______________________
SEMIANNUAL REPORT
______________________
Science and Technology Fund
______________________
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
Science & Technology Fund.
<PAGE>
--------------------------------------------------------------------------------
Fellow Shareholders
--------------------------------------------------------------------------------
Science and technology stocks have paced the brisk march of U.S. equity
markets so far in 1995. As a result, during the quarter and half-year ended June
30, your fund extended its strong absolute and relative performance. Its 20%
return in the June quarter was the third highest quarterly gain in the fund's
history, exceeding both the Lipper Science & Technology Fund Index and the
unmanaged Standard & Poor's 500 Stock Index. On a year-to-date basis, your fund
outperformed both benchmarks. Moreover, we are pleased to report that the fund
ranked among the top 15 stock funds in the country for the one-, three-, and
five-year periods ended June 30.(1)
--------------------------------------------------------------------------------
Performance Comparison
--------------------------------------------------------------------------------
Periods Ended 6/30/95
3 Months 6 Months
---------------------
Science & Technology Fund 20.1% 31.3%
S&P 500 9.6 20.2
Lipper Science & Technology
Fund Index 18.9 26.8
================================================================================
--------------------------------------------------------------------------------
MARKET ENVIRONMENT
--------------------------------------------------------------------------------
The June quarter was a stellar period for most financial assets. Stocks
benefited from a variety of factors, including a sharp drop in interest rates,
continued growth in corporate profits, and the shift of investors' assets into
equity securities. Science and technology stocks posted gains well in excess of
the broad market by riding the wave of extremely strong business conditions,
heightened merger and acquisition activity, an improving regulatory situation,
and burgeoning investor interest.
(1) According to Lipper Analytical Services, the fund's ranking based on
total return for the one-, three-, and five-year periods ended 6/30/95 and since
inception on 9/30/87 was 15 out of 2,686, 8 out of 1,456, 15 out of 1,070, and 3
out of 776, respectively. See the tables following this letter for the fund's
average annual compound total return. Past performance cannot guarantee future
results.
The business dynamics for electronic technology stocks remained
exceptional. Expanding global economies, stronger than expected demand for
personal computers by businesses and consumers, exploding interest in wireless
and broadband communications services, and a favorable pricing environment
continued to boost computer and communications companies. Similarly, life
sciences companies benefited from the ongoing discovery of novel therapeutics
and medical devices and the demise of massive health care reform efforts.
Meanwhile, data services companies continued expanding their horizons: corporate
downsizing and the evolution of electronic commerce create myriad opportunities
for companies that outsource and process transactions.
<PAGE>
Stocks of science and technology companies mirrored the fundamental
strength in the industry. Strong earnings growth combined with rising valuations
have driven stock prices to record levels. Specifically, these stocks have
appreciated more than 60% in the past year and over 200% from the lows
established during the 1990 Persian Gulf War, as measured by the Pacific
Technology Index. Aside from brief periods during the first half of 1992 and
1994, this sector's ascent has been uninterrupted. Not surprisingly, the
technology sector has been among the top performing industry groups over the
past few years.
While the current environment for science and technology stocks remains
extremely favorable, investors should remember that volatility in this sector
can work in BOTH directions (see box on next page). We are in the midst of the
historically weak season for these stocks, and valuations for equities remain at
the high end of historical norms. Accordingly, investors should recognize the
possibility of a significant correction in both the broad market and in science
and technology stocks beyond the unsettling but shortlived mid-July dip.
However, these factors do not diminish the longer-term attractiveness of
the sector. With an accelerating shift to client-server computing, the continued
development of wireless and broadband communications services, the proliferation
of technology in the consumer market, the coming of Windows 95 to the PC
industry, and the determined quest for affordable health care, we believe
industry fundamentals and investor interest will be sustained over the
intermediate term.
