-----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, EQx4fy52E1iDdDh1R0IBaHenr2gxh5YcS1mviALN/8ApIsKj8EnPDgXEDeZQhkhz bp6swCTP4EpxBtWccjeoKQ== 0001047469-05-006151.txt : 20050311 0001047469-05-006151.hdr.sgml : 20050311 20050311115338 ACCESSION NUMBER: 0001047469-05-006151 CONFORMED SUBMISSION TYPE: N-CSR PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20041231 FILED AS OF DATE: 20050311 DATE AS OF CHANGE: 20050311 EFFECTIVENESS DATE: 20050311 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MML SERIES INVESTMENT FUND CENTRAL INDEX KEY: 0000067160 IRS NUMBER: 042476032 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-CSR SEC ACT: 1940 Act SEC FILE NUMBER: 811-02224 FILM NUMBER: 05674467 BUSINESS ADDRESS: STREET 1: 1295 STATE ST CITY: SPRINGFIELD STATE: MA ZIP: 01111 BUSINESS PHONE: 4137888411 MAIL ADDRESS: STREET 1: 1295 STATE STREET CITY: SPRINGFIELD STATE: MA ZIP: 01111 FORMER COMPANY: FORMER CONFORMED NAME: MML EQUITY INVESTMENT CO INC DATE OF NAME CHANGE: 19850227 FORMER COMPANY: FORMER CONFORMED NAME: MML INVESTMENT CO INC DATE OF NAME CHANGE: 19811109 N-CSR 1 a2152351zn-csr.txt N-CSR 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 811-02224 ---------------------------------------------- MML Series Investment Fund - -------------------------------------------------------------------------------- (Exact name of registrant as specified in charter) 1295 State Street, Springfield, MA 01111 ------------------------------------------------------- (Address of principal executive offices) (Zip code) David W. O'Leary 1295 State Street, Springfield, MA 01111 ------------------------------------------------------- (Name and address of agent for service) Registrant's telephone number, including area code: 413-788-8411 --------------- Date of fiscal year end: 12/31/2004 ------------- Date of reporting period: 12/31/2004 ------------- ITEM 1 REPORTS TO STOCKHOLDERS. MML SERIES INVESTMENT FUND ANNUAL REPORT FOR THE YEAR ENDED DECEMBER 31, 2004 [GRAPHIC] MML INFLATION-PROTECTED BOND FUND MML LARGE CAP VALUE FUND MML EQUITY INDEX FUND MML ENHANCED INDEX CORE EQUITY FUND MML GROWTH EQUITY FUND MML OTC 100 FUND MML SMALL CAP EQUITY FUND MML SMALL COMPANY OPPORTUNITIES FUND MML SMALL CAP GROWTH EQUITY FUND MML EMERGING GROWTH FUND INVEST INSURE RETIRE [MASSMUTUAL FINANCIAL GROUP(SM) LOGO] YOU CAN'T PREDICT. YOU CAN PREPARE.(R) TABLE OF CONTENTS PORTFOLIO MANAGER REPORTS 1 PORTFOLIO OF INVESTMENTS 30 MML Inflation-Protected Bond Fund 30 MML Large Cap Value Fund 31 MML Equity Index Fund 33 MML Enhanced Index Core Equity Fund 39 MML Growth Equity Fund 44 MML OTC 100 Fund 47 MML Small Cap Equity Fund 49 MML Small Company Opportunities Fund 51 MML Small Cap Growth Equity Fund 53 MML Emerging Growth Fund 57 STATEMENT OF ASSETS AND LIABILITIES 60 STATEMENT OF OPERATIONS 62 STATEMENT OF CHANGES IN NET ASSETS 64 FINANCIAL HIGHLIGHTS 68 NOTES TO FINANCIAL STATEMENTS 79 INDEPENDENT AUDITORS' REPORT 91 DIRECTORS AND OFFICERS (UNAUDITED) 92 FEDERAL TAX INFORMATION (UNAUDITED) 95 FUND EXPENSES (UNAUDITED) 96
THIS MATERIAL MUST BE PRECEDED OR ACCOMPANIED BY A CURRENT PROSPECTUS FOR THE MML SERIES INVESTMENT FUND. INVESTORS SHOULD CONSIDER A FUND'S INVESTMENT OBJECTIVE, RISKS AND CHARGES AND EXPENSES CAREFULLY BEFORE INVESTING. THIS AND OTHER INFORMATION ABOUT THE INVESTMENT COMPANY IS AVAILABLE IN THE PROSPECTUS. READ IT CAREFULLY BEFORE INVESTING. MML SERIES INVESTMENT FUND - LETTER TO SHAREHOLDERS [PHOTO OF DAVID O'LEARY] DAVID O'LEARY "IN MASSMUTUAL'S VIEW, INVESTORS SHOULD FOCUS ON THE LONG TERM, WITH A PORTFOLIO THAT IS APPROPRIATELY DIVERSIFIED BASED ON THEIR FINANCIAL GOALS, TIME HORIZON AND RISK COMFORT LEVEL. STAYING THE COURSE WITH TIME-TESTED PRINCIPLES, SUCH AS DIVERSIFICATION, HAS HISTORICALLY PROVEN TO BE A SOUND STRATEGY." A LOOK BACK AT 2004 During the first half of 2004, the strong market advance of 2003 lost much of its momentum, as unsettling geopolitical developments, a nebulous market environment and the uncertainty surrounding the U.S. presidential election weighed on investors' minds. Although the larger-cap and technology-oriented market indexes lost some traction in the first quarter, the S&P 500 Index(R)* held its ground and small-cap and international stocks advanced. The bond market also benefited from slightly lower interest rates. A seesaw of positives and negatives kept many investors from making definitive moves in the second quarter. Despite stronger economic growth and corporate profits, greater consumer confidence and improving employment statistics, higher oil prices, renewed inflation concerns and continued terrorist threats unnerved investors. As a result, many market indexes turned in nearly flat returns. In the third quarter, stocks lost ground as high energy prices, rising interest rates, presidential election jitters and the worst hurricane season in 40 years kept investors on the defensive. Bonds outperformed stocks, despite two increases in short-term interest rates by the Federal Reserve (Fed). As 2004 drew to a close, many investors saw gains in the major stock indexes for both the fourth quarter and the year itself. The fixed income rally that had buoyed bond prices for a good portion of the year slowed considerably in the middle of the fourth quarter. Underscoring investor preference for technology stocks over blue chips as 2004 wound down, the Nasdaq Composite Index and Dow Jones Industrial Average returned 14.69% and 7.48% for the quarter and 8.59% and 5.29% for the year, respectively. Small-cap stocks easily outdistanced large caps on both a quarterly basis and for the year. International stocks benefited from the continued weakening of the dollar relative to other currencies, as the MSCI EAFE Index outperformed nearly every other major equity index. Despite an investment trend away from fixed income and toward equities, many bond investors still notched positive returns for the year. As with much of the year, economic news in the fourth quarter was generally mixed. Many investors were encouraged by a swift resolution to the presidential election and reports of an overall improvement in economic fundamentals. However, gyrating oil prices, predictions about a weak holiday retailing season, weak statistics for new home sales and mortgage applications and concerns about corporate earnings kept an equity rally from sustaining momentum until the second half of the fourth quarter, when a series of economic reports pointed to solid expansion and an improved outlook. THE ROLE OF THE WEAKENING DOLLAR In the fourth quarter of 2004, the U.S. dollar declined dramatically relative to its key benchmark currencies, including the euro, the Japanese yen and the British pound. The strong performance of international markets in 2004 directly correlates to the dollar's weakness. Currency rates suddenly became a focus for investors, who wondered about the impact to their portfolios and whether a falling dollar could be both negative and positive. The answer seems to be yes - depending on your perspective. - ---------- * Indexes are unmanaged, do not incur fees or expenses and cannot be purchased directly for investment. i Put simply, a dollar that is strengthening can buy more units of a foreign currency; a weakening dollar will buy fewer. When the dollar strengthens, the prices of goods and services produced abroad go down for American consumers, who have more purchasing power to buy foreign securities, and a better rate of exchange when traveling abroad. Viewed differently, a strong dollar means that U.S. companies have greater difficulty doing business internationally, as they must compete with the lower prices of foreign products. Conversely, when the value of the dollar declines, foreign products become more expensive for U.S. buyers, U.S. companies can offer more competitive pricing on products overseas, foreign travelers find the U.S. to be more affordable, and securities denominated in dollars become more attractive. On the other hand, the prices of foreign-produced goods become higher for U.S. buyers - whose travel to other countries may become cost-prohibitive and whose foreign securities purchasing power diminishes. OUTLOOK The weakening dollar notwithstanding, as we look toward 2005, there are various encouraging economic signs on the horizon. Inflation and interest rates are still low and economic expansion has been widely substantiated. Reports on personal income, consumer confidence and durable goods have suggested the economy may sustain above-average growth in the near term, all of which could translate into stronger corporate earnings figures and higher stock prices. The Fed will likely continue to raise interest rates at a measured pace - in tandem with a potentially stronger equity environment, this may present a challenge to bond investors. In summary, MassMutual continues to believe that investors should focus on the long term, with a portfolio that is appropriately diversified based on their financial goals, time horizon and risk comfort level. Staying the course with time-tested principles, such as diversification, has historically helped investors reach their goals, although past performance is no guarantee of future results. /s/ David W. O'Leary David W. O'Leary PRESIDENT THE OPINIONS EXPRESSED HEREIN ARE THOSE OF MASSMUTUAL AS OF JANUARY 1, 2005 AND ARE SUBJECT TO CHANGE WITHOUT NOTICE. THIS INFORMATION IS NOT TO BE CONSTRUED AS TAX, LEGAL OR INVESTMENT ADVICE. ii MML INFLATION-PROTECTED BOND FUND - PORTFOLIO MANAGER REPORT WHAT IS THE INVESTMENT OBJECTIVE OF THE MML INFLATION-PROTECTED BOND FUND? This Fund seeks to achieve as high a total rate of real return on an annual basis as is considered consistent with prudent investment risk and the preservation of capital. The Fund normally invests: - - at least 80% of its assets in inflation-indexed bonds of varying maturities issued by the U.S. and non-U.S. governments, their agencies or government-sponsored enterprises and corporations; and - - up to 20% of its assets in non-inflation-indexed U.S. securities or non-U.S. securities. HOW DID THE FUND PERFORM DURING 2004? For the 12 months ended December 31, 2004, the Fund's shares returned 6.25%, underperforming the 8.46% return for the Lehman U.S. Treasury Inflation Note Index. HOW DO INFLATION-INDEXED BONDS PROTECT AGAINST INFLATION? Like many other fixed-income securities, inflation-indexed bonds pay income twice a year, based on a fixed coupon rate. However, both the principal and the interest payment are adjusted for the level of inflation. The inflation rate - as measured by the Consumer Price Index - results in an adjustment to the principal amount of an inflation-protected security. The coupon rate is then applied to the adjusted principal amount to determine the interest payment. For example, assuming an inflation rate of 3% and a security with a par value of $1,000 and a coupon rate of 1.75%, the adjusted principal amount after one year would be $1,030 ($1,000 increased by 3%). The interest payment would be calculated by multiplying $1,030 by 1.75% instead of using the original $1,000 par value to calculate the amount of interest. WHAT WAS THE INVESTMENT BACKGROUND DURING THE PERIOD? The first quarter of 2004 was characterized by a lackluster stock market, positive total returns for bonds, and a Federal Reserve (Fed) that remained on hold. Yields on three- and six-month Treasury bills were little changed. However, yields on two-year notes declined by 0.25% and three-year notes fared even better, dropping 0.36%. Bond prices move in the opposite direction to interest rates (or yields); when yields fall, the prices of existing bonds rise. The biggest factor behind the strong bond performance was anemic job growth, which signaled an uneven economic expansion and led investors to prefer the relative safety of bonds compared to stocks. Stock and bond returns continued to be subdued in the second quarter. Stocks outperformed bonds, whose prices were negatively impacted by higher interest rates. On June 30, the Federal Reserve Open Market Committee (FOMC) raised its target for the federal funds level 0.25% to 1.25%. Bonds performed well during the third quarter of 2004, despite rising oil prices and two interest rate increases by the FOMC. The total return for the Lehman Brothers Aggregate Bond Index was 3.20% for the period. In contrast, both the S&P 500 and the Dow Industrials were in negative territory. The final release of second quarter GDP was 3.3%, a substantial revision from the earlier estimate of 2.7%. Longer-maturity Treasuries outperformed, resulting in a flattening of the yield curve. The 30-year bond declined by approximately 0.40% to end September yielding 4.89% and the 10-year note closed the quarter with a yield of 4.12%, a decline of 0.46%. The two-year note fell by only 0.07% to yield 2.61%. Bond market returns were muted and unexciting during the fourth quarter. The excitement was elsewhere - an active Fed, the U.S. presidential election, a dramatic weakening of the U.S. dollar and a strong rally in the equity markets. Corporate bonds, agencies, mortgages and other securitized assets all performed well during the quarter, beating the total return on Treasuries. Lower-credit quality outperformed versus higher-quality bonds. In a period of strong equity market performance, low levels of corporate defaults and investors' need to reach for yield, risk premiums - the difference in yield attributable to higher-risk investments - continued to decline. WHAT IS YOUR OUTLOOK? We remain guardedly optimistic that the economy will continue to grow in the 3+% range for the foreseeable future. It is unlikely that the extraordinary performance of bonds over the last two years will be repeated; however, we will continue to upgrade the portfolio where opportunities present themselves. 1 MML TREASURY-INFLATION PROTECTED BOND FUND QUALITY STRUCTURE (% OF NET ASSETS) ON 12/31/04 U.S. Governments, Aaa/AAA 79.3% Aa/AA 10.1% A 8.5% Short-Term Investments and Other Assets and Liabilities 2.1% ----- 100.0% =====
GROWTH OF A $10,000 INVESTMENT Hypothetical Investments in MML Inflation-Protected Bond Fund and the U.S. Treasury Inflation Note Index MML SERIES INVESTMENT FUND TOTAL RETURN
SINCE INCEPTION ONE YEAR AVERAGE ANNUAL 1/1/04 - 12/31/04 8/30/02 - 12/31/04 MML Inflation-Protected Bond Fund 6.25% 7.06% Lehman U.S. Treasury Inflation Note Index 8.46% 8.64%
[CHART] GROWTH OF A $10,000 INVESTMENT SINCE INCEPTION
MML INFLATION-PROTECTED BOND FUND LEHMAN U.S. TREASURY INFLATION NOTE INDEX 8/30/02 $ 10,000 $ 10,000 12/02 $ 10,317 $ 10,306 12/03 $ 11,040 $ 11,176 12/04 $ 11,730 $ 12,140
PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE; PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS. THE INVESTMENT RETURN AND PRINCIPAL VALUE OF SHARES OF THE FUND WILL FLUCTUATE WITH MARKET CONDITIONS SO THAT SHARES OF THE FUND, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT PERFORMANCE OF THE FUND MAY BE LOWER OR HIGHER THAN THE PERFORMANCE QUOTED. PERFORMANCE DATA CURRENT TO THE MOST RECENT MONTH END MAY BE OBTAINED BY ACCESSING THE WEBSITE AT www.massmutual.com. INVESTORS SHOULD NOTE THAT THE FUND IS A PROFESSIONALLY MANAGED MUTUAL FUND, WHILE THE LEHMAN U.S. TREASURY INFLATION NOTE INDEX IS UNMANAGED AND DOES NOT INCUR EXPENSES, AND CANNOT BE PURCHASED DIRECTLY BY INVESTORS. INVESTORS SHOULD READ THE FUND'S PROSPECTUS WITH REGARD TO THE FUND'S INVESTMENT OBJECTIVE, RISKS AND CHARGES AND EXPENSES IN CONJUNCTION WITH THESE FINANCIAL STATEMENTS. THE FUND'S RETURN REFLECTS CHANGES IN THE NET ASSET VALUE PER SHARE WITHOUT THE DEDUCTION OF ANY PRODUCT CHARGES. THE INCLUSION OF THESE CHARGES WOULD HAVE REDUCED THE PERFORMANCE SHOWN HERE. 2 MML LARGE CAP VALUE FUND - PORTFOLIO MANAGER REPORT WHAT IS THE INVESTMENT OBJECTIVE OF THE MML LARGE CAP VALUE FUND? This Fund seeks both capital growth and income by selecting high-quality, large-capitalization companies primarily in the S&P 500 Index(R). HOW DID THE FUND PERFORM DURING 2004? For the 12 months ended December 31, 2004, the Fund's shares returned 11.79%, outpacing the 10.88% return of the S&P 500 Index(R), a market-capitalization-weighted, unmanaged index of 500 common stocks. WHAT WAS THE INVESTMENT BACKGROUND DURING THE PERIOD? The U.S. stock market moved sideways in the first quarter of 2004, against a backdrop of unsettling geopolitical events and mixed economic data. Continuing that trend in both the second and third quarters of the year, geopolitical concerns, high energy prices and expectations of rising interest rates kept the equity markets in a narrow trading range. Finally, in the fourth quarter, the U.S. stock market, as represented by the S&P 500 Index(R), made some progress, advancing 9.23%. WHAT FACTORS CONTRIBUTED TO THE FUND'S PERFORMANCE - AND HOW DID YOU RESPOND? During the first quarter, the Fund's top-performing positions included Bank One, American Express, Berkshire Hathaway, American International Group, Loews and Tyco. Microsoft, Sealed Air, Comcast, HSBC Holdings and Wells Fargo were among the holdings that detracted from returns. During the period, we made notable changes to the portfolio, including the purchase of Comcast, the largest cable provider in the U.S. We added this holding at what we believe represents a reasonable valuation based on our analysis of its management quality, business fundamentals and competitive advantages. During the second quarter, top contributors to the Fund's results included Tyco International, EOG Resources, Costco Wholesale, Devon Energy and ConocoPhillips. Detractors included Altria Group, Citigroup, Bank One, Berkshire Hathaway and Golden West Financial. We made no significant changes to the portfolio during the second quarter. Our energy positions were among the top performers in the third quarter, while detractors were largely stock-specific. Top-performing holdings included Occidental Petroleum, JPMorgan Chase, ConocoPhillips, CenterPoint Properties and HSBC Holdings. Detractors included Sealed Air, Tyco, Transatlantic Holdings, American International Group and Lexmark International. Significant changes to the portfolio included the addition of Marsh & McLennan Companies and Cardinal Health, Inc. and the sale of Marriott and Kraft Foods. Turning to the fourth quarter, performance was driven by individual holdings, including Altria Group, Tyco, American Express and Comcast, Costco Wholesale. Detracting from performance were Eli Lilly, Pfizer, Aon, American International Group and Marsh & McLennan. During this timeframe, we purchased Iron Mountain and sold Pfizer. WHAT IS YOUR OUTLOOK? We believe that a competing set of headwinds and tailwinds could result in a range-bound market for some time and that stock selection will be the key to generating above-average results. 3 MML LARGE CAP VALUE FUND INDUSTRY TABLE (% OF NET ASSETS) ON 12/31/04 Banking, Savings & Loans 17.7% Financial Services 13.8% Insurance 13.1% Energy 8.3% Broadcasting, Publishing & Printing 5.8% Tobacco 4.9% Commercial Services 4.5% Industrial - Diversified 4.2% Retail 4.0% Containers 2.8% Pharmaceuticals 2.5% Beverages 2.0% Computers & Information 1.6% Building Materials & Construction 1.4% Healthcare 1.3% Prepackaged Software 1.0% Foods 1.0% Transportation 0.8% Diversified Financial 0.7% Communications 0.7% Advertising 0.3% Household Products 0.0% Short-Term Investments and Other Assets and Liabilities 7.6% ----- 100.0% =====
MML LARGE CAP VALUE FUND LARGEST STOCK HOLDINGS (12/31/04) American Express Co. Altria Group, Inc. Berkshire Hathaway, Inc. Cl. A American International Group, Inc. Tyco International Limited Comcast Corp. Special Cl. A Wells Fargo & Co. Costco Wholesale Corp. JP Morgan Chase & Co. Citigroup, Inc. 4 GROWTH OF A $10,000 INVESTMENT Hypothetical Investments in MML Large Cap Value Fund and the S&P 500 Index MML SERIES INVESTMENT FUND TOTAL RETURN
SINCE INCEPTION ONE YEAR AVERAGE ANNUAL 1/1/04 - 12/31/04 5/1/00 - 12/31/04 MML Large Cap Value Fund 11.79% 1.40% S&P 500 Index 10.88% -2.29%
[CHART] GROWTH OF A $10,000 INVESTMENT SINCE INCEPTION
MML LARGE CAP VALUE FUND S&P 500 INDEX 5/1/2000 $ 10,000 $ 10,000 12/00 $ 9,895 $ 9,162 12/01 $ 8,791 $ 8,074 12/02 $ 7,364 $ 6,290 12/03 $ 9,544 $ 8,094 12/04 $ 10,670 $ 8,974
PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE; PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS. THE INVESTMENT RETURN AND PRINCIPAL VALUE OF SHARES OF THE FUND WILL FLUCTUATE WITH MARKET CONDITIONS SO THAT SHARES OF THE FUND, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT PERFORMANCE OF THE FUND MAY BE LOWER OR HIGHER THAN THE PERFORMANCE QUOTED. PERFORMANCE DATA CURRENT TO THE MOST RECENT MONTH END MAY BE OBTAINED BY ACCESSING THE WEBSITE AT www.massmutual.com. INVESTORS SHOULD NOTE THAT THE FUND IS A PROFESSIONALLY MANAGED MUTUAL FUND, WHILE THE S&P 500 INDEX IS UNMANAGED AND DOES NOT INCUR EXPENSES, AND CANNOT BE PURCHASED DIRECTLY BY INVESTORS. INVESTORS SHOULD READ THE FUND'S PROSPECTUS WITH REGARD TO THE FUND'S INVESTMENT OBJECTIVE, RISKS AND CHARGES AND EXPENSES IN CONJUNCTION WITH THESE FINANCIAL STATEMENTS. THE FUND'S RETURN REFLECTS CHANGES IN THE NET ASSET VALUE PER SHARE WITHOUT THE DEDUCTION OF ANY PRODUCT CHARGES. TOTAL RETURN FIGURES WOULD BE LOWER FOR THE PERIODS PRESENTED IF THEY REFLECTED THESE CHARGES. 5 MML EQUITY INDEX FUND - PORTFOLIO MANAGER REPORT WHAT IS THE INVESTMENT OBJECTIVE OF THE MML EQUITY INDEX FUND? The Fund seeks to approximate as closely as practicable (before fees and expenses) the capitalization-weighted total rate of return of that portion of the U.S. market for publicly traded common stocks composed of larger-capitalized companies. The Fund pursues this objective by investing at least 80% of its assets in the equity securities of companies that make up the S&P 500 Index(R). HOW DID THE FUND PERFORM DURING 2004? For the 12 months ended December 31, 2004, the Fund's Class I shares returned 10.42%, nearly in line with the 10.88% return of the S&P 500 Index(R), a market-capitalization-weighted, unmanaged index of 500 common stocks. WHAT WAS THE INVESTMENT BACKDROP DURING THE PERIOD? While the U.S. economy continued to demonstrate signs of improvement during the first few months of 2004, a muted improvement in job growth dampened enthusiasm. Given the pace of economic growth, the sluggish job market implied a significant increase in corporate productivity, expected to translate into continued strong corporate profits. In this environment, value stocks continued to outpace growth stocks as they did in 2003. During the second quarter, the U.S. economy was positively impacted by a number of factors, including a rise in consumer confidence, rising corporate profits and improvements in the labor market, although the market was held back by a number of factors, including concerns of a Federal Reserve (Fed) interest rate hike and the handover of power in Iraq. The market gained some stability with both events taking place uneventfully at the end of June; however, investors remained cautious. Fixed-income markets struggled during the period, sparked by the rate increase and anticipation of further increases. In the third quarter, rapidly increasing oil prices, continued global instability and concerns over the lack of job growth tempered the performance of U.S. equity markets. The Fed raised the federal funds rate by 0.25% and affirmed its expectations that the flow of future economic data would support continued tightening at a measured pace. Bonds outperformed stocks for the quarter by approximately five percentage points. Global equity markets generally fared better than the U.S. equity markets, led by favorable performance across Europe. The U.S. economy rallied again in the fourth quarter. Economic growth, changing from a consumption-driven trend to one fueled by business and business investment, advanced slightly, although corporate executives were cautiously optimistic. Inflation remained relatively under control, and expectations continued that the Fed would maintain a measured pace of interest rate increases. Although the dollar, on a trade-weighted basis, continued to decline, the desirability of U.S. assets remained quite high. WHAT FACTORS CONTRIBUTED TO THE FUND'S PERFORMANCE? In the first quarter, sector performance was mixed. The financials sector provided the greatest contribution to the market's return; consumer staples and energy also helped boost Index performance. Conversely, the information technology sector, which drove the performance of the Index in 2003, lagged in the first quarter. Sector results were also mixed in the second quarter, as the financial services sector, which has the largest weight in the S&P 500, underperformed all other groups. On the other hand, the S&P's second-largest sector, information technology, advanced for the period. Energy was the best-performing sector. Continuing the trend of the prior two quarters, sector performance throughout the third quarter was mixed. The energy sector, driven by the rise in oil prices, advanced the most, while information technology turned in the worst performance, losing ground during the period. During the final quarter of 2004, all sectors generated results of 4.7% or better, with the information technology sector's double-digit advance leading the way. The financials sector also drove performance for the period. 6 MML EQUITY INDEX FUND INDUSTRY TABLE (% OF NET ASSETS) ON 12/31/04 Banking, Savings & Loans 11.8% Pharmaceuticals 8.5% Energy 7.2% Electrical Equipment & Electronics 6.8% Retail 5.7% Insurance 5.0% Computers & Information 4.4% Prepackaged Software 4.2% Financial Services 3.9% Broadcasting, Publishing & Printing 2.8% Electric Utilities 2.7% Medical Supplies 2.4% Cosmetics & Personal Care 2.3% Beverages 2.2% Communications 2.2% Telephone Utilities 2.2% Commercial Services 2.0% Foods 1.9% Aerospace & Defense 1.9% Transportation 1.9% Industrial - Diversified 1.9% Chemicals 1.6% Tobacco 1.3% Healthcare 1.1% Entertainment & Leisure 1.0% Automotive & Parts 1.0% Machinery & Components 0.9% Computers & Office Equipment 0.9% Data Processing & Preparation 0.8% Apparel, Textiles & Shoes 0.8% Metals & Mining 0.7% Household Products 0.6% Restaurants 0.6% Forest Products & Paper 0.5% Information Retrieval Services 0.4% Manufacturing 0.4% Computer Integrated Systems Design 0.4% Communications Equipment 0.4% Lodging 0.3% Home Construction, Furnishings & Appliances 0.3% Advertising 0.2% Building Materials & Construction 0.2% Real Estate 0.2% Containers 0.2% Air Transportation 0.1% Toys, Games 0.1% Photography Equipment/ Supplies 0.1% Retail - Grocery 0.1% Industrial - Distribution 0.1% Computer Programming Services 0.0% Travel 0.0% Futures 0.0% Short-Term Investments and Other Assets and Liabilities 0.8% ----- 100.0% =====
MML EQUITY INDEX FUND LARGEST STOCK HOLDINGS (12/31/04) General Electric Co. Exxon Mobil Corp. Microsoft Corp. Citigroup, Inc. Wal-Mart Stores, Inc. Pfizer, Inc. Bank of America Corp. Johnson & Johnson American International Group, Inc. International Business Machines Corp. 7 GROWTH OF A $10,000 INVESTMENT Hypothetical Investments in MML Equity Index Fund Class I and the S&P 500 Index. MML SERIES INVESTMENT FUND TOTAL RETURN
FIVE YEAR SINCE INCEPTION ONE YEAR AVERAGE ANNUAL AVERAGE ANNUAL 1/1/04 - 12/31/04 1/1/00 - 12/31/04 5/1/97 - 12/31/04 MML Equity Index Fund Class I 10.42% -2.75% 6.63% S&P 500 Index 10.88% -2.30% 7.15%
[CHART] GROWTH OF A $10,000 INVESTMENT SINCE INCEPTION
CLASS I S&P 500 INDEX 5/1/97 $ 10,000 $ 10,000 12/97 $ 12,193 $ 12,255 12/98 $ 15,634 $ 15,757 12/99 $ 18,811 $ 19,073 12/00 $ 17,018 $ 17,338 12/01 $ 14,921 $ 15,279 12/02 $ 11,569 $ 11,903 12/03 $ 14,818 $ 15,316 12/04 $ 16,362 $ 16,981
Hypothetical Investments in MML Equity Index Fund Class II, Class III and the S&P 500 Index MML SERIES INVESTMENT FUND TOTAL RETURN
SINCE INCEPTION ONE YEAR AVERAGE ANNUAL 1/1/04 - 12/31/04 5/1/00 - 12/31/04 MML Equity Index Fund Class II 10.60% -2.58% MML Equity Index Fund Class III 10.77% -2.51% S&P 500 Index 10.88% -2.29%
[CHART]
CLASS II CLASS III S&P 500 INDEX 5/1/2000 $ 10,000 $ 10,000 $ 10,000 12/00 $ 9,137 $ 9,150 $ 9,162 12/01 $ 8,024 $ 8,024 $ 8,074 12/02 $ 6,236 $ 6,244 $ 6,290 12/03 $ 8,001 $ 8,016 $ 8,094 12/04 $ 8,849 $ 8,879 $ 8,974
PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE; PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS. THE INVESTMENT RETURN AND PRINCIPAL VALUE OF SHARES OF THE FUND WILL FLUCTUATE WITH MARKET CONDITIONS SO THAT SHARES OF THE FUND, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT PERFORMANCE OF THE FUND MAY BE LOWER OR HIGHER THAN THE PERFORMANCE QUOTED. PERFORMANCE DATA CURRENT TO THE MOST RECENT MONTH END MAY BE OBTAINED BY ACCESSING THE WEBSITE AT www.massmutual.com. INVESTORS SHOULD NOTE THAT THE FUND IS A PROFESSIONALLY MANAGED MUTUAL FUND, WHILE THE S&P 500 INDEX IS UNMANAGED AND DOES NOT INCUR EXPENSES, AND CANNOT BE PURCHASED DIRECTLY BY INVESTORS. INVESTORS SHOULD READ THE FUND'S PROSPECTUS WITH REGARD TO THE FUND'S INVESTMENT OBJECTIVE, RISKS AND CHARGES AND EXPENSES IN CONJUNCTION WITH THESE FINANCIAL STATEMENTS. THE FUND'S RETURN REFLECTS CHANGES IN THE NET ASSET VALUE PER SHARE WITHOUT THE DEDUCTION OF ANY PRODUCT CHARGES. TOTAL RETURN FIGURES WOULD BE LOWER FOR THE PERIODS PRESENTED IF THEY REFLECTED THESE CHARGES. 8 MML ENHANCED INDEX CORE EQUITY FUND - PORTFOLIO MANAGER REPORT WHAT IS THE INVESTMENT OBJECTIVE OF THE MML ENHANCED INDEX CORE EQUITY FUND? The objective of the Fund is to achieve total returns that slightly exceed those of the S&P 500 Index over the long term, while maintaining a risk profile similar to that of the Index. The Fund invests primarily in a diversified portfolio consisting of approximately 90% of the securities in the S&P 500 Index(R). HOW DID THE FUND PERFORM DURING 2004? For the 12 months ended December 31, 2004, the Fund's shares returned 10.81%, nearly in line with the 10.88% return for the S&P 500 Index(R), a market-capitalization-weighted, unmanaged index of 500 common stocks. WHAT WAS THE INVESTMENT BACKGROUND DURING THE PERIOD? Equity markets recorded modest gains in the first quarter of 2004, as renewed concerns over terrorism and rising oil prices dampened investor psychology. Job growth improved during the period, with an increase in temporary employment across most industries; other positive indicators included favorable corporate earnings, declining interest rates and healthy consumer spending. In the second quarter, the pace of the economic recovery quickened with employment gains, higher commodity prices and increased capital spending. In response, interest rates rose by more than 1.00% on two- and three-year Treasuries. The Federal Reserve increased the federal funds and discount rates by 0.25% at the very end of the quarter, a move the bond market had been anticipating for months. Throughout the period, investors became increasingly concerned over higher energy prices. Third quarter equity market performance resembled a roller-coaster ride. Early in the quarter, factors such as higher interest rates, rising oil prices and weak economic data drove markets lower. Things turned around in the middle of August, when longer-term interest rates trended lower and bargain hunters feasted on attractive equity valuations. In September, however, headwinds - including record oil prices and presidential election uncertainty - cast a chill on the markets. Equity markets closed 2004 on a strong note, finishing a second straight year in positive territory. With a major element of uncertainty - political leadership - eliminated, investors refocused on major economic indicators, such as strengthening job creation and improved consumer confidence. WHAT FACTORS CONTRIBUTED TO THE FUND'S PERFORMANCE? Performance for the more economically sensitive industrial sectors, including technology, producer durables and autos/transportation generally pulled back in the first quarter. On the upside, robust consumer spending drove favorable results in some consumer sectors. Strength was also evident in the energy and financial services sectors. Looking to the Fund's results, the most favorable contributions came from the financial services, materials/processing, and producer durables sectors. Detractors came from the consumer discretionary and utilities sectors. Turning to the second quarter, the market rewarded companies with accelerating sales, increasing margins and earnings momentum. Fund performance was negatively impacted by the consumer discretionary sector, which experienced a general pullback driven by rising interest rate fears and slumping retail sales. Our holdings in the health care sector struggled relative to benchmark sector performance. Conversely, areas that contributed positively included the technology, utilities and financial services sectors. In the third quarter, the Fund showed strength relative to the benchmark on a broad portfolio basis. In fact, the only economic sectors showing weakness relative to the S&P 500 Index(R) were consumer staples and financial services. The Fund's best absolute results were realized in the integrated oils, utilities and other energy sectors. As 2004 came to a close, fourth quarter Fund results were highly favorable in consumer sectors, materials and processing, technology, and autos/transportation - - while performance trailed the benchmark in financial services, integrated oils and producer durables. 9 WHAT IS YOUR OUTLOOK? Our 2005 outlook for the U.S. stock market assumes that profit growth will decelerate from 2004 levels and settle in the 8% to 10% range. It's likely the market could face downward pressure on valuations as interest rates rise. If these two trends come to fruition, it may be a lackluster year for equities. Conversely, the stock market should be able to absorb rising interest rates, as long as the increases are gradual and inflation does not become troublesome. MML ENHANCED INDEX CORE EQUITY FUND INDUSTRY TABLE (% OF NET ASSETS) ON 12/31/04 Banking, Savings & Loans 12.0% Pharmaceuticals 8.5% Energy 7.6% Electrical Equipment & Electronics 5.9% Insurance 5.4% Financial Services 5.4% Retail 4.8% Prepackaged Software 4.6% Computers & Information 4.6% Electric Utilities 2.8% Broadcasting, Publishing & Printing 2.6% Aerospace & Defense 2.6% Telephone Utilities 2.5% Industrial - Diversified 2.4% Cosmetics & Personal Care 2.3% Commercial Services 2.1% Communications 2.0% Chemicals 1.6% Beverages 1.6% Foods 1.6% Transportation 1.6% Apparel, Textiles & Shoes 1.1% Medical Supplies 1.1% Healthcare 1.1% Computers & Office Equipment 1.0% Tobacco 1.0% Data Processing & Preparation 0.9% Automotive & Parts 0.9% Computer Integrated Systems Design 0.9% Household Products 0.8% Entertainment & Leisure 0.8% Restaurants 0.8% Forest Products & Paper 0.7% Communications Equipment 0.7% Machinery & Components 0.6% Metals & Mining 0.6% Lodging 0.4% Information Retrieval Services 0.4% Building Materials & Construction 0.3% Manufacturing 0.2% Containers 0.2% Home Construction, Furnishings & Appliances 0.2% Real Estate 0.2% Photography Equipment/ Supplies 0.1% Advertising 0.1% Retail - Grocery 0.1% Toys, Games 0.1% Industrial - Distribution 0.1% Travel 0.1% Short-Term Investments and Other Assets and Liabilities (0.0)% ----- 100.0% =====
MML ENHANCED INDEX CORE EQUITY FUND LARGEST STOCK HOLDINGS (12/31/04) General Electric Co. Exxon Mobil Corp. Citigroup, Inc. Microsoft Corp. Pfizer, Inc. Johnson & Johnson Bank of America Corp. Wal-Mart Stores, Inc. International Business Machines Corp. Standard and Poor's Depository Receipts Trust Series 1 10 GROWTH OF A $10,000 INVESTMENT Hypothetical Investments in MML Enhanced Index Core Equity Fund and the S&P 500 Index MML SERIES INVESTMENT FUND TOTAL RETURN
SINCE INCEPTION ONE YEAR AVERAGE ANNUAL 1/1/04 - 12/31/04 5/2/01 - 12/31/04 MML Enhanced Index Core Equity Fund 10.81% 0.65% S&P 500 Index 10.88% 0.84%
[CHART] GROWTH OF A $10,000 INVESTMENT SINCE INCEPTION*
MML ENHANCED INDEX CORE EQUITY FUND S&P 500 INDEX 5/2/01 $ 10,000 $ 10,000 12/01 $ 9,292 $ 9,277 12/02 $ 7,267 $ 7,227 12/03 $ 9,242 $ 9,166 12/04 $ 10,241 $ 10,310
* PLEASE NOTE, WHILE THE FUND COMMENCED OPERATIONS ON MAY 1, 2001, IT DID NOT COMMENCE INVESTMENT OPERATIONS UNTIL MAY 2, 2001. PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE; PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS. THE INVESTMENT RETURN AND PRINCIPAL VALUE OF SHARES OF THE FUND WILL FLUCTUATE WITH MARKET CONDITIONS SO THAT SHARES OF THE FUND, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT PERFORMANCE OF THE FUND MAY BE LOWER OR HIGHER THAN THE PERFORMANCE QUOTED. PERFORMANCE DATA CURRENT TO THE MOST RECENT MONTH END MAY BE OBTAINED BY ACCESSING THE WEBSITE AT www.massmutual.com. INVESTORS SHOULD NOTE THAT THE FUND IS A PROFESSIONALLY MANAGED MUTUAL FUND, WHILE THE S&P 500 INDEX IS UNMANAGED AND DOES NOT INCUR EXPENSES, AND CANNOT BE PURCHASED DIRECTLY BY INVESTORS. INVESTORS SHOULD READ THE FUND'S PROSPECTUS WITH REGARD TO THE FUND'S INVESTMENT OBJECTIVE, RISKS AND CHARGES AND EXPENSES IN CONJUNCTION WITH THESE FINANCIAL STATEMENTS. THE FUND'S RETURN REFLECTS CHANGES IN THE NET ASSET VALUE PER SHARE WITHOUT THE DEDUCTION OF ANY PRODUCT CHARGES. TOTAL RETURN FIGURES WOULD BE LOWER FOR THE PERIODS PRESENTED IF THEY REFLECTED THESE CHARGES. 11 MML GROWTH EQUITY FUND - PORTFOLIO MANAGER REPORT WHAT IS THE INVESTMENT OBJECTIVE OF THE MML GROWTH EQUITY FUND? This Fund seeks long-term growth of capital and future income by normally investing at least 80% of its assets in the common stocks and securities convertible into common stocks of companies the Fund's sub-adviser believes offer prospects for long-term growth. HOW DID THE FUND PERFORM DURING 2004? For the 12 months ended December 31, 2004, the Fund's shares returned 4.78%, trailing the 10.88% return of the S&P 500 Index(R), a market-capitalization-weighted, unmanaged index of 500 common stocks. WHAT WAS THE INVESTMENT BACKGROUND DURING THE PERIOD? The close of the first six months of 2004 saw U.S. equity markets in the black, putting a more positive spin on the overall state of affairs for the economy. The NASDAQ and the Dow Jones Industrial Average, along with the S&P 500, had modest gains during the period. In this environment, large-cap stocks beat their small-cap counterparts and, in the large-cap universe, growth stocks outperformed value stocks - while in the small-cap universe, value outpaced growth. The dollar strengthened in anticipation of the Federal Reserve's interest rate increase as well as on news of positive consumer-confidence data. Against a backdrop of rising oil prices and interest rates, continued terrorism fears, and the pending U.S. presidential election, the third quarter saw the majority of U.S. equities markets end in the red. The S&P 500 Index(R) result was -1.9%, while the tech-laden NASDAQ declined 7.4%. In addition, the Dow Jones Industrial Average lost 2.9%. Both large-cap and small-cap stocks produced negative returns for the period, although the large-cap universe fared better. In the fourth quarter of 2004, major U.S. equity market indexes posted positive returns, including those with both value and growth orientations, such as the Russell 1000 Value and Russell 1000 Growth Indexes. High-risk stocks outperformed their higher-quality brethren. WHAT FACTORS CONTRIBUTED TO THE FUND'S PERFORMANCE? During the first quarter, the largest relative contributor to performance was strong stock selection in the technology sector. Other contributors included our overweight position and several strong-performing stocks in both financial services and utilities/communications. Conversely, the largest detractor during the period came from our overweighting the leisure sector, which included several underperforming stocks. Also hampering performance were our holdings in the health care sector, where a positive contribution from pharmaceuticals was offset by poor performance in biotechnology. In the second quarter, sector selection hampered returns, and detractors included overweight positions in retail stores and manufacturing. Overweight positions in automotive and consumer goods and an underweight position in food and beverage contributed to relative returns, but not enough to offset overall negative sector performance. Conversely, stock-specific selection contributed to positive relative performance, with strong choices including retail store, health care and consumer goods securities. Sector selection was positive in the third quarter. Contributing to performance was our overweight position in oil/gas and an underweight in technology. Detractors consisted of underweight positions in both machinery and metals/mining. As in the second quarter, sector selection detracted from performance in the fourth quarter, hindered by overweight positions in oil/gas and consumer goods, as well as an underweight position in technology. Underweight positions in both food/beverage and metals/mining contributed to relative returns, but not enough to offset overall negative sector performance for the period. WHAT IS YOUR OUTLOOK? Despite the fact that riskier stocks outperformed their higher-quality counterparts as 2004 came to a close, we expect higher-quality securities to return to favor in 2005. 12 MML GROWTH EQUITY FUND INDUSTRY TABLE (% OF NET ASSETS) ON 12/31/04 Pharmaceuticals 13.0% Retail 10.4% Energy 7.1% Computers & Information 7.0% Prepackaged Software 4.5% Cosmetics & Personal Care 4.3% Communications 4.2% Insurance 3.9% Electrical Equipment & Electronics 3.4% Healthcare 3.4% Foods 2.9% Aerospace & Defense 2.7% Medical Supplies 2.7% Banking, Savings & Loans 2.6% Commercial Services 2.4% Apparel, Textiles & Shoes 2.4% Industrial - Diversified 2.3% Automotive & Parts 2.1% Telephone Utilities 2.0% Home Construction, Furnishings & Appliances 1.8% Data Processing & Preparation 1.6% Financial Services 1.4% Tobacco 1.2% Restaurants 1.1% Computer Integrated Systems Design 1.1% Household Products 1.0% Machinery & Components 0.9% Manufacturing 0.9% Communications Equipment 0.7% Transportation 0.6% Lodging 0.5% Beverages 0.4% Information Retrieval Services 0.4% Metals & Mining 0.2% Electric Utilities 0.1% Retail - Grocery 0.1% Computer Programming Services 0.1% Building Materials & Construction 0.1% Broadcasting, Publishing & Printing 0.1% Chemicals 0.1% Industrial - Distribution 0.0% Advertising 0.0% Forest Products & Paper 0.0% Miscellaneous 0.0% Short-Term Investments and Other Assets and Liabilities 2.3% ----- 100.0% =====
MML GROWTH EQUITY FUND LARGEST STOCK HOLDINGS (12/31/04) Johnson & Johnson Dell, Inc. The Home Depot, Inc. Exxon Mobil Corp. Qualcomm, Inc. Pfizer, Inc. Microsoft Corp. Wal-Mart Stores, Inc. Merck & Co., Inc. The Procter & Gamble Co. 13 GROWTH OF A $10,000 INVESTMENT Hypothetical Investments in MML Growth Equity Fund and the S&P 500 Index MML SERIES INVESTMENT FUND TOTAL RETURN
FIVE YEAR SINCE INCEPTION ONE YEAR AVERAGE ANNUAL AVERAGE ANNUAL 1/1/04 - 12/31/04 1/1/00 - 12/31/04 5/3/99 - 12/31/04 MML Growth Equity Fund 4.78% -8.24% -2.90% S&P 500 Index 10.88% -2.30% -0.21%
[CHART] GROWTH OF A $10,000 INVESTMENT SINCE INCEPTION
MML GROWTH EQUITY FUND S&P 500 INDEX 5/3/99 $ 10,000 $ 10,000 12/99 $ 13,010 $ 11,100 12/00 $ 12,159 $ 10,090 12/01 $ 9,096 $ 8,892 12/02 $ 6,567 $ 6,928 12/03 $ 8,078 $ 8,913 12/04 $ 8,464 $ 9,883
PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE; PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS. THE INVESTMENT RETURN AND PRINCIPAL VALUE OF SHARES OF THE FUND WILL FLUCTUATE WITH MARKET CONDITIONS SO THAT SHARES OF THE FUND, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT PERFORMANCE OF THE FUND MAY BE LOWER OR HIGHER THAN THE PERFORMANCE QUOTED. PERFORMANCE DATA CURRENT TO THE MOST RECENT MONTH END MAY BE OBTAINED BY ACCESSING THE WEBSITE AT www.massmutual.com. INVESTORS SHOULD NOTE THAT THE FUND IS A PROFESSIONALLY MANAGED MUTUAL FUND, WHILE THE S&P 500 INDEX IS UNMANAGED AND DOES NOT INCUR EXPENSES, AND CANNOT BE PURCHASED DIRECTLY BY INVESTORS. INVESTORS SHOULD READ THE FUND'S PROSPECTUS WITH REGARD TO THE FUND'S INVESTMENT OBJECTIVE, RISKS AND CHARGES AND EXPENSES IN CONJUNCTION WITH THESE FINANCIAL STATEMENTS. THE FUND'S RETURN REFLECTS CHANGES IN THE NET ASSET VALUE PER SHARE WITHOUT THE DEDUCTION OF ANY PRODUCT CHARGES. TOTAL RETURN FIGURES WOULD BE LOWER FOR THE PERIODS PRESENTED IF THEY REFLECTED THESE CHARGES. 14 MML OTC 100 FUND - PORTFOLIO MANAGER REPORT WHAT IS THE INVESTMENT OBJECTIVE OF THE MML OTC 100 FUND? This Fund seeks to approximate, as closely as practicable (before fees and expenses), the total return of the 100 largest publicly traded over-the-counter common stocks. The Fund pursues this objective by investing at least 80% of its assets in the equity securities of companies included in the NASDAQ 100 Index(R), which is generally recognized as representative of the over-the-counter market. HOW DID THE FUND PERFORM DURING 2004? For the 12 months ended December 31, 2004, the Fund's shares returned 10.48%, slightly outperforming the 10.44% return of the NASDAQ 100 Index(R). The NASDAQ 100 Index(R) represents 100 of the largest non-financial U.S. and non-U.S. companies listed on the National Tier of the NASDAQ stock market. It is a modified capitalization-weighted index that is designed to limit domination by a few large stocks while generally retaining the ranking of companies by capitalization. WHAT WAS THE INVESTMENT BACKDROP DURING THE PERIOD? While the U.S. economy continued to demonstrate signs of improvement during the first few months of 2004, a muted improvement in job growth dampened enthusiasm. Given the pace of economic growth, the sluggish job market implied a significant increase in corporate productivity, expected to translate into continued strong corporate profits. While strengthening corporate profits is favorable to equity owners, continued improvement in financial markets has mainly been contingent on translating growth in profits to more jobs. During the second quarter, the U.S. economy was positively impacted by a number of factors, including a rise in consumer confidence, rising corporate profits and improvements in the labor market. Despite these positive signs, the market was held back by a number of factors, including concerns of a Federal Reserve (Fed) interest rate hike and the handover of power in Iraq. The market gained some stability with both events taking place at the end of June, although investors remained cautious. Fixed-income markets struggled during the period, sparked by the increase and anticipation of further increases in interest rates. In the third quarter, rapidly increasing oil prices, continued global instability and concerns over the lack of job growth tempered the performance of U.S. equity markets. The Fed raised the federal funds rate by 0.25% and affirmed its expectations that the flow of future economic data would support continued tightening at a measured pace. Bonds outperformed stocks for the quarter by approximately five percentage points. Global equity markets generally fared better than the U.S. equity markets, led by favorable performance across Europe. The U.S. economy rallied again in the fourth quarter. Economic growth advanced slightly, changing from a consumption-driven trend to one fueled by business and business investment, although corporate executives were cautiously optimistic. Inflation remained relatively under control, and expectations continued that the Fed would maintain a measured pace of interest rate increases. Although the dollar, on a trade-weighted basis, continued to decline, the willingness to own U.S. assets remained quite high. WHAT FACTORS CONTRIBUTED TO THE FUND'S PERFORMANCE? During the first quarter, sector performance was mixed. Information technology, which comprises over 60% of the NASDAQ Index, was down 2.77%. Overall, telecommunication services was the worst-performing sector with a loss of 13.45%, while energy was the best-performing sector with its gain of 7.56%. The strongest sector of the second quarter was consumer staples (+15.61%), reflecting a surge in consumer spending during the month of May. In the third quarter, driven by the rise in oil prices, the sector leader was energy (+14.3%). In a turnaround from the first quarter, telecommunication services led sector performance with its gain of 25.99% in the fourth quarter. Information technology, which accounts for more than half of the index, advanced an impressive 15.42% during the final quarter of 2004. 15 MML OTC 100 FUND INDUSTRY TABLE (% OF NET ASSETS) ON 12/31/04 Prepackaged Software 16.6% Communications 14.5% Electrical Equipment & Electronics 13.9% Pharmaceuticals 9.8% Computers & Information 9.8% Commercial Services 7.5% Broadcasting, Publishing & Printing 4.4% Retail 4.2% Foods 2.5% Information Retrieval Services 1.8% Medical Supplies 1.8% Computer Integrated Systems Design 1.4% Manufacturing 1.4% Computer Programming Services 1.3% Automotive & Parts 1.2% Retail - Internet 0.9% Transportation 0.8% Data Processing & Preparation 0.7% Healthcare 0.7% Telephone Utilities 0.7% Lodging 0.5% Retail - Grocery 0.4% Communications Equipment 0.4% Miscellaneous 0.4% Containers 0.3% Apparel, Textiles & Shoes 0.3% Advertising 0.3% Internet Content 0.2% Futures 0.0% Short-Term Investments and Other Assets and Liabilities 1.3% ----- 100.0% =====
MML OTC 100 FUND LARGEST STOCK HOLDINGS (12/31/04) Microsoft Corp. Qualcomm, Inc. eBay, Inc. Intel Corp. Cisco Systems, Inc. Nextel Communications, Inc. Cl. A Dell, Inc. Amgen, Inc. Apple Computer, Inc. Starbucks Corp. 16 GROWTH OF A $10,000 INVESTMENT Hypothetical Investments in MML OTC 100 Fund and the NASDAQ 100 Index MML SERIES INVESTMENT FUND TOTAL RETURN
SINCE INCEPTION ONE YEAR AVERAGE ANNUAL 1/1/04 - 12/31/04 5/1/00 - 12/31/04 MML OTC 100 Fund 10.48% -17.02% NASDAQ 100 Index 10.44% -16.56%
[CHART] GROWTH OF A $10,000 INVESTMENT SINCE INCEPTION
MML OTC 100 FUND NASDAQ 100 INDEX 5/1/00 $ 10,000 $ 10,000 12/00 $ 6,110 $ 6,207 12/01 $ 4,087 $ 4,186 12/02 $ 2,547 $ 2,609 12/03 $ 3,785 $ 3,890 12/04 $ 4,182 $ 4,296
PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE; PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS. THE INVESTMENT RETURN AND PRINCIPAL VALUE OF SHARES OF THE FUND WILL FLUCTUATE WITH MARKET CONDITIONS SO THAT SHARES OF THE FUND, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT PERFORMANCE OF THE FUND MAY BE LOWER OR HIGHER THAN THE PERFORMANCE QUOTED. PERFORMANCE DATA CURRENT TO THE MOST RECENT MONTH END MAY BE OBTAINED BY ACCESSING THE WEBSITE AT www.massmutual.com. INVESTORS SHOULD NOTE THAT THE FUND IS A PROFESSIONALLY MANAGED MUTUAL FUND, WHILE THE NASDAQ 100 INDEX IS UNMANAGED AND DOES NOT INCUR EXPENSES, AND CANNOT BE PURCHASED DIRECTLY BY INVESTORS. INVESTORS SHOULD READ THE FUND'S PROSPECTUS WITH REGARD TO THE FUND'S INVESTMENT OBJECTIVE, RISKS AND CHARGES AND EXPENSES IN CONJUNCTION WITH THESE FINANCIAL STATEMENTS. THE FUND'S RETURN REFLECTS CHANGES IN THE NET ASSET VALUE PER SHARE WITHOUT THE DEDUCTION OF ANY PRODUCT CHARGES. TOTAL RETURN FIGURES WOULD BE LOWER FOR THE PERIODS PRESENTED IF THEY REFLECTED THESE CHARGES. 17 MML SMALL CAP EQUITY FUND - PORTFOLIO MANAGER REPORT WHAT IS THE INVESTMENT OBJECTIVE OF THE MML SMALL CAP EQUITY FUND? This Fund seeks to achieve long-term growth of capital and income by investing primarily in a diversified portfolio of equity securities of smaller companies. HOW DID THE FUND PERFORM DURING 2004? For the 12 months ended December 31, 2004, the Fund's shares returned 16.36%, trailing the 18.33% return of the Russell 2000 Index, a broadly based, unmanaged index of 2000 small-capitalization common stocks. WHAT WAS THE INVESTMENT BACKGROUND DURING THE PERIOD? Equity markets recorded modest gains in the first quarter of 2004, as renewed concerns over terrorism and rising oil prices dampened investor psychology and enthusiasm after a strong start in January. Job growth improved during the period; other positive indicators included favorable corporate earnings, declining interest rates and healthy consumer spending. During the second quarter, equities posted only a slight gain, as a bit of a holding pattern set in due to anxiety over how much and when the Federal Reserve would raise interest rates. Investors got closure at the end of June, when the central bank boosted rates for the first time since May 2000 by a quarter of a percentage point. Equity markets, relieved, rose modestly. Additional economic measures released during the quarter were largely favorable, although a few wrinkles remained - namely jobs and oil. Third quarter equity market performance resembled a roller-coaster ride. Early in the quarter, factors such as higher interest rates, rising oil prices and weak economic data drove markets lower. Things turned around in the middle of August, when longer-term interest rates trended lower and bargain hunters feasted on attractive equity valuations. In September, however, headwinds - including record oil prices and presidential election uncertainty - cast a chill on the markets. Equity markets closed 2004 on a strong note, finishing a second straight year in positive territory. With a major element of uncertainty - political leadership - eliminated, investors refocused on major economic indicators, such as strengthening job creation and improved consumer confidence. WHAT FACTORS CONTRIBUTED TO THE FUND'S PERFORMANCE? During the first quarter of 2004, less-than-favorable stock selection hindered the Fund's progress. In particular, our choices in the consumer discretionary, financial services and health care sectors hampered performance. The Fund's emphasis on oil services companies in the energy sector and semiconductor names in the technology sector also detracted from results, as both areas experienced a significant price correction during the quarter. Conversely, the Fund experienced strong results in autos/transportation. In the second quarter, favorable stock selection, from the autos/transportation and financial services sectors to the producer durables and technology sectors, helped to drive returns. Several of the Fund's energy services holdings and companies specializing in electrical components and equipment realized particularly strong results. Additionally, in technology, the Fund's holdings significantly outperformed corresponding benchmark positions and in the consumer discretionary sector, our holdings added value. The Fund's health care stocks hampered performance somewhat, although the portfolio held only minimal positions. Performance for the Fund's technology holdings was weak in the third quarter, particularly for a few holdings in the semiconductor space. Our stock selection was also weak in the financial services and health care sectors. With respect to areas of strength, our results continued to be highly favorable in the other energy and autos and transportation sectors, where several energy services holdings and companies specializing in shipping realized particularly strong results. In the final quarter of 2004, our stock selection turned out to be largely favorable across most economic sectors, with particular strength in the financial services, materials and processing, and health care sectors. The portfolio's holdings in the autos and transportation sector, a leading area in 2004, also performed strongly. Areas of weakness relative to the Russell 2000 Index were the technology, producer durables and consumer discretionary sectors. 18 WHAT IS YOUR OUTLOOK? Our 2005 outlook for the U.S. stock market assumes that profit growth will decelerate from 2004 levels and settle in the 8% to 10% range. It is likely the market could face downward pressure on valuations as interest rates rise. If these two trends materialize, we may be faced with a lackluster year for equities. Conversely, the stock market should be able to take in stride rising interest rates, as long as the increases are gradual and inflation does not become troublesome. MML SMALL CAP EQUITY FUND INDUSTRY TABLE (% OF NET ASSETS) ON 12/31/04 Machinery & Components 13.1% Financial Services 10.5% Banking, Savings & Loans 9.2% Electrical Equipment & Electronics 8.9% Transportation 6.7% Energy 6.7% Insurance 6.0% Commercial Services 6.0% Medical Supplies 4.5% Broadcasting, Publishing & Printing 2.9% Pharmaceuticals 2.9% Chemicals 2.8% Retail 2.5% Industrial - Diversified 1.9% Home Construction, Furnishings & Appliances 1.8% Household Products 1.7% Apparel, Textiles & Shoes 1.5% Prepackaged Software 1.4% Restaurants 1.3% Air Transportation 1.1% Computer Related Services 0.9% Cosmetics & Personal Care 0.6% Telephone Utilities 0.2% Metals & Mining 0.2% Short-Term Investments and Other Assets and Liabilities 4.7% ----- 100.0% =====
MML SMALL CAP EQUITY FUND LARGEST STOCK HOLDINGS (12/31/04) Eaton Vance Corp. Roper Industries, Inc. The Commerce Group, Inc. Landstar System, Inc. Jefferies Group, Inc. Heartland Express, Inc. Coldwater Creek, Inc. Kaydon Corp. Teleflex, Inc. First Republic Bank 19 GROWTH OF A $10,000 INVESTMENT Hypothetical Investments in MML Small Cap Equity Fund and the Russell 2000 Index MML SERIES INVESTMENT FUND TOTAL RETURN
FIVE YEAR SINCE INCEPTION ONE YEAR AVERAGE ANNUAL AVERAGE ANNUAL 1/1/04 - 12/31/04 1/1/00 - 12/31/04 6/1/98 - 12/31/04 MML Small Cap Equity Fund 16.36% 9.60% 4.47% Russell 2000 Index 18.33% 6.61% 6.93%
[CHART] GROWTH OF A $10,000 INVESTMENT SINCE INCEPTION
MML SMALL CAP EQUITY FUND RUSSELL 2000 INDEX 6/1/98 $ 10,000 $ 10,000 12/98 $ 8,522 $ 9,307 12/99 $ 8,433 $ 11,286 12/00 $ 9,583 $ 10,945 12/01 $ 9,904 $ 11,217 12/02 $ 8,732 $ 8,919 12/03 $ 11,464 $ 13,134 12/04 $ 13,339 $ 15,541
PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE; PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS. THE INVESTMENT RETURN AND PRINCIPAL VALUE OF SHARES OF THE FUND WILL FLUCTUATE WITH MARKET CONDITIONS SO THAT SHARES OF THE FUND, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT PERFORMANCE OF THE FUND MAY BE LOWER OR HIGHER THAN THE PERFORMANCE QUOTED. PERFORMANCE DATA CURRENT TO THE MOST RECENT MONTH END MAY BE OBTAINED BY ACCESSING THE WEBSITE AT www.massmutual.com. INVESTORS SHOULD NOTE THAT THE FUND IS A PROFESSIONALLY MANAGED MUTUAL FUND, WHILE THE RUSSELL 2000 INDEX IS UNMANAGED AND DOES NOT INCUR EXPENSES, AND CANNOT BE PURCHASED DIRECTLY BY INVESTORS. INVESTORS SHOULD READ THE FUND'S PROSPECTUS WITH REGARD TO THE FUND'S INVESTMENT OBJECTIVE, RISKS AND CHARGES AND EXPENSES IN CONJUNCTION WITH THESE FINANCIAL STATEMENTS. THE FUND'S RETURN REFLECTS CHANGES IN THE NET ASSET VALUE PER SHARE WITHOUT THE DEDUCTION OF ANY PRODUCT CHARGES. TOTAL RETURN FIGURES WOULD BE LOWER FOR THE PERIODS PRESENTED IF THEY REFLECTED THESE CHARGES. 20 MML SMALL COMPANY OPPORTUNITIES FUND - PORTFOLIO MANAGER REPORT WHAT IS THE INVESTMENT OBJECTIVE OF THE MML SMALL COMPANY OPPORTUNITIES FUND? The objective of the Fund is to achieve long-term growth of capital and income by investing primarily in a diversified portfolio of equity securities of micro-capitalization companies (those with market capitalizations at the time of purchase of no more than 50% of the weighted average market capitalization of the Russell 2000 Index) using a value-oriented investment strategy. HOW DID THE FUND PERFORM DURING 2004? For the 12 months ended December 31, 2004, the Fund returned 18.83%, modestly outpacing the 18.33% return of the Russell 2000 Index, a broadly based, unmanaged index of 2000 small-capitalization common stocks. WHAT WAS THE INVESTMENT BACKGROUND DURING THE PERIOD? Equity markets recorded modest gains in the first quarter of 2004, as renewed concerns over terrorism and rising oil prices dampened investor psychology and enthusiasm after a strong start in January. Economic factors during the quarter continued to point largely to growth. Although the employment picture continued to elicit concern, job growth improved during the period. Other positive indicators included favorable corporate earnings, declining interest rates and healthy consumer spending. During the second quarter of 2004, equities posted only slight gains, as a bit of a holding pattern set in due to anxiety over how much and when the Federal Reserve (Fed) would raise interest rates. Investors got closure at the end of June, when the central bank boosted rates for the first time since May 2000 by a quarter of a percentage point. The move had been widely anticipated by investors. Equity markets, relieved, rose modestly. Additional economic measures released during the period were largely favorable, but a few wrinkles remained - namely jobs and oil. U.S. equity markets were largely flat during the quarter, with large-cap stocks narrowly outperforming small-cap issues. Third quarter equity market performance resembled a roller-coaster ride. Early in the quarter, factors such as higher interest rates, rising oil prices and weak economic data drove markets lower. Things turned around in the middle of August, when longer-term interest rates trended lower and bargain hunters feasted on attractive equity valuations. In September, however, headwinds - including record oil prices and presidential election uncertainty - cast a chill on the markets. Equity markets closed 2004 on a strong note, finishing a second straight year in positive territory. With a major element of uncertainty - political leadership - eliminated, investors refocused on major economic indicators, such as strengthening job creation and improved consumer confidence. WHAT FACTORS CONTRIBUTED TO THE FUND'S PERFORMANCE? During the first quarter of 2004, unfortunate stock purchases across the portfolio, including consumer discretionary, financial services and health care - - which were some of the largest and best-performing market sectors - hampered performance versus the benchmark. The Fund's emphasis on oil services companies in the energy sector and semiconductor names in the technology sector also detracted from results, as both areas experienced significant price corrections during the quarter. On a favorable note, the Fund realized gains in the autos/transportation sector. Turning to the second quarter, favorable stock selection fueled the Fund's performance across broad sections of the portfolio, from the autos/transportation and energy sectors to the producer durables and technology sectors. Stock selection detracted from results in the health care sector, particularly pharmaceuticals. Additionally, the Fund's financial services and materials/processing positions moderately underperformed corresponding benchmark positions. During the third quarter, the Fund underperformed due to the market leadership exhibited by speculative areas in mid-August, such as Internet companies and homebuilders. As 2004 wound down, however, the Fund's performance was much stronger, as stock selection in the fourth quarter was highly favorable across many areas of the portfolio. Notable strength came from the financial services, materials and processing, and other energy sectors, although holdings in the autos and transportation, consumer discretionary and technology sectors also added considerable value. The only areas of stock selection weakness for the portfolio during the quarter were the health care and producer durables sectors. 21 WHAT IS YOUR OUTLOOK? Our 2005 outlook for the U.S. stock market assumes that profit growth will decelerate from 2004 levels and settle in the 8% to 10% range. It is likely the market could face downward pressure on valuations as interest rates rise. If these two trends materialize, the result could be a lackluster year for equities. Conversely, the stock market should be able to tolerate rising interest rates, as long as the increases are gradual and inflation does not become troublesome. MML SMALL COMPANY OPPORTUNITIES FUND INDUSTRY TABLE (% OF NET ASSETS) ON 12/31/04 Electrical Equipment & Electronics 15.0% Commercial Services 11.6% Transportation 11.0% Banking, Savings & Loans 7.6% Medical Supplies 6.0% Insurance 5.8% Healthcare 4.1% Entertainment & Leisure 3.8% Retail 3.7% Home Construction, Furnishings & Appliances 3.1% Prepackaged Software 2.5% Energy 2.3% Financial Services 2.2% Computer Integrated Systems Design 2.2% Metals & Mining 1.8% Data Processing & Preparation 1.7% Air Transportation 1.5% Broadcasting, Publishing & Printing 1.5% Heavy Machinery 1.3% Pharmaceuticals 1.1% Real Estate 1.0% Machinery & Components 0.9% Apparel, Textiles & Shoes 0.4% Chemicals 0.0% Short-Term Investments and Other Assets and Liabilities 7.9% ----- 100.0% =====
