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FUND PROFILE
April 1, 2000
T. Rowe Price Index Trust
Equity Index 500 FundExtended Equity Market Index FundTotal Equity Market Index
Fund
Three funds seeking to match performance of broad indices of common stocks.
This profile summarizes key information about each fund that is included in the
funds' prospectus. The funds' prospectus includes additional information about
each fund, including a more detailed description of the risks associated with
investing in each fund that you may want to consider before you invest. You may
obtain the prospectus and other information about each fund at no cost by
calling 1-800-541-6138, or by visiting our Web site at www.troweprice.com.
1. What is each fund's objective?
Equity Index 500 Fund (formerly the Equity Index Fund)
To match the performance of the Standard & Poor's 500 Stock Index/(R)/. The
S&P 500 is made up of primarily large-capitalization companies that represent
a broad spectrum of the U.S. economy and a substantial part of the U.S. stock
market's total capitalization. (Market capitalization is the number of a
company's outstanding shares multiplied by the market price per share.)
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Extended Equity Market Index Fund
To match the performance of the U.S. stocks not included in the S&P 500.
These are primarily small- and mid-capitalization stocks (market
capitalization below the 1,000 largest companies in the U.S. stock market and
between the 200 and 1,000 largest, respectively). We use the Wilshire 4500
Equity Index to represent this universe.
Total Equity Market Index Fund
To match the performance of the entire U.S. stock market. We use the Wilshire
5000 Equity Index to represent the market as a whole. Because the largest
stocks in the index carry the most weight (as in the other two indices),
large-capitalization stocks make up a substantial majority of the Wilshire
5000's value.
The inclusion of a stock in the S&P 500 Index or the Wilshire indices is in
no way an endorsement by Standard & Poor's or Wilshire Associates of the
stock as an investment, nor are S&P and Wilshire sponsors of the funds or in
any way affiliated with them.
2. What is each fund's principal investment strategy?
The Equity Index 500 Fund invests substantially all of its assets in all of
the stocks in the S&P 500 Index. We attempt to maintain holdings of each
stock in proportion to its weight in the index. This is known as a full
replication strategy.
Standard & Poor's constructs the index by first identifying major industry
categories and then allocating a representative sample of the larger and more
liquid stocks in those industries to the index. S&P weights each stock
according to its total market value. For example, the 50 largest companies in
the index may account for over 50% of its value.
The Extended Equity Market Index Fund uses a sampling strategy, investing
substantially all of its assets in a group of stocks representative of the
Wilshire 4500 Index. The fund does not attempt to fully replicate the index
by owning each of the stocks in it. Despite its name, the Wilshire 4500
includes more than 6,500 stocks.
The Total Equity Market Index Fund also uses a sampling strategy, investing
substantially all of its assets in a broad spectrum of small-, mid-, and
large-capitalization stocks representative of the Wilshire 5000 Index.
In an attempt to recreate the Wilshire indices, we select stocks in terms of
industry, size, and other characteristics. For example, if technology stocks
made up 15% of the Wilshire 4500, the Extended Equity Market Index Fund would
invest about 15% of its assets in technology stocks with similar
characteristics. Several factors are considered in selecting representative
stocks, including historical price movement, market capitalization,
transaction costs, and others.
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T. Rowe Price continually compares the composition of all three funds to that
of the indices. If a misweighting develops, the portfolios are rebalanced in
an effort to bring them into line with their respective indices. When
investing cash flow, the funds may purchase stocks, stock index futures, or
stock options. This approach is intended to minimize any deviations in
performance.
<TABLE>
Table 1 Index Funds Comparison Guide
<CAPTION>
<S> <C> <C> <C> <S>
Expected risk
Investment Principal type relative to one
Fund emphasis of stocks another
Equity Index 500 S&P 500 stocks Large-cap Lowest
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Extended Equity Broad market apart from Small- and mid-cap Highest
Market Index S&P 500 stocks
------------------------------------------------------------------------
Total Equity Market Broad market including Blend of small-, large-, Moderate
Index S&P 500 stocks and mid-cap stocks
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</TABLE>
Each fund may sell securities primarily to rebalance its portfolio or satisfy
redemption requests.
