<PAGE>
Semiannual Report
DIVERSIFIED
SMALL-CAP
GROWTH FUND
JUNE 30, 1998
[LOGO OF T. ROWE PRICE APPEARS HERE]
<PAGE>
Report Highlights
---------------------------------
Diversified Small-Cap Growth Fund
. Large-cap stocks continued to spearhead the stock market rally as investors
preferred their liquidity and relative earnings safety.
. Small-cap stocks and your fund provided respectable but more modest returns
than the broad market for the six months ended June 30, 1998.
. We continued to emphasize technology, health care, and service companies,
where earnings growth is strong.
. Portfolio company fundamentals remain strong, with upward earnings revisions
outpacing those of the S&P 500.
. Small-cap stocks are attractively valued relative to large-caps and could
capture more investor attention if large-cap earnings growth continues to
slow.
<PAGE>
FELLOW SHAREHOLDERS
So far 1998 has been a great year for large-cap, growth-oriented stocks, as
investors continue to prefer the liquidity and perceived safety of blue chip
names. Small-cap stocks and your fund have achieved respectable returns, but
they paled next to the seemingly relentless advance of the unmanaged Standard &
Poor's 500 Stock Index. While growth stocks trounced value stocks in the
large-cap area, they exceeded value stocks by a much smaller margin in the
small-cap market.
Performance Comparison
- -----------------------------------------------------------------------
Periods Ended 6/30/98 6 Months 12 Months
- -----------------------------------------------------------------------
Diversified Small-Cap
Growth Fund 6.36% 13.91%
.......................................................................
Russell 2000 Growth Index 5.46 13.19
.......................................................................
Lipper Small Cap Fund Index 6.45 15.52
.......................................................................
As you can see, performance for both the 6- and 12-month periods compares
favorably with our benchmark index but was a bit lower than the peer group
index, especially for the longer period when your fund was just getting under
way. In general, the fund's average market cap of $976 million is somewhat
larger than the companies in the Russell, which worked to our benefit as
investors have consistently favored larger over smaller. On the other hand, our
market cap is somewhat smaller than the average of our peer group, which has
worked against us in Lipper comparisons.
Market Environment
Since this leg of the stock market rally began at the end of 1994, the S&P 500
has advanced more than 160%, driven by outstanding economic news. Once again in
1998, we have seen exceptionally strong economic growth, with that of recent
quarters more typical of the start of an economic expansion than eight years
into one. At the same time, inflation and interests rates have remained low.
In a market where earnings growth becomes harder to find, stocks that can
produce it attract investor attention and are the best performers. This helps
explain the 17.71% advance of the S&P 500 so far in 1998. (Conversely, when
strong earnings growth is widespread, investors
1
<PAGE>
won't pay up for it, so value stocks outperform.) In the first quarter,
earnings estimates were revised downward at a rate not seen in recent
years, and the reported earnings for the S&P 500 declined modestly from the
level of a year ago.
In general, small-cap stocks have not participated as fully in the market's
surge as large-caps, as investors have stuck with familiar names. In
addition, supply and demand are always important in the small-cap arena,
and while the supply has been large in the form of initial public offerings
of stock, demand for aggressive investments has not kept pace. Prime
evidence of this is the much weaker cash flows into small-cap mutual funds
than large-cap funds.
As in the large-cap arena, the better-performing sectors were those
reflecting strong consumer confidence (retailers), low interest rates and
inflation (banks and other financial services), and robust economic growth
(computer software and services). Weak sectors included natural resources,
hurt by falling oil and other commodity prices, and semiconductors, facing
heightened competition from Asia as well as reduced demand from that part
of the world.
Portfolio Review
For those of you who joined the fund in recent months, I'd like to quickly
review our investment approach as the fund concludes its first year of
operations. The fund invests in the shares of small companies that are
growing their earnings at a rapid rate. Unlike many other funds investing
in this sector of the market, this fund has a very broadly diversified
portfolio: its largest holding is well under 1% of net assets, the 25
largest compose less than 14%, and we hold over 300 securities. Our goal
with wide diversification is to capture the general performance of the
small-cap sector while reducing the impact of any individual stock and
mitigating the potentially high volatility of small-cap growth stocks.
Another key aspect of the fund's investment program is the use of
quantitative strategies for determining the overall characteristics of the
portfolio and as an aid in selecting individual stocks. Our database of
investment-related information ranges from historical accounting data to
prospective earnings forecasts, and we use several proprietary decision
rules and data screens to help manage the portfolio. We also take advantage
of the sizable resources at T. Rowe Price devoted to funda-
2
<PAGE>
Portfolio Characteristics
Diversified Small-Cap
As of 6/30/98 Growth Fund S&P 500
- -------------------------------------------------------------------------
Market Cap (Investment-
Weighted Median) $976 million $50.0 billion
.........................................................................
Earnings Growth Rate
Estimated Next 5 Years * 24.6% 13.4%
.........................................................................
P/E Ratio (Based on Next 12
MONTHS' ESTIMATED EARNINGS) 22.3X 22.5X
.........................................................................
* Forecasts are based on T. Rowe Price research and are in no way an indication
of future investment returns.
mental research for small companies, and believe the combination of these
resources with quantitative tools creates a unique fund.
Other characteristics of our approach include remaining fully invested and
paying careful attention to transaction costs and portfolio turnover. Few
managers have successfully timed the markets, and since equity returns far
exceed cash over time, we expect to be fully exposed to stocks. Finally, trading
costs of smaller companies can be high, and we think shareholder value can be
maximized through a buy-and-hold approach.
We did not make significant changes in the portfolio over the past six months,
maintaining an emphasis on technology, health care, and service companies, where
growth is strong. As you can see in the Industry Diversification table following
this letter, these three sectors compose about 32% of the fund's net assets.
Probably the largest change in exposure was in the dynamic media and
communications industry, which rose from 2.8% to 5.2%, reflecting appreciation
and some new holdings.
Holdings that performed well included Jones Apparel Group in the vibrant retail
area; Synopsys in computer services and software; and Metris Companies in the
healthy financial services area. Laggards included Respironics, in the hospital
supply area, and Premiere Technologies in telecommunications services.
Our portfolio companies continued to have favorable fundamentals. Over the first
half of 1998, almost 56% received upward earnings revisions from Wall Street
analysts, compared with only 42% for S&P 500 companies. Both of these numbers
are lower than in the fourth quarter of 1997, when they were 65% and 49%,
respectively, illustrating the slowing trend of corporate earnings.
