<PAGE>
Semiannual Report
NEW AMERICA
GROWTH
FUND
---------------
June 30, 1999
---------------
[GRAPHIC APPEARS HERE]
T. ROWE PRICE
<PAGE>
REPORT HIGHLIGHTS
- -----------------
New America Growth Fund
. U.S. stocks continued to rally in the first half, still led by large-cap
stocks, but small- and mid-cap stocks rebounded in the second quarter.
. The New America Growth Fund posted a solid six-month gain that was slightly
behind its benchmarks.
. Media and telecommunications stocks and consumer-related stocks were the
best performers, while health care services stocks were the worst.
. A continued broadening trend in the market would benefit small- and mid-cap
stocks in the service sector, where the fund invests.
<PAGE>
FELLOW SHAREHOLDERS
The stock market in the first half of 1999 was quite robust. Much like the last
several years, a vibrant domestic economy led to solid GDP growth, strong
employment, and high consumer confidence. In spite of this exuberance, inflation
continued to be very mild. All of these factors helped the Standard & Poor's 500
Stock Index rise 12.38% during the period. Beginning in April, the market took a
dramatic and quite encouraging turn in favor of a broader list of stocks, and
this benefited your fund.
----------------------
PERFORMANCE COMPARISON
--------------------------------------------------
Periods Ended 6/30/99 6 Months 12 Months
--------------------------------------------------
New America Growth Fund 10.94% 11.54%
S&P 500 12.38 22.76
Lipper Growth Funds Average 11.65 18.87
The fund's solid gain of 10.94% year-to-date represented a vast improvement over
the previous six-month period, when the global financial crisis devastated the
returns of all but a handful of the largest growth stocks. Nonetheless, market
leadership over the six-month period was still quite narrow, as it was in 1998,
with the largest 10 stocks in the S&P 500 contributing more than 40% of the
index's total gain. The S&P 500's 12.38% gain was nearly double the S&P 400
MidCap Index's return of 6.87%. Another stunning example of the narrowness of
the market is that, as of the end of March, 80% of all stocks were lagging the
S&P 500 Index by more than 15 percentage points over the previous 12 months. By
June, however, the figure was down to 69%, which may bode well for a continued
broadening trend in the market. New America Growth invests in companies of all
sizes seeking the best relative valuations, and has recently focused on the
mid-cap area.
Given the degree of dominance by large-caps over the past 12 months, the New
America Growth Fund did not keep pace with the average growth fund or the
unmanaged S&P 500. The fund's 11.54% advance for the past year was respectable
but below its average annual returns for the past 5- and 10-year periods of
23.04% and 17.58%, respectively.
1
<PAGE>
MARKET ENVIRONMENT
Although we may sound like a broken record, the climate continued to be
excellent for investors in the first half. We are now going on a record ninth
consecutive year of economic expansion. With low inflation, low unemployment,
and still-low interest rates, the stage was set for continued increases in
consumer confidence. As a result, the consumer economy flourished and
overshadowed an industrial economy that was mixed at best. Furthermore,
corporate earnings accelerated since hitting a low of -2.8% in last year's third
quarter. Earnings growth for the companies that make up the S&P 500 is expected
to exceed 15% in the second half of the year.
Stocks were somewhat volatile in the first half, as fears of inflation led many
to speculate that the Federal Reserve would act aggressively to stunt growth.
Long-term interest rates rose above 6% in the second quarter for the first time
in more than a year. However, in spite of the vigor in the economy, signs of
inflation were not that strong and the central bank chose a moderate course. The
Fed raised the federal funds target rate just 25 basis points (100 basis points
equal one percentage point) and promptly adopted a
Among mid-size companies, growth continued to outperform value.
- --------------------------------------
INFORMATION ON YEAR-END DISTRIBUTIONS
- --------------------------------------------------------------------------------
To help you with tax planning, we try to give you a good idea of the per-share
income and capital gain amounts our funds may distribute near year-end. In late
October, we will provide estimates of these amounts, which will be paid on
December 16, 1999, to shareholders of record on December 14. These preliminary
numbers will be included in The Price Report mailing to shareholders in late
October and will also be available on our Web site--www.troweprice.com.
We hope that these preliminary numbers will be useful to you in approximating
the income and capital gains taxes you may pay on distributions to taxable
accounts.
