<PAGE>
- --------------------------------------------------------------------------------
Fellow Shareholders
- --------------------------------------------------------------------------------
The U.S. stock market and the Growth Stock Fund continued to rally sharply
during the second quarter. Your fund turned in excellent performances for both
the three- and six-month periods ended June 30, 1995, although returns lagged
the unmanaged Standard & Poor's 500 Stock Index primarily because of the fund's
substantial international exposure.
- --------------------------------------------------------------------------------
Performance Comparison
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Periods Ended 6/30/95
3 Months 6 Months
----------------------
<S> <C> <C>
Growth Stock Fund 8.2% 16.3%
S&P 500 9.6 20.2
</TABLE>
- --------------------------------------------------------------------------------
MARKET ENVIRONMENT
The second quarter was virtually a carbon copy of the first. Stocks advanced
almost 10% on the strength of strong performance from technology and financial
issues. Buoyed by rising bond prices and expectations of a soft landing for the
economy, the stock market surged to close out the first half of the year in
record territory for all the major indices.
Recent weakness in consumer spending, combined with a troublesome buildup
of inventories, has triggered fears of a recession, prompting the Federal
Reserve to cut the key fed funds rate after the quarter ended. The big question
now is whether a genuine recession is imminent or the Fed has succeeded in
navigating the economy toward a much-heralded soft landing.
The data we have seen so far seem to favor the soft-landing scenario.
Consumer sentiment is fairly strong, unemployment is well below the levels
reached in the 1990-91 recession, and manufacturers' shipments remain steady.
Record stock market prices suggest that corporate profits will be strong
throughout the year. However, the weakest groups at the moment are those whose
earnings growth is tied closely to current economic activity, such as retail,
restaurants, automotive, and housing.
As in 1994, foreign stocks have lagged the domestic market so far this
year, hindering fund performance to some extent because of our 26% position in
international issues. European stocks generated single-digit returns on average
in local currency terms, although the weak dollar boosted performance for U.S.
investors. Far Eastern markets registered disappointing returns earlier in the
year, followed by rallies in most Asian markets except for Japan. The major
arena of foreign underperformance was Latin America, particularly Mexico.
PORTFOLIO MANAGEMENT
Within your fund's portfolio, retail stocks such as TOYS "R" US and DAYTON
HUDSON sharply lagged the overall market. Strongest performance came from
financial stocks with stable income streams aided by lower interest rates,
including FREDDIE MAC and FANNIE MAE. Technology issues also soared, riding a
five-year boom in capital spending. Holdings in LOTUS DEVELOPMENT, which agreed
to be bought by IBM, MICROSOFT, and ORACLE contributed positively to fund
performance.
In the quarter, we added to existing holdings in insurance stocks UNUM and
ACE and initiated a new position in PMI GROUP. We believe the financial sector
continues to offer good value, since the Fed recently eased for the first time
in three years. Also, with the emphasis in Washington on deficit reduction and
tighter fiscal policy, looser monetary posture through lower rates remains the
most expedient way to stimulate economic growth.
We added to our holding in biotechnology stock GENENTECH and initiated new
positions in pharmaceutical stocks MERCK and SMITHKLINE BEECHAM on the thesis
that their stable earnings streams, which are relatively unaffected by economic
slowing, will attract investor interest.
On the sales side of the ledger, we took profits in some technology stocks
by trimming
<PAGE>
positions in LOTUS, SYBASE, and NORTHERN TELECOM.
INVESTMENT OUTLOOK
We have enjoyed the runup in stock prices that has elevated price/earnings
multiples to levels that typically accompany a sharp drop in interest rates. At
this juncture, we believe the overall stock market is fully valued and could
experience more volatility such as occurred after the close of the reporting
period. Continued progress in corporate earnings growth is necessary to justify
current valuations, and it would not be surprising to see a pullback in stock
prices in the near term.
However, the companies in your fund's portfolio should benefit from strong
earnings in coming months, making their stock valuations relatively attractive.
Therefore, we anticipate continuing good returns going forward, despite the
powerful surge in prices so far this year.
