<PAGE> 1
T. ROWE PRICE PERSONAL STRATEGY BALANCED PORTFOLIO
[T.ROWE PRICE LOGO]
SEMIANNUAL REPORT
June 30, 1995
DEAR INVESTOR
This is our first report since the fund's inception on December 31, 1994, and
we want to welcome you as an investor. We will send you reports twice a year
reviewing the financial market, the fund's performance, and our investment
strategy and outlook. This report examines the six-month period ended June 30,
1995.
The first half of 1995 was a nearly perfect environment for stocks and
bonds: falling interest rates, rising corporate earnings, a slowing yet
fundamentally sound economy, and relatively stable inflation. As a result, your
fund, with its mix of equities and fixed income securities, enjoyed the best of
both worlds.
The second quarter mirrored the first, with the unmanaged Standard &
Poor's 500 Stock Index up 9.6%, bringing the six-month gain to a resounding
20.2%. Based on the historical 10% return on equities, the market provided two
years' worth of average gains in only six months. The rally was led by
technology stocks, with the financial sector also responding strongly to
falling interest rates. The S&P 500, dominated by large companies, outperformed
many other equity benchmarks and stock mutual funds for both the quarter and
the half. However, it was outpaced by the Nasdaq Composite Index, which is
laden with technology issues.
After a lackluster first quarter, hampered by continuing fallout from the
devaluation of the Mexican peso, international stocks recovered enough to
generate positive returns for the second quarter and the first half. European
and Asian markets, except Japan, posted gains of around 8% in the second
quarter, bringing six-month returns to around 12% in Europe and 5% in Asia.
The bond market also continued to soar, as increasing signs of a slower
economic growth led to falling interest rates across all maturities. The
benchmark 30-year Treasury bond yield dropped by more than one percentage
point, from 7.8% in January to 6.6% at the end of June. As measured by the
INTEREST RATE LEVELS
[FIGURE 1]
Lehman Brothers Aggregate Bond Index, the bond market returned 6.1% in the
second quarter versus 5.0% in the previous period, for a six-month return of
11.4%.
In early July, the Federal Reserve finally acknowledged what the bond
market had been signaling since late last year, that the slowing economy called
for lower interest rates. The Fed lowered the federal funds target rate on
overnight loans among banks by one-quarter percentage point, to 5.75%, its
first reduction in nearly three years.
PERFORMANCE AND STRATEGY REVIEW
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% variations permitted for
each.
Your fund has enjoyed an excellent year so far, benefiting from the broad
rallies in both stock and bond markets. Stocks outperformed bonds somewhat, but
results for both asset classes were spectacular.
<TABLE>
<CAPTION>
PERFORMANCE COMPARISON
-------------------------------------------------------
Six Months Ended 6/30/95
------------------------
<S> <C>
Personal Strategy
Balanced Portfolio 15.9%
Combined Index Portfolio* 16.6
-------------------------------------------------------
</TABLE>
*An unmanaged portfolio composed of 60% stocks (S&P 500) and 40% bonds (Lehman
Brothers Aggregate Bond Index).
On June 30, 1995, the fund was invested 57.5% in stocks, 38% in bonds, and
4.5% in cash equivalents (see pie chart on the next page). After its powerful
first half run, we believe continuing strong earnings will be necessary to
sustain stock market valuations at current levels. Therefore, we retreated
below the 60% midpoint of our allowable equity range. Since inception, we have
increased the fund's emphasis on growth stocks versus value-oriented stocks,
moving from an equal weighting to a 60/40% tilt toward the former. During
periods of slow economic growth, investors typically seek rapidly growing
companies because their consistently rising earnings are expected to outpace a
sluggish economy.
Fixed income securities do well when the economy slows. To take advantage
of the appreciation in bond prices that accompanied falling rates, we maximized
the fund's exposure to bonds and lengthened durations. (The longer a fund's
duration, the greater its price is sensitive to interest rate changes.) With
the dollar stabilizing against key foreign currencies, limiting the benefits of
currency conversion, we lowered the fund's exposure to foreign, unhedged bonds.