3
<PAGE>
Outlook
The relative valuation of the small-cap sector is extremely attractive, and
the companies in our portfolio are strong. This valuation level has
historically been a good point at which to enter the market. Nevertheless,
the sector needs a catalyst to trigger a sustained period of performance
that exceeds that of large-cap stocks. The catalyst may be the slowing of
earnings now under way among S&P 500 companies. This could shift investor
focus to smaller companies that can continue to generate good growth. When
that turning point will come is impossible to predict, and whether a
slowdown in the large-cap area may turn investors away from stocks
altogether is also impossible to predict.
Our approach does not depend on short-term twists in the markets but aims
to capture the long-term appreciation potential demonstrated by dynamic,
smaller companies in the past. With the financial environment likely to
remain generally benign, in our view, we look for further progress in the
months ahead. Nevertheless, shareholders should be prepared to ride out the
setbacks that inevitably occur in stock investing in order to participate
in long-term trends.
Respectfully submitted,
/s/ Richard T. Whitney
RICHARD T. WHITNEY
President and Chairman of the Investment Advisory Committee
July 24, 1998
4
<PAGE>
T. Rowe Price Diversified Small-Cap Growth Fund
- --------------------------------------------------------------------------------
June 30, 1998
- ---------------------
Portfolio Highlights
- --------------------------------------------------------------------------------
INDUSTRY DIVERSIFICATION
Twenty-Five Largest Industries
Percent of Percent of
Net Assets Net Assets
12/31/97 6/30/98
- --------------------------------------------------------------------------------
Computer Service and Software 14.5% 16.1%
................................................................................
Miscellaneous Business Services 9.0 8.5
................................................................................
Hospital Supplies/Hospital Management 6.7 7.4
................................................................................
Specialty Merchandisers 6.6 6.4
................................................................................
Media and Communications 2.8 5.2
- --------------------------------------------------------------------------------
Telecommunications Equipment 4.7 3.5
................................................................................
Bank and Trust 3.9 3.4
................................................................................
Electronic Components 3.9 3.3
................................................................................
Pharmaceuticals 2.2 2.9
................................................................................
Miscellaneous Consumer Products 3.1 2.8
- --------------------------------------------------------------------------------
Distribution Services 2.3 2.7
................................................................................
Electronic Systems 2.4 2.4
................................................................................
Insurance 3.6 2.4
................................................................................
Aerospace and Defense 1.9 2.4
................................................................................
Transportation Services 2.5 2.3
- --------------------------------------------------------------------------------
Health Care Services 3.0 2.1
................................................................................
Entertainment and Leisure 3.5 2.1
................................................................................
Financial Services 1.9 2.1
................................................................................
Energy Services 2.0 2.0
................................................................................
General Merchandisers 1.1 1.9
- --------------------------------------------------------------------------------
Automobiles and Related 2.5 1.8
................................................................................
Building and Construction 1.4 1.7
................................................................................
Biotechnology 1.3 1.7
................................................................................
Restaurants -- 1.5
................................................................................
Education 1.3 1.3
- --------------------------------------------------------------------------------
Total 88.1% 89.9%
5
<PAGE>
T. Rowe Price Diversified Small-Cap Growth Fund
- -----------------------------------------------------------------------------
- --------------------
Portfolio Highlights
- -----------------------------------------------------------------------------
TWENTY-FIVE LARGEST HOLDINGS
Percent of
Net Assets
6/30/98
--------------------------------------------------------------------------
American Business Information 0.7%
..........................................................................
Orbital Sciences 0.7
..........................................................................
CBT 0.6
..........................................................................
Lincare 0.6
..........................................................................
NBTY 0.6
--------------------------------------------------------------------------
Bed Bath & Beyond 0.6
..........................................................................
AAR 0.6
..........................................................................
American Homestar 0.6
..........................................................................
Silicon Valley Bancshares 0.5
..........................................................................
O'Reilly Automotive 0.5
--------------------------------------------------------------------------
Viking Office Products 0.5
..........................................................................
Qwest Communications International 0.5
..........................................................................
Keane 0.5
..........................................................................
Jones Apparel Group 0.5
..........................................................................
Metamor Worldwide 0.5
--------------------------------------------------------------------------
Citrix Systems 0.5
..........................................................................
META Group 0.5
..........................................................................
Protective Life 0.5
..........................................................................
AmeriCredit 0.5
..........................................................................
Renters Choice 0.5
--------------------------------------------------------------------------
Serologicals 0.5
..........................................................................
Coach USA 0.5
..........................................................................
PMT Services 0.5
..........................................................................
Symbol Technologies 0.5
..........................................................................
AXENT Technologies 0.5
--------------------------------------------------------------------------
Total 13.5%
6
<PAGE>
T. Rowe Price Diversified Small-Cap Growth Fund
- --------------------------------------------------------------------------------
- ------------------------
Performance Comparison
- --------------------------------------------------------------------------------
This chart shows the value of a hypothetical $10,000 investment in the fund
over the past 10 fiscal year periods or since inception (for funds lacking
10-year records). The result is compared with a broad-based average or
index. The index return does not reflect expenses, which have been deducted
from the fund's return.
DIVERSIFIED SMALL-CAP GROWTH FUND
---------------------------------------------------------------------------
As of 6/30/98
[LINE GRAPH APPEARS HERE]
- --------------------------------------
Average Annual Compound Total Return
- --------------------------------------------------------------------------------
This table shows how the fund would have performed each year if its actual
(or cumulative) returns for the periods shown had been earned at a constant
rate.
Since Inception
Periods Ended 6/30/98 1 Year Inception Date
- --------------------------------------------------------------------------------
Diversified Small-Cap Growth Fund 13.91% 13.91% 6/30/97
................................................................................
Investment return and principal value represent past performance and will vary.
Shares may be worth more or less at redemption than at original purchase.
7
<PAGE>
T. Rowe Price Diversified Small-Cap Growth Fund
- --------------------------------------------------------------------------------
Unaudited
- ----------------------
Financial Highlights For a share outstanding throughout each period
- --------------------------------------------------------------------------------
6 Months 6/30/97
Ended Through
6/30/98 12/31/97
NET ASSET VALUE
Beginning of period $ 10.70 $ 10.00
.................................
Investment activities
Net investment income (0.04)* (0.03)*
Net realized and unrealized
gain (loss) 0.72 0.74
.................................
Total from investment
activities 0.68 0.71
.................................
Distributions
Net realized gain -- (0.01)
.................................
NET ASSET VALUE
End of period $ 11.38 $ 10.70
---------------------------------
Ratios/Supplemental Data
Total return. 6.36%* 7.10%*
................................................................................
Ratio of expenses to average net assets 1.25%+* 1.25%+*
................................................................................
Ratio of net investment income to average
net assets (0.56)%+* (0.67)%+*
................................................................................
Portfolio turnover rate 24.7% 13.4%
................................................................................
Net assets, end of period (in thousands) $76,396 $72,071
................................................................................
