<PAGE>
--------------------------------------------------------------------------------
Fellow Shareholders
--------------------------------------------------------------------------------
Stocks rose sharply in the second quarter, paced by technology issues, and all
of the major market indices ended the period at record levels. Your fund's gains
for the quarter and first half were also impressive. Returns were just shy of
the broad market, represented by the unmanaged Standard & Poor's 500 Stock
Index, but were close to the average growth mutual fund for the quarter and
exceeded this benchmark on a year-to-date basis. Neither your fund nor most
other stock indices surpassed the technology-dominated Nasdaq Composite Index.
--------------------------------------------------------------------------------
Performance Comparison
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Periods Ended 6/30/95
3 Months 6 Months
---------------------
<S> <C> <C>
New America Growth Fund 9.0% 19.7%
S&P 500 Index 9.6 20.2
Nasdaq Composite* 14.2 24.1
Lipper Growth Fund Avg. 9.3 17.5
--------------------------------------------------------------------------------
</TABLE>
*Principal only
MARKET ENVIRONMENT
The stock market's superb performance in the first half may seem surprising.
After all, in 1994, when the economy was growing briskly and corporate earnings
gains were the best in several years, stocks meandered and finished virtually
unchanged. However, the market has taken off this year despite abundant evidence
of a pullback in growth and increasing signs of a slowdown in corporate
earnings, particularly in the consumer sector. We believe the market has been
driven by lower interest rates and a changing perception of both the role and
direction of American government.
Slowing growth in the U.S. and abroad has assuaged fears of a pickup in
inflation. Long-term interest rates, whose surge in 1994 precipitated the worst
bond returns in many years, decisively reversed course and fell about 2
percentage points from their peaks last year. Investors were further comforted
by hints from the Federal Reserve early in the year that the tightening phase of
monetary policy was over; indeed, in July, the Fed cut rates for the first time
in three years. This action improved prospects for a "soft landing," and the
markets seemed to be expecting the best of all possible worlds -- moderate,
noninflationary growth.
Perhaps the most important, albeit subtle, catalyst for the market's
performance has come from Washington, where a Republican Congress appears to
have transformed the nation's political agenda. In fact, the concept of a
diminished role for government and the movement toward fiscal conservatism have
gained advocates in both parties. Even the Democratic president has proposed
slowing the growth of government services to attain a balanced budget in 10
years.
Technology stocks led the market's advance, while stocks of companies in
cyclical industries such as autos and steel lagged. Investor focus continued to
shift from the cyclicals that led the market through mid-1994 toward companies
whose earnings are expected to grow at rates of 15% to 25%, even in a slowing
economy. These are the types of companies your fund favors.
PORTFOLIO REVIEW
Your fund seeks high-growth companies operating in noncyclical, service
businesses. The service sector of the U.S. economy has grown rapidly since World
War II and is now much larger than the manufacturing sector. Most manufacturing
industries have pronounced cyclical characteristics; in contrast, service sector
gross domestic product has not declined in any year since 1947. Media reports
often misrepresent the service sector as the haven of burger-flipping teenagers,
when, in fact, it has created far more high-paying jobs
<PAGE>
than the manufacturing sector. Of greater importance to fund shareholders, the
service sector has spawned many of the fastest-growing, most exciting companies
in America today.
After paring our consumer-related stocks and augmenting our business
services holdings in 1994, we made few changes in the fund's overall sector
diversification so far in 1995, as shown below:
--------------------------------------------------------------------------------
Sector Diversification
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
12/31/94 6/30/95
-------- -------
<S> <C> <C>
Financial Services 12% 11%
Consumer Services 41 41
Business Services 43 45
Reserves 4 3
-------- -------
Total 100% 100%
--------------------------------------------------------------------------------
</TABLE>
Within the sectors, however, there were significant investment changes.