As the economy slowed, we began to favor high-quality bonds over high-yield
(lower-quality) bonds, which are more sensitive to the outlook for the economy
and corporate earnings than to fluctuations in interest rates.
1
<PAGE> 2
ASSET ALLOCATION
-------------------------------------------------------------------------
[FIGURE 2]
<TABLE>
<CAPTION>
BENCHMARK RANGE
--------------------------
<S> <C> <C>
Money Markets 10% 0 - 20%
Bonds 30% 20 - 40%
Stocks 60% 50 - 70%
</TABLE>
-------------------------------------------------------------------------
SUMMARY AND OUTLOOK
The slowing economy and early signs of progress in reducing the size of the
federal budget deficit provided the impetus for rising bond prices and falling
interest rates. Meanwhile, soaring corporate earnings along with declining
interest rates helped propel stock prices to record levels. While lower
interest rates should help the economy regain its momentum, growth is likely to
remain modest in the second half of 1995.
We anticipate a period of stability following the recent sharp decline in
interest rates, which would be favorable for stocks and bonds. Neither is
likely to keep up the torrid pace of the first half, as the market volatility
after the close of the fund's reporting period attests. Nevertheless, we
believe the present environment offers prospects for continuing good
performance in the months ahead.
Respectfully submitted,
/s/ PETER VAN DYKE
--------------------
Peter Van Dyke
President and Chairman of the
Investment Advisory Committee
July 26, 1995
SECTOR DIVERSIFICATION
-------------------------------------------------------------------------
<TABLE>
<CAPTION>
June 30, 1995
Percent of
Net Assets
----------
<S> <C>
Money Markets 4.5%
-------------------------------------------------------------------------
Commercial Paper 3.1
Other Assets Less Liabilities 1.4
Bonds 38.0
-------------------------------------------------------------------------
Corporate 17.9
U.S. Government Mortgage-Backed 10.6
Foreign Government Obligations/Agencies 5.3
U.S. Government Obligations/Agencies 4.2
Stocks 57.5
-------------------------------------------------------------------------
Ten Largest Holdings 12.8
--------------------
Freddie Mac 1.7
GE 1.7
Abbott Laboratories 1.5
Fannie Mae 1.3
Schlumberger 1.3
Pfizer 1.2
PepsiCo 1.2
Coke 1.0
Johnson & Johnson 1.0
Vodafone 0.9
-------------------------------------------------------------------------
</TABLE>
2
<PAGE> 3
STATEMENT OF NET ASSETS
T. Rowe Price Personal Strategy Balanced Portfolio / June 30, 1995 (Unaudited)
<TABLE>
<CAPTION>
Value
----------
<S> <C>
COMMON STOCKS & RIGHTS -- 57.5%
FINANCIAL -- 7.5%
----------------------------------------------------------------------
BANK & TRUST -- 1.6%
180 shs. Chemical Banking . . . . $ 8,505
240 J. P. Morgan . . . . . . 16,830
200 KeyCorp . . . . . . . . 6,275
120 Mellon Bank . . . . . . 4,995
36,605
INSURANCE -- 2.1%
100 American International
