Fellow Shareholders
Against a backdrop of declining stock prices, particularly in the small- and
mid-cap growth sectors of the market, your Fund fell 1.7% in the second
quarter and 5.8% in the first half of 1994. While any decline in net asset
value is disappointing, the Fund performed well relative to the unmanaged S&P
MidCap and Nasdaq Composite indices, although the larger-company S&P 500 Stock
Index, also unmanaged, fared slightly better.
Performance Comparison
Periods Ended 6/30/94
3 Months 6 Months
________________________
Mid-Cap Growth Fund -1.7% -5.8%
S&P MidCap Index -3.6 -7.3
S&P 500 Index 0.4 -3.4
Nasdaq Composite* -5.0 -9.1
*Principal only
Market Environment
The stock market began the year on a positive note, but the uptrend was
short-lived. In February, the Federal Reserve, for the first time in five
years, initiated a series of interest rate increases in an effort to restrain
what appeared to be an overheating economy. Long-term interest rates rose
nearly two percentage points, driven by investor fears of impending
inflationary pressures as well as the unwinding of leveraged speculative
positions by hedge funds and others. Several measures of commodity prices,
often a harbinger of future trends in consumer prices, rose ominously, further
unsettling investors. The rise in rates triggered a correction in the stock
market, led by growth stocks in the small- and mid-cap sectors. The Nasdaq
Composite Index finished the first half 12.2% below its high set in March.
While the economy still appears to be growing steadily, driven by
business investment in capital equipment and consumer purchases of durable
goods such as automobiles and furniture, investors became obsessed with a
perceived currency crisis in the second quarter. Since the economic recovery
in the U.S. has preceded significant growth in most other industrialized
nations, the trade deficit has widened as U.S. consumers stepped up their
purchases of foreign goods. This, coupled with Americans' new-found appetite
for foreign securities, which also necessitates the sale of U.S. currency,
caused the dollar to fall against several major currencies, notably the German
mark and the Japanese yen. The weak dollar, in turn, further pressured U.S.
interest rates. Lost in the talk of a "dollar crisis," however, is the fact
that the American dollar actually appreciated significantly in the first half
of 1994 against the currencies of our primary trading partners, Canada and
Mexico.
The current stock market correction has been driven by higher interest
rates. In this environment, the stocks of small- and mid-sized growth
companies have been especially hard hit as price/earnings ratios have
contracted despite little evidence of a deterioration in corporate
fundamentals or earnings growth. The best-performing sectors in the first half
of 1994 were commodity cyclicals (such as steel and paper), energy services,
and regional banks. The hardest hit sectors were utilities, consumer
companies, and housing-related companies. Technology stocks, which led the
market for nearly two years, fell sharply in the second quarter.
Portfolio Review
The top contributor to the Fund in both the
second quarter and the first half was Smith International, an energy service
company that made a very profitable acquisition. Danaher, a manufacturer of
hand tools and process controls, and Mercantile Bancorporation, a St.
Louis-based regional bank, each reported strong earnings and were top
contributors in both periods.
On the negative side of the ledger, the worst contributor in both the
second quarter and the first half was SEI Corporation, a financial services
and systems provider. While the company continues to meet earnings
expectations, some investors have questioned its future prospects because of
its reliance on the sliding financial markets. Another negative contributor in
both periods was CUC International, the Fund's best contributor in 1993. While
this company, the nation's largest purveyor of direct mail, discount shopping
services, continues to meet earnings expectations and we feel its prospects
are undiminished, its valuation has contracted. We believe the setbacks in
these two stocks are temporary.
