T. Rowe Price Personal Strategy Balanced Portfolio
Semiannual Report
June 30, 1996
Dear Investor
The U.S. stock market continued to perform well during the six months ended
June 30, but with a higher degree of volatility than in recent years. However,
the bond market suffered as yields rose sharply from their January lows. Your
fund generated solid returns over the last six months and even stronger
results during the 12-month period.
Performance and Strategy Review
Performance Comparison
Periods Ended 6/30/96
_____________________
6 Months 12 Months
________ _________
Personal Strategy
Balanced Portfolio 4.14% 15.64%
Combined Index Portfolio* 5.46 17.24
* An unmanaged portfolio composed of 60% stocks (S&P 500) and 40% bonds
(Lehman Brothers Aggregate Bond Index).
Your fund's absolute returns were solid, but foreign stocks failed to
deliver the powerful returns of the domestic stock market. Our exposure here,
coupled with an overweighting in bonds, caused the fund to lag its benchmark
over the past 6- and 12-month periods.
The objective of this fund is to provide the highest total return
consistent with an emphasis on both income and capital appreciation. The
typical asset mix is 60% stocks, 30% bonds, and 10% cash - with 10 percentage
point variations permitted for each asset class.
Chart 1 - Asset Allocation graph
At the end of June, your fund had 58% of its net assets in stocks, 32%
in bonds, and 10% in cash reserves. The equity weighting was increased by two
percentage points since the end of December, reflecting the addition of
foreign stocks in February to enhance the overall diversification of the fund.
We continued to overweight bonds since we anticipated a continuation of last
year's fixed income rally. In the equity area, we favored growth over value
stocks.
Market Review
The fund's investment committee meets monthly to adjust the weightings of
stocks, bonds, and money market securities within the appropriate ranges based
on market conditions and economic fundamentals. The committee increased the
weighting in stocks while maintaining the same exposure to bonds it had at the
end of 1995.
Just six months ago we reported that the economy was slowing and
interest rates were falling. Since then, the situation has reversed: Interest
rates rose through the end of June, and the economy's momentum stirred up
fears of inflation. Both the stock and bond markets were extremely volatile.
With strong gains in employment, 2.3% annualized growth in the first quarter,
and a stronger growth rate expected in the second quarter, bond yields moved
higher. The 30-year Treasury bond yield climbed to more than 7% from less than
6% at year-end, driving down prices in most sectors of the fixed income
market.
The exception was high-yield securities, which posted relatively strong
returns during the reporting period. These bonds tend to fare well in a
strengthening economy because of improving corporate profits. Foreign bonds
have not done well, however, as the continuing strength of the dollar against
most major currencies curtailed returns for U.S. investors.
Chart 2 - Interest Rate Levels graph
The stock market, on the other hand, continued to post solid advances.
The unmanaged Standard & Poor's 500 Stock Index registered a gain of 10.1% for
the last six months and 26.0% for the last 12 months. Small-cap stocks were
even more robust, outstripping their large-cap counterparts.
Although foreign stocks have recently lagged their U.S. brethren, over
the long term foreign equity returns have kept pace with or exceeded the U.S.
market while reducing the overall volatility in a portfolio. We believe
foreign equities offer good value at this time, and as global markets improve
they could favorably influence the performance of your fund.
Outlook
The strength of the economy took many of us by surprise. The concern now is
whether the economy is growing too fast, raising the specter of a possible
pickup in the rate of inflation. There is little question that the bond market
considers the prospect of accelerating inflation daunting, as interest rates
have risen significantly since late last year.
In our view, it is possible that the bond market may experience further
weakness in the months ahead, although the recent rise in yields may have
discounted much of the news on the inflation front. We believe bond returns in
coming months will more likely come from income than from price appreciation.
Turning to stocks, the domestic market has continued to climb, but with sharp
volatility, particularly after the end of the reporting period. Corporate
earnings have been strong, but if interest rates continue to rise and wage
inflation becomes an issue, profits could suffer.
Foreign equity markets appear to offer good value at this time, in our
estimation. The European economic cycle is behind that of the U.S., allowing
for further sustainable growth. We expect overall growth in foreign markets to
continue advancing. In this type of environment, your fund's exposure to
foreign equities and to selected areas of the domestic market should benefit
performance over the long term.
Respectfully submitted,
Peter Van Dyke
President and Chairman of the Investment Advisory Committee
July 26, 1996
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.
Periods Ended June 30, 1996
Since Inception
1 Year 12/30/94
_______ ________________
15.64% 21.62%
Investment return and principal value represent past performance and will
vary. Shares may be worth more or less at redemption than at original
purchase. Performance does not reflect insurance company contract and other
separate account charges. If these charges were deducted, performance would
have been lower.
