Fellow Shareholders
We are pleased to report that the Blue Chip Growth Fund followed its strong
inaugural quarter with good performance in its second quarter of operations.
For the three and six months since inception on July 1, the Fund outperformed
the unmanaged Standard & Poor's 500 Stock Index and the Lipper Growth Fund
Average by significant margins.
Performance Comparison
Periods Ended 12/31/93
3 Months 6 Months
______________________
Blue Chip Growth Fund 4.6% 14.3%
S&P 500 2.3 5.0
Lipper Growth Fund Average 2.3 7.4
Year-End Distributions
On December 21, the Fund's Board of Directors declared a dividend of $.05 per
share and a short-term capital gain of $.14 per share, payable December 31 to
shareholders of record on December 21. In early January, we mailed your check
or statement reflecting the total distributions of $.19 per share. Form
1099-DIV, reporting the distributions for tax purposes, was mailed to you in
late January.
Market Environment
Your Fund's strong performance occurred in a global environment marked by
unsettled political and economic conditions in many countries. Unrest in the
former Soviet Union and North Korea's possible nuclear ascendancy loomed
large. Foreign economies, particularly in Japan and certain European
countries, continued to grow slowly or decline. Evidence suggested, however,
that several important European economies were stabilizing and could resume
growing in 1994. NAFTA's passage and the potential for liberalized trade with
European countries and Japan could ultimately help fuel global economic
growth. On the home front, statistical data (e.g., housing starts, auto sales)
continued to confirm that U.S. economic growth was already accelerating.
Against this backdrop, the U.S. equity market recorded more modest gains
for the second half of 1993 than the substantial returns generated by foreign
equity markets. As is often the case, an accommodative monetary policy (and
falling interest rates) in many foreign countries provided a favorable
environment for equities. Returns on foreign stocks were also bolstered by
strong growth in certain Asian and Latin American economies and a surge of
investment assets into those markets.
Subdued inflation and relatively low interest rates in the U.S. also
supported a reasonably good environment for equities. However, signs of
accelerating economic growth raised the specter that meaningful increases in
inflation and interest rates could occur in 1994. Based on this risk and other
factors, our view of the various market sectors has been influenced as
follows:
o Though financial stocks have been under pressure, we believe current
valuations reflect the risk of rising interest rates to some degree.
Thus, quality financial companies with demonstrated earnings growth in
diverse economic environments should perform well in 1994.
o Consumer nondurable stocks, which often underperform during periods of
accelerated economic growth, have performed reasonably well. In
particular, selected health care and consumer products stocks could
continue to show improved performance in 1994, considering the modest
valuation levels of these stocks.
o Investors have been rotating in and out of cyclical stocks as
expectations for economic growth have changed. We continue to build
positions in well-managed companies in cyclical industries. However, we
strive to identify cyclicals that will show strong earnings growth even
if the economy slows.
o Many large multinational companies (particularly those in the U.S.) may
be poised to benefit from several emerging trends including: 1) improved
efficiency and the companies' resultant positions as low-cost providers
of products and services; 2) less restricted world trade; 3) a pickup in
global economic growth; and 4) the continued strong expansion in the
emerging economies, particularly in Latin America and Asia.
Portfolio Review
By December 31, the Fund was invested approximately 81% in common stocks and
19% in cash reserves. The largest industry and company holdings are provided
in the tables following this letter.
In the more cyclical industrial and technology sectors, the Fund made
major investments in several companies which generated positive contributions
to performance. General Electric, which was our second largest holding as of
December 31, contributed significantly, particularly in the final three months
of 1993. The company's leadership position as a provider of low-cost products
continued to drive strong earnings growth in an improving economy.
Allied-Signal generated strong earnings growth despite continued weakness in
the aerospace industry, and improved 1994 prospects for this industry could
signal a continuance of the company's exceptional performance for the Fund.
Selected consumer nondurable stocks also did well. In particular, Pepsi
showed notable price appreciation over the past three months. Pfizer, a blue
chip pharmaceutical company, and several other pharmaceutical and HMO
companies were bought at attractive prices, providing meaningful contributions
to three- and six-month results. Though cognizant of the risks associated with
health care reform and the pricing pressure attributable to the growing role
of managed care groups, we believe health care companies with innovative
products and careful cost controls can continue to show solid earnings growth.
