Form N-CSRS T. Rowe Price New Horizo For: Jun 30


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UNITED
STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT
INVESTMENT COMPANIES
 
 

Investment Company Act File Number: 811-00958

T. Rowe Price New Horizons Fund, Inc.

(Exact
name of registrant as specified in charter)
 
100
East Pratt Street, Baltimore, MD 21202

(Address of principal executive offices)
 
David
Oestreicher
100
East Pratt Street, Baltimore, MD 21202

(Name
and address of agent for service)

 

Registrant’s telephone number, including area code: (410) 345-2000
 
 
Date of fiscal year end: December 31
 
 
Date of reporting period: June 30, 2022

Item 1. Reports to Shareholders

(a) Report pursuant to Rule 30e-1.

T. Rowe Price Semiannual Report

New Horizons Fund

June 30, 2022

PRNHX Investor
Class
PRJIX I
Class
TRUZX Z
Class
T. ROWE PRICE New Horizons Fund

HIGHLIGHTS

U.S.
small-cap stocks pulled back significantly in the first half of 2022, with growth stocks
particularly punished in a persistent market sell-off prompted by rising inflation and a
more hawkish Federal Reserve.
   
The
New Horizons Fund underperformed the Russell 2000 Growth Index for the six months ended June
30, 2022.
   
The
information technology sector weighed heaviest on relative performance. The consumer discretionary
and energy sectors also modestly detracted and more than offset the contribution from relative
underweights to the real estate and communication services sectors.
   
Our
search for companies with strong competitive moats, sustainable growth prospects, solid balance
sheets, and skilled management teams continues to guide our investment decisions. We believe
that our focus on small companies that can become large and compound wealth will deliver
solid results for shareholders over the long term.

Log
in to your account at troweprice.com for more information.

*Certain
mutual fund accounts that are assessed an annual account service fee can also save money by switching to e-delivery.

Market
Commentary

Dear
Shareholder

Major
stock and bond indexes produced sharply negative results during the first half of 2022 as investors contended with persistently high
inflation, tightening financial conditions, and slowing growth.

After
reaching an all-time high on January 3, the S&P 500 Index finished the period down about 20%, the worst first half of a calendar
year for the index since 1970. Double-digit losses were common in equity markets around the globe, and bond investors also faced a historically
tough environment amid a sharp rise in interest rates.

Value
shares outperformed growth stocks as equity investors turned risk averse and rising rates put downward pressure on growth stock valuations.
Emerging markets stocks held up somewhat better than shares in developed markets due to the strong performance of some oil-exporting
countries. Meanwhile, the U.S. dollar strengthened during the period, which weighed on returns for U.S. investors in international securities.

Within
the S&P 500, energy was the only bright spot, gaining more than 30% as oil prices jumped in response to Russia’s invasion of
Ukraine and the ensuing commodity supply crunch. Typically defensive shares, such as utilities, consumer staples, and health care, finished
in negative territory but held up relatively well. The consumer discretionary, communication services, and information technology sectors
were the weakest performers. Shares of some major retailers fell sharply following earnings misses driven in part by overstocked inventories.

Inflation
remained the leading concern for investors throughout the period. Despite hopes in 2021 that the problem was transitory, and later expectations
that inflation would peak in the spring, headline consumer prices continued to grind higher throughout the first half of 2022. The war
in Ukraine exacerbated already existing supply chain problems, and other factors, such as the impact of the fiscal and monetary stimulus
enacted during the pandemic and strong consumer demand, also pushed prices higher. The May consumer price index report (the last to be
issued during our reporting period) showed prices increasing 8.6% over the 12-month period, the largest jump since late 1981.

In
response, the Federal Reserve, which at the end of 2021 had forecast that only three 25-basis-point (0.25 percentage point) rate hikes
would be necessary in all of 2022, rapidly shifted in a hawkish direction and executed three rate increases in the first six months of
the year. The policy moves included hikes of 25, 50, and 75 basis points—the largest single increase since 1994—increasing
the central bank’s short-term lending benchmark from near zero to a target range of 1.50% to 1.75% by the end of June. In addition,
the Fed ended the purchases of Treasuries and agency mortgage-backed securities that it had begun to support the economy early in the
pandemic and started reducing its balance sheet in June.

Longer-term
bond yields also increased considerably as the Fed tightened monetary policy, with the yield on the benchmark 10-year U.S. Treasury note
reaching 3.49% on June 14, its highest level in more than a decade. (Bond prices and yields move in opposite directions.) Higher mortgage
rates led to signs of cooling in the housing market.

The
economy continued to add jobs during the period, and other indicators pointed to a slowing but still expanding economy. However, the
University of Michigan consumer sentiment index dropped in June to its lowest level since records began in 1978 as higher inflation expectations
undermined confidence.

Looking
ahead, investors are likely to remain focused on whether the Fed can tame inflation without sending the economy into recession, a backdrop
that could produce continued volatility. We believe this environment makes skilled active management a critical tool for identifying
risks and opportunities, and our investment teams will continue to use fundamental research to identify companies that can add value
to your portfolio over the long term.

Thank
you for your continued confidence in T. Rowe Price.

Sincerely,

Robert
Sharps

CEO
and President

Management’s
Discussion of Fund Performance

INVESTMENT
OBJECTIVE

The
fund seeks long-term capital growth by investing primarily in common stocks of small, rapidly growing companies.

FUND
COMMENTARY

How
did the fund perform in the past six months?

The
New Horizons Fund returned -37.89% for the six months ended June 30, 2022. The fund underperformed the Russell 2000 Growth Index, which
returned -29.45%, and lagged the return of its peer group, the Lipper Mid-Cap Growth Funds Index, which returned -31.76%. (Returns for
I and Z Class shares varied slightly due to their different fee structures. Past performance cannot guarantee future results.)

What
factors influenced the fund’s performance?

Many
of the portfolio’s core holdings are in information technology (IT), particularly within the software and IT services industries.
Names within these industries were pressured as the Federal Reserve’s interest rate hikes designed to combat inflation prompted
widespread, indiscriminate sell-offs that hit high-growth and long duration companies particularly hard. While many of our holdings lost
value during the period, their performance is disconnected from the strong fundamentals and durable growth underpinning these investments.

Okta,
which provides software services for identity management solutions, detracted from relative performance as investors retreated from fast-growing
software companies that had soared in recent years. A security incident earlier in the year impacted investor sentiment as well, raising
concerns about any potential business disruption. Even so, Okta remains a fundamentally sound market leader in our view, and we believe
that an increasingly mobile workforce and growing attention to network security represent strong tailwinds for the firm. (Please refer
to the fund’s portfolio of investments for a complete list of our holdings and the amount each represents in the portfolio.)

HubSpot,
which provides marketing and customer relationship management software for small businesses, was another large detractor—despite
encouraging growth signs—as investors were concerned that e-commerce and consumer spending would weaken as inflation picked up.
We believe that the company should continue to benefit from strong demand as more businesses turn to the cloud for their marketing and
customer service needs and that HubSpot’s strong management team will help it move upmarket and sustain its durable growth profile.

Software
company Atlassian, a provider of productivity and collaboration tools, detracted from relative returns due to market concerns over the
company’s increased investments at a time when a potential IT spending slowdown could impact revenue. However, we remain constructive
on the long-term prospects of a company that directly targets users in marketing its products and boasts one of software’s best
management teams.