Portfolio Overview
June 30, 1996
Percent of
Net Assets
___________
Money Markets 10.0%
Commercial Paper 12.0
Other Assets Less Liabilities (2.0)
Bonds 32.0%
U.S. Government Agencies 2.0
Corporate 17.0
Mortgage-Backed 10.0
Foreign Government Agencies 3.0
Stocks 58.0%
Ten Largest Holdings 11.3
GE 2.0
Fannie Mae 1.4
Coca-Cola 1.2
PepsiCo 1.2
Freddie Mac 1.1
Great Lakes Chemical 1.0
Amgen 0.9
UNUM 0.9
Pfizer 0.8
Johnson & Johnson 0.8
Chart 3 - SEC Performance Comparison graph
Statement of Net Assets
T. Rowe Price Personal Strategy Balanced Portfolio / June 30, 1996 (Unaudited)
(value in thousands)
Value
Common Stocks - 58.3%
FINANCIAL - 10.0%
BANK AND TRUST - 2.8%
100 shs Air Liquide L (FRF) . . . . . . . . . . $ 18
10,000 Banca Commerciale Italiana (ITL). . . . 20
300 Banco de Bilbao Vizcaya ADR . . . . . . 12
300 Banco Frances del Rio ADR . . . . . . . 9
4,000 Barclays (GBP). . . . . . . . . . . . . 48
680 Chase Manhattan . . . . . . . . . . . . 48
300 Deutsche Bank (DEM) . . . . . . . . . . 14
2,000 Development Bank of Singapore (SGD) . . 25
1,400 HSBC Holdings (GBP) . . . . . . . . . . 22
1,140 J. P. Morgan. . . . . . . . . . . . . . 96
900 KeyCorp . . . . . . . . . . . . . . . . 35
720 Mellon Bank . . . . . . . . . . . . . . 41
1,600 National City . . . . . . . . . . . . . 56
100 Schweizerischer Bankverein (CHF). . . . 20
200 Societe Generale (FRF). . . . . . . . . 22
4,000 Westpac Bank (AUD). . . . . . . . . . . 18
504
INSURANCE - 3.7%
1,100 ACE Limited . . . . . . . . . . . . . . 51
2,200 American General. . . . . . . . . . . . 80
650 American International Group. . . . . . 64
3,200 PartnerRe Holdings ADR. . . . . . . . . 96
500 St. Paul Companies. . . . . . . . . . . 27
4,800 Travelers/Aetna Property
Casualty (Class A). . . . . . . . . . 136
2,470 UNUM. . . . . . . . . . . . . . . . . . 154
4,300 Willis-Corroon ADR. . . . . . . . . . . 51
659
FINANCIAL SERVICES - 3.5%
950 American Express. . . . . . . . . . . . 42
400 AXA (FRF) . . . . . . . . . . . . . . . 22
7,420 Fannie Mae. . . . . . . . . . . . . . . 249
2,370 Freddie Mac . . . . . . . . . . . . . . 203
1,700 Green Tree Financial. . . . . . . . . . 53
1,000 ING Groep (NLG) . . . . . . . . . . . . 30
500 * ING Groep, scrip shares,
8/2/96 (NLG). . . . . . . . . . . . . 8
330 Sallie Mae. . . . . . . . . . . . . . . 24
631
Total Financial 1,794
UTILITIES - 3.2%
TELEPHONE SERVICES - 1.1%
2,100 shs ALLTEL. . . . . . . . . . . . . . . . . $ 65
920 AT&T. . . . . . . . . . . . . . . . . . 57
560 SBC Communications. . . . . . . . . . . 28
200 Telefonica de Espana ADR. . . . . . . . 11
1,000 Telmex ADR. . . . . . . . . . . . . . . 33
194
ELECTRIC UTILITIES - 2.1%
4,800 Centerior Energy. . . . . . . . . . . . 35
100 Electrabel (BEL). . . . . . . . . . . . 21
300 Empresa Nacional de Electricidad ADR. . 19
1,470 Entergy . . . . . . . . . . . . . . . . 42
6,000 Hong Kong Electric (HKD). . . . . . . . 18
6,500 * Niagara Mohawk. . . . . . . . . . . . . 50
1,600 PECO Energy . . . . . . . . . . . . . . 42
840 Texas Utilities . . . . . . . . . . . . 36
3,300 Unicom. . . . . . . . . . . . . . . . . 92
500 Veba (DEM). . . . . . . . . . . . . . . 27
382
Total Utilities 576
CONSUMER NONDURABLES - 16.2%
COSMETICS - 0.1%
1,000 Kao (JPY) . . . . . . . . . . . . . . . 13
BEVERAGES - 2.9%
840 Anheuser-Busch. . . . . . . . . . . . . 63
4,360 Coca-Cola . . . . . . . . . . . . . . . 213
