<PAGE>
- --------------------------------------------------------------------------------
Semiannual Report Financial Statements
- --------------------------------------------------------------------------------
T. Rowe Price
Personal Strategy
Growth Fund
-----------------
November 30, 1997
-----------------
<PAGE>
T. Rowe Price Personal Strategy Growth Fund
- --------------------------------------------------------------------------------
Unaudited
- --------------------
Financial Highlights For a share outstanding throughout each period
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
6 Months Year 7/29/94
Ended Ended Through
11/30/97 5/31/97 5/31/96 5/31/95
<S> <C> <C> <C> <C>
NET ASSET VALUE
Beginning of period $ 15.20 $ 13.69 $ 11.44 $ 10.00
...........................................
Investment activities
Net investment income 0.13* 0.27* 0.30* 0.25*
Net realized and
unrealized gain (loss) 1.27 2.37 2.29 1.30
...........................................
Total from investment activities 1.40 2.64 2.59 1.55
...........................................
Distributions
Net investment income - (0.24) (0.27) (0.11)
Net realized gain - (0.89) (0.07) -
...........................................
Total distributions - (1.13) (0.34) (0.11)
...........................................
NET ASSET VALUE
End of period $ 16.60 $ 15.20 $ 13.69 $ 11.44
-------------------------------------------
<CAPTION>
Ratios/Supplemental Data
<S> <C> <C> <C> <C>
Total return 9.21%* 19.89%* 22.83%* 15.65%*
..................................................................................
Ratio of expenses to average
net assets 1.10%+* 1.10%* 1.10%* 1.10%+*
..................................................................................
Ratio of net investment income to
average net assets 2.12%+* 2.24%* 2.27%* 2.76%+*
..................................................................................
Portfolio turnover rate 12.8% 39.6% 39.5% 25.7%+
..................................................................................
Average commission rate paid $ 0.0354 $ 0.0378 $ 0.0441 $ -
..................................................................................
Net assets, end of period
(in thousands) $ 96,130 $ 67,552 $ 24,954 $ 10,748
..................................................................................
</TABLE>
* Excludes expenses in excess of a 1.10% voluntary expense limitation in
effect through 5/31/98.
+ Annualized.
The accompanying notes are an integral part of these financial statements.
2
<PAGE>
T. Rowe Price Personal Strategy Growth Fund
- --------------------------------------------------------------------------------
Unaudited November 30, 1997
<TABLE>
<CAPTION>
- -----------------------
Statement of Net Assets Shares/Par Value
- --------------------------------------------------------------------------------
In thousands
<S> <C> <C>
Common Stocks 72.2%
FINANCIAL 14.1%
Bank and Trust 7.9%
Abbey National (GBP) 18,000 $ 285
................................................................................
ABN Amro Holdings (NLG) 6,400 122
................................................................................
Air Liquide (L) (FRF) 730 115
................................................................................
Australia & New Zealand Banking ADR 1,200 41
................................................................................
BANC ONE 14,100 724
................................................................................
Banca Commerciale Italiana (ITL) 27,000 77
................................................................................
Banco de Bilbao Vizcaya ADR 4,500 135
................................................................................
Banco Frances del Rio ADR 2,300 62
................................................................................
BankBoston 2,000 178
................................................................................
Barclay's (GBP) 12,000 290
................................................................................
Chase Manhattan 6,000 652
................................................................................
Citicorp 2,300 276
................................................................................
Deutsche Bank (DEM) 1,700 109
................................................................................
Development Bank of Singapore (SGD) 3,000 28
................................................................................
Dresdner Bank AG (DEM) 3,100 120
................................................................................
First Union 4,300 210
................................................................................
HSBC Holdings (GBP) 12,100 308
................................................................................
J. P. Morgan 3,430 392
................................................................................
KeyCorp 1,750 118
................................................................................
Kredietbank (BEF) 300 121
................................................................................
Mellon Bank 11,100 629
................................................................................
Mercantile Bancorporation 600 31
................................................................................
National City 3,000 200
................................................................................
NationsBank 2,800 168
................................................................................
Norwest 9,200 345
................................................................................
Overseas Chinese Bank (SGD) 4,200 25
................................................................................
RHB Sakura Merchant Bankers (MYR) * 600 -
................................................................................
Schweizerischer Bankverein (CHF) * 600 172
................................................................................
Societe Generale (FRF) 1,129 148
................................................................................
Societe Generale de Belgique (BEF) 500 47
................................................................................
Svenska Handelsbanken (SEK) 6,000 211
................................................................................
U.S. Bancorp 2,300 247
................................................................................
Union Bank of Switzerland (CHF) 150 191
................................................................................
</TABLE>
3
<PAGE>
T. Rowe Price Personal Strategy Growth Fund
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares/Par Value
- --------------------------------------------------------------------------------
In thousands
<S> <C> <C>
Washington Mutual 9,900 $683
................................................................................
Wells Fargo 400 123
................................................................................
Westpac Bank (AUD) 9,000 57
................................................................................
7,640
.........
Insurance 3.0%
ACE Limited 3,900 387
................................................................................
American General 4,000 216
................................................................................
American International Group 1,200 121
................................................................................
EXEL 2,300 141
................................................................................
Mid Ocean Limited 2,800 174
................................................................................
St. Paul Companies 8,100 648
................................................................................
Sumitomo Marine & Fire Insurance (JPY) 18,000 91
................................................................................
Travelers Property Casualty 16,100 640
................................................................................
UNUM 4,500 213
................................................................................
Willis-Corroon ADR 24,900 266
................................................................................
2,897
.........
Financial Services 3.2%
American Express 7,400 584
................................................................................
Associates First Capital (Class A) 300 19
................................................................................
AXA (FRF) 1,900 138
................................................................................
DCB Holdings (MYR) 12,000 7
................................................................................
Fannie Mae 13,100 692
................................................................................
Freddie Mac 8,400 346
................................................................................
Green Tree Financial 1,400 43
................................................................................
Household International 1,600 202
................................................................................
ING Groep (NLG) 3,050 124
................................................................................
Money Store 1,500 38
................................................................................
Morgan Stanley Dean Witter Discover 600 32
................................................................................
Pearson (GBP) 6,000 84
................................................................................
SLM Holding 2,250 290
................................................................................
The CIT Group (Class A) * 1,300 39
................................................................................
Travelers Group 8,349 422
................................................................................
3,060
.........
Total Financial 13,597
.........
UTILITIES 5.7%
Telephone Services 3.6%
ALLTEL 3,400 135
................................................................................
</TABLE>
4
<PAGE>
T. Rowe Price Personal Strategy Growth Fund
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares/Par Value
- --------------------------------------------------------------------------------
In thousands
<S> <C> <C>
AT&T 18,750 $1,048
................................................................................
BellSouth 5,000 274
................................................................................
British Telecommunications PLC ADR 1,900 148
................................................................................
Compania de Telecommunicaciones de Chile ADR 850 23
................................................................................
Frontier 15,000 368
................................................................................
