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Previous: PRICE T ROWE PERSONAL STRATEGY FUNDS INC, N-30D, 2000-01-11 |
Next: PRICE T ROWE PERSONAL STRATEGY FUNDS INC, N-30D, 2000-01-11 |
<PAGE>
- --------------------------------------------------------------------------------
Semiannual Report - Financial Statements
- --------------------------------------------------------------------------------
T. ROWE PRICE
PERSONAL STRATEGY
INCOME FUND
- --------------------------------------------------------------------------------
NOVEMBER 30, 1999
- --------------------------------------------------------------------------------
<PAGE>
T. ROWE PRICE PERSONAL STRATEGY INCOME FUND
- --------------------------------------------------------------------------------
Unaudited November 30, 1999
- --------------------
FINANCIAL HIGHLIGHTS For a share outstanding throughout each period
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
6 Months Year 7/29/94
Ended Ended Through
11/30/99 5/31/99 5/31/98 5/31/97 5/31/96 5/31/95
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE
Beginning of period $ 13.35 $ 13.13 $ 11.98 $ 11.85 $ 10.94 $ 10.00
Investment activities
Net investment income 0.27* 0.51* 0.50* 0.51* 0.50* 0.41*
Net realized and
unrealized gain (loss) (0.11) 0.31 1.43 1.10 0.98 0.85
Total from investment
activities 0.16 0.82 1.93 1.61 1.48 1.26
Distributions
Net investment income (0.27) (0.50) (0.50) (0.50) (0.47) (0.32)
Net realized gain -- (0.10) (0.28) (0.98) (0.10) --
Total distributions (0.27) (0.60) (0.78) (1.48) (0.57) (0.32)
NET ASSET VALUE
End of period $ 13.24 $ 13.35 $ 13.13 $ 11.98 $ 11.85 $ 10.94
---------------------------------------------------------------------
Ratios/Supplemental Data
Total return. 1.23%* 6.43%* 16.61%* 14.70%* 13.84%* 12.90%*
Ratio of total expenses
to average net assets 0.90%*+ 0.90%* 0.95%* 0.95%* 0.95%* 0.95%*+
Ratio of net investment
income to average
net assets 4.01%*+ 3.91%* 4.13%* 4.38%* 4.31%* 4.71%*+
Portfolio turnover rate 32.7%+ 48.9% 30.9% 44.8% 34.1% 50.5%+
Net assets, end of
period (in thousands) $ 202,944 $ 208,208 $ 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 0.90% voluntary expense limitation in effect
through 5/31/00 and expenses in excess of a 0.95% voluntary expense
limitation in effect through 5/31/98.
+ Annualized
The accompanying notes are an integral part of these financial statements.
2
<PAGE>
T. ROWE PRICE PERSONAL STRATEGY INCOME FUND
- --------------------------------------------------------------------------------
Unaudited November 30, 1999
- ------------------------
PORTFOLIO OF INVESTMENTS Shares/Par Value
- --------------------------------------------------------------------------------
In thousands
COMMON STOCKS 41.5%
FINANCIAL 6.4%
Bank and Trust 3.0%
Abbey National (GBP) 10,500 $ 177
ABN Amro (EUR) 9,000 219
Australia & New Zealand Banking ADR 2,500 89
Banca Commerciale Italiana (EUR) 20,000 102
Banco de Bilbao Vizcaya ADR 10,200 142
Banco Frances del Rio de la Plata ADR 4,035 95
Bank of America 11,100 649
Bank of New York 6,200 247
Bank One 9,000 317
Bankgesellschaft Berlin (EUR) 2,300 36
Barclay's (GBP) 9,400 271
Charter One Financial 2,296 50
Chase Manhattan 4,900 379
Chittenden 2,500 81
Citizens Banking 3,900 99
DBS Group Holdings (SGD) * 6,978 91
Deutsche Bank (EUR) * 3,580 235
Downey Financial 5,300 107
Dresdner Bank (EUR) * 5,300 248
First Bell Bancorp 1,300 21
First Mariner Bancorp 600 5
First Security 1,400 39
Firstar 6,300 164
Frankfort First Bancorp 900 14
Glacier Bancorp 4,037 70
KBC Bancassurance Holding (EUR) 2,000 94
Marshall & Ilsley 400 27
Mediobanca (EUR) 13,800 127
Mellon Financial 10,600 386
Oversea Chinese Banking (SGD) 8,400 63
Societe Generale (EUR) 1,110 239
State Street 900 66
Summit Bancorp 1,800 59
3
<PAGE>
T. ROWE PRICE PERSONAL STRATEGY INCOME FUND
- --------------------------------------------------------------------------------
Shares/Par Value
- --------------------------------------------------------------------------------
In thousands
Svenska Handelsbanken (Series A) (SEK) * 3,000 $ 41
UBS (CHF) 978 268
UST 2,300 73
Washington Mutual 5,990 174
Wells Fargo 9,000 418
WestAmerica 900 28
Westpac Banking (AUD) 6,000 40
--------------
6,050
--------------
Insurance 1.3%
ACE Limited 3,800 65
American General 3,800 279
American International Group 1,106 114
Brown and Brown 3,000 117
E.W. Blanch 1,700 99
Harleysville Group 1,800 27
Istituto Nazionale delle Assicurazioni (EUR) 47,800 133
London Pacific Group ADR 1,100 34
Marsh & McLennan 2,000 157
PartnerRe Holdings 3,400 100
Royal&Sun Alliance (GBP) 20,544 125
Schweizerische Rueckversicherungs (CHF) 90 184
Selective Insurance 1,800 32
St. Paul 13,600 410
Sumitomo Marine & Fire Insurance (JPY) 32,000 226
UNUMProvident 200 6
W. R. Berkley 1,900 41
XL Capital (Class A) 10,743 548
--------------
2,697
--------------
Financial Services 2.1%
American Express 3,600 545
Associates First Capital (Class A) 4,200 140
Assurances Generales de France (EUR) 1,500 83
AXA (EUR) 1,700 229
Capital One Financial 4,000 186
Citigroup 13,573 731
Delta Financial * 2,200 10
Fannie Mae 7,300 486
Financial Federal * 3,000 62
Freddie Mac 10,300 509
4
<PAGE>
T. ROWE PRICE PERSONAL STRATEGY INCOME FUND
- --------------------------------------------------------------------------------
Shares/Par Value
- --------------------------------------------------------------------------------
In thousands
Goldman Sachs Group 300 $ 23
HSBC Holdings (GBP) 24,126 312
ING Groep (EUR) 4,250 239
ITLA Capital * 500 7
Morgan Stanley Dean Witter 1,500 181
Pearson (GBP) 9,600 230
Providian Financial 200 16
