<PAGE>
Semiannual Report
SMALL-CAP
VALUE FUND
JUNE 30, 1998
T. ROWE PRICE
<PAGE>
Report Highlights
- --------------------------------------------------------------------------------
Small-Cap Value Fund
. The U.S. stock market surged in the first half, led by a small group of
blue chip companies.
. Small-cap stocks continued to lag as investors sought the liquidity and
perceived earnings stability of well-known companies.
. Reflecting the difficult environment, the fund provided a modest but
positive return for the six months ended June 30 and a double-digit return
for the 12-month period.
. We added some new companies representing good values and sold some that had
grown too large for our program or were involved in mergers.
. Small stocks represent compelling values, in our opinion, and we believe
the performance cycle will eventually turn in their favor.
<PAGE>
Fellow Shareholders
The stock market began 1998 much as it ended 1997, with positive returns for
most U.S. investors. But in a pattern seen most recently during the first half
of 1997, a narrow group of large, blue chip companies fared much better than the
broad list of stocks. Small-cap stocks as measured by the Russell 2000 trailed
the S&P 500 by a substantial margin, and within the Russell universe, growth
stocks led value.
Performance Comparison
Periods Ended 6/30/98 6 Months 12 Months
- -------------------------------------------------------------------------
Small-Cap Value Fund 2.56% 17.93%
.........................................................................
S&P 500 17.71 30.16
.........................................................................
Russell 2000 Index 4.93 16.51
.........................................................................
Lipper Small Cap Fund Index 6.45 15.52
.........................................................................
The Small-Cap Value Fund found the environment particularly difficult,
with a six-month return of only 2.56%. For the past 12 months, the
fund's return of 17.93% was somewhat better than the Russell 2000 and
Lipper Small Cap Fund Index but trailed the S&P 500 by over 12
percentage points.
Market Environment
The S&P 500's magnificent performance was deceiving because it was so
narrowly based. As a market-weighted index, its returns reflect
disproportionately the results of a few very large companies, such as GE
(up 23%), Microsoft (up 67%), Wal-Mart (up 53%), and Coca-Cola (up 28%).
The unweighted S&P 500 rose 12.4% for the six-month period, more than
the Russell 2000 but much less than the weighted index return.
What accounted for the difference in results? One reason is undoubtedly
recent performance. Large, well-known stocks that did well in 1996 and
1997 attracted new investors who were seeking more of the same. Smaller
companies, which lagged the market's rise, lacked "momentum" and thus
received less attention. The trend toward large-company stocks has been
reinforced by foreign investors seeking an investment home away from the
turbulent Asian markets. These
<PAGE>
investors know and trust America's dominant companies and for now are
comfortable purchasing them at almost any price.
Portfolio Activity
The Major Portfolio Changes table that follows this letter shows the 10
largest purchases and sales of the past six months. There are three new
companies: OEA, National Health Realty, and CompX International. OEA
manufactures automobile air bag components, a growing market and one to
which the company brings expertise in explosives technology. National
Health Realty is a Tennessee-based REIT specializing in nursing homes
and other long-term care facilities. CompX, a newly public company that
makes components for office furniture, was valued at a significant
discount to other companies in its market, despite a long history of
profitable operations.
Many of the sales represent a natural turnover of companies resulting
from either maturation to mid-cap status (AMRESCO, Commercial Federal,
U.S. Foodservice, Financial Security Assurance) or merger (State of the
Art, Commnet Cellular, Henry Schein). We usually sell companies whose
market valuations exceed $1 billion as a discipline exercise. While we
may still like the companies and their long-term prospects, we are
conscious that our fund is meant to invest in small companies. And in
today's market, the lowest valuations are found in stocks with market
caps below $300 million. By selling our "graduates," we hold the
portfolio market cap down and provide funds for recycling into more
undervalued situations.
Outlook
To date, our cautious view of the stock market for 1998 has proven
overly pessimistic. As we forecasted in January, corporate profit growth
has slowed, but the market has almost ignored the slowdown. We see
little evidence in the short term that small stocks will outperform
large (notwithstanding a compelling valuation disparity between them)
because of the constant flow of money into a narrow group of stocks.
Although your fund's 12-month return of nearly 18% is far above the
long-term average equity return, we can't help feeling left out of the
party that the blue chips are enjoying. We could crash the party by
2
<PAGE>
buying large-company stocks, but our charter and your expectations
preclude that option. Instead, we labor on in our corner of the market,
sustained by the conviction that this cycle will eventually turn, as it
has in the past, and reassured that the valuations of our companies are
very attractive.
Respectfully submitted,
Preston G. Athey
President and Chairman of the Investment Advisory Committee
July 24, 1998
Why We Read Annual Reports
The investment management business can be pretty hectic at times. Fund managers
and analysts are bombarded with information, from company press releases to
analysts' reports to earnings announcements. In trying to deal with this surfeit
of material, it's tempting to reduce the job to a series of numbers such as
price/earnings ratios and sales growth rates. But the best investment decisions
tend to come after a time of reflection--about a company, about its industry,
and about the stock market's valuation of the company's stock.
I find that reading a company's annual report and, specifically, the president's
letter is a valuable exercise in judging how management views its business. Many
of the letters are straightforward; some are insightful; a few are appallingly
short on specifics but long on jargon. Then there are the gems that make for
enjoyable reading. Not only do they inform, they also force the reader to think.
Following are excerpts from three letters by presidents of companies we own in
the Small-Cap Value Fund.
A long-term focus on profitability is good in any business, but it's especially
important in insurance. The management of Markel has proven over the past 20
years that they know how to focus and not lose sight of the goal.
From Markel Corporation 1997 letter to shareholders:
In managing our company we have consistently tried to focus on generating
long-term results. We have sought to build shareholder value not just for the
next quarter or year but with a view to the next ten or even twenty years. In
contrast, today's fast paced world is one where almost everyone is focused on
today's activities and results... But today's instant gratification will be
long forgotten five years down the road.
While we would prefer to grow quickly, the current environment demands
patience. Those who resist the temptation to write business recklessly will be
rewarded. Ten years from now, we want
3
<PAGE>
to be able to tell you, our shareholders, of additional years of record
earnings and exceptional growth in shareholder value. Underwriting profit, not
growth, will continue to be our standard...
The trucking business is at heart a people business, and the management of
Frozen Food Express expresses this concept well.
From the Frozen Food Express 1997 letter to shareholders:
The Real Big Wheels
When you blow away all the smoke, the most important folks in a trucking
company are not your guys with the big titles. You can always find so-called
big shots to sit in meetings and talk on the phone. But you can't run a
trucking company without professional drivers. Those folks behind the wheel,
driving long lonely hours away from home. Always on the lookout for that
errant four-wheeler piloted by something less than a professional driver. It's
a rough way to make a living... We started 1988 with less than 25 company-
operated trucks and finished 1994 with about 1,100 of them. We got real good
at recruiting drivers. The primary reason we are not hit as hard as some other
truckers when there's a driver shortage is because we're real good recruiters.
