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Fund Profile
T. Rowe Price Spectrum Income Fund
Important Information About This Fund as of xx/xx/xx
This profile summarizes key information about the fund that is included in the
fund's prospectus. The fund's prospectus includes additional information about
the fund, including a more detailed description of the risks associated with
investing in the fund that you may want to consider before you invest. You may
obtain the prospectus and other information about the fund at no cost by
calling 1-800-638-5660 or visiting our web site at www.troweprice.com.
1. What is the fund's objective?
The fund seeks a high level of current income consistent with moderate share
price fluctuation.
2. What are the fund's principal investment strategies?
The fund can diversify its assets widely among nine T. Rowe Price funds: five
domestic bond funds, two international bond funds, a money market fund, and
one income-oriented stock fund. Within the ranges shown below, managers
decide how much of the fund's assets to allocate to each fund based on their
view of the relative valuations of the underlying funds and of the various
markets in which they invest.
<TABLE>
<CAPTION>
Asset Allocation Ranges
Fund Percent of Assets Fund Percent of Assets
<S> <C> <C> <C>
Short-Term Bond 0-15% Summit Cash Reserves 0-25%
GNMA 5-20 New Income 15-30
International Bond 5-20 U.S. Treasury Long-Term 0-15
Equity Income 10-25 Emerging Markets Bond 0-10
High Yield 10-25
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</TABLE>
Additional information about the fund's investments and strategy is available
in the annual and semiannual reports, which are available free by calling
1-800-638-5660 or visiting our web site.
3. What are the main risks of investing in the fund?
Because the fund invests in a broad array of investments, its overall
performance could be affected by downturns in many different markets. In
general, the share price will move in the opposite direction of U.S. interest
rates, so rising rates represent the most important source of risk. There is
also exposure to credit risk: corporate bond holdings in the underlying funds
may have their credit ratings downgraded or they may default. Such events
could reduce the fund's share price and income level. The risk of default is
more pronounced in the fund's high-yield ("junk") corporate bond holdings.
Foreign bond holdings expose the fund to risks of international investing:
for example, weakening foreign currencies versus the U.S. dollar could reduce
returns from bonds denominated in other currencies, and emerging market bonds
are subject to the special political and economic risks of these newly
industrialized countries. To the extent that Spectrum Income invests in
stocks, its share price could be lowered by stock market declines.
o Although the fund's broad diversification should moderate its price swings,
you could lose money by investing in fund shares.
4. How can I tell if the fund is appropriate for me?
Consider your investment goals, your time horizon for achieving them, and
your tolerance for risk. If you seek high current income through very broad
diversification, the fund may be an appropriate investment. The fund can be
used for both regular and tax-deferred accounts, such as IRAs.
5. How has the fund performed in the past?
The bar chart, which shows the fund's actual performance for each of the last
eight calendar years, indicates risk by illustrating how much returns can
differ from one year to the next.
The fund can also experience short-term performance swings, as shown in the
following chart by the best and worst calendar quarter returns during the
years depicted. Of course, the fund's past performance is no guarantee of its
future returns.
<TABLE>
<CAPTION>
Calendar Year Total Returns
--------------------------------
<S> <C>
1991 19.64%
1992 7.84
1993 12.36
1994 -1.94
1995 19.41
1996 7.64
1997 12.18
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</TABLE>
Quarter Ended Total Return
Best Quarter xx/xx/xx xx.xx%
Worst Quarter xx/xx/xx xx.xx%
The fund's total return for the xx months ended xx/xx/xx was x.xx%.
In the table, the fund's average annual total returns for the 1-, 5-, and
since inception periods ending June 30, 1998, are compared with those of its
appropriate benchmarks. By comparing the bar chart with this table, you can
see that average returns smooth out year-to-year variations.
<TABLE>
<CAPTION>
Average Annual Total Returns
Periods ended June 30, 1998
Since inception
1 year 5 years (6/29/90)
<S> <C> <C> <C>
Spectrum Income Fund
Salomon Smith Barney Broad
Investment Grade Index
Lipper General Bond Funds Average
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</TABLE>
These figures include changes in principal value, reinvested dividends, and
capital gain distributions, if any.
6. What fees or expenses will I pay?
The fund is 100% no load. There are no fees or charges to buy or sell fund
shares, reinvest dividends, or exchange into other T. Rowe Price funds. There
are no 12b-1 marketing fees.
While the fund itself imposes no fees or charges, it will indirectly bear its
pro-rata share of the expenses of the underlying funds. The following table
provides a range of average weighted expense ratios for the fund. A range is
given instead of a single number because the pro-rata share of expenses
fluctuates along with changes in the average assets in each of the underlying
funds.
The numbers in this table provide an estimate of how much it will cost to
operate the fund for a year, based on 1998 fiscal year expenses.
<TABLE>
<CAPTION>
Fees and expenses of the fund
Annual fund operating expenses
(expenses that are deducted from fund assets)
--------------------------------------------
<S> <C>
Range of Average Weighted 0.74% to 0.81%
Expense Ratios
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</TABLE>
Example. The following table gives you a rough idea of how expense ratios may
translate into dollars and helps you to compare the cost of investing in this
fund with the cost of investing in other funds. Although your actual costs
may be higher or lower, this table uses the midpoint of the above range to
show expenses you would pay if operating expenses remain the same, you invest
$10,000, you earn a 5% annual return, and you hold the investment for the
following periods:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
1 year 3 years 5 years 10 years
$80 $250 $430 $970
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</TABLE>
7. Who manages the fund?
The fund is managed by T. Rowe Price Associates. Founded in 1937, T. Rowe
Price and its affiliates manage investments for individual and institutional
accounts. The company offers a comprehensive array of stock, bond, and money
market funds directly to the investing public.
Peter Van Dyke manages the fund day-to-day and has been chairman of its
Investment Advisory Committee since 1990. He has been managing investments
for T. Rowe Price since 1985.
8. How can I purchase shares?
Fill out and return the New Account Form in the postpaid envelope, along with
your check for a minimum of $2,500 or more ($1,000 or more for retirement
plans and gifts or transfers to minors) or $50 if investing through Automatic
Asset Builder. You can also open an account by bank wire or by exchanging
from another T. Rowe Price fund.
9. How can I sell shares or close my account?
You may redeem or sell any portion of your account on any business day.
Simply write to us or call. You can also access your account at any time via
Tele*Access(R) or our web site. We also offer free exchange among our entire
family of domestic and international funds. Restrictions may apply in special
circumstances, and some redemption requests need a signature guarantee.
10. When will I receive distributions?
The fund distributes income monthly and net capital gains, if any, at year
end. Income and short-term gains are taxable at ordinary income rates, and
long-term gains are taxable at the current capital gains rate. Distributions
are reinvested automatically in additional shares unless you choose another
option, such as receiving a check.
11. What services are available?
A wide range, including but not limited to:
. retirement plans for individuals and large and small businesses;
. automated information and transaction services by telephone or computer;
. electronic transfers between fund and bank accounts;
. automatic investing and automatic exchange;
. discount brokerage.
To Open an Account
Investor Services
1-800-638-5660
For Existing Fund or Discount Brokerage Accounts
Shareholder Services
1-800-225-5132
For Fund Information and Account Transactions on the Internet
www.troweprice.com
For Yields, Prices and Account Transactions
Tele*Access (R)
1-800-638-2587
24 hours, 7 days
T. Rowe Price
100 East Pratt Street
Baltimore, MD 21202
