Fellow Shareholders
Although performance for the unmanaged S&P 500 Stock Index was marginally
positive for the quarter ended June 30, it nonetheless could not offset first
quarter losses, resulting in an overall decline for the year to date. April
and May returns were generally favorable, but rising interest rates and
inflationary fears in June caused bond market losses and a generally negative
market psychology that spilled over into virtually every area of the U.S.
stock market.
Your Fund closely tracked the S&P 500 Index for the three and six months
ended June 30. The small disparity against the Index reflects the ex-penses of
running a mutual fund.
Performance Comparison
Periods Ended 6/30/94
3 Months 6 Months
_____________________
Equity Index Fund 0.3% -3.6%
S&P 500 0.4 -3.4
Dividend Distributions
On June 27, your Board of Directors declared a second quarter dividend of
$0.08 per share, pay-able to shareholders of record on that date. Your check
or statement reflecting this distribution was mailed separately.
Market Review
Stocks of larger-capitalization companies generally declined less than those
of smaller companies in the first half of the year. Since the S&P 500 is
dominated by large companies, its performance exceeded that of many other
equity benchmarks. For the three- and six-month periods, the small-company
Nasdaq Composite underperformed the S&P 500 by about five percentage points.
Unlike other recent periods, no strong performance divergence existed
between growth and value stocks during the quarter. The S&P/Barra Growth Index
declined by 0.1% while the S&P/ Barra Value Index increased by 0.9%. This
modest gap is almost insignificant relative to the 17% differential in 1993.
Portfolio Review
Assets grew by almost 21% over the last six months largely because your Fund
remained a popular choice for retirement programs, whose participants invest
regularly with a long-term horizon. Overseeing an index fund actually becomes
more efficient and easier as assets increase-the opposite situation from many
types of actively managed funds. Not only are the fixed expenses spread out
over a wider asset base, but the added cash flow makes for a much closer
replication of the targeted index. To further boost assets, the Fund was
opened to retail investors on April 7, 1994.
Reviewing the Fund's holdings, electric utilities continued to receive
the pummeling that began last quarter and fell an additional 10%. Higher
interest rates and increased competition were the culprits. Utility stocks,
traditionally viewed as "defensive" in market downturns, have fallen almost
25% so far in 1994. Capital equipment stocks, such as Caterpillar, and
construction stocks, such as Pulte, dropped sharply for the quarter.
Technology stocks fared poorly, even though current fundamentals are strong,
because investors worried about upcoming product transitions and cutthroat
competition.
On the bright side, financial and natural resource stocks were lifted
due to the higher interest rates and the threat of increased inflation.
BankAmerica and Chase Manhattan were up sharply, and mortgage intermediaries,
such as the Federal Home Loan Mortgage Corporation (Freddie Mac), were also
strong. Energy and chemical stocks, such as Mobil and DuPont, performed well
as vigorous economic growth generally leads to increased commodity prices.
Health care stocks, generally strong in the quarter, were led by the large
drug companies Johnson & Johnson and Pfizer. HMO and bio-technology stocks,
however, were quite weak.
This has been a quiet year for changes in the S&P 500, with a notable
exception. Microsoft be-came the S&P 500's fourteenth-largest company when it
was added in June. Many investors were surprised to learn that such a large
company was not already in the S&P Index, but too much of the company's stock
had been previously owned by insiders to allow its inclusion until re-cently.
Standard & Poor's requires a certain level of publicly held stock to make
effective indexing feasible.
Derivatives in Index Funds
The use of derivatives has been newsworthy recently as some big investors have
suffered losses related to positions in these securities. Derivative
investments, so named because their prices are derived from those of other
securities, are used in a variety of ways to help investors control risks.
Unfortunately, when improperly used, derivatives can increase risk just like
any other security.
As we have discussed in previous reports, your Fund uses stock index
futures contracts, a type of derivative security, to help manage its cash flow
and thereby reduce costs. However, your Fund uses derivatives only as a
temporary measure, and we eventually undertake a corresponding investment
directly in the stock market. For example, we purchase futures contracts with
each day's net cash inflows. When the size of our futures positions reaches a
specific level, and if the market conditions are right, we sell the contracts
and buy the corresponding stocks. This avoids generating many small-and
expensive-trades. It is possible to manage an index fund without using
derivatives, but the performance divergence between the fund and the index
would increase dramatically.
Returns by Market Sector
Three Months Ended June 30, 1994
Financial 4.6%
Process Industries 2.3
Energy 1.5
Business Services & Transportation 0.1
Consumer Nondurables -0.8
Basic Materials -1.9
Utilities -2.9
Consumer Services -3.5
Technology -4.3
Capital Equipment -4.9
Consumer Cyclicals -6.3
Outlook
The financial markets are likely to remain skittish until investors feel more
confident about the direction of interest rates. The Fed may be forced to
tighten again to defend the dollar, but we believe it will wait to see the
effect of the last round of rate increases on the economy before raising the
federal funds rate again. If the economy grows at around a 3% rate in the
second half of 1994, we expect the Fed will push short-term rates higher
before the year is out. Since the U.S. economy is fundamentally sound,
equities could rebound once investor psychology improves.
