<PAGE>
Annual Report
EQUITY
MARKET
INDEX FUNDS
DECEMBER 31, 1999
[LOGO OF T. ROWE PRICE]
<PAGE>
REPORT HIGHLIGHTS
- --------------------------------------------------------------------------------
Equity Market Index Funds
. Gains among technology and other growth stocks powered a strong advance in
the equity markets in 1999.
. The Equity Index 500 Fund finished the year with its fifth consecutive
advance in excess of 20%.
. The Total Equity Market Index Fund performed well, benefiting largely from
technology-related companies.
. The Extended Equity Market Index Fund's significant gains reflected
tremendous success in a booming IPO market.
. We think the economy and inflation will remain on an even keel, but some
market volatility would not be unexpected.
UPDATES AVAILABLE
For updates on T. Rowe Price funds following the end of each calendar quarter,
please see our Web site at www.troweprice.com.
<PAGE>
FELLOW SHAREHOLDERS
After flagging somewhat in the fall, the domestic equity markets staged stunning
rallies to end the year with strong returns. In a change from many recent
periods, small-cap stocks came along for the ride, finishing the year slightly
ahead of large-caps. However, the market was extremely uneven, and only high-
growth technology and telecommunications firms really soared, while many lower-
growth issues slumped. Fortunately, the indices were increasingly exposed to
high-growth sectors, producing good performance for your funds.
YEAR-END DISTRIBUTIONS
On December 14, 1999, your Board of Directors declared income and
capital gain distributions for the Equity Market Index Funds as
follows to shareholders of record on that date: for the Equity Index
500 Fund, a quarterly income dividend of $0.09 per share, a year-end
short-term capital gain distribution of $0.05 per share, and a
year-end long-term capital gain distribution of $0.14 per share; for
the Extended Equity Market Index Fund, an annual income dividend of
$0.10 per share, an annual short-term capital gain distribution of
$0.35 per share, and an annual long-term capital gain distribution of
$0.18 per share; and for the Total Equity Market Index Fund, a
quarterly income dividend of $0.03 per share, a year-end short-term
capital gain distribution of $0.06 per share, and a year-end long-term
capital gain distribution of $0.03 per share. These were paid on
December 16. You should already have received your check or statement
reflecting these distributions, as well as Form 1099-DIV summarizing
this information for 1999 tax purposes.
MARKET ENVIRONMENT
The market environment should not have been ideal for stocks in 1999,
as the Federal Reserve raised the federal funds target rate three
times to forestall inflationary pressures. Indeed, a large number of
value- oriented and interest rate-sensitive stocks lost ground during
the year. Yet the economy continued to grow at a steady pace, and the
1
<PAGE>
"new economy" -- a term often used to describe the businesses that
use technology, telecommunications, and the Internet as the foundation
for new business models -- significantly expanded its reach. As a
result, growth stocks led the market higher, helping the Standard &
Poor's 500 Stock Index turn in an unprecedented fifth consecutive year
of gains above 20%. In an indication of where the hottest action was,
the technology-heavy Nasdaq Composite Index was up a remarkable 85.6%
for the year. No broad U.S. index has ever posted as high a one-year
return as this.
- -------------------------------
WILSHIRE 5000 RETURNS BY SECTOR
- --------------------------------------------------------------------------------
Periods Ended 12/31/99 6 Months 12 Months
- --------------------------------------------------------------------------------
Basic Materials -0.52% 16.98%
- --------------------------------------------------------------------------------
Business Services 9.58 19.39
- --------------------------------------------------------------------------------
Consumer Discretionary 8.85 26.96
- --------------------------------------------------------------------------------
Consumer Nondurables -7.60 -12.26
- --------------------------------------------------------------------------------
Durable Goods -10.56 -7.00
- --------------------------------------------------------------------------------
Energy -1.27 19.20
- --------------------------------------------------------------------------------
Financial -8.68 1.41
- --------------------------------------------------------------------------------
Health Care -2.97 -5.16
- --------------------------------------------------------------------------------
Industrial 11.03 28.35
- --------------------------------------------------------------------------------
Miscellaneous 18.30 11.85
- --------------------------------------------------------------------------------
Retail 7.42 18.27
- --------------------------------------------------------------------------------
Technology 47.82 82.56
- --------------------------------------------------------------------------------
Telecommunications 5.38 24.77
- --------------------------------------------------------------------------------
Transportation -13.63 -4.19
- --------------------------------------------------------------------------------
Utilities -8.79 -12.40
- --------------------------------------------------------------------------------
Dramatic changes brought on by the Internet fueled the tech rally. As investors
look back on this decade, they will surely look first at the firms that have
been aided by the Internet and those whose business models have been challenged.
In November and December, trading in technology and Internet names was
particularly frenzied and at times seemed irrational.
Related to the frenzy in technology stocks, the IPO market boomed. This was a
theme that started in 1998 and blossomed in 1999. While some very large,
established companies went public in 1999, such as Goldman Sachs and UPS,
technology and especially Internet startups dominated the scene. A phenomenal
number of companies went public in 1999, and their first-day returns continually
set records that were subsequently broken. In early December, VA Linux Systems
finally took the prize for best IPO "pop" with a startling return of 698% on its
first day as a public company. The end is not in sight -- many, many companies
have filed to go public in 2000.
