<PAGE>
- --------------------------------------------------------------------------------
Semiannual Report - Financial Statements
- --------------------------------------------------------------------------------
T. ROWE PRICE
PERSONAL STRATEGY
INCOME FUND
-------------------
NOVEMBER 30, 1998
-------------------
<PAGE>
T. ROWE PRICE PERSONAL STRATEGY INCOME FUND
- --------------------------------------------------------------------------------
Unaudited November 30, 1998
<TABLE>
<CAPTION>
- --------------------
FINANCIAL HIGHLIGHTS For a share outstanding throughout each period
- ---------------------------------------------------------------------------------------
6 Months Year 7/29/94
Ended Ended Through
11/30/98 5/31/98 5/31/97 5/31/96 5/31/95
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE
Beginning of period $ 13.13 $ 11.98 $ 11.85 $ 10.94 $ 10.00
.....................................................
Investment activities
Net investment income 0.25* 0.50* 0.51* 0.50* 0.41*
Net realized and
unrealized gain (loss) 0.08 1.43 1.10 0.98 0.85
.....................................................
Total from investment
activities 0.33 1.93 1.61 1.48 1.26
.....................................................
Distributions
Net investment income (0.25) (0.50) (0.50) (0.47) (0.32)
Net realized gain - (0.28) (0.98) (0.10) -
.....................................................
Total distributions (0.25) (0.78) (1.48) (0.57) (0.32)
.....................................................
NET ASSET VALUE
End of period $ 13.21 $ 13.13 $ 11.98 $ 11.85 $ 10.94
-----------------------------------------------------
Ratios/Supplemental Data
Total return@ 2.57%* 16.61%* 14.70%* 13.84%* 12.90%*
.....................................................................................
Ratio of expenses to
average net assets 0.90%*+ 0.95%* 0.95%* 0.95%* 0.95%*+
.....................................................................................
Ratio of net investment
income to average
net assets 3.92%*+ 4.13%* 4.38%* 4.31%* 4.71%*+
.....................................................................................
Portfolio turnover rate 53.5%+ 30.9% 44.8% 34.1% 50.5%+
.....................................................................................
Net assets, end of period
(in thousands) $ 206,266 $85,898 $ 44,368 $ 25,545 $ 20,705
.....................................................................................
</TABLE>
@ Total return reflects the rate that an investor would have earned on an
investment in the fund during each period, assuming reinvestment of all
distributions.
* Excludes expenses in excess of a 0.95% voluntary expense limitation in effect
through 5/31/00 and expenses in excess of a 0.90% voluntary expense limitation
in effect through 5/31/00.
+ Annualized
The accompanying notes are an integral part of these financial statements.
2
<PAGE>
<TABLE>
<CAPTION>
T. ROWE PRICE PERSONAL STRATEGY INCOME FUND
- ---------------------------------------------------------------------------------------
Unaudited November 30, 1998
- ------------------------
PORTFOLIO OF INVESTMENTS Shares/Par Value
- ---------------------------------------------------------------------------------------
In thousands
COMMON STOCKS 40.1%
FINANCIAL 6.8%
<S> <C> <C>
Bank and Trust 3.9%
Abbey National (GBP) 10,500 $ 217
.................................................................................
Air Liquide (L) (FRF) 371 63
.................................................................................
Albank Financial 700 47
.................................................................................
Australia & New Zealand Banking ADR 2,500 83
.................................................................................
Banca Commerciale Italiana (ITL) 20,000 137
.................................................................................
Banco de Bilbao Vizcaya ADR 10,200 161
.................................................................................
Banco Frances del Rio de la Plata (Class B) ADR 4,035 98
.................................................................................
Bank of New York 8,500 291
.................................................................................
Bank One 10,580 543
.................................................................................
BankAmerica 13,300 867
.................................................................................
Bankgesellschaft Berlin (DEM) 2,300 39
.................................................................................
Barclay's (GBP) 6,800 154
.................................................................................
Chase Manhattan 8,700 552
.................................................................................
Citigroup 16,449 826
.................................................................................
Citizens Banking 2,300 75
.................................................................................
Deutsche Bank (DEM) 1,980 122
.................................................................................
Downey Financial 3,000 78
.................................................................................
Dresdner Bank (DEM) 1,000 45
.................................................................................
First Bell Bancorp 900 14
.................................................................................
First Mariner Bancorp * 1,100 16
.................................................................................
First Security 1,100 22
.................................................................................
First Union 6,300 383
.................................................................................
Frankfort First Bancorp 900 14
.................................................................................
Glacier Bancorp 2,970 63
.................................................................................
HSBC Holdings (GBP) 7,900 215
.................................................................................
J. P. Morgan 2,530 270
.................................................................................
KBC Bancassurance Holding (BEF) 2,000 143
.................................................................................
KeyCorp 2,700 83
.................................................................................
Marshall & Ilsley 300 15
.................................................................................
Mediobanca (ITL) 13,800 167
.................................................................................
Mellon Bank 8,400 529
.................................................................................
Mercantile Bancorporation 700 31
.................................................................................
National City 2,900 195
.................................................................................
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
T. ROWE PRICE PERSONAL STRATEGY INCOME FUND
- ---------------------------------------------------------------------------------------
Shares/Par Value
- ---------------------------------------------------------------------------------------
In thousands
<S> <C> <C>
Societe Generale (FRF) 910 $ 143
.................................................................................
State Street 700 48
.................................................................................
Summit Bancorp 1,800 75
.................................................................................
Svenska Handelsbank (SEK) 1,000 40
.................................................................................
U.S. Bancorp 2,000 74
.................................................................................
Washington Mutual 9,990 387
.................................................................................
Wells Fargo 18,100 652
.................................................................................
WestAmerica 700 25
.................................................................................
Westpac Bank (AUD) 6,000 40
.................................................................................
8,042
..............
Insurance 1.2%
ACE Limited 10,700 342
.................................................................................
Allstate 2,000 81
.................................................................................
American General 3,000 211
.................................................................................
American International Group 425 40
.................................................................................
EXEL (Class A) 5,443 409
.................................................................................
General Re 400 93
.................................................................................
Harleysville Group 2,700 57
.................................................................................
PartnerRe Holdings 2,200 97
.................................................................................
Poe & Brown 1,500 53
.................................................................................
Selective Insurance 1,300 25
.................................................................................
St. Paul Companies 9,100 321
.................................................................................
Sumitomo Marine & Fire Insurance (JPY) 9,000 54
.................................................................................
Travelers Property Casualty (Class A) 12,600 434
.................................................................................
UNUM 3,000 162
.................................................................................
W. R. Berkley 1,600 54
.................................................................................
2,433
..............
Financial Services 1.7%
American Express 5,300 530
.................................................................................
Associates First Capital (Class A) 3,600 280
.................................................................................
AXA (FRF) 1,400 181
.................................................................................
Capital One Financial 1,900 209
.................................................................................
Delta Financial * 2,200 12
.................................................................................
Fannie Mae 12,300 895
.................................................................................
Financial Federal * 600 16
.................................................................................
Freddie Mac 12,400 750
.................................................................................
Household International 2,200 86
.................................................................................
ING Groep (NLG) 2,650 152
.................................................................................
</TABLE>
4
<PAGE>
T. ROWE PRICE PERSONAL STRATEGY INCOME FUND
- ----------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares/Par Value
- ------------------------------------------------------------------------------------
In thousands
<S> <C> <C>
ITLA Capital * 500 $ 9
.................................................................................
Morgan Stanley Dean Witter 2,000 140
.................................................................................
Pearson (GBP) 9,600 173
.................................................................................
Providian Financial 200 18
.................................................................................
Unidanmark (Class A) (DKK) 2,200 179
.................................................................................
3,630
..............
Total Financial 14,105
..............
UTILITIES 3.2%
Telephone 2.0%
Aliant Communications 5,400 154
.................................................................................
ALLTEL 5,500 291
.................................................................................
AT&T 11,050 688
.................................................................................
BellSouth 3,700 323
.................................................................................