Respectfully submitted,
Richard T. Whitney
President
July 22, 1994
Contributions to the Net Asset Value Per Share
T. Rowe Price Equity Index Fund
Three Months Ended June 30, 1994
_____________________________________________________________________________
TEN BEST CONTRIBUTORS
AT&T 1(cents)
DuPont 1
Johnson & Johnson 1
Royal Dutch Petroleum 1
Pfizer 1
Mobil 1
IBM 1
BankAmerica 1
Abbott Laboratories 1
BellSouth 1
Total 10(cents)
TEN WORST CONTRIBUTORS
Pacific Telesis -3(cents)
Exxon 2
GE 2
PepsiCo 2
Intel 1
Wal-Mart 1
Motorola 1
cisco Systems 1
General Motors 1
Pacific Gas & Electric 1
_____________________________________________________________________________
Total -15(cents)
Six Months Ended June 30, 1994
_____________________________________________________________________________
TEN BEST CONTRIBUTORS
DuPont 2(cents)
Dow Chemical 1
Oracle Systems 1
COMPAQ Computer 1
Western Atlas 1
Amoco 1
Columbia/HCA Healthcare 1
AT&T 1
BellSouth 0
Fannie Mae 0
_____________________________________________________________________________
Total 9(cents)
TEN WORST CONTRIBUTORS
GE -4(cents)
Pacific Telesis 3
PepsiCo 3
Exxon 3
Merck 2
Coke 2
Pacific Gas & Electric 2
Tele-Communications 2
Philip Morris 1
GTE 1
_____________________________________________________________________________
Total -23(cents)
Twenty-Five Largest Holdings
June 30, 1994
Percent of
Net Assets
__________
GE 1.9%
AT&T 1.8
Exxon 1.7
Royal Dutch Petroleum 1.4
Wal-Mart 1.4
Coke 1.3
Philip Morris 1.1
DuPont 1.0
General Motors 0.9
Merck 0.9
Procter & Gamble 0.9
IBM 0.8
Mobil 0.8
BellSouth 0.7
GTE 0.7
Ford Motor 0.7
Microsoft 0.7
Amoco 0.7
Johnson & Johnson 0.7
Bristol-Myers Squibb 0.7
American International Group 0.7
Chevron 0.6
Southwestern Bell 0.6
Bell Atlantic 0.6
PepsiCo 0.6
_____________________________________________________________________________
Total 23.9%
Statement of Net Assets (Value in thousands)
T. Rowe Price Equity Index Fund / June 30, 1994 (Unaudited)
Common Stocks - 77.4%
INDUSTRIAL - 58.9%
Value
____________
81,132 shs. GE . . . . . . . . . . . . . . . . . . . . $ 3,783
64,169 AT&T . . . . . . . . . . . . . . . . . . . 3,489
58,997 Exxon. . . . . . . . . . . . . . . . . . . 3,341
25,515 Royal Dutch Petroleum, ADR . . . . . . . . 2,669
109,322 Wal-Mart . . . . . . . . . . . . . . . . . 2,651
61,722 Coke . . . . . . . . . . . . . . . . . . . 2,507
41,574 Philip Morris. . . . . . . . . . . . . . . 2,141
32,224 DuPont . . . . . . . . . . . . . . . . . . 1,881
35,211 GM . . . . . . . . . . . . . . . . . . . . 1,769
59,304 Merck. . . . . . . . . . . . . . . . . . . 1,764
32,319 Procter & Gamble . . . . . . . . . . . . . 1,725
27,462 IBM. . . . . . . . . . . . . . . . . . . . 1,613
18,944 Mobil. . . . . . . . . . . . . . . . . . . 1,546
23,607 Ford Motor . . . . . . . . . . . . . . . . 1,393
26,800 * Microsoft. . . . . . . . . . . . . . . . . 1,380
23,513 Amoco. . . . . . . . . . . . . . . . . . . 1,340
31,118 Johnson & Johnson. . . . . . . . . . . . . 1,334
24,649 Bristol-Myers Squibb . . . . . . . . . . . 1,322
30,380 Chevron. . . . . . . . . . . . . . . . . . 1,272
37,731 PepsiCo. . . . . . . . . . . . . . . . . . 1,156
19,704 Intel. . . . . . . . . . . . . . . . . . . 1,153
25,848 Motorola . . . . . . . . . . . . . . . . . 1,150
39,323 Abbott Laboratories. . . . . . . . . . . . 1,140
25,405 Disney . . . . . . . . . . . . . . . . . . 1,057
20,546 3M . . . . . . . . . . . . . . . . . . . . 1,017
33,712 McDonald's . . . . . . . . . . . . . . . . 973
15,178 Pfizer . . . . . . . . . . . . . . . . . . 958
12,126 Hewlett-Packard. . . . . . . . . . . . . . 914
21,312 Home Depot . . . . . . . . . . . . . . . . 898
13,082 Dow Chemical . . . . . . . . . . . . . . . 855
14,725 American Home Products . . . . . . . . . . 836
16,630 Sears. . . . . . . . . . . . . . . . . . . 798
13,910 Eli Lilly. . . . . . . . . . . . . . . . . 791
16,740 Chrysler . . . . . . . . . . . . . . . . . 789
7,687 Unilever N.V., ADR . . . . . . . . . . . . 774
7,572 Atlantic Richfield . . . . . . . . . . . . 773
15,719 Eastman Kodak. . . . . . . . . . . . . . . 756
16,164 Boeing . . . . . . . . . . . . . . . . . . 748
12,294 Texaco . . . . . . . . . . . . . . . . . . 742
11,592 Schlumberger . . . . . . . . . . . . . . . 685
10,480 Gillette . . . . . . . . . . . . . . . . . 682
12,856 Anheuser-Busch . . . . . . . . . . . . . . 652
17,793 Time Warner. . . . . . . . . . . . . . . . 625
10,732 Emerson Electric . . . . . . . . . . . . . 610
11,214 J.C. Penney. . . . . . . . . . . . . . . . 608
22,829 WMX Technologies . . . . . . . . . . . . . 605
11,075 shs. Kellogg. . . . . . . . . . . . . . . . . . 602
15,810 Columbia / HCA Healthcare. . . . . . . . . 593
16,175 Sprint . . . . . . . . . . . . . . . . . . 564
25,430 MCI. . . . . . . . . . . . . . . . . . . . 563
9,006 Schering-Plough. . . . . . . . . . . . . . 552
23,289 AirTouch Communications. . . . . . . . . . 550
7,660 Capital Cities/ABC . . . . . . . . . . . . 545
17,753 Seagram. . . . . . . . . . . . . . . . . . 537
13,554 * Oracle Systems . . . . . . . . . . . . . . 508
9,600 * McCaw Cellular Communications
(Class A). . . . . . . . . . . . . . . . 497
23,124 Sara Lee . . . . . . . . . . . . . . . . . 491
4,959 Xerox. . . . . . . . . . . . . . . . . . . 485
8,465 Dun & Bradstreet . . . . . . . . . . . . . 470
11,842 May Department Stores. . . . . . . . . . . 465
4,579 Caterpillar. . . . . . . . . . . . . . . . 458
13,816 * Toys "R" Us. . . . . . . . . . . . . . . . 452
12,814 Allied-Signal. . . . . . . . . . . . . . . 444
5,341 ITT. . . . . . . . . . . . . . . . . . . . 436
21,297 * Tele-Communications. . . . . . . . . . . . 434
5,417 Monsanto . . . . . . . . . . . . . . . . . 410
11,894 Campbell . . . . . . . . . . . . . . . . . 409