MML SMALL COMPANY OPPORTUNITIES FUND LARGEST STOCK HOLDINGS (12/31/04) Safety Insurance Group, Inc. First Republic Bank Sterling Bancorp-NY Old Dominion Freight Line, Inc. Ambassadors Group, Inc. Ultralife Batteries, Inc. Moldflow Corp. Knight Transportation, Inc. Marten Transport Limited RPC, Inc. 22 GROWTH OF A $10,000 INVESTMENT Hypothetical Investments in MML Small Company Opportunities Fund and the Russell 2000 Index MML SERIES INVESTMENT FUND TOTAL RETURN
SINCE INCEPTION ONE YEAR AVERAGE ANNUAL 1/1/04 - 12/31/04 5/1/01 - 12/31/04 MML Small Company Opportunities Fund 18.83% 16.22% Russell 2000 Index 18.33% 9.79%
[CHART] GROWTH OF A $10,000 INVESTMENT SINCE INCEPTION
MML SMALL COMPANY OPPORTUNITIES FUND RUSSELL 2000 INDEX 5/1/2001 $ 10,000 $ 10,000 12/01 $ 10,969 $ 10,166 12/02 $ 10,273 $ 8,084 12/03 $ 14,614 $ 11,904 12/04 $ 17,366 $ 14,086
PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE; PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS. THE INVESTMENT RETURN AND PRINCIPAL VALUE OF SHARES OF THE FUND WILL FLUCTUATE WITH MARKET CONDITIONS SO THAT SHARES OF THE FUND, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT PERFORMANCE OF THE FUND MAY BE LOWER OR HIGHER THAN THE PERFORMANCE QUOTED. PERFORMANCE DATA CURRENT TO THE MOST RECENT MONTH END MAY BE OBTAINED BY ACCESSING THE WEBSITE AT www.massmutual.com. INVESTORS SHOULD NOTE THAT THE FUND IS A PROFESSIONALLY MANAGED MUTUAL FUND, WHILE THE RUSSELL 2000 INDEX IS UNMANAGED AND DOES NOT INCUR EXPENSES, AND CANNOT BE PURCHASED DIRECTLY BY INVESTORS. INVESTORS SHOULD READ THE FUND'S PROSPECTUS WITH REGARD TO THE FUND'S INVESTMENT OBJECTIVE, RISKS AND CHARGES AND EXPENSES IN CONJUNCTION WITH THESE FINANCIAL STATEMENTS. THE FUND'S RETURN REFLECTS CHANGES IN THE NET ASSET VALUE PER SHARE WITHOUT THE DEDUCTION OF ANY PRODUCT CHARGES. TOTAL RETURN FIGURES WOULD BE LOWER FOR THE PERIODS PRESENTED IF THEY REFLECTED THESE CHARGES. 23 MML SMALL CAP GROWTH EQUITY FUND - PORTFOLIO MANAGER REPORT WHAT IS THE INVESTMENT OBJECTIVE OF THE MML SMALL CAP GROWTH EQUITY FUND? This Fund seeks long-term capital appreciation by investing primarily in common stocks and equity securities of smaller companies the managers believe offer potential for long-term growth. HOW DID THE FUND PERFORM DURING 2004? For the 12 months ended December 31, 2004, the Fund's shares returned 13.29%, trailing the 18.33% return of the Russell 2000 Index, an unmanaged index of 2000 small capitalization common stocks, and the 22.65% return of the S&P SmallCap 600 Index, a market-capitalization-weighted index that measures the performance of 600 domestic small-cap stocks chosen for market size, liquidity and industry group representation. The Fund also underperformed the 14.30% return of the Russell 2000 Growth Index, which tracks the performance of stocks in the Russell 2000 Index sharing characteristics common to the growth universe. WHAT WAS THE INVESTMENT BACKGROUND DURING THE PERIOD? Early in 2004, equity markets continued to surge and higher-beta investments outperformed. These trends slowed or reversed later in the quarter, however, when a job growth slowdown, terrorist attacks and escalating energy prices served as headwind. Bond yields declined and domestic equity markets decelerated, as investors expressed a preference for less-risky assets. As we entered the second quarter, the rising price of oil, China's slowdown and inflationary concerns hampered equity markets. However, as the period progressed, corporate profits impressed, economic strength appeared to be broad based and oil prices receded somewhat. In this environment, small-cap stocks underperformed large caps for the first time in five quarters. In the third quarter, equity markets remained burdened by record oil prices, two interest rate hikes from the Federal Reserve (Fed), continuing violence in Iraq and falling earnings expectations. In this environment, small-cap stocks underperformed large caps for the second consecutive quarter, with growth issues dramatically underperforming their value counterparts. Shrugging off a decelerating economy, rising rates and record oil prices, investors sent the markets substantially higher in the fourth quarter, as all market capitalization styles registered strong returns. WHAT FACTORS CONTRIBUTED TO THE FUND'S PERFORMANCE? In the first quarter, unfavorable stock selection in the consumer discretionary and health care sectors detracted from the Fund's results - as did the Fund's underweight in real estate and overweight in diversified financials. Conversely, favorable stock picks in the information technology sector fueled returns during the period, and the Fund's underweight allocation to banks proved strategically sound. Turning to the second quarter, sub-par stock selection in the information technology and consumer discretionary sectors impaired the Fund's performance. Our media holdings also hampered relative returns. Contributing to the Fund's results for the period, however, were positive stock selection in the materials sector and our lower-than-benchmark exposure to the interest-rate-sensitive financials sector. Strong stock picking in the health care and consumer discretionary sectors contributed to the Fund's performance in the third quarter. Also driving returns was our greater concentration in the comparatively more stable health care, finance and consumer discretionary sectors. Detractors from performance were concentrated in the technology sector. As the year wound down, lackluster stock selection in the information technology, telecommunication services and health care sectors hampered the Fund's progress in the fourth quarter. Offsetting this, however, were several of the Fund's holdings that posted enormous gains. Leading the charge was Sirius Satellite, the number-two satellite radio provider, which gained 183% during the quarter, topping out at $10 billion in market capitalization. We sold this position to leverage its significant appreciation. 24 WHAT IS YOUR OUTLOOK? We expect 2005 to be a year of slower economic growth, marked by decelerating business investment and sluggish consumer spending. Absent the U.S. presidential election, most of 2004's pressures unfortunately look to carry into 2005. We expect the Fed to continue its interest rate increases, the U.S. dollar to remain weak, Iraq to continue its state of turmoil and consumer/federal debt to soar to uncomfortable levels. Consequently, the attributes of quality, which are primarily visibility and sustainability, will continue to be our prime focus for portfolio incorporation. MML SMALL CAP GROWTH EQUITY FUND INDUSTRY TABLE (% OF NET ASSETS) ON 12/31/04 Commercial Services 9.1% Healthcare 8.9% Prepackaged Software 8.1% Electrical Equipment & Electronics 7.2% Banking, Savings & Loans 5.2% Pharmaceuticals 4.2% Computer Related Services 3.7% Energy 3.7% Transportation 3.5% Retail 3.4% Financial Services 3.1% Medical Supplies 2.6% Lodging 2.4% Machinery & Components 2.4% Communications 2.2% Chemicals 1.9% Data Processing & Preparation 1.9% Advertising 1.8% Computer Integrated Systems Design 1.8% Information Retrieval Services 1.7% Home Construction, Furnishings & Appliances 1.7% Foods 1.7% Computers & Information 1.4% Automotive & Parts 1.0% Metals & Mining 1.0% Air Transportation 1.0% Telephone Utilities 0.9% Broadcasting, Publishing & Printing 0.9% Restaurants 0.7% Insurance 0.6% Apparel, Textiles & Shoes 0.5% Entertainment & Leisure 0.4% Household Products 0.4% Containers 0.4% Cosmetics & Personal Care 0.3% Internet Software 0.3% Real Estate 0.2% Building Materials & Construction 0.1% Beverages 0.1% Short-Term Investments and Other Assets and Liabilities 7.6% ----- 100.0% =====
MML SMALL CAP GROWTH EQUITY FUND LARGEST STOCK HOLDINGS (12/31/04) Checkfree Corp. ITT Educational Services, Inc. The Corporate Executive Board Co. Dendrite International, Inc. Financial Federal Corp. Vail Resorts, Inc. AmSurg Corp. American Healthways, Inc. Take-Two Interactive Software, Inc. Cerner Corp. 25 GROWTH OF A $10,000 INVESTMENT Hypothetical Investments in MML Small Cap Growth Equity Fund and the Russell 2000 Index. MML SERIES INVESTMENT FUND TOTAL RETURN
FIVE YEAR SINCE INCEPTION ONE YEAR AVERAGE ANNUAL AVERAGE ANNUAL 1/1/04 - 12/31/04 1/1/00 - 12/31/04 5/3/99 - 12/31/04 MML Small Cap Growth Equity Fund 13.29% -1.29% 8.07% Russell 2000 Index 18.33% 6.61% 8.89%
[CHART] GROWTH OF A $10,000 INVESTMENT SINCE INCEPTION
MML SMALL CAP GROWTH EQUITY FUND RUSSELL 2000 INDEX 5/3/99 $ 10,000 $ 10,000 12/99 $ 16,568 $ 11,767 12/00 $ 14,270 $ 11,411 12/01 $ 12,456 $ 11,695 12/02 $ 9,225 $ 9,299 12/03 $ 13,702 $ 13,694 12/04 $ 15,524 $ 16,204
PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE; PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS. THE INVESTMENT RETURN AND PRINCIPAL VALUE OF SHARES OF THE FUND WILL FLUCTUATE WITH MARKET CONDITIONS SO THAT SHARES OF THE FUND, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT PERFORMANCE OF THE FUND MAY BE LOWER OR HIGHER THAN THE PERFORMANCE QUOTED. PERFORMANCE DATA CURRENT TO THE MOST RECENT MONTH END MAY BE OBTAINED BY ACCESSING THE WEBSITE AT www.massmutual.com. INVESTORS SHOULD NOTE THAT THE FUND IS A PROFESSIONALLY MANAGED MUTUAL FUND, WHILE THE RUSSELL 2000 INDEX IS UNMANAGED AND DOES NOT INCUR EXPENSES, AND CANNOT BE PURCHASED DIRECTLY BY INVESTORS. INVESTORS SHOULD READ THE FUND'S PROSPECTUS WITH REGARD TO THE FUND'S INVESTMENT OBJECTIVE, RISKS AND CHARGES AND EXPENSES IN CONJUNCTION WITH THESE FINANCIAL STATEMENTS. THE FUND'S RETURN REFLECTS CHANGES IN THE NET ASSET VALUE PER SHARE WITHOUT THE DEDUCTION OF ANY PRODUCT CHARGES. TOTAL RETURN FIGURES WOULD BE LOWER FOR THE PERIODS PRESENTED IF THEY REFLECTED THESE CHARGES. 26 MML EMERGING GROWTH FUND - PORTFOLIO MANAGER REPORT WHAT IS THE INVESTMENT OBJECTIVE OF THE MML EMERGING GROWTH FUND? This Fund seeks capital appreciation by investing primarily in smaller, rapidly growing emerging companies - generally in industry segments experiencing rapid growth, and often including technology and technology-related concerns. HOW DID THE FUND PERFORM DURING 2004? For the 12 months ended December 31, 2004, the Fund's shares returned 14.73%, trailing the 18.33% return of the Russell 2000 Index, an unmanaged index of 2000 small-capitalization common stocks. WHAT WAS THE INVESTMENT BACKGROUND DURING THE PERIOD - AND HOW DID YOU RESPOND? The first half of 2004, and particularly the second quarter, was characterized by investors' unwillingness to embrace sustainable growth companies, despite attractive fundamentals and valuations. Instead, growth investors focused on many of the more muted growth or value sectors of the market. For example, during the second quarter, the autos/transportation and energy sectors of the Fund's benchmark index produced returns of 12.37% and 13.21%, respectively - among the largest of the 11 Russell sectors. Investor concerns about future technology capital spending trends, which emerged in the third quarter, continued into the fourth quarter of 2004. In fact, the market had little appetite for technology companies in the first seven months of the year - and we used this window to upgrade the technology exposure of the portfolio, building on high-conviction positions at attractive prices. WHAT FACTORS CONTRIBUTED TO THE FUND'S PERFORMANCE? After an excellent start in January, technology stocks fell by about 10% from their high in the first quarter of 2004. Conversely, consumer discretionary companies contributed positive returns to the portfolio, as did gaming stocks, which benefited from improved consumer spending in Las Vegas and a more favorable legislative environment for gaming expansion worldwide. Also driving performance were the Fund's holdings within the health care sector and our overweight in biotechnology. Health care holdings were positive in the second quarter - and the Fund's slightly overweight position in this sector amplified their contribution. A healthy allocation to Internet-related positions also drove performance in the second quarter. Conversely, technology, in particular the portfolio's specialty semiconductor holdings, lagged despite solid fundamentals. Turning to the third quarter, although we endured significant volatility in a number of our technology-related positions, technology was an overall positive contributor to returns. In the health care sector, two biotechnology stocks produced some of our largest gains, both appreciating more than 70% during the period. In the fourth quarter, our technology positions provided some of the portfolio's best returns relative to the benchmark. Two of our retail companies also drove performance, as did our Internet-related holdings. WHAT IS YOUR OUTLOOK? We are cautiously optimistic that investors will look more favorably on growth stocks in 2005. Our portfolio companies are trading at approximately 28 times their 2005 earnings-per-share estimates and have an average growth rate of approximately 50%, which offers investors an attractive rate of earnings growth at very fair valuations. 27 MML EMERGING GROWTH FUND INDUSTRY TABLE (% OF NET ASSETS) ON 12/31/04 Pharmaceuticals 12.4% Commercial Services 11.1% Electrical Equipment & Electronics 8.8% Prepackaged Software 4.8% Apparel, Textiles & Shoes 4.6% Medical Supplies 4.6% Financial Services 3.7% Banking, Savings & Loans 3.4% Healthcare 3.3% Computer Programming Services 3.2% Insurance 3.0% Computers & Information 2.9% Information Retrieval Services 2.9% Communications 2.7% Energy 2.6% Machinery & Components 2.0% Lodging 1.9% Telephone Utilities 1.8% Advertising 1.7% Restaurants 1.6% Building Materials & Construction 1.6% Computer Related Services 1.4% Retail - Internet 1.2% Internet Software 1.2% Transportation 1.1% Retail 1.0% Computer Integrated Systems Design 0.9% Photography Equipment/Supplies 0.8% Metals & Mining 0.7% Toys, Games 0.7% Aerospace & Defense 0.6% Air Transportation 0.4% Home Construction, Furnishings & Appliances 0.3% Real Estate 0.0% Short-Term Investments and Other Assets and Liabilities 5.1% ----- 100.0% =====
MML EMERGING GROWTH FUND LARGEST STOCK HOLDINGS (12/31/04) Navigant Consulting, Inc. bebe stores, inc. Deckers Outdoor Corp. Alexion Pharmaceuticals, Inc. Valueclick, Inc. Priceline.com, Inc. WebEx Communications, Inc. Four Seasons Hotels, Inc. M-Systems Flash Disk Pioneers Limited Infospace, Inc. 28 GROWTH OF A $10,000 INVESTMENT MML SERIES INVESTMENT FUND TOTAL RETURN
SINCE INCEPTION ONE YEAR AVERAGE ANNUAL 1/1/04 - 12/31/04 5/1/00 - 12/31/04 MML Emerging Growth Fund 14.73% -10.62% Russell 2000 Index 18.33% 6.95%
[CHART] GROWTH OF A $10,000 INVESTMENT SINCE INCEPTION
MML EMERGING GROWTH FUND RUSSELL 2000 INDEX 5/1/00 $ 10,000 $ 10,000 12/00 $ 7,350 $ 9,636 12/01 $ 6,150 $ 9,876 12/02 $ 3,540 $ 7,853 12/03 $ 5,160 $ 11,564 12/04 $ 5,920 $ 13,683
PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE; PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS. THE INVESTMENT RETURN AND PRINCIPAL VALUE OF SHARES OF THE FUND WILL FLUCTUATE WITH MARKET CONDITIONS SO THAT SHARES OF THE FUND, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT PERFORMANCE OF THE FUND MAY BE LOWER OR HIGHER THAN THE PERFORMANCE QUOTED. PERFORMANCE DATA CURRENT TO THE MOST RECENT MONTH END MAY BE OBTAINED BY ACCESSING THE WEBSITE AT www.massmutual.com. INVESTORS SHOULD NOTE THAT THE FUND IS A PROFESSIONALLY MANAGED MUTUAL FUND, WHILE THE RUSSELL 2000 INDEX IS UNMANAGED AND DOES NOT INCUR EXPENSES, AND CANNOT BE PURCHASED DIRECTLY BY INVESTORS. INVESTORS SHOULD READ THE FUND'S PROSPECTUS WITH REGARD TO THE FUND'S INVESTMENT OBJECTIVE, RISKS AND CHARGES AND EXPENSES IN CONJUNCTION WITH THESE FINANCIAL STATEMENTS. THE FUND'S RETURN REFLECTS CHANGES IN THE NET ASSET VALUE PER SHARE WITHOUT THE DEDUCTION OF ANY PRODUCT CHARGES. TOTAL RETURN FIGURES WOULD BE LOWER FOR THE PERIODS PRESENTED IF THEY REFLECTED THESE CHARGES. 29 MML INFLATION-PROTECTED BOND FUND - PORTFOLIO OF INVESTMENTS DECEMBER 31, 2004
PRINCIPAL MARKET AMOUNT VALUE ---------------- ---------------- BONDS & NOTES -- 97.4% CORPORATE DEBT -- 21.2% CIT Group, Inc. 5.390% 12/14/2016 $ 2,000,000 $ 2,000,000 Household Finance Corp. 5.500% 12/10/2013 1,500,000 1,508,805 International Bank for Reconstruction & Development 3.550% 12/10/2013 2,421,000 2,402,697 JP Morgan Chase & Co. Series C 4.920% 06/28/2009 1,500,000 1,540,515 Lehman Brothers Holdings, Inc. Series G 4.540% 05/12/2014 1,500,000 1,483,365 Merrill Lynch & Co., Inc. 3.700% 03/02/2009 2,400,000 2,386,536 Morgan Stanley 4.290% 02/01/2011 900,000 906,120 Morgan Stanley Series C 4.890% 11/01/2013 1,000,000 1,029,770 Pacific Life Global Funding+ 4.718% 02/06/2016 2,000,000 2,046,620 Principal Life Income Funding Trusts 4.420% 04/01/2016 1,000,000 987,940 SLM Corp. 4.660% 11/21/2013 2,500,000 2,526,925 ---------------- TOTAL CORPORATE DEBT (COST $18,745,192) 18,819,293 ---------------- U.S. GOVERNMENT AGENCY OBLIGATIONS -- 24.1% FEDERAL HOME LOAN MORTGAGE CORPORATION (FHLMC) -- 11.9% PASS-THROUGH SECURITIES Federal Home Loan Bank 6.430% 02/20/2007 1,750,000 1,851,658 FHLMC 3.625% 09/15/2008 1,500,000 1,497,659 FHLMC 4.500% 07/15/2013 7,200,000 7,230,420 ---------------- TOTAL PASS-THROUGH SECURITIES 10,579,737 ---------------- FEDERAL NATIONAL MORTGAGE ASSOCIATION (FNMA) -- 10.1% OTHER -- 4.1% FNMA (Benchmark Note) 4.375% 03/15/2013 3,600,000 3,585,657 ---------------- PASS-THROUGH SECURITIES -- 6.0% FNMA 3.250% 02/15/2009 $ 1,600,000 $ 1,567,311 FNMA 3.678% 02/17/2009 3,755,000 3,789,283 ---------------- TOTAL PASS-THROUGH SECURITIES 5,356,594 ---------------- TOTAL FEDERAL NATIONAL MORTGAGE ASSOCIATION (FNMA) 8,942,251 ---------------- OTHER AGENCIES -- 2.1% Tennessee Valley Authority 3.375% 01/15/2007 1,807,050 1,909,130 ---------------- TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS (COST $21,373,793) 21,431,118 ---------------- U.S. TREASURY OBLIGATIONS -- 52.1% U.S. TREASURY BONDS -- 15.0% U.S. Treasury Inflation Index 2.375% 01/15/2025 2,106,166 2,254,914 U.S. Treasury Inflation Index 3.375% 04/15/2032 854,871 1,132,438 U.S. Treasury Inflation Index 3.625% 04/15/2028 3,327,854 4,371,968 U.S. Treasury Inflation Index 3.875% 04/15/2029 4,075,250 5,597,102 ---------------- TOTAL U.S. TREASURY BONDS 13,356,422 ---------------- U.S. TREASURY NOTES -- 37.1% U.S. Treasury Inflation Index 1.875% 07/15/2013 3,522,956 3,624,241 U.S. Treasury Inflation Index 2.000% 01/15/2014 3,785,872 3,917,786 U.S. Treasury Inflation Index 2.000% 07/15/2014 3,280,759 3,385,333 U.S. Treasury Inflation Index 3.000% 07/15/2012 4,124,161 4,601,661 U.S. Treasury Inflation Index 3.375% 01/15/2012 1,026,549 1,168,661 U.S. Treasury Inflation Index 3.500% 01/15/2011 2,242,670 2,548,934 U.S. Treasury Inflation Index 3.625% 01/15/2008 $ 2,764,570 $ 3,012,085 U.S. Treasury Inflation Index 3.875% 01/15/2009 5,021,926 5,630,443 U.S. Treasury Inflation Index 4.250% 01/15/2010 2,376,694 2,756,408 U.S. Treasury Inflation Index 8.750% 04/15/2010 2,312,235 2,290,558 ---------------- TOTAL U.S. TREASURY NOTES 32,936,110 ---------------- TOTAL U.S. TREASURY OBLIGATIONS (COST $44,261,759) 46,292,532 ---------------- TOTAL BONDS & NOTES (COST $84,380,744) 86,542,943 ---------------- SHORT-TERM INVESTMENTS -- 2.5% REPURCHASE AGREEMENT Investors Bank & Trust Company Repurchase Agreement, dated 12/31/2004, 1.75%, due 01/03/2005(a) 2,188,832 2,188,832 ---------------- TOTAL SHORT-TERM INVESTMENTS (AT AMORTIZED COST) 2,188,832 ---------------- TOTAL INVESTMENTS -- 99.9% (COST $86,569,576)* 88,731,775 OTHER ASSETS/ (LIABILITIES) -- 0.1% 106,246 ---------------- NET ASSETS -- 100.0% $ 88,838,021 ================
NOTES TO PORTFOLIO OF INVESTMENTS * See Note 7 for aggregate cost for Federal tax purposes. + Securities exempt from registration under rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At December 31, 2004, these securities amounted to a value of $2,046,620 or 2.3% of net assets. (a) Maturity value $2,189,151. Collateralized by U.S. Government Agency obligation with a rate of 5.625%, maturity date of 08/25/2015, and an aggregate market value, including accrued interest, of $2,298,274. The accompanying notes are an integral part of the financial statements. 30 MML LARGE CAP VALUE FUND - PORTFOLIO OF INVESTMENTS DECEMBER 31, 2004
NUMBER OF MARKET SHARES VALUE ---------------- ---------------- EQUITIES -- 92.4% ADVERTISING -- 0.3% WPP Group PLC Sponsored ADR (United Kingdom)+ 4,200 $ 229,530 ---------------- BANKING, SAVINGS & LOANS -- 17.7% Citigroup, Inc. 52,800 2,543,904 Fifth Third Bancorp 21,800 1,030,704 Golden West Financial Corp. 34,600 2,125,132 HSBC Holdings PLC 149,082 2,526,415 JP Morgan Chase & Co. 66,816 2,606,492 Lloyds TSB Group PLC Sponsored ADR (United Kingdom)+ 15,800 581,282 Providian Financial Corp.* + 22,100 363,987 State Street Corp. 3,700 181,744 Wells Fargo & Co. 43,100 2,678,665 ---------------- 14,638,325 ---------------- BEVERAGES -- 2.0% Diageo PLC Sponsored ADR (United Kingdom) 18,500 1,070,780 Heineken Holding NV Cl. A+ 19,650 596,288 ---------------- 1,667,068 ---------------- BROADCASTING, PUBLISHING & PRINTING -- 5.8% Comcast Corp. Special Cl. A* 90,900 2,985,156 Gannett Co., Inc. 5,700 465,690 IAC/InterActiveCorp* + 17,000 469,540 Lagardere S.C.A. SA 12,100 875,731 ---------------- 4,796,117 ---------------- BUILDING MATERIALS & CONSTRUCTION -- 1.4% Martin Marietta Materials, Inc. 10,500 563,430 Vulcan Materials Co. 10,700 584,327 ---------------- 1,147,757 ---------------- COMMERCIAL SERVICES -- 4.5% Block (H&R), Inc.+ 25,900 1,269,100 Dun & Bradstreet Corp.* 11,450 682,992 Iron Mountain, Inc.* + 24,900 759,201 Moody's Corp. 11,300 981,405 ---------------- 3,692,698 ---------------- COMMUNICATIONS -- 0.7% Nokia Oyj Sponsored ADR (Finland) 12,800 200,576 SK Telecom Co. Limited ADR (South Korea)+ 15,900 $ 353,775 ---------------- 554,351 ---------------- COMPUTERS & INFORMATION -- 1.6% Lexmark International, Inc.* 15,900 1,351,500 ---------------- CONTAINERS -- 2.8% Sealed Air Corp.* 43,400 2,311,918 ---------------- DIVERSIFIED FINANCIAL -- 0.7% Takefuji Corp. 8,500 574,237 ---------------- ENERGY-- 8.3% ConocoPhillips 22,430 1,947,597 Devon Energy Corp. 40,800 1,587,936 EOG Resources, Inc. 17,200 1,227,392 Occidental Petroleum Corp. 27,500 1,604,900 Transocean, Inc.* + 13,100 555,309 ---------------- 6,923,134 ---------------- FINANCIAL SERVICES -- 13.8% American Express Co. 98,400 5,546,808 Berkshire Hathaway, Inc. Cl. A* 42 3,691,800 Centerpoint Properties Corp. 31,700 1,518,113 Morgan Stanley 11,600 644,032 ---------------- 11,400,753 ---------------- FOODS -- 1.0% Hershey Foods Corp. 14,800 821,992 ---------------- HEALTHCARE -- 1.3% HCA, Inc. 27,500 1,098,900 ---------------- HOUSEHOLD PRODUCTS -- 0.0% Hunter Douglas NV 200 10,703 ---------------- INDUSTRIAL - DIVERSIFIED -- 4.2% Tyco International Limited 98,243 3,511,205 ---------------- INSURANCE -- 13.1% American International Group, Inc. 55,750 3,661,102 Aon Corp. 24,200 577,412 Chubb Corp. 3,300 253,770 Loews Corp. 21,700 1,525,510 Markel Corp.* 200 72,800 Marsh & McLennan Companies, Inc. 27,100 891,590 Principal Financial Group, Inc. 7,700 315,238 Progressive Corp. 29,200 $ 2,477,328 Sun Life Financial, Inc. 4,400 147,576 Transatlantic Holdings, Inc. 15,500 958,365 ---------------- 10,880,691 ---------------- PHARMACEUTICALS -- 2.5% Cardinal Health, Inc.+ 17,200 1,000,180 Eli Lilly & Co. 13,300 754,775 Novartis AG 6,300 318,850 ---------------- 2,073,805 ---------------- PREPACKAGED SOFTWARE -- 1.0% Microsoft Corp. 31,800 849,378 ---------------- RETAIL -- 4.0% AutoZone, Inc.* 7,700 703,087 Costco Wholesale Corp. 54,200 2,623,822 ---------------- 3,326,909 ---------------- TOBACCO -- 4.9% Altria Group, Inc. 66,600 4,069,260 ---------------- TRANSPORTATION -- 0.8% United Parcel Service, Inc. Cl. B 8,200 700,772 ---------------- TOTAL EQUITIES (COST $61,425,203) 76,631,003 ---------------- PRINCIPAL AMOUNT ---------------- SHORT-TERM INVESTMENTS -- 14.7% CASH EQUIVALENTS -- 6.6%** American AAdvanage Select Money Market Fund 63,736 63,736 Bank of America Bank Note 2.260% 02/15/2005 $ 47,615 47,615 Bank of America Bank Note 2.270% 01/18/2005 111,101 111,101 Bank of America Bank Note 2.270% 03/03/2005 206,331 206,331 Bank of America Bank Note 2.300% 06/09/2005 111,101 111,101 Bank of Montreal Eurodollar Time Deposit 2.125% 02/02/2005 48,408 48,408
The accompanying notes are an integral part of the financial statements. 31
PRINCIPAL MARKET AMOUNT VALUE ---------------- ---------------- Bank of Montreal Eurodollar Time Deposit 2.260% 01/28/2005 $ 50,300 $ 50,300 BGI Institutional Money Market Fund 571,378 571,378 BNP Paribas Eurodollar Time Deposit 2.300% 01/03/2005 31,743 31,743 Calyon Eurodollar Time Deposit 2.435% 03/16/2005 135,861 135,861 Canadian Imperial Bank of Commerce Bank Note 2.030% 05/18/2005 317,433 317,433 Citigroup Eurodollar Time Deposit 2.080% 01/28/2005 124,592 124,592 Den Danske Bank Eurodollar Time Deposit 2.260% 01/20/2005 190,460 190,460 Dexia Group Eurodollar Time Deposit 2.040% 01/21/2005 63,486 63,486 Federal Home Loan Bank Discount Note 2.184% 01/05/2005 197,172 197,172 Fortis Bank Eurodollar Time Deposit 2.140% 01/12/2005 63,486 63,486 Fortis Bank Eurodollar Time Deposit 2.200% 02/11/2005 47,615 47,615 Fortis Bank Eurodollar Time Deposit 2.260% 01/05/2005 261,882 261,882 Freddie Mac Discount Note 2.184% 01/04/2005 221,839 221,839 Freddie Mac Discount Note 2.228% 02/01/2005 59,224 59,224 Freddie Mac Discount Note 2.277% 02/01/2005 277,156 277,156 General Electric Capital Corp. 2.294% 01/21/2005 90,383 90,383 General Electric Capital Corp. 2.295% 01/10/2005 $ 154,639 $ 154,639 HBOS Halifax Bank of Scotland Eurodollar Time Deposit 2.025% 01/21/2005 73,009 73,009 Lloyds TSB Bank Eurodollar Time Deposit 2.280% 02/02/2005 77,771 77,771 Merrill Lynch Premier Institutional Money Market Fund 104,753 104,753 Merrimac Cash Fund, Premium Class 238,075 238,075 Morgan Stanley Dean Witter & Co. 2.393% 07/19/2005 209,505 209,505 Royal Bank of Canada Eurodollar Time Deposit 2.250% 01/19/2005 158,717 158,717 Royal Bank of Canada Eurodollar Time Deposit 2.260% 02/01/2005 126,973 126,973 Royal Bank of Scotland Eurodollar Time Deposit 2.015% 01/21/2005 183,158 183,158 Royal Bank of Scotland Eurodollar Time Deposit 2.270% 02/02/2005 95,230 95,230 Royal Bank of Scotland Eurodollar Time Deposit 2.360% 02/17/2005 15,871 15,871 Toronto Dominion Bank Eurodollar Time Deposit 2.420% 03/01/2005 158,717 158,717 Wells Fargo Eurodollar Time Deposit 2.270% 01/25/2005 39,679 39,679 Wells Fargo Eurodollar Time Deposit 2.310% 01/28/2005 158,717 158,717 Wells Fargo Eurodollar Time Deposit 2.320% 01/14/2005 380,285 380,285 ---------------- 5,467,401 ---------------- REPURCHASE AGREEMENT -- 8.1% Investors Bank & Trust Company Repurchase Agreement, dated 12/31/2004, 1.75%, due 01/03/2005(a) $ 6,705,758 $ 6,705,758 ---------------- TOTAL SHORT-TERM INVESTMENTS (AT AMORTIZED COST) 12,173,159 ---------------- TOTAL INVESTMENTS -- 107.1% (COST $73,598,362)*** 88,804,162 OTHER ASSETS/ (LIABILITIES) -- (7.1%) (5,906,428) ---------------- NET ASSETS -- 100.0% $ 82,897,734 ================
NOTES TO PORTFOLIO OF INVESTMENTS ADR - American Depository Receipt. * Non-income producing security. ** Represents investments of security lending collateral. (NOTE 2). *** See Note 7 for aggregate cost for Federal tax purposes. + Denotes all or a portion of security on loan. (a) Maturity value of $6,706,736. Collateralized by U.S. Government Agency obligation with a rate of 4.875%, maturity date of 09/25/2023, and an aggregate market value, including accrued interest, of $7,041,046. The accompanying notes are an integral part of the financial statements. 32 MML EQUITY INDEX FUND - PORTFOLIO OF INVESTMENTS DECEMBER 31, 2004
NUMBER OF MARKET SHARES VALUE ---------------- ---------------- EQUITIES -- 99.2% ADVERTISING -- 0.2% Interpublic Group of Companies, Inc.* + 14,807 $ 198,414 Monster Worldwide, Inc.* 4,276 143,845 Omnicom Group, Inc. 6,706 565,450 ---------------- 907,709 ---------------- AEROSPACE & DEFENSE -- 1.9% Boeing Co. 29,969 1,551,495 General Dynamics Corp. 7,107 743,392 Goodrich Corp. 4,239 138,361 Honeywell International, Inc. 30,690 1,086,733 Lockheed Martin Corp. 15,940 885,467 Northrop Grumman Corp. 12,868 699,504 Raytheon Co. 16,088 624,697 Rockwell Collins, Inc. 6,368 251,154 United Technologies Corp. 18,311 1,892,442 ---------------- 7,873,245 ---------------- AIR TRANSPORTATION -- 0.1% Delta Air Lines, Inc.* + 4,499 33,653 Southwest Airlines Co. 28,240 459,747 ---------------- 493,400 ---------------- APPAREL, TEXTILES & SHOES -- 0.8% Coach, Inc.* 6,700 377,880 The Gap, Inc. 31,245 659,894 Jones Apparel Group, Inc. 4,496 164,419 Limited Brands 14,430 332,179 Liz Claiborne, Inc. 3,874 163,522 Nike, Inc. Cl. B 9,424 854,663 Nordstrom, Inc. 5,035 235,286 Reebok International Limited+ 2,156 94,864 VF Corp. 3,951 218,806 ---------------- 3,101,513 ---------------- AUTOMOTIVE & PARTS -- 1.0% AutoNation, Inc.* 9,600 184,416 Cooper Tire & Rubber Co.+ 2,346 50,556 Dana Corp. 5,303 91,901 Delphi Corp.+ 20,083 181,149 Ford Motor Co.+ 65,367 956,973 General Motors Corp.+ 20,130 806,408 Genuine Parts Co. 6,229 274,450 The Goodyear Tire & Rubber Co.* + 6,265 91,845 Harley-Davidson, Inc. 10,520 639,090 Navistar International Corp.* 2,474 $ 108,807 Paccar, Inc.+ 6,183 497,608 Visteon Corp.+ 4,612 45,059 ---------------- 3,928,262 ---------------- BANKING, SAVINGS & LOANS -- 11.8% AmSouth Bancorporation+ 12,659 327,868 Bank of America Corp. 143,992 6,766,184 Bank of New York Co., Inc. 27,845 930,580 BB&T Corp. 19,783 831,875 Capital One Financial Corp. 8,600 724,206 Citigroup, Inc. 185,044 8,915,420 Comerica, Inc.+ 6,169 376,432 Compass Bancshares, Inc. 3,800 184,946 Fannie Mae 34,576 2,462,157 Fifth Third Bancorp+ 20,363 962,763 First Horizon National Corp.+ 4,400 189,684 Freddie Mac 24,586 1,811,988 Golden West Financial Corp. 10,910 670,092 JP Morgan Chase & Co. 127,247 4,963,905 KeyCorp+ 14,510 491,889 M&T Bank Corp. 4,200 452,928 Marshall and Ilsley Corp. 8,000 353,600 Mellon Financial Corp. 15,194 472,685 National City Corp.+ 23,698 889,860 North Fork Bancorporation, Inc. 16,750 483,237 Northern Trust Corp. 8,488 412,347 Providian Financial Corp.* + 10,502 172,968 Regions Financial Corp. 16,470 586,167 SLM Corp. 15,542 829,787 Sovereign Bancorp, Inc.+ 11,677 263,316 State Street Corp. 12,022 590,521 SunTrust Banks, Inc. 12,790 944,925 Synovus Financial Corp. 11,063 316,181 U.S. Bancorp 67,132 2,102,574 Wachovia Corp. 57,351 3,016,663 Washington Mutual, Inc. 31,376 1,326,577 Wells Fargo & Co. 60,329 3,749,447 Zions Bancorp 3,193 217,220 ---------------- 47,790,992 ---------------- BEVERAGES -- 2.2% Anheuser-Busch Companies, Inc. 28,148 1,427,948 Brown-Forman Corp. Cl. B 4,380 213,218 The Coca-Cola Co. 86,676 3,608,322 Coca-Cola Enterprises, Inc. 16,774 $ 349,738 Coors (Adolph) Co. Cl. B+ 1,289 97,539 The Pepsi Bottling Group, Inc.+ 9,038 244,388 PepsiCo, Inc. 60,008 3,132,418 ---------------- 9,073,571 ---------------- BROADCASTING, PUBLISHING & PRINTING -- 2.8% Clear Channel Communications, Inc. 20,449 684,837 Comcast Corp. Cl. A* 79,118 2,633,047 Dow Jones & Co., Inc.+ 2,926 125,994 Gannett Co., Inc. 9,135 746,329 Knight Ridder, Inc.+ 2,755 184,420 The McGraw-Hill Companies, Inc. 6,830 625,218 Meredith Corp. 1,844 99,945 New York Times Co. Cl. A+ 5,265 214,812 Time Warner, Inc.* 163,408 3,176,652 Tribune Co. 11,409 480,775 Univision Communications, Inc. Cl. A* + 11,600 339,532 Viacom, Inc. Cl. B 60,768 2,211,348 ---------------- 11,522,909 ---------------- BUILDING MATERIALS & CONSTRUCTION -- 0.2% Louisiana-Pacific Corp. 3,856 103,109 Masco Corp. 15,467 565,010 Vulcan Materials Co. 3,610 197,142 ---------------- 865,261 ---------------- CHEMICALS -- 1.6% Air Products & Chemicals, Inc. 8,158 472,919 Ashland, Inc. 2,503 146,125 Dow Chemical Co. 33,568 1,661,952 Du Pont (E.I.) de Nemours & Co. 35,604 1,746,376 Eastman Chemical Co. 2,800 161,644 Engelhard Corp. 4,393 134,733 Great Lakes Chemical Corp.+ 1,855 52,849 Hercules, Inc.* 4,006 59,489 International Flavors & Fragrances, Inc. 3,346 143,343 Monsanto Co. 9,585 532,447 PPG Industries, Inc. 6,089 415,026 Praxair, Inc. 11,564 510,551 Rohm & Haas Co. 8,040 355,609 ---------------- 6,393,063 ----------------