Portfolio Strategy
In the first six months of 1994, we reduced our financial holdings and
increased our exposure to the health care and energy sectors, as shown below:
Industry Diversification
12/31/93 6/30/94
_______ _______
Financial 15% 10%
Health Care 4 5
Consumer 17 16
Technology 8 6
Business Services 21 22
Energy 6 8
Basic Industrial 15 14
Basic Materials 6 7
Reserves 8 12
In view of the trend toward rising interest rates, we reduced the Fund's
exposure to financial stocks early in the first half. However, we still like
several of the regional banks where stronger loan growth and a change in
national banking regulation should mitigate the negative impact of declining
net interest margins. Our increased commitment to the energy area,
particularly natural gas, is based on the observation that, after many years
of oversupply in the gas market, the supply-demand balance is close to
equilibrium. A strong economy, harsh weather, or an unforeseen factor (such as
a foreign disruption) could tip the balance toward the producers and servicers
we own.
We continue to overweight the industrial sector because American
manufacturers, pressured by a strong U.S. dollar in the mid-1980s, were among
the first in the industrialized world to begin restructuring. Having applied
advanced technologies and improved processes, many of these companies now rank
among the world's highest-quality, low-cost manufacturers. With respect to
your Fund's gold holdings, we expect that the rapid development taking place
in many emerging economies that lack stable currencies will strengthen the
demand for gold, creating an upward bias for gold prices over the next several
years.
Given the stock market's recent decline, we are reexamining three areas
we previously underweighted that have fallen significantly in
1994-biotechnology, technology, and certain financial stocks. We are also
turning our attention to some high growth companies with undiminished
prospects whose stocks have experienced sharp declines recently. In the coming
months, the Fund's 12% cash position may be reduced.
Outlook
In our reports over the last several quarters, we have warned that signs of
speculative excess were abundant and that stock valuations were high. Much of
the speculation has cooled: the volume of initial public offerings is
subsiding, and the stampede of U.S. investors into foreign equity mutual funds
specializing in emerging markets seems to be abating. Valuations, while hardly
compelling by historical standards, appear more reasonable as stock prices are
down and corporate earnings are up.
The market's performance in the second half of 1994 will depend in large
measure on the direction of interest rates. While we do not believe that
long-term interest rates will rise significantly from current levels, it will
be difficult for the stock market to gain ground if they do.
The Fund's portfolio exhibits growth characteristics significantly above
the market universe as a whole, yet its price/earnings ratio is only modestly
higher. We believe that the Mid-Cap Growth Fund is well positioned to achieve
attractive returns over the next several years.
Respectfully submitted,
Brian W. H. Berghuis
President and Chairman of the
Investment Advisory Committee
July 20, 1994
