<PAGE> 1
- --------------------------------------------------------------------------------
SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
FOR YIELD, PRICE, LAST TRANSACTION, [T.ROWE PRICE LOGO]
AND CURRENT BALANCE, 24 HOURS, NEW ERA FUND
7 DAYS A WEEK, CALL:
1-800-638-2587 toll free
625-7676 Baltimore area
FOR ASSISTANCE WITH YOUR EXISTING
FUND ACCOUNT, CALL: JUNE 30, 1995
Shareholder Service Center
1-800-225-5132 toll free
625-6500 Baltimore area [RAM ARTWORK]
T. ROWE PRICE
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 New
Era Fund(R).
[T.ROWE PRICE LOGO]
NEF
<PAGE> 2
- --------------------------------------------------------------------------------
Fellow Shareholders
The stock market continued its surge in the second quarter. The New Era Fund
generated good returns but did not keep pace with the broad market. The market's
rise was powered by the technology and financial sectors while many natural
resource groups, including energy and precious metals, trailed significantly.
The table below compares your fund's returns with the unmanaged Standard &
Poor's 500 Stock Index for the three- and six-month periods ended June 30.
- ------------------------------------------------------
PERFORMANCE COMPARISON
<TABLE>
<CAPTION>
Periods Ended 6/30/95
3 Months 6 Months
---------------------
<S> <C> <C>
New Era Fund 3.3% 12.1%
S&P 500 9.6 20.2
- ------------------------------------------------------
</TABLE>
MARKET ENVIRONMENT
The U.S. economy delivered mixed results during the first half of the year. The
overall economy continued to grow, although less robustly than in 1994. Concerns
about a possible recession prompted the Federal Reserve to lower the target for
the key federal funds rate by one quarter of a percentage point in early July.
This cut, the first in three years, fueled optimism among equity investors,
since slower growth than 1994's inflationary pace, combined with declining
interest rates, should benefit stocks.
Foreign economies were also mixed. The outlook for European stocks is
brightening as those economies appear to be following the U.S. lead. Japan and
other Asian markets struggled during the quarter, although they registered
powerful gains after the close of our reporting period. It remains to be seen
whether Japan in particular is emerging from its serious economic problems.
While technology and financial shares outdistanced natural resource stocks
in the U.S. market, some cyclical groups such as forest products, chemicals, and
base metals performed well. As a result, returns were still strong in absolute
terms during the first six months of the year.
PORTFOLIO MANAGEMENT
We were modest net sellers during the second quarter, eliminating or reducing
positions in some cyclical companies that performed well and met our price
objectives. These included paper and chemical stocks, as well as selected
precious metals and technology shares.
We replaced those holdings with others in the same groups and also bought
some stocks of energy producing companies. Several companies appear in your
portfolio for the first time, including COFLEXIP, an energy service company we
believe has above-average growth prospects and a reasonable valuation.
We also bought FORT HOWARD, which manufactures consumer paper products from
recycled fiber, a stock we owned for many years before the company went private.
When it recently went public again, we took the opportunity to repurchase the
stock. Other issues we bought included the utility NIAGARA MOHAWK and NUCOR, a
steel producer with a history of above-average, long-term growth and excellent
prospects.
Your fund's directors voted to increase the maximum percentage of assets
that can be invested in foreign securities (including Canadian issues) to 35%
from 25%. This step was taken to provide us with additional flexibility to take
advantage of overseas investment opportunities in the natural resources sector.
These opportunities could include major foreign companies, firms domiciled
outside the U.S. with operations in this country, and regions previously closed
to investment. As of June 30, 25% of your fund's portfolio was invested in
foreign securities.
<PAGE> 3
OUTLOOK
The domestic economy should continue to grow, despite the recent slowdown. The
reduction of the federal funds rate in early July is an important signal that
the Fed stands ready to act to avert a recession. Foreign economies should also
benefit from anticipated interest rate cuts by their central banks.