Further information about each fund's investments, including a review of
market conditions and fund strategies and their impact on performance, is
available in the annual and semiannual shareholder reports. To obtain free
copies of either of these documents, call 1-800-541-6138.
3. What are the main risks of investing in the funds?
Each fund is designed to track broad segments of the stock market--whether
they are rising or falling. Markets as a whole can decline for many reasons,
including adverse political or economic developments here or abroad, changes
in investor psychology, or heavy institutional selling.
Since each fund is passively managed and seeks to remain fully invested at
all times, assets cannot be shifted from one stock or group of stocks to
another based on their prospects, or from stocks into bonds or cash
equivalents in an attempt to cushion the impact of a market decline.
Therefore, actively managed funds may outperform these funds.
While there is no guarantee, Equity Index 500 Fund should tend to be less
volatile than the other two portfolios because of its focus on larger-cap
stocks. The fund emphasizes large-cap stocks, which may at times lag shares
of smaller, faster-growing companies. It may also pay a modest dividend that
can help offset losses in falling markets.
The Extended Equity Market Index Fund will be subject to the greater risks
associated with small- and mid-cap stocks. Smaller companies often have
limited product lines, markets, or financial resources, and may depend on a
small group of inexperienced managers. The securities of small companies may
have limited
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marketability and liquidity and are often subject to more abrupt or erratic
market movements than shares of larger companies or the major market
averages. The very nature of investing in smaller companies involves greater
risk than is customarily associated with large-cap companies.
While there is no guarantee, Total Equity Market Index Fund is expected to
have a risk level between the other two funds, and should have higher
dividends than the Extended Equity Market Fund.
The use of sampling for the Extended Equity and Total Equity Funds will
likely result in some deviation from their respective indices. In addition,
for all three index funds, returns are likely to be slightly below those of
the indices because the funds have fees and transaction expenses while
indices have none. The timing of cash flows and a fund's size can also
influence returns. While there is no guarantee, the investment manager
expects the correlation between the funds and their respective indices to be
at least .95. A correlation of 1.00 means the return of a fund can be
completely explained by the return of an index.
Investments in futures and options, if any, are subject to additional
volatility and potential losses.
As with any mutual fund, there can be no guarantee the funds will achieve
their objectives.
. Each fund's share price may decline, so when you sell your shares, you may
lose money. An investment in each fund is not a deposit of a bank and is not
insured or guaranteed by the Federal Deposit Insurance Corporation or any
other government agency.
4. How can I tell which fund is most appropriate for me?
Consider your investment goals, your time horizon for achieving them, and
your tolerance for the inherent risk of common stock investments. If you seek
a relatively low-cost way of participating in the U.S. equity markets through
a passively managed portfolio, one or more of the funds could be an
appropriate part of your overall investment strategy. The fund or funds you
select should not represent your complete investment program or be used for
short-term trading purposes.
The segments of the stock market to which you want exposure and the degree of
volatility you can accept in pursuit of long-term capital gains can guide you
in choosing among the funds.
The S&P 500 Index is one of the most widely tracked stock indices in the
world. If you want to closely match the performance of the mostly large-cap
stocks in this index, with the same level of risk, the Equity Index 500 Fund
may be an appropriate choice.
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If you seek potentially higher returns, can assume greater risk, and want
broad exposure to small- and mid-cap stocks, you may wish to invest in the
Extended Equity Market Index Fund.
Finally, if your risk profile is between that of the first two funds and you
would like to participate in the entire U.S. stock market, you may want to
consider the Total Equity Market Index Fund.
Each fund can be used in both regular and tax-deferred accounts, such as
IRAs.
. Equity investors should have a long-term investment horizon and be willing
to wait out bear markets.
5. How has each fund performed in the past?
The bar charts showing calendar year returns and the average annual total
return table indicate risk by illustrating how much returns can differ from
one year to the next and over time. Fund past performance is no guarantee of
future returns.
The funds can also experience short-term performance swings, as shown by the
best and worst calendar quarter returns during the years depicted in the
charts.