Hong Kong Telecommunications ADR 2,232 42
................................................................................
Nippon Telegraph & Telephone (JPY) 18 148
................................................................................
SBC Communications 10,700 779
................................................................................
Telecom Corp. of New Zealand ADR 1,600 66
................................................................................
Telecom Italia (ITL) 19,440 121
................................................................................
Telecom Italia Mobile (ITL) 15,000 61
................................................................................
Telefonica de Espana ADR 1,600 138
................................................................................
Telmex (Class L) ADR 1,800 89
................................................................................
Telekom Malaysia (MYR) 7,500 17
................................................................................
3,457
............
Electric Utilities 2.1%
Electrabel (BEF) 300 67
................................................................................
Empresa Nacional de Electricidad ADR 4,000 75
................................................................................
Empresa Nacional de Electricidad Chile ADR 1,000 19
................................................................................
Entergy 2,700 70
................................................................................
FirstEnergy * 21,037 568
................................................................................
Hong Kong Electric (HKD) 16,000 54
................................................................................
Niagara Mohawk * 12,000 115
................................................................................
PECO Energy 8,000 194
................................................................................
Texas Utilities 6,600 264
................................................................................
Unicom 16,000 466
................................................................................
VEBA (DEM) 2,400 143
................................................................................
2,035
...........
Total Utilities 5,492
...........
CONSUMER NONDURABLES 15.7%
Cosmetics 0.7%
Gillette 500 46
................................................................................
International Flavors & Fragrances 9,000 434
................................................................................
Kao (JPY) 16,000 213
................................................................................
693
...........
</TABLE>
5
<PAGE>
T. Rowe Price Personal Strategy Growth Fund
- ---------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares/Par Value
- ---------------------------------------------------------------------
In thousands
<S> <C> <C>
Beverages 1.0%
Anheuser-Busch 9,000 $ 389
.....................................................................
LVMH (FRF) 550 95
.....................................................................
PepsiCo 12,700 468
.....................................................................
952
..........
Food Processing 3.3%
Cadbury Schweppes (GBP) 10,900 113
.....................................................................
Cadbury Schweppes ADR 2,000 84
.....................................................................
CPC International 3,000 310
.....................................................................
CSM (NLG) 2,000 84
.....................................................................
Danisco (DKK) 1,800 98
.....................................................................
Dean Foods 1,500 80
.....................................................................
Eridania Beghin-Say (FRF) 800 124
.....................................................................
General Mills 2,460 182
.....................................................................
Heinz 2,700 135
.....................................................................
Hershey Foods 1,100 67
.....................................................................
Interstate Bakeries 2,200 76
.....................................................................
McCormick 12,000 319
.....................................................................
Nabisco Holdings (Class A) 3,100 145
.....................................................................
Nestle (CHF) 190 280
.....................................................................
Ralston Purina 4,600 428
.....................................................................
Sara Lee 12,100 640
.....................................................................
3,165
..........
Hospital Supplies/Hospital Management 1.2%
Abbott Laboratories 1,500 98
.....................................................................
Baxter International 1,900 96
.....................................................................
Boston Scientific * 2,600 118
.....................................................................
HealthSouth * 6,900 181
.....................................................................
Medtronic 2,900 138
.....................................................................
Smith & Nephew (GBP) 22,000 64
.....................................................................
St. Jude Medical * 2,100 62
.....................................................................
Tenet Healthcare * 4,000 127
.....................................................................
Terumo (JPY) 8,000 125
.....................................................................
United States Surgical * 5,700 150
.....................................................................
1,159
..........
Pharmaceuticals 4.6%
American Home Products 10,480 732
.....................................................................
Astra (Class B) (SEK) 4,267 71
.....................................................................
</TABLE>
6
<PAGE>
T. Rowe Price Personal Strategy Growth Fund
- --------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares/Par Value
- --------------------------------------------------------------------
In thousands
<S> <C> <C>
Biogen 1,300 $ 46
....................................................................
Bristol-Myers Squibb 3,600 337
....................................................................
Eli Lilly 2,828 178
....................................................................
Gehe (DEM) 2,000 102
....................................................................
Glaxo Wellcome ADR 2,900 132
....................................................................
Johnson & Johnson 4,200 264
....................................................................
Merck 3,800 359
....................................................................
Novartis (CHF) 80 128
....................................................................
Pfizer 8,420 613
....................................................................
Pharmacia & Upjohn 6,160 208
....................................................................
Schering-Plough 4,100 257
....................................................................
SmithKline Beecham ADR 11,800 586
....................................................................
Takeda Chemical Industries (JPY) 8,000 234
....................................................................
Warner-Lambert 1,500 210
....................................................................
4,457
.........
Health Care Services 0.3%
Altana AG (DEM) 1,200 83
....................................................................
United HealthCare 4,100 213
....................................................................
296
.........
Miscellaneous Consumer Products 4.6%
Benetton Group (ITL) 5,200 79
....................................................................
Bridgestone (JPY) 7,000 152
....................................................................
Colgate-Palmolive 9,100 608
....................................................................
CUC International * 9,350 269
....................................................................
Grand Metropolitan ADR 2,800 104
....................................................................
Jones Apparel Group * 1,300 63
....................................................................
Kuraray (JPY) 12,000 104
....................................................................
Lion Nathan (NZD) 30,000 71
....................................................................
Mattel 6,400 256
....................................................................
Newell 3,300 135
....................................................................
Philip Morris 19,550 850
....................................................................
Procter & Gamble 2,400 183
....................................................................
Service Corp. International 6,100 223
....................................................................
Stanley Works 3,100 137
....................................................................
Textron 1,100 65
....................................................................
Tomkins ADR 5,000 104
....................................................................
Unifi 7,400 281
....................................................................
Unilever N.V. ADR 4,000 232
....................................................................
</TABLE>
7
<PAGE>
T. Rowe Price Personal Strategy Growth Fund
- --------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares/Par Value
- --------------------------------------------------------------------
In thousands
<S> <C> <C>
UST 12,300 $ 380
....................................................................
Yue Yuen Industrial (HKD) 42,000 92
....................................................................
4,388
...........
Total Consumer Nondurables 15,110
...........
CONSUMER SERVICES 7.4%
Restaurants 0.0%
Tricon Global Restaurants * 600 20
....................................................................
20
...........
General Merchandisers 1.8%
Dayton Hudson 3,300 219
....................................................................
Fred Meyer * 900 30
....................................................................
J.C. Penney 2,000 129
....................................................................
JUSCO (JPY) 7,000 117
....................................................................
Marui (JPY) 4,000 63
....................................................................
Neiman-Marcus * 4,300 142
....................................................................
Pinault Printemps Redoute (FRF) 350 179
....................................................................
Tesco (GBP) 20,160 163
....................................................................
TJX 4,400 152
....................................................................
Wal-Mart 9,200 367
....................................................................
Warnaco Group (Class A) 7,000 206
....................................................................
1,767
...........
Specialty Merchandisers 2.5%
American Stores 5,100 101
....................................................................