7,682 Kimberly-Clark . . . . . . . . . . . . . . 406
7,342 General Mills. . . . . . . . . . . . . . . 401
6,044 Warner-Lambert . . . . . . . . . . . . . . 399
6,001 International Paper. . . . . . . . . . . . 398
6,119 Raytheon . . . . . . . . . . . . . . . . . 396
10,496 PPG Industries . . . . . . . . . . . . . . 394
10,403 RockWell . . . . . . . . . . . . . . . . . 389
9,702 Weyerhaeuser . . . . . . . . . . . . . . . 388
12,402 Phillips Petroleum . . . . . . . . . . . . 388
6,013 United Technologies. . . . . . . . . . . . 386
12,032 Heinz. . . . . . . . . . . . . . . . . . . 384
11,820 * COMPAQ Computer. . . . . . . . . . . . . . 381
8,100 Tenneco. . . . . . . . . . . . . . . . . . 376
7,185 Colgate-Palmolive. . . . . . . . . . . . . 374
15,920 Archer Daniels Midland . . . . . . . . . . 370
6,878 Automatic Data Processing. . . . . . . . . 365
11,889 ConAgra. . . . . . . . . . . . . . . . . . 363
7,800 United HealthCare. . . . . . . . . . . . . 358
7,032 Gannett. . . . . . . . . . . . . . . . . . 348
4,351 Texas Instruments. . . . . . . . . . . . . 346
13,169 Baxter International . . . . . . . . . . . 346
11,955 Northern Telecom . . . . . . . . . . . . . 330
4,753 AMP. . . . . . . . . . . . . . . . . . . . 329
11,429 Unocal . . . . . . . . . . . . . . . . . . 327
11,844 Albertson's. . . . . . . . . . . . . . . . 326
6,735 CPC International. . . . . . . . . . . . . 325
4,431 Alcoa. . . . . . . . . . . . . . . . . . . 324
13,500 American Barrick Resources . . . . . . . . 322
9,502 Corning. . . . . . . . . . . . . . . . . . 310
7,665 Computer Associates. . . . . . . . . . . . 307
T. Rowe Price Equity Index Fund / Statement of Net Assets
INDUSTRIAL (Cont'd)
9,636 shs. American Brands. . . . . . . . . . . . . . $ 305
1,731 BLOCKBUSTER Entertainment. . . . . . . . . 304
7,035 The Gap. . . . . . . . . . . . . . . . . . 301
19,398 K mart . . . . . . . . . . . . . . . . . . 301
17,233 The Limited. . . . . . . . . . . . . . . . 297
17,440 * Novell . . . . . . . . . . . . . . . . . . 292
7,566 Pitney Bowes . . . . . . . . . . . . . . . 289
4,172 Nucor. . . . . . . . . . . . . . . . . . . 286
3,412 Marsh & McLennan . . . . . . . . . . . . . 284
7,600 U.S. Healthcare . . . . . . . . . . . . . 281
6,521 * Amgen. . . . . . . . . . . . . . . . . . . 280
3,431 Dayton Hudson. . . . . . . . . . . . . . . 278
4,058 Deere. . . . . . . . . . . . . . . . . . . 274
14,521 Occidental Petroleum . . . . . . . . . . . 274
5,758 Wrigley. . . . . . . . . . . . . . . . . . 273
11,600 * cisco Systems. . . . . . . . . . . . . . . 271
8,762 Browning-Ferris. . . . . . . . . . . . . . 266
9,798 UST. . . . . . . . . . . . . . . . . . . . 266
7,352 Goodyear Tire & Rubber . . . . . . . . . . 265
6,300 Burlington Resources . . . . . . . . . . . 261
2,084 McDonnell Douglas. . . . . . . . . . . . . 244
4,069 Georgia-Pacific. . . . . . . . . . . . . . 244
8,358 Upjohn . . . . . . . . . . . . . . . . . . 243
11,314 Placer Dome. . . . . . . . . . . . . . . . 243
10,603 Alcan Aluminum . . . . . . . . . . . . . . 241
3,433 Quaker Oats. . . . . . . . . . . . . . . . 240
5,619 Air Products and Chemicals . . . . . . . . 238
4,206 American Cyanamid. . . . . . . . . . . . . 236
6,800 Lowes. . . . . . . . . . . . . . . . . . . 233
2,899 Medtronic. . . . . . . . . . . . . . . . . 232
736 CBS. . . . . . . . . . . . . . . . . . . . 228
13,581 USX-Marathon . . . . . . . . . . . . . . . 227
6,099 Genuine Parts. . . . . . . . . . . . . . . 220
6,016 Walgreen . . . . . . . . . . . . . . . . . 220
5,546 Illinois Tool Works. . . . . . . . . . . . 216
3,569 NIKE . . . . . . . . . . . . . . . . . . . 213
1,969 Hercules . . . . . . . . . . . . . . . . . 211
3,948 Textron. . . . . . . . . . . . . . . . . . 207
4,194 Amerada Hess . . . . . . . . . . . . . . . 207
8,137 Mattel . . . . . . . . . . . . . . . . . . 206
4,656 Martin Marietta . . . . . . . . . . . . . 205
6,606 Honeywell. . . . . . . . . . . . . . . . . 205
8,973 Sysco. . . . . . . . . . . . . . . . . . . 203
3,411 Avon . . . . . . . . . . . . . . . . . . . 201
7,295 Masco. . . . . . . . . . . . . . . . . . . 201
7,606 Rubbermaid . . . . . . . . . . . . . . . . 200
7,181 R. R. Donnelly . . . . . . . . . . . . . . 199
5,125 Melville . . . . . . . . . . . . . . . . . 199
5,507 Cooper Industries. . . . . . . . . . . . . 198
3,027 TRW. . . . . . . . . . . . . . . . . . . . 195
16,657 Westinghouse . . . . . . . . . . . . . . . 194
2,472 shs. Morton International . . . . . . . . . . . $ 193
7,208 Union Carbide. . . . . . . . . . . . . . . 193
3,083 Rohm & Haas. . . . . . . . . . . . . . . . 192
2,920 Lockheed . . . . . . . . . . . . . . . . . 191
10,500 * Comcast Corporation. . . . . . . . . . . . 189
3,697 Fluor. . . . . . . . . . . . . . . . . . . 188
4,785 H&R Block. . . . . . . . . . . . . . . . . 188
3,292 Phelps Dodge . . . . . . . . . . . . . . . 188
3,929 Eastman Chemical . . . . . . . . . . . . . 188
3,567 Scott Paper. . . . . . . . . . . . . . . . 186
4,743 International Flavors & Fragrances . . . . 186
5,455 Halliburton. . . . . . . . . . . . . . . . 184
4,599 W. R. Grace. . . . . . . . . . . . . . . . 183
5,213 Ingersoll-Rand . . . . . . . . . . . . . . 183
3,488 Eaton. . . . . . . . . . . . . . . . . . . 181
3,298 Great Lakes Chemical . . . . . . . . . . . 178
5,151 Ralston Purina . . . . . . . . . . . . . . 178
4,086 Hershey Foods. . . . . . . . . . . . . . . 177
3,430 Gerber . . . . . . . . . . . . . . . . . . 175
3,776 Newell . . . . . . . . . . . . . . . . . . 175
5,767 Times Mirror . . . . . . . . . . . . . . . 174
3,293 Whirlpool. . . . . . . . . . . . . . . . . 173
8,255 Dresser Industries . . . . . . . . . . . . 169
2,622 W. W. Grainger . . . . . . . . . . . . . . 167
3,127 Tribune. . . . . . . . . . . . . . . . . . 167