<TABLE>
<CAPTION>
<S> <C>
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</TABLE>
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<TABLE>
<CAPTION>
Calendar Year Total Returns
Fund "91" "92" "93" "94" "95" "96" "97" "98" "99"
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<S> <S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <S>
Equity Index 500 29.21 7.19 9.42 1.01 37.16 22.65 32.87 28.31 20.64
Extended Equity
Market Index -- -- -- -- -- -- -- -- 33.72
Total Equity -- -- -- -- -- -- -- -- 23.25
Market Index
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</TABLE>
Equity Index 500 Fund Quarter ended Total return
Best quarter 12/31/9821.31%
Worst quarter 9/30/98 -9.97%
Extended Equity Market Index Fund Quarter ended Total return
Best quarter 12/31/9928.48%
Worst quarter 9/30/99 -6.44%
Total Equity Market Index Fund Quarter ended Total return
Best quarter 12/31/9917.85%
Worst quarter 9/30/99 -6.49%
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Table 2 Average Annual Total Returns
<CAPTION>
Periods ended March 31, 2000
Shorter of 10 years
1 year 5 years or since inception Inception date
------------------------
<S> <C> <C> <C> <S>
Equity Index 500 Fund 17.58% 26.39% 18.44% 3/30/90
S&P 500 Stock Index 17.94 26.76 18.84
Extended Equity 47.51% -- 25.63% 1/30/98
Market Index Fund
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Wilshire 4500 Index 49.51 -- 25.89
Total Equity Market
Index Fund 23.12% -- 23.32% 1/30/98
Wilshire 5000 Index 23.61 -- 23.38
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</TABLE>
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These figures include changes in principal value, reinvested dividends, and
capital gain distributions, if any.
The funds' returns do not include the account maintenance fee which, if
reflected, would reduce the returns shown.
6. What fees or expenses will I pay?
The funds are 100% no load. However, the funds charge a redemption fee of
0.50%, payable to the funds, for shares held less than six months, and a
quarterly maintenance fee of $2.50 for accounts of less than $10,000. There
are no fees or charges to buy or sell fund shares, reinvest dividends, or
exchange into other T. Rowe Price funds. There are no 12b-1 fees. The
Extended Equity Market Index and Total Equity Market Index Funds each have a
single, all-inclusive fee covering investment management and operating
expenses. This will not fluctuate.
<TABLE>
Table 3 Fees and Expenses of the Funds
<CAPTION> Shareholder fees (fees
paid directly from your Annual fund operating expenses
investment) (expenses that are deducted from fund assets)
Total annual Fee waiver/
Redemption Small account Management Other fund operating expense Net
Fund fee fee/a/ fee expenses expenses reimbursement expenses
<S> <C> <C> <C> <C> <C> <C> <C> <S>
Equity Index 500 0.50% $10 0.15%/b/ 0.26%/c/ 0.41% 0.06% 0.35%/b/
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Extended Equity 0.50 10 0.40/d/ -- 0.40 -- 0.40/d/
Market Index
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Total Equity Market 0.50 10 0.40/d/ -- 0.40 -- 0.40/d/
Index
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</TABLE>
/a/A $2.50 quarterly fee is charged for accounts with balances less than
$10,000.
/b/
To limit the fund's expenses, T. Rowe Price contractually obligated itself to
waive its fees and bear any expenses through December 31, 1999, which would
cause the fund's ratio of expenses to average net assets to exceed 0.40%.
Effective January 1, 2000, T. Rowe Price agreed to lower the expense
limitation to 0.35% and extend it for a period of one year through December
31, 2000. Fees waived or expenses paid or assumed under these agreements are
subject to reimbursement to T. Rowe Price by the fund whenever the fund's
expense ratio is below 0.35%; however, no reimbursement will be made after
December 31, 2001, or if it would result in the expense ratio exceeding
0.35%. Any amounts reimbursed will have the effect of increasing fees
otherwise paid by the fund.
/c/Expenses have been restated to reflect the 0.35% expense cap in effect
January 1, 2000.
/d/ The management fee includes operating expenses.
