds.
Since this fund is concentrated in the health services industry, it is less
diversified than stock funds investing in a broader range of industries and,
therefore, could experience significant volatility. It may invest a
considerable portion of assets in companies in the same business, such as
pharmaceuticals, or in related businesses, such as hospital management and
managed care.
Developments that could adversely affect the fund's share price include:
. increased competition within the health care industry;
. changes in legislation or government regulations;
. reductions in government funding;
. product liability or other litigation; and
. the obsolescence of popular products.
The level of risk will be increased to the extent that the fund has
significant exposure to smaller or unseasoned companies (those with less than
a three-year operating history), which may not have established products or
more experienced management.
Growth stocks can have steep declines if their earnings disappoint investors.
The value approach carries the risk that the market will not recognize a
security's intrinsic value for a long time, or that a stock judged to be
undervalued may actually be appropriately priced.
Foreign stock holdings are subject to the risk that some holdings may lose
value because of declining foreign currencies or adverse political or
economic events overseas. Investments in futures and options, if any, are
subject 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 risk. If you seek an aggressive approach to capital growth
through investment in health sciences stocks, and can accept the potential
for
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above-average price fluctuations, the fund could be an appropriate part of
your overall investment strategy. This fund should not represent your
complete investment program or be used for short-term trading purposes.
The fund can be used in both regular and tax-deferred accounts, such as IRAs.
. Equity investors should have a long-term investment horizon and be willing
to wait out bear markets.
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
"96" "97" "98" "99"
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<S> <C> <C> <C>
26.75 19.41 22.37 7.97
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</TABLE>
Quarter ended Total return
Best quarter 12/31/98 19.57%
Worst quarter 9/30/98 -7.05%
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<TABLE>
Table 1 Average Annual Total Returns
<CAPTION>
Periods ended 09/30/2000
Since inception
1 year (12/29/1995)
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<S> <C> <C>
Health Sciences Fund 78.34% 27.04%
S&P 500 Stock Index 13.28 21.43
Lipper Health/ Biotechnology Fund 63.30 23.20
Index
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</TABLE>
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 0.67%/ // /
Other expenses 0.44%
Total annual fund operating 1.11%/ // /
expenses
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</TABLE>
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, earn a 5% annual return, and 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>
$113 $353 $612 $1,352
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</TABLE>
Who manages the fund?
The fund is managed by T. Rowe Price Associates, Inc. Founded in 1937, T.
Rowe Price and its affiliates manage investments for individual and
institutional accounts. The company offers a comprehensive array of stock,
bond, and money market funds directly to the investing public.
Kris H. Jenner, M.D., D. Phil., manages the fund day-to-day and has been
chairman of its Investment Advisory Committee since 2000. He joined T. Rowe
Price as an analyst in 1997 and has been managing investments
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since 1998. From 1995-1997, while on leave from the general surgery residency
program at the Johns Hopkins Hospital, he was a postdoctoral fellow at the
Brigham and Women's Hospital, Harvard Medical School.
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;
. 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 F10-035
T. Rowe Price Investment Services, Inc., Distributor
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