4,098 Newmont Mining . . . . . . . . . . . . . . 165
5,296 Louisiana Pacific. . . . . . . . . . . . . 162
3,798 Nordstrom. . . . . . . . . . . . . . . . . 161
6,554 American Stores. . . . . . . . . . . . . . 161
4,997 Dillard Department Stores (Class A). . . . 154
10,327 * Price/Costco . . . . . . . . . . . . . . . 154
3,558 Winn-Dixie . . . . . . . . . . . . . . . . 153
2,075 McKesson . . . . . . . . . . . . . . . . . 150
3,289 Union Camp . . . . . . . . . . . . . . . . 149
5,560 Marriot International . . . . . . . . . . 148
3,967 * Crown Cork & Seal. . . . . . . . . . . . . 148
4,699 Dow Jones. . . . . . . . . . . . . . . . . 146
4,160 Loral. . . . . . . . . . . . . . . . . . . 146
4,899 * Promus Companies . . . . . . . . . . . . . 145
5,388 Apple Computer . . . . . . . . . . . . . . 143
3,450 Becton, Dickinson. . . . . . . . . . . . . 141
5,238 Sun Company. . . . . . . . . . . . . . . . 141
2,380 Dover. . . . . . . . . . . . . . . . . . . 140
2,098 McGraw-Hill. . . . . . . . . . . . . . . . 140
6,779 Baker Hughes . . . . . . . . . . . . . . . 139
4,198 Champion International . . . . . . . . . . 138
3,356 General Dynamics . . . . . . . . . . . . . 137
2,881 V. F.. . . . . . . . . . . . . . . . . . . 137
4,100 Pioneer Hi Bred. . . . . . . . . . . . . . 134
2,622 Knight-Ridder. . . . . . . . . . . . . . . 134
2,729 Clorox . . . . . . . . . . . . . . . . . . 133
2,476 Hilton . . . . . . . . . . . . . . . . . . 131
2,747 shs. Temple-Inland. . . . . . . . . . . . . . . $ 131
4,058 Sherwin-Williams . . . . . . . . . . . . . 128
2,881 Mead . . . . . . . . . . . . . . . . . . . 127
4,200 Reebok . . . . . . . . . . . . . . . . . . 125
8,006 National Medical Enterprises . . . . . . . 125
6,447 * Digital Equipment. . . . . . . . . . . . . 125
3,538 Harcourt General . . . . . . . . . . . . . 124
6,610 Homestake Mining . . . . . . . . . . . . . 124
2,411 Pennzoil . . . . . . . . . . . . . . . . . 124
5,242 * Kroger . . . . . . . . . . . . . . . . . . 122
4,096 Cyprus Amax Minerals . . . . . . . . . . . 122
4,807 Engelhard. . . . . . . . . . . . . . . . . 121
5,051 New York Times . . . . . . . . . . . . . . 121
6,140 Praxair Incorporated . . . . . . . . . . . 120
4,934 Inco . . . . . . . . . . . . . . . . . . . 120
4,000 Hasbro . . . . . . . . . . . . . . . . . . 118
4,138 Dana . . . . . . . . . . . . . . . . . . . 118
3,549 Mallinckrodt Group . . . . . . . . . . . . 115
2,391 Reynolds Metals. . . . . . . . . . . . . . 115
3,327 USX-U.S. Steel . . . . . . . . . . . . . . 113
3,634 Interpublic Group. . . . . . . . . . . . . 113
2,372 Tyco Laboratories. . . . . . . . . . . . . 109
4,194 Service Corp.. . . . . . . . . . . . . . . 108
3,590 American Greetings (Class A) . . . . . . . 108
4,307 * Advanced Micro Devices . . . . . . . . . . 107
1,422 Premark International. . . . . . . . . . . 107
2,880 Bausch & Lomb. . . . . . . . . . . . . . . 107
2,479 Parker Hannifin. . . . . . . . . . . . . . 106
3,060 Tandy. . . . . . . . . . . . . . . . . . . 106
5,352 * DSC Communications . . . . . . . . . . . . 105
3,284 Nalco Chemical . . . . . . . . . . . . . . 105
1,830 Alco Standard. . . . . . . . . . . . . . . 105
3,424 Supervalu . . . . . . . . . . . . . . . . 104
3,921 Deluxe Corp. . . . . . . . . . . . . . . . 103
4,991 * Sun Microsystems . . . . . . . . . . . . . 103
6,331 WoolWorth. . . . . . . . . . . . . . . . . 100
4,439 Brunswick. . . . . . . . . . . . . . . . . 98
2,884 Ashland Oil. . . . . . . . . . . . . . . . 97
3,141 Westvaco . . . . . . . . . . . . . . . . . 97
1,987 * Western Atlas. . . . . . . . . . . . . . . 95
2,348 Stanley Works. . . . . . . . . . . . . . . 94
1,985 Kerr-McGeeq. . . . . . . . . . . . . . . . 94
2,104 Harris . . . . . . . . . . . . . . . . . . 93
4,904 * Bethlehem Steel. . . . . . . . . . . . . . 91
2,877 Pep Boys . . . . . . . . . . . . . . . . . 91
5,273 * National Semiconductor . . . . . . . . . . 91
3,201 Brown-Forman (Class B) . . . . . . . . . . 90
2,087 Dial . . . . . . . . . . . . . . . . . . . 89
4,763 Pet. . . . . . . . . . . . . . . . . . . . 89
2,387 Northrop . . . . . . . . . . . . . . . . . 89
3,829 Cooper Tire. . . . . . . . . . . . . . . . 89
4,755 Maytag . . . . . . . . . . . . . . . . . . 88
3,730 * ALZA . . . . . . . . . . . . . . . . . . . 88
2,992 Avery Dennison . . . . . . . . . . . . . . 87
1,793 shs. Johnson Controls . . . . . . . . . . . . . $ 87
4,212 Circuit City Stores. . . . . . . . . . . . 86
4,180 Rite Aid . . . . . . . . . . . . . . . . . 85
2,785 Echlin . . . . . . . . . . . . . . . . . . 84
6,672 Borden . . . . . . . . . . . . . . . . . . 83
1,757 PACCAR . . . . . . . . . . . . . . . . . . 81
4,758 Moore. . . . . . . . . . . . . . . . . . . 80
3,949 Liz Claiborne. . . . . . . . . . . . . . . 79
1,458 * FMC. . . . . . . . . . . . . . . . . . . . 79
5,253 Pall . . . . . . . . . . . . . . . . . . . 79
4,233 Worthington Industries . . . . . . . . . . 78
1,660 Armstrong World. . . . . . . . . . . . . . 77
4,846 Wendys . . . . . . . . . . . . . . . . . . 76
1,718 Cummins Engine Incorporated. . . . . . . . 74
4,801 Whitman. . . . . . . . . . . . . . . . . . 74
2,057 Raychem. . . . . . . . . . . . . . . . . . 74
1,709 Louisiana Land & Exploration . . . . . . . 73
1,964 * Lotus Development. . . . . . . . . . . . . 72
1,933 Snap-on Tools. . . . . . . . . . . . . . . 72
7,752 * Unisys . . . . . . . . . . . . . . . . . . 72
3,274 TJX. . . . . . . . . . . . . . . . . . . . 72
1,716 * Computer Sciences. . . . . . . . . . . . . 71
1,927 Foster Wheeler . . . . . . . . . . . . . . 70
2,745 Manor Care . . . . . . . . . . . . . . . . 69
4,582 Oryx Energy. . . . . . . . . . . . . . . . 69
1,888 * Varity . . . . . . . . . . . . . . . . . . 69
3,149 Allergan . . . . . . . . . . . . . . . . . 68
