<PAGE>
Semiannual Report
New Era
Fund
- -------------
June 30, 1997
- -------------
[LOGO OF T. ROWE PRICE APPEARS HERE]
<PAGE>
REPORT HIGHLIGHTS
- --------------------------------------------------------------------------------
New Era Fund
. The stock market continued its extraordinary performance in an ideal economic
environment, including low inflation kept in check by moderate energy and
other commodity prices.
. The fund's return for the six-month period was weaker than the broad market
but well ahead of the average returns for competitive funds.
. Performance lagged the S&P 500 but surpassed that of the Lipper peer group
largely because of fund exposure to international oil companies.
. We initiated several new positions in real estate and international energy
stocks during the past six months and reduced exposure to poorly performing
precious metals stocks.
. We believe that fiscal policies in the U.S. and abroad are likely to become
more stimulative, which could benefit the types of stocks in which your fund
invests.
<PAGE>
Fellow Shareholders
The stock market continued its extraordinary performance during the first six
months of this year, buoyed by an economic environment that remained nearly
ideal. The economy continued to grow, yet slowed enough from the first
quarter's torrid pace. As a result, the Federal Reserve did not raise the
federal funds rate following its token increase in March. Inflation also
remained quite low as energy prices retreated and other commodity prices
remained under control.
Your fund lagged the unmanaged Standard & Poor's 500 Stock Index during the
first half of the year due to the strength of large-capitalization growth stocks
and the relative weakness in gold and energy equities. However, it outperformed
the average return for its peer group during the last 6- and 12-month periods,
as represented by the Lipper Natural Resources Funds Average. This favorable
comparison can be attributed to your fund's greater exposure to the
international oil companies and to industries outside of the energy and precious
metals areas.
<TABLE>
<CAPTION>
- ----------------------
Performance Comparison
- -------------------------------------------------
Periods Ended 6/30/97 6 Months 12 Months
- -------------------------------------------------
<S> <C> <C>
New Era Fund 10.02% 23.99%
.................................................
S&P 500 20.61 34.70
.................................................
Lipper Natural Resources
Funds Average 2.56 15.78
.................................................
</TABLE>
MARKET ENVIRONMENT
The economy continued to live up to its billing as a "Goldilocks Economy,"
neither too hot nor too cold, but just ideal for the equity market. The Federal
Reserve made a single modest increase of a quarter-point in the federal funds
rate following the rapid growth of the first quarter. However, it did not
follow through with the series of increases feared by the market, as the economy
slowed in the second quarter.
To date, the high rate of employment has not led to the wage inflation normally
associated with tight labor markets in the mature phase of a business expansion.
Commodity price inflation has been insignificant, and the consumer price index
rose at only a 1.4% annual rate in the
1
<PAGE>
first half of the year. The decline in energy prices was a major contributing
factor to subdued inflation.
COMMODITY MARKETS GENERALLY DECLINED DURING THE FIRST SIX MONTHS WITH THE
EXCEPTION OF THE BASE METALS.
Commodity markets generally declined during the first six months with the
exception of the base metals. As the winter weather turned unseasonably warm,
inventories of oil and natural gas were rebuilt from very low levels. This,
combined with the commencement of Iraqi oil exports to provide for humanitarian
aid, led to sharply lower energy prices in the early months of the year. Grain
prices also eased with the better weather and high level of plantings.
Gold retreated sharply as central bank sales continued to outpace demand. While
inflation is likely to pick up modestly, the outlook for gold prices is largely
in the hands of the central bankers, since their stockpiles are high enough to
overwhelm any supply contraction from the closing of mines that are uneconomic
at the current gold price.
PORTFOLIO MANAGEMENT
This is my first report to you as president and chairman of the Investment
Advisory Committee, the posts I assumed this spring as mentioned in our year-end
report. Since I have been a long-standing member of the fund's Investment
Advisory Committee, you should expect more continuity than change.
Following the decline in oil and natural gas prices from their lofty levels at
the beginning of the year, the domestic integrated oil and exploration and
production companies performed poorly as investors shifted their focus to the
energy service and international integrated oils. The earnings of these latter
groups are considered less sensitive to energy prices. Your fund was well
positioned for this environment and the shift in investor sentiment.