Unidanmark (Class A) (DKK) 2,200 167
--------------
4,156
--------------
Total Financial 12,903
--------------
UTILITIES 2.9%
Telephone 2.2%
ALLTEL 1,100 95
AT&T 7,275 406
AT&T Liberty Group Media * 1,500 63
BellSouth 4,800 222
British Telecommunications ADR 1,300 266
Cable & Wireless ADR 1,100 29
Compania de Telecomunicaciones de Chile (Class A) ADR 500 9
GTE 800 58
Nextel Communications * 1,000 99
Nippon Telegraph & Telephone (JPY) 20 360
Rural Cellular (Class A) * 1,200 96
SBC Communications 7,800 405
Sprint 12,300 853
Telebras ADR 1,600 145
Telecom Corp. of New Zealand ADR 5,400 181
Telecom Italia (EUR) 23,000 254
Telecom Italia Mobile (EUR) 27,000 212
Telefonica de Espana ADR * 3,182 198
Telefonos de Mexico (Class L) ADR 3,300 305
Western Wireless 1,400 82
--------------
4,338
--------------
Electric Utilities 0.7%
Cleco 3,800 124
Electrabel (EUR) 210 67
Empresa Nacional de Electricidad Chile ADR 532 7
5
<PAGE>
T. ROWE PRICE PERSONAL STRATEGY INCOME FUND
- --------------------------------------------------------------------------------
Shares/Par Value
- --------------------------------------------------------------------------------
In thousands
Endesa ADR 5,100 $ 101
FirstEnergy 9,695 226
GPU 2,100 67
Hong Kong Electric (HKD) 14,000 44
PECO Energy 3,900 129
Powergen (GBP) 7,600 66
Texas Utilities 6,800 244
Unicom 7,400 236
Veba (EUR) 3,410 168
--------------
1,479
--------------
Water Utilities 0.0%
United Water Resources 800 27
--------------
27
--------------
Total Utilities 5,844
--------------
CONSUMER NONDURABLES 7.9%
Cosmetics 0.5%
Chattem * 1,700 33
Gillette 300 12
International Flavors & Fragrances 17,100 630
Kao (JPY) 12,000 357
--------------
1,032
--------------
Beverages 0.7%
Anheuser-Busch 6,500 486
Bass (GBP) 11,900 133
Coca-Cola 800 54
Diageo ADR 4,450 164
LVMH (EUR) 1,075 349
PepsiCo 5,200 180
--------------
1,366
--------------
Food Processing 1.2%
American Italian Pasta * 2,100 63
Associated British Foods (GBP) 12,000 59
Cadbury Schweppes ADR 7,000 172
Campbell 4,600 205
Carrefour (EUR) 1,200 209
Danisco (DKK) 1,200 49
6
<PAGE>
T. ROWE PRICE PERSONAL STRATEGY INCOME FUND
- --------------------------------------------------------------------------------
Shares/Par Value
- --------------------------------------------------------------------------------
In thousands
Eridania Beghin-Say (EUR) 840 $ 94
General Mills 8,920 336
International Multifoods 6,300 88
McCormick 5,200 167
Nestle (CHF) 162 292
Quaker Oats 200 13
Ralston Purina 11,300 335
Sara Lee 6,500 158
Seneca Foods (Class A) * 1,600 19
Seneca Foods (Class B) * 700 8
Unilever 2,317 126
United Natural Foods * 2,600 22
--------------
2,415
--------------
Hospital Supplies/Hospital Management 0.4%
Baxter International 1,900 128
Cephalon * 300 7
Medtronic 200 8
Mentor 6,100 142
Quorum Health Group * 3,300 30
Renal Care Group * 3,150 64
Smith & Nephew (GBP) 34,900 121
Steris * 3,100 40
Terumo (JPY) 9,000 274
--------------
814
--------------
Pharmaceuticals 2.7%
American Home Products 21,160 1,100
Amgen * 2,400 109
AstraZeneca Group (GBP) 1,614 72
AstraZeneca Group ADR 4,600 205
Aurora Biosciences * 800 9
Biogen * 500 37
Boron Lepore & Associates * 1,100 8
Bristol-Myers Squibb 5,900 431
Eli Lilly 2,800 201
Emisphere Technologies * 200 4
Gehe (EUR) 4,000 156
Genetech 1,800 155
Glaxo Wellcome ADR 3,300 196
7
<PAGE>
T. ROWE PRICE PERSONAL STRATEGY INCOME FUND
- --------------------------------------------------------------------------------
Shares/Par Value
- --------------------------------------------------------------------------------
In thousands
Imclone Systems * 500 $ 18
Incyte Pharmaceuticals * 400 12
Johnson & Johnson 2,800 291
Liposome * 500 6
Merck 4,200 330
Novartis (CHF) 203 317
Noven Pharmaceuticals * 700 9
Pfizer 12,760 462
Pharmacia & Upjohn 2,905 159
Schering-Plough 5,400 276
Takeda Chemical Industries (JPY) 8,000 473
Triangle Pharmaceuticals * 2,100 41
Warner-Lambert 4,800 430
--------------
5,507
--------------
Biotechnology 0.2%
Abegenix * 300 15
Alkermes * 1,700 72
Anesta * 1,700 25
COR Therapeutics * 700 14
Coulter Pharmaceutical * 800 14
Gilead Sciences * 500 24
Inhale Therapeutic Systems * 2,900 90
Millennium Pharmaceuticals * 100 10
Neurocrine Biosciences * 2,400 31
Northfield Laboratories * 2,300 27
Serologicals * 3,600 26
--------------
348
--------------
Health Care Services 0.3%
Altana (EUR) 1,400 100
AmeriPath * 4,300 35
CIGNA 200 16
IMS Health 2,500 59
Monarch Dental 1,300 3
Orthodontic Centers of America * 2,300 28
ProMedCo 1,200 3
United HealthCare 4,800 249
US Oncology * 4,500 21
Wellpoint Health Networks * 1,400 81
--------------
595
--------------
8
<PAGE>
T. ROWE PRICE PERSONAL STRATEGY INCOME FUND
- --------------------------------------------------------------------------------
Shares/Par Value
- --------------------------------------------------------------------------------
In thousands
Miscellaneous Consumer Products 1.9%
Benetton Group (EUR) 41,600 $ 84
Bridgestone (JPY) 8,000 198
Coles Myer Limited (AUD) 12,000 61
Colgate-Palmolive 12,600 691
Cone Mills * 5,600 28
Culp 1,700 11
Dan River * 6,900 37
Hasbro 3,050 66
Kuraray (JPY) 18,000 203
Lion Nathan (NZD) 20,000 44
Mattel 22,800 326
Mitsui (JPY) 31,000 237
NIKE (Class B) 2,000 92
Philip Morris 13,850 364
Philips Electronics ADR 2,116 253
Procter & Gamble 1,500 162
Reebok * 1,500 13
Sola * 4,400 63
Stanley Works 8,600 268
Stride Rite 4,800 31
Takkt (EUR) * 4,000 23
Tomkins (GBP) 29,000 101
Tomkins ADR 968 14
Unifi * 16,700 221
US Can * 6,600 118
UST 7,500 200
WestPoint Stevens 1,400 29
--------------
3,938
--------------
Total Consumer Nondurables 16,015