The accompanying notes are an integral part of the financial statements. 33
NUMBER OF MARKET SHARES VALUE ---------------- ---------------- COMMERCIAL SERVICES -- 2.0% Allied Waste Industries, Inc.* 11,360 $ 105,421 Apollo Group, Inc. Cl. A* 6,588 531,717 Block (H&R), Inc.+ 5,874 287,826 Cendant Corp. 37,842 884,746 Cintas Corp. 6,190 271,493 Convergys Corp.* 5,116 76,689 Donnelley (R.R.) & Sons Co. 7,822 276,038 eBay, Inc.* 23,720 2,758,162 Ecolab, Inc.+ 9,216 323,758 Equifax, Inc. 4,859 136,538 Fluor Corp.+ 2,927 159,551 Moody's Corp. 5,246 455,615 Paychex, Inc. 13,497 459,978 PerkinElmer, Inc. 4,608 103,634 Quest Diagnostics, Inc. 3,664 350,095 Robert Half International, Inc. 6,280 184,820 Ryder System, Inc. 2,382 113,788 Waste Management, Inc. 20,753 621,345 ---------------- 8,101,214 ---------------- COMMUNICATIONS -- 2.2% ADC Telecommunications, Inc.* 27,448 73,561 Andrew Corp.* 5,761 78,522 Avaya, Inc.* + 16,176 278,227 Ciena Corp.* 19,241 64,265 Citizens Communications Co. 12,201 168,252 L-3 Communications Holdings, Inc. 3,800 278,312 Lucent Technologies, Inc.* + 153,879 578,585 Network Appliance, Inc.* + 12,820 425,880 Nextel Communications, Inc. Cl. A* 39,730 1,191,900 Qualcomm, Inc. 58,160 2,465,984 SBC Communications, Inc. 118,546 3,054,930 Scientific-Atlanta, Inc. 5,510 181,885 Tellabs, Inc.* 14,912 128,094 ---------------- 8,968,397 ---------------- COMMUNICATIONS EQUIPMENT -- 0.4% Motorola, Inc. 86,010 1,479,372 ---------------- COMPUTER INTEGRATED SYSTEMS DESIGN -- 0.4% Autodesk, Inc. 8,180 310,431 Computer Sciences Corp.* 6,787 382,583 Parametric Technology Corp.* 9,034 53,210 Sun Microsystems, Inc.* 118,808 639,187 Teradyne, Inc.* 6,960 $ 118,807 Unisys Corp.* 11,915 121,295 ---------------- 1,625,513 ---------------- COMPUTER PROGRAMMING SERVICES -- 0.0% Mercury Interactive Corp.* + 3,370 153,503 ---------------- COMPUTERS & INFORMATION -- 4.4% Apple Computer, Inc.* 13,826 890,394 Cisco Systems, Inc.* 234,773 4,531,119 Comverse Technology, Inc.* 7,022 171,688 Dell, Inc.* 88,547 3,731,371 EMC Corp.* 85,932 1,277,809 Gateway, Inc.* 12,490 75,065 International Business Machines Corp. 59,344 5,850,132 International Game Technology 12,316 423,424 Jabil Circuit, Inc.* + 7,178 183,613 Lexmark International, Inc.* 4,664 396,440 Solectron Corp.* 34,381 183,251 Symbol Technologies, Inc.+ 8,535 147,655 ---------------- 17,861,961 ---------------- COMPUTERS & OFFICE EQUIPMENT -- 0.9% Electronic Data Systems Corp. 17,871 412,820 Hewlett-Packard Co. 107,815 2,260,881 Pitney Bowes, Inc. 8,302 384,217 Xerox Corp.* 34,014 578,578 ---------------- 3,636,496 ---------------- CONTAINERS -- 0.2% Ball Corp. 4,020 176,800 Bemis Co., Inc. 3,866 112,462 Pactiv Corp.* 5,359 135,529 Sealed Air Corp.* 2,991 159,331 Temple-Inland, Inc. 2,038 139,399 ---------------- 723,521 ---------------- COSMETICS & PERSONAL CARE -- 2.3% Alberto-Culver Co. 3,207 155,764 Avon Products, Inc. 16,956 656,197 Colgate-Palmolive Co. 18,977 970,863 The Gillette Co. 35,783 1,602,363 Kimberly-Clark Corp. 17,703 1,165,034 The Procter & Gamble Co. 90,408 4,979,673 ---------------- 9,529,894 ---------------- DATA PROCESSING & PREPARATION -- 0.8% Affiliated Computer Services, Inc. Cl. A* + 4,600 276,874 Automatic Data Processing, Inc. 20,904 $ 927,092 First Data Corp. 29,533 1,256,334 Fiserv, Inc.* 7,021 282,174 IMS Health, Inc. 8,324 193,200 NCR Corp.* 3,350 231,920 ---------------- 3,167,594 ---------------- ELECTRIC UTILITIES -- 2.7% AES Corp.* 23,449 320,548 Allegheny Energy, Inc.* + 5,020 98,944 Ameren Corp.+ 6,481 324,957 American Electric Power Co.+ 14,257 489,585 Calpine Corp.* + 20,471 80,656 CenterPoint Energy, Inc.+ 11,363 128,402 Cinergy Corp. 6,563 273,218 CMS Energy Corp.* + 5,538 57,872 Consolidated Edison, Inc.+ 8,750 382,812 Constellation Energy Group, Inc. 5,925 258,982 Dominion Resources, Inc. 11,878 804,616 DTE Energy Co.+ 6,037 260,376 Duke Energy Corp. 33,635 851,975 Edison International 11,730 375,712 Entergy Corp. 8,160 551,534 Exelon Corp.+ 23,636 1,041,639 FirstEnergy Corp. 11,857 468,470 FPL Group, Inc.+ 6,686 499,778 NiSource, Inc. 9,446 215,180 PG&E Corp.* 14,421 479,931 Pinnacle West Capital Corp. 3,200 142,112 PPL Corp. 6,689 356,390 Progress Energy, Inc.+ 8,872 401,369 Public Service Enterprise Group, Inc.+ 8,598 445,118 Southern Co.+ 26,487 887,844 Teco Energy, Inc.+ 7,361 112,918 TXU Corp.+ 8,777 566,643 ---------------- 10,877,581 ---------------- ELECTRICAL EQUIPMENT & ELECTRONICS -- 6.8% Advanced Micro Devices, Inc.* + 12,760 280,975 Altera Corp.* 13,320 275,724 American Power Conversion Corp. 7,130 152,582 Analog Devices, Inc. 13,570 501,004 Applied Micro Circuits Corp.* 10,300 43,363 Broadcom Corp. Cl. A* 11,553 372,931 Emerson Electric Co. 14,957 1,048,486 Freescale Semiconductor, Inc. Cl. B* 14,325 263,007
The accompanying notes are an integral part of the financial statements. 34
NUMBER OF MARKET SHARES VALUE ---------------- ---------------- General Electric Co. 377,093 $ 13,763,894 Intel Corp. 225,402 5,272,153 JDS Uniphase Corp.* + 51,388 162,900 Johnson Controls, Inc. 6,750 428,220 Kla-Tencor Corp.* + 7,006 326,339 Linear Technology Corp. 11,030 427,523 LSI Logic Corp.* 13,828 75,777 Maxim Integrated Products, Inc. 11,660 494,267 Micron Technology, Inc.* + 21,917 270,675 Molex, Inc.+ 6,790 203,700 National Semiconductor Corp. 12,896 231,483 Novellus Systems, Inc. 5,150 143,633 Nvidia Corp.* 6,000 141,360 PMC-Sierra, Inc.* 6,189 69,626 Power-One, Inc.* 3,020 26,938 Qlogic Corp.* 3,300 121,209 Rockwell Automation, Inc. 6,568 325,444 Sanmina-SCI Corp.* + 18,652 157,982 Texas Instruments, Inc. 61,926 1,524,618 Xilinx, Inc. 12,411 367,986 ---------------- 27,473,799 ---------------- ENERGY -- 7.2% Amerada Hess Corp. 3,253 267,982 Anadarko Petroleum Corp. 8,922 578,235 Apache Corp. 11,700 591,669 BJ Services Co. 5,800 269,932 Burlington Resources, Inc. 14,200 617,700 ChevronTexaco Corp. 75,544 3,966,815 ConocoPhillips 24,664 2,141,575 Devon Energy Corp. 17,370 676,040 Dynegy, Inc. Cl. A* + 14,427 66,653 El Paso Corp. 22,846 237,598 EOG Resources, Inc. 4,200 299,712 Exxon Mobil Corp. 229,934 11,786,417 Halliburton Co. 15,765 618,619 Kerr-McGee Corp. 5,446 314,724 KeySpan Corp. 5,780 228,021 Kinder Morgan, Inc. 4,390 321,041 Marathon Oil Corp. 12,405 466,552 Nabors Industries Limited* 5,315 272,606 Nicor, Inc.+ 1,589 58,698 Noble Corp.* 4,840 240,742 Occidental Petroleum Corp. 14,004 817,273 Peoples Energy Corp. 1,357 59,640 Rowan Companies, Inc.* 3,821 98,964 Schlumberger Limited 21,139 1,415,256 Sempra Energy+ 8,317 305,068 Sunoco, Inc. 2,693 220,045 Transocean, Inc.* + 11,527 488,630 Unocal Corp. 9,457 $ 408,921 Valero Energy Corp. 9,100 413,140 The Williams Companies, Inc. 19,818 322,835 Xcel Energy, Inc. 14,472 263,390 XTO Energy, Inc. 9,300 329,034 ---------------- 29,163,527 ---------------- ENTERTAINMENT & LEISURE -- 1.0% Brunswick Corp. 3,239 160,330 Harrah's Entertainment, Inc.+ 4,023 269,098 News Corp., Inc. Cl. A+ 92,200 1,720,452 The Walt Disney Co. 73,422 2,041,132 ---------------- 4,191,012 ---------------- FINANCIAL SERVICES -- 3.9% American Express Co. 44,772 2,523,798 Apartment Investment & Management Co. Cl. A 3,400 131,036 Archstone-Smith Trust 6,200 237,460 Bear Stearns Companies, Inc. 3,718 380,389 CIT Group, Inc. 7,500 343,650 Countrywide Financial Corp. 20,154 745,900 E Trade Financial Corp.* 13,300 198,835 Federated Investors, Inc. Cl. B 3,900 118,560 Franklin Resources, Inc. 8,928 621,835 The Goldman Sachs Group, Inc. 17,325 1,802,493 Huntington Bancshares, Inc.+ 8,234 204,039 Janus Capital Group, Inc. 8,550 143,725 Lehman Brothers Holdings, Inc. 9,672 846,107 MBNA Corp. 45,621 1,286,056 Merrill Lynch & Co., Inc. 33,169 1,982,511 Morgan Stanley 39,191 2,175,884 PNC Financial Services Group, Inc. 10,049 577,215 Price (T. Rowe) Group, Inc. 4,500 279,900 ProLogis Trust 6,500 281,645 The Schwab (Charles) Corp.+ 48,761 583,182 Simon Property Group, Inc. 7,700 497,959 ---------------- 15,962,179 ---------------- FOODS -- 1.9% Archer-Daniels-Midland Co. 23,261 518,953 Campbell Soup Co. 14,702 439,443 ConAgra Foods, Inc. 18,872 $ 555,780 General Mills, Inc.+ 13,008 646,628 Heinz (H. J.) Co. 12,522 488,233 Hershey Foods Corp. 8,844 491,196 Kellogg Co. 14,764 659,360 The Kroger Co.* + 26,418 463,372 McCormick & Co., Inc. 4,900 189,140 Safeway, Inc.* 15,960 315,050 Sara Lee Corp. 28,365 684,731 Starbucks Corp.* 14,230 887,383 SuperValu, Inc. 4,821 166,421 Sysco Corp.+ 22,830 871,421 Wrigley (Wm.) Jr. Co. 8,034 555,872 ---------------- 7,932,983 ---------------- FOREST PRODUCTS & PAPER -- 0.5% Georgia-Pacific Corp. 9,270 347,440 International Paper Co. 17,389 730,338 MeadWestvaco Corp. 7,201 244,042 OfficeMax, Inc. 3,142 98,596 Plum Creek Timber Co., Inc. 6,600 253,704 Weyerhaeuser Co. 8,490 570,698 ---------------- 2,244,818 ---------------- HEALTHCARE -- 1.1% Caremark Rx, Inc.* 16,600 654,538 Express Scripts, Inc.* 2,800 214,032 HCA, Inc. 14,976 598,441 Health Management Associates, Inc. Cl. A 8,700 197,664 Humana, Inc.* 5,703 169,322 Laboratory Corp. of America Holdings* 5,000 249,100 Manor Care, Inc. 3,132 110,967 Tenet Healthcare Corp.* + 16,659 182,916 UnitedHealth Group, Inc. 23,240 2,045,817 ---------------- 4,422,797 ---------------- HOME CONSTRUCTION, FURNISHINGS & APPLIANCES -- 0.3% Centex Corp.+ 4,446 264,893 KB Home 1,671 174,452 Leggett & Platt, Inc. 6,850 194,745 Maytag Corp.+ 2,786 58,785 Pulte Homes, Inc. 4,522 288,504 Whirlpool Corp.+ 2,369 163,958 ---------------- 1,145,337 ---------------- HOUSEHOLD PRODUCTS -- 0.6% Black & Decker Corp.+ 2,950 260,573 The Clorox Co. 5,470 322,347 Corning, Inc.* 49,791 586,040 Fortune Brands, Inc. 5,180 399,792 Newell Rubbermaid, Inc. 9,835 237,909
The accompanying notes are an integral part of the financial statements. 35
NUMBER OF MARKET SHARES VALUE ---------------- ---------------- Sherwin-Williams Co. 5,129 $ 228,907 Snap-On, Inc. 2,153 73,977 The Stanley Works+ 3,005 147,215 ---------------- 2,256,760 ---------------- INDUSTRIAL - DISTRIBUTION -- 0.1% Grainger (W.W.), Inc. 3,332 221,978 ---------------- INDUSTRIAL - DIVERSIFIED -- 1.9% 3M Co. 27,972 2,295,662 Cooper Industries Limited Cl. A 3,414 231,776 Danaher Corp. 11,010 632,084 Eaton Corp. 5,394 390,310 Illinois Tool Works, Inc. 10,543 977,125 ITT Industries, Inc. 3,337 281,810 Textron, Inc. 4,932 363,982 Tyco International Limited 71,874 2,568,777 ---------------- 7,741,526 ---------------- INFORMATION RETRIEVAL SERVICES -- 0.4% Yahoo!, Inc.* 48,816 1,839,387 ---------------- INSURANCE -- 5.0% ACE Limited 10,200 436,050 Aetna, Inc. 5,249 654,813 AFLAC, Inc. 18,120 721,901 Allstate Corp. 24,804 1,282,863 Ambac Financial Group, Inc. 3,875 318,254 American International Group, Inc. 93,070 6,111,907 Aon Corp. 11,246 268,330 Chubb Corp. 6,873 528,534 Cigna Corp. 4,940 402,956 Cincinnati Financial Corp. 6,083 269,234 The Hartford Financial Services Group, Inc.+ 10,558 731,775 Jefferson-Pilot Corp. 4,920 255,643 Lincoln National Corp. 6,341 295,998 Loews Corp. 6,658 468,057 Marsh & McLennan Companies, Inc. 18,642 613,322 MBIA, Inc.+ 5,175 327,474 Metlife, Inc. 26,832 1,086,964 MGIC Investment Corp. 3,589 247,318 Principal Financial Group, Inc. 11,200 458,528 Progressive Corp. 7,148 606,436 Prudential Financial, Inc. 18,600 1,022,256 Safeco Corp. 4,559 238,162 St. Paul Travelers Companies 23,963 888,308 Torchmark Corp. 3,926 224,332 UnumProvident Corp. 10,670 191,420 WellPoint, Inc.* 10,603 $ 1,219,345 XL Capital Limited Cl. A+ 5,027 390,347 ---------------- 20,260,527 ---------------- LODGING -- 0.3% Hilton Hotels Corp. 13,791 313,607 Marriott International, Inc. Cl. A 8,164 514,169 Starwood Hotels & Resorts Worldwide, Inc. 7,440 434,496 ---------------- 1,262,272 ---------------- MACHINERY & COMPONENTS -- 0.9% Baker Hughes, Inc. 11,898 507,688 Caterpillar, Inc. 12,252 1,194,693 Cummins, Inc. 1,539 128,953 Deere & Co. 8,843 657,919 Dover Corp. 7,335 307,630 Ingersoll-Rand Co. Cl. A 6,283 504,525 Pall Corp.+ 4,592 132,938 Parker-Hannifin Corp. 4,314 326,742 ---------------- 3,761,088 ---------------- MANUFACTURING -- 0.4% American Standard Companies, Inc.* 7,700 318,164 Applied Materials, Inc.* 60,706 1,038,073 Avery Dennison Corp. 3,928 235,562 Millipore Corp.* + 1,815 90,405 ---------------- 1,682,204 ---------------- MEDICAL SUPPLIES -- 2.4% Agilent Technologies, Inc.* 17,383 418,930 Allergan, Inc. 4,707 381,596 Applied Biosystems Group-Applera Corp. 7,238 151,347 Bard (C.R.), Inc. 3,720 238,006 Bausch & Lomb, Inc. 1,892 121,958 Baxter International, Inc. 21,992 759,604 Becton, Dickinson & Co. 8,948 508,246 Biomet, Inc. 9,055 392,896 Boston Scientific Corp.* 30,122 1,070,837 Fisher Scientific International* 4,100 255,758 Guidant Corp. 11,188 806,655 Medtronic, Inc. 43,181 2,144,800 St. Jude Medical, Inc.* 12,644 530,163 Stryker Corp. 14,300 689,975 Tektronix, Inc. 3,120 94,255 Thermo Electron Corp.* 5,854 176,732 Waters Corp.* 4,200 196,518 Zimmer Holdings, Inc.* 8,722 698,807 ---------------- 9,637,083 ---------------- METALS & MINING -- 0.7% Alcoa, Inc. 31,088 $ 976,785 Allegheny Technologies, Inc. 3,144 68,130 Freeport-McMoRan Copper & Gold, Inc. Cl. B+ 6,333 242,111 Newmont Mining Corp.+ 15,809 702,078 Nucor Corp.+ 5,712 298,966 Phelps Dodge Corp. 3,385 334,844 United States Steel Corp.+ 4,054 207,767 ---------------- 2,830,681 ---------------- PHARMACEUTICALS -- 8.5% Abbott Laboratories 55,798 2,602,977 AmerisourceBergen Corp. 4,076 239,180 Amgen, Inc.* 45,206 2,899,965 Biogen Idec, Inc.* + 12,037 801,785 Bristol-Myers Squibb Co. 69,542 1,781,666 Cardinal Health, Inc.+ 15,469 899,522 Chiron Corp.* + 6,660 221,978 Eli Lilly & Co. 40,380 2,291,565 Forest Laboratories, Inc.* + 13,280 595,741 Genzyme Corp.* 8,100 470,367 Gilead Sciences, Inc.* 15,344 536,887 Hospira, Inc.* 5,539 185,556 Johnson & Johnson 106,012 6,723,281 King Pharmaceuticals, Inc.* 8,867 109,951 McKesson Corp. 10,587 333,067 Medco Health Solutions, Inc.* 9,720 404,352 Medimmune, Inc.* 8,864 240,303 Merck & Co., Inc. 79,343 2,550,084 Mylan Laboratories, Inc.+ 9,800 173,264 Pfizer, Inc. 268,427 7,218,002 Schering-Plough Corp. 52,688 1,100,125 Sigma-Aldrich Corp. 2,484 150,183 Watson Pharmaceutical, Inc.* 3,970 130,256 Wyeth 47,656 2,029,669 ---------------- 34,689,726 ---------------- PHOTOGRAPHY EQUIPMENT/SUPPLIES -- 0.1% Eastman Kodak Co.+ 10,260 330,885 ---------------- PREPACKAGED SOFTWARE -- 4.2% Adobe Systems, Inc. 8,606 539,940 BMC Software, Inc.* 8,065 150,009 Citrix Systems, Inc.* 6,092 149,437 Computer Associates International, Inc.+ 20,923 649,868 Compuware Corp.* 13,878 89,791 Electronic Arts, Inc.* 10,900 672,312 Intuit, Inc.* 6,910 304,109
The accompanying notes are an integral part of the financial statements. 36
NUMBER OF MARKET SHARES VALUE ---------------- ---------------- Microsoft 387,528 $ 10,350,873 Novell, Inc.* 13,976 94,338 Oracle Corp.* 182,861 2,508,853 Siebel Systems, Inc.* 18,118 190,239 SunGard Data Systems, Inc.* 10,300 291,799 Symantec Corp.* 22,600 582,176 Veritas Software Corp.* 15,546 443,838 ---------------- 17,017,582 ---------------- REAL ESTATE -- 0.2% Equity Office Properties Trust 14,460 421,075 Equity Residential 10,000 361,800 ---------------- 782,875 ---------------- RESTAURANTS -- 0.6% Darden Restaurants, Inc. 5,692 157,896 McDonald's Corp. 44,877 1,438,757 Wendy's International, Inc. 4,075 159,984 Yum! Brands, Inc. 10,398 490,578 ---------------- 2,247,215 ---------------- RETAIL -- 5.7% AutoZone, Inc.* 2,954 269,730 Bed Bath & Beyond, Inc.* 10,750 428,172 Best Buy Co., Inc. 11,630 691,055 Big Lots, Inc.* 4,174 50,631 Circuit City Stores, Inc.+ 7,100 111,044 Costco Wholesale Corp. 16,442 795,957 CVS Corp. 14,303 644,636 Dillards, Inc. Cl. A 3,001 80,637 Dollar General Corp. 11,714 243,300 Family Dollar Stores, Inc.+ 6,051 188,973 Federated Department Stores, Inc. 6,063 350,381 The Home Depot, Inc. 78,437 3,352,397 J.C. Penney Co., Inc. 10,309 426,793 Kohl's Corp.* 12,223 601,005 Lowe's Companies, Inc. 27,882 1,605,724 The May Department Stores Co. 10,432 306,701 Office Depot, Inc.* 11,265 195,560 RadioShack Corp. 5,705 187,580 Sears, Roebuck and Co. 7,629 389,308 Staples, Inc. 17,773 599,128 Target Corp. 32,268 1,675,677 Tiffany & Co. 5,192 165,988 TJX Companies, Inc.+ 17,476 439,172 Toys R Us, Inc.* 7,662 156,841 Walgreen Co. 36,604 1,404,495 Wal-Mart Stores, Inc. 150,912 7,971,172 ---------------- 23,332,057 ---------------- RETAIL - GROCERY -- 0.1% Albertson's, Inc.+ 13,147 $ 313,950 ---------------- TELEPHONE UTILITIES -- 2.2% Alltel Corp. 10,967 644,421 AT&T Corp. 28,684 546,717 BellSouth Corp. 65,520 1,820,801 CenturyTel, Inc. 4,931 174,903 Qwest Communications International, Inc.* 66,058 293,298 Sprint Corp. (FON Group) 52,135 1,295,555 Verizon Communications, Inc. 99,029 4,011,665 ---------------- 8,787,360 ---------------- TOBACCO -- 1.3% Altria Group, Inc. 73,429 4,486,512 Reynolds American, Inc.+ 5,400 424,440 UST, Inc. 6,022 289,718 ---------------- 5,200,670 ---------------- TOYS, GAMES -- 0.1% Hasbro, Inc. 6,391 123,858 Mattel, Inc. 14,889 290,187 ---------------- 414,045 ---------------- TRANSPORTATION -- 1.9% Burlington Northern Santa Fe Corp. 13,286 628,561 Carnival Corp. 22,585 1,301,574 CSX Corp. 7,665 307,213 FedEx Corp. 10,803 1,063,987 Norfolk Southern Corp. 14,089 509,881 Union Pacific Corp. 9,217 619,843 United Parcel Service, Inc. Cl. B 39,900 3,409,854 ---------------- 7,840,913 ---------------- TRAVEL -- 0.0% Sabre Holdings Corp. 4,931 109,271 ---------------- TOTAL EQUITIES (COST $373,180,319) 403,171,478 ---------------- PRINCIPAL AMOUNT ---------------- SHORT-TERM INVESTMENTS -- 7.5% CASH EQUIVALENTS -- 6.9%** American AAdvanage Select Money Market Fund 325,065 325,065 Bank of America Bank Note 2.260% 02/15/2005 $ 242,843 242,843 PRINCIPAL MARKET AMOUNT VALUE ---------------- ---------------- Bank of America Bank Note 2.270% 01/18/2005 $ 566,633 $ 566,633 Bank of America Bank Note 2.270% 03/03/2005 1,052,318 1,052,318 Bank of America Bank Note 2.300% 06/09/2005 566,633 566,633 Bank of Montreal Eurodollar Time Deposit 2.125% 02/02/2005 246,890 246,890 Bank of Montreal Eurodollar Time Deposit 2.260% 01/28/2005 256,537 256,537 BGI Institutional Money Market Fund 2,914,112 2,914,112 BNP Paribas Eurodollar Time Deposit 2.300% 01/03/2005 161,895 161,895 Calyon Eurodollar Time Deposit 2.435% 03/16/2005 692,911 692,911 Canadian Imperial Bank of Commerce Bank Note 2.030% 05/18/2005 1,618,951 1,618,951 Citigroup Eurodollar Time Deposit 2.080% 01/28/2005 635,438 635,438 Den Danske Bank Eurodollar Time Deposit 2.260% 01/20/2005 971,371 971,371 Dexia Group Eurodollar Time Deposit 2.040% 01/21/2005 323,790 323,790 Federal Home Loan Bank Discount Note 2.184% 01/05/2005 1,005,605 1,005,605 Fortis Bank Eurodollar Time Deposit 2.140% 01/12/2005 323,790 323,790 Fortis Bank Eurodollar Time Deposit 2.200% 02/11/2005 242,843 242,843 Fortis Bank Eurodollar Time Deposit 2.260% 01/05/2005 1,335,635 1,335,635 Freddie Mac Discount Note 2.184% 01/04/2005 1,131,413 1,131,413 Freddie Mac Discount Note 2.228% 02/01/2005 302,051 302,051
The accompanying notes are an integral part of the financial statements. 37
PRINCIPAL MARKET AMOUNT VALUE ---------------- ---------------- Freddie Mac Discount Note 2.277% 02/01/2005 $ 1,413,534 $ 1,413,534 General Electric Capital Corp. 2.294% 01/21/2005 460,969 460,969 General Electric Capital Corp. 2.295% 01/10/2005 788,681 788,681 HBOS Halifax Bank of Scotland Eurodollar Time Deposit 2.025% 01/21/2005 372,359 372,359 Lloyds TSB Bank Eurodollar Time Deposit 2.280% 02/02/2005 396,643 396,643 Merrill Lynch Premier Institutional Money Market Fund 534,256 534,256 Merrimac Cash Fund, Premium Class 1,214,213 1,214,213 Morgan Stanley Dean Witter & Co. 2.393% 07/19/2005 1,068,508 1,068,508 Royal Bank of Canada Eurodollar Time Deposit 2.250% 01/19/2005 809,476 809,476 Royal Bank of Canada Eurodollar Time Deposit 2.260% 02/01/2005 647,580 647,580 Royal Bank of Scotland Eurodollar Time Deposit 2.015% 01/21/2005 934,135 934,135 Royal Bank of Scotland Eurodollar Time Deposit 2.270% 02/02/2005 485,685 485,685 Royal Bank of Scotland Eurodollar Time Deposit 2.360% 02/17/2005 80,948 80,948 Toronto Dominion Bank Eurodollar Time Deposit 2.420% 03/01/2005 809,476 809,476 Wells Fargo Eurodollar Time Deposit 2.270% 01/25/2005 202,369 202,369 Wells Fargo Eurodollar Time Deposit 2.310% 01/28/2005 809,476 809,476 Wells Fargo Eurodollar Time Deposit 2.320% 01/14/2005 1,939,503 1,939,503 ---------------- 27,884,535 ---------------- REPURCHASE AGREEMENT -- 0.5% Investors Bank & Trust Company Repurchase Agreement, dated 12/31/2004, 1.75%, due 01/03/2005(a) $ 2,030,018 $ 2,030,018 ---------------- U.S. TREASURY BILLS -- 0.1% U.S. Treasury Bill 2.140% 03/24/2005 385,000 383,152 ---------------- TOTAL SHORT-TERM INVESTMENTS (COST $30,297,676) 30,297,705 ---------------- TOTAL INVESTMENTS -- 106.7% (COST $403,477,995)*** 433,469,183 OTHER ASSETS/ (LIABILITIES) -- (6.7%) (27,132,777) ---------------- NET ASSETS -- 100.0% $ 406,336,406 ================
NOTES TO PORTFOLIO OF INVESTMENTS * Non-income producing security. ** Represents investments of security lending collateral. (NOTE 2). *** See Note 7 for aggregate cost for Federal tax purposes. + Denotes all or a portion of security on loan. (a) Maturity value of $2,030,314. Collateralized by U.S. Government Agency obligation with a rate of 5.875%, maturity date of 5/25/2015, and an aggregate market value, including accrued interest, of $2,131,519. The accompanying notes are an integral part of the financial statements. 38 MML ENHANCED INDEX CORE EQUITY FUND -- PORTFOLIO OF INVESTMENTS DECEMBER 31, 2004
NUMBER OF MARKET SHARES VALUE ---------------- ---------------- EQUITIES -- 100.0% ADVERTISING -- 0.1% Omnicom Group, Inc.+ 200 $ 16,864 ---------------- AEROSPACE & DEFENSE -- 2.6% Boeing Co. 2,500 129,425 General Dynamics Corp. 600 62,760 Goodrich Corp. 1,000 32,640 Honeywell International, Inc. 1,300 46,033 Lockheed Martin Corp. 700 38,885 Northrop Grumman Corp. 600 32,616 Raytheon Co. 800 31,064 Rockwell Collins, Inc. 300 11,832 United Technologies Corp. 800 82,680 ---------------- 467,935 ---------------- APPAREL, TEXTILES & SHOES -- 1.1% Coach, Inc.* 200 11,280 The Gap, Inc. 2,600 54,912 Jones Apparel Group, Inc. 300 10,971 Limited Brands 1,600 36,832 Liz Claiborne, Inc. 200 8,442 Nike, Inc. Cl. B 400 36,276 Nordstrom, Inc. 300 14,019 Reebok International Limited+ 100 4,400 VF Corp. 500 27,690 ---------------- 204,822 ---------------- AUTOMOTIVE & PARTS -- 0.9% Cooper Tire & Rubber Co.+ 100 2,155 Ford Motor Co.+ 6,700 98,088 General Motors Corp.+ 100 4,006 Genuine Parts Co. 400 17,624 The Goodyear Tire & Rubber Co.* + 300 4,398 Harley-Davidson, Inc. 300 18,225 Paccar, Inc. 300 24,144 ---------------- 168,640 ---------------- BANKING, SAVINGS & LOANS -- 12.0% AmSouth Bancorporation+ 900 23,310 Bank of America Corp. 6,700 314,833 Bank of New York Co., Inc. 800 26,736 BB&T Corp. 900 37,845 Citigroup, Inc. 9,600 462,528 Comerica, Inc.+ 600 36,612 Fannie Mae 1,500 106,815 Fifth Third Bancorp 900 42,552 First Horizon National Corp.+ 200 8,622 Freddie Mac 1,100 $ 81,070 Golden West Financial Corp. 400 24,568 JP Morgan Chase & Co. 5,900 230,159 KeyCorp 1,300 44,070 M&T Bank Corp. 200 21,568 Marshall and Ilsley Corp. 400 17,680 Mellon Financial Corp. 700 21,777 National City Corp.+ 2,400 90,120 North Fork Bancorporation, Inc. 750 21,637 Northern Trust Corp. 300 14,574 Providian Financial Corp.* + 2,000 32,940 Regions Financial Corp. 670 23,845 SLM Corp. 700 37,373 Sovereign Bancorp, Inc. 600 13,530 SunTrust Banks, Inc. 600 44,328 Synovus Financial Corp. 300 8,574 U.S. Bancorp 3,000 93,960 Wachovia Corp. 2,445 128,607 Washington Mutual, Inc. 1,300 54,964 Wells Fargo & Co. 1,600 99,440 Zions Bancorp 100 6,803 ---------------- 2,171,440 ---------------- BEVERAGES -- 1.6% Brown-Forman Corp. Cl. B 200 9,736 The Coca-Cola Co. 2,200 91,586 Coca-Cola Enterprises, Inc. 800 16,680 Coors (Adolph) Co. Cl. B 100 7,567 The Pepsi Bottling Group, Inc.+ 1,000 27,040 PepsiCo, Inc. 2,800 146,160 ---------------- 298,769 ---------------- BROADCASTING, PUBLISHING & PRINTING -- 2.6% Clear Channel Communications, Inc.+ 900 30,141 Comcast Corp. Cl. A* 2,200 73,216 Dow Jones & Co., Inc.+ 100 4,306 Gannett Co., Inc. 300 24,510 Knight Ridder, Inc.+ 200 13,388 The McGraw-Hill Companies, Inc. 400 36,616 Meredith Corp. 300 16,260 New York Times Co. Cl. A+ 200 8,160 Time Warner, Inc.* 7,500 145,800 Tribune Co. 300 12,642 Univision Communications, Inc. Cl. A* + 100 2,927 Viacom, Inc. Cl. B 2,800 $ 101,892 ---------------- 469,858 ---------------- BUILDING MATERIALS & CONSTRUCTION -- 0.3% Louisiana-Pacific Corp. 300 8,022 Masco Corp. 800 29,224 Vulcan Materials Co. 200 10,922 ---------------- 48,168 ---------------- CHEMICALS -- 1.6% Air Products & Chemicals, Inc. 300 17,391 Ashland, Inc. 100 5,838 Dow Chemical Co. 1,600 79,216 Du Pont (E.I.) de Nemours & Co. 1,600 78,480 Eastman Chemical Co. 100 5,773 Engelhard Corp. 200 6,134 International Flavors & Fragrances, Inc. 100 4,284 Monsanto Co. 900 49,995 PPG Industries, Inc. 500 34,080 Rohm & Haas Co. 400 17,692 ---------------- 298,883 ---------------- COMMERCIAL SERVICES -- 2.1% Apollo Group, Inc. Cl. A* 100 8,071 Block (H&R), Inc.+ 300 14,700 Cendant Corp. 1,700 39,746 Cintas Corp.+ 200 8,772 Convergys Corp.* 300 4,497 Donnelley (R.R.) & Sons Co. 100 3,529 eBay, Inc.* 1,100 127,908 Ecolab, Inc.+ 200 7,026 Equifax, Inc. 700 19,670 Moody's Corp. 300 26,055 Paychex, Inc. 500 17,040 PerkinElmer, Inc. 2,100 47,229 Quest Diagnostics, Inc. 200 19,110 Robert Half International, Inc. 100 2,943 Ryder System, Inc. 100 4,777 Waste Management, Inc. 900 26,946 ---------------- 378,019 ---------------- COMMUNICATIONS -- 2.0% Avaya, Inc.* + 800 13,760 Citizens Communications Co. 500 6,895 Lucent Technologies, Inc.* + 7,200 27,072 Network Appliance, Inc.* 600 19,932
The accompanying notes are an integral part of the financial statements. 39
NUMBER OF MARKET SHARES VALUE ---------------- ---------------- Nextel Communications, Inc. Cl. A* 500 $ 15,000 Qualcomm, Inc. 1,900 80,560 SBC Communications, Inc. 7,100 182,967 Scientific-Atlanta, Inc. 300 9,903 Tellabs, Inc.* 700 6,013 ---------------- 362,102 ---------------- COMMUNICATIONS EQUIPMENT -- 0.7% Motorola, Inc. 7,000 120,400 ---------------- COMPUTER INTEGRATED SYSTEMS DESIGN -- 0.9% Autodesk, Inc. 800 30,360 Computer Sciences Corp.* 500 28,185 Parametric Technology Corp.* 3,300 19,437 Sun Microsystems, Inc.* 14,600 78,548 Unisys Corp.* 500 5,090 ---------------- 161,620 ---------------- COMPUTERS & INFORMATION -- 4.6% Apple Computer, Inc.* 600 38,640 Cisco Systems, Inc.* 11,300 218,090 Comverse Technology, Inc.* 300 7,335 Dell, Inc.* 4,100 172,774 EMC Corp.* 3,900 57,993 Gateway, Inc.* 600 3,606 International Business Machines Corp. 3,000 295,740 International Game Technology 400 13,752 Jabil Circuit, Inc.* + 200 5,116 Lexmark International, Inc.* 200 17,000 Solectron Corp.* 100 533 Symbol Technologies, Inc. 300 5,190 ---------------- 835,769 ---------------- COMPUTERS & OFFICE EQUIPMENT -- 1.0% Electronic Data Systems Corp. 800 18,480 Hewlett-Packard Co. 4,900 102,753 Pitney Bowes, Inc. 300 13,884 Xerox Corp.* 3,200 54,432 ---------------- 189,549 ---------------- CONTAINERS -- 0.2% Ball Corp. 200 8,796 Bemis Co., Inc. 200 5,818 Pactiv Corp.* 300 7,587 Sealed Air Corp.* 200 10,654 Temple-Inland, Inc. 100 6,840 ---------------- 39,695 ---------------- COSMETICS & PERSONAL CARE -- 2.3% Alberto-Culver Co. 150 $ 7,286 Avon Products, Inc. 800 30,960 The Gillette Co. 1,700 76,126 Kimberly-Clark Corp. 800 52,648 The Procter & Gamble Co. 4,400 242,352 ---------------- 409,372 ---------------- DATA PROCESSING & PREPARATION -- 0.9% Affiliated Computer Services, Inc. Cl. A* + 200 12,038 Automatic Data Processing, Inc. 900 39,915 Deluxe Corp.+ 300 11,199 First Data Corp. 1,300 55,302 Fiserv, Inc.* 50 2,010 IMS Health, Inc. 400 9,284 NCR Corp.* 600 41,538 ---------------- 171,286 ---------------- ELECTRIC UTILITIES -- 2.8% Allegheny Energy, Inc.* + 200 3,942 Ameren Corp.+ 300 15,042 American Electric Power Co. 400 13,736 CenterPoint Energy, Inc. 500 5,650 Cinergy Corp. 300 12,489 CMS Energy Corp.* + 200 2,090 Consolidated Edison, Inc. 400 17,500 Constellation Energy Group, Inc. 200 8,742 Dominion Resources, Inc. 500 33,870 DTE Energy Co. 300 12,939 Duke Energy Corp. 2,800 70,924 Edison International 700 22,421 Entergy Corp. 300 20,277 Exelon Corp. 1,100 48,477 FirstEnergy Corp. 500 19,755 FPL Group, Inc. 300 22,425 NiSource, Inc. 400 9,112 PG&E Corp.* 600 19,968 Pinnacle West Capital Corp. 100 4,441 PPL Corp. 500 26,640 Progress Energy, Inc. 400 18,096 Public Service Enterprise Group, Inc. 500 25,885 Southern Co. 1,200 40,224 Teco Energy, Inc.+ 300 4,602 TXU Corp. 400 25,824 ---------------- 505,071 ---------------- ELECTRICAL EQUIPMENT & ELECTRONICS -- 5.9% Altera Corp.* 100 2,070 American Power Conversion Corp. 300 6,420 Analog Devices, Inc. 200 $ 7,384 Broadcom Corp. Cl. A* 100 3,228 Emerson Electric Co. 1,200 84,120 Freescale Semiconductor, Inc. Cl. B* 772 14,174 General Electric Co. 15,200 554,800 Intel Corp. 10,700 250,273 Johnson Controls, Inc. 100 6,344 Kla-Tencor Corp.* 200 9,316 Linear Technology Corp.+ 500 19,380 Maxim Integrated Products, Inc. 100 4,239 Micron Technology, Inc.* + 100 1,235 National Semiconductor Corp. 100 1,795 Rockwell Automation, Inc. 700 34,685 Texas Instruments, Inc. 2,800 68,936 Xilinx, Inc. 200 5,930 ---------------- 1,074,329 ---------------- ENERGY -- 7.6%. Amerada Hess Corp. 200 16,476 Anadarko Petroleum Corp. 500 32,405 Apache Corp. 500 25,285 BJ Services Co. 200 9,308 Burlington Resources, Inc. 600 26,100 ChevronTexaco Corp. 3,100 162,781 ConocoPhillips 1,400 121,562 Devon Energy Corp. 1,100 42,812 Dynegy, Inc. Cl. A* 600 2,772 El Paso Corp. 1,800 18,720 EOG Resources, Inc. 200 14,272 Exxon Mobil Corp. 10,300 527,978 Halliburton Co. 800 31,392 Kerr-McGee Corp. 400 23,116 KeySpan Corp. 400 15,780 Kinder Morgan, Inc. 300 21,939 Marathon Oil Corp. 600 22,566 Nabors Industries Limited* 300 15,387 Nicor, Inc.+ 100 3,694 Noble Corp.* 300 14,922 Occidental Petroleum Corp. 1,100 64,196 Peoples Energy Corp. 100 4,395 Rowan Companies, Inc.* 200 5,180 Schlumberger Limited 500 33,475 Sempra Energy+ 700 25,676 Sunoco, Inc. 100 8,171 Transocean, Inc.* 400 16,956 Unocal Corp. 400 17,296 Valero Energy Corp. 600 27,240 The Williams Companies, Inc. 1,200 19,548 Xcel Energy, Inc. 600 10,920 ---------------- 1,382,320 ----------------