Precious metals stocks declined sharply as central banks continued to liquidate
their gold reserves, putting downward pressure on the price of gold.
Furthermore, a major fraud was committed by a junior gold producer, Bre-X
Minerals, which negatively affected investor sentiment toward the whole sector.
We did not hold Bre-X in the portfolio and had been reducing our weighting in
the group since the beginning of the year. Still, the precious metals exposure
we did have hurt performance somewhat. Our diversification in cyclical commodity
2
<PAGE>
companies benefited the portfolio relative to other resource funds, although
these stocks also lagged the broader market.
We added several new positions during the first half of the year. In the real
estate area we purchased Beacon Properties, a high-quality office real estate
investment trust (REIT), and United Dominion Realty Trust, one of the largest
apartment REITs that is benefiting from a recent large acquisition. Although we
reduced our weighting in precious metals, we did add an Australian gold
producer, Normandy Mining. In the energy sector we purchased Santa Fe
International, a premier global drilling company, and Penn Virginia, a domestic
coal royalty owner and natural gas producer. We also added significantly to our
holdings in McDermott International, an engineering and construction company
primarily serving the energy industry. A new and unique fund holding is Western
Water, a company that controls significant potable water rights in California.
OUTLOOK
Domestically, the budget packages being considered by Congress and the President
are likely to be more stimulative than those in the recent past. This stimulus,
combined with signs that the consumer was only resting during the second quarter
of the year, suggest that economic growth will pick up soon. This could
convince the Federal Reserve to raise the federal funds rate once again.
The strength in the U.S. dollar helped kickstart the export-led sectors of the
German and Japanese economies, but their domestic industries remain sluggish.
There are signs that the fiscal and monetary restraint being practiced in Europe
has led to political backlashes, as unemployment has reached painful levels in
many areas. Specifically, the change in France's leadership may presage a
loosening in the requirements for entry into the European Monetary Union.
In Latin America, election results in Mexico suggest that forthcoming policies
are also likely to be more stimulative in spite of pressure from the
International Monetary Fund to maintain a tight fiscal course. These shifts in
the political landscape are likely to result in higher growth and potentially
higher inflation in these regions, as other countries succumb to similar
pressure to loosen the monetary and fiscal reins.
. . . We anticipate a modest acceleration in global GDP growth . . . which could
benefit the cyclical stocks
we hold . . .
3
<PAGE>
In Asia, the situation is somewhat different. Economic problems in Thailand and
South Korea are likely to lead to slower growth among the Tigers of the Pacific
Rim. As a result of these various outlooks for both domestic and international
markets, we anticipate a modest acceleration in global GDP growth in the second
half of 1997, which could benefit the cyclical stocks we hold in the portfolio.
Respectfully submitted,
/s/ Charles M. Ober
Charles M. Ober
President and Chairman of the Investment Advisory Committee
July 18, 1997
4
<PAGE>
T. Rowe Price New Era Fund
- --------------------------------------------------------------------------------
- ---------------------
Portfolio Highlights
- --------------------------------------------------------------------------------
TWENTY-FIVE LARGEST HOLDINGS
<TABLE>
<CAPTION>
Percent of
Net Assets
6/30/97
- --------------------------------------------------------------------------------
<S> <C>
Mobil 4.1%
................................................................................
Newmont Mining 3.5
................................................................................
Wal-Mart 3.3
................................................................................
Royal Dutch Petroleum 3.2
................................................................................
Cooper Cameron 2.4
- --------------------------------------------------------------------------------
Atlantic Richfield 2.4
................................................................................
British Petroleum 2.2
................................................................................
Reynolds Metals 2.1
................................................................................
DuPont 2.0
................................................................................
Union Pacific 1.9
- --------------------------------------------------------------------------------
Camco International 1.9
................................................................................
Burlington Northern Santa Fe 1.8
................................................................................
McDermott International 1.7
................................................................................
Texaco 1.7
................................................................................
USX-Marathon 1.6
- --------------------------------------------------------------------------------
Rouse 1.6
................................................................................
