Annual Report
Personal Strategy Funds
May 31, 1996
T. Rowe Price
REPORT HIGHLIGHTS
o U.S. stocks performed well during the past six months. However, bonds
were hurt as yields rose sharply from their January lows.
o Foreign stocks trailed their U.S. counterparts but have kept pace with
or exceeded the returns of domestic stocks over the long term.
o The Personal Strategy Funds registered solid returns during the past 6-
and 12-month periods. The Income Fund outperformed its benchmark, while
both the Balanced and Growth Funds lagged theirs partly due to foreign
stock holdings.
o Bond prices could fall a bit further from current levels but may have
discounted much of the news on inflation.
o We expect bond returns to come principally from income. Foreign stocks
appear more attractively valued than domestic stocks; exposure to
international markets could benefit your funds' performance.
Fellow Shareholders
The U.S. stock market continued to perform well during the six months ended
May 31, 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
funds, which are well diversified, generated solid returns over the last six
months and even stronger results during the 12-month period.
MARKET REVIEW
The funds' investment committee meets monthly to adjust the weightings of
stocks, bonds, and money market securities within the appropriate ranges for
each fund based on market conditions and economic fundamentals. The committee
increased the weightings in stocks while maintaining minimal weightings in
cash equivalents. In February, the committee elected to add a foreign stock
component to enhance the overall diversification of the funds.
Chart 1 - Interest Rate Levels
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 May, 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 positive returns of
about 3% over the last six months and more than 10% for the last 12 months.
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.
The stock market, on the other hand, continued to post solid advances. The
unmanaged Standard & Poor's 500 Stock Index registered a gain of 11.8% for the
last six months and 28.4% for the last 12 months. Small-cap stocks were even
more robust, outperforming 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 largely domes-tic portfolio.
We believe foreign equities offer good value at this time, and, as global
markets improve, they could favorably influence the performance of your funds.
PERFORMANCE AND STRATEGY REVIEW
Personal Strategy Income Fund
This fund's investment goal is to generate the highest total return consistent
with an emphasis on income first and capital appreciation second. The typical
mix of securities for the fund is 40% bonds, 40% stocks, and 20% money market
securities, although these figures can vary by as much as 10 percentage points
above or below these levels.
Chart 2 - Asset Allocation
You will note that the bond and cash components of the portfolio fell outside
their parameters at fiscal year-end. A temporary dip in assets caused cash to
drop below the minimum at the end of May, pushing up the percentages allocated
to the other sectors. This situation was adjusted after the end of the period.
On May 31, the mix of securities had changed somewhat to incorporate the
foreign equity component. The weighting in stocks increased to 43% and the
weighting in money market securities decreased to 6%, as mentioned. The bond
component was up slightly at 51%. We continued to favor a blend of
investment-grade and high-yield securities in this market environment; we
expect high-yield securities in particular to continue to benefit from a
healthy economy. We underweighted foreign bonds, since we expect the U.S.
dollar to continue in its strengthening trend against major foreign
currencies.
PERFORMANCE COMPARISON
Periods Ended 5/31/96 6 Months 12 Months
Personal Strategy Income Fund 4.16% 13.84%
Combined Index Portfolio * 3.87 13.50
*An unmanaged portfolio composed of 40% stocks (S&P 500) and 60% bonds (Lehman
Brothers Aggregate Bond Index).
In the equity area, we added an exposure to foreign stocks. We also focused on
domestic growth stocks, which outperformed value shares during the past six
months. Your fund's relatively high stock market exposure, as well as its
weighting in high-yield securities, contributed significantly to results,
enabling the fund to outperform its benchmark for the 6- and 12-month periods
ended May 31.
Personal Strategy Balanced Fund
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. This asset allocation structure
offers higher risk but also a higher potential return than the Income Fund.
Chart 3 - Asset Allocation
At the end of the fiscal year, your fund had 59% of its assets in stocks, 35%
in bonds, and 6% in cash reserves. The equity weighting was increased by three
percentage points since the end of November, reflecting the addition of
foreign stocks in February. We also favored growth over value stocks. We
continued to overweight bonds and underweight money market securities, since
we anticipated a continuation of last year's fixed income rally.
PERFORMANCE COMPARISON
Periods Ended 5/31/96 6 Months 12 Months
Personal Strategy Balanced Fund6.14% 17.97%
Combined Index Portfolio * 6.46 18.31
*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 slightly
over the past 6- and 12-month periods.
Personal Strategy Growth
Your fund seeks capital appreciation by investing primarily in common stocks.
The typical asset mix is 80% stocks and 20% bonds and money market securities,
with 10 percentage point variations permitted. As of May 31, the fund's
allocation was 80% stocks, 17% bonds, and 3% cash equivalents.
Chart 4 - Asset Allocation
The fund's exposure to stocks was increased by six percentage points over the
last six months, primarily due to a larger commitment to foreign equities.
While domestic stocks outperformed foreign shares during this period, we
believe the latter offer greater potential value at this stage of the economic
cycle. Regarding domestic stocks, we continued to favor growth over value
since the earnings of growth companies tend to hold up better in the later
stages of an economic expansion.
In the fixed income area, we overweighted high-yield securities, which tend to
perform more like stocks than bonds in a fairly robust economic environment.
We also underweighted the fund's exposure to foreign bonds since we expect the
U.S. dollar to continue to strengthen against most major currencies.
PERFORMANCE COMPARISON
Periods Ended 5/31/96 6 Months 12 Months
Personal Strategy Growth Fund 8.34% 22.83%
Combined Index Portfolio * 9.10 23.28
*An unmanaged portfolio composed of 80% stocks (S&P 500) and 20% bonds (Lehman
Brothers Aggregate Bond Index).
Your fund generated strong returns but trailed its benchmark over the past 6-
and 12-month periods because of its earlier underweighting in stocks and its
more recent exposure to the underperforming foreign equities market.
OUTLOOK
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
increased volatility. 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
June 21, 1996
T. Rowe Price Personal Strategy Funds
PORTFOLIO HIGHLIGHTS
PORTFOLIO OVERVIEW
Percent of
Net Assets
5/31/96
Personal Strategy Income Fund
Money Market Securities 5.6%
Bonds 51.5%
Treasuries/Agencies 5.1
Mortgage-Backed 18.2
Corporate 22.3
Foreign 5.9
Stocks 42.9%
Five Largest Holdings:
GE 1.4
Fannie Mae 1.0
Vodafone ADR 0.9
Freddie Mac 0.9
PepsiCo 0.9
Personal Strategy Balanced Fund
Money Market Securities 5.6%
Bonds 34.9%
Treasuries/Agencies 2.9
Mortgage-Backed 13.9
Corporate 15.4
Foreign 2.7
Stocks 59.5%
Five Largest Holdings:
GE 1.9
Fannie Mae 1.3
Freddie Mac 1.1
PepsiCo 1.1
Coca-Cola 1.1
Personal Strategy Growth Fund
Money Market Securities 2.8%
Bonds 17.2%
Treasuries/Agencies 0.3
Mortgage-Backed 4.6
Corporate 10.5
Foreign 1.8
Stocks 80.0%
Five Largest Holdings:
GE 2.4
Fannie Mae 1.7
Vodafone ADR 1.5
Freddie Mac 1.5
PepsiCo 1.4
T. Rowe Price Personal Strategy Funds
PERFORMANCE COMPARISON
These charts show the value of a hypothetical $10,000 investment in each fund
over the past 10 fiscal year periods or since inception (for funds lacking
10-year records). The result is compared with a broad-based average or index.
The index return does not reflect expenses, which have been deducted from the
fund's return.
Chart 5 - Personal Strategy Income Fund
Chart 6 - Personal Strategy Balanced Fund
Chart 7 - Personal Strategy Growth Fund
AVERAGE ANNUAL COMPOUND TOTAL RETURN
This table shows how each fund would have performed each year if its actual
(or cumulative) returns for the periods shown had been earned at a constant
rate.
Since Inception
Periods Ended 5/31/96 1 Year Inception Date
__________________________________________________________________________
Personal Strategy
Income Fund 13.84% 14.62% 7/29/94
Personal Strategy
Balanced Fund 17.97 17.68 7/29/94
Personal Strategy
Growth Fund 22.83 21.03 7/29/94
Investment return and principal value represent past performance and will
vary. Shares may be worth more or less at redemption than at original
purchase.
T. Rowe Price Personal Strategy Funds
FINANCIAL HIGHLIGHTSFor a share outstanding throughout each period
Income Fund Balanced Fund Growth Fund
__________________________________________________________________________
Year 7/29/94 Year7/29/94 Year7/29/94
Ended to Ended to Ended to
5/31/965/31/955/31/965/31/955/31/96 5/31/95
__________________________________________________________________________
NET ASSET VALUE
Beginning
of period $10.94 $10.00 $11.15 $10.00 $11.44 $10.00
Investment activities
Net invest-
ment income 0.50* 0.41* 0.41* 0.33* 0.30* 0.25*
Net realized
and unrealized
gain (loss) 0.98 0.85 1.56 1.08 2.29 1.30
Total from
investment
activities 1.48 1.26 1.97 1.41 2.59 1.55
Distributions
Net invest-
ment income (0.47) (0.32) (0.37) (0.26) (0.27) (0.11)
Net realized
gain (0.10) - (0.07) - (0.07) -
Total dis-
tributions (0.57) (0.32) (0.44) (0.26) (0.34) (0.11)
NET ASSET VALUE
End of period$11.85 $10.94 $12.68 $11.15 $13.69 $11.44
Ratios/Supplemental Data
Total return13.84%*12.90%*17.97%*14.35%*22.83%* 15.65%*
Ratio of
expenses to
average
net assets 0.95%*0.95%!* 1.05%*1.05%!* 1.10%* 1.10%!*
Ratio of net
investment
income to
average
net assets 4.31%*4.71%!* 3.44%*3.74%!* 2.27%* 2.76%!*
Portfolio
turnover
rate 34.1% 50.5%! 47.7% 25.8%! 39.5% 25.7%!
Average
commission
rate paid $0.046 - $0.046 - $0.049 -
Net assets,
end of period
(in thousands)$25,545$20,705$116,826$13,336$24,954$10,748
* Excludes expenses in excess of a voluntary expense limitation in effect
through 5/31/96.
! Annualized.
The accompanying notes are an integral part of these financial statements.