100 LVMH (FRF). . . . . . . . . . . . . . . 24
6,000 PepsiCo . . . . . . . . . . . . . . . . 212
512
FOOD PROCESSING - 2.5%
500 Cadbury Schweppes ADR . . . . . . . . . 16
500 Danisco (DKK) . . . . . . . . . . . . . 25
100 Eridania Beghin-Say (FRF) . . . . . . . 16
830 General Mills . . . . . . . . . . . . . 45
2,000 Heinz . . . . . . . . . . . . . . . . . 61
1,600 McCormick . . . . . . . . . . . . . . . 35
60 Nestle (CHF). . . . . . . . . . . . . . 68
1,300 Pioneer Hi-Bred . . . . . . . . . . . . 69
680 Ralston Purina. . . . . . . . . . . . . 44
1,770 Sara Lee. . . . . . . . . . . . . . . . 57
436
HOSPITAL SUPPLIES/HOSPITAL
MANAGEMENT - 1.4%
860 shs Baxter International. . . . . . . . . . $ 41
700 * Boston Scientific . . . . . . . . . . . 31
2,140 Columbia/HCA Healthcare . . . . . . . . 114
2,100 * St. Jude Medical. . . . . . . . . . . . 70
256
PHARMACEUTICALS - 6.3%
940 American Home Products. . . . . . . . . 57
3,000 * Amgen . . . . . . . . . . . . . . . . . 162
500 Astra (Class B) (SEK) . . . . . . . . . 22
500 * Biogen. . . . . . . . . . . . . . . . . 27
290 Bristol-Myers Squibb. . . . . . . . . . 26
25 Ciba-Geigy (CHF). . . . . . . . . . . . 30
300 Eli Lilly . . . . . . . . . . . . . . . 19
50 Gehe (DEM). . . . . . . . . . . . . . . 34
2,100 * Genentech . . . . . . . . . . . . . . . 110
2,980 Johnson & Johnson . . . . . . . . . . . 148
900 Merck . . . . . . . . . . . . . . . . . 58
5,300 * Perrigo . . . . . . . . . . . . . . . . 60
2,120 Pfizer. . . . . . . . . . . . . . . . . 151
617 Pharmacia & Upjohn. . . . . . . . . . . 27
1,360 SmithKline Beecham ADR. . . . . . . . . 74
1,000 Takeda Chemical Industries (JPY). . . . 18
1,980 Warner-Lambert. . . . . . . . . . . . . 109
1,132
MISCELLANEOUS CONSUMER PRODUCTS - 2.7%
2,000 Benetton Group (ITL). . . . . . . . . . 26
1,000 Bridgestone (JPY) . . . . . . . . . . . 19
420 Colgate-Palmolive . . . . . . . . . . . 36
1,670 Hasbro. . . . . . . . . . . . . . . . . 60
2,000 Kuraray (JPY) . . . . . . . . . . . . . 22
8,000 Lion Nathan (NZD) . . . . . . . . . . . 21
1,740 Newell. . . . . . . . . . . . . . . . . 53
1,260 Philip Morris . . . . . . . . . . . . . 131
900 Procter & Gamble. . . . . . . . . . . . 82
320 Tambrands . . . . . . . . . . . . . . . 13
730 UST . . . . . . . . . . . . . . . . . . 25
488
HEALTH CARE SERVICES - 0.3%
1,100 United HealthCare . . . . . . . . . . . 56
Total Consumer Nondurables 2,893
CONSUMER SERVICES - 6.6%
GENERAL MERCHANDISERS - 1.3%
600 Dayton Hudson . . . . . . . . . . . . . 62
1,000 Marui (JPY) . . . . . . . . . . . . . . 22
5,000 shs Tesco (GBP) . . . . . . . . . . . . . . $ 23
1,700 TJX . . . . . . . . . . . . . . . . . . 57
2,700 Wal-Mart. . . . . . . . . . . . . . . . 69
233
SPECIALTY MERCHANDISERS - 1.8%
3,000 Circuit City Stores . . . . . . . . . . 108
600 * Federated Department Stores . . . . . . 20
2,600 * General Nutrition . . . . . . . . . . . 45
1,900 Home Depot. . . . . . . . . . . . . . . 103
2,200 * Revco . . . . . . . . . . . . . . . . . 53
329
ENTERTAINMENT AND LEISURE - 1.6%
870 Disney. . . . . . . . . . . . . . . . . 55
5,000 Hutchison Whampoa (HKD) . . . . . . . . 32
1,270 McDonald's. . . . . . . . . . . . . . . 59
1,020 Reader's Digest (Class B) . . . . . . . 40
2,000 * Sharp (JPY) . . . . . . . . . . . . . . 35
1,415 * Viacom (Class B). . . . . . . . . . . . 55
276
MEDIA AND COMMUNICATIONS - 1.9%