Twenty-Five Largest Holdings
June 30, 1994
Percent of
Company Net Assets
______________________________ __________
Smith International 3.1%
Sbarro 2.8
Alco Standard 2.6
SunGard Data Systems 2.5
Danaher 2.2
Pittston Services 2.1
Mercantile Bancorporation 2.1
First Financial Management 2.1
Fred Meyer 2.1
Duff & Phelps 2.1
Minerals Technologies 2.0
SEI 2.0
Catalina Marketing 1.9
Integra Financial 1.9
Reliance Electric 1.9
Addington Resources 1.9
TriMas 1.8
CUC International 1.8
Albany International 1.8
Sealed Air 1.8
Placer Dome 1.7
Jones Apparel Group 1.6
Oceaneering International 1.6
Freeport McMoRan Copper & Gold 1.5
Teleflex 1.5
_____________________________________________________________________________
Total 50.4%
Contributions to the Net Asset Value Per Share
T. Rowe Price Mid-Cap Growth Fund
Three Months Ended June 30, 1994
_____________________________________________________________________________
TEN BEST CONTRIBUTORS
Smith International 14(cents)
Pittston Services 6
Danaher 4
Alco Standard 3
Sanifill 3
Mercantile Bancorporation 3
Minerals Technologies 3
Addington Resources 3
Oceaneering International 3
Impala Platinum 3
_____________________________________________________________________________
Total 45(cents)
TEN WORST CONTRIBUTORS
SEI -9(cents)
Phillips-Van Heusen 5
CKE Restaurants 5
CUC International 5
ADVO 4
Placer Dome 4
Sigma Aldrich 4
Autotote 3
Freeport McMoRan Copper & Gold 3
Fred Meyer 3
_____________________________________________________________________________
Total -45(cents)
*Position added
Six Months Ended June 30, 1994
_____________________________________________________________________________
TEN BEST CONTRIBUTORS
Smith International 21(cents)
Mercantile Bancorporation 5
Impala Platinum* 4
Sanifill 3
Danaher 3
Boston Scientific 3
Camco International* 2
Revco* 2
Integra Financial 2
Reliance Electric 2
_____________________________________________________________________________
Total 47(cents)
TEN WORST CONTRIBUTORS
SEI -13(cents)
CUC International 8
Pittston Minerals 8
Autotote 7
Phillips-Van Heusen 7
CKE Restaurants* 7
Sbarro 6
Immunex 5
Roberts Pharmaceuticals 5
Charles Schwab 5
_____________________________________________________________________________
Total -71(cents)
Statement of Net Assets (Value in thousands)
T. Rowe Price Mid-Cap Growth Fund / June 30, 1994 (Unaudited)
Common Stocks - 88.2%
FINANCIAL - 9.6%
Value
______
BANK & TRUST - 5.5%
35,000 shs. Integra Financial . . . . . . . . . . . . . . $ 1,636
40,000 Keycorp . . . . . . . . . . . . . . . . . . . 1,275
52,500 Mercantile Bancorporation . . . . . . . . . . 1,844
4,755
INSURANCE - 1.2%
9,600 Citizens Corp . . . . . . . . . . . . . . . . 168
35,000 Selective Insurance . . . . . . . . . . . . . 880
1,048
FINANCIAL SERVICES - 2.9%
30,000 Charles Schwab. . . . . . . . . . . . . . . . 742
90,000 Duff & Phelps . . . . . . . . . . . . . . . . 1,789
2,531
Total Financial . . . . . . . . . . . . . . . . . . . . . . . 8,334
HEALTH CARE - 5.7%
PHARMACEUTICALS - 0.3%
15,000 * Roberts Pharmaceutical. . . . . . . . . . . . 311
BIOTECHNOLOGY - 1.9%
20,000 * Biogen. . . . . . . . . . . . . . . . . . . . 573
5,500 * Chiron. . . . . . . . . . . . . . . . . . . . 301
60,000 * Immunex . . . . . . . . . . . . . . . . . . . 765
