<PAGE>

                                                                 January 1, 2002
 FUND PROFILE
T. ROWE PRICE
Small-Cap
Value Fund

 A stock fund seeking long-term capital growth through investments in small U.S.
 companies whose stocks appear undervalued.
This profile summarizes key information about the fund that is included in the
fund's prospectus. The fund's prospectus includes additional information about
the fund, including a more detailed description of the risks associated with
investing in the fund that you may want to consider before you invest. You may
obtain the prospectus and other information about the fund at no cost by calling
1-800-638-5660, or by visiting our Web site at www.troweprice.com.

TROWEPRICELOGO

<PAGE>


<PAGE>


                                                                               1


                                                                               1

FUND PROFILE
---------------------------------------------------------
 What is the fund's objective?

   The fund seeks long-term capital growth by investing primarily in small
   companies whose common stocks are believed to be undervalued.


 What is the fund's principal investment strategy?

   Reflecting a value approach to investing, the fund will seek the stocks of
   companies whose current stock prices do not appear to adequately reflect
   their underlying value as measured by assets, earnings, cash flow, or
   business franchises. Normally, the fund will invest at least 65% of its total
   assets in companies with a market capitalization of $1 billion or less.
   However, the fund will not sell a stock just because the company has grown to
   a market capitalization of more than $1 billion and, on occasion, may
   purchase companies with a market capitalization of more than $1 billion. Our
   in-house research team seeks to identify companies that appear to be
   undervalued by various measures, and may be temporarily out of favor, but
   have good prospects for capital appreciation. In selecting investments, we
   generally look for some of the following:

  . low price/earnings, price/book value, or price/cash flow ratios relative to
   the S&P 500, the company's peers, or its own historic norm;

  . low stock price relative to a company's underlying asset values;

  . above-average dividend yield relative to a company's peers or its own
   historic norm;

  . a plan to improve the business through restructuring; and

  . a sound balance sheet and other positive financial characteristics.

   While most assets will be invested in U.S. common stocks, other securities
   may also be purchased, including foreign stocks, futures, and options, in
   keeping with fund objectives.

   The fund may sell securities for a variety of reasons, such as to secure
   gains, limit losses, or redeploy assets into more promising opportunities.

   Further information about the fund's investments, including a review of
   market conditions and fund strategies and their impact on performance, is
   available in the annual and semiannual shareholder reports. To obtain free
   copies of these documents, call 1-800-638-5660.


 What are the main risks of investing in the fund?

   Investing in small companies involves greater risk than is customarily
   associated with larger companies. Stocks of small companies are subject to
   more abrupt or erratic price movements than larger-company stocks. Small
   companies often have limited product lines, markets, or financial resources,
   and their managements may lack depth and experience. Such companies seldom
   pay significant dividends that could cushion returns in a falling market.
<PAGE>


                                                                               2

FUND PROFILE
---------------------------------------------------------
   The value approach carries the risk that the market will not recognize a
   security's intrinsic value for a long time, or that a stock judged to be
   undervalued may actually be appropriately priced.

   As with all equity funds, this fund's share price can fall because of
   weakness in the broad market, a particular industry, or specific holdings.
   The market as a whole can decline for many reasons, including adverse
   political or economic developments here or abroad, changes in investor
   psychology, or heavy institutional selling. The prospects for an industry or
   company may deteriorate because of a variety of factors, including
   disappointing earnings or changes in the competitive environment. In
   addition, our assessment of companies held in the fund may prove incorrect,
   resulting in losses or poor performance even in a rising market. Finally, the
   fund's investment approach could fall out of favor with the investing public,
   resulting in lagging performance versus other types of stock funds.

   Foreign stock holdings are subject to the risk that some holdings may lose
   value because of declining foreign currencies or adverse political or
   economic events overseas. Investments in futures and options, if any, are
   subject to additional volatility and potential losses.

   As with any mutual fund, there can be no guarantee the fund will achieve its
   objective.

  . The fund's share price may decline, so when you sell your shares, you may
   lose money. An investment in the fund is not a deposit of a bank and is not
   insured or guaranteed by the Federal Deposit Insurance Corporation or any
   other government agency.


 How can I tell if the fund is appropriate for me?

   Consider your investment goals, your time horizon for achieving them, and
   your tolerance for risk. If you seek an aggressive, long-term approach to
   capital growth through small-company stocks, the fund could be an appropriate
   part of your overall investment strategy. This fund should not represent your
   complete investment program or be used for short-term trading purposes.

   The fund can be used in both regular and tax-deferred accounts, such as IRAs.

  . Equity investors should have a long-term investment horizon and be willing
   to wait out bear markets.


 How has the fund performed in the past?

   The bar chart showing calendar year returns and the average annual total
   return table indicate risk by illustrating how much returns can differ from
   one year to the next and over time. Fund past performance is no guarantee of
   future returns.