2,000 Elsevier (NLG). . . . . . . . . . . . . 30
3,560 Gaylord Entertainment . . . . . . . . . 101
900 Reuters ADR . . . . . . . . . . . . . . 65
3,940 Vodafone ADR. . . . . . . . . . . . . . 145
341
Total Consumer Services 1,179
CONSUMER CYCLICALS - 2.3%
AUTO RELATED - 0.2%
500 Honda ADR . . . . . . . . . . . . . . . 26
BUILDING AND REAL ESTATE - 1.1%
3,000 Cheung Kong Holdings (HKD). . . . . . . 21
5,000 DBS Land (SGD). . . . . . . . . . . . . 17
4,200 DeBartolo Realty, REIT. . . . . . . . . 68
4,300 Federal Realty Investment Trust, REIT . 97
203
MISCELLANEOUS CONSUMER
DURABLES - 1.0%
3,600 Corning . . . . . . . . . . . . . . . . 138
200 Roussel UCLAF (FRF) . . . . . . . . . . 48
186
Total Consumer Cyclicals 415
TECHNOLOGY - 4.2%
ELECTRONIC COMPONENTS - 1.3%
700 * Altera. . . . . . . . . . . . . . . . . 27
1,300 shs Intel . . . . . . . . . . . . . . . . . $ 95
600 * Maxim Integrated Products . . . . . . . 16
1,000 Tyco International. . . . . . . . . . . 41
1,600 * Xilinx. . . . . . . . . . . . . . . . . 51
230
ELECTRONIC SYSTEMS - 0.6%
500 Hewlett-Packard . . . . . . . . . . . . 50
800 Honeywell . . . . . . . . . . . . . . . 43
400 Nokia ADR . . . . . . . . . . . . . . . 15
108
INFORMATION PROCESSING - 0.4%
300 Hitachi ADR . . . . . . . . . . . . . . 28
410 IBM . . . . . . . . . . . . . . . . . . 41
69
OFFICE AUTOMATION - 0.4%
1,400 * Ceridian. . . . . . . . . . . . . . . . 71
TELECOMMUNICATIONS - 1.2%
1,500 * 3Com. . . . . . . . . . . . . . . . . . 69
1,600 * AirTouch Communications . . . . . . . . 45
2,700 * Bay Networks. . . . . . . . . . . . . . 69
600 LM Ericsson (Class B) ADR . . . . . . . 13
200 Telecomunicacoes Brazil ADR . . . . . . 14
210
AEROSPACE AND DEFENSE - 0.3%
220 AlliedSignal. . . . . . . . . . . . . . 12
550 Boeing. . . . . . . . . . . . . . . . . 48
60
Total Technology 748
CAPITAL EQUIPMENT - 3.5%
ELECTRICAL EQUIPMENT - 2.8%
20 ABB (DEM) . . . . . . . . . . . . . . . 25
2,500 Exide . . . . . . . . . . . . . . . . . 60
4,080 GE. . . . . . . . . . . . . . . . . . . 353
500 Siemans (DEM) . . . . . . . . . . . . . 27
2,000 Tomkins ADR . . . . . . . . . . . . . . 30
495
MACHINERY - 0.7%
580 Deere . . . . . . . . . . . . . . . . . 23
100 * Man (DEM) . . . . . . . . . . . . . . . 26
1,600 * Varity. . . . . . . . . . . . . . . . . 77
126
Total Capital Equipment 621
BUSINESS SERVICES AND TRANSPORTATION - 3.6%
COMPUTER SERVICE AND SOFTWARE - 2.3%
1,200 shs Adobe Systems . . . . . . . . . . . . . $ 43
2,140 Automatic Data Processing . . . . . . . 83
1,117 First Data. . . . . . . . . . . . . . . 89
1,000 * Intuit. . . . . . . . . . . . . . . . . 47
480 * Microsoft . . . . . . . . . . . . . . . 57
1,200 * Oracle Systems. . . . . . . . . . . . . 47
1,550 * Sybase. . . . . . . . . . . . . . . . . 37
403
DISTRIBUTION SERVICES - 0.7%
1,240 Alco Standard . . . . . . . . . . . . . 56
1,040 Cardinal Health . . . . . . . . . . . . 75
131
MISCELLANEOUS BUSINESS
SERVICES - 0.3%
1,400 WMX Technologies. . . . . . . . . . . . 46
AIRLINES - 0.3%
420 * AMR . . . . . . . . . . . . . . . . . . 38
600 KLM Royal Dutch Airlines ADR. . . . . . 19
57
Total Business Services and Transportation 637
ENERGY - 3.8%
ENERGY SERVICES - 1.1%
600 Halliburton . . . . . . . . . . . . . . 33
1,490 Schlumberger. . . . . . . . . . . . . . 126
1,000 Total ADR . . . . . . . . . . . . . . . 37
196
INTEGRATED PETROLEUM - DOMESTIC - 1.4%