LONRHO 1.5
................................................................................
Schlumberger 1.4
................................................................................
Repsol 1.3
................................................................................
FMC 1.3
- --------------------------------------------------------------------------------
United Meridian 1.3
................................................................................
Great Lakes Chemical 1.3
................................................................................
Kimberly-Clark 1.2
................................................................................
James River 1.2
................................................................................
Corning 1.2
- --------------------------------------------------------------------------------
Total 49.1%
</TABLE>
5
<PAGE>
T. Rowe Price New Era Fund
- --------------------------------------------------------------------------------
- ---------------------
Portfolio Highlights
- --------------------------------------------------------------------------------
CONTRIBUTIONS TO THE CHANGE IN NET ASSET VALUE PER SHARE
<TABLE>
<CAPTION>
6 Months Ended 6/30/97
Ten Best Contributors Ten Worst Contributors
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Wal-Mart 30 cents United Meridian -17 cents
......................................... .....................................
Royal Dutch Petroleum 20 TVX Gold 13
......................................... .....................................
McDermott International 19 Placer Dome 8
......................................... .....................................
Mobil 15 Cambior 8
......................................... .....................................
DuPont 14 Barrick Gold 6
......................................... .....................................
Reynolds Metals 13 Newmont Mining 6
......................................... .....................................
Cooper Cameron 12 Dayton Mining 5
......................................... .....................................
Bristol-Myers Squibb 12 Barrett Resources 4
......................................... .....................................
Corning 11 Rouse 3
......................................... .....................................
Petrolite * 10 Ashanti Goldfields 2
- ----------------------------------------- -------------------------------------
Total 156 cents Total -72 cents
<CAPTION>
12 Months Ended 6/30/97
Ten Best Contributors Ten Worst Contributors
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Cooper Cameron 47 cents LONRHO -16 cents
......................................... .....................................
Royal Dutch Petroleum 28 Newmont Mining 14
......................................... .....................................
Petrolite * 25 Placer Dome 11
......................................... .....................................
Mobil 24 TVX Gold 11
......................................... .....................................
Camco International 23 Pegasus Gold * 8
......................................... .....................................
Wal-Mart 23 Great Lakes Chemical 7
......................................... .....................................
DuPont 22 Ashanti Goldfields 5
......................................... .....................................
Bristol-Myers Squibb 18 Cambior 5
......................................... .....................................
McDermott International 17 Battle Mountain Gold 4
......................................... .....................................
British Petroleum 17 Barrick Gold 4
- ----------------------------------------- -------------------------------------
Total 244 cents Total -85 cents
</TABLE>
* Position eliminated
6
<PAGE>
T. Rowe Price New Era Fund
- --------------------------------------------------------------------------------
- ---------------------
Portfolio Highlights
- --------------------------------------------------------------------------------
PERFORMANCE CONTRIBUTIONS
<TABLE>
<CAPTION>
6 Months Ended 6/30/97
Cents-Per-Share Percent of
Sector Contribution Net Assets
- --------------------------------------------------------------------------------
<S> <C> <C>
Natural Resource-Related
................................................................................
Building and Real Estate 2 cents 4%
................................................................................
Forest Products 22 6
................................................................................
Integrated Petroleum - Domestic 10 7
................................................................................
Integrated Petroleum - International 59 15
................................................................................
Petroleum Exploration and Production -30 6
................................................................................
Miscellaneous Energy 1 1
................................................................................
Energy Services 76 11
................................................................................
Precious Metals -46 11
................................................................................
Diversified Metals 24 7
................................................................................
Chemicals 27 7
................................................................................
Diversified Resources 20 6
- --------------------------------------------------------------------------------
Total 165 cents 81%
Consumer and Service
................................................................................
Merchandising 31 3
................................................................................
Miscellaneous 44 4
- --------------------------------------------------------------------------------
Total 75 cents 7%
Science and Technology 3 1
................................................................................
Miscellaneous 1 3
................................................................................
Subtotal 244 92
................................................................................