1,947 * Inland Steel Industries. . . . . . . . . . 68
3,048 Ecolab . . . . . . . . . . . . . . . . . . 67
3,895 James River. . . . . . . . . . . . . . . . 66
1,336 Autodesk . . . . . . . . . . . . . . . . . 66
3,795 Black & Decker . . . . . . . . . . . . . . 65
2,512 National Service Industries. . . . . . . . 65
2,609 McDermott International. . . . . . . . . . 65
1,991 St. Jude Medical . . . . . . . . . . . . . 65
4,380 * Stone Container. . . . . . . . . . . . . . 64
1,995 Polaroid . . . . . . . . . . . . . . . . . 64
1,975 Merchantile Stores . . . . . . . . . . . . 63
2,643 C. R. Bard . . . . . . . . . . . . . . . . 63
5,526 * Tandem Computers . . . . . . . . . . . . . 62
2,208 ASARCO . . . . . . . . . . . . . . . . . . 62
994 * Clark Equipment. . . . . . . . . . . . . . 59
1,796 General Signal . . . . . . . . . . . . . . 59
1,721 Scientific-Atlanta . . . . . . . . . . . . 59
1,480 * King World Productions . . . . . . . . . . 59
2,628 United States Surgical . . . . . . . . . . 58
5,620 * Biomet . . . . . . . . . . . . . . . . . . 58
858 Briggs & Stratton. . . . . . . . . . . . . 57
2,918 Giant Food . . . . . . . . . . . . . . . . 57
1,951 Perkin-Elmer . . . . . . . . . . . . . . . 57
1,820 * Owens-Corning. . . . . . . . . . . . . . . 57
5,260 Echo Bay Mines . . . . . . . . . . . . . . 57
2,269 * Ceridian . . . . . . . . . . . . . . . . . 56
T. Rowe Price Equity Index Fund/Statement of Net Assets
INDUSTRIAL (Cont'd)
2,485 shs. Bemis. . . . . . . . . . . . . . . . . . . $ 55
1,967 Fleming Companies. . . . . . . . . . . . . 55
877 Thomas & Betts . . . . . . . . . . . . . . 54
1,391 Potlatch . . . . . . . . . . . . . . . . . 54
1,785 Russell. . . . . . . . . . . . . . . . . . 52
1,478 TRINOVA. . . . . . . . . . . . . . . . . . 51
2,233 Federal Paper Board. . . . . . . . . . . . 51
958 Millipore. . . . . . . . . . . . . . . . . 51
1,324 E-Systems. . . . . . . . . . . . . . . . . 49
1,496 Timken . . . . . . . . . . . . . . . . . . 49
2,808 Safety-Kleen . . . . . . . . . . . . . . . 48
3,930 * Beverly Enterprises. . . . . . . . . . . . 48
1,077 B. F. Goodrich . . . . . . . . . . . . . . 47
4,876 Charming Shoppes . . . . . . . . . . . . . 46
2,780 Teledyne . . . . . . . . . . . . . . . . . 44
3,229 * Navistar . . . . . . . . . . . . . . . . . 43
1,959 Ogden. . . . . . . . . . . . . . . . . . . 43
1,146 * Andrew . . . . . . . . . . . . . . . . . . 42
2,751 EG&G . . . . . . . . . . . . . . . . . . . 41
1,539 Ball . . . . . . . . . . . . . . . . . . . 40
941 Meredith . . . . . . . . . . . . . . . . . 40
1,503 Crane. . . . . . . . . . . . . . . . . . . 40
4,221 Santa Fe Energy Resources. . . . . . . . . 40
2,010 Fleetwood. . . . . . . . . . . . . . . . . 38
2,349 Jostens. . . . . . . . . . . . . . . . . . 38
972 Brown Group. . . . . . . . . . . . . . . . 37
1,272 Tektronix. . . . . . . . . . . . . . . . . 36
4,001 * Rowan. . . . . . . . . . . . . . . . . . . 35
1,596 A & P. . . . . . . . . . . . . . . . . . . 34
1,302 Centex . . . . . . . . . . . . . . . . . . 34
6,542 * Maxus Energy . . . . . . . . . . . . . . . 33
1,463 Boise Cascade. . . . . . . . . . . . . . . 32
2,104 * Shoney's . . . . . . . . . . . . . . . . . 32
897 Longs Drug Stores. . . . . . . . . . . . . 32
1,414 Luby's Cafeterias. . . . . . . . . . . . . 32
1,461 Alberto Culver . . . . . . . . . . . . . . 32
1,452 John H. Harland. . . . . . . . . . . . . . 32
1,925 Alexander & Alexander. . . . . . . . . . . 31
5,480 Amdahl . . . . . . . . . . . . . . . . . . 30
2,302 Stride Rite. . . . . . . . . . . . . . . . 30
1,362 Morrison-Knudsen . . . . . . . . . . . . . 29
5,143 * Armco. . . . . . . . . . . . . . . . . . . 29
1,256 Pulte. . . . . . . . . . . . . . . . . . . 29
1,346 Cincinnati Milacron. . . . . . . . . . . . 28
3,771 Bruno's. . . . . . . . . . . . . . . . . . 27
1,557 Coors. . . . . . . . . . . . . . . . . . . 27
1,393 Harnischfeger. . . . . . . . . . . . . . . 27
1,162 * Cray Research. . . . . . . . . . . . . . . 26
923 Helmerich & Payne. . . . . . . . . . . . . 24
2,385 * Intergraph . . . . . . . . . . . . . . . . 23
1,729 Kaufman & Broad. . . . . . . . . . . . . . 23
1,888 shs. * Community Psychiatric Centers. . . . . . . $ 22
1,426 Giddings & Lewis . . . . . . . . . . . . . 22
907 Shared Medical Systems . . . . . . . . . . 22
381 NACCO Industries . . . . . . . . . . . . . 20
685 Bassett Furniture. . . . . . . . . . . . . 20
2,563 * Ryan's Family Steak Houses . . . . . . . . 19
807 Outboard Marine. . . . . . . . . . . . . . 16
1,665 * Zenith Electronics . . . . . . . . . . . . 15
1,823 * Data General . . . . . . . . . . . . . . . 14
469 Springs Industries . . . . . . . . . . . . 14
786 * National Intergroup. . . . . . . . . . . . 14
2,866 Rollins Environmental Services . . . . . . 14
868 First Mississippi. . . . . . . . . . . . . 13
1,316 Handleman. . . . . . . . . . . . . . . . . 13
2,043 * Bally Entertainment. . . . . . . . . . . . 13
923 Oshkosh B'Gosh . . . . . . . . . . . . . . 13
1,677 * Hartmarx . . . . . . . . . . . . . . . . . 10
431 Zurn Industries. . . . . . . . . . . . . . 9
388 Skyline. . . . . . . . . . . . . . . . . . 7
418 SPX. . . . . . . . . . . . . . . . . . . . 6
955 * National Education . . . . . . . . . . . . 5
1,257 * Genesco. . . . . . . . . . . . . . . . . . 4
Total Industrial 115,542
UTILITIES - 8.1%
23,528 BellSouth. . . . . . . . . . . . . . . . . 1,453
44,761 GTE. . . . . . . . . . . . . . . . . . . . 1,410
28,508 Southwestern Bell. . . . . . . . . . . . . 1,240
20,764 Bell Atlantic. . . . . . . . . . . . . . . 1,163
25,910 Ameritech. . . . . . . . . . . . . . . . . 991
20,886 U. S. WEST . . . . . . . . . . . . . . . . 875
19,660 NYNEX. . . . . . . . . . . . . . . . . . . 745