   The fund can also experience short-term performance swings, as shown by the
   best and worst calendar quarter returns during the years depicted in the
   chart.
<PAGE>


                                                                               3


                                                                               3

FUND PROFILE
---------------------------------------------------------

<TABLE>
<CAPTION>
                                 Calendar Year Total Returns
 "92"       "93"   "94"    "95"    "96"   "97".    "98"     "99"    "00"   "01"
 ----------------------------------------------------------------------------------
 <S>      <C>    <C>   <C>   <C>   <C>     <C>    <C>    <C>   <C>
  20.87  23.30  -1.38  29.29  24.61  27.92  -12.47   1.19  19.77   21.94
 ----------------------------------------------------------------------------------
</TABLE>


                  Quarter ended    Total return

 Best quarter        6/30/99          16.68%
 Worst quarter       9/30/98         -20.17%


<TABLE>
 Table 1  Average Annual Total Returns
<CAPTION>
                                          Periods ended 12/31/2001
                                      1 year      5 years      10 years
 -------------------------------------------------------------------------------
 <S>                                <C>          <C>          <C>
  Small-Cap Value Fund                   21.94%       10.60%       14.63%

  Russell 2000 Index                      2.49         7.52        11.51
  Lipper Small-Cap Core Fund Index        7.13        10.15        12.61
 -------------------------------------------------------------------------------
</TABLE>


 These figures include changes in principal value, reinvested dividends, and
 capital gain distributions, if any.

 What fees or expenses will I pay?

   The fund is 100% no load. However, the fund charges a 1.00% redemption fee,
   payable to the fund, on shares held less than one year. There are no other
   fees or charges to buy or sell fund shares, reinvest dividends, or exchange
   into other T. Rowe Price funds. There are no 12b-1 fees.
<PAGE>


                                                                               4

FUND PROFILE
---------------------------------------------------------
<TABLE>
 Table 2  Fees and Expenses of the Fund*
<CAPTION>
                         Shareholder fees (fees paid directly from your investment)
  Redemption fee (for shares held less than one year)                                                 1.00%
                                       Annual fund operating expenses
                                (expenses that are deducted from fund assets)
 ------------------------------------------------------------------------------------------------------------------
 <S>                                                   <C>
  Management fee                                                              0.67%/ /
  Other expenses                                                              0.23%
  Total annual fund operating expenses                                        0.90%/ /
 ------------------------------------------------------------------------------------------------------------------
</TABLE>


 * Redemption proceeds of less than $5,000 sent by wire are subject to a $5 fee
   paid to the fund. Accounts with less than a $2,000 balance (with certain
   exceptions) are subject to a $10 fee.


   Example. The following table gives you a rough idea of how expense ratios may
   translate into dollars and helps you to compare the cost of investing in this
   fund with that of other mutual funds. Although your actual costs may be
   higher or lower, the table shows how much you would pay if operating expenses
   remain the same, you invest $10,000, earn a 5% annual return, and hold the
   investment for the following periods and then redeem:
<TABLE>
<CAPTION>
      1 year      3 years      5 years       10 years
    ----------------------------------------------------
    <S>         <C>          <C>          <C>
       $92         $287         $498          $1,108
    ----------------------------------------------------
</TABLE>



 Who manages the fund?

   The fund is managed by T. Rowe Price Associates, Inc. Founded in 1937, T.
   Rowe Price and its affiliates manage investments for individual and
   institutional accounts. The company offers a comprehensive array of stock,
   bond, and money market funds directly to the investing public.

   Preston G. Athey manages the fund day to day and has been chairman of its
   Investment Advisory Committee since 1991. He joined T. Rowe Price in 1978 and
   has been managing investments since 1982.


 Note: The following questions and answers about buying and selling shares and
 services do not apply to employer-sponsored retirement plans. If you are a
 participant in one of these plans, please call your plan's toll-free number for
 additional information.


 How can I purchase shares?

   Fill out the New Account Form and return it with your check in the postpaid
   envelope. The minimum initial purchase is $2,500 ($1,000 for IRAs and gifts
   or transfers to minors). The minimum subsequent investment is $100 ($50 for
<PAGE>


                                                                               5


                                                                               5

FUND PROFILE
---------------------------------------------------------
   IRAs, gifts or transfers to minors, or Automatic Asset Builder). You can also
   open an account by bank wire, by exchanging from another T. Rowe Price fund,
   or by transferring assets from another financial institution.


 How can I sell shares?


   You may redeem or sell any portion of your account on any business day.
   Simply write to us or call. You can also access your account at any time via
   Tele*Access /(R)/ or our Web site. We offer convenient exchange among our
   entire family of domestic and international funds. Restrictions may apply in
   special circumstances, and some redemption requests need a signature
   guarantee.



 When will I receive income and capital gain distributions?

   The fund distributes income and net capital gains, if any, at year-end. For
   regular accounts, income and short-term gains are taxable at ordinary income
   rates, and long-term gains are taxable at the capital gains rate.
   Distributions are reinvested automatically in additional shares unless you
   choose another option, such as receiving a check. Distributions paid to IRAs
   and employer-sponsored retirement plans are automatically reinvested.


 What services are available?

   A wide range, including but not limited to:

  . retirement plans for individuals and large and small businesses;

  . automated information and transaction services by telephone or computer;

  . electronic transfers between fund and bank accounts;

  . automatic investing and automatic exchange;

  . brokerage services; and

  . asset manager accounts.
<PAGE>

FUND PROFILE
---------------------------------------------------------
T. Rowe Price Associates, Inc.
100 East Pratt Street
Baltimore, MD 21202
www.troweprice.com

LOGO


                                                                 RPS F46-035


 T. Rowe Price Investment Services, Inc., Distributor