If your fund distributed any capital gains earlier in 1999, you can find the
amounts on your statements and should include them in your tax planning
calculations. Please keep in mind that the numbers are not final and are likely
to be revised before the December 14 declaration and record date. As the fall
progresses, you may want to check our Web site for revisions.
If you would like information on tax matters relating to mutual funds, please
visit our Web site to download our Insights report, Tax Information for Mutual
Fund Investors, or call 1-800-225-5132 to request a copy.
2
<PAGE>
neutral stance toward future hikes. In spite of low unemployment, wage growth
has not accelerated and strong productivity gains appear to have mitigated much
of that growth. Although cyclical and value stocks advanced late in the period,
growth stocks still performed well in the first half, and, among mid-size
companies, growth continued to outperform value. Many cyclical companies
continued to see their results hurt by the problems in Asia, and investors are
seeking out companies whose growth prospects are relatively immune to slowdowns
in foreign economies. This has increased investor interest in the types of
businesses New America focuses on - domestic, non-cyclical service-based
companies.
The Internet mania that has swept mainstream America is a trend that cannot be
ignored. Surely, the Internet is one of the most important developments in
recent history. However, many Internet stocks have risen to valuations that defy
logic. An unmanaged Internet index of 20 stocks surged 52% in the first half and
more than 290% in the past 18 months, compared with the S&P 500's nearly 42%
rise in the longer period. We have invested in several companies that will
benefit greatly from the Internet, but have tended to stay away from many of the
pure-play Internet stocks as the valuations are too extreme. We certainly want
to be exposed to the Internet and its great growth prospects, but we will
continue to be judicious with our entry points (that is, purchase prices). We
firmly believe that any stock's valuation is a function of the future cash flows
that the business will deliver. Buying companies just because they are
generating a lot of revenues will be a poor strategy unless the companies are
expected to generate significant cash flow in the future. Our focus is on
finding the stocks that will generate that cash flow and then finding the
appropriate entry point.
PORTFOLIO REVIEW
Each major sector had positive contributors to the portfolio in the first half,
though consumer-related and media and telecommunications stocks tended to
perform best as a strong economy paved the way for solid earnings growth. Five
of the top 10 companies were in media and telecommunications. The fund's top
performer was Circuit City Stores, which benefited from both a strong consumer
economy and new digital product cycles. Western Wireless, which split into two
companies - Western Wireless and VoiceStream Wireless - was the
3
<PAGE>
next best contributor during the six-month period. Western Wireless is a leading
rural provider of wireless telecommunications services, while VoiceStream is a
faster-growing PCS operator in major markets. AT&T Liberty Media, AirTouch
Communications, Comcast, and MCI WorldCom were other media and
telecommunications names that performed well in the period. First Data, the
world's largest credit card processor, benefited as well from the strong
consumer economy.
SECTOR DIVERSIFICATION
---------------------------------------------------
6/30/98 12/31/98 6/30/99
---------------------------------------------------
Financial Services 16.0% 15.4% 14.6%
Consumer Services 35.7 39.6 35.8
Business Services 44.1 44.8 47.8
Reserves 4.2 0.2 1.8
===================================================
Total 100.0% 100.0% 100.0%
Health care services was the fund's worst-performing industry. Total Renal Care
Holdings, the second-largest worldwide provider of integrated dialysis services
for patients suffering from chronic kidney failure, was the fund's worst
contributor. The stock was weak due to a lack of expense control and an ongoing
investigation into reimbursement issues at a lab business that represents only
about 2% of the company. Omnicare, a leading geriatric pharmacy company, was the
second worst, as changes in Medicare reimbursement put pressure on its
customers. Cole National was also disappointing as it miscalculated the sales
environment in its optical business and missed sales targets as a result.
Changes in sector weightings in the last six months were relatively modest.
Business services continued to grow as a percentage of the fund, but it is
important to note that our additions included stocks in several industries, such
as health care services, computer services, and environmental services. New
holdings included Republic Services, the fourth-largest provider of nonhazardous
solid waste collection and disposal, NOVA, a credit card processor that focuses
on the less-penetrated small and mid-market businesses, and Equifax, the leading
provider of credit information on consumers. We reduced our consumer services
positions slightly as we trimmed some stocks that had benefited from the strong
economy and eliminated stocks such as AutoZone and Saks.
4
<PAGE>
We remain excited about the fund's holdings. Among our largest are AT&T Liberty
Media, Circuit City Stores, and Vodafone. Liberty Media is a portfolio of
companies positioned to capitalize on the continuing growth of cable networks.