Several holdings in the entertainment and leisure sector were also top
performers. We believe investors have not fully recognized the value of
Disney's film production, theme park, and merchandising operations (as well as
the synergy developed among these areas). An example of the synergy is the
company's ability to produce animated feature films and distribute film
character products through its extensive retailing operation. McDonald's
continues to experience strong growth in international markets, and the
company is expected to generate substantial free cash flow in the next several
years. We purchased Shoney's, the family restaurant chain, at what we believe
will prove to be an attractive valuation. By revamping its menu and restaurant
format, the company has begun to realize improved revenue growth at stores
open longer than one year.
Though the Fund invests overwhelmingly in domestic companies, we are
always seeking investments in high-quality international companies on a
selective basis. As our top 25 portfolio holdings notes, we did participate in
the Mexican market's strong performance through positions in companies such as
Telmex, the largest telecommunications company in Mexico.
Outlook
Stocks remain valued in the upper quartile of their historical range.
Relatively low inflation and interest rates are the principal supports for
these valuations. Consequently, the potential for increased inflation and
higher interest rates (in response to accelerated economic growth) might cause
a correction in the equity markets. We accept that market corrections or
declines are inevitable, but they do not negate the long-term growth potential
inherent in the stock market.
Also, we are optimistic about the prospect for liberalized world trade,
renewed global economic growth, and the improved efficiency at many U.S.
companies. These factors could help drive sharp earnings growth, particularly
for U.S.-based multinational companies. We emphasize that the Fund is managed
with a bias toward high-quality, well-managed companies with leading market
positions and sound financial fundamentals-a philosophy designed to yield
superior long-term results.
While we would not expect to match our inaugural six-month performance
on a regular basis, we believe our disciplined search for companies with
durable, sustainable earnings growth and reasonable valuations will produce
attractive returns for shareholders over time.
Respectfully submitted,
Thomas H. Broadus, Jr.
President and Chairman of the
Investment Advisory Committee
January 28, 1994
Portfolio Highlights
Three Months Ended December 31, 1993
SECTOR DIVERSIFICATION*
Percent of
Net Assets
__________
Financial 22.3%
Utilities 2.6
Consumer Nondurables 20.9
Consumer Services 12.8
Consumer Cyclicals 3.1
Technology 3.2
Capital Equipment 6.4
Business Services & Transportation 5.6
Energy 1.2
Process Industries 2.2
Basic Materials 1.1
Reserves 18.6
____________________________________________________________________________
Total 100.0%
*Sectors include securities listed as miscellaneous in the
portfolio.
Twenty-Five Largest Holdings
December 31, 1993
Percent of
Net Assets
__________
Mid Ocean Limited 2.2%
GE 1.8
Allied-Signal 1.7
Mellon Bank 1.6
PartnerRe Holdings 1.6
Pfizer 1.5
Albertson's 1.5
PepsiCo 1.5
UNUM 1.4
Fannie Mae 1.4
First Financial Management 1.4
Disney 1.4
TJX 1.4
Primerica 1.3
Telmex 1.3
Federated Department Stores 1.3
McArthur/Glen Realty 1.2
Charming Shoppes 1.2
McDonald's 1.2
NationsBank 1.2
Money Store 1.2
Chubb 1.2
Chemical Banking 1.1
Philip Morris 1.1
Danaher 1.1
______________________________________________________________________________
Total 34.8%
Key Statistics
Change in N.A.V. ($10.93 to $11.24) $0.31*
Dividend Per Share 0.05
Capital Gains Per Share 0.14
Total Net Assets $24.7 Million
*Three months ended December 31, 1993.
Chart 1 - Performance Comparison
Income return and principal value represent past performance and will vary.
Shares may be worth more or less at redemption than at original purchase.