Respectively submitted,
/s/ John Gillespie
John Gillespie
President and Chairman of the
Investment Advisory Committee
July 19, 1995
- --------------------------------------------------------------------------------
Twenty-Five Largest Holdings
- --------------------------------------------------------------------------------
June 30, 1995
<TABLE>
<CAPTION>
Percent of
Company Net Assets
- -------------------------------------------------------------------- ----------
<S> <C>
Freddie Mac 4.5%
GE 2.3
Berkshire Hathaway 1.9
Vodafone 1.8
Schlumberger 1.8
Great Lakes Chemical 1.8
UNUM 1.7
First Financial Management 1.6
Hutchison Whampoa 1.4
Disney 1.3
PartnerRe Holdings 1.3
Danaher 1.3
Reuters 1.3
Fannie Mae 1.2
Reader's Digest 1.2
Microsoft 1.1
Time Warner 1.1
AlliedSignal 1.1
Viacom 1.1
Scott Paper 1.0
Exide 1.0
Royal Dutch Petroleum 1.0
ACE Limited 1.0
Norwest 1.0
Elsevier 1.0
- --------------------------------------------------------------------------------
Total 36.8%
================================================================================
</TABLE>
- --------------------------------------------------------------------------------
Average Annual Compound Total Return
- --------------------------------------------------------------------------------
Periods Ended June 30, 1995
<TABLE>
<CAPTION>
1 Year 5 Years 10 Years
-------- --------- ----------
<S> <C> <C>
21.77% 11.46% 13.55%
================================================================================
</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.
2
<PAGE>
- --------------------------------------------------------------------------------
Major Portfolio Changes
- --------------------------------------------------------------------------------
Three Months Ended June 30, 1995
- --------------------------------------------------------------------------------
TEN LARGEST PURCHASES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Cost (000)
-------------
<S> <C>
Exide* $18,043
SmithKline Beecham* 17,653
Merck* 17,197
Genentech 14,657
BMC Software* 13,380
Royal Dutch Petroleum 12,007
PMI Group* 11,284
Starwood Lodging* 10,760
UNUM 10,335
Vodafone ADR 10,317
================================================================================
</TABLE>
- --------------------------------------------------------------------------------
TEN LARGEST SALES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Proceeds (000)
--------------
<S> <C>
Lotus Development $16,170
Foundation Health** 14,879
Sybase 12,323
Jones Apparel Group** 11,587
Northern Telecom 11,491
Dun & Bradstreet** 10,503
Boston Scientific 9,232
Harcourt General** 8,021
Berliner Bank** 7,940
Biogen** 7,384
================================================================================
</TABLE>
* Position added
** Position eliminated
3
<PAGE>
- --------------------------------------------------------------------------------
Statement of Net Assets
T. Rowe Price Growth Stock Fund / June 30, 1995 (Unaudited)
- --------------------------------------------------------------------------------
(values in thousands)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Common Stocks, Rights
& Warrants--93.0%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FINANCIAL -- 19.7%
- --------------------------------------------------------------------------------
Value
-----------
<S> <C> <C>
BANK & TRUST -- 5.7%
5,000,000 shs. Banca Fideuram (ITL)........................ $ 5,678
19,255,073 rts. *Banco Bradesco (BRL)........................ 22
609,886 shs. Cho Hung Bank (KRW)......................... 7,239
257,140 Deutsche Bank (DEM)......................... 12,514
5,910 wts. *Deutsche Bank, 6/30/97 (DEM)................ 139
1,875,000 shs. Lippo Bank (IDR)............................ 3,305
97,941,200 Lojas American (BRL)........................ 2,229
250,000 Mellon Bank................................. 10,406
300,000 NationsBank................................. 16,087
394,700 Northern Trust.............................. 15,788
825,000 Norwest..................................... 23,719
140 *Seoul Access Trust.......................... 2,135
55,000 Societe Generale de France
(FRF).................................... 6,428
8,320 Societe Generale de
Surveillance (CHF)....................... 14,451
600,000 Swedbank (SEK).............................. 5,075
750,000 Toronto-Dominion
Bank (CAD)............................... 11,603
136,818
INSURANCE -- 5.5%
825,000 ACE Limited................................. 23,925
7,500 Alfa........................................ 90
210,000 Citizens Corp............................... 3,439
169,500 Foremost.................................... 6,526
250,000 *Fund American Enterprises................... 17,844
100,000 Horace Mann Educators....................... 2,300
1,055,409 ++PartnerRe Holdings.......................... 24,696
531,665 wts. *++PartnerRe Holdings,
11/04/00................................. 5,678
150,000 shs. PMI Group................................... 6,506
850,000 UNUM........................................ 39,844
130,848
FINANCIAL SERVICES -- 8.5%