The majority of the company's portfolio is centered around ownership interests
in more than 100 cable networks, such as The Learning Channel and The Discovery
Channel. In addition, Liberty Media boasts several investments in interactive TV
and Internet infrastructure. As mentioned earlier, Circuit City is right in the
middle of major digital product cycle for consumers. It will not be too long
before DVD players, high-definition TVs, and digital cameras are commonplace.
Our ownership of Vodafone came through its acquisition of AirTouch. The merger
gave us the best portfolio of international wireless assets, and the combined
company is poised for strong subscriber and cash flow growth.
OUTLOOK
The economy continues to look healthy, and the global environment looks much
better than even six months ago. That said, many of the top 50 names in the S&P
500 remain very expensive on a relative valuation basis. We would feel much
better about the market if it were to broaden significantly. There are many
solid growth businesses that are not related to the Internet and are not among
the top 50 S&P 500 stocks. Many of these trade at quite reasonable valuations
and offer tremendous opportunities for growth.
The outlook for the New America Growth Fund is favorable, in our view. We expect
most of the companies in the fund to grow faster than the typical S&P 500 stock,
but they trade at lower multiples. In addition, given the service focus of the
fund, many of the companies have high levels of recurring revenues. Such
companies are by definition more stable than those that have to resell their
products every day. While we are disappointed with the fund's relative
performance over the past year, we remain excited about our holdings, which are
leaders in their respective industries. We believe the market will continue to
broaden such that these stocks will better reflect their strong prospects.
WE WOULD FEEL MUCH BETTER ABOUT THE MARKET IF IT WERE TO BROADEN SIGNIFICANTLY.
5
<PAGE>
We would like to take this opportunity to introduce Marc Baylin to you. Marc, a
business services analyst at T. Rowe Price for six years, has been a significant
part of the fund's management team for several years as a member of its
Investment Advisory Committee. He has agreed to take on an expanded role as
executive vice president. In this role, Marc replaces Brian Berghuis, manager of
the T. Rowe Price Mid-Cap Growth Fund, who served ably as executive vice
president of New America Growth for many years and remains a member of the
advisory committee. We are excited about Marc's greater involvement and
confident he will add real value to future performance.
Respectfully submitted,
/s/ John H. Laporte
John H. Laporte
President and Chairman of the Investment Advisory Committee
/s/ Marc Baylin
Marc Baylin
Executive Vice President
July 21, 1999
6
<PAGE>
T. ROWE PRICE NEW AMERICA GROWTH FUND
- --------------------------------------------------------------------------------
PORTFOLIO HIGHLIGHTS
- --------------------------------------------------------------------------------
TWENTY-FIVE LARGEST HOLDINGS
Percent of
Net Assets
6/30/99
------------------------------------------------------------------------------
AT&T Liberty Media 3.2%
Circuit City Stores 2.9
MCI WorldCom 2.7
Outdoor Systems 2.6
Vodafone 2.6
------------------------------------------------------------------------------
Cendant 2.6
Chancellor Media 2.5
Office Depot 2.5
Waste Management 2.5
Affiliated Computer Services 2.3
------------------------------------------------------------------------------
Galileo International 2.2
Apollo Group 2.1
Freddie Mac 2.1
Home Depot 2.1
Catalina Marketing 2.0
------------------------------------------------------------------------------
Comcast 2.0
First Data 2.0
Morgan Stanley Dean Witter 1.9
BISYS Group 1.8
Costco Companies 1.8
------------------------------------------------------------------------------
Clear Channel Communications 1.8
Associates First Capital 1.8
Outback Steakhouse 1.8
Kroger 1.8
Premier Parks 1.7
------------------------------------------------------------------------------
Total 55.3%
Note: Table excludes reserves.
