-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, RdLOImOoipqkHydoihgRj3WUBE+xJcYiED0OE7zphFR6C0kwLVVjATOEOgjSW9zf sUZyJEEitKI/8cmSpFaTXg== 0000950156-99-000575.txt : 19990830 0000950156-99-000575.hdr.sgml : 19990830 ACCESSION NUMBER: 0000950156-99-000575 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19990630 FILED AS OF DATE: 19990827 FILER: COMPANY DATA: COMPANY CONFORMED NAME: STATE STREET RESEARCH GROWTH TRUST CENTRAL INDEX KEY: 0000034918 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 046013177 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-30D SEC ACT: SEC FILE NUMBER: 811-00985 FILM NUMBER: 99700787 BUSINESS ADDRESS: STREET 1: ONE FINANCIAL CTR CITY: BOSTON STATE: MA ZIP: 02111 BUSINESS PHONE: 6173571340 MAIL ADDRESS: STREET 1: STATE STREET RESEARCH GROWTH TRUST STREET 2: ONE FINANCIAL CENTER CITY: BOSTON STATE: MA ZIP: 02111 FORMER COMPANY: FORMER CONFORMED NAME: STATE STREET GROWTH TRUST DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: STATE STREET GROWTH FUND INC DATE OF NAME CHANGE: 19890827 FORMER COMPANY: FORMER CONFORMED NAME: FEDERAL STREET FUND INC DATE OF NAME CHANGE: 19830503 N-30D 1 STATE STREET RESEARCH GROWTH FUND-6/30/1999 - ------------------------------------------------------------------------------- STATE STREET RESEARCH - ------------------------------------------------------------------------------- GROWTH FUND ---------------- SEMIANNUAL REPORT June 30, 1999 -------------------- WHAT'S INSIDE -------------------- INVESTMENT UPDATE About the Fund, economy and markets FUND INFORMATION Facts and figures PLUS, COMPLETE PORTFOLIO HOLDINGS AND FINANCIAL STATEMENTS ---------------------- DALBAR HONORS COMMITMENT TO: INVESTORS 1997 ---------------------- For Excellence in Shareholder Service [LOGO] STATE STREET RESEARCH STATE STREET RESEARCH GROWTH FUND - -------------------------------------------------------------------------------- INVESTMENT UPDATE - -------------------------------------------------------------------------------- INVESTMENT ENVIRONMENT THE ECONOMY o The U.S. economy surprised market watchers with an annualized 6.1% growth rate in the last quarter of 1998. Growth slowed in the first half of 1999, ending at an annualized 2.3%. o Inflation remained low, but spiked its first real advance in more than a year as the price of crude oil rose more than 40% in the first half of the year. o Americans earned more -- and spent more. Meanwhile, the nation's savings rate slipped further into negative territory. It stood at -1.2% at mid year. THE MARKETS o The S&P 500, a broad measure of common stock performance, gained 12.38% for the six months ended June 30, 1999.(1) The gap between large company growth stocks and the rest of the market narrowed, the result of growing concern over their premium valuations plus the Fed's announced predilection for an interest rate hike -- which it delivered at the end of the period. o U.S. Treasury bonds lost ground as the yield on the 30-year benchmark rose above 6.0%. High-yield bonds, which had weakened late in 1998, rebounded in the first half of 1999. THE FUND OVER THE PAST SIX MONTHS o For the six months ended June 30, 1999, Class A shares of State Street Research Growth Fund returned 9.33% (does not reflect sales charge).(2) The Fund underperformed the Lipper average growth fund, which returned 11.65%. o In terms of industry and sector holdings, the Fund was not positioned as aggressively as many peer funds. The portfolio was underweighted in technology. CURRENT STRATEGY o We continue to believe that the U.S. stock market will show low double-digit returns for 1999, with small- and mid-cap stocks narrowing the performance gap with large company stocks. o Attractive investments may include companies with opportunities to improve productivity by restructuring, substituting capital for labor and cutting costs, as well as companies with improving fundamentals that favor the business cycle. June 30, 1999 (1) The S&P 500 (officially the "Standard and Poor's 500 Stock Price Index") is an unmanaged index of 500 U.S. stocks. The index does not take transaction charges into consideration. It is not possible to invest directly in the index. (2) 9.09% for Class B(1) shares; 8.97% for Class B shares; 8.97% for Class C shares; 9.48% for Class S shares. (3) Keep in mind that past performance is no guarantee of future results. The Fund's share price, yield and return will fluctuate, and you may have a gain or loss when you sell your shares. All returns assume reinvestment of capital gain distributions and income dividends at net asset value. During the periods prior to 1993 that shares of the Fund were not offered to the general public, the Fund was not subject to the cash inflows and higher redemptions and expenses that have occurred during the Fund's current, continuous public offering. Performance for a class includes periods prior to the adoption of class designations in 1993. Class S shares, offered without a sales charge, are available through certain