Major additions in the first half included the purchase of two cable companies,
COMCAST and COX COMMUNICATIONS. We felt that negative investor sentiment toward
the stocks was overdone, and that the growth prospects of these two operators,
in particular, were strong. We also established sizable positions in OLSTEN, a
temporary staffing company that is growing quickly in the home health care
field, and in ADT, a company with strong growth prospects in two attractive
businesses, security systems and wholesale used auto auctions. We also
eliminated two major, longtime holdings: TOYS "R" US, whose earnings growth
rate, we believe, is slowing, and CHARLES SCHWAB, a financial services company
whose stock reached a valuation level we considered excessive.
The fund's top contributor in the first half was CUC INTERNATIONAL, the
nation's largest purveyor of direct mail, membership-based discount shopping
services, which continued to post outstanding results. Several computer
processing companies were also among the top contributors to the fund, including
FIRST FINANCIAL MANAGEMENT, a leader in credit card transaction processing,
SUNGARD DATA SYSTEMS, the largest data recovery provider, and PAYCHEX, a payroll
processor. Several retailers, including GENERAL NUTRITION, MICRO WAREHOUSE, and
CIRCUIT CITY STORES, bucked the negative retailing environment to land in the
top 10 for the second quarter.
Several of our holdings fell victim to the slowdown in the consumer sector,
however. ANNTAYLOR STORES, a women's apparel retailer, and SBARRO, the Italian
restaurant chain, both reported disappointing earnings and were among the worst
contributors for both the second quarter and the first half. Our holdings in
health maintenance organizations (HMOs) PACIFICARE HEALTH SYSTEMS, UNITED
HEALTHCARE, and FOUNDATION HEALTH also penalized the fund in the quarter as
investors reacted to a perceived deterioration in their pricing environment. We
have reduced our exposure to HMOs, but expect to retain the premier operators
and may add selectively to our positions if selling appears overdone.
The portfolio's characteristics remain vibrant, as shown below. We continue
to search for highly profitable, rapidly growing companies with excellent
managements and strong competitive positions in businesses that we like. We
favor companies that generate substantial positive cash flows, have strong
financial positions, and can finance their own growth. We look for companies we
can own for a number of years.
--------------------------------------------------------------------------------
Financial Comparison
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
New America
Growth Fund S&P 500
----------- -------
<S> <C> <C>
Earnings Growth Rate
Estimated Next 5 Years 21.4% 7.0%
Profitability-Return on Equity
Latest 12 Months 17.2% 16.0%
Dividend Yield on Stocks 0.5% 2.5%
P/E Ratio (based on next 12
months' estimated earnings) 18.3x 15.2x
--------------------------------------------------------------------------------
</TABLE>
2
<PAGE>
OUTLOOK
We expect modest economic growth in the second half of the year. Soft landings
are unusual, but we are optimistic the economy will achieve a respectable,
sustainable growth rate. We do worry, however, that this comfortable scenario
could be shattered by an unanticipated event or systemic shock. Nevertheless,
most of the companies in your fund should continue to grow even in difficult
economic times.
Interest rates have already fallen dramatically from their peaks, and we do
not expect them to fall much further. In the absence of strong evidence of a
faltering economy, we think the Federal Reserve will be cautious about lowering
rates again soon, and may become increasingly wary of fueling further
speculation in the financial markets.
While speculation has been apparent in some market sectors, particularly
technology (to which your fund has only modest exposure), we continue to believe
that most growth stocks remain reasonably priced relative to the market. Your
fund should be well positioned to achieve attractive returns over the next
several years.