1,639
MEDICAL INSTRUMENTS & DEVICES - 3.5%
70,000 * Boston Scientific . . . . . . . . . . . . . . 884
68,700 * Haemonetics . . . . . . . . . . . . . . . . . 1,245
30,000 * Sybron International. . . . . . . . . . . . . 900
3,029
Total Health Care 4,979
CONSUMER - 16.2%
SOFT GOOD RETAILERS - 2.0%
40,000 * Hanover Direct. . . . . . . . . . . . . . . . 180
17,000 * Kohl's. . . . . . . . . . . . . . . . . . . . 799
30,000 Phillips-Van Heusen . . . . . . . . . . . . . 754
1,733
HARD GOOD RETAILERS - 3.0%
50,000 * Fred Meyer. . . . . . . . . . . . . . . . . . 1,819
52,200 * Revco . . . . . . . . . . . . . . . . . . . . 835
2,654
CONSUMER NON-DURABLES - 1.6%
50,000 shs. * Jones Apparel Group . . . . . . . . . . . . . $ 1,412
RESTAURANTS - 4.6%
80,000 CKE Restaurants . . . . . . . . . . . . . . . 680
40,000 Morrison Restaurants. . . . . . . . . . . . . 910
65,000 Sbarro. . . . . . . . . . . . . . . . . . . . 2,421
4,011
ENTERTAINMENT - 1.8%
30,000 * Hollywood Park. . . . . . . . . . . . . . . . 705
25,000 * International Family
Entertainment (Class B) . . . . . . . . . 413
25,000 Turner Broadcasting Systems
(Class B) . . . . . . . . . . . . . . . . 434
1,552
CONSUMER SERVICES - 3.2%
60,000 * CUC International . . . . . . . . . . . . . . 1,605
100,000 * Home Shopping Network . . . . . . . . . . . . 1,175
2,780
Total Consumer 14,142
TECHNOLOGY - 6.0%
COMPUTER HARDWARE - 0.4%
17,000 * Silicon Graphics. . . . . . . . . . . . . . . 376
COMPUTER SOFTWARE - 2.9%
15,000 Autodesk. . . . . . . . . . . . . . . . . . . 743
17,000 * Intuit. . . . . . . . . . . . . . . . . . . . 565
12,000 * Oracle Systems. . . . . . . . . . . . . . . . 450
9,000 * Sybase. . . . . . . . . . . . . . . . . . . . 441
8,000 * Synopsys. . . . . . . . . . . . . . . . . . . 300
2,499
PERIPHERALS - 1.0%
55,000 * Autotote (Class A). . . . . . . . . . . . . . 866
SEMICONDUCTORS - 1.7%
14,000 Linear Technology . . . . . . . . . . . . . . 616
10,000 * Maxim Integrated Products . . . . . . . . . . 520
10,000 * Xilinx. . . . . . . . . . . . . . . . . . . . 341
1,477
Total Technology 5,218
T. Rowe Price Mid-Cap Growth Fund / Statement of Net Assets
BUSINESS SERVICES - 21.5%
TELECOM SERVICES - 0.7%
20,000 shs. * ALC Communications. . . . . . . . . . . . . . $ 615
COMPUTER SERVICES - 6.6%
33,000 First Financial Management. . . . . . . . . . 1,831
95,000 SEI . . . . . . . . . . . . . . . . . . . . . 1,734
60,000 * SunGard Data Systems. . . . . . . . . . . . . 2,175
5,740
DISTRIBUTION - 2.6%
40,000 Alco Standard . . . . . . . . . . . . . . . . 2,285
MEDIA & ADVERTISING - 3.3%
80,000 ADVO. . . . . . . . . . . . . . . . . . . . . 1,220
40,000 * Catalina Marketing. . . . . . . . . . . . . . 1,680
2,900
ENVIRONMENTAL - 3.3%
100,000 * Addington Resources . . . . . . . . . . . . . 1,625
50,000 * Sanifill. . . . . . . . . . . . . . . . . . . 1,263
2,888
MISCELLANEOUS BUSINESS SERVICES - 5.0%
35,000 * Hospitality Franchise . . . . . . . . . . . . 858
70,000 Pittston Services . . . . . . . . . . . . . . 1,872
57,000 * Sealed Air. . . . . . . . . . . . . . . . . . 1,582
4,312
Total Business Services 18,740
ENERGY - 8.0%
ENERGY SERVICES - 8.0%
50,000 Camco International . . . . . . . . . . . . . 1,019
46,500 * Enterra . . . . . . . . . . . . . . . . . . . 976