But we have not been real good keepers. Our driver turnover rate is just as
high as most every other trucker's. And we're trying to change that.
Drivers are people. And people want to be recognized as more than just part of
a big machine that runs down the road. So we've designed a program that
enables those individuals who really want to be professionals to receive
recognition as they travel the road to professionalism.
The chairman, "Mit" Stubbs, describes programs the company has instituted to
motivate drivers to stay with the company. Most are common sense, but the
industry's high turnover suggests other companies haven't tried them. I suspect
Frozen Food Express is on the right road with its initiative.
UICI (United Insurance) has for years provided employees and its sales force
with superb financial incentives including stock ownership. The result has been
a growth record nearly unmatched in the health insurance industry. Chairman Ron
Jensen paid tribute to the employees in his 1996 letter to shareholders.
From UICI 1996 Letter to Shareholders:
The January 13, 1997, issue of Forbes magazine featured its Annual Report on
American Industry. In the Life and Health Insurance Section, UICI was the
number one company in return on equity over the last five years. This first
place standing says more than this letter can ever convey about the dedication
of United Companies agents and employees to serve the interest of
shareholders, for no other financial measurement is more meaningful to
shareholders. They understand that above all, this Company strives to make
money for its owners. This is an excellent time for each shareholder to take a
moment to say "thank you" to each agent and employee. I'll join you. UICI's
five-year return on capital of 26.4% is even more impressive when you consider
it was accomplished while employing minimal debt, as throughout the period
UICI's debt to capital ratio was among the lowest in the industry.
We do not invest in stocks simply on the basis of the annual report. But as
shown above, a president's letter to stockholders can be a good way to assess
the people managing each company -- and it is certainly more interesting than a
list of financial ratios.
4
<PAGE>
T. ROWE PRICE SMALL-CAP VALUE FUND
- --------------------------------------------------------------------------------
- ---------------------
Portfolio Highlights
- --------------------------------------------------------------------------------
MAJOR PORTFOLIO CHANGES
LISTED IN DESCENDING ORDER OF SIZE
6 Months Ended 6/30/98
TEN LARGEST PURCHASES TEN LARGEST SALES
---------------------------------------------------------------------------
Meridian Industrial Trust Commnet Cellular
.................................. ....................................
Oea * State of the Art ***
.................................. ....................................
Medical Assurance Amresco
.................................. ....................................
National Health Realty * Boston Acoustics **
.................................. ....................................
Perceptron Apartment Investment & Management **
.................................. ....................................
Shiloh Industries * Henry Schein **
.................................. ....................................
Littelfuse Commercial Federal
.................................. ....................................
Sunsource U.s. Foodservice **
.................................. ....................................
Compx International * Net Bank **
.................................. ....................................
Cross Timbers Oil Pfd. Financial Security Assurance **
.................................. ....................................
* Position added
** Position eliminated
*** Acquired by another company
5
<PAGE>
T. ROWE PRICE SMALL-CAP VALUE FUND
- --------------------------------------------------------------------------------
- ---------------------
Portfolio Highlights
- --------------------------------------------------------------------------------
TWENTY-FIVE LARGEST HOLDINGS
Percent of
Net Assets
6/30/98
----------------------------------------------------------------------
Electro Rent 2.1%
......................................................................
Silicon Valley Bancshares 1.8
......................................................................
Poe & Brown 1.7
......................................................................
Allied Capital 1.6
......................................................................
Analogic 1.5
----------------------------------------------------------------------
Community First Bankshares 1.5
......................................................................
McGrath RentCorp 1.3
......................................................................
Cross Timbers Oil 1.2
......................................................................
Insituform Technologies 1.2
......................................................................
CSS Industries 1.2
----------------------------------------------------------------------
First Republic Bank 1.1
......................................................................
Meridian Industrial Trust 1.1
......................................................................
Furon 1.1
......................................................................
Consolidated Products 1.1
......................................................................
Puerto Rican Cement 1.0
----------------------------------------------------------------------
Medical Assurance 1.0
......................................................................
Giant Cement 1.0
......................................................................
PXRE 1.0
......................................................................
Holophane 1.0
......................................................................
Grey Advertising 1.0
----------------------------------------------------------------------
CORT Business Services 1.0
......................................................................
Landauer 0.9
......................................................................
Hancock Fabrics 0.9
......................................................................
Analysts International 0.9
......................................................................
Chromcraft Revington 0.9
----------------------------------------------------------------------
Total 30.1%
6
<PAGE>
T. ROWE PRICE SMALL-CAP VALUE FUND
- --------------------------------------------------------------------------------
- -----------------------
Performance Comparison
- --------------------------------------------------------------------------------
This chart shows the value of a hypothetical $10,000 investment in the fund
over the past 10 fiscal year periods or since inception (for funds lacking
10-year records). The result is compared with a broad-based average or
index. The index return does not reflect expenses, which have been deducted
from the fund's return.
SMALL-CAP VALUE FUND
---------------------------------------------------------------------------
Russell 2000 Index Small-Cap Value Fund
06/88 10,000 10,000
06/89 11,273 10,775
06/90 11,617 11,870
06/91 11,760 12,369
06/92 13,470 14,317
06/93 16,966 18,259
06/94 17,714 19,739
06/95 21,269 23,106
06/96 26,357 28,879
06/97 27,938 32,115
06/98 35,742 42,003
- -------------------------------------
Average Annual Compound Total Return
- --------------------------------------------------------------------------------
This table shows how the fund would have performed each year if its actual
(or cumulative) returns for the periods shown had been earned at a constant
rate.
Periods Ended 6/30/98 1 Year 3 Years 5 Years 10 Years
---------------------------------------------------------------------------
Small-Cap Value Fund 17.93% 22.04% 18.13% 15.43%
...........................................................................
Investment return and principal value represent past performance and will
vary. Shares may be worth more or less at redemption than at original
purchase.
7
<PAGE>
T. ROWE PRICE SMALL-CAP VALUE FUND
- --------------------------------------------------------------------------------
Unaudited
<TABLE>
<CAPTION>
- -----------------------
Financial Highlights For a share outstanding throughout each period
- ------------------------------------------------------------------------------------------------------------
6 Months Year
Ended Ended
6/30/98 12/31/97 12/31/96 12/31/95 12/31/94 12/31/93
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE
Beginning of period $ 23.40 $ 19.56 $ 16.53 $ 13.40 $ 14.68 $ 12.28
.............................................................................