400,000 AMBAC....................................... 16,050
700,000 Countrywide Credit.......................... 14,700
109,400 *Fairfax Financial (CAD)..................... 6,292
305,100 Fannie Mae.................................. 28,794
1,554,600 Freddie Mac................................. 106,879
203,600 H&R Block................................... 8,373
225,000 shs. Quick & Reilly.............................. $ 8,156
545,000 *Zurich Reinsurance.......................... 15,601
204,845
TOTAL FINANCIAL 472,511
- --------------------------------------------------------------------------------
UTILITIES -- 1.4%
- --------------------------------------------------------------------------------
TELEPHONE -- 1.4%
350,000 Sprint...................................... 11,769
2,000,000 Telecom Italia (ITL)........................ 5,421
2,900,000 Telecom Italia, savings
shares (ITL)............................. 6,132
1,500,000 Telekom Malaysia (MYR)...................... 11,382
TOTAL UTILITIES 34,704
- --------------------------------------------------------------------------------
CONSUMER NONDURABLES -- 15.1%
- --------------------------------------------------------------------------------
COSMETICS -- 0.7%
350,000 International Flavors &
Fragrances............................... 17,412
BEVERAGES -- 1.6%
350,000 Grolsch (NLG)............................... 12,288
50,000 LVMH (FRF).................................. 8,998
375,000 PepsiCo..................................... 17,109
38,395
FOOD PROCESSING -- 0.5%
168,500 McCormick................................... 3,644
300,000 Sara Lee.................................... 8,550
12,194
HOSPITAL SUPPLIES/HOSPITAL
MANAGEMENT -- 2.3%
500,000 Abbott Laboratories......................... 20,250
700,000 *Boston Scientific........................... 22,312
250,000 St. Jude Medical............................ 12,516
55,078
PHARMACEUTICALS -- 6.3%
15,000 Ares-Serono (CHF)........................... 8,793
500,000 Astra (Class B) (SEK)....................... 15,060
50,000 *Chiron...................................... 3,237
400,000 *Genentech................................... 19,450
2,162,234 Medeva (GBP)................................ 8,598
80,000 Medeva ADR.................................. 1,330
400,000 Merck....................................... 19,600
500,000 Mylan Laboratories.......................... 15,375
250,000 Pfizer...................................... 23,094
22,000 Sandoz (CHF)................................ 15,170
65,000 *Schwarz Pharma (DEM)........................ 2,726
400,000 SmithKline Beecham ADR...................... 18,100
150,533
</TABLE>
4
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C>
MISCELLANEOUS CONSUMER
PRODUCTS -- 3.7%
700,000 shs. American Greetings (Class A)................ $ 20,519
225,000 *CUC International........................... 9,450
475,000 Hasbro...................................... 15,081
600,000 Newell...................................... 14,700
150,000 Philip Morris............................... 11,156
402,500 Sunbeam-Oster............................... 5,585
100,000 Unilever N.V. ADR........................... 13,012
89,503
TOTAL CONSUMER NONDURABLES....................................... 363,115
- --------------------------------------------------------------------------------
CONSUMER SERVICES -- 19.1%
- --------------------------------------------------------------------------------
GENERAL MERCHANDISERS -- 0.6%
200,000 Dayton Hudson............................... 14,350
SPECIALTY MERCHANDISERS -- 2.6%
1,800,000 CML Group................................... 14,175
400,000 *Department 56............................... 15,300
200,000 *Federated Department Stores................. 5,150
225,000 *Home Shopping Network....................... 1,912
663,600 J. Baker.................................... 6,636
700,000* Toys "R" Us................................. 20,475
63,648
ENTERTAINMENT & LEISURE -- 5.7%
550,000 Disney...................................... 30,594
7,000,000 Hutchison Whampoa (HKD)..................... 33,834
450,000 McDonald's.................................. 17,606
437,400 Reader's Digest (Class A),
non-voting................................ 19,300
218,100 Reader's Digest (Class B)................... 8,915
600,000 rts. *Viacom...................................... 900
174,000 shs. *Viacom (Class A)............................ 8,091
381,845 *Viacom (Class B)............................ 17,708
136,948
MEDIA & COMMUNICATIONS -- 10.2%
800,000 American Media (Class A).................... 5,500
200,000 Capital Cities/ABC.......................... 21,600
2,000,000 Elsevier (NLG).............................. 23,621
509,000 *Franklin Quest.............................. 12,216
525,000 Gaylord Entertainment....................... 13,256
1,750,000 Granada (GBP)............................... 16,979
350,000 *Mobile Telecommunication
Technologies............................. 9,559
240,000 *Multimedia.................................. 9,300
600,000 Reuters ADR................................. 30,038
650,000 Time Warner................................. 26,731