--------------------------------------------------------------------------------
INVESTMENT PHILOSOPHY
--------------------------------------------------------------------------------
Before discussing the portfolio, we would like to welcome the many new
shareholders to the fund and take a moment to review our portfolio management
methodology and investment philosophy. The salient characteristic of our
approach is intensive, timely, hands-on research in the areas of electronic
technology, life sciences and health care, and process technology. This involves
extensive company visits, customer and competitor interviews, attendance at
trade shows and industry symposiums, and detailed financial analysis. We focus
our internal resources on developing insights, relying on external resources
primarily for information. Given the inherent volatility of the fund's universe,
we maintain a modest cash position to permit opportunistic purchases.
================================================================================
Our investment philosophy can be summarized by these
five investment principles:
* Stay exposed to secular (longer-term) themes.
* Diversify exposure among the most attractive segments
of the science and technology sector.
* Concentrate holdings in companies that can sustain
earnings momentum beyond a single technology cycle.
* Invest at the leading edge.
* Avoid the valuation trap.
================================================================================
<PAGE>
These principles have significant ramifications for the longer-term
profile of your fund. First, our stock holdings will be concentrated in the
secular themes. While individual stock holdings will change frequently, the
themes should be more enduring. Second, in contrast to most technology-oriente d
sector funds, our investments will be spread across a variety of areas within a
broadly defined science and technology sector. Third, the fund will not
emphasize stocks of companies selling commodity products into highly cyclical
markets. Fourth, our investments are likely to be concentrated in newer, smaller
companies. Finally, many of the fund's holdings will carry above-market
valuations.
By consistently applying these investment principles to the portfolio
management process, we hope to ensure that your fund remains exposed to the
best-positioned companies in the most rapidly growing areas of the science and
technology industry. Our investment approach is aggressive, and the potential
long-term rewards from an investment in this fund are likely to entail
considerable short-term price fluctuations. However, we firmly believe that over
time the rewards will compensate for the risks.
PORTFOLIO REVIEW
The fund remains focused in electronic technology, which accounts for 58% of
total assets. Software, semiconductor, and communications companies continue to
dominate our holdings
================================================================================
Evidence of Volatility
The attractive returns of science and technology stocks
do not come without risks. One of them is a high degree
of volatility, which can produce wide swings in total
return from year to year and even month to month.
This volatility was reflected in a recent study T. Rowe
Price conducted on the Science & Technology Fund. In
one extreme case, the fund returned a negative 29.5% in
the three months ended September 30, 1990. But this
dismal performance was followed by gains of 16.4%,
67.2%, and 46.1% in the ensuing three-, six- and
nine-month periods. On the other extreme, a gain of
43.6% in the three months ended March 31, 1991, was
followed by losses of 12.6% and 2.3% in the ensuing
three- and six-month periods. However, these losses
were soon offset by gains, helping the fund produce a
positive return of 11.6% for the nine-month period
following March.
The evidence is clear that shareholders must prepare
for the occasional roller coaster ride to enjoy the
long-term potential of these stocks. Of course, past
performance does not indicate future results.
================================================================================
<PAGE>
in this segment. About 25% of the fund's assets are spread among data services,
media and telecommunications services and health care. Due to strong cash
inflows and selective profit taking near the end of the quarter, our reserve
position ended the period at 14%. Despite our diversified profile and rising
assets under management, we continued to manage the fund in a concentrated
manner, with the top 10 holdings representing approximately 35% of assets.
During the past quarter and six months, your fund's performance was buoyed
by holdings across all of its primary investment areas. In electronic
technology, software vendors ADOBE SYSTEMS and SAP, semiconductor manufacturers
XILINX and CIRRUS LOGIC, and communications equipment providers ASCEND
COMMUNICATIONS and NOKIA were strong contributors. Other winners included
electronic transaction processor FIRST FINANCIAL MANAGEMENT and computer on-line
service provider AMERICA ONLINE. Although they did not make our list of top
performers for the six months, our investments in foreign cellular operator VO
DAFONE and neurobiotechnology company CEPHALON paid off handsomely. In addition,
as one of the larger shareholders of LOTUS DEVELOPMENT, the fund was on the
winning side of the IBM-Lotus merger. Key new investments during the period
included BMC SOFTWARE, a leading provider of systems management utilities, drug
delivery company ALZA, and HEWLETT-PACKARD.