Respectfully submitted,
/s/ John H. Laporte
John H. Laporte
President and
Chairman of the Investment
Advisory Committee
/s/ Brian W. H. Berghuis
Brian W. H. Berghuis
Executive Vice President
July 21, 1995
--------------------------------------------------------------------------------
Foreign Stock Authorization Increased
--------------------------------------------------------------------------------
The Board of Trustees of the New America Growth Fund has increased the amount of
fund assets that can be invested in foreign securities from 10% to 15%. While
the fund typically has modest foreign exposure (currently 8.5% of total assets),
the greater flexibility could be advantageous in the future because of the
proliferation of suitable overseas investment opportunities, the increase in
foreign companies with operations in the U.S., and the opening up of financial
markets in areas of the world previously closed to investment.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Twenty-Five Largest Holdings
--------------------------------------------------------------------------------
June 30, 1995
<TABLE>
<CAPTION>
Percent of
Company Net Assets
-------------------------------------------------------------------- ----------
<S> <C>
CUC International 4.3%
--------------------------------------------------------------------------------
First Financial Management 3.0
--------------------------------------------------------------------------------
Vodafone 2.9
--------------------------------------------------------------------------------
Comcast 2.7
--------------------------------------------------------------------------------
Viacom 2.6
--------------------------------------------------------------------------------
SunGard Data Systems 2.6
--------------------------------------------------------------------------------
United HealthCare 2.5
--------------------------------------------------------------------------------
Paychex 2.4
--------------------------------------------------------------------------------
MGIC Investment 2.3
--------------------------------------------------------------------------------
Paging Network 2.2
--------------------------------------------------------------------------------
Office Depot 2.2
--------------------------------------------------------------------------------
Alco Standard 2.2
--------------------------------------------------------------------------------
Catalina Marketing 2.1
--------------------------------------------------------------------------------
Circuit City Stores 2.0
--------------------------------------------------------------------------------
Franklin Resources 2.0
--------------------------------------------------------------------------------
Columbia/HCA Healthcare 2.0
--------------------------------------------------------------------------------
Sanifill 1.9
--------------------------------------------------------------------------------
Cardinal Health 1.8
--------------------------------------------------------------------------------
Schlumberger 1.8
--------------------------------------------------------------------------------
Hospitality Franchise 1.8
--------------------------------------------------------------------------------
ADVO 1.7
--------------------------------------------------------------------------------
Olsten 1.7
--------------------------------------------------------------------------------
ADT 1.7
--------------------------------------------------------------------------------
Cox Communications 1.6
--------------------------------------------------------------------------------
General Nutrition 1.6
--------------------------------------------------------------------------------
Total 55.6%
--------------------------------------------------------------------------------
</TABLE>
3
<PAGE>
--------------------------------------------------------------------------------
Contributions to the Change in Net Asset Value Per Share
--------------------------------------------------------------------------------
T. Rowe Price New America Growth Fund
Three Months Ended June 30, 1995
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
TEN BEST CONTRIBUTORS
--------------------------------------------------------------------------------
<S> <C>
First Financial Management 14c
--------------------------------------------------------------------------------
Comcast 12
--------------------------------------------------------------------------------
Sanifill 12
--------------------------------------------------------------------------------
General Nutrition 12
--------------------------------------------------------------------------------
Micro Warehouse 12
--------------------------------------------------------------------------------
Paychex 12
--------------------------------------------------------------------------------
Vodafone 12
--------------------------------------------------------------------------------
ALC Communications 10
--------------------------------------------------------------------------------
Circuit City Stores 10
--------------------------------------------------------------------------------
CUC International 10
--------------------------------------------------------------------------------
Total 116c
--------------------------------------------------------------------------------
<CAPTION>
--------------------------------------------------------------------------------
TEN WORST CONTRIBUTORS
--------------------------------------------------------------------------------
<S> <C>
AnnTaylor Stores** -17c
--------------------------------------------------------------------------------
Sbarro 10
--------------------------------------------------------------------------------
PacifiCare Health Systems 10
--------------------------------------------------------------------------------
United HealthCare 9
--------------------------------------------------------------------------------
Foundation Health 8
--------------------------------------------------------------------------------
Pittston Services** 4
--------------------------------------------------------------------------------
Danka Business Systems 3
--------------------------------------------------------------------------------
ADVO 3
--------------------------------------------------------------------------------
HEALTHSOUTH Rehabilitation 2
--------------------------------------------------------------------------------
Patterson Dental 2
--------------------------------------------------------------------------------
Total -68c
--------------------------------------------------------------------------------
</TABLE>
**Position eliminated
--------------------------------------------------------------------------------
Average Annual Compound Total Return
--------------------------------------------------------------------------------
Periods Ended June 30, 1995
<TABLE>
<CAPTION>
Since
Inception
1 Year 5 Years 9/30/85
------ ------- ---------
<S> <C> <C>
23.02% 14.19% 15.55%
--------------------------------------------------------------------------------
</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.