200,000 Turner Broadcasting
Systems (Class B)........................ 4,100
700,000 *United International
Holdings (Class A)....................... 11,463
20,000 VNU (NLG)................................... 2,394
2,600,000 shs. Vodafone (GBP).............................. $ 9,677
900,000 Vodafone ADR................................ 34,088
150,176 Wolters Kluwer (NLG)........................ 13,249
243,771
TOTAL CONSUMER SERVICES.......................................... 458,717
- --------------------------------------------------------------------------------
CONSUMER CYCLICALS -- 0.8%
- --------------------------------------------------------------------------------
AUTOMOBILES & RELATED -- 0.1%
170,000 Ek Chor China Motorcycle.................... 2,741
BUILDING & REAL ESTATE -- 0.7%
5,113,545 Hopewell Holdings (HKD)..................... 4,329
467,400 *Starwood Lodging, REIT...................... 10,984
15,313
TOTAL CONSUMER CYCLICALS 18,054
- --------------------------------------------------------------------------------
TECHNOLOGY -- 6.0%
- --------------------------------------------------------------------------------
ELECTRONIC COMPONENTS -- 1.3%
150,000 Linear Technology........................... 9,862
320,000 *Maxim Integrated Products................... 16,320
50,000 *Xilinx...................................... 4,694
30,876
ELECTRONIC SYSTEMS -- 0.4%
135,600 Hewlett-Packard............................. 10,102
OFFICE AUTOMATION -- 0.7%
450,000 *Ceridian.................................... 16,594
SPECIALIZED COMPUTER -- 0.3%
200,000 *Silicon Graphics............................ 7,975
TELECOMMUNICATIONS -- 1.5%
200,000 *BroadBand Technologies...................... 5,000
480,000 LM Ericsson (Class B) ADR................... 9,630
300,000 Northern Telecom............................ 10,950
3,000,000 Telmex (Class A) (MXN)...................... 4,435
4,500,000 Telmex (Class L) (MXN)...................... 6,653
36,668
AEROSPACE & DEFENSE -- 1.8%
600,000 AlliedSignal................................ 26,700
250,000 Boeing...................................... 15,656
42,356
TOTAL TECHNOLOGY 144,571
- --------------------------------------------------------------------------------
CAPITAL EQUIPMENT -- 9.1%
- --------------------------------------------------------------------------------
ELECTRICAL EQUIPMENT -- 4.3%
100,000 Emerson Electric............................ 7,150
570,200 Exide....................................... 24,519
1,000,000 GE.......................................... 56,375
315,743 Getronics (NLG)............................. 15,466
103,510
</TABLE>
5
<PAGE>
- --------------------------------------------------------------------------------
T. Rowe Price Growth Stock Fund / Statement of Net Assets (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C>
MACHINERY -- 4.8%
900,000 shs. *Coltec Industries........................... $ 15,525
1,000,000 Danaher..................................... 30,250
200,000 Greenfield Industries....................... 5,750
54,500 Mannesmann (DEM)............................ 16,651
9,300 S I G Schweis (CHF)......................... 21,726
307,500 Teleflex.................................... 13,222
500,000 TriMas...................................... 11,500
114,624
TOTAL CAPITAL EQUIPMENT.......................................... 218,134
- --------------------------------------------------------------------------------
BUSINESS SERVICES & TRANSPORTATION -- 9.4%
- --------------------------------------------------------------------------------
COMPUTER SERVICE & SOFTWARE -- 6.9%
300,000 Adobe Systems............................... 17,475
300,000 Automatic Data Processing................... 18,863
65,000 *Baan Company ADR............................ 2,007
173,000 *BMC Software................................ 13,321
450,000 First Financial Management.................. 38,475
242,000 *Intuit...................................... 18,407
114,200 *Lotus Development........................... 7,288
300,000 *Microsoft................................... 27,131
450,000 *Oracle Systems.............................. 17,353
180,000 *Sybase...................................... 5,231
165,551
MISCELLANEOUS BUSINESS
SERVICES -- 1.7%
350,000 Assa-Abloy (SEK)............................ 1,829
400,000 Interpublic Group........................... 15,000
176,400 Mutual Risk Management...................... 5,910
202,500 Paychex..................................... 7,391
350,000 Securitas (Class B) (SEK)................... 12,130
42,260
AIRLINES -- 0.8%
2,500,000 Swire Pacific (Class A) (HKD)............... 19,062
TOTAL BUSINESS SERVICES & TRANSPORTATION......................... 226,873
- --------------------------------------------------------------------------------
ENERGY -- 4.5%
- --------------------------------------------------------------------------------
ENERGY SERVICES -- 3.1%
452,000 *BJ Services................................. 10,283
150,000 Camco International......................... 3,506
500,000 Halliburton................................. 17,875
700,000 Schlumberger................................ 43,488