The fund's worst performing stock during the period was SYBASE, an
aggressively valued software company which experienced an earnings shortfall due
to poor strategic marketing and product transition. SYBASE ended our multi-year
streak of avoiding a disaster among our top holdings. While such disappointments
are to be expected in such a volatile sector, they harden our resolve to avoid a
repeat episode.
The other major underperformer is listed as a single "HEDGING POSITION." It
refers to a series of securities purchased during the spring to protect the fund
against a sharp drop in science and technology stock prices. We believe the
tactical use of hedges can be a value-enhancing strategy for our shareholders
because it allows the fund to participate in market advances while limiting its
exposure to significant declines. In addition, hedging permits us to focus on
the investment merits of individual issues without becoming preoccupied with
making sector calls. Moreover, we do not suffer from the liquidity and tax
issues involved with selling, and ultimately repurchasing, large portions of
fund assets. Finally, such a strategy permits us to hold our winners longer and
manage the portfolio in a more aggressive manner, thereby participating fully in
a rising market for science and technology stocks, such as the one experienced
this year.
--------------------------------------------------------------------------------
OUTLOOK
--------------------------------------------------------------------------------
We are extremely encouraged by the longer-term prospects for science and
technology companies. As the market for their products expands from businesses
to consumers, from data processing to information access and communications, and
from developed to emerging countries, the opportunities facing these companies
will increase dramatically. With semiconductor industry capacity tight,
telecommunications reform on the horizon, and electronic media proliferating, it
is hard to discount the merits of the science and technology sector.
<PAGE>
We are acutely aware of the tremendous run these stocks have had over the
past several quarters, their high current valuations, and their history of
correcting at least 10% every year since 1986. While we expect the sector's
strong business dynamics and growing investor interest to buoy the group over
the longer term, we will remain flexible enough to take advantage of any
near-term correction in these stocks. We appreciate your continued support.
Respectfully submitted,
[signature]
Charles A. Morris
President and Chairman of the
Investment Advisory Committee
July 21, 1995
--------------------------------------------------------------------------------
Contributions to the Change in Net Asset Value Per Share
--------------------------------------------------------------------------------
TEN BEST CONTRIBUTORS
--------------------------------------------------------------------------------
Three Months Ended June 30, 1995
Cirrus Logic 53 cents
Nokia 50
Xilinx 39
Applied Materials 29
Intel 24
Broderbund Software 22
Ascend Communications 22
SAP 21
Cephalon 20
Synopsys 18
Total 298 cents
================================================================================
--------------------------------------------------------------------------------
TEN BEST CONTRIBUTORS
--------------------------------------------------------------------------------
Six Months Ended June 30, 1995
Adobe Systems 57 cents
Xilinx 57
Cirrus Logic* 54
Nokia 48
First Financial Management 36
Ascend Communications 35
SAP 29
America Online* 28
Applied Materials* 26
Synopsys 25
Total 395 cents
================================================================================
<PAGE>
--------------------------------------------------------------------------------
TEN WORST CONTRIBUTORS
--------------------------------------------------------------------------------
Three Months Ended June 30, 1995
Hedging Position -52 cents
Sybase** 36
Paging Network** 5
General Instruments** 5
Autodesk** 4
H&R Block 2
Biogen** 1
MCI** 1
ITG 1
Alias Research** 1
Total -108 cents
================================================================================
--------------------------------------------------------------------------------
TEN WORST CONTRIBUTORS
--------------------------------------------------------------------------------
Six Months Ended June 30, 1995
Sybase** -54 cents
Hedging Position* 54
Biogen** 6
Paging Network** 6
Autodesk** 5
General Instruments** 5
AirTouch Communications** 4
United International Holdings 3
DSC Communications** 2
Canarc Resources 2
Total -141 cents
* Position added
**Position eliminated
================================================================================
<PAGE>
--------------------------------------------------------------------------------
Twenty-Five Largest Holdings
--------------------------------------------------------------------------------
June 30, 1995
Percent of
Company Net Assets
---------------------------------- --------
First Financial Management 4.5%
Vodafone 4.5
Nokia 4.2
Adobe Systems 3.4
Broderbund Software 3.4
Xilinx 3.3
Intel 3.0
Cirrus Logic 3.0
BMC Software 2.7
Microsoft 2.4
Synopsys 2.3
Maxim Integrated Products 2.3
America Online 2.2
ALZA 2.1
Applied Materials 2.0
COMPAQ Computer 2.0
Ascend Communications 1.9
Chiron 1.9
Intuit 1.9
Bay Networks 1.8
Hewlett-Packard 1.8
SAP 1.7
Mobile Telecom. Technologies 1.6
3Com 1.6
SunGuard Data Systems 1.3
Total 62.8%
================================================================================
--------------------------------------------------------------------------------
Average Annual Compound Total Return
--------------------------------------------------------------------------------
Periods Ended June 30, 1995
Since inception
1 Year 5 Years 9/30/87
------- ------- -------------
68.12% 24.14% 21.61%
Investment return and principal value represent past performance and will vary.