The stock market registered an ebullient first half. While we were
apprehensive about the high level of stock valuations and expect-
ed some of the volatility that followed the fund's reporting period, we also
believe that the New Era Fund -- and natural resource stocks in general -- could
do well during the balance of the year. The natural resource sector has not been
subjected to the excessive speculation of some market sectors and is influenced
by different economic factors than many economically sensitive companies.
Market activity usually favors one group or another at any particular time,
so we anticipate that many lagging groups will gain momentum in coming months,
as long as the economy continues to grow.
Respectfully submitted,
/s/ GEORGE A. ROCHE
-----------------------------
George A. Roche
President and Chairman of the
Investment Advisory Committee
July 19, 1995
2
<PAGE> 4
- --------------------------------------------------------------------------------
Contributions to the Change in Net Asset Value Per Share
Three Months Ended June 30, 1995
- --------------------------------------------------
- --------------------------------------------------
TEN BEST CONTRIBUTORS
<TABLE>
<S> <C>
DuPont 8 cents
- --------------------------------------------------
Stillwater Mining 6
- --------------------------------------------------
Wal-Mart 5
- --------------------------------------------------
USX-Marathon 5
- --------------------------------------------------
Kimberly-Clark 5
- --------------------------------------------------
TVX Gold 4
- --------------------------------------------------
Modo* 4
- --------------------------------------------------
Camco International 4
- --------------------------------------------------
Albany International 4
- --------------------------------------------------
Mobil 3
- --------------------------------------------------
Total 48 cents
- --------------------------------------------------
</TABLE>
- --------------------------------------------------
TEN WORST CONTRIBUTORS
<TABLE>
<S> <C>
Pittson Minerals 6 cents
- --------------------------------------------------
Pegasus Gold 4
- --------------------------------------------------
Ashanti Goldfields 4
- --------------------------------------------------
Atlantic Richfield 4
- --------------------------------------------------
LONRHO 2
- --------------------------------------------------
Union Texas Petroleum 2
- --------------------------------------------------
Murphy Oil 2
- --------------------------------------------------
Coflexip 1
- --------------------------------------------------
Corning 1
- --------------------------------------------------
Newmont Mining 1
- --------------------------------------------------
Total 27 cents
- --------------------------------------------------
</TABLE>
* Position eliminated
Six Months Ended June 30, 1995
- --------------------------------------------------
- --------------------------------------------------
TEN BEST CONTRIBUTORS
<TABLE>
<S> <C>
Wal-Mart 22 cents
- --------------------------------------------------
Schlumberger 13
- --------------------------------------------------
DuPont 12
- --------------------------------------------------
Mobil 11
- --------------------------------------------------
Newmont Mining 10
- --------------------------------------------------
Stillwater Mining 9
- --------------------------------------------------
Union Pacific 9
- --------------------------------------------------
Royal Dutch Petroleum 8
- --------------------------------------------------
USX-Marathon 7
- --------------------------------------------------
Barrick Gold 7
- --------------------------------------------------
Total 108 cents
- --------------------------------------------------
</TABLE>
- --------------------------------------------------
TEN WORST CONTRIBUTORS
<TABLE>
<S> <C>
Pittson Minerals 12 cents
- --------------------------------------------------
Pegasus Gold 3
- --------------------------------------------------
General Growth Properties 2
- --------------------------------------------------
Rustenburg* 1
- --------------------------------------------------
Murphy Oil 1
- --------------------------------------------------
Overseas Shipholding Group 1
- --------------------------------------------------
Jefferson Smurfit 1