75,152
EXPLORATION & PRODUCTION -- 0.2%
313,000 *Kirby Corporation........................... 4,969
INTEGRATED PETROLEUM-
DOMESTIC -- 0.2%
200,000 Union Texas Petroleum....................... 4,225
INTEGRATED PETROLEUM-
INTERNATIONAL -- 1.0%
200,000 shs. Royal Dutch Petroleum ADR................... $ 24,375
TOTAL ENERGY 108,721
- --------------------------------------------------------------------------------
PROCESS INDUSTRIES -- 4.3%
- --------------------------------------------------------------------------------
DIVERSIFIED CHEMICALS -- 0.6%
300,000 Hercules.................................... 14,625
SPECIALTY CHEMICALS -- 2.0%
700,000 Great Lakes Chemical........................ 42,175
130,000 Sigma Aldrich............................... 6,386
48,561
PAPER & PAPER PRODUCTS -- 1.7%
400,000 Albany International
(Class A)................................ 9,550
510,000 Kimberly-Clark Mexico
(Class A) (MXN).......................... 5,843
500,000 Scott Paper................................. 24,750
40,143
TOTAL PROCESS INDUSTRIES......................................... 103,329
- --------------------------------------------------------------------------------
BASIC MATERIALS -- 0.8%
- --------------------------------------------------------------------------------
METALS -- 0.7%
73,500 Ashanti Goldfields (144a)
GDR...................................... 1,695
150,000 Nucor....................................... 8,025
128,000 Pohang Iron & Steel ADR..................... 3,776
210,000 Usiminas (144a) ADR......................... 2,310
15,806
MISCELLANEOUS BASIC MATERIALS -- 0.1%
225,000 Cemex ADR................................... 1,617
TOTAL BASIC MATERIALS 17,423
- --------------------------------------------------------------------------------
CONGLOMERATES -- 2.8%
- --------------------------------------------------------------------------------
55,466 AGAB (DEM).................................. 6,020
6,400 wts. *AGAB, 3/11/96 (DEM)......................... 5
1,970 shs. *Berkshire Hathaway.......................... 46,196
306,186 Hagemeyer (NLG)............................. 13,654
25,000 Maculan (ATS)............................... 963
TOTAL CONGLOMERATES 66,838
TOTAL COMMON STOCKS, RIGHTS & WARRANTS
(COST $1,489,051) 2,232,990
</TABLE>
6
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Preferred Stocks -- 0.5%
- --------------------------------------------------------------------------------
<S> <C> <C>
1,066,289,693 shs. Banco Bradesco (BRL)........................ $ 9,035
591 Deutsche Bank, 8.75%,
participating
certificates (DEM)....................... 484
357 Deutsche Bank, 9.00%,
participating
certificates (DEM)....................... 300
55,966,400 Lojas American (BRL)........................ 1,246
35,000 Maculan (ATS)............................... 1,279
TOTAL PREFERRED STOCKS (COST $10,910)............................ 12,344
- --------------------------------------------------------------------------------
Convertible Bonds -- 0.1%
- --------------------------------------------------------------------------------
$ 1,100,000 J. Baker, 7.00%, 6/1/02..................... 976
2,000,000 Reliance Industries,
3.50%, 11/3/99........................... 2,170
TOTAL CONVERTIBLE BONDS (COST $3,503)............................ 3,146
- --------------------------------------------------------------------------------
Corporate Bonds -- 0.1%
- --------------------------------------------------------------------------------
1,600,000 DEM AGAB, 8.875%, 4/9/96........................ 1,163
TOTAL CORPORATE BONDS (COST $929)................................ 1,163
- --------------------------------------------------------------------------------
Short-Term Investments -- 8.6%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
BANK NOTES -- 1.7%
- --------------------------------------------------------------------------------
$ 10,000,000 Bank New York,
6.52%, 8/15/95........................... 10,010
10,000,000 Fifth Third Bank,
6.21%, 10/27/95.......................... 10,000
10,000,000 First Union National Bank,
6.12%, 7/31/95........................... 10,002
10,000,000 Wachovia Bank N.A.,
5.375%, 10/31/95......................... 9,966
39,978
- --------------------------------------------------------------------------------
CERTIFICATES OF DEPOSIT -- 0.4%
- --------------------------------------------------------------------------------
10,000,000 MBNA America Bank N.A.,
6.00%, 7/7/95............................ 10,000
- --------------------------------------------------------------------------------
COMMERCIAL PAPER -- 6.1%
- --------------------------------------------------------------------------------
8,000,000 Air Products & Chemicals,
5.95%, 8/4/95............................ 7,948
10,000,000 American Express,
6.02%, 7/18/95........................... 9,850
$ 10,000,000 Asset Securitization
Cooperative, 4(2),
5.95%, 7/26/95........................... $ 9,929
10,000,000 AT&T, 6.00%, 10/11/95....................... 9,717
10,000,000 Bell Atlantic Financial Services,
5.95%, 7/28/95........................... 9,947