T. Rowe Price Personal Strategy Income Fund
May 31, 1996
STATEMENT OF NET ASSETS Shares/Par Value
In thousands
Common Stocks 42.9%
FINANCIAL 7.2%
Bank and Trust 2.5%
Banca Commerciale Italiana (ITL) 20,000 $ 42
Banco de Bilbao Vizcaya ADR 500 19
Banco Frances del Rio ADR 600 17
Chase Manhattan 900 63
Development Bank of Singapore (SGD) 3,000 36
J. P. Morgan 1,530 133
KeyCorp 950 37
Kredietbank (BEL) 200 58
Mellon Bank 750 43
National City 2,100 75
Schweizerischer Bankverein (CHF) 300 53
Societe Generale (FRF) 400 42
Westpac Banking (AUD) 6,000 28
__________________________________________________________________________646
Insurance 2.3%
ACE Limited 1,200 59
American General 1,000 36
American International Group 700 66
CK AG Colonia Konzern (DEM) 60 39
Highlands Insurance Group 140 3
PartnerRe Holdings 2,700 81
Travelers/Aetna Property Casualty
(Class A) 5,000 136
UNUM 2,500 147
Willis-Corroon ADR 2,100 27
__________________________________________________________________________594
Financial Services 2.4%
American Express 1,000 46
Fannie Mae 8,200 253
Freddie Mac 2,700 223
Internationale Nederlanden Group (NLG)700 58
Sallie Mae 350 26
__________________________________________________________________________606
__________________________________________________________________________
Total Financial 1,846
UTILITIES 1.8%
Telephone 0.9%
ALLTEL 2,300 $ 73
AT&T 350 22
SBC Communications 900 44
Telefonica de Espana ADR 1,000 52
Telmex ADR 1,300 43
__________________________________________________________________________234
Electric Utilities 0.9%
Centerior Energy 5,800 41
Entergy 1,400 37
Hong Kong Electric (HKD) 10,000 32
Niagara Mohawk 5,400 41
PacifiCorp 700 14
Texas Utilities 700 29
Unicom 1,400 39
__________________________________________________________________________233
__________________________________________________________________________
Total Utilities 467
CONSUMER NONDURABLES 13.0%
Cosmetics 0.2%
Kao (JPY) 4,000 53
__________________________________________________________________________53
Beverages 2.1%
Anheuser-Busch 900 64
Coca-Cola 4,400 202
LVMH (FRF) 200 49
PepsiCo 6,600 219
__________________________________________________________________________534
Food Processing 2.3%
Cadbury Schweppes ADR 1,500 45
Danisco (DKK) 1,000 49
Eridania Beghin-Say (FRF) 300 47
General Mills 660 38
Heinz 2,000 67
Nestle (CHF) 50 56
Pioneer Hi-Bred 1,400 79
Ralston Purina 900 55
Sara Lee 4,400 $ 147
__________________________________________________________________________583
Hospital Supplies/Hospital Management 1.2%
Baxter International 1,000 44
Columbia/HCA Healthcare 2,500 135
St. Jude Medical * 2,300 87
United HealthCare 1,000 55
__________________________________________________________________________321
Pharmaceuticals 5.0%
American Home Products 980 52
Amgen * 3,400 202
Astra (Class B) (SEK) 1,200 54
Bristol-Myers Squibb 300 26
Ciba-Geigy (CHF) 60 66
Eli Lilly 396 25
GEHE (DEM) 100 64
Genentech * 2,200 116
Johnson & Johnson 1,500 146
Merck 1,400 91
Perrigo * 2,000 23
Pfizer 2,460 174
Pharmacia & Upjohn 805 33
SmithKline Beecham ADR 2,600 133
Warner-Lambert 1,200 67
__________________________________________________________________________
1,272
Biotechnology 0.1%
Guidant 304 18
__________________________________________________________________________18
Miscellaneous Consumer Products 2.1%
Benetton Group (ITL) 4,000 49
Bridgestone (JPY) 3,000 52
Colgate-Palmolive 450 36
Hasbro 1,900 72
Lion Nathan (NZD) 20,000 48
Newell 1,800 54
Philip Morris 1,250 124
Procter & Gamble 900 79
Tambrands 340 16
UST 700 $ 23
__________________________________________________________________________553
__________________________________________________________________________
Total Consumer Nondurables 3,334
CONSUMER SERVICES 5.3%
Restaurants 0.1%
Darden Restaurants 960 11
__________________________________________________________________________11
General Merchandisers 0.8%
Dayton Hudson 400 41
Tesco (GBP) 10,000 46
TJX 2,300 81
Wal-Mart 1,500 39
__________________________________________________________________________207
Specialty Merchandisers 1.3%
Circuit City Stores 3,300 108
Federated Department Stores * 1,200 42
General Nutrition * 2,200 34
Home Depot 2,000 102
Revco * 2,200 52
__________________________________________________________________________338
Entertainment and Leisure 1.2%
Disney 800 48
Hutchison Whampoa (HKD) 11,000 71
McDonald's 1,200 58
Reader's Digest (Class B) 640 25
Sharp (JPY) 3,000 49
Viacom (Class B) * 1,464 62
__________________________________________________________________________313
Media and Communications 1.9%
Elsevier (NLG) 3,000 46
Gaylord Entertainment 3,963 103
Reuters ADR 900 63
Times Mirror (Class A) 911 40
Vodafone ADR 6,000 238
__________________________________________________________________________490
__________________________________________________________________________
Total Consumer Services 1,359
CONSUMER CYCLICALS 1.5%
Automobiles and Related 0.2%
Honda ADR 1,000 $ 48
48
Building and Real Estate 0.4%
DBS Land (SGD) 10,000 33
DeBartolo Realty, REIT 2,000 32
Federal Realty Investment Trust, REIT2,200 48
__________________________________________________________________________113
Miscellaneous Consumer Durables 0.9%
Corning 4,500 172
Roussel UCLAF (FRF) 200 47
__________________________________________________________________________219
__________________________________________________________________________
Total Consumer Cyclicals 380
TECHNOLOGY 2.7%
Electronic Components 0.6%
Altera * 500 24
Intel 900 68
Xilinx * 1,400 48
__________________________________________________________________________140
Electronic Systems 0.2%
Honeywell 850 43
__________________________________________________________________________43
Information Processing 0.3%
Hitachi ADR 400 37
IBM 430 46
__________________________________________________________________________83
Office Automation 0.4%
Ceridian * 2,100 111
__________________________________________________________________________111
Telecommunications 0.8%
3Com * 1,800 89
Bay Networks * 2,600 75
Telecomunicacoes Brazil ADR 400 26
__________________________________________________________________________190
Aerospace and Defense 0.4%
AlliedSignal 640 35
Boeing 900 $ 77
__________________________________________________________________________112
__________________________________________________________________________
Total Technology 679
CAPITAL EQUIPMENT 2.6%
Electrical Equipment 1.9%
Exide 900 21
GE 4,300 356
Siemens (DEM) 1,000 56
Tomkins ADR 2,000 32
__________________________________________________________________________465
Machinery 0.7%
Deere 1,140 48
Man (DEM) 200 52
Varity * 1,800 88
__________________________________________________________________________188
__________________________________________________________________________
Total Capital Equipment 653
BUSINESS SERVICES AND
TRANSPORTATION 2.8%
Computer Service and Software 1.6%
Adobe Systems 1,000 37
Automatic Data Processing 2,200 84
First Data 1,409 112
Intuit * 800 42
Microsoft * 400 47
Oracle Systems * 1,800 60
Sybase * 900 21
__________________________________________________________________________403
Distribution Services 0.5%
Alco Standard 1,200 75
Cardinal Health 1,000 64
__________________________________________________________________________139
Miscellaneous Business Services 0.4%
Deluxe Corp. 1,000 36
WMX Technologies 1,860 66
__________________________________________________________________________102
Airlines 0.3%
AMR * 440 $ 41
KLM (NLG) 1,000 36
__________________________________________________________________________77
__________________________________________________________________________
Total Business Services and Transportation 721
ENERGY 2.9%
Energy Services 0.8%
Halliburton 600 33
Schlumberger 1,830 153
__________________________________________________________________________186
Integrated Petroleum - Domestic 1.1%
Atlantic Richfield 900 107
British Petroleum ADR 940 99
Unocal 700 23
USX-Marathon 2,500 55
__________________________________________________________________________284
Integrated Petroleum - International 1.0%
Exxon 430 36
Mobil 500 56
Repsol ADR 500 17
Royal Dutch Petroleum ADR 800 120
Texaco 400 34
__________________________________________________________________________263
__________________________________________________________________________
Total Energy 733
PROCESS INDUSTRIES 2.0%
Diversified Chemicals 0.2%
DuPont 500 40
__________________________________________________________________________40
Specialty Chemicals 1.0%
3M 800 55
A. Schulman 2,000 52
Great Lakes Chemical 2,040 131
Pall 1,100 29
__________________________________________________________________________267
Paper and Paper Products 0.7%
Dai Nippon Printng (JPY) 3,000 56
International Paper 1,600 64
James River 1,000 $ 25
Mead 600 32
__________________________________________________________________________177
Forest Products 0.1%
Georgia-Pacific 400 29
__________________________________________________________________________29
__________________________________________________________________________
Total Process Industries 513
BASIC MATERIALS 1.1%
Metals 0.6%
Alcoa 600 37
Alumax * 900 30
Cyprus Amax Minerals 700 17
Nucor 1,100 60
__________________________________________________________________________144
Mining 0.3%
Barrick Gold 2,497 79
__________________________________________________________________________79
Miscellaneous Materials 0.2%
Malayan Cement (MYR) 21,000 49
__________________________________________________________________________49
__________________________________________________________________________
Total Basic Materials 272
__________________________________________________________________________
Total Common Stocks (Cost $8,714) 10,957
Corporate Bonds 22.3%
Agricultural Minerals and Chemicals
Sr. Notes, 10.75%, 9/30/03 $50,000 53
Alpine Group, 12.25%, 7/15/03 100,000 100
American Express, 7.60%, 8/15/02 100,000 102
American Safety Razor, Sr. Notes,
9.875%, 8/1/05 100,000 101
American Standard, Sr. Sub. Deb.,
9.875%, 6/1/01 100,000 103
Ametek, 9.75%, 3/15/04 10,000 11
Arcadian Partners, Sr. Notes,
10.75%, 5/1/05 90,000 98
Associates Corporation, 5.25%, 3/30/0060,000 57
B.F. Saul, REIT, Sr. Secured Notes,
11.625%, 4/1/02 90,000 93
Bally's Park Place, 9.25%, 3/15/04100,000 101
Bank of Nova Scotia, 6.25%, 9/15/0880,000 72
Boise Cascade, Sr. Notes, 7.35%, 2/1/16100,000 91
Chancellor Broadcasting, Sr. Sub. Notes,
9.375%, 10/1/04 $50,000 $ 47
Citicorp, 7.75%, 6/15/06 100,000 102
Coca-Cola Bottling Group, Sr. Sub. Notes,
9.00%, 11/15/03 90,000 90
Coinmach, Sr. Secured Notes,
11.75%, 11/15/05 100,000 104
Coltec Industries, Sr. Sub. Notes,
10.25%, 4/1/02 150,000 154
Consolidated Cigar, Sr. Sub. Notes,
10.50%, 3/1/03 100,000 105
Container Corporation of America,
Sr. Notes, 9.75%, 4/1/03 90,000 89
Continental Airlines, PTC, 144a,
6.94%, 10/15/13 500,000 445
Continental Cablevision, Sr. Deb.,
9.00%, 9/1/08 150,000 158
Daimler-Benz Auto Grantor Trust,
3.90%, 10/15/98 8,372 8
Doane Products, Sr. Notes,
10.625%, 3/1/06 50,000 51
Dominion Textile USA, Sr. Notes,
9.25%, 4/1/06 100,000 99
El Paso Electric, 1st Mtg. Notes,
8.90%, 2/1/06 100,000 100
Ferrellgas, Sr. Notes, 10.00%, 8/1/0190,000 93
First Federal Financial,
11.75%, 10/1/04 100,000 100
GNF, 1st Mtg. Notes, 10.625%, 4/1/03100,000 102
H.F. Ahmanson, 7.875%, 9/1/04 100,000 102
Harrah's, 10.875%, 4/15/02 90,000 97
Herff Jones, Sr. Sub. Notes,
11.00%, 8/15/05 100,000 105
IMC Fertilizer Group, Sr. Notes,
9.45%, 12/15/11 100,000 102
Long Island Lighting, 8.75%, 2/15/9720,000 20
Mobilemedia, 9.375%, 11/1/07 100,000 94
Northrop Grumman, 144a, 7.00%, 3/1/0670,000 67
Owens-Illinois, Sr. Deb.,
11.00%, 12/1/03 90,000 98
Pennsylvania Power and Light,
6.50%, 4/1/05 100,000 94
Petroleum Heat & Power, 10.125%, 4/1/03100,000 97
PNC Bank N.A., 7.875%, 4/15/05 100,000 102
Portola Packaging, Sr. Notes,
10.75%, 10/1/05 100,000 102
Principal Mutual Life Insurance, 144a,
8.00%, 3/1/44 110,000 106
Public Service Electric & Gas,
7.00%, 9/1/24 150,000 131
Quorum Health Group, 11.875%, 12/15/0290,000 100
Repap Wisconsin, Sr. Secured, 2nd
Priority Notes, 9.875%, 5/1/06100,000 88
Riverwood International, Sr. Notes,
10.25%, 4/1/06 50,000 50
Rogers Cablesystem, Sr. Secured Notes,
10.00%, 3/15/05 90,000 90
Rouse, 8.50%, 1/15/03 60,000 61
Safeway, 9.875%, 3/15/07 90,000 100
Shawmut National, 7.20%, 4/15/03 60,000 59
Silgan, Sr. Sub. Notes, 11.75%, 6/15/0290,000 94
Sinclair Broadcasting, Sr. Sub. Notes,
10.00%, 9/30/05 100,000 97
Synthetic Industries, Sr. Sub. Deb.,
12.75%, 12/1/02 100,000 $ 106
Tenneco, 8.00%, 11/15/99 60,000 62
Texas New Mexico Power, 12.50%, 1/15/99200,000 216
Texas Utilities Electric, 1st Mtg. Notes,
7.375%, 10/1/25 120,000 109
Trump Atlantic City Associates
1st Mtg. Notes, 11.25%, 5/1/0650,000 50
Tuboscope Vetco International, Sr. Sub.