Reserves and Income 17 8
- --------------------------------------------------------------------------------
Total Portfolio 261 cents 100%
</TABLE>
7
<PAGE>
T. Rowe Price New Era 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.
[LINE CHART APPEARS HERE]
NEW ERA FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NATURAL
RESOURCES
S&P 500 FUNDS NEW ERA
DATE Index AVERAGE FUND
- ---- ------- ------- ---------
<S> <C> <C> <C>
6/30/87 10,000 10,000 10,000
6/30/88 9,307 8,762 10,233
6/30/89 11,220 9,686 11,129
6/30/90 13,070 11,143 12,208
6/30/91 14,036 10,602 12,470
6/30/92 15,919 10,552 12,912
6/30/93 18,089 12,988 14,394
6/30/94 18,342 12,899 15,454
6/30/95 23,125 13,911 18,116
6/30/96 29,138 17,260 21,522
6/30/97 39,249 21,287 26,686
</TABLE>
- --------------------------------------
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.
<TABLE>
<CAPTION>
Periods Ended 6/30/97 1 Year 3 Years 5 Years 10 Years
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
New Era Fund 23.99% 19.97% 15.63% 10.31%
................................................................................
</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.
8
<PAGE>
T. Rowe Price New Era Fund
- --------------------------------------------------------------------------------
Unaudited
- --------------------
Financial Highlights For a share outstanding throughout each period
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
6 Months Year
Ended Ended
6/30/97 12/31/96 12/31/95 12/31/94 12/31/93 12/31/92
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE
Beginning of period $ 26.06 $ 22.65 $ 20.15 $ 20.35 $ 18.88 $19.86
................................................................................
Investment activities
Net investment income 0.18 0.38 0.47 0.36 0.40 0.45
Net realized and
unrealized gain (loss) 2.43 5.12 3.71 0.69 2.48 (0.04)
................................................................................
Total from
investment activities 2.61 5.50 4.18 1.05 2.88 0.41
................................................................................
Distributions
Net investment income - (0.38) (0.48) (0.38) (0.38) (0.45)
Net realized gain - (1.71) (1.20) (0.87) (1.03) (0.94)
................................................................................
Total distributions - (2.09) (1.68) (1.25) (1.41) (1.39)
................................................................................
NET ASSET VALUE
End of period $ 28.67 $ 26.06 $ 22.65 $ 20.15 $ 20.35 $18.88
--------------------------------------------------------------------------------
Ratios/Supplemental Data
Total return 10.02% 24.25% 20.76% 5.17% 15.33% 2.08%
...............................................................................................................................
Ratio of expenses to
average net assets 0.75%+ 0.76% 0.79% 0.80% 0.80% 0.81%
...............................................................................................................................
Ratio of net investment
income to average
net assets 1.32%+ 1.53% 2.00% 1.87% 1.92% 2.22%
...............................................................................................................................
Portfolio turnover rate 29.5%+ 28.6% 22.7% 24.7% 24.7% 16.9%
...............................................................................................................................
Average commission
rate paid $ 0.0438 $ 0.0300 - - - -
...............................................................................................................................
Net assets, end of period
(in millions) $ 1,612 $ 1,468 $ 1,090 $ 979 $ 753 $ 700
...............................................................................................................................
</TABLE>
+ Annualized.
The accompanying notes are an integral part of these financial statements.
9
<PAGE>
T. Rowe Price New Era Fund
- --------------------------------------------------------------------------------
Unaudited June 30, 1997
<TABLE>
<CAPTION>
- ------------------------
Statement of Net Assets Shares/Par Value
- --------------------------------------------------------------------------------
In thousands
Common Stocks and Warrants 90.9%
NATURAL RESOURCE-RELATED 79.5%
<S> <C> <C>
Building and Real Estate 4.2%
Beacon Properties, REIT 150,000 $ 5,006
................................................................................
Federal Realty Investment Trust, REIT 230,000 6,210
................................................................................
Reckson Associates Realty, REIT 340,000 7,820
................................................................................
Rouse 850,000 25,075
................................................................................
SECURITY CAPITAL PACIFIC TRUST, REIT 60,900 1,393
................................................................................
Security Capital U.S. Realty (144a), REIT * 580,000 8,642
................................................................................