25,000 Halliburton . . . . . . . . . . . . . . . . . 844
100,000 * Oceaneering International . . . . . . . . . . 1,400
179,300 * Smith International . . . . . . . . . . . . . 2,734
Total Energy 6,973
INDUSTRIAL - 14.4%
PAPER & FOREST PRODUCTS - 1.8%
85,000 Albany International (Class A). . . . . . . . 1,605
SPECIALTY CHEMICALS - 4.3%
25,000 A. Schulman . . . . . . . . . . . . . . . . . 647
10,000 Great Lakes Chemical. . . . . . . . . . . . . 541
60,000 Minerals Technologies . . . . . . . . . . . . 1,740
20,000 Sigma Aldrich . . . . . . . . . . . . . . . . 800
3,728
MACHINERY - 8.3%
45,000 Danaher . . . . . . . . . . . . . . . . . . . 1,879
40,000 Greenfield Industries . . . . . . . . . . . . 780
90,000 shs. * Reliance Electric (Class A) . . . . . . . . . $ 1,631
40,000 Teleflex. . . . . . . . . . . . . . . . . . . 1,305
70,000 TriMas. . . . . . . . . . . . . . . . . . . . 1,610
7,205
Total Industrial 12,538
BASIC MATERIALS - 6.8%
MINING - 6.8%
60,000 Freeport-McMoRan Copper &
Gold (Class A). . . . . . . . . . . . . . 1,335
50,000 Impala Platinum, ADR. . . . . . . . . . . . . 895
56,660 Pittston Minerals . . . . . . . . . . . . . . 1,048
70,000 Placer Dome . . . . . . . . . . . . . . . . . 1,505
66,000 * TVX Gold. . . . . . . . . . . . . . . . . . . 388
134,000 *# TVX Gold. . . . . . . . . . . . . . . . . . . 787
Total Basic Materials 5,958
Total Common Stocks (Cost - $72,157) 76,882
Short-Term Investments - 12.2%
COMMERCIAL PAPER - 10.5%
$ 1,000,000 Arco Coal Australia, 4(2), 4.42%, 9/6/94. . . . . . 989
1,000,000 Asset Securitization Cooperative, 4(2),
4.43%, 9/8/94. . . . . . . . . . . . . . . . . . 988
1,000,000 Commerzbank United States Finance,
4.55%, 10/3/94 . . . . . . . . . . . . . . . . . 987
1,000,000 Daimler-Benz North America, 4.30%, 7/19/94. . . . . 997
500,000 Fleet Financial Group, 4.563%, 9/2/94 . . . . . . . 500
2,161,000 Harvard University, 4.30%, 7/1/94 . . . . . . . . . 2,161
1,500,000 International Nederland Bank, 4.45%, 8/8/94 . . . . 1,492
1,000,000 National Australia Funding
(Delaware), 4.41%, 8/1/94 . . . . . . . . . . . . 993
9,107
MEDIUM-TERM NOTES - 1.7%
500,000 Citicorp, VR, 4.583%, 12/13/94. . . . . . . . . . . 500
1,000,000 Morgan Stanley Group, VR, 4.663%, 3/15/95 . . . . . 1,000
1,500
Total Short-Term Investments (Cost - $10,607) 10,607
Total Investments In Securities - 100.4%
(Cost $82,764) $87,489
Other Assets Less Liabilities - (0.4)% . . . . . . . . . . . . . $ (338)
Net Assets Consisting of:
Accumulated net investment income
- net of distributions . . . . . . . . . . . . . $ (29)
Accumulated realized gains/losses
- net of distributions . . . . . . . . . . . . . 1,563
Net unrealized appreciation of
investments. . . . . . . . . . . . . . . . . . . 4,725
Paid-in-capital applicable to
6,093,606 shares of $0.01 par
value capital stock outstanding;
1,000,000,000 shares authorized. . . . . . . . . 80,892
________
Net Assets - 100.0%. . . . . . . . . . . . . . . . . . . . . . . $87,151
________
________
Net Asset Value Per Share. . . . . . . . . . . . . . . . . . . . $ 14.30
_______
_______
* Non-income producing
# Securities contain some restrictions as to public resale - total of
such securities at period-end amounts to 0.9% of net assets.
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."