7
<PAGE>
T. ROWE PRICE NEW AMERICA GROWTH FUND
- --------------------------------------------------------------------------------
PORTFOLIO HIGHLIGHTS
- --------------------------------------------------------------------------------
CONTRIBUTIONS TO THE CHANGE IN NET ASSET VALUE PER SHARE
6 Months Ended 6/30/99
Ten Best Contributors
-----------------------------------------
Circuit City Stores 73(cent)
Western Wireless 68
AT&T Liberty Media 65
AirTouch Communications** 57
First Data 36
Outback Steakhouse 35
Comcast 34
MCI WorldCom 31
Morgan Stanley Dean Witter 30
Catalina Marketing 27
=========================================
Total 456(cent)
Ten Worst Contributors
-----------------------------------------
Total Renal Care Holdings -39(cent)
Omnicare* 30
Cole National 22
Service Corp. International** 21
Allied Waste Industries** 19
Acxiom 17
Office Depot 15
Apollo Group 13
Freddie Mac 12
SunGard Data Systems 11
=========================================
Total -199(cent)
12 Months Ended 6/30/99
Ten Best Contributors
-----------------------------------------
MCI WorldCom 91(cent)
AirTouch Communications** 87
AT&T Liberty Media 82
Circuit City Stores 80
Comcast 77
Western Wireless 73
Catalina Marketing 48
Home Depot 40
Outback Steakhouse 37
Chancellor Media 34
=========================================
Total 649(cent)
Ten Worst Contributors
-----------------------------------------
Cole National -68(cent)
General Nutrition 44
Quorom Health Group** 43
Sinclair Broadcast Group** 43
Total Renal Care Holdings 41
Paging Network** 39
Concentra Managed Care** 38
Republic Industries** 36
Franklin Resources 35
Interim Services 33
=========================================
Total -420(cent)
* Position added
** Position eliminated
8
<PAGE>
T. ROWE PRICE NEWAMERICA GROWTH FUND
- --------------------------------------------------------------------------------
PERFORMANCE COMPARISON
- --------------------------------------------------------------------------------
This chart shows the value of a hypothetical $10,000 investment in the fund over
the past 10 fiscal year periods or since inception (for funds lacking 10-year
records). The result is compared with a broad-based average or index. An index
return does not reflect expenses, which have been deducted from the fund's
return.
NEW AMERICA GROWTH FUND
- --------------------------------------------------------------------------------
[CHART APPEARS HERE]
AVERAGE ANNUAL COMPOUND TOTAL RETURN
- --------------------------------------------------------------------------------
This table shows how the fund would have performed each year if its actual (or
cumulative) returns for the periods shown had been earned at a constant rate.
Periods Ended 6/30/99 1 Year 3 Years 5 Years 10 Years
-------------------------------------------------------------------
New America Growth Fund 11.54% 18.40% 23.04% 17.58%
Investment return and principal value represent past performance and will vary.
Shares may be worth more or less at redemption than at original purchase.
9
<PAGE>
T. ROWE PRICE NEW AMERICA GROWTH FUND
- --------------------------------------------------------------------------------
Unaudited
FINANCIAL HIGHLIGHTS For a share outstanding throughout each period
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
6 Months Year
Ended Ended
6/30/99 12/31/98 12/31/97 12/31/96 12/31/95 12/31/94
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE
Beginning of period $ 47.79 $ 44.19 $ 38.37 $ 34.91 $ 25.42 $ 28.04
------------------------------------------------------------------
Investment activities
Net investment income (0.14) (0.21) (0.13) (0.13) (0.12) (0.07)
Net realized and
unrealized gain (loss) 5.37 7.65 8.15 7.08 11.36 (2.02)
------------------------------------------------------------------
Total from
investment activities 5.23 7.44 8.02 6.95 11.24 (2.09)
------------------------------------------------------------------
Distributions
Net realized gain - (3.84) (2.20) (3.49) (1.75) (0.53)
------------------------------------------------------------------
NET ASSET VALUE
End of period $ 53.02 $ 47.79 $ 44.19 $ 38.37 $ 34.91 $ 25.42
==================================================================
Ratios/Supplemental Data
- --------------------------------------------------------------------------------------------
Total return* 10.94% 17.89% 21.10% 20.01% 44.31% (7.43)%
- --------------------------------------------------------------------------------------------
Ratio of total expenses to
average net assets 0.96%+ 0.95% 0.96% 1.01% 1.07% 1.14%
- --------------------------------------------------------------------------------------------
Ratio of net investment
income to average
net assets (0.57)%+ (0.49)% (0.34)% (0.39)% (0.46)% (0.27)%
- --------------------------------------------------------------------------------------------
Portfolio turnover rate 28.4%+ 45.6% 43.2% 36.7% 56.2% 31.0%
- --------------------------------------------------------------------------------------------
Net assets, end of period
(in millions) $ 2,186 $ 2,064 $ 1,758 $ 1,440 $ 1,028 $ 646
- --------------------------------------------------------------------------------------------
</TABLE>
* Total return reflects the rate that an investor would have earned on an
investment in the fund during each period, assuming reinvestment of all
distributions.