19,789 Pacific Telesis. . . . . . . . . . . . . . 611
30,264 Southern Company . . . . . . . . . . . . . 567
20,582 Pacific Gas & Electric . . . . . . . . . . 489
11,348 Enron. . . . . . . . . . . . . . . . . . . 372
9,720 Duke Power . . . . . . . . . . . . . . . . 347
10,625 Texas Utilities. . . . . . . . . . . . . . 333
11,483 Public Service Enterprise. . . . . . . . . 299
11,121 Consolidated Edison. . . . . . . . . . . . 295
7,888 Dominion Resources . . . . . . . . . . . . 287
10,565 PECO Energy . . . . . . . . . . . . . . . 279
21,316 SCE. . . . . . . . . . . . . . . . . . . . 274
10,967 Entergy. . . . . . . . . . . . . . . . . . 271
8,893 FPL Group. . . . . . . . . . . . . . . . . 266
8,821 American Electric Power. . . . . . . . . . 249
10,127 Commonwealth Edison. . . . . . . . . . . . 230
13,229 PacifiCorp . . . . . . . . . . . . . . . . 223
6,378 Houston Industries . . . . . . . . . . . . 208
8,961 Central & South West . . . . . . . . . . . 190
7,056 shs. Detroit Edison . . . . . . . . . . . . . . $ 175
7,182 Carolina Power & Light . . . . . . . . . . 166
4,376 Consolidated Natural Gas . . . . . . . . . 165
4,824 Union Electric . . . . . . . . . . . . . . 153
6,870 BG&E . . . . . . . . . . . . . . . . . . . 146
4,830 Williams Companies . . . . . . . . . . . . 138
5,115 Coastal. . . . . . . . . . . . . . . . . . 138
3,211 Northern States Power. . . . . . . . . . . 132
7,291 Ohio Edison. . . . . . . . . . . . . . . . 130
3,874 Sonat. . . . . . . . . . . . . . . . . . . 119
5,659 Panhandle Eastern. . . . . . . . . . . . . 112
6,709 Niagara Mohawk . . . . . . . . . . . . . . 101
3,977 Pacific Enterprises. . . . . . . . . . . . 79
2,378 NICOR. . . . . . . . . . . . . . . . . . . 63
2,777 PSI Resources. . . . . . . . . . . . . . . 59
1,990 * Columbia Gas System. . . . . . . . . . . . 54
3,117 ENSERCH. . . . . . . . . . . . . . . . . . 45
1,630 Peoples Energy . . . . . . . . . . . . . . 38
5,967 Noram Energy . . . . . . . . . . . . . . . 36
1,768 Transco Energy . . . . . . . . . . . . . . 29
1,296 ONEOK. . . . . . . . . . . . . . . . . . . 22
645 Eastern Enterprises. . . . . . . . . . . . 15
Total Utilities 15,782
FINANCIAL - 8.9%
15,092 American International Group . . . . . . . 1,307
12,933 Fannie Mae . . . . . . . . . . . . . . . . 1,080
16,976 BankAmerica. . . . . . . . . . . . . . . . 777
17,780 Citicorp . . . . . . . . . . . . . . . . . 709
12,788 NationsBank. . . . . . . . . . . . . . . . 657
17,883 BANC ONE . . . . . . . . . . . . . . . . . 612
23,042 American Express . . . . . . . . . . . . . 593
9,118 J. P. Morgan . . . . . . . . . . . . . . . 564
8,494 Freddie Mac. . . . . . . . . . . . . . . . 514
15,223 Travelers. . . . . . . . . . . . . . . . . 491
4,251 General Re . . . . . . . . . . . . . . . . 463
11,943 Chemical Banking . . . . . . . . . . . . . 460
14,652 Norwest. . . . . . . . . . . . . . . . . . 383
7,990 First Union. . . . . . . . . . . . . . . . 369
2,429 Wells Fargo. . . . . . . . . . . . . . . . 365
11,327 KeyCorp. . . . . . . . . . . . . . . . . . 361
9,962 Merrill Lynch. . . . . . . . . . . . . . . 349
8,699 Chase Manhattan. . . . . . . . . . . . . . 333
11,134 PNC Bank . . . . . . . . . . . . . . . . . 321
8,122 Dean Witter, Discover. . . . . . . . . . . 305
13,952 Chubb. . . . . . . . . . . . . . . . . . . 303
3,896 First Interstate . . . . . . . . . . . . . 300
10,282 American General . . . . . . . . . . . . . 284
4,890 Aetna. . . . . . . . . . . . . . . . . . . 273
8,200 Wachovia . . . . . . . . . . . . . . . . . 272
5,600 SunTrust . . . . . . . . . . . . . . . . . 271
3,819 Bankers Trust New York . . . . . . . . . . 254
3,413 shs. CIGNA. . . . . . . . . . . . . . . . . . . $ 250
5,213 Salomon. . . . . . . . . . . . . . . . . . 249
7,737 NBD Bancorp. . . . . . . . . . . . . . . . 245
6,475 Fleet Financial Group. . . . . . . . . . . 244
4,173 First Chicago. . . . . . . . . . . . . . . 201
4,538 Barnett Banks. . . . . . . . . . . . . . . 198
3,584 Transamerica . . . . . . . . . . . . . . . 187
3,916 First Fidelity . . . . . . . . . . . . . . 182
4,226 Lincoln National . . . . . . . . . . . . . 179
4,444 St. Paul Companies . . . . . . . . . . . . 178
3,125 Mellon Bank. . . . . . . . . . . . . . . . 176
3,013 SAFECO . . . . . . . . . . . . . . . . . . 168
3,600 UNUM . . . . . . . . . . . . . . . . . . . 161
6,220 CoreStates Financial . . . . . . . . . . . 160
4,680 Household International. . . . . . . . . . 159
4,946 Boatmen's Bancshares . . . . . . . . . . . 156
6,699 MBNA . . . . . . . . . . . . . . . . . . . 151
4,818 Providian Corporation. . . . . . . . . . . 146
3,483 Torchmark. . . . . . . . . . . . . . . . . 136
4,905 U.S. Bancorp . . . . . . . . . . . . . . . 127
5,044 Bank of Boston . . . . . . . . . . . . . . 124
2,498 Jefferson Pilot. . . . . . . . . . . . . . 122
6,397 Great Western Financial. . . . . . . . . . 118
3,018 Golden West Financial. . . . . . . . . . . 117
5,748 H. F. Ahmanson . . . . . . . . . . . . . . 108
4,458 Shawmut National . . . . . . . . . . . . . 98
2,096 Beneficial . . . . . . . . . . . . . . . . 76
4,028 USF&G. . . . . . . . . . . . . . . . . . . 49
1,288 USLIFE . . . . . . . . . . . . . . . . . . 46
2,643 Continental. . . . . . . . . . . . . . . . 41
Total Financial 17,522
TRANSPORTATION - 1.5%
9,729 Union Pacific. . . . . . . . . . . . . . . 551
6,804 Norfolk Southern . . . . . . . . . . . . . 429
4,613 CSX. . . . . . . . . . . . . . . . . . . . 348
4,085 Burlington Northern. . . . . . . . . . . . 218
3,570 * AMR. . . . . . . . . . . . . . . . . . . . 212
3,824 Conrail Incorporated . . . . . . . . . . . 209
2,652 * Federal Express. . . . . . . . . . . . . . 198
8,630 Santa Fe Pacific . . . . . . . . . . . . . 180
1,152 * UAL. . . . . . . . . . . . . . . . . . . . 146