Investment activities
Net investment income 0.12 0.21 0.22 0.18 0.13 0.12
Net realized and
unrealized gain (loss) 0.48 5.22 3.84 3.74 (0.35) 2.73
.............................................................................
Total from
investment activities 0.60 5.43 4.06 3.92 (0.22) 2.85
.............................................................................
Distributions
Net investment income -- (0.20) (0.23) (0.18) (0.14) (0.10)
Net realized gain -- (1.39) (0.80) (0.61) (0.92) (0.35)
.............................................................................
Total Distributions -- (1.59) (1.03) (0.79) (1.06) (0.45)
.............................................................................
NET ASSET VALUE
End of period $ 24.00 $ 23.40 $ 19.56 $ 16.53 $ 13.40 $ 14.68
-----------------------------------------------------------------------------
Ratios/Supplemental Data
Total return* 2.56% 27.92% 24.61% 29.29% (1.38)% 23.30%
..........................................................................................................
Ratio of expenses to
average net assets 0.87%+ 0.87% 0.94% 0.98% 0.97% 1.05%
..........................................................................................................
Ratio of net investment
income to average
net assets 0.97%+ 1.01% 1.28% 1.59% 0.93% 0.91%
..........................................................................................................
Portfolio turnover rate 6.4% 14.6% 15.2% 18.1% 21.4% 11.8%
..........................................................................................................
Net assets, end of period
(in millions) $ 2,130 $ 2,088 $ 1,410 $ 936 $ 408 $ 452
..........................................................................................................
</TABLE>
* Total return reflects the rate that an investor would have earned on an
investment in the fund during each period, assuming reinvestment of all
distributions and payment of no redemption or account fees.
+ Annualized
The accompanying notes are an integral part of these financial statements.
8
<PAGE>
T. ROWE PRICE SMALL-CAP VALUE FUND
- --------------------------------------------------------------------------------
Unaudited June 30, 1998
Portfolio of Investments Shares/par Value
- --------------------------------------------------------------------------------
In thousands
Common Stocks 92.1%
FINANCIAL 16.5%
Bank and Trust 7.0%
Columbia Bancorp 130,000 $ 2,291
..........................................................................
Commercial Federal 572,200 18,096
..........................................................................
Community First Bankshares 1,200,000 31,688
..........................................................................
First Bell Bancorp + 525,000 10,139
..........................................................................
First International Bancorp + 450,000 6,497
..........................................................................
First National Bank of Anchorage 10,000 13,225
..........................................................................
First Republic Bank * + 639,400 23,098
..........................................................................
Glacier Bancorp 225,000 6,089
..........................................................................
Silicon Valley Bancshares * + 1,090,000 38,797
..........................................................................
149,920
.............
Insurance 6.3%
Annuity and Life Re * 83,600 1,865
..........................................................................
Markel * 80,900 14,400
..........................................................................
Medical Assurance * 800,000 22,200
..........................................................................
NYMAGIC + 500,000 13,688
..........................................................................
Poe & Brown + 979,350 36,420
..........................................................................
Presidential Life 400,000 8,575
..........................................................................
PXRE + 700,000 21,000
..........................................................................
UICI * 565,000 15,396
..........................................................................
133,544
.............
Financial Services 3.2%
Allied Capital 1,394,000 34,197
..........................................................................
American Capital Strategies 150,000 3,422
..........................................................................
Delta Financial * 475,000 8,728
..........................................................................
Medallion Financial 280,000 7,647
..........................................................................
Sirrom Capital 500,000 13,000
..........................................................................
66,994
.............
Total Financial 350,458
.............
UTILITIES 0.5%
Telephone 0.5%
Commnet Cellular* 511,170 7,508
..........................................................................
Rural Cellular (Class A)* 252,500 3,913
..........................................................................
Total Utilities 11,421
.............
9
<PAGE>
T. ROWE PRICE SMALL-CAP VALUE FUND
- -------------------------------------------------------------------------------
Shares/par Value
- -------------------------------------------------------------------------------
In thousands
CONSUMER NONDURABLES 9.1%
Beverages 0.2%
Chalone Wine Group * 170,400 $ 1,864
...........................................................................
Chalone Wine Group *++ 142,857 1,406
...........................................................................
3,270
...............
Food Processing 0.6%
CTB International * 350,000 4,769
...........................................................................
Sylvan *+ 530,000 8,447
...........................................................................
13,216
...............
Hospital Supplies/Hospital Management 2.4%
Allied Healthcare Products *+ 500,000 2,469
...........................................................................
Intelligent Medical Imaging *+ 950,000 3,266
...........................................................................
Landauer + 650,200 19,425
...........................................................................
Lunar * 200,000 3,662
...........................................................................
Minntech + 650,000 8,084
...........................................................................
Optical Coating Laboratory 350,000 6,628
...........................................................................
Owens & Minor 600,000 6,000
...........................................................................
Safeguard Health *+ 400,000 2,525
...........................................................................
52,059
...............
Pharmaceuticals 1.1%
Bone Care International *+ 785,200 6,969
...........................................................................
COR Therapeutics * 125,000 1,742
...........................................................................
Coulter Pharmaceutical * 200,000 6,062
...........................................................................
Neurocrine Biosciences * 500,000 3,906
...........................................................................
Quidel *+ 1,200,000 3,769
...........................................................................
22,448
...............
Biotechnology 0.4%
Cell Genesys * 1,065,000 9,086
...........................................................................
9,086
...............
Health Care Services 0.1%
Harborside Healthcare * 77,100 1,841
...........................................................................
1,841
...............
Miscellaneous Consumer Products 4.3%
American Safety Razor *+ 700,000 10,281
...........................................................................
Applied Extrusion Technologies *+ 850,000 6,242
...........................................................................
BWAY *+ 750,000 16,125
...........................................................................
Chic by H.I.S.* 450,000 3,544
...........................................................................
Culp 600,000 7,762
...........................................................................
10
<PAGE>
T. ROWE PRICE SMALL-CAP VALUE FUND
- --------------------------------------------------------------------------------
Shares/Par Value
- --------------------------------------------------------------------------------
In thousands
Dan River * 344,400 $ 5,855
............................................................................
Fab Industries + 325,000 9,059
............................................................................
Home Products International * + 532,500 6,157
............................................................................
Martin Industries 315,000 1,536
............................................................................
North Face * 87,500 2,111
............................................................................
QuikSilver * 150,000 2,991
............................................................................
Rival + 950,000 12,706
............................................................................
Superior Surgical Mfg. + 401,000 6,516
............................................................................
90,885
............
Total Consumer Nondurables 192,805
............
CONSUMER SERVICES 10.3%
Restaurants 2.6%
Consolidated Products * + 1,069,500 22,593
............................................................................
Fresh Choice * + 540,000 1,789
............................................................................
