SemiAnnual Report
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T. Rowe Price
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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 Equity Index
Fund.
T. Rowe Price
Equity Index Fund
June 30, 1995
T. Rowe Price
Invest With Confidence (Regisered Trademark)
EXF
Fellow Shareholders
Fueled by strong corporate earnings and falling interest rates, the stock
market rally would not quit. The unmanaged Standard & Poor's 500 Stock Index,
which your fund seeks to replicate, gained 9.6% in the quarter and a
resounding 20.2% for the first half. That's the strongest first half since
1987 and the eighth best first half advance in the last 70 years. Based on the
historical 10% return of stocks, the S&P 500 has churned out two years' worth
of average returns in just six months.
Your fund closely tracked the S&P 500 for the three- and six-month
periods ended June 30, 1995. The small disparity against the S&P reflects the
expenses of running a mutual fund.
Performance Comparison
Periods Ended 6/30/95
3 Months 6 Months
_________________________
Equity Index Fund 9.4% 20.0%
S&P 500 9.6 20.2
Dividend Distribution
On June 27, your Board of Directors declared a second quarter dividend of
$0.09 per share, payable to shareholders of record on that date. Your
distribution check or statement was mailed separately.
Market Review
The last six months have been a nearly perfect environment for stocks: rising
corporate earnings, falling interest rates, a slowing yet fundamentally sound
economy, and stable inflation. In early July, the Federal Reserve gave stocks
another boost by dropping the federal funds target for overnight loans by
one-quarter percentage point, to 5.75%, its first reduction in nearly three
years.
The market fed off a speculative frenzy in technology stocks. Drawn by
the increasingly ubiquitous use of technology by consumers as well as
businesses, investors rushed to purchase shares in the sector, lifting our
holdings in Microsoft and chip maker Intel. Financial stocks also did well,
propelled by the sharp drop in interest rates. The stocks of large,
multinational companies, whose earnings received a boost from the generally
weak dollar, outpaced most other stocks, giving the S&P 500 the lead over many
equity indices and stock mutual funds. However, the Nasdaq Composite
outperformed the S&P for the quarter and the first half due to its
preponderance of technology issues.
It was hard to go wrong in stocks. The value and growth sectors of the
market, which often take turns leading the market, both joined the rally. The
Barra/S&P Value and Barra/S&P Growth indices gained 19% and 21%, respectively,
in the first half. In the second quarter, they gained 8.7% and 10.3%,
respectively.
Portfolio Review
Not surprisingly, the two top contributors to performance in the quarter were
technology stalwarts-Microsoft and Intel. The latter, which makes the
semiconductor chips that run everything from personal computers to cellular
telephones, doubled. Microsoft, buoyed by its dominance of the PC software
industry and pent-up demand for its soon-to-be-released Windows 95 operating
software, continued its ascent-despite ongoing federal antitrust scrutiny and
an aborted takeover of Intuit, a financial software developer. Altogether,
technology stocks represented five of our top 10 contributors in the quarter.
The fund also received a boost from financial stocks such as Citicorp, which
benefited from the accelerating drop in interest rates.
In terms of laggards, utilities were quite weak, despite a low-interest
rate environment that usually enhances the lure of their relatively high
payouts. Unfortunately, high dividends could not assuage investor concerns
over the changing regulatory environment and increased competition that loom
over the utility industry.
Increasing signs of an economic slowdown, and its potentially negative
effect on corporate earnings, depressed stocks that are most sensitive to
downturns. Retailers such as Home Depot and housewares manufacturer Rubbermaid
were among the worst performers in the index during the quarter. Consumer
cyclicals, such as autos, construction, and durable goods, also suffered as
demand slackened. Ford Motor was again a poor performer. Producers of basic
materials, such as metals and chemicals, were also weak. With inflation
stable, oil prices dipped, hampering the performance of holdings like Phillips
Petroleum and Atlantic Richfield.
It was a quiet quarter for changes in the S&P 500 Index, with just 0.5%
of the portfolio turning over. The changes were mostly due to takeovers and
the deletion of some small companies that were no longer representative of
their industry sectors. Insurance giant CNA Financial acquired Continental,
and Ingersoll-Rand bought Clark Equipment, a maker of building machinery.
Meanwhile, Oshkosh B'Gosh and Hartmarx, both apparel manufacturers, were
dropped from the index. The biggest addition was Loews, a tobacco and
insurance conglomerate. Also added were CUC International, a credit card
services company; Tellabs, a maker of communications equipment; and Cabletron
Systems, which supplies equipment to the cable television industry.
Outlook
The cut in the federal funds rate, together with a fundamentally sound
economy, should help allay fears of a near-term recession. The question now
centers on the pace of economic growth for the rest of the year and the Fed's
future course on monetary policy. Recent economic signals have been somewhat
mixed: industrial production remains weak, with several months of declines
followed by a slight uptick in June. But retail sales rose and unemployment
dropped in June, indicating underlying strength in the economy.
We believe the economy remains basically sound and will pick up later
this year, which is good news for stocks. In light of the strong rally in
equities this year, the volatility after the close of the reporting period was
no surprise. By several measures, the overall stock market is fully valued.
Keep in mind that it has always rebounded from periodic declines to provide
solid returns over the long haul.
Respectfully submitted,
Richard T. Whitney
President and Chairman of the
Investment Advisory Committee
July 19, 1995
Twenty-Five Largest Holdings
June 30, 1995
Percent of
Company Net Assets
____________________________ ____________
GE 2.1%
Exxon 1.9
AT&T 1.9
Coca-Cola 1.8
Royal Dutch Petroleum 1.4
Philip Morris 1.4
Wal-Mart 1.4
Merck 1.3
IBM 1.2
Intel 1.2
Microsoft 1.1
Procter & Gamble 1.1
Johnson & Johnson 1.0
Motorola 0.9
Mobil 0.8
Hewlett-Packard 0.8
DuPont 0.8
PepsiCo 0.8
American International Group 0.8
GM 0.8
Bristol-Myers Squibb 0.8
Amoco 0.7
Abbott Laboratories 0.7
GTE 0.7
BellSouth 0.7
________________________________________________________________
Total 28.1%
Contributions to the Change in Net Asset Value Per Share
Three Months Ended June 30, 1995
________________________________________________________________
TEN BEST CONTRIBUTORS
Intel 6(cent)
Microsoft 4
Coca-Cola 3
IBM 3
Merck 3
Philip Morris 3
Hewlett-Packard 2
Motorola 2
Citicorp 2
PepsiCo 2
________________________________________________________________
Total 30(cent)
TEN WORST CONTRIBUTORS
U.S. Healthcare - 1(cent)
Home Depot 1
Pacific Telesis 1
General Mills 1
United HealthCare 0
Promus Companies 0
Chevron 0
Rubbermaid 0
Phillips Petroleum 0
Atlantic Richfield 0
________________________________________________________________
Total - 4(cent)
Six Months Ended June 30, 1995
________________________________________________________________
TEN BEST CONTRIBUTORS
Intel 9(cent)
Microsoft 6
Coca-Cola 6
Philip Morris 5
Merck 5
IBM 5
Hewlett-Packard 4
Wal-Mart 4
Exxon 4
GE 3
________________________________________________________________
Total 51(cent)
TEN WORST CONTRIBUTORS
Home Depot - 1(cent)
U.S. Healthcare 1
Archer Daniels Midland 1
Times Mirror 1
Alltel 0
General Mills 0
Loews* 0
Pacific Telesis 0
United HealthCare 0
Fruit of the Loom* 0
________________________________________________________________
Total - 4(cent)
*Position added
Average Annual Compound Total Return
Periods ended June 30, 1995
Since Inception
1 Year 5 Years 3/30/90
________ ________ ________________
25.71% 11.53% 12.35%
Investment return and principal value represent past performance and will
vary. Shares may be worth more or less at redemption than at original
purchase.