Six Months Ended June 30, 1995
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
TEN BEST CONTRIBUTORS
--------------------------------------------------------------------------------
<S> <C>
CUC International 29c
--------------------------------------------------------------------------------
First Financial Management 26
--------------------------------------------------------------------------------
SunGard Data Systems 20
--------------------------------------------------------------------------------
MGIC Investment 20
--------------------------------------------------------------------------------
Paychex 19
--------------------------------------------------------------------------------
Circuit City Stores* 18
--------------------------------------------------------------------------------
Alco Standard 15
--------------------------------------------------------------------------------
Comcast* 14
--------------------------------------------------------------------------------
ALC Communications 13
--------------------------------------------------------------------------------
Money Store 12
--------------------------------------------------------------------------------
Total 186c
--------------------------------------------------------------------------------
<CAPTION>
--------------------------------------------------------------------------------
TEN WORST CONTRIBUTORS
--------------------------------------------------------------------------------
<S> <C>
AnnTaylor Stores** -10c
--------------------------------------------------------------------------------
PacifiCare Health Systems* 9
--------------------------------------------------------------------------------
Sbarro 6
--------------------------------------------------------------------------------
United HealthCare 6
--------------------------------------------------------------------------------
Autotote** 6
--------------------------------------------------------------------------------
Toys "R" Us** 6
--------------------------------------------------------------------------------
Foundation Health 4
--------------------------------------------------------------------------------
Pittston Services** 2
--------------------------------------------------------------------------------
Catalina Marketing 2
--------------------------------------------------------------------------------
President Casinos** 2
--------------------------------------------------------------------------------
Total -53c
--------------------------------------------------------------------------------
</TABLE>
* Position added
** Position eliminated
4
<PAGE>
--------------------------------------------------------------------------------
Statement of Net Assets
T. Rowe Price New America Growth Fund / June 30, 1995 (Unaudited)
--------------------------------------------------------------------------------
(values in thousands)
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
Common Stocks & Rights -- 97.5%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
FINANCIAL SERVICES -- 11.1%
--------------------------------------------------------------------------------
Value
<S> <C> <C>
BANK & TRUST -- 1.6%
220,000 shs. BANC ONE.................................... $ 7,095
150,000 State Street Boston......................... 5,531
12,626
INSURANCE -- 3.7%
53,500 CMAC Investment............................. 2,321
375,000 MGIC Investment............................. 17,578
200,000 PMI Group................................... 8,675
28,574
INVESTMENT SERVICES -- 2.0%
350,000 Franklin Resources.......................... 15,575
OTHER FINANCIAL SERVICES -- 3.8%
75,000 Fannie Mae.................................. 7,078
120,000 Freddie Mac................................. 8,250
333,333 Mercury Finance............................. 6,417
200,000 Money Store................................. 7,175
28,920
TOTAL FINANCIAL SERVICES 85,695
--------------------------------------------------------------------------------
CONSUMER SERVICES -- 40.8%
--------------------------------------------------------------------------------
RETAILING/SPECIALTY MERCHANDISERS -- 12.9%
500,000 Circuit City Stores......................... 15,812
431,300 *Cole National (Class A)..................... 4,475
350,000 Dollar General.............................. 11,069
343,000 *General Nutrition........................... 11,962
300,000 *Jones Apparel Group......................... 8,963
195,000 *Kohl's...................................... 8,897
93,500 *Little Switzerland.......................... 403
28,700 *Nautica Enterprises......................... 1,033
600,000 *Office Depot................................ 16,875
99,500 Phillips-Van Heusen......................... 1,542
350,000 *Revco....................................... 8,400