2
<PAGE>
Another theme that has dominated the second half of the '90s is merger mania;
1999 saw a continuation of that theme. Several very large mergers closed this
year, such as Exxon/Mobil and Ameritech/SBC Communications, and some major new
deals were announced. Many of these were among telecommunications or media
firms, including MCI WorldCom's planned merger with Sprint and AT&T's planned
merger with MediaOne Group. As has been the case in recent years, a large number
of companies are using their highly appreciated stock to acquire companies
instead of using cash or debt.
In a sign of the times, some significant changes were made to the Dow Jones
Industrial Average. Microsoft, Home Depot, Intel, and SBC Communications were
all added to the Dow in late October. These stocks replaced Chevron, Goodyear
Tire, Sears, and Union Carbide. Many market analysts thought these changes were
long overdue if the Dow was to be viewed as representative of the biggest blue
chip companies.
- -------------------------
PORTFOLIO CHARACTERISTICS
- --------------------------------------------------------------------------------
Extended
Equity Total Equity Equity
As of 12/31/99 Index 500 Market Index Market Index
- --------------------------------------------------------------------------------
Market Cap
(Investment-
Weighted Median) $92.9 billion $41.6 billion $2.7 billion
- --------------------------------------------------------------------------------
Earnings Growth
Rate Estimated
Next 5 Years* 13.9% 15.0% 22.1%
- --------------------------------------------------------------------------------
P/E Ratio (Based
on Next 12 Months)
Estimated Earnings 28.1X 29.7X 39.9X
- --------------------------------------------------------------------------------
*Forecasts are based on T. Rowe Price research and are in no way an indication
of future investment returns.
Fortunately for small-cap investors, one longstanding trend in the 1990s finally
came to an end in 1999: small-cap stocks modestly outperformed large-caps for
the first time since the early part of the decade. However, much of this success
derived from gains in smaller technology companies.
EQUITY INDEX 500 FUND
For the six and 12 months ended December 31, 1999, your fund posted
attractive returns of 7.55% and 20.64%, respectively. These results were in
step with those of the S&P 500, trailing slightly because of the fund's
annual operating and management expenses, which the index does not incur.
3
<PAGE>
- ----------------------
PERFORMANCE COMPARISON
- --------------------------------------------------------------------------------
Periods Ended 12/31/99 6 Months 12 Months
Equity Index 500 Fund 7.55% 20.64%
S&P 500 7.71 21.04
Technology stocks dominated the market. While almost every type of technology
stock advanced, communications stocks did particularly well as investors saw
huge growth potential for these companies. Communications equipment maker Cisco
Systems, for example, was up 131% for the year, and wireless telecom firms
Nextel and Sprint PCS were up 336% and 343%, respectively. Software stocks also
shone. Oracle was up just over 200% in the last six months after a short-lived
slump.
While the eye-popping returns tended to be in the technology sector, large
growth stocks in general did well. The large retailers Wal-Mart and Home Depot
were up 43% and 60%, respectively, in the last six months. GE also performed
well in the second half, up 38%. The heady advances of these companies, already
among the largest in the S&P 500, tended to obscure the decline of many sectors
for the year as concerns over inflation and rising interest rates plagued the
broad market. In fact, close to half of all stocks in the S&P 500 actually fell
during that period.
Many changes took place in the S&P 500 in 1999, with a total of 41 companies
entering the index. As has been the case in much of the late 1990s, most of
these changes were triggered by merger and acquisition activity, a hallmark of
this bull market. Eleven of the 41 companies added came from the technology
sector -- more than from any other area. In comparison, the financial sector,
which has added numerous companies to the index in recent years, had six
companies from its ranks move into the index.
As a result of these changes as well as strong performance, the technology
sector has become a very large part of the S&P 500. As suggested by the Sector
Diversification table on page 5, technology is now the largest component in the
benchmark indices for all three of our index funds. It now accounts for more
than 30% of the S&P and even larger percentages for the Wilshire 4500 and
Wilshire 5000 Total Market Index. The S&P remains fairly representative of the
broad market, but, like the broad market, it has become more volatile with the
expanded exposure to this sector. Volatility may be an ongoing characteristic of
the technology stocks, which now carry very high price-to-earnings ratios and
have a lot of hope for good news priced into them.