Christian Dior (FRF) 700 69
....................................................................
CVS 4,206 279
....................................................................
Federated Department Stores * 4,600 210
....................................................................
General Nutrition * 4,800 164
....................................................................
Home Depot 2,850 159
....................................................................
Kohl's * 1,900 137
....................................................................
McKesson 300 34
....................................................................
Omron (JPY) 7,000 120
....................................................................
Safeway * 5,400 328
....................................................................
The Gap 200 11
....................................................................
Toys "R" Us * 10,000 341
....................................................................
Tupperware 20,000 477
....................................................................
2,430
...........
</TABLE>
8
<PAGE>
T. Rowe Price Personal Strategy Growth Fund
- --------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares/Par Value
- --------------------------------------------------------------------
In thousands
<S> <C> <C>
Entertainment and Leisure 1.4%
Carnival (Class A) ADR 4,200 $ 227
....................................................................
Disney 3,300 313
....................................................................
Hutchison Whampoa (HKD) 39,000 260
....................................................................
ITT * 600 45
....................................................................
McDonald's 2,200 107
....................................................................
Reader's Digest (Class B) 15,040 367
....................................................................
Sharp (JPY) 4,000 27
....................................................................
1,346
.........
Media and Communications 1.7%
Asatsu (JPY) 6,000 104
....................................................................
Elsevier (NLG) 8,000 135
....................................................................
R.R. Donnelley 11,500 406
....................................................................
Time Warner 3,900 227
....................................................................
Tribune 4,000 226
....................................................................
U S WEST Media * 5,600 149
....................................................................
Valassis Communications * 2,800 84
....................................................................
Vodafone ADR 3,700 244
....................................................................
1,575
.........
Total Consumer Services 7,138
.........
CONSUMER CYCLICALS 3.2%
Automobiles and Related 0.6%
Cycle & Carriage (SGD) 6,000 25
....................................................................
Honda ADR 3,000 213
....................................................................
Lear * 600 28
....................................................................
Lucasvarity ADR 4,140 132
....................................................................
SPX 1,700 116
....................................................................
514
.........
Building and Real Estate 1.0%
Cheung Kong Holdings (HKD) 29,000 204
....................................................................
City Developments (SGD) 5,000 25
....................................................................
Crescent Real Estate Equities, REIT 400 15
....................................................................
DBS Land (SGD) 15,000 25
....................................................................
Federal Realty Investment Trust, REIT 8,000 202
....................................................................
Patriot American Hospitality, REIT 4,098 128
....................................................................
Simon DeBartolo Group, REIT 5,440 178
....................................................................
</TABLE>
9
<PAGE>
T. Rowe Price Personal Strategy Growth Fund
- --------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares/Par Value
- --------------------------------------------------------------------
In thousands
<S> <C> <C>
Starwood Lodging, REIT 3,600 $ 193
....................................................................
970
.........
Miscellaneous Consumer Durables 1.6%
Corning 18,200 772
....................................................................
Masco 2,900 137
....................................................................
OCE Van Der Grinten NV (NLG) 500 57
....................................................................
Ricoh (JPY) 8,000 97
....................................................................
Sony (JPY) 2,000 171
....................................................................
Sony ADR 600 50
....................................................................
Whirlpool 5,000 274
....................................................................
1,558
.........
Total Consumer Cyclicals 3,042
.........
TECHNOLOGY 4.1%
Electronic Components 0.7%
Altera * 1,000 47
....................................................................
EMC * 1,600 49
....................................................................
Intel 3,200 248
....................................................................
Linear Technology 1,800 116
....................................................................
Maxim Integrated Products * 1,900 131
....................................................................
Motorola 1,900 119
....................................................................
710
.........
Electronic Systems 0.6%
Hewlett-Packard 2,300 140
....................................................................
Honeywell 3,950 259
....................................................................
KLA Instruments * 600 23
....................................................................
Nokia ADR 1,900 158
....................................................................
580
.........
Information Processing 0.9%
COMPAQ Computer 3,250 203
....................................................................
Dell Computer * 1,000 84
....................................................................
Hitachi ADR 1,500 108
....................................................................
IBM 3,860 423
....................................................................
818
.........
Office Automation 0.1%
Xerox 1,100 86
....................................................................
86
.........
</TABLE>
10
<PAGE>
T. Rowe Price Personal Strategy Growth Fund
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares/Par Value
- --------------------------------------------------------------------------------
In thousands
<S> <C> <C>
Specialized Computer 0.0%
Sun Microsystems * 700 $ 25
................................................................................
25
..........
Telecommunications Equipment 1.0%
Cisco Systems * 2,600 224
................................................................................
LM Ericsson (Class B) ADR 2,500 101
................................................................................
Lucent Technologies 700 56
................................................................................
MCI 5,100 224
................................................................................
Telecomunicacoes Brasileiras ADR 1,400 146
................................................................................
WorldCom 5,300 170
................................................................................
921
..........
Aerospace and Defense 0.8%
AlliedSignal 10,280 382
................................................................................
Boeing 2,700 143
................................................................................
Lockheed Martin 1,800 176
................................................................................
Raytheon 800 45
................................................................................
746
..........
Total Technology 3,886
..........
CAPITAL EQUIPMENT 2.9%
Electrical Equipment 2.0%
ABB Group (CHF) 100 133
................................................................................
Canon (JPY) 6,000 145
................................................................................
GE 13,000 959
................................................................................
Hubbell (Class B) 3,800 172
................................................................................
Matsushita Electric Works (JPY) 6,000 49
................................................................................
Mitsubishi Electric (JPY) 13,000 36
................................................................................
Siemens (DEM) 1,500 88
................................................................................
Tyco International 7,924 311
................................................................................
1,893
..........
Machinery 0.9%
Cooper Industries 1,100 57
................................................................................
Danaher 4,300 253
................................................................................
GKN (GBP) 5,500 120
................................................................................
Man (DEM) 300 89
................................................................................
S I G Schweis (CHF) 30 78
................................................................................
Teleflex 6,600 252
................................................................................
</TABLE>
11
<PAGE>
T. Rowe Price Personal Strategy Growth Fund
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares/Par Value
- --------------------------------------------------------------------------------
In thousands
<S> <C> <C>
Valmet (FIM) 2,000 $ 30
................................................................................
879
..........
Total Capital Equipment 2,772
..........
BUSINESS SERVICES AND
TRANSPORTATION 5.4%
Computer Service and Software 2.3%
Automatic Data Processing 4,000 225
................................................................................
BMC Software * 4,000 260
................................................................................
Electronic Data Systems 10,000 380
................................................................................
First Data 7,970 226
................................................................................
Galileo International 3,300 88
................................................................................
McAfee Associates * 2,400 110
................................................................................
Microsoft * 2,200 311
................................................................................
National Data 1,700 60
................................................................................
Oracle * 3,450 115
................................................................................
Parametric Technology * 3,100 157
................................................................................
SunGard Data Systems * 5,600 145
................................................................................
Synopsys * 2,700 111
................................................................................
2,188
..........