employee benefit plans and special programs. (4) Performance reflects up to maximum 5.75% Class A share front-end sales charge, or 5% Class B(1) or Class B share or 1% Class C share contingent deferred sales charges, where applicable. The Fund's returns include performance before the creation of share classes. If this performance reflected the share classes' current 12b-1 fees, the Fund's returns may have been lower. PLEASE NOTE THAT THE DISCUSSION THROUGHOUT THIS SHAREHOLDER REPORT IS DATED AS INDICATED AND, BECAUSE OF POSSIBLE CHANGES IN VIEWPOINT, DATA AND TRANSACTIONS, SHOULD NOT BE RELIED UPON AS BEING CURRENT THEREAFTER. - -------------------------------------------------------------------------------- FUND INFORMATION (all data are for periods ended June 30, 1999) - -------------------------------------------------------------------------------- AVERAGE ANNUAL TOTAL RETURN (at maximum applicable sales charge)(3)(4) - ----------------------------------------------------------------------------- LIFE OF FUND (since 3/24/61) 10 YEARS 5 YEARS 1 YEAR - ----------------------------------------------------------------------------- Class A 10.45% 12.63% 16.72% 11.44% - ----------------------------------------------------------------------------- Class B(1) 10.48% 12.75% 17.00% 12.42% - ----------------------------------------------------------------------------- Class B 10.48% 12.73% 16.97% 12.30% - ----------------------------------------------------------------------------- Class C 10.48% 12.75% 17.20% 16.45% - ----------------------------------------------------------------------------- Class S 10.66% 13.45% 18.36% 18.47% - ----------------------------------------------------------------------------- TOP 10 STOCK POSITIONS (by percentage of net assets) (1) MICROSOFT Computer software & service 5.0% (2) CISCO SYSTEMS Computer network products 4.9% (3) TYCO INTERNATIONAL Diversified manufacturer 4.4% (4) CHANCELLOR MEDIA Radio stations 3.8% (5) MCI WORLDCOM Telecommunication services 3.6% (6) GUIDANT Medical instruments 3.1% (7) SCHERING-PLOUGH Pharmaceuticals 3.0% (8) INTEL Semiconductor chips 2.8% (9) SAFEWAY Food supermarket chain 2.7% (10) EMC Computer storage systems 2.6% These securities represent an aggregate of 35.9% of the portfolio. Because of active management, there is no guarantee that the Fund currently invests, or will continue to invest, in the securities listed in this table or in the text above. TOP 5 INDUSTRIES (by percentage of net assets) DRUGS & BIOTECHNOLOGY 14.5% COMPUTER TECHNOLOGY 10.7% MULTI-SECTOR COMPANIES 8.7% COMPUTER SOFTWARE 8.4% TELECOMMUNICATIONS 5.1% Total: 47.4% STATE STREET RESEARCH GROWTH FUND - -------------------------------------------------------------------------------- INVESTMENT PORTFOLIO - -------------------------------------------------------------------------------- June 30, 1999 (Unaudited) VALUE SHARES (NOTE 1) - -------------------------------------------------------------------------------- COMMON STOCKS 95.8% CONSUMER DISCRETIONARY 15.7% ADVERTISING AGENCIES 1.6% Omnicom Group Inc. ............................ 52,000 $ 4,160,000 ------------ COMMERCIAL SERVICES 2.2% eBay Inc.* .................................... 13,900 2,098,900 Waste Management Inc.* ........................ 68,400 3,676,500 ------------ 5,775,400 ------------ COMMUNICATIONS, MEDIA & ENTERTAINMENT 3.7% Chancellor Media Corp.* ....................... 180,200 9,933,525 ------------ CONSUMER SERVICES 0.9% Apollo Group Inc. Cl. A* ...................... 91,500 2,430,469 ------------ HOUSEHOLD FURNISHINGS 1.8% Black & Decker Corp. .......................... 77,000 4,860,625 ------------ RESTAURANTS 1.8% McDonald's Corp. .............................. 114,000 4,709,625 ------------ RETAIL 3.7% Dayton Hudson Corp. ........................... 75,000 4,875,000 Men's Wearhouse, Inc.* ........................ 188,100 4,796,550 ------------ 9,671,550 ------------ Total Consumer Discretionary .................. 41,541,194 ------------ CONSUMER STAPLES 10.5% BEVERAGES 3.4% Anheuser-Busch Companies, Inc. ................ 50,000 3,546,875 Coca-Cola Enterprises Inc. .................... 183,300 5,453,175 ------------ 9,000,050 ------------ DRUG & GROCERY STORE CHAINS 4.2% CVS Corp. ..................................... 76,200 3,867,150 Safeway Inc.* ................................. 145,200 7,187,400 ------------ 11,054,550 ------------ HOUSEHOLD PRODUCTS 2.9% Colgate-Palmolive Co. ......................... 30,000 2,962,500 Procter & Gamble Co. .......................... 52,000 4,641,000 ------------ 7,603,500 ------------ Total Consumer Staples ........................ 27,658,100 ------------ FINANCIAL SERVICES 8.1% BANKS & SAVINGS & LOAN 2.5% Bank of America Corp. ......................... 90,174 6,610,881 ------------ INSURANCE 1.5% Ace Ltd. ...................................... 67,800 1,915,350 Unum Provident Corp. .......................... 36,700 2,009,325 ------------ 3,924,675 ------------ MISCELLANEOUS FINANCIAL 4.1% AMBAC Inc. .................................... 