4
<PAGE>
SECTOR DIVERSIFICATION
- --------------------------------------------------------------------------------
Percent of Equity Total Equity Extended
Equities Index Market Equity
As of 12/31/99 500 Index Market Index
- --------------------------------------------------------------------------------
Basic Materials 4.0% 3.6% 2.7%
Business Services 0.6 2.2 6.8
Consumer
Discretionary 4.8 5.9 8.7
Consumer
Nondurables 6.5 5.3 2.3
Durable Goods 1.4 2.4 5.2
Energy 5.8 4.3 2.4
Financial 13.5 13.5 12.3
Health Care 9.7 8.6 6.5
Industrial 6.3 5.5 2.2
Miscellaneous 0.1 0.2 0.7
Retail 6.7 6.2 3.9
Technology 30.2 32.2 37.8
Telecommu-
nications 7.9 7.1 4.4
Transportation 0.7 0.9 1.3
Utilities 1.8 2.1 2.8
- --------------------------------------------------------------------------------
Total 100% 100% 100%
Among the technology companies added to the index in the second half of 1999,
two were particularly notable. Yahoo! caused quite a stir when it was added in
early December. In the seven days between the time the S&P committee announced
its decision and the day it actually moved into the index, the stock rallied an
astounding 64%. A more typical gain for a stock from announcement to entry would
be 8%. The Yahoo! addition is also notable as a nod by S&P toward pure Internet
stocks despite their relative youth and volatile performance history. Recall
that America Online was added in December of 1998. If the S&P 500 is to remain
representative of the broad U.S. market, such additions are necessary.
The other noteworthy addition during the second half of 1999 was Qualcomm, the
maker of digital wireless communications products. This stock was already up
505% for the year through July 21 when it was added to the index. It then went
on to rise another 350% through year-end. By December 31, Qualcomm had become
the 27th largest stock in the S&P 500, representing 0.94% of the index. Yahoo!
had become the 29th largest, with a 0.93% weight. These stocks are examples of
how the S&P 500 is rapidly changing. Two other communications equipment makers,
ADC Telecommunications and Comverse Technology, entered the index, as did four
semiconductor stocks: Analog Devices, Adaptec, Teradyne, and Xilinx.
5
<PAGE>
One S&P 500 addition during the second half was of particular interest to
us: T. Rowe Price Associates was added in mid-October. While funds at T.
Rowe Price would ordinarily not consider it appropriate to own T. Rowe
Price stock, we decided that this fund should break with the policy. Our
goal is to replicate the returns of the S&P 500 as precisely as possible,
and so we own every stock in the index to achieve this goal.
Most of the deletions from the S&P 500 were due to merger and acquisition
activity. A few were dropped because they had become comparatively small
and, as the S&P 500 Committee puts it, "lacked representation." These
included Laidlaw, Battle Mountain Gold, and Fruit of the Loom.
TOTAL EQUITY MARKET INDEX FUND
For the six and 12 months ended December 31, 1999, your fund posted strong
returns of 10.20% and 23.25%, respectively. These returns closely tracked
the Wilshire 5000 Total Market Index, falling slightly behind due to the
fund's operating and management expenses.
PERFORMANCE COMPARISON
- --------------------------------------------------------------------------------
Periods Ended 12/31/99 6 Months 12 Months
- --------------------------------------------------------------------------------
Total Equity Market
Index Fund 10.20% 23.25%
- --------------------------------------------------------------------------------
Wilshire 5000 Total
Market Index 10.45 23.56
- --------------------------------------------------------------------------------
The Wilshire 5000 and your fund outperformed the S&P 500 during both the one-
year and six-month periods. This is largely because the Wilshire 5000's
technology weight is slightly larger than the S&P 500's, and that difference
made a difference in the second half of 1999. In addition, the Wilshire 5000
includes a lot of very young technology companies that the market -- looking for
the "next big thing" -- has rewarded with high returns, high valuations, and
high market capitalizations. This index, and your fund, participated in the huge
returns of stocks like Yahoo! and Qualcomm before they entered the S&P 500.
While this fund benefited from its holdings in the large technology companies
that performed well, many of which are mentioned in the Equity Index 500 Fund
section above, several of the top technology performers were companies that,
while large or newly large, are not yet in the S&P 500. For example,
semiconductor maker JDS Uniphase, software company VERITAS Software, and e-
business applications
6
<PAGE>
supplier BroadVision turned in results of 289%, 352%, and 592%,
respectively, just in the second half of 1999. A number of small technology
companies also outperformed the averages.
While most health care stocks performed poorly this year, including large
drug stocks that had been market darlings in previous years, some
biotechnology stocks did very well. Companies involved in gene sequencing
proved extremely popular with investors. For example, PE Corporation-Celera
Genomics Group soared 820% and Human Genome Sciences climbed 286% in the
second half.
The assets in the fund have grown quite a bit over the last year due partly
to market performance but also due to new subscriptions. We have used the
new assets to increase the number of stocks in the portfolio. The fund now
owns approximately 1500 securities, compared with roughly 900 securities
last year at this time. We still use sampling techniques to replicate the
performance of the more than 6,000 small- and mid-cap securities in our
index, but these additions should help us track our index more closely.
Many of these new holdings are of companies that went public this year.
Some examples are Sycamore Networks, an optical networking company, Red
Hat, a provider of the popular open-source operating system Linux, and
Juniper Networks, a provider of Internet infrastructure systems. These
companies do not yet have earnings, but we own them because they represent
large weights in the Wilshire 5000 based on their market capitalizations.
EXTENDED EQUITY MARKET INDEX FUND
For the six and 12 months ended December 31, 1999, your fund posted returns
of 20.20% and 33.72%, respectively. These returns were slightly behind
those of the Wilshire 4500. The difference owed partly to fund operating
and management expenses, which the index does not incur. However, some of
the performance disparity came from tracking error.
