<PAGE>
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T. Rowe Price
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Semiannual Report
Spectrum Funds
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June 30, 1999
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REPORT HIGHLIGHTS
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SPECTRUM FUNDS
- ---------------------
* U.S. stocks continued their record run and markets in Asia and Latin
America surged, but European shares faltered. Developed country bonds
fell.
* Spectrum Growth's performance was solid for the 6- and 12-month
periods, though not as strong as that of the Lipper Growth & Income
Fund Index.
* Spectrum Income performed well relative to its Lipper category and
managed positive returns in a difficult environment for bonds.
* Spectrum International posted a strong six-month return on a par with
its peer group. Twelve-month returns were well ahead of the Lipper
category.
* With the global outlook improved from six months ago despite lingering
risks, we believe shareholders will be well served by the Spectrum
Funds' balanced approach.
================================================================================
FELLOW SHAREHOLDERS
================================================================================
Stocks continued their record-setting rally in the first half, rising even
in the face of higher interest rates. Bond prices fell as rates rose, however,
and high-quality bonds suffered the most. Unflagging U.S. economic growth and
the perception that the global financial crisis had passed turned investor
attention away from safe havens like Treasury bonds and large-cap growth stocks.
Emerging market assets benefited and small-cap and value stocks in the U.S.
joined the rally later in the period. Japanese stocks surged, but European
stocks sagged.
<PAGE>
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MARKET ENVIRONMENT
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[Bar chart shown here; with four pairs of bars, representing 6- and
12-month returns for the following indices for periods ended 6/30/99 (returns
follow). S&P 500 Stock Index: 12.38%, 22.76%; Russell 2000 Index: 9.28%, 1.50%;
MSCI EAFE Index, 4.11%, 7.92%; MSCI Emerging Markets Free Index: 39.87%, 28.71%]
The first half of this year differed from 1998 in many respects. Investors
were generally rewarded for buying value rather than growth stocks. In similar
fashion, risky emerging market bonds rallied while "safer" U.S. Treasuries
plunged, and stocks in Asia and Latin America shone while Europe's star dimmed.
There were some constants, however: Stocks kept rising, the U.S. economy kept
growing, and corporate deals kept coming. The Standard & Poor's 500 Stock Index
rose 12.38% in the period, while the Dow Jones Industrial Average rose 20.46%.
With inflation low and global markets improving, U.S. stocks began a healthy
transition toward broader participation, marked by April's surprising surge in
long-depressed cyclical stocks. Higher oil prices boosted energy stocks. Many
other natural resource, metals, and chemical stocks also recovered, particularly
in the second quarter.
[Line graph showing 30-year Treasury Bond, 5-year
Treasury Note, 90-Day Treasury Bill for 12 months
ended 6/30/99.]
Stocks in Europe fell 2.3% in dollar terms in the first half, while
Japanese stocks rallied 20.8%, the Pacific ex-Japan rose 26.2%, and Latin
American markets surged 31%, according to Morgan Stanley Capital International
indices. The change in leadership among international markets was consistent
with the stages of the economic cycle in which Europe, the emerging markets, and
Japan find themselves. Until recently, economic growth was stagnant in the
developed countries of Europe. Despite the fanfare surrounding the launch of
Europe's new single currency in January, the euro fell steadily against the
dollar, undercutting returns for U.S. investors. The new currency was pressured
by political turmoil and by NATO's limited war in the Balkans, which ended in
June. In Asia there were distinct signs of recovery, though stocks have run far
ahead of concrete economic improvement. Most of Latin America except Mexico
remains in recession, but the January devaluation of the Brazilian real appears
to have caused less damage than initially feared.
<PAGE>
================================================================================
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.
================================================================================
<PAGE>
Bonds were generally weak in the U.S. and overseas because of rising U.S.
rates, but emerging market bonds posted a solid rally in the first half. In the
U.S., lower-quality corporate bonds and high-yield ("junk") bonds fared better
than high-quality bonds. High-yield bonds are typically more sensitive to the
prospects for economic growth and corporate profits than to interest rates. The
yield on the 30-year Treasury bond rose from about 5% in January to over 6% in
June, as shown in the chart on page 2, reflecting the global economic
improvement and also concern that the best inflation news was behind us. The
Federal Reserve raised the key federal funds rate on June 30, but then shifted
to a neutral policy bias, indicating that further rate hikes may not be
imminent.
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SPECTRUM GROWTH FUND
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PERFORMANCE COMPARISON
----------------------
Periods Ended 6/30/99 6 Months 12 Months
--------------------- -------- ---------
Spectrum Growth Fund 9.12% 12.03%
Lipper Growth &
Income Fund Index 11.59 13.56
S&P 500 Stock Index 12.38 22.76
============================================================
Your fund gained a hefty 9.12% in the first half and 12.03% for the past 12
months, as shown in the table. Each result was behind the Lipper category, which
tracks large-cap domestic funds. The fund's diversification also hampered
performance relative to the unmanaged S&P 500 Stock Index, which rose 12.38% and
22.76% over the two periods, respectively. Our exposure to European stocks
through the International Stock Fund, and to small-caps through the New Horizons
Fund, restrained returns in both periods. Still, in absolute terms, 12-month
returns were solid and six-month performance was strong.
Consistent with the shift in market leadership, our best-performing funds
for the past six months were 1998's laggards. The New Era, Growth & Income, and
Equity Income funds drove Spectrum Growth's gains after a long stretch of
underperformance, as natural resource, cyclical, and value stocks came back to
life. The Blue Chip Growth and Growth Stock funds provided good returns for the
six-month period, and were the best performers for the past year. Our two
largest holdings, the small-cap New Horizons Fund and the International Stock
Fund, provided only modest returns in both periods, as did our small position in
the Mid-Cap Value Fund.