British Telecommunications ADR 1,300 180
.................................................................................
Compania de Telecomunicaciones de Chile (Class A) ADR 500 12
.................................................................................
Frontier 11,100 334
.................................................................................
GTE 1,900 118
.................................................................................
Hong Kong Telecommunications ADR 1,100 21
.................................................................................
Nippon Telegraph & Telephone (JPY) 8 60
.................................................................................
Rural Cellular (Class A) * 2,500 27
.................................................................................
SBC Communications 18,500 887
.................................................................................
Telebras ADR * 2,400 227
.................................................................................
Telecom Corp. of New Zealand ADR 5,400 181
.................................................................................
Telecom Italia (ITL) 23,000 186
.................................................................................
Telecom Italia Mobile (ITL) 27,000 177
.................................................................................
Telefonica de Espana ADR 1,000 139
.................................................................................
Telefonos de Mexico (Class L) ADR 3,300 154
.................................................................................
Western Wireless * 1,600 29
.................................................................................
4,188
............
Electric Utilities 1.2%
Cleco 1,400 48
.................................................................................
Electrabel (BEF) 210 81
.................................................................................
Empresa Nacional de Electricidad Chile ADR 800 9
.................................................................................
Endesa ADR 5,100 133
.................................................................................
FirstEnergy 15,595 483
.................................................................................
GPU 4,000 175
.................................................................................
</TABLE>
5
<PAGE>
T. ROWE PRICE PERSONAL STRATEGY INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares/Par Value
- ------------------------------------------------------------------------------------
In thousands
<S> <C> <C>
Hong Kong Electric (HKD) 14,000 $ 46
.................................................................................
PECO Energy 6,000 241
.................................................................................
Texas Utilities 11,900 530
.................................................................................
Unicom 11,800 445
.................................................................................
Veba (DEM) 3,110 172
.................................................................................
2,363
...............
Total Utilities 6,551
...............
CONSUMER NONDURABLES 8.3%
Cosmetics 0.5%
Gillette 2,500 115
.................................................................................
International Flavors & Fragrances 14,400 603
.................................................................................
Kao (JPY) 12,000 227
.................................................................................
945
...............
Beverages 0.6%
Anheuser-Busch 10,000 606
.................................................................................
Coca-Cola 1,000 70
.................................................................................
Diageo ADR 2,950 135
.................................................................................
LVMH (FRF) 1,075 208
.................................................................................
PepsiCo 7,200 278
.................................................................................
1,297
...............
Food Processing 1.5%
American Italian Pasta * 900 23
.................................................................................
Bestfoods 4,300 250
.................................................................................
Cadbury Schweppes ADR 3,500 211
.................................................................................
Campbell 2,400 137
.................................................................................
CSM (NLG) 800 43
.................................................................................
Danisco (DKK) 1,200 62
.................................................................................
Eridania Beghin-Say (FRF) 840 156
.................................................................................
General Mills 6,260 473
.................................................................................
Heinz 2,500 146
.................................................................................
Imperial Holly 4,400 38
.................................................................................
McCormick 8,900 297
.................................................................................
Nestle (CHF) 88 183
.................................................................................
Ralston Purina 11,200 390
.................................................................................
Sara Lee 10,400 607
.................................................................................
Seneca Foods (Class A) * 1,100 13
.................................................................................
</TABLE>
6
<PAGE>
T. ROWE PRICE PERSONAL STRATEGY INCOME FUND
- ----------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares/Par Value
- ------------------------------------------------------------------------------------
In thousands
<S> <C> <C>
Seneca Foods (Class B) * 700 $ 9
.................................................................................
United Natural Foods * 1,000 24
.................................................................................
3,062
...............
Hospital Supplies/Hospital Management 0.4%
American Oncology Resources * 4,200 47
.................................................................................
Arterial Vascular Engineering * 900 44
.................................................................................
Boston Scientific * 100 5
.................................................................................
Guidant 1,500 129
.................................................................................
HealthSouth * 10,000 134
.................................................................................
Medtronic 1,000 68
.................................................................................
Mentor 4,400 82
.................................................................................
Pediatrix Medical Group * 400 21
.................................................................................
Quorum Health Group * 3,300 55
.................................................................................
Renal Care Group * 2,450 66
.................................................................................
Smith & Nephew (GBP) 8,000 22
.................................................................................
Steris * 1,900 51
.................................................................................
Terumo (JPY) 8,000 178
.................................................................................
902
...............
Pharmaceuticals 2.9%
Alkermes * 1,700 31
.................................................................................
American Home Products 16,360 871
.................................................................................
Astra (Class B) (SEK) 3,200 57
.................................................................................
Biogen * 3,600 273
.................................................................................
Bristol-Myers Squibb 6,000 735
.................................................................................
COR Therapeutics * 1,000 12
.................................................................................
Coulter Pharmaceutical * 900 26
.................................................................................
Eli Lilly 3,200 287
.................................................................................
Gehe (DEM) 1,000 64
.................................................................................
Gilead Sciences * 400 12
.................................................................................
Glaxo Wellcome ADR 3,300 210
.................................................................................
Johnson & Johnson 3,500 284
.................................................................................
Merck 3,600 558
.................................................................................
Millennium Pharmaceuticals * 1,800 37
.................................................................................
Neurocrine Biosciences * 1,000 7
.................................................................................
Novartis (CHF) 114 214
.................................................................................
PathoGenesis * 200 10
.................................................................................
Pfizer 6,620 739
.................................................................................
Pharmacia & Upjohn 5,505 287
.................................................................................
</TABLE>
7
<PAGE>
T. ROWE PRICE PERSONAL STRATEGY INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares/Par Value
- ------------------------------------------------------------------------------------
In thousands
<S> <C> <C>
PharmaPrint * 2,500 $ 30
.................................................................................
Schering-Plough 3,300 351
.................................................................................
Takeda Chemical Industries (JPY) 8,000 269
.................................................................................
Warner-Lambert 7,300 551
.................................................................................
5,915
...............
Biotechnology 0.0%
Cell Genesys * 1,900 9
.................................................................................
Zonagen * 900 18
.................................................................................
27
...............
Health Care Services 0.3%
Altana AG (DEM) 400 28
.................................................................................
AmeriPath * 4,000 18
.................................................................................
Concentra Managed Care * 4,600 53
.................................................................................
Inhale Therapeutic Systems * 1,200 39
.................................................................................
Monarch Dental * 1,500 17
.................................................................................
Northfield Laboratories * 1,700 23
.................................................................................
Orthodontic Centers of America * 2,300 44
.................................................................................
ProMedCo * 2,200 12
.................................................................................
SteriGenics International * 3,000 77
.................................................................................
United HealthCare 6,300 284
.................................................................................
595
...............
Miscellaneous Consumer Products 2.1%
Benetton Group (ITL) 41,600 76
.................................................................................
Bridgestone (JPY) 7,000 164
.................................................................................
Colgate-Palmolive 7,200 616
.................................................................................
Cone Mills * 5,600 26
.................................................................................
CSS Industries * 900 27
.................................................................................
Culp 1,000 9
.................................................................................
Dan River * 4,100 33
.................................................................................
Equity Corp. International * 2,500 65
.................................................................................
Hasbro 6,800 238
.................................................................................
Kuraray (JPY) 16,000 166
.................................................................................
Lion Nathan (NZD) 20,000 51
.................................................................................
Newell 3,500 155
.................................................................................
Philip Morris 22,450 1,256
.................................................................................
Philips Electronics ADR 2,300 146
.................................................................................
Procter & Gamble 1,800 158
.................................................................................
Service Corp. International 3,500 131
.................................................................................
</TABLE>
8
<PAGE>
T. ROWE PRICE PERSONAL STRATEGY INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares/Par Value
- ------------------------------------------------------------------------------------
In thousands
<S> <C> <C>
Sola * 3,600 $ 57
.................................................................................
Tomkins ADR 6,300 114
.................................................................................
Unifi 13,200 254
.................................................................................