- --------------------------------------------------
Toys "R" Us 1
- --------------------------------------------------
LONRHO 0
- --------------------------------------------------
Freeport-McMoRan Copper & Gold 0
- --------------------------------------------------
Total 22 cents
- --------------------------------------------------
</TABLE>
3
<PAGE> 5
- ------------------------------------------------------
Twenty-Five Largest Holdings
June 30, 1995
<TABLE>
<CAPTION>
Percent of
Company Net Assets
- --------------------------------------- ----------
<S> <C>
Wal-Mart 4.6%
- --------------------------------------------------
Mobil 3.9
- --------------------------------------------------
Atlantic Richfield 3.6
- --------------------------------------------------
Newmont Mining 3.6
- --------------------------------------------------
Schlumberger 3.0
- --------------------------------------------------
Royal Dutch Petroleum 2.9
- --------------------------------------------------
DuPont 2.7
- --------------------------------------------------
Barrick Gold 2.4
- --------------------------------------------------
TVX Gold 2.3
- --------------------------------------------------
Union Pacific 2.2
- --------------------------------------------------
LONRHO 2.2
- --------------------------------------------------
USX-Marathon 1.8
- --------------------------------------------------
Rouse 1.7
- --------------------------------------------------
Kimberly-Clark 1.5
- --------------------------------------------------
Amerada Hess 1.4
- --------------------------------------------------
Camco International 1.4
- --------------------------------------------------
Halliburton 1.3
- --------------------------------------------------
Murphy Oil 1.3
- --------------------------------------------------
Bristol-Myers Squibb 1.3
- --------------------------------------------------
Eli Lilly 1.2
- --------------------------------------------------
Helmerich & Payne 1.2
- --------------------------------------------------
Burlington Northern 1.2
- --------------------------------------------------
Texaco 1.1
- --------------------------------------------------
FMC 1.1
- --------------------------------------------------
Northern Telecom 1.1
- --------------------------------------------------
Total 52.0%
- --------------------------------------------------
</TABLE>
- ------------------------------------------------------
Performance Contributions
Six Months Ended June 30, 1995
<TABLE>
<CAPTION>
Cents-Per-Share Percent of
Contribution Net Assets
---------------- ----------
<S> <C> <C>
NATURAL RESOURCE-RELATED
Building and Real Estate 0 cents 4%
- -----------------------------------------------------
Forest Products 26 6
- -----------------------------------------------------
Integrated Petroleum 41 17
- -----------------------------------------------------
Petroleum Exploration
and Production 13 7
- -----------------------------------------------------
Miscellaneous Energy 2 1
- -----------------------------------------------------
Energy Services 27 8
- -----------------------------------------------------
Precious Metals 36 13
- -----------------------------------------------------
Diversified Metals 3 5
- -----------------------------------------------------
Chemical 24 8
- -----------------------------------------------------
Diversified Resources 9 5
- -----------------------------------------------------
TOTAL 181 74
CONSUMER AND SERVICE
Merchandising 21 5
- -----------------------------------------------------
Consumer Durables 0 0
- -----------------------------------------------------
Miscellaneous 12 5
TOTAL 33 10
SCIENCE AND TECHNOLOGY 5 1
Miscellaneous 1 1
SUBTOTAL 220 86
RESERVES AND INCOME 23 14
- -----------------------------------------------------
TOTAL PORTFOLIO 243 cents 100%
- -----------------------------------------------------
</TABLE>
- ------------------------------------------------------
Average Annual Compound Total Return
Periods Ended June 30, 1995
<TABLE>
<CAPTION>
1 Year 5 Years 10 Years
- --------- ---------- -----------
<S> <C> <C>
17.22% 8.21% 11.67%
</TABLE>
- ------------------------------------------------------
Investment return and principal value represent past performance and will vary.
Shares may be worth more or less at redemption than at original purchase.