Notes, 10.75%, 4/15/03 100,000 103
UCAR Global Enterprises,
12.00%, 1/15/05 40,000 46
Wal- Mart, 7.25%, 6/1/13 20,000 19
Westinghouse, 8.875%, 6/1/01 100,000 102
__________________________________________________________________________
Total Corporate Bonds (Cost $5,661) 5,698
Foreign Government Obligations/
Agencies 5.9%
Australian Commonwealth Government
Bonds, 9.50%, 8/15/03 AUD 10,000 8
Belgian Government Bonds,
7.25%, 4/29/04 BEL2,900,000 97
Canadian Government Bonds
6.50%, 6/1/04 CAD 30,000 20
9.75%, 6/1/21 CAD 70,000 60
French Government Bonds,
8.25%, 2/27/04 FRF 270,000 59
German Federal Government Bonds
6.50%, 7/15/03 DEM 425,000 286
8.50%, 8/21/00 DEM 145,000 107
Int'l Bank for Reconstruction &
Development, 6.75%, 3/15/00JPY6,000,000 65
Italian Government Bonds,
8.50%, 8/1/04 ITL275,000,000 170
Japanese Government Bonds,
4.50%, 6/20/03 # JPY40,500,000 407
Kingdom of Denmark,
7.00%, 12/15/04 DKK 120,000 20
Spanish Government Bonds,
8.00%, 5/30/04 ESP8,000,000 59
Swedish Government Bonds,
6.00%, 2/9/05 SEK 100,000 13
United Kingdom Treasury Notes
8.50%, 12/7/05 GBP 65,000 103
9.00%, 3/3/00 GBP 25,000 41
__________________________________________________________________________
Total Foreign Government Obligations/Agencies
(Cost $1,429) 1,515
U.S. Government Mortgage-
Backed Securities 18.2%
Government National Mortgage Assn., I
6.00%, 1/15 - 2/15/24 $ 964,080 $ 865
6.50%, 7/15/23 - 4/15/24 1,008,522 932
7.50%, 9/15/22 - 12/15/25 722,997 714
8.00%, 1/15/22 - 10/20/25 932,009 938
8.50%, 9/15/24 395,968 405
10.50%, 2/15 - 10/15/13 21,779 24
Government National Mortgage Assn., II
7.50%, 11/15 - 12/15/25 782,205 766
__________________________________________________________________________
Total U.S. Government Mortgage-Backed Securities
(Cost $4,604) 4,644
U.S. Government Obligations/
Agencies 5.1%
Tennessee Valley Authority
7.25%, 7/15/43 60,000 55
8.25%, 4/15/42 1,189,000 1,246
__________________________________________________________________________
Total U.S. Government Obligations/Agencies
(Cost $1,233) 1,301
Short-Term Investments 4.3%
Certificates of Deposit 2.0%
Bank One Dayton, 5.30%, 6/25/96 500,000 500
__________________________________________________________________________500
Commercial Paper 2.3%
Investments in Commercial Paper through a
joint account, 5.41%, 6/3/96 99,310 99
Tasmanian Public Finance, 5.27%, 9/23/96500,000492
__________________________________________________________________________
591
__________________________________________________________________________
Total Short-Term Investments (Cost $1,091) 1,091
Total Investments in Securities
98.7% of Net Assets (Cost $22,732) $ 25,206
Other Assets Less Liabilities 339
NET ASSETS $ 25,545
Net Assets Consist of:
Accumulated net investment income -
net of distributions $ 203
Accumulated net realized gain/loss -
net of distributions 998
Net unrealized gain (loss) 2,470
Paid-in-capital applicable to 2,154,878 shares of
$0.0001 par value capital stock outstanding;
1,000,000,000 shares of the corporation authorized.21,874
NET ASSETS $ 25,545
NET ASSET VALUE PER SHARE $ 11.85
* Non-income producing
# Securities contain some restrictions as to public resale-total of such
securities at year-end amounts to 1.59% of net assets.
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 year-end amounts to
2.42% of net assets.
AUD Australian dollar
BEL Belgian franc
CAD Canadian dollar
CHF Swiss franc
DEM German deutschemark
DKK Danish krone
ESP Spanish peseta
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.
T. Rowe Price Personal Strategy Balanced Fund
May 31, 1996
Statement of Net Assets Shares/Par Value
In thousands
Common Stocks 59.5%
FINANCIAL 10.0%
Bank and Trust 3.2%
Air Liquide L (FRF) 700 $ 122
Banca Commerciale Italiana (ITL) 36,000 76
Banco de Bilbao Vizcaya ADR 2,400 89
Banco Frances del Rio ADR 3,700 104
Barclays (GBP) 20,000 233
Berliner Bank (DEM) 400 87
Chase Manhattan 5,000 350
Deutsche Bank (DEM) 3,000 140
Development Bank of Singapore (SGD) 9,000 107
HSBC Holdings (GBP) 11,000 167
J. P. Morgan 8,030 698
KeyCorp 6,150 238
Kredietbank (BEL) 300 88
Mellon Bank 5,050 288
National City 10,800 385
Overseas Chinese Bank (SGD) 10,000 128
Schweizerische Bankgesellschaft (CHF) 200 187
Schweizerischer Bankverein (CHF) 800 142
Societe Generale (FRF) 700 74
Westpac Banking (AUD) 20,000 93
__________________________________________________________________________
3,796
Insurance 3.4%
ACE Limited 5,800 284
American General 10,700 380
American International Group 4,450 419
CK AG Colonia Konzern (DEM) 100 66
Highlands Insurance Group 220 4
PartnerRe Holdings 20,900 627
Travelers/Aetna Property
Casualty (Class A) 30,300 826
UNUM 16,200 956
Willis-Corroon ADR 28,100 365
__________________________________________________________________________
3,927
Financial Services 3.4%
American Express 6,500 $ 297
Associates First Capital 7,300 270
Axa (FRF) 1,500 85
Fannie Mae 47,800 1,476
Freddie Mac 16,200 1,339
Internationale Nederlanden Group (NLG)3,200 263
Sallie Mae 2,650 197
__________________________________________________________________________
3,927
__________________________________________________________________________
Total Financial 11,650
UTILITIES 2.8%
Electric Utilities 1.6%
Centerior Energy 40,800 291
Electrabel (BEL) 500 107
Empresa Nacional de Electricidad ADR1,200 75
Entergy 9,600 252
Hong Kong Electric (HKD) 57,000 183
Niagara Mohawk 42,600 325
PacifiCorp 4,200 84
Texas Utilities 5,700 233
Unicom 7,400 204
Veba (DEM) 3,300 173
__________________________________________________________________________
1,927
Telephone 1.2%
ALLTEL 12,800 403
AT&T 2,750 172
Hong Kong Telecommunications ADR 4,200 78
SBC Communications 4,100 202
Telecom Italia (ITL) 60,000 120
Telecom Italia Mobile (ITL) 60,000 128
Telefonica de Espana ADR 2,000 105
Telekom Malaysia (MYR) 12,000 110
Telmex ADR 2,400 79
__________________________________________________________________________
1,397
__________________________________________________________________________
Total Utilities 3,324
CONSUMER NONDURABLES 16.5%
Cosmetics 0.1%
Kao (JPY) 9,000 $ 120
__________________________________________________________________________120
Beverages 2.7%
Anheuser-Busch 5,900 420
Coca-Cola 27,800 1,279
LVMH (FRF) 800 194
PepsiCo 38,800 1,290
__________________________________________________________________________
3,183
Food Processing 2.4%
Cadbury Schweppes ADR 3,600 109
CSM (NLG) 4,000 185
Danisco (DKK) 2,100 102
Eridania Beghin-Say (FRF) 500 78
General Mills 3,460 199
Heinz 11,700 389
Huhtamaki Oy (FIM) 1,500 50
Nestle (CHF) 200 225
Pioneer Hi-Bred 7,800 441
Ralston Purina 4,200 257
Sara Lee 23,700 791
__________________________________________________________________________
2,826
Hospital Supplies/Hospital Management 1.9%
Baxter International 6,500 288
Boston Scientific * 4,000 171
Columbia/HCA Healthcare 13,900 749
St. Jude Medical * 14,700 558
United HealthCare 6,900 379
__________________________________________________________________________
2,145
Pharmaceuticals 6.6%
American Home Products 6,080 325
Amgen * 20,500 1,219
Astra (Class B) (SEK) 4,500 203
Biogen * 2,600 157
Bristol-Myers Squibb 2,200 188
Ciba-Geigy (CHF) 150 165
Eli Lilly 1,864 120
GEHE (DEM) 250 $ 161
Genentech * 13,900 732
Johnson & Johnson 10,000 974
Merck 7,600 491
Perrigo * 35,600 403
Pfizer 14,360 1,016
Pharmacia & Upjohn 4,560 186
SmithKline Beecham ADR 12,900 658
Takeda Chemical (JPY) 13,000 215
Warner-Lambert 8,200 459
__________________________________________________________________________
7,672
Biotechnology 0.1%
Guidant 2,686 156
__________________________________________________________________________156
Miscellaneous Consumer Products 2.7%
Benetton Group (ITL) 7,000 86
Bridgestone (JPY) 10,000 174
Colgate-Palmolive 3,050 240
Hasbro 11,100 419
Kuraray (JPY) 19,000 217
Lion Nathan (NZD) 54,000 130
Newell 12,400 372
Philip Morris 7,550 750
Procter & Gamble 5,100 448
Tambrands 3,340 154
UST 3,900 129
__________________________________________________________________________
3,119
__________________________________________________________________________
Total Consumer Nondurables 19,221
CONSUMER SERVICES 7.1%
Restaurants 0.1%
Darden Restaurants 14,360 170
__________________________________________________________________________170
General Merchandisers 1.4%
Carrefour (FRF) 200 110
Carrefour, rights (FRF) 200 55
Dayton Hudson 3,500 357
Marui (JPY) 8,000 $ 164
Tesco (GBP) 30,000 140
TJX 11,300 398
Wal-Mart 17,800 461
__________________________________________________________________________
1,685
Specialty Merchandisers 1.8%
Circuit City Stores 20,500 669
Federated Department Stores * 4,900 169
General Nutrition * 16,400 252
Home Depot 12,600 644
Revco * 13,800 328
__________________________________________________________________________
2,062
Entertainment and Leisure 1.4%
Disney 5,400 328
Hutchison Whampoa (HKD) 55,000 353
McDonald's 7,600 366
Reader's Digest (Class B) 3,740 146
Sharp (JPY) 8,000 130
Viacom (Class B) * 7,903 335
__________________________________________________________________________
1,658