880 Atlantic Richfield. . . . . . . . . . . 104
620 British Petroleum ADR . . . . . . . . . 66
730 Unocal. . . . . . . . . . . . . . . . . 25
2,360 USX-Marathon. . . . . . . . . . . . . . 48
243
INTEGRATED PETROLEUM - INTERNATIONAL - 1.3%
410 Exxon . . . . . . . . . . . . . . . . . 36
380 Mobil . . . . . . . . . . . . . . . . . 42
400 Repsol ADR. . . . . . . . . . . . . . . 14
700 Royal Dutch Petroleum ADR . . . . . . . 108
470 Texaco. . . . . . . . . . . . . . . . . 39
239
Total Energy 678
PROCESS INDUSTRIES - 3.8%
DIVERSIFIED CHEMICALS - 0.2%
500 shs DuPont. . . . . . . . . . . . . . . . . $ 40
SPECIALTY CHEMICALS - 1.9%
570 3M. . . . . . . . . . . . . . . . . . . 39
2,600 A. Schulman . . . . . . . . . . . . . . 64
200 Akzo Nobel (NLG). . . . . . . . . . . . 24
100 BASF AG (DEM) . . . . . . . . . . . . . 29
2,750 Great Lakes Chemical. . . . . . . . . . 171
1,000 Pall. . . . . . . . . . . . . . . . . . 24
351
PAPER AND PAPER PRODUCTS - 1.5%
2,000 * Dai Nippon Printing (JPY) . . . . . . . 39
1,600 International Paper . . . . . . . . . . 59
3,200 James River . . . . . . . . . . . . . . 84
1,100 Kimberly-Clark. . . . . . . . . . . . . 85
267
FOREST PRODUCTS - 0.2%
470 Georgia-Pacific . . . . . . . . . . . . 33
Total Process Industries 691
BASIC MATERIALS - 1.0%
METALS - 0.5%
480 Alcoa . . . . . . . . . . . . . . . . . 27
340 Cyprus Amax Minerals. . . . . . . . . . 8
1,100 Nucor . . . . . . . . . . . . . . . . . 56
91
MINING - 0.4%
2,370 Barrick Gold. . . . . . . . . . . . . . 64
MISCELLANEOUS MATERIALS - 0.1%
10,000 * Malayan Cement (MYR). . . . . . . . . . 24
Total Basic Materials 179
CONGLOMERATES - 0.1%
8,000 LONRHO (GBP). . . . . . . . . . . . . . 23
Total Conglomerates 23
Total Common Stocks (Cost $9,758) 10,434
Corporate Bonds - 16.4%
$ 25,000 American Safety Razor, Sr. Notes,
9.875%, 8/1/05. . . . . . . . . . . . 25
50,000 Arcadian, Sr. Notes,
10.75%, 5/1/05. . . . . . . . . . . . 54
60,000 B. F. Saul, REIT, Sr. Secured Notes,
11.625%, 4/1/02 . . . . . . . . . . . 61
$ 50,000 Be Aerospace,
9.875%, 2/1/06. . . . . . . . . . . . $ 49
50,000 Black and Decker, MTN,
6.97%, 9/26/96. . . . . . . . . . . . 50
30,000 Boeing Company,
6.35%, 6/15/03. . . . . . . . . . . . 29
60,000 Boise Cascade, Sr. Notes,
7.35%, 2/1/16 . . . . . . . . . . . . 55
50,000 Citicorp, 7.75%, 6/15/06. . . . . . . . 50
50,000 Coca-Cola Bottling Group, Sr. Sub. Notes,
9.00%, 11/15/03 . . . . . . . . . . . 49
50,000 CoinMachine, Sr. Secured Notes,
11.75%, 11/15/05. . . . . . . . . . . 52
75,000 Coleman, Sr. Secured Disc. Notes,
Zero Coupon, 5/27/98. . . . . . . . . 63
50,000 Collins & Aikman,
11.50%, 4/15/06 . . . . . . . . . . . 51
50,000 Coltec Industries, Sr. Sub.
Notes, 10.25%, 4/1/02 . . . . . . . . 51
75,000 Commonwealth Edison, 1st Mtg. Bonds,
6.40%, 10/15/05 . . . . . . . . . . . 67
25,000 Consolidated Cigar, Sr. Sub. Notes,
10.50%, 3/1/03. . . . . . . . . . . . 26
200,000 Continental Airlines, PTC,
6.94%, 10/15/13 . . . . . . . . . . . 188
100,000 Cyprus Minerals Company,
6.625%, 10/15/05. . . . . . . . . . . 94
60,000 Delta, MTN,
8.625%, 6/15/04 . . . . . . . . . . . 63
50,000 Doane Products, Sr. Notes,
10.625%, 3/1/06 . . . . . . . . . . . 50
50,000 Dominion Textile USA, Sr. Notes,
9.25%, 4/1/06 . . . . . . . . . . . . 48
50,000 Dual Drilling, Sr. Sub. Notes,
9.875%, 1/15/04 . . . . . . . . . . . 52
25,000 El Paso Electric, 1st Mtg.