In
other sectors, our position in Warby Parker hurt returns as supply chain issues and inflationary headwinds weighed on the eyeglass retailer.
However, we continue to like the company’s digitally focused business model and believe it has a long growth runway and a clearly
defined vision to expand new stores to help drive sales and profitability. Our relative underweight allocation to the energy sector,
the only positive-performing sector in the benchmark, weighed modestly on relative performance.

Turning
to performance contributors, at the sector level, our relative underweights in real estate and communication services contributed slightly
to relative performance. In the industrials and business services sector, we benefited from our holding in Booz Allen Hamilton, a provider
of consulting and technology services for the U.S. government. Shares outperformed during the period as the company recorded better organic
growth than its industry peers, and we believe the company is well positioned to benefit from an increasing focus on cybersecurity and
government digitization. The health care sector—most notably, the biotechnology industry—was home to many of the fund’s
top contributors, as several holdings performed well despite the challenging environment. Turning Point Therapeutics was one notable
contributor, as the biopharmaceutical company that designs and develops novel small molecule-targeted oncology therapies agreed to be
acquired by Bristol Myers Squibb for a substantial premium.

How
is the fund positioned?

Information
technology accounted for slightly over one-third of the fund at the end of June. We took advantage of the drop in valuations afforded
by the market’s downturn to increase positions in many of our core software holdings, whose underlying fundamentals remain intact
over the long term. We made significant purchases of high-conviction holdings Atlassian and HubSpot, each of which showed attractive
topline growth despite market conditions. We also added to our positions in applications monitoring and analytics company Datadog and
financial services platform Bill.com. Outside of those names, we made significant purchases within the IT services industry. We added
shares of Okta, cloud-based restaurant software company Toast, and digital consulting services firm Endava. All three companies, in our
view, have strong organic growth stories.

We
pared our positions in a few industrials and business services companies that held up relatively well to add to IT holdings at more attractive
valuations. We reduced our holding in Waste Connections, whose shares rose to record levels as investors gravitated toward businesses
with pricing power that appeared to offer some protection from rising inflation and recession risk. We also sold shares of consulting
firm Booz Allen Hamilton and CoStar Group, a commercial real estate data and analytics group. While we remain constructive on the companies,
we moderated our positions to fund ideas with more attractive risk/reward profiles. We eliminated our position in TransUnion after the
credit rating agency’s series of acquisitions and divestitures raised concerns about its core business.

Our
allocation to health care, the fund’s second-largest sector on an absolute basis, increased over the period following a few key
trades. We added to our position in life sciences company Repligen, which develops and sells bioprocessing technologies and systems used
to make biological drugs. We believe Repligen will benefit from underappreciated growth tailwinds in its core business of supplying manufacturers
of biologics drugs, including gene and cell therapies, while continuing to benefit from its position in the coronavirus vaccine production
process. We added to Veeva Systems, the portfolio’s top holding at period-end. A cloud software company providing customer relationship
management and business services in the life sciences industry, Veeva showed accelerated billings and earnings growth in a challenging
inflationary environment. We believe it’s a high-quality, durable-growth company that is a proven innovator and has the potential
to maintain outsized growth in revenue and cash generation.

What
is portfolio management’s outlook?

We
continue to look beyond near-term expectations to identify companies capable of delivering multiyear compounding returns, as the market
often misprices exponential growth. At a time when markets are increasingly focused on valuation and broader macro headwinds, there has
been a low risk tolerance for high-growth companies preparing to make sound capital investments to help plant the seeds for sustainable
above-average growth over the long term. While we could continue to see intermittent volatility, we believe there are some early signs
that the market is becoming more discerning and focused on fundamentals that we believe should play to the strengths of our companies,
and have superior long-term business models. In an extended period of market uncertainty, we remain mindful of risk while prudently managing
position sizes and the overall construction of the portfolio. In addition, we continue to seek opportunities during market volatility
to scale up positions in attractive emerging growth prospects.

As
quality-minded investors focused on identifying durable compounders, competitive differentiation, strong management teams, and solid
balance sheets are critical in risk mitigation. We do not expect the world to abandon recent technology adoption on the other side of
the pandemic, but, rather, we believe the last few years only served to highlight the value that such technologies provide in all corners
of the market. As we look to a world beyond COVID, we are excited about the composition of our portfolio, the quality of the companies
we own, and the growth runway that lies ahead.

Pursuit
of both emerging growth companies and durable compounders has been the mission of the New Horizons Fund since inception, and it remains
a challenging but fruitful effort. Our focus on companies with strong underlying competitive moats, durable and sustainable growth potential,
and skilled management teams continue to influence our investment choices. The value of positioning has compounding impacts beyond near-term
volatility, and our emphasis remains on identifying long-term winners that we are comfortable owning for multiple years. Growth stocks
that have both defensive and offensive qualities to complement their strong fundamental stories are attractive to the team for their
potential to compound over the long term. By staying committed to our process and focusing on high-conviction ideas, we feel well positioned
to create value for clients over time.

The
views expressed reflect the opinions of T. Rowe Price as of the date of this report and are subject to change based on changes
in market, economic, or other conditions. These views are not intended to be a forecast of future events and are no guarantee
of future results.

RISKS
OF INVESTING IN THE FUND

Principal
Risks

As
with any fund, there is no guarantee that the fund will achieve its objective(s). The fund’s share price fluctuates, which means
you could lose money by investing in the fund. The principal risks of investing in this fund, which may be even greater during periods
of market disruption or volatility, are summarized as follows:

Market
conditions.
The value of the fund’s investments may decrease, sometimes rapidly or unexpectedly, due to factors affecting
an issuer held by the fund, particular industries, or the overall securities markets. A variety of factors can increase the volatility
of the fund’s holdings and markets generally, including political or regulatory developments, recessions, inflation, rapid interest
rate changes, war or acts of terrorism, natural disasters, and outbreaks of infectious illnesses or other widespread public health issues.
Certain events may cause instability across global markets, including reduced liquidity and disruptions in trading markets, while some
events may affect certain geographic regions, countries, sectors, and industries more significantly than others. These adverse developments
may cause broad declines in market value due to short-term market movements or for significantly longer periods during more prolonged
market downturns.

Small-cap
stocks.
Investments in securities issued by small-cap companies are likely to be more volatile than investments in securities issued
by larger companies. Small-cap companies often have less experienced management, narrower product lines, more limited financial resources,
and less publicly available information than larger companies. In addition, smaller companies are typically more sensitive to changes
in overall economic conditions, and their securities may be difficult to trade.

Growth
investing.
The fund’s growth approach to investing could cause it to underperform other stock funds that employ a different
investment style. Growth stocks tend to be more volatile than certain other types of stocks, and their prices may fluctuate more dramatically
than the overall stock market. A stock with growth characteristics can have sharp price declines due to decreases in current or expected
earnings and may lack dividends that can help cushion its share price in a declining market.

BENCHMARK
INFORMATION

Note:
Portions of the mutual fund information contained in this report was supplied by Lipper, a Refinitiv Company, subject to the following:
Copyright 2022 © Refinitiv. All rights reserved. Any copying, republication or redistribution of Lipper content is expressly prohibited
without the prior written consent of Lipper. Lipper shall not be liable for any errors or delays in the content, or for any actions taken
in reliance thereon.