Simon DeBartolo Group, REIT 271,400 8,685
................................................................................
United Dominion Realty Trust, REIT 300,000 4,256
................................................................................
67,087
.............
Forest Products 5.3%
Deltic Timber 57,142 1,675
................................................................................
Georgia-Pacific 179,600 15,333
................................................................................
International Paper 320,000 15,540
................................................................................
James River 350,000 12,950
................................................................................
Jefferson Smurfit * 760,000 12,255
................................................................................
Kimberly-Clark 400,000 19,900
................................................................................
Mead 40,000 2,490
................................................................................
Willamette Industries 85,000 5,950
................................................................................
86,093
.............
Integrated Petroleum - Domestic 6.7%
Amerada Hess 220,000 12,224
................................................................................
Atlantic Richfield 540,000 38,070
................................................................................
Murphy Oil 340,000 16,575
................................................................................
Phillips Petroleum 170,000 7,438
................................................................................
Unocal 181,000 7,025
................................................................................
USX-Marathon 900,000 25,987
................................................................................
107,319
.............
Integrated Petroleum - International 14.8%
British Petroleum ADR 470,000 35,191
................................................................................
Chevron 80,000 5,915
................................................................................
ENI S.P.A. ADR 290,000 16,494
................................................................................
Mobil 940,000 65,682
................................................................................
Repsol ADR 500,000 21,219
................................................................................
</TABLE>
10
<PAGE>
T. Rowe Price New Era Fund
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares/Par Value
- --------------------------------------------------------------------------------
In thousands
<S> <C> <C>
Royal Dutch Petroleum ADR 958,400 $ 52,113
................................................................................
Texaco 250,000 27,187
................................................................................
Total ADR 300,000 15,188
................................................................................
238,989
.............
Petroleum Exploration and Production 5.5%
Barrett Resources * 204,550 6,124
................................................................................
Enserch Exploration * 700,000 7,656
................................................................................
Noble Affiliates 150,000 5,803
................................................................................
Rutherford-Moran Oil * 633,200 14,920
................................................................................
Triton Energy * 170,200 7,797
................................................................................
Union Pacific Resources 254,186 6,323
................................................................................
Union Texas Petroleum 700,000 14,656
................................................................................
United Meridian * 686,000 20,580
................................................................................
Vastar Resources 150,000 5,260
................................................................................
89,119
.............
Miscellaneous Energy 0.9%
Centerior Energy 1,050,000 11,747
................................................................................
Niagara Mohawk * 350,000 2,997
................................................................................
14,744
.............
Energy Services 11.4%
BJ Services * 75,000 4,022
................................................................................
Camco International 550,000 30,113
................................................................................
Coflexip ADR 500,000 15,156
................................................................................
Cooper Cameron * 843,200 39,420
................................................................................
Halliburton 235,000 18,624
................................................................................
McDermott International 936,650 27,338
................................................................................
Santa Fe International * 180,000 6,120
................................................................................
Schlumberger 175,000 21,875
................................................................................
Weatherford Enterra * 154,500 5,948
................................................................................
Western Atlas * 200,000 14,650
................................................................................
183,266
.............
Precious Metals 11.3%
Amplats (ZAR) 248,000 2,050
................................................................................
Ashanti Goldfields 873,300 10,207
................................................................................
Barrick Gold 320,640 7,054
................................................................................
Battle Mountain Gold (Class A) 1,400,000 7,962
................................................................................
Cambior 1,436,000 16,245
................................................................................
Dayton Mining * 1,050,000 4,003
................................................................................
</TABLE>
11
<PAGE>
T. Rowe Price New Era Fund
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares/Par Value
- --------------------------------------------------------------------------------
In thousands
<S> <C> <C>
Dayton Mining, Warrants, 7/31/97 (CAD) * 112,500 $ 0
................................................................................
Delta Gold (AUD) 5,500,000 9,186
................................................................................
Golden Star Resources * 186,300 1,514
................................................................................
Homestake Mining 260,250 3,399
................................................................................
Newmont Mining 1,442,359 56,252
................................................................................