--------------
CONSUMER SERVICES 4.6%
Restaurants 0.0%
Buca * 2,500 28
PJ America * 2,000 32
--------------
60
--------------
General Merchandisers 0.7%
Bon-Ton Stores * 5,300 26
9
<PAGE>
T. ROWE PRICE PERSONAL STRATEGY INCOME FUND
- --------------------------------------------------------------------------------
Shares/Par Value
- --------------------------------------------------------------------------------
In thousands
Casey's General Stores 8,300 $ 106
Columbia Sportswear * 3,200 66
Dayton Hudson 2,300 162
JUSCO (JPY) 7,000 134
Marui (JPY) 13,000 223
Pinault Printemps Redoute (EUR) 1,030 215
Tesco (GBP) 65,421 177
Wal-Mart 6,500 375
-------------
1,484
-------------
Specialty Merchandisers 1.3%
Christian Dior (EUR) 720 129
CompuCom Systems * 6,900 22
CVS 4,268 169
Goody's Family Clothing * 2,400 16
Home Depot 3,600 285
Kroger * 8,100 173
O' Charley's * 3,000 40
Omron (JPY) 8,000 196
Rite Aid 36,400 275
Safeway * 6,500 240
Toys 'R' Us * 33,400 584
Tupperware 19,700 351
Urban Outfitters * 1,600 32
-------------
2,512
-------------
Entertainment and Leisure 1.0%
Carnival (Class A) 1,300 57
Disney 17,900 499
Hutchison Whampoa (HKD) 43,000 530
McDonald's 3,600 162
MediaOne Group * 3,400 270
Reader's Digest (Class A) 16,700 484
Sharp (JPY) 3,000 62
-------------
2,064
-------------
Media and Communications 1.6%
American Tower Systems (Class A) * 400 11
Asatsu (JPY) 2,000 96
CBS * 7,100 369
Charter Communications (Class A) * 1,500 35
10
<PAGE>
T. ROWE PRICE PERSONAL STRATEGY INCOME FUND
- --------------------------------------------------------------------------------
Shares/Par Value
- --------------------------------------------------------------------------------
In thousands
Clear Channel Communications * 2,500 $ 201
Comcast (Class A Special) 1,700 77
Elsevier (EUR) 3,000 30
Emmis Broadcasting (Class A) * 2,000 162
Fox Entertainment Group (Class A) * 3,200 74
France Telecom ADR 2,200 255
Infinity Broadcasting (Class A) * 4,500 164
Pegasus Communications * 700 46
Publishing & Broadcasting (AUD) 9,600 63
R.R. Donnelley 20,700 497
Sinclair Broadcast Group (Class A) * 3,800 44
Time Warner 4,300 265
Tribune 2,400 115
Vodafone Airtouch ADR 11,550 545
Young Broadcasting (Class A) * 1,900 76
-------------
3,125
-------------
Total Consumer Services 9,245
-------------
CONSUMER CYCLICALS 3.1%
Automobiles and Related 0.3%
A.O. Smith (Class B) 7,350 162
Cycle & Carriage (SGD) 4,000 14
DaimlerChrysler (EUR) 2,000 137
Honda ADR 2,600 215
Keystone Automotive * 1,500 9
Littelfuse * 3,700 78
SPX * 400 30
Strattec Security * 500 17
-------------
662
-------------
Building and Real Estate 1.4%
Accor (EUR) 700 159
Apartment Investment & Management, REIT 1,200 45
Arden Realty, REIT 2,800 54
Cheung Kong Holdings (HKD) 29,000 327
City Developments (SGD) 4,000 23
DBS Land (SGD) 11,000 21
EastGroup Properties, REIT 4,800 83
11
<PAGE>
T. ROWE PRICE PERSONAL STRATEGY INCOME FUND
- --------------------------------------------------------------------------------
Shares/Par Value
- --------------------------------------------------------------------------------
In thousands
Federal Realty Investment Trust, REIT 21,900 $ 394
First Washington Realty Trust, REIT 2,700 48
Glenborough Realty Trust, REIT 2,600 34
JP Realty, REIT 2,400 41
Parkway Properties, REIT 4,300 128
Reckson Associates Realty (Class B), REIT 1,971 41
Reckson Associates Realty, REIT 21,900 442
Simon DeBartolo Group, REIT 19,368 452
Singapore Land (SGD) 8,000 19
Starwood Hotels & Resorts, REIT 21,000 469
Westfield Trust (AUD) 14,400 27
Woodhead Industries 5,100 68
-------------
2,875
-------------
Miscellaneous Consumer Durables 1.4%
CompX * 2,800 51
Corning 12,100 1,134
Eastman Kodak 12,300 761
Harman International 1,700 88
Masco 4,100 103
OCE (EUR) 1,200 21
Ricoh (JPY) 9,000 167
Sony (JPY) 2,000 371
-------------
2,696
-------------
Total Consumer Cyclicals 6,233
-------------
TECHNOLOGY 3.5%
Electronic Components 1.1%
Altera * 2,400 129
American Superconductor * 600 11
Analogic 3,500 105
Benchmark Electronics * 2,800 62
Burr Brown * 2,200 97
EMC * 1,400 117
Exar * 1,000 49
Intel 5,400 414
Linear Technology 400 28
Maxim Integrated Products * 3,700 297
12
<PAGE>
T. ROWE PRICE PERSONAL STRATEGY INCOME FUND
- --------------------------------------------------------------------------------
Shares/Par Value
- --------------------------------------------------------------------------------
In thousands
Methode Electronics (Class A) 5,600 $ 152
Motorola 1,300 149
Planar Systems * 2,700 18
PMC-Sierra * 700 72
QuickLogic * 1,100 19
SIPEX * 1,200 17
Texas Instruments 2,700 259
Xilinx * 2,100 188
-------------
2,183
-------------
Electronic Systems 0.5%
Applied Materials * 2,100 205
Applied Micro Circuits * 1,200 100
Armor Holdings * 3,500 41
EMS Technologies * 2,600 28
Hewlett-Packard 1,900 180
Lifeline Systems * 1,600 24
Lo-Jack 3,400 27
Nokia ADR * 1,500 207
Solectron * 1,700 140
-------------
952
-------------
Information Processing 0.3%
Dell Computer * 5,600 241
F. Y. I. * 2,700 87
Hitachi ADR 1,600 221
IBM 400 41
Source Information Management * 3,200 49
-------------
639
-------------
Office Automation 0.3%
Ceridian * 1,000 21
Technitrol 3,400 146
Xerox 15,100 409
-------------
576
-------------
Specialized Computer 0.1%
Sun Microsystems * 1,600 212
Virata * 500 16
-------------
228
-------------
Aerospace and Defense 0.1%
Allied-Signal 3,600 215
13
<PAGE>
T. ROWE PRICE PERSONAL STRATEGY INCOME FUND
- --------------------------------------------------------------------------------
Shares/Par Value
- --------------------------------------------------------------------------------