Distribution Services 0.0%
Rykoff-Sexton 1,400 31
................................................................................
31
..........
Environmental 0.1%
USA Waste Services * 3,000 99
................................................................................
99
..........
Transportation Services 0.1%
Mitsubishi Heavy Industries (JPY) 12,000 47
................................................................................
United Engineers (MYR) 5,000 5
................................................................................
52
..........
Miscellaneous Business Services 1.6%
British Airport Authorities (GBP) 10,000 84
................................................................................
Corporate Express * 7,500 118
................................................................................
H&R Block 18,400 754
................................................................................
Omnicom 1,600 119
................................................................................
Sime Darby (MYR) 19,000 19
................................................................................
Wallace Computer Services 1,800 63
................................................................................
Waste Management 15,560 383
................................................................................
1,540
..........
</TABLE>
12
<PAGE>
T. Rowe Price Personal Strategy Growth Fund
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares/Par Value
- --------------------------------------------------------------------------------
In thousands
<S> <C> <C>
Airlines 1.1%
AMR * 1,840 $ 223
................................................................................
Delta 7,000 780
................................................................................
KLM (NLG) 2,000 72
................................................................................
Singapore Airlines (SGD) 3,000 20
................................................................................
1,095
..........
Railroads 0.2%
Burlington Northern Santa Fe 1,600 146
................................................................................
146
..........
Total Business Services and Transportation 5,151
..........
ENERGY 5.2%
Energy Services 0.9%
BJ Services * 1,100 79
................................................................................
Camco International 1,000 63
................................................................................
Cooper Cameron * 2,400 146
................................................................................
Elf Aquitaine ADR 1,400 80
................................................................................
Halliburton 3,400 183
................................................................................
Johnson Electric Holdings (HKD) 42,000 107
................................................................................
Schlumberger 2,660 219
................................................................................
TOTAL ADR 700 37
................................................................................
914
..........
Exploration and Production 0.1%
Santos (AUD) 18,000 74
................................................................................
74
..........
Integrated Petroleum - Domestic 2.3%
Atlantic Richfield 7,700 628
................................................................................
British Petroleum ADR 5,980 496
................................................................................
Occidental Petroleum 15,000 445
................................................................................
Unocal 5,300 211
................................................................................
USX-Marathon 12,700 435
................................................................................
2,215
..........
Integrated Petroleum - International 1.9%
ENI S.p.A. ADR 2,000 116
................................................................................
Exxon 6,160 376
................................................................................
Mobil 7,000 503
................................................................................
Repsol ADR 1,800 78
................................................................................
Royal Dutch Petroleum ADR 4,000 211
................................................................................
</TABLE>
13
<PAGE>
T. Rowe Price Personal Strategy Growth Fund
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares/Par Value
- --------------------------------------------------------------------------------
In thousands
<S> <C> <C>
Shell Transport & Trading ADR 3,600 $ 150
................................................................................
Texaco 7,200 407
................................................................................
1,841
..........
Total Energy 5,044
..........
PROCESS INDUSTRIES 5.0%
Diversified Chemicals 1.3%
Dow Chemical 7,700 761
................................................................................
DuPont 4,000 242
................................................................................
Hercules 2,800 136
................................................................................
Olin 1,500 74
................................................................................
1,213
..........
Specialty Chemicals 2.3%
3M 1,100 107
................................................................................
A. Schulman 9,900 223
................................................................................
Akzo Nobel (NLG) 500 88
................................................................................
Akzo Nobel ADR 400 35
................................................................................
BASF AG (DEM) 4,100 145
................................................................................
Bayer AG (DEM) 2,900 108
................................................................................
Great Lakes Chemical 13,740 616
................................................................................
Pall 30,000 634
................................................................................
Sigma Aldrich 1,500 54
................................................................................
Sumitomo Chemicals (JPY) 11,000 37
................................................................................
Technip (FRF) 1,400 145
................................................................................
2,192
..........
Paper and Paper Products 1.0%
Dai Nippon Printing (JPY) 4,000 79
................................................................................
Fort James 6,000 235
................................................................................
Kimberly-Clark 12,800 666
................................................................................
980
..........
Forest Products 0.1%
International Paper 3,000 142
................................................................................
142
..........
Building and Construction 0.3%
Blue Circle Industries (GBP) 24,286 140
................................................................................
Holderbank Financiere (CHF) 130 113
................................................................................
253
..........
Total Process Industries 4,780
..........
</TABLE>
14
<PAGE>
T. Rowe Price Personal Strategy Growth Fund
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares/Par Value
- --------------------------------------------------------------------------------
In thousands
<S> <C> <C>
BASIC MATERIALS 0.9%
Metals 0.6%
Alcoa 1,000 $ 67
................................................................................
Anglo American Platinum (ZAR) 9,000 140
................................................................................
Nucor 2,000 100
................................................................................
Reynolds Metals 5,000 285
................................................................................
592
..........
Mining 0.2%
LONRHO (GBP) 42,900 67
................................................................................
Newmont Mining 3,200 96
................................................................................
Rio Tinto (AUD) 3,000 33
................................................................................
196
..........
Miscellaneous Materials 0.1%
Crown Cork & Seal 2,100 102
................................................................................
Malayan Cement (MYR) 33,750 21
................................................................................
123
..........
Total Basic Materials 911
..........
MISCELLANEOUS 2.3%
Other Miscellaneous 2.2%
SPDR Trust 22,200 2,123
................................................................................
2,123
..........
Conglomerates 0.1%
ORKLA (Class A) (NOK) 1,100 95
................................................................................
95
..........
Total Miscellaneous 2,218
..........
FOREIGN 0.3%
Europe 0.2%
AXA Colonia Konzern (DEM) 1,000 84
................................................................................
Svenska Cellulosa (SEK) 4,000 88
................................................................................
172
..........
Other Foreign 0.1%
Bobst AG (CHF) 77 114
................................................................................
114
..........
Total Foreign 286
..........
Total Common Stocks (Cost $56,982) 69,427
..........
</TABLE>
15
<PAGE>
T. Rowe Price Personal Strategy Growth Fund
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares/Par Value
- -------------------------------------------------------------------------------
In thousands
<S> <C> <C>
Corporate Bonds 10.3%
AEI Holding, Sr. Notes, (144a) 10.00%, 11/15/07 $ 50,000 $ 51
...............................................................................
Agricultural Minerals, Sr. Notes, 10.75%, 9/30/03 50,000 54
...............................................................................
Agrium, 7.00%, 2/1/04 400,000 410
...............................................................................
Ahmanson, H.F., Sub. Notes, 7.875%, 9/1/04 100,000 106
...............................................................................
Airplane Pass Thru, 10.875%, 3/15/19 70,000 79
...............................................................................
Allied Waste, Sr. Sub. Notes, 10.25%, 12/1/06 50,000 54
...............................................................................
AMC Entertainment, Sr. Sub. Notes, 9.50%, 3/15/09 50,000 51
...............................................................................
