SUMMARY | |
POMIX | |
May 1, 2016 | |
T. Rowe Price Total Equity Market Index Fund | |
An index fund seeking to match the performance of the entire U.S. stock market by tracking the performance of the S&P Total Market Index. | |
Before you invest, you may want to review
the funds prospectus, which contains more information about the fund and its risks. You can find
the funds prospectus and other information about the fund online at troweprice.com/prospectus. You can
also get this information at no cost by calling The Securities and Exchange Commission has not approved or disapproved these securities or passed upon the adequacy of this prospectus. Any representation to the contrary is a criminal offense. | |
Summary | 1 |
Investment Objective
The fund seeks to match the performance of the entire U.S. stock market.
Fees and Expenses
This table describes the fees and expenses that you may pay if you buy and hold shares of the fund.
Fees and Expenses of the Fund
Shareholder fees (fees paid directly from your investment) | |
Maximum sales charge (load) imposed on | NONE |
Maximum deferred sales charge (load) | NONE |
Redemption fee (as a percentage of amount redeemed on shares held for 90 days or less) | 0.50% |
Maximum account fee | $20a |
Annual fund operating expenses | |
Management fees | 0.30%b |
Distribution and service (12b-1) fees | 0.00% |
Other expenses | 0.00% |
Total annual fund operating expenses | 0.30%b |
a Subject to certain exceptions, accounts with a balance of less than $10,000 are charged an annual $20 fee.
b Restated to reflect current fees.
Example This example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. The example assumes that you invest $10,000 in the fund for the time periods indicated and then redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that the funds operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions your costs would be:
1 year | 3 years | 5 years | 10 years |
$31 | $97 | $169 | $381 |
Portfolio Turnover The fund pays transaction costs, such as commissions, when it buys and sells securities (or turns over its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when fund shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the example, affect the funds performance. During the
T. Rowe Price | 2 |
most recent fiscal year, the funds portfolio turnover rate was 7.5% of the average value of its portfolio.
Investments, Risks, and Performance
Principal Investment Strategies The fund seeks to match the performance of the entire U.S. stock market. The fund uses the S&P Total Market Index (S&P Index) as its benchmark index to represent the U.S. stock market as a whole. Because the largest stocks in the index carry the most weight, large-capitalization stocks make up a substantial majority of the S&P Total Market Indexs value.
The fund attempts to match the performance of the S&P Index by using a sampling strategy, which involves investing substantially all of its assets in a broad spectrum of small-, mid-, and large-capitalization stocks representative of the sector allocations, financial characteristics, and other attributes of the S&P Index. The S&P Index includes approximately 3,800 stocks as of February 29, 2016.
In an attempt to track the S&P Index, we select stocks based on industry, size, and other characteristics. For example, if technology stocks made up 15% of the S&P Index, the fund would invest about 15% of its assets in technology stocks with similar characteristics. Several factors are considered in selecting representative stocks, including historical price movement, market capitalization, transaction costs, and others.
Under normal conditions, the fund will invest at least 80% of its net assets (including any borrowings for investment purposes) in stocks that are included in its benchmark index. T. Rowe Price compares the composition of the fund to that of the index. If a material misweighting develops, the portfolio managers seek to rebalance the portfolio in an effort to realign it with its index.
While most assets will be invested in common stocks, the fund may also purchase stock index futures contracts and exchange-traded funds. Futures and exchange-traded funds would typically be used to reduce cash balances in the fund and increase the level of fund assets exposed to common stocks represented in the funds benchmark index. In addition, the fund lends its portfolio securities as a means of generating additional income.
While there is no guarantee, the correlation between the fund and its benchmark index is expected to be at least 0.95. A correlation of 1.00 indicates that the returns of the fund and the index will always move in the same direction (but not necessarily by the same amount). A correlation of 0.00 would mean price movements in the fund are unrelated to price movements in the index.
The fund may sell securities to better align its portfolio with the characteristics of its benchmark index or to satisfy redemption requests. The fund will generally seek to sell securities that have been removed from the benchmark index within a reasonable timeframe taking into consideration market conditions.
Summary | 3 |
Principal Risks As with any mutual fund, there is no guarantee that the fund will achieve its objective. The funds share price fluctuates, which means you could lose money by investing in the fund. The principal risks of investing in this fund are summarized as follows:
Risks of U.S. stock investing Stocks generally fluctuate in value more than bonds and may decline significantly over short time periods. There is a chance that stock prices overall will decline because stock markets tend to move in cycles, with periods of rising and falling prices. The value of a stock in which the fund invests may decline due to general weakness in the U.S. stock market, such as when the U.S. financial markets decline, or because of factors that affect a particular company or industry.
Index investing risk Because the fund is passively managed and seeks to match the performance of its benchmark index, holdings are generally not reallocated based on changes in market conditions or outlook for a specific security, industry, or market sector. As a result, the funds performance may lag the performance of actively managed funds.
Tracking error The returns of the fund are expected to be slightly below the returns of its benchmark index (referred to as tracking error) because the fund incurs fees and transaction expenses while the index has no fees or expenses. Increased tracking error could also result from changes in the composition of the index or the timing of purchases and redemptions of fund shares. The fund uses a sampling strategy and does not attempt to fully replicate its benchmark index, which increases the potential for the funds performance to deviate from that of its index.