Group . . . . . . . 11,400
400 PartnerRe Holdings ADR . 10,425
200 PMI Group . . . . . . . 8,675
270 UNUM . . . . . . . . . . 12,656
400 Willis-Corroon ADR . . . 4,800
47,956
FINANCIAL SERVICES -- 3.8%
250 American Express . . . . 8,781
330 Fannie Mae . . . . . . . 31,144
570 Freddie Mac . . . . . . 39,187
100 H&R Block . . . . . . . 4,113
130 Sallie Mae . . . . . . . 6,094
89,319
TOTAL FINANCIAL 173,880
UTILITIES -- 2.7%
----------------------------------------------------------------------
TELEPHONE -- 1.3%
200 ALLTEL . . . . . . . . . 5,075
120 AT&T . . . . . . . . . . 6,375
160 SBC Communications . . . 7,620
300 Sprint . . . . . . . . . 10,087
29,157
ELECTRIC UTILITIES -- 1.4%
500 Centerior Energy . . . . 4,812
270 Entergy . . . . . . . . 6,514
300 Niagara Mohawk . . . . . 4,425
250 PacifiCorp . . . . . . . 4,688
140 Texas Utilities . . . . 4,813
300 Unicom . . . . . . . . . 7,987
33,239
TOTAL UTILITIES 62,396
CONSUMER NONDURABLES -- 18.5%
----------------------------------------------------------------------
BEVERAGES -- 2.6%
140 Anheuser-Busch . . . . . 7,962
380 Coke . . . . . . . . . . 24,225
600 PepsiCo . . . . . . . . 27,375
59,562
FOOD PROCESSING -- 2.6%
170 Campbell . . . . . . . . 8,330
130 CPC International . . . 8,027
230 General Mills . . . . . 11,816
100 Pioneer Hi-Bred . . . . 4,188
180 Ralston Purina . . . . . 9,180
670 Sara Lee . . . . . . . . 19,095
60,636
HOSPITAL SUPPLIES/HOSPITAL
MANAGEMENT -- 3.0%
840 Abbott Laboratories . . 34,020
260 Baxter International . . 9,458
341 *Boston Scientific . . . 10,869
340 Columbia/HCA
Healthcare . . . . . 14,705
69,052
PHARMACEUTICALS -- 5.5%
340 *ALZA . . . . . . . . . . 7,948
120 American Home Products . 9,285
90 Bristol-Myers Squibb . . 6,131
90 Eli Lilly . . . . . . . 7,065
340 Johnson & Johnson . . . 22,992
310 Pfizer . . . . . . . . . 28,636
200 Schering-Plough . . . . 8,825
400 SmithKline Beecham
ADR . . . . . . . . 18,100
150 Upjohn . . . . . . . . . 5,681
140 Warner-Lambert . . . . . 12,093
126,756
MISCELLANEOUS CONSUMER
PRODUCTS -- 4.8%
370 American Greetings
(Class A) . . . . . 10,846
300 Brunswick . . . . . . . 5,100
220 Colgate-Palmolive . . . 16,087
270 *CUC International . . . 11,340
270 Harcourt General . . . . 11,475
270 Hasbro . . . . . . . . . 8,573
340 Newell . . . . . . . . . 8,330
260 Philip Morris . . . . . 19,337
120 Tambrands . . . . . . . 5,130
530 UST . . . . . . . . . . 15,768
111,986
TOTAL CONSUMER NONDURABLES 427,992
CONSUMER SERVICES -- 7.9%
----------------------------------------------------------------------
GENERAL MERCHANDISERS -- 1.0%
148 *Carson Pirie Scott . . . 2,424
100 Dayton Hudson . . . . . 7,175
100 Sears . . . . . . . . . 5,987
600 TJX . . . . . . . . . . 7,950
23,536
SPECIALTY MERCHANDISERS -- 0.7%
200 *Federated Department
Stores . . . . . . . 5,150
370 *Toys "R" Us . . . . . . 10,823
15,973
</TABLE>
3
<PAGE> 4
STATEMENT OF NET ASSETS
T. Rowe Price Personal Strategy Balanced Portfolio / June 30, 1995 (Unaudited)