Notes, 8.90%, 2/1/06. . . . . . . . . 25
50,000 Ferrellgas, Sr. Notes,
10.00%, 8/1/01. . . . . . . . . . . . 51
50,000 First Federal Financial,
11.75%, 10/1/04 . . . . . . . . . . . 50
200,000 First USA Bank,
5.85%, 2/22/01. . . . . . . . . . . . 189
25,000 GMAC, 7.125%, 6/1/99. . . . . . . . . . 25
50,000 GNF, 1st Mtg. Notes,
10.625%, 4/1/03 . . . . . . . . . . . 54
$ 25,000 Herff Jones, Sr. Sub. Notes,
11.00%, 8/15/05 . . . . . . . . . . . $ 26
25,000 HMC Acquisition Properties, Sr Notes,
(144a), 9.00%, 12/15/07 . . . . . . . 23
25,000 IMC Fertilizer Group,
9.45%, 12/15/11 . . . . . . . . . . . 25
25,000 K & F Industries, Sr. Sub. Deb.,
13.75%, 8/1/01. . . . . . . . . . . . 26
20,000 Lenfest Communications, Sr. Notes,
8.375%, 11/1/05 . . . . . . . . . . . 18
50,000 Loehmann Holdings, Sr. Notes,
11.875%, 5/15/03. . . . . . . . . . . 52
50,000 MAXXAM Group, Sr. Secured Notes,
11.25%, 8/1/03. . . . . . . . . . . . 50
200,000 Northrop Grumman,
7.00%, 3/1/06 . . . . . . . . . . . . 192
50,000 Owens & Minor, Sr. Sub. Notes,
10.875%, 6/1/06 . . . . . . . . . . . 51
50,000 Owens-Illinois, Sr. Deb.,
11.00%, 12/1/03 . . . . . . . . . . . 54
50,000 Pennsylvania Power and
Light, 6.50%, 4/1/05. . . . . . . . . 47
40,000 Petroleum Heat & Power,
10.125%, 4/1/03 . . . . . . . . . . . 39
35,000 Portola Packaging, Sr. Notes,
10.75%, 10/1/05 . . . . . . . . . . . 36
100,000 Public Service Electric & Gas Company,
8.875%, 6/1/03. . . . . . . . . . . . 108
10,000 Quorum Health Group,
11.875%, 12/15/02 . . . . . . . . . . 11
50,000 Revlon Worldwide, Sr. Secured Disc. Notes,
Zero Coupon, 3/15/98. . . . . . . . . 42
10,000 Safeway, 9.875%, 3/15/07. . . . . . . . 11
100,000 Scotland International Finance, MTN,
6.50%, 2/15/11. . . . . . . . . . . . 90
50,000 Silgan, Sr. Sub. Notes,
11.75%, 6/15/02 . . . . . . . . . . . 51
50,000 Sinclair Broadcasting, Sr. Sub. Notes,
10.00%, 9/30/05 . . . . . . . . . . . 48
25,000 Synthetic Industries, Sr. Sub. Deb.,
12.75%, 12/1/02 . . . . . . . . . . . 26
$ 25,000 Tenet Healthcare, Sr. Notes,
8.625%, 12/1/03 . . . . . . . . . . . $ 25
100,000 Texas Utilities Electric,
7.875%, 4/1/24. . . . . . . . . . . . 97
50,000 Trump Atlantic City, 1st Mtg. Notes,
11.25%, 5/1/06. . . . . . . . . . . . 50
50,000 Tuboscope Vetco International,
Sr. Sub. Notes, 10.75%, 4/15/03 . . . 51
10,000 UCAR Global Enterprises,
12.00%, 1/15/05 . . . . . . . . . . . 11
50,000 Wright Medical Technologies,
Sr. Secured Notes, 10.75%, 7/1/00 . . 49
Total Corporate Bonds (Cost $2,978) 2,930
Foreign Government
Obligations/Agencies - 3.0%
50,000 DEM Bundesrepublic,
6.50%, 7/15/03. . . . . . . . . . . . 33
42,000 CAD Canadian Government
Bonds, 8.50%, 4/1/02. . . . . . . . . 33
17,000,000 JPY European Investor Bank,
4.625%, 2/26/03 . . . . . . . . . . . 172
125,000 DEM German Federal Government Bonds,
8.375%, 5/21/01 . . . . . . . . . . . 92
422,000 FRF Government Of France,
8.50%, 11/25/02 . . . . . . . . . . . 93
40,000,000 ITL Italian Government Bonds,
8.50%, 8/1/04 . . . . . . . . . . . . 25
4,000,000 JPY Japan, 4.50%, 6/20/03 . . . . . . . . . 40
United Kingdom Treasury Notes
27,000 GBP 8.00%, 6/10/03. . . . . . . . . . . . 43
10,000 8.50%, 12/7/05. . . . . . . . . . . . 16
Total Foreign Government
Obligations/Agencies (Cost $546) 547
U.S. Government Mortgage-Backed Securities - 10.4%
Government National
Mortgage Assn.