Media and Communications 2.3%
Elsevier (NLG) 12,000 186
Gaylord Entertainment 23,389 611
Reuters ADR 6,100 426
Times Mirror (Class A) 4,371 191
Vodafone ADR 31,300 1,240
__________________________________________________________________________
2,654
Retailing 0.1%
Pinault Printemps (FRF) 300 93
__________________________________________________________________________93
__________________________________________________________________________
Total Consumer Services 8,322
CONSUMER CYCLICALS 2.6%
Automobiles and Related 0.1%
Honda ADR 3,000 143
__________________________________________________________________________143
Building and Real Estate 1.2%
Cheung Kong Holdings (HKD) 24,000 178
DBS Land (SGD) 20,000 $ 66
DeBartolo Realty, REIT 30,400 494
Federal Realty Investment Trust, REIT32,200 696
__________________________________________________________________________
1,434
Miscellaneous Consumer Durables 1.2%
Corning 25,600 979
Ricoh (JPY) 18,000 182
Roussel UCLAF (FRF) 700 162
__________________________________________________________________________
1,323
Building and Construction 0.1%
Holderbk Fn Glarus (CHF) 200 154
__________________________________________________________________________154
__________________________________________________________________________
Total Consumer Cyclicals 3,054
TECHNOLOGY 4.0%
Electronic Components 1.2%
Altera * 3,600 174
Intel 8,900 671
Maxim Integrated Products * 5,000 170
Xilinx * 9,400 326
__________________________________________________________________________
1,341
Electronic Systems 0.5%
Hewlett-Packard 1,500 160
Honeywell 5,650 287
Nokia ADR 1,600 69
__________________________________________________________________________516
Information Processing 0.3%
Hitachi ADR 1,200 112
IBM 2,630 281
__________________________________________________________________________393
Office Automation 0.4%
Ceridian * 9,400 497
__________________________________________________________________________497
Telecommunications Equipment 1.2%
3Com * 9,900 487
AirTouch Communications 6,000 191
Bay Networks * 17,400 505
LM Ericsson (Class B) ADR 6,000 138
Telecomunicacoes Brazil ADR 1,600 103
__________________________________________________________________________
1,424
Aerospace and Defense 0.4%
AlliedSignal 2,440 $ 134
Boeing 4,000 341
__________________________________________________________________________475
__________________________________________________________________________
Total Technology 4,646
CAPITAL EQUIPMENT 3.3%
Electrical Equipment 2.6%
ABB AG (CHF) 200 239
Exide 15,300 359
GE 26,500 2,193
Mitsubishi Electric (JPY) 23,000 158
Siemens (DEM) 2,000 112
Tomkins ADR 9,000 145
__________________________________________________________________________
3,206
Machinery 0.7%
Deere 3,440 143
Man (DEM) 300 78
Varity * 11,800 580
__________________________________________________________________________801
__________________________________________________________________________
Total Capital Equipment 4,007
BUSINESS SERVICES AND
TRANSPORTATION 4.3%
Computer Service and Software 2.3%
Adobe Systems 8,500 315
Automatic Data Processing 14,200 545
Cerner * 1,000 25
First Data 7,292 582
Intuit * 7,000 364
Microsoft * 3,000 356
Oracle Systems * 7,425 245
Sybase * 10,700 246
__________________________________________________________________________
2,678
Distribution Services 0.8%
Alco Standard 8,600 537
Cardinal Health 6,700 428
__________________________________________________________________________965
Miscellaneous Business Services 0.6%
Deluxe Corp. 5,000 $ 181
Sime Darby (MYR) 40,000 107
United Engineers (MYR) 15,000 105
WMX Technologies 9,060 320
__________________________________________________________________________713
Airlines 0.6%
AMR * 2,940 278
KLM (NLG) 6,000 214
Singapore Airlines (SGD) 13,000 134
__________________________________________________________________________626
__________________________________________________________________________
Total Business Services and Transportation 4,982
ENERGY 4.0%
Energy Services 1.1%
Elf Aquitaine ADR 3,000 110
Halliburton 4,100 228
Schlumberger 11,730 978
__________________________________________________________________________
1,316
Integrated Petroleum - Domestic 1.5%
Atlantic Richfield 5,700 682
British Petroleum ADR 4,640 489
Unocal 5,300 172
USX-Marathon 15,600 341
__________________________________________________________________________
1,684
Integrated Petroleum - International 1.4%
Exxon 3,130 265
Mobil 2,200 249
Repsol ADR 1,700 58
Royal Dutch Petroleum ADR 4,400 660
Shell Transport & Trading 1,500 129
Texaco 3,500 293
__________________________________________________________________________
1,654
__________________________________________________________________________
Total Energy 4,654
PROCESS INDUSTRIES 3.5%
Diversified Chemicals 0.2%
DuPont 3,500 $ 279
__________________________________________________________________________279
Specialty Chemicals 1.9%
3M 4,200 287
A. Schulman 17,300 448
BASF AG (DEM) 600 167
Bayer (DEM) 500 167
Great Lakes Chemical 13,440 867
Pall 7,300 195
Technip (FRF) 1,000 90
__________________________________________________________________________
2,221
Paper and Paper Products 1.2%
Dai Nippon Printng (JPY) 7,000 130
International Paper 12,500 498
James River 14,200 353
Kimberly-Clark 4,000 292
Mead 1,700 91
__________________________________________________________________________
1,364
Forest Products 0.2%
Georgia-Pacific 3,000 217
__________________________________________________________________________217
__________________________________________________________________________
Total Process Industries 4,081
BASIC MATERIALS 1.2%
Metals 0.6%
Alcoa 3,900 240
Alumax * 2,200 73
Cyprus Amax Minerals 2,500 60
Nucor 7,100 391
__________________________________________________________________________764
Mining 0.5%
Barrick Gold 14,729 464
CRA (AUD) 6,000 97
__________________________________________________________________________561
Miscellaneous Materials 0.1%
Malayan Cement (MYR) 39,000 $ 91
__________________________________________________________________________91
__________________________________________________________________________
Total Basic Materials 1,416
CONGLOMERATES 0.2%
LONRHO (GBP) 40,000 116
__________________________________________________________________________
Total Conglomerates 116
__________________________________________________________________________
Total Common Stocks (Cost $65,402) 69,473
Corporate Bonds 15.4%
Abbey National, 6.69%, 10/17/05$ 65,000 62
Agricultural Minerals and Chemicals,
Sr. Notes, 10.75%, 9/30/03 250,000 267
Airplane Pass Through Trust,
10.875%, 3/15/19 250,000 260
Alpine Group, 12.25%, 7/15/03 250,000 250
American Airlines, 9.71%, 1/2/07 44,810 49
American Safety Razor, Sr. Notes,
9.875%, 8/1/05 250,000 254
Ametek, 9.75%, 3/15/04 20,000 21
AMR Corporation, 9.00%, 9/15/16 100,000 105
Arcadian Partners, Sr. Notes,
10.75%, 5/1/05 250,000 271
Associates Corporation, 5.25%, 3/30/0025,000 24
B.F. Saul, REIT, Sr. Secured Notes,
11.625%, 4/1/02 100,000 103
Bally's Park Place, 9.25%, 3/15/04 50,000 50
Bank of Nova Scotia, 6.25%, 9/15/0837,000 33
BE Aerospace, Sr. Sub. Notes,
9.875%, 2/1/06 250,000 246
Bear Stearns, 8.25%, 2/1/02 150,000 157
Boise Cascade, Sr. Notes, 7.35%, 2/1/1660,000 54
Chancellor Broadcasting, Sr. Sub. Notes,
9.375%, 10/1/04 250,000 234
Citicorp, 7.75%, 6/15/06 500,000 509
Coinmach, Sr. Secured Notes,
11.75%, 11/15/05 250,000 260
Coleman Holdings, Sr. Sec. Disc. Notes,
Zero Coupon, 5/27/98 250,000 210
Coltec Industries, Sr. Sub. Notes,
10.25%, 4/1/02 125,000 129
Consolidated Cigar, Sr. Sub. Notes,
10.50%, 3/1/03 250,000 262
Container Corporation of America,
Sr. Notes, 9.75%, 4/1/03 250,000 249
Continental Airlines, PTC, 144a,
6.94%, 10/15/13 700,000 624
Continental Cablevision, Sr. Deb.,
9.00%, 9/1/08 $ 75,000 $ 79
Courtyard By Marriott II, Sr. Secured
Notes, 10.75%, 2/1/08 100,000 98
Cox Communications, 7.25%, 11/15/15100,000 93
Daimler-Benz Auto Grantor Trust,
3.90%, 10/15/98 10,705 11
Dan River, Sr. Sub. Notes,
10.125%, 12/15/03 250,000 241
Discover Card, 7.75%, 4/16/02 100,000 102
Doane Products, Sr. Notes,
10.625%, 3/1/06 250,000 254
Dominion Textile USA, Sr. Notes,
9.25%, 4/1/06 125,000 123
Dual Drilling, Sr. Sub. Notes,
9.875%, 1/15/04 250,000 262
El Paso Electric, 1st Mtg. Notes,
8.90%, 2/1/06 100,000 100
Eli Lilly, 7.125%, 6/1/25 700,000 662
Exide Electronics Group, Units,
11.50%, 3/15/06 250,000 268
Federated Department Stores, Sr. Notes,
8.125%, 10/15/02 100,000 98
First Federal Financial,
11.75%, 10/1/04 250,000 251
First National Bank Boston,
8.00%, 9/15/04 75,000 77
First USA Bank, 5.85%, 2/22/01 500,000 469
Fleet Norstar Financial Group,
9.90%, 6/15/01 100,000 111
Florida Power, 6.125%, 3/1/03 210,000 197
Ford Motor Credit MTN,
7.60%, 3/29/00 50,000 51
5.80%, 5/11/98 50,000 49
General Electric Capital,
8.625%, 6/15/08 100,000 110
GNF, 1st Mtg. Notes, 10.625%, 4/1/03250,000 254
Government Trust Certificates,
9.25%, 11/15/01 70,000 75
Grand Casinos, 1st Mtg. Notes,
10.125%, 12/1/03 250,000 256
Gulf Canada Resources Ltd., Sr.