+ Annualized
The accompanying notes are an integral part of these financial statements.
10
<PAGE>
T. ROWE PRICE NEW AMERICA GROWTH FUND
- --------------------------------------------------------------------------------
Unaudited June 30, 1999
STATEMENT OF NET ASSETS Shares Value
- -------------------------------------------------------------------
In thousands
COMMON STOCKS 98.1%
FINANCIAL SERVICES 14.6%
Bank and Trust 1.5%
Wells Fargo 775,000 $ 33,131
33,131
----------
Insurance 1.7%
ACE Limited 525,000 14,831
MGIC Investment 435,000 21,152
35,983
----------
Investment Services 4.8%
Franklin Resources 525,000 21,328
Goldman Sachs Group * 100,000 7,225
Morgan Stanley Dean Witter 400,000 41,000
Waddell & Reed Financial (Class A) 325,000 8,918
Waddell & Reed Financial (Class B) 1,000,000 27,000
105,471
----------
Other Financial Services 6.6%
Associates First Capital (Class A) 900,000 39,881
Fannie Mae 385,000 26,324
Freddie Mac 800,000 46,400
The CIT Group (Class A) 1,100,000 31,763
144,368
----------
Total Financial Services 318,953
----------
CONSUMER SERVICES 35.6%
Retailing/General Merchandisers 4.4%
Costco Companies * 500,000 40,016
Kroger * 1,400,000 39,112
Safeway * 344,100 17,033
-----------------------------------------------------------------
96,161
----------
Retailing/Specialty Merchandisers 9.2%
Circuit City Stores 675,000 62,775
Cole National (Class A) * + 1,000,000 7,938
CVS 236,000 11,977
General Nutrition * 369,100 8,593
Home Depot 705,000 45,429
11
<PAGE>
T. ROWE PRICE NEW AMERICA GROWTH FUND
- -------------------------------------------------------------------
Shares Value
- -------------------------------------------------------------------
In thousands
Office Depot * 2,437,500 $ 53,777
Williams-Sonoma * 340,000 11,836
----------
202,325
----------
Entertainment and Leisure 3.8%
Carnival (Class A) 450,000 21,825
Extended Stay America * 2,000,000 24,000
Premier Parks * 1,000,000 36,750
----------
82,575
----------
Restaurants/Food Distribution 1.8%
Outback Steakhouse * 1,000,000 39,219
----------
39,219
----------
Personal Services 8.4%
Apollo Group (Class A) * 1,750,000 46,429
Avis Rent A Car * 1,000,000 29,125
Cendant * 2,750,000 56,375
ServiceMaster 1,200,000 22,500
Sylvan Learning Systems * 1,050,000 28,547
----------
182,976
----------
Communications 8.0%
MCI Worldcom * 675,000 58,071
Vodafone ADR 287,500 56,637
Voicestream Wireless * 1,034,000 29,437
Western Wireless 1,125,000 30,410
----------
174,555
----------
Total Consumer Services 777,811
----------
BUSINESS SERVICES 47.4%
Health Care Services 3.4%
Cardinal Health 325,000 20,840
IMS Health 500,000 15,625
Omnicare 1,200,000 15,150
Total Renal Care Holdings * 1,500,000 23,344
----------
74,959
----------
Computer Services 11.9%
Acxiom * 1,250,000 31,211
Affiliated Computer Services (Class A) * 1,000,000 50,625
BISYS Group * 690,000 40,387
12
<PAGE>
T. ROWE PRICE NEW AMERICA GROWTH FUND
- --------------------------------------------------------------------------------
Shares Value
- -------------------------------------------------------------------
In thousands
Ceridian * 400,000 $ 13,075
First Data 875,000 42,820
Galileo International 900,000 48,094
SunGard Data Systems * 1,000,000 34,500
260,712
----------
Environmental Services 3.9%
Republic Services (Class A) * 1,300,000 32,175
Waste Management 1,000,000 53,750
85,925
----------
Other Business Services 10.4%
ADVO * 775,000 16,081
Catalina Marketing * 475,000 43,700
Concord EFS * 250,000 10,586
Equifax 540,100 19,275
Gartner Group (Class A) * 850,000 17,425
Interim Services * 1,200,000 24,750
Metamor Worldwide * 1,075,000 25,800
Modis Professional Services * 2,000,000 27,500
NOVA * 950,900 23,772
Paychex 562,500 17,895
226,784
----------
Energy Services 1.8%
Schlumberger 400,000 25,475
Smith International 300,000 13,031
38,506
----------
Media Services 15.0%
AT&T Liberty Media * 1,900,000 69,825
Chancellor Media * 1,000,000 55,094
Clear Channel Communications * 578,657 39,891
Comcast (Class A Special) 1,125,000 43,242
