T. Rowe Price
--------------------------------------------------------------------------------
Semiannual Report
Mid-Cap Growth Fund
--------------------------------------------------------------------------------
June 30, 2000
--------------------------------------------------------------------------------
REPORT HIGHLIGHTS
================================================================================
MID-CAP GROWTH FUND
-------------------
* Amid extreme volatility in the first half and a steep correction in
technology stocks, mid-caps outperformed large- and small-caps.
* The fund posted a modest advance in the six months ended June 30, but
lagged its benchmarks. The solid 12-month gain exceeded one benchmark but
trailed two others.
* Valuations in many sectors remain stretched, but investors have at least
returned to fundamentals following rampant speculation in late 1999 and
early 2000.
* Several promising sectors -- and mid-cap stocks in general -- offer
excellent growth potential at reasonable valuations, which bodes well for
the Mid-Cap Growth Fund.
================================================================================
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.
================================================================================
FELLOW SHAREHOLDERS
-------------------
Stocks were extremely volatile in the first half of 2000, and most market
indices declined despite a powerful rebound late in the period. The signal event
was a 37% correction in the tech-heavy Nasdaq Composite in early spring that
resulted in the near destruction of many small- and mid-capitalization Internet
companies. After trailing large-caps for several years, mid-cap stocks were
strong performers during the period, led by the technology and biotechnology
sectors.
PERFORMANCE COMPARISON
----------------------
Periods Ended 6/30/00 6 Months 12 Months
--------------------- -------- ---------
Mid-Cap Growth Fund 5.76% 17.65%
S&P MidCap Index 8.97 16.98
Russell Midcap Growth Index 12.15 48.59
Lipper Mid-Cap Core
Fund Index 10.66 32.06
<PAGE>
The Mid-Cap Growth Fund's 5.76% first-half ret urn, while respectable in
absolute terms, lagged its benchmarks for the period. Our gain of 17.65% in the
12 months ended June 30 exceeded the Standard & Poor's MidCap Index but trailed
the Russell Midcap Growth Index and our Lipper category. Results in both periods
were affected by our lower weighting in technology stocks compared with the
benchmarks as well as our more valuation-sensitive approach. June 30 marked your
fund's eighth birthday, and over that time the fund has gained 424.30% (for an
average annual return of 23.01%), versus 292.09% for the S&P MidCap Index. For
the past five years, the fund has delivered an average annual return of 22.90%,
compared with 21.18% for the S&P MidCap Index.
MARKET ENVIRONMENT
------------------
In the midst of an economic expansion that has shattered all records for
duration, U.S. economic growth actually accelerated in the first quarter of
2000. The Federal Reserve, which had raised short-term rates three times last
year, raised the ante three more times in the first half of 2000, capped by a
half-point move on May 16. Finally, by late May, the economy began to show signs
of responding to the Fed's strong medicine. Retail sales were sluggish, consumer
confidence dipped slightly, and job creation and industrial demand slowed.
Despite anecdotal evidence of wage inflation and a sharp increase in energy
prices, the government's price measures continued to show only slight increases
over 1999. The economy's robust growth has helped generate increasingly large
federal government budget surpluses, a situation most would have thought
impossible just a few years ago, and some are even predicting that the U.S.
government could be debt-free in a decade. Fixed-income investors nearly
panicked at the prospect of a looming "shortage" of 30-year Treasury bonds
resulting from reduced federal borrowing and the initiation of a Treasury debt
buyback.
*****************************
. . . Technology stocks
bounced back quickly in
June . . . But most of the
dot-coms . . . have not
recovered . . .
*****************************
In the first quarter, the stock market, like the economy, proved amazingly
resilient in the face of generally rising interest rates. Powerful momentum --
and rabid speculation -- carried over from late 1999. Valuations of the favored
technology, Internet, biotech, and telecom stocks reached historically high
levels by the time the Nasdaq Composite peaked above 5000 on March 10. However,
market volatility was also extreme. During the first half, the S&P 500
experienced intraday price swings of 2% or more on 40% of all trading days, and
the Nasdaq Composite fluctuated more than 2% intraday an incredible 84% of the
time. The only comparable periods in market history were the 1930s and the 1970s
-- and stocks did not fare well overall in either decade. In our opinion, the
high volatility indicates a lack of conviction on the part of investors.
<PAGE>
A sharp correction -- some called it a bear market -- took hold in March,
as Internet and biotech stocks, in particular, crashed. Many technology stocks
bounced back quickly in June as investors grew more optimistic that the Fed's
rate hikes might be nearing an end. In fact, by mid-July, after the close of our
reporting period, many biotech, telecom, networking, and semiconductor stocks
had pushed back toward their highs. But most of the dot-coms, particularly those
with the slimmest profit prospects, have not recovered. While many of the
biggest winners of 1999 and early 2000 were companies with no earnings,
investors have begun to demand profitability, though they are once again willing
to pay very high price/earnings (P/E) ratios for stocks with rapid profit
growth.
Value-oriented shares, such as those of retailers and industrial
com-panies, had a brief moment in the sun during the Nasdaq correction, but
faded late in the period on fears of an economic slowdown. A more positive sign,
however, is that market breadth improved in June as investors also began to
embrace more reasonably priced, steady growth stocks. While large-cap stocks
have generally dominated the market since 1994, small- and mid-cap shares have
taken the lead in the past year. The S&P MidCap Index's robust 8.97% first-half
gain was nearly three times that of the Russell 2000 Index of smaller companies,
while the Dow Jones Industrial Average, the S&P 500, and the Nasdaq Composite
all fell in the period.
PORTFOLIO REVIEW
----------------
Technology, telecom, and health care stocks once again dominated our top
contributors list for the past 6- and 12-month periods. Both PMC-SIERRA, a
leader in chips that help speed network communications, and ANALOG DEVICES,
which specializes in analog-to-digital processors that are also important for
communications, were among our top three contributors for the two periods.
XILINX, a leader in programmable logic chips, made it into the top 10 twice.