. Total return reflects the rate that an investor would have earned on an
investment in the fund during each period, assuming reinvestment of all
distributions and payment of no redemption or account fees.
* Excludes expenses in excess of a 1.25% voluntary expense limitation in
effect through 12/31/98.
+ Annualized.
The accompanying notes are an integral part of these financial statements.
8
<PAGE>
T. Rowe Price Diversified Small-Cap Growth Fund
- --------------------------------------------------------------------------------
Unaudited June 30, 1998
- -------------------------
Statement of Net Assets Shares/Par Value
- --------------------------------------------------------------------------------
In thousands
Common Stocks 99.7%
FINANCIAL 7.9%
Bank and Trust 3.4%
Astoria Financial 2,900 $ 155
................................................................................
Bay View Capital 6,200 197
................................................................................
City National 9,100 336
................................................................................
Coast Federal Litigation Trust * 5,400 82
................................................................................
Commerce Bancorp 4,725 277
................................................................................
Community First Bankshares 11,800 312
................................................................................
Imperial Bancorp * 10,500 315
................................................................................
North Fork Bancorporation 15,300 374
................................................................................
Silicon Valley Bancshares * 11,800 420
................................................................................
Webster Financial 5,600 186
................................................................................
2,654
...............
Insurance 2.4%
Amerin * 9,000 263
................................................................................
CMAC Investment 6,000 369
................................................................................
E.W. Blanch 5,200 191
................................................................................
Executive Risk 4,200 310
................................................................................
Protective Life 10,800 396
................................................................................
Triad Guaranty * 8,500 293
................................................................................
1,822
...............
Financial Services 2.1%
AmeriCredit * 11,000 392
................................................................................
FirstPlus Financial * 5,100 184
................................................................................
Healthcare Financial Partners * 5,800 355
................................................................................
Imperial Credit Industries * 11,700 272
................................................................................
Legg Mason 5,866 338
................................................................................
WMF Group * 1,833 43
................................................................................
1,584
...............
Total Financial 6,060
...............
UTILITIES 0.7%
Telephone Services 0.7%
COMSAT 6,700 190
................................................................................
Comverse Technology * 6,800 353
................................................................................
Total Utilities 543
...............
9
<PAGE>
T. Rowe Price Diversified Small-Cap Growth Fund
- --------------------------------------------------------------------------------
Shares/Par Value
- --------------------------------------------------------------------------------
In thousands
CONSUMER NONDURABLES 17.8%
Cosmetics 0.2%
French Fragrances * 9,500 $ 147
................................................................................
147
...............
Food Processing 0.7%
Earthgrains 2,700 151
................................................................................
Smithfield Foods * 9,900 300
................................................................................
Twinlab * 1,800 79
................................................................................
530
...............
Hospital Supplies/Hospital Management 7.4%
Acuson * 13,800 251
................................................................................
ADAC Laboratories * 10,900 246
................................................................................
Airgas * 11,300 162
................................................................................
American Oncology Resources * 9,100 111
................................................................................
Dentsply International 6,600 164
................................................................................
First Health Group * 10,200 292
................................................................................
Genesis Health Ventures * 8,600 215
................................................................................
Integrated Health Services 8,709 327
................................................................................
Lincare * 11,400 479
................................................................................
Mentor 8,800 213
................................................................................
National Surgery Centers * 12,600 369
................................................................................
NovaCare * 16,400 193
................................................................................
Omnicare 9,600 366
................................................................................
Patterson Dental * 4,950 182
................................................................................
Pediatrix Medical Group * 6,900 257
................................................................................
PhyCor * 10,500 174
................................................................................
PSS World Medical * 14,175 207
................................................................................
Quorum Health Group * 5,300 140
................................................................................
Renal Care Group * 5,400 238
................................................................................
Respironics * 21,193 328
................................................................................
Steris * 3,700 235
................................................................................
Trex Med * 4,300 71
................................................................................
Universal Health Services * 5,100 298
................................................................................
Veterinary Centers of America * 4,100 77
................................................................................
VI Technologies * 5,000 57
................................................................................
5,652
...............
Pharmaceuticals 2.9%
Barr Laboratories * 3,700 147
................................................................................
10
<PAGE>
T. Rowe Price Diversified Small-Cap Growth Fund
- --------------------------------------------------------------------------------
Shares/Par Value
- --------------------------------------------------------------------------------
In thousands
Duane Reade * 10,000 $ 300
................................................................................
Express Scripts * 2,000 161
................................................................................
IDEXX Laboratories * 3,000 75
................................................................................
Jones Pharma 7,100 235
................................................................................
Parexel International * 9,000 327
................................................................................
Sofamor/Danek Group * 3,600 312
................................................................................
Theragenics * 11,800 307
................................................................................
Watson Pharmaceuticals * 7,800 364
................................................................................
2,228
...............
Biotechnology 1.7%
Affymetrix * 4,900 118
................................................................................
Biogen * 3,500 171
................................................................................
Covance * 7,000 158
................................................................................
Medco Research * 1,600 41
................................................................................
NBTY * 24,300 444
................................................................................
Serologicals * 12,000 390
................................................................................
1,322
...............
Health Care Services 2.1%
Access Health Marketing * 6,600 169
................................................................................
Concentra Managed Care * 11,472 298
................................................................................
Henry Schein * 3,900 179
................................................................................
Inhale Therapeutic Systems * 8,500 212
................................................................................
Novoste * 6,900 152
................................................................................
Orthodontic Centers of America * 12,900 270
................................................................................
Total Renal Care * 9,780 337
................................................................................
1,617
...............
Miscellaneous Consumer Products 2.8%
Blyth Industries * 9,000 299
................................................................................
Equity Corp. International * 13,100 314
................................................................................
Fossil * 3,100 77
................................................................................
Jones Apparel Group * 11,000 402
................................................................................
Nautica Enterprises * 7,500 202
................................................................................
North Face * 9,300 224
................................................................................
Pillowtex 3,800 153
................................................................................
Wesley Jessen VisionCare * 5,500 127
................................................................................
Wolverine World Wide 14,600 317
................................................................................
2,115
...............
Total Consumer Nondurables 13,611
...............
11
<PAGE>
T. Rowe Price Diversified Small-Cap Growth Fund
- --------------------------------------------------------------------------------
Shares/Par Value
- --------------------------------------------------------------------------------
In thousands
- ---------------------------------------
CONSUMER SERVICES 17.1%
- ---------------------------------------
Restaurants 1.5%
Applebee's 7,500 $ 168
................................................................................
CKE Restaurants 6,050 249
................................................................................
Dave & Busters * 10,200 254
................................................................................
Landry's Seafood Restaurant * 7,500 136
................................................................................