193,000 Cargill Financial Services,
6.10%, 7/3/95............................ 193
10,000,000 Chase Manhattan,
6.03%, 7/18/95........................... 9,849
10,000,000 Ciesco L.P., 4(2),
6.01%, 7/21/95........................... 9,846
10,000,000 Countrywide Funding,
6.00%, 7/17/95........................... 9,948
10,000,000 Dover, 4(2), 5.95%, 7/17/95................. 9,942
10,000,000 Mobil Australia Finance,
4(2), 5.97%, 7/11/95..................... 9,977
21,000,000 New Center Asset Trust,
5.95 - 6.30%,
7/3 - 8/3/95............................. 20,893
10,000,000 PHH, 5.95%, 7/28/95......................... 9,942
10,000,000 Raytheon, 4(2), 6.00%,
7/6/95................................... 9,978
10,000,000 Yale University,
6.00%, 7/12/95........................... 9,882
147,841
- --------------------------------------------------------------------------------
MEDIUM-TERM NOTES -- 0.4%
- --------------------------------------------------------------------------------
10,000,000 Wells Fargo, VR, 6.062%,
9/20/95.................................. 9,998
TOTAL SHORT-TERM INVESTMENTS (COST $207,817) 207,817
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS IN SECURITIES -- 102.3%
OF NET ASSETS (COST $1,712,210) $2,457,460
- --------------------------------------------------------------------------------
OTHER ASSETS LESS LIABILITIES.................................... (55,851)
------
NET ASSETS CONSIST OF: Value
-----------
Accumulated net investment
income-net of distributions........ 16,276
Accumulated net realized
gain/loss-net of distributions..... 76,548
Net unrealized gain (loss)........... 745,361
Paid-in-capital applicable to
110,179,627 shares of $1.00 par
value capital stock outstanding;
200,000,000 shares authorized...... 1,563,424
-----------
NET ASSETS $2,401,609
==========
NET ASSET VALUE PER SHARE $21.80
======
- --------------------------------------------------------------------------------
</TABLE>
7
<PAGE>
- --------------------------------------------------------------------------------
T. Rowe Price Growth Stock Fund / Statement of Net Assets (Unaudited)
- --------------------------------------------------------------------------------
* Non-income producing
++ Securities contain some restrictions as to public resale--total of such
securities at period-end amounts to 1.3% of net assets.
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
0.2% of net assets.
ATS Austrian schilling
BRL Brazilian real
CAD Canadian dollar
CHF Swiss franc
DEM German deutschemark
FRF French franc
GBP British sterling
HKD Hong Kong dollar
IDR Indonesian rupia
ITL Italian lira
KRW S. Korean won
MXN Mexican peso
MYR Malaysian ringgit
NLG Dutch guilder
SEK Swedish krona
The accompanying notes are an integral part of these financial statements.
8
<PAGE>
- --------------------------------------------------------------------------------
Statement of Operations
- --------------------------------------------------------------------------------
T. Rowe Price Growth Stock Fund / Six Months Ended June 30, 1995 (Unaudited)
(in thousands)
<TABLE>
<S> <C>
INVESTMENT INCOME
Income
Dividend (net of foreign taxes of $1,039)............................ $ 19,409
Interest............................................................. 5,582
---------
Total income......................................................... 24,991
---------
Expenses
Investment management................................................ 6,515
Shareholder servicing................................................ 1,916
Custodian and accounting............................................. 207
Prospectus and shareholder reports................................... 91
Registration......................................................... 35
Directors............................................................ 23
Legal and audit...................................................... 21
Miscellaneous........................................................ 27
---------
Total expenses....................................................... 8,835
---------
Net investment income................................................... 16,156
---------
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Securities........................................................... 47,656
Foreign currency transactions........................................ (93)
---------
Net realized gain (loss)............................................. 47,563
---------
Change in net unrealized gain or loss on:
Securities........................................................... 274,119
Other assets and liabilities denominated in foreign currencies....... 109
---------
Change in net unrealized gain or loss................................ 274,228
---------
Net realized and unrealized gain (loss)................................. 321,791
---------
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS....................... $ 337,947
=========
- -------------------------------------------------------------------------------------
</TABLE>
9
The accompanying notes are an integral part of these financial statements.