In health care, we benefited from powerful rallies in WATERS CORP.,
SEPRACOR, TEVA PHARMACEUTICAL INDUSTRIES, and AMERISOURCE HEALTH over the past
six months. Waters manufactures equipment, including mass spectrometers,
necessary for drug research and development in the biotech industry. Investors
concluded -- correctly, in our view -- that one way to profit from the surge of
investment in genetic research, especially in the early stages, is to invest in
companies providing "picks and shovels" for the prospectors engaged in the human
genome gold rush. Sepracor, by contrast, has been mining the biotech field for
years and has struck gold in the form of a strong pipeline of new products that
have already begun producing accelerating revenues for the company. Teva,
expanding beyond its roots as a leading generic-drug maker, is experiencing
considerable success with the introduction of a powerful new multiple sclerosis
drug, Copaxone. Fears of Internet disintermediation weighed heavily on many of
the fund's holdings in late 1999 and early 2000, and none more than AmeriSource,
the fourth-largest drug distributor in the U.S., which was seen to be
particularly vulnerable. The company's stock more than doubled in the first half
as investors concluded that its business would not be imminently affected by the
Internet. To the best of our knowledge, pharmaceuticals still cannot be
downloaded electronically!
<PAGE>
Exceptions to this tech and health care hegemony included WADDELL & REED
FINANCIAL and BJ SERVICES. Waddell & Reed, a 1998 spin-off from Torchmark, is a
well-run investment manager that is beginning to gain recognition on Wall
Street. BJ Services, which provides oil field equipment and services, benefited
from rising energy prices and an increase in exploration activity.
SECTOR DIVERSIFICATION
----------------------
12/31/99 6/30/00
-------- -------
Financial 9% 9%
Health Care 13 16
Consumer 14 8
Technology 17 21
Business Services 31 29
Energy 4 6
Industrial 4 3
Basic Materials - -
Reserves 8 8
Total 100% 100%
The list of our worst performers was domi- nated by consumer and business
services stocks, such as CIBER, ROYAL CARIBBEAN CRUISES, HERTZ, and CIRCUIT CITY
STORES. CIBER, an information technology firm, experienced problems
transitioning its revenue base from packaged applications and Year 2000
assignments to Internet enablement, the segment now in greatest demand. We
eliminated Royal Caribbean Cruises as industry capacity appears likely to
outstrip demand in the intermediate term. Hertz, the world's largest car rental
firm, continued to grow earnings, but investors sold the stock anyway, fearing
an economic slowdown. We believe that Hertz's stock price discounts a much more
negative scenario than is likely, and we have added to our position. Circuit
City, a category killer well positioned to benefit from increased consumer
spending on all manner of digital devices, experienced a sales slowdown in May,
causing its stock to dive . Two software companies -- Novell and Parametric
Technology -- disappointed investors with poor earnings. We eliminated both from
the portfolio.
We added marginally to our technology and health care holdings, and their
sector weightings rose due to strong relative performance. Exposure to the
consumer sector fell because of weak performance and sales of stocks such as
Royal Caribbean.
<PAGE>
INVESTMENT STRATEGY AND OUTLOOK
-------------------------------
We are in the midst of a remarkable period of technological change.
Advances in many fields -- semiconductors, biotechnology, genomics,
telecommunications, and the Internet, to name just a few -- are reported daily.
The changes are so rapid that it is often unclear what is important or relevant,
even to industry participants, until much later. The technology revolution has
coincided with two other phenomena that have led to a combustible stock market
environment. The first is a change in the structure of markets, which we have
discussed at length in earlier letters. The dramatic reduction in trading
commissions, driven by huge advances in processing and communications
technology, has made the individual investor a greater force in the market. Even
as individuals have greatly accelerated their trading activity, interme-diaries
such as brokers and dealers have reacted to lower commission structures by
reducing the capital devoted to their own market-making activities. The net
result is that stock price movements are exaggerated in both directions.
Finally, it is worth noting that these changes in technology and market
structure have coincided with the longest economic expansion ever, dulling our
collective memories of the risks inherent in the market.
*****************************
. . . Many technology
companies have been driven
by momentum strategies, and
valuations have become
divorced from the fundamentals.
*****************************
Momentum investing is again ascendant. In spite of the spring correction,
technology stocks dominated first-half performance in the mid-cap sector,
contributing a significant amount of the indices' return. Virtually all of this
came from stocks with very high valuations, or without any earnings at all. Many
investors are buying stocks based on accelerating earnings per share,
accelerating revenues, or even accelerating increases in stock prices. This can
lead to very high valuations that are hard to justify by traditional measures.
While bulls rationalize high stock prices by noting the boundless opportunities
of many of these companies, the recent experience of many dot-com companies
should be instructive. Price movements can suddenly reverse, and if fundamental
problems develop, stocks can fall dramatically before they find strong valuation
support.
We have always prided ourselves on being able to achieve market-beating
returns while taking below-average risk for a mid-cap growth fund. Risk
reduction is achieved through individual security and sector diversification as
well as a strong bias toward buying growth at reasonable valuations. Over the
long run this has held us in good stead, but in the last few quarters, our
valuation bias strongly hindered returns. One of our benchmarks, the Russell
Midcap Growth Index, is composed of 52% technology stocks, and 26% of the
index's stocks are Internet-related, according to Prudential Securities. We have
not been able to keep pace with this index while maintaining our valuation
discipline (even though our loss in the second quarter was only about half that
of the index). We do not feel it is appropriate to concentrate more than half of
our holdings in a particular sector like technology.
<PAGE>
Some of the many newly minted companies will become the blue chips of the
next decade. We realize that fundamentals in the technology sector are terrific.
But from a stock standpoint, many technology companies have been driven by
price-momentum strategies, and valuations have become divorced from the
fundamentals. Finding good companies at reasonable prices -- which is our
philosophy -- has not been a market-beating strategy.
New Economy wisdom holds that technology is not cyclical given the
megatrends in global commerce. However, history tells us that in general,
technology, as a capital good, is indeed cyclical. Furthermore, in fast-evolving
areas where product cycles are short, the propensity for technology firms to
remain growth companies over an extended period is lower than average. This
would argue for lower-than-average P/Es, not higher, relative to underlying
growth rates.