Garden Fresh Restaurant * + 301,600 5,410
............................................................................
Logan's Roadhouse * 146,200 3,056
............................................................................
PJ America * 110,500 2,010
............................................................................
Rare Hospitality International * 400,000 5,888
............................................................................
Ruby Tuesday 700,000 10,850
............................................................................
Uno Restaurant * + 550,000 4,056
............................................................................
55,652
............
General Merchandisers 0.3%
Fred's (Class A) 250,000 6,367
............................................................................
6,367
............
Specialty Merchandisers 4.7%
Building Materials Holding * 430,000 5,913
............................................................................
Compucom Systems * 1,000,000 6,563
............................................................................
CSS Industries * + 750,000 24,562
............................................................................
Fabri-Centers of America (Class B) * 625,000 14,805
............................................................................
Genovese Drug Stores (Class A) 280,000 5,495
............................................................................
Hancock Fabrics + 1,500,000 18,750
............................................................................
Haverty Furniture 400,000 8,875
............................................................................
S & K Famous Brands * + 425,000 7,703
............................................................................
Stein Mart * 600,000 8,081
............................................................................
100,747
............
11
<PAGE>
T. ROWE PRICE SMALL-CAP VALUE FUND
- --------------------------------------------------------------------------------
Shares/Par Value
- --------------------------------------------------------------------------------
In thousands
Entertainment and Leisure 0.5%
Seattle Filmworks * + 1,425,000 $ 11,021
............................................................................
11,021
..............
Media and Communications 2.2%
Big City Radio * 500,000 4,062
............................................................................
Courier + 195,000 5,314
............................................................................
Grey Advertising 51,865 20,772
............................................................................
Saga Communications (Class A) * 1,025,390 16,342
............................................................................
46,490
..............
Total Consumer Services 220,277
..............
CONSUMER CYCLICALS 10.5%
Automobiles and Related 2.1%
Keystone Automotive * 240,000 5,544
............................................................................
Littelfuse * 300,000 7,631
............................................................................
Myers Industries 330,000 7,920
............................................................................
R & B * 400,000 4,350
............................................................................
Strattec Security * 268,000 8,007
............................................................................
TBC * + 1,650,000 10,880
............................................................................
44,332
..............
Building and Real Estate 6.4%
First Washington Realty Trust, REIT + 400,000 9,300
............................................................................
Glenborough Realty Trust, REIT 500,000 13,187
............................................................................
Horizon Group Properties, REIT 17,940 119
............................................................................
Innkeepers USA, REIT 850,000 10,731
............................................................................
Meridian Industrial Trust, REIT 1,000,000 23,000
............................................................................
National Health Investors, REIT 273,300 9,053
............................................................................
National Health Realty, REIT + 550,000 8,663
............................................................................
Pacific Gulf Properties, REIT 600,000 12,975
............................................................................
Post Properties, REIT 400,000 15,400
............................................................................
Skyline, REIT 409,900 13,373
............................................................................
Sun Communities, REIT 500,000 16,562
............................................................................
United Dominion Realty Trust, REIT 300,000 4,163
............................................................................
136,526
..............
Miscellaneous Consumer Durables 2.0%
Chromcraft Revington * + 1,000,000 18,125
............................................................................
CompX International * 250,000 5,406
............................................................................
Ellett Brothers + 300,000 1,453
............................................................................
12
<PAGE>
T. ROWE PRICE SMALL-CAP VALUE FUND
- --------------------------------------------------------------------------------
Shares/Par Value
- --------------------------------------------------------------------------------
In thousands
Juno Lighting 350,000 $ 8,203
............................................................................
Stanley Furniture * + 350,000 8,991
............................................................................
42,178
...............
Total Consumer Cyclicals 223,036
...............
TECHNOLOGY 7.5%
Electronic Components 3.1%
Analogic + 709,000 31,728
............................................................................
Badger Meter 100,000 3,544
............................................................................
Optek Technology * 200,000 3,775
............................................................................
PCD * 350,000 6,256
............................................................................
Pioneer-Standard Electronics 217,100 2,076
............................................................................
Planar Systems * + 560,000 5,968
............................................................................
Special Devices * 379,000 13,395
............................................................................
66,742
...............
Electronic Systems 0.7%
CEM * + 325,000 4,083
............................................................................
Perceptron * + 600,000 7,200
............................................................................
Total Control Products * + 415,000 3,709
............................................................................
14,992
...............
Telecommunications Equipment 0.4%
Mosaix * + 660,000 6,455
............................................................................
Syntellect * + 700,000 1,466
............................................................................
7,921
...............
Aerospace and Defense 3.3%
COMARCO * + 395,000 8,357
............................................................................
DONCASTERS ADR * + 100,000 2,781
............................................................................
Nichols Research * 465,000 12,773
............................................................................
OEA 813,000 13,008
............................................................................
Raven Industries + 380,000 7,339
............................................................................
Tech-Sym * 200,000 5,562
............................................................................
TransTechnology 279,000 7,167
............................................................................
Woodward Governor 406,500 12,576
............................................................................
69,563
...............
Total Technology 159,218
...............
13
<PAGE>
T. ROWE PRICE SMALL-CAP VALUE FUND
- --------------------------------------------------------------------------------
Shares/Par Value
- --------------------------------------------------------------------------------
In thousands
CAPITAL EQUIPMENT 3.9%
Electrical Equipment 2.2%
Franklin Electric 135,000 $ 9,104
............................................................................
Holophane * + 813,000 20,833
............................................................................
LSI Industries 380,000 7,743
............................................................................
Thomas Industries 375,000 9,164
............................................................................
46,844
..............
Other Capital Equipment 0.3%
Omniquip International 300,000 5,559
............................................................................
5,559
..............
Machinery 1.4%
Alamo Group + 700,000 13,300
............................................................................
Farrel + 465,500 1,826
............................................................................
Haskel International (Class A) + 269,300 2,676
............................................................................
K-Tron * + 250,000 4,719
............................................................................
Scotsman Industries 300,000 8,325
............................................................................
30,846
..............
Total Capital Equipment 83,249
..............
BUSINESS SERVICES AND
TRANSPORTATION 17.1%
Computer Service and Software 1.3%
Analysts International 650,000 18,485
............................................................................
Ardent Software * 650,000 8,978
............................................................................
27,463
..............
Distribution Services 1.4%
Allou Health & Beauty * 325,000 3,088
............................................................................
Richardson Electronics + 700,000 9,537
............................................................................
SunSource 250,000 5,438
............................................................................
Valley National Gases * + 682,200 7,675
............................................................................
VWR Scientific Products * 200,000 4,931
............................................................................
30,669
..............
Environmental 1.3%
BHA Group (Class A) + 605,000 9,756
............................................................................