American Builders & Contractors Supply, Sr. Sub. Notes
10.625%, 5/15/07 50,000 52
...............................................................................
American Radio Systems, Sr. Sub. Notes, 9.00%, 2/1/06 25,000 27
...............................................................................
American Safety Razor, Sr. Notes, 9.875%, 8/1/05 50,000 53
...............................................................................
American Standard, Deb., 9.25%, 12/1/16 50,000 52
...............................................................................
Amerigas Partners L.P., Sr. Notes, 10.125%, 4/15/07 50,000 54
...............................................................................
Ameriserve Food, Sr. Sub. Notes, (144a)
10.125%, 7/15/07 50,000 52
...............................................................................
Ametek, Sr. Notes, 9.75%, 3/15/04 10,000 11
...............................................................................
Archibald Candy, Sr. Secured Notes, 10.25%, 7/1/04 50,000 52
...............................................................................
Associated Materials, Sr. Sub. Notes, 11.50%, 8/15/03 50,000 53
...............................................................................
Associates Corporation, Sr. Notes, 5.25%, 3/30/00 15,000 15
...............................................................................
Aurora Foods, Sr. Sub. Notes, 9.875%, 2/15/07 50,000 53
...............................................................................
B E Aerospace, Sr. Sub. Notes, 9.875%, 2/1/06 50,000 53
...............................................................................
B. F. Saul, REIT, Sr. Secured Notes, 11.625%, 4/1/02 150,000 160
...............................................................................
Bank Nova Scotia, Sub. Notes, 6.25%, 9/15/08 15,000 14
...............................................................................
Bay View Capital, Sub. Notes, 9.125%, 8/15/07 125,000 129
...............................................................................
Boise Cascade, Deb., 7.35%, 2/1/16 330,000 329
...............................................................................
BWAY, Sr. Sub. Notes, (144a) 10.25%, 4/15/07 50,000 55
...............................................................................
Celestica International, Gtd. Sr. Sub. Notes
10.50%, 12/31/06 50,000 53
...............................................................................
Chief Auto Parts, Sr. Notes, 10.50%, 5/15/05 50,000 49
...............................................................................
Coach USA, Gtd. Sr. Sub. Notes, 9.375%, 7/1/07 75,000 76
...............................................................................
Coinmach, Sr. Sub. Notes, 11.75%, 11/15/05 50,000 55
...............................................................................
Communications & Power Industries, Sr. Sub. Notes
12.00%, 8/1/05 50,000 56
...............................................................................
Container Corporation of America, Gtd., 10.75%, 5/1/02 25,000 27
...............................................................................
Continental Bank, Sub. Notes, 12.50%, 4/1/01 48,000 57
...............................................................................
Dan River, Sr. Sub. Notes, 10.125%, 12/15/03 50,000 53
...............................................................................
</TABLE>
16
<PAGE>
T. Rowe Price Personal Strategy Growth Fund
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares/Par Value
- --------------------------------------------------------------------------------
In thousands
<S> <C> <C>
Delta Air Lines, MTN, 8.625%, 6/15/04 $ 90,000 $ 99
................................................................................
Delta Mills, Sr. Notes, (144a) 9.625%, 9/1/07 50,000 51
................................................................................
Doane Products, Sr. Notes, 10.625%, 3/1/06 50,000 53
................................................................................
Dr Pepper Bottling, Sr. Disc. Notes, STEP
Zero Coupon, 2/15/03 50,000 52
................................................................................
Dyersburg, Sr. Sub. Notes, 9.75%, 9/1/07 50,000 52
................................................................................
Dyncorp, Sr. Sub. Notes, 9.50%, 3/1/07 50,000 51
................................................................................
Energy Corporation of America, Sr. Sub. Notes
9.50%, 5/15/07 50,000 50
................................................................................
Enhance Financial Services, Deb., 6.75%, 3/1/03 300,000 299
................................................................................
Fairchild Semiconductor, Sr. Sub. Notes
10.125%, 3/15/07 50,000 52
................................................................................
Fairfax Financial Holdings, 8.25%, 10/1/15 250,000 274
................................................................................
Falcon Building Products, Gtd. Sr. Sub. Notes
9.50%, 6/15/07 50,000 51
................................................................................
First Federal Financial, 11.75%, 10/1/04 50,000 56
................................................................................
First USA Bank, Sr. Notes, 5.85%, 2/22/01 300,000 295
................................................................................
Frontiervision, Sr. Sub. Notes, 11.00%, 10/15/06 50,000 54
................................................................................
Fundy Cable, Sr. Securied 2nd Priority Notes
11.00%, 11/15/05 50,000 54
................................................................................
Grand Casino, 1st Mtg. Notes, 10.125%, 12/1/03 50,000 53
................................................................................
HMC Acquisition Properties, Sr. Notes, 9.00%, 12/15/07 50,000 52
................................................................................
Host Marriott Travel Plazas, Sr. Notes, 9.50%, 5/15/05 50,000 53
................................................................................
International Logistics, Sr. Notes, (144a) 9.75%, 10/15/07 50,000 49
................................................................................
International Wire, Sr. Sub. Notes, (144a) 11.75%, 6/1/05 50,000 54
................................................................................
Intertek Finance, Sr. Sub. Notes, 10.25%, 11/1/06 50,000 53
................................................................................
Iron Mountain, Sr. Sub. Notes, 8.75%, 9/30/09 50,000 51
................................................................................
Jersey Central Power & Light, 1st Mtg. Notes
7.125%, 10/1/04 150,000 152
................................................................................
Keebler, Sr. Sub. Notes, 10.75%, 7/1/06 50,000 56
................................................................................
Lockheed Martin, Gtd. Notes, 6.55%, 5/15/99 200,000 201
................................................................................
Marcus Cable, Gtd. Sr. Disc. Notes, STEP
Zero Coupon, 8/1/04 50,000 46
................................................................................
Maxxam Group Holdings, Sr. Secured Notes
12.00%, 8/1/03 50,000 54
................................................................................
Mrs Fields Original, Gtd. Sr. Notes, (144a)
10.125%, 12/1/04 50,000 50
................................................................................
Northland Cable Television, Sr. Sub. Notes, (144a)
10.25%, 11/15/07 50,000 51
................................................................................
</TABLE>
17
<PAGE>
T. Rowe Price Personal Strategy Growth Fund
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares/Par Value
- --------------------------------------------------------------------------------
In thousands
<S> <C> <C>
Northrop Grumman, 7.00%, 3/1/06 $ 100,000 $ 102
................................................................................
Ocwen Financial, Sr. Notes, 11.875%, 10/1/03 50,000 56
................................................................................
Owens & Minor, Sr. Sub. Notes, 10.875%, 6/1/06 50,000 55
................................................................................
Pacific Mutual Life, (144a) 7.90%, 12/30/23 500,000 547
................................................................................
Paine Webber Group, 8.25%, 5/1/02 100,000 106
................................................................................
Parker & Parsley Petroleum, Sr. Notes, 8.875%, 4/15/05 100,000 112
................................................................................