<TABLE>
<S> <C>
ENTERTAINMENT & LEISURE -- 1.9%
270 shs. Disney . . . . . . . . . . . $ 15,018
270 McDonald's . . . . . . . . . 10,564
120 Reader's Digest (Class B) . 4,905
70 *Viacom (Class A) . . . . . . 3,255
200 *Viacom (Class B) . . . . . . 9,275
700 rts. *Viacom . . . . . . . . . . . 1,050
44,067
MEDIA & COMMUNICATIONS -- 4.2%
120 Dun & Bradstreet . . . . . . 6,300
315 Gaylord Entertainment . . . 7,954
300 *Multimedia . . . . . . . . . 11,625
300 Reuters ADR . . . . . . . . 15,019
400 Time Warner . . . . . . . . 16,450
162 Times Mirror (Class A) . . . 3,868
300 Turner Broadcasting
Systems (Class B) . . . 6,150
540 Vodafone ADR . . . . . . . . 20,452
40 Washington Post (Class B) . 10,440
98,258
RESTAURANTS -- 0.1%
230 *Darden Restaurants . . . . . 2,501
TOTAL CONSUMER SERVICES 184,335
CONSUMER CYCLICALS -- 0.8%
------------------------------------------------------------------
MISCELLANEOUS CONSUMER
DURABLES -- 0.8%
200 Corning . . . . . . . . . . 6,550
200 Eastman Kodak . . . . . . . 12,125
TOTAL CONSUMER CYCLICALS 18,675
TECHNOLOGY -- 3.1%
------------------------------------------------------------------
ELECTRONIC SYSTEMS -- 0.6%
300 Honeywell . . . . . . . . . 12,938
INFORMATION PROCESSING -- 0.4%
110 IBM . . . . . . . . . . . . 10,560
TELECOMMUNICATIONS -- 1.0%
140 *Cox Communications
(Class A) . . . . . . . 2,713
200 *DSC Communications . . . . . 9,312
300 Northern Telecom . . . . . . 10,950
22,975
AEROSPACE & DEFENSE -- 1.1%
120 AlliedSignal . . . . . . . . 5,340
320 Boeing . . . . . . . . . . . 20,040
25,380
TOTAL TECHNOLOGY 71,853
CAPITAL EQUIPMENT -- 3.2%
------------------------------------------------------------------
ELECTRICAL EQUIPMENT -- 2.2%
300 Exide . . . . . . . . . . . 12,900
680 GE . . . . . . . . . . . . 38,335
51,235
MACHINERY -- 1.0%
80 Caterpillar . . . . . . . . 5,140
800 *Coltec Industries . . . . . 13,800
60 Deere . . . . . . . . . . . 5,138
24,078
TOTAL CAPITAL EQUIPMENT 75,313
BUSINESS SERVICES &
TRANSPORTATION -- 4.9%
------------------------------------------------------------------
COMPUTER SERVICE & SOFTWARE -- 2.0%
170 Automatic Data
Processing . . . . . . . . . 10,689
100 *Intuit . . . . . . . . . . . 7,606
100 *Lotus Development . . . . . 6,381
80 *Microsoft . . . . . . . . . 7,235
300 *Oracle Systems . . . . . . . 11,569
150 *Sybase . . . . . . . . . . . 4,359
47,839
DISTRIBUTION SERVICES -- 1.3%
170 Alco Standard . . . . . . . 13,579
340 Cardinal Health . . . . . . 16,065
29,644
MISCELLANEOUS BUSINESS
SERVICES -- 1.2%
220 Browning-Ferris . . . . . . 7,948
170 Deluxe Corp. . . . . . . . . 5,631
500 WMX Technologies . . . . . . 14,187
27,766
AIRLINES -- 0.4%
120 *AMR . . . . . . . . . . . . 8,955
TOTAL BUSINESS SERVICES & TRANSPORTATION 114,204
ENERGY -- 4.2% . . . . . . . . . . . .
------------------------------------------------------------------
ENERGY SERVICES -- 2.0%
440 Halliburton . . . . . . . . 15,730