350,000 *Tommy Hilfiger.............................. 9,800
99,231
ENTERTAINMENT & LEISURE -- 3.9%
100,000 *Harrah's Entertainment...................... 2,800
120,000 *International Family
Entertainment (Class B).................. 1,890
150,000 *Mirage Resorts.............................. 4,594
50,000 *Promus Hotel................................ 1,100
48,000 *Viacom (Class A)............................ 2,232
363,690 shs. *Viacom (Class B)............................ 16,866
600,000 rts.* Viacom...................................... 900
30,382
MEDIA/COMMUNICATION SERVICES -- 13.5%
241,000shs. *ALC Communications.......................... 10,875
150,000 *America Online.............................. 6,563
240,000 *CellStar.................................... 5,550
806,300 Comcast (Class A Special)................... 14,967
313,700 Comcast (Class A)........................... 5,725
648,900 *Cox Communications
(Class A)................................ 12,572
300,000 *Mobile Telecommunication
Technologies............................. 8,194
510,000 *Paging Network.............................. 17,340
600,000 Vodafone ADR................................ 22,725
104,511
RESTAURANTS/FOOD DISTRIBUTION -- 4.1%
175,000 *Lone Star Steakhouse
& Saloon................................. 5,294
300,000 *Outback Steakhouse.......................... 8,700
450,000 Sbarro...................................... 10,462
205,200 *Starbucks................................... 7,285
31,741
PERSONAL SERVICES -- 6.4%
791,531 *CUC International........................... 33,244
103,100 H&R Block................................... 4,240
332,200 Loewen Group................................ 11,793
49,277
TOTAL CONSUMER SERVICES 315,142
--------------------------------------------------------------------------------
BUSINESS SERVICES -- 44.5%
--------------------------------------------------------------------------------
HEALTH CARE SERVICES -- 8.0%
350,000 Columbia/HCA Healthcare..................... 15,138
50,000 *Foundation Health........................... 1,350
184,700 *Genesis Health Ventures..................... 5,472
200,086 *HEALTHSOUTH
Rehabilitation........................... 3,476
200,000 *PacifiCare Health Systems
(Class B)................................ 10,175
300,000 *Quorum Health Group......................... 6,019
475,000 United HealthCare........................... 19,653
61,283
DISTRIBUTION SERVICES -- 6.3%
208,300 Alco Standard............................... 16,638
300,000 Cardinal Health............................. 14,175
330,100 Danka Business Systems ADR.................. 8,005
410,000 *Patterson Dental............................ 9,686
48,504
</TABLE>
5
<PAGE>
--------------------------------------------------------------------------------
T. Rowe Price New America Growth Fund / Statement of Net Assets (Unaudited)
--------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
COMPUTER SERVICES -- 8.9%
368,000 shs. *BISYS Group................................. $ 8,142
300,000 *Ceridian.................................... 11,063
275,000 First Financial Management.................. 23,512
225,000 *FIserv...................................... 6,286
375,000 *SunGard Data Systems........................ 19,687
68,690
ENVIRONMENTAL SERVICES -- 2.8%
200,000 Browning-Ferris............................. 7,225
458,900 *Sanifill.................................... 14,398
21,623
ENERGY SERVICES -- 4.8%
325,000 *BJ Services................................. 7,394
300,000 Camco International......................... 7,012
95,000 *Enterra..................................... 1,995
225,000 Schlumberger................................ 13,978
400,000 *Smith International......................... 6,700
37,079
OTHER BUSINESS SERVICES -- 13.7%
1,100,000 *ADT......................................... 12,925
700,000 ADVO........................................ 13,213
300,000 *Catalina Marketing.......................... 16,087
150 *Corporate Express........................... 3
25,000 *Creative Computers.......................... 669
188,000 *DIMAC....................................... 2,914
400,000 *Hospitality Franchise....................... 13,850
200,000 *Micro Warehouse............................. 9,225
400,000 Olsten...................................... 13,100
506,250 Paychex..................................... 18,478
150,000 *Viking Office Products...................... 5,494
105,958
TOTAL BUSINESS SERVICES 343,137
MISCELLANEOUS COMMON STOCKS -- 1.1% 8,200
TOTAL COMMON STOCKS & RIGHTS (COST $523,145) 752,174
--------------------------------------------------------------------------------
Short-Term Investments -- 1.7%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BANK NOTES -- 0.4%
--------------------------------------------------------------------------------
$3,000,000 Fifth Third Bank, 6.21%,