*************************************************************************
ADVISOR SHARE CLASS CREATED
---------------------------
T. Rowe Price has introduced a new class of shares for
certain funds, including this one. The new Advisor
Class shares will be sold exclusively by financial
intermediaries, such as brokers and financial advisers,
and will enhance our ability to reach a new group of
investors through this expanding channel. Since the new
share class has a modest 12b-1 fee (a distribution fee
paid to the sales intermediary), its performance will
likely vary somewhat from your fund shares even though
both invest in the same portfolio.
We want to emphasize that the new class will have no
impact whatsoever on your investment in the fund or on
the returns provided to you by the fund. The daily net
asset value and expenses for the existing shares and
the Advisor Class shares are calculated separately. In
due course, you will see the Advisor Class share prices
listed in newspapers and other print and electronic
media. Certain expenses associated with the Advisor
Class shares will be itemized in financial statements
in your fund's shareholder reports.
*************************************************************************
In the last few months, a refreshing reality has returned to the high
growth marketplace. In fact, it almost seems that investors' valuation
methodology has come full circle. A year or so ago, in an attempt to rationalize
bringing unprofitable dot-com companies with unproven business models public,
investors moved from analyzing price-to-earnings ratios to gauging
price-to-sales ratios. By the beginning of this year, as valuations continued to
climb and underwriting standards fell further, investors collectively migrated
from price-to-sales ratios to a true back-of-the-envelope construct,
price-to-market opportunity. In this surreal environment, dreams seemed reality,
and economic reason was ignored. But in the span of six short months, we have
returned to analyzing earnings again. Eventually, we are confident, investors
will rediscover that P (price) can get too high compared with E (earnings).
<PAGE>
Although highly valued stocks have driven investment performance in the
last year, a large part of the market remains untouched by the excitement.
Valuations remain well above historical averages in sectors such as
semiconductors, communications equipment, and biotechnology, but many other
segments, such as business services and telecom services, appear reasonably
priced. We have even added some new holdings in the Internet sector in the last
few months. Mid-caps remain a segment of the market where, on balance, prices
are reasonable compared with earnings, and valuations are especially attractive
compared with large-caps. We believe that the Mid-Cap Growth Fund remains an
excellent vehicle for capitalizing on the exciting opportunities available in
mid-cap stocks today.
Respectfully submitted,
/s/
Brian W.H. Berghuis
President and Chairman of the Investment Advisory Committee
/s/
John F. Wakeman
Executive Vice President
July 17, 2000
================================================================================
T. Rowe Price Mid-Cap Growth Fund
---------------------------------
PORTFOLIO HIGHLIGHTS
--------------------
TWENTY-FIVE LARGEST HOLDINGS
----------------------------
Percent of
Net Assets
6/30/00
-------
Waddell & Reed Financial 2.3%
-------------------------------------------------------------------------------
Analog Devices 2.0
-------------------------------------------------------------------------------
Western Wireless 2.0
-------------------------------------------------------------------------------
Waters Corporation 1.6
-------------------------------------------------------------------------------
AmeriSource Health 1.6
-------------------------------------------------------------------------------
Devon Energy 1.5
-------------------------------------------------------------------------------
Sepracor 1.5
-------------------------------------------------------------------------------
VoiceStream Wireless 1.5
-------------------------------------------------------------------------------
Xilinx 1.5
-------------------------------------------------------------------------------
<PAGE>
Robert Half International 1.4
-------------------------------------------------------------------------------
Teva Pharmaceutical Industries 1.4
-------------------------------------------------------------------------------
MedImmune 1.4
-------------------------------------------------------------------------------
Federated Investors 1.4
-------------------------------------------------------------------------------
Concord EFS 1.3
-------------------------------------------------------------------------------
Gilead Sciences 1.3
-------------------------------------------------------------------------------
NOVACorporation 1.3
-------------------------------------------------------------------------------
Intuit 1.3
-------------------------------------------------------------------------------
Circuit City Stores 1.2
-------------------------------------------------------------------------------
Republic Services 1.2
-------------------------------------------------------------------------------
Shire Pharmaceuticals 1.2
-------------------------------------------------------------------------------
Maxim Integrated Products 1.2
-------------------------------------------------------------------------------
PMC-Sierra 1.1
-------------------------------------------------------------------------------
Tech Data 1.1
-------------------------------------------------------------------------------
Viad 1.1
-------------------------------------------------------------------------------
BJServices 1.1
-------------------------------------------------------------------------------
Total 35.5%
Note: Table excludes reserves.
================================================================================
T. Rowe Price Mid-Cap Growth Fund
---------------------------------
PORTFOLIO HIGHLIGHTS
--------------------
CONTRIBUTIONS TO THE CHANGE IN NET ASSET VALUE PER SHARE
--------------------------------------------------------
6 Months Ended 6/30/00
TEN BEST CONTRIBUTORS
---------------------
PMC-Sierra 44 cents
Waddell & Reed Financial 44
Analog Devices 42
Waters Corporation 39
Sepracor 39
Robert Half International 35
AmeriSource Health 34
BJServices 34
Xilinx 32
Teva Pharmaceutical Industries 31
Total 374 cents
<PAGE>
TEN WORST CONTRIBUTORS
----------------------
CIBER -25 cents
Novell ** 24
Royal Caribbean Cruises ** 22
Hertz 20
Circuit City Stores 18
Synopsys ** 18
VoiceStream Wireless 17
Affiliated Computer Services 16
Rhythms NetConnections * 16
Parametric Technology ** 16
Total -192 cents
12 Months Ended 6/30/00
TEN BEST CONTRIBUTORS
---------------------
VoiceStream Wireless 149 cents
PMC-Sierra 88
Analog Devices 84
Western Wireless 68
Xilinx 58
MedImmune 55
BJServices 55
Teva Pharamaceutical Industries 49
Sepracor 46
Waddell & Reed Financial 42
Total 694 cents
TEN WORST CONTRIBUTORS
----------------------
Galileo International -37 cents
Warnaco Group ** 34
Shopko Stores 25
Affiliated Computer Services 24
Republic Services 22
Circuit City Stores 21
Ingram Micro ** 19
Covance ** 18
Premier Parks 18
National Data ** 18
Total -236 cents
* Position added
** Position eliminated
================================================================================
<PAGE>
T. Rowe Price Mid-Cap Growth Fund
---------------------------------
PERFORMANCE COMPARISON
----------------------
This chart shows the value of a hypothetical $10,000 investment in the 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.