4
<PAGE> 6
- --------------------------------------------------------------------------------
Statement of Net Assets
T. Rowe Price New Era Fund / June 30, 1995 (Unaudited)
(values in thousands)
- ------------------------------------------------------------
Common Stocks -- 85.5%
- ------------------------------------------------------------
NATURAL RESOURCE-RELATED -- 73.1%
<TABLE>
<CAPTION>
Value
-----------
<S> <C>
BUILDING & REAL ESTATE -- 3.4%
605,000 shs. DeBartolo Realty, REIT.... $ 8,848
440,000 General Growth Properties,
REIT................... 8,965
940,000 Rouse..................... 18,497
36,310
FOREST PRODUCTS -- 5.6%
310,000 Albany International
(Class A).............. 7,401
400,000 *Fort Howard............... 5,625
89,600 Georgia-Pacific........... 7,773
140,000 International Paper....... 12,005
415,000 *Jefferson Smurfit......... 5,447
280,000 Kimberly-Clark............ 16,765
100,000 Mead...................... 5,937
60,953
INTEGRATED PETROLEUM -- 16.8%
123,000 Amoco..................... 8,195
358,300 Atlantic Richfield........ 39,323
120,000 British Petroleum ADR..... 10,275
160,000 Chevron................... 7,460
440,000 Mobil..................... 42,240
360,000 Repsol ADR................ 11,385
259,600 Royal Dutch Petroleum
ADR.................... 31,639
190,000 Texaco.................... 12,469
1,000,000 USX-Marathon.............. 19,750
182,736
PETROLEUM EXPLORATION & PRODUCTION -- 6.9%
320,000 Amerada Hess.............. 15,640
70,000 Anadarko Petroleum........ 3,019
875,600 *Gulf Canada Resources..... 3,557
159,400 Louisiana Land &
Exploration............ 6,356
340,000 Murphy Oil................ 13,940
150,000 Noble Affiliates.......... 3,825
300,000 *Oryx Energy............... 4,125
500,000 Union Texas Petroleum..... 10,563
200,000 *United Meridian........... 3,100
181,000 Unocal.................... 5,000
200,000 Vastar Resources.......... 6,175
75,300
MISCELLANEOUS ENERGY -- 1.1%
950,000 shs. Centerior Energy.......... 9,144
200,000 Niagara Mohawk............ 2,950
12,094
ENERGY SERVICES -- 8.1%
80,000 *BJ Services............... 1,820
650,000 Camco International....... 15,194
300,000 Coflexip ADR.............. 7,612
170,000 *Enterra................... 3,570
400,000 Halliburton............... 14,300
430,000 Helmerich & Payne......... 12,685
530,000 Schlumberger.............. 32,926
88,107
PRECIOUS METALS -- 13.2%
506,300 Ashanti Goldfields GDR
(144a)................. 11,677
1,020,640 Barrick Gold.............. 25,771
101,200 *Golden Star Resources..... 708
20,240 *Guyanor Ressources S.A.
(Class B).............. 46
130,250 Homestake Mining.......... 2,149
930,000 Newmont Mining............ 38,944
1,100,000 *Pegasus Gold.............. 11,138
400,000 Placer Dome............... 10,450
750,000 Santa Fe Pacific Gold..... 9,094
375,938 *++Stillwater Mining
(144a)................. 8,887
3,450,000 *++TVX Gold ADR.............. 25,012
143,876
DIVERSIFIED METALS -- 5.1%
120,000 Alcoa..................... 6,015
175,000 *Alumax.................... 5,447
180,000 Cyprus Amax Minerals...... 5,130
370,000 Freeport-McMoRan Copper &
Gold (Class A)......... 7,631
10,000,000 LONRHO (GBP).............. 23,461
150,000 Nucor..................... 8,025
55,709
CHEMICALS -- 7.5%
60,000 Dow Chemical.............. 4,313
430,000 DuPont.................... 29,562
180,000 *FMC....................... 12,105
317,800 Geon...................... 9,137
180,000 Great Lakes Chemical...... 10,845
70,000 Monsanto.................. 6,309
400,000 Pall...................... 8,900
81,171
</TABLE>
5
<PAGE> 7
- --------------------------------------------------------------------------------
T. Rowe Price New Era Fund / Statement of Net Assets (Unaudited)
- ------------------------------------------------------------
NATURAL RESOURCE-RELATED (cont'd)
<TABLE>
<S> <C>
DIVERSIFIED RESOURCES -- 5.4%