VR Variable rate
Statement of Operations
T. Rowe Price Mid-Cap Growth Fund / Six Months Ended June 30, 1994 (Unaudited)
Amounts in Thousands
_______________________
INVESTMENT INCOME
Income
Dividends. . . . . . . . . . . . . . . . . . . . $ 310
Interest . . . . . . . . . . . . . . . . . . . . 165
________
Total income . . . . . . . . . . . . . . . . . . $ 475
Expenses
Shareholder servicing fees & expenses. . . . . . 188
Investment management fees . . . . . . . . . . . 179
Custodian and accounting fees & expenses . . . . 51
Registration fees & expenses . . . . . . . . . . 29
Prospectus & shareholder reports . . . . . . . . 23
Legal & auditing fees. . . . . . . . . . . . . . 15
Directors' fees & expenses . . . . . . . . . . . 5
Proxy & annual meeting . . . . . . . . . . . . . 3
Miscellaneous expenses . . . . . . . . . . . . . 11
________
Total expenses 504
________
Net investment income. . . . . . . . . . . . . . . (29)
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain. . . . . . . . . . . . . . . . . 749
Change in net unrealized
appreciation or depreciation . . . . . . . . . . (5,927)
________
Net loss on investments. . . . . . . . . . . . . . (5,178)
_________
DECREASE IN NET ASSETS FROM
OPERATIONS . . . . . . . . . . . . . . . . . . . $ (5,207)
_________
_________
The accompanying notes are an integral part of these financial statements.
Statement of Changes in Net Assets
T. Rowe Price Mid-Cap Growth Fund (Unaudited)
Six Months Ended Year Ended
June 30, 1994 Dec. 31, 1993
________________ ________________
Amounts in Thousands
__________________________________
INCREASE (DECREASE) IN NET ASSETS
Operations
Net investment income. . . . . . . . . . $ (29) $ (52)
Net realized gain on
investments. . . . . . . . . . . . . . 749 2,072
Change in net unrealized
appreciation or depreciation
of investments . . . . . . . . . . . . (5,927) 8,335
__________ __________
Increase (decrease) in net assets
from operations . . . . . . . . . . . . (5,207) 10,355
__________ __________
Distributions to shareholders
Net realized gain on
investments. . . . . . . . . . . . . . - (1,224)
__________ __________
Capital share transactions
Sold 3,098 and 3,262 shares. . . . . . . 46,452 44,666
Distributions reinvested of
0 and 80 shares. . . . . . . . . . . . . - 1,178
Redeemed 1,313 and 1,284 shares. . . . . (19,520) (17,159)
. . . . . . . . . . . . . . . . . . . . . __________ __________
Increase in net assets from capital
share transactions . . . . . . . . . . 26,932 28,685
__________ __________
Net equalization . . . . . . . . . . . . - 4
__________ __________
Total increase . . . . . . . . . . . . . . 21,725 37,820
NET ASSETS
Beginning of period. . . . . . . . . . . 65,426 27,606
. . . . . . . . . . . . . . . . . . . . . __________ __________
End of period. . . . . . . . . . . . . . $ 87,151 $ 65,426
__________ __________
__________ __________
The accompanying notes are an integral part of these financial statements.
Notes to Financial Statements
T. Rowe Price Mid-Cap Growth Fund / June 30, 1994 (Unaudited)
Note 1 - Significant Accounting Policies
T Rowe Price Mid-Cap Growth 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 (including Nasdaq) are valued at the last quoted sales price on the
day the valuations are made. A security which is listed or traded on more than
one exchange is valued at the quotation on the exchange determined to be the
primary market for such security. Other equity securities and those listed
securities that are not traded on a particular day are valued at a price
within the limits of the latest bid and asked prices deemed by the Board of
Directors or by persons delegated by the Board, best to reflect fair value.
Short-term debt securities are valued at their cost which, when combined with
accrued interest, approximates fair value.
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 which may differ from generally accepted accounting
principles. The Fund follows the practice of equalization under which
undistributed net investment income per share is unaffected by Fund shares
sold or redeemed.
Note 2 - Portfolio Transactions
Purchases and sales of portfolio securities, other than short-term and U.S.
Government securities, aggregated $36,758,000 and $14,553,000 respectively,
for the six months ended June 30, 1994.
Note 3 - Federal Income Taxes
No provision for federal income taxes is required since the Fund intends to
continue to qualify as a regulated investment company and distribute all of
its taxable income.