Logan's Roadhouse * 1,800 38
................................................................................
Outback Steakhouse * 6,900 269
................................................................................
1,114
............
General Merchandisers 1.9%
Bed Bath & Beyond * 8,400 435
................................................................................
Dollar Tree Stores * 9,225 375
................................................................................
Fred Meyer * 5,700 242
................................................................................
Kenneth Cole Productions (Class A) * 2,900 75
................................................................................
Neiman-Marcus * 7,500 326
................................................................................
1,453
............
Specialty Merchandisers 6.4%
................................................................................
Barnes & Noble * 4,500 168
................................................................................
Borders Group * 9,500 352
................................................................................
Cannondale * 5,200 68
................................................................................
CDW Computer Centers * 4,100 205
................................................................................
CompUSA * 6,500 117
................................................................................
Day Runner * 6,900 174
................................................................................
General Nutrition * 8,000 250
................................................................................
Guitar Center * 2,900 88
................................................................................
Insight Enterprises * 7,800 312
................................................................................
Lands' End * 7,000 221
................................................................................
Men's Wearhouse * 8,700 287
................................................................................
Pacific Sunwear * 5,100 179
................................................................................
R.P. Scherer * 900 80
................................................................................
Renters Choice * 13,700 390
................................................................................
Restoration Hardware * 5,000 125
................................................................................
Ross Stores 6,500 280
................................................................................
SLI * 11,100 290
................................................................................
Stein Mart * 17,200 232
................................................................................
Viking Office Products * 12,900 404
................................................................................
Wet Seal (Class A) * 4,600 148
................................................................................
Whole Foods Market * 2,700 164
................................................................................
12
<PAGE>
T. Rowe Price Diversified Small-Cap Growth Fund
- --------------------------------------------------------------------------------
Shares/Par Value
- --------------------------------------------------------------------------------
In thousands
Williams-Sonoma * 11,200 $ 356
................................................................................
4,890
............
Entertainment and Leisure 2.1%
Brinker * 3,800 73
................................................................................
GC Companies * 300 16
................................................................................
Imax * 12,800 290
................................................................................
Intrawest Corp 3,800 76
................................................................................
J & J Snack Foods * 7,600 161
................................................................................
Luby's Cafeterias 4,200 74
................................................................................
Promus Hotel * 5,147 198
................................................................................
SFX Entertainment (Class A) * 5,200 238
................................................................................
Signature Resorts * 17,200 284
................................................................................
Sonic * 3,800 85
................................................................................
Steinway Musical Instruments * 3,100 100
................................................................................
1,595
............
Media and Communications 5.2%
A.C. Nielson * 5,700 144
................................................................................
American Business Information (Class A) * 17,400 268
................................................................................
American Business Information (Class B) 15,700 250
................................................................................
American Tower Systems * 5,200 130
................................................................................
Chancellor Media * 7,200 357
................................................................................
CKS Group * 11,100 199
................................................................................
Cox Radio * 5,000 216
................................................................................
CSG Systems International * 1,000 47
................................................................................
Emmis Broadcasting (Class A) * 5,000 240
................................................................................
Harte Hanks Communications 7,000 181
................................................................................
Heftel Broadcasting * 3,900 174
................................................................................
Jacor Communications * 5,100 301
................................................................................
Level One * 11,400 268
................................................................................
Outdoor Systems * 11,775 330
................................................................................
Saga Communications (Class A) * 2,500 40
................................................................................
TCA Cable TV 3,900 234
................................................................................
United Video Satellite * 4,100 163
................................................................................
Univision Communications * 4,500 168
................................................................................
World Color Press * 2,400 84
................................................................................
Young Broadcasting (Class A) * 2,900 189
................................................................................
3,983
............
Total Consumer Services 13,035
............
13
<PAGE>
T. Rowe Price Diversified Small-Cap Growth Fund
- --------------------------------------------------------------------------------
Shares/Par Value
- --------------------------------------------------------------------------------
In thousands
- ---------------------------------------
CONSUMER CYCLICALS 3.0%
- ---------------------------------------
Automobiles and Related 1.8%
Central Parking 6,150 $ 286
................................................................................
Dura Automotive Systems * 2,300 73
................................................................................
Gentex * 17,900 325
................................................................................
O'Reilly Automotive * 11,700 419
................................................................................
Tower Automotive * 6,200 266
................................................................................
1,369
............
Building and Real Estate 0.8%
................................................................................
Apartment Investment & Management, REIT 8,012 316
................................................................................
Premier Parks * 4,600 307
................................................................................
623
............
Miscellaneous Consumer Durables 0.4%
HA-LO Industries * 8,700 271
................................................................................
271
............
Total Consumer Cyclicals 2,263
............
- ---------------------------------------
TECHNOLOGY 14.3%
- ---------------------------------------
Electronic Components 3.3%
Artesyn Technologies 7,300 116
................................................................................
ATMI * 8,200 123
................................................................................
Burr Brown * 9,550 202
................................................................................
Cybex * 6,700 152
................................................................................
Dallas Semiconductor 5,000 155
................................................................................
Etec Systems * 4,700 166
................................................................................
Lattice Semiconductor * 4,500 128
................................................................................
Microchip Technology * 5,800 152
................................................................................
MicroTouch Systems * 11,700 218
................................................................................
Photronics * 9,600 212
................................................................................
Plexus * 1,700 34
................................................................................
Qlogic * 5,200 185
................................................................................
Sanmina * 6,800 294
................................................................................
Semtech * 8,700 154
................................................................................
SMART Modular Technologies * 9,200 135
................................................................................
Special Devices * 2,200 78
................................................................................
2,504
............
Electronic Systems 2.4%
Black Box * 5,800 193
................................................................................
14
<PAGE>
T. Rowe Price Diversified Small-Cap Growth Fund
- --------------------------------------------------------------------------------
Shares/Par Value
- --------------------------------------------------------------------------------
In thousands
Dionex * 8,800 $ 233
................................................................................
Electro Scientific Industries * 2,900 92
................................................................................
KLA-Tencor * 5,700 158
................................................................................
Kulicke & Soffa * 5,000 85
................................................................................
Novellus Systems * 3,200 114
................................................................................
Sawtek * 13,000 190
................................................................................
Thermo Optek * 12,000 178
................................................................................
Tollgrade Communications * 10,000 256
................................................................................
Uniphase * 5,200 326
................................................................................
1,825
............
Information Processing 0.7%
Data Processing Resources * 7,000 218
................................................................................
Paymentech * 7,700 158
................................................................................
SCI Systems * 4,800 181
................................................................................
557
............
Office Automation 0.8%
Technitrol 8,400 335
................................................................................
Transition Systems * 13,100 141
................................................................................
XcelleNet * 7,300 164
................................................................................