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Example. The following table gives you a rough idea of how expense ratios
may translate into dollars and helps you to compare the cost of investing in
these funds with that of other funds. Although your actual costs may be
higher or lower, the table shows how much you would pay if operating expenses
remain the same, the expense limitation currently in place is not renewed (if
applicable), you invest $10,000, earn a 5% annual return, and hold the
investment for the following periods:
<TABLE>
<CAPTION>
Fund 1 year* 3 years* 5 years* 10 years*
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<S> <C> <C> <C> <C> <S>
Equity Index 500 $36 $126 $224 $512
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Extended Equity Market Index 41 128 224 505
----------------------------------------
Total Equity Market Index 41 128 224 505
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</TABLE>
* Does not include account maintenance fee for accounts of less than $10,000.
7. Who manages the funds?
Each fund is managed by T. Rowe Price Associates, Inc. Founded in 1937, T.
Rowe Price and its affiliates manage investments for individual and
institutional accounts. The company offers a comprehensive array of stock,
bond, and money market funds directly to the investing public.
Kristen F. Culp manages the funds day-to-day and became chairperson of their
Investment Advisory Committees in 2000. Ms. Culp has been a member of the
Equity Index 500 Fund's committee since 1992, and a member of the Extended
Equity Market Index and Total Equity Market Index Funds' committees since
their inception. She joined T. Rowe Price in 1990 and has been managing
investments since 1995.
Note: The following questions and answers about buying and selling shares and
services do not apply to employer-sponsored retirement plans. If you are a
participant in one of these plans, please call your plan's toll-free number for
additional information.
8. How can I purchase shares?
Fill out the New Account Form and return it with your check in the postpaid
envelope. The minimum initial purchase is $2,500 ($1,000 for IRAs and gifts
or transfers to minors). The minimum subsequent investment is $100 ($50 for
IRAs, gifts or transfers to minors, or Automatic Asset Builder). You can also
open an account by bank wire, by exchanging from another T. Rowe Price fund,
or by transferring assets from another financial institution.
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9. How can I sell shares?
You may redeem or sell any portion of your account on any business day.
Simply write to us or call. You can also access your account at any time via
Tele*Access /(R)/ or our Web site. We offer convenient exchange among our
entire family of domestic and international funds. Restrictions may apply in
special circumstances, and some redemption requests need a signature
guarantee. A $5 fee is charged for wire redemptions under $5,000.
10. When will I receive income and capital gain distributions?
Equity Index 500 Fund distributes income quarterly and Extended Equity Market
Index and Total Equity Market Index Funds distribute income annually. Net
capital gains, if any, are distributed at year-end. For regular accounts,
income and short-term gains are taxable at ordinary income rates, and
long-term gains are taxable at the capital gains rate. Distributions are
reinvested automatically in additional shares unless you choose another
option, such as receiving a check. Distributions paid to IRAs and
employer-sponsored retirement plans are automatically reinvested.
11. What services are available?
A wide range, including but not limited to:
. retirement plans for individuals and large and small businesses;
. automated information and transaction services by telephone or computer;
. electronic transfers between fund and bank accounts;
. automatic investing and automatic exchange;
. brokerage services; and
. asset manager accounts.
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Walk-in
Investor Centers
For directions, call 1-800-225-5132 or visit our Web site
Baltimore Area
Downtown
101 East Lombard Street
Owings Mills
Three Financial Center 4515 Painters Mill Road
Boston Area
386 Washington Street Wellesley
Colorado Springs
4410 ArrowsWest Drive
Los Angeles Area
Warner Center 21800 Oxnard Street Suite 270 Woodland Hills
Tampa
4200 West Cypress Street 10th Floor
Washington, D.C.
900 17th Street, N.W. Farragut Square
For Mutual Fund
or T. Rowe Price Brokerage Information
Investor Services
1-800-541-6138
For Existing Accounts
Shareholder Services
1-800-225-5132
For Yields, Prices, Account Information, or to Conduct Transactions
Tele*Access/(R)/
24 hours, 7 days 1-800-638-2587
Internet Address
www.troweprice.com
T. Rowe Price Associates, Inc. 100 East Pratt Street Baltimore, MD 21202
www.troweprice.com
(LOGO)
T. Rowe Price Investment Services, Inc., Distributor