Sub. Deb., 9.625%, 7/1/05 100,000 100
Harrah's, 10.875%, 4/15/02 100,000 107
Herff Jones, Sr. Sub. Notes,
11.00%, 8/15/05 125,000 131
HMC Acquisition Properties,
Sr Notes, 144a, 9.00%, 12/15/0725,000 23
Host Marriott Travel Plazas, Sr. Notes,
9.50%, 5/15/05 100,000 97
IMC Fertilizer Group, Sr. Notes,
9.45%, 12/15/11 50,000 51
International Business Machs,
6.375%, 11/1/97 1,000,000 1,000
K & F Industries, Sr. Sub. Notes,
13.75%, 8/1/01 100,000 104
Lehman Brothers Holdings,
7.41%, 5/25/99 100,000 101
Lenfest Communications, Sr. Notes,
8.375%, 11/1/05 30,000 28
Loehmann's, 11.875%, 5/15/03 100,000 103
Long Island Lighting,
8.75%, 2/15/97 $ 50,000 $ 51
7.05%, 3/15/03 75,000 69
MAFCO, Sr. Sub. Notes, 11.875%, 11/15/02100,000109
Marriott International, 6.75%, 12/15/03100,000 95
Ml Trust V, 6.00%, 3/20/18 16,558 16
Northrop Grumman, 144a, 7.00%, 3/1/06200,000 191
Old Dominion Electric Cooperative,
7.27%, 12/1/97 67,000 68
Owens & Minor, 10.875%, 6/1/06 75,000 76
Owens-Illinois, Sr. Deb., 11.00%, 12/1/03250,000271
Paine Webber Group, 8.25%, 5/1/02 500,000 517
Paine Webber Group, MTN, 6.82%, 8/1/98100,000 100
Pathmark Stores, Sr. Sub. Notes,
9.625%, 5/1/03 100,000 95
Petroleum Heat & Power,
10.125%, 4/1/03 50,000 49
12.25%, 2/1/05 200,000 221
Portola Packaging, Sr. Notes,
10.75%, 10/1/05 40,000 41
Praxair, 8.70%, 7/15/22 100,000 105
Principal Mutual Life Insurance, 144a,
8.00%, 3/1/44 100,000 96
Regency Health Services, Sr. Sub. Notes,
9.875%, 10/15/02 125,000 121
Repap Wisconsin, Sr. Secured
2nd Priority Notes, 9.875%, 5/1/06100,000 88
Resolution Funding Corporation,
8.125%, 10/15/19 210,000 229
Riverwood International, Sr. Notes,
10.25%, 4/1/06 250,000 250
Rogers Cablesystem, Sr. Secured Notes,
10.00%, 3/15/05 250,000 251
Rouse, 8.50%, 1/15/03 25,000 25
Rowan Companies, Sr. Notes,
11.875%, 12/1/01 100,000 108
Sea Containers Ltd., Sr. Sub. Deb.,
12.50%, 12/1/04 250,000 273
Sears Credit Account Master Trust,
8.10%, 6/15/04 100,000 104
Shawmut National, 7.20%, 4/15/03 25,000 25
Showboat, 1st Mtg. Bonds, 9.25%, 5/1/08250,000 252
Silgan, Sr. Sub. Notes, 11.75%, 6/15/02250,000 260
Sinclair Broadcasting, Sr. Sub. Notes,
10.00%, 9/30/05 250,000 242
Standard Credit Card Master Trust,
5.50%, 2/7/00 100,000 97
Synthetic Industries, Sr. Sub. Deb.,
12.75%, 12/1/02 250,000 265
Tele Communications,
8.25%, 1/15/03 100,000 100
8.75%, 2/15/23 500,000 469
Tenneco, 8.00%, 11/15/99 25,000 26
Texas Bottling Group, Sr. Sub. Notes,
9.00%, 11/15/03 $ 100,000 $ 100
Texas New Mexico Power, 12.50%, 1/15/99120,000 130
Texas Utilities Electric,
7.375%, 10/1/25 315,000 287
7.875%, 4/1/24 30,000 28
8.00%, 6/1/02 100,000 103
Time Warner Entertainment Company
L P, 8.375%, 3/15/23 100,000 97
Tuboscope Vetco International, Sr.
Sub. Notes, 10.75%, 4/15/03 100,000 103
United Air Lines, 9.20%, 3/22/08 230,491 244
United Artists Theatre Circuit, PTC,
144a, 9.30%, 7/1/15 50,000 45
Vanguard Cellular Systems,
9.375%, 4/15/06 250,000 246
Wal- Mart, 7.25%, 6/1/13 60,000 58
Westamerica Bank California,
6.99%, 9/30/03 250,000 236
Westinghouse, 8.875%, 6/1/01 100,000 102
__________________________________________________________________________
Total Corporate Bonds (Cost $18,378) 17,953
Foreign Government Obligations/
Agencies 2.7%
Australian Commonwealth Government
Bonds, 9.50%, 8/15/03 AUD 10,000 8
Belgian Government Bonds,
7.25%, 4/29/04 BEL 750,000 25
Canadian Government Bonds,
6.50%, 6/1/04 CAD 9,000 6
8.50%, 4/1/02 CAD 240,000 185
9.75%, 6/1/21 CAD 30,000 26
European Investor Bank,
4.625%, 2/26/03 JPY100,000,000 1,020
French Government Bonds
8.25%, 2/27/04 FRF 324,000 70
8.50%, 11/25/02 FRF 2,766,000 606
German Federal Government Bonds,
6.50%, 7/15/03 DEM 80,000 54
8.375%, 5/21/01 DEM 800,000 592
8.50%, 8/21/00 DEM 65,000 48
Int'l Bank for Reconstruction &
Development, 6.75%, 3/15/00JPY2,000,000$ 22
Italian Government Bonds,
8.50%, 8/1/04 ITL100,000,000 62
Japanese Government Bonds,
4.50%, 6/20/03 # JPY15,700,000 158
Kingdom of Denmark,
7.00%, 12/15/04 DKK 55,000 9
Spanish Government Bonds,
8.00%, 5/30/04 ESP 100,000 1
Swedish Government Bonds,
6.00%, 2/9/05 SEK 100,000 13
United Kingdom Treasury Notes,
8.00%, 6/10/03 GBP 178,000 277
8.50%, 12/7/05 GBP 10,000 16
9.00%, 3/3/00 GBP 24,000 39
__________________________________________________________________________
Total Foreign Government Obligations/Agencies
(Cost $3,220) 3,237
U.S. Government Mortgage-Backed
Securities 13.9%
Federal Home Loan Mortgage Corporation,
6.00%, 4/1/24 - 11/1/25 $ 258,646 233
6.50%, 10/1 - 12/1/08 347,714 336
7.00%, 10/1/08 - 10/1/25 144,308 139
8.00%, 1/1/25 209,148 210
9.00%, 11/1/04 31,467 32
Federal Home Loan Mortgage PC Guaranteed,
9.10%, 10/15/19 2,215 2
Federal National Mortgage Assn.,
6.00%, 9/1/08 85,366 81
6.50%, 3/1/09 - 8/1/23 260,536 249
7.00%, 8/1/23 - 12/1/25 760,537 726
7.50%, 11/1/07 132,344 133
8.00%, 5/1/07 - 5/1/10 180,817 184
8.50%, 8/1/06 - 11/1/21 161,480 166
9.00%, 5/1/01 69,483 72
Federal National Mortgage Assn. Remic,
8.00%, 2/25/07 100,000 102
Government National Mortgage Assn., I,
6.50%, 12/15/23 - 3/15/26 1,306,676 1,207
7.00%, 4/15/24 - 4/15/26 10,185,252 9,700
7.50%, 12/15/22 - 2/15/26 609,230 598
8.00%, 3/15/22 - 10/20/25 1,245,587 1,253
Government National Mortgage Assn., II,
7.50%, 2/15 - 3/15/26 $ 805,654 $ 789
__________________________________________________________________________
Total U.S. Government Mortgage-Backed Securities
(Cost $16,647) 16,212
U.S. Government Obligations/
Agencies 2.9%
Tennessee Valley Authority,
7.25%, 7/15/43 40,000 36
6.875%, 12/15/43 2,940,000 2,586
U.S. Treasury Bonds,
7.25%, 5/15/16 - 8/15/22 795,000 801
__________________________________________________________________________
Total U.S. Government Obligations/Agencies
(Cost $3,638) 3,423
Short-Term Investments 5.4%
Certificates of Deposit 0.8%
Branch Banking & Trust Company,
5.35%, 7/29/96 1,000,000 1,000
__________________________________________________________________________
1,000
Commercial Paper 3.9%
Bex America Finance, 5.03%, 6/6/96500,000 500
Countrywide Funding, 5.33%, 6/11/961,000,000 998
Delaware Funding, 4(2),
5.30%, 6/20/96 1,871,000 1,866
Investments in Commercial Paper
through a joint account,5.41%, 6/3/96953,299 953
Tasmanian Public Finance,
5.27%, 9/23/96 200,000 197
__________________________________________________________________________
4,514
Medium-Term Notes 0.5%
PHH Corporation, 5.33%, 6/21/96 565,000 565
__________________________________________________________________________565
U.S. Government Obligations 0.2%
U.S. Treasury Bills, 5.03%, 10/10/96200,000 196
__________________________________________________________________________196
__________________________________________________________________________
Total Short-Term Investments (Cost $6,275) 6,275
Total Investments in Securities
99.8% of Net Assets (Cost $113,560) $116,573
Futures Contracts
In thousands
ContractUnrealized
Expiration ValueGain (Loss)
__________________ ________
Long, 4 Standard &
Poor's 500 Stock Index
contracts, $2,089,000
of U.S. Treasury
Bills pledged as
initial margin 6/96 $1,334 $14
Net payments (receipts)
of variation
margin to date (27)
Variation margin receivable
(payable) on open futures contracts $ (13)
Other Assets Less Liabilities 266
NET ASSETS $116,826
Net Assets Consist of:
Accumulated net investment income -
net of distributions $ 657
Accumulated net realized gain/loss -
net of distributions 890
Net unrealized gain (loss) 3,018
Paid-in-capital applicable to 9,213,959 shares of
$0.0001 par value capital stock outstanding,
1,000,000,000 shares of the corporation authorized112,261
NET ASSETS $116,826
NET ASSET VALUE PER SHARE $ 12.68
* Non-income producing
# Securities contain some restrictions as to public resale-total of such
securities at year-end amounts to 0.14% of net assets.
REIT Real Estate Investment Trust
4(2) Commercial paper sold within terms of a private placement
memorandum,exempt from registration under section 4.2 of the Securities
Act of 1933, as amended, and may be sold only to dealers in that program
or other "accredited investors."
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 year-end amounts to
0.84% of net assets.
AUD Australian dollar
BEL Belgian franc
CAD Canadian dollar
CHF Swiss franc
DEM German deutschemark
DKK Danish krone
ESP Spanish peseta
FIM Finnish mark
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.