The Wilshire 4500 and your fund outperformed the S&P 500 handily in both
periods. This resulted almost exclusively from the differences in
technology exposure between the two indices. The Wilshire 4500 has a larger
technology weighting; in addition, Wilshire 4500 technology and telecom
stocks significantly outperformed the S&P 500 stocks in the same sectors.
7
<PAGE>
- ----------------------
PERFORMANCE COMPARISON
- --------------------------------------------------------------------------------
Periods Ended 12/31/99 6 Months 12 Months
- --------------------------------------------------------------------------------
Extended Equity Market
Index Fund 20.20% 33.72%
Wilshire 4500 21.68 35.49
Internet-related technology companies were where the action was in 1999.
Although the market kept changing which Internet stock it liked best, the sector
as a group soared. Early in the year, Web site operators and Internet retailers
were all the rage, but eventually, the quality of these types of firms coming to
market deteriorated, and the focus shifted to equipment suppliers. Then
business-to-business Internet players and companies related to the Linux
operating system became popular. One of our bigger challenges in 1999 was
keeping up with the frenzied whims of the market in Internet stocks. When in
favor, these stocks posted huge returns. At times, we were not always properly
weighted in them and that caused some tracking error between the fund and its
benchmark. In addition, numerous companies were added to the benchmark via the
IPO market, and many companies left it to enter the S&P 500. These changes,
combined with huge disparities in performance among sectors, made the Wilshire
4500's sector weightings change considerably.
The fund benefited from owning the companies mentioned in the Total Equity
Market Index Fund section above, excepting those in the S&P 500. It should be
noted that while the market was very kind to small technology stocks for which
there was a lot of hope and good news, it was merciless to stocks that
encountered bad news. For example, Visx, a stock that was a high-flier in the
first half of 1999, lost a patent battle and was down more than 50% from its
high in late July. Berkshire Hathaway, the largest stock in the fund, was down
19% during the second half -- not because there was bad news specific to
Berkshire Hathaway, but because the company owned large stakes in out-of-favor
stocks.
As fund assets have grown, we have continued to add companies in an effort to
reduce potential tracking error. At this time last year, the fund held roughly
1000 securities; it now holds around 1900. While this has kept our returns
roughly in line with our benchmark, the Wilshire 4500 remains a challenging
index to track. The 100 largest companies represent only about 30% of the index
and the 1000 largest companies represent roughly 75%. Compare that to the
Wilshire 5000, for which the 100 largest names make up roughly 55% and the 1000
largest names, approximately 90%. Because the Wilshire 5000 is much more
concentrated in its large companies, it is easier to track.
8
<PAGE>
OUTLOOK
We do not expect inflation or long-term interest rates to rise
significantly from current levels, although at least one Fed rate hike
appears likely in the first half of 2000. Given the Fed's proactive stance
and the positive influence of technological advancements, including the
Internet, we expect sustained economic growth and manageable levels of
inflation. These developments would ultimately be beneficial to the
financial markets, but as investors try to anticipate Fed actions, the
volatility of last year may continue. In addition, considering how costly
some sectors of the U.S. stock market are, especially technology, and how
large the technology sector has become, we think investors should be
prepared for a bumpy ride and will need to keep a long-term perspective.
Respectfully submitted,
/s/ Richard T. Whitney
Richard T. Whitney
Chairman of the Investment Advisory Committee
/s/ Kristen F. Culp
Kristen F. Culp
Executive Vice President
January 20, 2000
- ---------------
DIVIDEND CHANGE
- --------------------------------------------------------------------------------
The Board of Directors of the Total Equity Market Index Fund voted at its
meeting in February to distribute the fund's income dividends annually instead
of quarterly. Since long-term capital appreciation is the primary investment
objective of the fund, with income only a secondary objective, the fund's
quarterly dividends have been relatively small. Our records indicate that an
overwhelming majority of shareholders currently reinvest these dividends rather
than take them in cash. Moving from a quarterly to annual payout schedule should
help economize on fund expenses. As a result of this decision, the income
dividend for the year will be paid in December.
This updates the Total Equity Market Index Fund's prospectus dated May 1, 1999.
9
<PAGE>
T. ROWE PRICE EQUITY MARKET INDEX FUNDS
- --------------------------------------------------------------------------------
- --------------------------
THE EVOLVING S&P 500 INDEX
- --------------------------------------------------------------------------------
Changes in the Index in 1999 *
Additions
- --------------------------------------------------------------------------------
McKesson HBOC
SouthTrust
AmSouth
Century Telephone
Kansas City Southern Industries
Watson Pharmaceuticals
CMS Energy
AFLAC
Delphi Automotive Systems
PaineWebber Group
WellPoint Health Networks
Nabisco Group
Florida Progress
Office Depot
Network Appliance
Best Buy
Vulcan Materials
QUALCOMM
ADC Telecommunications
Allied Waste Industries
Conoco
Lexmark International
Tosco
Global Crossing
Bed Bath & Beyond
Adaptec
Pinnacle West Capital
Analog Devices
T. Rowe Price
Leggett & Platt
El Paso Energy
Comverse Technology
Tenneco Packaging
Xilinx
Teradyne
Deletions
- --------------------------------------------------------------------------------
HBO
Oryx Energy
Tele-Communications
Rubbermaid
AMP
Aeroquip-Vickers
Union Camp
Meyer (Fred)
Moore
Bankers Trust
Harnischfeger Industries
RJR Nabisco Holdings
Morton International
American Stores
Ascend Communications
AirTouch Communications
Provident Companies
Transamerica
Nalco Chemical
Browning-Ferris
Battle Mountain Gold
Raychem
Mercantile
Frontier
BankBoston
Fruit of the Loom
Pioneer Hi-Bred
Ameritech
Data General
Cyprus Amax Minerals
Sonat
ASARCO
Tenneco
Harris
Case
Continued on page 11.