Unilever N.V. ADR 1,700 131
.................................................................................
US Can * 1,900 33
.................................................................................
UST 12,500 434
.................................................................................
WestPoint Stevens * 1,200 36
.................................................................................
4,376
...............
Total Consumer Nondurables 17,119
...............
CONSUMER SERVICES 4.5%
Restaurants 0.0%
Logan's Roadhouse * 1,800 37
.................................................................................
PJ America * 900 18
.................................................................................
55
...............
General Merchandisers 1.1%
Bon-Ton Stores * 5,300 41
.................................................................................
Carrefour (FRF) 200 142
.................................................................................
Casey's General Stores 5,900 81
.................................................................................
Columbia Sportswear * 2,000 44
.................................................................................
Costco Companies * 400 25
.................................................................................
Dayton Hudson 5,200 234
.................................................................................
Fred Meyer * 6,500 331
.................................................................................
JUSCO (JPY) 7,000 133
.................................................................................
Marui (JPY) 3,000 53
.................................................................................
Pinault Printemps Redoute (FRF) 1,030 176
.................................................................................
Saks * 7,700 212
.................................................................................
Tesco (GBP) 62,821 185
.................................................................................
Wal-Mart 4,900 369
.................................................................................
Warnaco Group (Class A) 6,700 166
.................................................................................
2,192
...............
Specialty Merchandisers 1.5%
American Stores 17,100 574
.................................................................................
Christian Dior (FRF) 720 78
.................................................................................
CompuCom Systems * 6,900 26
.................................................................................
CVS 8,168 403
.................................................................................
General Nutrition * 2,900 52
.................................................................................
</TABLE>
9
<PAGE>
T. ROWE PRICE PERSONAL STRATEGY INCOME FUND
- --------------------------------------------------------------------------------
Shares/Par Value
- --------------------------------------------------------------------------------
In thousands
Home Depot 5,500 $ 274
..........................................................................
Kroger * 2,100 111
..........................................................................
Omron (JPY) 2,000 24
..........................................................................
Performance Food Group * 2,300 56
..........................................................................
Rite Aid 6,200 287
..........................................................................
Safeway * 10,500 555
..........................................................................
St. John Knits 1,400 28
..........................................................................
Toys "R" Us * 15,000 296
..........................................................................
Tupperware 18,100 316
..........................................................................
Urban Outfitters * 1,600 23
..........................................................................
3,103
...................
Entertainment and Leisure 0.7%
Carnival (Class A) 5,500 190
..........................................................................
Disney 4,000 129
..........................................................................
Hutchison Whampoa (HKD) 43,000 305
..........................................................................
McDonald's 3,400 238
..........................................................................
MediaOne Group * 3,700 150
..........................................................................
Reader's Digest (Class A) 19,300 464
..........................................................................
Seattle Filmworks * 2,300 7
..........................................................................
Sharp (JPY) 3,000 27
..........................................................................
1,510
...................
Media and Communications 1.2%
American Tower (Class A) * 400 9
..........................................................................
Asatsu (JPY) 2,000 42
..........................................................................
CBS 10,200 304
..........................................................................
Chancellor Media * 2,000 76
..........................................................................
Elsevier (NLG) 3,000 39
..........................................................................
Emmis Broadcasting (Class A) * 800 28
..........................................................................
Fox Entertainment Group 7,800 184
..........................................................................
France Telecom ADR 2,900 198
..........................................................................
Jacor Communications * 1,700 99
..........................................................................
Pegasus Communications * 700 12
..........................................................................
R.R. Donnelley 7,600 323
..........................................................................
Sinclair Broadcast Group (Class A) * 1,900 23
..........................................................................
Time Warner 4,500 476
..........................................................................
Tribune 4,400 282
..........................................................................
Valassis Communications * 2,200 94
..........................................................................
Vanguard Cellular (Class A) * 700 16
..........................................................................
10
<PAGE>
T. ROWE PRICE PERSONAL STRATEGY INCOME FUND
- --------------------------------------------------------------------------------
Shares/Par Value
- --------------------------------------------------------------------------------
In thousands
Vodafone ADR 1,500 $ 222
..........................................................................
Young Broadcasting (Class A) * 1,700 61
..........................................................................
2,488
..........................................................................
Total Consumer Services 9,348
.....................
CONSUMER CYCLICALS 2.2%
Automobiles and Related 0.3%
A.O. Smith (Class B) 5,350 133
..........................................................................
Cycle & Carriage (SGD) 2,000 7
..........................................................................
Federal-Mogul 2,500 142
..........................................................................
Honda ADR 2,600 188
..........................................................................
Keystone Automotive * 500 10
..........................................................................
Littelfuse * 1,600 37
..........................................................................
SPX * 1,000 58
..........................................................................
575
.....................
Building and Real Estate 1.3%
Apartment Investment & Management, REIT 1,000 34
..........................................................................
Arden Realty, REIT 2,800 65
..........................................................................
Cheung Kong Holdings (HKD) 29,000 209
..........................................................................
Crescent Real Estate Equities, REIT 7,800 194
..........................................................................
DBS Land (SGD) 10,000 14
..........................................................................
EastGroup Properties, REIT 4,200 78
..........................................................................
Federal Realty Investment Trust, REIT 5,800 378
..........................................................................
First Washington Realty Trust, REIT 2,300 53
..........................................................................
Glenborough Realty Trust, REIT 1,000 21
..........................................................................
JP Realty, REIT 1,000 22
..........................................................................
Parkway Properties, REIT 3,400 103
..........................................................................
Reckson Associates Realty, REIT 4,400 332
..........................................................................
Simon Property Group, REIT 5,568 461
..........................................................................
Starwood Hotels & Resorts, REIT 4,700 750
..........................................................................
Tower Realty Trust, REIT 3,000 57
..........................................................................
Woodhead Industries 4,600 60
..........................................................................
2,831
..............
11
<PAGE>
T. ROWE PRICE PERSONAL STRATEGY INCOME FUND
- --------------------------------------------------------------------------------
Shares/Par Value
- --------------------------------------------------------------------------------
In thousands
Miscellaneous Consumer Durables 0.6%
CompX * 2,400 $ 60
..........................................................................
Corning 15,400 618
..........................................................................
Eastman Kodak 500 37
..........................................................................
Harman International 800 34
..........................................................................
Masco 8,700 251
..........................................................................
OCE (NLG) 1,200 42
..........................................................................
Ricoh (JPY) 4,000 39
..........................................................................
Sony (JPY) 2,000 146
..........................................................................
1,227
..............
Total Consumer Cyclicals 4,633
..............
TECHNOLOGY 2.7%
Electronic Components 0.8%
American Superconductor * 600 6
..........................................................................
Analogic 2,600 93
..........................................................................
Burr Brown * 1,700 40
..........................................................................
EMC * 4,100 297
..........................................................................
Exar * 900 16
..........................................................................
Intel 3,800 409
..........................................................................
Linear Technology 1,000 70
..........................................................................
Maxim Integrated Products * 5,900 232
..........................................................................
Methode Electronics (Class A) 2,900 39
..........................................................................
Optek Technology * 2,400 43
..........................................................................
Planar Systems * 2,700 22
..........................................................................
PMC-Sierra * 500 27
..........................................................................
Texas Instruments 1,600 122
..........................................................................
Trident International * 2,700 27
..........................................................................
UBS (CHF) 673 202
..........................................................................
Xilinx * 1,500 76
..........................................................................
1,721
..............
Electronic Systems 0.3%
Applied Micro Circuits * 1,300 43
..........................................................................
Electromagnetic Sciences * 3,200 43
..........................................................................
Hewlett-Packard 3,500 220
..........................................................................
Lifeline Systems * 1,500 39
..........................................................................
12
<PAGE>
T. ROWE PRICE PERSONAL STRATEGY INCOME FUND
- --------------------------------------------------------------------------------
Shares/Par Value
- -------------------------------------------------------------------------------
In thousands
Lo-Jack * 3,400 $ 32
..........................................................................
Nokia ADR 2,700 265
..........................................................................