<PAGE>
- --------------------------------------------------------------------------------
Statement of Changes in Net Assets
- --------------------------------------------------------------------------------
T. Rowe Price Growth Stock 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........................................................... $ 16,156 $ 18,277
Net realized gain (loss)........................................................ 47,563 193,195
Change in net unrealized gain or loss........................................... 274,228 (195,749)
----------- -------------
Increase (decrease) in net assets from operations............................... 337,947 15,723
----------- -------------
Distributions to shareholders
Net investment income........................................................... -- (18,157)
Net realized gain............................................................... -- (167,419)
----------- -------------
Decrease in net assets from distributions....................................... -- (185,576)
----------- -------------
Capital share transactions*
Shares sold..................................................................... 167,931 316,804
Distributions reinvested........................................................ -- 175,609
Shares redeemed................................................................. (171,789) (230,594)
----------- -------------
Increase (decrease) in net assets from capital share transactions............... (3,858) 261,819
----------- -------------
Increase (decrease) in net assets.................................................. 334,089 91,966
NET ASSETS
Beginning of period................................................................ 2,067,520 1,975,554
----------- -------------
End of period...................................................................... $ 2,401,609 $2,067,520
=========== =============
- ------------------------------------------------------------------------------------------------------------------------------------
*Share information
Shares sold..................................................................... 8,427 15,480
Distributions reinvested........................................................ -- 9,421
Shares redeemed................................................................. (8,519) (11,357)
----------- -------------
Increase (decrease) in shares outstanding....................................... (92) 13,544
=========== =============
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
10
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements
- --------------------------------------------------------------------------------
T. Rowe Price Growth Stock Fund / June 30, 1995 (Unaudited)
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
T. Rowe Price Growth Stock Fund (the fund) is registered under the Investment
Company Act of 1940 as a diversified, open-end management investment company.
A) Valuation - Equity securities listed or regularly traded on a securities
exchange are valued at the last quoted sales price at the time the valuations
are made. A security which is listed or traded on more than one exchange is
valued at the quotation on the exchange determined to be the primary market for
such security. Listed securities that are not traded on a particular day and
securities that are regularly traded in the over-the-counter market are valued
at the mean of the latest bid and asked prices. Other equity securities are
valued at a price within the limits of the latest bid and asked prices deemed by
the Board of Directors, or by persons delegated by the Board, best to reflect
fair value.
Debt securities are generally traded in the over-the-counter market and are
valued at a price deemed best to reflect fair value as quoted by dealers who
make markets in these securities or by an independent pricing service. Short-
term debt securities are valued at their cost which, when combined with accrued
interest, approximates fair value.
For purposes of determining the fund's net asset value per share, the U.S.
dollar value of all assets and liabilities initially expressed in foreign
currencies is determined by using the mean of the bid and offer prices of such
currencies against U.S. dollars quoted by a major bank.
Assets and liabilities for which the above valuation procedures are
inappropriate or are deemed not to reflect fair value are stated at fair value
as determined in good faith by or under the supervision of the officers of the
fund, as authorized by the Board of Directors.
B) Currency Translation - Assets and liabilities are translated into U.S.
dollars at the prevailing exchange rate at the end of the reporting period.
Purchases and sales of securities and income and expenses are translated into
U.S. dollars at the prevailing exchange rate on the dates of such transactions.
The effect of changes in foreign exchange rates on realized and unrealized
security gains and losses is reflected as a component of such gains and losses.
C) Other - Income and expenses are recorded on the accrual basis. Investment
transactions are accounted for on the trade date. Realized gains and losses are
reported on an identified cost basis. Dividend income and distributions to
shareholders are recorded by the fund on the ex-dividend date. Income and
capital gain distributions are determined in accordance with federal income tax
regulations and may differ from those determined in accordance with generally
accepted accounting principles.
NOTE 2 - INVESTMENT TRANSACTIONS
Purchases and sales of portfolio securities, other than short-term securities,
aggregated $483,754,000 and $453,839,000, 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 $1,712,210,000 and net unrealized gain
aggregated $745,250,000, of which $778,597,000 related to appreciated
investments and $33,347,000 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
11
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements
- --------------------------------------------------------------------------------
T. Rowe Price Growth Stock Fund / June 30, 1995 (Unaudited)
$1,158,000 was payable at June 30, 1995. The fee is computed daily and paid
monthly, and consists of an Individual Fund Fee equal to 0.25% of average daily
net assets and a Group Fee. The Group Fee is based on the combined assets of
certain mutual funds sponsored by the Manager or Rowe-Price Fleming
International, Inc. (the Group). The Group Fee rate ranges from 0.48% for the
first $1 billion of assets to 0.31% for assets in excess of $34 billion. At June
30, 1995, and for the six months then ended, the effective annual Group Fee rate
was 0.34%. The fund pays 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 $1,694,000 for
the six months ended June 30, 1995, of which $293,000 was payable at period-end.