Note:
London Stock Exchange Group plc and its group undertakings (collectively, the “LSE Group”). © LSE Group 2022. FTSE Russell
is a trading name of certain of the LSE Group companies. Russell® is a trademark(s) of the relevant LSE Group companies
and is/are used by any other LSE Group company under license. All rights in the FTSE Russell indexes or data vest in the relevant LSE
Group company which owns the index or the data. Neither LSE Group nor its licensors accept any liability for any errors or omissions
in the indexes or data and no party may rely on any indexes or data contained in this communication. No further distribution of data
from the LSE Group is permitted without the relevant LSE Group company’s express written consent. The LSE Group does not promote,
sponsor or endorse the content of this communication. The LSE Group is not responsible for the formatting or configuration of this material
or for any inaccuracy in T. Rowe Price’s presentation thereof.

Note:
The S&P 500 Index and the S&P MidCap 400 Index are a product of S&P Dow Jones Indices LLC, a division of S&P Global,
or its affiliates (“SPDJI”) and has been licensed for use by T. Rowe Price. Standard & Poor’s® and
S&P® are registered trademarks of Standard & Poor’s Financial Services LLC, a division of S&P Global
(“S&P”); Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC (“Dow Jones”);
T. Rowe Price is not sponsored, endorsed, sold or promoted by SPDJI, Dow Jones, S&P, or their respective affiliates, and none of
such parties make any representation regarding the advisability of investing in such product(s) nor do they have any liability for any
errors, omissions, or interruptions of the S&P 500 Index and the S&P MidCap 400 Index.

GROWTH
OF $10,000

This
chart shows the value of a hypothetical $10,000 investment in the fund over the past 10 fiscal year periods or since inception (for funds
lacking 10-year records). The result is compared with benchmarks, which include a broad-based market index and may also include a peer
group average or index. Market indexes do not include expenses, which are deducted from fund returns as well as mutual fund averages
and indexes.

AVERAGE
ANNUAL COMPOUND TOTAL RETURN

EXPENSE
RATIO

FUND
EXPENSE EXAMPLE

As
a mutual fund shareholder, you may incur two types of costs: (1) transaction costs, such as redemption fees or sales loads, and (2) ongoing
costs, including management fees, distribution and service (12b-1) fees, and other fund expenses. The following example is intended to
help you understand your ongoing costs (in dollars) of investing in the fund and to compare these costs with the ongoing costs of investing
in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the most recent six-month period
and held for the entire period.

Please
note that the fund has three share classes: The original share class (Investor Class) charges no distribution and service (12b-1) fee,
I Class shares are also available to institutionally oriented clients and impose no 12b-1 or administrative fee payment, and Z Class
shares are offered only to funds advised by T. Rowe Price and other advisory clients of T. Rowe Price or its affiliates that are subject
to a contractual fee for investment management services and impose no 12b-1 fee or administrative fee payment. Each share class is presented
separately in the table.

Actual
Expenses

The
first line of the following table (Actual) provides information about actual account values and expenses based on the fund’s actual
returns. You may use the information on this line, together with your account balance, to estimate the expenses that you paid over the
period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the
result by the number on the first line under the heading “Expenses Paid During Period” to estimate the expenses you paid
on your account during this period.

Hypothetical
Example for Comparison Purposes

The
information on the second line of the table (Hypothetical) is based on hypothetical account values and expenses derived from the fund’s
actual expense ratio and an assumed 5% per year rate of return before expenses (not the fund’s actual return). You may compare
the ongoing costs of investing in the fund with other funds by contrasting this 5% hypothetical example and the 5% hypothetical examples
that appear in the shareholder reports of the other funds. The hypothetical account values and expenses may not be used to estimate the
actual ending account balance or expenses you paid for the period.

Note:
T. Rowe Price charges an annual account service fee of $20, generally for accounts with less than $10,000. The fee is waived for
any investor whose T. Rowe Price mutual fund accounts total $50,000 or more; accounts electing to receive electronic delivery of account
statements, transaction confirmations, prospectuses, and shareholder reports; or accounts of an investor who is a T. Rowe Price Personal
Services or Enhanced Personal Services client (enrollment in these programs generally requires T. Rowe Price assets of at least $250,000).
This fee is not included in the accompanying table. If you are subject to the fee, keep it in mind when you are estimating the ongoing
expenses of investing in the fund and when comparing the expenses of this fund with other funds.

You
should also be aware that the expenses shown in the table highlight only your ongoing costs and do not reflect any transaction costs,
such as redemption fees or sales loads. Therefore, the second line of the table is useful in comparing ongoing costs only and will not
help you determine the relative total costs of owning different funds. To the extent a fund charges transaction costs, however, the total
cost of owning that fund is higher.

Unaudited

The
accompanying notes are an integral part of these financial statements.

Unaudited

The
accompanying notes are an integral part of these financial statements.

Unaudited

The
accompanying notes are an integral part of these financial statements.

June
30, 2022 (Unaudited)

The
accompanying notes are an integral part of these financial statements.

June
30, 2022 (Unaudited)

The
accompanying notes are an integral part of these financial statements.

Unaudited

The
accompanying notes are an integral part of these financial statements.

Unaudited

The
accompanying notes are an integral part of these financial statements.

Unaudited

NOTES
TO FINANCIAL STATEMENTS

T.
Rowe Price New Horizons Fund, Inc. (the fund) is registered under the Investment Company Act of 1940 (the 1940 Act) as a diversified,
open-end management investment company. The fund seeks long-term capital growth by investing primarily in common stocks of small, rapidly
growing companies. The fund has three classes of shares: the New Horizons Fund (Investor Class), the New Horizons Fund–I Class
(I Class), and the New Horizons Fund–Z Class (Z Class). I Class shares require a $500,000 initial investment minimum, although
the minimum generally is waived or reduced for financial intermediaries, eligible retirement plans, and certain other accounts. Prior
to November 15, 2021, the initial investment minimum was $1 million and was generally waived for financial intermediaries, eligible retirement
plans, and other certain accounts. As a result of the reduction in the I Class minimum, certain assets transferred from the Investor
Class to the I Class. This transfer of shares from Investor Class to I Class is reflected in the Statement of Changes in Net Assets within
the Capital shares transactions as Shares redeemed and Shares sold, respectively. The Z Class is only available to funds advised by T.
Rowe Price Associates, Inc. and its affiliates and other clients that are subject to a contractual fee for investment management services.
Each class has exclusive voting rights on matters related solely to that class; separate voting rights on matters that relate to all
classes; and, in all other respects, the same rights and obligations as the other classes.

NOTE
1 – SIGNIFICANT ACCOUNTING POLICIES

Basis
of Preparation
The fund is an investment company and follows accounting and reporting guidance in the Financial Accounting Standards
Board (FASB) Accounting Standards Codification Topic 946 (ASC 946). The accompanying financial statements were prepared in accordance
with accounting principles generally accepted in the United States of America (GAAP), including, but not limited to, ASC 946. GAAP requires
the use of estimates made by management. Management believes that estimates and valuations are appropriate; however, actual results may
differ from those estimates, and the valuations reflected in the accompanying financial statements may differ from the value ultimately
realized upon sale or maturity.