Shares may be worth more or less at redemption than at original purchase.
================================================================================
<PAGE>
--------------------------------------------------------------------------------
Statement of Net Assets
T. Rowe Price Science & Technology Fund / June 30, 1995 (Unaudited)
--------------------------------------------------------------------------------
(Values In Thousands)
--------------------------------------------------------------------------------
Common Stocks & Warrants -- 87.2%
ELECTRONIC TECHNOLOGY -- 58.2%
--------------------------------------------------------------------------------
Value
BUSINESS SOFTWARE -- 16.3%
1,000,000 shs Adobe Systems $ 58,250
600,000 *BMC Software 46,200
600,000 *Informix 15,188
480,000 *Microsoft 43,410
400,000 *Oracle Systems 15,425
250,000 *PeopleSoft 13,500
23,500 SAP (DEM) 29,602
550,000 *Symantec 15,847
625,000 *Synopsys 39,062
276,484
CONSUMER SOFTWARE -- 5.3%
900,000 *Broderbund Software 57,262
425,000 *Intuit 32,327
89,589
SEMICONDUCTOR -- 14.8%
400,000 *Analog Devices 13,600
800,000 *Cirrus Logic 50,150
400,000 *Cypress Semiconductor 16,200
300,000 *Integrated Device Technology 13,857
800,000 Intel 50,650
750,000 *Maxim Integrated Products 38,250
300,000 *Microchip Technology 10,950
600,000 *Xilinx 56,325
249,982
SEMICONDUCTOR EQUIPMENT -- 3.8%
400,000 *Applied Materials 34,600
200,000 *KLA Instruments 15,475
400,000 *Silicon Valley Group 14,525
64,600
NETWORKING -- 13.0%
400,000 *3Com 26,800
550,000 +ALANTEC 19,113
650,000 *Ascend Communications 32,906
750,000 *Bay Networks 30,937
200,000 *Cascade Communications 8,625
750,000 LM Ericsson (Class B) ADR 15,047
1,200,000 Nokia ADR 71,550
350,000 *Shiva 15,050
220,028
<PAGE>
COMPUTER HARDWARE SYSTEMS -- 5.0%
750,000 *COMPAQ Computer 34,031
400,000 Hewlett-Packard 29,800
300,000 +*Pinnacle 6,825
300,000 *Sun Microsystems 14,569
85,225
TOTAL ELECTRONIC TECHNOLOGY 985,908
================================================================================
LIFE SCIENCES & HEALTH CARE -- 7.1%
PHARMACEUTICALS -- 7.1%
1,500,000 *ALZA 35,062
200,000 *Amgen 16,075
1,046,200 *Cephalon 19,224
500,000 *Chiron 32,375
400,000 SmithKline Beecham equity
units ADR 18,100
TOTAL LIFE SCIENCES & HEALTH CARE 120,836
================================================================================
DATA SERVICES -- 11.5%
COMPUTER SERVICES -- 10.7%
850,000 *America Online 37,187
144,000wts. ++*Bachman Information
Systems, $3.28, 11/21/97 529
720shs. ++*Bachman Information
Systems, Series A 4,536
900,000 First Financial Management 76,950
400,000 H&R Block 16,450
1,000,000 +*ITG 7,250
435,000 *SunGard Data Systems 22,838
1,299,300 *Tech Data 14,942
180,682
CONSUMER INFO SERVICES -- 0.8%
350,000 *CUC International 14,700
TOTAL DATA SERVICES 195,382
================================================================================