Normandy Mining (AUD) 4,380,200 4,932
................................................................................
Placer Dome 960,000 15,720
................................................................................
Prime Resources Group (CAD) * 1,204,400 8,721
................................................................................
Rustenburg Platinum (ZAR) 353,000 6,458
................................................................................
Rustenburg Platinum ADR * 596,744 10,891
................................................................................
TVX Gold * 3,257,200 17,304
................................................................................
181,898
.............
Diversified Metals 6.6%
Alcoa 120,000 9,045
................................................................................
Bougainville Copper (AUD) * 2,030,829 813
................................................................................
Freeport-McMoRan Copper & Gold (Class A) 370,000 10,823
................................................................................
LONRHO (GBP) 11,737,090 24,823
................................................................................
Nucor 310,000 17,515
................................................................................
Reynolds Metals 485,000 34,556
................................................................................
Steel Dynamics * 367,000 9,244
................................................................................
106,819
.............
Chemicals 6.7%
DuPont 520,000 32,695
................................................................................
FMC * 260,800 20,717
................................................................................
Great Lakes Chemical 390,000 20,426
................................................................................
Lyondell Petrochemical 595,700 12,994
................................................................................
Millennium Chemicals 250,000 5,687
................................................................................
Pall 400,000 9,300
................................................................................
Witco 150,000 5,691
................................................................................
107,510
.............
Diversified Resources 6.1%
Burlington Northern Santa Fe 330,000 29,659
................................................................................
Canadian National Railway 39,200 1,715
................................................................................
Energy Group ADR 87,500 3,708
................................................................................
GATX 100,000 5,775
................................................................................
Overseas Shipholding Group 200,000 3,925
................................................................................
Penn Virginia 182,000 9,009
................................................................................
Pittston Minerals 176,300 2,060
................................................................................
</TABLE>
12
<PAGE>
T. Rowe Price New Era Fund
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares/Par Value
- --------------------------------------------------------------------------------
In thousands
<S> <C> <C>
Union Pacific 430,000 $ 30,315
................................................................................
Western Water * 344,500 4,651
................................................................................
Wheelabrator Technologies 500,000 7,719
................................................................................
98,536
.............
Total Natural Resource-Related 1,281,380
.............
CONSUMER AND SERVICE 7.7%
Merchandising 3.3%
Petrie Stores Liquidation Trust * 400,000 1,263
................................................................................
Wal-Mart 1,550,000 52,409
................................................................................
53,672
.............
Miscellaneous 4.4%
Bristol-Myers Squibb 200,000 16,200
................................................................................
Corning 350,000 19,469
................................................................................
Eli Lilly 30,000 3,279
................................................................................
Gannett 130,000 12,837
................................................................................
GE 100,000 6,538
................................................................................
Warner-Lambert 100,000 12,425
................................................................................
70,748
.............
Total Consumer and Service 124,420
.............
SCIENCE AND TECHNOLOGY 0.7%
Science & Technology 0.7%
3Com * 250,000 11,242
................................................................................
Total Science and Technology 11,242
.............
Miscellaneous Common Stocks 3.0% 48,755
.............
Total Common Stocks and Warrants (Cost $ 945,532) 1,465,797
.............
Convertible Preferred Stocks 0.9%
Cross Timbers Oil (Series A) 172,000 5,353
................................................................................
James River (Series P) 200,000 6,900
................................................................................
Western Water (Series C) * 2,000 1,915
................................................................................
Total Convertible Preferred Stocks (Cost $8,250) 14,168
.............
</TABLE>
13
<PAGE>
T. Rowe Price New Era Fund
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares/Par Value
- --------------------------------------------------------------------------------
In thousands
<S> <C> <C>
Short-Term Investments 9.5%
Certificates of Deposit 2.5%
Caisse Nationale de Credit Agricole, 5.63%, 8/11/97 $10,000,000 $ 10,000
................................................................................
Svenska Handelsbanken, 5.68 - 5.705%, 7/7 - 10/1/97 20,000,000 20,001
................................................................................
Westpac Banking, 5.62%, 8/27/97 10,000,000 10,000
................................................................................