Statement of Net Assets
T. Rowe Price Equity Index Fund / June 30, 1995 (Unaudited)
(values in thousands)
Common & Preferred Stocks - 88.1%
INDUSTRIAL - 68.4%
Value
__________
118,532 shs. GE. . . . . . . . . . . . . . . . . . . $ 6,682
86,797 Exxon . . . . . . . . . . . . . . . . . 6,130
110,769 AT&T. . . . . . . . . . . . . . . . . . 5,885
88,622 Coke. . . . . . . . . . . . . . . . . . 5,650
37,515 Royal Dutch Petroleum ADR . . . . . . . 4,572
60,074 Philip Morris . . . . . . . . . . . . . 4,468
160,622 Wal-Mart. . . . . . . . . . . . . . . . 4,297
86,504 Merck . . . . . . . . . . . . . . . . . 4,239
40,762 IBM . . . . . . . . . . . . . . . . . . 3,913
58,608 Intel . . . . . . . . . . . . . . . . . 3,711
40,300 * Microsoft . . . . . . . . . . . . . . . 3,645
47,819 P & G . . . . . . . . . . . . . . . . . 3,437
44,918 Johnson & Johnson . . . . . . . . . . . 3,038
40,948 Motorola. . . . . . . . . . . . . . . . 2,749
27,844 Mobil . . . . . . . . . . . . . . . . . 2,673
35,652 Hewlett-Packard . . . . . . . . . . . . 2,656
38,624 DuPont. . . . . . . . . . . . . . . . . 2,655
55,331 PepsiCo . . . . . . . . . . . . . . . . 2,524
52,411 GM. . . . . . . . . . . . . . . . . . . 2,457
35,549 Bristol-Myers Squibb. . . . . . . . . . 2,422
34,713 Amoco . . . . . . . . . . . . . . . . . 2,313
57,023 Abbott Laboratories . . . . . . . . . . 2,309
45,580 Chevron . . . . . . . . . . . . . . . . 2,125
70,514 Ford Motor. . . . . . . . . . . . . . . 2,098
21,978 Pfizer. . . . . . . . . . . . . . . . . 2,030
36,305 Disney. . . . . . . . . . . . . . . . . 2,019
49,112 McDonald's. . . . . . . . . . . . . . . 1,921
29,546 3M. . . . . . . . . . . . . . . . . . . 1,691
21,325 American Home Products. . . . . . . . . 1,650
27,130 Sears . . . . . . . . . . . . . . . . . 1,624
20,410 Eli Lilly . . . . . . . . . . . . . . . 1,602
23,864 Boeing. . . . . . . . . . . . . . . . . 1,494
11,187 Unilever N.V. ADR . . . . . . . . . . . 1,456
23,219 Eastman Kodak . . . . . . . . . . . . . 1,408
19,282 Dow Chemical. . . . . . . . . . . . . . 1,386
30,960 Gillette. . . . . . . . . . . . . . . . 1,382
30,910 Columbia/HCA Healthcare . . . . . . . . 1,337
31,512 Home Depot. . . . . . . . . . . . . . . 1,280
11,272 Atlantic Richfield. . . . . . . . . . . 1,237
25,840 Chrysler. . . . . . . . . . . . . . . . 1,237
18,094 Texaco. . . . . . . . . . . . . . . . . 1,187
26,812 Schering-Plough . . . . . . . . . . . . 1,183
16,332 Emerson Electric. . . . . . . . . . . . 1,168
10,760 Capital Cities/ABC. . . . . . . . . . . 1,162
30,081 * Oracle Systems. . . . . . . . . . . . . 1,160
24,944 shs. * Viacom (Class B). . . . . . . . . . . . $ 1,157
15,675 Kellogg . . . . . . . . . . . . . . . . 1,119
26,493 Time Warner . . . . . . . . . . . . . . 1,090
45,697 * Tele-Communications (Class A) . . . . . 1,071
16,992 Schlumberger. . . . . . . . . . . . . . 1,056
18,456 Anheuser-Busch. . . . . . . . . . . . . 1,050
47,530 MCI . . . . . . . . . . . . . . . . . . 1,043
34,389 * AirTouch Communications . . . . . . . . 980
33,829 WMX Technologies. . . . . . . . . . . . 960
33,424 Sara Lee. . . . . . . . . . . . . . . . 953
18,300 * cisco Systems . . . . . . . . . . . . . 925
14,158 Caterpillar . . . . . . . . . . . . . . 910
26,053 Seagram . . . . . . . . . . . . . . . . 902
19,814 AlliedSignal. . . . . . . . . . . . . . 882
13,960 Lockheed Martin . . . . . . . . . . . . 881
7,441 ITT . . . . . . . . . . . . . . . . . . 874
6,451 Texas Instruments . . . . . . . . . . . 864
7,359 Xerox . . . . . . . . . . . . . . . . . 863
17,494 Campbell. . . . . . . . . . . . . . . . 857
18,020 * COMPAQ Computer . . . . . . . . . . . . 818
24,175 Sprint. . . . . . . . . . . . . . . . . 813
9,344 Warner-Lambert. . . . . . . . . . . . . 807
16,414 J.C. Penney . . . . . . . . . . . . . . 788
14,200 Micron Technology . . . . . . . . . . . 779
17,432 Heinz . . . . . . . . . . . . . . . . . 774
11,265 Computer Associates . . . . . . . . . . 763
10,285 Colgate-Palmolive . . . . . . . . . . . 752
9,321 * Amgen . . . . . . . . . . . . . . . . . 749
8,701 International Paper . . . . . . . . . . 746
8,217 Monsanto. . . . . . . . . . . . . . . . 741
17,342 May Department Stores . . . . . . . . . 722
19,769 Baxter International. . . . . . . . . . 719
15,303 RockWell. . . . . . . . . . . . . . . . 700
8,813 United Technologies . . . . . . . . . . 689
14,402 Weyerhaeuser. . . . . . . . . . . . . . 679
11,282 Kimberly-Clark. . . . . . . . . . . . . 676
36,024 Archer Daniels Midland. . . . . . . . . 671
8,619 Raytheon. . . . . . . . . . . . . . . . 669
17,655 Northern Telecom. . . . . . . . . . . . 644
8,352 McDonnell Douglas . . . . . . . . . . . 641
14,896 PPG Industries. . . . . . . . . . . . . 641
10,335 CPC International . . . . . . . . . . . 638
12,462 Alcoa . . . . . . . . . . . . . . . . . 625
8,098 Medtronic . . . . . . . . . . . . . . . 625
11,865 Dun & Bradstreet. . . . . . . . . . . . 623
14,706 AMP . . . . . . . . . . . . . . . . . . 621
9,878 Automatic Data Processing . . . . . . . 621
24,500 Barrick Gold. . . . . . . . . . . . . . 619
18,302 Phillips Petroleum. . . . . . . . . . . 611
13,200 Tenneco . . . . . . . . . . . . . . . . 607
17,389 shs. ConAgra . . . . . . . . . . . . . . . . $ 606
20,116 * Toys "R" Us . . . . . . . . . . . . . . 588
11,042 General Mills . . . . . . . . . . . . . 567
10,332 Gannett . . . . . . . . . . . . . . . . 561
14,036 American Brands . . . . . . . . . . . . 558
25,033 The Limited . . . . . . . . . . . . . . 551
6,269 Georgia-Pacific . . . . . . . . . . . . 544
17,744 Albertson's . . . . . . . . . . . . . . 528