MEDIA/TELECOMMUNICATIONS SERVICES -- 6.6%
MEDIA -- 0.5%
500,000 *United International Holdings Class A 8,188
TELECOM SERVICES-- 6.1%
1,000,000 *Mobile Telecommunication Technologies 27,312
2,000,000 Vodafone ADR 75,750
103,062
TOTAL MEDIA/TELECOMMUNICATIONS SERVICES 111,250
================================================================================
<PAGE>
ENVIRONMENTAL SERVICES -- 0.1%
PROCESS SERVICES -- 0.1%
1,000,000 *Canarc Resources (CAD) 1,529
TOTAL ENVIRONMENTAL SERVICES 1,529
================================================================================
MISCELLANEOUS COMMON STOCKS -- 3.7% 62,099
--------------------------------------------------------------------------------
TOTAL COMMON STOCKS & WARRANTS
(COST $1,055,647) 1,477,004
--------------------------------------------------------------------------------
Options Written -- (0.1%)
3,000 cts Microsoft "W" Call, 8/18/95,@ $85.86 (2,106)
TOTAL OPTIONS WRITTEN (COST ($1,608)) (2,106)
================================================================================
Options Purchased -- 0.0%
10,872 NASDAQ 100 "B" Put, 8/18/95 @ $465.00 207
TOTAL OPTIONS PURCHASED (COST $8,111) 207
================================================================================
Short-Term Investments -- 14.0%
131,905,000 Federal Home Loan Mortgage
Discount Notes,
5.82 - 5.90%, 7/5 - 8/3/95 131,413
105,000,000 Federal National Mortgage
Association Discount Notes,
5.85 - 5.90%, 7/6 - 7/28/95 104,597
560,000 Student Loan Marketing
Discount Notes, 6.10%,
7/3/95 560
--------------------------------------------------------------------------------
TOTAL SHORT-TERM INVESTMENTS
(COST $236,570) 236,570
================================================================================
TOTAL INVESTMENTS IN SECURITIES -- 101.1%
OF NET ASSETS (COST $1,298,720) 1,711,675
--------------------------------------------------------------------------------
================================================================================
<PAGE>
OTHER ASSETS LESS LIABILITIES (18,091)
----------
Net Assets Consist of: Value
--------
Accumulated net investment income -
net of distributions . . . . . . . $ (446)
Accumulated net realized gain/loss -
net of distributions . . . . . . . 130,896
Net unrealized gain (loss) . . . . 412,955
Paid-in-capital applicable to
59,598,101 shares of $0.01 par value
capital stock outstanding;
1,000,000,000 shares authorized 1,150,179
-----------
NET ASSETS. . . . . . . . . . . . . . . . . . . 1,693,584
==========
Net Asset Value Per Share. . . . . . . . . . . . 28.42
==========
+ Affiliated company
* Non-income producing
++ Securities contain some restrictions as to public resale--total of
such securities at period-end amounts to 0.3% of net assets.
CAD Canadian dollar
DEM German deutschemark
The accompanying notes are an integral part of these financial statements.