[Pie chart (shown here) based on net assets as of
6/30/99, with the following segments: U.S. Stocks:
Large-cap, 44%; Mid-cap, 17%; Small-cap, 10%;
International stocks, 26%; Reserves, 3%]
The fund benefited from our decision to take profits in the Blue Chip
Growth and Growth Stock funds. We overweighted large-cap growth stocks relative
to large-cap value stocks last year, which proved timely, but in the first half
we tipped the scales back slightly in favor of large-cap value stocks -- which
has again been positive. Target allocations for the Blue Chip Growth and Growth
Stock funds were reduced to 11.5% each, while targets for the Growth & Income
and Equity Income funds were raised to 13.5% each. Together, these positions
make up 50% of the fund. (See table on page 12.)
Otherwise, our sector allocations were little changed. We maintained our
overweighting in small- and mid-cap stocks (21% for New Horizons and 4% for
Mid-Cap Value) and in International Stock Fund (22.5%). Our decision last year
to reduce exposure to natural resource stocks through the New Era Fund (2.5%)
did not help performance in the first half. As 1999 has demonstrated so far,
market leadership worldwide inevitably rotates from one region or group of
nations to another, and from one investment style to another. The appeal of our
disciplined approach to diversification is that it allows shareholders to
participate broadly in the global equity markets without having to guess which
type of investment will provide the best returns in any given period. We
continue to believe that a diversified strategy including both growth and value
stocks, large-caps and small-caps, and foreign and domestic equities will
provide long-term benefits to the patient investor.
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SPECTRUM INCOME FUND
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PERFORMANCE COMPARISON
----------------------
Periods Ended 6/30/99 6 Months 12 Months
--------------------- -------- ---------
Spectrum Income Fund 0.24% 2.60%
Lipper General Bond
Funds Average -0.98 1.47
Salomon Smith Barney Broad
Investment Grade Index -1.38 3.12
============================================================
<PAGE>
The Spectrum Income Fund again proved an effective vehicle for navigating
the uncertainties of the fixed income markets, even as most bond prices
declined. Though the six-month return of 0.24% was fractional and the 12-month
gain of 2.60% modest in absolute terms, both results were well ahead of the
Lipper General Bond Funds Average, as shown in the table. The advantage came
from holdings of dividend-paying stocks through the Equity Income Fund and, to a
lesser extent, holdings in the High Yield and GNMA funds. These factors helped
the fund outperform the Salomon Smith Barney Broad Investment Grade Index in the
past six months, though for the full year, the fund lagged the index. Longer
term, Spectrum Income has provided an excellent annualized return of 9.42% since
its inception in 1990. (The fund's five-year annualized return through June 30
was 9.36%.)
[Pie chart (shown here) based on net assets as of
6/30/99, with the following segments: High-grade
bonds, 48%; High-yield bonds, 17%; Stocks, 14%;
International bonds, 16%; money markets, 5%]
With rising rates sinking bond returns, the Equity Income Fund was the best
performer for both the 6- and 12-month periods. The Emerging Markets Bond Fund
boosted performance in the first half. Rising rates (see chart on page 2) hurt
the domestic bond market in the first half. The High Yield Fund, the third-best
performer in the first half thanks to strong economic and corporate profit
growth, faltered toward the end of the period. High-grade bonds such as those in
the U.S. Treasury Long-Term and New Income funds were most affected by rising
rates and posted negative returns for both periods. The GNMA Fund suffered a
fractional loss in the first half, but was the second-best performer for the
past year. The International Bond Fund was the worst performer in the first
half, hurt by weakness in the euro as well as by rising interest rates.
We have shifted our target allocations slightly since year-end, reducing
the Equity Income Fund to 12% (see table on page 12) because of concern about
high valuations in the stock market. We increased our target allocation to the
U.S. Treasury Long-Term Fund to 7.5%, after trimming it last year, because of
Treasury bonds' unsurpassed quality and liquidity, and because yields are more
attractive than six months ago. The target for the High Yield Fund was trimmed
slightly late in the period (effective in the third quarter) to 20%. The target
for the GNMA Fund fell to 15% earlier in the period, but was raised back to 16%,
effective in the third quarter. Mortgage-backed bonds should further benefit
from reduced prepayments, or mortgage refinancings, as long-term interest rates
have risen from last fall's lows and many homeowners have already refinanced
their loans. Our confidence in the euro and European fixed income markets, which
led us to increase exposure to the International Bond Fund last year, has not
been rewarded. Our target allocation remained unchanged at 12.5%. However, our
decision last year to increase our modest position in the Emerging Markets Bond
Fund to 3.5% was positive.
================================================================================
<PAGE>
SPECTRUM INTERNATIONAL FUND
================================================================================
PERFORMANCE COMPARISON
----------------------
Periods Ended 6/30/99 6 Months 12 Months
--------------------- -------- ---------
Spectrum International Fund 7.01% 9.16%
Lipper International
Funds Average 7.38 4.83
Combined Index Benchmark* 2.72 7.83
------------------------------------------------------------
* 90% MSCI EAFE/10% J.P. Morgan Non-U.S. Dollar Government
Bond Index
============================================================
Your fund provided a solid return of 7.01% in the first half, slightly
behind its Lipper category. Performance for the past 12 months was significantly
ahead of the Lipper International Funds Average. The fund exceeded the
performance of its unmanaged, combined index benchmark, as shown in the table,
for both periods. Recovering markets in Asia fueled fund performance -- a first
in the two-and-a-half-year life span of the fund. The Japan Fund was the top
performer for both the first half and the past 12 months, gaining 40.61% and
59.04%, respectively. The New Asia, Emerging Markets Stock, and International
Discovery funds also posted strong gains in both periods. (We initiated a
position in the small-company International Discovery Fund this year.) The Latin
America Fund overcame the devaluation of the Brazilian real in January to post
an impressive six-month gain, but still posted a loss over the past year.
Recovering commodity prices and the apparently modest impact of the devaluation
on regional economies -- at least, so far -- boosted Latin stocks in the first
half.