642
..............
Information Processing 0.3%
COMPAQ Computer 2,900 94
..........................................................................
Dell Computer * 2,400 146
..........................................................................
Hitachi ADR 1,600 94
..........................................................................
IBM 1,100 182
..........................................................................
516
..............
Office Automation 0.1%
Ceridian * 1,600 104
..........................................................................
104
..............
Specialized Computer 0.1%
Sun Microsystems * 2,700 200
..........................................................................
200
..............
Telecommunications Equipment 0.8%
AirTouch Communications * 4,000 229
..........................................................................
Cisco Systems * 4,425 334
..........................................................................
LM Ericsson ADR (Class B) 6,800 187
..........................................................................
Lucent Technologies 300 26
..........................................................................
MCI WorldCom * 13,621 803
..........................................................................
Premisys Communications * 1,500 22
..........................................................................
Tellabs * 1,200 65
..........................................................................
West TeleServices * 1,300 15
..........................................................................
1,681
..............
Aerospace and Defense 0.3%
AlliedSignal 11,500 506
...........................................................................
Raytheon (Class B) 3,000 166
...........................................................................
Woodward Governor 1,400 35
...........................................................................
707
..............
Total Technology 5,571
..............
EDUCATION 0.0%
ITT Educational Service * 1,400 46
...........................................................................
Total Education 46
........
13
<PAGE>
T. ROWE PRICE PERSONAL STRATEGY INCOME FUND
- --------------------------------------------------------------------------------
Shares/Par Value
- ------------------------------------------------------------------------------
In thousands
CAPITAL EQUIPMENT 1.7%
Electrical Equipment 1.1%
ABB (CHF) 30 $ 37
..........................................................................
Canon (JPY) 6,000 132
..........................................................................
GE 11,100 1,004
..........................................................................
Holophane * 3,000 69
..........................................................................
Mitsubishi Electric (JPY) 5,000 13
..........................................................................
Siemens (DEM) 1,000 70
..........................................................................
Tyco International 13,147 865
..........................................................................
2,190
..............
Machinery 0.6%
Danaher 11,400 520
..........................................................................
GKN (GBP) 6,000 66
..........................................................................
JLG Industries 3,900 64
..........................................................................
Man (DEM) 240 68
..........................................................................
NN Ball & Roller 2,200 14
..........................................................................
S I G Schweis (CHF) 430 277
..........................................................................
Teleflex 4,100 174
..........................................................................
Toolex Alpha * 2,000 23
..........................................................................
Valmet (FIM) 2,000 26
..........................................................................
1,232
..............
Capital Equipment 0.0%
Omniquip International 3,000 41
..........................................................................
41
..............
Total Capital Equipment 3,463
..............
BUSINESS SERVICES AND TRANSPORTATION 4.6%
Computer Service and Software 1.8%
Adobe Systems 1,300 58
..........................................................................
America Online 3,000 263
..........................................................................
Analysts International 1,300 22
..........................................................................
Ascend Communications * 1,400 79
..........................................................................
Automatic Data Processing 3,800 293
..........................................................................
BISYS Group * 700 34
..........................................................................
BMC Software * 7,000 357
..........................................................................
Computer Associates 1,000 44
..........................................................................
14
<PAGE>
T. ROWE PRICE PERSONAL STRATEGY INCOME FUND
- --------------------------------------------------------------------------------
Shares/Par Value
- --------------------------------------------------------------------------------
In thousands
Electronic Arts * 400 $ 17
..........................................................................
First Data 8,418 225
..........................................................................
Galileo International 4,700 188
..........................................................................
Great Plains Software * 900 35
..........................................................................
HBO 9,500 237
..........................................................................
HCIA * 2,700 13
..........................................................................
Microsoft * 5,300 647
..........................................................................
Network Associates * 6,000 305
..........................................................................
Oracle * 4,900 168
..........................................................................
Parametric Technology * 15,200 259
..........................................................................
Peerless Systems * 2,400 19
..........................................................................
Phoenix Technologies * 900 6
..........................................................................
PSINet * 500 9
..........................................................................
Saville Systems ADR * 4,100 80
..........................................................................
Sterling Commerce * 3,500 127
..........................................................................
Summit Design * 2,600 22
..........................................................................
SunGard Data Systems * 4,700 150
..........................................................................
Synopsys * 200 10
..........................................................................
Vantive * 600 5
..........................................................................
Visio * 1,600 57
..........................................................................
3,729
..............
Distribution Services 0.3%
Cardinal Health 877 60
..........................................................................
MSC * 1,700 40
..........................................................................
Primesource 1,400 10
..........................................................................
Richfood Holdings 3,800 71
..........................................................................
SED International Holdings * 3,000 14
..........................................................................
SunSource 1,800 38
..........................................................................
U.S. Foodservice * 5,287 243
..........................................................................
Watsco (Class A) 4,150 74
..........................................................................
550
..............
Environmental 0.0%
CUNO * 1,900 28
..........................................................................
Rentokil Group (GBP) 4,600 30
..........................................................................
Waterlink * 3,900 15
..........................................................................
73
..............
15
<PAGE>
T. ROWE PRICE PERSONAL STRATEGY INCOME FUND
- --------------------------------------------------------------------------------
Shares/Par Value
- --------------------------------------------------------------------------------
In thousands
Transportation Services 0.2%
C.H. Robinson Worldwide 1,400 $ 31
..........................................................................
Coach USA * 3,300 94
..........................................................................
Comfort Systems USA * 4,500 84
........................................................................
Eagle USA Air Freight * 2,300 43
..........................................................................
Expeditors International of Washington 1,000 39
..........................................................................
Frozen Food Express 1,700 13
..........................................................................
Heartland Express * 1,000 17
..........................................................................
Hub Group (Class A) * 200 4
..........................................................................
International Shipholding 1,500 23
..........................................................................
Mitsubishi Heavy Industries (JPY) 4,000 15
..........................................................................
363
................
Miscellaneous Business Services 1.7%
Alternative Resources * 2,700 26
..........................................................................
Billing Information Concepts * 3,200 40
..........................................................................
British Airport Authorities (GBP) 4,100 45
..........................................................................
Browning-Ferris 13,900 410
..........................................................................
Cendant * 7,900 150
..........................................................................
CORT Business Services * 1,700 39
..........................................................................
Electro Rent * 3,500 40
..........................................................................
Equifax 3,900 162
..........................................................................
H&R Block 15,000 674
..........................................................................
Insituform Technologies (Class A) * 4,200 55
..........................................................................
Iron Mountain * 1,300 38
..........................................................................
McGrath RentCorp 2,600 53
..........................................................................
Metamor Worldwide * 1,300 31
..........................................................................
MPW Industrial Services Group * 1,300 15
..........................................................................
New England Business Service 3,700 118
..........................................................................
Omnicom 5,200 278
..........................................................................
Paging Network * 1,800 11
..........................................................................
Paxar * 1,900 20
..........................................................................
Renaissance Worldwide * 2,700 19
..........................................................................
Romac International * 3,300 46
..........................................................................
Shorewood Packaging * 6,000 89
..........................................................................
Strayer Education 2,500 93
..........................................................................
Superior Services * 600 11
..........................................................................
Tetra Tech * 4,050 85
..........................................................................
The Peterson Companies (Class A) * 1,300 31
..........................................................................
16
<PAGE>
T. ROWE PRICE PERSONAL STRATEGY INCOME FUND
- --------------------------------------------------------------------------------
Shares/Par Value
- --------------------------------------------------------------------------------
In thousands
The Vincam Group * 600 $ 9
..........................................................................
Unitog 1,900 41
..........................................................................
Waste Management 18,406 789
..........................................................................
3,418
..............
Airlines 0.3%
Delta 10,600 569
..........................................................................
KLM (NLG) 1,000 28
..........................................................................
Midwest Express Holdings * 300 8
..........................................................................
605
..............
Railroads 0.3%
Burlington Northern Santa Fe 3,600 122
..........................................................................
Norfolk Southern 18,200 553
..........................................................................