2,491 Delta. . . . . . . . . . . . . . . . . . . 113
1,782 Roadway Services . . . . . . . . . . . . . 112
3,633 Ryder System . . . . . . . . . . . . . . . 91
1,792 Pittston Services. . . . . . . . . . . . . 48
1,790 * Consolidated Freightways . . . . . . . . . 43
1,196 Yellow Corporation . . . . . . . . . . . . 21
2,876 * USAir. . . . . . . . . . . . . . . . . . . 18
Total Transportation 2,937
Total Common Stocks (Cost - $142,287) 151,783
T. Rowe Price Equity Index Fund / Statement of Net Assets
Short-Term Investments - 22.5%
COMMERCIAL PAPER - 21.0%
$5,000,000 Dover, 4(2), 4.28%, 7/19/94. . . . . . . . $ 4,983
5,000,000 Great Lakes Chemical Corp.,
4.3%, 7/22/94. . . . . . . . . . . . . . 4,983
5,000,000 Statoil (Den Norske Stats
Oljeselskap), 4.28%, 7/20/94 . . . . . . 4,982
5,000,000 Unilever Capital,
4(2), 4.53%, 7/5/94. . . . . . . . . . . 4,966
5,000,000 Western Australia Treasury,
4.5%, 7/13/94. . . . . . . . . . . . . . 4,962
5,000,000 Mobil Australia Finance Co.,
4(2), 4.43%, 8/16/94 . . . . . . . . . . 4,948
5,000,000 Bell Atlantic Financial Services,
4.47%, 8/22/94 . . . . . . . . . . . . . 4,946
5,000,000 Preferred Receivables Funding,
4.5%, 9/1/94 . . . . . . . . . . . . . . 4,942
1,558,000 UBS Finance (Delaware),
4.35%, 7/1/94. . . . . . . . . . . . . . 1,558
41,270
U.S. GOVERNMENT OBLIGATIONS - 1.5%
3,000,000 U.S. Treasury Bills,
4.04-4.08%, 8/4/94 . . . . . . . . . . . 2,971
Total Short-Term Investments (Cost - $44,241) 44,241
Total Investments In Securities - 99.9%
(Cost - $186,528) $196,024
Other Assets Less Liabilities - 0.1% . . . . . . . . . . . . . 160
Net Assets Consisting of:
Accumulated net investment income
- net of distributions . . . . . . . . . . . . . $ 125
Accumulated realized gains/losses
- net of distributions . . . . . . . . . . . . . 582
Net unrealized appreciation of
investments. . . . . . . . . . . . . . . . . . . 7,881
Paid-in-capital applicable to
15,324,847 shares of $0.01 par
value capital stock outstanding;
1,000,000,000 shares authorized. . . . . . . . . 187,596
_______
Net Assets - 100.0% $196,184
________
________
Net Asset Value Per Share $12.80
______
______
*Non-income producing
4(2) Commercial Paper sold within terms of a private placement memorandum,
exempt from registration under section 4.2 of the Securities Act of 1933, as
amended, and may be sold only to dealers in that program or other "accredited
investors."
The accompanying notes are an integral part of these financial statements.
Statement of Operations
T. Rowe Price Equity Index Fund / Six Months Ended June 30, 1994 (Unaudited)
Amounts in Thousands
_______________________
INVESTMENT INCOME
Income
Dividends. . . . . . . . . . . . . . . . . . . . . $ 2,216
Interest . . . . . . . . . . . . . . . . . . . . . 489
_______
Total income . . . . . . . . . . . . . . . . . . . $2,705
Expenses
Shareholder servicing fees & expenses. . . . . . . 186
Custodian and accounting fees & expenses . . . . . 71
Investment management fees . . . . . . . . . . . . 43
Prospectus & shareholder reports . . . . . . . . . 33
Registration fees & expenses . . . . . . . . . . . 33
Legal & auditing fees. . . . . . . . . . . . . . . 17
Directors' fees & expenses . . . . . . . . . . . . 5
Miscellaneous expenses . . . . . . . . . . . . . . 15
_______
Total expenses 403
_______
Net investment income. . . . . . . . . . . . . . . . 2,302
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain (loss)
Securities . . . . . . . . . . . . . . . . . . . . (34)
Futures. . . . . . . . . . . . . . . . . . . . . . 725
_______
Net realized gain. . . . . . . . . . . . . . . . . . 691
Change in net unrealized appreciation or depreciation
Securities . . . . . . . . . . . . . . . . . . . . (7,416)
Futures. . . . . . . . . . . . . . . . . . . . . . (1,617)
_______
Change in net unrealized appreciation or depreciation (9,033)
Net loss on investments. . . . . . . . . . . . . . . (8,342)
_______
DECREASE IN NET ASSETS FROM OPERATIONS $(6,040)
_______
_______
The accompanying notes are an integral part of these financial statements.
Statement of Changes in Net Assets
T. Rowe Price Equity Index Fund (Unaudited)
Six Months Ended Year Ended
June 30, 1994 Dec. 31, 1993
_______________ _____________
Amounts in Thousands
______________________________
INCREASE (DECREASE) IN NET ASSETS
Operations
Net investment income. . . . . . . . . . . . . $ 2,302 $ 3,514
Net realized gain on investments . . . . . . . 691 628
Change in net unrealized appreciation
or depreciation of investments. . . . . . . (9,033) 8,882
__________ __________
Increase (decrease) in net assets
from operations. . . . . . . . . . . . . . . (6,040) 13,024
__________ __________
Distributions to shareholders
Net investment income. . . . . . . . . . . . . (2,199) (3,571)
Net realized gain on investments . . . . . . . (492) (163)
__________ _________
Decrease in net assets from
distributions to shareholders. . . . . . . . (2,691) (3,734)
__________ _________
Capital share transactions
Sold 4,476 and 5,497 shares. . . . . . . . . . 58,518 71,701
Distributions reinvested of
202 and 272 shares . . . . . . . . . . . . . 2,609 3,592
Redeemed 1,740 and 3,538 shares. . . . . . . . (23,229) (45,888)
__________ _________
Increase in net assets
from capital share transactions. . . . . . . 37,898 29,405
__________ _________
Net equalization . . . . . . . . . . . . . . . . 23 57
__________ _________
Total increase . . . . . . . . . . . . . . . . . 29,190 38,752
NET ASSETS
Beginning of period. . . . . . . . . . . . . . 166,994 128,242
__________ _________
End of period. . . . . . . . . . . . . . . . . $ 196,184 $ 166,994
__________ __________
__________ __________
The accompanying notes are an integral part of these financial statements.