<PAGE>
--------------------------------------------------------------------------------
Statement of Operations
--------------------------------------------------------------------------------
T. Rowe Price Science & Technology Fund / Six Months Ended June 30, 1995
(Unaudited)
(IN THOUSANDS)
--------------------------------------------------------------------------------
INVESTMENT INCOME
Income
Interest ........................................................... $3,646
Dividend (net of foreign taxes of $241) ............................ 2,261
-------
Total income ....................................................... 5,907
-------
Expenses
Investment management .............................................. 4,110
Shareholder servicing .............................................. 1,934
Registration ....................................................... 98
Custody and accounting ............................................. 79
Prospectus and shareholder reports ................................. 75
Directors .......................................................... 13
Legal and audit .................................................... 12
Miscellaneous ..................................................... 32
--------
Total expenses .................................................... 6,353
--------
Net investment income ............................................. (446)
--------
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Securities ........................................................ 124,298
Options ........................................................... (20,505)
Foreign currency transactions ..................................... (1)
---------
Net realized gain (loss) .......................................... 103,792
---------
Change in net unrealized gain or loss on:
Securities ........................................................ 263,936
Options ........................................................... (8,402)
---------
Change in net unrealized gain or loss ............................. 255,534
---------
Net realized and unrealized gain (loss) ........................... 359,326
---------
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS ................. $358,880
==========
The accompanying notes are an integral part of these financial statements.
================================================================================
<PAGE>
--------------------------------------------------------------------------------
Statement of Changes in Net Assets
T. Rowe Price Science & Technology Fund (Unaudited)
(IN THOUSANDS)
--------------------------------------------------------------------------------
Six Months Ended Year Ended
June 30, 1995 Dec 31, 1994
------------- -----------
INCREASE (DECREASE) IN NET ASSETS FROM
Operations
Net investment income ........................... $ (446) $ (3,741)
Net realized gain (loss) ........................ 103,792 29,701
Change in net unrealized gain or loss ........... 255,534 84,769
------------ ---------
Increase (decrease) in net assets from operations 358,880 110,729
------------ ---------
Distributions to shareholders
Net realized gain ............................... -- (12,349)
------------ ---------
Decrease in net assets from distributions ....... -- (12,349)
------------ ---------
Capital share transactions*
Shares sold ..................................... 665,745 582,569
Distributions reinvested ........................ -- 11,887
Shares redeemed ................................. (246,093) (279,238)
------------ ---------
Increase (decrease) in net assets
from capital share transactions ............. 419,652 315,218
------------ ---------
Increase (decrease) in net assets ................. 778,532 413,598
NET ASSETS
Beginning of period ............................... 915,052 501,454
------------ ---------
End of period ..................................... $ 1,693,584 $ 915,052
============ =========
*Share information
Shares sold ...................................... 27,711 29,623
Distributions reinvested ......................... -- 552
Shares redeemed .................................. (10,403) (14,354)
------------ ---------
Increase (decrease) in shares outstanding ........ 17,308 15,821
============ =========
The accompanying notes are an integral part of these financial statements.
================================================================================
<PAGE>
--------------------------------------------------------------------------------
Notes to Financial Statements
T. Rowe Price Science & Technology Fund / June 30, 1995 (Unaudited)
--------------------------------------------------------------------------------
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
--------------------------------------------------------------------------------
T. Rowe Price Science & Technology 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.
Short-term debt securities are valued at their cost which, when combined
with accrued interest, approximates fair value. In the absence of a last sale
price, purchased and written options are valued at the latest bid and asked
prices, respectively.
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) Affiliated Companies - Investments in companies 5% or more of whose
outstanding voting securities are held by the fund are defined as "Affiliated
Companies" in Section 2(a)(3) of the Investment Company Act of 1940.
C) 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.
D) 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.
<PAGE>
--------------------------------------------------------------------------------
NOTE 2 - INVESTMENT TRANSACTIONS
--------------------------------------------------------------------------------
Consistent with its investment objective, the fund engages in the following
practices to manage exposure to certain risks and enhance performance. The
investment objective, policies, program, risk factors, and following practices
of the fund are described more fully in the fund's Prospectus and Statement of
Additional Information.
A) Options - Call and put options give the holder the right to purchase or
sell, respectively, a security at a specified price until a certain date. Risks
arise from possible illiquidity of the options market and from movements in
security values. Options are reflected in the accompanying Statement of Net
Assets at market value.
Stock index call or put options give the holder the right to receive
cash, based on market movement, equal to the difference between the exercise
settlement value of the index and the exercise price of the option. Risks arise
from possible illiquidity of the options market and from movements in underlying
security values. Options are reflected in the accompanying Statement of Net
Assets at market value.
