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April 1, 2000
FUND PROFILE
T. ROWE PRICE
Financial Services Fund
A stock fund seeking long-term capital appreciation and modest current income.
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.
TROWEPRICELOGO
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FUND PROFILE
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What is the fund's objective?
The fund seeks long-term growth of capital and a modest level of income.
What is the fund's principal investment strategy?
The fund will invest at least 65% of assets in the common stocks of companies
in the financial services industry. In addition, the fund may invest in
companies deriving substantial revenues (at least 50%) from conducting
business with the industry, such as providers of financial software.
For purposes of selecting investments, we define financial services broadly
and include (but are not limited to) the following:
. regional and money center banks;
. insurance companies;
. home, auto, and other specialty finance companies;
. securities brokerage firms;
. investment management firms;
. publicly traded, government-sponsored financial intermediaries;
. thrift and savings banks;
. financial conglomerates; and
. foreign financial services companies.
Stock selection is based on fundamental, "bottom up" analysis that seeks to
identify companies with good appreciation prospects. The fund will have no
restrictions on the market capitalization (stock price multiplied by shares
outstanding) of its holdings. We may use both growth and value approaches in
selecting investments. In the growth area, we will try to identify companies
with capable management, attractive business niches, sound financial and
accounting practices, and a demonstrated ability to increase revenues,
earnings, and cash flow consistently. In the value area, the manager will
seek companies whose current stock prices appear undervalued in terms of
earnings, projected cash flow, or asset value per share, that have growth
potential temporarily unrecognized by the market, or that may be temporarily
out of favor. Many companies held by the fund are expected to pay a dividend.
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.
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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 any 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 performance by those holdings, 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 the fund will be concentrated in the financial services industry, it
will be less diversified than stock funds investing in a broader range of
industries and, therefore, could experience significant volatility.
Generally, a fund limited to one area of economic activity represents greater
potential risk than a more diversified fund, although the dividends paid by
financial services companies moderate this risk to some extent. Financial
services companies may be hurt when interest rates rise sharply, although not
all participants are affected equally. The stocks may also be vulnerable to
rapidly rising inflation. In addition, government deregulation of the
industry may stall, which could limit the profit potential of industry
participants.
Many companies in this field can possess growth characteristics, but the
industry is not generally perceived to be dynamic or aggressive, which could
dampen fund performance compared with more aggressive funds.
The fund's potential investments in growth stocks could result in greater
volatility because of the generally higher valuations of these stocks. The
fund's potential use of the value approach carries the risks 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.
To the extent that the fund invests in foreign stocks, it is also subject to
the risk that some holdings may lose value because of declining foreign
currencies or adverse political or economic events overseas. If the fund uses
futures and options, it is exposed to additional volatility and potential
losses.
As with any mutual fund, there can be no guarantee the fund will achieve its
objective.
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FUND PROFILE
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. 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 can accept the risks of investing in a
single-industry fund in an effort to achieve significant capital
appreciation, and you seek to participate directly in the growth prospects of
the financial services sector, 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 and the average annual total return table indicate risk by
illustrating how much returns can differ from one year to the next. The
fund's past performance is no guarantee of its 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
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<TABLE>
<CAPTION>
Calendar Year Total Returns
"97" "98" "99"
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<S> <C> <C> <C> <S>
41.44 11.55 1.70
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</TABLE>
Quarter ended Total return
Best quarter 12/30/98 21.04%
Worst quarter 9/30/98 -20.07%
<TABLE>
Table 1 Average Annual Total Returns
<CAPTION>
Periods ended 3/31/00
Since inception
1 year (09/30/1996)
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<S> <C> <C>
Financial Services Fund 5.14% 20.73%
S&P 500 Stock Index 17.94 26.89
Lipper Financial Services Funds -3.76 16.35
Average
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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%/a// /
Other expenses 0.50%
Total annual fund operating 1.17%/a// /
expenses
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</TABLE>
/a/
To limit the fund's expenses during its initial period of operations, T. Rowe
Price agreed to waive its fees and bear any expenses through December 31,
1998, which would cause the fund's ratio of expenses to average net assets to
exceed 1.25%. Fees waived or expenses paid or assumed under this agreement
are subject to reimbursement to T. Rowe Price by the fund whenever the fund's
expense ratio is below 1.25%; however, no reimbursement will be made after
December 31, 2000, or if it would result in the expense ratio exceeding
1.25%. Any amounts reimbursed will have the effect of increasing fees
otherwise paid by the fund. As a result of reimbursements by the fund to T.
Rowe Price under these agreements, the management fee and total annual fund
operating expenses have been restated. In the absence of this restatement,
these fees would have been 0.69% and 1.19%, respectively.
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
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or lower, the table shows how much you would pay if operating expenses remain
the same, you invest $10,000, you earn a 5% annual return, and you 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>
$119 $372 $644 $1,420
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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.
Larry J. Puglia manages the fund day-to-day and has been chairman of its
Investment Advisory Committee since October 1997. He joined T. Rowe Price in
1990 and has been managing investments since 1993.
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
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FUND PROFILE
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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.
T. Rowe Price Associates, Inc.
100 East Pratt Street
Baltimore, MD 21202
www.troweprice.com
LOGO
RPS F17-035
T. Rowe Price Investment Services, Inc., Distributor
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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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