6,058 Deere . . . . . . . . . . . . . . . . . 519
25,840 * Novell. . . . . . . . . . . . . . . . . 515
10,334 Scott Paper . . . . . . . . . . . . . . 512
15,402 Corning . . . . . . . . . . . . . . . . 504
5,800 * Applied Materials . . . . . . . . . . . 502
21,821 Occidental Petroleum. . . . . . . . . . 499
12,000 United HealthCare . . . . . . . . . . . 496
4,100 Loews . . . . . . . . . . . . . . . . . 496
13,662 Browning-Ferris . . . . . . . . . . . . 494
15,703 Alcan Aluminum. . . . . . . . . . . . . 475
16,929 Unocal. . . . . . . . . . . . . . . . . 468
31,898 K mart. . . . . . . . . . . . . . . . . 466
12,058 Upjohn. . . . . . . . . . . . . . . . . 457
7,919 Air Products & Chemicals. . . . . . . . 441
7,700 First Data. . . . . . . . . . . . . . . 438
7,946 Illinois Tool Works . . . . . . . . . . 437
10,552 Goodyear Tire & Rubber. . . . . . . . . 435
5,169 NIKE. . . . . . . . . . . . . . . . . . 434
16,614 Placer Dome . . . . . . . . . . . . . . 434
8,616 Walgreen. . . . . . . . . . . . . . . . 432
10,700 * Silicon Graphics. . . . . . . . . . . . 427
14,198 UST . . . . . . . . . . . . . . . . . . 422
10,966 Pitney Bowes. . . . . . . . . . . . . . 421
5,112 Marsh & McLennan. . . . . . . . . . . . 415
6,599 W. R. Grace . . . . . . . . . . . . . . 405
8,307 Hercules. . . . . . . . . . . . . . . . 405
15,546 Mattel. . . . . . . . . . . . . . . . . 404
20,081 USX-Marathon. . . . . . . . . . . . . . 397
9,647 * Digital Equipment . . . . . . . . . . . 393
9,106 Honeywell . . . . . . . . . . . . . . . 393
10,781 R. R. Donnelly. . . . . . . . . . . . . 388
8,288 Apple Computer. . . . . . . . . . . . . 385
7,743 International Flavors
& Fragrances. . . . . . . . . . . . . 385
12,873 Sysco . . . . . . . . . . . . . . . . . 380
8,158 Wrigley . . . . . . . . . . . . . . . . 378
7,852 * DSC Communications. . . . . . . . . . . 366
24,757 Westinghouse. . . . . . . . . . . . . . 362
4,527 TRW . . . . . . . . . . . . . . . . . . 362
5,031 Dayton Hudson . . . . . . . . . . . . . 361
7,051 Ralston Purina. . . . . . . . . . . . . 360
6,148 Textron . . . . . . . . . . . . . . . . 357
10,235 The Gap . . . . . . . . . . . . . . . . 357
10,608 Union Carbide . . . . . . . . . . . . . 354
11,200 U. S. Healthcare. . . . . . . . . . . . 344
5,729 Eastman Chemical. . . . . . . . . . . . 341
6,498 shs. Champion International. . . . . . . . . $ 339
6,086 Hershey Foods . . . . . . . . . . . . . 336
8,000 * CUC International . . . . . . . . . . . 336
5,011 Avon. . . . . . . . . . . . . . . . . . 336
9,000 Burlington Resources. . . . . . . . . . 332
10,400 * Boston Scientific . . . . . . . . . . . 331
8,699 Genuine Parts . . . . . . . . . . . . . 329
11,000 Lowes . . . . . . . . . . . . . . . . . 329
6,072 Nucor . . . . . . . . . . . . . . . . . 325
8,107 Cooper Industries . . . . . . . . . . . 320
6,591 * Sun Microsystems. . . . . . . . . . . . 320
6,494 Amerada Hess. . . . . . . . . . . . . . 317
11,406 Rubbermaid. . . . . . . . . . . . . . . 317
6,267 * Crown Cork & Seal . . . . . . . . . . . 314
8,660 Marriot International . . . . . . . . . 311
16,700 Comcast (Class A Special) . . . . . . . 310
5,288 Eaton . . . . . . . . . . . . . . . . . 307
3,830 Alco Standard . . . . . . . . . . . . . 306
9,266 Quaker Oats . . . . . . . . . . . . . . 305
7,385 H&R Block . . . . . . . . . . . . . . . 304
5,860 Loral . . . . . . . . . . . . . . . . . 303
10,316 Morton International. . . . . . . . . . 302
5,797 Fluor . . . . . . . . . . . . . . . . . 301
4,998 Great Lakes Chemical. . . . . . . . . . 301
5,158 Winn-Dixie. . . . . . . . . . . . . . . 298
10,895 Masco . . . . . . . . . . . . . . . . . 294
5,050 Becton, Dickinson . . . . . . . . . . . 294
4,727 Tribune . . . . . . . . . . . . . . . . 290
3,980 Dover . . . . . . . . . . . . . . . . . 290
4,892 Phelps Dodge. . . . . . . . . . . . . . 289
6,707 Engelhard . . . . . . . . . . . . . . . 288
12,855 Dresser Industries. . . . . . . . . . . 286
5,193 Whirlpool . . . . . . . . . . . . . . . 286
5,272 Tyco Laboratories . . . . . . . . . . . 285
7,955 Halliburton . . . . . . . . . . . . . . 284
7,413 Ingersoll-Rand. . . . . . . . . . . . . 284
4,889 Union Camp. . . . . . . . . . . . . . . 283
9,954 American Stores . . . . . . . . . . . . 280
4,130 CBS . . . . . . . . . . . . . . . . . . 277
7,507 * Advanced Micro Devices. . . . . . . . . 273
11,052 Newell. . . . . . . . . . . . . . . . . 271
5,000 * Cabletron Systems . . . . . . . . . . . 266
3,498 McGraw-Hill . . . . . . . . . . . . . . 265
4,783 Rohm & Haas . . . . . . . . . . . . . . 262
6,200 Pioneer Hi-Bred . . . . . . . . . . . . 260
6,999 Dow Jones . . . . . . . . . . . . . . . 258
5,998 Newmont Mining. . . . . . . . . . . . . 251
7,325 Melville. . . . . . . . . . . . . . . . 251
15,327 * Price/Costco. . . . . . . . . . . . . . 250
4,181 Mead. . . . . . . . . . . . . . . . . . 248
5,100 * Tellabs . . . . . . . . . . . . . . . . 245
3,729 Clorox. . . . . . . . . . . . . . . . . 243
4,481 V. F. . . . . . . . . . . . . . . . . . 241
8,573 * National Semiconductor. . . . . . . . . 238
3,376 shs. Hilton. . . . . . . . . . . . . . . . . $ 237
5,698 Nordstrom . . . . . . . . . . . . . . . 235
7,897 Dillard Department Stores
(Class A) . . . . . . . . . . . . . . 232
4,460 Tandy . . . . . . . . . . . . . . . . . 231
4,444 Premark International . . . . . . . . . 231
8,134 Inco. . . . . . . . . . . . . . . . . . 230
4,291 Reynolds Metals . . . . . . . . . . . . 222
5,100 Harcourt General. . . . . . . . . . . . 217
8,967 Times Mirror (Class A). . . . . . . . . 214