10/27/95................................. $ 3,001
--------------------------------------------------------------------------------
COMMERCIAL PAPER -- 0.7%
--------------------------------------------------------------------------------
121,000 Cargill Inc., 6.10%, 7/3/95................. 121
5,000,000 Countrywide Funding, 6.00%,
7/18/95.................................. 4,978
5,099
--------------------------------------------------------------------------------
CERTIFICATES OF DEPOSIT -- 0.6%
--------------------------------------------------------------------------------
5,000,000 LandesBank Hessen Thurin,
6.02%, 8/9/95............................ 5,000
TOTAL SHORT-TERM INVESTMENTS (COST $13,100) 13,100
--------------------------------------------------------------------------------
TOTAL INVESTMENTS IN SECURITIES -- 99.2% OF
NET ASSETS (COST $536,245).......................................... 765,274
--------------------------------------------------------------------------------
Other Assets Less Liabilities....................................... 6,463
--------
NET ASSETS CONSIST OF: Value
--------
Accumulated net investment
income - net of distributions............. $ (1,603)
Accumulated net realized
gain/loss - net of distributions.......... 18,929
Net unrealized gain (loss).................. 229,029
Paid-in-capital applicable to
25,372,039 shares of no par
value capital stock outstanding;
unlimited number of shares
authorized................................ 525,382
--------
NET ASSETS.......................................................... $771,737
========
NET ASSET VALUE PER SHARE........................................... $30.42
======
--------------------------------------------------------------------------------
</TABLE>
*Non-income producing
The accompanying notes are an integral part of these financial statements.
6
<PAGE>
--------------------------------------------------------------------------------
Statement of Operations
--------------------------------------------------------------------------------
T. Rowe Price New America Growth Fund /
Six Months Ended June 30, 1995 (Unaudited)
(in thousands)
<TABLE>
<S> <C>
INVESTMENT INCOME
Income
Dividend.......................................................... $ 1,324
Interest.......................................................... 868
--------
Total income...................................................... 2,192
--------
Expenses
Investment management............................................. 2,395
Shareholder servicing............................................. 1,167
Custody and accounting............................................ 78
Registration...................................................... 55
Prospectus and shareholder reports................................ 50
Legal and audit................................................... 15
Directors......................................................... 10
Miscellaneous..................................................... 25
--------
Total expenses.................................................... 3,795
--------
Net investment income................................................ (1,603)
--------
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on securities............................... 18,195
Change in net unrealized gain or loss on securities.................. 110,950
--------
Net realized and unrealized gain (loss).............................. 129,145
--------
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS.................... $127,542
========
</TABLE>
--------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
7
<PAGE>
--------------------------------------------------------------------------------
Statement of Changes in Net Assets
--------------------------------------------------------------------------------
T. Rowe Price New America Growth Fund (Unaudited)
(in thousands)
<TABLE>
<CAPTION>
Six Months Ended Year Ended
June 30, 1995 Dec. 31, 1994
---------------- -------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM
Operations
Net investment income....................................................... $ (1,603) $ (1,681)
Net realized gain (loss).................................................... 18,195 13,346
Change in net unrealized gain or loss....................................... 110,950 (61,025)
-------- --------
Increase (decrease) in net assets from operations........................... 127,542 (49,360)
-------- --------
Distributions to shareholders
Net realized gain........................................................... -- (13,216)
-------- --------
Capital share transactions*
Shares sold................................................................. 94,451 232,076
Distributions reinvested.................................................... -- 12,762