200,000 shs. Burlington Northern....... $ 12,675
255,000 *Dundee Bancorp (Class
A)..................... 2,251
110,000 GATX...................... 5,184
200,000 Overseas Shipholding
Group.................. 4,150
150,000 Pennzoil.................. 7,069
371,300 Pittston Minerals......... 3,666
430,000 Union Pacific............. 23,811
58,806
TOTAL NATURAL RESOURCE-RELATED 795,062
- ------------------------------------------------------------
CONSUMER & SERVICE -- 10.0%
MERCHANDISING -- 5.4%
400,000 Petrie Stores............. 2,700
200,000 *Toys "R" Us............... 5,850
1,852,640 Wal-Mart.................. 49,558
58,108
CONSUMER DURABLES -- 0.2%
120,000 *Coltec Industries......... 2,070
MISCELLANEOUS -- 4.4%
200,000 Bristol-Myers Squibb...... 13,625
170,000 Corning................... 5,568
170,000 Eli Lilly................. 13,345
195,000 Gannett................... 10,579
100,000 Reuters ADR............... 5,006
48,123
TOTAL CONSUMER & SERVICE 108,301
- ------------------------------------------------------------
SCIENCE & TECHNOLOGY -- 1.1%
330,000 Northern Telecom.......... 12,045
MISCELLANEOUS COMMON STOCKS -- 1.3% 14,270
TOTAL COMMON STOCKS (COST $671,772) 929,678
- ------------------------------------------------------------
Convertible Preferred Stocks -- 0.5%
230,000 James River, Series P..... 5,692
TOTAL CONVERTIBLE PREFERRED STOCKS
(COST $3,968) 5,692
- ------------------------------------------------------------
Short-Term Investments -- 14.3%
BANK NOTES -- 0.9%
$10,000,000 Fifth Third Bank, 6.21%,
10/27/95............... 10,002
COMMERCIAL PAPER -- 10.6%
10,000,000 AT&T, 6.01%, 8/4/95....... 9,823
10,000,000 Canadian Wheat Board,
6.01%, 10/24/95........ 9,700
89,000 Cargill Financial
Services, 6.10%,
7/3/95................. 89
10,000,000 Countrywide Funding,
6.00%, 7/18/95......... 9,957
10,000,000 Delaware Funding, 5.90%,
8/28/95................ 9,852
10,000,000 Electronic Data Systems,
5.95%, 7/17/95......... 9,924
10,000,000 KFW International Finance,
5.95%, 7/24/95......... 9,947
10,000,000 Kingdom of Sweden, 6.02%,
9/18/95................ 9,749
10,000,000 Raytheon, 4(2), 6.00%,
7/10/95................ 9,978
6,000,000 Southwestern Bell
Telephone, 5.94%,
8/3/95................. 5,963
3,600,000 Teco Finance, 5.88%,
9/22/95................ 3,545
10,000,000 U.S. West Capital Funding,
4(2), 5.70%, 9/5/95.... 9,850
6,700,000 UBS Finance (Delaware),
6.25%, 7/3/95.......... 6,697
10,000,000 Yorkshire Building
Society, 6.00%,
7/5/95................. 9,893
114,967
CERTIFICATES OF DEPOSIT -- 2.8%
10,000,000 Bank of Montreal New York,
5.97%, 7/12/95......... 9,999
10,000,000 Bayerische Hypotheken
Wechsel, 6.45%,
5/24/96................ 10,010
10,000,000 Swiss Bank, 6.01%,
7/21/95................ 10,000
30,009
TOTAL SHORT-TERM INVESTMENTS
(COST $154,978) 154,978
</TABLE>
6
<PAGE> 8
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
- ----------------------------------------------------------
TOTAL INVESTMENTS IN SECURITIES -- 100.3% OF
NET ASSETS (COST $830,718) $1,090,348
- ----------------------------------------------------------
Other Assets Less Liabilities................ (3,019)
-----------
<CAPTION>
Value
----------
<S> <C> <C>
NET ASSETS CONSIST OF:
Accumulated net investment
income -- net of
distributions.................. 11,006
Accumulated net realized
gain/loss -- net of
distributions.................. 37,306
Net unrealized gain (loss)........ 259,630
Paid-in-capital applicable to
48,163,826 shares of $1.00 par
value capital stock
outstanding; 200,000,000 shares
authorized..................... 779,387
----------
NET ASSETS $1,087,329
==========
NET ASSET VALUE PER SHARE $22.58
======
</TABLE>
- ------------------------------------------------------
* Non-income producing
++ Securities contain some restrictions as to
public resale -- total of such securities at
period-end amounts to 3.12% of net assets.