The worst performers in the first half were the International Bond Fund,
which declined nearly 10%, and the European Stock Fund, which lost nearly 2%.
Both were hurt by weakness in the euro versus the U.S. dollar. Anemic economic
growth also hurt European stocks. The International Stock Fund, where we have
nearly half of our assets and which also invests in Europe (about 70% of its net
assets), Asia, and Latin America, gained just 4.2%.
[Pie chart (shown here) based on net assets as of
6/30/99, with the following segments: Europe,
60%; Japan, 18%; Latin America, 9%, Far East,
7%; Other and Reserves, 6%]
Over the last six months we lowered the target allocation to the
International Bond Fund and raised the target allocations to the International
Discovery, Emerging Markets Stock, and New Asia funds. This proved beneficial as
each of the latter funds fared significantly better. We continue to overweight
the International Stock and European Stock funds, and kept our investment in the
Japan Fund unchanged at 7.5% of net assets. Overall exposure to Europe declined
from the end of last year, while exposure to Asia and Latin America increased.
(The table on page 12 lists target allocations for each underlying T. Rowe Price
fund. However, your fund's overall geographic allocation also reflects the
<PAGE>
composition of the International Stock Fund's portfolio.) Accommodative monetary
policies, increasing shareholder pressure, corporate restructuring, and
merger-and-acquisition activity provide a dynamic backdrop for European
equities. The Japanese market appears fully valued even allowing for a rapid
profit recovery over the next two years. With restructuring in Japan taking
place only selectively, companies that embrace a strategy of improving returns
on equity will do best in the longer term. In general, however, market prospects
will remain limited by the implicit conflict between corporate restructuring and
economic recovery, and the continuing need for government funding to
recapitalize the financial sector and revive domestic consumption.
In Southeast Asia stronger economies, news of reforms, and low interest
rates stimulated heavy buying. Hong Kong has recovered less because its currency
remains pegged to the U.S. dollar, but even there economic activity is picking
up. Across Southeast Asia, further structural reforms are necessary to ensure
sustained recovery.
================================================================================
OUTLOOK
================================================================================
The U.S. economy and the domestic consumer have served as the drivers of
world economic growth for several quarters. However, this has created some
imbalances and potential risks. Primary among these are the record trade
deficit, a negative personal savings rate, and job creation in excess of
population growth. These factors have created renewed concern about inflationary
pressures, and continued strong U.S. growth may result in further rate hikes by
the Fed. Nonetheless, we still expect the economy to slow over the next six to
12 months, though robust consumer demand will likely keep GDP growth above 3% --
down from the recent rate of better than 4%.
It's too soon to say if recent shifts in market leadership will be
sustained. At the current pace, the U.S. market will produce an astonishing
fifth straight year of double-digit gains. The recent broadening of
participation in the market is a positive sign, though valuations remain
unquestionably high. Our outlook for moderating growth provides scope for
interest rates to stabilize or decline, which could in turn support equity
market valuations. Merger and acquisition activity is likely to continue given
that higher stock prices give many corporations added buying power.
Progress in Latin America remains vulnerable to economic and political
factors, as Brazil and Argentina are under increasing pressure on both counts.
The outlook is favorable in Europe given lower interest rates, recovering
economies, and increased corporate activity. However, still-sluggish growth and
high unemployment hamper fiscal discipline and euro zone cooperation. In Japan,
positive change is underway. But the stronger GDP data from the last quarter was
exaggerated by a spurt in public sector spending, which continues to shoulder
most of the burden of reviving the moribund economy. The lack of private sector
involvement and the prospect of increasing unemployment as corporations
restructure will result in stagnant economic growth well into next year. While
the immediate prospects for the rest of Asia are encouraging, we are less
enthusiastic over the medium-term because we fear that the recent recovery in
asset prices will take pressure off regional leaders to implement much-needed
reforms.
<PAGE>
==================================
. . . we expect international
markets to build on the progress
made so far this year . . .
==================================
Nonetheless, we expect international markets to build on the progress made
so far this year, though regional performance may rotate away from Asia and
Latin America and back to Europe. In short, there is much potential yet many
risks still remain in the global stock and bond markets. The diversified
approach of the Spectrum Funds provides investors with a balanced way to
participate in the long-term potential of all these markets while never placing
all of their assets in a single basket.
Respectfully submitted,
/s/
Edmund M. Notzon III
President and Chairman of the Investment Advisory Committee
July 16, 1999
================================================================================
T. Rowe Price Spectrum Funds
- ----------------------------
Portfolio Highlights
- --------------------
TEN LARGEST HOLDINGS
--------------------
Percent of
(Of the combined underlying funds at 6/30/99) Net Assets
6/30/99
SPECTRUM GROWTH FUND
- -------------------------------------------------------------------------------
National Westminster Bank 0.5%
- -------------------------------------------------------------------------------
Adobe Systems 0.4
- -------------------------------------------------------------------------------
SmithKline Beecham 0.4
- -------------------------------------------------------------------------------
Shell Transport & Trading 0.4
- -------------------------------------------------------------------------------
Wolters Kluwer 0.4
- -------------------------------------------------------------------------------
Xilinx 0.4
- -------------------------------------------------------------------------------
Analog Devices 0.3
- -------------------------------------------------------------------------------
Maxim Integrated Products 0.3
- -------------------------------------------------------------------------------
Synopsys 0.3
- -------------------------------------------------------------------------------
Nestle 0.3
- -------------------------------------------------------------------------------
Total 3.7%
===============================================================================
<PAGE>
TEN LARGEST HOLDINGS
--------------------
Percent of
(Of the combined underlying funds at 6/30/99) Net Assets
6/30/99
SPECTRUM INTERNATIONAL FUND
- -------------------------------------------------------------------------------
National Westminster Bank 2.1%
- -------------------------------------------------------------------------------
Nokia 1.5
- -------------------------------------------------------------------------------
Wolters Kluwer 1.4
- -------------------------------------------------------------------------------
SmithKline Beecham 1.4
- -------------------------------------------------------------------------------
Shell Transport & Trading 1.4
- -------------------------------------------------------------------------------
Nestle 1.3
- -------------------------------------------------------------------------------
ING Groep 1.2
- -------------------------------------------------------------------------------
Kingfisher 1.2
- -------------------------------------------------------------------------------
Diageo 1.2
- -------------------------------------------------------------------------------
Glaxo Wellcome 1.2
- -------------------------------------------------------------------------------
Total 13.9%
Note: Table excludes reserves.