T. Rowe Price Personal Strategy Growth Fund
May 31, 1996
Statement of Net Assets Shares/Par Value
In thousands
Common Stocks 79.8%
FINANCIAL 13.4%
Bank and Trust 3.7%
Banca Commerciale Italiana (ITL) 27,000 $ 57
Banco de Bilbao Vizcaya ADR 600 22
Banco Frances del Rio ADR 1,000 28
Chase Manhattan 1,300 91
Development Bank of Singapore (SGD) 5,000 59
HSBC Holdings (GBP) 3,100 47
J. P. Morgan 1,830 159
KeyCorp 1,750 68
Kredietbank (BEL) 200 59
Mellon Bank 1,350 77
National City 3,000 107
Schweizerischer Bankverein (CHF) 400 71
Societe Generale (FRF) 500 53
Westpac Banking (AUD) 6,000 28
__________________________________________________________________________926
Insurance 4.9%
ACE Limited 1,700 83
American General 4,000 142
American International Group 1,350 127
CK AG Colonia Konzern (DEM) 100 66
PartnerRe Holdings 6,100 183
Travelers/Aetna Property Casualty
(Class A) 8,400 229
UNUM 4,700 277
Willis-Corroon ADR 7,900 103
__________________________________________________________________________
1,210
Financial Services 4.8%
American Express 1,800 82
Associates First Capital 1,500 56
Axa (FRF) 700 40
Fannie Mae 13,700 423
Freddie Mac 4,400 364
Green Tree Financial 3,300 108
Internationale Nederlanden Group (NLG)900 74
Sallie Mae 650 $ 48
__________________________________________________________________________
1,195
__________________________________________________________________________
Total Financial 3,331
UTILITIES 3.7%
Telephone 1.9%
ALLTEL 3,900 123
AT&T 1,650 103
Hong Kong Telecommunications ADR 1,200 22
SBC Communications 1,100 54
Telefonica de Espana ADR 1,600 84
Telekom Malaysia (MYR) 3,000 27
Telmex ADR 1,800 60
__________________________________________________________________________473
Electric Utilities 1.8%
Centerior Energy 11,500 82
Entergy 2,700 71
Hong Kong Electric (HKD) 16,000 51
Niagara Mohawk 12,000 92
PacifiCorp 1,300 26
Texas Utilities 1,600 65
Unicom 2,000 55
__________________________________________________________________________442
__________________________________________________________________________
Total Utilities 915
CONSUMER NONDURABLES 23.0%
Cosmetics 0.3%
Kao (JPY) 5,000 67
__________________________________________________________________________67
Beverages 3.5%
Anheuser-Busch 1,400 100
Coca-Cola 7,600 349
LVMH (FRF) 300 73
PepsiCo 10,800 359
__________________________________________________________________________881
Food Processing 3.6%
Cadbury Schweppes ADR 2,000 61
CSM (NLG) 1,000 46
Danisco (DKK) 1,300 $ 63
Eridania Beghin-Say (FRF) 300 47
General Mills 960 55
Heinz 3,000 100
Nestle (CHF) 50 56
Pioneer Hi-Bred 2,500 141
Ralston Purina 1,200 73
Sara Lee 6,400 214
__________________________________________________________________________856
Hospital Supplies/Hospital Management 2.3%
Baxter International 1,700 75
Boston Scientific * 1,100 47
Columbia/HCA Healthcare 3,800 205
St. Jude Medical * 3,900 148
United HealthCare 1,900 104
__________________________________________________________________________
579
Pharmaceuticals 9.4%
American Home Products 1,680 90
Amgen * 5,400 321
Astra (Class B) (SEK) 1,600 72
Biogen * 800 48
Bristol-Myers Squibb 600 51
Ciba-Geigy (CHF) 75 83
Eli Lilly 664 43
GEHE (DEM) 200 129
Genentech * 3,900 205
Johnson & Johnson 3,500 341
Merck 2,200 142
Perrigo * 10,000 113
Pfizer 3,960 280
Pharmacia & Upjohn 1,160 47
SmithKline Beecham ADR 3,800 194
Takeda Chemical Inds (JPY) 3,000 50
Warner-Lambert 2,600 146
__________________________________________________________________________
2,355
Miscellaneous Consumer Products 3.9%
Benetton Group (ITL) 5,000 61
Bridgestone (JPY) 4,000 70
Colgate-Palmolive 850 $ 67
Guidant 586 34
Hasbro 2,500 94
Kuraray (JPY) 5,000 57
Lion Nathan (NZD) 30,000 72
Newell 3,500 105
Philip Morris 2,150 214
Procter & Gamble 1,500 132
Tambrands 640 30
UST 1,300 43
__________________________________________________________________________979
__________________________________________________________________________
Total Consumer Nondurables 5,717
CONSUMER SERVICES 9.4%
Restaurants 0.2%
Darden Restaurants 3,960 47
__________________________________________________________________________47
General Merchandisers 1.8%
Dayton Hudson 1,000 102
Marui (JPY) 2,000 41
Tesco (GBP) 15,000 70
TJX 3,200 113
Wal-Mart 5,000 130
__________________________________________________________________________456
Specialty Merchandisers 2.1%
Circuit City Stores 5,000 163
Federated Department Stores * 1,200 41
General Nutrition 4,800 74
Home Depot 3,300 169
Revco * 3,100 74
__________________________________________________________________________521
Entertainment and Leisure 2.2%
Disney 1,600 97
Hutchison Whampoa (HKD) 15,000 97
McDonald's 2,500 120
Reader's Digest (Class B) 2,040 79
Sharp (JPY) 4,000 65
Viacom (Class B) * 2,403 102
__________________________________________________________________________560
Media and Communications 3.1%
Elsevier (NLG) 4,000 $ 62
Gaylord Entertainment 6,479 169
Reuters ADR 1,800 126
Times Mirror (Class A) 1,071 47
Vodafone ADR 9,300 368
__________________________________________________________________________772
__________________________________________________________________________
Total Consumer Services 2,356
CONSUMER CYCLICALS 3.5%
Automobiles and Related 0.3%
Honda ADR 1,500 71
__________________________________________________________________________71
Building and Real Estate 1.6%
Cheung Kong Holdings (HKD) 7,000 52
DBS Land (SGD) 15,000 50
DeBartolo Realty, REIT 8,000 130
Federal Realty Investment Trust, REIT8,000 173
__________________________________________________________________________405
Miscellaneous Consumer Durables 1.6%
Corning 6,300 241
Ricoh (JPY) 5,000 50
Roussel UCLAF (FRF) 400 93
__________________________________________________________________________384
__________________________________________________________________________
Total Consumer Cyclicals 860
TECHNOLOGY 5.5%
Electronic Components 1.4%
Altera * 1,100 53
Intel 2,300 173
Maxim Integrated Products * 1,400 48
Xilinx * 2,200 76
__________________________________________________________________________350
Electronic Systems 0.7%
Hewlett-Packard 500 53
Honeywell 1,550 79
Nokia ADR 1,000 44
__________________________________________________________________________176
Information Processing 0.6%
Hitachi ADR 700 $ 66
IBM 730 78
__________________________________________________________________________144
Office Automation 0.6%
Ceridian * 2,700 143
__________________________________________________________________________143
Aerospace and Defense 0.5%
AlliedSignal 540 29
Boeing 1,100 94
__________________________________________________________________________123
Telecommunications 1.7%
3Com * 2,700 133
AirTouch Communications 3,300 105
Bay Networks * 4,800 139
LM Ericsson (Class B) ADR 1,000 23
Telecomunicacoes Brazil ADR 500 32
__________________________________________________________________________432
__________________________________________________________________________
Total Technology 1,368
CAPITAL EQUIPMENT 4.8%
Electrical Equipment 3.8%
ABB AG (CHF) 100 119
Exide 3,900 92
GE 7,200 596
Siemens (DEM) 1,000 56
Tomkins ADR 5,000 80
__________________________________________________________________________943
Machinery 1.0%
Deere 1,140 48
Man (DEM) 200 52
Varity * 3,000 147
__________________________________________________________________________247
__________________________________________________________________________
Total Capital Equipment 1,190
BUSINESS SERVICES AND
TRANSPORTATION 5.3%
Computer Service and Software 2.9%
Adobe Systems 2,400 $ 89
Automatic Data Processing 3,600 138
Cerner * 400 10
First Data 1,985 158
Intuit * 1,800 94
Microsoft * 700 83
Oracle Systems * 2,700 89
Sybase * 3,200 74
__________________________________________________________________________735
Distribution Services 1.0%
Alco Standard 2,300 144
Cardinal Health 1,800 115
__________________________________________________________________________259
Miscellaneous Business Services 0.8%
Deluxe Corp. 1,300 47
United Engineers (MYR) 5,000 35
WMX Technologies 2,560 90
__________________________________________________________________________172
Airlines 0.6%
AMR * 840 79
KLM (NLG) 2,000 72
__________________________________________________________________________151
Total Business Services and Transportation 1,317
ENERGY 4.9%
Energy Services 1.4%
Halliburton 1,100 61
Highlands Insurance Group 110 2
Schlumberger 3,230 270
__________________________________________________________________________333
Integrated Petroleum - Domestic 1.9%
Atlantic Richfield 1,500 180
British Petroleum ADR 1,540 162
Unocal 1,300 42
USX-Marathon 4,400 $ 96
__________________________________________________________________________480
Integrated Petroleum - International 1.6%
Exxon 830 70
Mobil 600 68
Repsol ADR 600 21
Royal Dutch Petroleum ADR 1,100 165
Texaco 900 75
__________________________________________________________________________399
__________________________________________________________________________
Total Energy 1,212
PROCESS INDUSTRIES 4.6%
Diversified Chemicals 0.3%
DuPont 1,000 80
__________________________________________________________________________80
Specialty Chemicals 2.4%
3M 1,100 75
A. Schulman 4,900 127
Bayer (DEM) 100 33
Great Lakes Chemical 4,440 286
Pall 2,000 54
Technip (FRF) 300 27
__________________________________________________________________________602
Paper and Paper Products 1.7%
Dai Nippon Printing (JPY) 4,000 74
International Paper 3,000 120
James River 5,000 124
Kimberly-Clark 1,000 73
Mead 500 27
__________________________________________________________________________418
Forest Products 0.2%
Georgia-Pacific 800 58
__________________________________________________________________________58
__________________________________________________________________________
Total Process Industries 1,158
BASIC MATERIALS 1.7%
Metals 0.9%
Alcoa 1,000 62
Alumax * 700 $ 23
Cyprus Amax Minerals 800 19
Nucor 2,000 110
__________________________________________________________________________214
Mining 0.5%
Barrick Gold 3,629 114
CRA (AUD) 2,000 32
__________________________________________________________________________146
Miscellaneous Materials 0.2%
Malayan Cement (MYR) 27,000 63
__________________________________________________________________________63
__________________________________________________________________________
Total Basic Materials 423
CONGLOMERATES 0.9%
LONRHO (GBP) 22,000 64
__________________________________________________________________________
Total Conglomerates 64
Total Common Stocks (Cost $16,913) 19,911
Corporate Bonds 10.5%
Agricultural Minerals and Chemicals,
Sr. Notes, 10.75%, 9/30/03$ 50,000 54
Airplane Pass Through Trust,
10.875%, 3/15/19 50,000 52
American Safety Razor, Sr. Notes,
9.875%, 8/1/05 50,000 51
Ametek, 9.75%, 3/15/04 10,000 11
Arcadian Partners, Sr. Notes,
10.75%, 5/1/05 50,000 54
Associates Corporation, 5.25%, 3/30/0015,000 14
Bally's Park Place, 9.25%, 3/15/04 50,000 50
Bank of Nova Scotia, 6.25%, 9/15/0815,000 13
Boise Cascade, Sr. Notes, 7.35%, 2/1/1680,000 73
Coinmach, Sr. Secured Notes,
11.75%, 11/15/05 50,000 52
Coltec Industries, Sr. Sub. Notes,
10.25%, 4/1/02 25,000 26
Consolidated Cigar, Sr. Sub. Notes,
10.50%, 3/1/03 50,000 52