40,001
............
Commercial Paper 6.4%
Allied Signal, 4(2), 5.58%, 7/15/97 10,000,000 9,978
................................................................................
Asset Securitization Cooperative, 4(2)
5.55%, 7/22 - 8/19/97 20,000,000 19,892
................................................................................
Island Finance Puerto Rico, 5.55%, 7/28/97 10,000,000 9,959
................................................................................
Jefferson Pilot, 5.55%, 7/18/97 10,000,000 9,974
................................................................................
National Rural Utilities Cooperative Finance
5.55%, 9/19/97 10,000,000 9,877
................................................................................
Repeat Offering Security Entity, 5.60%, 8/29/97 10,000,000 9,908
................................................................................
Smith Barney, 5.55%, 7/29/97 10,000,000 9,957
................................................................................
Investments in Commercial Paper through a Joint
Account 6.05 - 6.20%, 7/1/97 23,107,354 23,107
................................................................................
102,652
............
Structured Investment Vehicle 0.6%
Short Term Card Account Trust, VR, (144a)
5.708%, 7/15/97 10,000,000 10,000
................................................................................
10,000
............
Total Short-Term Investments (Cost $152,653) 152,653
............
Total Investments in Securities
101.3% of Net Assets (Cost $1,106,435) $1,632,618
Other Assets Less Liabilities (20,850)
............
NET ASSETS $1,611,768
------------
</TABLE>
14
<PAGE>
T. Rowe Price New Era Fund
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Value
- --------------------------------------------------------------------------------
In thousands
<S> <C>
Net Assets Consist of:
Accumulated net investment income - net of distributions $ 9,954
Accumulated net realized gain/loss - net of distributions 90,524
Net unrealized gain (loss) 526,183
Paid-in-capital applicable to 56,217,742 shares of $1.00 par
value capital stock outstanding; 200,000,000 shares authorized 985,107
............
NET ASSETS $1,611,768
------------
NET ASSET VALUE PER SHARE $ 28.67
------------
</TABLE>
* Non-income producing
REIT Real Estate Investment Trust
VR Variable rate
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
1.16% of net assets.
AUD Australian dollar
CAD Canadian dollar
GBP British sterling
ZAR South African rand
The accompanying notes are an integral part of these financial statements.
15
<PAGE>
T. Rowe Price New Era Fund
- --------------------------------------------------------------------------------
Unaudited
- -----------------------
Statement of Operations
- --------------------------------------------------------------------------------
In thousands
<TABLE>
<CAPTION>
6 Months
Ended
6/30/97
<S> <C>
Investment Income
Income
Dividend $ 11,813
Interest 3,805
.............
Total income 15,618
.............
Expenses
Investment management 4,341
Shareholder servicing 1,126
Custody and accounting 76
Prospectus and shareholder reports 75
Registration 24
Legal and audit 9
Directors 7
Miscellaneous 6
.............
Total expenses 5,664
.............
Net investment income 9,954
.............
Realized and Unrealized Gain (Loss)
Net realized gain (loss)
Securities 75,228
Foreign currency transactions (121)
.............
Net realized gain (loss) 75,107
.............
Change in net unrealized gain or loss
Securities 61,490
Other assets and liabilities
denominated in foreign currencies 5
.............
Change in net unrealized gain or loss 61,495
.............
Net realized and unrealized gain (loss) 136,602
.............
INCREASE (DECREASE) IN NET
ASSETS FROM OPERATIONS $ 146,556
-------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
16
<PAGE>
T. Rowe Price New Era Fund
- --------------------------------------------------------------------------------
Unaudited
- ----------------------------------
Statement of Changes in Net Assets
- --------------------------------------------------------------------------------
In thousands
<TABLE>
<CAPTION>
6 Months Year
Ended Ended
6/30/97 12/31/96
<S> <C> <C>
Increase (Decrease) in Net Assets
Operations
Net investment income $ 9,954 $ 19,867
Net realized gain (loss) 75,107 94,425
Change in net unrealized gain or loss 61,495 162,309
.........................
Increase (decrease) in net assets from operations 146,556 276,601
.........................