640
............
Specialized Computer 1.2%
Pinnacle * 5,100 164
................................................................................
Security Dynamics Technologies * 3,900 75
................................................................................
Symbol Technologies 10,050 379
................................................................................
Technology Solutions * 8,900 282
................................................................................
900
............
Telecommunications Equipment 3.5%
Aspect Telecommunications * 13,000 357
................................................................................
Coherent Communications Systems * 5,300 249
................................................................................
Dialogic * 7,600 225
................................................................................
Inter-Tel 5,400 87
................................................................................
MRV Communications * 8,100 169
................................................................................
P-COM * 10,100 93
................................................................................
Pacific Gateway Exchange * 4,300 172
................................................................................
Premisys Communications * 6,100 152
................................................................................
Proxim * 15,300 255
................................................................................
Qwest Communications International * 11,572 403
................................................................................
Tekelec * 4,400 197
................................................................................
Transaction Network Services * 7,800 165
................................................................................
<PAGE>
T. Rowe Price Diversified Small-Cap Growth Fund
- --------------------------------------------------------------------------------
Shares/Par Value
- --------------------------------------------------------------------------------
In thousands
USA Networks * 7,700 $ 194
................................................................................
2,718
...........
Aerospace and Defense 2.4%
AAR 14,400 426
................................................................................
Avondale Industries * 10,000 277
................................................................................
Orbital Sciences * 13,800 516
................................................................................
Precision Castparts 4,100 219
................................................................................
Remec * 8,400 97
................................................................................
Triumph Group * 6,700 281
................................................................................
1,816
...........
Total Technology 10,960
...........
EDUCATION 1.3%
Education 1.3%
Apollo Group (Class A) * 9,750 322
................................................................................
ITT Educational Service * 5,200 168
................................................................................
Learning Tree International * 12,400 250
................................................................................
Sylvan Learning Systems * 7,650 252
................................................................................
Total Education 992
...........
CAPITAL EQUIPMENT 0.6%
Electrical Equipment 0.6%
Advanced Lighting * 8,600 201
................................................................................
Berg Electronics * 10,100 198
................................................................................
Power One * 7,000 66
................................................................................
Total Capital Equipment 465
...........
BUSINESS SERVICES AND
TRANSPORTATION 30.8%
Computer Service and Software 16.1%
Advent Software * 1,400 59
................................................................................
Affiliated Computer Services (Class A) * 6,700 258
................................................................................
Analysts International 7,500 213
................................................................................
Arbor Software * 5,700 180
................................................................................
Aspen Technology * 6,600 335
................................................................................
Autodesk 5,500 212
................................................................................
AXENT Technologies * 12,300 376
................................................................................
BISYS Group * 5,800 238
................................................................................
16
<PAGE>
T. Rowe Price Diversified Small-Cap Growth Fund
- --------------------------------------------------------------------------------
Shares/Par Value
- --------------------------------------------------------------------------------
In thousands
Cadence Design Systems * 8,200 $ 256
................................................................................
Cambridge Technology Partners * 1,300 73
................................................................................
CBT ADR 9,200 494
................................................................................
CIBER * 7,400 281
................................................................................
Citrix Systems * 5,850 400
................................................................................
Cognos * 6,600 176
................................................................................
Computer Management Sciences * 14,400 342
................................................................................
Cotelligent Group * 8,900 208
................................................................................
Datastream Systems * 13,200 251
................................................................................
Documentum * 5,200 251
................................................................................
DST Systems * 5,300 297
................................................................................
E*TRADE * 12,000 275
................................................................................
Electronic Arts * 6,300 341
................................................................................
Engineering Animation * 4,300 263
................................................................................
FARO Technologies * 5,000 54
................................................................................
Harbinger * 10,300 250
................................................................................
HBO 7,640 270
................................................................................
Hyperion Software * 6,000 171
................................................................................
IDX Systems * 6,600 305
................................................................................
Integrated Systems Consulting Group * 16,300 225
................................................................................
International Network Services * 4,300 175
................................................................................
JDA Software Group * 6,700 294
................................................................................
Keane * 7,200 403
................................................................................
Legato Systems * 8,800 344
................................................................................
Lexmark International * 1,300 78
................................................................................
National Data 8,400 367
................................................................................
National Instruments * 7,700 276
................................................................................
Network Associates * 5,400 258
................................................................................
QuickResponse Services * 8,000 302
................................................................................
Saville Systems ADR * 4,500 226
................................................................................
Sterling Commerce * 1,600 77
................................................................................
Summit Design * 16,000 237
................................................................................
Sykes Enterprises * 9,300 187
................................................................................
Symantec * 5,800 151
................................................................................
Synopsys * 7,500 343
................................................................................
Systems & Computer Technology * 12,600 343
................................................................................
Transaction Systems Architects * 7,400 285
................................................................................
Vanstar * 9,300 135
................................................................................
17
<PAGE>
T. Rowe Price Diversified Small-Cap Growth Fund
- --------------------------------------------------------------------------------
Shares/Par Value
- --------------------------------------------------------------------------------
In thousands
VERITAS Software * 6,450 $ 267
................................................................................
Visio * 5,000 239
................................................................................
Zebra Technologies * 6,400 274
................................................................................
12,315
........
Distribution Services 2.7%
AmeriSource Health * 5,100 335
................................................................................
Aviation Sales * 3,000 119
................................................................................
Barnett * 14,100 284
................................................................................
Central Garden & Pet * 7,100 221
................................................................................
Daisytek International * 2,200 56
................................................................................
Danka Business Systems ADR 8,800 104
................................................................................
MSC * 5,400 154
................................................................................
Richfood Holdings 9,800 203
................................................................................
Tech Data * 5,900 253
................................................................................
Watsco (Class A) 9,500 334
................................................................................
2,063
........
Environmental 0.6%
Allied Waste Industries * 13,400 321
................................................................................
U.S. Filter * 4,312 121
................................................................................
442
........
Transportation Services 2.3%
BE Aerospace * 11,600 340
................................................................................
Coach USA * 8,500 388
................................................................................
Expeditors International of Washington 6,600 290
................................................................................
Heartland Express * 8,500 172
................................................................................
Swift Transportation * 15,150 301
................................................................................
US Freightways 7,900 259
................................................................................
1,750
........
Miscellaneous Business Services 8.5%
ABR Information Services * 5,000 119
................................................................................
AccuStaff * 6,300 197
................................................................................
AMRESCO * 8,200 238
................................................................................
Billing Information Concepts * 500 8
................................................................................
Carriage Services * 6,700 168
................................................................................
Concord EFS * 13,350 349
................................................................................
Consolidated Graphics * 4,100 242
................................................................................
CORT Business * 8,100 255
................................................................................