Lipper Mid-Cap
S&P MidCap Index Core Fund Index Mid-Cap Growth Fund
6/30/92 10000 10000 10000
6/93 12269 12552 13692
6/94 12262 12983 14810
6/95 15002 15768 18698
6/96 18241 19492 25139
6/97 22496 22767 29470
6/98 28406 27450 38282
6/99 33519 29290 44565
6/00 39209 38681 52430
AVERAGE ANNUAL COMPOUND TOTAL RETURN
------------------------------------
This table shows how the fund would have performed each year if its actual
(or cumulative) returns for the periods shown had been earned at a constant
rate.
Since Inception
Periods Ended 6/30/00 1 Year 3 Years 5 Years Inception Date
--------------------- ------ ------- ------- --------- ----
Mid-Cap Growth Fund 17.65% 21.17% 22.90% 23.01% 6/30/92
Investment return and principal value represent past performance and will
vary. Shares may be worth more or less at redemption than at original purchase.
================================================================================
<PAGE>
T. Rowe Price Mid-Cap Growth Fund
---------------------------------
Unaudited For a share outstanding throughout each period
FINANCIAL HIGHLIGHTS
--------------------
MID-CAP GROWTH SHARES
6 Months Year
Ended Ended
6/30/00 12/31/99 12/31/98 12/31/97 12/31/96 12/31/95
NET ASSET VALUE
Beginning of period $40.13 $ 34.08 $ 28.60 $ 24.43 $ 20.13 $ 14.85
--------------------------------------------------------------------------------
Investment activities
Net investment
income (loss) (0.02) (0.03) (0.03) (0.03) (0.01) -
Net realized and
unrealized gain (loss) 2.33 7.96 6.24 4.50 5.00 6.07
--------------------------------------------------------------------------------
Total from
investment activities 2.31 7.93 6.21 4.47 4.99 6.07
--------------------------------------------------------------------------------
Distributions
Net realized gain - (1.88) (0.73) (0.30) (0.69) (0.79)
--------------------------------------------------------------------------------
NET ASSET VALUE
End of period $42.44 $ 40.13 $ 34.08 $ 28.60 $ 24.43 $ 20.13
RATIOS/SUPPLEMENTAL DATA
Total return ** 5.76% 23.78% 22.00% 18.33% 24.84% 40.95%
--------------------------------------------------------------------------------
Ratio of total expenses
to average net assets 0.86%+ 0.87% 0.91% 0.95% 1.04% 1.25%
--------------------------------------------------------------------------------
Ratio of net investment
income (loss) to average
net assets (0.12)%+ (0.09)% (0.14)% (0.14)% (0.11)% (0.01)%
--------------------------------------------------------------------------------
Portfolio turnover rate 65.7%+ 53.3% 46.7% 42.6% 38.1% 57.5%
--------------------------------------------------------------------------------
Net assets, end of
period (in millions) $5,833 $ 5,243 $ 3,310 $ 1,839 $ 1,021 $ 264
--------------------------------------------------------------------------------
** Total return reflects the rate that an investor would have earned on an
investment in the fund during each period, assuming reinvestment of all
distributions.
+ Annualized
The accompanying notes are an integral part of these financial statements.
================================================================================
<PAGE>
T. Rowe Price Mid-Cap Growth Fund
---------------------------------
Unaudited For a share outstanding throughout each period
FINANCIAL HIGHLIGHTS
--------------------
MID-CAP GROWTH ADVISOR CLASS SHARES
-----------------------------------
3/31/00
Through
6/30/00
NET ASSET VALUE
Beginning of period $ 44.13
-------------------------------------------------------------------------------
Investment activities
Net investment income (loss) -
Net realized and
unrealized gain (loss) (1.67)
-------------------------------------------------------------------------------
Total from
investment activities (1.67)
-------------------------------------------------------------------------------
NET ASSET VALUE
End of period $ 42.46
RATIOS/SUPPLEMENTAL DATA
Total return** (3.78)%
-------------------------------------------------------------------------------
Ratio of total expenses to
average net assets 0.75%+
-------------------------------------------------------------------------------
Ratio of net investment
income (loss) to average
net assets (0.02)%+
-------------------------------------------------------------------------------
Portfolio turnover rate 65.7%+
-------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $ 136
** Total return reflects the rate that an investor would have earned on an
investment in the fund during each period, assuming reinvestment of all
distributions.
+ Annualized
The accompanying notes are an integral part of these financial statements.