================================================================================
T. Rowe Price Spectrum Funds
- ----------------------------
Portfolio Highlights
- --------------------
KEY STATISTICS
--------------
12/31/98 6/30/99
SPECTRUM INCOME FUND
- ------------------------------------------------------------------------------
Price Per Share $ 11.50 $ 11.17
- ------------------------------------------------------------------------------
Capital Gain Distribution Per Share
- ------------------------------------------------------------------------------
Short-Term 0.02 -
- ------------------------------------------------------------------------------
Long-Term 0.15 0.02
- ------------------------------------------------------------------------------
Dividends Per Share
- ------------------------------------------------------------------------------
For 6 months 0.37 0.34
- ------------------------------------------------------------------------------
For 12 months 0.72 0.70
- ------------------------------------------------------------------------------
Dividend Yield *
<PAGE>
- ------------------------------------------------------------------------------
For 6 months 6.28% 6.27%
- ------------------------------------------------------------------------------
For 12 months 6.35 6.48
- ------------------------------------------------------------------------------
30-Day Standardized Yield 6.26% 6.31%
- ------------------------------------------------------------------------------
Weighted Average Maturity (years)** 10.5 10.3
- ------------------------------------------------------------------------------
Weighted Average Effective Duration (years)** 5.4 5.5
- ------------------------------------------------------------------------------
Weighted Average Quality *** A+ A+
- ------------------------------------------------------------------------------
* Dividends earned and reinvested for the periods indicated are
annualized and divided by the fund's net asset value per share at the
end of the period.
** Excludes Equity Income Fund.
*** Based on T. Rowe Price research; excludes Equity Income Fund.
================================================================================
T. Rowe Price Spectrum Funds
- ----------------------------
Portfolio Highlights
- --------------------
TARGET ALLOCATIONS FOR UNDERLYING FUNDS
---------------------------------------
Minimum- Target at Target at
Maximum 12/31/98 6/30/99
------- -------- -------
SPECTRUM GROWTH FUND
- -------------------------------------------------------------------------------
International Stock 10-25% 22.5% 22.5%
- -------------------------------------------------------------------------------
New Horizons 10-25 21.0 21.0
- -------------------------------------------------------------------------------
Growth & Income 7.5-22.5 12.5 13.5
- -------------------------------------------------------------------------------
Equity Income 7.5-22.5 12.5 13.5
- -------------------------------------------------------------------------------
Growth Stock 5-20 12.5 11.5
- -------------------------------------------------------------------------------
Blue Chip Growth 5-20 12.5 11.5
- -------------------------------------------------------------------------------
Mid-Cap Value 0-15 4.0 4.0
- -------------------------------------------------------------------------------
New Era 0-15 2.5 2.5
- -------------------------------------------------------------------------------
SPECTRUM INCOME FUND
- -------------------------------------------------------------------------------
New Income 15-30 28.0 28.0
- -------------------------------------------------------------------------------
High Yield 10-25 20.0 21.0
- -------------------------------------------------------------------------------
GNMA5-20 16.0 15.5
- -------------------------------------------------------------------------------
International Bond 5-20 12.5 12.5
<PAGE>
- -------------------------------------------------------------------------------
Equity Income 10-25 14.0 12.0
- -------------------------------------------------------------------------------
U.S. Treasury Long-Term 0-15 6.0 7.5
- -------------------------------------------------------------------------------
Emerging Markets Bond 0-10 3.5 3.5
- -------------------------------------------------------------------------------
Short-Term Bond 0-15 0.0 0.0
- -------------------------------------------------------------------------------
Summit Cash Reserves 0-25 0.0 0.0
- -------------------------------------------------------------------------------
SPECTRUM INTERNATIONAL FUND
- -------------------------------------------------------------------------------
International Stock 35-65 50.0 50.0
- -------------------------------------------------------------------------------
European Stock 0-30 26.5 26.5
- -------------------------------------------------------------------------------
Japan 0-30 7.5 7.5
- -------------------------------------------------------------------------------
Emerging Markets Bond 0-15 5.0 5.0
- -------------------------------------------------------------------------------
Emerging Markets Stock 0-20 3.0 4.3
- -------------------------------------------------------------------------------
International Discovery 0-20 0.0 3.0
- -------------------------------------------------------------------------------
Latin America 0-15 2.0 2.0
- -------------------------------------------------------------------------------
New Asia 0-20 1.0 1.7
- -------------------------------------------------------------------------------
International Bond 0-20 5.0 0.0
- -------------------------------------------------------------------------------
Summit Cash Reserves 0-25 0.0 0.0
================================================================================
T. Rowe Price Spectrum Funds
- ----------------------------
PERFORMANCE COMPARISON
- ----------------------
These charts show the value of a hypothetical $10,000 investment in each
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 each
fund's return.
[SEC chart for Spectrum Growth Fund shown here]
[SEC chart for Spectrum Income Fund shown here]
[SEC chart for Spectrum International Fund shown here]
<PAGE>
AVERAGE ANNUAL COMPOUND TOTAL RETURN
- ------------------------------------
This table shows how each fund would have performed each year if its actual
(or cumulative) returns for the periods shown had been earned at a constant
rate.