The accompanying notes are an integral part of the financial statements. 40
NUMBER OF MARKET SHARES VALUE ---------------- ---------------- ENTERTAINMENT & LEISURE -- 0.8% Harrah's Entertainment, Inc. 200 $ 13,378 News Corp., Inc. Cl. A+ 2,000 37,320 The Walt Disney Co. 3,400 94,520 ---------------- 145,218 ---------------- FINANCIAL SERVICES -- 5.4% American Express Co. 2,000 112,740 Bear Stearns Companies, Inc. 300 30,693 CIT Group, Inc. 300 13,746 Countrywide Financial Corp. 598 22,132 E Trade Financial Corp.* 300 4,485 Federated Investors, Inc. Cl. B 200 6,080 Franklin Resources, Inc. 400 27,860 The Goldman Sachs Group, Inc. 800 83,232 Huntington Bancshares, Inc.+ 400 9,912 Janus Capital Group, Inc. 400 6,724 Lehman Brothers Holdings, Inc. 700 61,236 MBNA Corp. 1,900 53,561 Merrill Lynch & Co., Inc. 1,500 89,655 Morgan Stanley 1,700 94,384 PNC Financial Services Group, Inc. 400 22,976 Price (T. Rowe) Group, Inc. 100 6,220 ProLogis Trust 300 12,999 The Schwab (Charles) Corp. 600 7,176 Simon Property Group, Inc.+ 300 19,401 Standard and Poor's Depository Receipts Trust Series 1 2,400 290,160 ---------------- 975,372 ---------------- FOODS -- 1.6% Archer-Daniels-Midland Co. 1,100 24,541 Campbell Soup Co. 700 20,923 ConAgra Foods, Inc. 900 26,505 Heinz (H. J.) Co. 400 15,596 Hershey Foods Corp. 600 33,324 Kellogg Co. 700 31,262 McCormick & Co., Inc. 100 3,860 Safeway, Inc.* 800 15,792 Sara Lee Corp. 1,300 31,382 Starbucks Corp.* 600 37,416 SuperValu, Inc. 1,000 34,520 Wrigley (Wm.) Jr. Co. 300 $ 20,757 ---------------- 295,878 ---------------- FOREST PRODUCTS & PAPER -- 0.7% Georgia-Pacific Corp. 700 26,236 International Paper Co. 100 4,200 MeadWestvaco Corp. 800 27,112 Neenah Paper, Inc.* + 24 782 Plum Creek Timber Co., Inc. 700 26,908 Weyerhaeuser Co. 600 40,332 ---------------- 125,570 ---------------- HEALTHCARE -- 1.1% Caremark Rx, Inc.* 800 31,544 Express Scripts, Inc.* 200 15,288 HCA, Inc. 600 23,976 Humana, Inc.* 300 8,907 Laboratory Corp. of America Holdings* 300 14,946 Manor Care, Inc. 100 3,543 UnitedHealth Group, Inc. 1,100 96,833 ---------------- 195,037 ---------------- HOME CONSTRUCTION, FURNISHINGS & APPLIANCES -- 0.2% Centex Corp. 200 11,916 KB Home 100 10,440 Leggett & Platt, Inc. 200 5,686 Whirlpool Corp.+ 100 6,921 ---------------- 34,963 ---------------- HOUSEHOLD PRODUCTS -- 0.8% Black & Decker Corp. 300 26,499 The Clorox Co. 300 17,679 Corning, Inc.* 2,200 25,894 Fortune Brands, Inc. 200 15,436 Newell Rubbermaid, Inc. 600 14,514 Sherwin-Williams Co. 300 13,389 Snap-On, Inc. 100 3,436 The Stanley Works 600 29,394 ---------------- 146,241 ---------------- INDUSTRIAL - DISTRIBUTION -- 0.1% Grainger (W.W.), Inc. 200 13,324 ---------------- INDUSTRIAL - DIVERSIFIED -- 2.4% 3M Co. 700 57,449 Cooper Industries Limited Cl. A 400 27,156 Danaher Corp. 800 45,928 Eaton Corp. 300 21,708 Illinois Tool Works, Inc. 500 46,340 ITT Industries, Inc. 100 8,445 Textron, Inc. 500 36,900 Tyco International Limited 5,200 $ 185,848 ---------------- 429,774 ---------------- INFORMATION RETRIEVAL SERVICES -- 0.4% Yahoo!, Inc.* 1,900 71,592 ---------------- INSURANCE -- 5.4% ACE Limited 500 21,375 Aetna, Inc. 300 37,425 AFLAC, Inc. 500 19,920 Allstate Corp. 1,200 62,064 Ambac Financial Group, Inc. 200 16,426 American International Group, Inc. 3,100 203,577 Aon Corp. 800 19,088 Chubb Corp. 600 46,140 Cigna Corp. 500 40,785 Cincinnati Financial Corp. 210 9,295 The Hartford Financial Services Group, Inc. 500 34,655 Jefferson-Pilot Corp. 300 15,588 Lincoln National Corp. 500 23,340 Loews Corp. 600 42,180 MBIA, Inc.+ 300 18,984 Metlife, Inc.+ 1,900 76,969 MGIC Investment Corp. 300 20,673 Principal Financial Group, Inc. 500 20,470 Progressive Corp. 300 25,452 Prudential Financial, Inc. 1,300 71,448 Safeco Corp. 300 15,672 St. Paul Travelers Companies 1,130 41,889 Torchmark Corp. 100 5,714 UnumProvident Corp.+ 800 14,352 WellPoint, Inc.* 600 69,000 XL Capital Limited Cl. A+ 200 15,530 ---------------- 988,011 ---------------- LODGING -- 0.4% Hilton Hotels Corp. 1,300 29,562 Marriott International, Inc. Cl. A 400 25,192 Starwood Hotels & Resorts Worldwide, Inc. 400 23,360 ---------------- 78,114 ---------------- MACHINERY & COMPONENTS -- 0.6% Baker Hughes, Inc. 600 25,602 Cummins, Inc. 200 16,758 Dover Corp. 300 12,582 Ingersoll-Rand Co. Cl. A 300 24,090 Pall Corp. 200 5,790
The accompanying notes are an integral part of the financial statements. 41
NUMBER OF MARKET SHARES VALUE ---------------- ---------------- Parker-Hannifin Corp. 400 $ 30,296 ---------------- 115,118 ---------------- MANUFACTURING -- 0.2% American Standard Companies, Inc.* 400 16,528 Applied Materials, Inc.* 1,400 23,940 ---------------- 40,468 ---------------- MEDICAL SUPPLIES -- 1.1% Agilent Technologies, Inc.* 200 4,820 Applied Biosystems Group-Applera Corp. 400 8,364 Bard (C.R.), Inc. 200 12,796 Bausch & Lomb, Inc. 300 19,338 Becton, Dickinson & Co. 700 39,760 Fisher Scientific International* 200 12,476 Medtronic, Inc. 600 29,802 St. Jude Medical, Inc.* 600 25,158 Tektronix, Inc. 200 6,042 Thermo Electron Corp.* 1,000 30,190 Waters Corp.* 200 9,358 ---------------- 198,104 ---------------- METALS & MINING -- 0.6% Alcoa, Inc. 300 9,426 Allegheny Technologies, Inc. 100 2,167 Crane Co. 500 14,420 Nucor Corp.+ 500 26,170 Phelps Dodge Corp. 400 39,568 United States Steel Corp. 300 15,375 Worthington Industries, Inc. 200 3,916 ---------------- 111,042 ---------------- PHARMACEUTICALS -- 8.5% Abbott Laboratories 2,800 130,620 AmerisourceBergen Corp. 300 17,604 Amgen, Inc.* 1,500 96,225 Biogen Idec, Inc.* 300 19,983 Bristol-Myers Squibb Co. 3,500 89,670 Cardinal Health, Inc.+ 800 46,520 Eli Lilly & Co. 600 34,050 Forest Laboratories, Inc.* + 500 22,430 Genzyme Corp.* 300 17,421 Hospira, Inc.* 200 6,700 Johnson & Johnson 5,500 348,810 King Pharmaceuticals, Inc.* 500 6,200 McKesson Corp. 600 18,876 Medco Health Solutions, Inc.* 500 20,800 Merck & Co., Inc. 5,900 189,626 Pfizer, Inc. 13,900 373,771 Sigma-Aldrich Corp. 100 6,046 Wyeth 2,400 $ 102,216 ---------------- 1,547,568 ---------------- PHOTOGRAPHY EQUIPMENT/SUPPLIES -- 0.1% Eastman Kodak Co.+ 600 19,350 ---------------- PREPACKAGED SOFTWARE -- 4.6% Adobe Systems, Inc. 400 25,096 BMC Software, Inc.* 1,800 33,480 Citrix Systems, Inc.* 1,500 36,795 Computer Associates International, Inc. 1,500 46,590 Compuware Corp.* 400 2,588 Intuit, Inc.* 500 22,005 Microsoft Corp. 15,200 405,992 Oracle Corp.* 11,700 160,524 Peoplesoft, Inc.* 400 10,592 Siebel Systems, Inc.* 800 8,400 SunGard Data Systems, Inc.* 500 14,165 Symantec Corp.* 2,200 56,672 Veritas Software Corp.* 700 19,985 ---------------- 842,884 ---------------- REAL ESTATE -- 0.2% Equity Office Properties Trust 700 20,384 Equity Residential 400 14,472 ---------------- 34,856 ---------------- RESTAURANTS -- 0.8% Darden Restaurants, Inc. 300 8,322 McDonald's Corp. 3,300 105,798 Yum! Brands, Inc. 500 23,590 ---------------- 137,710 ---------------- RETAIL -- 4.8% AutoZone, Inc.* 100 9,131 Best Buy Co., Inc. 600 35,652 Circuit City Stores, Inc. 2,800 43,792 Costco Wholesale Corp. 1,300 62,933 Dillards, Inc. Cl. A 200 5,374 Dollar General Corp. 100 2,077 Federated Department Stores, Inc. 400 23,116 The Home Depot, Inc. 3,900 166,686 J.C. Penney Co., Inc. 800 33,120 Kohl's Corp.* 100 4,917 Lowe's Companies, Inc.+ 200 11,518 The May Department Stores Co. 500 14,700 Office Depot, Inc.* 400 6,944 RadioShack Corp. 300 9,864 Sears, Roebuck and Co. 400 20,412 Staples, Inc. 1,000 33,710 Target Corp. 900 $ 46,737 TJX Companies, Inc.+ 800 20,104 Wal-Mart Stores, Inc. 5,900 311,638 ---------------- 862,425 ---------------- RETAIL - GROCERY -- 0.1% Albertson's, Inc.+ 700 16,716 ---------------- TELEPHONE UTILITIES -- 2.5% Alltel Corp. 700 41,132 AT&T Corp. 2,800 53,368 BellSouth Corp. 1,600 44,464 CenturyTel, Inc. 400 14,188 Qwest Communications International, Inc.* 400 1,776 Sprint Corp. (FON Group) 4,900 121,765 Verizon Communications, Inc. 4,200 170,142 ---------------- 446,835 ---------------- TOBACCO -- 1.0% Altria Group, Inc. 2,200 134,420 Reynolds American, Inc.+ 300 23,580 UST, Inc. 600 28,866 ---------------- 186,866 ---------------- TOYS, GAMES -- 0.1% Hasbro, Inc. 300 5,814 Mattel, Inc. 500 9,745 ---------------- 15,559 ---------------- TRANSPORTATION -- 1.6% Burlington Northern Santa Fe Corp. 600 28,386 CSX Corp. 400 16,032 FedEx Corp. 900 88,641 Norfolk Southern Corp. 1,400 50,666 United Parcel Service, Inc. Cl. B 1,200 102,552 ---------------- 286,277 ---------------- TRAVEL -- 0.1% Sabre Holdings Corp. 400 8,864 ---------------- TOTAL EQUITIES (COST $16,271,641) 18,144,647 ---------------- PRINCIPAL MARKET AMOUNT VALUE ---------------- ---------------- SHORT-TERM INVESTMENTS -- 6.7% CASH EQUIVALENTS -- 5.3%** American AAdvanage Select Money Market Fund 11,203 11,203
The accompanying notes are an integral part of the financial statements. 42
PRINCIPAL MARKET AMOUNT VALUE ---------------- ---------------- Bank of America Bank Note 2.260% 02/15/2005 $ 8,369 $ 8,369 Bank of America Bank Note 2.270% 01/18/2005 19,529 19,529 Bank of America Bank Note 2.270% 03/03/2005 36,267 36,267 Bank of America Bank Note 2.300% 06/09/2005 19,529 19,529 Bank of Montreal Eurodollar Time Deposit 2.125% 02/02/2005 8,509 8,509 Bank of Montreal Eurodollar Time Deposit 2.260% 01/28/2005 8,841 8,841 BGI Institutional Money Market Fund 100,432 100,432 BNP Paribas Eurodollar Time Deposit 2.300% 01/03/2005 5,580 5,580 Calyon Eurodollar Time Deposit 2.435% 03/16/2005 23,881 23,881 Canadian Imperial Bank of Commerce Bank Note 2.030% 05/18/2005 55,796 55,796 Citigroup Eurodollar Time Deposit 2.080% 01/28/2005 21,900 21,900 Den Danske Bank Eurodollar Time Deposit 2.260% 01/20/2005 33,478 33,478 Dexia Group Eurodollar Time Deposit 2.040% 01/21/2005 11,159 11,159 Federal Home Loan Bank Discount Note 2.184% 01/05/2005 34,658 34,658 Fortis Bank Eurodollar Time Deposit 2.140% 01/12/2005 11,159 11,159 Fortis Bank Eurodollar Time Deposit 2.200% 02/11/2005 8,369 8,369 Fortis Bank Eurodollar Time Deposit 2.260% 01/05/2005 46,031 46,031 Freddie Mac Discount Note 2.184% 01/04/2005 38,993 38,993 Freddie Mac Discount Note 2.228% 02/01/2005 10,410 10,410 Freddie Mac Discount Note 2.277% 02/01/2005 48,716 48,716 General Electric Capital Corp. 2.294% 01/21/2005 $ 15,887 $ 15,887 General Electric Capital Corp. 2.295% 01/10/2005 27,181 27,181 HBOS Halifax Bank of Scotland Eurodollar Time Deposit 2.025% 01/21/2005 12,833 12,833 Lloyds TSB Bank Eurodollar Time Deposit 2.280% 02/02/2005 13,670 13,670 Merrill Lynch Premier Institutional Money Market Fund 18,413 18,413 Merrimac Cash Fund, Premium Class 41,847 41,847 Morgan Stanley Dean Witter & Co. 2.393% 07/19/2005 36,825 36,825 Royal Bank of Canada Eurodollar Time Deposit 2.250% 01/19/2005 27,898 27,898 Royal Bank of Canada Eurodollar Time Deposit 2.260% 02/01/2005 22,318 22,318 Royal Bank of Scotland Eurodollar Time Deposit 2.015% 01/21/2005 32,194 32,194 Royal Bank of Scotland Eurodollar Time Deposit 2.270% 02/02/2005 16,739 16,739 Royal Bank of Scotland Eurodollar Time Deposit 2.360% 02/17/2005 2,790 2,790 Toronto Dominion Bank Eurodollar Time Deposit 2.420% 03/01/2005 27,898 27,898 Wells Fargo Eurodollar Time Deposit 2.270% 01/25/2005 6,974 6,974 Wells Fargo Eurodollar Time Deposit 2.310% 01/28/2005 27,898 27,898 Wells Fargo Eurodollar Time Deposit 2.320% 01/14/2005 66,842 66,842 ---------------- 961,016 ---------------- REPURCHASE AGREEMENT -- 1.4% Investors Bank & Trust Company Repurchase Agreement, dated 12/31/2004, 1.75%, due 01/03/2005(a) $ 260,423 $ 260,423 ---------------- TOTAL SHORT-TERM INVESTMENTS (AT AMORTIZED COST) $ 1,221,439 ---------------- TOTAL INVESTMENTS -- 106.7% (COST $17,493,080)*** 19,366,086 OTHER ASSETS/ (LIABILITIES) -- (6.7%) (1,209,606) ---------------- NET ASSETS -- 100.0% $ 18,156,480 ================
NOTES TO PORTFOLIO OF INVESTMENTS * Non-income producing security. ** Represents investments of security lending collateral. (NOTE 2). *** See Note 7 for aggregate cost for Federal tax purposes. + Denotes all or a portion of security on loan. (a) Maturity value of $260,461. Collaterized by U.S. Government Agency obligation with a rate of 4.875%, maturity date of 9/25/2016 and an aggregate market value, including accrued interest, of $273,445. The accompanying notes are an integral part of the financial statements. 43 MML GROWTH EQUITY FUND - PORTFOLIO OF INVESTMENTS DECEMBER 31, 2004
NUMBER OF MARKET SHARES VALUE ---------------- ---------------- EQUITIES -- 97.7% ADVERTISING -- 0.0% Catalina Marketing Corp. 200 $ 5,926 ---------------- AEROSPACE & DEFENSE -- 2.7% Boeing Co. 8,000 414,160 Lockheed Martin Corp. 1,300 72,215 Rockwell Collins, Inc. 400 15,776 United Defense Industries, Inc.* + 600 28,350 United Technologies Corp. 900 93,015 ---------------- 623,516 ---------------- APPAREL, TEXTILES & SHOES -- 2.4% Abercrombie & Fitch Co. Cl. A 2,200 103,290 American Eagle Outfitters, Inc. 1,400 65,940 Chico's FAS, Inc.* 300 13,659 Coach, Inc.* 1,500 84,600 Columbia Sportswear Co.* + 500 29,805 Nike, Inc. Cl. B 600 54,414 Nordstrom, Inc. 800 37,384 Pacific Sunwear of California, Inc.* 600 13,356 Ross Stores, Inc.+ 1,300 37,531 Timberland Co. Cl. A* 200 12,534 Urban Outfitters, Inc.* 2,200 97,680 ---------------- 550,193 ---------------- AUTOMOTIVE & PARTS -- 2.1% Harley-Davidson, Inc. 6,500 394,875 Oshkosh Truck Corp. 500 34,190 Paccar, Inc. 500 40,240 ---------------- 469,305 ---------------- BANKING, SAVINGS & LOANS -- 2.6% Fannie Mae 7,600 541,196 Freddie Mac 800 58,960 ---------------- 600,156 ---------------- BEVERAGES -- 0.4% Coca-Cola Enterprises, Inc. 200 4,170 PepsiCo, Inc. 1,600 83,520 ---------------- 87,690 ---------------- BROADCASTING, PUBLISHING & PRINTING -- 0.1% The McGraw-Hill Companies, Inc. 200 18,308 ---------------- BUILDING MATERIALS & CONSTRUCTION -- 0.1% Kinetic Concepts, Inc.* 300 22,890 ---------------- CHEMICALS -- 0.1% Church & Dwight, Inc. 350 $ 11,767 ---------------- COMMERCIAL SERVICES -- 2.4% Apollo Group, Inc. Cl. A* 400 32,284 Cendant Corp. 600 14,028 Convergys Corp.* 1,700 25,483 eBay, Inc.* 1,300 151,164 Ecolab, Inc.+ 800 28,104 Fastenal Co. 700 43,092 ITT Educational Services, Inc.* 1,100 52,305 Jacobs Engineering Group, Inc.* 400 19,116 Manpower, Inc. 100 4,830 Pharmaceutical Product Development, Inc.* 10 413 Quest Diagnostics, Inc. 600 57,330 Regis Corp. 800 36,920 Rent-A-Center, Inc.* 2,800 74,200 Robert Half International, Inc. 500 14,715 ---------------- 553,984 ---------------- COMMUNICATIONS -- 4.2% Plantronics, Inc. 300 12,441 Qualcomm, Inc. 22,400 949,760 ---------------- 962,201 ---------------- COMMUNICATIONS EQUIPMENT -- 0.7% Motorola, Inc. 9,300 159,960 ---------------- COMPUTER INTEGRATED SYSTEMS DESIGN -- 1.1% Autodesk, Inc. 5,800 220,110 National Instruments Corp. 700 19,075 ---------------- 239,185 ---------------- COMPUTER PROGRAMMING SERVICES -- 0.1% VeriSign, Inc.* 700 23,464 ---------------- COMPUTERS & INFORMATION -- 7.0% Apple Computer, Inc.* 1,000 64,400 CDW Corp. 100 6,635 Cisco Systems, Inc.* 6,200 119,660 Dell, Inc.* 30,500 1,285,270 Lexmark International, Inc.* 1,600 136,000 ---------------- 1,611,965 ---------------- COSMETICS & PERSONAL CARE -- 4.3% Avon Products, Inc. 1,570 60,759 The Gillette Co. 4,600 205,988 Kimberly-Clark Corp. 2,300 151,363 The Procter & Gamble Co. 10,400 $ 572,832 ---------------- 990,942 ---------------- DATA PROCESSING & PREPARATION -- 1.6% Alliance Data Systems Corp.* 600 28,488 Factset Research Systems, Inc.+ 400 23,376 First Data Corp. 6,700 285,018 Total System Services, Inc.+ 1,100 26,730 ---------------- 363,612 ---------------- ELECTRIC UTILITIES -- 0.1% AES Corp.* 2,100 28,707 Mirant Corp.* 300 115 ---------------- 28,822 ---------------- ELECTRICAL EQUIPMENT & ELECTRONICS -- 3.4% Amphenol Corp. Cl. A* 300 11,022 Emerson Electric Co. 700 49,070 Freescale Semiconductor, Inc. Cl. B* 1,534 28,164 General Electric Co. 9,800 357,700 Intel Corp. 14,000 327,460 ---------------- 773,416 ---------------- ENERGY -- 7.1% BJ Services Co. 3,000 139,620 Burlington Resources, Inc. 2,000 87,000 EOG Resources, Inc. 600 42,816 Equitable Resources, Inc. 400 24,264 Exxon Mobil Corp. 21,900 1,122,594 Halliburton Co. 900 35,316 National-Oilwell, Inc.* + 1,700 59,993 Patterson-UTI Energy, Inc. 2,600 50,570 Southwestern Energy Co.* 200 10,138 Western Gas Resources, Inc. 500 14,625 XTO Energy, Inc. 1,130 39,979 ---------------- 1,626,915 ---------------- FINANCIAL SERVICES -- 1.4% MBNA Corp. 11,600 327,004 ---------------- FOODS -- 2.9% Del Monte Foods Co.* 2,000 22,040 Hershey Foods Corp. 600 33,324 Hormel Foods Corp. 200 6,270 The J.M. Smucker Co. 830 39,068 The Kroger Co.* 1,200 21,048 Sara Lee Corp. 4,800 115,872 Starbucks Corp.* 6,900 430,284 ---------------- 667,906 ----------------
The accompanying notes are an integral part of the financial statements. 44
NUMBER OF MARKET SHARES VALUE ---------------- ---------------- FOREST PRODUCTS & PAPER -- 0.0% Neenah Paper, Inc.* 96 $ 3,130 ---------------- HEALTHCARE -- 3.4% Coventry Health Care, Inc.* 500 26,540 Health Management Associates, Inc. Cl. A 500 11,360 Health Net, Inc.* 1,900 54,853 Lincare Holdings, Inc.* 3,000 127,950 Renal Care Group, Inc.* 1,700 61,183 Tenet Healthcare Corp.* 3,100 34,038 UnitedHealth Group, Inc. 5,044 444,023 Universal Health Services Cl. B 300 13,350 ---------------- 773,297 ---------------- HOME CONSTRUCTION, FURNISHINGS & APPLIANCES -- 1.8% D.R. Horton, Inc.+ 1,300 52,403 Fossil, Inc.* 700 17,948 Harman International Industries 1,200 152,400 Lennar Corp.+ 300 17,004 Maytag Corp.+ 1,000 21,100 Miller (Herman), Inc. 800 22,104 Mohawk Industries, Inc.* 1,100 100,375 NVR, Inc.* 25 19,235 ---------------- 402,569 ---------------- HOUSEHOLD PRODUCTS -- 1.0% Black & Decker Corp.+ 1,300 114,829 Fortune Brands, Inc. 400 30,872 Sherwin-Williams Co. 1,700 75,871 ---------------- 221,572 ---------------- INDUSTRIAL - DISTRIBUTION -- 0.0% Grainger (W.W.), Inc. 100 6,662 ---------------- INDUSTRIAL - DIVERSIFIED -- 2.3% 3M Co. 1,800 147,726 Danaher Corp. 1,700 97,597 Illinois Tool Works, Inc.+ 2,900 268,772 ---------------- 514,095 ---------------- INFORMATION RETRIEVAL SERVICES -- 0.4% Yahoo!, Inc.* 2,200 82,896 ---------------- INSURANCE -- 3.9% Aetna, Inc. 1,200 149,700 Ambac Financial Group, Inc. 900 73,917 American International Group, Inc. 6,800 446,556 Marsh & McLennan Companies, Inc. 3,100 101,990 Radian Group, Inc. 700 37,268 WellPoint, Inc.* 800 92,000 ---------------- 901,431 ---------------- LODGING -- 0.5% Mandalay Resort Group+ 800 $ 56,344 Marriott International, Inc. Cl. A 400 25,192 Starwood Hotels & Resorts Worldwide, Inc. 600 35,040 ---------------- 116,576 ---------------- MACHINERY & COMPONENTS -- 0.9% Baker Hughes, Inc. 1,200 51,204 Caterpillar, Inc. 300 29,253 FMC Technologies, Inc.* 600 19,320 Grant Prideco, Inc.* 200 4,010 Smith International, Inc.* 2,000 108,820 ---------------- 212,607 ---------------- MANUFACTURING -- 0.9% American Standard Companies, Inc.* 4,400 181,808 Avery Dennison Corp.+ 500 29,985 ---------------- 211,793 ---------------- MEDICAL SUPPLIES -- 2.7% Bard (C.R.), Inc. 1,820 116,444 Bausch & Lomb, Inc. 600 38,676 Becton, Dickinson & Co. 1,800 102,240 Biomet, Inc. 2,000 86,780 Cooper Cos., Inc. 200 14,118 Dentsply International, Inc. 200 11,240 Guidant Corp. 1,800 129,780 Stryker Corp. 600 28,950 Zimmer Holdings, Inc.* 1,100 88,132 ---------------- 616,360 ---------------- METALS & MINING -- 0.2% Nucor Corp.+ 800 41,872 ---------------- MISCELLANEOUS -- 0.0% Handleman Co. 10 215 ---------------- PHARMACEUTICALS -- 13.0% AmerisourceBergen Corp. 1,500 88,020 Charles River Laboratories International, Inc.* 400 18,404 Hospira, Inc.* 300 10,050 Johnson & Johnson 22,900 1,452,318 Merck & Co., Inc. 19,200 617,088 Pfizer, Inc. 29,200 785,188 Valeant Pharmaceuticals International+ 500 13,175 ---------------- 2,984,243 ---------------- PREPACKAGED SOFTWARE -- 4.5% Adobe Systems, Inc.+ 1,300 81,562 Microsoft Corp. 28,000 747,880 Oracle Corp.* 3,300 45,276 Symantec Corp.* 6,000 $ 154,560 ---------------- 1,029,278 ---------------- RESTAURANTS -- 1.1% Applebee's International, Inc. 2,450 64,803 Brinker International, Inc.* 1,500 52,605 Outback Steakhouse, Inc. 2,000 91,560 Yum! Brands, Inc. 1,000 47,180 ---------------- 256,148 ---------------- RETAIL -- 10.4% Bed Bath & Beyond, Inc.* 4,600 183,218 Dollar General Corp. 2,400 49,848 Dollar Tree Stores, Inc.* 2,200 63,096 The Home Depot, Inc. 27,200 1,162,528 Lowe's Companies, Inc.+ 2,100 120,939 MSC Industrial Direct Co. Cl. A 700 25,186 Pier 1 Imports, Inc.+ 1,600 31,520 TJX Companies, Inc. 3,700 92,981 Walgreen Co. 700 26,859 Wal-Mart Stores, Inc. 11,800 623,276 ---------------- 2,379,451 ---------------- RETAIL - GROCERY -- 0.1% Whole Foods Market, Inc. 300 28,605 ---------------- TELEPHONE UTILITIES -- 2.0% Verizon Communications, Inc. 11,300 457,763 ---------------- TOBACCO -- 1.2% Altria Group, Inc. 4,400 268,840 ---------------- TRANSPORTATION -- 0.6% Expeditors International of Washington, Inc.+ 1,200 67,056 FedEx Corp. 500 49,245 J.B. Hunt Transport Services, Inc. 600 26,910 ---------------- 143,211 ---------------- TOTAL EQUITIES (COST $20,751,048) 22,371,741 ---------------- RIGHTS -- 0.0% COMPUTERS & INFORMATION Seagate Technology* ++ 11,100 - ---------------- TOTAL RIGHTS (COST $0) - ----------------
The accompanying notes are an integral part of the financial statements. 45
NUMBER OF MARKET SHARES VALUE ---------------- ---------------- WARRANTS -- 0.0% COMMUNICATIONS Lucent Technologies, Inc Warrants, Expires 12/10/2007* 71 $ 112 ---------------- TOTAL WARRANTS (COST $0) 112 ---------------- TOTAL LONG TERM INVESTMENTS (COST $20,751,048) 22,371,853 ---------------- PRINCIPAL AMOUNT --------------- SHORT-TERM INVESTMENTS -- 5.7% CASH EQUIVALENTS -- 4.5%** American AAdvanage Select Money Market Fund 11,946 11,946 Bank of America Bank Note 2.260% 02/15/2005 $ 8,924 8,924 Bank of America Bank Note 2.270% 01/18/2005 20,823 20,823 Bank of America Bank Note 2.270% 03/03/2005 38,671 38,671 Bank of America Bank Note 2.300% 06/09/2005 20,823 20,823 Bank of Montreal Eurodollar Time Deposit 2.125% 02/02/2005 9,073 9,073 Bank of Montreal Eurodollar Time Deposit 2.260% 01/28/2005 9,427 9,427 BGI Institutional Money Market Fund 107,088 107,088 BNP Paribas Eurodollar Time Deposit 2.300% 01/03/2005 5,949 5,949 Calyon Eurodollar Time Deposit 2.435% 03/16/2005 25,463 25,463 Canadian Imperial Bank of Commerce Bank Note 2.030% 05/18/2005 59,494 59,494 Citigroup Eurodollar Time Deposit 2.080% 01/28/2005 23,351 23,351 Den Danske Bank Eurodollar Time Deposit 2.260% 01/20/2005 35,696 35,696 Dexia Group Eurodollar Time Deposit 2.040% 01/21/2005 11,899 11,899 Federal Home Loan Bank Discount Note 2.184% 01/05/2005 $ 36,954 $ 36,954 Fortis Bank Eurodollar Time Deposit 2.140% 01/12/2005 11,898 11,898 Fortis Bank Eurodollar Time Deposit 2.200% 02/11/2005 8,924 8,924 Fortis Bank Eurodollar Time Deposit 2.260% 01/05/2005 49,081 49,081 Freddie Mac Discount Note 2.184% 01/04/2005 41,578 41,578 Freddie Mac Discount Note 2.228% 02/01/2005 11,100 11,100 Freddie Mac Discount Note 2.277% 02/01/2005 51,945 51,945 General Electric Capital Corp. 2.294% 01/21/2005 16,940 16,940 General Electric Capital Corp. 2.295% 01/10/2005 28,983 28,983 HBOS Halifax Bank of Scotland Eurodollar Time Deposit 2.025% 01/21/2005 13,684 13,684 Lloyds TSB Bank Eurodollar Time Deposit 2.280% 02/02/2005 14,576 14,576 Merrill Lynch Premier Institutional Money Market Fund 19,633 19,633 Merrimac Cash Fund, Premium Class 44,620 44,620 Morgan Stanley Dean Witter & Co. 2.393% 07/19/2005 39,266 39,266 Royal Bank of Canada Eurodollar Time Deposit 2.250% 01/19/2005 29,747 29,747 Royal Bank of Canada Eurodollar Time Deposit 2.260% 02/01/2005 23,798 23,798 Royal Bank of Scotland Eurodollar Time Deposit 2.015% 01/21/2005 34,328 34,328 Royal Bank of Scotland Eurodollar Time Deposit 2.270% 02/02/2005 17,848 17,848 Royal Bank of Scotland Eurodollar Time Deposit 2.360% 02/17/2005 2,975 2,975 Toronto Dominion Bank Eurodollar Time Deposit 2.420% 03/01/2005 $ 29,747 $ 29,747 Wells Fargo Eurodollar Time Deposit 2.270% 01/25/2005 7,437 7,437 Wells Fargo Eurodollar Time Deposit 2.310% 01/28/2005 29,747 29,747 Wells Fargo Eurodollar Time Deposit 2.320% 01/14/2005 71,274 71,274 ---------------- 1,024,710 ---------------- REPURCHASE AGREEMENT -- 1.2% Investors Bank & Trust Company Repurchase Agreement, dated 12/31/2004, 1.75%, due 01/03/2005(a) 275,007 275,007 ---------------- TOTAL SHORT-TERM INVESTMENTS (AT AMORTIZED COST) 1,299,717 ---------------- TOTAL INVESTMENTS -- 103.4% (COST $22,050,765)*** 23,671,570 OTHER ASSETS/ (LIABILITIES) -- (3.4%) (777,938) ---------------- NET ASSETS -- 100.0% $ 22,893,632 ================
NOTES TO PORTFOLIO OF INVESTMENTS * Non-income producing security. ** Represents investments of security lending collateral. (NOTE 2). *** See Note 7 for aggregate cost for Federal tax purposes. + Denotes all or a portion of security on loan. ++ This security is valued in good faith under procedures established by the board of trustees. (a) Maturity value of $275,047. Collateralized by U.S. Government Agency Obligation with a rate of 4.61%, maturity date of 09/25/2029, and an aggregate market value, including accrued interest, of $288,757. The accompanying notes are an integral part of the financial statements. 46 MML OTC 100 FUND - PORTFOLIO OF INVESTMENTS DECEMBER 31, 2004
NUMBER OF MARKET SHARES VALUE ---------------- ---------------- EQUITIES -- 98.7% ADVERTISING -- 0.3% Lamar Advertising Co.* 759 $ 32,470 ---------------- APPAREL, TEXTILES & SHOES -- 0.3% Ross Stores, Inc. 1,297 37,444 ---------------- AUTOMOTIVE & PARTS -- 1.2% Paccar, Inc. 1,738 139,874 ---------------- BROADCASTING, PUBLISHING & PRINTING -- 4.4% Comcast Corp. Cl. A* 8,496 282,747 IAC/InterActiveCorp* 6,400 176,768 Liberty Media International, Inc. Cl. A* 1,578 72,951 ---------------- 532,466 ---------------- COMMERCIAL SERVICES -- 7.5% Apollo Group, Inc. Cl. A* 1,672 134,947 Career Education Corp.* 931 37,240 Cintas Corp. 1,838 80,615 eBay, Inc.* 4,413 513,144 Fastenal Co. 648 39,891 Paychex, Inc. 3,203 109,158 ---------------- 914,995 ---------------- COMMUNICATIONS -- 14.5% EchoStar Communications Corp. Cl. A 1,991 66,181 Juniper Networks, Inc.* 3,154 85,757 Network Appliance, Inc.* 3,349 111,254 Nextel Communications, Inc. Cl. A* 12,435 373,050 NTL, Inc.* 853 62,235 Qualcomm, Inc. 17,647 748,233 Research In Motion Limited* 1,676 138,136 Sirius Satellite Radio, Inc.* 12,210 93,407 Tellabs, Inc.* 2,123 18,237 XM Satellite Radio Holdings, Inc. Cl. A* 1,884 70,876 ---------------- 1,767,366 ---------------- COMMUNICATIONS EQUIPMENT -- 0.4% Ericsson (LM) Cl. B Sponsored ADR (Sweden)* 1,555 48,967 ---------------- COMPUTER INTEGRATED SYSTEMS DESIGN -- 1.4% Autodesk, Inc. 2,150 81,593 Sun Microsystems, Inc.* 13,060 70,263 Synopsys, Inc.* 1,213 23,799 ---------------- 175,655 ---------------- COMPUTER PROGRAMMING SERVICES -- 1.3% Cognizant Technology Solutions Corp.* 1,169 $ 49,484 Mercury Interactive Corp.* 802 36,531 VeriSign, Inc.* 2,144 71,867 ---------------- 157,882 ---------------- COMPUTERS & INFORMATION -- 9.8% Apple Computer, Inc.* 5,006 322,386 CDW Corp. 772 51,222 Cisco Systems, Inc.* 21,001 405,319 Comverse Technology, Inc.* 1,832 44,792 Dell, Inc.* 8,159 343,820 Sandisk Corp.* 1,334 33,310 ---------------- 1,200,849 ---------------- CONTAINERS -- 0.3% Smurfit-Stone Container Corp. 2,223 41,526 ---------------- DATA PROCESSING & PREPARATION -- 0.7% Fiserv, Inc.* 2,184 87,775 ---------------- ELECTRICAL EQUIPMENT & ELECTRONICS -- 13.9% Altera Corp.* 4,674 96,752 American Power Conversion Corp. 1,716 36,722 ATI Technologies, Inc.* 2,188 42,425 Broadcom Corp. Cl. A* 2,201 71,048 Flextronics International Limited* 5,418 74,877 Garmin Limited 895 54,452 Intel Corp. 19,765 462,303 Intersil Corp. Cl. A 1,356 22,699 JDS Uniphase Corp.* 14,638 46,402 Kla-Tencor Corp.* 2,114 98,470 Linear Technology Corp. 3,663 141,978 Marvell Technology Group Limited* 2,299 81,546 Maxim Integrated Products, Inc. 4,068 172,443 Microchip Technology, Inc. 1,531 40,816 Molex, Inc. 882 26,460 Novellus Systems, Inc. 1,272 35,476 Qlogic Corp.* 842 30,927 Sanmina-SCI Corp.* 4,966 42,062 Xilinx, Inc. 4,125 122,306 ---------------- 1,700,164 ---------------- FOODS -- 2.5% Starbucks Corp.* 4,933 307,622 ---------------- HEALTHCARE -- 0.7% Express Scripts, Inc.* 605 $ 46,246 Lincare Holdings, Inc.* 864 36,850 ---------------- 83,096 ---------------- INFORMATION RETRIEVAL SERVICES -- 1.8% Yahoo!, Inc.* 5,900 222,312 ---------------- INTERNET CONTENT -- 0.2% BEA Systems, Inc.* 3,347 29,654 ---------------- LODGING -- 0.5% Wynn Resorts Limited* 954 63,842 ---------------- MANUFACTURING -- 1.4% Applied Materials, Inc.* 7,840 134,064 Lam Research Corp.* 1,256 36,311 ---------------- 170,375 ---------------- MEDICAL SUPPLIES -- 1.8% Biomet, Inc. 3,043 132,036 Dentsply International, Inc. 691 38,834 Patterson Cos., Inc.* 1,175 50,983 ---------------- 221,853 ---------------- MISCELLANEOUS -- 0.4% Nasdaq-100 Index Tracking Stock 1,217 48,570 ---------------- PHARMACEUTICALS -- 9.8% Amgen, Inc.* 5,285 339,033 Biogen Idec, Inc.* 3,237 215,617 Chiron Corp.* 2,333 77,759 Genzyme Corp.* 2,568 149,124 Gilead Sciences, Inc.* 3,806 133,172 Invitrogen Corp.* 430 28,866 Medimmune, Inc.* 2,376 64,413 Millennium Pharmaceuticals, Inc.* 2,995 36,299 Sigma-Aldrich Corp. 592 35,792 Teva Pharmaceutical Sponsored ADR (Israel) 4,106 122,605 ---------------- 1,202,680 ---------------- PREPACKAGED SOFTWARE -- 16.6% Adobe Systems, Inc. 2,088 131,001 Check Point Software Technologies Limited* 2,271 55,935 Citrix Systems, Inc.* 1,797 44,080 Electronic Arts, Inc.* 2,748 169,497 Intuit, Inc.* 2,104 92,597 Microsoft Corp. 33,381 891,607 Oracle Corp.* 19,089 261,901 Pixar, Inc.* 519 44,432
The accompanying notes are an integral part of the financial statements. 47
NUMBER OF MARKET SHARES VALUE ---------------- ---------------- Siebel Systems, Inc.* 5,314 $ 55,797 Symantec Corp.* 6,566 169,140 Veritas Software Corp.* 3,852 109,975 ---------------- 2,025,962 ---------------- RETAIL -- 4.2% Bed Bath & Beyond, Inc.* 3,613 143,906 Costco Wholesale Corp. 2,206 106,792 Dollar Tree Stores, Inc.* 971 27,848 Kmart Holding Corp.* 833 82,425 Petsmart, Inc. 1,290 45,834 Staples, Inc. 2,986 100,658 ---------------- 507,463 ---------------- RETAIL - GROCERY -- 0.4% Whole Foods Market, Inc. 546 52,061 ---------------- RETAIL - INTERNET -- 0.9% Amazon.com, Inc.* 2,419 107,138 ---------------- TELEPHONE UTILITIES -- 0.7% Level 3 Communications, Inc.* 6,044 20,489 MCI, Inc. 3,090 62,294 ---------------- 82,783 ---------------- TRANSPORTATION -- 0.8% Expeditors International of Washington, Inc. 934 52,192 Robinson (C.H.) Worldwide, Inc. 753 41,807 ---------------- 93,999 ---------------- TOTAL EQUITIES (COST $9,749,219) 12,056,843 ---------------- PRINCIPAL MARKET AMOUNT VALUE ---------------- ---------------- SHORT-TERM INVESTMENTS -- 1.7% REPURCHASE AGREEMENT -- 1.3% Investors Bank & Trust Company Repurchase Agreement, dated 12/31/2004, 1.75%, due 01/03/2005(a) $ 159,202 $ 159,202 ---------------- U.S. TREASURY BILLS -- 0.4% U.S. Treasury Bill** 2.140% 03/24/2005 50,000 49,760 ---------------- TOTAL SHORT-TERM INVESTMENTS (COST $208,958) 208,962 ---------------- TOTAL INVESTMENTS -- 100.4% (COST $9,958,177)*** 12,265,805 OTHER ASSETS/ (LIABILITIES) -- (0.4%) (42,776) ---------------- NET ASSETS -- 100.0% $ 12,223,029 ================