During the six months ended June 30, 1995, the fund, in the ordinary course
of business, paid commissions of $63,000 to, and placed security purchase and
sale orders aggregating $13,063,000 with, certain affiliates of the Manager in
connection with the execution of various portfolio transactions.
12
<PAGE>
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
T. Rowe Price Growth Stock 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............................. $18.75 $20.42 $18.66 $18.75 $14.71 $16.27
------ ------ ------ ------ ------ ------
Investment Activities
Net investment income................. 0.15 0.18 0.17 0.18 0.24 0.38
Net realized and unrealized
gain (loss)........................ 2.90 (0.01) 2.72 0.94 4.67 (1.08)
------ ------ ------ ------ ------ ------
Total from Investment Activities...... 3.05 0.17 2.89 1.12 4.91 (0.70)
------ ------ ------ ------ ------ ------
Distributions
Net investment income................. -- (0.18) (0.14) (0.18) (0.25) (0.43)
Net realized gain..................... -- (1.66) (0.99) (1.03) (0.62) (0.43)
------ ------ ------ ------ ------ ------
Total Distributions................... -- (1.84) (1.13) (1.21) (0.87) (0.86)
------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD........... $21.80 $18.75 $20.42 $18.66 $18.75 $14.71
====== ====== ====== ====== ====== ======
- --------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Total Return............................. 16.3% 0.9% 15.6% 6.0% 33.8% (4.3)%
Ratio of Expenses to Average
Net Assets............................ 0.80%+ 0.81% 0.82% 0.83% 0.85% 0.76%
Ratio of Net Investment Income
to Average Net Assets................. 1.46%+ .91% .86% .94% 1.40% 2.31%
Portfolio Turnover Rate.................. 44.4%+ 54.0% 35.3% 27.4% 31.8% 30.2%
Net Assets, End of Period
(in thousands)........................ $2,401,609 $2,067,520 $1,975,554 $1,946,250 $1,846,016 $1,396,961
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
+Annualized.
13
<PAGE>
- --------------------------------------------------------------------------------
Shareholder Services
- --------------------------------------------------------------------------------
To help shareholders 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 a 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.
14
<PAGE>
- --------------------------------------------------------------------------------
T. Rowe Price No-Load Mutual Funds
- --------------------------------------------------------------------------------
STABILITY
Prime Reserve
Summit Cash Reserves
U.S. Treasury Money
California Tax-Free Money
New York Tax-Free Money
Summit Municipal Money Market
Tax-Exempt Money
CONSERVATIVE INCOME
Short-Term Bond
Short-Term Global Income
Short-Term U.S. Government
Summit Limited-Term Bond
U.S. Treasury Intermediate
Florida Insured Intermediate Tax-Free
Maryland Short-Term Tax-Free Bond
Summit Municipal Intermediate
Tax-Free Insured Intermediate Bond
Tax-Free Short-Intermediate
Virginia Short-Term Tax-Free Bond
INCOME
Global Government Bond
GNMA
New Income
Spectrum Income
Summit GNMA
U.S. Treasury Long-Term
California Tax-Free Bond
Georgia Tax-Free Bond
Maryland Tax-Free Bond
New Jersey Tax-Free Bond
New York Tax-Free Bond
Summit Municipal Income
Tax-Free Income
Virginia Tax-Free Bond
AGGRESSIVE INCOME
Emerging Markets Bond
High Yield
International Bond
Tax-Free High Yield
CONSERVATIVE GROWTH
Balanced
Capital Appreciation
Dividend Growth
Equity Income
Equity Index
Growth & Income
Spectrum Growth
Value
GROWTH
Blue Chip Growth
European Stock
Growth Stock
International Stock
Japan
Mid-Cap Growth
New Era
Small-Cap Value
AGGRESSIVE GROWTH
Capital Opportunity
Emerging Markets Stock
International Discovery
Latin America
New America Growth
New Asia
New Horizons
OTC
Science & Technology
PERSONAL STRATEGY FUNDS
Personal Strategy Income
Personal Strategy Balanced
Personal Strategy Growth
Call if you want to know about any T. Rowe Price fund. We'll send you a
prospectus with more complete information, including management fees and other
expenses. Read it carefully before you invest or send money. T. Rowe Price
Investment Services, Inc., Distributor.
15
<PAGE>
- --------------------------------------------------------------------------------
SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
T. Rowe Price
- -------------
GROWTH STOCK FUND
JUNE 30, 1995
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 Growth Stock
Fund/(R)/.
T. Rowe Price
Invest With Confidence/(R)/
GSF