95,800 5,472,575 Citigroup, Inc. ............................... 114,975 5,461,313 ------------ 10,933,888 ------------ Total Financial Services ...................... 21,469,444 ------------ HEALTH CARE 17.6% DRUGS & BIOTECHNOLOGY 14.5% Amgen Inc.* ................................... 72,600 4,419,525 Baxter International Inc. ..................... 70,000 4,243,750 Bristol-Myers Squibb Co. ...................... 74,000 5,212,375 Johnson & Johnson ............................. 62,000 6,076,000 Pfizer Inc. ................................... 40,000 4,390,000 Pharmacia & Upjohn Inc. ....................... 102,100 5,800,556 Schering-Plough Corp. ......................... 151,200 8,013,600 ------------ 38,155,806 ------------ HOSPITAL SUPPLY 3.1% Guidant Corp.* ................................ 160,800 8,271,150 ------------ Total Health Care ............................. 46,426,956 ------------ OTHER 8.7% MULTI-SECTOR 8.7% AlliedSignal Inc. ............................. 85,300 5,373,900 General Electric Co. .......................... 53,000 5,989,000 Tyco International Ltd. ....................... 123,000 11,654,250 ------------ Total Other ................................... 23,017,150 ------------ OTHER ENERGY 1.9% OIL & GAS PRODUCERS 1.9% Ocean Energy Inc.* ............................ 511,600 4,924,150 ------------ Total Other Energy ............................ 4,924,150 ------------ TECHNOLOGY 28.2% COMMUNICATIONS TECHNOLOGY 2.1% Lucent Technologies Inc. ...................... 81,000 5,462,437 ------------ COMPUTER SOFTWARE 8.4% Citrix Systems Inc.* .......................... 109,700 6,198,050 i2 Technologies Inc.* ......................... 64,000 2,752,000 Microsoft Corp.* .............................. 147,400 13,293,637 ------------ 22,243,687 ------------ COMPUTER TECHNOLOGY 10.7% Cisco Systems Inc.* ........................... 202,050 13,032,225 EMC Corp.* .................................... 125,600 6,908,000 International Business Machines Corp. ......... 28,600 3,696,550 Sun Microsystems Inc.* ........................ 67,000 4,614,625 ------------ 28,251,400 ------------ ELECTRONICS 2.2% Sanmina Corp.* ................................ 78,200 5,933,425 ------------ ELECTRONICS: SEMI-CONDUCTORS/COMPONENTS 4.8% Analog Devices Inc.* .......................... 102,500 5,144,219 Intel Corp. ................................... 126,400 7,520,800 ------------ 12,665,019 ------------ Total Technology .............................. 74,555,968 ------------ UTILITIES 5.1% TELECOMMUNICATIONS 5.1% MCI WorldCom Inc.* ............................ 111,300 9,578,756 Qwest Communications International Inc.* ...... 118,200 3,907,988 ------------ 13,486,744 ------------ Total Utilities ............................... 13,486,744 ------------ Total Common Stocks (Cost $161,417,907) ....... 253,079,706 ------------ SHORT-TERM INVESTMENTS 3.8% AIM Liquid Assets Portfolio ................... 10,194,997 10,194,997 ------------ Total Short-Term Investments (Cost $10,194,997) 10,194,997 ------------
PRINCIPAL MATURITY VALUE AMOUNT DATE (NOTE 1) - ----------------------------------------------------------------------------------------------------------------- COMMERCIAL PAPER 4.3% American Express Credit Corp., 5.05% ................ $2,483,000 7/01/1999 $ 2,483,000 American Express Credit Corp., 5.25% ................ 1,173,000 7/01/1999 1,173,000 American Express Credit Corp., 5.06% ................ 1,505,000 7/07/1999 1,505,000 American Express Credit Corp., 5.28% ................ 1,371,000 7/08/1999 1,371,000 Ford Motor Credit Co., 4.94% ........................ 1,270,000 7/02/1999 1,270,000 Ford Motor Credit Co., 5.09% ........................ 3,000,000 7/09/1999 3,000,000 General Electric Capital Corp., 5.20% ............... 600,000 7/07/1999 600,000 ------------ Total Commercial Paper (Cost $11,402,000) ................................................ 11,402,000 ------------ Total Investments (Cost $183,014,904) - 103.9% ........................................... 274,676,703 Cash and Other Assets, Less Liabilities - (3.9%) ......................................... (10,436,547) ------------ Net Assets - 100.0% ...................................................................... $264,240,156 ============ Federal Income Tax Information: At June 30, 1999, the net unrealized appreciation of investments based on cost for Federal income tax purposes of $182,636,102 was as follows: Aggregate gross unrealized appreciation for all investments in which there is an excess of value over tax cost..................................................... $ 97,628,776 Aggregate gross unrealized depreciation for all investments in which there is an excess of tax cost over value ............................................................ (5,588,175) ------------ $ 92,040,601 ============ - ----------------------------------------------------------------------------------------------------------------- * Non-income-producing securities.