6,712 Circuit City Stores . . . . . . . . . . 212
5,958 Sherwin-Williams. . . . . . . . . . . . 212
3,722 Knight-Ridder . . . . . . . . . . . . . 212
7,742 * Kroger. . . . . . . . . . . . . . . . . 208
3,522 W. W. Grainger. . . . . . . . . . . . . 207
4,641 Westvaco. . . . . . . . . . . . . . . . 205
7,438 Sun Company . . . . . . . . . . . . . . 204
7,696 Louisiana Pacific . . . . . . . . . . . 202
3,164 * Lotus Development . . . . . . . . . . . 202
7,199 * Harrah's Entertainment. . . . . . . . . 202
9,779 Baker Hughes. . . . . . . . . . . . . . 200
3,516 * Computer Sciences . . . . . . . . . . . 200
13,906 * Tenet Healthcare. . . . . . . . . . . . 200
6,938 Dana. . . . . . . . . . . . . . . . . . 199
4,456 General Dynamics. . . . . . . . . . . . 198
5,234 Interpublic Group . . . . . . . . . . . 196
5,700 Reebok. . . . . . . . . . . . . . . . . 194
6,100 Hasbro. . . . . . . . . . . . . . . . . 194
3,585 Kerr-McGee. . . . . . . . . . . . . . . 192
5,349 Mallinckrodt Group. . . . . . . . . . . 190
5,994 Service Corp. . . . . . . . . . . . . . 190
5,721 Deluxe Corp.. . . . . . . . . . . . . . 189
19,400 Laidlaw (Class B) . . . . . . . . . . . 187
6,496 Cyprus Amax Minerals. . . . . . . . . . 185
5,068 Parker Hannifin . . . . . . . . . . . . 184
3,847 Temple-Inland . . . . . . . . . . . . . 183
5,895 Black & Decker. . . . . . . . . . . . . 182
5,227 USX-U.S. Steel. . . . . . . . . . . . . 180
8,053 Pall. . . . . . . . . . . . . . . . . . 179
3,387 Northrop. . . . . . . . . . . . . . . . 177
4,784 Nalco Chemical. . . . . . . . . . . . . 174
4,180 Bausch & Lomb . . . . . . . . . . . . . 173
7,351 New York Times (Class A). . . . . . . . 173
2,558 * FMC . . . . . . . . . . . . . . . . . . 172
3,500 Sigma Aldrich . . . . . . . . . . . . . 172
3,291 St. Jude Medical. . . . . . . . . . . . 165
4,801 Brown-Forman (Class B). . . . . . . . . 160
6,474 Dial. . . . . . . . . . . . . . . . . . 160
3,587 * Western Atlas . . . . . . . . . . . . . 159
9,610 Homestake Mining. . . . . . . . . . . . 159
2,793 Johnson Controls. . . . . . . . . . . . 158
5,695 James River . . . . . . . . . . . . . . 157
3,892 shs. Avery Dennison. . . . . . . . . . . . . $ 156
6,958 Moore . . . . . . . . . . . . . . . . . 154
5,980 Rite Aid. . . . . . . . . . . . . . . . 153
5,190 American Greetings
(Class A) . . . . . . . . . . . . . . 152
2,619 * Andrew. . . . . . . . . . . . . . . . . 152
3,211 Pennzoil. . . . . . . . . . . . . . . . 151
4,184 Ashland . . . . . . . . . . . . . . . . 147
5,024 Supervalu . . . . . . . . . . . . . . . 146
2,804 Harris. . . . . . . . . . . . . . . . . 145
7,401 Whitman . . . . . . . . . . . . . . . . 143
5,829 Cooper Tire . . . . . . . . . . . . . . 142
4,085 Echlin. . . . . . . . . . . . . . . . . 142
3,272 Autodesk. . . . . . . . . . . . . . . . 140
9,231 WoolWorth . . . . . . . . . . . . . . . 140
3,088 * Varity. . . . . . . . . . . . . . . . . 136
3,295 Polaroid. . . . . . . . . . . . . . . . 134
5,730 * ALZA. . . . . . . . . . . . . . . . . . 134
6,280 * Stone Container . . . . . . . . . . . . 133
2,660 Armstrong World . . . . . . . . . . . . 133
3,296 General Signal. . . . . . . . . . . . . 131
11,952 * Unisys. . . . . . . . . . . . . . . . . 130
6,333 Worthington Industries. . . . . . . . . 129
8,026 * Tandem Computers. . . . . . . . . . . . 129
2,757 PACCAR. . . . . . . . . . . . . . . . . 129
2,918 Cummins Engine. . . . . . . . . . . . . 127
4,345 Manor Care. . . . . . . . . . . . . . . 127
7,046 Wendys. . . . . . . . . . . . . . . . . 126
8,020 * Biomet. . . . . . . . . . . . . . . . . 124
7,604 * Bethlehem Steel . . . . . . . . . . . . 124
4,449 Allergan. . . . . . . . . . . . . . . . 121
11,042 Darden Restaurants. . . . . . . . . . . 120
2,575 Merchantile Stores. . . . . . . . . . . 120
7,455 Maytag. . . . . . . . . . . . . . . . . 119
3,148 Stanley Works . . . . . . . . . . . . . 119
1,758 Millipore . . . . . . . . . . . . . . . 119
5,549 Liz Claiborne . . . . . . . . . . . . . 118
3,033 Snap-On Tools . . . . . . . . . . . . . 118
4,118 Giant Food. . . . . . . . . . . . . . . 117
5,242 Scientific-Atlanta. . . . . . . . . . . 115
4,277 Pep Boys. . . . . . . . . . . . . . . . 114
2,957 Raychem . . . . . . . . . . . . . . . . 113
3,069 * Ceridian. . . . . . . . . . . . . . . . 113
6,639 Brunswick . . . . . . . . . . . . . . . 113
5,300 * Fruit Of The Loom (Class A) . . . . . . 112
3,020 * Owens-Corning . . . . . . . . . . . . . 111
9,158 Santa Fe Pacific Gold . . . . . . . . . 111
3,193 Harnischfeger . . . . . . . . . . . . . 111
3,643 C. R. Bard. . . . . . . . . . . . . . . 109
4,448 Ecolab. . . . . . . . . . . . . . . . . 109
3,051 Perkin-Elmer. . . . . . . . . . . . . . 108
2,663 Boise Cascade . . . . . . . . . . . . . 108
2,580 * King World Productions. . . . . . . . . 104
2,933 Federal Paper Board . . . . . . . . . . 104
2,072 Tektronix . . . . . . . . . . . . . . . 102
3,512 shs. National Services
Industries. . . . . . . . . . . . . . $ 101
2,196 Timken. . . . . . . . . . . . . . . . . 101
3,147 Inland Steel Industries . . . . . . . . 96
1,777 B. F. Goodrich. . . . . . . . . . . . . 95
3,880 Teledyne. . . . . . . . . . . . . . . . 95
1,377 Thomas & Betts. . . . . . . . . . . . . 94
6,782 * Oryx Energy . . . . . . . . . . . . . . 93
3,585 Bemis . . . . . . . . . . . . . . . . . 93
2,309 Louisiana Land &
Exploration . . . . . . . . . . . . . 92
8,080 * Amdahl. . . . . . . . . . . . . . . . . 90
3,709 McDermott International . . . . . . . . 89
2,527 Foster Wheeler. . . . . . . . . . . . . 89
2,908 ASARCO. . . . . . . . . . . . . . . . . 89