================================================================================
<PAGE>
T. Rowe Price Mid-Cap Growth Fund
---------------------------------
Unaudited June 30, 2000
PORTFOLIO OF INVESTMENTS In thousands
------------------------- Shares Value
COMMON STOCKS 92.1%
FINANCIAL 9.4%
Bank and Trust 0.4%
North Fork Bancorporation 1,595,000 $ 24,124
-----------------------------------------------------------------------------
24,124
-----------------------------------------------------------------------------
Insurance 2.9%
ACE Limited 1,700,000 47,600
-----------------------------------------------------------------------------
MGIC Investment 920,000 41,860
-----------------------------------------------------------------------------
Protective Life 1,195,000 31,817
-----------------------------------------------------------------------------
Radian Group 950,000 49,163
-----------------------------------------------------------------------------
170,440
-----------------------------------------------------------------------------
Financial Services 6.1%
Capital One Financial 1,000,000 44,625
-----------------------------------------------------------------------------
E*Trade Group * 2,075,400 34,179
-----------------------------------------------------------------------------
eSpeed (Class A) * 146,000 6,346
-----------------------------------------------------------------------------
Federated Investors (Class B) 2,300,000 80,644
-----------------------------------------------------------------------------
Heller Financial + 2,450,000 50,225
-----------------------------------------------------------------------------
NextCard * 450,000 3,811
-----------------------------------------------------------------------------
Waddell & Reed Financial (Class A) 2,150,000 70,547
-----------------------------------------------------------------------------
Waddell & Reed Financial (Class B) 2,190,000 63,647
-----------------------------------------------------------------------------
354,024
-----------------------------------------------------------------------------
Total Financial 548,588
HEALTH CARE 15.8%
Pharmaceuticals 3.2%
ALZA * 108,300 6,403
-----------------------------------------------------------------------------
Shire Pharmaceuticals ADR * 1,360,000 70,635
-----------------------------------------------------------------------------
Teva Pharmaceutical Industries ADR 1,500,000 83,203
-----------------------------------------------------------------------------
Watson Pharmaceuticals * 500,000 26,875
-----------------------------------------------------------------------------
187,116
-----------------------------------------------------------------------------
<PAGE>
Biotechnology 7.0%
Abegenix * 200,000 23,969
-----------------------------------------------------------------------------
Affymetrix * 200,000 33,019
-----------------------------------------------------------------------------
Gilead Sciences * 1,050,000 74,714
-----------------------------------------------------------------------------
IDEC Pharmaceuticals * 400,000 $ 46,912
-----------------------------------------------------------------------------
Incyte Genomics * 275,000 22,593
-----------------------------------------------------------------------------
MedImmune * 1,095,000 80,996
-----------------------------------------------------------------------------
QLT * 525,000 40,770
-----------------------------------------------------------------------------
Sepracor * 725,000 87,453
-----------------------------------------------------------------------------
410,426
-----------------------------------------------------------------------------
Medical Instruments and Devices 3.0%
Millipore 400,000 30,150
-----------------------------------------------------------------------------
Sybron International * 2,550,000 50,522
-----------------------------------------------------------------------------
Waters Corporation * 730,000 91,113
-----------------------------------------------------------------------------
171,785
-----------------------------------------------------------------------------
Health Care Services 2.6%
Lincare * 2,000,000 49,187
-----------------------------------------------------------------------------
Omnicare 4,380,000 39,694
-----------------------------------------------------------------------------
Wellpoint Health Networks * 850,000 61,572
-----------------------------------------------------------------------------
150,453
-----------------------------------------------------------------------------
Total Health Care 919,780
-----------------------------------------------------------------------------
<PAGE>
CONSUMER 8.4%
Soft Goods Retailers 0.9%
TJX 2,895,000 54,281
-----------------------------------------------------------------------------
54,281
-----------------------------------------------------------------------------
Hard Goods Retailers 5.4%
BJ's Wholesale Club * 1,650,000 54,450
-----------------------------------------------------------------------------
Borders Group * 1,170,000 18,208
-----------------------------------------------------------------------------
Circuit City Stores 2,190,000 72,681
-----------------------------------------------------------------------------
Consolidated Stores * 1,950,000 23,400
-----------------------------------------------------------------------------
Family Dollar Stores 3,125,000 61,133
-----------------------------------------------------------------------------
HomeGrocer.com * 1,310,000 7,922
-----------------------------------------------------------------------------
O'Reilly Automotive * 1,900,000 26,184
-----------------------------------------------------------------------------
Shopko Stores * 996,600 15,323
-----------------------------------------------------------------------------
Whole Foods Market * 875,000 36,176
-----------------------------------------------------------------------------
315,477
-----------------------------------------------------------------------------
Consumer Non-Durables 0.6%
Jones Apparel Group * 1,500,000 35,250
-----------------------------------------------------------------------------
35,250
-----------------------------------------------------------------------------
Restaurants 0.8%
Outback Steakhouse * 1,650,000 $ 48,262
-----------------------------------------------------------------------------
48,262
-----------------------------------------------------------------------------
Entertainment 0.7%
Premier Parks * 1,625,000 36,969
-----------------------------------------------------------------------------
36,969
-----------------------------------------------------------------------------
Total Consumer 490,239
-----------------------------------------------------------------------------
TECHNOLOGY 21.2%
Computer Software 6.1%
Electronic Arts * 580,000 42,322
-----------------------------------------------------------------------------
Informatica * 450,000 36,844
-----------------------------------------------------------------------------
Intuit * 1,775,000 73,330
-----------------------------------------------------------------------------
ISS Group * 375,000 37,019
-----------------------------------------------------------------------------
<PAGE>
Macromedia * 300,000 28,997
-----------------------------------------------------------------------------
Mercury Interactive * 250,000 24,195
-----------------------------------------------------------------------------
NetIQ * 500,000 29,812
-----------------------------------------------------------------------------
Peregrine Systems * 1,500,000 52,219
-----------------------------------------------------------------------------
Vitria Technology * 500,000 30,578
-----------------------------------------------------------------------------
355,316
-----------------------------------------------------------------------------
Semiconductors & Components 8.2%
Analog Devices * 1,525,000 115,900
-----------------------------------------------------------------------------
CTS 162,500 7,312
-----------------------------------------------------------------------------
KLA-Tencor * 800,000 46,875
-----------------------------------------------------------------------------
Lattice Semiconductor * 800,000 55,325
-----------------------------------------------------------------------------
Maxim Integrated Products * 1,025,000 69,604
-----------------------------------------------------------------------------
Molex (Class A) 950,000 33,280
-----------------------------------------------------------------------------
PMC-Sierra * 375,000 66,621
-----------------------------------------------------------------------------
Xilinx * 1,025,000 84,659
-----------------------------------------------------------------------------
479,576
-----------------------------------------------------------------------------
Networking and Telecom Equipment 0.2%
Efficient Networks * 170,000 12,511
-----------------------------------------------------------------------------
12,511
-----------------------------------------------------------------------------
E-Commerce 3.8%
CNET Networks * 1,000,000 24,531
-----------------------------------------------------------------------------
Commerce One * 235,300 10,699
-----------------------------------------------------------------------------
Digex * 450,000 30,586
-----------------------------------------------------------------------------