Shares redeemed............................................................. (96,402) (155,234)
-------- --------
Increase (decrease) in net assets from capital share transactions........... (1,951) 89,604
-------- --------
Increase (decrease) in net assets.............................................. 125,591 27,028
NET ASSETS
Beginning of period............................................................ 646,146 619,118
-------- --------
End of period.................................................................. $771,737 $646,146
======== ========
----------------------------------------------------------------------------------------------------------------------
*Share information
Shares sold................................................................. 3,452 8,663
Distributions reinvested.................................................... -- 508
Shares redeemed............................................................. (3,500) (5,834)
-------- --------
Increase (decrease) in shares outstanding................................... (48) 3,337
======== ========
----------------------------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
8
<PAGE>
--------------------------------------------------------------------------------
Notes To Financial Statements
--------------------------------------------------------------------------------
T. Rowe Price New America Growth Fund / June 30, 1995 (Unaudited)
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
T. Rowe Price New America Growth 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.
Short-term debt securities are valued at their cost which, when combined
with accrued interest, approximates fair value.
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 Trustees.
B) 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 $245,062,000 and $242,642,000, 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 $536,245,000 and net unrealized gain
aggregated $229,029,000, of which $236,094,000 related to appreciated
investments and $7,065,000 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 $429,000 was payable at June 30, 1995. The fee is computed daily and
paid monthly, and consists of an Individual Fund Fee equal to 0.35% 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 0.31% 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 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. 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 $1,030,000 for the six months
ended June 30, 1995, of which $203,000 was payable at period-end.
9
<PAGE>
--------------------------------------------------------------------------------
Financial Highlights
--------------------------------------------------------------------------------
T. Rowe Price New America Growth Fund (Unaudited)
<TABLE>
<CAPTION>
For a share outstanding throughout each period
---------------------------------------------------------------------------------
Six Months Year Ended December 31,
Ended -----------------------------------------------------------------
June 30, 1995 1994 1993 1992 1991 1990
---------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING
OF PERIOD.............................. $25.42 $28.04 $24.86 $22.79 $14.66 $16.90
------ ------ ------ ------ ------ ------
Investment Activities
Net investment income.................. (0.06) (0.07) (0.08) (0.04) (0.02) 0.13*
Net realized and unrealized
gain (loss)......................... 5.06 (2.02) 4.39 2.29 9.02 (2.20)
------ ------ ------ ------ ------ ------
Total from Investment Activities....... 5.00 (2.09) 4.31 2.25 9.00 (2.07)
------ ------ ------ ------ ------ ------
Distributions
Net investment income.................. -- -- -- -- -- (0.17)
Net realized gain...................... -- (0.53) (1.13) (0.18) (0.87) --
------ ------ ------ ------ ------ ------
Total Distributions.................... -- (0.53) (1.13) (0.18) (0.87) (0.17)
------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD............ $30.42 $25.42 $28.04 $24.86 $22.79 $14.66
====== ====== ====== ====== ====== ======
-------------------------------------------------------------------------------------------------------------------------------
RATIOS / SUPPLEMENTAL DATA
Total Return.............................. 19.7% (7.4)% 17.4% 9.9% 61.9% (12.2)%*
Ratio of Expenses to Average
Net Assets............................. 1.09%+ 1.14% 1.23% 1.25% 1.25% 1.25%*
Ratio of Net Investment Income
to Average Net Assets.................. (0.46)%+ (0.27)% (0.39)% (0.44)% (0.12)% 0.81%*
Portfolio Turnover Rate................... 72.5%+ 31.0% 43.7% 26.4% 42.3% 41.7%
Net Assets, End of Period
(in thousands)......................... $771,737 $646,146 $619,118 $480,229 $231,729 $95,697
-------------------------------------------------------------------------------------------------------------------------------
</TABLE>
+ Annualized.