Investment
Transactions, Investment Income, and Distributions
Investment transactions are accounted for on the trade date basis. Income and
expenses are recorded on the accrual basis. Realized gains and losses are reported on the identified cost basis. Premiums and discounts
on debt securities are amortized for financial reporting purposes. Income tax-related interest and penalties, if incurred, are recorded
as income tax expense. Dividends received from mutual fund investments are reflected as dividend income; capital gain distributions are
reflected as realized gain/loss. Dividend income and capital gain distributions are recorded on the ex-dividend date. Non-cash dividends,
if any, are recorded at the fair market value of the asset received. Distributions to shareholders are recorded on the ex-dividend date.
Income distributions, if any, are declared and paid by each class annually. A capital gain distribution may also be declared and paid
by the fund annually.

Currency
Translation
Assets, including investments, and liabilities denominated in foreign currencies are translated into U.S. dollar values
each day at the prevailing exchange rate, using the mean of the bid and asked prices of such currencies against U.S. dollars as provided
by an outside pricing service. Purchases and sales of securities, income, and expenses are translated into U.S. dollars at the prevailing
exchange rate on the respective date of such transaction. The effect of changes in foreign currency exchange rates on realized and unrealized
security gains and losses is not bifurcated from the portion attributable to changes in market prices.

Class
Accounting
Shareholder servicing, prospectus, and shareholder report expenses incurred by each class are charged directly to the
class to which they relate. Expenses common to all classes, investment income, and realized and unrealized gains and losses are allocated
to the classes based upon the relative daily net assets of each class.

Capital
Transactions
Each investor’s interest in the net assets of the fund is represented by fund shares. The fund’s net asset
value (NAV) per share is computed at the close of the New York Stock Exchange (NYSE), normally 4 p.m. ET, each day the NYSE is open for
business. However, the NAV per share may be calculated at a time other than the normal close of the NYSE if trading on the NYSE is restricted,
if the NYSE closes earlier, or as may be permitted by the SEC. Purchases and redemptions of fund shares are transacted at the next-computed
NAV per share, after receipt of the transaction order by T. Rowe Price Associates, Inc., or its agents.

Indemnification
In the normal course of business, the fund may provide indemnification in connection with its officers and directors, service providers,
and/or private company investments. The fund’s maximum exposure under these arrangements is unknown; however, the risk of material
loss is currently considered to be remote.

NOTE
2 – VALUATION

Fair
Value
The fund’s financial instruments are valued at the close of the NYSE and are reported at fair value, which GAAP defines
as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants
at the measurement date. The T. Rowe Price Valuation Committee (the Valuation Committee) is an internal committee that has been delegated
certain responsibilities by the fund’s Board of Directors (the Board) to ensure that financial instruments are appropriately priced
at fair value in accordance with GAAP and the 1940 Act. Subject to oversight by the Board, the Valuation Committee develops and oversees
pricing-related policies and procedures and approves all fair value determinations. Specifically, the Valuation Committee establishes
policies and procedures used in valuing financial instruments, including those which cannot be valued in accordance with normal procedures
or using pricing vendors; determines pricing techniques, sources, and persons eligible to effect fair value pricing actions; evaluates
the services and performance of the pricing vendors; oversees the pricing process to ensure policies and procedures are being followed;
and provides guidance on internal controls and valuation-related matters. The Valuation Committee provides periodic reporting to the
Board on valuation matters.

Various
valuation techniques and inputs are used to determine the fair value of financial instruments. GAAP establishes the following fair value
hierarchy that categorizes the inputs used to measure fair value:

Level
1 – quoted prices (unadjusted) in active markets for identical financial instruments that the fund can access at the reporting
date

Level
2 – inputs other than Level 1 quoted prices that are observable, either directly or indirectly (including, but not limited to,
quoted prices for similar financial instruments in active markets, quoted prices for identical or similar financial instruments in inactive
markets, interest rates and yield curves, implied volatilities, and credit spreads)

Level
3 – unobservable inputs (including the fund’s own assumptions in determining fair value)

Observable
inputs are developed using market data, such as publicly available information about actual events or transactions, and reflect the assumptions
that market participants would use to price the financial instrument. Unobservable inputs are those for which market data are not available
and are developed using the best information available about the assumptions that market participants would use to price the financial
instrument. GAAP requires valuation techniques to maximize the use of relevant observable inputs and minimize the use of unobservable
inputs. When multiple inputs are used to derive fair value, the financial instrument is assigned to the level within the fair value hierarchy
based on the lowest-level input that is significant to the fair value of the financial instrument. Input levels are not necessarily an
indication of the risk or liquidity associated with financial instruments at that level but rather the degree of judgment used in determining
those values.

Valuation
Techniques
Equity securities, including exchange-traded funds, listed or regularly traded on a securities exchange or in the over-the-counter
(OTC) market are valued at the last quoted sale price or, for certain markets, the official closing price at the time the valuations
are made. OTC Bulletin Board securities are valued at the mean of the closing bid and asked prices. A security that 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 are valued at the mean of the closing bid and asked prices for domestic securities and the last quoted
sale or closing price for international securities.

The
last quoted prices of non-U.S. equity securities may be adjusted to reflect the fair value of such securities at the close of the NYSE,
if the fund determines that developments between the close of a foreign market and the close of the NYSE will affect the value of some
or all of its portfolio securities. Each business day, the fund uses information from outside pricing services to evaluate and, if appropriate,
decide whether it is necessary to adjust quoted prices to reflect fair value by reviewing a variety of factors, including developments
in foreign markets, the performance of U.S. securities markets, and the performance of instruments trading in U.S. markets that represent
foreign securities and baskets of foreign securities. The fund uses outside pricing services to provide it with quoted prices and information
to evaluate or adjust those prices. The fund cannot predict how often it will use quoted prices and how often it will determine it necessary
to adjust those prices to reflect fair value.

Debt
securities generally are traded in the over-the-counter (OTC) market and are valued at prices furnished by independent pricing services
or by broker dealers who make markets in such securities. When valuing securities, the independent pricing services consider the yield
or price of bonds of comparable quality, coupon, maturity, and type, as well as prices quoted by dealers who make markets in such securities.

Investments
in mutual funds are valued at the mutual fund’s closing NAV per share on the day of valuation. Assets and liabilities other than
financial instruments, including short-term receivables and payables, are carried at cost, or estimated realizable value, if less, which
approximates fair value.

Investments
for which market quotations or market-based valuations are not readily available or deemed unreliable are valued at fair value as determined
in good faith by the Valuation Committee, in accordance with fair valuation policies and procedures. The objective of any fair value
pricing determination is to arrive at a price that could reasonably be expected from a current sale. Financial instruments fair valued
by the Valuation Committee are primarily private placements, restricted securities, warrants, rights, and other securities that are not
publicly traded. Factors used in determining fair value vary by type of investment and may include market or investment specific considerations.
The Valuation Committee typically will afford greatest weight to actual prices in arm’s length transactions, to the extent they
represent orderly transactions between market participants, transaction information can be reliably obtained, and prices are deemed representative
of fair value. However, the Valuation Committee may also consider other valuation methods such as market-based valuation multiples; a
discount or premium from market value of a similar, freely traded security of the same issuer; discounted cash flows; yield to maturity;
or some combination. Fair value determinations are reviewed on a regular basis and updated as information becomes available, including
actual purchase and sale transactions of the investment. Because any fair value determination involves a significant amount of judgment,
there is a degree of subjectivity inherent in such pricing decisions, and fair value prices determined by the Valuation Committee could
differ from those of other market participants.