DoubleClick * 900,000 $ 34,313
-----------------------------------------------------------------------------
HomeStore.com * 1,100,000 32,244
-----------------------------------------------------------------------------
Internet Capital Group * 1,000,000 36,937
-----------------------------------------------------------------------------
Priceline.com * 800,000 30,350
-----------------------------------------------------------------------------
USInternetworking * 1,100,000 22,447
-----------------------------------------------------------------------------
222,107
-----------------------------------------------------------------------------
<PAGE>
Computer Hardware/Peripherals 2.9%
Flextronics International * 525,000 36,077
-----------------------------------------------------------------------------
Jabil Circuit * 600,000 29,775
-----------------------------------------------------------------------------
Sanmina * 580,000 49,572
-----------------------------------------------------------------------------
SCI Systems * 1,271,900 49,843
-----------------------------------------------------------------------------
165,267
-----------------------------------------------------------------------------
Total Technology 1,234,777
-----------------------------------------------------------------------------
BUSINESS SERVICES 27.5%
Telecom Services 7.7%
Allegiance Telecom * 290,000 18,569
-----------------------------------------------------------------------------
AT&T (Class B) * 850,000 28,156
-----------------------------------------------------------------------------
Charter Communications (Class A) * 1,450,000 23,880
-----------------------------------------------------------------------------
Covad Communications Group * 580,000 9,334
-----------------------------------------------------------------------------
Crown Castle International * 1,425,000 51,968
-----------------------------------------------------------------------------
McLeod USA * 1,100,000 22,791
-----------------------------------------------------------------------------
Pinnacle Holdings * 875,000 46,922
-----------------------------------------------------------------------------
Rhythms NetConnections * 970,000 12,186
-----------------------------------------------------------------------------
Rogers Communications * 1,225,000 34,912
-----------------------------------------------------------------------------
VoiceStream Wireless * 730,000 84,908
-----------------------------------------------------------------------------
Western Wireless* 2,090,000 113,840
-----------------------------------------------------------------------------
447,466
-----------------------------------------------------------------------------
Computer Services 6.3%
Affiliated Computer Services (Class A) * 1,700,000 56,206
-----------------------------------------------------------------------------
BISYS Group * 250,000 15,453
-----------------------------------------------------------------------------
Ceridian * 1,900,000 45,719
-----------------------------------------------------------------------------
Concord EFS * 2,920,000 75,920
-----------------------------------------------------------------------------
Fiserv * 350,000 15,137
-----------------------------------------------------------------------------
Galileo International 1,950,000 40,706
-----------------------------------------------------------------------------
NOVA Corporation * 2,663,500 $ 74,412
-----------------------------------------------------------------------------
SunGard Data Systems * 1,375,000 42,625
-----------------------------------------------------------------------------
366,178
-----------------------------------------------------------------------------
<PAGE>
Distribution 3.1%
AmeriSource Health * + 2,925,000 90,675
-----------------------------------------------------------------------------
MSC * 1,275,000 26,695
-----------------------------------------------------------------------------
Tech Data * 1,500,000 65,297
-----------------------------------------------------------------------------
182,667
-----------------------------------------------------------------------------
Transportation 0.7%
C.H. Robinson Worldwide 431,100 21,326
-----------------------------------------------------------------------------
Expeditors International of Washington 400,000 18,912
-----------------------------------------------------------------------------
40,238
-----------------------------------------------------------------------------
Media and Advertising 2.5%
Catalina Marketing * 550,000 56,100
-----------------------------------------------------------------------------
Lamar Advertising * 513,800 22,270
-----------------------------------------------------------------------------
TMP Worldwide * 475,000 35,046
-----------------------------------------------------------------------------
Univision Communications * 325,000 33,638
-----------------------------------------------------------------------------
147,054
-----------------------------------------------------------------------------
Environmental 1.2%
Republic Services (Class A) * 4,450,000 71,200
-----------------------------------------------------------------------------
71,200
-----------------------------------------------------------------------------
Miscellaneous Business Services 5.5%
CIBER * 2,200,000 29,150
-----------------------------------------------------------------------------
eLoyalty * 500,000 6,344
-----------------------------------------------------------------------------
Hertz 1,325,000 37,183
-----------------------------------------------------------------------------
Keane * 1,925,000 41,628
-----------------------------------------------------------------------------
Manpower 1,700,000 54,400
-----------------------------------------------------------------------------
Robert Half International * 2,925,000 83,363
-----------------------------------------------------------------------------
Viad 2,300,000 62,675
-----------------------------------------------------------------------------
Xpedior * 433,300 5,971
-----------------------------------------------------------------------------
320,714
-----------------------------------------------------------------------------
Engineering and Construction 0.5%
Martin Marietta Materials 800,000 32,350
-----------------------------------------------------------------------------
32,350
-----------------------------------------------------------------------------
Total Business Services 1,607,867
-----------------------------------------------------------------------------
<PAGE>
ENERGY 6.1%
Energy Services 3.0%
BJ Services * 1,000,000 $ 62,500
-----------------------------------------------------------------------------
Smith International * 725,000 52,789
-----------------------------------------------------------------------------
Tidewater 1,700,000 61,200
-----------------------------------------------------------------------------
176,489
-----------------------------------------------------------------------------
Exploration and Production 3.1%
Devon Energy 1,575,000 88,495
-----------------------------------------------------------------------------
Diamond Offshore Drilling 975,000 34,247
-----------------------------------------------------------------------------
Ocean Energy * 3,900,000 55,331
-----------------------------------------------------------------------------
178,073
-----------------------------------------------------------------------------
Total Energy 354,562
-----------------------------------------------------------------------------
INDUSTRIAL 3.3%
Automobiles and Related 0.5%
ITT Industries 900,000 27,338
-----------------------------------------------------------------------------
27,338
-----------------------------------------------------------------------------
Machinery 2.8%
Danaher 800,000 39,550
-----------------------------------------------------------------------------
Pentair 1,700,000 60,350
-----------------------------------------------------------------------------
Teleflex 975,000 36,136
-----------------------------------------------------------------------------
United Rentals * 1,660,000 28,427
-----------------------------------------------------------------------------
164,463
-----------------------------------------------------------------------------
Total Industrial 191,801
-----------------------------------------------------------------------------
<PAGE>
BASIC MATERIALS 0.3%
Mining 0.3%
Allegheny Technologies 975,000 17,550
-----------------------------------------------------------------------------
Total Basic Materials 17,550
-----------------------------------------------------------------------------
Total Miscellaneous Common Stocks 0.1% 8,329
-----------------------------------------------------------------------------
Total Common Stocks (Cost $4,072,243) 5,373,493
SHORT-TERM INVESTMENTS 7.7%
Money Market Funds 7.7%
Government Reserve Investment Fund, 6.27%, # + 449,354,391 $ 449,354
-----------------------------------------------------------------------------
Total Short-Term Investments (Cost $449,354) 449,354
Total Investments in Securities
99.8% of Net Assets (Cost $4,521,597) $ 5,822,847
Other Assets Less Liabilities 10,226
NET ASSETS $ 5,833,073
# Seven-day yield
+ Affiliated company
* Non-income producing
ADR American Depository Receipt
The accompanying notes are an integral part of these financial statements.