675
..............
Total Business Services and Transporta 9,413
..............
ENERGY 2.9%
Energy Services 0.3%
Baker Hughes 11,000 202
..........................................................................
Carbo Ceramics 200 4
..........................................................................
Cooper Cameron * 300 7
..........................................................................
Elf Aquitaine ADR 1,900 118
..........................................................................
Halliburton 4,500 132
..........................................................................
Schlumberger 1,200 54
..........................................................................
Smith International * 300 7
..........................................................................
TOTAL ADR 1,200 73
..........................................................................
Weatherford International * 600 11
..........................................................................
608
..............
Exploration and Production 0.0%
Rutherford-Moran Oil * 1,600 4
..........................................................................
Santos (AUD) 7,000 20
..........................................................................
24
..............
Integrated Petroleum - Domestic 0.9%
Atlantic Richfield 4,300 286
..........................................................................
British Petroleum ADR 9,280 855
..........................................................................
Occidental Petroleum 11,100 225
..........................................................................
Unocal 3,700 125
..........................................................................
USX-Marathon 9,800 278
..........................................................................
1,769
..............
17
<PAGE>
T. ROWE PRICE PERSONAL STRATEGY INCOME FUND
- --------------------------------------------------------------------------------
Shares/Par Value
- ------------------------------------------------------------------------------
In thousands
Integrated Petroleum - International 1.7%
Amoco 14,200 $ 837
..........................................................................
Chevron 1,800 150
..........................................................................
ENI S.P.A. ADR 2,900 177
..........................................................................
Exxon 4,560 342
..........................................................................
Mobil 12,900 1,112
..........................................................................
Repsol ADR 2,700 152
..........................................................................
Royal Dutch Petroleum ADR 3,800 179
..........................................................................
Shell Transport & Trading ADR 3,800 138
..........................................................................
Texaco 7,000 403
..........................................................................
3,490
..............
Total Energy 5,891
..............
PROCESS INDUSTRIES 2.2%
Diversified Chemicals 0.6%
Dow Chemical 5,900 575
..........................................................................
DuPont 5,200 305
..........................................................................
Hercules 8,600 283
..........................................................................
1,163
..............
Specialty Chemicals 0.9%
3M 2,800 225
..........................................................................
A. Schulman 8,900 190
..........................................................................
Akzo Nobel (NLG) 3,100 127
..........................................................................
BASF AG (DEM) 2,130 81
..........................................................................
Bayer (DEM) 2,030 83
..........................................................................
CFC International * 1,000 8
..........................................................................
Furon 500 9
..........................................................................
Great Lakes Chemical 14,040 561
..........................................................................
Hauser * 3,200 14
..........................................................................
Octel * 2,610 38
..........................................................................
Pall 22,200 516
..........................................................................
Technip (FRF) 845 71
..........................................................................
1,923
..............
Paper and Paper Products 0.5%
Dai Nippon Printing (JPY) 3,000 43
..........................................................................
Fort James 8,600 337
..........................................................................
18
<PAGE>
T. ROWE PRICE PERSONAL STRATEGY INCOME FUND
- --------------------------------------------------------------------------------
Shares/Par Value
- --------------------------------------------------------------------------------
In thousands
Kimberly-Clark 13,700 $ 721
..........................................................................
Smurfit Container 1,200 17
..........................................................................
1,118
..............
Forest Products 0.1%
Georgia-Pacific 3,300 187
..........................................................................
International Paper 2,000 87
..........................................................................
274
..............
Building and Construction 0.1%
Blue Circle Industries (GBP) 8,095 41
..........................................................................
Holderbank Financiere Glarus (CHF) 60 70
..........................................................................
Layne Christensen * 2,800 29
..........................................................................
Simpson Manufacturing * 400 15
..........................................................................
155
..........................................................................
Total Process Industries 4,633
..............
BASIC MATERIALS 0.4%
Metals 0.4%
Anglo American Platinum (ZAR) 3,000 48
..........................................................................
AngloGold ADR 531 12
..........................................................................
Cambior 6,100 32
..........................................................................
Gibraltar Steel * 700 14
..........................................................................
Inco 13,400 155
..........................................................................
Matthews International (Class A) 3,700 109
..........................................................................
Reynolds Metals 7,400 406
..........................................................................
776
..............
Mining 0.0%
Prime Resources Group 2,100 16
..........................................................................
Rio Tinto (AUD) 3,200 41
..........................................................................
TVX Gold * 4,500 9
..........................................................................
66
..............
Miscellaneous Materials 0.0%
Malayan Cement (MYR) 15,750 5
..........................................................................
Synthetic Industries * 900 15
..........................................................................
20
..............
Total Basic Materials 862
..............
19
<PAGE>
T. ROWE PRICE PERSONAL STRATEGY INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares/Par Value
- -----------------------------------------------------------------------------------------------
In thousands
<S> <C> <C>
MISCELLANEOUS 0.5%
SPDR Trust 8,900 $ 1,035
...............................................................................................
Western Water * 700 4
...............................................................................................
Conglomerates 0.0%
Orkla (Class A) (NOK) 2,800 47
...............................................................................................
47
..............
Total Miscellaneous 1,086
..............
FOREIGN 0.1%
Europe 0.1%
AXA Colonia Konzern (DEM) 600 70
...............................................................................................
Svenska Cellulosa (SEK) 500 11
...............................................................................................
81
..............
Other Foreign 0.0%
Bobst (CHF) 43 59
...............................................................................................
59
..............
Total Foreign 140
..............
Total Common Stocks (Cost $76,655) 82,861
..............
CORPORATE BONDS 23.9%
ABN Amro Bank, Sub. Deb., 7.125%, 10/15/93 $ 2,000,000 2,102
...............................................................................................
AEI Holding, Sr. Notes, (144a), 10.00%, 11/15/07 125,000 129
...............................................................................................
Agricultural Minerals, Sr. Notes, 10.75%, 9/30/03 50,000 51
...............................................................................................
American Builders & Contractors Supply
Sr. Sub. Notes, 10.625%, 5/15/07 150,000 143
...............................................................................................
American Express, 7.60%, 8/15/02 300,000 318
...............................................................................................
American Radio Systems, Sr. Sub. Notes, 9.00%, 2/1/06 100,000 108
...............................................................................................
American Safety Razor, Sr. Notes, 9.875%, 8/1/05 100,000 99
...............................................................................................
American Standard, 9.25%, 12/1/16 70,000 72
...............................................................................................
Amerigas Partners, Sr. Notes, 10.125%, 4/15/07 100,000 101
...............................................................................................
APCOA, Sr. Sub. Notes, 9.25%, 3/15/08 200,000 186
...............................................................................................
Archibald Candy, Sr. Secured Notes, 10.25%, 7/1/04 150,000 153
...............................................................................................
Associated Materials, Sr. Sub. Notes, 9.25%, 3/1/08 200,000 200
...............................................................................................
Aurora Foods, Sr. Sub. Notes, 9.875%, 2/15/07 50,000 55
...............................................................................................
B&G Foods, Sr. Sub. Notes, 9.625%, 8/1/07 500,000 497
...............................................................................................
</TABLE>
20
<PAGE>
T. ROWE PRICE PERSONAL STRATEGY INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares/Par Value
- -----------------------------------------------------------------------------------------------
In thousands
<S> <C> <C>
Ballys Health & Tennis, Sr. Sub. Notes, 9.875%, 10/15/07 $ 350,000 $ 346
..................................................................................................
Banque Parabas New York, 6.875%, 3/1/09 1,850,000 1,829
..................................................................................................
BBV International Finance, 7.00%, 12/1/25 1,000,000 956
..................................................................................................
Boyd Gaming, Sr. Sub. Notes, 9.50%, 7/15/07 350,000 343
..................................................................................................
Building Materials, Sr. Notes, 7.75%, 7/15/05 500,000 496
..................................................................................................
Bway, Sr. Sub. Notes, 10.25%, 4/15/07 200,000 213
..................................................................................................