EMCON * + 700,000 3,369
............................................................................
Fluor Daniel / GTI * 300,000 1,837
............................................................................
International Technology * + 850,000 8,075
............................................................................
TRC * 325,000 1,462
............................................................................
14
<PAGE>
T. ROWE PRICE SMALL-CAP VALUE FUND
- --------------------------------------------------------------------------------
SHARES/PAR VALUE
- -----------------------------------------------------------------------------
In thousands
Waterlink * 500,000 $ 4,250
............................................................................
28,749
.................
Transportation Services 2.6%
Builders Transport * + 445,000 83
............................................................................
Frozen Food Express 600,000 5,888
............................................................................
International Shipholding + 664,000 10,666
............................................................................
Landstar Systems * 400,000 14,012
............................................................................
M.S. Carriers * 170,000 4,601
............................................................................
Midwest Express Holdings * 299,025 10,821
............................................................................
Transport Corp. of America * + 575,000 9,523
............................................................................
55,594
.................
Miscellaneous Business Services 10.5%
Aaron Rents (Class A) 55,500 1,006
............................................................................
Aaron Rents (Class B) 800,000 16,000
............................................................................
AMRESCO * 125,000 3,633
............................................................................
Business Resource Group * + 380,000 1,093
............................................................................
CORT Business Services * + 650,000 20,475
............................................................................
Electro Rent * + 2,000,000 44,750
............................................................................
Hunt 151,000 3,577
............................................................................
Insituform Technologies (Class A) * + 1,830,000 25,334
............................................................................
International Total Services * 37,600 261
............................................................................
IVEX Packaging * 225,200 5,236
............................................................................
Leasing Solutions * + 442,800 12,730
............................................................................
McGrath RentCorp + 1,298,000 27,988
............................................................................
Mine Safety Appliances 75,000 5,503
............................................................................
MPW Industrial Services Group * 195,100 2,622
............................................................................
MYR Group + 433,333 6,040
............................................................................
Rainbow Rentals * 217,000 2,312
............................................................................
Right Management Consultants * + 500,000 6,594
............................................................................
Sealright * + 691,300 8,987
............................................................................
Shorewood Packaging * 121,350 1,926
............................................................................
Tab Products + 400,000 4,950
............................................................................
UniFirst 350,000 8,750
............................................................................
Unitog + 592,000 13,079
............................................................................
222,846
.................
Total Business Services and Transportation 365,321
.................
15
<PAGE>
T. ROWE PRICE SMALL-CAP VALUE FUND
- --------------------------------------------------------------------------------
SHARES/PAR VALUE
- -----------------------------------------------------------------------------
In thousands
ENERGY 2.7%
Energy Services 1.2%
Carbo Ceramics 420,000 $ 14,411
............................................................................
Newpark Resources * 175,000 1,947
............................................................................
Offshore Logistics * 150,000 2,677
............................................................................
Pitt-DesMoines 230,200 6,100
............................................................................
25,135
.................
Exploration and Production 1.4%
Brigham Exploration * 550,000 4,984
............................................................................
Cross Timbers Oil 300,000 5,719
............................................................................
Devon Energy 25,000 873
............................................................................
HS Resources *+ 1,000,000 14,563
............................................................................
Ocean Energy * 200,000 3,913
............................................................................
30,052
.................
Gas Transmission 0.1%
Atrion + 275,000 2,466
............................................................................
2,466
.................
Total Energy 57,653
.................
PROCESS INDUSTRIES 7.1%
Diversified Chemicals 0.7%
Aceto + 600,000 9,675
............................................................................
LeaRonal 238,350 5,691
............................................................................
15,366
.................
Specialty Chemicals 2.4%
Furon + 1,100,000 19,937
............................................................................
Hauser *+ 600,000 3,525
............................................................................
Sybron Chemical * 250,000 8,000
............................................................................
Synalloy + 550,000 7,459
............................................................................
Tuscarora + 730,000 11,726
............................................................................
50,647
.................
Paper and Paper Products 1.1%
Republic Group 451,400 9,480
............................................................................
Wausau-Mosinee Paper 630,000 14,411
............................................................................
23,891
.................
Building and Construction 2.9%
Cameron Ashley * 400,000 6,750
............................................................................
CorrPro Companies * 234,875 2,642
............................................................................
16
<PAGE>
T. ROWE PRICE SMALL-CAP VALUE FUND
- --------------------------------------------------------------------------------
SHARES/PAR VALUE
- --------------------------------------------------------------------------------
In thousands
Giant Cement *+ 750,000 $ 21,469
...........................................................................
Layne Christensen *+ 600,000 7,406
...........................................................................
Puerto Rican Cement + 470,000 22,208
...........................................................................
60,475
................
Total Process Industries 150,379
................
BASIC MATERIALS 3.4%
Metals 1.7%
Cold Metal Products *+ 550,000 2,750
...........................................................................
Gibraltar Steel * 450,000 9,366
...........................................................................
Hawk * 201,000 3,543
...........................................................................
Lone Star Technologies * 354,000 5,398
...........................................................................
Material Sciences * 600,000 6,975
...........................................................................
Shiloh Industries * 250,000 5,125
...........................................................................
Steel Technologies 250,000 2,547
...........................................................................
35,704
.................
Mining 0.5%
AngloGold (ZAR) 37,800 1,523
...........................................................................
Dayton Mining (CAD) *+ 2,200,000 1,513
...........................................................................
Delta Gold (AUD) 1,000,000 1,229
...........................................................................
Gold Fields (ZAR) * 475,434 2,004
...........................................................................
Golden Star Resources (CAD) * 1,300,000 2,762
...........................................................................
SAMAX Gold (CAD) * 272,300 990
...........................................................................
TVX Gold * 600,000 1,838
...........................................................................
11,859
.................
Miscellaneous Materials 1.2%
Oil-Dri + 500,000 7,219
...........................................................................
Penn Virginia + 500,000 12,937
...........................................................................
Synthetic Industries * 350,000 5,108
...........................................................................
25,264
.................
Total Basic Materials 72,827
.................
INVESTMENT COMPANIES 0.4%
First Financial Fund 429,690 8,137
...........................................................................
Total Investment Companies 8,137
.................
17
<PAGE>
T. ROWE PRICE SMALL-CAP VALUE FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares/par Value
- -----------------------------------------------------------------------------------------------------------
In thousands
MISCELLANEOUS COMMON STOCKS 3.1%
<S> <C> <C>
Integrated Water Technology *+ ++ 200,000 $ 416
.......................................................................................................
Western Water * 350,000 3,522
.......................................................................................................
Other Miscellaneous Common Stocks 62,248
.......................................................................................................
Total Miscellaneous Common Stocks 66,186
.......................