NOTES TO PORTFOLIO OF INVESTMENTS ADR - American Depository Receipt. * Non-income producing security. ** This security is held as collateral for open futures contracts. (NOTE 2). *** See Note 7 for aggregate cost for Federal tax purposes. (a) Maturity value of $159,225. Collateralized by a U.S. Government Agency obligation with a rate of 5.375%, maturity date of 01/25/2016 and an aggregate market value, including accrued interest, of $167,162. The accompanying notes are an integral part of the financial statements. 48 MML SMALL CAP EQUITY FUND - PORTFOLIO OF INVESTMENTS DECEMBER 31, 2004
NUMBER OF MARKET SHARES VALUE ---------------- ---------------- EQUITIES -- 95.3% AIR TRANSPORTATION -- 1.1% SkyWest, Inc.+ 56,800 $ 1,139,408 ---------------- APPAREL, TEXTILES & SHOES -- 1.5% Carter's, Inc.* + 44,900 1,526,151 ---------------- BANKING, SAVINGS & LOANS -- 9.2% Alabama National Bancorp 5,900 380,550 First Republic Bank 45,100 2,390,300 First State Bancorp 11,300 415,388 Hanmi Financial Corp. 41,300 1,484,322 Pacific Capital Bancorp 69,554 2,364,140 UMB Financial Corp. 8,400 475,944 Webster Financial Corp. 34,680 1,756,195 ---------------- 9,266,839 ---------------- BROADCASTING, PUBLISHING & PRINTING -- 2.9% Gray Television, Inc. 107,100 1,660,050 Lin TV Corp. Cl. A* 66,800 1,275,880 ---------------- 2,935,930 ---------------- CHEMICALS -- 2.8% MacDermid, Inc. 39,600 1,429,560 Spartech Corp. 52,500 1,422,225 ---------------- 2,851,785 ---------------- COMMERCIAL SERVICES -- 6.0% ADVO, Inc. 56,100 1,999,965 Arbitron, Inc.* 57,800 2,264,604 G&K Services, Inc. Cl. A 41,400 1,797,588 ---------------- 6,062,157 ---------------- COMPUTER RELATED SERVICES -- 0.9% eSpeed, Inc. Cl. A* 70,000 865,900 ---------------- COSMETICS & PERSONAL CARE -- 0.6% Revlon, Inc. Cl. A* 262,700 604,210 ---------------- ELECTRICAL EQUIPMENT & ELECTRONICS -- 8.9% Baldor Electric Co. 56,500 1,555,445 Cognex Corp. 52,800 1,473,120 Micrel, Inc.* + 136,400 1,503,128 Mykrolis Corp.* 143,400 2,031,978 Teleflex, Inc. 46,600 2,420,404 ---------------- 8,984,075 ---------------- ENERGY -- 6.7% Headwaters, Inc.* 45,400 1,293,900 Rowan Companies, Inc.* 36,100 934,990 St. Mary Land & Exploration Co. 22,800 951,672 Unit Corp.* 48,500 1,853,185 W-H Energy Services, Inc.* 77,200 1,726,192 ---------------- 6,759,939 ---------------- FINANCIAL SERVICES -- 10.5% Chittenden Corp. 73,450 $ 2,110,219 Eaton Vance Corp. 61,500 3,207,225 Fidelity Bankshares, Inc. 37,100 1,586,396 Jefferies Group, Inc.+ 64,800 2,610,144 Piper Jaffray Cos.* 22,200 1,064,490 ---------------- 10,578,474 ---------------- HOME CONSTRUCTION, FURNISHINGS & APPLIANCES -- 1.8% Fossil, Inc.* 72,350 1,855,054 ---------------- HOUSEHOLD PRODUCTS -- 1.7% Trex Company, Inc.* + 33,200 1,741,008 ---------------- INDUSTRIAL - DIVERSIFIED -- 1.9% Carlisle Companies, Inc. 29,300 1,902,156 ---------------- INSURANCE -- 6.0% The Commerce Group, Inc. 46,000 2,807,840 HCC Insurance Holdings, Inc. 50,500 1,672,560 IPC Holdings Limited 37,000 1,609,870 ---------------- 6,090,270 ---------------- MACHINERY & COMPONENTS -- 13.1% Actuant Corp. Cl. A* 33,500 1,747,025 Global Power Equipment Group, Inc.* 202,800 1,995,552 Helix Technology Corp. 101,400 1,763,346 IDEX Corp. 56,300 2,280,150 Kaydon Corp.+ 74,000 2,443,480 Roper Industries, Inc. 49,200 2,989,884 ---------------- 13,219,437 ---------------- MEDICAL SUPPLIES -- 4.5% Coherent, Inc.* 58,900 1,792,916 Dionex Corp.* 28,500 1,615,095 Mine Safety Appliances Co. 21,900 1,110,330 ---------------- 4,518,341 ---------------- METALS & MINING -- 0.2% Foundation Coal Holdings, Inc.* + 6,400 147,584 ---------------- PHARMACEUTICALS -- 2.9% Taro Pharmaceutical Industries Limited* + 37,400 1,272,722 Valeant Pharmaceuticals International+ 62,200 1,638,970 ---------------- 2,911,692 ---------------- PREPACKAGED SOFTWARE -- 1.4% Dendrite International, Inc.* 71,100 1,379,340 ---------------- RESTAURANTS -- 1.3% RARE Hospitality International, Inc.* 42,000 $ 1,338,120 ---------------- RETAIL -- 2.5% Coldwater Creek, Inc.* 82,000 2,531,340 ---------------- TELEPHONE UTILITIES -- 0.2% Iowa Telecommunications Services, Inc.+ 6,900 148,833 ---------------- TRANSPORTATION -- 6.7% Heartland Express, Inc. 115,415 2,593,375 Landstar System, Inc.* 37,000 2,724,680 Robinson (C.H.) Worldwide, Inc.+ 26,700 1,482,384 ---------------- 6,800,439 ---------------- TOTAL EQUITIES (COST $69,160,640) 96,158,482 ---------------- PRINCIPAL AMOUNT ---------------- SHORT-TERM INVESTMENTS -- 17.4% CASH EQUIVALENTS -- 12.1%** American AAdvanage Select Money Market Fund 141,612 141,612 Bank of America Bank Note 2.260% 02/15/2005 $ 105,793 105,793 Bank of America Bank Note 2.270% 01/18/2005 246,849 246,849 Bank of America Bank Note 2.270% 03/03/2005 458,434 458,434 Bank of America Bank Note 2.300% 06/09/2005 246,849 246,849 Bank of Montreal Eurodollar Time Deposit 2.125% 02/02/2005 107,556 107,556 Bank of Montreal Eurodollar Time Deposit 2.260% 01/28/2005 111,759 111,759 BGI Institutional Money Market Fund 1,269,510 1,269,510 BNP Paribas Eurodollar Time Deposit 2.300% 01/03/2005 70,528 70,528
The accompanying notes are an integral part of the financial statements. 49
PRINCIPAL MARKET AMOUNT VALUE ---------------- ---------------- Calyon Eurodollar Time Deposit 2.435% 03/16/2005 $ 301,861 $ 301,861 Canadian Imperial Bank of Commerce Bank Note 2.030% 05/18/2005 705,283 705,283 Citigroup Eurodollar Time Deposit 2.080% 01/28/2005 276,824 276,824 Den Danske Bank Eurodollar Time Deposit 2.260% 01/20/2005 423,170 423,170 Dexia Group Eurodollar Time Deposit 2.040% 01/21/2005 141,057 141,057 Federal Home Loan Bank Discount Note 2.184% 01/05/2005 438,084 438,084 Fortis Bank Eurodollar Time Deposit 2.140% 01/12/2005 141,057 141,057 Fortis Bank Eurodollar Time Deposit 2.200% 02/11/2005 105,793 105,793 Fortis Bank Eurodollar Time Deposit 2.260% 01/05/2005 581,859 581,859 Freddie Mac Discount Note 2.184% 01/04/2005 492,891 492,891 Freddie Mac Discount Note 2.228% 02/01/2005 131,586 131,586 Freddie Mac Discount Note 2.277% 02/01/2005 615,795 615,795 General Electric Capital Corp. 2.294% 01/21/2005 200,818 200,818 General Electric Capital Corp. 2.295% 01/10/2005 343,583 343,583 HBOS Halifax Bank of Scotland Eurodollar Time Deposit 2.025% 01/21/2005 162,215 162,215 Lloyds TSB Bank Eurodollar Time Deposit 2.280% 02/02/2005 172,794 172,794 Merrill Lynch Premier Institutional Money Market Fund 232,744 232,744 Merrimac Cash Fund, Premium Class 528,962 528,962 Morgan Stanley Dean Witter & Co. 2.393% 07/19/2005 $ 465,487 $ 465,487 Royal Bank of Canada Eurodollar Time Deposit 2.250% 01/19/2005 352,642 352,642 Royal Bank of Canada Eurodollar Time Deposit 2.260% 02/01/2005 282,113 282,113 Royal Bank of Scotland Eurodollar Time Deposit 2.015% 01/21/2005 406,948 406,948 Royal Bank of Scotland Eurodollar Time Deposit 2.270% 02/02/2005 211,585 211,585 Royal Bank of Scotland Eurodollar Time Deposit 2.360% 02/17/2005 35,264 35,264 Toronto Dominion Bank Eurodollar Time Deposit 2.420% 03/01/2005 352,642 352,642 Wells Fargo Eurodollar Time Deposit 2.270% 01/25/2005 88,160 88,160 Wells Fargo Eurodollar Time Deposit 2.310% 01/28/2005 352,642 352,642 Wells Fargo Eurodollar Time Deposit 2.320% 01/14/2005 844,929 844,929 ---------------- 12,147,678 ---------------- REPURCHASE AGREEMENT -- 5.3% Investors Bank & Trust Company Repurchase Agreement, dated 12/31/2004, 1.75%, due 01/03/2005(a) 5,375,141 5,375,141 ---------------- TOTAL SHORT-TERM INVESTMENTS (AT AMORTIZED COST) 17,522,819 ---------------- TOTAL INVESTMENTS -- 112.7% (COST $86,683,459)*** 113,681,301 OTHER ASSETS/ (LIABILITIES) -- (12.7%) (12,766,704) ---------------- NET ASSETS -- 100.0% $ 100,914,597 ================
NOTES TO PORTFOLIO OF INVESTMENTS * Non-income producing security. ** Represents investments of security lending collateral. (NOTE 2). *** See Note 7 for aggregate cost for Federal tax purposes. + Denotes all or a portion of security on loan. (a) Maturity value of $5,375,925. Collaterized by U.S. Government Agency obligation with a rate of 4.126%, maturity date of 02/01/2033, and an aggregate market value, including accrued interest, of $5,643,898. The accompanying notes are an integral part of the financial statements. 50 MML SMALL COMPANY OPPORTUNITIES FUND - PORTFOLIO OF INVESTMENTS DECEMBER 31, 2004
NUMBER OF MARKET SHARES VALUE ---------------- ---------------- EQUITIES -- 92.1% AIR TRANSPORTATION -- 1.5% Republic Airways Holdings, Inc.* 72,400 $ 960,748 ---------------- APPAREL, TEXTILES & SHOES -- 0.4% Penn Engineering & Manufacturing Corp. 12,800 231,680 ---------------- BANKING, SAVINGS & LOANS -- 7.6% Enterprise Financial Services Corp.* 4,800 88,800 Financial Institutions, Inc. 21,100 490,575 First Republic Bank 32,600 1,727,800 First State Bancorp 21,900 805,044 Sterling Bancorp-NY 61,102 1,726,132 ---------------- 4,838,351 ---------------- BROADCASTING, PUBLISHING & PRINTING -- 1.5% Saga Communications, Inc. Cl. A* 56,675 954,974 ---------------- CHEMICALS -- 0.0% American Vanguard Corp.+ 100 3,678 ---------------- COMMERCIAL SERVICES -- 11.6% Ambassadors Group, Inc. 46,700 1,662,987 American Bank Note Holographics, Inc.* 65,900 207,585 Casella Waste Systems, Inc. Cl. A* 49,100 718,824 Clean Harbors, Inc.* + 61,100 921,388 First Advantage Corp. Cl. A* 300 6,120 iPayment, Inc.* 18,200 901,264 Lo-Jack Corp.* 55,000 667,150 Multi-Color Corp.* 18,900 339,444 On Assignment, Inc.* 169,000 877,110 Team, Inc.* 65,800 1,023,190 ---------------- 7,325,062 ---------------- COMPUTER INTEGRATED SYSTEMS DESIGN -- 2.2% Ansoft Corp.* 48,400 977,680 SI International, Inc.* 13,500 415,260 ---------------- 1,392,940 ---------------- DATA PROCESSING & PREPARATION -- 1.7% HMS Holdings Corp.* 116,900 1,050,931 ---------------- ELECTRICAL EQUIPMENT & ELECTRONICS -- 15.0% Actel Corp.* 47,300 829,642 Axsys Technologies, Inc.* 58,450 1,027,551 AZZ, Inc.* 41,000 666,250 Bel Fuse, Inc. Cl. B 23,800 804,202 The Eastern Co. 48,100 962,000 EDO Corp. 37,600 $ 1,193,800 Mykrolis Corp.* 51,400 728,338 Nu Horizons Electronics Corp.* 114,788 916,008 Ultralife Batteries, Inc.* 85,000 1,653,250 ZiLOG, Inc.* 91,750 734,000 ---------------- 9,515,041 ---------------- ENERGY -- 2.3% RPC, Inc. 58,100 1,459,472 ---------------- ENTERTAINMENT & LEISURE -- 3.8% Pinnacle Entertainment, Inc.* 68,200 1,348,996 Steinway Musical Instruments, Inc.* 36,300 1,050,522 ---------------- 2,399,518 ---------------- FINANCIAL SERVICES -- 2.2% Boston Private Financial Holdings, Inc. 49,500 1,394,415 ---------------- HEALTHCARE -- 4.1% Bio-Imaging Technologies, Inc.* + 141,400 774,872 Bio-Reference Labs, Inc.* 65,900 1,146,660 CorVel Corp.* 24,700 661,466 Life Sciences Research, Inc.* 1,000 11,300 ---------------- 2,594,298 ---------------- HEAVY MACHINERY -- 1.3% Natural Gas Services Group, Inc.* + 90,000 848,700 ---------------- HOME CONSTRUCTION, FURNISHINGS & APPLIANCES -- 3.1% MITY Enterprises, Inc.* 40,886 614,925 Movado Group, Inc. 73,600 1,372,640 ---------------- 1,987,565 ---------------- INSURANCE -- 5.8% Donegal Group, Inc. Cl. A 46,700 1,070,831 EMC Insurance Group, Inc. 36,800 796,352 Safety Insurance Group, Inc. 58,800 1,831,620 ---------------- 3,698,803 ---------------- MACHINERY & COMPONENTS -- 0.9% Met-Pro Corp. 43,266 575,438 ---------------- MEDICAL SUPPLIES -- 6.0% ADE Corp.* + 32,500 608,400 Excel Technology, Inc.* 25,683 667,758 II-VI, Inc.* 21,000 892,290 Inficon Holding AG, ADR (Switzerland)* 400 $ 3,000 MTS Medication Technologies, Inc.* 29,500 217,415 Neogen Corp.* 61,425 1,391,276 ---------------- 3,780,139 ---------------- METALS & MINING -- 1.8% Foundation Coal Holdings, Inc.* + 5,200 119,912 Gibraltar Industries, Inc. 44,150 1,042,823 ---------------- 1,162,735 ---------------- PHARMACEUTICALS -- 1.1% Stratagene Corp.* 87,800 680,450 ---------------- PREPACKAGED SOFTWARE -- 2.5% Moldflow Corp.* 100,400 1,596,360 ---------------- REAL ESTATE -- 1.0% United Capital Corp.* 27,500 622,875 ---------------- RETAIL -- 3.7% Big 5 Sporting Goods Corp. 48,800 1,422,032 Sportsman's Guide, Inc.* 40,800 918,000 ---------------- 2,340,032 ---------------- TRANSPORTATION -- 11.0% Knight Transportation, Inc. 57,325 1,421,660 Marine Products Corp. 50,600 1,321,166 Marten Transport Limited* 64,550 1,467,222 Old Dominion Freight Line, Inc.* 49,600 1,726,080 Pegasus Solutions, Inc.* 35,744 450,374 Portec Rail Products, Inc. 53,160 552,864 ---------------- 6,939,366 ---------------- TOTAL EQUITIES (COST $45,545,473) 58,353,571 ---------------- PRINCIPAL AMOUNT ---------------- SHORT-TERM INVESTMENTS -- 11.3% CASH EQUIVALENTS -- 3.3%** American AAdvanage Select Money Market Fund 24,437 24,437 Bank of America Bank Note 2.260% 02/15/2005 $ 18,256 18,256 Bank of America Bank Note 2.270% 01/18/2005 42,596 42,596
The accompanying notes are an integral part of the financial statements. 51
PRINCIPAL MARKET AMOUNT VALUE ---------------- ---------------- Bank of America Bank Note 2.270% 03/03/2005 $ 79,107 $ 79,107 Bank of America Bank Note 2.300% 06/09/2005 42,596 42,596 Bank of Montreal Eurodollar Time Deposit 2.125% 02/02/2005 18,560 18,560 Bank of Montreal Eurodollar Time Deposit 2.260% 01/28/2005 19,285 19,285 BGI Institutional Money Market Fund 219,066 219,066 BNP Paribas Eurodollar Time Deposit 2.300% 01/03/2005 12,170 12,170 Calyon Eurodollar Time Deposit 2.435% 03/16/2005 52,089 52,089 Canadian Imperial Bank of Commerce Bank Note 2.030% 05/18/2005 121,703 121,703 Citigroup Eurodollar Time Deposit 2.080% 01/28/2005 47,769 47,769 Den Danske Bank Eurodollar Time Deposit 2.260% 01/20/2005 73,022 73,022 Dexia Group Eurodollar Time Deposit 2.040% 01/21/2005 24,341 24,341 Federal Home Loan Bank Discount Note 2.184% 01/05/2005 75,596 75,596 Fortis Bank Eurodollar Time Deposit 2.140% 01/12/2005 24,341 24,341 Fortis Bank Eurodollar Time Deposit 2.200% 02/11/2005 18,256 18,256 Fortis Bank Eurodollar Time Deposit 2.260% 01/05/2005 100,405 100,405 Freddie Mac Discount Note 2.184% 01/04/2005 85,053 85,053 Freddie Mac Discount Note 2.228% 02/01/2005 22,706 22,706 Freddie Mac Discount Note 2.277% 02/01/2005 $ 106,261 $ 106,261 General Electric Capital Corp. 2.294% 01/21/2005 34,653 34,653 General Electric Capital Corp. 2.295% 01/10/2005 59,289 59,289 HBOS Halifax Bank of Scotland Eurodollar Time Deposit 2.025% 01/21/2005 27,992 27,992 Lloyds TSB Bank Eurodollar Time Deposit 2.280% 02/02/2005 29,817 29,817 Merrill Lynch Premier Institutional Money Market Fund 40,162 40,162 Merrimac Cash Fund, Premium Class 91,278 91,278 Morgan Stanley Dean Witter & Co. 2.393% 07/19/2005 80,324 80,324 Royal Bank of Canada Eurodollar Time Deposit 2.250% 01/19/2005 60,852 60,852 Royal Bank of Canada Eurodollar Time Deposit 2.260% 02/01/2005 48,682 48,682 Royal Bank of Scotland Eurodollar Time Deposit 2.015% 01/21/2005 70,222 70,222 Royal Bank of Scotland Eurodollar Time Deposit 2.270% 02/02/2005 36,511 36,511 Royal Bank of Scotland Eurodollar Time Deposit 2.360% 02/17/2005 6,085 6,085 Toronto Dominion Bank Eurodollar Time Deposit 2.420% 03/01/2005 60,852 60,852 Wells Fargo Eurodollar Time Deposit 2.270% 01/25/2005 15,213 15,213 Wells Fargo Eurodollar Time Deposit 2.310% 01/28/2005 60,852 60,852 Wells Fargo Eurodollar Time Deposit 2.320% 01/14/2005 145,801 145,801 ---------------- 2,096,200 ---------------- REPURCHASE AGREEMENT -- 8.0% Investors Bank & Trust Company Repurchase Agreement, dated 12/31/2004, 1.75%, due 01/03/2005(a) $ 5,053,706 $ 5,053,706 ---------------- TOTAL SHORT-TERM INVESTMENTS (AT AMORTIZED COST) 7,149,906 ---------------- TOTAL INVESTMENTS -- 103.4% (COST $52,695,379)*** 65,503,477 OTHER ASSETS/ (LIABILITIES) -- (3.4%) (2,172,403) ---------------- NET ASSETS -- 100.0% $ 63,331,074 ================
NOTES TO PORTFOLIO OF INVESTMENTS ADR - American Depository Receipt. * Non-income producing security. ** Represents investments of security lending collateral. (NOTE 2). *** See Note 7 for aggregate cost for Federal tax purposes. + Denotes all or a portion of security on loan. (a) Maturity value of $5,054,443. Collateralized by U.S. Government Agency obligation with a rate of 5.70%, maturity date of 03/25/2018, and an aggregate market value, including accrued interest, of $5,306,391. The accompanying notes are an integral part of the financial statements. 52 MML SMALL CAP GROWTH EQUITY FUND - PORTFOLIO OF INVESTMENTS DECEMBER 31, 2004
NUMBER OF MARKET SHARES VALUE ---------------- ---------------- EQUITIES -- 92.4% ADVERTISING -- 1.8% Catalina Marketing Corp. 7,400 $ 219,262 Getty Images, Inc.* + 13,175 907,099 ---------------- 1,126,361 ---------------- AIR TRANSPORTATION -- 1.0% Airtran Holdings, Inc.* + 21,900 234,330 AMR Corp.* + 19,800 216,810 Forward Air Corp.* 1,280 57,216 Gol Linhas Aereas Inteligentes SA ADR (Brazil)* 2,630 83,844 ---------------- 592,200 ---------------- APPAREL, TEXTILES & SHOES -- 0.5% HOT Topic, Inc.* 2,330 40,053 Quiksilver, Inc.* 8,970 267,216 ---------------- 307,269 ---------------- AUTOMOTIVE & PARTS -- 1.0% LKQ Corp.* 21,172 424,922 Visteon Corp.+ 22,000 214,940 ---------------- 639,862 ---------------- BANKING, SAVINGS & LOANS -- 5.2% Advanta Corp. Cl. B 11,700 283,959 Amcore Financial, Inc. 7,190 231,374 City National Corp. 5,100 360,315 Financial Federal Corp.* 25,725 1,008,420 Hancock Holding Co. 4,700 157,262 Providian Financial Corp.* + 16,800 276,696 Southwest Bancorp. of Texas, Inc. 23,400 544,986 UMB Financial Corp. 2,100 118,986 Westcorp 4,900 225,057 ---------------- 3,207,055 ---------------- BEVERAGES -- 0.1% Peet's Coffee & Tea, Inc.* 2,080 55,058 ---------------- BROADCASTING, PUBLISHING & PRINTING -- 0.9% LodgeNet Entertainment Corp.* 10,400 183,976 Playboy Enterprises, Inc. Cl. B* 15,600 191,724 TiVo, Inc.* + 30,610 179,681 ---------------- 555,381 ---------------- BUILDING MATERIALS & CONSTRUCTION -- 0.1% Eagle Materials, Inc. 960 82,896 ---------------- CHEMICALS -- 1.9% Cytec Industries, Inc. 3,825 $ 196,681 Hercules, Inc.* 16,310 242,203 Minerals Technologies, Inc. 3,300 220,110 The Scotts Co. Cl. A* 7,300 536,696 ---------------- 1,195,690 ---------------- COMMERCIAL SERVICES -- 9.1% The Advisory Board Co.* 1,790 66,015 ADVO, Inc. 7,300 260,245 The Corporate Executive Board Co. 15,250 1,020,835 DiamondCluster International, Inc. Cl. A* 2,130 30,523 Exelixis, Inc.* 24,190 229,805 Fluor Corp. 4,300 234,393 Harris Interactive, Inc.* 25,000 197,500 Incyte Corp.* + 23,900 238,761 ITT Educational Services, Inc.* + 21,750 1,034,213 Jackson Hewitt Tax Service, Inc. 2,540 64,135 Navigant Consulting, Inc.* 2,920 77,672 Netease.com, Inc. Sponsored ADR (China)* + 9,200 486,036 Opsware, Inc.* + 28,700 210,658 Stericycle, Inc.* 14,310 657,545 Strayer Education, Inc. 720 79,049 Vertrue, Inc.* 12,850 485,345 Washington Group International, Inc.* 6,560 270,600 ---------------- 5,643,330 ---------------- COMMUNICATIONS -- 2.2% American Tower Corp. Cl. A* 10,070 185,288 AudioCodes Limited* 2,730 45,345 Crown Castle International Corp.* 11,090 184,538 EFJ, Inc.* 4,070 39,276 Openwave Systems, Inc.* 29,400 454,524 Polycom, Inc.* 4,020 93,746 Spectrasite, Inc.* 1,240 71,796 Westell Technologies, Inc. Cl. A* 44,100 299,880 ---------------- 1,374,393 ---------------- COMPUTER INTEGRATED SYSTEMS DESIGN -- 1.8% Avid Technology, Inc.* 13,000 802,750 F5 Networks, Inc.* 900 43,848 IDX Systems Corp.* 7,300 251,558 ---------------- 1,098,156 ---------------- COMPUTER RELATED SERVICES -- 3.7% Acxiom Corp. 18,260 $ 480,238 Checkfree Corp.* 36,892 1,404,847 Ingram Micro, Inc. Cl. A* 15,600 324,480 Kanbay International, Inc.* 1,750 54,775 Sierra Wireless* 1,680 29,702 ---------------- 2,294,042 ---------------- COMPUTERS & INFORMATION -- 1.4% Extreme Networks, Inc.* 29,600 193,880 Mikohn Gaming Corp.* 2,770 28,309 Scientific Games Corp. Cl. A* 26,150 623,416 ---------------- 845,605 ---------------- CONTAINERS -- 0.4% Pactiv Corp.* 9,500 240,255 ---------------- COSMETICS & PERSONAL CARE -- 0.3% Nu Skin Enterprises, Inc. Cl. A 8,400 213,192 ---------------- DATA PROCESSING & PREPARATION -- 1.9% The BISYS Group, Inc.* 14,100 231,945 CSG Systems International, Inc.* 2,150 40,205 Factset Research Systems, Inc.+ 15,775 921,891 ---------------- 1,194,041 ---------------- ELECTRICAL EQUIPMENT & ELECTRONICS -- 7.2% Aeroflex, Inc.* 8,390 101,687 Agere Systems, Inc. Cl. A* 173,100 237,147 Benchmark Electronics, Inc.* + 5,700 194,370 Cree, Inc.* + 23,150 927,852 ESCO Technologies, Inc.* 1,060 81,249 Fairchild Semiconductor International, Inc. Cl. A* 4,220 68,617 FuelCell Energy, Inc.* + 18,680 184,932 Gentex Corp.+ 20,400 755,208 Graftech International Limited* 6,830 64,612 MEMC Electronic Materials, Inc.* 9,080 120,310 Microsemi Corp.* 4,190 72,738 Moog, Inc. Cl. A* 6,590 298,857 ON Semiconductor Corp.* 56,800 257,872 SBS Technologies, Inc.* 4,740 66,170 Semtech Corp.* 3,070 67,141 Teledyne Technologies, Inc.* 7,100 208,953 Visx, Inc.* 28,900 747,643 ---------------- 4,455,358 ----------------
The accompanying notes are an integral part of the financial statements. 53
NUMBER OF MARKET SHARES VALUE ---------------- ---------------- ENERGY -- 3.7% Arch Coal, Inc. 2,100 $ 74,634 Cabot Oil & Gas Corp. Cl. A 1,330 58,853 CAL Dive International, Inc.* 2,700 110,025 Grey Wolf, Inc.* 58,300 307,241 Newfield Exploration Co.* 12,450 735,173 Patina Oil & Gas Corp. 1,400 52,500 Premcor, Inc. 2,600 109,642 Range Resources Corp. 2,560 52,378 TETRA Technologies, Inc.* 9,000 254,700 UGI Corp. 5,400 220,914 Vintage Petroleum, Inc. 10,300 233,707 Whiting Petroleum Corp.* 2,100 63,525 ---------------- 2,273,292 ---------------- ENTERTAINMENT & LEISURE -- 0.4% Churchill Downs, Inc. 4,400 196,680 Lions Gate Entertainment Corp.* 5,450 57,879 ---------------- 254,559 ---------------- FINANCIAL SERVICES -- 3.1% Affiliated Managers Group, Inc.* + 4,550 308,217 The Chicago Mercantile Exchange+ 3,600 823,320 IndyMac Bancorp, Inc. 8,010 275,945 Investment Technology Group, Inc.* 15,050 301,000 Spirit Finance Corp. REIT* 590 7,464 Ventas, Inc. 7,400 202,834 ---------------- 1,918,780 ---------------- FOODS -- 1.7% The J.M. Smucker Co. 12,650 595,436 Panera Bread Co. Cl. A* + 10,650 429,408 Wild Oats Markets, Inc.* 1,000 8,810 ---------------- 1,033,654 ---------------- HEALTHCARE -- 8.9% Allscripts Healthcare Solutions, Inc.* 27,029 288,399 American Healthways, Inc.* + 29,700 981,288 AmSurg Corp.* 33,450 988,113 Genesis HealthCare Corp.* 11,040 386,731 Human Genome Sciences, Inc.* 22,820 274,296 Humana, Inc.* 14,700 436,443 Manor Care, Inc. 8,500 301,155 Matria Healthcare, Inc.* + 6,100 238,327 Odyssey Healthcare, Inc.* + 51,600 705,888 Psychiatric Solutions, Inc.* 4,900 179,144 Symbion, Inc.* 3,220 $ 71,098 Triad Hospitals, Inc.* 9,600 357,216 VCA Antech, Inc.* 15,250 298,900 ---------------- 5,506,998 ---------------- HOME CONSTRUCTION, FURNISHINGS & APPLIANCES -- 1.7% Fossil, Inc.* 26,000 666,640 Furniture Brands International, Inc.+ 7,925 198,521 Helen of Troy Limited* 2,310 77,639 Standard-Pacific Corp. 1,490 95,569 Tempur-Pedic International, Inc.* 1,730 36,676 ---------------- 1,075,045 ---------------- HOUSEHOLD PRODUCTS -- 0.4% Ferro Corp. 8,900 206,391 Jarden Corp.* 820 35,621 ---------------- 242,012 ---------------- INFORMATION RETRIEVAL SERVICES -- 1.7% Agile Software Corp.* 25,590 209,070 CoStar Group, Inc.* + 12,100 558,778 Intergraph Corp.* + 11,450 308,349 ---------------- 1,076,197 ---------------- INSURANCE -- 0.6% American Equity Investment Life Holding Co. 3,310 35,649 Arch Capital Group Limited* 1,240 47,988 HealthExtras, Inc.* 1,580 25,754 Platinum Underwriters Holdings Limited 1,310 40,741 Reinsurance Group of America, Inc. 4,500 218,025 USI Holdings Corp.* 1,100 12,727 ---------------- 380,884 ---------------- INTERNET SOFTWARE -- 0.3% webMethods, Inc.* 22,900 165,109 ---------------- LODGING -- 2.4% Aztar Corp.* 6,300 219,996 La Quinta Corp.* 30,160 274,154 Vail Resorts, Inc.* 44,800 1,004,416 ---------------- 1,498,566 ---------------- MACHINERY & COMPONENTS -- 2.4% Agco Corp.* 11,600 253,924 Chicago Bridge & Iron Co. NV 14,700 588,000 Global Power Equipment Group, Inc.* + 15,400 151,536 Kennametal, Inc. 4,100 $ 204,057 Techtronic Industries Co. Sponsored ADR (Hong Kong) 27,280 297,447 ---------------- 1,494,964 ---------------- MEDICAL SUPPLIES -- 2.6% Arrow International, Inc. 6,300 195,237 CONMED Corp.* 7,500 213,150 CTI Molecular Imaging, Inc.* 18,000 255,420 Foxhollow Technologies, Inc.* 410 10,082 Kensey Nash Corp.* + 6,100 210,633 PSS World Medical, Inc.* 18,600 232,779 Resmed, Inc.* + 7,850 401,135 Respironics, Inc.* 810 44,032 Zoll Medical Corp.* 1,410 48,504 ---------------- 1,610,972 ---------------- METALS & MINING -- 1.0% Carpenter Technology 6,220 363,621 Precision Castparts Corp. 3,600 236,448 ---------------- 600,069 ---------------- PHARMACEUTICALS -- 4.2% Abgenix, Inc.* 20,910 216,209 Alkermes, Inc.* + 14,920 210,223 Amylin Pharmaceuticals, Inc.* + 11,140 260,230 Angiotech Pharmaceuticals, Inc.* 11,600 214,020 Atherogenics, Inc.* 2,270 53,481 Encysive Pharmaceuticals, Inc.* 3,370 33,464 EPIX Pharmaceuticals, Inc.* 22,400 401,184 Eyetech Pharmaceuticals, Inc.* 830 37,765 ICOS Corp.* 1,580 44,682 Impax Laboratories, Inc.* 2,830 44,940 Martek Biosciences Corp.* 13,400 686,080 The Medicines Co.* + 9,830 283,104 Neurocrine Biosciences, Inc.* 670 33,031 NPS Pharmaceuticals, Inc.* 1,990 36,377 Salix Pharmaceuticals Limited* 2,370 41,688 ---------------- 2,596,478 ---------------- PREPACKAGED SOFTWARE -- 8.1% Blackboard, Inc.* + 22,900 339,149 Cerner Corp.* + 18,125 963,706 Dendrite International, Inc.* 52,150 1,011,710
The accompanying notes are an integral part of the financial statements. 54
NUMBER OF MARKET SHARES VALUE ---------------- ---------------- EPIQ Systems, Inc.* + 16,440 $ 240,682 Hyperion Solutions Corp.* 4,800 223,776 MicroStrategy, Inc. Cl. A* 9,700 584,425 Motive, Inc.* + 13,700 155,906 NAVTEQ Corp.* 1,470 68,149 Red Hat, Inc.* + 16,100 214,935 Salesforce.com, Inc.* 4,210 71,317 Seebeyond Technology Corp.* 13,700 49,046 Take-Two Interactive Software, Inc.* + 27,930 971,685 THQ, Inc.* 4,100 94,054 Verint Systems, Inc.* 1,680 61,034 ---------------- 5,049,574 ---------------- REAL ESTATE -- 0.2% CB Richard Ellis Group, Inc. Cl. A* 3,390 113,735 ---------------- RESTAURANTS -- 0.7% Landry's Restaurants, Inc. 1,620 47,077 RARE Hospitality International, Inc.* 9,670 308,086 Red Robin Gourmet Burgers, Inc.* 1,350 72,185 ---------------- 427,348 ---------------- RETAIL -- 3.4% A.C. Moore Arts & Crafts, Inc.* 2,690 77,499 Borders Group, Inc. 9,300 236,220 Electronics Boutique Holdings Corp.* 460 19,752 Foot Locker, Inc. 15,800 425,494 Insight Enterprises, Inc.* 3,450 70,794 Men's Wearhouse, Inc.* 2,430 77,663 O'Reilly Automotive, Inc.* + 16,345 736,342 Stamps.com, Inc. 11,250 178,200 Tuesday Morning Corp.* 9,200 281,796 ---------------- 2,103,760 ---------------- TELEPHONE UTILITIES -- 0.9% General Communication, Inc. Cl. A* 21,200 234,048 Nextel Partners, Inc. Cl. A* + 11,700 228,618 Novatel Wireless, Inc.* 1,990 38,566 Rural Cellular Corp. Cl. A* + 9,900 61,667 ---------------- 562,899 ---------------- TRANSPORTATION -- 3.5% Arkansas Best Corp. 1,946 87,356 CNF, Inc. 4,200 210,420 Fleetwood Enterprises, Inc.* 4,200 $ 56,532 J.B. Hunt Transport Services, Inc. 21,400 959,790 Kansas City Southern* + 33,025 585,533 Knight Transportation, Inc. 1,970 48,856 OMI Corp. 1,900 32,015 Sirva, Inc.* 4,700 90,334 Yellow Roadway Corp.* 1,760 98,050 ---------------- 2,168,886 ---------------- TOTAL EQUITIES (COST $43,340,948) 57,273,925 ---------------- PRINCIPAL AMOUNT ---------------- SHORT-TERM INVESTMENTS -- 31.6% CASH EQUIVALENTS -- 23.0%** American AAdvanage Select Money Market Fund 166,068 166,068 Bank of America Bank Note 2.260% 02/15/2005 $ 124,063 124,063 Bank of America Bank Note 2.270% 01/18/2005 289,481 289,481 Bank of America Bank Note 2.270% 03/03/2005 537,608 537,608 Bank of America Bank Note 2.300% 06/09/2005 289,481 289,481 Bank of Montreal Eurodollar Time Deposit 2.125% 02/02/2005 126,130 126,130 Bank of Montreal Eurodollar Time Deposit 2.260% 01/28/2005 131,058 131,058 BGI Institutional Money Market Fund 1,488,761 1,488,761 BNP Paribas Eurodollar Time Deposit 2.300% 01/03/2005 82,709 82,709 Calyon Eurodollar Time Deposit 2.435% 03/16/2005 353,994 353,994 Canadian Imperial Bank of Commerce Bank Note 2.030% 05/18/2005 827,089 827,089 Citigroup Eurodollar Time Deposit 2.080% 01/28/2005 324,633 324,633 Den Danske Bank Eurodollar Time Deposit 2.260% 01/20/2005 $ 496,254 $ 496,254 Dexia Group Eurodollar Time Deposit 2.040% 01/21/2005 165,418 165,418 Federal Home Loan Bank Discount Note 2.184% 01/05/2005 513,744 513,744 Fortis Bank Eurodollar Time Deposit 2.140% 01/12/2005 165,418 165,418 Fortis Bank Eurodollar Time Deposit 2.200% 02/11/2005 124,064 124,064 Fortis Bank Eurodollar Time Deposit 2.260% 01/05/2005 682,349 682,349 Freddie Mac Discount Note 2.184% 01/04/2005 578,017 578,017 Freddie Mac Discount Note 2.228% 02/01/2005 154,312 154,312 Freddie Mac Discount Note 2.277% 02/01/2005 722,147 722,147 General Electric Capital Corp. 2.294% 01/21/2005 235,500 235,500 General Electric Capital Corp. 2.295% 01/10/2005 402,922 402,922 HBOS Halifax Bank of Scotland Eurodollar Time Deposit 2.025% 01/21/2005 190,231 190,231 Lloyds TSB Bank Eurodollar Time Deposit 2.280% 02/02/2005 202,637 202,637 Merrill Lynch Premier Institutional Money Market Fund 272,941 272,941 Merrimac Cash Fund, Premium Class 620,317 620,317 Morgan Stanley Dean Witter & Co. 2.393% 07/19/2005 545,879 545,879 Royal Bank of Canada Eurodollar Time Deposit 2.250% 01/19/2005 413,545 413,545 Royal Bank of Canada Eurodollar Time Deposit 2.260% 02/01/2005 330,837 330,837
The accompanying notes are an integral part of the financial statements. 55
PRINCIPAL MARKET AMOUNT VALUE ---------------- ---------------- Royal Bank of Scotland Eurodollar Time Deposit 2.015% 01/21/2005 $ 477,230 $ 477,230 Royal Bank of Scotland Eurodollar Time Deposit 2.270% 02/02/2005 248,127 248,127 Royal Bank of Scotland Eurodollar Time Deposit 2.360% 02/17/2005 41,354 41,354 Toronto Dominion Bank Eurodollar Time Deposit 2.420% 03/01/2005 413,545 413,545 Wells Fargo Eurodollar Time Deposit 2.270% 01/25/2005 103,386 103,386 Wells Fargo Eurodollar Time Deposit 2.310% 01/28/2005 413,545 413,545 Wells Fargo Eurodollar Time Deposit 2.320% 01/14/2005 990,854 990,854 ---------------- 14,245,648 ---------------- REPURCHASE AGREEMENT -- 8.6% Investors Bank & Trust Company Repurchase Agreement, dated 12/31/2004, 1.75%, due 01/03/2005(a) 5,346,782 5,346,782 ---------------- TOTAL SHORT-TERM INVESTMENTS (AT AMORTIZED COST) 19,592,430 ---------------- TOTAL INVESTMENTS -- 124.0% (COST $62,933,378)*** 76,866,355 OTHER ASSETS/ (LIABILITIES) -- (24.0%) (14,857,367) ---------------- NET ASSETS -- 100.0% $ 62,008,988 ================
NOTES TO PORTFOLIO OF INVESTMENTS ADR - American Depository Receipt. * Non-income producing security. ** Represents investments of security lending collateral. (NOTE 2). *** See Note 7 for aggregate cost for Federal tax purposes. + Denotes all or a portion of security on loan. (a) Maturity value of $5,347,562. Collateralized by U.S. Government Agency obligation with a rate of 5.125%, maturity date of 09/25/2022, and an aggregate market value, including accrued interest, of $5,614,121. The remainder of this page is intentionally left blank. The accompanying notes are an integral part of the financial statements. 56 MML EMERGING GROWTH FUND - PORTFOLIO OF INVESTMENTS DECEMBER 31, 2004