490 Schlumberger ADR . . . . . . 30,441
46,171
INTEGRATED PETROLEUM -
DOMESTIC -- 1.3%
80 Atlantic Richfield . . . . . 8,780
120 British Petroleum ADR . . . 10,275
230 Unocal . . . . . . . . . . . 6,354
260 USX-Marathon . . . . . . . . 5,135
30,544
INTEGRATED PETROLEUM -
INTERNATIONAL -- 0.9%
110 Exxon . . . . . . . . . . . 7,769
80 Mobil . . . . . . . . . . . 7,680
70 Texaco . . . . . . . . . . . 4,594
20,043
TOTAL ENERGY 96,758
</TABLE>
4
<PAGE> 5
STATEMENT OF NET ASSETS
T. Rowe Price Personal Strategy Balanced Portfolio / June 30, 1995 (Unaudited)
<TABLE>
<S> <C>
PROCESS INDUSTRIES -- 2.8%
-----------------------------------------------------------
DIVERSIFIED CHEMICALS -- 0.2%
60 shs. Monsanto . . . . . . . . . $ 5,408
SPECIALTY CHEMICALS -- 2.0%
170 3M . . . . . . . . . . . . . 9,732
250 Great Lakes Chemical . . . . 15,062
300 Pall . . . . . . . . . . . . 6,675
100 Rohm & Haas . . . . . . . . . 5,488
200 Sigma Aldrich . . . . . . . . 9,825
46,782
PAPER & PAPER PRODUCTS -- 0.3%
100 Mead . . . . . . . . . . . . 5,938
FOREST PRODUCTS -- 0.3%
70 Georgia-Pacific . . . . . . . 6,072
TOTAL PROCESS INDUSTRIES 64,200
BASIC MATERIALS -- 1.9%
-----------------------------------------------------------
METALS -- 1.5%
180 Alcoa . . . . . . . . . . . . 9,023
410 *Alumax . . . . . . . . . . . 12,761
140 Cyprus Amax Minerals . . . . 3,990
340 De Beers ADR . . . . . . . . 8,840
34,614
MINING -- 0.4%
370 Barrick Gold . . . . . . . . 9,342
TOTAL BASIC MATERIALS . . . . . . . . . . . . . 43,956
TOTAL COMMON STOCKS & RIGHTS
(COST $1,137,854) . . . . . . . . . . . . . 1,333,562
CORPORATE BONDS -- 17.9%
$ 10,000 American Media, Sr. Sub.
Notes, 11.625%,
11/15/04 . . . . . . . . . 10,700
10,000 Arcadian, Sr. Notes, Series
B, 10.75%, 5/1/05 . . . . 10,075
50,000 Black & Decker, MTN,
6.97%, 9/26/96 . . . . . . 50,325
1,748 Carson Pirie Scott, 13.00%,
3/28/05 . . . . . . . . . 1,750
50,000 Citicorp, 7.75%, 6/15/06 . . 52,419
10,000 Coca-Cola Bottling Group,
Sr. Sub. Notes,
9.00%, 11/15/03 . . . . . 9,850
20,000 Crown Central Petroleum,
Sr. Notes, 10.875%,
2/1/05 . . . . . . . . . . 20,900
60,000 Delta Air Lines, MTN,
8.625%, 6/15/04 . . . . . 63,031
10,000 Exide, Sr. Notes, 10.75%,
12/15/02 . . . . . . . . . 10,575
10,000 Ferrellgas, Sr. Notes,
10.00%, 8/1/01 . . . . . . 10,400
10,000 Firstfed Financial, 11.75%,
10/1/04 . . . . . . . . . 10,050
25,000 General Motors Acceptance
Corp., 7.125%, 6/1/99 . . 25,378
5,000 Loral, 8.375%, 6/15/24 . . . 5,320
10,000 National Medical
Enterprises, Sr. Sub.
Notes, 10.125%,
3/1/05 . . . . . . . . . . 10,562
50,000 Niagara Mohawk, 6.625%,
7/1/05 . . . . . . . . . . 47,951
10,000 Quorum Health Group,
11.875%, 12/15/02 . . . . 10,950
10,000 Riverwood International,
10.75%, 6/15/00 . . . . . 10,775
10,000 Safeway, 9.875%, 3/15/07 . . 11,400
10,000 Silgan, Sr. Sub. Notes,
11.75%, 6/15/02 . . . . . 10,450
20,000 Ucar Global Enterprises,
12.00%, 1/15/05 . . . . . 21,600
10,000 Westpoint Stevens, Sr.