Since Inception
Periods Ended 6/30/99 1 Year 5 Years Inception Date
- ------------- ------- ------ ------- --------- ----
Spectrum Growth Fund 12.03% 19.10% 14.94% 6/29/90
Spectrum Income Fund 2.60 9.36 9.42 6/29/90
Spectrum International Fund 9.16 - 8.67 12/31/96
Investment return and principal value represent past performance and will
vary. Shares may be worth more or less at redemption than at original purchase.
================================================================================
T. Rowe Price Spectrum Growth Fund
- ---------------------------------- Unaudited
For a share outstanding throughout each period
FINANCIAL HIGHLIGHTS
- --------------------
6 Months Year
Ended Ended
6/30/99 12/31/98 12/31/97 12/31/96 12/31/95 12/31/94
NET ASSET VALUE
Beginning of period $ 16.45 $ 15.93 $ 15.13 $ 13.49 $ 11.13 $ 11.87
- -------------------------------------------------------------------------------
Investment activities
Investment income 0.04 0.19 0.20 0.20 0.21 0.17
Net realized and
unrealized gain (loss) 1.46 1.88 2.40 2.57 3.12 (0.01)
- -------------------------------------------------------------------------------
Total from
investment activities 1.50 2.07 2.60 2.77 3.33 0.16
- -------------------------------------------------------------------------------
Distributions
Investment income - (0.18) (0.20) (0.20) (0.21) (0.17)
Net realized gain - (1.37) (1.60) (0.93) (0.76) (0.73)
- -------------------------------------------------------------------------------
Total distributions - (1.55) (1.80) (1.13) (0.97) (0.90)
- -------------------------------------------------------------------------------
NET ASSET VALUE
===============================================================================
End of period $ 17.95 $ 16.45 $ 15.93 $ 15.13 $ 13.49 $ 11.13
Ratios/Supplemental=Data=======================================================
Total return** 9.12% 13.62% 17.40% 20.53% 29.96% 1.40%
- -------------------------------------------------------------------------------
Ratio of total expenses
to average net assets 0.00%* 0.00% 0.00% 0.00% 0.00% 0.00%
- -------------------------------------------------------------------------------
Ratio of investment
income to average
net assets 0.49%+ 1.09% 1.26% 1.58% 1.81% 1.60%
<PAGE>
- -------------------------------------------------------------------------------
Portfolio turnover
rate 14.1%+ 17.9% 20.4% 2.9% 7.4% 20.7%
- -------------------------------------------------------------------------------
Net assets, end of
period (in millions) $ 2,817 $ 2,768 $ 2,605 $ 2,104 $ 1,358 $ 879
- -------------------------------------------------------------------------------
** Total return reflects the rate that an investor would have earned on an
investment in the fund during the period, assuming reinvestment of all
distributions.
* See Note 3. The annualized weighted average expense ratio of the underlying
funds was 0.85% for the six months ended June 30, 1999.
+ Annualized
================================================================================
The accompanying notes are an integral part of these financial statements.
================================================================================
T. Rowe Price Spectrum Income Fund
- ---------------------------------- Unaudited
For a share outstanding throughout each period
FINANCIAL HIGHLIGHTS
- --------------------
6 Months Year
Ended Ended
6/30/99 12/31/98 12/31/97 12/31/96 12/31/95 12/31/94
NET ASSET VALUE
Beginning of period $ 11.50 $ 11.66 $ 11.20 $ 11.24 $ 10.11 $ 11.11
- --------------------------------------------------------------------------------
Investment activities
Investment income 0.34 0.72 0.71 0.71 0. 72 0.69
Net realized and
unrealized gain (loss) (0.31) 0.02 0.61 0.11 1.16 (0.90)
- --------------------------------------------------------------------------------
Total from
investment activities 0.03 0.74 1.32 0.82 1.88 (0.21)
- --------------------------------------------------------------------------------
Distributions
Investment income (0.34) (0.72) (0.71) (0.71) (0.72) (0.69)
Net realized gain (0.02) (0.18) (0.15) (0.15) (0.03) (0.10)
- --------------------------------------------------------------------------------
Total distributions (0.36) (0.90) (0.86) (0.86) (0.75) (0.79)
- --------------------------------------------------------------------------------
NET ASSET VALUE
================================================================================
End of period $ 11.17 $ 11.50 $ 11.66 $ 11.20 $ 11.24 $ 10.11
Ratios/Supplemental=Data========================================================
<PAGE>
Total return** 0.24% 6.57% 12.18% 7.64 19.41% (1.94)%
- --------------------------------------------------------------------------------
Ratio of total expenses to
average net assets 0.00%* 0.00% 0.00% 0.00% 0.00% 0.00%
- --------------------------------------------------------------------------------
Ratio of investment
income to average
net assets 6.01%+ 6.22% 6.21% 6.46% 6.43% 6.48%
- --------------------------------------------------------------------------------
Portfolio turnover
rate 16.3%+ 12.8% 14.1% 17.6% 20.2% 23.1%
- --------------------------------------------------------------------------------
Net assets, end of period
(in millions) $ 2,544 $ 2,574 $ 2,022 $ 1,356 $ 987 $ 625
- --------------------------------------------------------------------------------
** 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.
* See Note 3. The annualized weighted average expense ratio of the underlying
funds was 0.79% for the six months ended June 30, 1999.
+ Annualized.
The accompanying notes are an integral part of these financial statements.
================================================================================
T. Rowe Price Spectrum International Fund
- ------------------------------------------ Unaudited
For a share outstanding throughout each period
FINANCIAL HIGHLIGHTS
- --------------------
6 Months Year
Ended Ended
6/30/99 12/31/98 12/31/97
NET ASSET VALUE
Beginning of period $ 10.56 $ 9.74 $ 10.00
- -------------------------------------------------------------------------------
Investment activities
Investment income 0.04 0.21 0.15
Net realized and unrealized
gain (loss) 0.70 0.97 0.09ss.