NUMBER OF MARKET SHARES VALUE ---------------- ---------------- EQUITIES -- 94.9% ADVERTISING -- 1.7% Jupitermedia Corp.* 3,000 $ 71,340 Valueclick, Inc.* 13,120 174,890 ---------------- 246,230 ---------------- AEROSPACE & DEFENSE -- 0.6% Engineered Support Systems, Inc. 1,420 84,092 ---------------- AIR TRANSPORTATION -- 0.4% Forward Air Corp.* 1,300 58,110 ---------------- APPAREL, TEXTILES & SHOES -- 4.6% American Eagle Outfitters, Inc. 930 43,803 bebe stores, inc. 8,188 220,899 Deckers Outdoor Corp.* 3,890 182,791 Oxford Industries, Inc. 1,710 70,623 Urban Outfitters, Inc.* 3,110 138,084 ---------------- 656,200 ---------------- BANKING, SAVINGS & LOANS -- 3.4% Advance America Cash Advance Centers, Inc.* 390 8,931 Commercial Capital Bancorp, Inc. 4,940 114,509 Community Bancorp/NV* 50 1,530 Nara Bancorp, Inc. 4,150 88,270 PrivateBancorp, Inc. 2,700 87,021 Signature Bank* 1,500 48,540 Silicon Valley Bancshares* 2,850 127,737 ---------------- 476,538 ---------------- BUILDING MATERIALS & CONSTRUCTION -- 1.6% Chemed Corp. 2,110 141,602 Merge Technologies, Inc.* 3,500 77,875 ---------------- 219,477 ---------------- COMMERCIAL SERVICES -- 11.1% Aaron Rents, Inc. 3,085 77,125 Arbinet-thexchange, Inc.* 310 7,703 Bright Horizons Family Solutions, Inc.* 1,760 113,978 eResearch Technology, Inc.* 180 2,853 Global Payments, Inc. 2,130 124,690 Greenfield Online, Inc.* 6,740 148,213 Heidrick & Struggles International, Inc.* 3,320 113,776 Huron Consulting Group, Inc.* 990 21,978 Magellan Health Services, Inc.* 1,610 $ 54,998 Marlin Business Services Corp.* 3,530 67,070 MPS Group, Inc.* 12,190 149,449 Navigant Consulting, Inc.* 8,510 226,366 Netease.com, Inc. Sponsored ADR (China)* 2,440 128,905 Resources Connection, Inc.* 2,320 125,999 Universal Technical Institute, Inc.* 2,800 106,736 Wind River Systems, Inc.* 7,000 94,850 ---------------- 1,564,689 ---------------- COMMUNICATIONS -- 2.7% Alvarion Limited* 3,200 42,496 AudioCodes Limited* 5,790 96,172 InPhonic, Inc.* 1,360 37,373 Lifeline Systems, Inc.* 3,070 79,083 Openwave Systems, Inc.* 8,440 130,482 ---------------- 385,606 ---------------- COMPUTER INTEGRATED SYSTEMS DESIGN -- 0.9% F5 Networks, Inc.* 660 32,155 Mercury Computer Systems, Inc.* 2,130 63,218 Sapient Corp.* 4,350 34,408 ---------------- 129,781 ---------------- COMPUTER PROGRAMMING SERVICES -- 3.2% CACI International, Inc. Cl. A* 1,500 102,195 Innovative Solutions & Support, Inc.* 1,040 34,694 Jamdat Mobile, Inc.* 3,740 77,231 Macromedia, Inc.* 4,460 138,795 Shanda Interactive Entertainment Limited ADR (Cayman Islands)* 2,230 94,775 ---------------- 447,690 ---------------- COMPUTER RELATED SERVICES -- 1.4% Checkfree Corp.* 2,080 79,206 CNET Networks, Inc.* 10,140 113,872 ---------------- 193,078 ---------------- COMPUTERS & INFORMATION -- 2.9% Emulex Corp.* 1,500 25,260 M-Systems Flash Disk Pioneers Limited* 8,250 162,690 PalmOne, Inc.* 2,730 86,131 Scientific Games Corp. Cl. A* 5,710 $ 136,126 ---------------- 410,207 ---------------- ELECTRICAL EQUIPMENT & ELECTRONICS -- 8.8% August Technology Corp.* 7,310 76,974 California Micro Devices Corp.* 1,780 12,620 Cascade Microtech, Inc.* 260 3,489 Ceradyne, Inc.* 1,755 100,404 Credence Systems Corp.* 4,880 44,652 Cree, Inc.* 1,040 41,683 DRS Technologies, Inc.* 3,060 130,693 FormFactor, Inc.* 2,550 69,207 Ixia* 7,120 119,687 O2Micro International Limited* 6,170 70,585 Photon Dynamics, Inc.* 3,680 89,350 Power Integrations, Inc.* 2,590 51,230 Sigmatel, Inc.* 3,010 106,945 Skyworks Solutions, Inc.* 1,910 18,011 Synaptics, Inc.* 1,710 52,292 Tessera Technologies, Inc.* 3,790 141,026 Virage Logic Corp.* 6,510 120,891 ---------------- 1,249,739 ---------------- ENERGY -- 2.6% CAL Dive International, Inc.* 2,290 93,318 Denbury Resources, Inc.* 4,720 129,564 Superior Energy Services, Inc.* 1,560 24,040 Unit Corp.* 3,340 127,621 ---------------- 374,543 ---------------- FINANCIAL SERVICES -- 3.7% Accredited Home Lenders Holding Co.* 1,710 84,952 Affiliated Managers Group, Inc.* 2,300 155,802 Boston Private Financial Holdings, Inc. 4,820 135,779 East West Bancorp, Inc. 1,500 62,940 First Cash Financial Services, Inc.* 3,265 87,208 ---------------- 526,681 ---------------- HEALTHCARE -- 3.3% American Healthways, Inc.* 4,250 140,420 Matria Healthcare, Inc.* 3,680 143,778
The accompanying notes are an integral part of the financial statements. 57
NUMBER OF MARKET SHARES VALUE ---------------- ---------------- United Surgical Partners International, Inc.* 3,740 $ 155,958 VistaCare, Inc. Cl. A* 1,970 32,761 ---------------- 472,917 ---------------- HOME CONSTRUCTION, FURNISHINGS & APPLIANCES -- 0.3% Miller (Herman), Inc. 1,620 44,761 ---------------- INFORMATION RETRIEVAL SERVICES -- 2.9% Ask Jeeves, Inc.* 4,450 119,038 CoStar Group, Inc.* 880 40,638 Digital River, Inc.* 2,010 83,636 Infospace, Inc.* 3,410 162,146 ---------------- 405,458 ---------------- INSURANCE -- 3.0% AMERIGROUP Corp.* 1,890 142,997 Centene Corp.* 3,420 96,957 HealthExtras, Inc.* 5,780 94,214 ProAssurance Corp.* 670 26,204 Tower Group, Inc. 5,240 62,880 ---------------- 423,252 ---------------- INTERNET SOFTWARE -- 1.2% WebEx Communications, Inc.* 7,110 169,076 ---------------- LODGING -- 1.9% Four Seasons Hotels, Inc. 2,020 165,216 Las Vegas Sands Corp.* 50 2,400 Station Casinos, Inc. 1,870 102,252 ---------------- 269,868 ---------------- MACHINERY & COMPONENTS -- 2.0% Axcelis Technologies, Inc.* 3,990 32,439 Grant Prideco, Inc.* 7,420 148,771 IDEX Corp. 930 37,665 Ultratech, Inc.* 3,370 63,525 ---------------- 282,400 ---------------- MEDICAL SUPPLIES -- 4.6% Advanced Neuromodulation Systems, Inc.* 1,500 59,191 American Medical Systems Holdings, Inc.* 2,285 95,536 Armor Holdings, Inc.* 2,300 108,146 BEI Technologies, Inc. 2,540 78,435 I-Flow Corp.* 1,970 35,913 Intuitive Surgical, Inc.* 2,830 113,257 Laserscope* 2,960 106,294 Ventana Medical Systems, Inc.* 830 53,112 ---------------- 649,884 ---------------- METALS & MINING -- 0.7% Maverick Tube Corp.* 3,420 103,626 ---------------- PHARMACEUTICALS -- 12.4% Able Laboratories, Inc.* 5,600 127,400 Alexion Pharmaceuticals, Inc.* 7,000 $ 176,400 Angiotech Pharmaceuticals, Inc.* 7,750 142,988 Atherogenics, Inc.* 2,570 60,549 Bone Care International, Inc.* 2,600 72,410 CV Therapeutics, Inc.* 2,770 63,710 Cypress Bioscience, Inc.* 5,450 76,627 Discovery Laboratories, Inc.* 13,380 106,103 EPIX Pharmaceuticals, Inc.* 4,100 73,431 First Horizon Pharmaceutical Corp.* 2,150 49,214 Inspire Pharmaceuticals, Inc.* 6,070 101,794 The Medicines Co.* 1,500 43,200 Nabi Biopharmaceuticals* 8,820 129,213 NitroMed, Inc.* 2,750 73,288 Nuvelo, Inc.* 7,420 73,087 Orchid Biosciences, Inc.* 1,440 16,560 QLT, Inc.* 3,480 55,958 Rigel Pharmaceuticals, Inc.* 5,290 129,182 Salix Pharmaceuticals Limited* 4,985 87,686 Theravance, Inc.* 2,850 51,015 Vaxgen, Inc.* 2,160 36,720 ---------------- 1,746,535 ---------------- PHOTOGRAPHY EQUIPMENT/SUPPLIES -- 0.8% Sonic Solutions, Inc.* 5,220 117,137 ---------------- PREPACKAGED SOFTWARE -- 4.8% Altiris, Inc.* 4,360 154,475 Dendrite International, Inc.* 5,450 105,730 Epicor Software Corp.* 7,220 101,730 FalconStor Software, Inc.* 930 8,900 MicroStrategy, Inc. Cl. A* 1,530 92,183 Open Solutions, Inc.* 3,160 82,034 Quest Software, Inc.* 4,460 71,137 THQ, Inc.* 2,440 55,974 ---------------- 672,163 ---------------- REAL ESTATE -- 0.0% Housevalues, Inc.* 310 4,656 ---------------- RESTAURANTS -- 1.6% P.F. Chang's China Bistro, Inc.* 1,610 90,724 RARE Hospitality International, Inc.* 4,150 132,219 ---------------- 222,943 ---------------- RETAIL -- 1.0% GSI Commerce, Inc.* 3,430 60,985 Kenneth Cole Productions, Inc. Cl. A 2,390 $ 73,755 ---------------- 134,740 ---------------- RETAIL - INTERNET -- 1.2% Priceline.com, Inc.* 7,353 173,457 ---------------- TELEPHONE UTILITIES -- 1.8% j2 Global Communications, Inc.* 3,740 129,030 Novatel Wireless, Inc.* 6,130 118,799 ---------------- 247,829 ---------------- TOYS, GAMES -- 0.7% K2, Inc.* 5,990 95,121 ---------------- TRANSPORTATION -- 1.1% Old Dominion Freight Line, Inc.* 2,180 75,864 UTI Worldwide, Inc. 1,190 80,944 ---------------- 156,808 ---------------- TOTAL EQUITIES (COST $11,424,870) 13,415,292 ---------------- PRINCIPAL AMOUNT ---------------- SHORT-TERM INVESTMENTS -- 7.5% REPURCHASE AGREEMENT Investors Bank & Trust Company Repurchase Agreement, dated 12/31/2004, 1.75%, due 01/03/2005(a) $ 1,060,566 1,060,566 ---------------- TOTAL SHORT-TERM INVESTMENTS (AT AMORTIZED COST) 1,060,566 ---------------- TOTAL INVESTMENTS -- 102.4% (COST $12,485,436)** 14,475,858 OTHER ASSETS/ (LIABILITIES) -- (2.4%) (339,952) ---------------- NET ASSETS -- 100.0% $ 14,135,906 ================
NOTES TO PORTFOLIO OF INVESTMENTS ADR - American Depository Receipt. * Non-income producing security. ** See Note 7 for aggregate cost for Federal tax purposes. (a) Maturity value of $1,060,721. Collaterized by U.S. Government Agency obligation with a rate of 2.903%, maturity date of 04/15/2028, and an aggregate market value, including accrued interest, of $1,114,071. The accompanying notes are an integral part of the financial statements. 58 [This page is intentionally left blank.] MML SERIES INVESTMENT FUND - FINANCIAL STATEMENTS STATEMENT OF ASSETS AND LIABILITIES DECEMBER 31, 2004
MML MML MML MML INFLATION-PROTECTED LARGE CAP EQUITY ENHANCED INDEX BOND VALUE INDEX CORE EQUITY FUND FUND FUND FUND ------------------- -------------- -------------- -------------- ASSETS: Investments, at value (NOTE 2)(a) $ 86,542,943 $ 76,631,003 $ 403,171,478 $ 18,144,647 Short-term investments, at value (NOTE 2)(b) 2,188,832 12,173,159 30,297,705 1,221,439 -------------- -------------- -------------- -------------- Total Investments(c) 88,731,775 88,804,162 433,469,183 19,366,086 -------------- -------------- -------------- -------------- Cash - - - 2 Receivables from: Investments sold - - 357,222 - Investment adviser (NOTE 3) - - - 902 Fund shares sold 354,593 45,177 23,550 1,444 Interest and dividends 832,847 117,980 566,409 27,335 Variation margin on open futures contracts (NOTE 2) - - - - Foreign taxes withheld - 1,111 - - -------------- -------------- -------------- -------------- Total assets 89,919,215 88,968,430 434,416,364 19,395,769 -------------- -------------- -------------- -------------- LIABILITIES: Payables for: Investments purchased 1,008,987 512,993 - 242,800 Fund shares repurchased 939 2,951 51,064 293 Variation margin on open futures contracts (NOTE 2) - - 2,750 - Securities on loan (NOTE 2) - 5,467,401 27,884,535 961,016 Directors' fees and expenses (NOTE 3) 3,086 6,059 33,144 1,199 Affiliates (NOTE 3): Investment management fees 43,336 54,688 34,053 8,283 Administration fees - - 42,943 - Investment advisor - - - - Due to custodian - - - - Accrued expenses and other liabilities 24,846 26,604 31,469 25,698 -------------- -------------- -------------- -------------- Total liabilities 1,081,194 6,070,696 28,079,958 1,239,289 -------------- -------------- -------------- -------------- NET ASSETS $ 88,838,021 $ 82,897,734 $ 406,336,406 $ 18,156,480 ============== ============== ============== ============== NET ASSETS CONSIST OF: Paid-in capital $ 87,094,687 $ 73,464,054 $ 391,561,349 $ 17,144,523 Undistributed net investment income (distributions in excess of net investment income) (1,050) (33,074) (10,102) (492) Accumulated net realized gain (loss) on investments, futures contracts and foreign currency translations (417,815) (5,739,034) (15,284,575) (860,557) Net unrealized appreciation on investments, futures contracts, foreign currency and other assets and liabilities 2,162,199 15,205,788 30,069,734 1,873,006 -------------- -------------- -------------- -------------- NET ASSETS $ 88,838,021 $ 82,897,734 $ 406,336,406 $ 18,156,480 ============== ============== ============== ============== Shares outstanding: 8,146,288 7,983,354 - 1,846,371 ============== ============== ============== ============== Net asset value, offering price and redemption price per share: $ 10.91 $ 10.38 $ - $ 9.83 ============== ============== ============== ============== Class I shares: Net assets $ - $ - $ 85,138,011 $ - ============== ============== ============== ============== Shares outstanding - - 5,712,676 - ============== ============== ============== ============== Net asset value, offering price and redemption price per share $ - $ - $ 14.90 $ - ============== ============== ============== ============== Class II shares: Net assets $ - $ - $ 184,271,177 $ - ============== ============== ============== ============== Shares outstanding - - 12,374,179 - ============== ============== ============== ============== Net asset value, offering price and redemption price per share $ - $ - $ 14.89 $ - ============== ============== ============== ============== Class III shares: Net assets $ - $ - $ 136,927,218 $ - ============== ============== ============== ============== Shares outstanding - - 9,213,017 - ============== ============== ============== ============== Net asset value, offering price and redemption price per share $ - $ - $ 14.86 $ - ============== ============== ============== ============== (a) Cost of investments: $ 84,380,744 $ 61,425,203 $ 373,180,319 $ 16,271,641 (b) Cost of short-term investments: $ 2,188,832 $ 12,173,159 $ 30,297,676 $ 1,221,439 (c) Securities on loan with market value of: $ - $ 5,273,924 $ 26,729,027 $ 924,618
The accompanying notes are an integral part of the financial statements. 60
MML MML GROWTH MML SMALL CAP EQUITY OTC 100 EQUITY FUND FUND FUND -------------- -------------- -------------- ASSETS: Investments, at value (NOTE 2)(a) $ 22,371,853 $ 12,056,843 $ 96,158,482 Short-term investments, at value (NOTE 2)(b) 1,299,717 208,962 17,522,819 -------------- -------------- -------------- Total Investments(c) 23,671,570 12,265,805 113,681,301 -------------- -------------- -------------- Cash 206 - 1,627 Receivables from: Investments sold 891,010 19,984 - Investment adviser (NOTE 3) - - - Fund shares sold 9,355 5,283 45,637 Interest and dividends 24,254 5,619 63,907 Variation margin on open futures contracts (NOTE 2) - 60 - Foreign taxes withheld 17 - - -------------- -------------- -------------- Total assets 24,596,412 12,296,751 113,792,472 -------------- -------------- -------------- LIABILITIES: Payables for: Investments purchased 629,810 38,036 610,441 Fund shares repurchased 1,496 162 27,249 Variation margin on open futures contracts (NOTE 2) - - - Securities on loan (NOTE 2) 1,024,710 - 12,147,678 Directors' fees and expenses (NOTE 3) 4,236 2,325 8,726 Affiliates (NOTE 3): Investment management fees 15,352 4,639 54,580 Administration fees - - - Investment advisor 1,145 1,784 - Due to custodian - - - Accrued expenses and other liabilities 26,031 26,776 29,201 -------------- -------------- -------------- Total liabilities 1,702,780 73,722 12,877,875 -------------- -------------- -------------- NET ASSETS $ 22,893,632 $ 12,223,029 $ 100,914,597 ============== ============== ============== NET ASSETS CONSIST OF: Paid-in capital $ 46,341,829 $ 20,150,994 $ 73,993,478 Undistributed net investment income (distributions in excess of net investment income) (2,794) 885 (7,904) Accumulated net realized gain (loss) on investments, futures contracts and foreign currency translations (25,066,210) (10,237,742) (68,819) Net unrealized appreciation on investments, futures contracts, foreign currency and other assets and liabilities 1,620,807 2,308,892 26,997,842 -------------- -------------- -------------- NET ASSETS $ 22,893,632 $ 12,223,029 $ 100,914,597 ============== ============== ============== Shares outstanding: 3,255,224 2,959,478 7,937,656 ============== ============== ============== Net asset value, offering price and redemption price per share: $ 7.03 $ 4.13 $ 12.71 ============== ============== ============== Class I shares: Net assets $ - $ - $ - ============== ============== ============== Shares outstanding - - - ============== ============== ============== Net asset value, offering price and redemption price per share $ - $ - $ - ============== ============== ============== Class II shares: Net assets $ - $ - $ - ============== ============== ============== Shares outstanding - - - ============== ============== ============== Net asset value, offering price and redemption price per share $ - $ - $ - ============== ============== ============== Class III shares: Net assets $ - $ - $- ============== ============== ============== Shares outstanding - - - ============== ============== ============== Net asset value, offering price and redemption price per share $ - $ - $ - ============== ============== ============== (a) Cost of investments: $ 20,751,048 $ 9,749,219 $ 69,160,640 (b) Cost of short-term investments: $ 1,299,717 $208,958 $ 17,522,819 (c) Securities on loan with market value of: $ 996,564 $ - $ 11,715,677 MML MML MML SMALL COMPANY SMALL CAP EMERGING OPPORTUNITIES GROWTH EQUITY GROWTH FUND FUND FUND -------------- -------------- -------------- ASSETS: Investments, at value (NOTE 2)(a) $ 58,353,571 $ 57,273,925 $ 13,415,292 Short-term investments, at value (NOTE 2)(b) 7,149,906 19,592,430 1,060,566 -------------- -------------- -------------- Total Investments(c) 65,503,477 76,866,355 14,475,858 -------------- -------------- -------------- Cash - - - Receivables from: Investments sold 21,491 93,814 11,825 Investment adviser (NOTE 3) - 1,080 3,207 Fund shares sold 51,760 27,900 153,469 Interest and dividends 22,835 4,617 423 Variation margin on open futures contracts (NOTE 2) - - - Foreign taxes withheld - 41 9 -------------- -------------- -------------- Total assets 65,599,563 76,993,807 14,644,791 -------------- -------------- -------------- LIABILITIES: Payables for: Investments purchased 88,476 545,488 461,065 Fund shares repurchased 324 103,298 5,386 Variation margin on open futures contracts (NOTE 2) - - - Securities on loan (NOTE 2) 2,096,200 14,245,648 - Directors' fees and expenses (NOTE 3) 3,110 6,025 2,366 Affiliates (NOTE 3): Investment management fees 53,549 54,732 12,008 Administration fees - - - Investment advisor - - - Due to custodian 499 - - Accrued expenses and other liabilities 26,331 29,628 28,060 -------------- -------------- -------------- Total liabilities 2,268,489 14,984,819 508,885 -------------- -------------- -------------- NET ASSETS $ 63,331,074 $ 62,008,988 $ 14,135,906 ============== ============== ============== NET ASSETS CONSIST OF: Paid-in capital $ 49,632,418 $ 64,446,109 $ 20,585,839 Undistributed net investment income (distributions in excess of net investment income) (2,641) (5,543) (2,256) Accumulated net realized gain (loss) on investments, futures contracts and foreign currency translations 893,199 (16,364,555) (8,438,099) Net unrealized appreciation on investments, futures contracts, foreign currency and other assets and liabilities 12,808,098 13,932,977 1,990,422 -------------- -------------- -------------- NET ASSETS $ 63,331,074 $ 62,008,988 $ 14,135,906 ============== ============== ============== Shares outstanding: 4,169,521 4,695,392 2,389,768 ============== ============== ============== Net asset value, offering price and redemption price per share: $ 15.19 $ 13.21 $ 5.92 ============== ============== ============== Class I shares: Net assets $ - $ - $ - ============== ============== ============== Shares outstanding - - - ============== ============== ============== Net asset value, offering price and redemption price per share $ - $ - $ - ============== ============== ============== Class II shares: Net assets $ - $ - $ - ============== ============== ============== Shares outstanding - - - ============== ============== ============== Net asset value, offering price and redemption price per share $ - $ - $ - ============== ============== ============== Class III shares: Net assets $ - $ - $ - ============== ============== ============== Shares outstanding - - - ============== ============== ============== Net asset value, offering price and redemption price per share $ - $ - $ - ============== ============== ============== (a) Cost of investments: $ 45,545,473 $ 43,340,948 $ 11,424,870 (b) Cost of short-term investments: $ 7,149,906 $ 19,592,430 $ 1,060,566 (c) Securities on loan with market value of: $ 1,954,329 $ 13,693,919 $ -
61 STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2004
MML MML MML MML INFLATION-PROTECTED LARGE CAP EQUITY ENHANCED INDEX BOND VALUE INDEX CORE EQUITY FUND FUND FUND FUND ------------------- -------------- -------------- -------------- INVESTMENT INCOME (NOTE 2): Dividends(a) $ - $ 1,064,929 $ 8,067,833 $ 351,627 Interest(b) 2,644,017 37,240 52,528 77 -------------- -------------- -------------- -------------- Total investment income 2,644,017 1,102,169 8,120,361 351,704 -------------- -------------- -------------- -------------- EXPENSES (NOTE 2): Investment management fees (NOTE 3) 364,588 534,531 401,854 92,690 Custody fees 4,833 9,088 61,689 13,161 Trustee reporting 2,711 4,371 5,039 6,934 Audit and legal fees 22,238 22,250 27,923 21,481 Proxy fees 527 984 921 126 Shareholder reporting fees 807 1,764 19,585 434 Directors' fees (NOTE 3) 4,883 5,863 36,827 1,533 Administration fees (NOTE 3): Class I - - 241,990 - Class II - - 350,614 - Class III - - 68,329 - -------------- -------------- -------------- -------------- Total expenses 400,587 578,851 1,214,771 136,359 Expenses waived (NOTE 3) - - - (25,132) Class II Administration fees waived (NOTE 3) - - (111,436) - Class III Administration fees waived (NOTE 3) - - (68,329) - Fees paid indirectly (NOTE 3) - (23) - - -------------- -------------- -------------- -------------- Net expenses 400,587 578,828 1,035,006 111,227 -------------- -------------- -------------- -------------- NET INVESTMENT INCOME (LOSS) 2,243,430 523,341 7,085,355 240,477 -------------- -------------- -------------- -------------- REALIZED AND UNREALIZED GAIN (LOSS): Net realized gain (loss) on: Investment transactions 244,266 (393,269) (5,834,571) 1,297,969 Closed futures contracts - - 505,241 - Foreign currency transactions - (1,089) - - -------------- -------------- -------------- -------------- Net realized gain (loss) 244,266 (394,358) (5,329,330) 1,297,969 -------------- -------------- -------------- -------------- Net change in unrealized appreciation (depreciation) on: Investments 1,275,812 7,873,765 38,250,052 200,309 Open futures contracts - - (10,845) - Translation of assets and liabilities in foreign currencies - (12) - - -------------- -------------- -------------- -------------- Net unrealized gain 1,275,812 7,873,753 38,239,207 200,309 -------------- -------------- -------------- -------------- NET REALIZED AND UNREALIZED GAIN 1,520,078 7,479,395 32,909,877 1,498,278 -------------- -------------- -------------- -------------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 3,763,508 $ 8,002,736 $ 39,995,232 $ 1,738,755 ============== ============== ============== ============== (a) Net of withholding tax of: $ - $ 20,083 $ - $ - (b) Including securities lending income of: $ - $ 7,400 $ 19,210 $ 77
The accompanying notes are an integral part of the financial statements. 62
MML MML GROWTH MML SMALL CAP EQUITY OTC 100 EQUITY FUND FUND FUND -------------- -------------- -------------- INVESTMENT INCOME (NOTE 2): Dividends(a) $ 273,597 $ 137,630 $ 747,032 Interest(b) 24,668 1,437 42,120 -------------- -------------- -------------- Total investment income 298,265 139,067 789,152 -------------- -------------- -------------- EXPENSES (NOTE 2): Investment management fees (NOTE 3) 176,033 52,526 580,751 Custody fees 15,234 8,309 15,952 Trustee reporting 4,263 4,241 4,411 Audit and legal fees 21,550 22,324 23,319 Proxy fees 984 922 126 Shareholder reporting fees 961 471 2,326 Directors' fees (NOTE 3) 1,999 1,132 8,092 Administration fees (NOTE 3): Class I - - - Class II - - - Class III - - - -------------- -------------- -------------- Total expenses 221,024 89,925 634,977 Expenses waived (NOTE 3) (20,786) (24,559) - Class II Administration fees waived (NOTE 3) - - - Class III Administration fees waived (NOTE 3) - - - Fees paid indirectly (NOTE 3) (5,452) - - -------------- -------------- -------------- Net expenses 194,786 65,366 634,977 -------------- -------------- -------------- NET INVESTMENT INCOME (LOSS) 103,479 73,701 154,175 -------------- -------------- -------------- REALIZED AND UNREALIZED GAIN (LOSS): Net realized gain (loss) on: Investment transactions 461,452 750,030 2,541,228 Closed futures contracts - 22,086 - Foreign currency transactions (300) - - -------------- -------------- -------------- Net realized gain (loss) 461,152 772,116 2,541,228 -------------- -------------- -------------- Net change in unrealized appreciation (depreciation) on: Investments 478,767 158,232 11,469,589 Open futures contracts - (5,182) - Translation of assets and liabilities in foreign currencies (22) - - -------------- -------------- -------------- Net unrealized gain 478,745 153,050 11,469,589 -------------- -------------- -------------- NET REALIZED AND UNREALIZED GAIN 939,897 925,166 14,010,817 -------------- -------------- -------------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 1,043,376 $ 998,867 $ 14,164,992 ============== ============== ============== (a) Net of withholding tax of: $ 559 $ 191 $ - (b) Including securities lending income of: $ 1,865 $ - $ 6,137 MML MML MML SMALL COMPANY SMALL CAP EMERGING OPPORTUNITIES GROWTH EQUITY GROWTH FUND FUND FUND -------------- -------------- -------------- INVESTMENT INCOME (NOTE 2): Dividends(a) $ 266,659 $ 177,534 $ 9,647 Interest(b) 30,880 86,552 12,979 -------------- -------------- -------------- Total investment income 297,539 264,086 22,626 -------------- -------------- -------------- EXPENSES (NOTE 2): Investment management fees (NOTE 3) 520,418 549,086 124,263 Custody fees 14,666 35,377 38,644 Trustee reporting 6,934 4,329 4,243 Audit and legal fees 22,003 22,426 21,495 Proxy fees 126 1,067 1,234 Shareholder reporting fees 1,361 1,252 286 Directors' fees (NOTE 3) 4,393 4,648 1,057 Administration fees (NOTE 3): Class I - - - Class II - - - Class III - - - -------------- -------------- -------------- Total expenses 569,901 618,185 191,222 Expenses waived (NOTE 3) - (12,913) (53,941) Class II Administration fees waived (NOTE 3) - - - Class III Administration fees waived (NOTE 3) - - - Fees paid indirectly (NOTE 3) - (20,496) - -------------- -------------- -------------- Net expenses 569,901 584,776 137,281 -------------- -------------- -------------- NET INVESTMENT INCOME (LOSS) (272,362) (320,690) (114,655) -------------- -------------- -------------- REALIZED AND UNREALIZED GAIN (LOSS): Net realized gain (loss) on: Investment transactions 4,781,901 3,138,016 734,464 Closed futures contracts - - - Foreign currency transactions - - - -------------- -------------- -------------- Net realized gain (loss) 4,781,901 3,138,016 734,464 -------------- -------------- -------------- Net change in unrealized appreciation (depreciation) on: Investments 5,038,175 4,254,359 1,032,165 Open futures contracts - - - Translation of assets and liabilities in foreign currencies - - - -------------- -------------- -------------- Net unrealized gain 5,038,175 4,254,359 1,032,165 -------------- -------------- -------------- NET REALIZED AND UNREALIZED GAIN 9,820,076 7,392,375 1,766,629 -------------- -------------- -------------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 9,547,714 $ 7,071,685 $ 1,651,974 ============== ============== ============== (a) Net of withholding tax of: $ - $ 443 $ 16 (b) Including securities lending income of: $ 2,068 $ 19,902 $ -
63 STATEMENTS OF CHANGES IN NET ASSETS
MML INFLATION-PROTECTED BOND FUND MML LARGE CAP VALUE FUND ------------------------------------- ------------------------------------- YEAR YEAR YEAR YEAR ENDED ENDED ENDED ENDED DECEMBER 31, 2004 DECEMBER 31, 2003 DECEMBER 31, 2004 DECEMBER 31, 2003 ----------------- ----------------- ----------------- ----------------- INCREASE (DECREASE) IN NET ASSETS: OPERATIONS: Net investment income $ 2,243,430 $ 474,742 $ 523,341 $ 338,897 Net realized gain (loss) on investment transactions, futures contracts and foreign currency transactions 244,266 163,191 (394,358) (796,004) Net change in unrealized appreciation (depreciation) on investments, futures contracts and translation of assets and liabilities in foreign currencies 1,275,812 647,327 7,873,753 12,346,148 -------------- -------------- -------------- -------------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 3,763,508 1,285,260 8,002,736 11,889,041 DISTRIBUTIONS TO SHAREHOLDERS (NOTE 2): From net investment income (2,595,759) (474,521) (573,534) (359,133) Class I - - - - Class II - - - - Class III - - - - -------------- -------------- -------------- -------------- TOTAL DISTRIBUTIONS FROM NET INVESTMENT INCOME (2,595,759) (474,521) (573,534) (359,133) -------------- -------------- -------------- -------------- FROM NET REALIZED GAINS (453,773) (21,371) - - NET FUND SHARE TRANSACTIONS (NOTE 5): Class I - - - - Class II - - - - Class III - - - - -------------- -------------- -------------- -------------- NET FUND SHARE TRANSACTIONS (NOTE 5) 52,688,262 23,856,740 18,193,811 11,826,285 -------------- -------------- -------------- -------------- TOTAL INCREASE IN NET ASSETS 53,402,238 24,646,108 25,623,013 23,356,193 NET ASSETS: Beginning of year 35,435,783 10,789,675 57,274,721 33,918,528 -------------- -------------- -------------- -------------- End of year $ 88,838,021 $ 35,435,783 $ 82,897,734 $ 57,274,721 ============== ============== ============== ============== Undistributed net investment income (distributions in excess of net investment income) included in net assets at end of the year $ (1,050) $ 850 $ (33,074) $ 18,208 ============== ============== ============== ==============
The accompanying notes are an integral part of the financial statements. 64
MML EQUITY INDEX FUND MML ENHANCED INDEX CORE EQUITY FUND ------------------------------------- ------------------------------------- YEAR YEAR YEAR YEAR ENDED ENDED ENDED ENDED DECEMBER 31, 2004 DECEMBER 31, 2003 DECEMBER 31, 2004 DECEMBER 31, 2003 ----------------- ----------------- ----------------- ----------------- INCREASE (DECREASE) IN NET ASSETS: OPERATIONS: Net investment income $ 7,085,355 $ 5,321,954 $ 240,477 $ 138,465 Net realized gain (loss) on investment transactions, futures contracts and foreign currency transactions (5,329,330) (2,518,982) 1,297,969 (264,783) Net change in unrealized appreciation (depreciation) on investments, futures contracts and translation of assets and liabilities in foreign currencies 38,239,207 84,005,759 200,309 3,213,416 -------------- -------------- -------------- -------------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 39,995,232 86,808,731 1,738,755 3,087,098 DISTRIBUTIONS TO SHAREHOLDERS (NOTE 2): From net investment income - - (240,282) (138,749) Class I (1,343,883) (913,733) - - Class II (3,190,498) (2,486,104) - - Class III (2,549,489) (1,931,671) - - -------------- -------------- -------------- -------------- TOTAL DISTRIBUTIONS FROM NET INVESTMENT INCOME (7,083,870) (5,331,508) (240,282) (138,749) -------------- -------------- -------------- -------------- FROM NET REALIZED GAINS - - - - NET FUND SHARE TRANSACTIONS (NOTE 5): Class I 1,433 4,695,413 - - Class II (19,877,415) 26,828,374 - - Class III (11,810,653) (7,355,331) - - -------------- -------------- -------------- -------------- NET FUND SHARE TRANSACTIONS (NOTE 5) (31,686,635) 24,168,456 575,490 3,467,743 -------------- -------------- -------------- -------------- TOTAL INCREASE IN NET ASSETS 1,224,727 105,645,679 2,073,963 6,416,092 NET ASSETS: Beginning of year 405,111,679 299,466,000 16,082,517 9,666,425 -------------- -------------- -------------- -------------- End of year $ 406,336,406 $ 405,111,679 $ 18,156,480 $ 16,082,517 ============== ============== ============== ============== Undistributed net investment income (distributions in excess of net investment income) included in net assets at end of the year $ (10,102) $ (12,524) $ (492) $ (475) ============== ============== ============== ============== MML GROWTH EQUITY FUND ------------------------------------- YEAR YEAR ENDED ENDED DECEMBER 31, 2004 DECEMBER 31, 2003 ----------------- ----------------- INCREASE (DECREASE) IN NET ASSETS: OPERATIONS: Net investment income $ 103,479 $ 2,972 Net realized gain (loss) on investment transactions, futures contracts and foreign currency transactions 461,152 2,295,983 Net change in unrealized appreciation (depreciation) on investments, futures contracts and translation of assets and liabilities in foreign currencies 478,745 1,464,571 -------------- -------------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 1,043,376 3,763,526 DISTRIBUTIONS TO SHAREHOLDERS (NOTE 2): From net investment income (103,437) (4,061) Class I - - Class II - - Class III - - -------------- -------------- TOTAL DISTRIBUTIONS FROM NET INVESTMENT INCOME (103,437) (4,061) -------------- -------------- FROM NET REALIZED GAINS - - NET FUND SHARE TRANSACTIONS (NOTE 5): Class I - - Class II - - Class III - - -------------- -------------- NET FUND SHARE TRANSACTIONS (NOTE 5) 493,476 1,132,622 -------------- -------------- TOTAL INCREASE IN NET ASSETS 1,433,415 4,892,087 NET ASSETS: Beginning of year 21,460,217 16,568,130 -------------- -------------- End of year $ 22,893,632 $ 21,460,217 ============== ============== Undistributed net investment income (distributions in excess of net investment income) included in net assets at end of the year $ (2,794) $ (3,633) ============== ==============