Total Common Stocks (Cost $1,340,263) 1,960,967
.......................
Preferred Stocks 0.2%
Prime Retail, Cum., 10.50%, (Series A) 180,000 4,838
.......................................................................................................
Total Preferred Stocks (Cost $3,453) 4,838
.......................
Convertible Preferred Stocks 1.5%
Cross Timbers Oil (Series A) 480,390 20,567
.......................................................................................................
International Technology, 7.00% + 128,300 2,598
.......................................................................................................
Prime Retail, 8.50%, (Series B) 300,000 6,150
.......................................................................................................
Western Water (Series C) ++ 2,104 1,426
.......................................................................................................
Miscellaneous Convertible Preferred Stocks 1,305
.......................................................................................................
Total Convertible Preferred Stocks (Cost $22,240) 32,046
.......................
Convertible Bonds 0.4%
Builders Transport, Deb.
6.50%, 5/1/11 * + $ 1,158,000 127
.......................................................................................................
8.00%, 8/15/05 * + 1,700,000 187
.......................................................................................................
Glycomed, Sub. Deb., 7.50%, 1/1/03 2,000,000 1,872
.......................................................................................................
Leasing Solutions, Sub. Notes, 6.875%, 10/1/03 + 2,000,000 2,140
.......................................................................................................
Offshore Logistics, Sub. Notes, (144a), 6.00%, 12/15/03 3,000,000 3,141
.......................................................................................................
Richardson Electronics, Sr. Sub. Notes, 7.25%, 12/15/06 + 500,000 443
.......................................................................................................
Total Convertible Bonds (Cost $8,383) 7,910
.......................
Corporate Bonds 0.6%
Delta Financial, 9.50%, 8/1/04 3,000,000 2,985
.......................................................................................................
Furon, Sr. Sub. Notes, (144a), 8.125%, 3/1/08 + 3,000,000 2,996
.......................................................................................................
International Shipholding, Sr. Notes, 7.75%, 10/15/07 + 3,000,000 2,933
.......................................................................................................
</TABLE>
18
<PAGE>
<TABLE>
<CAPTION>
T. ROWE PRICE SMALL-CAP VALUE FUND
- ------------------------------------------------------------------------------------------------------------------------
SHARES/PAR VALUE
- ------------------------------------------------------------------------------------------------------------------------
In thousands
<S> <C> <C>
Owens & Minor, Sr. Sub. Notes, 10.875%, 6/1/06 $ 2,000,000 $ 2,180
......................................................................................................................
Synthetic Industries, Sr. Sub. Notes, 9.25%, 2/15/07 3,000,000 3,105
......................................................................................................................
Total Corporate Bonds (Cost $14,121) 14,199
................
Short-Term Investments 5.5%
Money Market Funds 5.4%
Reserve Investment Fund, 5.69%# 114,614,113 114,614
......................................................................................................................
114,614
................
U.S. Government Obligations 0.1%
U.S. Treasury Bills, 5.04 - 5.05%, 9/17 - 10/15/98 $ 2,500,000 2,467
......................................................................................................................
2,467
................
Total Short-Term Investments (Cost $117,081) 117,081
................
Total Investments in Securities
100.3% of Net Assets (Cost $1,505,541) $ 2,137,041
Futures Contracts
In thousands
<CAPTION>
CONTRACT UNREALIZED
EXPIRATION VALUE GAIN (LOSS)
<S> <C> <C> <C> <C>
Long, 40 Russell 2000 Stock Index
contracts, $300,000 of U.S. Treasury Bills
pledged as initial margin 9/98 $9,247 $ 318
Net payments (receipts) of variation
margin to date (271)
............
Variation margin receivable
(payable) on open futures contracts 47
Other Assets Less Liabilities (6,677)
................
NET ASSETS $ 2,130,411
----------------
</TABLE>
# Seven-day yield
+ Affiliated company
* Non-income producing
++ Securities contain some restrictions as to public resale--total of
such securities at period-end amounts to 0.15% of net assets.
ADR American Depository Receipt
REIT Real Estate Investment Trust
144a Security was purchased pursuant to Rule 144a under the Securities
Act of 1933 and may not be resold subject to that rule except to
qualified institutional buyers -- total of such securities at
period-end amounts to 0.29% of net assets.
AUD Australian dollar
CAD Canadian dollar
ZAR South African rand
The accompanying notes are an integral part of these financial statements.
19
<PAGE>
T. ROWE PRICE SMALL-CAP VALUE FUND
- --------------------------------------------------------------------------------
Unaudited June 30, 1998
- ------------------------------------
Statement of Assets and Liabilities
- --------------------------------------------------------------------------------
in thousands
Assets
Investments in securities, at value
Affiliated companies (cost $658,101) $ 942,946
Other companies (cost $847,440) 1,194,095
..............
Total investments in securities 2,137,041
Other assets 8,253
..............
Total assets 2,145,294
..............
Liabilities
Total liabilities 14,883
..............
NET ASSETS $ 2,130,411
--------------
Net Assets Consist of:
Accumulated net investment income - net of distributions $ 11,311
Accumulated net realized gain/loss - net of distributions 61,277
Net unrealized gain (loss) 631,818
Paid-in-capital applicable to 88,768,538 shares of
$0.01 par value capital stock outstanding;
1,000,000,000 shares authorized 1,426,005
..............
NET ASSETS $ 2,130,411
--------------
NET ASSET VALUE PER SHARE $ 24.00
--------------
The accompanying notes are an integral part of these financial statements.
20
<PAGE>
T. ROWE PRICE SMALL-CAP VALUE FUND
- --------------------------------------------------------------------------------
Unaudited
- ------------------------
Statement of Operations
- --------------------------------------------------------------------------------
in thousands
6 Months
Ended
6/30/98
Investment Income
Income
Dividend (including $4,478 from affiliated companies) $ 12,620
Interest 7,354
............
Total income 19,974
............
Expenses
Investment management 7,298
Shareholder servicing 1,869
Registration 74
Custody and accounting 70
Prospectus and shareholder reports 65
Legal and audit 8
Directors 6
Miscellaneous 12
............
Total expenses 9,402
............
Net investment income 10,572
............
Realized and Unrealized Gain (Loss)
Net realized gain (loss)
Securities 49,379
Futures (793)
Foreign currency transactions (3)
............
Net realized gain (loss) 48,583
............
Change in net unrealized gain or loss
Securities (including ($18,918) from affiliated companies) (4,605)
Futures (185)
............
Change in net unrealized gain or loss (4,790)
............
Net realized and unrealized gain (loss) 43,793
............
INCREASE (DECREASE) IN NET
ASSETS FROM OPERATIONS $ 54,365
------------
The accompanying notes are an integral part of these financial statements.