Major Portfolio Changes
Three Months Ended December 31, 1993
PURCHASES
Cost
_________
PartnerRe Holdings* $500,000
Charming Shoppes* 327,750
NationsBank* 279,735
McArthur/Glen Realty* 268,750
U.S. West* 256,274
Danaher 246,023
Money Stores 246,000
Society Corp. 242,220
Toys "R" Us 239,130
First Financial Management 213,567
SALES
Proceeds
_________
Gillette $245,252
May Department Stores** 209,224
Dillard Department Stores** 201,488
Forest Laboratories 171,254
ONBANCorp** 166,863
Abbott Laboratories 143,885
Blockbuster Entertainment 137,997
General Mills** 135,888
Whirlpool 134,228
AMBAC** 132,006
* Position added
** Position eliminated
Statement of Net Assets (Value in thousands)
T. Rowe Price Blue Chip Growth Fund / December 31, 1993
Common Stocks - 81.4%
BASIC MATERIALS - 1.1%
Value
______
METALS - 1.1%
2,200 shs. Alcoa . . . . . . . . . . . . . . . $ 153
4,500 Inco. . . . . . . . . . . . . . . . 121
274
Total Basic Materials 274
BUSINESS SERVICES & TRANSPORTATION - 4.1%
COMPUTER SERVICE & SOFTWARE - 2.5%
6,200 First Financial Management. . . . . 352
3,300 * Microsoft . . . . . . . . . . . . . 266
618
DISTRIBUTION SERVICES-0.7%
3,000 Alco Standard . . . . . . . . . . . 164
MISCELLANEOUS BUSINESS SERVICES-0.9%
8,500 WMX Technologies. . . . . . . . . . 224
Total Business Services & Transportation 1,006
CAPITAL EQUIPMENT-6.4%
ELECTRICAL EQUIPMENT-1.8%
4,200 GE. . . . . . . . . . . . . . . . . 440
MACHINERY-4.6%
7,000 * Coltec Industries . . . . . . . . . 131
7,300 Danaher . . . . . . . . . . . . . . 279
16,000 * Reliance Electric (Class A) . . . . 270
7,000 Teleflex. . . . . . . . . . . . . . 259
8,000 TriMas. . . . . . . . . . . . . . . 195
1,134
Total Capital Equipment. . . . . . . . . . . . . . . . 1,574
CONSUMER CYCLICALS-3.1%
BUILDING & REAL ESTATE-1.2%
12,500 McArthur/Glen Realty. . . . . . . . 305
MISCELLANEOUS CONSUMER
DURABLES-1.9%
7,300 Corning . . . . . . . . . . . . . . 204
4,000 Whirlpool . . . . . . . . . . . . . 266
470
Total Consumer Cyclicals . . . . . . . . . . . . . . . 775
CONSUMER NONDURABLES-20.9%
BEVERAGES-4.0%
6,000 shs. * Coca-Cola FEMSA, ADR. . . . . . . . $ 196
4,200 Coke. . . . . . . . . . . . . . . . 187
6,000 Panamerican Beverages
(Class A) . . . . . . . . . . . 230
9,000 PepsiCo . . . . . . . . . . . . . . 368
981
COSMETICS-1.0%
4,000 Gillette. . . . . . . . . . . . . . 239
FOOD PROCESSING-2.8%
6,000 Campbell. . . . . . . . . . . . . . 246
7,500 McCormick . . . . . . . . . . . . . 185
11,000 Tyson Foods (Class A) . . . . . . . 264
695
HOSPITAL SUPPLIES/
HOSPITAL MANAGEMENT-2.7%
3,500 Abbott Laboratories . . . . . . . . 103
10,000 National Health Laboratories. . . . 143
4,200 U.S. Healthcare . . . . . . . . . . 242
2,200 United HealthCare . . . . . . . . . 167
655
MISCELLANEOUS CONSUMER
PRODUCTS-3.7%
3,600 Colgate-Palmolive . . . . . . . . . 224
2,200 PPG Industries. . . . . . . . . . . 167
5,000 Philip Morris . . . . . . . . . . . 279
6,500 Phillips-Van Heusen . . . . . . . . 244
914
PHARMACEUTICALS-6.7%
5,000 * Forest Laboratories . . . . . . . . 238
5,500 Johnson & Johnson . . . . . . . . . 246
5,500 Pfizer. . . . . . . . . . . . . . . 379
7,000 * Roberts Pharmaceutical. . . . . . . 278
3,600 Schering-Plough . . . . . . . . . . 247
10,000 SmithKline Beecham,
equity units, ADR . . . . . . . 274
1,662
Total Consumer Nondurables 5,146
CONSUMER SERVICES-11.8%
ENTERTAINMENT & LEISURE-3.7%
8,200 Disney. . . . . . . . . . . . . . . 350
5,200 McDonald's. . . . . . . . . . . . . 296
11,000 * Shoney's. . . . . . . . . . . . . . 254
900
T. Rowe Price Blue Chip Growth Fund / Statement of Net Assets
GENERAL MERCHANDISERS-2.9%
3,400 shs. Dayton Hudson . . . . . . . . . . . $ 227