$291,812 6.00%, 1/15 - 2/15/24 . . . . . . . . 265
243,494 6.50%, 4/15/24 - 4/15/26. . . . . . . 227
$141,944 7.00%, 5/15/23. . . . . . . . . . . . $ 136
484,893 7.50%, 5/15/24 - 11/15/25 . . . . . . 478
617,005 8.00%, 10/15/25 - 6/15/26 . . . . . . 624
92,746 8.50%, 12/15/24 . . . . . . . . . . . 95
31,147 11.50%, 11/15/19. . . . . . . . . . . 35
Total U.S. Government Mortgage-Backed Securities
(Cost $1,878) 1,860
U.S. Government Obligations/Agencies - 2.0%
Tennessee Valley Authority
200,000 7.25%, 7/15/43. . . . . . . . . . . . 186
160,000 8.25%, 4/15/42. . . . . . . . . . . . 170
Total U.S. Government Obligations/Agencies
(Cost $357) 356
Short-Term Investments - 11.6%
COMMERCIAL PAPER - 11.6%
300,000 Countrywide Funding, 5.38%, 7/15/96 . . 299
276,000 Daimler-Benz North America,
5.40%, 7/3/96 . . . . . . . . . . . . 276
1,402,531 Investments in Commercial
Paper through a joint account
5.49 - 5.68%, 7/1/96. . . . . . . . . 1,403
100,000 Tasmanian Public Finance,
5.27%, 9/23/96. . . . . . . . . . . . 99
Total Short-Term Investments (Cost $2,077) 2,077
Total Investments in Securities - 101.7%
of Net Assets (Cost $17,594) 18,204
Other Assets Less Liabilities . . . . . . . . . . . . . . $ (308)
NET ASSETS . . . . . . . . . . . . . . . . . . . $ 17,896
Net Assets Consist of:
Accumulated net investment income -
net of distributions. . . . . . . . . . . . . . . . . . 23
Accumulated net realized gain/loss -
net of distributions. . . . . . . . . . . . . . . . . . 148
Net unrealized gain (loss) . . . . . . . . . . . . . . . . 610
Paid-in-capital applicable to 1,412,013 shares of $0.0001
par value capital stock outstanding; 1,000,000,000
shares of the Corporation authorized. . . . . . . . . . 17,115
NET ASSETS . . . . . . . . . . . . . . . . . . . $ 17,896
NET ASSET VALUE PER SHARE. . . . . . . . . . . . . . . . . $12.67
* Non-income producing
MTN Medium term note
PTC Pass-through Certificate
REIT Real Estate Investment Trust
144a Security was purchased pursuant to Rule 144a under the Securities
Act of 1933 and may not be resold subject to that rule except to
qualified institutional buyers - total of such securities at
period-end amounts to 0.1% of net assets.
AUD Australian dollar
BEL Belgian franc
CAD Canadian dollar
CHF Swiss franc
DEM German deutschemark
DKK Danish krone
FRF French franc
GBP British sterling
HKD Hong Kong dollar
ITL Italian lira
JPY Japanese yen
MYR Malaysian ringgit
NLG Dutch guilder
NZD New Zealand dollar
SEK Swedish krona
SGD Singapore dollar
The accompanying notes are an integral part of these financial statements.
Statement of Operations
T. Rowe Price Personal Strategy Balanced Portfolio / Six Months Ended June 30,
1996 (Unaudited)
In thousands
INVESTMENT INCOME
Income
Interest. . . . . . . . . . . . . . . . . . . . . . . . $ 169
Dividend. . . . . . . . . . . . . . . . . . . . . . . . 71
_________
Total income. . . . . . . . . . . . . . . . . . . . . . 240
_________
Expenses
Investment management and administrative. . . . . . . . 49
_________
Net investment income. . . . . . . . . . . . . . . . . . . 191
_________
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss)
Securities. . . . . . . . . . . . . . . . . . . . . . . 129
Foreign currency transactions . . . . . . . . . . . . . (3)
_________
Net realized gain (loss). . . . . . . . . . . . . . . . 126
_________
Change in net unrealized gain or loss on securities. . . . 98
_________
Net realized and unrealized gain (loss). . . . . . . . . . 224
_________
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS. . . . . $ 415
_________
_________
The accompanying notes are an integral part of these financial statements.
Statement of Changes in Net Assets
T. Rowe Price Personal Strategy Balanced Portfolio (Unaudited)
In thousands
Six Months Ended Year Ended
6/30/96 12/31/95
________________ __________________
INCREASE (DECREASE) IN NET ASSETS
Operations
Net investment income. . . . . . . . $ 191 $ 101
Net realized gain (loss) . . . . . . 126 74
Change in net unrealized
gain or loss . . . . . . . . . . . . 98 512
__________ __________
Increase (decrease) in net assets
from operations. . . . . . . . . . . 415 687
__________ __________
Distributions to shareholders
Net investment income. . . . . . . . (217) (110)
Net realized gain. . . . . . . . . . (43) -
__________ __________
Decrease in net assets
from distributions . . . . . . . . . (260) (110)
__________ __________
Capital share transactions*
Shares sold. . . . . . . . . . . . . 15,012 5,161
Distributions reinvested . . . . . . 260 110
Shares redeemed. . . . . . . . . . . (3,205) (239)
__________ __________
Increase (decrease) in
net assets from capital
share transactions . . . . . . . . . 12,067 5,032
__________ __________
Net equalization . . . . . . . . . . . 49 16
__________ __________
NET ASSETS
Increase (decrease) during period. . . 12,271 5,625
Beginning of period. . . . . . . . . . 5,625 -
__________ __________
End of period. . . . . . . . . . . . . $17,896 $ 5,625
__________ __________
__________ __________
*Share information
Shares sold. . . . . . . . . . . . . 1,193 463
Distributions reinvested . . . . . . 21 9
Shares redeemed. . . . . . . . . . . (254) (20)
__________ __________
Increase (decrease) in
shares outstanding . . . . . . . . . 960 452
__________ __________
__________ __________
The accompanying notes are an integral part of these financial statements.