21
<PAGE>
T. ROWE PRICE SMALL-CAP VALUE FUND
- --------------------------------------------------------------------------------
Unaudited
- -----------------------------------
Statement of Changes in Net Assets
- --------------------------------------------------------------------------------
In thousands
6 MONTHS YEAR
ENDED ENDED
6/30/98 12/31/97
Increase (Decrease) in Net Assets
Operations
Net investment income $ 10,572 $ 17,402
Net realized gain (loss) 48,583 109,610
Change in net unrealized gain or loss (4,790) 294,031
...........................
Increase (decrease) in net assets from operations 54,365 421,043
...........................
Distributions to shareholders
Net investment income - (16,703)
Net realized gain - (116,072)
...........................
Decrease in net assets from distributions - (132,775)
...........................
Capital share transactions *
Shares sold 270,619 587,864
Distributions reinvested - 126,742
Shares redeemed (282,848) (324,546)
Redemption fees received 58 60
...........................
Increase (decrease) in net assets from capital
share transactions (12,171) 390,120
...........................
Net Assets
Increase (decrease) during period 42,194 678,388
Beginning of period 2,088,217 1,409,829
...........................
End of period $ 2,130,411 $ 2,088,217
---------------------------
*Share information
Shares sold 11,193 26,430
Distributions reinvested - 5,520
Shares redeemed (11,667) (14,781)
...........................
Increase (decrease) in shares outstanding (474) 17,169
The accompanying notes are an integral part of these financial statements.
22
<PAGE>
T. ROWE PRICE SMALL-CAP VALUE FUND
- --------------------------------------------------------------------------------
Unaudited June 30, 1998
- --------------------------------
Notes to Financial Statements
- --------------------------------------------------------------------------------
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
T. Rowe Price Small-Cap Value Fund, Inc. (the fund) is registered under the
Investment Company Act of 1940 as a diversified, open-end management
investment company and commenced operations on June 30, 1988.
The accompanying financial statements are prepared in accordance with
generally accepted accounting principles for the investment company
industry; these principles may require the use of estimates by fund
management.
Valuation Equity securities listed or regularly traded on a securities
exchange are valued at the last quoted sales price on the day the
valuations are made. A security which is listed or traded on more than one
exchange is valued at the quotation on the exchange determined to be the
primary market for such security. Listed securities not traded on a
particular day and securities regularly traded in the over-the-counter
market are valued at the mean of the latest bid and asked prices. Other
equity securities are valued at a price within the limits of the latest bid
and asked prices deemed by the Board of Directors, or by persons delegated
by the Board, best to reflect fair value.
Debt securities are generally traded in the over-the-counter market and are
valued at a price deemed best to reflect fair value as quoted by dealers
who make markets in these securities or by an independent pricing service.
Short-term debt securities are valued at amortized cost which, when
combined with accrued interest, approximates fair value.
Investments in mutual funds are valued at the closing net asset value per
share of the mutual fund on the day of valuation. Financial futures
contracts are valued at closing settlement prices.
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.
23
<PAGE>
T. ROWE PRICE SMALL-CAP VALUE FUND
- --------------------------------------------------------------------------------
Affiliated Companies As defined by the Investment Company Act of 1940, an
affiliated company is one in which the fund owns at least 5% of the
outstanding voting securities.
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.
Premiums and Discounts Premiums and discounts on debt securities are
amortized for both financial reporting and tax purposes.
Other Income and expenses are recorded on the accrual basis. Investment
transactions are accounted for on the trade date. Realized gains and losses
are reported on the identified cost basis. Dividend income and
distributions to shareholders are recorded by the fund on the ex-dividend
date. Income and capital gain distributions are determined in accordance
with federal income tax regulations and may differ from those determined in
accordance with generally accepted accounting principles. Payments
("variation margin") made or received by the fund to settle the daily
fluctuations in the value of futures contracts are recorded as unrealized
gains or losses until the contracts are closed. Unrealized gains and losses
on futures contracts are included in Other assets and Liabilities,
respectively, and in Change in net unrealized gain or loss in the
accompanying financial statements.
NOTE 2 - INVESTMENT TRANSACTIONS
Consistent with its investment objective, the fund engages in the following
practices to manage exposure to certain risks or enhance performance. The
investment objective, policies, program, and risk factors of the fund are
described more fully in the fund's prospectus and Statement of Additional
Information.
Futures Contracts At June 30, 1998, the fund was a party to futures
contracts, which provide for the future sale by one party and purchase by
another of a specified amount of a specific financial instrument at an
agreed upon price, date, time, and place. Risks arise from possible
illiquidity of the futures market and from movements in security values.
24
<PAGE>
T. ROWE PRICE SMALL-CAP VALUE FUND
- --------------------------------------------------------------------------------
Other Purchases and sales of portfolio securities, other than short-term
securities, aggregated $227,109,000 and $126,393,000, respectively, for the
six months ended June 30, 1998.
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, 1998, the aggregate cost of investments for federal income tax
and financial reporting purposes was $1,505,541,000, and net unrealized
gain aggregated $631,500,000, of which $717,197,000 related to appreciated
investments and $85,697,000 to depreciated investments.
NOTE 4 - RELATED PARTY TRANSACTIONS
The investment management agreement between the fund and T. Rowe Price
Associates, Inc. (the manager) provides for an annual investment management
fee, of which $1,182,000 was payable at June 30, 1998. The fee is computed
daily and paid monthly, and consists of an individual fund fee equal to
0.35% of average daily net assets and a group fee. The group fee is based
on the combined assets of certain mutual funds sponsored by the manager or
Rowe Price-Fleming International, Inc. (the group). The group fee rate
ranges from 0.48% for the first $1 billion of assets to 0.30% for assets in
excess of $80 billion. At June 30, 1998, and for the six months then ended,
the effective annual group fee rate was 0.32%. The fund pays a pro-rata
share of the group fee based on the ratio of its net assets to those of the
group.
In addition, the fund has entered into agreements with the manager and two
wholly owned subsidiaries of the manager, pursuant to which the fund
receives certain other services. The manager computes the daily share price
and maintains the financial records of the fund. T. Rowe Price Services,
Inc., is the fund's transfer and dividend disbursing agent and provides
shareholder and administrative services to the fund. T. Rowe Price
Retirement Plan Services, Inc., provides subaccounting and recordkeeping
services for certain retirement accounts invested in the fund. The fund
incurred expenses pursuant to these related party agreements totaling
approximately $1,586,000 for the six months ended June 30, 1998, of which
$299,000 was payable at period-end.
25
<PAGE>
T. ROWE PRICE SMALL-CAP VALUE FUND
- --------------------------------------------------------------------------------
The fund may invest in the Reserve Investment Fund and Government Reserve
Investment Fund (collectively, the Reserve Funds), open-end management
investment companies managed by T. Rowe Price Associates, Inc. The Reserve
Funds are offered as cash management options only to mutual funds and other
accounts managed by T. Rowe Price and its affiliates and are not available
to the public. The Reserve Funds pay no investment management fees.