Continental Bank Chicago NA,
12.50%, 4/1/01 48,000 58
Continental Cablevision, Sr. Deb.,
9.00%, 9/1/08 50,000 53
Cyprus Minerals Company,
6.625%, 10/15/05 100,000 93
Daimler-Benz Auto Grantor Trust,
3.90%, 10/15/98 11,803 12
Delta, MTN, 8.625%, 6/15/04 $ 90,000 $ 94
Doane Products, Sr. Notes,
10.625%, 3/1/06 50,000 51
Dominion Textile USA, Sr. Notes,
9.25%, 4/1/06 50,000 49
First Federal Financial,
11.75%, 10/1/04 50,000 50
First USA Bank, 5.85%, 2/22/01 300,000 281
GNF, 1st Mtg. Notes, 10.625%, 4/1/0350,000 51
H.F. Ahmanson, 7.875%, 9/1/04 100,000 102
Harrah's, 10.875%, 4/15/02 50,000 54
Loehmann's, 11.875%, 5/15/03 50,000 52
Long Island Lighting, 8.75%, 2/15/9730,000 30
Northrop Grumman, 144a, 7.00%, 3/1/06100,000 95
Owens-Illinois, Sr. Deb., 11.00%, 12/1/0350,000 54
Paine Webber Group, 8.25%, 5/1/02 100,000 103
Petroleum Heat & Power, 10.125%, 4/1/0350,000 49
Principal Mutual Life Insurance, 144a,
8.00%, 3/1/44 90,000 87
Riverwood International, Sr. Notes,
10.25%, 4/1/06 50,000 50
Rogers Cablesystem, 10.00%, 3/15/0550,000 50
Rouse, 8.50%, 1/15/03 15,000 15
Rowan Companies, Sr. Notes,
11.875%, 12/1/01 50,000 54
Scotland International Finance MTN,
6.50%, 2/15/11 100,000 88
Shawmut National, 7.20%, 4/15/03 15,000 15
Silgan, Sr. Sub. Notes, 11.75%, 6/15/0250,000 52
Sinclair Broadcasting, 10.00%, 9/30/0550,000 48
Tenneco, 8.00%, 11/15/99 15,000 15
Texas New Mexico Power, 12.50%, 1/15/9950,000 54
Texas Utilities Electric,
7.375%, 10/1/25 100,000 91
7.875%, 4/1/24 100,000 96
Trump Atlantic City Associates,
1st Mtg. Notes, 11.25%, 5/1/0650,000 50
Wal- Mart, 7.25%, 6/1/13 30,000 29
Wright Medical Technology, Sr. Secured
Notes,
10.75%, 7/1/00 25,000 25
__________________________________________________________________________
Total Corporate Bonds (Cost $2,647) 2,652
Foreign Government Obligations/
Agencies 1.8%
Belgian Government Bonds,
7.25%, 4/29/04 BEL 300,000 $ 10
Canadian Government Bonds,
6.50%, 6/1/04 CAD 3,000 2
8.50%, 4/1/02 CAD 22,000 17
9.75%, 6/1/21 CAD 5,000 4
European Investor Bank,
4.625%, 2/26/03 JPY 8,000,000 81
French Government Bonds,
8.25%, 2/27/04 FRF 142,000 31
8.50%, 11/25/02 FRF 214,000 47
German Federal Government Bonds
6.50%, 7/15/03 DEM 30,000 20
8.375%, 5/21/01 DEM 65,000 48
8.50%, 8/21/00 DEM 23,000 17
Int'l Bank for Reconstruction &
Development, 6.75%, 3/15/00JPY1,000,000 11
Italian Government Bonds,
8.50%, 8/1/04 ITL45,000,000 28
Japanese Government Bonds,
4.50%, 6/20/03 # JPY 8,400,000 84
Spanish Government Bonds,
8.00%, 5/30/04 ESP 1,500,000 11
Swedish Government Bonds,
6.00%, 2/9/05 SEK 100,000 13
United Kingdom Treasury Notes,
8.00%, 6/10/03 GBP 14,000 22
9.00%, 3/3/00 GBP 8,000 13
__________________________________________________________________________
Total Foreign Government Obligations/Agencies
(Cost $453) 459
U.S. Government Mortgage-Backed
Securities 4.6%
Government National Mortgage Assn., I
6.50%, 12/15/23 - 4/15/24$ 141,209 130
7.50%, 10/15/22 57,880 57
8.00%, 1/15/22 - 9/15/24 371,569 375
Government National Mortgage Assn., II
7.00%, 8/15/23 144,546 138
7.50%, 1/15/26 407,688 399
8.00%, 10/20/25 47,915 48
__________________________________________________________________________
Total U.S. Government Mortgage-Backed Securities
(Cost $1,144) 1,147
U.S. Government Obligations/
Agencies 0.3%
Tennessee Valley Authority
7.25%, 7/15/43 $ 70,000 $ 64
__________________________________________________________________________
Total U.S. Government Obligations/Agencies (Cost $69)64
Short-Term Investments 2.8%
Commercial Paper 2.8%
Countrywide Funding, 5.36%, 6/11/96100,000 100
Investments in Commercial Paper through
a joint account, 5.41%, 6/3/96 487,850 488
Tasmanian Public Finance,
5.27%, 9/23/96 100,000 98
__________________________________________________________________________
Total Short-Term Investments (Cost $686) 686
Total Investments in Securities
99.8% of Net Assets (Cost $21,912) $ 24,919
Other Assets Less Liabilities 35
NET ASSETS $ 24,954
Net Assets Consist of:
Accumulated net investment income -
net of distributions $ 132
Accumulated net realized gain/loss -
net of distributions 663
Net unrealized gain (loss) 3,007
Paid-in-capital applicable to 1,823,337 shares
of $0.0001 par value capital stock outstanding;
1,000,000,000 shares of the corporation authorized.21,152
NET ASSETS $ 24,954
NET ASSET VALUE PER SHARE $ 13.69
* Non-income producing
# Securities contain some restrictions as to public resale-total of such
securities at year-end amounts to 0.34% of net assets.
MTN Medium term note
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 year-end amounts to
0.73% of net assets.
AUD Australian dollar
BEL Belgian franc
CAD Canadian dollar
CHF Swiss franc
DEM German deutschemark
DKK Danish krone
ESP Spanish peseta
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.
T. Rowe Price Personal Strategy Funds
STATEMENT OF OPERATIONS
In thousands
IncomeBalanced Growth
Fund Fund Fund
__________________________________________________________________________
Year Year Year
Ended Ended Ended
5/31/965/31/96 5/31/96
__________________________________________________________________________
Investment Income
Income
Interest $ 1,070 $1,251 $ 291
Dividend 200 477 263
Total income 1,270 1,728 554
Expenses
Investment management - 150 -
Custody and accounting 113 117 108
Shareholder servicing 74 51 63
Registration 34 32 32
Legal and audit 19 21 22
Prospectus and shareholder
reports 6 13 13
Directors 6 7 6
Miscellaneous 13 13 13
Reimbursed by Manager (35) - (76)
Total expenses 230 404 181
Net investment income 1,040 1,324 373
Realized and Unrealized Gain/Loss
Net realized gain (loss) on
Securities 1,161 1,135 749
Futures - (118) -
Foreign currency
transactions (7) (23) (11)
Net realized gain (loss)1,154 994 738
Change in net unrealized gain
or loss on
Securities 806 1,857 2,017
Futures - 14 -
Other assets and liabilities
denominated in foreign
currencies (13) (15) (2)
Change in net unrealized
gain or loss 793 1,856 2,015
Net realized and unrealized
gain (loss) 1,947 2,850 2,753
INCREASE (DECREASE) IN NET
ASSETS FROM OPERATIONS $ 2,987 $4,174 $ 3,126
The accompanying notes are an integral part of these financial statements.
T. Rowe Price Personal Strategy Funds
STATEMENT OF CHANGES IN NET ASSETS
In thousands
Income Fund Balanced Fund Growth Fund
__________________________________________________________________________
Year7/29/94 Year7/29/94 Year 7/29/94
Ended to Ended to Ended to
5/31/965/31/955/31/965/31/955/31/96 5/31/95
__________________________________________________________________________
Increase (Decrease) in Net Assets
Operations
Net investment
income $1,040 $ 435 $1,324 $ 251 $ 373 $ 142
Net realized
gain (loss) 1,154 51 994 1 738 10
Change in net
unrealized
gain or loss 793 1,677 1,856 1,162 2,015 992
Increase (decrease)
in net assets
from
operations 2,987 2,163 4,174 1,414 3,126 1,144
Distributions to shareholders
Net investment
income (974) (314) (722) (211) (330) (68)
Net realized
gain (207) - (105) - (86) -
Decrease in
net assets
from dis-
tributions (1,181) (314) (827) (211) (416) (68)
Capital share transactions*
Shares sold 10,965 19,163104,537 12,675 14,369 10,577
Distributions
reinvested 1,076 230 802 204 411 67
Shares
redeemed (9,020) (619)(5,309) (819)(3,374) (1,060)
Increase
(decrease) in
net assets from
capital share
transactions 3,021 18,774100,030 12,060 11,406 9,584
Net
equalization 13 42 113 43 90 58
Net Assets
Increase (decrease)
during period 4,840 20,665103,490 13,306 14,206 10,718
Beginning of
period 20,705 40 13,336 30 10,748 30
End of period$25,545$20,705$116,826$13,336$24,954$10,748
*Share information
Shares sold 949 1,926 8,390 1,251 1,116 1,029
Distributions
reinvested 94 22 66 20 32 7
Shares
redeeemed (780) (60) (438) (78) (264) (100)
Increase
(decrease)
in shares
outstanding 263 1,888 8,018 1,193 884 936
The accompanying notes are an integral part of these financial statements.
T. Rowe Price Personal Strategy Funds
May 31, 1996
NOTES TO FINANCIAL STATEMENTS
Note 1 - Significant Accounting Policies
T. Rowe Price Personal Strategy Funds, Inc., (the corporation) is registered
under the Investment Company Act of 1940. The Personal Strategy Income Fund
(the Income Fund), the Personal Strategy Balanced Fund (the Balanced Fund),
and the Personal Strategy Growth Fund (the Growth Fund), diversified, open-end
management investment companies, are three of the portfolios established by
the corporation and commenced operations on July 29, 1994.
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 each 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
each fund, as authorized by the Board of Directors.
Financial futures contracts are valued at closing settlement prices.
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 each 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 funds follow the practice of
equalization under which undistributed net investment income per share is
unaffected by fund shares sold or redeemed. Payments ("variation margin") made
or received by each fund to settle the daily fluctuations in the value of
futures contracts are recorded as unrealized gain or loss until the contracts
are closed. Unrealized gains or losses on futures contracts are included in
Change in net unrealized gain or loss in the accompanying financial
statements.
Note 2 - Investment Transactions
Consistent with their investment objectives, the funds engage in the following
practices to manage exposure to certain risks or enhance performance. The
investment objective, policies, program, and risk factors of each fund are
described more fully in each fund's prospectus and Statement of Additional
Information.
Commercial Paper Joint Account The Personal Strategy Funds, 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 each
fund's criteria as to quality, yield, and liquidity.
Securities Lending To earn additional income, each fund lends its securities
to approved brokers. At May 31, 1996, the market value of securities on loan
by the Income Fund, the Balanced Fund, and Growth Fund was $3,775,000,
$15,469,000, and $1,952,000, respectively, which was fully collateralized with
cash. Although the risk is mitigated by the collateral, each fund could
experience a delay in recovering its securities and a possible loss of income
or value if the borrower fails to return them.
Other Purchases and sales of U.S. government securities and other portfolio
securities, excluding short-term securities, for the year ended May 31, 1996,
were as follows:
Income Balanced Growth
Fund Fund Fund
__________________________________________________________________________
U.S. government securities
Purchases $1,449,000 $11,941,000$1,627,000
Sales 413,000 4,201,000 773,000
Other securities
Purchases 9,776,000 88,810,000 15,734,000
Sales 6,847,000 12,968,000 5,580,000
Note 3 - Federal Income Taxes
No provision for federal income taxes is required since each fund intends to
continue to qualify as a regulated investment company and distribute all of
its taxable income.
In order for each fund's capital accounts and distributions to shareholders to
reflect the tax character of certain transactions, the following
reclassifications were made during the year ended May 31, 1996. The results of
operations and net assets were not affected by the reclassifications.