Eltron International * 8,000 222
................................................................................
Fair, Issac and Company 4,800 183
................................................................................
18
<PAGE>
T. Rowe Price Diversified Small-Cap Growth Fund
- --------------------------------------------------------------------------------
Shares/Par Value
- --------------------------------------------------------------------------------
In thousands
Fastenal 3,100 $ 144
................................................................................
G & K Services 5,600 245
................................................................................
Knoll * 5,400 159
................................................................................
Merrill 9,400 208
................................................................................
META Group * 18,000 397
................................................................................
Metamor Worldwide * 11,400 402
................................................................................
National Computer Systems 6,400 153
................................................................................
NCO Group * 9,800 217
................................................................................
Paging Network * 17,300 242
................................................................................
PMT Services * 15,100 384
................................................................................
Pre-Paid Legal Services * 4,600 145
................................................................................
Professional Staff ADR * 1,100 14
................................................................................
Rent Way * 9,900 302
................................................................................
Romac International * 10,200 311
................................................................................
Service Experts * 8,000 276
................................................................................
Staffmark * 4,100 151
................................................................................
Strayer Education 3,800 137
................................................................................
Superior Services * 10,700 322
................................................................................
Tetra Tech * 14,500 355
................................................................................
6,545
.......
Airlines 0.6%
Comair Holdings 8,950 276
................................................................................
Mesaba Holdings * 7,000 161
................................................................................
437
.......
Total Business Services and Transportation 23,552
.......
ENERGY 3.2%
Energy Services 2.0%
BJ Services * 6,200 180
................................................................................
EVI Weatherford * 4,100 152
................................................................................
Newpark Resources * 15,600 173
................................................................................
Oceaneering International * 11,700 208
................................................................................
Offshore Logistics * 10,400 186
................................................................................
Pool Energy Services * 9,800 145
................................................................................
R & B Falcon * 6,200 140
................................................................................
Smith International * 4,500 157
................................................................................
UTI Energy * 14,300 184
................................................................................
1,525
.......
19
<PAGE>
T. Rowe Price Diversified Small-Cap Growth Fund
- --------------------------------------------------------------------------------
Shares/Par Value
- --------------------------------------------------------------------------------
In thousands
Exploration and Production 1.2%
Devon Energy 6,000 $ 210
................................................................................
Noble Affiliates 6,100 232
................................................................................
Swift Energy * 11,350 181
................................................................................
Vintage Petroleum 13,800 260
................................................................................
883
..............
Total Energy 2,408
..............
PROCESS INDUSTRIES 2.1%
Specialty Chemicals 0.4%
Sybron International * 12,100 306
................................................................................
306
..............
Building and Construction 1.7%
American Homestar * 17,700 424
................................................................................
Blount International (Class A) 8,400 239
................................................................................
Fairfield Communities * 9,600 184
................................................................................
NCI Building Systems * 4,900 283
................................................................................
Simpson Manufacturing * 4,000 155
................................................................................
1,285
..............
Total Process Industries 1,591
..............
BASIC MATERIALS 0.9%
Metals 0.5%
RMI Titanium * 12,600 287
................................................................................
Steel Dynamics * 9,800 136
................................................................................
423
..............
Miscellaneous Materials 0.4%
Box Hill Systems * 12,500 87
................................................................................
Gilat Satellite Networks * 6,300 211
................................................................................
298
..............
Total Basic Materials 721
..............
Total Common Stocks (Cost $ 69,050) 76,201
..............
Short-Term Investments 0.7%
Money Market Funds 0.7%
Reserve Investment Fund, 5.69% # 526,259 526
................................................................................
Total Short-Term Investments (Cost $526) 526
..............
20
<PAGE>
T. Rowe Price Diversified Small-Cap Growth Fund
- --------------------------------------------------------------------------------
Value
- --------------------------------------------------------------------------------
In thousands
Total Investments in Securities
100.4% of Net Assets (Cost $69,576) $ 76,727
Other Assets Less Liabilities (331)
..............
NET ASSETS $ 76,396
--------------
Net Assets Consist of:
Accumulated net investment income - net of distributions $ (281)
Accumulated net realized gain/loss - net of distributions (2,274)
Net unrealized gain (loss) 7,151
Paid-in-capital applicable to 6,711,975 shares of $0.0001 par
value capital stock outstanding; 1,000,000,000 shares authorized 71,800
.............
NET ASSETS $ 76,396
-------------
NET ASSET VALUE PER SHARE $ 11.38
-------------
* Non-income producing
# Seven-day yield
ADR American Depository Receipt
REIT Real Estate Investment Trust
The accompanying notes are an integral part of these financial statements.
21
<PAGE>
T. Rowe Price Diversified Small-Cap Growth Fund
- --------------------------------------------------------------------------------
Unaudited
Statement of Operations
- --------------------------------------------------------------------------------
In thousands
6 Months
Ended
6/30/98
Investment Income
Income
Dividend $ 122
Interest 80
..............
Total income 202
..............
Expenses
Investment management 186
Shareholder servicing 162
Organization 44
Custody and accounting 40
Prospectus and shareholder reports 30
Registration 10
Legal and audit 7
Directors 3
Miscellaneous 1
..............
Total expenses 483
..............
Net investment income (281)
..............
Realized and Unrealized Gain (Loss)
Net realized gain (loss) on securities (2,469)
Change in net unrealized gain or loss on securities 7,072
..............
Net realized and unrealized gain (loss) 4,603
..............
INCREASE (DECREASE) IN NET
ASSETS FROM OPERATIONS $ 4,322
--------------
The accompanying notes are an integral part of these financial statements.
22
<PAGE>
T. Rowe Price Diversified Small-Cap Growth Fund
- --------------------------------------------------------------------------------
Unaudited
Statement of Changes in Net Assets
- --------------------------------------------------------------------------------
In thousands
6 Months 6/30/97
Ended Through
6/30/98 12/31/97
Increase (Decrease) in Net Assets
Operations
Net investment income $ (281) $ (174)
Net realized gain (loss) (2,469) 431
Change in net unrealized gain or loss 7,072 79
......................
Increase (decrease) in net assets from operations 4,322 336
......................
Distributions to shareholders
Net realized gain -- (67)
......................
Capital share transactions *
Shares sold 21,341 81,333
Distributions reinvested -- 65
Shares redeemed (21,386) (9,747)
Redemption fees received 48 51
......................
Increase (decrease) in net assets from capital
share transactions 3 71,702
......................
Net Assets
Increase (decrease) during period 4,325 71,971
Beginning of period 72,071 100
......................
End of period $ 76,396 $ 72,071
----------------------
* Share information
Shares sold 1,885 7,622
Distributions reinvested -- 6
Shares redeemed (1,906) (905)
......................
