The fund will normally invest at least 80% of its net assets (including any borrowings for investment purposes) in a broadly diversified portfolio of common stocks of mid-cap growth companies. T. Rowe Price expects the earnings of these companies to grow at a faster rate than the average company. The fund defines mid-cap companies as those whose market capitalization (number of shares outstanding multiplied by share price) falls within the range of either the S&P MidCap 400® Index or the Russell Midcap® Growth Index. As of December 31, 2022, the market capitalization ranges for the S&P MidCap 400® Index and the Russell Midcap® Growth Index were approximately $1.76 billion to $30.59 billion, and $0.74 billion to $52.82 billion, respectively.

The fund has the flexibility to purchase some large-cap and small-cap companies that have qualities consistent with the portfolio’s core characteristics. The market capitalization of the companies in the fund’s portfolio, and the S&P and the Russell indices changes over time, and the fund will not automatically sell or cease to purchase stock of a company it holds just because the company’s market capitalization grows or falls outside of the index ranges. The portfolio will be broadly diversified, and the top 25 holdings will not constitute a large portion of the fund’s assets. This broad diversification should help reduce the effects of individual security price volatility on overall fund performance.

Stock selection is based on a combination of fundamental, bottom-up analysis and top-down quantitative strategies in an effort to identify companies with superior long-term appreciation prospects. We generally use a growth approach, looking for companies with one or more of the following characteristics:

·a demonstrated ability to consistently increase revenues, earnings, and cash flow;

·capable management;

·attractive business niches; and

·a sustainable competitive advantage.

Valuation measures, such as a company’s price/earnings (P/E) ratio relative to the market and its own growth rate, are also considered. We will typically limit holdings of high-yielding stocks, but the payment of dividends—even above-average dividends—does not disqualify a stock from consideration. Most holdings are expected to have relatively low dividend yields.

At times, the fund may have a significant portion of its assets invested in the same economic sector, such as the financial or information technology sectors.