Valuation
Inputs
The following table summarizes the fund’s financial instruments, based on the inputs used to determine their fair values
on June 30, 2022 (for further detail by category, please refer to the accompanying Portfolio of Investments):

Following
is a reconciliation of the fund’s Level 3 holdings for the six months ended June 30, 2022. Gain (loss) reflects both realized and
change in unrealized gain/loss on Level 3 holdings during the period, if any, and is included on the accompanying Statement of Operations.
The change in unrealized gain/loss on Level 3 instruments held at June 30, 2022, totaled $(173,009,000) for the six months ended June
30, 2022.

In
accordance with GAAP, the following table provides quantitative information about significant unobservable inputs used to determine the
fair valuations of the fund’s Level 3 assets, by class of financial instrument. Because the Valuation Committee considers a wide
variety of factors and inputs, both observable and unobservable, in determining fair values, the unobservable inputs presented do not
reflect all inputs significant to the fair value determination.

NOTE
3 – OTHER INVESTMENT TRANSACTIONS

Consistent
with its investment objective, the fund engages in the following practices to manage exposure to certain risks and/or to 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.

Restricted
Securities
The fund invests in securities that are subject to legal or contractual restrictions on resale. Prompt sale of such securities
at an acceptable price may be difficult and may involve substantial delays and additional costs.

Other
Purchases and sales of portfolio securities other than short-term securities aggregated $5,921,853,000 and $7,578,102,000, respectively,
for the six months ended June 30, 2022.

NOTE
4 – FEDERAL INCOME TAXES

No
provision for federal income taxes is required since the fund intends to continue to qualify as a regulated investment company under
Subchapter M of the Internal Revenue Code and distribute to shareholders all of its taxable income and gains. Distributions determined
in accordance with federal income tax regulations may differ in amount or character from net investment income and realized gains for
financial reporting purposes. Financial reporting records are adjusted for permanent book/tax differences to reflect tax character but
are not adjusted for temporary differences. The amount and character of tax-basis distributions and composition of net assets are finalized
at fiscal year-end; accordingly, tax-basis balances have not been determined as of the date of this report.

The
fund intends to retain realized gains to the extent of available capital loss carryforwards. Net realized capital losses may be carried
forward indefinitely to offset future realized capital gains. As of December 31, 2021, the fund had $160,077,000 of available capital
loss carryforwards.

At
June 30, 2022, the cost of investments for federal income tax purposes was $21,198,243,000. Net unrealized gain aggregated $1,870,283,000
at period-end, of which $6,075,508,000 related to appreciated investments and $4,205,225,000 related to depreciated investments.

NOTE
5 – FOREIGN TAXES

The
fund is subject to foreign income taxes imposed by certain countries in which it invests. Additionally, capital gains realized upon disposition
of securities issued in or by certain foreign countries are subject to capital gains tax imposed by those countries. All taxes are computed
in accordance with the applicable foreign tax law, and, to the extent permitted, capital losses are used to offset capital gains. Taxes
attributable to income are accrued by the fund as a reduction of income. Current and deferred tax expense attributable to capital gains
is reflected as a component of realized or change in unrealized gain/loss on securities in the accompanying financial statements. To
the extent that the fund has country specific capital loss carryforwards, such carryforwards are applied against net unrealized gains
when determining the deferred tax liability. Any deferred tax liability incurred by the fund is included in either Other liabilities
or Deferred tax liability on the accompanying Statement of Assets and Liabilities.

NOTE
6 – RELATED PARTY TRANSACTIONS

The
fund is managed by T. Rowe Price Associates, Inc. (Price Associates), a wholly owned subsidiary of T. Rowe Price Group, Inc. (Price Group).
The investment management agreement between the fund and Price Associates provides for an annual investment management fee that consists
of an individual fund fee and a group fee; management fees are computed daily and paid monthly. The investment management agreement provides
for an individual fund fee equal to 0.35% of the fund’s average daily net assets. The group fee rate is calculated based on the
combined net assets of certain mutual funds sponsored by Price Associates (the group) applied to a graduated fee schedule, with rates
ranging from 0.48% for the first $1 billion of assets to 0.260% for assets in excess of $845 billion. The fund’s group fee is determined
by applying the group fee rate to the fund’s average daily net assets. At June 30, 2022, the effective annual group fee rate was
0.29%. Effective May 1, 2021, Price Associates has contractually agreed, at least through April 30, 2023, to waive a portion of its management
fee so that an individual fund fee of 0.2975% is applied to the fund’s average daily net assets that are equal to or greater than
$40 billion. Thereafter, this agreement will automatically renew for one-year terms unless terminated by the fund’s Board. Any
fees waived under this agreement are not subject to reimbursement to Price Associates by the fund. No management fees were waived under
this arrangement for the six months ended June 30, 2022.

The
I Class is subject to an operating expense limitation (I Class Limit) pursuant to which Price Associates is contractually required to
pay all operating expenses of the I Class, excluding management fees; interest; expenses related to borrowings, taxes, and brokerage;
and other non-recurring expenses permitted by the investment management agreement, to the extent such operating expenses, on an annualized
basis, exceed the I Class Limit. This agreement will continue through the expense limitation date indicated in the table below, and may
be renewed, revised, or revoked only with approval of the fund’s Board. The I Class is required to repay Price Associates for expenses
previously paid to the extent the class’s net assets grow or expenses decline sufficiently to allow repayment without causing the
class’s operating expenses (after the repayment is taken into account) to exceed the lesser of: (1) the I Class Limit in place
at the time such amounts were paid; or (2) the current I Class Limit. However, no repayment will be made more than three years after
the date of a payment or waiver.

The
Z Class is also subject to a contractual expense limitation agreement whereby Price Associates has agreed to waive and/or bear all of
the Z Class’ expenses (excluding interest; expenses related to borrowings, taxes, and brokerage; and nonrecurring expenses) in
their entirety. This fee waiver and/or expense reimbursement arrangement is expected to remain in place indefinitely, and the agreement
may only be amended or terminated with approval by the fund’s Board. Expenses of the fund waived/paid by the manager are not subject
to later repayment by the fund.

Pursuant
to these agreements, expenses were waived/paid by and/or repaid to Price Associates during the six months ended June 30, 2022 as indicated
in the table below. At June 30, 2022, there were no amounts subject to repayment by the fund. Any repayment of expenses previously waived/paid
by Price Associates during the period would be included in the net investment income and expense ratios presented on the accompanying
Financial Highlights.