In thousands
DONCASTERS ADR * 600 $ 5
Woodward Governor 1,700 46
-------------
266
-------------
Telecommunications 1.1%
ADC Telecommunications * 895 48
Aether Systems * 100 8
Airgate PCS * 600 24
Avant * 2,700 42
Cacheflow * 100 15
Cisco Systems * 4,850 432
Deutsche Telekom ADR 4,800 273
Ditech Communications * 500 52
LM Ericsson (Class B) ADR 6,800 328
Lucent Technologies 4,025 294
MCI WorldCom * 5,521 456
Premisys Communications 1,100 11
Singapore Telecommunications (SGD) 37,000 70
Tellabs * 600 39
Uniphase 200 46
Voicestream Wireless * 1,000 92
West TeleServices * 2,200 38
-------------
2,268
-------------
Total Technology 7,112
-------------
EDUCATION 0.0%
ITT Educational Service * 1,500 26
-------------
Total Education 26
-------------
CAPITAL EQUIPMENT 1.4%
Electrical Equipment 1.0%
ABB (CHF) 1,653 163
Canon (JPY) 8,000 236
GE 7,500 975
LSI 3,500 85
Matsushita Electric Works (JPY) 8,000 77
Mitsubishi Electric (JPY) 13,000 77
Tyco International 13,494 541
-------------
2,154
-------------
14
<PAGE>
T. ROWE PRICE PERSONAL STRATEGY INCOME FUND
- --------------------------------------------------------------------------------
Shares/Par Value
- --------------------------------------------------------------------------------
In thousands
Machinery 0.4%
Danaher 3,500 $ 172
GKN (GBP) 13,700 215
Kennametal 2,600 87
NN Ball & Roller 3,200 21
S I G Schweis (CHF) 430 236
Toolex Alpha * 1,000 15
-------------
746
-------------
Total Capital Equipment 2,900
-------------
BUSINESS SERVICES AND TRANSPORTATION 3.7%
Computer Service and Software 1.8%
America Online * 5,500 400
Analysts International 2,300 27
Automatic Data Processing 4,200 207
BISYS Group * 800 46
BMC Software * 3,200 233
Cambridge Technology Partners * 1,400 20
Citrix Systems * 1,100 104
Computer Associates 3,000 195
Concord Communications * 900 48
Digital Impact * 600 32
Electronic Arts * 500 53
First Data 4,018 174
Great Plains Software * 1,100 59
Jack Henry & Associates 1,400 56
Loislaw * 700 21
Mastech * 2,500 47
Microsoft * 8,200 747
MMC Networks * 600 12
NetIQ * 1,500 63
Netsolve * 300 8
Oracle * 3,600 244
Parametric Technology * 5,000 113
Peerless Systems * 2,800 24
Phoenix Technologies * 1,400 20
Progress Software * 4,000 160
PSINet * 700 35
15
<PAGE>
T. ROWE PRICE PERSONAL STRATEGY INCOME FUND
- --------------------------------------------------------------------------------
Shares/Par Value
- --------------------------------------------------------------------------------
In thousands
Quest Software * 200 $ 15
Retek * 400 27
SalesLoggix * 1,300 38
Sciquest * 100 3
SPSS * 1,800 41
SunGard Data Systems * 600 13
Synopsys * 200 15
Syntel * 100 1
Vantive * 1,300 20
VERITAS Software * 1,350 124
Viasoft * 6,200 38
Visio * 1,200 43
Vitria Technology * 100 10
WebTrends * 800 46
Wind River Systems * 1,100 38
Yahoo! * 300 64
Zebra Technologies (Class A) * 700 42
-------------
3,726
-------------
Distribution Services 0.2%
Aviation Sales * 1,600 23
MSC * 3,300 30
Performance Food Group * 1,400 35
Primesource 2,500 15
SCP Pool * 3,800 90
SunSource 1,800 9
U.S. Foodservice * 8,574 156
United Stationers * 1,600 37
Watsco (Class A) 4,350 47
Wilmar Industries * 1,900 26
-------------
468
-------------
Environmental 0.0%
CUNO * 2,500 51
IT Group * 1,500 16
Waterlink * 5,500 17
-------------
84
-------------
Transportation Services 0.3%
C.H. Robinson Worldwide 2,400 84
Comfort Systems USA * 6,100 50
16
<PAGE>
T. ROWE PRICE PERSONAL STRATEGY INCOME FUND
- --------------------------------------------------------------------------------
Shares/Par Value
- --------------------------------------------------------------------------------
In thousands
Eagle USA Air Freight * 3,650 $ 123
Expeditors International of Washington 2,200 89
Frozen Food Express 1,400 6
Heartland Express * 1,000 15
Hub Group (Class A) * 500 9
International Shipholding 1,500 20
Mitsubishi Heavy Industries (JPY) 50,000 163
-------------
559
-------------
Miscellaneous Business Services 1.1%
Agilent Technologies * 400 17
British Airport Authorities (GBP) 18,200 129
Consolidated Graphics * 3,900 87
CORT Business Services * 2,800 55
Electro Rent * 4,300 51
H&R Block 6,700 288
Insituform Technologies (Class A) * 4,200 105
Iron Mountain * 2,000 59
Ivex Packaging * 6,100 64
Maximus * 2,500 70
McGrath Rent 2,600 47
Metamor Worldwide * 1,300 34
MPW Industrial Services Group * 3,300 29
New England Business Service 5,800 131
Omnicom 2,600 229
Romac International * 3,900 44
Shorewood Packaging * 10,000 164
Strayer Education 2,700 56
Tetra Tech * 5,062 58
United Parcel Service 800 53
Waste Management 30,806 500
-------------
2,270
-------------
Airlines 0.1%
KLM (EUR) 750 19
Midwest Express Holdings * 2,500 72
Singapore Airlines (SGD) 9,000 91
-------------
182
-------------
Railroads 0.2%
Kansas City Southern Industries 1,100 65
17
<PAGE>
T. ROWE PRICE PERSONAL STRATEGY INCOME FUND
- --------------------------------------------------------------------------------
Shares/Par Value
- --------------------------------------------------------------------------------
In thousands
Norfolk Southern 11,400 $ 244
-------------
309
-------------
Total Business Services and Transportation 7,598
-------------
ENERGY 3.9%
Energy Services 0.7%
Baker Hughes 19,800 500
BG (GBP) 15,100 79
Cooper Cameron * 500 22
Halliburton 2,000 77
Smith International * 600 24
Tokyo Electric Power (JPY) 9,000 254
TOTAL ADR * 4,474 296
United Utilities (GBP) 15,700 148
Weatherford International 1,000 35
-------------
1,435
-------------
Exploration and Production 0.4%
Key Energy * 6,300 32
National Oilwell * 1,700 24
Santos (EUR) 11,000 29