REIT Real Estate Investment Trust
4(2) Commercial Paper sold within terms of a private
placement memorandum, exempt from registration
under section 4.2 of the Securities Act of 1933,
as amended, and may be sold only to dealers in
that program or other "accredited investors."
144a Security was purchased pursuant to Rule 144a
under the Securities Act of 1933 and may not be
resold subject to that rule except to qualified
institutional buyers -- total of such securities
at period-end amounts to 1.89% of net assets.
GBP British sterling
7
<PAGE> 9
- --------------------------------------------------------------------------------
Statement of Operations
T. Rowe Price New Era Fund / Six Months Ended June 30, 1995 (Unaudited)
(in thousands)
<TABLE>
<CAPTION>
<S> <C>
INVESTMENT INCOME
Income
Dividend............................................................................... $ 11,297
Interest............................................................................... 3,766
--------
Total income........................................................................... 15,063
--------
Expenses
Investment management.................................................................. 3,048
Shareholder servicing.................................................................. 786
Custody and accounting................................................................. 82
Prospectus and shareholder reports..................................................... 52
Registration........................................................................... 44
Legal and audit........................................................................ 14
Directors.............................................................................. 13
Miscellaneous.......................................................................... 18
--------
Total expenses......................................................................... 4,057
--------
Net investment income.................................................................... 11,006
--------
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Securities............................................................................. 26,152
Foreign currency transactions.......................................................... (39)
--------
Net realized gain (loss)............................................................... 26,113
Change in net unrealized gain or loss on securities...................................... 80,166
--------
Net realized and unrealized gain (loss).................................................. 106,279
--------
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS $117,285
=========
</TABLE>
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
8
<PAGE> 10
- --------------------------------------------------------------------------------
Statement of Changes in Net Assets
T. Rowe Price New Era Fund (Unaudited)
(in thousands)
<TABLE>
<CAPTION>
Six Months Ended Year Ended Dec.
June 30, 1995 31, 1994
---------------- ----------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM
Operations
Net investment income........................................ $ 11,006 $ 16,648
Net realized gain (loss)..................................... 26,113 43,842
Change in net unrealized gain or loss........................ 80,166 (22,054)
---------- ----------
Increase (decrease) in net assets from operations............ 117,285 38,436
---------- ----------
Distributions to shareholders
Net investment income........................................ -- (17,469)
Net realized gain............................................ -- (40,146)
---------- ----------
Decrease in net assets from distributions.................... -- (57,615)
---------- ----------
Capital share transactions*
Shares sold.................................................. 98,612 353,442
Distributions reinvested..................................... -- 52,205
Shares redeemed.............................................. (108,063) (159,505)
---------- ----------
Increase (decrease) in net assets from capital share
transactions............................................... (9,451) 246,142
---------- ----------
Increase (decrease) in net assets.............................. 107,834 226,963
NET ASSETS
Beginning of period............................................ 979,495 752,532
---------- ----------
End of period.................................................. $1,087,329 $ 979,495
========== ==========
- --------------------------------------------------------------------------------------------------------
* Share information
Shares sold.................................................. 4,589 16,659
Distributions reinvested..................................... -- 2,596
Shares redeemed.............................................. (5,044) (7,608)
---------- ----------
Increase (decrease) in shares outstanding.................... (455) 11,647
========== ==========
- --------------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
9
<PAGE> 11
- --------------------------------------------------------------------------------
Notes to Financial Statements
T. Rowe Price New Era Fund / June 30, 1995 (Unaudited)
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
T. Rowe Price New Era Fund (the fund) is registered under the Investment Company
Act of 1940 as a diversified, open-end management investment company.
A) Valuation - Equity securities listed or regularly traded on a securities
exchange are valued at the last quoted sales price at the time 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 that are not traded on a particular day and
securities that are 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 dele-
gated by the Board, best to reflect fair value.
Short-term debt securities are valued at their cost which, when combined
with accrued interest, approximates fair value.