In
addition, the fund has entered into service agreements with Price Associates and two wholly owned subsidiaries of Price Associates, each
an affiliate of the fund (collectively, Price). Price Associates provides certain accounting and administrative services to the fund.
T. Rowe Price Services, Inc. provides shareholder and administrative services in its capacity as the fund’s transfer and dividend-disbursing
agent. T. Rowe Price Retirement Plan Services, Inc. provides subaccounting and recordkeeping services for certain retirement accounts
invested in the Investor Class. For the six months ended June 30, 2022, expenses incurred pursuant to these service agreements were $53,000
for Price Associates; $2,507,000 for T. Rowe Price Services, Inc.; and $2,715,000 for T. Rowe Price Retirement Plan Services, Inc. All
amounts due to and due from Price, exclusive of investment management fees payable, are presented net on the accompanying Statement of
Assets and Liabilities.

Additionally,
the fund is one of several mutual funds in which certain college savings plans managed by Price Associates may invest. As approved by
the fund’s Board of Directors, shareholder servicing costs associated with each college savings plan are borne by the fund in proportion
to the average daily value of its shares owned by the college savings plan. Price has agreed to waive/reimburse shareholder servicing
costs in excess of 0.05% of the fund’s average daily value of its shares owned by the college savings plan. Any amounts waived/paid
by Price under this voluntary agreement are not subject to repayment by the fund. Price may amend or terminate this voluntary arrangement
at any time without prior notice. For the six months ended June 30, 2022, the fund was charged $172,000 for shareholder servicing costs
related to the college savings plans, of which $129,000 was for services provided by Price. All amounts due to and due from Price, exclusive
of investment management fees payable, are presented net on the accompanying Statement of Assets and Liabilities. At June 30, 2022, approximately
1% of the outstanding shares of the Investor Class were held by college savings plans.

Mutual
funds, trusts, and other accounts managed by Price Associates or its affiliates (collectively, Price Funds and accounts) may invest in
the fund. No Price fund or account may invest for the purpose of exercising management or control over the fund. At June 30, 2022, approximately
100% of the Z Class’s outstanding shares were held by Price Funds and accounts.

The
fund may invest its cash reserves in certain open-end management investment companies managed by Price Associates and considered affiliates
of the fund: the T. Rowe Price Government Reserve Fund or the T. Rowe Price Treasury Reserve Fund, organized as money market funds, or
the T. Rowe Price Short-Term Fund, a short-term bond fund (collectively, the Price Reserve Funds). The Price Reserve Funds are offered
as short-term investment options to mutual funds, trusts, and other accounts managed by Price Associates or its affiliates and are not
available for direct purchase by members of the public. Cash collateral from securities lending, if any, is invested in the T. Rowe Price
Government Reserve Fund; prior to December 13, 2021, the cash collateral from securities lending was invested in the T. Rowe Price Short-Term
Fund. The Price Reserve Funds pay no investment management fees.

As
of June 30, 2022, T. Rowe Price Group, Inc., or its wholly owned subsidiaries, owned 288,056 shares of the I Class, representing less
than 1% of the I Class’s net assets.

The
fund may participate in securities purchase and sale transactions with other funds or accounts advised by Price Associates (cross trades),
in accordance with procedures adopted by the fund’s Board and Securities and Exchange Commission rules, which require, among other
things, that such purchase and sale cross trades be effected at the independent current market price of the security. During the six
months ended June 30, 2022, the aggregate value of purchases and sales cross trades with other funds or accounts advised by Price Associates
was less than 1% of the fund’s net assets as of June 30, 2022.

Price
Associates has voluntarily agreed to reimburse the fund from its own resources on a monthly basis for the cost of investment research
embedded in the cost of the fund’s securities trades. This agreement may be rescinded at any time. For the six months ended June
30, 2022, this reimbursement amounted to $624,000, which is included in Net realized gain (loss) on Securities in the Statement of Operations.

NOTE
7 – OTHER MATTERS

Unpredictable
events such as environmental or natural disasters, war, terrorism, pandemics, outbreaks of infectious diseases, and similar public health
threats may significantly affect the economy and the markets and issuers in which a fund invests. Certain events may cause instability
across global markets, including reduced liquidity and disruptions in trading markets, while some events may affect certain geographic
regions, countries, sectors, and industries more significantly than others, and exacerbate other pre-existing political, social, and
economic risks. Since 2020, a novel strain of coronavirus (COVID-19) has resulted in disruptions to global business activity and caused
significant volatility and declines in global financial markets. In February 2022, Russian forces entered Ukraine and commenced an armed
conflict leading to economic sanctions being imposed on Russia and certain of its citizens, creating impacts on Russian-related stocks
and debt and greater volatility in global markets. These are recent examples of global events which may have an impact on the fund’s
performance, which could be negatively impacted if the value of a portfolio holding were harmed by these and such other events. Management
is actively monitoring the risks and financial impacts arising from these events.

INFORMATION
ON PROXY VOTING POLICIES, PROCEDURES, AND RECORDS

A
description of the policies and procedures used by T. Rowe Price funds to determine how to vote proxies relating to portfolio securities
is available in each fund’s Statement of Additional Information. You may request this document by calling 1-800-225-5132 or by
accessing the SEC’s website, sec.gov.

The
description of our proxy voting policies and procedures is also available on our corporate website. To access it, please visit the following
Web page:

https://www.troweprice.com/corporate/us/en/utility/policies.html

Scroll
down to the section near the bottom of the page that says, “Proxy Voting Guidelines.” Click on the links in the shaded box.

Each
fund’s most recent annual proxy voting record is available on our website and through the SEC’s website. To access it through
T. Rowe Price, visit the website location shown above, and scroll down to the section near the bottom of the page that says, “Proxy
Voting Records.” Click on the Proxy Voting Records link in the shaded box.

HOW
TO OBTAIN QUARTERLY PORTFOLIO HOLDINGS

The
fund files a complete schedule of portfolio holdings with the Securities and Exchange Commission (SEC) for the first and third quarters
of each fiscal year as an exhibit to its reports on Form N-PORT. The fund’s reports on Form N-PORT are available electronically
on the SEC’s website (sec.gov). In addition, most T. Rowe Price funds disclose their first and third fiscal quarter-end holdings
on troweprice.com.

APPROVAL
OF INVESTMENT MANAGEMENT AGREEMENT

Each
year, the fund’s Board of Directors (Board) considers the continuation of the investment management agreement (Advisory Contract)
between the fund and its investment adviser, T. Rowe Price Associates, Inc. (Adviser). In that regard, at a meeting held on March 7–8,
2022 (Meeting), the Board, including all of the fund’s independent directors, approved the continuation of the fund’s Advisory
Contract. At the Meeting, the Board considered the factors and reached the conclusions described below relating to the selection of the
Adviser and the approval of the Advisory Contract. The independent directors were assisted in their evaluation of the Advisory Contract
by independent legal counsel from whom they received separate legal advice and with whom they met separately.

In
providing information to the Board, the Adviser was guided by a detailed set of requests for information submitted by independent legal
counsel on behalf of the independent directors. In considering and approving the Advisory Contract, the Board considered the information
it believed was relevant, including, but not limited to, the information discussed below. The Board considered not only the specific
information presented in connection with the Meeting but also the knowledge gained over time through interaction with the Adviser about
various topics. The Board meets regularly and, at each of its meetings, covers an extensive agenda of topics and materials and considers
factors that are relevant to its annual consideration of the renewal of the T. Rowe Price funds’ advisory contracts, including
performance and the services and support provided to the funds and their shareholders.