12,000 TJX . . . . . . . . . . . . . . . . 350
6,000 Wal-Mart. . . . . . . . . . . . . . 150
727
SPECIALTY MERCHANDISERS-5.2%
14,000 Albertson's . . . . . . . . . . . . 375
300 BLOCKBUSTER Entertainment . . . . . 9
25,000 Charming Shoppes. . . . . . . . . . 297
15,000 * Federated Department Stores . . . . 311
1,000 * R.P. Scherer. . . . . . . . . . . . 38
6,000 * Toys "R" Us . . . . . . . . . . . . 245
1,275
Total Consumer Services 2,902
ENERGY-1.2%
ENERGY SERVICES-0.9%
3,800 Schlumberger. . . . . . . . . . . . 225
INTEGRATED PETROLEUM-
DOMESTIC-0.3%
700 Atlantic Richfield. . . . . . . . . 73
Total Energy 298
FINANCIAL-22.2%
BANK & TRUST-8.5%
4,700 BankAmerica . . . . . . . . . . . . 218
7,000 Chemical Banking. . . . . . . . . . 281
2,000 First Security. . . . . . . . . . . 52
6,000 First Union . . . . . . . . . . . . 247
4,000 Integra Financial . . . . . . . . . 172
7,500 Mellon Bank . . . . . . . . . . . . 398
6,000 NationsBank . . . . . . . . . . . . 294
8,000 Norwest . . . . . . . . . . . . . . 195
8,500 Society Corp. . . . . . . . . . . . 253
2,110
FINANCIAL SERVICES-5.6%
8,000 Countrywide Credit. . . . . . . . . 201
4,500 Fannie Mae. . . . . . . . . . . . . 353
4,400 Green Tree Financial. . . . . . . . 211
12,000 Money Store . . . . . . . . . . . . 290
8,500 Primerica . . . . . . . . . . . . . 330
1,385
INSURANCE-8.1%
3,700 Chubb . . . . . . . . . . . . . . . 288
5,000 EXEL. . . . . . . . . . . . . . . . 222
19,000 * Mid Ocean Limited . . . . . . . . . 537
6,500 shs. National Re Holdings. . . . . . . . $ 201
18,000 * PartnerRe Holdings. . . . . . . . . 392
6,800 UNUM. . . . . . . . . . . . . . . . 357
1,997
Total Financial 5,492
PROCESS INDUSTRIES-2.2%
PAPER & PAPER PRODUCTS-0.7%
3,300 Kimberly-Clark. . . . . . . . . . . 171
SPECIALTY CHEMICALS-1.5%
7,000 A. Schulman . . . . . . . . . . . . 236
6,200 Crompton & Knowles. . . . . . . . . 137
373
Total Process Industries 544
TECHNOLOGY-3.2%
AEROSPACE & DEFENSE-1.7%
5,300 Allied-Signal . . . . . . . . . . . 419
ELECTRONIC COMPONENTS-1.0%
2,600 Motorola. . . . . . . . . . . . . . 240
TELECOMMUNICATIONS-0.5%
6,000 * Novell. . . . . . . . . . . . . . . 124
Total Technology 783
UTILITIES-2.3%
TELEPHONE-2.3%
4,700 Telmex, ADR . . . . . . . . . . . . 317
5,400 U.S. WEST . . . . . . . . . . . . . 248
Total Utilities 565
MISCELLANEOUS-2.9% . . . . . . . . . . . . . . . . 710
Total Common Stocks (Cost-$18,884) 20,069
Short-Term Investments-17.9%
COMMERCIAL PAPER-17.9%
$ 1,000,000 Caisse des Depots et
Consignations,
3.30%, 1/12/94. . . . . . . . . . 993
100,000 General Electric Capital,
3.26%, 5/9/94 . . . . . . . . . . 99
153,000 Harvard University,
3.20%, 1/3/94 . . . . . . . . . . 153
255,000 Kingdom of Spain,
3.22%, 2/15/94. . . . . . . . . . 252
500,000 Morgan Stanley Group,
VRMTN, 3.475%, 3/15/95. . . . . . 500
$ 500,000 Panasonic Finance,
3.35%, 2/4/94 . . . . . . . . . . $ 496
500,000 PHH, 3.32%, 1/12/94. . . . . . . . . . 498
600,000 Procter & Gamble,
3.15%, 4/8/94. . . . . . . . . . . 594
300,000 Province of British Columbia,
3.30%, 2/11/94 . . . . . . . . . . 295
525,000 Volkswagon Of America,
3.30%, 1/31/94 . . . . . . . . . . 523
Total Short-Term Investments (Cost-$4,403) 4,403
Total Investments in Securities-
99.3% (Cost $23,287) 24,472
Other Assets Less Liabilities-0.7% 179
Net Assets Consisting of:
Accumulated realized gains/losses-
net of distributions. . . . . . . . . . . . . . . $ 372
Unrealized appreciation of
investments. . . . . . . . . . . . . . . . . . . . 1,185
Paid-in-capital applicable to
2,194,008 shares of $0.0001 par
value capital stock outstanding;
1,000,000,000 shares authorized. . . . . . . . . . 23,094