Increase (decrease) in shares outstanding (21) 6,723
The accompanying notes are an integral part of these financial statements.
23
<PAGE>
T. Rowe Price Diversified Small-Cap Growth Fund
- --------------------------------------------------------------------------------
Unaudited June 30, 1998
- -------------------------------
Notes to Financial Statements
- --------------------------------------------------------------------------------
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
T. Rowe Price Diversified Small-Cap Growth Fund, Inc. (the fund) is registered
under the Investment Company Act of 1940 as a diversified, open-end management
investment company and commenced operations on June 30, 1997.
The accompanying financial statements are prepared in accordance with
generally accepted accounting principles for the investment company industry;
these principles may require the use of estimates by fund management.
Valuation Equity securities listed or regularly traded on a securities
exchange are valued at the last quoted sales price on the day the valuations
are made. A security which is listed or traded on more than one exchange is
valued at the quotation on the exchange determined to be the primary market
for such security. Listed securities not traded on a particular day and
securities regularly traded in the over-the-counter market are valued at the
mean of the latest bid and asked prices. Other equity securities are valued at
a price within the limits of the latest bid and asked prices deemed by the
Board of Directors, or by persons delegated by the Board, best to reflect fair
value.
Investments in mutual funds are valued at the closing net asset value per
share of the mutual fund on the day of valuation.
Assets and liabilities for which the above valuation procedures are
inappropriate or are deemed not to reflect fair value are stated at fair value
as determined in good faith by or under the supervision of the officers of the
fund, as authorized by the Board of Directors.
Other Income and expenses are recorded on the accrual basis. Investment
transactions are accounted for on the trade date. Realized gains and losses
are reported on the identified cost basis. Dividend income and distributions
to shareholders are recorded by the fund on the ex-dividend date. Income and
capital gain distributions are determined in accordance with federal income
tax regulations and may differ from those determined in accordance with
generally accepted accounting principles. Effective June 30, 1998, the fund
recognized in expense its remaining unamortized organization costs. Results of
operations and net assets were not affected by this charge, due to the expense
limitation provisions of the investment management agreement.
24
<PAGE>
T. Rowe Price Diversified Small-Cap Growth Fund
- --------------------------------------------------------------------------------
NOTE 2 - INVESTMENT TRANSACTIONS
Purchases and sales of portfolio securities, other than short-term securities,
aggregated $19,509,000 and $18,627,000, respectively, for the six months ended
June 30, 1998.
NOTE 3 - FEDERAL INCOME TAXES
No provision for federal income taxes is required since the fund intends to
continue to qualify as a regulated investment company and distribute all of
its taxable income.
At June 30, 1998, the aggregate cost of investments for federal income tax and
financial reporting purposes was $69,576,000, and net unrealized gain
aggregated $7,151,000, of which $12,494,000 related to appreciated investments
and $5,343,000 to depreciated investments.
NOTE 4 - RELATED PARTY TRANSACTIONS
The investment management agreement between the fund and T. Rowe Price
Associates, Inc. (the manager) provides for an annual investment management
fee. The fee is computed daily and paid monthly, and consists of an individual
fund fee equal to 0.35% of average daily net assets and a group fee. The group
fee is based on the combined assets of certain mutual funds sponsored by the
manager or Rowe Price-Fleming International, Inc. (the group). The group fee
rate ranges from 0.48% for the first $1 billion of assets to 0.30% for assets
in excess of $80 billion. At June 30, 1998, and for the six months then ended,
the effective annual group fee rate was 0.32%. The fund pays a pro-rata share
of the group fee based on the ratio of its net assets to those of the group.
Under the terms of the investment management agreement, the manager is
required to bear any expenses through December 31, 1998, which would cause the
fund's ratio of expenses to average net assets to exceed 1.25%. Thereafter,
through December 31, 2000, the fund is required to reimburse the manager for
these expenses, provided that average net assets have grown or expenses have
declined sufficiently to allow reimbursement without causing the fund's ratio
of expenses to average net assets to exceed 1.25%. Pursuant to this agreement,
$167,000 of management fees were not accrued by the fund for the six months
25
<PAGE>
T. Rowe Price Diversified Small-Cap Growth Fund
- --------------------------------------------------------------------------------
ended June 30, 1998. Additionally, $94,000 of unaccrued 1997 fees are subject
to reimbursement through December 31, 2000.
In addition, the fund has entered into agreements with the manager and two
wholly owned subsidiaries of the manager, pursuant to which the fund receives
certain other services. The manager computes the daily share price and
maintains the financial records of the fund. T. Rowe Price Services, Inc., is
the fund's transfer and dividend disbursing agent and provides shareholder and
administrative services to the fund. T. Rowe Price Retirement Plan Services,
Inc., provides subaccounting and recordkeeping services for certain retirement
accounts invested in the fund. The fund incurred expenses pursuant to these
related party agreements totaling approximately $160,000 for the six months
ended June 30, 1998, of which $33,000 was payable at period-end.
The fund may invest in the Reserve Investment Fund and Government Reserve
Investment Fund (collectively, the Reserve Funds), open-end management
investment companies managed by T. Rowe Price Associates, Inc. The Reserve
Funds are offered as cash management options only to mutual funds and other
accounts managed by T. Rowe Price and its affiliates and are not available to
the public. The Reserve Funds pay no investment management fees. Distributions
from the Reserve Funds to the fund for the six months ended June 30, 1998,
totaled $80,000 and are reflected as interest income in the accompanying
Statement of Operations.
26
<PAGE>
T. ROWE PRICE SHAREHOLDER SERVICES
- --------------------------------------------------------------------------------
Investment Services And Information
KNOWLEDGEABLE SERVICE REPRESENTATIVES
By Phone 1-800-225-5132 Available Monday through Friday from 8 a.m. to 10
p.m. ET and weekends from 8:30 a.m. to 5 p.m. ET.
In Person Available in T. Rowe Price Investor Centers.
ACCOUNT SERVICES
Checking Available on most fixed income funds ($500 minimum).
Automatic Investing From your bank account or paycheck.
Automatic Withdrawal Scheduled, automatic redemptions.
Distribution Options Reinvest all, some, or none of your distributions.
Automated 24-Hour Services Including Tele*Access(R) and the T. Rowe Price
Web site on the Internet. Address: www.troweprice.com
DISCOUNT BROKERAGE*
Individual Investments Stocks, bonds, options, precious metals, and other
securities at a savings over regular commission rates.
INVESTMENT INFORMATION
Combined Statement Overview of all your accounts with T. Rowe Price.
Shareholder Reports Fund managers' reviews of their strategies and results.
T. Rowe Price Report Quarterly investment newsletter discussing markets and
financial strategies.