2,091 Potlatch. . . . . . . . . . . . . . . . 87
3,928 United States Surgical. . . . . . . . . 82
2,785 Russell . . . . . . . . . . . . . . . . 80
5,229 * Navistar International. . . . . . . . . 79
2,103 Crane . . . . . . . . . . . . . . . . . 76
2,116 Briggs & Stratton . . . . . . . . . . . 73
3,025 Alexander & Alexander . . . . . . . . . 72
5,830 * Beverly Enterprises . . . . . . . . . . 72
2,039 Ball. . . . . . . . . . . . . . . . . . 71
2,696 A & P . . . . . . . . . . . . . . . . . 71
7,860 Echo Bay Mines. . . . . . . . . . . . . 71
1,978 TRINOVA . . . . . . . . . . . . . . . . 69
5,174 TJX . . . . . . . . . . . . . . . . . . 69
2,567 Fleming Companies . . . . . . . . . . . 68
3,149 Jostens . . . . . . . . . . . . . . . . 67
3,059 Ogden . . . . . . . . . . . . . . . . . 67
1,607 Shared Medical Systems. . . . . . . . . 65
4,008 Safety-Kleen. . . . . . . . . . . . . . 65
3,851 EG&G. . . . . . . . . . . . . . . . . . 64
3,210 Fleetwood . . . . . . . . . . . . . . . 63
2,346 Cincinnati Milacron . . . . . . . . . . 63
6,321 * Santa Fe Energy Resources . . . . . . . 60
2,102 Centex. . . . . . . . . . . . . . . . . 59
1,961 Alberto Culver. . . . . . . . . . . . . 59
4,871 Bruno's . . . . . . . . . . . . . . . . 57
1,497 Longs Drug Stores . . . . . . . . . . . 56
1,956 Pulte Corporation . . . . . . . . . . . 55
1,723 Helmerich & Payne . . . . . . . . . . . 51
2,152 John H. Harland . . . . . . . . . . . . 49
7,243 * Armco . . . . . . . . . . . . . . . . . 49
5,901 * Rowan . . . . . . . . . . . . . . . . . 48
1,882 Meredith. . . . . . . . . . . . . . . . 48
1,269 Springs Industries. . . . . . . . . . . 47
1,368 First Mississippi . . . . . . . . . . . 47
2,426 Giddings & Lewis. . . . . . . . . . . . 43
2,657 Coors . . . . . . . . . . . . . . . . . 43
1,662 * Cray Research . . . . . . . . . . . . . 41
3,243 * Bally Entertainment Group . . . . . . . 40
7,176 Charming Shoppes. . . . . . . . . . . . 38
1,814 Luby's Cafeterias . . . . . . . . . . . 36
3,502 Stride Rite . . . . . . . . . . . . . . 36
581 shs. Nacco Industries. . . . . . . . . . . . $ 35
3,088 Community Psychiatric
Centers . . . . . . . . . . . . . . . 35
2,904 * Shoney's. . . . . . . . . . . . . . . . 34
2,229 Kaufman & Broad . . . . . . . . . . . . 32
3,763 * Ryan's Family Steak Houses. . . . . . . 29
1,272 Brown Group . . . . . . . . . . . . . . 29
985 Bassett Furniture . . . . . . . . . . . 27
2,385 * Intergraph. . . . . . . . . . . . . . . 27
2,523 * Data General. . . . . . . . . . . . . . 24
1,207 Outboard Marine . . . . . . . . . . . . 24
3,065 * Zenith Electronics. . . . . . . . . . . 23
2,216 Handleman . . . . . . . . . . . . . . . 21
831 Zurn Industries . . . . . . . . . . . . 16
788 Skyline . . . . . . . . . . . . . . . . 14
1,962 Morrison-Knudsen. . . . . . . . . . . . 13
38 Teledyne, $15,
Cumulative Preferred . . . . . . . . 1
Total Industrial 217,340
UTILITIES - 8.3%
66,861 GTE . . . . . . . . . . . . . . . . . . 2,282
34,728 BellSouth . . . . . . . . . . . . . . . 2,205
42,108 SBC Communications. . . . . . . . . . . 2,005
30,464 Bell Atlantic . . . . . . . . . . . . . 1,706
38,410 Ameritech . . . . . . . . . . . . . . . 1,690
31,786 U. S. WEST. . . . . . . . . . . . . . . 1,323
29,360 NYNEX . . . . . . . . . . . . . . . . . 1,182
45,364 Southern Company. . . . . . . . . . . . 1,015
30,082 Pacific Gas and Electric. . . . . . . . 872
29,689 Pacific Telesis . . . . . . . . . . . . 794
17,548 Enron . . . . . . . . . . . . . . . . . 616
14,320 Duke Power. . . . . . . . . . . . . . . 594
15,825 Texas Utilities . . . . . . . . . . . . 544
31,316 SCEcorp . . . . . . . . . . . . . . . . 536
13,293 FPL Group . . . . . . . . . . . . . . . 514
16,421 Consolidated Edison . . . . . . . . . . 484
17,083 Public Service Enterprise . . . . . . . 474
12,921 American Electric Power . . . . . . . . 454
11,788 Dominion Resources. . . . . . . . . . . 430
15,465 Peco Energy . . . . . . . . . . . . . . 427
14,927 Unicom. . . . . . . . . . . . . . . . . 397
9,178 Houston Industries. . . . . . . . . . . 387
15,967 Entergy . . . . . . . . . . . . . . . . 385
19,729 PacifiCorp. . . . . . . . . . . . . . . 370
13,261 Central and South West. . . . . . . . . 348
11,182 Carolina Power & Light. . . . . . . . . 338
13,100 ALLTEL. . . . . . . . . . . . . . . . . 332
10,256 Detroit Edison. . . . . . . . . . . . . 303
10,339 CINergy . . . . . . . . . . . . . . . . 271
7,124 Union Electric. . . . . . . . . . . . . 265
10,270 BGE . . . . . . . . . . . . . . . . . . 257
7,330 Williams Companies. . . . . . . . . . . 256
10,459 shs. Panhandle Eastern . . . . . . . . . . . $ 255
6,476 Consolidated Natural Gas. . . . . . . . 245
10,691 Ohio Edison . . . . . . . . . . . . . . 242
8,000 General Public Utilities. . . . . . . . 238
7,315 Coastal . . . . . . . . . . . . . . . . 222
4,711 Northern States Power . . . . . . . . . 217
6,074 Sonat . . . . . . . . . . . . . . . . . 185
10,009 Niagara Mohawk. . . . . . . . . . . . . 148
5,777 Pacific Enterprise. . . . . . . . . . . 142
3,490 * Columbia Gas System . . . . . . . . . . 111
3,678 NICOR . . . . . . . . . . . . . . . . . 99
4,617 ENSERCH . . . . . . . . . . . . . . . . 79
2,430 Peoples Energy. . . . . . . . . . . . . 63
8,567 Noram Energy. . . . . . . . . . . . . . 56
1,896 ONEOK . . . . . . . . . . . . . . . . . 41
Total Utilities 26,399
FINANCIAL - 10.0%
22,092 American International
Group . . . . . . . . . . . . . . . . 2,519
19,133 Fannie Mae. . . . . . . . . . . . . . . 1,806
27,180 Citicorp. . . . . . . . . . . . . . . . 1,573
25,976 BankAmerica . . . . . . . . . . . . . . 1,367