_______
Net Assets-100.0% $24,651
_______
_______
Net Asset Value Per Share $11.24
_______
_______
* Non-income producing
VRMTN Variable rate medium term note
Statement of Operations
T. Rowe Price Blue Chip Growth Fund / From June 30, 1993 (Commencement of
Operations) to December 31, 1993
Amounts in Thousands
_______________________
INVESTMENT INCOME
Income
Dividends . . . . . . . . . . . . . . . . . . . $ 105
Interest . . . . . . . . . . . . . . . . . . . . 65
_______
Total income $ 170
Expenses
Shareholder servicing fees & expenses. . . . . . 61
Custodian and accounting fees & expenses . . . . 41
Legal & auditing fees. . . . . . . . . . . . . . 12
Registration fees & expenses . . . . . . . . . . 7
Organizational expenses. . . . . . . . . . . . . 5
Directors' fees & expenses . . . . . . . . . . . 4
Prospectus & shareholder reports . . . . . . . . 3
Less: Expenses reimbursed by Manager . . . . . . (30)
________
Total expenses 103
______
Net investment income 67
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Net realized gain. . . . . . . . . . . . . . . . . 703
Change in unrealized
appreciation or depreciation . . . . . . . . . . 1,185
_______
Net gain on investments. . . . . . . . . . . . . . 1,888
________
INCREASE IN NET ASSETS FROM OPERATIONS $1,955
________
________
The accompanying notes are an integral part of these financial statements.
Statement of Changes in Net Assets
T. Rowe Price Blue Chip Growth Fund / From June 30, 1993 (Commencement of
Operations) to December 31, 1993
Amounts in Thousands
_______________________
INCREASE (DECREASE) IN NET ASSETS
Operations
Net investment income. . . . . . . . . . . . . . $ 67
Net realized gain on investments . . . . . . . . 703
Change in unrealized appreciation
or depreciation of investments. . . . . . . 1,185
_______
Increase in net assets from operations . . . . . 1,955
_______
Distributions to shareholders
Net investment income. . . . . . . . . . . . . . (106)
Net realized gain on investments . . . . . . . . (298)
_______
Decrease in net assets from
distributions to shareholders. . . . . . . . . . . (404)
_______
Capital share transactions
Sold 2,377 shares. . . . . . . . . . . . . . . . 25,060
Distributions reinvested of 35 shares. . . . . . 389
Redeemed 228 shares. . . . . . . . . . . . . . . (2,492)
_______
Increase in net assets from
capital share transactions . . . . . . . . . 22,957
_______
Net equalization . . . . . . . . . . . . . . . . . 43
_______
Total increase . . . . . . . . . . . . . . . . . . 24,551
NET ASSETS
Beginning of period. . . . . . . . . . . . . . . 100
End of period. . . . . . . . . . . . . . . . . . $24,651
_______
_______
The accompanying notes are an integral part of these financial statements.
Notes to Financial Statements
T. Rowe Price Blue Chip Growth Fund / December 31, 1993
Note 1-Significant Accounting Policies
T. Rowe Price Blue Chip 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.
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-Organization
The Fund was organized on April 21, 1993 and had no operations prior to June
30, 1993, other than those related to organizational matters, including the
sale of 10,000 shares of its capital stock at $10.00 per share on June 25,
1993, to T. Rowe Price Associates, Inc.
Note 3-Portfolio Transactions
Purchases and sales of portfolio securities, other than short-term and U.S.
Government securities, aggregated $23,806,000 and $5,625,000 respectively, for
the period ended December 31, 1993.
Note 4-Federal Income Taxes
No provision for federal income taxes is required since the Fund intends to
qualify as a regulated investment company and distribute all of its taxable
income.