Unocal 17,900 594
-------------
679
-------------
Integrated Petroleum - Domestic 0.7%
Amerada Hess 900 52
Atlantic Richfield 4,800 463
Conoco (Class B) 6,469 170
Occidental Petroleum 11,500 252
USX-Marathon 19,300 510
-------------
1,447
-------------
Integrated Petroleum - International 2.1%
BP Amoco ADR 25,222 1,537
Chevron 2,200 195
ENI SPA ADR 2,900 157
Exxon 2,960 235
Mobil 7,600 793
Repsol ADR 8,100 176
Royal Dutch Petroleum ADR 8,900 516
18
<PAGE>
T. ROWE PRICE PERSONAL STRATEGY INCOME FUND
- --------------------------------------------------------------------------------
Shares/Par Value
- --------------------------------------------------------------------------------
In thousands
Shell Transport & Trading ADR 6,100 $ 278
Texaco 4,300 262
Total Fina (Class B) (EUR) * 1,311 174
-------------
4,323
-------------
Total Energy 7,884
-------------
PROCESS INDUSTRIES 2.7%
Diversified Chemicals 0.5%
Arch Chemicals 5,500 86
Dow Chemical 3,600 422
DuPont 3,502 208
Hercules 15,900 377
-------------
1,093
-------------
Specialty Chemicals 1.1%
3M 6,400 611
A. Schulman 1,400 22
Air Liquide (EUR) 371 54
Akzo Nobel (EUR) 3,100 133
BASF (EUR) 2,830 131
Bayer (EUR) 2,030 86
Great Lakes Chemical 8,140 270
Hauser * 1,550 4
Imperial Chemical Industries ADR 2,100 86
Pall 17,900 419
Sumitomo Chemicals (JPY) 52,000 293
Technip (EUR) 845 81
-------------
2,190
-------------
Paper and Paper Products 0.7%
Dai Nippon Printing (JPY) 14,000 244
Fort James 18,000 517
Kimberly-Clark 9,700 620
Smurfit-Stone Container * 1,600 31
-------------
1,412
-------------
Forest Products 0.2%
International Paper 1,300 68
Weyerhaeuser 4,500 276
-------------
344
-------------
19
<PAGE>
T. ROWE PRICE PERSONAL STRATEGY INCOME FUND
- --------------------------------------------------------------------------------
Shares/Par Value
- --------------------------------------------------------------------------------
In thousands
Building and Construction 0.2%
Blue Circle Industries (GBP) 13,595 $ 78
CBR (EUR) * 400 41
Heidelberg Zement (EUR) 1,500 109
Holderbank Financiere Glarus (CHF) 91 114
Layne Christensen * 4,000 27
Simpson Manufacturing * 700 29
Trex * 2,800 72
U.S. Aggregates * 2,500 30
-------------
500
-------------
Total Process Industries 5,539
-------------
BASIC MATERIALS 0.8%
Metals 0.7%
Gibraltar Steel 1,000 24
Inco * 18,200 334
Material Sciences * 5,100 56
Matthews International (Class A) 5,500 125
Phelps Dodge 6,700 348
Reynolds Metals 9,700 607
-------------
1,494
-------------
Mining 0.1%
Battle Mountain Gold 14,200 35
Lihir Gold * 16,140 13
Rio Tinto (EUR) 3,200 56
-------------
104
-------------
Miscellaneous Materials 0.0%
Malayan Cement (MYR) * 15,750 5
Synthetic Industries * 2,000 65
-------------
70
-------------
Total Basic Materials 1,668
-------------
MISCELLANEOUS 0.1%
Conglomerates 0.1%
Berkshire Hathaway (Class B) * 19 36
Orkla (Class A) (NOK) 3,200 49
-------------
85
-------------
20
<PAGE>
T. ROWE PRICE PERSONAL STRATEGY INCOME FUND
- --------------------------------------------------------------------------------
Shares/Par Value
- --------------------------------------------------------------------------------
In thousands
Other Miscellaneous 0.0%
CSM (EUR) * 1,600 $ 32
Other Miscellaneous Common Stocks 13
-------------
45
-------------
Total Miscellaneous 130
-------------
FOREIGN 0.5%
Europe 0.3%
AXA Colonia Konzern (EUR) 2,100 198
Man (EUR) 3,400 105
Rhone Poulenc (EUR) 1,900 118
Schneider Electric (EUR) 1,500 101
Singapore Press (SGD) * 4,000 75
Svenska Cellulosa (SEK) 500 14
-------------
611
-------------
Far East 0.1%
Nippon Express (JPY) 36,000 209
-------------
209
-------------
Other Foreign 0.1%
Bobst (CHF) 43 50
Pacific Dunlop (EUR) 22,400 30
Siemens (EUR) 1,300 130
Valmet Rauma (EUR) 2,000 22
-------------
232
-------------
Total Foreign 1,052
-------------
Total Common Stocks (Cost $73,311) 84,149
-------------
CORPORATE BONDS 22.1%
Adelphia Communications
7.875%, 5/1/09 $ 75,000 68
9.875%, 3/1/05 425,000 435
Allied Holdings, Gtd. Sr. Sub. Notes,
8.625%, 10/1/07 250,000 219
American Builders & Contractors Supply,
Sr. Sub. Notes 10.625%, 5/15/07 500,000 443
American Express, 7.60%, 8/15/02 300,000 305
American Radio Systems, Sr. Sub. Notes,
9.00%, 2/1/06 100,000 105
21
<PAGE>
T. ROWE PRICE PERSONAL STRATEGY INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares/Par Value
- -----------------------------------------------------------------------------------------
In thousands
<S> <C> <C>
American Standard, 9.25%, 12/1/16 $ 55,000 $ 54
Amerigas Partners, Sr. Notes, 10.125%, 4/15/07 100,000 102
Anchor Advanced, Sr. Notes, 11.75%, 4/1/04 500,000 450
APCOA, Sr. Sub. Notes, 9.25%, 3/15/08 200,000 163
Associated Materials, Sr. Sub. Notes, 9.25%, 3/1/08 200,000 188
Aurora Foods, Sr. Sub. Notes, 9.875%, 2/15/07 50,000 51
Avis Rent A Car, Sr. Sub. Notes, 11.00%, 5/1/09 250,000 262
B&G Foods, Sr. Sub. Notes, 9.625%, 8/1/07 500,000 453
Ballys Total Fitness, Sr. Sub. Notes, 9.875%, 10/15/07 350,000 333
BBV International Finance, 7.00%, 12/1/25 1,000,000 886
Building Materials, Sr. Notes, 7.75%, 7/15/05 125,000 114
BWAY, Sr. Sub. Notes, 10.25%, 4/15/07 200,000 198
CE Electric UK Funding, 6.853%, 12/30/04 1,850,000 1,796
Chancellor Media
Sr. Notes, 8.00%, 11/1/08 250,000 251
Sr. Sub. Notes, 8.125%, 12/15/07 250,000 249
Charter Communication, Sr. Notes, 8.25%, 4/1/07 500,000 472
Chattem, Sr. Sub. Notes, 12.75%, 6/15/04 200,000 214
Cinemark USA, Sr. Sub. Notes, 8.50%, 8/1/08 500,000 430
Coach USA, Gtd. Sr. Sub. Notes, 9.375%, 7/1/07 175,000 194
Coinmach, Sr. Sub. Notes, 11.75%, 11/15/05 150,000 155