34,642 American Express. . . . . . . . . . . . 1,217
19,188 NationsBank . . . . . . . . . . . . . . 1,029
22,723 Travelers . . . . . . . . . . . . . . . 994
13,518 J. P. Morgan. . . . . . . . . . . . . . 948
28,583 BANC ONE. . . . . . . . . . . . . . . . 922
12,594 Freddie Mac . . . . . . . . . . . . . . 866
17,743 Chemical Banking. . . . . . . . . . . . 838
5,751 General Re. . . . . . . . . . . . . . . 770
13,562 Merrill Lynch . . . . . . . . . . . . . 712
3,729 Wells Fargo . . . . . . . . . . . . . . 672
22,252 Norwest . . . . . . . . . . . . . . . . 640
12,899 Chase Manhattan . . . . . . . . . . . . 606
11,922 Dean Witter, Discover . . . . . . . . . 560
11,990 First Union . . . . . . . . . . . . . . 543
17,027 KeyCorp . . . . . . . . . . . . . . . . 534
13,100 Bank of New York. . . . . . . . . . . . 529
8,600 SunTrust. . . . . . . . . . . . . . . . 501
7,890 Aetna . . . . . . . . . . . . . . . . . 496
6,152 Chubb . . . . . . . . . . . . . . . . . 493
14,582 American General. . . . . . . . . . . . 492
5,696 First Interstate. . . . . . . . . . . . 457
16,434 PNC Bank. . . . . . . . . . . . . . . . 433
12,000 Wachovia . . . . . . . . . . . . . . . 429
10,087 Mellon Bank . . . . . . . . . . . . . . 420
5,013 CIGNA . . . . . . . . . . . . . . . . . 389
6,473 First Chicago . . . . . . . . . . . . . 388
9,875 Fleet Financial Group . . . . . . . . . 367
11,237 NBD Bancorp . . . . . . . . . . . . . . 360
10,399 shs. MBNA. . . . . . . . . . . . . . . . . . $ 351
6,838 Barnett Banks . . . . . . . . . . . . . 350
10,020 CoreStates Financial. . . . . . . . . . 349
5,519 Bankers Trust New York. . . . . . . . . 342
5,616 First Fidelity. . . . . . . . . . . . . 331
6,580 Household International . . . . . . . . 326
8,846 Boatmen's Bancshares. . . . . . . . . . 311
10,500 National City . . . . . . . . . . . . . 308
7,413 Salomon . . . . . . . . . . . . . . . . 297
6,626 Lincoln National. . . . . . . . . . . . 290
5,844 St. Paul Companies. . . . . . . . . . . 288
4,884 Transamerica. . . . . . . . . . . . . . 285
7,444 Bank of Boston. . . . . . . . . . . . . 279
8,258 Shawmut National. . . . . . . . . . . . 263
4,413 SAFECO. . . . . . . . . . . . . . . . . 253
6,918 Providian . . . . . . . . . . . . . . . 251
5,300 UNUM. . . . . . . . . . . . . . . . . . 248
9,440 Praxair . . . . . . . . . . . . . . . . 236
4,318 Golden West Financial . . . . . . . . . 203
3,600 Republic New York . . . . . . . . . . . 202
5,083 Torchmark . . . . . . . . . . . . . . . 192
9,297 Great Western Financial . . . . . . . . 192
3,498 Jefferson Pilot . . . . . . . . . . . . 192
8,148 H. F. Ahmanson. . . . . . . . . . . . . 179
7,005 U. S. Bancorp . . . . . . . . . . . . . 169
3,696 Beneficial. . . . . . . . . . . . . . . 163
5,928 USF&G . . . . . . . . . . . . . . . . . 96
1,588 USLIFE. . . . . . . . . . . . . . . . . 64
1,445 Eastern Enterprises . . . . . . . . . . 43
Total Financial 31,923
TRANSPORTATION - 1.4%
14,329 Union Pacific . . . . . . . . . . . . . 794
9,504 Norfolk Southern. . . . . . . . . . . . 640
7,313 CSX . . . . . . . . . . . . . . . . . . 549
6,285 Burlington Northern . . . . . . . . . . 398
5,270 * AMR . . . . . . . . . . . . . . . . . . 393
5,524 Conrail . . . . . . . . . . . . . . . . 307
10,373 Santa Fe Pacific. . . . . . . . . . . . 265
3,491 Delta . . . . . . . . . . . . . . . . . 258
3,952 * Federal Express . . . . . . . . . . . . 240
10,000 Southwest Airlines. . . . . . . . . . . 239
5,433 Ryder System. . . . . . . . . . . . . . 130
2,682 Roadway Services. . . . . . . . . . . . 126
2,892 Pittston Services . . . . . . . . . . . 69
2,490 Consolidated Freightways. . . . . . . . 55
1,996 Yellow Corporation. . . . . . . . . . . 36
2,876 * USAir . . . . . . . . . . . . . . . . . 34
Total Transportation . . . . . . . . . . . . . . . . . . . 4,533
Total Common & Preferred Stocks
(Cost $224,214) 280,195
Short-Term Investments - 14.2%
BANK NOTES - 1.0%
$2,000,000 NBD Bank N.A.,
6.17%, 10/31/95 . . . . . . . . . . . $ 2,001
1,000,000 Fifth Third Bank,
6.21%, 10/27/95 . . . . . . . . . . . 1,000
3,001
CERTIFICATES OF DEPOSIT - 3.8%
3,000,000 Bayerische Hypotheken,
6.11%, 7/14/95. . . . . . . . . . . . 3,000
3,000,000 Swiss Bank, 6.01%, 7/21/95. . . . . . . 3,000
3,000,000 LandesBank Hessen Thurin,
6.08%, 7/25/95. . . . . . . . . . . . 3,000
3,000,000 National Westminster Bank,
6.09%, 7/28/95. . . . . . . . . . . . 3,001
12,001
COMMERCIAL PAPER - 8.8%
5,000,000 New Center Asset Trust,
6.05%, 7/6/95 . . . . . . . . . . . . 4,929
$2,055,000 UBS Finance (Delaware),
6.25%, 7/3/95 . . . . . . . . . . . . $ 2,054
2,000,000 BANC ONE, 4(2),
6.04%, 7/7/95 . . . . . . . . . . . . 1,971
3,000,000 Falcon Asset Securitization,
5.97%, 7/13/95. . . . . . . . . . . . 2,979
3,000,000 Halifax Building Society,
6.01%, 7/20/95. . . . . . . . . . . . 2,954
3,000,000 Caisse des Depots et Consignations,
4(2), 5.95%, 7/21/95. . . . . . . . . 2,980
3,000,000 Preferred Receivables Funding,
5.97%, 7/25/95. . . . . . . . . . . . 2,983
3,183,000 Teco Finance,
5.92%, 8/31/95. . . . . . . . . . . . 3,146
4,000,000 Province of Quebec,
5.82%, 9/26/95. . . . . . . . . . . . 3,942
27,938
U.S. GOVERNMENT OBLIGATIONS - 0.6%
2,000,000 U.S. Treasury Bills,
5.60%, 7/20/95. . . . . . . . . . . . 1,972
Total Short-Term Investments (Cost $44,912) 44,912
Total Investments in Securities - 102.3%
of Net Assets (Cost $269,126) $ 325,107
Futures Contracts
Contract Unrealized
Expiration Value Gain (Loss)
__________ ________ ___________
Long, 140 Standard & Poor's
500 Stock Index contracts,
$1,800,000 of U.S.