At December 31, 1993, the aggregate cost of investments for federal
income tax and financial reporting purposes was $23,287,000 and net unrealized
appreciation aggregated $1,185,000, of which $1,560,000 related to appreciated
investments and $375,000 to depreciated investments.
Note 5-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 0.30% 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 0.31% for assets in
excess of $34 billion. The effective annual Group Fee rate at December 31,
1993 and for the period then ended was 0.35%. 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, 1994, 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 reimbursement shall be made to the Manager after
December 31, 1996. Pursuant to this agreement, $53,000 of management fees were
not accrued by the Fund for the period ended December 31, 1993, and $30,000 of
other expenses were borne by the Manager and subject to future reimbursement.
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 period ended December 31, 1993 the Fund incurred fees totalling
approximately $62,000 for these services provided by related parties. At
December 31, 1993, these service fees payable were $16,000.
Financial Highlights
T. Rowe Price Blue Chip Growth Fund / From June 30, 1993 (Commencement of
Operations) to December 31, 1993
For a share outstanding through the period
___________________________________________
NET ASSET VALUE,
BEGINNING OF PERIOD. . . . . . . . . . $ 10.00
______
Investment Activities
Net investment income. . . . . . . . . 0.05*
Net realized and
unrealized gain . . . . . . . . . . 1.38
______
Total from Investment Activities . . . . 1.43
______
Distributions
Net investment income. . . . . . . . . (0.05)
Net realized gain. . . . . . . . . . . (0.14)
______
Total Distributions. . . . . . . . . . . (0.19)
______
NET ASSET VALUE,
END OF PERIOD. . . . . . . . . . . . . $ 11.24
______
______
RATIOS / SUPPLEMENTAL DATA
Total Return . . . . . . . . . . . . . . 14.3%
Ratio of Expenses to
Average Net Assets . . . . . . . . . . 1.25%!*
Ratio of Net Investment
Income to Average Net Assets . . . . . 0.80%!
Portfolio Turnover Rate. . . . . . . . . 89.0%!
Net Assets, End of
Period (in thousands). . . . . . . . . $ 24,651
Number of Shareholder Accounts,
End of Period. . . . . . . . . . . . 3,000
! Annualized
* Excludes expenses in excess of a 1.25% voluntary expense limitation in
effect through December 31, 1994.
Report of Independent Accountants
To the Shareholders and Board of Directors
of Blue Chip Growth Fund, Inc.
In our opinion, the accompanying statement of net assets and the related
statements of operations and of changes in net assets and the selected per
share data and information (which appears under the heading "Financial
Highlights") present fairly, in all material respects, the financial position
of T. Rowe Price Blue Chip Growth Fund, Inc. at December 31, 1993, the results
of its operations, the changes in its net assets and the selected per share
data and information for the period June 30, 1993 (commencement of operations)
to December 31, 1993, in conformity with generally accepted accounting
principles. These financial statements and selected per share data and
information (hereafter referred to as "financial statements") are the
responsibility of the Fund's management; our responsibility is to express an
opinion on these financial statements based on our audit. We conducted our
audit of these financial statements in accordance with generally accepted
auditing standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management,
and evaluating the overall financial statement presentation. We believe that
our audit, which included confirmation of securities at December 31, 1993 by
correspondence with custodians and brokers and, where appropriate, the
application of alternative auditing procedures for unsettled security
transactions, provides a reasonable basis for the opinion expressed above.
PRICE WATERHOUSE
Baltimore, Maryland
January 19, 1994
Officers and Directors
Thomas H. Broadus, Jr., President/Director
Leo C. Bailey, Director
Donald W. Dick, Director
David K. Fagin, Director
Addison Lanier, Director
John K. Major, Director
James S. Riepe, Vice President/Director
M. David Testa, Director
Hubert D. Vos, Director
Paul M. Wythes, Director
Henry H. Hopkins, Vice President
Larry J. Puglia, Vice President
Lenora V. Hornung, Secretary
Carmen F. Deyesu, Treasurer
David S. Middleton, Controller
Chart 1-Performance Comparison
A line graph compares the 12/31/93 value of a hypothetical $10,000 investment
made in the Blue Chip Growth Fund at its inception (6/30/93) and a similar
investment made concurrently in the S&P 500. At 12/31/93, the Fund investment
would have been worth $11,432, the Index investment would have been worth
$10,496.