Comcast Cable Communications, 8.50%, 5/1/27 1,850,000 1,984
Communications & Power, Sr. Sub. Notes, 12.00%, 8/1/05 200,000 161
Consolidated Container, Sr. Sub. Notes, (144a)
10.125%, 7/15/09 300,000 305
Container Corp of America
Sr. Notes, 9.75%, 4/1/03 100,000 103
Gtd., 10.75%, 5/1/02 100,000 105
Courtyard by Marriott II, Sr. Secured Notes,
10.75%, 2/1/08 500,000 479
CSC Holdings, Sr. Deb., 7.625%, 7/15/18 375,000 346
Dan River, Sr. Sub. Notes, 10.125%, 12/15/03 100,000 99
Delta Air Lines, ETC, 10.00%, 5/17/10 146,000 163
Doane Pet Care, Sr. Sub. Notes, 9.75%, 5/15/07 829,000 797
Dyersburg, Sr. Sub. Notes, 9.75%, 9/1/07 150,000 60
Dyncorp, Sr. Sub. Notes, 9.50%, 3/1/07 100,000 89
Energy Corporation of America, Sr. Sub. Notes
9.50%, 5/15/07 500,000 290
</TABLE>
22
<PAGE>
T. ROWE PRICE PERSONAL STRATEGY INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares/Par Value
- ----------------------------------------------------------------------------------------
In thousands
<S> <C> <C>
Fairfax Financial, 8.25%, 10/1/15 $ 1,850,000 $ 1,628
Federal-Mogul, Sr. Notes, 7.75%, 7/1/06 500,000 465
First Federal Financial, 11.75%, 10/1/04 100,000 104
Ford Motor Credit, Sr. Notes, 5.80%, 1/12/09 1,000,000 901
Frontiervision, Sr. Notes, 11.00%, 10/15/06 500,000 531
Group Maintenance America, Sr. Sub. Notes
9.75%, 1/15/09 250,000 248
Harrahs Operating, 7.875%, 12/15/05 500,000 487
Hawk, Sr. Notes, 10.25%, 12/1/03 400,000 376
Herff Jones, Sr. Sub. Notes, 11.00%, 8/15/05 150,000 160
Hollinger International Publishing, Gtd. Notes
9.25%, 3/15/07 500,000 490
Holmes Products, Gtd. Notes, 9.875%, 11/15/07 175,000 140
Host Marriott Travel, Sr. Notes, 9.50%, 5/15/05 500,000 521
Intermedia Communications, Sr. Notes
8.60%, 6/1/08 300,000 274
9.50%, 3/1/09 200,000 191
International Home Foods, Gtd. Sr. Sub. Notes
10.375%, 11/1/06 500,000 519
International Wire, Sr. Sub. Notes, 11.75%, 6/1/05 500,000 514
Intertek Finance, Sr. Sub. Notes, 10.25%, 11/1/06 100,000 94
Iron Mountain, Sr. Sub. Notes, 8.75%, 9/30/09 150,000 143
ISP Holdings, Sr. Notes, 9.75%, 2/15/02 150,000 152
Jitney-Jungle Stores, Sr. Sub. Notes, 12.00%, 3/1/06 350,000 84
Mastec, Sr. Sub. Notes, 7.75%, 2/1/08 250,000 235
MCI WorldCom, 7.75%, 4/1/07 1,850,000 1,911
Mediacom LLC, Sr. Notes, 7.875%, 2/15/11 500,000 443
Metromedia Fiber Network, Sr. Notes, 10.00%, 11/15/08 250,000 253
Metronet Communications, Sr. Disc. Notes, STEP, 0%, 6/15/08 650,000 510
Midland Bank, Sub. Notes, 7.65%, 5/1/25 1,000,000 1,011
Mohegan Tribal Gaming Authority, Sr. Notes, 8.125%, 1/1/06 425,000 414
Newport News Shipbuilding, Sr. Notes, 8.625%, 12/1/06 500,000 501
Nextel Communications, Sr. Disc. Notes, STEP, 0%, 10/31/07 900,000 652
Nextlink Communications, Sr. Disc. Notes, STEP, 0%, 6/1/09 750,000 450
Niagara Mohawk, Sr. Notes, 7.75%, 10/1/08 350,000 355
Northland Cable Television, Sr. Sub. Notes, 10.25%, 11/15/07 150,000 150
NTL, Sr. Notes, Zero Coupon, 4/1/08 750,000 517
</TABLE>
23
<PAGE>
T. ROWE PRICE PERSONAL STRATEGY INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares/Par Value
- -----------------------------------------------------------------------------------------
In thousands
<S> <C> <C>
Orange, Sr. Notes, 9.00%, 6/1/09 $ 500,000 $ 530
Owens & Minor, Sr. Sub. Notes, 10.875%, 6/1/06 50,000 51
Packaging Corporation of America, 9.625%, 4/1/09 500,000 516
Paine Webber, Sr. Notes, 6.55%, 4/15/08 1,850,000 1,718
Paragon Corporate Holdings, Sr. Notes, 9.625%, 4/1/08 50,000 18
Park Place Entertainment, Sr. Sub. Notes, 7.875%, 12/15/05 500,000 477
Premier Parks, Sr. Disc. Notes, STEP, 0%, 4/1/08 500,000 338
Price Communications Wireless, 9.125%, 12/15/06 500,000 511
Pride Petroleum Services, Sr. Notes, 9.375%, 5/1/07 100,000 100
Principal Mutual, (144a), 8.00%, 3/1/44 1,850,000 1,723
Protection One, Sr. Sub. Notes, (144a), 8.625%, 1/15/09 250,000 105
Quest Diagnostics, Gtd. Sr. Sub. Notes, 10.75%, 12/15/06 150,000 157
Qwest Communications
Sr. Disc. Notes, STEP 0 %, 10/15/07 600,000 477
Sr. Notes, 7.50%, 11/1/08 50,000 50
R & B Falcon, Sr. Notes, 6.95%, 4/15/08 1,850,000 1,538
Raytheon, 5.70%, 11/1/03 500,000 468
Red Roof Inns, Sr. Notes, 9.625%, 12/15/03 200,000 206
Rogers Cablesystems, Sr. Sec. 2nd Priority Notes
10.00%, 3/15/05 90,000 96
Safelite Glass, Sr. Sub. Notes, 9.875%, 12/15/06 50,000 3
Six Flags Entertainment, Sr. Notes, 8.875%, 4/1/06 500,000 484
Smithfield Foods, Sr. Sub. Notes, 7.625%, 2/15/08 350,000 316
Southern Foods, Sr. Sub. Notes, 9.875%, 9/1/07 150,000 152
Sovereign Speciality, Sr. Sub. Notes, 9.50%, 8/1/07 150,000 151
Sprint, 6.125%, 11/15/08 900,000 829
Stena, Sr. Notes, 10.50%, 12/15/05 400,000 372
Tenet Healthcare, Sr. Notes, 8.00%, 1/15/05 250,000 241
TravelCenters of America, Sr. Sub. Notes, 10.25%, 4/1/07 500,000 490
Union Planters Trust Capital, Gtd. Bonds, 8.20%, 12/15/26 1,850,000 1,700
United International Holdings, Sr. Disc. Notes, STEP
10.75%, 2/15/08 300,000 188
US Can, Sr. Gtd. Notes, 10.125%, 10/15/06 100,000 102
Venture Holdings Trust, Sr. Notes, (144a), 11.00%, 6/1/07 200,000 194
Voicestream Wire, Sr. Notes, (144a), 10.375%, 11/15/09 500,000 521
Westinghouse Air Brake, Sr. Notes, 9.375%, 6/15/05 500,000 495
Westpoint Stevens, Sr. Notes, 7.875%, 6/15/08 500,000 467
---------------
Total Corporate Bonds (Cost $49,239) 44,779
---------------
</TABLE>
24
<PAGE>
T. ROWE PRICE PERSONAL STRATEGY INCOME FUND
- --------------------------------------------------------------------------------
Shares/Par Value
- --------------------------------------------------------------------------------
In thousands
U.S. GOVERNMENT MORTGAGE-BACKED
SECURITIES 12.7%
Government National Mortgage Assn.