Notes, 8.75%,
12/15/01 . . . . . . . . . 9,850
TOTAL CORPORATE BONDS (COST $392,353) . . . . . 414,311
FOREIGN GOVERNMENT OBLIGATIONS/AGENCIES -- 5.3%
50,000 DEM German Federal
Government Bonds,
6.50%, 7/15/03 . . . . . . 35,039
40,000,000 ITL Italian Government Bonds,
8.50%, 8/1/04 . . . . . . 19,584
4,000,000 JPY Japanese Government
Bonds, 4.50%,
6/20/03 . . . . . . . . . 52,483
10,000 GBP United Kingdom Treasury
Notes, 8.50%, 12/7/05 . . 15,921
TOTAL FOREIGN GOVERNMENT
OBLIGATIONS/AGENCIES (COST $108,918) 123,027
U.S. GOVERNMENT MORTGAGE-BACKED
SECURITIES -- 10.6%
Government National
Mortgage Assn., I,
$ 100,706 6.50%, 4/15/24 . . . . . . 96,777
101,693 8.50%, 12/15/24 . . . . . 105,633
39,661 11.50%, 11/15/19 . . . . . 44,475
TOTAL U.S. GOVERNMENT MORTGAGE-BACKED
SECURITIES (COST $230,910) 246,885
U.S. GOVERNMENT OBLIGATIONS/AGENCIES -- 4.2%
90,000 Tennessee Valley Authority,
8.25%, 4/15/42 . . . . . . 97,202
TOTAL U.S. GOVERNMENT OBLIGATIONS/AGENCIES
(COST $92,179) 97,202
</TABLE>
5
<PAGE> 6
STATEMENT OF NET ASSETS
T. Rowe Price Personal Strategy Balanced Portfolio / June 30, 1995 (Unaudited)
<TABLE>
<S> <C>
SHORT-TERM INVESTMENTS -- 3.1%
COMMERCIAL PAPER -- 3.1%
$ 72,000 Cargill Financial Services,
6.10%, 7/3/95 . . . . . . $ 71,963
TOTAL SHORT-TERM INVESTMENTS (COST $71,963) . . 71,963
===============================================================
TOTAL INVESTMENTS IN SECURITIES -- 98.6% OF
NET ASSETS (COST $2,034,177) 2,286,950
===============================================================
OTHER ASSETS LESS LIABILITIES . . . . . . . . 31,623
----------
</TABLE>
<TABLE>
<CAPTION>
NET ASSETS CONSIST OF: Value
---------
<S> <C> <C>
Accumulated net investment
income - net of distributions. . . $ 2,191
Accumulated net realized
gain/loss - net of distributions 23,961
Net unrealized gain (loss) . . . . . 253,448
Paid-in-capital applicable to
203,534 shares of $0.0001
par value capital stock
outstanding; 1,000,000,000
shares authorized . . . . . . . . 2,038,973
---------
NET ASSETS . . . . . . . . . . . . . $ 2,318,573
============
NET ASSET VALUE PER SHARE. . . . . . $ 11.39
=======
===============================================================
</TABLE>
* Non-income producing
MTN Medium term note
DEM German deutschemark
GBP British sterling
ITL Italian lira
JPY Japanese yen
The accompanying notes are an integral part of these financial statements.
6
<PAGE> 7
STATEMENT OF OPERATIONS
T. Rowe Price Personal Strategy Balanced Portfolio / From Dec. 30, 1994
(Commencement of Operations) to June 30, 1995 (Unaudited)
<TABLE>
<CAPTION>
<S> <C>
INVESTMENT INCOME
Income
Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 36,162
Dividend . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,675
----------
Total income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49,837
----------
Expenses
Investment management and administrative . . . . . . . . . . . . . . . . 9,503
----------
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . 40,334
----------
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,151
Foreign currency transactions . . . . . . . . . . . . . . . . . . . . . 3,810
----------
Net realized gain (loss) . . . . . . . . . . . . . . . . . . . . . . . . 23,961
----------
Change in net unrealized gain or loss on:
Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 252,773
Other assets and liabilities denominated in foreign currencies . . . . . 675
----------
Change in net unrealized gain or loss . . . . . . . . . . . . . . . . . 253,448
----------
Net realized and unrealized gain (loss) . . . . . . . . . . . . . . . . . . 277,409
----------
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS . . . . . . . . . . . . . $ 317,743
==========
====================================================================================================
</TABLE>
The accompanying notes are an integral part of these financial statements.