Notes to Financial Statements
T. Rowe Price Equity Index Fund / June 30, 1994 (Unaudited)
Note 1 - Significant Accounting Policies
T. Rowe Price Equity Index 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 regular-ly traded on a securities
exchange (including Nasdaq) 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. Other equity securities and those listed
securities that are not traded on a particular day 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. Financial futures contracts are
valued at closing settlement prices.
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) 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. Payments ("variation margin") made
or received by the Fund, dependent on the daily fluctuations in the value of
futures contracts, are recorded as unrealized gains or losses until the
contracts are closed. Dividend income and distri-butions 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
which may differ from generally accepted accounting principles. The Fund
follows the practice of equalization under which undistributed net investment
income per share is unaffected by Fund shares sold or redeemed.
Note 2 - Financial Instruments
As a part of its investment program, the Fund engages in the following
activities, the nature and risk of which are set forth more fully in the
Fund's Prospectus and Statement of Additional Information.
A) Futures Contracts - A futures contract provides for the future sale by one
party and purchase by another party of a specified amount of a specific
financial instrument at a specified price, date, time and place designated at
the time the contract is made. Risks arise from the possible illiquidity of
the futures market and from movements in security values. At June 30, 1994,
the Fund had a long position in 197 Standard & Poor's 500 Stock Index Futures
which expire in September 1994, and which have a contract value of
$43,837,000. Net unrealized depreciation of $1,615,000 on these contracts at
June 30, 1994, is included in the accompanying financial statements. U.S.
Treasury Bills having a market value of $2,089,000 were pledged as initial
margin on these contracts.
B) Securities Lending - To earn additional income, the Fund lends securities
to approved brokers. At June 30, 1994, the market value of securities on loan
was $6,989,000, for which the Fund has received cash collateral of $7,142,000.
Although risk is mitigated by obtaining collateral, the Fund could experience
a delay in recovering its securities and possibly incur a capital loss if the
borrower fails to return them.
C) Other - Purchases and sales of portfolio securities, other than short-term
and U.S. Govern-ment securities, aggregated $3,312,000 and $892,000,
respectively, for the six months ended June 30, 1994.
Note 3 - Federal Income Taxes
No provision for federal income taxes is required since the Fund intends to
continue to
Notes to Financial Statements (Cont'd)
qualify as a regulated investment company and distribute all of its taxable
income.
At June 30, 1994, the aggregate cost of invest-ments for federal income
tax and financial reporting purposes was $186,528,000 and net unrealized
appreciation aggregated $9,496,000, of which $19,286,000 related to
appreciated invest-ments and $9,790,000 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, computed daily and paid monthly, equal to 0.20% of average daily net
assets.
Under the terms of the investment manage-ment agreement, the Manager is
required to bear any expenses through December 31, 1995, which would cause the
Fund's ratio of expenses to aver-age net assets to exceed 0.45%. Thereafter,
the Fund is required to reimburse the Manager for these expenses, provided
average net assets have grown or expenses have declined sufficiently so as not
to cause the Fund's ratio of expenses to average net assets to exceed 0.45% in
any month, and that no such reimbursement shall be made to the Manager after
December 31, 1997. Pursuant to this agreement, $135,000 of management fees
were not accrued by the Fund for the six months ended June 30, 1994.
Additionally, $651,000 of unaccrued management fees and expenses related to a
previous expense limitation are subject to reimbursement through December 31,
1995
T. Rowe Price Services, Inc. (TRPS) and Retirement Plan Services, Inc.
(RPS) are wholly owned subsidiaries of the Manager. TRPS provides transfer and
dividend disbursing agent functions and shareholder services for all accounts.
RPS provides subaccounting and recordkeeping services for certain retirement
accounts invested in the Fund. The Manager, under a separate agreement,
calculates the daily share price and maintains the financial records of the
Fund. For the six months ended June 30, 1994 the Fund incurred fees totalling
approximately $177,000 for these services provided by related parties. At June
30, 1994, these service fees payable were $25,000.
<TABLE>
Financial Highlights
T. Rowe Price Equity Index Fund (Unaudited)
<CAPTION>
For a share outstanding throughout each period
___________________________________________________________
March 30, 1990
(Commencement of
Operations) to
Six Months Ended Year Ended December 31, Dec. 31,
_________________________
June 30, 1994 1993 1992 1991 1990
___________________________________________________________
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD . . . $13.48 $12.63 $12.10 $ 9.72 $10.00
. . . . . . . . . . . . . . . . . . . . . ______ ______ ______ ______ ______
Investment Activities
Net investment income. . . . . . . . . . 0.17** 0.32* 0.32* 0.34* 0.31*
Net realized and unrealized gain (loss). (0.65) 0.86 0.53 2.46 (0.28)
______ ______ ______ ______ ______
Total from Investment Activities . . . . . (0.48) 1.18 0.85 2.80 0.03
Distributions
Net investment income. . . . . . . . . . (0.16) (0.32) (0.31) (0.34) (0.31)
Net realized gain. . . . . . . . . . . . (0.04) (0.01) (0.01) (0.08) --
______ ______ ______ ______ ______
Total Distributions. . . . . . . . . . . . (0.20) (0.33) (0.32) (0.42) (0.31)
______ ______ ______ ______ ______
NET ASSET VALUE, END OF PERIOD . . . . . . $12.80 $13.48 $12.63 $12.10 $9.72
______ ______ ______ ______ ______
______ ______ ______ ______ ______
RATIOS/SUPPLEMENTAL DATA
Total Return . . . . . . . . . . . . . . . (3.6)% 9.4% 7.2% 29.2% 0.4%!
Ratio of Expenses to Average
Net Assets . . . . . . . . . . . . . . . 0.45%!** 0.45%* 0.45%* 0.45%* 0.45%!*
Ratio of Net Investment Income
to Average Net Assets. . . . . . . . . . 2.63%! 2.40% 2.57% 3.07% 4.28%!
Portfolio Turnover Rate. . . . . . . . . . 1.2%! 0.8% 0.1% 5.8% 7.0%!
Net Assets, End of Period
(in thousands) . . . . . . . . . . . . . $196,184 $166,994 $128,242 $22,069 $7,285
<FN>
! Annualized.
* Excludes expenses in excess of a 0.45% voluntary expense limitation in effect through December 31, 1993.
**Excludes expenses in excess of a 0.45% voluntary expense limitation in effect through December 31, 1995.
</FN>
</TABLE>