The accompanying notes are an integral part of the financial statements. - -------------------------------------------------------------------------------- STATEMENT OF ASSETS AND LIABILITIES - -------------------------------------------------------------------------------- June 30, 1999 (Unaudited) ASSETS Investments, at value (Cost $183,014,904) (Note 1) .... $274,676,703 Cash .................................................. 141,328 Dividends and interest receivable ..................... 81,394 Receivable for fund shares sold ....................... 77,473 Other assets .......................................... 54,785 ------------ 275,031,683 LIABILITIES Payable for collateral received on securities loaned .. 10,194,997 Accrued transfer agent and shareholder services (Note 2) ............................................ 118,113 Accrued management fee (Note 2) ....................... 105,788 Payable for fund shares redeemed ...................... 87,799 Accrued distribution and services fees (Note 4) ....... 53,065 Accrued trustees' fees (Note 2) ....................... 31,377 Other accrued expenses ................................ 200,388 ------------ 10,791,527 ------------ NET ASSETS $264,240,156 ============ Net Assets consist of: Unrealized appreciation of investments .............. $ 91,661,799 Accumulated net realized gain ....................... 18,767,109 Paid-in capital ..................................... 153,811,248 ------------ $264,240,156 ============ Net Asset Value and redemption price per share of Class A shares ($24,407,929 / 2,508,350 shares) ..... $ 9.73 ====== Maximum Offering Price per share of Class A shares ($9.73 / .9425) ..................................... $10.32 ====== Net Asset Value and offering price per share of Class B(1) shares ($4,802,277 / 519,760 shares)* .... $ 9.24 ====== Net Asset Value and offering price per share of Class B shares ($46,838,297 / 5,073,938 shares)* .... $ 9.23 ====== Net Asset Value and offering price per share of Class C shares ($5,296,410 / 573,663 shares)* ...................... $ 9.23 ====== Net Asset Value, offering price and redemption price per share of Class S shares ($182,895,243 / 18,617,895 shares) .................. $ 9.82 ====== - --------------------------------------------------------------------- *Redemption price per share for Class B(1), Class B and Class C is equal to net asset value less any applicable contingent deferred sales charge. The accompanying notes are an integral part of the financial statements. STATE STREET RESEARCH GROWTH FUND - -------------------------------------------------------------------------------- STATEMENT OF OPERATIONS - -------------------------------------------------------------------------------- For the six months ended June 30, 1999 (Unaudited) INVESTMENT INCOME Dividends ........................................................ $ 635,453 Interest (Note 1) ................................................ 157,794 ----------- 793,247 EXPENSES Management fee (Note 2) .......................................... 589,131 Transfer agent and shareholder services (Note 2) ................. 156,960 Reports to shareholders .......................................... 92,816 Custodian fee .................................................... 57,825 Registration fees ................................................ 21,732 Trustees' fees (Note 2) .......................................... 31,377 Audit fee ........................................................ 15,219 Service fee-Class A (Note 4) ..................................... 28,045 Distribution and service fees-Class B(1) (Note 4) ................ 12,102 Distribution and service fees-Class B (Note 4) ................... 221,025 Distribution and service fees-Class C (Note 4) ................... 25,261 Legal fee ........................................................ 7,052 Miscellaneous .................................................... 3,253 ----------- 1,261,798 Fees paid indirectly (Note 2) .................................... (9,113) ----------- 1,252,685 ----------- Net investment loss .............................................. (459,438) ----------- REALIZED AND UNREALIZED GAIN ON INVESTMENTS Net realized gain on investments (Notes 1 and 3) ................. 20,417,796 Net unrealized appreciation of investments ....................... 2,774,982 ----------- Net gain on investments .......................................... 23,192,778 ----------- Net increase in net assets resulting from operations ............. $22,733,340 =========== The accompanying notes are an integral part of the financial statements. STATE STREET RESEARCH GROWTH FUND - -------------------------------------------------------------------------------- STATEMENT OF CHANGES IN NET ASSETS - -------------------------------------------------------------------------------- SIX MONTHS ENDED YEAR ENDED JUNE 30, 1999 DECEMBER 31, 1998 (UNAUDITED) - ------------------------------------------------------------------------------ INCREASE (DECREASE) IN NET ASSETS Operations: Net investment loss .................. $ (741,693) $ (459,438) Net realized gain on investments...... 562,491 20,417,796 Net unrealized appreciation of investments ..................... 52,559,818 2,774,982 ------------ ------------ Net increase resulting from operations ......................... 52,380,616 22,733,340 ------------ ------------ Distribution from net realized gains: Class A ............................ (2,465) -- Class B ............................ (5,301) -- Class C ............................ (578) -- Class S ............................ (21,173) -- ------------ ------------ (29,517) -- ------------ ------------ Net decrease from fund share transactions (Note 5) .............. (27,619,723) (5,387,285) ------------ ------------ Total increase in net assets.......... 24,731,376 17,346,055 NET ASSETS Beginning of period .................. 222,162,725 246,894,101 ------------ ------------ End of period ........................ $246,894,101 $264,240,156 ============ ============ The accompanying notes are an integral part of the financial statements. STATE STREET RESEARCH GROWTH FUND - -------------------------------------------------------------------------------- NOTES TO UNAUDITED FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- June 30, 1999 NOTE 1 State Street Research Growth Fund (the "Fund"), is a series of State Street Research Growth Trust (the "Trust"), which is a Massachusetts business trust registered under the Investment Company Act of 1940, as amended, as an open-end management investment company. The Fund is presently the only series of the Trust. The investment objective of the Fund is to provide long-term growth of capital. In seeking to achieve its investment objective, the Fund invests primarily in equity securities believed by the Investment Adviser to have better than average growth potential over the years. The Fund offers five classes of shares. Class A shares are subject to an initial sales charge of up to 5.75% and an annual service fee equal to 0.25% of average daily net assets. On January 1, 1999, the Fund began offering Class B(1) shares and continued offering Class B shares but only to current shareholders through reinvestment of dividends and distributions or through exchanges from existing Class B accounts of State Street Research funds. Class B(1) and Class B pay annual distribution and service fees of 1.00% and both classes automatically convert into Class A shares (which pay lower ongoing expenses) at the end of eight years. Class B(1) shares are subject to a contingent deferred sales charge on certain redemptions made within six years of purchase. Class B shares are subject to a contingent deferred sales charge on certain redemptions made within five years of purchase. Class C shares are subject to a contingent deferred sales charge of 1.00% on any shares redeemed within one year of their purchase. Class C shares also pay annual distribution and service fees of 1.00%. Class S shares are only offered to certain retirement accounts, advisory accounts of State Street Research & Management Company (the "Adviser"), an indirect wholly owned subsidiary of Metropolitan Life Insurance Company ("Metropolitan"), and special programs. No sales charge is imposed at the time of purchase or redemption of Class S shares. Class S shares do not pay any distribution or service fees. The Fund's expenses are borne pro-rata by each class, except that each class bears expenses, and has exclusive voting rights with respect to provisions of the Plan of Distribution, related specifically to that class. The Trustees declare separate dividends on each class of shares. The following significant policies are consistently followed by the Fund in preparing its financial statements, and such policies are in conformity with generally accepted accounting principles for investment companies. A. INVESTMENTS IN SECURITIES Values for listed securities represent the last sale on national securities exchanges quoted prior to the close of the New York Stock Exchange. Over-the- counter securities quoted on the National Association of Securities Dealers Automated Quotation ("NASDAQ") system are valued at the closing price supplied through such system. In the absence of recorded sales and for those over-the-counter securities not quoted on the NASDAQ system, valuations are at the mean of the closing bid and asked quotations, except for securities that may be restricted as to public resale, which are valued in accordance with methods adopted by the Trustees. Security transactions are accounted for on the trade date (date the order to buy or sell is executed), and dividends declared but not received are accrued on the ex-dividend date. Interest income is determined on the accrual basis. Realized gains and losses from security transactions are reported on the basis of average cost of securities delivered. B. FEDERAL INCOME TAXES No provision for Federal income taxes is necessary since the Fund has elected to qualify under Subchapter M of the Internal Revenue Code and maintains a policy to distribute all of its taxable income, including net realized capital gains, within the prescribed time periods. It is also the intention of the Fund to distribute an amount sufficient to avoid imposition of any Federal Excise Tax under Section 4982 of the Internal Revenue Code. At December 31, 1998, the Fund had a capital loss carryforward of $1,495,557 available, to the extent provided in regulations, to offset future capital gains, if any, which expires on December 31, 2006. C. DIVIDENDS Dividends from net investment income, if any, are declared and paid or reinvested semiannually. Net realized capital gains are distributed annually, unless additional distributions are required for compliance with applicable tax regulations. Income dividends and capital gain distributions are determined in accordance with Federal income tax regulations which may differ from generally accepted accounting principles. The difference is primarily due to the disposition of securities that have different bases for financial reporting and tax purposes. D. ESTIMATES The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates. E. SECURITIES LENDING The Fund may seek additional income by lending portfolio securities to qualified institutions. The Fund will receive cash or securities as collateral in an amount equal to at least 100% of the current market value of any loaned securities plus accrued interest. By reinvesting any cash collateral it receives in these transactions, the Fund could realize additional gains and losses. If the borrower fails to return the securities and the value of the collateral has declined during the term of the loan, the Fund will bear the loss. At June 30, 1999, the value of the securities loaned and the value of cash collateral were $10,037,925 and $10,194,997, respectively. During the six months ended June 30, 1999, income from securities lending amounted to $30,898 and is included in interest income. NOTE 2 The Trust and the Adviser have entered into a contract that provides for an annual fee equal to 0.475% of the Fund's average daily net assets. In consideration of these fees, the Adviser furnishes the Fund with management, investment advisory, statistical and research facilities and services. The Adviser also pays all salaries, rent and certain other expenses of management. During the six months ended June 30, 1999, the fees pursuant to such agreement amounted to $589,131. State Street Research Service Center, a division of State Street Research Investment Services, Inc., the Trust's principal underwriter (the "Distributor"), an indirect wholly owned subsidiary of Metropolitan, provides certain shareholder services to the Fund such as responding to inquiries and instructions from investors with respect to the purchase and redemption of shares of the Fund. In addition, Metropolitan receives a fee for maintenance of the accounts of certain shareholders who are participants in sponsored arrangements, employee benefit plans and similar programs or plans, through or under which shares of the Fund may be purchased. During the six months ended June 30, 1999, the amount of such expenses was $36,651. The Fund has entered into an arrangement with its transfer agent whereby credits realized as a result of uninvested cash balances were used to reduce a portion of