* Excludes expenses in excess of a 1.25% voluntary expense limitation in
effect through December 31, 1993.
The accompanying notes are an integral part of these financial statements.
10
<PAGE>
--------------------------------------------------------------------------------
Shareholder Services
--------------------------------------------------------------------------------
To help shareholder monitor their current investments and make decisions that
accurately reflect their financial goals, T. Rowe Price offers a wide variety of
information and services--at no extra cost.
Knowledgeable Service Representatives
By Phone--Shareholder service representatives are available from 8:00 a.m. to
10:00 p.m., Monday - Friday, and weekends from 9:00 a.m. to 5:00 p.m ET. Call
1-800-225-5132 to speak directly with a representative who will be able to
assist you with your accounts.
In Person--Visit one of our investor center locations to meet with a
representative who will be able to assist you with your accounts. While there,
you can drop off applications or obtain prospectuses and other literature.
Automated 24-Hour Services
Tele*Access(R)(1-800-638-2587) provides information such as account
balance, date and amount of your last transaction, latest dividend payment, and
fund prices and yields. Additionally, you have the ability to request
prospectuses, statements, account and tax forms; reorder checks; and initiate
purchase, redemption, and exchange orders for identically registered accounts.
PC*Access(R) provides the same information as Tele*Access, but on a personal
computer via dial-up modem.
Account Services
Checking--Write checks for $500 or more on any money market and most bond
fund accounts (except the High Yield Fund and Emerging Markets Bond Fund).
Automatic Investing--Build your account over time by investing directly
from your bank account or paycheck with Automatic Asset Builder. Additionally,
Automatic Exchange enables you to set up systematic investments from one fund
account into another, such as from a money fund into stock fund. A low, $50
minimum makes it easy to get started.
Automatic Withdrawal--If you need money from your fund account on a regular
basis, you can establish scheduled automatic redemptions.
Dividend and Capital Gains Payment Options--Reinvest all or some of your
distributions, or take them in cash. We give you maximum flexibility and
convenience.
Investment Information
Combined Statement--A comprehensive overview of your T. Rowe Price
accounts. The summary page gives your earnings by tax category, provides total
portfolio value, and lists your investments by type--stock, bond, and money
market. Detail pages itemize account transactions by fund.
Quarterly Shareholder Reports--Portfolio managers review the performance of
the funds in plain language and discuss T. Rowe Price's economic outlook.
The T. Rowe Price Report--A quarterly newsletter with relevant articles on
market trends, personal financial planning, and T. Rowe Price's economic
perspective.
Insights--A library of information that includes reports on mutual fund tax
issues, investment strategies, and financial markets.
Detailed Investment Guides--Our widely acclaimed Asset Mix Worksheet,
College Planning Kit, Retirees Financial Guide, Retirement Planning Kit (also
available on disk for PC use), and Guide to Risk-Adjusted performance can help
you determine and reach your investment goals.
Discount Brokerage
You can trade stocks, bonds, options, precious metals, and other securities at a
substantial savings over regular commission rates. Call a shareholder service
representative for more information.
11
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SEMIANNUAL REPORT
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T. Rowe Price
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NEW AMERICA GROWTH
FUND
JUNE 30, 1995
[LOGO OF T. ROWE PRICE APPEARS HERE]
FOR YIELD, PRICE, LAST TRANSACTION, AND CURRENT BALANCE, 24 HOURS, 7 DAYS A
WEEK, CALL:
1-800-638-2587 toll free
625-7676 Baltimore area
FOR ASSISTANCE WITH YOUR EXISTING FUND ACCOUNT, CALL:
Shareholder Service Center
1-800-225-5132 toll free
625-6500 Baltimore area
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
America Growth Fund./(R)/
T. Rowe Price
Invest With Confidence/(R)/
NAG