I
6.00%, 12/15/23 - 5/15/26 $ 1,379,183 $ 1,284
6.50%, 7/15/23 - 5/15/29 16,299,430 15,511
7.00%, 2/15/27 - 1/15/29 6,667,999 6,515
7.50%, 9/15/22 - 12/15/25 659,304 660
8.00%, 1/15/22 - 11/15/24 309,431 315
8.50%, 9/15/24 133,428 138
10.50%, 2/15 - 8/15/13 7,047 8
II
7.00%, 7/20/27 1,342,487 1,313
8.00%, 10/20/25 77,424 79
---------------
Total U.S. Government Mortgage-Backed Securities (Cost $26,808) 25,823
---------------
U.S. GOVERNMENT OBLIGATIONS/
AGENCIES 13.0%
Federal Home Loan Mortgage
5.75%, 4/15/08 3,000,000 2,801
Federal National Mortgage Assn.
7.00%, 4/18/22 1,250,000 1,249
Tennessee Valley Authority
5.88%, 4/1/36 2,475,000 2,352
6.235%, 7/15/45 500,000 500
U.S. Treasury Bonds
6.75%, 8/15/26 8,945,000 9,199
U.S. Treasury Notes
5.50%, 7/31/01 10,450,000 10,373
---------------
Total U.S. Government Obligations/Agencies (Cost $27,421) 26,474
---------------
SHORT-TERM INVESTMENTS 9.5%
Money Market Funds 9.5%
Reserve Investment Fund, 5.65%# 19,375,227 19,375
---------------
Total Short-Term Investments (Cost $19,375) 19,375
---------------
25
<PAGE>
T. ROWE PRICE PERSONAL STRATEGY INCOME FUND
- --------------------------------------------------------------------------------
Value
- --------------------------------------------------------------------------------
In thousands
Total Investments in Securities
98.8% of Net Assets (Cost $196,154) $ 200,600
Other Assets Less Liabilities 2,344
--------------
NET ASSETS $ 202,944
--------------
# Seven-day yield
* Non-income producing
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
1.4% of net assets.
AUD Australian dollar
CHF Swiss franc
DKK Danish krone
EUR Euro
GBP British sterling
HKD Hong Kong dollar
JPY Japanese yen
MYR Malaysian ringgit
NOK Norwegian krone
NZD New Zealand dollar
SEK Swedish krona
SGD Singapore dollar
The accompanying notes are an integral part of these financial statements.
26
<PAGE>
T. ROWE PRICE PERSONAL STRATEGY INCOME FUND
- --------------------------------------------------------------------------------
Unaudited November 30, 1999
- -----------------------------------
STATEMENT OF ASSETS AND LIABILITIES
- --------------------------------------------------------------------------------
In thousands
Assets
Investments in securities, at value (cost $196,154) $ 200,600
Securities lending collateral 27,387
Other assets 2,651
-----------
Total assets 230,638
-----------
Liabilities
Obligation to return securities lending collateral 27,387
Other liabilities 307
-----------
Total liabilities 27,694
-----------
NET ASSETS $ 202,944
-----------
Net Assets Consist of:
Accumulated net investment income - net of distributions $ 1,445
Accumulated net realized gain/loss - net of distributions 5,398
Net unrealized gain (loss) 4,446
Paid-in-capital applicable to 15,322,525 shares of
$0.0001 par value capital stock outstanding;
1,000,000,000 shares of the Corporation authorized 191,655
-----------
NET ASSETS $ 202,944
-----------
NET ASSET VALUE PER SHARE $ 13.24
-----------
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
11/30/99
Investment Income
Income
Interest $ 4,321
Dividend 740
-----------
Total income 5,061
-----------
Expenses
Investment management 532
Shareholder servicing 285
Custody and accounting 74
Prospectus and shareholder reports 23
Legal and audit 8
Directors 3
Registration 1
Miscellaneous 2
-----------
Total expenses 928
Expenses paid indirectly (1)
-----------
Net expenses 927
-----------
Net investment income 4,134
-----------
Realized and Unrealized Gain (Loss)
Net realized gain (loss)
Securities 827
Foreign currency transactions (6)
-----------
Net realized gain (loss) 821
Change in net unrealized gain or loss on securities (2,381)
-----------
Net realized and unrealized gain (loss) (1,560)
-----------
INCREASE (DECREASE) IN NET
ASSETS FROM OPERATIONS $ 2,574
-----------
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
11/30/99 5/31/99
Increase (Decrease) in Net Assets
Operations
Net investment income $ 4,134 $ 7,527
Net realized gain (loss) 821 4,794
Change in net unrealized gain or loss (2,381) (1,503)
-------------------------
Increase (decrease) in net assets from operations 2,574 10,818
-------------------------
Distributions to shareholders
Net investment income (4,199) (6,611)
Net realized gain -- (1,572)
-------------------------
Decrease in net assets from distributions (4,199) (8,183)
-------------------------
Capital share transactions *
Shares sold 26,685 175,277
Distributions reinvested 4,133 8,046
Shares redeemed (34,457) (63,648)
-------------------------
Increase (decrease) in net assets from capital
share transactions (3,639) 119,675
-------------------------
Net Assets
Increase (decrease) during period (5,264) 122,310
Beginning of period 208,208 85,898
-------------------------
End of period $ 202,944 $ 208,208
-------------------------
* Share information
Shares sold 2,014 13,292
Distributions reinvested 315 616
Shares redeemed (2,603) (4,852)
-------------------------
Increase (decrease) in shares outstanding (274) 9,056
The accompanying notes are an integral part of these financial statements.
29
<PAGE>
T. ROWE PRICE PERSONAL STRATEGY INCOME FUND
- --------------------------------------------------------------------------------
Unaudited November 30, 1999
- -----------------------------
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.
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.
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
30
<PAGE>
T. ROWE PRICE PERSONAL STRATEGY INCOME FUND
- --------------------------------------------------------------------------------
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. Expenses paid indirectly reflect credits earned
on daily uninvested cash balances at the custodian, which are used to reduce the
fund's custody charges.
NOTE 2 - INVESTMENT TRANSACTIONS
Consistent with its investment objective, the fund engages in the following
practices to manage exposure to certain risks or enhance performance. The
investment objective, policies, program, and risk factors of the fund are
described more fully in the fund's prospectus and Statement of Additional
Information.
Noninvestment-Grade Debt Securities At November 30, 1999, the fund held
investments in noninvestment-grade debt securities, commonly referred to as
"high-yield" or "junk" bonds. A real or perceived economic downturn or higher
interest rates could adversely affect the liquidity or value, or both, of such
securities because such events could lessen the ability of issuers to make
principal and interest payments.