Treasury Bills pledged as
initial margin . . . . . . . 9/95 $38,301 $ 533
Net payments (receipts) of
variation margin
to date. . . . . . . . . . . . . . . . . . . . (640)
________
Variation margin receivable
(payable) on open futures contracts. . . . . . (107.)
Other Assets Less Liabilities. . . . . . . . . . (7,067.)
_______
Net Assets Consist of: Value
_________
Accumulated net investment income
- net of distributions. . . . . . . . . . . 113
Accumulated net realized gain/loss
- net of distributions. . . . . . . . . . . 3,434
Net unrealized gain (loss) . . . . . . . . . . 56,514
Paid-in-capital applicable to
20,499,659 shares of $0.01
par value capital stock
outstanding; 1,000,000,000
shares authorized . . . . . . . . . . . . . 257,872
_______
NET ASSETS . . . . . . . . . . . . . . . . . . $317,933
_________
_________
NET ASSET VALUE PER SHARE. . . . . . . . . . . $15.51
______
______
* 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, 1995 (Unaudited)
(in thousands)
INVESTMENT INCOME
Income
Dividend. . . . . . . . . . . . . . . . . . $ 3,414
Interest. . . . . . . . . . . . . . . . . . 935
_________
Total income. . . . . . . . . . . . . . . . 4,349
_________
Expenses
Shareholder servicing . . . . . . . . . . . 344
Investment management . . . . . . . . . . . 162
Custody and accounting. . . . . . . . . . . 62
Prospectus and
shareholder reports . . . . . . . . . . . 24
Registration. . . . . . . . . . . . . . . . 18
Legal and audit . . . . . . . . . . . . . . 12
Directors . . . . . . . . . . . . . . . . . 6
Organization. . . . . . . . . . . . . . . . 3
Miscellaneous . . . . . . . . . . . . . . . 11
_________
Total expenses. . . . . . . . . . . . . . . 642
_________
Net investment income. . . . . . . . . . . . . 3,707
_________
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Securities. . . . . . . . . . . . . . . . . 556
Futures . . . . . . . . . . . . . . . . . . 4,491
_________
Net realized gain (loss). . . . . . . . . . 5,047
_________
Change in net unrealized gain or loss on:
Securities. . . . . . . . . . . . . . . . . 43,296
Futures . . . . . . . . . . . . . . . . . . 28
_________
Change in net
unrealized gain or loss . . . . . . . . . 43,324
_________
Net realized and
unrealized gain (loss). . . . . . . . . . . 48,371
_________
INCREASE (DECREASE) IN NET
ASSETS FROM OPERATIONS. . . . . . . . . . . $ 52,078
_________
_________
The accompanying notes are an integral part of these financial statements.
Statement of Changes in Net Assets
T. Rowe Price Equity Index Fund (Unaudited)
(in thousands)
Six Months Ended Year Ended
June 30, 1995 Dec. 31, 1994
________________ _____________
INCREASE (DECREASE) IN NET ASSETS FROM
Operations
Net investment income
(loss) . . . . . . . . . . . . . . . . $ 3,707 $ 5,740
Net realized gain (loss) . . . . . . . . 5,047 1,232
Change in net unrealized
gain or loss . . . . . . . . . . . . . 43,324 (3,724)
________ ________
Increase (decrease) in net
assets from operations . . . . . . . . 52,078 3,248
________ ________
Distributions to shareholders
Net investment income. . . . . . . . . . (3,636) (5,776)
Net realized gain. . . . . . . . . . . . (195) (1,677)
Distributions in excess of
net realized gain. . . . . . . . . . . - (1,356)
________ ________
Decrease in net assets
from distributions . . . . . . . . . . (3,831) (8,809)
________ ________
Capital share transactions*
Shares sold. . . . . . . . . . . . . . . 47,632 142,421
Distributions reinvested . . . . . . . . 3,725 8,570
Shares redeemed. . . . . . . . . . . . . (51,880) (42,357)
Redemption fees received . . . . . . . . 2 -
________ ________
Increase (decrease) in
net assets from capital
share transactions . . . . . . . . . . . (521) 108,634
________ ________
Net equalization . . . . . . . . . . . . . 42 98
________ ________
Increase (decrease) in
net assets . . . . . . . . . . . . . . . 47,768 103,171
NET ASSETS
Beginning of period. . . . . . . . . . . . 270,165 166,994
________ ________
End of period. . . . . . . . . . . . . . . $317,933 $270,165
________ ________
________ ________
*Share information
Shares sold. . . . . . . . . . . . . . . 3,320 10,780
Distributions reinvested . . . . . . . . 250 653
Shares redeemed. . . . . . . . . . . . . (3,703) (3,187)
________ ________
Increase (decrease) in shares
outstanding. . . . . . . . . . . . . . (133) 8,246
________ ________
________ ________
The accompanying notes are an integral part of these financial statements.
Notes To Financial Statements
T. Rowe Price Equity Index Fund / June 30, 1995 (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 regularly traded on a securities
exchange are valued at the last quoted sales price at the time the valuations
are made. A security which is listed or traded on more than one exchange is
valued at the quotation on the exchange determined to be the primary market
for such security. Listed securities that are not traded on a particular day
and securities that are regularly traded in the over-the-counter market are
valued at the mean of the latest bid and asked prices.
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. 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. The fund follows the practice of
equalization under which undistributed net investment income per share is
unaffected by fund shares sold or redeemed. Payments ("variation margin") made
or received by the fund to settle the daily fluctuations in the value of
futures contracts, are recorded as unrealized gain or loss until the contracts
are closed. Unrealized gains and losses on futures contracts are included 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 and enhance performance. The
investment objective, policies, program, risk factors, and following practices
of the fund are described more fully in the fund's Prospectus and Statement of
Additional Information.