10
<PAGE>
T. ROWE PRICE EQUITY MARKET INDEX FUNDS
- --------------------------------------------------------------------------------
- --------------------------
THE EVOLVING S&P 500 INDEX
- --------------------------------------------------------------------------------
Changes in the Index in 1999 *
Additions
- --------------------------------------------------------------------------------
Quintiles Transnational
Molex
Citrix Systems
Old Kent Financial
Yahoo!
Transocean Sedco Forex
NCR *
Deletions
- --------------------------------------------------------------------------------
King World Productions
PacifiCorp
Mobil
Honeywell
Laidlaw
Helmerich & Payne
Republic New York
* Although S&P deleted Republic New York on December 31, 1999, it did not add
its replacement, NCR, until January 3, 2000.
11
<PAGE>
T. ROWE PRICE EQUITY MARKET INDEX FUNDS
- --------------------------------------------------------------------------------
- --------------------
PORTFOLIO HIGHLIGHTS
- --------------------------------------------------------------------------------
TWENTY-FIVE LARGEST HOLDINGS
Percent of
Net Assets
Equity Index 500 Fund 12/31/99
- --------------------------------------------------------------------------------
Microsoft 4.8%
GE 4.1
Cisco Systems 2.8
Wal-Mart 2.5
Exxon Mobil 2.2
- --------------------------------------------------------------------------------
Intel 2.2
Lucent Technologies 1.9
IBM 1.6
Citigroup 1.5
America Online 1.4
- --------------------------------------------------------------------------------
American International Group 1.3
SBC Communications 1.3
AT&T 1.3
Oracle 1.3
Home Depot 1.3
- --------------------------------------------------------------------------------
Merck 1.3
MCI WorldCom 1.2
Procter & Gamble 1.2
Coca-Cola 1.2
Nortel Networks 1.1
- --------------------------------------------------------------------------------
Royal Dutch Petroleum 1.0
Dell Computer 1.0
Johnson & Johnson 1.0
Bristol-Myers Squibb 1.0
Pfizer 1.0
- --------------------------------------------------------------------------------
Total 42.5%
Note: Table excludes reserves.
12
<PAGE>
T. ROWE PRICE EQUITY MARKET INDEX FUNDS
- --------------------------------------------------------------------------------
- --------------------
PORTFOLIO HIGHLIGHTS
- --------------------------------------------------------------------------------
TWENTY-FIVE LARGEST HOLDINGS
Percent of
Net Assets
Total Equity Market Index Fund 12/31/99
- --------------------------------------------------------------------------------
Microsoft 3.6%
GE 3.1
Cisco Systems 2.1
Wal-Mart 1.9
Exxon Mobil 1.7
- --------------------------------------------------------------------------------
Intel 1.7
Lucent Technologies 1.4
IBM 1.2
Citigroup 1.1
America Online 1.0
- --------------------------------------------------------------------------------
American International Group 1.0
SBC Communications 1.0
AT&T 1.0
Oracle 1.0
Home Depot 1.0
- --------------------------------------------------------------------------------
Merck 0.9
MCI WorldCom 0.9
Coca-Cola 0.9
Procter & Gamble 0.9
Dell Computer 0.8
- --------------------------------------------------------------------------------
Johnson & Johnson 0.8
Bristol-Myers Squibb 0.8
Pfizer 0.7
Sun Microsystems 0.7
Hewlett-Packard 0.7
- --------------------------------------------------------------------------------
Total 31.9%
Note: Table excludes reserves.
13
<PAGE>
T. ROWE PRICE EQUITY MARKET INDEX FUNDS
- --------------------------------------------------------------------------------
- --------------------
PORTFOLIO HIGHLIGHTS
- --------------------------------------------------------------------------------
TWENTY-FIVE LARGEST HOLDINGS
Percent of
Net Assets
Extended Equity Market Index Fund 12/31/99
- --------------------------------------------------------------------------------
Berkshire Hathaway 2.0%
VERITAS Software 0.9
JDS Uniphase 0.8
Qwest Communications International 0.7
Cox Communications 0.7
- --------------------------------------------------------------------------------
CMG Information Services 0.7
Level 3 Communications 0.6
Amazon.com 0.6
Sycamore Networks 0.6
VeriSign 0.4
- --------------------------------------------------------------------------------
Immunex 0.4
Ariba 0.4
Foundry Networks 0.4
Juniper Networks 0.4
AMFM 0.4
- --------------------------------------------------------------------------------
Siebel Systems 0.4
e-Bay 0.4
i2 Technologies 0.4
Equitable Companies 0.4
Broadvision 0.3
- --------------------------------------------------------------------------------
Exodus Communications 0.3
At Home 0.3
Commerce One 0.3
Red Hat 0.3
Broadcom 0.3
- --------------------------------------------------------------------------------
Total 13.4%
Note: Table excludes reserves.