Plastic Containers, Sr. Secured Notes, 10.00%, 12/15/06 50,000 53
................................................................................
Pride Petroleum Services, Sr. Notes, 9.375%, 5/1/07 50,000 54
................................................................................
Principal Mutual, (144a) 8.00%, 3/1/44 190,000 202
................................................................................
Quest Diagnostics, Gtd. Sr. Sub. Notes, 10.75%, 12/15/06 25,000 27
................................................................................
Revlon Consumer Products, Sr. Sub. Notes
10.50%, 2/15/03 50,000 53
................................................................................
Rio Hotel & Casino, Gtd. Sr. Sub. Notes, 9.50%, 4/15/07 50,000 53
................................................................................
Rogers Cablesystems, Sr. Sec. 2nd Priority Notes
10.00%, 3/15/05 50,000 55
................................................................................
Rouse, 8.50%, 1/15/03 15,000 16
................................................................................
Safelite Glass, Sr. Sub. Notes, (144a) 9.875%, 12/15/06 50,000 55
................................................................................
Scotland International Finance, Sub. Notes, (144a)
6.50%, 2/15/11 100,000 98
................................................................................
Shawmut National, Sub. Notes, 7.20%, 4/15/03 15,000 15
................................................................................
Six Flags Theme Parks, Sr. Sub. Disc. Notes, STEP
Zero Coupon, 6/15/05 50,000 53
................................................................................
Southern Foods Group, Sr. Sub. Notes, (144a)
9.875%, 9/1/07 50,000 52
................................................................................
Sovereign Specialty Chemicals, Sr. Sub. Notes, (144a)
9.50%, 8/1/07 50,000 51
................................................................................
Specialty Retailers, Sr. Notes, 8.50%, 7/15/05 50,000 51
................................................................................
Stellex Industries, Sr. Sub. Notes, (144a) 9.50%, 11/1/07 50,000 50
................................................................................
Synthetic Industries, Sr. Sub. Notes, 9.25%, 2/15/07 50,000 52
................................................................................
Tele-Communications, Deb., 8.75%, 2/15/23 200,000 210
................................................................................
TeleWest PLC, Sr. Disc. Deb., STEP
Zero Coupon, 10/1/07 50,000 38
................................................................................
Tenet Healthcare, Sr. Sub. Notes, 8.625%, 1/15/07 50,000 51
................................................................................
Tenneco, 8.20%, 11/15/99 15,000 15
................................................................................
Texas Utilities, 1st Mtg. Bonds
7.375%, 10/1/25 100,000 98
...........................................................................
7.875%, 4/1/24 100,000 102
................................................................................
Texas-New Mexico Power, Deb., 12.50%, 1/15/99 50,000 53
................................................................................
</TABLE>
18
<PAGE>
T. Rowe Price Personal Strategy Growth Fund
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares/Par Value
- --------------------------------------------------------------------------------------
In thousands
<S> <C> <C>
Trump Atlantic City, 1st Mtg. Notes, 11.25%, 5/1/06 $ 50,000 $ 50
......................................................................................
US Can, Sr. Gtd. Notes, 10.125%, 10/15/06 50,000 53
......................................................................................
USF&G Capital II, Gtd. Notes, 8.47%, 1/10/27 500,000 527
......................................................................................
USG, Sr. Notes, 8.50%, 8/1/05 50,000 53
......................................................................................
Vencor, Sr. Sub. Notes, 8.625%, 7/15/07 50,000 49
......................................................................................
Vesta Insurance Group, Deb. Notes, 8.75%, 7/15/25 1,000,000 1,176
......................................................................................
Viasystems, Sr. Sub. Notes, (144a) 9.75%, 6/1/07 50,000 52
......................................................................................
Wal-Mart Stores, Deb., 7.25%, 6/1/13 280,000 297
......................................................................................
Westpoint Stevens, Sr. Sub. Deb. Notes, 9.375%,
12/15/05 50,000 52
......................................................................................
Windy Hill Pet Food, Sr. Sub. Notes, 9.75%, 5/15/07 50,000 52
......................................................................................
United Artists Theatre Circuit, PTC, 9.30%, 7/1/15 48,706 49
......................................................................................
Total Corporate Bonds (Cost $9,542) 9,908
.......
<CAPTION>
Foreign Government Obligations/
Agencies 1.3%
<S> <C> <C> <C>
European Investment Bank
3.00%, 9/20/06 JPY 34,000,000 289
................................................................................
4.625%, 2/26/03 JPY 10,000,000 92
......................................................................................
Federal Republic of Germany
6.00%, 7/4/07 DEM 280,000 165
................................................................................
6.50%, 7/15/03 DEM 30,000 18
................................................................................
8.375%, 5/21/01 DEM 80,000 51
................................................................................
8.50%, 8/21/00 DEM 23,000 14
......................................................................................
Government of Canada
6.50%, 6/1/04 CAD 3,000 2
................................................................................
8.50%, 4/1/02 CAD 111,000 88
................................................................................
9.75%, 6/1/21 CAD 5,000 5
......................................................................................
Government of France
5.50%, 4/25/07 FRF 972,000 166
................................................................................
8.25%, 2/27/04 FRF 142,000 28
................................................................................
8.50%, 11/25/02 FRF 264,000 51
......................................................................................
Government of Japan, 4.50%, 6/20/03++ JPY 8,400,000 76
......................................................................................
Int'l Bank for Reconstruction & Development
6.75%, 3/15/00 JPY 1,000,000 9
......................................................................................
Kingdom of Belgium, 7.25%, 4/29/04 BEF 300,000 9
......................................................................................
Kingdom of Spain, 8.00%, 5/30/04 ESP 1,500,000 11
......................................................................................
Kingdom of Sweden, 6.00%, 2/9/05 SEK 100,000 13
......................................................................................
</TABLE>
19
<PAGE>
T. Rowe Price Personal Strategy Growth Fund
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares/Par Value
- ---------------------------------------------------------------------------------
In thousands
<S> <C> <C> <C>
Republic of Italy, 8.50%, 8/1/04 ITL 45,000,000 $ 30
.................................................................................
United Kingdom Treasury Notes
7.50%, 12/7/06 GBP 55,000 99
.................................................................................
8.00%, 6/10/03 GBP 17,000 30
.................................................................................
9.00%, 3/3/00 GBP 8,000 14
.................................................................................
Total Foreign Government Obligations/Agencies (Cost $1,285) 1,260
.......
<CAPTION>
U.S. Government Mortgage-Backed
Securities 5.8%
<S> <C> <C>
Federal National Mortgage Assn.
6.50%, 1/1/26 $ 180,191 177
.................................................................................
Government National Mortgage Assn.
I
6.00%, 12/15/23 - 5/15/26 676,734 653
.................................................................................
6.50%, 12/15/23 - 3/15/26 520,729 514
.................................................................................
7.00%, 8/15/23 120,551 121
.................................................................................
7.50%, 10/15/22 - 1/15/26 449,801 460
.................................................................................
8.00%, 1/15/22 - 9/15/24 315,263 328
.................................................................................