At June 30, 1994, the aggregate cost of investments for federal income
tax and financial reporting purposes was $82,764,000 and net unrealized
appreciation aggregated $4,725,000, of which $8,271,000 related to appreciated
investments and $3,546,000 to depreciated investments.
Note 4 - Related Party Transactions
The investment management agreement between the Fund and T. Rowe Price
Associates, Inc. (the Manager) provides for an annual investment management
fee, computed daily and paid monthly, consisting of an Individual Fund Fee
equal to 0.35% of average daily net assets and a Group Fee. The Group Fee is
based on the combined assets of certain mutual funds sponsored by the Manager
or Rowe Price-Fleming Inter-national, Inc. (the Group). The Group Fee rate
ranges from 0.48% for the first $1 billion of assets to 0.31% for assets in
excess of $34 billion. The effective annual Group Fee rate at June 30, 1994
and for the period then ended was 0.34%. The Fund pays a pro rata portion of
the Group Fee based on the ratio of the Fund's net assets to those of the
Group.
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 1.25%. Thereafter,
the Fund is required to reimburse the Manager for these expenses, provided
average net assets have grown or expenses have declined sufficiently so as not
to cause the Fund's ratio of expenses to average net assets to exceed 1.25% in
any month, and that no such
Notes to Financial Statements (Cont'd)
reimbursement shall be made to the Manager after December 31, 1997. Pursuant
to this agreement, $100,000 of management fees were not accrued by the Fund
for the six months ended June 30, 1994. Additionally, $228,000 of unaccrued
management fees and expenses related to a previous expense limitation are
subject to reimbursement through December 31, 1995.
T. Rowe Price Services, Inc. (TRPS) and Retirement Plan Services, Inc.
(RPS) are wholly owned subsidiaries of the Manager. TRPS provides transfer and
dividend disbursing agent functions and shareholder services for all accounts.
RPS provides subaccounting and recordkeeping services for certain retirement
accounts invested in the Fund. The Manager, under a separate agreement,
calculates the daily share price and maintains the financial records of the
Fund. For the six months ended June 30, 1994 the Fund incurred fees totalling
approximately $182,000 for these services provided by related parties. At June
30, 1994, these investment management and service fees payable were $79,000.
Financial Highlights
T. Rowe Price Mid-Cap Growth Fund (Unaudited)
For a share outstanding throughout each period
_____________________________________________________
June 30, 1992
(Commencement
Six Months Ended Year Ended of Operations) to
June 30, 1994 December 31, 1993 December 31, 1992
_____________________________________________________
NET ASSET VALUE,
BEGINNING OF
PERIOD. . . . . . . . . $ 15.18 $ 12.27 $ 10.00
________ ________ ________
Investment Activities
Net investment
income. . . . . . . . . -** -* 0.01*
Net realized and
unrealized gain
(loss) . . . . . . . . (0.88) 3.21 2.44
________ ________ ________
Total from Investment
Activities . . . . . . . (0.88) 3.21 2.45
Distributions
Net realized gain. . . . - (0.30) (0.18)
. . . . . . . . . . . . . ________ ________ ________
NET ASSET VALUE,
END OF PERIOD. . . . . . $ 14.30 $ 15.18 $ 12.27
________ ________ ________
________ ________ ________
RATIOS/SUPPLEMENTAL DATA
Total Return . . . . . . . (5.8)% 26.2% 24.5%
Ratio of Expenses
to Average
Net Assets . . . . . . 1.25%!** 1.25%* 1.25%!*
Ratio of Net Investment
Income to Average
Net Assets . . . . . . (0.07)%! (0.12)% 0.16%!
Portfolio Turnover
Rate . . . . . . . . . . 40.2%! 62.4% 51.9%!
Net Assets, End of
Period
(in thousands). . . . . $ 87,151 $ 65,426 $ 27,606
! Annualized.
* Excludes expenses in excess of a 1.25% voluntary expense limitation in
effect through December 31, 1993.
** Excludes expenses in excess of a 1.25% voluntary expense limitation in
effect through December 31, 1995.