================================================================================
T. Rowe Price Mid-Cap Growth Fund
---------------------------------
Unaudited June 30, 2000
STATEMENT OF ASSETS AND LIABILITIES
----------------------------------- In thousands
ASSETS
Investments in securities, at value
Affiliated companies (cost $593,728) $ 590,254
Other companies (cost $3,927,869) 5,232,593
-------------------------------------------------------------------------------
Total investments in securities 5,822,847
Other assets 46,359
-------------------------------------------------------------------------------
Total assets 5,869,206
-------------------------------------------------------------------------------
LIABILITIES
Total liabilities 36,133
-------------------------------------------------------------------------------
<PAGE>
NET ASSETS $ 5,833,073
Net Assets Consist of:
Accumulated net investment income - net of distributions $ (3,268)
Accumulated net realized gain/loss - net of distributions 547,475
Net unrealized gain (loss) 1,301,250
Paid-in-capital applicable to 137,427,083 shares of
$0.01 par value capital stock outstanding;
1,000,000,000 shares authorized 3,987,616
NET ASSETS $ 5,833,073
Mid-Cap Growth shares
($5,832,936,729/137,423,883 shares outstanding) $ 42.44
Mid-Cap Growth Advisor Class shares
($135,878/3,200 shares outstanding) $ 42.46
The accompanying notes are an integral part of these financial statements.
================================================================================
T. Rowe Price Mid-Cap Growth Fund
--------------------------------- Unaudited
STATEMENT OF OPERATIONS
----------------------- In thousands
6 Months
Ended
6/30/00
Investment Income (Loss)
Income
Interest (including $12,608 from affiliated companies) $ 12,716
Dividend 8,126
------------------------------------------------------------------------------
Total income 20,842
------------------------------------------------------------------------------
Expenses
Investment management 18,673
Shareholder servicing
Mid-Cap Growth shares 4,996
Mid-Cap Growth Advisor Class shares -
Prospectus and shareholder reports
Mid-Cap Growth shares 182
Mid-Cap Growth Advisor Class shares -
Custody and accounting 128
Registration 117
Legal and audit 15
Directors 8
Miscellaneous 23
------------------------------------------------------------------------------
Total expenses 24,142
Expenses paid indirectly (32)
------------------------------------------------------------------------------
<PAGE>
Net expenses 24,110
------------------------------------------------------------------------------
Net investment income (loss) (3,268)
------------------------------------------------------------------------------
Realized and Unrealized Gain (Loss)
Net realized gain (loss) on securities 421,281
Change in net unrealized gain or loss on securities (108,781)
------------------------------------------------------------------------------
Net realized and unrealized gain (loss) 312,500
------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET
ASSETS FROM OPERATIONS $ 309,232
The accompanying notes are an integral part of these financial statements.
================================================================================
T. Rowe Price Mid-Cap Growth Fund
--------------------------------- Unaudited
STATEMENT OF CHANGES IN NET ASSETS
---------------------------------- In thousands
6 Months Year
Ended Ended
6/30/00 12/31/99
Increase (Decrease) in Net Assets
Operations
Net investment income (loss) $ (3,268) $ (3,688)
Net realized gain (loss) 421,281 335,431
Change in net unrealized gain or loss (108,781) 631,785
--------------------------------------------------------------------------------
Increase (decrease) in net assets from operations 309,232 963,528
--------------------------------------------------------------------------------
Distributions to shareholders
Net realized gain
Mid-Cap Growth shares - (233,452)
--------------------------------------------------------------------------------
Capital share transactions *
Shares sold
Mid-Cap Growth shares 1,253,148 2,030,839
Mid-Cap Growth Advisor Class shares 139 -
--------------------------------------------------------------------------------
Increase in net assets from shares sold 1,253,287 2,030,839
Distributions reinvested
Mid-Cap Growth shares - 223,427
Shares redeemed
Mid-Cap Growth shares (972,926) (1,051,037)
--------------------------------------------------------------------------------
Increase (decrease) in net assets from
capital share transactions 280,361 1,203,229
--------------------------------------------------------------------------------
<PAGE>
Net Assets
Increase (decrease) during period 589,593 1,933,305
Beginning of period 5,243,480 3,310,175
--------------------------------------------------------------------------------
End of period $ 5,833,073 $ 5,243,480
*Share information
Shares sold
Mid-Cap Growth shares 30,429 56,953
Mid-Cap Growth Advisor Class shares 3 -
Distributions reinvested
Mid-Cap Growth shares - 6,083
Shares redeemed
Mid-Cap Growth shares (23,670) (29,497)
--------------------------------------------------------------------------------
Increase (decrease) in shares outstanding 6,762 33,539
The accompanying notes are an integral part of these financial statements.