Fox Entertainment Group (Class A) * 1,200,000 32,325
Infinity Broadcasting (Class A) * 1,000,000 29,750
Outdoor Systems * 1,575,000 57,488
327,615
----------
Transportation Services 1.0%
Coach USA * 523,300 21,946
21,946
----------
Total Business Services 1,036,447
----------
13
<PAGE>
T. ROWE PRICE NEW AMERICA GROWTH FUND
- --------------------------------------------------------------------------------
Shares Value
- -------------------------------------------------------------------
In thousands
Total Miscellaneous Common Stocks 0.5% $ 12,353
----------
Total Common Stocks (Cost $1,274,279) 2,145,564
----------
SHORT-TERM INVESTMENTS 1.9%
Money Market Funds 1.9%
Reserve Investment Fund, 5.05% # 40,692,273 40,692
-----------------------------------------------------------------
Total Short-Term Investments (Cost $40,692) 40,692
----------
Total Investments in Securities
100.0% of Net Assets (Cost $1,314,971) $2,186,256
Other Assets Less Liabilities (506)
----------
NET ASSETS $2,185,750
==========
Net Assets Consist of:
Accumulated net investment income - net of
distributions $ (5,854)
Accumulated net realized gain/loss - net of
distributions 194,865
Net unrealized gain (loss) 871,285
Paid-in-capital applicable to 41,228,735 shares
of no par value capital stock outstanding; unlimited
number of shares authorized 1,125,454
----------
NET ASSETS $2,185,750
==========
NET ASSET VALUE PER SHARE $ 53.02
==========
+ Affiliated company
* Non-income producing
# Seven-day yield
ADR American Depository Receipt
The accompanying notes are an integral part of these financial statements.
14
<PAGE>
T. ROWE PRICE NEW AMERICA GROWTH FUND
- --------------------------------------------------------------------------------
Unaudited
STATEMENT OF OPERATIONS
- --------------------------------------------------------------------------------
In thousands
6 Months
Ended
6/30/99
Investment Income
Income
Dividend $ 2,636
Interest 1,308
----------
Total income 3,944
----------
Expenses
Investment management 6,854
Shareholder servicing 2,655
Prospectus and shareholder reports 140
Custody and accounting 83
Registration 49
Legal and audit 7
Trustees 6
Miscellaneous 9
----------
Total expenses 9,803
Expenses paid indirectly (5)
----------
Net expenses 9,798
----------
Net investment income (5,854)
----------
Realized and Unrealized Gain (Loss)
Net realized gain (loss) on securities 157,780
Change in net unrealized gain or loss on securities 65,712
----------
Net realized and unrealized gain (loss) 223,492
----------
INCREASE (DECREASE) IN NET
ASSETS FROM OPERATIONS $ 217,638
==========
The accompanying notes are an integral part of these financial statements.
15
<PAGE>
T ROWE PRICE NEW AMERICA GROWTH FUND
- --------------------------------------------------------------------------------
Unaudited
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
In thousands
6 Months Year
Ended Ended
6/30/99 12/31/98
Increase (Decrease) in Net Assets
Operations
Net investment income $ (5,854) $ (9,205)
Net realized gain (loss) 157,780 146,088
Change in net unrealized gain or loss 65,712 169,824
------------------------
Increase (decrease) in net assets from operations 217,638 306,707
------------------------
Distributions to shareholders
Net realized gain - (153,725)
------------------------
Capital share transactions*
Shares sold 189,610 553,381
Distributions reinvested - 149,481
Shares redeemed (285,946) (549,281)
------------------------
Increase (decrease) in net assets from capital
share transactions (96,336) 153,581
------------------------
Net Assets
Increase (decrease) during period 121,302 306,563
Beginning of period 2,064,448 1,757,885
------------------------
End of period $2,185,750 $2,064,448
========================
*Share information
Shares sold 3,904 11,747
Distributions reinvested - 3,508
Shares redeemed (5,874) (11,832)
------------------------
Increase (decrease) in shares outstanding (1,970) 3,423
The accompanying notes are an integral part of these financial statements.