Securities Lending The fund lends its securities to approved brokers to earn
additional income and receives cash and U.S. government securities as collateral
31
<PAGE>
T. ROWE PRICE PERSONAL STRATEGY INCOME FUND
- --------------------------------------------------------------------------------
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 delay
in recovering its securities and a possible loss of income or value if the
borrower fails to return them. At November 30, 1999, the value of loaned
securities was $26,437,000; aggregate collateral consisted of $27,387,000 in the
securities lending collateral pool.
Other Purchases and sales of portfolio securities, other than short-term and
U.S. government securities, aggregated $19,320,000 and $27,785,000,
respectively, for the six months ended November 30, 1999. Purchases and sales of
U.S. government securities aggregated $10,863,000 and $6,998,000, respectively,
for the six months ended November 30, 1999.
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, 1999, the cost of investments for federal income tax purposes
was substantially the same as for financial reporting and totaled $196,154,000.
Net unrealized gain aggregated $4,446,000 at period-end, of which $17,841,000
related to appreciated investments and $13,395,000 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 $78,000 was payable at November 30, 1999. 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 0.295% for assets in excess of $120 billion. At
November 30, 1999, 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.
32
<PAGE>
T. ROWE PRICE PERSONAL STRATEGY INCOME FUND
- --------------------------------------------------------------------------------
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
total expenses to average net assets to exceed 0.90%. Thereafter, 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 total
expenses to average net assets to exceed 0.90%. Pursuant to this agreement,
$1,000 of management fees were not accrued by the fund for the six months ended
November 30, 1999 and $10,000 remains unaccrued from a previous period. Pursuant
to a previous agreement, $38,000 of unaccrued fees were repaid during the six
months ended November 30, 1999, and $200,000 remains 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 $288,000 for the six months
ended November 30, 1999, of which $57,000 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, 1999, totaled
$532,000 and are reflected as interest income in the accompanying Statement of
Operations.
During the six months ended November 30, 1999, the fund, in the ordinary course
of business, placed security purchase and sale orders aggregating $1,000 with
certain affiliates of the manager and paid $10 commissions related thereto.
33
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T. ROWE PRICE PERSONAL STRATEGY INCOME FUND
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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 SERVICE
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
BROKERAGE SERVICES*
Individual Investments Stocks, bonds, options, precious metals, and other
securities at a savings over full-service 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.
* T. Rowe Price Brokerage is a division of T. Rowe Price Investment Services,
Inc., Member NASD/SIPC.
** Based on a September 1999 survey for representative-assisted stock trades.
Services vary by firm, and commissions may vary depending on size of order.
34
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T. ROWE PRICE PERSONAL STRATEGY INCOME FUND
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STOCK FUNDS
Domestic
Blue Chip Growth
Capital Appreciation
Capital Opportunity
Diversified Small-Cap Growth
Dividend Growth
Equity Income
Equity Index 500
Extended Equity Market Index
Financial Services
Growth & Income
Growth Stock
Health Sciences
Media & Telecommunications
Mid-Cap Growth
Mid-Cap Value
New America Growth
New Era
New Horizons*
Real Estate
Science & Technology
Small-Cap Stock
Small-Cap Value
Spectrum Growth
Tax-Efficient Growth
Total Equity Market Index
Value
International/Global
Emerging Markets Stock
European Stock
Global Stock
International Discovery
International Growth & Income
International Stock
Japan
Latin America
New Asia
Spectrum International
BOND FUNDS
Domestic Taxable
Corporate Income
GNMA
High Yield
New Income
Short-Term Bond
Short-Term U.S. Government
Spectrum Income
Summit GNMA
Summit Limited-Term Bond
U.S. Treasury Intermediate
U.S. Treasury Long-Term
Domestic Tax-Free
California Tax-Free Bond
Florida Intermediate Tax-Free
Georgia Tax-Free Bond
Maryland Short-Term
Tax-Free Bond
Maryland Tax-Free Bond
New Jersey Tax-Free Bond
New York Tax-Free Bond
Summit Municipal Income
Summit Municipal Intermediate
Tax-Free High Yield
Tax-Free Income
Tax-Free Intermediate Bond
Tax-Free Short-Intermediate
Virginia Short-Term Tax-Free Bond
Virginia Tax-Free Bond
International/Global
Emerging Markets Bond
Global Bond
International Bond
MONEY MARKET FUNDS+
Taxable
Prime Reserve
Summit Cash Reserves
U.S. Treasury Money
Tax-Free
California Tax-Free Money
New York Tax-Free Money
Summit Municipal
Money Market
Tax-Exempt Money
BLENDED ASSET FUNDS
Balanced
Personal Strategy Balanced
Personal Strategy Growth
Personal Strategy Income
Tax-Efficient Balanced
T. ROWE PRICE NO-LOAD VARIABLE ANNUITY
Equity Income Portfolio
International Stock Portfolio
Limited-Term Bond Portfolio
Mid-Cap Growth Portfolio
New America Growth Portfolio
Personal Strategy Balanced Portfolio
Prime Reserve Portfolio
* Closed to new investors.
+ Investments in the funds are not insured or guaranteed by the FDIC or any
other government agency. Although the funds seek to preserve the value of your
investment at $1.00 per share, it is possible to lose money by investing in
the funds.
Please call for a prospectus. Read it carefully before investing.
The T. Rowe Price No-Load Variable Annuity [#V6021] is issued by Security
Benefit Life Insurance Company. In New York, it [#FSB201(11-96)] is issued by
First Security Benefit Life Insurance Company of New York, White Plains, NY. T.
Rowe Price refers to the underlying portfolios' investment managers and the
distributors, T. Rowe Price Investment Services, Inc.; T. Rowe Price Insurance
Agency, Inc.; and T. Rowe Price Insurance Agency of Texas, Inc. The Security
Benefit Group of Companies and the T. Rowe Price companies are not affiliated.
The variable annuity may not be available in all states. The contract has
limitations. Call a representative for costs and complete details of the
coverage.
35
<PAGE>
For fund and account information or to conduct transactions, 24 hours, 7 days a
week
By touch-tone telephone
Tele*Access 1-800-638-2587
By Account Access on the Internet
www.troweprice.com/access
For assistance with your existing fund account, call:
Shareholder Service Center
1-800-225-5132
To open a brokerage account or obtain information, call:
1-800-638-5660
Internet address:
www.troweprice.com
Plan Account Lines for retirement plan participants:
The appropriate 800 number appears on your retirement account statement.
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 appropriate to the fund or funds
covered in this report.
Walk-In Investor Centers:
For directions, call 1-800-225-5132 or visit our Web site
Baltimore Area
Downtown
101 East Lombard Street
Owings Mills
Three Financial Center
4515 Painters Mill Road
Boston Area
386 Washington Street
Wellesley
Colorado Springs
4410 ArrowsWest Drive
Los Angeles Area
Warner Center
21800 Oxnard Street, Suite 270
Woodland Hills
Tampa
4200 West Cypress Street
10th Floor
Washington, D.C.
900 17th Street N.W.
Farragut Square
[LOGO OF T. ROWE PRICE]
T. Rowe Price Investment Services, Inc., Distributor. C11-058 11/30/99
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