Distributions from the Reserve Funds to the fund for the six months ended
June 30, 1998, totaled $6,141,000 and are reflected as interest income in
the accompanying Statement of Operations.
26
<PAGE>
T. ROWE PRICE SHAREHOLDER SERVICES
- --------------------------------------------------------------------------------
INVESTMENT SERVICES AND INFORMATION
KNOWLEDGEABLE SERVICE REPRESENTATIVES
By Phone 1-800-225-5132 Available Monday through Friday from
8 a.m. to 10 p.m. ET and weekends from 8:30 a.m. to 5 p.m. ET.
In Person Available in T. Rowe Price Investor Centers.
ACCOUNT SERVICES
Checking Available on most fixed income funds ($500 minimum).
Automatic Investing From your bank account or paycheck.
Automatic Withdrawal Scheduled, automatic redemptions.
Distribution Options Reinvest all, some, or none of your
distributions.
Automated 24-Hour Services Including Tele*Access(R) and the T.
Rowe Price Web site on the Internet. Address: www.troweprice.com
DISCOUNT BROKERAGE*
Individual Investments Stocks, bonds, options, precious metals,
and other securities at a savings over regular commission rates.
INVESTMENT INFORMATION
Combined Statement Overview of all your accounts with T. Rowe Price.
Shareholder Reports Fund managers' reviews of their strategies
and results.
T. Rowe Price Report Quarterly investment newsletter discussing
markets and financial strategies.
Performance Update Quarterly review of all T. Rowe Price fund
results.
Insights Educational reports on investment strategies and
financial markets.
Investment Guides Asset Mix Worksheet, College Planning Kit,
Diversifying Overseas: A Guide to International Investing, Personal
Strategy Planner, Retirees Financial Guide, and Retirement Planning
Kit.
*A division of T. Rowe Price Investment Services, Inc. Member
NASD/SIPC.
27
<PAGE>
T. ROWE PRICE MUTUAL FUNDS
- --------------------------------------------------------------------------------
STOCK FUNDS
- -----------------------
Domestic
Blue Chip Growth
Capital Appreciation
Capital Opportunity
Diversified Small-Cap Growth
Dividend Growth
Equity Income
Equity Index 500*
Extended Equity Market Index
Financial Services
Growth & Income
Growth Stock
Health Sciences
Media & Telecommunications**
Mid-Cap Growth
Mid-Cap Value
New America Growth
New Era
New Horizons***
Real Estate
Science & Technology
Small-Cap Stock
Small-Cap Value***
Spectrum Growth
Total Equity Market Index
Value
International/Global
Emerging Markets Stock
European Stock
Global Stock
International Discovery
International 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 Insured
Intermediate Tax-Free
Georgia Tax-Free Bond
Maryland Short-Term Tax-Free Bond
Maryland Tax-Free Bond
New Jersey Tax-Free Bond
New York Tax-Free Bond
Summit Municipal Income
Summit Municipal Intermediate
Tax-Free High Yield
Tax-Free Income
Tax-Free Insured Intermediate Bond
Tax-Free Short-Intermediate
Virginia Short-Term Tax-Free Bond
Virginia Tax-Free Bond
International/Global
Emerging Markets Bond
Global Bond+
International Bond
MONEY MARKET FUNDS++
- -----------------------
Taxable
Prime Reserve
Summit Cash Reserves
U.S. Treasury Money
Tax-Free
California Tax-Free Money
New York Tax-Free Money
Summit Municipal
Money Market
Tax-Exempt Money
BLENDED ASSET FUNDS
- -----------------------
Balanced
Personal Strategy Balanced
Personal Strategy Growth
Personal Strategy Income
Tax-Efficient Balanced
T. ROWE PRICE NO-LOAD
VARIABLE ANNUITY
- -----------------------
Equity Income Portfolio
International Stock Portfolio
Limited-Term Bond Portfolio
Mid-Cap Growth Portfolio
New America Growth Portfolio
Personal Strategy Balanced Portfolio
Prime Reserve Portfolio
*Formerly named Equity Index.
**Formerly the closed-end New Age Media Fund. Converted to open-end status on
7/28/97.
***Closed to new investors.
+Formerly named Global Government Bond.
++Neither the funds nor their share prices are insured or guaranteed by the
U.S. government.
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.
28
<PAGE>
T. ROWE PRICE DISCOUNT BROKERAGE
- --------------------------------------------------------------------------------
DISCOUNT BROKERAGE
A Division of T. Rowe Price Investment Services, Inc., Member NASD/SIPC
This low-cost service gives you the opportunity to easily consolidate
all your investments with one company. Through T. Rowe Price Discount
Brokerage, you can buy and sell individual securities--stocks, bonds,
options, and others--as well as mutual funds at considerable
commission savings over full-service brokers.* We also provide a wide
range of services, including:
Automated Telephone and Internet Services You can enter trades,
access quotes, and review account information 24 hours a day, seven
days a week. Any trades executed through these programs provide
additional savings on commissions.**
Investor Information A variety of informative reports, such as our
Brokerage Insights series, S&P Market Month newsletter, and select
stock reports, can help you better evaluate economic trends and
investment opportunities.
Dividend Reinvestment Service Virtually all stocks held in customer
accounts are eligible for this service, free of charge.
*Based on an April 1998 survey for representative-assisted stock
trades. Services vary by firm, and commissions may vary by size
of order.
**Discount applies to our current commission schedule. All trades
subject to a $35 minimum commission except equity trades placed
through Internet-Trader, which are subject to a $29.95 minimum
commission.
29
<PAGE>
For yield, price, last transaction,
current balance, or to conduct
transactions, 24 hours, 7 days
a week, call Tele*Access(R):
1-800-638-2587 toll free
For assistance
with your existing
fund account, call:
Shareholder Service Center
1-800-225-5132 toll free
410-625-6500 Baltimore area
To open a Discount Brokerage
account or obtain information,
call: 1-800-638-5660 toll free
Internet address:
www.troweprice.com
T. Rowe Price Associates
100 East Pratt Street
Baltimore, Maryland 21202
This report is authorized for
distribution only to shareholders
and to others who have received
a copy of the prospectus of the
T. Rowe Price Small-Cap Value Fund.
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
ARCO Tower
31st Floor
515 South Flower St.
Los Angeles, CA 90071
4200 West Cypress St.
10th Floor
Tampa, FL 33607
[LOGO OF T. ROWE PRICE APPEARS HERE]
T. Rowe Price Investment Services, Inc., Distributor. F46-051 6/30/98