II
7.00%, 9/20/27 1,976,277 1,973
.................................................................................
8.00%, 10/20/25 41,213 42
.................................................................................
TBA, I
7.00%, 12/15/99 1,300,000 1,305
.................................................................................
Total U.S. Government Mortgage-Backed Securities (Cost $5,465) 5,573
.......
<CAPTION>
U.S. Government Obligations/
Agencies 6.6%
<S> <C> <C>
Tennessee Valley Authority
5.88%, 4/1/36 1,350,000 1,378
.................................................................................
6.235%, 7/15/45 500,000 512
.................................................................................
U.S. Treasury Bonds, 6.75%, 8/15/26 4,100,000 4,456
.................................................................................
Total U.S. Government Obligations/Agencies (Cost $6,023) 6,346
.......
</TABLE>
20
<PAGE>
T. Rowe Price Personal Strategy Growth Fund
- --------------------------------------------------------------------------------
Value
- --------------------------------------------------------------------------------
In thousands
<TABLE>
<CAPTION>
Short-Term Investments 4.7%
<S> <C> <C>
Money Market Funds 4.7%
Reserve Investment Fund, 5.71% # 4,505,065 4,505
.................................................................................
Total Short-Term Investments (Cost $4,505) 4,505
..............
Total Investments in Securities
100.9% of Net Assets (Cost $83,802) $ 97,019
Other Assets Less Liabilities (889)
..............
NET ASSETS $ 96,130
--------------
Net Assets Consist of:
Accumulated net investment income - net of distributions $ 1,317
Accumulated net realized gain/loss - net of distributions 1,114
Net unrealized gain (loss) 13,215
Paid-in-capital applicable to 5,790,606 shares of $0.0001 par
value capital stock outstanding; 1,000,000,000 shares authorized 80,484
..............
NET ASSETS $ 96,130
--------------
NET ASSET VALUE PER SHARE $ 16.60
--------------
</TABLE>
* Non-income producing
+++ Securities contain some restrictions as to public resale--total of
such securities at period-end amounts to 0.08% of net assets.
# Seven-day yield
ADR American Depository Receipt
MTN Medium term note
PTC Pass-through Certificate
REIT Real Estate Investment Trust
STEP Stepped coupon note for which the interest rate will adjust on
specified future date(s)
TBA To be announced security was purchased on a forward commitment basis
144a Security was purchased pursuant to Rule 144a under the Securities Act of
1933 and may not be resold subject to that rule except to qualified
institutional buyers -- total of such securities at period-end amounts to
1.58% of net assets.
AUD Australian dollar
BEF 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
NOK Norwegian krone
NZD New Zealand dollar
SEK Swedish krona
SGD Singapore dollar
ZAR South African rand
L Local registered shares
The accompanying notes are an integral part of these financial statements.
21
<PAGE>
T. Rowe Price Personal Strategy Growth Fund
- --------------------------------------------------------------------------------
Unaudited
- -----------------------
Statement of Operations
- --------------------------------------------------------------------------------
In thousands
<TABLE>
<CAPTION>
6 Months
Ended
11/30/97
<S> <C>
Investment Income
Income
Interest $ 759
Dividend 550
Other 17
.........
Total income 1,326
.........
Expenses
Investment management 195
Shareholder servicing 138
Custody and accounting 63
Registration 24
Prospectus and shareholder reports 17
Legal and audit 7
Directors 3
Miscellaneous 6
.........
Total expenses 453
.........
Net investment income 873
.........
Realized and Unrealized Gain (Loss)
Net realized gain (loss)
Securities 801
Foreign currency transactions 1
.........
Net realized gain (loss) 802
.........
Change in net unrealized gain or loss
Securities 5,022
Other assets and liabilities
denominated in foreign currencies (1)
.........
Change in net unrealized gain or loss 5,021
.........
Net realized and unrealized gain (loss) 5,823
.........
INCREASE (DECREASE) IN NET
ASSETS FROM OPERATIONS $ 6,696
---------
</TABLE>
The accompanying notes are an integral part of these financial statements.
22
<PAGE>
T. Rowe Price Personal Strategy Growth Fund
- --------------------------------------------------------------------------------
Unaudited
- ----------------------------------
Statement of Changes in Net Assets
- --------------------------------------------------------------------------------
In thousands
<TABLE>
<CAPTION>
6 Months Year
Ended Ended
11/30/97 5/31/97
<S> <C> <C>
Increase (Decrease) in Net Assets
Operations
Net investment income $ 873 $ 960
Net realized gain (loss) 802 2,083
Change in net unrealized gain or loss 5,021 5,188
........................
Increase (decrease) in net assets from operations 6,696 8,231
........................
Distributions to shareholders
Net investment income -- (656)
Net realized gain -- (2,434)
........................
Decrease in net assets from distributions -- (3,090)
........................
Capital share transactions*
Shares sold 29,529 43,489
Distributions reinvested -- 3,043
Shares redeemed (7,647) (9,075)
........................
Increase (decrease) in net assets from capital
share transactions 21,882 37,457
........................
Net Assets
Increase (decrease) during period 28,578 42,598
Beginning of period 67,552 24,954
........................
End of period $ 96,130 $ 67,552
------------------------
*Share information
Shares sold 1,815 3,043
Distributions reinvested -- 215
Shares redeemed (470) (635)
........................
Increase (decrease) in shares outstanding 1,345 2,623
</TABLE>
The accompanying notes are an integral part of these financial statements.
23
<PAGE>
T. Rowe Price Personal Strategy Growth Fund
- --------------------------------------------------------------------------------
Unaudited November 30, 1997
- -----------------------------
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 Growth Fund (the
fund), a diversified, open-end management investment company, is one of the
portfolios established by the corporation and commenced operations on July 29,
1994.
The accompanying financial statements are prepared in accordance with generally
accepted accounting principles for the investment company industry; these
principles may require the use of estimates by fund management.
Valuation Equity securities listed or regularly traded on a securities exchange
are valued at the last quoted sales price on the day the valuations are made. A
security which is listed or traded on more than one exchange is valued at the
quotation on the exchange determined to be the primary market for such security.
Listed securities not traded on a particular day and securities regularly traded
in the over-the-counter market are valued at the mean of the latest bid and
asked prices. Other equity securities are valued at a price within the limits
of the latest bid and asked prices deemed by the Board of Directors, or by
persons delegated by the Board, best to reflect fair value.
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 amortized cost which, when combined with
accrued interest, approximates fair value.
For purposes of determining the fund's net asset value per share, the U.S.
dollar value of all assets and liabilities initially expressed in foreign
currencies is determined by using the mean of the bid and offer prices of such
currencies against U.S. dollars quoted by a major bank.
Assets and liabilities for which the above valuation procedures are
inappropriate or are deemed not to reflect fair value are stated at fair value
as determined in good faith by or under the supervision of the officers of the
fund, as authorized by the Board of Directors.
