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September 1, 1999
FUND PROFILE
T. Rowe Price
Mid-Cap Growth Fund
A stock fund seeking long-term capital appreciation through investments in
medium-sized growth companies.
This profile summarizes key information about the fund that is included in the
fund's prospectus. The fund's prospectus includes additional information about
the fund, including a more detailed description of the risks associated with
investing in the fund that you may want to consider before you invest. You may
obtain the prospectus and other information about the fund at no cost by calling
1-800-638-5660, or by visiting our Web site at www.troweprice.com.
T. ROWE PRICE RAM LOGO
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FUND PROFILE
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What is the fund's objective?
The fund seeks to provide long-term capital appreciation by investing in
mid-cap stocks with potential for above-average earnings growth.
What is the fund's principal investment strategy?
We will invest at least 65% of the fund's assets in a diversified portfolio
of common stocks of mid-cap companies whose earnings T. Rowe Price expects to
grow at a faster rate than the average company. We define mid-cap companies
as those whose market capitalization (number of shares outstanding multiplied
by share price) falls within the range of companies in the S&P MidCap Index.
However, the fund will not automatically sell or cease to purchase stock of a
company it already owns just because the company's market capitalization
grows or falls outside this range.
As "growth" investors, we believe that when a company's earnings grow faster
than both inflation and the overall economy, the market will eventually
reward it with a higher stock price.
In selecting investments, we generally favor companies that:
. have proven products or services;
. have a record of above-average earnings growth;
. have demonstrated potential to sustain earnings growth;
. operate in industries experiencing increasing demand; or
. have stock prices that appear to undervalue their growth prospects.
While most assets will be invested in U.S. common stocks, other securities
may also be purchased, including foreign stocks, futures, and options, in
keeping with fund objectives.
The fund may sell securities for a variety of reasons, such as to secure
gains, limit losses, or redeploy assets into more promising opportunities.
Further information about the 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 any of these documents, call 1-800-638-5660.
What are the main risks of investing in the fund?
As with all equity funds, this fund's share price can fall because of
weakness in the broad market, a particular industry, or specific holdings.
The market 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. The prospects for an industry or
company may deteriorate because of a variety of factors, including
disappointing earnings or changes in
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the competitive environment. In addition, our assessment of companies held in
the fund may prove incorrect, resulting in losses or poor performance even in
a rising market. Finally, the fund's investment approach could fall out of
favor with the investing public, resulting in lagging performance versus
other types of stock funds.
The stocks of mid-cap companies entail greater risk and are usually more
volatile than the shares of large companies. In addition, growth stocks can
be volatile for several reasons. Since they usually reinvest a high
proportion of earnings in their own businesses, they may lack the dividend
associated with value stocks that can cushion their decline in a falling
market. Also, since investors buy these stocks because of their expected
superior earnings growth, earnings disappointments often result in sharp
price declines.
To the extent that the fund invests in foreign stocks, it is also subject to
the risk that some holdings may lose value because of declining foreign
currencies or adverse political or economic events overseas. If the fund uses
futures and options, it is exposed to additional volatility and potential
losses.
As with any mutual fund, there can be no guarantee the fund will achieve its
objective.
3 The fund's share price may decline, so when you sell your shares, you may
lose money. An investment in the 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.
How can I tell if the fund is appropriate for me?
Consider your investment goals, your time horizon for achieving them, and
your tolerance for risk. If you can accept the greater risk of investing in
mid-cap growth companies in an effort to achieve superior capital
appreciation, the fund could be an appropriate part of your overall
investment strategy. This fund should not represent your complete investment
program or be used for short-term trading purposes.
The fund can be used in both regular and tax-deferred accounts, such as IRAs.
3 Equity investors should have a long-term investment horizon and be willing
to wait out bear markets.
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FUND PROFILE
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How has the fund performed in the past?
The bar chart and the average annual total return table indicate risk by
illustrating how much returns can differ from one year to the next. The
fund's past performance is no guarantee of its future returns.
The fund can also experience short-term performance swings, as shown by the
best and worst calendar quarter returns during the years depicted in the
chart.
<TABLE>
<CAPTION>
Calendar Year Total Returns
"93" "94" "95" "96" "97" "98"
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<S> <C> <C> <C> <C> <C>
26.24 0.29 40.95 24.84 18.33 22.00
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</TABLE>
Quarter ended Total return
Best quarter 12/31/98 26.79%
Worst quarter 9/30/98 -17.48%
<TABLE>
Average Annual Total Returns
<CAPTION>
Periods ended
June 30, 1999
Since inception
1 year 5 years (6/30/92)
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<S> <C> <C> <C>
Mid-Cap Growth Fund 16.41% 24.65% 23.80%
S&P MidCap Index 17.18 22.28 18.86
Russell Midcap Growth Index 20.31 22.35 18.70
Lipper Mid Cap Fund Index 13.61 20.08 17.50
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</TABLE>
These figures include changes in principal value, reinvested dividends, and
capital gain distributions.
What fees or expenses will I pay?
The fund is 100% no load. 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.
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Fees and Expenses of the Fund
<CAPTION>
Annual fund operating expenses
(expenses that are deducted from fund asset)
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<S> <C>
Management fee 0.67%/ // /
Other expenses 0.24%
Total annual fund operating 0.91%/ // /
expenses
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</TABLE>
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
this fund with that of other funds. Although your actual costs may be higher
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or lower, the table shows how much you would pay if operating expenses remain
the same, you invest $10,000, you earn a 5% annual return, and you hold the
investment for the following periods:
<TABLE>
<CAPTION>
1 year 3 years 5 years 10 years
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<S> <C> <C> <C>
$93 $290 $504 $1,120
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Who manages the fund?
The 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.
Brian W.H. Berghuis manages the fund day-to-day and has been chairman of its
Investment Advisory Committee since 1992. He has been managing investments
since joining T. Rowe Price in 1985.
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.
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.
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.
When will I receive income and capital gain distributions?
The fund distributes income and net capital gains, if any, 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.
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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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T. Rowe Price Associates, Inc.
100 East Pratt Street
Baltimore, MD 21202
www.troweprice.com
LOGO
RPS F64-035
T. Rowe Price Investment Services, Inc., Distributor
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