CE Electric UK Funding, 6.853%, 12/30/04 1,850,000 1,908
..................................................................................................
Chancellor Media, Sr. Sub. Notes, (144a)
8.125%, 12/15/07 500,000 496
..................................................................................................
Chattem, Sr. Sub. Notes, 12.75%, 6/15/04 200,000 220
..................................................................................................
Coach USA, Gtd. Sr. Sub. Notes, 9.375%, 7/1/07 175,000 181
..................................................................................................
Coinmach, Sr. Sub. Notes, 11.75%, 11/15/05 150,000 164
..................................................................................................
Comcast Cable Communications, 8.50%, 5/1/27 1,850,000 2,276
..................................................................................................
Communications & Power Industries
Sr. Sub. Notes, 12.00%, 8/1/05 200,000 211
..................................................................................................
Container Corp of America
Sr. Notes, 9.75%, 4/1/03 100,000 102
...........................................................................................
Gtd., 10.75%, 5/1/02 100,000 102
..................................................................................................
Courtyard by Marriott II, Sr. Secured Notes
10.75%, 2/1/08 500,000 522
..................................................................................................
CSC Holdings, Sr. Deb., 7.625%, 7/15/18 375,000 375
..................................................................................................
Dan River, Sr. Sub. Notes, 10.125%, 12/15/03 100,000 103
..................................................................................................
Doane Prods, Sr. Sub. Notes, (144a), 9.75%, 5/15/07 829,000 850
..................................................................................................
Dyersburg, Sr. Sub. Notes, 9.75%, 9/1/07 150,000 138
..................................................................................................
Dyncorp, Sr. Sub. Notes, 9.50%, 3/1/07 100,000 100
..................................................................................................
Energy Corporation of America, Sr. Sub. Notes
9.50%, 5/15/07 500,000 480
..................................................................................................
Eye Care Centers of America, 9.125%, 5/1/08 500,000 480
..................................................................................................
Fairchild Semiconductor, Sr. Sub. Notes
10.125%, 3/15/07 75,000 74
..................................................................................................
Fairfax Financial, 8.25%, 10/1/15 1,850,000 1,853
..................................................................................................
Federal-Mogul, Sr. Notes, 7.75%, 7/1/06 500,000 498
..................................................................................................
First Federal Financial, 11.75%, 10/1/04 100,000 104
..................................................................................................
Flag Limited, Sr. Notes, 8.25%, 1/30/08 150,000 153
..................................................................................................
Frontiervision, Sr. Notes, 11.00%, 10/15/06 500,000 562
..................................................................................................
Fundy Cable, Sr. Secured 2nd Priority Notes
11.00%, 11/15/05 75,000 80
..................................................................................................
Furon, Sr. Sub. Notes, 8.125%, 3/1/08 125,000 124
..................................................................................................
</TABLE>
21
<PAGE>
T. ROWE PRICE PERSONAL STRATEGY INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares/Par Value
- ------------------------------------------------------------------------------
In thousands
<S> <C> <C>
Genesis Health Ventures, Sr. Sub. Notes, 9.25%,
10/1/06 $ 100,000 $ 98
.................................................................................
Grand Casinos, Sr. Sub. Notes, 10.125%, 12/1/03 150,000 164
.................................................................................
Harcourt General, Sr. Deb., 7.20%, 8/1/27 1,700,000 1,615
.................................................................................
Herff Jones, Sr. Sub. Notes, 11.00%, 8/15/05 150,000 164
.................................................................................
HMH Properties, Sr. Notes, 7.875%, 8/1/08 500,000 490
.................................................................................
Hollinger International Publishing, Gtd. Notes
9.25%, 3/15/07 500,000 531
.................................................................................
Holmes Products, Gtd. Notes, 9.875%, 11/15/07 200,000 192
.................................................................................
Host Marriott Travel, Sr. Notes, 9.50%, 5/15/05 100,000 105
.................................................................................
Intermedia Communications, Sr. Notes, 8.50%, 1/15/08 200,000 198
.................................................................................
International Wire, Sr. Sub. Notes, 11.75%, 6/1/05 500,000 522
.................................................................................
Intertek Finance, Sr. Sub. Notes, 10.25%, 11/1/06 100,000 100
.................................................................................
Iron Mountain, Sr. Sub. Notes, 8.75%, 9/30/09 150,000 154
.................................................................................
ISP Holdings, Sr. Notes, 9.75%, 2/15/02 150,000 159
.................................................................................
Jitney-Jungle Stores, Sr. Sub. Notes, 12.00%, 3/1/06 500,000 561
.................................................................................
Keebler, Sr. Sub. Notes, 10.75%, 7/1/06 150,000 169
.................................................................................
Mastec, Sr. Sub. Notes, (144a), 7.75%, 2/1/08 250,000 241
.................................................................................
Mediacom Capital, Sr. Notes, (144a), 8.50%, 4/15/08 650,000 666
.................................................................................
Merrill Lynch & Company, 6.75%, 6/1/28 1,000,000 1,012
.................................................................................
Midland Bank, Sub. Notes, 7.65%, 5/1/25 1,000,000 1,103
.................................................................................
Newport News Shipbuilding, Sr. Notes, 8.625%, 12/1/06 500,000 527
.................................................................................
Nextel Communications, Sr. Disc. Notes
STEP, 0%, 10/31/07 325,000 206
.................................................................................
Niagara Mohawk
Sr. Disc. Notes, STEP, 0%, 7/1/10 200,000 152
..........................................................................
Sr. Notes, 7.75%, 10/1/08 350,000 378
.................................................................................
Northland Cable Television, Sr. Sub. Notes
10.25%, 11/15/07 150,000 159
.................................................................................
Ocwen Capital Trust I, 10.875%, 8/1/27 150,000 113
.................................................................................
Owens & Minor, Sr. Sub. Notes, 10.875%, 6/1/06 50,000 54
.................................................................................
Owens Illinois, Sr. Notes, 7.35%, 5/15/08 1,850,000 1,827
.................................................................................
Paine Webber, Sr. Notes, 6.55%, 4/15/08 1,850,000 1,852
.................................................................................
Paragon Corporate Holdings, Sr. Notes, (144a)
9.625%, 4/1/08 100,000 84
.................................................................................
Plastic Containers, Sr. Secured Notes, 10.00%,
12/15/06 500,000 525
.................................................................................
Price Communications Wireless, Sr. Notes, (144a)
9.125%, 12/15/06 500,000 520
.................................................................................
Pride Petroleum Services, Sr. Notes, 9.375%, 5/1/07 100,000 99
.................................................................................
</TABLE>
22
<PAGE>
T. ROWE PRICE PERSONAL STRATEGY INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares/Par Value
- ---------------------------------------------------------------------------------
In thousands
<S> <C> <C>
Principal Mutual, (144a), 8.00%, 3/1/44 $ 1,850,000 $ 1,891
.................................................................................
Purina Mills, Sr. Sub. Notes, (144a), 9.00%,
3/15/10 500,000 515
.................................................................................
Quest Diagnostics, Gtd. Sr. Sub. Notes, 10.75%,
12/15/06 150,000 167
.................................................................................
Qwest Communications
Sr. Disc. Notes, Zero Coupon, 10/15/07 600,000 467
..........................................................................
Sr. Notes, (144a), 7.50%, 11/1/08 50,000 51
.................................................................................
R & B Falcon, Sr. Notes, (144a), 6.95%, 4/15/08 1,850,000 1,737
.................................................................................
Revlon Consumer Products, Sr. Sub. Notes, 8.625%,
2/1/08 500,000 495
.................................................................................
Rio Hotel & Casino, Gtd. Sr. Sub. Notes, 9.50%,
4/15/07 100,000 110
.................................................................................
Rogers Cablesystems, Sr. Sec. 2nd Priority Notes
10.00%, 3/15/05 90,000 100
.................................................................................
Rouse, 8.50%, 1/15/03 401,000 421
.................................................................................
Rural/Metro, Sr. Notes, 7.875%, 3/15/08 125,000 116
.................................................................................