Currency Translation Assets and liabilities are translated into U.S. dollars at
the prevailing exchange rate at the end of the reporting period. Purchases and
sales of securities and income and expenses are translated into U.S. dollars at
the
24
<PAGE>
T. Rowe Price Personal Strategy Growth Fund
- --------------------------------------------------------------------------------
prevailing exchange rate on the dates of such transactions. The effect of
changes in foreign exchange rates on realized and unrealized security gains and
losses is reflected as a component of such gains and losses.
Premiums and Discounts Premiums and discounts on debt securities, other than
mortgage-backed securities, are amortized for both financial reporting and tax
purposes. Premiums and discounts on mortgage-backed securities are recognized
upon principal repayment as gain or loss for financial reporting purposes and as
ordinary income for tax purposes.
Other Income and expenses are recorded on the accrual basis. Investment
transactions are accounted for on the trade date. Realized gains and losses are
reported on the identified cost basis. Dividend income and distributions to
shareholders are recorded by the fund on the ex-dividend date. Income and
capital gain distributions are determined in accordance with federal income tax
regulations and may differ from those determined in accordance with generally
accepted accounting principles.
NOTE 2 - INVESTMENT TRANSACTIONS
Consistent with its investment objective, the fund engages in the following
practices to manage exposure to certain risks or enhance performance. The
investment objective, policies, program, and risk factors of the fund are
described more fully in the fund's prospectus and Statement of Additional
Information.
Noninvestment-Grade Debt Securities At November 30, 1997, the fund held
investments in noninvestment-grade debt securities, commonly referred to as
"high-yield" or "junk" bonds. A real or perceived economic downturn or higher
interest rates could adversely affect the liquidity or value, or both, of such
securities because such events could lessen the ability of issuers to make
principal and interest payments.
Securities Lending The fund lends its securities to approved brokers to earn
additional income and takes cash and U.S. Treasury securities as collateral to
secure the loans. Collateral is maintained at not less than 100% of the value
of loaned securities. At November 30, 1997, the value of securities on loan was
$13,210,000. Although the risk is mitigated by the collateral, the fund could
experience a delay in recovering its securities and a possible loss of income or
value if the borrower fails to return them.
25
<PAGE>
T. Rowe Price Personal Strategy Growth Fund
- --------------------------------------------------------------------------------
Other Purchases and sales of portfolio securities, other than short-term and
U.S. government securities, aggregated $22,109,000 and $8,619,000, respectively,
for the six months ended November 30, 1997. Purchases and sales of U.S.
government securities aggregated $8,804,000 and $1,578,000, respectively, for
the six months ended November 30, 1997.
NOTE 3 - FEDERAL INCOME TAXES
No provision for federal income taxes is required since the fund intends to
continue to qualify as a regulated investment company and distribute all of its
taxable income.
At November 30, 1997, the aggregate cost of investments for federal income tax
and financial reporting purposes was $83,802,000, and net unrealized gain
aggregated $13,217,000, of which $15,214,000 related to appreciated investments
and $1,997,000 to depreciated investments.
NOTE 4 - RELATED PARTY TRANSACTIONS
The investment management agreement between the fund and T. Rowe Price
Associates, Inc. (the manager) provides for an annual investment management fee,
of which $29,000 was payable at November 30, 1997. The fee is computed daily and
paid monthly, and consists of an individual fund fee equal to 0.30% of average
daily net assets and a group fee. The group fee is based on the combined assets
of certain mutual funds sponsored by the manager or Rowe Price-Fleming
International, Inc. (the group). The group fee rate ranges from 0.48% for the
first $1 billion of assets to 0.30% for assets in excess of $80 billion. At
November 30, 1997, and for the six months then ended, the effective annual group
fee rate was 0.32%. The fund pays a pro-rata share of the group fee based on the
ratio of its net assets to those of the group.
Under the terms of the investment management agreement, the manager is required
to bear any expenses through May 31, 1998, which would cause the fund's ratio of
expenses to average net assets to exceed 1.10%. Thereafter, through May 31,
2000, the 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 the fund's ratio of expenses to average net
assets to exceed 1.10%. Pursuant to this agreement, $62,000 of management fees
were not accrued by the fund for the six months
26
<PAGE>
T. Rowe Price Personal Strategy Growth Fund
- --------------------------------------------------------------------------------
ended November 30, 1997. Pursuant to a previous agreement, $325,000 of fees and
expenses remain subject to reimbursement through May 31, 1998. Additionally,
$177,000 of unaccrued management fees related to the current expense limitation
are subject to reimbursement through May 31, 2000.
In addition, the fund has entered into agreements with the manager and two
wholly owned subsidiaries of the manager, pursuant to which the fund receives
certain other services. The manager computes the daily share price and maintains
the financial records of the fund. T. Rowe Price Services, Inc., is the fund's
transfer and dividend disbursing agent and provides shareholder and
administrative services to the fund. T. Rowe Price Retirement Plan Services,
Inc., provides subaccounting and recordkeeping services for certain retirement
accounts invested in the fund. The fund incurred expenses pursuant to these
related party agreements totaling approximately $153,000 for the six months
ended November 30, 1997, of which $26,000 was payable at period-end.
The fund may invest in the Reserve Investment Fund and Government Reserve
Investment Fund (collectively, the Reserve Funds), open-end management
investment companies managed by T. Rowe Price Associates, Inc. The Reserve Funds
are offered as cash management options only to mutual funds and other accounts
managed by T. Rowe Price and its affiliates and are not available to the public.
The Reserve Funds pay no investment management fees. Distributions from the
Reserve Funds to the fund for the six months ended November 30, 1997, totaled
$43,000 and are reflected as interest income in the accompanying Statement of
Operations.
During the six months ended November 30, 1997, the fund, in the ordinary course
of business, placed security purchase and sale orders aggregating $1,049,000
with certain affiliates of the manager and paid commissions of $3,000 related
thereto.
27
<PAGE>
For yield, price, last transaction,
current balance, or to conduct
transactions, 24 hours, 7 days
a week, call Tele*Access(R):
1-800-638-2587 toll free
For assistance
with your existing
fund account, call:
Shareholder Service Center
1-800-225-5132 toll free
410-625-6500 Baltimore area
To open a Discount Brokerage
account or obtain information,
call: 1-800-638-5660 toll free
Internet address:
www.troweprice.com
T. Rowe Price Associates
100 East Pratt Street
Baltimore, Maryland 21202
This report is authorized for
distribution only to shareholders
and to others who have received
a copy of the prospectus of the
T. Rowe Price Personal Strategy Funds.
Investor Centers:
101 East Lombard St.
Baltimore, MD 21202
T. Rowe Price
Financial Center
10090 Red Run Blvd.
Owings Mills, MD 21117
Farragut Square
900 17th Street, N.W.
Washington, D.C. 20006
ARCO Tower
31st Floor
515 South Flower St.
Los Angeles, CA 90071
4200 West Cypress St.
10th Floor
Tampa, FL 33607
[LOGO OF T. ROWE PRICE APPEARS HERE]
T. Rowe Price Investment Services, Inc., Distributor C11-057 11/30/97