- -------------------------------------------------------------------------------
Total from investment activities 0.74 1.18 0.24
- -------------------------------------------------------------------------------
Distributions
Investment income - (0.21) (0.15)
Net realized gain - (0.15) (0.35)
- -------------------------------------------------------------------------------
Total distributions - (0.36) (0.50)
- -------------------------------------------------------------------------------
NET ASSET VALUE
===============================================================================
End of period $ 11.30 $ 10.56 $ 9.74
<PAGE>
Ratios/Supplemental=Data=======================================================
Total return** 7.01% 12.28% 2.42%
- -------------------------------------------------------------------------------
Ratio of total expenses to average
net assets 0.00%*+ 0.00%* 0.00%
- -------------------------------------------------------------------------------
Ratio of investment income
to average net assets 0.77%+ 1.94% 2.23%
- -------------------------------------------------------------------------------
Portfolio turnover rate 25.8%+ 31.7% 20.0%
- -------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $ 58,379 $ 54,752 $ 51,050
- -------------------------------------------------------------------------------
** 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.
* See Note 3. The annualized weighted average expense ratio of the underlying
funds was 1.02% for the six months ended June 30, 1999.
+ Annualized
ss. The amount presented is calculated pursuant to a methodology prescribed by
the Securities and Exchange Commission for a share outstanding throughout
the period. This amount is inconsistent with the Fund's aggregate gains and
losses because of the timing of sales and redemptions of Fund shares in
relation to fluctuating market values for the investment portfolio.
The accompanying notes are an integral part of these financial statements.
================================================================================
<PAGE>
T. Rowe Price Spectrum Growth Fund
- ----------------------------------
Unaudited June 30, 1999
Percent of
Net Assets Shares Value
---------- ------ -----
STATEMENT OF NET ASSETS
-----------------------
T. Rowe Price International Stock Fund 21.7% 39,134,403 $ 611,280
- ------------------------------------------------------------------------------
T. Rowe Price New Horizons Fund 21.5 24,145,341 605,565
- ------------------------------------------------------------------------------
T. Rowe Price Growth & Income Fund 13.5 13,043,431 380,868
- ------------------------------------------------------------------------------
T. Rowe Price Equity Income Fund 13.1 12,731,858 370,370
- ------------------------------------------------------------------------------
T. Rowe Price Blue Chip Growth Fund 11.8 9,850,528 331,076
- ------------------------------------------------------------------------------
T. Rowe Price Growth Stock Fund 11.6 9,368,718 326,125
- ------------------------------------------------------------------------------
T. Rowe Price Mid-Cap Value Fund 4.2 8,137,163 118,965
- ------------------------------------------------------------------------------
T. Rowe Price New Era Fund 2.7 3,162,884 75,372
=Total=Investments============================================================
100.1% of Net Assets (Cost $2,038,900) $ 2,819,621
Other Assets Less Liabilities (2,663)
NET ASSETS $ 2,816,958
Net Assets Consist of:
Accumulated investment income - net of distributions $ 8,926
Accumulated net realized gain/loss - net of distributions 50,176
Net unrealized gain (loss) 780,721
Paid-in-capital applicable to 156,973,751 shares of $0.01
par value capital stock outstanding; 1,000,000,000 shares of
Spectrum authorized 1,977,135
NET ASSETS $ 2,816,958
NET ASSET VALUE PER SHARE $ 17.95
The accompanying notes are an integral part of these financial statements.
================================================================================
<PAGE>
T. Rowe Price Spectrum Income Fund
- ----------------------------------
Unaudited June 30, 1999
Percent of
Net Assets Shares Value
---------- ------ -----
STATEMENT OF NET ASSETS
-----------------------
T. Rowe Price New Income Fund 28.1% 85,022,159 $ 715,036
- -------------------------------------------------------------------------------
T. Rowe Price High Yield Fund 21.1 65,156,533 536,238
- -------------------------------------------------------------------------------
T. Rowe Price GNMA Fund 15.5 42,638,907 393,131
- -------------------------------------------------------------------------------
T. Rowe Price International Bond Fund 12.2 33,805,898 310,000
- -------------------------------------------------------------------------------
T. Rowe Price Equity Income Fund 11.9 10,371,996 301,721
- -------------------------------------------------------------------------------
T. Rowe Price U.S. Treasury Long-Term Fund 7.4 17,497,959 190,728
- -------------------------------------------------------------------------------
T. Rowe Price Emerging Markets Bond Fund 3.9 10,557,612 99,031
- -------------------------------------------------------------------------------
=Total=Investments=============================================================
100.1% of Net Assets (Cost $2,559,273) $ 2,545,885
Other Assets Less Liabilities (2,113)
NET ASSETS $ 2,543,772
Net Assets Consist of:
Accumulated investment income - net of distributions $ 111
Accumulated net realized gain/loss - net of distributions 10,739
Net unrealized gain (loss) (13,388)
Paid-in-capital applicable to 227,770,444 shares of $0.01
par value capital stock outstanding; 1,000,000,000 shares of
Spectrum authorized 2,546,310
NET ASSETS $ 2,543,772
NET ASSET VALUE PER SHARE $ 11.17
The accompanying notes are an integral part of these financial statements.