the Fund's expense. During the six months ended June 30, 1999 the Fund's transfer agent fees were reduced by $9,113 under this agreement. The fees of the Trustees not currently affiliated with the Adviser amounted to $31,377 during the six months ended June 30, 1999. NOTE 3 For the six months ended June 30, 1999, exclusive of short-term investments and U.S. Government obligations, purchases and sales of securities aggregated $65,643,530 and $80,824,209, respectively. NOTE 4 The Trust has adopted plans of distribution pursuant to Rule 12b-1 under the Investment Company Act of 1940, as amended. Under the plans, the Fund pays annual service fees to the Distributor at a rate of 0.25% of average daily net assets for Class A, Class B(1), Class B and Class C shares. In addition, the Fund pays annual distribution fees of 0.75% of average daily net assets for Class B(1), Class B and Class C shares. The Distributor uses such payments for personal services and/or the maintenance or servicing of shareholder accounts, to reimburse securities dealers for distribution and marketing services, to furnish ongoing assistance to investors and to defray a portion of its distribution and marketing expenses. For the six months ended June 30, 1999, fees pursuant to such plans amounted to $28,045, $12,102, $221,025 and $25,261 for Class A, Class B(1), Class B and Class C shares, respectively. The Fund has been informed that the Distributor and MetLife Securities, Inc., a wholly owned subsidiary of Metropolitan, earned initial sales charges aggregating $8,842 and $55,295, respectively, on sales of Class A shares of the Fund during the six months ended June 30, 1999, and that MetLife Securities, Inc. earned commissions aggregating $28,401 and $127,857 on sales of Class B(1) and Class B shares, and that the Distributor collected contingent deferred sales charges of $1,526, $48,625 and $20 on redemptions of Class B(1), Class B and Class C shares, respectively, during the same period. STATE STREET RESEARCH GROWTH FUND - -------------------------------------------------------------------------------- NOTES (cont'd) - -------------------------------------------------------------------------------- NOTE 5 The Trustees have the authority to issue an unlimited number of shares of beneficial interest, $.001 par value per share. At June 30, 1999, Metropolitan owned 59,032 Class B(1) shares of the Fund. Share transactions were as follows:
SIX MONTHS ENDED YEAR ENDED JUNE 30, 1999 DECEMBER 31, 1998 (UNAUDITED) ---------------------------- ---------------------------- CLASS A SHARES AMOUNT SHARES AMOUNT - ----------------------------------------------------------------------------------------------------------------- Shares sold ...................................... 849,883 $ 6,572,034 530,800 $ 4,896,567 Issued upon reinvestment of distribution from net realized gains ............................. 298 2,439 -- -- Shares redeemed .................................. (807,885) (6,158,180) (394,193) (3,642,613) ------------ ------------ ------------ ------------ Net increase ..................................... 42,296 $ 416,293 136,607 $ 1,253,954 ============ ============ ============ ============ CLASS B(1)* SHARES AMOUNT SHARES AMOUNT - ----------------------------------------------------------------------------------------------------------------- Shares sold ...................................... -- -- 534,867 $ 4,706,824 Shares repurchased ............................... -- -- (15,107) (145,348) ------------ ------------ ------------ ------------ Net increase ..................................... -- -- 519,760 $ 4,561,476 ============ ============ ============ ============ CLASS B SHARES AMOUNT SHARES AMOUNT - ----------------------------------------------------------------------------------------------------------------- Shares sold ...................................... 1,347,823 $ 9,980,623 757,766 $ 6,600,275 Issued upon reinvestment of distribution from net realized gains ............................. 634 4,933 -- -- Shares redeemed .................................. (1,716,822) (12,469,662) (685,257) (5,970,063) ------------ ------------ ------------ ------------ Net increase (decrease) .......................... (368,365) $ (2,484,106) 72,509 $ 630,212 ============ ============ ============ ============ CLASS C SHARES AMOUNT SHARES AMOUNT - ----------------------------------------------------------------------------------------------------------------- Shares sold ...................................... 58,325 $ 430,199 111,079 $ 975,492 Issued upon reinvestment of distribution from net realized gains ............................. 71 557 -- -- Shares redeemed .................................. (172,948) (1,252,401) (95,460) (837,682) ------------ ------------ ------------ ------------ Net increase (decrease) .......................... (114,552) $ (821,645) 15,619 $ 137,810 ============ ============ ============ ============ CLASS S SHARES AMOUNT SHARES AMOUNT - ----------------------------------------------------------------------------------------------------------------- Shares sold ...................................... 53,725 $ 407,083 71,017 $ 647,222 Issued upon reinvestment of distribution from net realized gains ............................. 985 8,127 -- -- Shares redeemed .................................. (3,290,775) (25,145,475) (1,373,186) (12,617,959) ------------ ------------ ------------ ------------ Net decrease ..................................... (3,236,065) $(24,730,265) (1,302,169) $(11,970,737) ============ ============ ============ ============ - ----------------------------------------------------------------------------------------------------------------- * January 1, 1999 (commencement of share class) to June 30, 1999.
STATE STREET RESEARCH GROWTH FUND - -------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS - -------------------------------------------------------------------------------- For a share outstanding throughout each period:
CLASS A CLASS B(1) -------------------------------------------------------------------------------------- ---------------- SIX MONTHS SIX MONTHS ENDED ENDED YEARS ENDED DECEMBER 31 JULY 31, JULY 31, ---------------------------------------------------------- 1999 1999 1994 1995(a) 1996(a) 1997(a) 1998(a) (UNAUDITED)(a) (UNAUDITED)(a)(c) - ---------------------------------------------------------------------------------------------------------- ---------------- NET ASSET VALUE, BEGINNING OF PERIOD ($) ................... 8.50 7.09 7.02 7.17 7.07 8.90 8.47 ---- ---- ---- ---- ---- ---- ---- Net investment income (loss) ($) ........ 0.05 0.01 (0.03) (0.00) (0.03) (0.02) (0.05) Net realized and unrealized gain (loss) on investments ($) ............. (0.38) 2.30 0.93 0.68 1.86 0.85 0.82 ---- ---- ---- ---- ---- ---- ---- TOTAL FROM INVESTMENT OPERATIONS ($) ...... (0.33) 2.31 0.90 0.68 1.83 0.83 0.77 ---- ---- ---- ---- ---- ---- ---- Dividends from net investment income ($) (0.05) (0.02) -- -- -- -- -- Distributions from net realized gains ($) (1.03) (2.36) (0.75) (0.78) (0.00) -- -- ---- ---- ---- ---- ---- ---- ---- TOTAL DISTRIBUTIONS ($) ................... (1.08) (2.38) (0.75) (0.78) (0.00) -- -- ---- ---- ---- ---- ---- ---- ---- NET ASSET VALUE, END OF PERIOD ($) ........ 7.09 7.02 7.17 7.07 8.90 9.73 9.24 ==== ==== ==== ==== ==== ==== ==== Total return (b) (%) ...................... (3.83) 32.57 12.65 10.14 25.90 9.33(d) 9.09(d) RATIOS/SUPPLEMENTAL DATA: Net assets at end of period ($ thousands) . 719 2,379 15,181 16,470 21,098 24,408 4,802 Ratio of operating expenses to average net assets (%) .......................... 0.90 0.89 0.90 0.93 0.97 1.04 (e) 1.79(e) Ratio of net investment income (loss) to average net assets (%) ............... 0.54 0.12 (0.34) (0.05) (0.37) (0.39)(e) (1.13)(e) Portfolio turnover rate (%) ............... 57.18 234.43 237.85 258.99 39.27 26.35 26.35 CLASS B ---------------------------------------------------------------------------- YEARS ENDED DECEMBER 31 SIX MONTHS ENDED ------------------------------------------------------------ JUNE 30, 1999 1994 1995(a) 1996(a) 1997(a) 1998(a) (UNAUDITED)(a) - ------------------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD ($) 8.46 7.02 6.89 6.96 6.79 8.47 --------- --------- --------- --------- --------- --------- Net investment loss ($) (0.00) (0.06) (0.08) (0.06) (0.08) (0.05) Net realized and unrealized gain (loss) on investments ($) (0.41) 2.29 0.90 0.67 1.76 0.81 --------- --------- --------- --------- --------- --------- TOTAL FROM INVESTMENT OPERATIONS ($) (0.41) 2.23 0.82 0.61 1.68 0.76 --------- --------- --------- --------- --------- --------- Distributions from net realized gains ($) (1.03) (2.36) (0.75) (0.78) (0.00) -- --------- --------- --------- --------- --------- --------- TOTAL DISTRIBUTIONS ($) (1.03) (2.36) (0.75) (0.78) (0.00) -- --------- --------- --------- --------- --------- --------- NET ASSET VALUE, END OF PERIOD ($) 7.02 6.89 6.96 6.79 8.47 9.23 ========= ========= ========= ========= ========= ========= Total return (b) (%) (4.80) 31.71 11.73 9.44 24.76 8.97 (d) RATIOS/SUPPLEMENTAL DATA: Net assets at end of period ($ thousands) 1,544 10,684 31,119 36,442 42,379 46,838 Ratio of operating expenses to average net assets (%) 1.63 1.63 1.65 1.68 1.72 1.79 (e) Ratio of net investment loss to average net assets (%) (0.20) (0.69) (1.07) (0.82) (1.13) (1.14)(e) Portfolio turnover rate (%) 57.18 234.43 237.85 258.99 39.27 26.35 - ------------------------------------------------------------------------------------------ (a) Per-share figures have been calculated using the average shares method. (b) Does not reflect any front-end or contingent deferred sales charges. (c) January 1, 1999 (commencement of shares class) to June 30, 1999. (d) Not annualized. (e) Annualized.
STATE STREET RESEARCH GROWTH FUND - -------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS (cont'd) - -------------------------------------------------------------------------------- For a share outstanding throughout each period:
CLASS C -------------------------------------------------------------------------------------------------------------- YEARS ENDED DECEMBER 31 SIX MONTHS ENDED --------------------------------------------------------------------------------- JUNE 30, 1999 1994 1995(a) 1996(a) 1997(a) 1998(a) (UNAUDITED)(a) - ----------------------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD ($) 8.45 7.02 6.88 6.95 6.78 8.47 ---- ---- ---- ---- ---- ---- Net investment loss ($) (0.00) (0.06) (0.08) (0.06) (0.08) (0.05) Net realized and unrealized gain (loss) on investments ($) (0.40) 2.28 0.90 0.67 1.77 0.81 ---- ---- ---- ---- ---- ---- TOTAL FROM INVESTMENT OPERATIONS ($) (0.40) 2.22 0.82 0.61 1.69 0.76 ---- ---- ---- ---- ---- ---- Distributions from net realized gains ($) (1.03) (2.36) (0.75) (0.78) (0.00) -- ---- ---- ---- ---- ---- ---- TOTAL DISTRIBUTIONS ($) (1.03) (2.36) (0.75) (0.78) (0.00) -- ---- ---- ---- ---- ---- ---- NET ASSET VALUE, END OF PERIOD ($) 7.02 6.88 6.95 6.78 8.47 9.23 ==== ==== ==== ==== ==== ==== Total return (b) (%) (4.68) 31.57 11.89 9.30 24.94 8.97 (d) RATIOS/SUPPLEMENTAL DATA: Net assets at end of period ($ thousands) 384 2,117 5,584 4,562 4,727 5,296 Ratio of operating expenses to average net assets (%) 1.63 1.63 1.65 1.68 1.72 1.79 (e) Ratio of net investment loss to average net assets (%) (0.20) (0.67) (1.07) (0.79) (1.13) (1.14)(e) Portfolio turnover rate (%) 57.18 234.43 237.85 258.99 39.27 26.35 CLASS S -------------------------------------------------------------------------------------------------------------- YEARS ENDED DECEMBER 31 SIX MONTHS ENDED --------------------------------------------------------------------------------- JUNE 30, 1999 1994 1995(a) 1996(a) 1997(a) 1998(a) (UNAUDITED)(a) - ----------------------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD ($) 8.51 7.08 7.02 7.18 7.11 8.97 ---- ---- ---- ---- ---- ---- Net investment income (loss) ($) 0.07 0.04 (0.00) 0.01 (0.01) (0.01) Net realized and unrealized gain (loss) on investments ($) (0.40) 2.29 0.92 0.70 1.87 0.86 ---- ---- ---- ---- ---- ---- TOTAL FROM INVESTMENT OPERATIONS ($) (0.33) 2.33 0.92 0.71 1.86 0.85 ---- ---- ---- ---- ---- ---- Dividends from net investment income ($) (0.07) (0.03) (0.01) -- -- -- Distributions from net realized gains ($) (1.03) (2.36) (0.75) (0.78) (0.00) -- ---- ---- ---- ---- ---- ---- TOTAL DISTRIBUTIONS ($) (1.10) (2.39) (0.76) (0.78) (0.00) -- ---- ---- ---- ---- ---- ---- NET ASSET VALUE, END OF PERIOD ($) 7.08 7.02 7.18 7.11 8.97 9.82 ==== ==== ==== ==== ==== ==== Total return (b) (%) (3.82) 33.02 12.74 10.54 26.18 9.48 (d) RATIOS/SUPPLEMENTAL DATA: Net assets at end of period ($ thousands) 186,108 186,689 177,147 164,689 178,691 182,895 Ratio of operating expenses to average net assets (%) 0.64 0.64 0.65 0.68 0.72 0.79 (e) Ratio of net investment income (loss) to average net assets (%) 0.78 0.43 (0.06) 0.19 (0.13) (0.14)(e) Portfolio turnover rate (%) 57.18 234.43 237.85 258.99 39.27 26.35 - ------------------------------------------------------------------------------------------------------------------------- (a) Per-share figures have been calculated using the average shares method. (b) Does not reflect any front-end or contingent deferred sales charges. (c) January 1, 1999 (commencement of shares class) to June 30, 1999. (d) Not annualized. (e) Annualized.