16
<PAGE>
T. ROWE PRICE NEW AMERICA GROWTH FUND
- --------------------------------------------------------------------------------
Unaudited June 30, 1999
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
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 and commenced operations on September 30, 1985.
The accompanying financial statements are prepared in accordance with generally
accepted accounting principles for the investment company industry; these
principles may require the use of estimates by fund management.
Valuation Equity securities listed or regularly traded on a securities
exchange are valued at the last quoted sales price on the day the valuations are
made. A security which is listed or traded on more than one exchange is valued
at the quotation on the exchange determined to be the primary market for such
security. Listed securities not traded on a particular day and securities
regularly traded in the over-the-counter market are valued at the mean of the
latest bid and asked prices. Other equity securities are valued at a price
within the limits of the latest bid and asked prices deemed by the Board of
Trustees, or by persons delegated by the Board, best to reflect fair value.
Investments in mutual funds are valued at closing net asset value per share of
the mutual fund on the day of valuation.
Assets and liabilities for which the above valuation procedures are
inappropriate or are deemed not to reflect fair value are stated at fair value
as determined in good faith by or under the supervision of the officers of the
fund, as authorized by the Board of Trustees.
Affiliated Companies As defined by the Investment Company Act of 1940, an
affiliated company is one in which the fund owns at least 5% of the outstanding
voting securities.
Other Income and expenses are recorded on the accrual basis. Investment
transactions are accounted for on the trade date. Realized gains and losses are
reported on the identified cost basis. Dividend income and distributions to
shareholders are recorded by the fund on the ex-dividend date. Income and
capital gain distributions are determined in accordance with federal income tax
regulations and may differ from those determined in accordance with generally
accepted accounting principles. Expenses paid indirectly reflect credits earned
on daily, uninvested cash balances at the custodian, used to reduce the fund's
custody credits.
17
<PAGE>
T. ROWE PRICE NEW AMERICA GROWTH FUND
- --------------------------------------------------------------------------------
Note 2 - Investment Transactions
Purchases and sales of portfolio securities, other than short-term securities,
aggregated $288,230,000 and $426,883,000, respectively, for the six months ended
June 30, 1999.
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, 1999, the cost of investments for federal income tax purposes was
substantially the same as for financial reporting and totaled $1,314,971,000.
Net unrealized gain aggregated $871,286,000 at period-end, of which $915,850,000
related to appreciated investments and $44,564,000 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 $1,166,000 was payable at June 30, 1999. The fee is computed daily and
paid monthly, and consists of an individual fund fee equal to 0.35% of average
daily net assets and a group fee. The group fee is based on the combined assets
of certain mutual funds sponsored by the manager or Rowe Price-Fleming
International, Inc. (the group). The group fee rate ranges from 0.48% for the
first $1 billion of assets to 0.30% for assets in excess of $80 billion. At June
30, 1999, and for the six months then ended, the effective annual group fee rate
was 0.32%. The fund pays a pro-rata share of the group fee based on the ratio of
its net assets to those of the group.
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
18
<PAGE>
T. ROWE PRICE NEW AMERICA GROWTH FUND
- --------------------------------------------------------------------------------
invested in the fund. The fund incurred expenses pursuant to these related party
agreements totaling approximately $2,274,000 for the six months ended June 30,
1999, of which $452,000 was payable at period-end.
The fund may invest in the Reserve Investment Fund and Government Reserve
Investment Fund (collectively, the Reserve Funds), open-end management
investment companies managed by T. Rowe Price Associates, Inc. The Reserve Funds
are offered as cash management options only to mutual funds and other accounts
managed by T. Rowe Price and its affiliates and are not available to the public.
The Reserve Funds pay no investment management fees. Distributions from the
Reserve Funds to the fund for the six months ended June 30, 1999, totaled
$1,308,000 and are reflected as interest income in the accompanying Statement of
Operations.
19
<PAGE>
T. ROWE PRICE SHAREHOLDER SERVICES
- --------------------------------------------------------------------------------
INVESTMENT SERVICES AND INFORMATION
KNOWLEDGEABLE SERVICE REPRESENTATIVES
By Phone 1-800-225-5132 Available Monday through Friday from 8 a.m. to
10 p.m. ET and weekends from 8:30 a.m. to 5 p.m. ET.
In Person Available in T. Rowe Price Investor Centers.