14
<PAGE>
T. ROWE PRICE EQUITY MARKET INDEX FUNDS
- --------------------------------------------------------------------------------
- ----------------------
PERFORMANCE COMPARISON
- --------------------------------------------------------------------------------
These charts show the value of a hypothetical $10,000 investment in each
fund over the past 10 fiscal year periods or since inception (for funds
lacking 10-year records). The result is compared with benchmarks, which may
include a broad-based market index and a peer group average or index. Market
indexes do not include expenses, which are deducted from fund returns as
well as mutual fund averages and indexes.
EQUITY INDEX 500 FUND
- --------------------------------------------------------------------------------
[GRAPH]
Equity Index 500 Fund S&P 500 Stock Index
3/30/90 10,000 10,000
12/90 9,690 10,031
12/91 12,642 12,962
12/92 13,605 13,894
12/93 14,976 15,202
12/94 15,174 15,356
12/95 20,876 21,063
12/96 25,669 25,834
12/97 34,233 34,327
12/98 44,016 44,046
12/99 54,931 53,135
TOTAL EQUITY MARKET INDEX FUND
- --------------------------------------------------------------------------------
[GRAPH]
Total Equity
Market Index Fund Wilshire 5000 Index
1/30/98 10,000 10,000
12/98 12,276 12,319
12/99 15,169 15,184
15
<PAGE>
T. ROWE PRICE EQUITY MARKET INDEX FUNDS
- --------------------------------------------------------------------------------
- ----------------------
PERFORMANCE COMPARISON
- --------------------------------------------------------------------------------
EXTENDED EQUITY MARKET INDEX FUND
- --------------------------------------------------------------------------------
[GRAPH]
Extended Equity
Market Index Fund Wilshire 4500 Index
1/30/98 10,000 10,000
12/98 11,020 11,229
12/99 14,932 15,016
- ------------------------------------
AVERAGE ANNUAL COMPOUND TOTAL RETURN
- --------------------------------------------------------------------------------
This table shows how each fund would have performed each year if its actual
(or cumulative) returns for the periods shown had been earned at a constant
rate.
<TABLE>
<CAPTION>
Since Inception
Periods Ended 12/31/99 1 Year 5 Years 10 Years Inception Date
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Equity Index 500 Fund 20.64% 28.18% -- 18.67% 3/30/90
Total Equity Market Index Fund 23.25 -- -- 24.33 1/30/98
Extended Equity Market Index Fund 33.72 -- -- 23.61 1/30/98
</TABLE>
Investment return and principal value represent past performance and will vary.
Shares may be worth more or less at redemption than at original purchase.
16
<PAGE>
T. ROWE PRICE SHAREHOLDER SERVICES
- --------------------------------------------------------------------------------
INVESTMENT SERVICES AND INFORMATION
KNOWLEDGEABLE SERVICE REPRESENTATIVES
By Phone 1-800-225-5132 Available Monday through Friday from 8 a.m. to
10 p.m. ET and weekends from 8:30 a.m. to 5 p.m. ET.
In Person Available in T. Rowe Price Investor Centers.
ACCOUNT SERVICES
Checking Available on most fixed income funds ($500 minimum).
Automatic Investing From your bank account or paycheck.
Automatic Withdrawal Scheduled, automatic redemptions.
Distribution Options Reinvest all, some, or none of your
distributions.
Automated 24-Hour Services Including Tele*Access(R) and the T. Rowe
Price Web site on the Internet. Address: www.troweprice.com
BROKERAGE SERVICES*
Individual Investments Stocks, bonds, options, precious metals, and
other securities at a savings over full-service commission rates. **
INVESTMENT INFORMATION
Combined Statement Overview of all your accounts with T. Rowe Price.
Shareholder Reports Fund managers' reviews of their strategies and
results.
T. Rowe Price Report Quarterly investment newsletter discussing
markets and financial strategies.
Performance Update Quarterly review of all T. Rowe Price fund results.
Insights Educational reports on investment strategies and financial
markets.
Investment Guides Asset Mix Worksheet, College Planning Kit,
Diversifying Overseas: A Guide to International Investing, Personal
Strategy Planner, Retirees Financial Guide, and Retirement Planning
Kit.
* T. Rowe Price Brokerage is a division of T. Rowe Price Investment
Services, Inc., Member NASD/SIPC.
** Based on a September 1999 survey for representative-assisted
stock trades. Services vary by firm, and commissions may vary
depending on size of order.