Services
Provided by the Adviser

The
Board considered the nature, quality, and extent of the services provided to the fund by the Adviser. These services included, but were
not limited to, directing the fund’s investments in accordance with its investment program and the overall management of the fund’s
portfolio, as well as a variety of related activities such as financial, investment operations, and administrative services; compliance;
maintaining the fund’s records and registrations; and shareholder communications. The Board also reviewed the background and experience
of the Adviser’s senior management team and investment personnel involved in the management of the fund, as well as the Adviser’s
compliance record. The Board concluded that it was satisfied with the nature, quality, and extent of the services provided by the Adviser.

Investment
Performance of the Fund

The
Board took into account discussions with the Adviser and reports that it receives throughout the year relating to fund performance. In
connection with the Meeting, the Board reviewed the fund’s total returns for various periods through December 31, 2021, and compared
these returns with the performance of a peer group of funds with similar investment programs and a wide variety of other previously agreed-upon
comparable performance measures and market data, including relative performance information as of September 30, 2021, supplied by Broadridge,
which is an independent provider of mutual fund data.

On
the basis of this evaluation and the Board’s ongoing review of investment results, and factoring in the relative market conditions
during certain of the performance periods, the Board concluded that the fund’s performance was satisfactory.

Costs,
Benefits, Profits, and Economies of Scale

The
Board reviewed detailed information regarding the revenues received by the Adviser under the Advisory Contract and other direct and indirect
benefits that the Adviser (and its affiliates) may have realized from its relationship with the fund. In considering soft-dollar arrangements
pursuant to which research may be received from broker-dealers that execute the fund’s portfolio transactions, the Board noted
that the Adviser bears the cost of research services for all client accounts that it advises, including the T. Rowe Price funds. The
Board received information on the estimated costs incurred and profits realized by the Adviser from managing the T. Rowe Price funds.
The Board also reviewed estimates of the profits realized from managing the fund in particular, and the Board concluded that the Adviser’s
profits were reasonable in light of the services provided to the fund.

The
Board also considered whether the fund benefits under the fee levels set forth in the Advisory Contract or otherwise from any economies
of scale realized by the Adviser. Under the Advisory Contract, the fund pays a fee to the Adviser for investment management services
composed of two components—a group fee rate based on the combined average net assets of most of the T. Rowe Price funds (including
the fund) that declines at certain asset levels and an individual fund fee rate that declines at certain asset levels based on the fund’s
average daily net assets—and the fund pays its own expenses of operations. The Board concluded that the advisory fee structure
for the fund continued to provide for a reasonable sharing of benefits from any economies of scale with the fund’s investors.

Fees
and Expenses

The
Board was provided with information regarding industry trends in management fees and expenses. Among other things, the Board reviewed
data for peer groups that were compiled by Broadridge, which compared: (i) contractual management fees, actual management fees, nonmanagement
expenses, and total expenses of the Investor Class of the fund with a group of competitor funds selected by Broadridge (Expense Group)
and (ii) actual management fees, nonmanagement expenses, and total expenses of the Investor Class of the fund with a broader set of funds
within the Lipper investment classification (Expense Universe). The Board considered the fund’s contractual management fee rate,
actual management fee rate (which reflects the management fees actually received from the fund by the Adviser after any applicable waivers,
reductions, or reimbursements), operating expenses, and total expenses (which reflect the net total expense ratio of the fund after any
waivers, reductions, or reimbursements) in comparison with the information for the Broadridge peer groups. Broadridge generally constructed
the peer groups by seeking the most comparable funds based on similar investment classifications and objectives, expense structure, asset
size, and operating components and attributes and ranked funds into quintiles, with the first quintile representing the funds with the
lowest relative expenses and the fifth quintile representing the funds with the highest relative expenses. The information provided to
the Board by Broadridge in comparison to other mid-cap growth funds indicated that the fund’s contractual management fee ranked
in the first quintile (Expense Group), the fund’s actual management fee rate ranked in the first quintile (Expense Group) and second
quintile (Expense Universe), and the fund’s total expenses ranked in the first quintile (Expense Group and Expense Universe). In
addition, at the request of the Adviser, Broadridge compared the fund against peer groups consisting of small-cap growth funds. That
information provided to the Board indicated that the fund’s contractual management fee ranked in the first quintile (Expense Group),
the fund’s actual management fee rate ranked in the first quintile (Expense Group and Expense Universe), and the fund’s total
expenses ranked in the first quintile (Expense Group and Expense Universe).

The
Board also reviewed the fee schedules for other investment portfolios with similar mandates that are advised or subadvised by the Adviser
and its affiliates, including separately managed accounts for institutional and individual investors; subadvised funds; and other sponsored
investment portfolios, including collective investment trusts and pooled vehicles organized and offered to investors outside the United
States. Management provided the Board with information about the Adviser’s responsibilities and services provided to subadvisory
and other institutional account clients, including information about how the requirements and economics of the institutional business
are fundamentally different from those of the proprietary mutual fund business. The Board considered information showing that the Adviser’s
mutual fund business is generally more complex from a business and compliance perspective than its institutional account business and
considered various relevant factors, such as the broader scope of operations and oversight, more extensive shareholder communication
infrastructure, greater asset flows, heightened business risks, and differences in applicable laws and regulations associated with the
Adviser’s proprietary mutual fund business. In assessing the reasonableness of the fund’s management fee rate, the Board
considered the differences in the nature of the services required for the Adviser to manage its mutual fund business versus managing
a discrete pool of assets as a subadviser to another institution’s mutual fund or for an institutional account and that the Adviser
generally performs significant additional services and assumes greater risk in managing the fund and other T. Rowe Price funds than it
does for institutional account clients, including subadvised funds.

On
the basis of the information provided and the factors considered, the Board concluded that the fees paid by the fund under the Advisory
Contract are reasonable.

Approval
of the Advisory Contract

As
noted, the Board approved the continuation of the Advisory Contract. No single factor was considered in isolation or to be determinative
to the decision. Rather, the Board concluded, in light of a weighting and balancing of all factors considered, that it was in the best
interests of the fund and its shareholders for the Board to approve the continuation of the Advisory Contract (including the fees to
be charged for services thereunder).

Item
1. (b) Notice pursuant to Rule 30e-3.

Not
applicable.

Item
2. Code of Ethics.

A
code of ethics, as defined in Item 2 of Form N-CSR, applicable to its principal executive officer, principal financial officer, principal
accounting officer or controller, or persons performing similar functions is filed as an exhibit to the registrant’s annual Form
N-CSR. No substantive amendments were approved or waivers were granted to this code of ethics during the registrant’s most recent
fiscal half-year.

Item
3. Audit Committee Financial Expert.

Disclosure
required in registrant’s annual Form N-CSR.

Item
4. Principal Accountant Fees and Services.

Disclosure
required in registrant’s annual Form N-CSR.

Item
5. Audit Committee of Listed Registrants.

Not
applicable.

Item
6. Investments.

(a)
Not applicable. The complete schedule of investments is included in Item 1 of this Form N-CSR.

(b)
Not applicable.

Item
7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.

Not
applicable.

Item
8. Portfolio Managers of Closed-End Management Investment Companies.

Not
applicable.

Item
9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.

Not
applicable.