B) Other - Purchases and sales of portfolio securities, other than
short-term securities, aggregated $1,027,126,000 and $746,064,000, 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 $1,298,720,000 and net unrealized gain
aggregated $412,955,000, of which $426,635,000 related to appreciated
investments and $13,680,000 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 $869,000 was payable at June 30, 1995. The fee is computed daily and
paid monthly, and consists of an Individual Fund Fee equal to 0.35% of average
daily net assets and a Group Fee. The Group Fee is based on the combined assets
of certain mutual funds sponsored by the Manager or Rowe-Price Fleming
International, Inc. (the Group). The Group Fee rate ranges from 0.48% for the
first $1 billion of assets to 0.31% for assets in excess of $34 billion. At June
30, 1995, and for the six months then ended, the effective annual Group Fee rate
was 0.34%. The fund pays a pro rata share of the Group Fee based on the ratio of
its net assets to those of the Group.
<PAGE>
In addition, the fund has entered into agreements with the Manager and two
wholly owned subsidiaries of the Manager, pursuant to which the fund receives
certain other services. The Manager computes the daily share price and maintains
the financial records of the fund. T. Rowe Price Services, Inc. is the fund's
transfer and dividend disbursing agent and provides shareholder and
administrative services to the fund. T. Rowe Price Retirement Plan Services,
Inc. provides subaccounting and recordkeeping services for certain retirement
accounts invested in the fund. The fund incurred expenses pursuant to these
related party agreements totaling approximately $1,621,000 for the six months
ended June 30 1995, of which $275,000 was payable at period-end.
<TABLE>
--------------------------------------------------------------------------------
Financial Highlights
--------------------------------------------------------------------------------
T. Rowe Price Science & Technology Fund (Unaudited)
--------------------------------------------------------------------------------
For a share outstanding throughout each period
<S> <C> <C> <C> <C> <C> <C>
Six Months
Ended Year Ended December 31,
June 30, 1995 1994 1993 1992 1991 1990
------------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING
OF PERIOD ........................................ $ 21.64 $ 18.95 $ 17.33 $ 15.57 $ 10.05 $ 10.53
------ ------ ------ ------ ------ ------
Investment Activities
Net investment income (loss) .................... (0.01) (0.09) (0.05)* (0.10)* (0.01)* 0.09*
Net realized and unrealized
gain (loss) ................................... 6.79 3.08 4.18 2.98 6.01 (0.24)
------ ------ ------ ------ ------ ------
Total from Investment Activities ................... 6.78 2.99 4.13 2.88 6.00 (0.15)
------ ------ ------ ------ ------ ------
Distributions
Net investment income ............................ -- -- -- -- -- (0.09)
Net realized gain ................................ -- (0.30) (2.51) (1.12) (0.48) (0.24)
------ ------ ------ ------ ------ ------
Total Distributions ................................ -- (0.30) (2.51) (1.12) (0.48) (0.33)
------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD ..................... $ 28.42 $ 21.64 $ 18.95 $ 17.33 $ 15.57 $ 10.05
====== ====== ====== ====== ====== ======
RATIOS / SUPPLEMENTAL DATA
Total Return ....................................... 31.3% 15.8% 24.2%* 18.8%* 60.2%* (1.3)%*
Ratio of Expenses to Average
Net Assets ....................................... 1.06%+ 1.11% 1.25%* 1.25%* 1.25%* 1.25%*
Ratio of Net Investment Income
to Average Net Assets ............................ (0.07)%+ (0.58)% (0.68)%* (0.81)%* (0.07)%* 0.91%*
Portfolio Turnover Rate ............................ 136.7%+ 113.3% 163.4% 144.3% 148.2% 182.5%
Net Assets, End of Period
(in thousands) .................................$1,693,584 $915,052 $501,454 $281,045 $166,048 $61,535
<FN>
+Annualized.
*Excludes expenses in excess of a 1.25% voluntary expense limitation in effect
through December 31, 1993.
</FN>
</TABLE>