================================================================================
<PAGE>
T. Rowe Price Spectrum International Fund
- ------------------------------------------
Unaudited June 30, 1999
Percent of
Net Assets Shares Value
---------- ------ -----
STATEMENT OF NET ASSETS
-----------------------
T. Rowe Price International Stock Fund 48.2% 1,801,628 $ 28,141
- -------------------------------------------------------------------------------
T. Rowe Price European Stock Fund 24.7 674,220 14,401
- -------------------------------------------------------------------------------
T. Rowe Price Japan Fund 8.8 488,541 5,159
- -------------------------------------------------------------------------------
T. Rowe Price Emerging Markets Bond Fund 5.5 341,075 3,199
- -------------------------------------------------------------------------------
T. Rowe Price Emerging Markets Stock Fund 5.1 271,528 2,995
- -------------------------------------------------------------------------------
T. Rowe Price International Discovery Fund 3.2 87,038 1,831
- -------------------------------------------------------------------------------
T. Rowe Price Latin America Fund 2.5 171,952 1,479
- -------------------------------------------------------------------------------
T. Rowe Price New Asia Fund 2.1 177,641 1,219
- -------------------------------------------------------------------------------
=Total=Investments=============================================================
100.1% of Net Assets (Cost $54,024) $ 58,424
Other Assets Less Liabilities (45)
NET ASSETS $ 58,379
Net Assets Consist of:
Accumulated investment income - net of distributions $ 240
Accumulated net realized gain/loss - net of distributions 234
Net unrealized gain (loss) 4,400
Paid-in-capital applicable to 5,167,589 shares of $0.01
par value capital stock outstanding; 1,000,000,000 shares of
Spectrum authorized 53,505
NET ASSETS $ 58,379
NET ASSET VALUE PER SHARE $ 11.30
The accompanying notes are an integral part of these financial statements.
================================================================================
<PAGE>
T. Rowe Price Spectrum Funds
- ---------------------------- Unaudited
STATEMENT OF OPERATIONS
- -----------------------
In thousands
Growth Income International
Fund Fund Fund
6 Months 6 Months 6 Months
Ended Ended Ended
6/30/99 6/30/99 6/30/99
Investment=Income=============================================================
Income distributions from
underlying funds $ 6,656 $ 76,752 $ 211
- ------------------------------------------------------------------------------
Realized=and=Unrealized=Gain=(Loss)===========================================
Net realized gain (loss)
Sale of underlying funds 32,368 5,235 (105)
Capital gain distributions
from underlying funds 4,571 6,148 28
- ------------------------------------------------------------------------------
Net realized gain (loss) 36,939 11,383 (77)
Change in net unrealized gain
or loss 194,765 (81,780) 3,630
- ------------------------------------------------------------------------------
Net realized and unrealized gain
(loss) 231,704 (70,397) 3,553
- ------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET
- ------------------------------------------------------------------------------
ASSETS FROM OPERATIONS $ 238,360 $ 6,355 $ 3,764
The accompanying notes are an integral part of these financial statements.
================================================================================
T. Rowe Price Spectrum 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
Investment income $ 6,656 $ 29,372
Net realized gain (loss) 36,939 219,345
Change in net unrealized gain or loss 194,765 89,469
- -------------------------------------------------------------------------------
Increase (decrease) in net assets from operations 238,360 338,186
- -------------------------------------------------------------------------------
Distributions to shareholders
Investment income - (27,938)
Net realized gain - (212,530)
- -------------------------------------------------------------------------------
Decrease in net assets from distributions - (240,468)
- -------------------------------------------------------------------------------
Capital share transactions*
Shares sold 220,263 527,058
Distributions reinvested - 236,644
Shares redeemed (409,906) (698,444)
- -------------------------------------------------------------------------------
Increase (decrease) in net assets from capital
share transactions (189,643) 65,258
==Net=Assets===================================================================
Increase (decrease) during period 48,717 162,976
Beginning of period 2,768,241 2,605,265
===============================================================================
End of period $2,816,958 $ 2,768,241
===============================================================================
*Share information
Shares sold 13,289 31,506
Distributions reinvested - 15,317
Shares redeemed (24,568) (42,158)
- -------------------------------------------------------------------------------
Increase (decrease) in shares outstanding (11,279) 4,665
The accompanying notes are an integral part of these financial statements.
================================================================================
<PAGE>
T. Rowe Price Spectrum Income 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
Investment income $ 76,752 $ 147,637
Net realized gain (loss) 11,383 42,031
Change in net unrealized gain or loss (81,780) (41,478)
- -------------------------------------------------------------------------------
Increase (decrease) in net assets from operations 6,355 148,190
- -------------------------------------------------------------------------------
Distributions to shareholders
Investment income (76,752) (147,637)
Net realized gain (4,499) (39,203)
- -------------------------------------------------------------------------------
Decrease in net assets from distributions (81,251) (186,840)
- -------------------------------------------------------------------------------
Capital share transactions*
Shares sold 391,007 1,082,811
Distributions reinvested 74,811 173,901
Shares redeemed (421,203) (666,236)
- -------------------------------------------------------------------------------
Increase (decrease) in net assets from capital
share transactions 44,615 590,476
==Net=Assets===================================================================
Increase (decrease) during period (30,281) 551,826
Beginning of period 2,574,053 2,022,227
===============================================================================
End of period $2,543,772 $ 2,574,053
===============================================================================
*Share information
Shares sold 34,448 92,606
Distributions reinvested 6,619 14,979
Shares redeemed (37,145) (57,176)
- -------------------------------------------------------------------------------
Increase (decrease) in shares outstanding 3,922 50,409
The accompanying notes are an integral part of these financial statements.
================================================================================
<PAGE>
T. Rowe Price Spectrum International 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
Investment income $ 211 $ 1,051
Net realized gain (loss) (77) 861
Change in net unrealized gain or loss 3,630 4,039
- -------------------------------------------------------------------------------
Increase (decrease) in net assets from operations 3,764 5,951
- -------------------------------------------------------------------------------
Distributions to shareholders
Investment income - (1,055)
Net realized gain - (753)
- -------------------------------------------------------------------------------
Decrease in net assets from distributions - (1,808)
- -------------------------------------------------------------------------------
Capital share transactions*
Shares sold 8,014 21,074
Distributions reinvested - 1,740
Shares redeemed (8,151) (23,255)
- -------------------------------------------------------------------------------
Increase (decrease) in net assets from capital
share transactions (137) (441)
==Net=Assets===================================================================
Increase (decrease) during period 3,627 3,702
Beginning of period 54,752 51,050
===============================================================================
End of period $ 58,379 $ 54,752
===============================================================================
*Share information
Shares sold 746 2,025
Distributions reinvested - 172
Shares redeemed (763) (2,255)
- -------------------------------------------------------------------------------
Increase (decrease) in shares outstanding (17) (58)
The accompanying notes are an integral part of these financial statements.