17
<PAGE>
T. ROWE PRICE MUTUAL FUNDS
- --------------------------------------------------------------------------------
STOCK FUNDS
Domestic
Blue Chip Growth
Capital Appreciation
Capital Opportunity
Diversified Small-Cap Growth
Dividend Growth
Equity Income
Equity Index 500
Extended Equity Market Index
Financial Services
Growth & Income
Growth Stock
Health Sciences
Media & Telecommunications
Mid-Cap Growth
Mid-Cap Value
New America Growth
New Era
New Horizons*
Real Estate
Science & Technology
Small-Cap Stock
Small-Cap Value
Spectrum Growth
Tax-Efficient Growth
Total Equity Market Index Value
International/Global
Emerging Markets Stock
European Stock
Global Stock
International Discovery
International Growth & Income
International Stock
Japan
Latin America
New Asia
Spectrum International
BOND FUNDS
Domestic Taxable
Corporate Income
GNMA
High Yield
New Income
Short-Term Bond
Short-Term U.S. Government
Spectrum Income
Summit GNMA
Summit Limited-Term Bond
U.S. Treasury Intermediate
U.S. Treasury Long-Term
Domestic Tax-Free
California Tax-Free Bond
Florida Intermediate Tax-Free
Georgia Tax-Free Bond
Maryland Short-Term
Tax-Free Bond
Maryland Tax-Free Bond
New Jersey Tax-Free Bond
New York Tax-Free Bond
Summit Municipal Income
Summit Municipal Intermediate
Tax-Free High Yield
Tax-Free Income
Tax-Free Intermediate Bond
Tax-Free Short-Intermediate
Virginia Short-Term
Tax-Free Bond
Virginia Tax-Free Bond
International/Global
Emerging Markets Bond
Global Bond
International Bond
MONEY MARKET FUNDS+
Taxable
Prime Reserve
Summit Cash Reserves
U.S. Treasury Money
Tax-Free
California Tax-Free Money
New York Tax-Free Money
Summit Municipal
Money Market
Tax-Exempt Money
BLENDED ASSET FUNDS
- --------------------------------------------------------------------------------
Balanced
Personal Strategy Balanced
Personal Strategy Growth
Personal Strategy Income
Tax-Efficient Balanced
T. ROWE PRICE NO-LOAD
VARIABLE ANNUITY
Equity Income Portfolio
International Stock Portfolio
Limited-Term Bond Portfolio
Mid-Cap Growth Portfolio
New America Growth Portfolio
Personal Strategy Balanced
Portfolio
Prime Reserve Portfolio
* Closed to new investors.
+ Investments in the funds are not insured or guaranteed by the FDIC or any
other government agency. Although the funds seek to preserve the value of
your investment at $1.00 per share, it is possible to lose money by
investing in the funds.
Please call for a prospectus. Read it carefully before investing.
The T. Rowe Price No-Load Variable Annuity [#V6021] is issued by Security
Benefit Life Insurance Company. In New York, it [#FSB201(11-96)] is issued by
First Security Benefit Life Insurance Company of New York, White Plains, NY. T.
Rowe Price refers to the underlying portfolios' investment managers and the
distributors, T. Rowe Price Investment Services, Inc.; T. Rowe Price Insurance
Agency, Inc.; and T. Rowe Price Insurance Agency of Texas, Inc. The Security
Benefit Group of Companies and the T. Rowe Price companies are not affiliated.
The variable annuity may not be available in all states. The contract has
limitations. Call a representative for costs and complete details of the
coverage.
18
<PAGE>
T. ROWE PRICE ADVISORY SERVICES AND RETIREMENT RESOURCES
- --------------------------------------------------------------------------------
ADVISORY SERVICES,RETIREMENT RESOURCES
T. Rowe Price is your full-service retirement specialist. We have
developed unique advisory services that can help you meet the most
difficult retirement challenges. Our broad array of retirement plans
is suitable for individuals, the self-employed, small businesses,
corporations, and nonprofit organizations. We also provide
recordkeeping, communications, and investment management services, and
our educational materials, self-help planning guides, and software
tools are recognized as among the industry's best. For information or
to request literature, call us at 1-800-638-5660, or visit our Web
site at www.troweprice.com.
ADVISORY SERVICES
T. Rowe Price Retirement Income Manager(SM) helps retirees or those
within two years of retirement determine how much income they can take
in retirement. The program uses extensive statistical analysis and the
input of financial planning professionals to suggest an income plan
that best meets your objectives.
T. Rowe Price Rollover Investment Service offers asset allocation
advice to those planning a major change in their qualified retirement
plans, such as a 401(k) rollover from a previous employer or an IRA
transfer.
RETIREMENT RESOURCES AT T. ROWE PRICE
Traditional, Roth, and Rollover IRAs
SEP-IRA and SIMPLE IRA
Profit Sharing
Money Purchase Pension
"Paired" Plans (Money Purchase
Pension and Profit Sharing Plans)
401(k) and 403(b)
457 Deferred Compensation
Planning and Informational Guides
Minimum Required Distributions Guide
Retirement Planning Kit
Retirees Financial Guide
Tax Considerations for Investors
Insights Reports
The Challenge of Preparing for Retirement
Financial Planning After Retirement
The Roth IRA: A Review
Software Packages
T. Rowe Price Retirement Planning
Analyzer(TM) CD-ROM or diskette $19.95.