Distributions to shareholders
Net investment income - (19,926)
Net realized gain - (89,635)
.........................
Decrease in net assets from distributions - (109,561)
.........................
Capital share transactions *
Shares sold 132,998 347,496
Distributions reinvested - 100,862
Shares redeemed (135,524) (238,053)
.........................
Increase (decrease) in net assets from capital
share transactions (2,526) 210,305
.........................
Net Assets
Increase (decrease) during period 144,030 377,345
Beginning of period 1,467,738 1,090,393
.........................
End of period $1,611,768 $1,467,738
-------------------------
* Share information
Shares sold 4,990 13,774
Distributions reinvested - 3,855
Shares redeemed (5,087) (9,445)
.........................
Increase (decrease) in shares outstanding (97) 8,184
</TABLE>
The accompanying notes are an integral part of these financial statements.
17
<PAGE>
T. Rowe Price New Era Fund
- --------------------------------------------------------------------------------
Unaudited June 30, 1997
- -----------------------------
Notes to Financial Statements
- --------------------------------------------------------------------------------
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
T. Rowe Price New Era 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 January 20, 1969.
Valuation Equity securities 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.
Short-term debt securities are valued at amortized 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.
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.
Premiums and Discounts Premiums and discounts on debt securities are amortized
for both financial reporting and tax purposes.
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
18
<PAGE>
T. Rowe Price New Era Fund
- --------------------------------------------------------------------------------
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
Commercial Paper Joint Account The fund, and other affiliated funds, may
transfer uninvested cash into a commercial paper joint account, the daily
aggregate balance of which is invested in high-grade commercial paper. All
securities purchased by the joint account satisfy the fund's criteria as to
quality, yield, and liquidity.
Other Purchases and sales of portfolio securities, other than short-term
securities, aggregated $204,474,000 and $226,428,000, respectively, for the six
months ended June 30, 1997.
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, 1997, the aggregate cost of investments for federal income tax and
financial reporting purposes was $1,106,436,000, and net unrealized gain
aggregated $526,183,000, of which $555,596,000 related to appreciated
investments and $29,413,000 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 $758,000 was payable at June 30, 1997. 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 0.30% for assets in excess of $80 billion. At
19
<PAGE>
T. Rowe Price New Era Fund
- --------------------------------------------------------------------------------
June 30, 1997, and for the six months then ended, the effective annual group fee
rate was 0.33%. The fund pays 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 $1,000,000 for the six months ended June 30, 1997, of which
$178,000 was payable at period-end.
20
<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
Financial Services
Growth & Income
Growth Stock
Health Sciences
Media & Telecommunications
Mid-Cap Growth
Mid-Cap Value
New America Growth
New Era
New Horizons*
Science & Technology
Small-Cap Stock**
Small-Cap Value*
Spectrum Growth
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
Global Government Bond
Emerging Markets 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 Income
Personal Strategy Balanced
Personal Strategy Growth
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
*Closed to new investors.
**Formerly the OTC Fund.
Please call for a prospectus. Read it carefully before you invest or send money.
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.
21
<PAGE>
For yield, price, last transaction,
current balance, or to conduct
transactions, 24 hours, 7 days
a week, call Tele*Access(R):
1-800-638-2587 toll free
For assistance
with your existing
fund account, call:
Shareholder Service Center
1-800-225-5132 toll free
410-625-6500 Baltimore area
To open a Discount Brokerage
account or obtain information,
call: 1-800-638-5660 toll free
Internet address:
www.troweprice.com
T. Rowe Price Associates
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).
Investor Centers:
101 East Lombard St.
Baltimore, MD 21202
T. Rowe Price
Financial Center
10090 Red Run Blvd.
Owings Mills, MD 21117
Farragut Square
900 17th Street, N.W.
Washington, D.C. 20006
ARCO Tower
31st Floor
515 South Flower St.
Los Angeles, CA 90071
4200 West Cypress St.
10th Floor
Tampa, FL 33607
[LOGO OF T. ROWE PRICE APPEARS HERE]
T. Rowe Price Investment Services, Inc., Distributor. F41-051 6/30/97