================================================================================
<PAGE>
T. Rowe Price Spectrum Funds
- ---------------------------- Unaudited
June 30, 1999
NOTES TO FINANCIAL STATEMENTS
-----------------------------
T. Rowe Price Spectrum Fund, Inc. (the corporation) is registered under the
Investment Company Act of 1940 (the Act) as a nondiversified, open-end
management investment company. Spectrum Growth Fund, Spectrum Income Fund, and
Spectrum International Fund (collectively, the Spectrum Funds), are the three
portfolios established by the corporation. Operations commenced on June 29, 1990
for Spectrum Growth and Spectrum Income Funds, and on December 31, 1996 for
Spectrum International Fund.
Each Spectrum Fund diversifies its assets within set limits among specific
underlying T. Rowe Price funds (underlying funds). Spectrum Growth Fund
principally seeks long-term capital appreciation and growth of income by
allocating its assets to underlying funds that invest primarily in stocks.
Spectrum Income Fund strives to provide a high level of current income with
moderate share price fluctuation, by investing in underlying funds that invest
primarily in fixed income securities. The objective of Spectrum International
Fund is to provide long-term capital appreciation through allocations to
underlying funds that invest primarily in international stocks and, to a lesser
degree, international bonds.
================================================================================
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
================================================================================
BASIS OF PREPARATION The 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 Investments in the underlying funds are valued at the closing net
asset value per share of each underlying fund on the day of valuation.
Assets 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.
DISTRIBUTIONS Income and capital gain distributions from the underlying
funds and distributions to the Spectrum Funds' shareholders are recorded on the
ex-dividend date.
Income and capital gain distributions to the Spectrum Funds' shareholders
are determined in accordance with federal income tax regulations, which may
differ from generally accepted accounting principles.
FEDERAL INCOME TAXES No provision for federal income taxes is required
since each fund intends to continue to qualify as a regulated investment company
and distribute all of its taxable income.
OTHER Income is recorded on the accrual basis. Purchases and sales of the
underlying funds are accounted for on the trade date. Realized gains and losses
are reported on the identified cost basis.
================================================================================
<PAGE>
NOTE 2 - INVESTMENTS IN UNDERLYING FUNDS
================================================================================
Purchases and sales of the underlying funds for the six months ended June
30, 1999, were as follows:
================================================================================
Growth Income International
Fund Fund Fund
---- ---- ----
Purchases $191,935,000 $254,098,000 $ 7,290,000
Sales 375,021,000 210,332,000 7,132,000
================================================================================
At June 30, 1999, the net unrealized gain (loss) on investments in the
underlying funds for both federal income tax and financial reporting purposes
were as follows:
==============================================================================
Growth Income International
Fund Fund Fund
---- ---- ----
Appreciated investments $780,721,000 $101,855,000 $ 4,977,000
Depreciated investments - (115,243,000) (577,000)
Net unrealized gain (loss) $780,721,000 $(13,388,000) $ 4,400,000
================================================================================
NOTE 3 - RELATED PARTIES
================================================================================
T. Rowe Price Associates, Inc. (T. Rowe Price) is the investment manager
for Spectrum Growth and Spectrum Income Funds, and also serves as manager for
the domestic underlying funds. Rowe Price-Fleming International, Inc.
(Price-Fleming) is the investment manager for Spectrum International Fund, and
also serves as manager for the international underlying funds. T. Rowe Price and
its wholly-owned subsidiaries provide transfer and dividend disbursing agent,
accounting, shareholder, administrative, marketing, and certain other services
to the Spectrum Funds. Certain officers and directors of the Spectrum Funds are
also officers and directors of T. Rowe Price, Price-Fleming, and the underlying
funds.
The Spectrum Funds pay no management fees; however, T. Rowe Price and
Price-Fleming receive management fees from managing the underlying funds. In
addition, expenses associated with the operation of the Spectrum Funds are borne
by each underlying fund in proportion to the average daily value of its shares
owned by the Spectrum Funds, pursuant to special servicing agreements between
and among the corporation, the underlying funds, T. Rowe Price, and, in the case
of Spectrum International, Rowe Price-Fleming. Therefore, the Spectrum Funds
each operate at a zero expense ratio, although the valuations of the underlying
funds reflect the impact of Spectrum investments on management fees and other
expenses of the underlying funds.
<PAGE>
The Spectrum Funds do not invest in underlying funds for the purpose of
exercising management or control; however, investments by Spectrum within the
set limits may represent a significant portion of an underlying fund's net
assets. At June 30, 1999, Spectrum International Fund held less than 25% of the
outstanding shares of any underlying fund; Spectrum Growth Fund held
approximately 52.2% of the outstanding shares of the T. Rowe Price Mid-Cap Value
Fund, and Spectrum Income Fund held approximately 59.0% of the outstanding
shares of the T. Rowe Price Emerging Markets Bond Fund, 57.7% of the T. Rowe
Price U.S. Treasury Long-Term Fund, 37.4% of the T. Rowe Price New Income Fund,
36.8% of the T. Rowe Price International Bond Fund, 35.9% of the T. Rowe Price
GNMA Fund, and 30.6% of the T. Rowe Price High Yield Fund.
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 (Registration Mark)
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.**
<PAGE>
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.
================================================================================
<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
<PAGE>
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
<PAGE>
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
- ----------------------------------------
<PAGE>
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.
===========================================================================
FOR YIELD, PRICE, LAST
TRANSACTION, CURRENT BALANCE,
OR TO CONDUCT TRANSACTIONS, 24
HOURS, 7 DAYS A WEEK, CALL
TELE*ACCESS [REGISTRATION
MARK:] 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
<PAGE>
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
T. Rowe Price Investment Services, Inc., Distributor. C08-051 6/30/99