================================================================================
T. Rowe Price Mid-Cap Growth Fund
---------------------------------
Unaudited June 30, 2000
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
----------------------------------------
T. Rowe Price Mid-Cap Growth Fund, Inc. (the fund) is registered under the
Investment Company Act of 1940 as a diversified, open-end management investment
company. The fund seeks long-term capital appreciation by investing in the comm
on stocks of mid-cap companies whose earnings are expected to grow at a
faster-than-average rate. The fund has two classes of shares -- Mid-Cap Growth,
offered since June 30, 1992, and Mid-Cap Growth Advisor Class, first offered on
March 31, 2000. Mid-Cap Growth Advisor Class sells its shares only through
financial intermediaries, which it compensates for distribution and certain
administrative services under a Board-approved Rule 12b-1 plan. Each class has
exclusive voting rights on matters related solely to that class, separate voting
rights on matters that relate to both classes, and, in all other respects, the
same rights and obligations as the other class.
The accompanying financial statements are prepared in accordance with
generally accepted accounting principles for the investment company industry;
these principles may require the use of estimates by fund management.
Valuation Equity securities listed or regularly traded on a securities
exchange 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. Listed securities not traded on a particular day and securities
regularly traded in the over-the-counter market are valued at the mean of the
latest bid and asked prices. Other equity securities 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.
<PAGE>
Investments in mutual funds are valued at the closing net asset value per
share of the mutual fund on the day of valuation.
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.
Affiliated Companies As defined by the Investment Company Act of 1940, an
affiliated company is one in which the fund owns at least 5% of the outstanding
voting securities.
Class Accounting The Mid-Cap Growth Advisor Class pays distribution and
administrative expenses, in the form of Rule 12b-1 fees, in an amount not
exceeding 0.25% of the class's average net assets. Shareholder servicing,
prospectus, and shareholder report expenses are charged directly to the class to
which they relate. Expens es common to both classes, investment income, and
realized and unrealized gains and losses are allocated to the classes based upon
the relative daily net assets of each class. Income distributions are declared
and paid by each class on an annual basis. Capital gain distributions are
declared and paid by the fund on an annual basis.
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 the identified cost basis. Dividend income and distributions to
shareholders are recorded by the fund on the ex-dividend date. Income and
capital gain distributions are determined in accordance with federal income tax
regulations and may differ from those determined in accordance with generally
accepted accounting principles. Expenses paid indirectly reflect credits earned
on daily uninvested cash balances at the custodian and are used to reduce the
fund's custody charges.
NOTE 2 - INVESTMENT TRANSACTIONS
Purchases and sales of portfolio securities, other than short-term
securities, aggregated $1,940,454,000 and $1,695,773,000, respectively, for the
six months ended June 30, 2000.
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, 2000, the cost of investments for federal income tax
purposes was substantially the same as for financial reporting and totaled
$4,521,597,000. Net unrealized gain aggregated $1,301,250,000 at period-end, of
which $1,715,529,000 related to appreciated investments and $414,279,000 to
depreciated investments.
<PAGE>
NOTE 4 - RELATED PARTY TRANSACTIONS
The investment management agreement between the fund and T. Rowe Price
Associates, Inc. (the manager) provides for an annual investment management fee,
of which $3,242,000 was payable at June 30, 2000. The fee is computed daily and
paid monthly, and consists 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
International, Inc. (the group). The group fee rate ranges from 0.48% for the
first $1 billion of assets to 0.295% for assets in excess of $120 billion. At
June 30, 2000, and for the six months then ended, the effective annual group fee
rate was 0.32%. The fund pays a pro-rata share of the group fee based on the
ratio of its net assets to those of the group.
The manager has agreed to bear any expenses through December 31, 2001,
which would cause Mid-Cap Growth Advisor Class's ratio of total expenses to
average net assets to exceed 1.10%. Thereafter, through December 31, 2003,
Mid-Cap Growth Advisor Class is required to reimburse the manager for these
expenses, provided that its average net assets have grown or expenses have
declined sufficiently to allow reimbursement without causing its ratio of total
expenses to average net assets to exceed 1.10%.
In addition, the fund has entered into agreements with the manager and two
wholly owned subsidiaries of the manager, pursuant to which the fund receives
certain other services. The manager computes the daily share price and maintains
the financial records of the fund. T. Rowe Price Services, Inc. is the fund's
transfer and dividend disbursing agent and provides shareholder and
administrative services to the fund. T. Rowe Price Retirement Plan Services,
Inc. provides subaccounting and recordkeeping services for certain retirement
accounts invested in the fund. The fund incurred expenses pursuant to these
related party agreements totaling approximately $3,880,000 for the six months
ended June 30, 2000, of which $696,000 was payable at period-end.
The fund may invest in the Reserve Investment Fund and Government Reserve
Investment Fund (collectively, the Reserve Funds), open-end management
investment companies managed by T. Rowe Price Associates, Inc. The Reserve Funds
are offered as cash management options only to mutual funds and other accounts
managed by T. Rowe Price and its affiliates and are not available to the public.
The Reserve Funds pay no investment management fees. Distributions from the
Reserve Funds to the fund for the six months ended June 30, 2000, totaled
$12,608,000 and are reflected as interest income in the accompanying Statement
of Operations.
================================================================================
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.
<PAGE>
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*AccessRegistration Mark 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 July 2000 survey for representative-assisted stock trades.
Services vary by firm, and commissions may vary depending on size of
order.
================================================================================
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
<PAGE>
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
<PAGE>
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
<PAGE>
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, which contains complete information,
including fees and expenses. 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.
================================================================================
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.
<PAGE>
ADVISORY SERVICES
-----------------
T. ROWE PRICE RETIREMENT INCOME MANAGERsm 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
AnalyzerTM 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 AnalyzerTM
CD-ROM or diskette, free. To order,
please call 1-800-469-5304.
<PAGE>
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.
================================================================================
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
<PAGE>
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.
================================================================================
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.**
<PAGE>
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, intraday 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 July 2000 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.
================================================================================
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
<PAGE>
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
T. Rowe Price Investment Services, Inc., Distributor. F64-051 6/30/00