Notes To Financial Statements
T. Rowe Price Personal Strategy Balanced Portfolio / June 30, 1996 (Unaudited)
Note 1 - Significant Accounting Policies
T. Rowe Price Equity Series, Inc. (the corporation) is registered under the
Investment Company Act of 1940. The Personal Strategy Balanced Portfolio (the
fund), a diversified, open-end management investment company, is one of the
portfolios established by the corporation and commenced operations on December
30, 1994. The shares of the fund are currently being offered only to separate
accounts of certain insurance companies as an investment medium for both
variable annuity contracts and variable life insurance policies.
Valuation Equity securities listed or regularly traded on a securities
exchange are valued at the last quoted sales price at the time 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 that are not traded on a particular day
and securities that are 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.
Debt securities are generally traded in the over-the-counter market and
are valued at a price deemed best to reflect fair value as quoted by dealers
who make markets in these securities or by an independent pricing service.
Short-term debt securities are valued at their cost which, when combined with
accrued interest, approximates fair value.
For purposes of determining the fund's net asset value per share, the
U.S. dollar value of all assets and liabilities initially expressed in foreign
currencies is determined by using the mean of the bid and offer prices of such
currencies against U.S. dollars quoted by a major bank.
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.
Currency Translation Assets and liabilities are translated into U.S. dollars
at the prevailing exchange rate at the end of the reporting period. Purchases
and sales of securities and income and expenses are translated into U.S.
dollars at the prevailing exchange rate on the dates of such transactions. The
effect of changes in foreign exchange rates on realized and unrealized
security gains and losses is reflected as a component of such gains and
losses.
Premiums and Discounts Premiums and discounts on debt securities, other than
mortgage-backed securities, are amortized for both financial reporting and tax
purposes. Premiums and discounts on mortgage-backed securities are recognized
upon principal repayment as gain or loss for financial reporting purposes and
as ordinary income for tax purposes.
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. 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 - Investment Transactions
Commercial Paper Joint Account The fund, and other affiliated funds, may
transfer uninvested cash into a commercial paper joint account, the daily
aggregate balance of which is invested in high-grade commercial paper. All
securities purchased by the joint account satisfy the fund's criteria as to
quality, yield, and liquidity.
Other Purchases and sales of portfolio securities, other than short-term and
U.S. government securities, aggregated $11,041,000 and $1,576,000,
respectively, for the six months ended June 30, 1996. Purchases and sales of
U.S. government securities aggregated $1,521,000 and $39,000, respectively,
for the six months ended June 30, 1996.
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, 1996, the aggregate cost of investments for federal income
tax and financial reporting purposes was $17,594,000, and net unrealized gain
aggregated $610,000, of which $908,000 related to appreciated investments and
$298,000 to depreciated investments.
Note 4 - Related Party Transactions
The investment management and administrative agreement between the fund and T.
Rowe Price Associates, Inc. (the manager) provides for an all-inclusive annual
fee, computed daily and paid monthly, equal to 0.90% of the fund's average
daily net assets. Pursuant to the agreement, investment management,
shareholder servicing, transfer agency, accounting, and custody services are
provided to the fund, and interest, taxes, brokerage commissions, and
extraordinary expenses are paid directly by the fund.
During the six months ended June 30, 1996, the fund, in the ordinary
course of business, paid commissions of $2,000 to, and placed security
purchase and sale orders aggregating $303,000 with, certain affiliates of the
manager in connection with the execution of various portfolio transactions.
Financial Highlights
T. Rowe Price Personal Strategy Balanced Portfolio /(Unaudited)
For a share outstanding throughout each period
__________________________________________
Six Months 12/30/94
Ended to
6/30/96 12/31/95
__________ _________
NET ASSET VALUE, BEGINNING OF PERIOD . . . . . $12.43 $10.00
______ ______
Investment activities
Net investment income. . . . . . . . . . . . 0.21 0.42
Net realized and unrealized gain (loss). . . 0.30 2.41
______ ______
Total from investment activities . . . . . . 0.51 2.83
______ ______
Distributions
Net investment income. . . . . . . . . . . . (0.19) (0.40)
Net realized gain. . . . . . . . . . . . . . (0.08) -
______ ______
Total distributions. . . . . . . . . . . . . (0.27) (0.40)
______ ______
NET ASSET VALUE, END OF PERIOD . . . . . . . . $12.67 $12.43
______ ______
______ ______
RATIOS/SUPPLEMENTAL DATA
Total return . . . . . . . . . . . . . . . . . 4.14% 28.66%
Ratio of expenses to average net assets. . . . 0.90%! 0.90%!
Ratio of net investment income to
average net assets . . . . . . . . . . . . . 3.51%! 3.69%!
Portfolio turnover rate. . . . . . . . . . . . 31.5%! 39.3%!
Average commission rate paid . . . . . . . . . $0.0444 -
Net assets, end of period (in thousands) . . . $17,896 $5,625
! Annualized
Chart 1 - Asset Allocation pie chart showing stocks 58%, bonds 32%, and money
markets 10%.
Chart 2 - Interest Rate Levels chart showing yields on 30-year, 5-year, and
1-year Treasuries from 6/30/95 to 6/30/96.
Chart 3 - SEC graph showing the cumulative growth of $10,000 invested in the
Personal Strategy Balanced Portfolio from inception (12/30/94) compared with
$10,000 invested in a broad-based index over the same period.