For purposes of determining the fund's net asset value per share, the U.S.
dollar value of all assets and liabilities initially expressed in foreign
currencies is determined by using the mean of the bid and offer prices of such
currencies against U.S. dollars quoted by a major bank.
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.
B) Currency Translation - Assets and liabilities are translated into U.S.
dollars at the prevailing exchange rate at the end of the reporting period.
Purchases and sales of securities and income and expenses are translated into
U.S. dollars at the prevailing exchange rate on the dates of such transactions.
The effect of changes in foreign exchange rates on realized and unrealized
security gains and losses is reflected as a component of such gains and losses.
C) 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 an 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.
NOTE 2 - INVESTMENT TRANSACTIONS
Purchases and sales of portfolio securities, other than short-term securities,
aggregated $96,139,000 and $127,528,000, respectively, for the six months ended
June 30, 1995.
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, 1995, the aggregate cost of investments for federal income tax
and financial reporting purposes was $830,718,000 and net unrealized gain
aggregated $259,630,000, of which $275,950,000 related to appreciated
investments and $16,320,000 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,
of which $530,000 was payable at June 30, 1995. The fee is computed daily and
paid monthly, and consists of an Individual Fund Fee equal to 0.25% 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 0.31% for assets in excess of $34 billion. At June
30, 1995, and for the six months then ended, the effective annual Group Fee rate
was 0.34%. The fund pays
10
<PAGE> 12
- --------------------------------------------------------------------------------
a pro rata share of the Group Fee based on the ratio of its net assets to those
of the Group.
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. (TRPS) 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. Additionally, the fund is one of several T. Rowe
Price mutual funds (the Underlying Funds) in which the T. Rowe Price Spectrum
Growth Fund (Spectrum) invests. In accordance with an Agreement among Spectrum,
the Underlying Funds, the Manager and TRPS, expenses from the operation of
Spectrum are borne by the Underlying Funds based on each Underlying Fund's
proportionate share of assets owned by Spectrum. The fund incurred expenses
pursuant to these related party agreements totaling approximately $689,000 for
the six months ended June 30, 1995, of which $124,000 was payable at period-end.
- --------------------------------------------------------------------------------
Financial Highlights
T. Rowe Price New Era Fund (Unaudited)
<TABLE>
<CAPTION>
For a share outstanding throughout each period
-----------------------------------------------------------------
Six Months
Ended Year Ended December 31,
June 30, ----------------------------------------------------
1995 1994 1993 1992 1991 1990
-----------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD... $20.15 $20.35 $18.88 $19.86 $18.48 $21.73
------ ------ ------ ------ ------ ------
Net investment income................ 0.23 0.36 0.40 0.45 0.54 0.60
Net realized and unrealized gain
(loss)............................. 2.20 0.69 2.48 (0.04) 2.12 (2.52)
------ ------ ------ ------ ------ ------
Total from Investment Activities....... 2.43 1.05 2.88 0.41 2.66 (1.92)
------ ------ ------ ------ ------ ------
Distributions
Net investment income................ -- (0.38) (0.38) (0.45) (0.55) (0.62)
Net realized gain.................... -- (0.87) (1.03) (0.94) (0.73) (0.71)
------ ------ ------ ------ ------ ------
Total Distributions.................... -- (1.25) (1.41) (1.39) (1.28) (1.33)
------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD......... $22.58 $20.15 $20.35 $18.88 $19.86 $18.48
====== ====== ====== ====== ====== ======
- ----------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Total Return........................... 12.1% 5.2% 15.3% 2.1% 14.7% (8.8)%
Ratio of Expenses to Average Net
Assets............................... 0.79%+ 0.80% 0.80% 0.81% 0.85% 0.83%
Ratio of Net Investment Income to
Average Net Assets................... 2.13%+ 1.87% 1.92% 2.22% 2.56% 2.81%
Portfolio Turnover Rate................ 21.2%+ 24.7% 24.7% 16.9% 9.0% 9.0%
Net Assets, End of Period (in
thousands)........................... $1,087,329 $979,495 $752,532 $699,599 $756,817 $707,548
- ----------------------------------------------------------------------------------------------------------
</TABLE>
+ Annualized.
11