To order, please call
1-800-541-5760. Also available
on the Internet for $9.95.
T. Rowe Price Variable Annuity Analyzer(TM)
CD-ROM or diskette, free. To order,
please call 1-800-469-5304.
T. Rowe Price Immediate Variable
Annuity (Income Account)
Investment Kits
We will be happy to send you one of our easy-to-follow investment kits
when you are ready to invest in any T. Rowe Price retirement vehicle,
including IRAs, qualified plans, small-business plans, or our no-load
variable annuities.
19
<PAGE>
T. ROWE PRICE INSIGHTS REPORTS
- --------------------------------------------------------------------------------
THE FUNDAMENTALS OF INVESTING
Whether you are unsure how to get started or are saving for a specific
goal, such as retirement or college, the T. Rowe Price Insights series
can help you make informed investment decisions. These reports,
written in plain English about fundamental investment topics, can be
useful at every stage of your investment journey. They cover a range
of topics, from the basic, such as getting started with mutual funds,
to the more advanced, such as managing risk through diversification or
buying individual securities through a broker. To request one or more
Insights, call us at 1-800-638-5660.
INSIGHTS REPORTS
General Information
The ABCs of Giving
Back to Basics: The ABCs of Investing
The Challenge of Preparing for
Retirement
Financial Planning After Retirement
Getting Started: Investing With Mutual
Funds
The Roth IRA: A Review
Tax Information for Mutual Fund
Investors
Investment Strategies
Conservative Stock Investing
Dollar Cost Averaging
Equity Index Investing
Growth Stock Investing
Investing for Higher Yield
Managing Risk Through Diversification
The Power of Compounding
Value Investing
Types of Securities
The Basics of International Stock
Investing
The Basics of Tax-Free Investing
The Fundamentals of Fixed Income
Investing
Global Bond Investing
Investing in Common Stocks
Investing in Emerging Growth Stocks
Investing in Financial Services Stocks
Investing in Health Care Stocks
Investing in High-Yield Municipal
Bonds
Investing in Money Market Securities
Investing in Mortgage-Backed Securities
Investing in Natural Resource Stocks
Investing in Science and Technology
Stocks
Investing in Small-Company Stocks
Understanding Derivatives
Understanding High-Yield "Junk"
Bonds
Brokerage Insights
Combining Individual Securities With
Mutual Funds
Getting Started: An Introduction to
Individual Securities
What You Should Know About Bonds
What You Should Know About Margin
and Short-Selling
What You Should Know About Options
What You Should Know About Stocks
T. Rowe Price Insights are also available for reading or downloading
on the Internet at www.troweprice.com.
20
<PAGE>
T. ROWE PRICE BROKERAGE
- --------------------------------------------------------------------------------
BROKERAGE SERVICES
T. Rowe Price Brokerage is a division of T. Rowe Price Investment Services,
Inc., Member NASD/SIPC.
T. Rowe Price Brokerage provides high-quality services and financial tools
you can use to manage your investments effectively and conveniently. We
also offer significant commission savings over full-service brokerages on a
wide range of individual securities and other investments.*
Internet and Automated Services You can enter trades, access quotes,
and review account information 24 hours a day, seven days a week, by
telephone or computer. We offer a flat-rate commission of $24.95 on
stock trades placed through our Internet-Trader service.**
Research Services To help you make informed investment decisions, we
offer access to several sources of data. You can research your
investments using our Online Research & News Service, provided by
Thomson Investors Network, which includes company profiles, intra-day
and 12-month interactive charting, and analysts' ratings and earnings
estimates. Using our Research On Call service, you can request reports
from Standard & Poor's, Vicker's, Lipper, and other well-known
research providers to be delivered by fax or by mail.
Dividend Reinvestment Service This service helps keep more of your
money working for you. Cash dividends (of $10 or greater) from your
eligible securities will be invested automatically in additional
shares of the same company, free of charge. Most stocks listed on
national securities exchanges or Nasdaq are eligible for this service.
* Based on a September 1999 survey for representative-assisted
stock trades. Services vary by firm, and commissions may vary
depending on size of order.
** $24.95 per trade for up to 1,000 shares plus an additional $.02
for each share over 1,000 shares. Visit our Web site for a
complete commission schedule or call for rates on
representative-assisted and other non-Internet trades.
21
<PAGE>
For fund and account information or to conduct transactions, 24 hours, 7 days a
week By touch-tone telephone Tele*Access 1-800-638-2587
By Account Access on the Internet www.troweprice.com/access
For assistance with your existing fund account, call: Shareholder Service Center
1-800-225-5132
To open a brokerage account or obtain information, call: 1-800-638-5660
Internet address: www.troweprice.com
Plan Account Lines for retirement plan participants: The appropriate 800 number
appears on your retirement account statement.
T. Rowe Price Associates
100 East Pratt Street
Baltimore, Maryland 21202
This report is authorized for distribution only to shareholders and to others
who have received a copy of the prospectus appropriate to the fund or funds
covered in this report.
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
[LOGO OF T. ROWE PRICE]
T. Rowe Price Investment Services, Inc., Distributor. C50-050 12/31/99