Futures risk The funds use of stock index futures exposes it to potential volatility and losses in excess of direct investments in the contracts underlying assets. The values of the funds positions in stock index futures tend to fluctuate in response to changes in the value of the underlying index, which exposes the fund to the risk that the underlying index will not move in a direction that is favorable to the fund. While the value of a stock index futures contract tends to correlate with the value of the underlying index, differences between the futures market and the value of the underlying index may result in an imperfect correlation. Since losses could result from market movement, the fund may need to sell other portfolio securities at disadvantageous times in order to meet daily margin requirements. The futures markets may experience reduced liquidity, which could result in losses to the fund and cause the fund to be unable to settle its futures positions.
Exchange-traded fund risk To the extent the fund invests in exchange-traded funds, the fund will bear its proportionate share of each exchange-traded funds fees and expenses. An investment in an exchange-traded fund involves substantially the same risks as investing directly in the exchange-traded funds underlying assets, although an exchange-traded fund may trade at a premium or discount to the actual net asset value of its portfolio securities, may have greater price volatility than its underlying assets, and its shares may be less liquid.
T. Rowe Price | 4 |
Securities lending risk Securities lending involves the risk that the fund may lose money because the borrower of the loaned securities fails to return the securities to the fund in a timely manner or not at all. The fund may also lose money if there is a decline in the value of the collateral provided for loaned securities or a decline in the value of any investments made with cash collateral. In addition, securities lending activities may cause adverse tax consequences for the fund.
Performance The bar chart showing calendar year returns and the average annual total returns table provide some indication of the risks of investing in the fund by showing how much returns can differ from year to year and how the funds average annual returns for certain periods compare with the returns of a relevant broad-based market index, as well as with the returns of one or more comparative indexes that have investment characteristics similar to those of the fund. The funds performance information represents only past performance (before and after taxes) and is not necessarily an indication of future results.
The fund can also experience short-term performance swings, as shown by the best and worst calendar quarter returns during the years depicted.
In addition, the average annual total returns table shows hypothetical after-tax returns to demonstrate how taxes paid by a shareholder may influence returns. After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investors tax situation and may differ from those shown. After-tax returns shown are not relevant to investors who hold their fund shares through tax-deferred arrangements, such as a 401(k) account or individual retirement account. In some cases, the figure shown for returns after taxes on distributions and sale of fund shares may be higher than the figure shown for returns before taxes
Summary | 5 |
because the calculations assume the investor received a tax deduction for any loss incurred on the sale of shares.
Average Annual Total Returns | ||||||||||||
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| Periods ended |
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| December 31, 2015 |
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| 1 Year | 5 Years | 10 Years |
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| Total Equity Market Index Fund |
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| Returns before taxes | 0.33 | % | 12.00 | % | 7.31 | % |
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| Returns after taxes on distributions | -0.16 |
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| 11.64 |
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| 6.99 |
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| Returns after taxes on distributions |
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| and sale of fund shares | 0.58 |
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| 9.59 |
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| 5.91 |
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| S&P Total Market Index (reflects no deduction for fees, expenses, or taxes) | 0.47 |
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| 12.11 |
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| 7.35 |
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| Combined Index Portfolio (reflects no deduction for fees, expenses, or taxes)a | 0.47 |
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| 12.11 |
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| 7.39 |
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a Combined Index Portfolio is a blended benchmark composed of 100% Dow Jones Wilshire 5000 Composite Index (1/30/98 - 3/31/07), then 100% S&P Total Market Index (from 4/1/07 forward).
Updated performance information is available through troweprice.com or may be obtained by calling 1-800-225-5132.
Management
Investment Adviser T. Rowe Price Associates, Inc. (T. Rowe Price)
Portfolio Manager | Title | Managed Fund Since | Joined Investment |
Ken D. Uematsu | Chairman of Investment Advisory Committee | 2008 | 1997 |
Purchase and Sale of Fund Shares
The fund requires a $1,000 minimum initial investment and a $100 minimum subsequent investment for individual retirement accounts, small business retirement plan accounts, and Uniform Gifts to Minors Act or Uniform Transfers to Minors Act accounts. For all other accounts, the fund generally requires a $2,500 minimum initial investment and a $100 minimum subsequent investment. The investment minimums may be modified for financial intermediaries that submit orders on behalf of their customers.
You may purchase, redeem, or exchange fund shares by accessing your account online at troweprice.com, by calling 1-800-225-5132, or by written request. If you hold shares through a financial intermediary, you must purchase, redeem, and exchange shares through your intermediary.
T. Rowe Price | 6 |
Tax Information
Any dividends or capital gains are declared and paid annually, usually in December. Redemptions or exchanges of fund shares and distributions by the fund, whether or not you reinvest these amounts in additional fund shares, may be taxed as ordinary income or capital gains unless you invest through a tax-deferred account (although you may be taxed upon withdrawal from such account).
Payments to Broker-Dealers and Other Financial Intermediaries
If you purchase shares of the fund through a broker-dealer or other financial intermediary (such as a bank), the fund and its related companies may pay the intermediary for the sale of fund shares and related services. These payments may create a conflict of interest by influencing the broker-dealer or other intermediary and your salesperson to recommend the fund over another investment. Ask your salesperson or visit your financial intermediarys website for more information.
T. Rowe Price
Associates, Inc. | F123-045 5/1/16 |
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