Income Balanced Growth
Fund Fund Fund
__________________________________________________________________________
Undistributed net
investment income $ (4,000) $(105,000) $ (81,000)
Paid-in-capital 4,000 105,000 81,000
At May 31, 1996, the aggregate cost of investments for the Income, Balanced,
and Growth funds for federal income tax and financial reporting purposes was
$22,732,000, $113,560,000, and $21,912,000, respectively. Net unrealized gain
(loss) on investments was as follows:
Income Balanced Growth
Fund Fund Fund
__________________________________________________________________________
Appreciated
investments $2,853,000 $5,142,000 $3,385,000
Depreciated
investments (379,000) (2,129,000) (378,000)
Net unrealized
gain (loss) $2,474,000 $3,013,000 $3,007,000
Note 4 - Related Party Transactions
The investment management agreement between each fund and T. Rowe Price
Associates, Inc. (the manager) provides for an annual investment management
fee, of which $70,000 was payable at May 31, 1996 by the Balanced Fund. The
fee is computed daily and paid monthly, and consists of an individual fund fee
equal to 0.15% for the Income Fund, 0.25% for the Balanced Fund and 0.30% for
the Growth Fund, 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 0.305% for assets in
excess of $50 billion. At May 31, 1996, and for the year then ended, the
effective annual group fee rate was 0.33% and 0.34%, respectively. Each fund
pays a pro rata share of the group fee based on the ratio of its net assets to
those of the group.
Under the terms of the investment management agreement, the manager is
required to bear any expenses through May 31, 1996, for the funds which would
cause each fund's ratio of expenses to average net assets to exceed 0.95% for
the Income Fund, 1.05% for the Balanced Fund and 1.10% for the Growth Fund.
Thereafter through May 31, 1998, each fund is required to reimburse the
manager for these expenses, provided that average net assets have grown or
expenses have declined sufficiently to allow reimbursement without causing
each fund's ratio of expenses to average net assets to exceed 0.95%, 1.05% and
1.10%, respectively. Pursuant to these agreements, $117,000, $53,000 and
$104,000 of management fees were not accrued by the Income Fund, Balanced
Fund, and Growth Fund for the year ended May 31, 1996, and $35,000 and $76,000
of other expenses were borne by the manager of the Income Fund and Growth
Fund, respectively. Pursuant to this agreement, $133,000, $138,000, and
$145,000 of unaccrued prior year fees and expenses remain subject to
reimbursement through May 31, 1998 for the Income Fund, Balanced Fund and
Growth Fund, respectively.
In addition, each fund has entered into agreements with the manager and two
wholly owned subsidiaries of the manager, pursuant to which each fund receives
certain other services. The manager computes the daily share price and
maintains the financial records of each fund. T. Rowe Price Services, Inc., is
each fund's transfer and dividend disbursing agent and provides shareholder
and administrative services to the funds. T. Rowe Price Retirement Plan
Services, Inc., provides subaccounting and recordkeeping services for certain
retirement accounts invested in each fund. The Income, Balanced and Growth
funds incurred expenses pursuant to these related party agreements totaling
approximately $136,000, $107,000 and $117,000, respectively, for the year
ended May 31, 1996, of which $24,000, $8,000 and $10,000, respectively, were
payable at period-end.
During the year ended May 31, 1996, the Balanced and Growth funds, in the
ordinary course of business, paid commissions of $ 20,000 and $ 6,000,
respectively, to, and placed security purchase and sale orders aggregating
$3,215,000 and $1,037,000 with certain affiliates of the manager in connection
with the execution of various portfolio transactions.
T. Rowe Price Personal Strategy Funds
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders and Board of Directors
of T. Rowe Price Personal Strategy Funds, Inc.
We have audited the accompanying statement of net assets of T. Rowe Price
Personal Strategy Income Fund, T. Rowe Price Personal Strategy Balanced Fund
and the T. Rowe Price Personal Strategy Growth Fund (collectively the "Funds")
as of May 31, 1996, and the related statement of operations for the year then
ended, the statement of changes in net assets for the year then ended May 31,
1996 and the period July 29, 1994 (commencement of operations) through May 31,
1995, and the financial highlights for the year then ended May 31, 1996 and
the period July 29, 1994 (commencement of operations) through May 31, 1995.
These financial statements and financial highlights are the responsibility of
the Funds' management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. Our procedures included confirmation of investments
owned as of May 31, 1996, by correspondence with the custodian and brokers.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights, referred to
above, present fairly, in all material respects, the financial position of T.
Rowe Price Personal Strategy Income Fund, T. Rowe Price Personal Strategy
Balanced Fund, and the T. Rowe Price Personal Strategy Growth Fund as of May
31, 1996, the results of their operations, the changes in their net assets and
financial highlights for the respective periods stated in the first paragraph
in conformity with generally accepted accounting principles.
COOPERS & LYBRAND L.L.P.
Baltimore, Maryland
June 19, 1996
T. ROWE PRICE SHAREHOLDER SERVICES
To help shareholders monitor their current investments and make decisions that
accurately reflect their financial goals, T. Rowe Price offers a wide variety
of information and services - at no extra cost.
Knowledgeable Service Representatives
By Phone Shareholder service representatives are available Monday through
Friday from 8 a.m. to 10 p.m. ET and weekends from 8:30 a.m. to 5 p.m. ET.
Call 1-800-225-5132 to speak directly with a representative who will be able
to assist you with your accounts.
In Person Visit one of our Investor Center locations to meet with a
representative who will be able to assist you with your accounts. You can also
drop off applications or obtain prospectuses and other literature.
Automated 24-Hour Services
Tele*Access(registered trademark) Call 1-800-638-2587 to obtain information
such as account balance, date and amount of your last transaction, latest
dividend payment, and fund prices and yields. Additionally, you can request
prospectuses, statements, new account and tax forms; reorder checks; and
initiate purchase, redemption, and exchange orders for identically registered
accounts.
T. Rowe Price OnLine Through a personal computer via dial-up modem, you can
replicate all the services available on Tele*Access.
Account Services
Checking Write checks for $500 or more on any money market and most bond fund
accounts (except the High Yield and Emerging Markets Bond Funds).
Automatic Investing Build your account over time by investing directly from
your bank account or paycheck with Automatic Asset Builder. Additionally,
Automatic Exchange enables you to move investments systematically from one
fund account to another, such as from a money fund to a stock fund. A low $50
minimum makes it easy to get started.
T. Rowe Price Shareholder Services
Automatic Withdrawal If you need money from your fund account on a regular
basis, you can establish scheduled, automatic redemptions.
Dividend and Capital Gains Payment Options Reinvest all or some of your
distributions, or take them in cash. We give you maximum flexibility and
convenience.
Discount Brokerage
Investments Available You can trade stocks, bonds, options, precious metals,
and other securities at a substantial savings over regular commission rates.
To Open an Account Call a shareholder service representative at
1-800-225-5132.
Investment Information
Combined Statement A comprehensive overview of your T. Rowe Price accounts is
provided. The summary page gives you earnings by tax category, provides total
portfolio value, and lists your investments by type - stock, bond, and money
market. Detail pages itemize account transactions by fund.
Shareholder Reports Portfolio managers review the performance of the funds in
plain language and discuss T. Rowe Price's economic outlook.
The T. Rowe Price Report This is a quarterly newsletter with relevant
articles on market trends, personal financial planning, and T. Rowe Price's
economic perspective.
Performance Update This quarterly report reviews recent market developments
and provides comprehensive performance information for each T. Rowe Price
fund.
Insights This library of information includes reports on mutual fund tax
issues, investment strategies, and financial markets.
Detailed Investment Guides Our widely acclaimed Asset Mix Worksheet, College
Planning Kit, Personal Strategy Planner, Retirees Financial Guide, and
Retirement Planning Kit (also available on disk for PC use) help you determine
and reach your investment goals.
T. ROWE PRICE MUTUAL FUNDS
Stock Funds
Domestic
Balanced
Blue Chip Growth
Capital Appreciation
Capital Opportunity
Dividend Growth
Equity Income
Equity Index
Growth & Income
Growth Stock
Health Sciences
Mid-Cap Growth
Mid-Cap Value
New America Growth
New Era
New Horizons*
OTC
Science & Technology
Small-Cap Value*
Spectrum Growth
Value
International/Global
Emerging Markets Stock
European Stock
Global Stock
International Discovery
International Stock
Japan
Latin America
New Asia
Bond Funds
Domestic Taxable
Corporate Income
GNMA
High Yield
New Income
Short-Term Bond
Short-Term U.S. Government
Spectrum Income
Summit GNMA
Summit Limited-Term Bond
U.S. Treasury Intermediate
U.S. Treasury Long-Term
Domestic Tax-Free
California Tax-Free Bond
Florida Insured Intermediate Tax-Free
Georgia Tax-Free Bond
Maryland Short-Term Tax-Free Bond
Maryland Tax-Free Bond
New Jersey Tax-Free Bond
New York Tax-Free Bond
Summit Municipal Income
Summit Municipal Intermediate
Tax-Free High Yield
Tax-Free Income
Tax-Free Insured
Intermediate Bond
Tax-Free Short-Intermediate
Virginia Short-Term
Tax-Free Bond
Virginia Tax-Free Bond
International/Global
Emerging Markets Bond
Global Government Bond
International Bond
Short-Term Global Income
Money Market
Taxable
Prime Reserve
Summit Cash Reserves
U.S. Treasury Money
Tax-Free
California Tax-Free Money
New York Tax-Free Money
Summit Municipal Money Market
Tax-Exempt Money
Blended Asset
Personal Strategy Balanced
Personal Strategy Growth
Personal Strategy Income
T. Rowe Price No-Load Variable Annuity
Equity Income Portfolio
International Stock Portfolio
Limited-Term Bond Portfolio
New America Growth Portfolio
Personal Strategy Balanced Portfolio
*Closed to new investors.
For yield, price, last transaction, and current balance, 24 hours, 7 days a
week, call:
1-800-638-2587 toll free
For assistance with your existing fund account, call:
Shareholder Service Center
1-800-225-5132 toll free
625-6500 Baltimore area
T. Rowe Price
100 East Pratt Street
Baltimore, Maryland 21202
This report is authorized for distribution only to shareholders and to others
who have received a copy of the prospectus of the T. Rowe Price Personal
Strategy Funds.
Invest With Confidence(registered trademark)
T. Rowe Price
T. Rowe Price Investment Services, Inc., DistributorRPRTPSC 5/31/96
Chart 1 - Interest Rate Levels - chart showing yields on 30-year, 5-year, and
90-day Treasuries from 5/31/95 to 5/31/96.
Chart 2 - Asset Allocation - Personal Strategy Income Fund - pie chart showing
stocks 43%, bonds 51%, and money markets 6%.
Chart 3 - Asset Allocation - Personal Strategy Balanced Fund - pie chart
showing stocks 59%, bonds 35%, and money markets 6%.
Chart 4 - Asset Allocation - Personal Strategy Growth Fund - pie chart showing
stocks 80% and bonds 20%.
Chart 5 - Personal Strategy Income Fund - A line chart showing the cumulative
growth of $10,000 invested in the Personal Strategy Income Fund from inception
compared with $10,000 invested in a broad-based index over the same period.
Chart 6 - Personal Strategy Balanced Fund - A line chart showing the
cumulative growth of $10,000 invested in the Personal Strategy Balanced Fund
from inception compared with $10,000 invested in a broad-based index over the
same period.
Chart 7 - Personal Strategy Growth Fund - A line chart showing the cumulative
growth of $10,000 invested in the Personal Strategy Growth Fund from inception
compared with $10,000 invested in a broad-based index over the same period.