Performance Update Quarterly review of all T. Rowe Price fund results.
Insights Educational reports on investment strategies and financial
markets.
Investment Guides Asset Mix Worksheet, College Planning Kit, Diversifying
Overseas: A Guide to International Investing, Personal Strategy Planner,
Retirees Financial Guide, and Retirement Planning Kit
*A division of T. Rowe Price Investment Services, Inc. Member NASD/SIPC.
27
<PAGE>
T. ROWE PRICE MUTUAL FUNDS
- --------------------------------------------------------------------------------
STOCK FUNDS
................................................................................
Domestic
Blue Chip Growth
Capital Appreciation
Capital Opportunity
Diversified Small-Cap Growth
Dividend Growth
Equity Income
Equity Index 500*
Extended Equity Market Index
Financial Services
Growth & Income
Growth Stock
Health Sciences
Media & Telecommunications**
Mid-Cap Growth
Mid-Cap Value
New America Growth
New Era
New Horizons***
Real Estate
Science & Technology
Small-Cap Stock
Small-Cap Value***
Spectrum Growth
Total Equity Market Index
Value
International/Global
Emerging Markets Stock
European Stock
Global Stock
International Discovery
International Stock
Japan
Latin America
New Asia
Spectrum International
BOND FUNDS
................................................................................
Domestic Taxable
Corporate Income
GNMA
High Yield
New Income
Short-Term Bond
Short-Term U.S. Government
Spectrum Income
Summit GNMA
Summit Limited-Term Bond
U.S. Treasury Intermediate
U.S. Treasury Long-Term
Domestic Tax-Free
California Tax-Free Bond
Florida Insured
Intermediate Tax-Free
Georgia Tax-Free Bond
Maryland Short-Term
Tax-Free Bond
Maryland Tax-Free Bond
New Jersey Tax-Free Bond
New York Tax-Free Bond
Summit Municipal Income
Summit Municipal Intermediate
Tax-Free High Yield
Tax-Free Income
Tax-Free Insured
Intermediate Bond
Tax-Free Short-Intermediate
Virginia Short-Term
Tax-Free Bond
Virginia Tax-Free Bond
................................................................................
International/Global
Emerging Markets Bond
Global Bond+
International Bond
MONEY MARKET FUNDS++
................................................................................
Taxable
Prime Reserve
Summit Cash Reserves
U.S. Treasury Money
Tax-Free
California Tax-Free Money
New York Tax-Free Money
Summit Municipal
Money Market
Tax-Exempt Money
BLENDED ASSET FUNDS
................................................................................
Balanced
Personal Strategy Balanced
Personal Strategy Growth
Personal Strategy Income
Tax-Efficient Balanced
T. ROWE PRICE NO-LOAD VARIABLE ANNUITY
................................................................................
Equity Income Portfolio
International Stock Portfolio
Limited-Term Bond Portfolio
Mid-Cap Growth Portfolio
New America Growth Portfolio
Personal Strategy Balanced Portfolio
Prime Reserve Portfolio
* Formerly named Equity Index.
** Formerly the closed-end New Age Media Fund. Converted to open-end status on
7/28/97.
*** Closed to new investors.
+ Formerly named Global Government Bond.
++ Neither the funds nor their share prices are insured or guaranteed by the
U.S. government.
Please call for a prospectus. Read it carefully before investing.
The T. Rowe Price No-Load Variable Annuity [#V6021] is issued by Security
Benefit Life Insurance Company. In New York, it [#FSB201(11-96)] is issued by
First Security Benefit Life Insurance Company of New York, White Plains, NY.
T. Rowe Price refers to the underlying portfolios' investment managers and the
distributors, T. Rowe Price Investment Services, Inc.; T. Rowe Price Insurance
Agency, Inc.; and T. Rowe Price Insurance Agency of Texas, Inc. The Security
Benefit Group of Companies and the T. Rowe Price companies are not affiliated.
The variable annuity may not be available in all states. The contract has
limitations. Call a representative for costs and complete details of the
coverage.
28
<PAGE>
T. Rowe Price Discount Brokerage
- --------------------------------------------------------------------------------
Discount Brokerage
A Division of T. Rowe Price Investment Services, Inc., Member NASD/SIPC
This low-cost service gives you the opportunity to easily consolidate
all your investments with one company. Through T. Rowe Price Discount
Brokerage, you can buy and sell individual securities--stocks, bonds,
options, and others--as well as mutual funds at considerable
commission savings over full-service brokers.* We also provide a wide
range of services, including:
Automated Telephone and Internet Services You can enter trades, access
quotes, and review account information 24 hours a day, seven days a
week. Any trades executed through these programs provide additional
savings on commissions.**
Investor Information A variety of informative reports, such as our
Brokerage Insights series, S&P Market Month newsletter, and select
stock reports, can help you better evaluate economic trends and
investment opportunities.
Dividend Reinvestment Service Virtually all stocks held in customer
accounts are eligible for this service, free of charge.
*Based on an April 1998 survey for representative-assisted stock
trades. Services vary by firm, and commissions may vary by size of
order.
**Discount applies to our current commission schedule. All trades
subject to a $35 minimum commission except equity trades placed
through Internet-Trader, which are subject to a $29.95 minimum
commission.
29
<PAGE>
For yield, price, last transaction, Investor Centers:
current balance, or to conduct 101 East Lombard St.
transactions, 24 hours, 7 days Baltimore, MD 21202
a week, call Tele*Access(R):
1-800-638-2587 toll free T. Rowe Price
Financial Center
FOR ASSISTANCE 10090 Red Run Blvd.
WITH YOUR EXISTING Owings Mills, MD 21117
FUND ACCOUNT, CALL:
SHAREHOLDER SERVICE CENTER Farragut Square
1-800-225-5132 TOLL FREE 900 17th Street, N.W.
410-625-6500 BALTIMORE AREA Washington, D.C. 20006
To open a Discount Brokerage ARCO Tower
account or obtain information, 31st Floor
call: 1-800-638-5660 toll free 515 South Flower St.
Los Angeles, CA 90071
Internet address:
www.troweprice.com 4200 West Cypress St.
10th Floor
T. ROWE PRICE ASSOCIATES Tampa, FL 33607
100 EAST PRATT STREET
BALTIMORE, MARYLAND 21202
THIS REPORT IS AUTHORIZED FOR
DISTRIBUTION ONLY TO SHAREHOLDERS
AND TO OTHERS WHO HAVE RECEIVED
A COPY OF THE PROSPECTUS OF THE
T. ROWE PRICE DIVERSIFIED SMALL-CAP
GROWTH FUND.
[LOGO OF T. ROWE PRICE APPEARS HERE]
T. Rowe Price Investment Services, Inc., Distributor. F20-051 6/30/98