A) Futures Contracts - At June 30, 1995, 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.
B) Securities Lending - To earn additional income, the fund lends its
securities to approved brokers. At June 30, 1995, the market value of
securities on loan was $3,952,000, which was fully collateralized with cash.
Although the risk is mitigated by the collateral, the fund could experience a
delay in recovering its securities and a possible loss of income or value if
the borrower fails to return them.
C) Other - Purchases and sales of portfolio securities, other than short-term
securities, aggregated $4,623,000 and $2,222,000, respectively, for the six
months ended June 30, 1995.
Note 3 - Federal Income Taxes
No provision for federal income taxes is required since the fund intends to
continue to qualify as a regulated investment company and distribute all of
its taxable income.
At June 30, 1995, the aggregate cost of investments for federal income tax
and financial reporting purposes was $269,126,000 and net unrealized gain
aggregated $55,981,000, of which $58,931,000 related to appreciated
investments and $2,950,000 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 $34,000 was payable at June 30, 1995. The fee, computed daily
and paid monthly, is equal to 0.20% of average daily net assets.
Under the terms of the investment management agreement, the Manager is
required to bear any expenses through December 31, 1995, which would cause the
fund's ratio of expenses to average net assets to exceed 0.45%. Thereafter
through December 31, 1997, the fund is required to reimburse the Manager for
these expenses, provided that average net assets have grown or expenses have
declined sufficiently to allow reimbursement without causing the fund's ratio
of expenses to average net assets to exceed 0.45%. Pursuant to this agreement,
$123,000 of management fees for the six months ended June 30, 1995 and
$264,000 of management fees for the year ended December 31, 1994 were not
accrued by the fund. Additionally, $651,000 of unaccrued fees and expenses
related to a previous expense limitation are subject to reimbursement through
December 31, 1995.
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 $324,000 for the six-months
ended June 30, 1995, of which $47,000 was payable at period-end.
<TABLE>
<CAPTION>
Financial Highlights
T. Rowe Price Capital Appreciation Fund (Unaudited)
For a share outstanding throughout each period
________________________________________________________________
March 30, 1990
Six Months Year Ended December 31, (Commencement
Ended ________________________________ of Operations)
June 30, 1995 1994 1993 1992 1991 to Dec. 31, 1990
________________________________________________________________
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING
OF PERIOD. . . . . . . . . . . . . . $13.09 $13.48 $12.63 $12.10 $9.72 $10.00
Investment Activities
Net investment income. . . . . . . . 0.19* 0.36* 0.32* 0.32* 0.34* 0.31*
Net realized and unrealized
gain (loss) . . . . . . . . . . . 2.42 (0.23) 0.86 0.53 2.46 (0.28)
______ ______ ______ ______ ______ ______
Total from Investment
Activities . . . . . . . . . . . . . 2.61 0.13 1.18 0.85 2.80 0.03
______ ______ ______ ______ ______ ______
Distributions
Net investment income. . . . . . . . (0.18) (0.36) (0.32) (0.31) (0.34) (0.31)
Net realized gain. . . . . . . . . . (0.01) (0.09) (0.01) (0.01) (0.08) -
Distributions in excess of net
realized gain . . . . . . . . . . - (0.07) - - - -
______ ______ ______ ______ ______ ______
Total Distributions. . . . . . . . . . . (0.19) (0.52) (0.33) (0.32) (0.42) (0.31)
______ ______ ______ ______ ______ ______
NET ASSET VALUE, END OF PERIOD $15.51 $13.09 $13.48 $12.63 $12.10 $9.72
______ ______ ______ ______ ______ ______
______ ______ ______ ______ ______ ______
RATIOS / SUPPLEMENTAL DATA
Total Return . . . . . . . . . . . . . . 20.0%* 1.0%* 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%* 0.45%!*
Ratio of Net Investment Income to
Average Net Assets . . . . . . . . . 2.60%!* 2.73%* 2.40%* 2.57%* 3.07%* 4.28%!*
Portfolio Turnover Rate. . . . . . . . . 1.7%! 1.3% 0.8% 0.1% 5.8% 7.0%!
Net Assets, End of Period
(in thousands) . . . . . . . . . . . $317,933 $270,165 $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,
1995.
</FN>
</TABLE>
Shareholder Services
To help shareholders monitor their current investments and make decisions that
accurately reflect their financial goals, T. Rowe Price offers a wide variety
of information and services-at no extra cost.
Knowledgeable Service Representatives
By Phone-Shareholder service representatives are available from 8:00 a.m. to
10:00 p.m., Monday - Friday, and weekends from 9:00 a.m. to 5:00 p.m ET. Call
1-800-225-5132 to speak directly with a representative who will be able to
assist you with your accounts.
In Person-Visit one of our investor center locations to meet with a
representative who will be able to assist you with your accounts. While there,
you can drop off applications or obtain prospectuses and other literature.
Automated 24-Hour Services
Tele*Access(registered trademark) (1-800-638-2587) provides information
such as account balance, date and amount of your last transaction, latest
dividend payment, and fund prices and yields. Additionally, you have the
ability to request prospectuses, statements, account and tax forms; reorder
checks; and initiate purchase, redemption, and exchange orders for identically
registered accounts.
PC*Access(registered trademark) provides the same information as
Tele*Access, but on a personal computer via dial-up modem.
Account Services
Checking-Write checks for $500 or more on any money market and most bond
fund accounts (except the High Yield Fund and Emerging Markets Bond Fund).
Automatic Investing-Build your account over time by investing directly
from your bank account or paycheck with Automatic Asset Builder. Additionally,
Automatic Exchange enables you to set up systematic investments from one fund
account into another, such as from a money fund into a stock fund. A low, $50
minimum makes it easy to get started.
Automatic Withdrawal-If you need money from your fund account on a regular
basis, you can establish scheduled, automatic redemptions.
Dividend and Capital Gains Payment Options-Reinvest all or some of your
distributions, or take them in cash. We give you maximum flexibility and
convenience.
Investment Information
Combined Statement-A comprehensive overview of your T. Rowe Price
accounts. The summary page gives your earnings by tax category, provides total
portfolio value, and lists your investments by type-stock, bond, and money
market. Detail pages itemize account transactions by fund.
Quarterly Shareholder Reports-Portfolio managers review the performance of
the funds in plain language and discuss T. Rowe Price's economic outlook.
The T. Rowe Price Report-A quarterly newsletter with relevant articles on
market trends, personal financial planning, and T. Rowe Price's economic
perspective.
Insights-A library of information that includes reports on mutual fund tax
issues, investment strategies, and financial markets.
Detailed Investment Guides-Our widely acclaimed Asset Mix Worksheet,
College Planning Kit, Retirees Financial Guide, Retirement Planning Kit (also
available on disk for PC use), and Guide to Risk-Adjusted Performance can help
you determine and reach your investment goals.
Discount Brokerage
You can trade stocks, bonds, options, precious metals, and other securities at
a substantial savings over regular commission rates. Call a shareholder
service representative for more information.