STATE STREET RESEARCH GROWTH FUND - -------------------------------------------------------------------------------- REPORT ON SPECIAL MEETING OF SHAREHOLDERS - -------------------------------------------------------------------------------- A Special Meeting of Shareholders of State Street Research Growth Fund ("Fund"), a series of State Street Research Growth Trust ("Trust"), was convened on April 6, 1999 ("Meeting"). The results of the Meeting are set forth below. VOTES (MILLIONS OF SHARES) ------------------------- ACTION ON PROPOSAL FOR WITHHELD - ------------------------------------------------------------------------------- The following persons were elected as Trustees: Bruce R. Bond ..................................... 14.3 0.2 Steve A. Garban ................................... 14.3 0.2 Malcolm T. Hopkins ................................ 14.3 0.2 Susan M. Phillips ................................. 14.3 0.2 STATE STREET RESEARCH GROWTH FUND - -------------------------------------------------------------------------------- FUND INFORMATION, OFFICERS AND TRUSTEES OF STATE STREET RESEARCH GROWTH TRUST - --------------------------------------------------------------------------------
FUND INFORMATION OFFICERS TRUSTEES STATE STREET RESEARCH RALPH F. VERNI RALPH F. VERNI GROWTH FUND Chairman of the Board, Chairman of the Board, One Financial Center President and President, Chief Executive Boston, MA 02111 Chief Executive Officer Officer and Director, State Street Research & INVESTMENT ADVISER PETER C. BENNETT Management Company State Street Research & Vice President Management Company BRUCE R. BOND One Financial Center DUDLEY F. WADE Chairman of the Board Boston, MA 02111 Vice President Chief Executive Officer and President, DISTRIBUTOR JAMES M. WEISS PictureTel Corporation State Street Research Vice President Investment Services, Inc. STEVE A. GARBAN One Financial Center KENNARD WOODWORTH, JR. Retired; formerly Senior Vice Boston, MA 02111 Vice President President for Finance and Operations and Treasurer, The SHAREHOLDER SERVICES GERARD P. MAUS Pennsylvania State University State Street Research Treasurer Service Center MALCOLM T. HOPKINS P.O. Box 8408 JOSEPH W. CANAVAN Former Vice Chairman of the Boston, MA 02266-8408 Assistant Treasurer Board and Chief Financial 1-800-562-0032 Officer, St. Regis Corp. DOUGLAS A. ROMICH CUSTODIAN Assistant Treasurer DEAN O. MORTON State Street Bank and Retired; formerly Executive Trust Company FRANCIS J. MCNAMARA, III Vice President, Chief 225 Franklin Street Secretary and General Counsel Operating Officer and Director, Boston, MA 02110 Hewlett-Packard Company DARMAN A. WING LEGAL COUNSEL Assistant Secretary and SUSAN M. PHILLIPS Goodwin, Procter & Hoar LLP Assistant General Counsel Dean, School of Business and Exchange Place Public Management, George Boston, MA 02109 AMY L. SIMMONS Washington University; former Assistant Secretary Member of the Board of Governors of the Federal Reserve System and Chairman and Commissioner of the Commodity Futures Trading Commission TOBY ROSENBLATT President, Founders Investments Ltd. President, The Glen Ellen Company MICHAEL S. SCOTT MORTON Jay W. Forrester Professor of Management, Sloan School of Management, Massachusetts Institute of Technology
STATE STREET RESEARCH GROWTH FUND ---------------- One Financial Center Bulk Rate Boston, MA 02111 U.S. Postage PAID Permit #6 Hartford, CT ---------------- STATE STREET RESEARCH [graphic omitted] LASTING VALUES -------------- LEADING IDEAS QUESTIONS? COMMENTS? CALL us at 1-800-562-0032 or [hearing-impaired 1-800-676-7876] [Chinese and Spanish-speaking 1-888-638-3193] WRITE us at: State Street Research Service Center P.O. Box 8408 Boston, MA 02266-8408 E-MAIL us at: info@ssrfunds.com INTERNET site: www.ssrfunds.com [LOGO] STATE STREET RESEARCH This report is prepared for the general information of current shareholders. When used in the general solicitation of investors, this report must be accompanied or preceded by a current State Street Research Growth Fund prospectus. When used after September 30, 1999, this report must be accompanied by a current Quarterly Performance Update. Portfolio changes should not be considered recommendations for action by individual investors. The Dalbar awards recognize quality shareholder service and should not be considered a rating of fund performance. The survey included mutual fund complexes that volunteered or were otherwise selected to participate and was not industry-wide. CONTROL NUMBER: (exp0800)SSR-LD GF-017G-0899 -----END PRIVACY-ENHANCED MESSAGE-----