Safelite Glass, Sr. Sub. Notes, (144a), 9.875%,
12/15/06 75,000 74
.................................................................................
Six Flags Entertainment, Sr. Notes, 8.875%,
4/1/06 500,000 521
.................................................................................
Six Flags Theme Parks, Sr. Sub. Disc. Notes
12.25%, 6/15/05 200,000 222
.................................................................................
Smithfield Foods, Sr. Sub. Notes, (144a), 7.625%,
2/15/08 100,000 101
.................................................................................
Southern Foods, Sr. Sub. Notes, (144a), 9.875%,
9/1/07 150,000 157
.................................................................................
Sovereign Speciality, Sr. Sub. Notes, (144a),
9.50%, 8/1/07 150,000 149
.................................................................................
Sprint Capital, 6.125%, 11/15/08 900,000 916
.................................................................................
Stena, Sr. Notes, 10.50%, 12/15/05 500,000 520
.................................................................................
Tenet Healthcare, Sr. Sub. Notes, 8.625%, 1/15/07 100,000 106
.................................................................................
Texas-New Mexico Power, Deb., 12.50%, 1/15/99 200,000 201
.................................................................................
TravelCenters of America, Sr. Sub. Notes, 10.25%,
4/1/07 500,000 505
.................................................................................
Union Planters Trust Capital, Gtd. Bonds, 8.20%,
12/15/26 1,850,000 1,938
.................................................................................
US Can, Gtd. Sr. Notes, 10.125%, 10/15/06 100,000 104
.................................................................................
Viasystems, Sr. Sub. Notes, 9.75%, 6/1/07 75,000 74
.................................................................................
Westpoint Stevens, Sr. Notes, 7.875%, 6/15/08 200,000 206
.................................................................................
WorldCom, 7.75%, 4/1/07 1,850,000 2,085
.................................................................................
Total Corporate Bonds (Cost $50,161) 49,242
..............
FOREIGN GOVERNMENT OBLIGATIONS/
AGENCIES 1.0%
Commonwealth of Australia
9.50%, 8/15/03 AUD 10,000 7
.................................................................................
</TABLE>
23
<PAGE>
T. ROWE PRICE PERSONAL STRATEGY INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares/Par Value
- ------------------------------------------------------------------------------------
In thousands
<S> <C> <C> <C>
European Investment Bank
3.00%, 9/20/06 JPY 18,000,000 $ 168
.................................................................................
Federal Republic of Germany
6.00%, 7/4/07 DEM 150,000 101
..........................................................................
6.50%, 7/15/03 DEM 425,000 282
..........................................................................
8.50%, 8/21/00 DEM 145,000 93
.................................................................................
Government of Canada
6.50%, 6/1/04 CAD 30,000 21
..........................................................................
8.50%, 4/1/02 CAD 45,000 33
..........................................................................
9.75%, 6/1/21 CAD 70,000 72
.................................................................................
Government of France
5.50%, 4/25/07 FRF 520,000 101
..........................................................................
8.25%, 2/27/04 FRF 270,000 58
.................................................................................
Government of Japan
4.50%, 6/20/03++ JPY 40,500,000 380
.................................................................................
Int'l Bank for Reconstruction & Development
6.75%, 3/15/00 JPY 6,000,000 53
.................................................................................
Kingdom of Belgium
7.25%, 4/29/04 BEF 2,900,000 97
.................................................................................
Kingdom of Denmark
7.00%, 12/15/04 DKK 120,000 21
.................................................................................
Kingdom of Spain
8.00%, 5/30/04 ESP 8,000,000 67
.................................................................................
Kingdom of Sweden
6.00%, 2/9/05 SEK 100,000 14
.................................................................................
Republic of Italy
8.50%, 8/1/04 ITL 275,000,000 202
.................................................................................
United Kingdom Treasury Notes,
7.50%, 12/7/06 GBP 30,000 58
..........................................................................
8.50%, 12/7/05 GBP 65,000 131
..........................................................................
9.00%, 3/3/00 GBP 25,000 43
.................................................................................
Total Foreign Government Obligations/Agencies (Cost $1,857) 2,002
..............
ASSET-BACKED SECURITIES 0.1%
Delta Air Lines, ETC, 10.00%, 5/17/10 $ 146,000 180
.................................................................................
Total Asset-Backed Securities (Cost $183) 180
..............
</TABLE>
24
<PAGE>
T. ROWE PRICE PERSONAL STRATEGY INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares/Par Value
- ------------------------------------------------------------------------------------
In thousands
<S> <C> <C>
U.S. GOVERNMENT MORTGAGE-BACKED
SECURITIES 8.4%
Government National Mortgage Assn.
6.00%, 12/15/23 - 5/15/26 $ 1,578,033 $ 1,564
..........................................................................
6.50%, 7/15/23 - 7/15/28 11,121,953 11,237
..........................................................................
7.00%, 2/15 - 7/20/27 2,618,406 2,677
..........................................................................
7.50%, 9/15/22 - 12/15/25 973,619 1,006
..........................................................................
8.00%, 1/15/22 - 10/20/25 559,439 583
..........................................................................
8.50%, 9/15/24 220,723 235
..........................................................................
10.50%, 2/15 - 10/15/13 12,278 14
.................................................................................
Total U.S. Government Mortgage-Backed Securities (Cost $16,812) 17,316
..............
U.S. GOVERNMENT OBLIGATIONS/
AGENCIES 11.8%
Federal Home Loan Mortgage Corp.
5.75%, 4/15/08 3,000,000 3,087
.................................................................................
Federal National Mortgage Assn.
7.00%, 4/18/22 1,250,000 1,267
.................................................................................
Tennessee Valley Authority
5.88%, 4/1/36 2,475,000 2,574
..........................................................................
6.235%, 7/15/45 500,000 528
.................................................................................
U.S. Treasury Bonds
6.125%, 11/15/27 4,000,000 4,512
..........................................................................
6.75%, 8/15/26 10,370,000 12,500
.................................................................................
Total U.S. Government Obligations/Agencies (Cost $23,155) 24,468
..............
SHORT-TERM INVESTMENTS 13.9%
Certificates of Deposit 0.0%
Chase Manhattan Bank, N.A., fixed deposit
5.50%, 12/9/98 (MYR) 33,983 8
.................................................................................
8
..............
Money Market Funds 13.9%
Reserve Investment Fund, 5.34% # 28,624,917 28,625
.................................................................................
28,625
..............
Total Short-Term Investments (Cost $28,633) 28,633
..............
</TABLE>
25
<PAGE>
T. ROWE PRICE PERSONAL STRATEGY INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares/Par Value
- ------------------------------------------------------------------------------------
In thousands
<S> <C>
Total Investments in Securities
99.2% of Net Assets (Cost $197,456) $ 204,702
Other Assets Less Liabilities 1,564
..............
NET ASSETS $ 206,266
--------------
</TABLE>
# Seven-day yield
* Non-income producing
++ Securities contain some restrictions as to public resale--total of such
securities at period-end amounts to 0.2% of net assets.
ADR American Depository Receipt
ETC Equipment Trust Certificate
REIT Real Estate Investment Trust
STEP Stepped coupon note for which the interest rate will adjust on specified
future date(s)
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
3.7% 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.
26
<PAGE>
T. ROWE PRICE PERSONAL STRATEGY INCOME FUND
- --------------------------------------------------------------------------------
- -----------------------------------
STATEMENT OF ASSETS AND LIABILITIES
- --------------------------------------------------------------------------------
In thousands
Assets
Investments in securities, at value (cost $197,456) $ 204,702
Securities Lending Collateral Pool 17,717
Other assets 2,373
..............
Total assets 224,792
..............
Liabilities
Obligation to return securities lending collateral 17,717
Other liabilities 809
..............
Total liabilities 18,526
..............
NET ASSETS $ 206,266
--------------
Net Assets Consist of:
Accumulated net investment income - net of distributions $ 1,361
Accumulated net realized gain/loss - net of distributions 2,116
Net unrealized gain (loss) 7,247
Paid-in-capital applicable to 15,610,176 shares of
$0.0001 par value capital stock outstanding;
1,000,000,000 shares of the corporation authorized 195,542
..............