7
<PAGE> 8
STATEMENT OF CHANGES IN NET ASSETS
T. Rowe Price Personal Strategy Balanced Portfolio (Unaudited)
<TABLE>
<CAPTION>
From Dec. 30, 1994
(Commencement of
Operations) to
June 30, 1995
-------------------
<S> <C>
INCREASE (DECREASE) IN NET ASSETS FROM
Operations
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . $ 40,334
Net realized gain (loss) . . . . . . . . . . . . . . . . . . . . . . . . 23,961
Change in net unrealized gain or loss . . . . . . . . . . . . . . . . . 253,448
----------
Increase (decrease) in net assets from operations . . . . . . . . . . . 317,743
----------
Distributions to shareholders
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . (38,176)
----------
Capital share transactions(1)
Shares sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,004,895
Distributions reinvested . . . . . . . . . . . . . . . . . . . . . . . . 38,148
Shares redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4,071)
----------
Increase (decrease) in net assets from capital share transactions . . . 2,038,972
----------
Net equalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
----------
Increase (decrease) in net assets . . . . . . . . . . . . . . . . . . . . . 2,318,573
NET ASSETS
Beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . --
----------
End of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $2,318,573
==========
==================================================================================================
(1)Share information
Shares sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 200,449
Distributions reinvested . . . . . . . . . . . . . . . . . . . . . . . . 3,454
Shares redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . . (369)
----------
Increase (decrease) in shares outstanding . . . . . . . . . . . . . . . 203,534
==========
==================================================================================================
</TABLE>
The accompanying notes are an integral part of these financial statements.
8
<PAGE> 9
NOTES TO FINANCIAL STATEMENTS
T. Rowe Price Personal Strategy Balanced Portfolio / June 30, 1995 (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. 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.
A) 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.
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.
B) 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.
C) Premiums and Discounts - Premiums and discounts on debt securities are
amortized for both financial and tax reporting purposes.
D) 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 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 - ORGANIZATION
The fund was organized on July 13, 1994, and had no operations prior to
December 30, 1994, other than those related to organizational matters.
NOTE 3 - INVESTMENT TRANSACTIONS
Purchases and sales of portfolio securities, other than short-term and U.S.
government securities, aggregated $1,821,942 and $188,248, respectively, for
the period ended June 30, 1995. Purchases and sales of U.S. government
securities aggregated $611,892 and $304,243 respectively, for the period ended
June 30, 1995.
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 June 30, 1995, the aggregate cost of investments for federal income tax
and financial reporting purposes was $2,034,177 and net unrealized gain
aggregated $252,773 of which $259,579 related to appreciated investments and
$6,806 to depreciated investments.
NOTE 5 - 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.
9
<PAGE> 10
FINANCIAL HIGHLIGHTS
T. Rowe Price Personal Strategy Balanced Portfolio / From December 30, 1994
(Commencement of Operations)
to June 30, 1995 (Unaudited)
<TABLE>
<CAPTION>
For a share outstanding throughout the period
---------------------------------------------
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD . . . . . . . . . . . . . . . . . . . $10.00
------
Investment Activities
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . 0.20
Net realized and unrealized gain (loss) . . . . . . . . . . . . . . . . 1.38
------
Total from Investment Activities . . . . . . . . . . . . . . . . . . . . . 1.58
------
Distributions
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . (0.19)
------
NET ASSET VALUE, END OF PERIOD . . . . . . . . . . . . . . . . . . . . . . $11.39
======
=====================================================================================================================
RATIOS/SUPPLEMENTAL DATA
Total Return . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.9%
Ratio of Expenses to Average Net Assets . . . . . . . . . . . . . . . . . . 0.90%+
Ratio of Net Investment Income to Average Net Assets . . . . . . . . . . . 3.79%+
Portfolio Turnover Rate . . . . . . . . . . . . . . . . . . . . . . . . . . 47.3%+
Net Assets, End of Period . . . . . . . . . . . . . . . . . . . . . . . . $2,318,573
=====================================================================================================================
</TABLE>
+Annualized.
10
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T. Rowe Price Personal Strategy Balanced Portfolio
Semiannual Report
June 30, 1995
Edgar description: A 4-line chart showing interest rate levels on the 30-Year
Treasury Bond, 5-Year Treasury note, 1-Year Treasury Bill and the Federal Funds
rate from 12/31/94 to 6/30/95
Edgar description: A pie chart showing percent of assets allocated to stocks,
bonds, and money market securities as of 6/30/95. Accompanying table also
lists benchmark and allocation range for each asset class.