Item
10. Submission of Matters to a Vote of Security Holders.

There
has been no change to the procedures by which shareholders may recommend nominees to the registrant’s board of directors.

Item
11. Controls and Procedures.

(a)
The registrant’s principal executive officer and principal financial officer have evaluated the registrant’s disclosure controls
and procedures within 90 days of this filing and have concluded that the registrant’s disclosure controls and procedures were effective,
as of that date, in ensuring that information required to be disclosed by the registrant in this Form N-CSR was recorded, processed,
summarized, and reported timely.

(b)
The registrant’s principal executive officer and principal financial officer are aware of no change in the registrant’s internal
control over financial reporting that occurred during the period covered by this report that has materially affected, or is reasonably
likely to materially affect, the registrant’s internal control over financial reporting.

Item
12. Disclosure of Securities Lending Activities for Closed-End Management Investment Companies.

Not
applicable.

Item
13. Exhibits.

(a)(1)
The registrant’s code of ethics pursuant to Item 2 of Form N-CSR is filed with the registrant’s annual Form N-CSR.

(2)
Separate certifications by the registrant’s principal executive officer and principal financial officer, pursuant to Section 302
of the Sarbanes-Oxley Act of 2002 and required by Rule 30a-2(a) under the Investment Company Act of 1940, are attached.

(3)
Written solicitation to repurchase securities issued by closed-end companies: not applicable.

(b)
A certification by the registrant’s principal executive officer and principal financial officer, pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002 and required by Rule 30a-2(b) under the Investment Company Act of 1940, is attached.

SIGNATURES

Pursuant to the requirements of the
Securities Exchange Act of 1934 and the Investment Company Act of 1940, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

T. Rowe Price New Horizons Fund, Inc.

By       /s/
David Oestreicher
David Oestreicher
Principal Executive
Officer     
 
Date       August 17, 2022

Pursuant to the requirements of the
Securities Exchange Act of 1934 and the Investment Company Act of 1940, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.

By       /s/
David Oestreicher
David Oestreicher
Principal Executive
Officer     
 
Date       August 17, 2022
 
 
By /s/
Alan S. Dupski
Alan S. Dupski
Principal Financial Officer
 
Date August 17, 2022

Item 13. (a)(2)

CERTIFICATIONS

I, David Oestreicher, certify that:

1. I have reviewed this
report on Form N-CSR of T. Rowe Price New Horizons Fund;
 
2.       Based on my knowledge,
this report does not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements made, in
light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;
 
3. Based on my knowledge,
the financial statements, and other financial information included in this
report, fairly present in all material respects the financial condition,
results of operations, changes in net assets, and cash flows (if the
financial statements are required to include a statement of cash flows) of
the registrant as of, and for, the periods presented in this
report;
 
4. The registrant’s other
certifying officer(s) and I are responsible for establishing and
maintaining disclosure controls and procedures (as defined in rule
30a-3(c) under the Investment Company Act of 1940) and internal control
over financial reporting (as defined in Rule 30a-3(d) under the Investment
Company Act of 1940) for the registrant and have:
 
(a)       Designed such disclosure controls
and procedures, or caused such disclosure controls and procedures to be
designed under our supervision, to ensure that material information
relating to the registrant, including its consolidated subsidiaries, is
made known to us by others within those entities, particularly during the
period in which this report is being prepared;
 
(b) Designed such internal control
over financial reporting, or caused such internal control over financial
reporting to be designed under our supervision, to provide reasonable
assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance
with generally accepted accounting principles;
 
(c) Evaluated the effectiveness of
the registrant’s disclosure controls and procedures and presented in this
report our conclusions about the effectiveness of the disclosure controls
and procedures, as of a date within 90 days prior to the filing date of
this report based on such evaluation; and
 
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
 
5. The registrant’s other
certifying officer(s) and I have disclosed to the registrant’s auditors
and the audit committee of the registrant’s board of directors (or persons
performing the equivalent functions):
 
(a) All significant deficiencies and
material weaknesses in the design or operation of internal control over
financial reporting which are reasonably likely to adversely affect the
registrant’s ability to record, process, summarize, and report financial
information; and
 
(b) Any fraud, whether or not
material, that involves management or other employees who have a
significant role in the registrant’s internal control over financial
reporting.

Date: August 17, 2022 /s/ David Oestreicher
David Oestreicher
Principal
Executive
Officer     

CERTIFICATIONS

I, Alan S. Dupski, certify that:

1. I have reviewed this
report on Form N-CSR of T. Rowe Price New Horizons Fund;
 
2.       Based on my knowledge,
this report does not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements made, in
light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;
 
3. Based on my knowledge,
the financial statements, and other financial information included in this
report, fairly present in all material respects the financial condition,
results of operations, changes in net assets, and cash flows (if the
financial statements are required to include a statement of cash flows) of
the registrant as of, and for, the periods presented in this
report;
 
4. The registrant’s other
certifying officer(s) and I are responsible for establishing and
maintaining disclosure controls and procedures (as defined in rule
30a-3(c) under the Investment Company Act of 1940) and internal control
over financial reporting (as defined in Rule 30a-3(d) under the Investment
Company Act of 1940) for the registrant and have:
 
(a)       Designed such disclosure controls
and procedures, or caused such disclosure controls and procedures to be
designed under our supervision, to ensure that material information
relating to the registrant, including its consolidated subsidiaries, is
made known to us by others within those entities, particularly during the
period in which this report is being prepared;
 
(b) Designed such internal control
over financial reporting, or caused such internal control over financial
reporting to be designed under our supervision, to provide reasonable
assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance
with generally accepted accounting principles;
 
(c) Evaluated the effectiveness of
the registrant’s disclosure controls and procedures and presented in this
report our conclusions about the effectiveness of the disclosure controls
and procedures, as of a date within 90 days prior to the filing date of
this report based on such evaluation; and
 
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
 
5. The registrant’s other
certifying officer(s) and I have disclosed to the registrant’s auditors
and the audit committee of the registrant’s board of directors (or persons
performing the equivalent functions):
 
(a) All significant deficiencies and
material weaknesses in the design or operation of internal control over
financial reporting which are reasonably likely to adversely affect the
registrant’s ability to record, process, summarize, and report financial
information; and
 
(b) Any fraud, whether or not
material, that involves management or other employees who have a
significant role in the registrant’s internal control over financial
reporting.

Date: August 17, 2022 /s/ Alan S. Dupski
Alan S. Dupski
Principal
Financial Officer     

Item 13. (b)

CERTIFICATION UNDER SECTION 906
OF SARBANES-OXLEY ACT OF 2002
 
 
Name of Issuer: T. Rowe Price New Horizons Fund
 
 
In connection with the Report on Form
N-CSR for the above named Issuer, the undersigned hereby certifies, to the
best of his knowledge, that:
 
1.       The Report fully complies with the
requirements of Section 13(a) or 15(d) of the Securities Exchange Act of
1934;
 
2. The information contained in the
Report fairly presents, in all material respects, the financial condition
and results of operations of the
Issuer.
Date: August 17, 2022 /s/
David Oestreicher
David Oestreicher
Principal Executive
Officer     
 
 
Date: August 17, 2022 /s/
Alan S. Dupski
Alan S. Dupski
Principal Financial
Officer



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