T. Rowe Price Health Sciences

Objective And Strategy

Objective
Long term capital appreciation.

Strategy
The Fund normally invests at least 80% of assets in stocks of companies engaged in research, development, production, or distribution of products/services related to health care, medicine, or life sciences. While the Fund can invest in companies of any size, the majority of Fund assets are expected to be invested in large- & mid-cap companies. Allocation among pharmaceuticals, health care services companies, products & devices providers, & biotechnology firms will vary depending on the relative potential seen within each area and the outlook for the overall health sciences sector. In general, the Fund will follow a growth investment strategy, seeking companies whose earnings are expected to grow faster than inflation and the economy. When stock valuations seem unusually high, a "value" approach, which gives preference to seemingly undervalued companies, may be emphasized.

Principal Risks

* This portfolio invests in securities of foreign issuers which involves risks not typically associated with domestic issuers, including currency fluctuations and the possibility of political and economic instability. Emerging markets involve risks in addition to those generally associated with foreign securities, because political and economic structures in many emerging markets may be undergoing significant evolution and rapid development.

* This portfolio invests (or may invest) in securities of companies with micro-, small-, or mid-capitalization. Any investment in micro-, small-, or mid-capitalization companies involves greater risk than that customarily associated with investments in larger, more established companies because of the greater business risks of smaller size, limited markets and financial resources, narrower product lines, and frequent lack of management depth. As such, micro- or small-cap companies may be more subject to erratic and abrupt market movements than securities of larger, more established companies.

* This portfolio can leverage or use leveraged instruments or derivatives. Portfolios that use leverage, that is, borrow money, are subject to the risk that the cost of borrowing money to leverage will exceed the returns for the securities purchased or that the securities purchased may actually go down in value. Thus, the portfolio's net asset value can decrease more quickly than if the portfolio had not borrowed. Portfolios that use leveraged instruments or derivatives such as futures, options and swap agreements, may expose the portfolio to additional risks that it would not be subject to if it invested directly in the securities underlying those derivatives. The more a portfolio invests in leveraged instruments, the more the leverage will magnify any gains or losses on those investments.