NET ASSETS $ 206,266
--------------
NET ASSET VALUE PER SHARE $ 13.21
--------------
The accompanying notes are an integral part of these financial statements.
27
<PAGE>
T. ROWE PRICE PERSONAL STRATEGY INCOME FUND
- --------------------------------------------------------------------------------
Unaudited
- -----------------------
STATEMENT OF OPERATIONS
- --------------------------------------------------------------------------------
In thousands
6 Months
Ended
11/30/98
Investment Income
Income
Interest $ 3,650
Dividend 600
..............
Total income 4,250
..............
Expenses
Investment management 402
Shareholder servicing 213
Custody and accounting 75
Registration 72
Prospectus and shareholder reports 11
Legal and audit 7
Directors 3
Miscellaneous 11
..............
Total expenses 794
..............
Net investment income 3,456
..............
Realized and Unrealized Gain (Loss)
Net realized gain (loss)
Securities 782
Foreign currency transactions (21)
..............
Net realized gain (loss) 761
..............
Change in net unrealized gain or loss
Securities (1,096)
Other assets and liabilities
denominated in foreign currencies 13
..............
Change in net unrealized gain or loss (1,083)
..............
Net realized and unrealized gain (loss) (322)
..............
INCREASE (DECREASE) IN NET
ASSETS FROM OPERATIONS $ 3,134
--------------
The accompanying notes are an integral part of these financial statements.
28
<PAGE>
T. ROWE PRICE PERSONAL STRATEGY INCOME FUND
- --------------------------------------------------------------------------------
Unaudited
- ----------------------------------
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
In thousands
6 Months Year
Ended Ended
11/30/98 5/31/98
Increase (Decrease) in Net Assets
Operations
Net investment income $ 3,456 $ 2,646
Net realized gain (loss) 761 2,006
Change in net unrealized gain or loss (1,083) 4,846
...........................
Increase (decrease) in net assets from operations 3,134 9,498
...........................
Distributions to shareholders
Net investment income (2,674) (2,388)
Net realized gain - (1,446)
...........................
Decrease in net assets from distributions (2,674) (3,834)
...........................
Capital share transactions *
Shares sold 139,720 61,162
Distributions reinvested 2,615 3,679
Shares redeemed (22,427) (28,975)
...........................
Increase (decrease) in net assets from capital
share transactions 119,908 35,866
...........................
Net Assets
Increase (decrease) during period 120,368 41,530
Beginning of period 85,898 44,368
...........................
End of period $ 206,266 $ 85,898
---------------------------
*Share information
Shares sold 10,617 4,819
Distributions reinvested 204 295
Shares redeemed (1,752) (2,278)
...........................
Increase (decrease) in shares outstanding 9,069 2,836
The accompanying notes are an integral part of these financial statements.
29
<PAGE>
T. ROWE PRICE PERSONAL STRATEGY INCOME FUND
- --------------------------------------------------------------------------------
Unaudited November 30, 1998
- ------------------------------
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
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.
Investments in mutual funds are valued at the closing net asset value per share
of the mutual fund on the day of valuation.
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.
30
<PAGE>
T. ROWE PRICE PERSONAL STRATEGY INCOME FUND
- --------------------------------------------------------------------------------
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 (MBS), are amortized for both financial reporting and
tax purposes. Premiums and discounts on all MBS are recognized upon disposition
or principal repayment as gain or loss for financial reporting purposes. For tax
purposes, premiums and discounts on MBS acquired on or before June 8, 1997, are
recognized upon disposition or principal repayment as ordinary income. For MBS
acquired after June 8, 1997, premiums are recognized as gain or loss; discounts
are recognized as gain or loss, except to the extent of accrued market
discount.
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.
Securities Lending The fund lends its securities to approved brokers to earn
additional income and receives cash and U.S. government securities as collateral
against the loans. Cash collateral received is invested in a money market pooled
account by the fund's lending agent. Collateral is maintained over the life of
the loan in an amount not less than 100% of the value of loaned securities.
Although risk is mitigated by the collateral, the fund could experience a
31
<PAGE>
T. ROWE PRICE PERSONAL STRATEGY INCOME FUND
- --------------------------------------------------------------------------------
delay in recovering its securities and a possible loss of income or value if the
borrower fails to return them. At November 30, 1998, the value of loaned
securities was $17,016,000; aggregate collateral consisted of $17,717,000 in the
securities lending collateral pool.
Other Purchases and sales of portfolio securities, other than short-term and
U.S. government securities, aggregated $104,040,000 and $21,749,000,
respectively, for the six months ended November 30, 1998. Purchases and sales of
U.S. government securities aggregated $34,815,000 and $16,533,000, respectively,
for the six months ended November 30, 1998.
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, 1998, the cost of investments for federal income tax purposes
was substantially the same as for financial reporting and totaled $197,456,000.
Net unrealized gain aggregated $7,246,000, of which $12,716,000 related to
appreciated investments and $5,470,000 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 $55,000 was payable at November 30, 1998. The fee is computed daily and
paid monthly, and consists of an individual fund fee equal to 0.15% 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, 1998, 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, 2000, which would cause the fund's ratio of
expenses to average net assets to exceed 0.90%. Thereafter,
32
<PAGE>
T. ROWE PRICE PERSONAL STRATEGY INCOME FUND
- --------------------------------------------------------------------------------
through May 31, 2002, 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 0.90%. Pursuant to this agreement, $13,000 of
management fees were not accrued by the fund for the six months ended November
30, 1998. Additionally, $238,000 of unaccrued management fees related to a
previous 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 $222,000 for the six months
ended November 30, 1998, of which $32,000 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, 1998, totaled
$681,000 and are reflected as interest income in the accompanying Statement of
Operations.
33
<PAGE>
T. ROWE PRICE PERSONAL STRATEGY INCOME FUND
- --------------------------------------------------------------------------------
- -------------------------------------------------------------
TAX INFORMATION (UNAUDITED) FOR THE TAX YEAR ENDED 10/31/98
- --------------------------------------------------------------------------------
We are providing this information as required by the Internal Revenue Code. The
amounts shown may differ from those elsewhere in this report because of
differences between tax and financial reporting requirements.
For corporate shareholders, $556,000 of the fund's distributed income and short-
term capital gains qualified for the dividends-received deduction.
34
<PAGE>
T. ROWE PRICE SHAREHOLDER SERVICES
- --------------------------------------------------------------------------------
INVESTMENT SERVICES AND INFORMATION
KNOWLEDGEABLE SERVICE REPRESENTATIVES
By Phone 1-800-225-5132 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.
In Person Available in T. Rowe Price Investor Centers.
ACCOUNT SERVICES
Checking Available on most fixed income funds ($500 minimum).
Automatic Investing From your bank account or paycheck.
Automatic Withdrawal Scheduled, automatic redemptions.
Distribution Options Reinvest all, some, or none of your distributions.
Automated 24-Hour Services Including Tele*Access(R) and the T. Rowe Price Web
site on the Internet. Address: www.troweprice.com
DISCOUNT BROKERAGE*
Individual Investments Stocks, bonds, options, precious metals, and other
securities at a savings over regular commission rates.
INVESTMENT INFORMATION
Combined Statement Overview of all your accounts with T. Rowe Price.
Shareholder Reports Fund managers' reviews of their strategies and results.
T. Rowe Price Report Quarterly investment newsletter discussing markets and
financial strategies.
Performance Update Quarterly review of all T. Rowe Price fund results.
Insights Educational reports on investment strategies and financial markets.
Investment Guides Asset Mix Worksheet, College Planning Kit, Diversifying
Overseas: A Guide to International Investing, Personal Strategy Planner,
Retirees Financial Guide, and Retirement Planning Kit.
*A division of T. Rowe Price Investment Services, Inc. Member NASD/SIPC.
35
<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. C11-058 11/30/98