ACCOUNT SERVICES
Checking Available on most fixed income funds ($500 minimum).
Automatic Investing From your bank account or paycheck.
Automatic Withdrawal Scheduled, automatic redemptions.
Distribution Options Reinvest all, some, or none of your
distributions.
Automated 24-Hour Services Including Tele*Access(R) and the T. Rowe
Price Web site on the Internet. Address: www.troweprice.com
BROKERAGE SERVICES*
Individual Investments Stocks, bonds, options, precious metals, and
other securities at a savings over full-service commission rates.**
INVESTMENT INFORMATION
Combined Statement Overview of all your accounts with T. Rowe Price.
Shareholder Reports Fund managers' reviews of their strategies and
results.
T. Rowe Price Report Quarterly investment newsletter discussing
markets and financial strategies.
Performance Update Quarterly review of all T. Rowe Price fund results.
Insights Educational reports on investment strategies and financial
markets.
Investment Guides Asset Mix Worksheet, College Planning Kit,
Diversifying Overseas: A Guide to International Investing, Personal
Strategy Planner, Retirees Financial Guide, and Retirement Planning
Kit.
* T. Rowe Price Brokerage is a division of T. Rowe Price Investment
Services, Inc., Member NASD/SIPC.
** Based on a January 1999 survey for representative-assisted stock
trades. Services vary by firm, and commissions may vary depending
on size of order.
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 500
Extended Equity Market Index
Financial Services
Growth & Income
Growth Stock
Health Sciences
Media & Telecommunications
Mid-Cap Growth
Mid-Cap Value
New America Growth
New Era
New Horizons*
Real Estate
Science & Technology
Small-Cap Stock
Small-Cap Value
Spectrum Growth
Total Equity Market Index
Value
International/Global
Emerging Markets Stock
European Stock
Global Stock
International Discovery
International Growth & Income
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 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 Intermediate Bond***
Tax-Free Short-Intermediate
Virginia Short-Term
Tax-Free Bond
Virginia Tax-Free Bond
International/Global
Emerging Markets Bond
Global Bond
International Bond
MONEY MARKET FUNDS+
- ---------------------------------------
Taxable
Prime Reserve
Summit Cash Reserves
U.S. Treasury Money
Tax-Free
California Tax-Free Money
New York Tax-Free Money
Summit Municipal
Money Market
Tax-Exempt Money
BLENDED ASSET FUNDS
- ---------------------------------------
Balanced
Personal Strategy Balanced
Personal Strategy Growth
Personal Strategy Income
Tax-Efficient Balanced
T. ROWE PRICE NO-LOAD
VARIABLE ANNUITY
- ---------------------------------------
Equity Income Portfolio
International Stock Portfolio
Limited-Term Bond Portfolio
Mid-Cap Growth Portfolio
New America Growth Portfolio
Personal Strategy Balanced Portfolio
Prime Reserve Portfolio
* Closed to new investors. ** Formerly named Florida Insured Intermediate
Tax-Free. *** Formerly named Tax-Free Insured Intermediate Bond.
+ Investments in the funds are not insured or guaranteed by the FDIC or any
other government agency. Although the funds seek to preserve the value of your
investment at $1.00 per share, it is possible to lose money by investing in the
funds.
Please call for a prospectus. Read it carefully before investing.
The T. Rowe Price No-Load Variable Annuity [#V6021] is issued by Security
Benefit Life Insurance Company. In New York, it [#FSB201(11-96)] is issued by
First Security Benefit Life Insurance Company of New York, White Plains, NY. T.
Rowe Price refers to the underlying portfolios' investment managers and the
distributors, T. Rowe Price Investment Services, Inc.; T. Rowe Price Insurance
Agency, Inc.; and T. Rowe Price Insurance Agency of Texas, Inc. The Security
Benefit Group of Companies and the T. Rowe Price companies are not affiliated.
The variable annuity may not be available in all states. The contract has
limitations. Call a representative for costs and complete details of the
coverage.
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 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 appropriate
to the fund or funds covered in this
report.
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
4200 West Cypress St.
10th Floor
Tampa, FL 33607
4410 ArrowsWest Drive
Colorado Springs, CO 80907
Warner Center
21800 Oxnard Street, Suite 270
Woodland Hills, CA 91367
Invest With Confidence(R) [LOGO APPEARS HERE]
T. Rowe Price
T. Rowe Price Investment Services, Inc., Distributor. F60-051 6/30/99