65
MML OTC 100 FUND MML SMALL CAP EQUITY FUND ------------------------------------- ------------------------------------- YEAR YEAR YEAR YEAR ENDED ENDED ENDED ENDED DECEMBER 31, 2004 DECEMBER 31, 2003 DECEMBER 31, 2004 DECEMBER 31, 2003 ----------------- ----------------- ----------------- ----------------- INCREASE (DECREASE) IN NET ASSETS: OPERATIONS: Net investment income (loss) $ 73,701 $ (23,146) $ 154,175 $ 141,322 Net realized gain (loss) on investment transactions, futures contracts and translation of assets and liabilities in foreign currencies 772,116 (392,827) 2,541,228 2,035,667 Net change in unrealized appreciation on investments and futures contracts 153,050 3,332,472 11,469,589 17,469,139 -------------- -------------- -------------- -------------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 998,867 2,916,499 14,164,992 19,646,128 DISTRIBUTIONS TO SHAREHOLDERS (NOTE 2): From net investment income (71,288) - (159,391) (142,999) From net realized gains - - (1,804,441) - NET FUND SHARE TRANSACTIONS (NOTE 5) (978,802) 5,261,985 2,809,366 4,892,753 -------------- -------------- -------------- -------------- TOTAL INCREASE (DECREASE) IN NET ASSETS (51,223) 8,178,484 15,010,526 24,395,882 NET ASSETS: Beginning of year 12,274,252 4,095,768 85,904,071 61,508,189 -------------- -------------- -------------- -------------- End of year $ 12,223,029 $ 12,274,252 $ 100,914,597 $ 85,904,071 ============== ============== ============== ============== Undistributed net investment income (distributions in excess of net investment income) included in net assets at end of the year $ 885 $ (1,847) $ (7,904) $ (5,072) ============== ============== ============== ==============
The accompanying notes are an integral part of the financial statements. 66
MML SMALL COMPANY OPPORTUNITIES FUND MML SMALL CAP GROWTH EQUITY FUND ------------------------------------- ------------------------------------- YEAR YEAR YEAR YEAR ENDED ENDED ENDED ENDED DECEMBER 31, 2004 DECEMBER 31, 2003 DECEMBER 31, 2004 DECEMBER 31, 2003 ----------------- ----------------- ----------------- ----------------- INCREASE (DECREASE) IN NET ASSETS: OPERATIONS: Net investment income (loss) $ (272,362) $ (114,489) $ (320,690) $ (272,859) Net realized gain (loss) on investment transactions, futures contracts and translation of assets and liabilities in foreign currencies 4,781,901 3,385,671 3,138,016 1,394,593 Net change in unrealized appreciation on investments and futures contracts 5,038,175 8,075,407 4,254,359 12,478,220 -------------- -------------- -------------- -------------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 9,547,714 11,346,589 7,071,685 13,599,954 DISTRIBUTIONS TO SHAREHOLDERS (NOTE 2): From net investment income - - - - From net realized gains (4,414,393) (1,853,674) - - NET FUND SHARE TRANSACTIONS (NOTE 5) 15,025,867 10,475,678 7,250,402 7,302,485 -------------- -------------- -------------- -------------- TOTAL INCREASE (DECREASE) IN NET ASSETS 20,159,188 19,968,593 14,322,087 20,902,439 NET ASSETS: Beginning of year 43,171,886 23,203,293 47,686,901 26,784,462 -------------- -------------- -------------- -------------- End of year $ 63,331,074 $ 43,171,886 $ 62,008,988 $ 47,686,901 ============== ============== ============== ============== Undistributed net investment income (distributions in excess of net investment income) included in net assets at end of the year $ (2,641) $ (1,079) $ (5,543) $ (3,923) ============== ============== ============== ============== MML EMERGING GROWTH FUND ------------------------------------- YEAR YEAR ENDED ENDED DECEMBER 31, 2004 DECEMBER 31, 2003 ----------------- ----------------- INCREASE (DECREASE) IN NET ASSETS: OPERATIONS: Net investment income (loss) $ (114,655) $ (70,583) Net realized gain (loss) on investment transactions, futures contracts and translation of assets and liabilities in foreign currencies 734,464 1,222,283 Net change in unrealized appreciation on investments and futures contracts 1,032,165 1,137,693 -------------- -------------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 1,651,974 2,289,393 DISTRIBUTIONS TO SHAREHOLDERS (NOTE 2): From net investment income - - From net realized gains - - NET FUND SHARE TRANSACTIONS (NOTE 5) 2,419,889 3,441,673 -------------- -------------- TOTAL INCREASE (DECREASE) IN NET ASSETS 4,071,863 5,731,066 NET ASSETS: Beginning of year 10,064,043 4,332,977 -------------- -------------- End of year $ 14,135,906 $ 10,064,043 ============== ============== Undistributed net investment income (distributions in excess of net investment income) included in net assets at end of the year $ (2,256) $ (1,883) ============== ==============
67 FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
YEAR ENDED YEAR ENDED PERIOD ENDED 12/31/04 12/31/03 12/31/02+ -------------- -------------- -------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 10.72 $ 10.23 $ 10.00 -------------- -------------- -------------- INCOME (LOSS) FROM INVESTMENT OPERATIONS: Net investment income 0.36 0.23 0.09 Net realized and unrealized gain on investments 0.29 0.50 0.23 -------------- -------------- -------------- Total income from investment operations 0.65 0.73 0.32 -------------- -------------- -------------- LESS DISTRIBUTIONS TO SHAREHOLDERS: From net investment income (0.40) (0.23) (0.09) From net realized gains (0.06) (0.01) - -------------- -------------- -------------- Total distributions (0.46) (0.24) (0.09) -------------- -------------- -------------- NET ASSET VALUE, END OF PERIOD $ 10.91 $ 10.72 $ 10.23 ============== ============== ============== TOTAL RETURN(a) 6.25% 7.01% 3.17%** RATIOS / SUPPLEMENTAL DATA: Net assets, end of period (000's) $ 88,838 $ 35,436 $ 10,790 Ratio of expenses to average daily net assets: Before expense waiver 0.66% 0.78% 1.57%* After expense waiver# N/A 0.71% 0.71%* Net investment income to average daily net assets 3.69% 2.53% 2.54%* Portfolio turnover rate 15% 25% 0%**
* ANNUALIZED. ** PERCENTAGE REPRESENTS RESULTS FOR THE PERIOD AND ARE NOT ANNUALIZED. + FOR THE PERIOD FROM AUGUST 30, 2002 (COMMENCEMENT OF OPERATIONS) THROUGH DECEMBER 31, 2002. # COMPUTED AFTER GIVING EFFECT TO AN AGREEMENT BY MASSMUTUAL TO WAIVE CERTAIN FEES AND EXPENSES OF THE FUND FOR THE PERIOD AUGUST 30, 2002 THROUGH DECEMBER 31, 2002 AND FOR THE YEAR ENDED DECEMBER 31, 2003. (a) TOTAL RETURN INFORMATION SHOWN IN THE FINANCIAL HIGHLIGHTS TABLE DOES NOT REFLECT EXPENSES THAT APPLY AT THE SEPARATE ACCOUNT LEVEL OR TO RELATED INSURANCE PRODUCTS. INCLUSION OF THESE CHARGES WOULD REDUCE THE TOTAL RETURN FIGURES FOR ALL PERIODS SHOWN. The accompanying notes are an integral part of the financial statements. 68
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED PERIOD ENDED 12/31/04 12/31/03 12/31/02 12/31/01 12/31/00+ ---------- ---------- ---------- ---------- ------------ NET ASSET VALUE, BEGINNING OF PERIOD $ 9.35 $ 7.26 $ 8.73 $ 9.86 $ 10.00 ---------- ---------- ---------- ---------- ---------- INCOME (LOSS) FROM INVESTMENT OPERATIONS: Net investment income 0.06 0.06 0.05 0.03 0.05*** Net realized and unrealized gain (loss) on investments 1.04 2.09 (1.47) (1.13) (0.15) ---------- ---------- ---------- ---------- ---------- Total income (loss) from investment operations 1.10 2.15 (1.42) (1.10) (0.10) ---------- ---------- ---------- ---------- ---------- LESS DISTRIBUTIONS TO SHAREHOLDERS: From net investment income (0.07) (0.06) (0.05) (0.03) (0.04) Tax return of capital - - (0.00)^ - - ---------- ---------- ---------- ---------- ---------- Total distributions (0.07) (0.06) (0.05) (0.03) (0.04) ---------- ---------- ---------- ---------- ---------- NET ASSET VALUE, END OF PERIOD $ 10.38 $ 9.35 $ 7.26 $ 8.73 $ 9.86 ========== ========== ========== ========== ========== TOTAL RETURN(a) 11.79% 29.60% (16.23)% (11.16)% (1.05)%** RATIOS / SUPPLEMENTAL DATA: Net assets, end of period (000's) $ 82,898 $ 57,275 $ 33,919 $ 36,171 $ 18,052 Ratio of expenses to average daily net assets: Before expense waiver 0.87% 0.92% 0.92% 0.87% 1.07%* After expense waiver# 0.87%(b) 0.90%(b) 0.90%(b) N/A 0.91%* Net investment income to average daily net assets 0.78% 0.79% 0.61% 0.48% 0.78%* Portfolio turnover rate 3% 7% 32% 19% 14%**
* ANNUALIZED. ** PERCENTAGE REPRESENTS RESULTS FOR THE PERIOD AND ARE NOT ANNUALIZED. *** PER SHARE AMOUNT CALCULATED ON THE AVERAGE SHARES METHOD. ^ TAX RETURN OF CAPITAL IS LESS THAN $0.01 PER SHARE. + FOR THE PERIOD FROM MAY 1, 2000 (COMMENCEMENT OF OPERATIONS) THROUGH DECEMBER 31, 2000. # COMPUTED AFTER GIVING EFFECT TO AN AGREEMENT BY MASSMUTUAL TO WAIVE CERTAIN FEES AND EXPENSES OF THE FUND FOR THE PERIOD MAY 1, 2000 THROUGH DECEMBER 31, 2000 AND FOR THE YEARS ENDED DECEMBER 31, 2002 AND 2003. (a) TOTAL RETURN INFORMATION SHOWN IN THE FINANCIAL HIGHLIGHTS TABLE DOES NOT REFLECT EXPENSES THAT APPLY AT THE SEPARATE ACCOUNT LEVEL OR TO RELATED INSURANCE PRODUCTS. INCLUSION OF THESE CHARGES WOULD REDUCE THE TOTAL RETURN FIGURES FOR ALL PERIODS SHOWN. (b) THE FUND HAS ENTERED INTO AGREEMENTS WITH CERTAIN BROKERS TO REBATE A PORTION OF BROKERAGE COMMISSIONS. THE REBATED COMMISSIONS ARE USED TO REDUCE OPERATING EXPENSES OF THE FUND. The accompanying notes are an integral part of the financial statements. 69
CLASS I ---------- YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED 12/31/04 12/31/03 12/31/02 12/31/01 12/31/00 ---------- ---------- ---------- ---------- ---------- NET ASSET VALUE, BEGINNING OF PERIOD $ 13.71 $ 10.83 $ 14.14 $ 16.27 $ 18.13 ---------- ---------- ---------- ---------- ---------- INCOME (LOSS) FROM INVESTMENT OPERATIONS: Net investment income 0.22*** 0.16*** 0.14*** 0.14*** 0.16*** Net realized and unrealized gain (loss) on investments 1.21 2.88 (3.31) (2.14) (1.88) ---------- ---------- ---------- ---------- ---------- Total income (loss) from investment operations 1.43 3.04 (3.17) (2.00) (1.72) ---------- ---------- ---------- ---------- ---------- LESS DISTRIBUTIONS TO SHAREHOLDERS: From net investment income (0.24) (0.16) (0.14) (0.07) (0.14) From net realized gains - - - (0.06) - ---------- ---------- ---------- ---------- ---------- Total distributions (0.24) (0.16) (0.14) (0.13) (0.14) ---------- ---------- ---------- ---------- ---------- NET ASSET VALUE, END OF PERIOD $ 14.90 $ 13.71 $ 10.83 $ 14.14 $ 16.27 ========== ========== ========== ========== ========== TOTAL RETURN(a) 10.42% 28.08% (22.46)% (12.32)% (9.53)% RATIOS / SUPPLEMENTAL DATA: Net assets, end of period (000's) $ 85,138 $ 78,597 $ 58,454 $ 81,535 $ 82,798 Ratio of expenses to average daily net assets: Before expense waiver 0.44% 0.44% 0.44% 0.45% 0.45% After expense waiver# N/A N/A N/A N/A 0.45% Net investment income to average daily net assets 1.60% 1.37% 1.16% 0.92% 0.89% Portfolio turnover rate 4% 5% 6% 5% 3% CLASS II ---------- YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED PERIOD ENDED 12/31/04 12/31/03 12/31/02 12/31/01 12/31/00+ ---------- ---------- ---------- ---------- ---------- NET ASSET VALUE, BEGINNING OF PERIOD $ 13.70 $ 10.82 $ 14.13 $ 16.26 $ 17.96 ---------- ---------- ---------- ---------- ---------- INCOME (LOSS) FROM INVESTMENT OPERATIONS: Net investment income 0.25*** 0.19*** 0.17*** 0.16*** 0.13*** Net realized and unrealized gain (loss) on investments 1.20 2.87 (3.32) (2.14) (1.68) ---------- ---------- ---------- ---------- ---------- Total income (loss) from investment operations 1.45 3.06 (3.15) (1.98) (1.55) ---------- ---------- ---------- ---------- ---------- LESS DISTRIBUTIONS TO SHAREHOLDERS: From net investment income (0.26) (0.18) (0.16) (0.09) (0.15) From net realized gains - - - (0.06) - ---------- ---------- ---------- ---------- ---------- Total distributions (0.26) (0.18) (0.16) (0.15) (0.15) ---------- ---------- ---------- ---------- ---------- NET ASSET VALUE, END OF PERIOD $ 14.89 $ 13.70 $ 10.82 $ 14.13 $ 16.26 ========== ========== ========== ========== ========== TOTAL RETURN(a) 10.60% 28.31% (22.29)% (12.18)% (8.63)%** RATIOS / SUPPLEMENTAL DATA: Net assets, end of period (000's) $ 184,271 $ 188,869 $ 125,942 $ 74,636 $ 56,998 Ratio of expenses to average daily net assets: Before expense waiver 0.33% 0.33% 0.33% 0.34% 0.34%* After expense waiver## 0.27% 0.25% 0.26% 0.29% 0.29%* Net investment income to average daily net assets 1.75% 1.56% 1.37% 1.08% 1.10%* Portfolio turnover rate 4% 5% 6% 5% 3%**
* ANNUALIZED. ** PERCENTAGE REPRESENTS RESULTS FOR THE PERIOD AND ARE NOT ANNUALIZED. *** PER SHARE AMOUNT CALCULATED ON THE AVERAGE SHARES METHOD. + FOR THE PERIOD FROM MAY 1, 2000 (COMMENCEMENT OF OPERATIONS) THROUGH DECEMBER 31, 2000. # COMPUTED AFTER GIVING EFFECT TO AN AGREEMENT BY MASSMUTUAL TO WAIVE CERTAIN FEES AND EXPENSES OF THE FUND FOR THE YEAR ENDED DECEMBER 31, 2000. ## COMPUTED AFTER GIVING EFFECT TO AN AGREEMENT BY MASSMUTUAL TO WAIVE CERTAIN FEES AND EXPENSES OF THE FUND FOR THE PERIOD MAY 1, 2000 THROUGH DECEMBER 31, 2000, THE YEARS ENDED DECEMBER 31, 2001, 2002, 2003 AND 2004. (a) TOTAL RETURN INFORMATION SHOWN IN THE FINANCIAL HIGHLIGHTS TABLE DOES NOT REFLECT EXPENSES THAT APPLY AT THE SEPARATE ACCOUNT LEVEL OR TO RELATED INSURANCE PRODUCTS. INCLUSION OF THESE CHARGES WOULD REDUCE THE TOTAL RETURN FIGURES FOR ALL PERIODS SHOWN. The accompanying notes are an integral part of the financial statements. 70
CLASS III ---------- YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED PERIOD ENDED 12/31/04 12/31/03 12/31/02 12/31/01 12/31/00+ ---------- ---------- ---------- ---------- ------------ NET ASSET VALUE, BEGINNING OF PERIOD $ 13.67 $ 10.80 $ 14.10 $ 16.27 $ 17.96 ---------- ---------- ---------- ---------- ---------- INCOME (LOSS) FROM INVESTMENT OPERATIONS: Net investment income 0.26*** 0.20*** 0.18*** 0.19*** 0.15*** Net realized and unrealized gain (loss) on investments 1.21 2.86 (3.31) (2.19) (1.67) ---------- ---------- ---------- ---------- ---------- Total income (loss) from investment operations 1.47 3.06 (3.13) (2.00) (1.52) ---------- ---------- ---------- ---------- ---------- LESS DISTRIBUTIONS TO SHAREHOLDERS: From net investment income (0.28) (0.19) (0.17) (0.11) (0.17) From net realized gains - - - (0.06) - ---------- ---------- ---------- ---------- ---------- Total distributions (0.28) (0.19) (0.17) (0.17) (0.17) ---------- ---------- ---------- ---------- ---------- NET ASSET VALUE, END OF PERIOD $ 14.86 $ 13.67 $ 10.80 $ 14.10 $ 16.27 ========== ========== ========== ========== ========== TOTAL RETURN(a) 10.77% 28.38% (22.18)% (12.30)% (8.50)%** RATIOS / SUPPLEMENTAL DATA: Net assets, end of period (000's) $ 136,927 $ 137,646 $ 115,070 $ 154,588 $ 34,111 Ratio of expenses to average daily net assets: Before expense waiver 0.19% 0.19% 0.19% 0.20% 0.20%* After expense waiver## 0.14% 0.14% 0.14% 0.15% 0.15%* Net investment income to average daily net assets 1.88% 1.67% 1.46% 1.32% 1.25%* Portfolio turnover rate 4% 5% 6% 5% 3%**
* ANNUALIZED. ** PERCENTAGE REPRESENTS RESULTS FOR THE PERIOD AND ARE NOT ANNUALIZED. *** PER SHARE AMOUNT CALCULATED ON THE AVERAGE SHARES METHOD. + FOR THE PERIOD FROM MAY 1, 2000 (COMMENCEMENT OF OPERATIONS) THROUGH DECEMBER 31, 2000. ## COMPUTED AFTER GIVING EFFECT TO AN AGREEMENT BY MASSMUTUAL TO WAIVE CERTAIN FEES AND EXPENSES OF THE FUND FOR THE PERIOD MAY 1, 2000 THROUGH DECEMBER 31, 2000, THE YEARS ENDED DECEMBER 31, 2001, 2002, 2003 AND 2004. (a) TOTAL RETURN INFORMATION SHOWN IN THE FINANCIAL HIGHLIGHTS TABLE DOES NOT REFLECT EXPENSES THAT APPLY AT THE SEPARATE ACCOUNT LEVEL OR TO RELATED INSURANCE PRODUCTS. INCLUSION OF THESE CHARGES WOULD REDUCE THE TOTAL RETURN FIGURES FOR ALL PERIODS SHOWN. The accompanying notes are an integral part of the financial statements. 71
YEAR ENDED YEAR ENDED YEAR ENDED PERIOD ENDED 12/31/04 12/31/03 12/31/02 12/31/01+ -------------- -------------- -------------- -------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 8.99 $ 7.13 $ 9.21 $ 10.00 -------------- -------------- -------------- -------------- INCOME (LOSS) FROM INVESTMENT OPERATIONS: Net investment income 0.13 0.08 0.07 0.06*** Net realized and unrealized gain (loss) on investments 0.84 1.86 (2.08) (0.80) -------------- -------------- -------------- -------------- Total income (loss) from investment operations 0.97 1.94 (2.01) (0.74) -------------- -------------- -------------- -------------- LESS DISTRIBUTIONS TO SHAREHOLDERS: From net investment income (0.13) (0.08) (0.07) (0.05) -------------- -------------- -------------- -------------- NET ASSET VALUE, END OF PERIOD $ 9.83 $ 8.99 $ 7.13 $ 9.21 ============== ============== ============== ============== TOTAL RETURN(a) 10.81% 27.19% (21.80)% (7.08)%** RATIOS / SUPPLEMENTAL DATA: Net assets, end of period (000's) $ 18,156 $ 16,083 $ 9,666 $ 10,560 Ratio of expenses to average daily net assets: Before expense waiver 0.81% 0.80% 0.95% 0.76%* After expense waiver# 0.66% 0.66% 0.66% 0.66%* Net investment income to average daily net assets 1.43% 1.14% 0.96% 0.93%* Portfolio turnover rate 120% 78% 82% 59%**
* ANNUALIZED. ** PERCENTAGE REPRESENTS RESULTS FOR THE PERIOD AND ARE NOT ANNUALIZED. *** PER SHARE AMOUNT CALCULATED ON THE AVERAGE SHARES METHOD. + FOR THE PERIOD FROM MAY 1, 2001 (COMMENCEMENT OF OPERATIONS) THROUGH DECEMBER 31, 2001. # COMPUTED AFTER GIVING EFFECT TO AN AGREEMENT BY MASSMUTUAL TO WAIVE CERTAIN FEES AND EXPENSES OF THE FUND FOR THE PERIOD MAY 1, 2001 THROUGH DECEMBER 31, 2001 AND THE YEARS ENDED DECEMBER 31, 2002, 2003 AND 2004. (a) TOTAL RETURN INFORMATION SHOWN IN THE FINANCIAL HIGHLIGHTS TABLE DOES NOT REFLECT EXPENSES THAT APPLY AT THE SEPARATE ACCOUNT LEVEL OR TO RELATED INSURANCE PRODUCTS. INCLUSION OF THESE CHARGES WOULD REDUCE THE TOTAL RETURN FIGURES FOR ALL PERIODS SHOWN. The accompanying notes are an integral part of the financial statements. 72
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED 12/31/04 12/31/03 12/31/02 12/31/01 12/31/00 ---------- ---------- ---------- ---------- ------------ NET ASSET VALUE, BEGINNING OF PERIOD $ 6.74 $ 5.48 $ 7.59 $ 10.15 $ 13.01 ---------- ---------- ---------- ---------- ------------ INCOME (LOSS) FROM INVESTMENT OPERATIONS: Net investment income (loss) 0.03 0.00+ (0.01) (0.00)+ (0.01) Net realized and unrealized gain (loss) on investments 0.29 1.26 (2.10) (2.56) (0.77) ---------- ---------- ---------- ---------- ------------ Total income (loss) from investment operations 0.32 1.26 (2.11) (2.56) (0.78) ---------- ---------- ---------- ---------- ------------ LESS DISTRIBUTIONS TO SHAREHOLDERS: From net investment income (0.03) (0.00)++ - (0.00)++ (0.00)++ Tax return of capital - - - - (0.00)++ From net realized gains - - - - (2.08) ---------- ---------- ---------- ---------- ------------ Total distributions (0.03) (0.00) - (0.00) (2.08) ---------- ---------- ---------- ---------- ------------ NET ASSET VALUE, END OF PERIOD $ 7.03 $ 6.74 $ 5.48 $ 7.59 $ 10.15 ========== ========== ========== ========== ============ TOTAL RETURN(a) 4.78% 23.02% (27.80)% (25.20)% (6.54)% RATIOS / SUPPLEMENTAL DATA: Net assets, end of period (000's) $ 22,894 $ 21,460 $ 16,568 $ 44,745 $ 53,081 Ratio of expenses to average daily net assets: Before expense waiver 1.00% 1.28% 1.08% 0.99% 1.08% After expense waiver# 0.89%(b) 0.86%(b) 0.89%(b) 0.91% 0.91% Net investment income (loss) to average daily net assets 0.47% 0.02% (0.10)% (0.06)% (0.10)% Portfolio turnover rate 184% 271% 219% 292% 271%
+ NET INVESTMENT INCOME (LOSS) IS LESS THAN $0.01 PER SHARE. ++ DISTRIBUTIONS FROM NET INVESTMENT INCOME AND TAX RETURN OF CAPITAL ARE LESS THAN $0.01 PER SHARE. # COMPUTED AFTER GIVING EFFECT TO AN AGREEMENT BY MASSMUTUAL TO WAIVE CERTAIN FEES AND EXPENSES OF THE FUND FOR THE YEARS ENDING DECEMBER 31, 2000, 2001, 2002, 2003 AND 2004. (a) TOTAL RETURN INFORMATION SHOWN IN THE FINANCIAL HIGHLIGHTS TABLE DOES NOT REFLECT EXPENSES THAT APPLY AT THE SEPARATE ACCOUNT LEVEL OR TO RELATED INSURANCE PRODUCTS. INCLUSION OF THESE CHARGES WOULD REDUCE THE TOTAL RETURN FIGURES FOR ALL PERIODS SHOWN. (b) THE FUND HAS ENTERED INTO AN AGREEMENT WITH CERTAIN BROKERS TO REBATE A PORTION OF BROKERAGE COMMISSIONS. THE RELATED COMMISSIONS ARE USED TO REDUCE OPERATING EXPENSES OF THE FUND. The accompanying notes are an integral part of the financial statements. 73
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED PERIOD ENDED 12/31/04 12/31/03 12/31/02 12/31/01 12/31/00+ ---------- ---------- ---------- ---------- ------------ NET ASSET VALUE, BEGINNING OF PERIOD $ 3.76 $ 2.53 $ 4.06 $ 6.07 $ 10.00 ---------- ---------- ---------- ---------- ------------ INCOME (LOSS) FROM INVESTMENT OPERATIONS: Net investment income (loss) 0.02 (0.01) (0.02) (0.02)*** (0.02)*** Net realized and unrealized gain (loss) on investments 0.37 1.24 (1.51) (1.99) (3.87) ---------- ---------- ---------- ---------- ------------ Total income (loss) from investment operations 0.39 1.23 (1.53) (2.01) (3.89) ---------- ---------- ---------- ---------- ------------ LESS DISTRIBUTIONS TO SHAREHOLDERS: From net investment income (0.02) - - - - From net realized gains - - - (0.00)+ (0.04) ---------- ---------- ---------- ---------- ------------ Total distributions (0.02) - - (0.00) (0.04) ---------- ---------- ---------- ---------- ------------ NET ASSET VALUE, END OF PERIOD $ 4.13 $ 3.76 $ 2.53 $ 4.06 $ 6.07 ========== ========== ========== ========== ============ TOTAL RETURN(a) 10.48% 48.62% (37.68)% (33.11)% (38.90)%** RATIOS / SUPPLEMENTAL DATA: Net assets, end of period (000's) $ 12,223 $ 12,274 $ 4,096 $ 10,749 $ 8,032 Ratio of expenses to average daily net assets: Before expense waiver 0.77% 1.22% 1.08% 0.71% 0.88%* After expense waiver# 0.56% 0.56% 0.56% 0.56% 0.56%* Net investment income (loss) to average daily net assets 0.63% (0.31)% (0.45)% (0.40)% (0.36)%* Portfolio turnover rate 35% 48% 64% 67% 51%**
* ANNUALIZED. ** PERCENTAGE REPRESENTS RESULTS FOR THE PERIOD AND ARE NOT ANNUALIZED. *** PER SHARE AMOUNT CALCULATED ON THE AVERAGE SHARES METHOD. + DISTRIBUTIONS FROM NET REALIZED GAINS ARE LESS THAN $0.01 PER SHARE. + FOR THE PERIOD FROM MAY 1, 2000 (COMMENCEMENT OF OPERATIONS) THROUGH DECEMBER 31, 2000. # COMPUTED AFTER GIVING EFFECT TO AN AGREEMENT BY MASSMUTUAL TO WAIVE CERTAIN FEES AND EXPENSES OF THE FUND FOR THE PERIOD MAY 1, 2000 THROUGH DECEMBER 31, 2000, THE YEARS ENDED DECEMBER 31, 2001, 2002, 2003 AND 2004. (a) TOTAL RETURN INFORMATION SHOWN IN THE FINANCIAL HIGHLIGHTS TABLE DOES NOT REFLECT EXPENSES THAT APPLY AT THE SEPARATE ACCOUNT LEVEL OR TO RELATED INSURANCE PRODUCTS. INCLUSION OF THESE CHARGES WOULD REDUCE THE TOTAL RETURN FIGURES FOR ALL PERIODS SHOWN. The accompanying notes are an integral part of the financial statements. 74
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED 12/31/04 12/31/03 12/31/02 12/31/01 12/31/00 ---------- ---------- ---------- ---------- ---------- NET ASSET VALUE, BEGINNING OF YEAR $ 11.14 $ 8.50 $ 9.67 $ 9.40 $ 8.34 ---------- ---------- ---------- ---------- ---------- INCOME (LOSS) FROM INVESTMENT OPERATIONS: Net investment income 0.02 0.02 0.02 0.05 0.08 Net realized and unrealized gain (loss) on investments 1.80 2.64 (1.17) 0.27 1.06 ---------- ---------- ---------- ---------- ---------- Total income (loss) from investment operations 1.82 2.66 (1.15) 0.32 1.14 ---------- ---------- ---------- ---------- ---------- LESS DISTRIBUTIONS TO SHAREHOLDERS: From net investment income (0.02) (0.02) (0.02) (0.05) (0.08) From net realized gains (0.23) - - - - ---------- ---------- ---------- ---------- ---------- Total distributions (0.25) (0.02) (0.02) (0.05) (0.08) ---------- ---------- ---------- ---------- ---------- NET ASSET VALUE, END OF YEAR $ 12.71 $ 11.14 $ 8.50 $ 9.67 $ 9.40 ========== ========== ========== ========== ========== TOTAL RETURN(a) 16.36% 31.29% (11.84)% 3.36% 13.63% RATIOS / SUPPLEMENTAL DATA: Net assets, end of year (000's) $ 100,915 $ 85,904 $ 61,508 $ 57,096 $ 42,661 Ratio of expenses to average daily net assets: Before expense waiver 0.71% 0.73% 0.77% 0.69% 0.80% After expense waiver# N/A 0.73%(b) 0.76%(b) N/A 0.76% Net investment income to average daily net assets 0.17% 0.20% 0.25% 0.59% 1.12% Portfolio turnover rate 39% 43% 44% 97% 65%
# COMPUTED AFTER GIVING EFFECT TO AN AGREEMENT BY MASSMUTUAL TO WAIVE CERTAIN FEES AND EXPENSES OF THE FUND, FOR THE YEARS ENDED DECEMBER 31, 2000 AND 2002. (a) TOTAL RETURN INFORMATION SHOWN IN THE FINANCIAL HIGHLIGHTS TABLE DOES NOT REFLECT EXPENSES THAT APPLY AT THE SEPARATE ACCOUNT LEVEL OR TO RELATED INSURANCE PRODUCTS. INCLUSION OF THESE CHARGES WOULD REDUCE THE TOTAL RETURN FIGURES FOR ALL PERIODS SHOWN. (b) THE FUND HAS ENTERED INTO AN AGREEMENT WITH CERTAIN BROKERS TO REBATE A PORTION OF BROKERAGE COMMISSIONS. THE REBATED COMMISSIONS ARE USED TO REDUCE OPERATING EXPENSES OF THE FUND. The accompanying notes are an integral part of the financial statements. 75
YEAR ENDED YEAR ENDED YEAR ENDED PERIOD ENDED 12/31/04 12/31/03 12/31/02 12/31/01+ ------------ ------------ ------------ ------------ NET ASSET VALUE, BEGINNING OF PERIOD $ 13.79 $ 10.13 $ 10.84 $ 10.00 ------------ ------------ ------------ ------------ INCOME (LOSS) FROM INVESTMENT OPERATIONS: Net investment income (loss) (0.07) (0.04) (0.03) 0.00+ Net realized and unrealized gain (loss) on investments 2.62 4.32 (0.66) 0.97 ------------ ------------ ------------ ------------ Total income (loss) from investment operations 2.55 4.28 (0.69) 0.97 ------------ ------------ ------------ ------------ LESS DISTRIBUTIONS TO SHAREHOLDERS: From net investment income - - - (0.00)++ From net realized gains (1.15) (0.62) (0.02) (0.13) ------------ ------------ ------------ ------------ Total distributions (1.15) (0.62) (0.02) (0.13) ------------ ------------ ------------ ------------ NET ASSET VALUE, END OF PERIOD $ 15.19 $ 13.79 $ 10.13 $ 10.84 ============ ============ ============ ============ TOTAL RETURN(a) 18.83% 42.25% (6.34)% 9.69%** RATIOS / SUPPLEMENTAL DATA: Net assets, end of period (000's) $ 63,331 $ 43,172 $ 23,203 $ 13,830 Ratio of expenses to average daily net assets: Before expense waiver 1.15% 1.18% 1.29% 1.34%* After expense waiver# N/A 1.16% 1.16% 1.16%* Net investment income (loss) to average daily net assets (0.55)% (0.38)% (0.41)% 0.04%* Portfolio turnover rate 59% 57% 43% 50%**
* ANNUALIZED. ** PERCENTAGE REPRESENTS RESULTS FOR THE PERIOD AND ARE NOT ANNUALIZED. + NET INVESTMENT INCOME IS LESS THAN $0.01 PER SHARE. ++ DISTRIBUTIONS FROM NET INVESTMENT INCOME IS LESS THAN $0.01 PER SHARE. + FOR THE PERIOD FROM MAY 1, 2001 (COMMENCEMENT OF OPERATIONS) THROUGH DECEMBER 31, 2001. # COMPUTED AFTER GIVING EFFECT TO AN AGREEMENT BY MASSMUTUAL TO WAIVE CERTAIN FEES AND EXPENSES OF THE FUND FOR THE PERIOD MAY 1, 2001 THROUGH DECEMBER 31, 2001 AND THE YEARS ENDED DECEMBER 31, 2002 AND 2003. (a) TOTAL RETURN INFORMATION SHOWN IN THE FINANCIAL HIGHLIGHTS TABLE DOES NOT REFLECT EXPENSES THAT APPLY AT THE SEPARATE ACCOUNT LEVEL OR TO RELATED INSURANCE PRODUCTS. INCLUSION OF THESE CHARGES WOULD REDUCE THE TOTAL RETURN FIGURES FOR ALL PERIODS SHOWN. The accompanying notes are an integral part of the financial statements. 76
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED 12/31/04 12/31/03 12/31/02 12/31/01 12/31/00 ---------- ---------- ---------- ---------- ---------- NET ASSET VALUE, BEGINNING OF PERIOD $ 11.66 $ 7.85 $ 10.60 $ 12.20 $ 16.15 ---------- ---------- ---------- ---------- ---------- INCOME (LOSS) FROM INVESTMENT OPERATIONS: Net investment loss (0.07) (0.07) (0.09) (0.06) (0.01)* Net realized and unrealized gain (loss) on investments 1.62 3.88 (2.66) (1.49) (2.09) ---------- ---------- ---------- ---------- ---------- Total income (loss) from investment operations 1.55 3.81 (2.75) (1.55) (2.10) ---------- ---------- ---------- ---------- ---------- LESS DISTRIBUTIONS TO SHAREHOLDERS: From net realized gains - - - (0.05) (1.85) ---------- ---------- ---------- ---------- ---------- NET ASSET VALUE, END OF PERIOD $ 13.21 $ 11.66 $ 7.85 $ 10.60 $ 12.20 ========== ========== ========== ========== ========== TOTAL RETURN(a) 13.29% 48.54% (25.94)% (12.71)% (13.87)% RATIOS / SUPPLEMENTAL DATA: Net assets, end of period (000's) $ 62,009 $ 47,687 $ 26,784 $ 48,983 $ 70,380 Ratio of expenses to average daily net assets: Before expense waiver 1.21% 1.25% 1.24% 1.15% 1.25% After expense waiver# 1.14%(b) 1.16%(b) 1.16%(b) N/A 1.18% Net investment loss to average daily net assets (0.63)% (0.79)% (0.84)% (0.46)% (0.04)% Portfolio turnover rate 62% 59% 53% 104% 95%
* PER SHARE AMOUNT CALCULATED ON THE AVERAGE SHARES METHOD. # COMPUTED AFTER GIVING EFFECT TO AN AGREEMENT BY MASSMUTUAL TO WAIVE CERTAIN FEES AND EXPENSES OF THE FUND FOR THE YEARS ENDED DECEMBER 31, 2000, 2002, 2003 AND 2004. (a) TOTAL RETURN INFORMATION SHOWN IN THE FINANCIAL HIGHLIGHTS TABLE DOES NOT REFLECT EXPENSES THAT APPLY AT THE SEPARATE ACCOUNT LEVEL OR TO RELATED INSURANCE PRODUCTS. INCLUSION OF THESE CHARGES WOULD REDUCE THE TOTAL RETURN FIGURES FOR ALL PERIODS SHOWN. (b) THE FUND HAS ENTERED INTO AN AGREEMENT WITH CERTAIN BROKERS TO REBATE A PORTION OF BROKERAGE COMMISSIONS. THE REBATED COMMISSIONS ARE USED TO REDUCE OPERATING EXPENSES OF THE FUND. The accompanying notes are an integral part of the financial statements. 77
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED PERIOD ENDED 12/31/04 12/31/03 12/31/02 12/31/01 12/31/00+ ---------- ---------- ---------- ---------- ------------ NET ASSET VALUE, BEGINNING OF PERIOD $ 5.16 $ 3.54 $ 6.15 $ 7.34 $ 10.00 ---------- ---------- ---------- ---------- ------------ INCOME (LOSS) FROM INVESTMENT OPERATIONS: Net investment loss (0.05) (0.04) (0.05)*** (0.04) (0.04)*** Net realized and unrealized gain (loss) on investments 0.81 1.66 (2.56) (1.15) (2.62) ---------- ---------- ---------- ---------- ------------ Total income (loss) from investment operations 0.76 1.62 (2.61) (1.19) (2.66) ---------- ---------- ---------- ---------- ------------ NET ASSET VALUE, END OF PERIOD $ 5.92 $ 5.16 $ 3.54 $ 6.15 $ 7.34 ========== ========== ========== ========== ============ TOTAL RETURN(a) 14.73% 45.76% (42.44)% (16.33)% (26.50)%** RATIOS / SUPPLEMENTAL DATA: Net assets, end of period (000's) $ 14,136 $ 10,064 $ 4,333 $ 12,184 $ 11,095 Ratio of expenses to average daily net assets: Before expense waiver 1.62% 2.28% 1.76% 1.37% 1.56%* After expense waiver# 1.16% 1.16% 1.16% 1.16% 1.16%* Net investment loss to average daily net assets (0.97)% (1.09)% (1.09)% (0.81)% (0.63)%* Portfolio turnover rate 184% 195% 190% 139% 119%**
* ANNUALIZED. ** PERCENTAGE REPRESENTS RESULTS FROM THE PERIOD AND ARE NOT ANNUALIZED. *** PER SHARE AMOUNT CALCULATED ON THE AVERAGE SHARES METHOD. + FOR THE PERIOD FROM MAY 1, 2000 (COMMENCEMENT OF OPERATIONS) THROUGH DECEMBER 31, 2000. # COMPUTED AFTER GIVING EFFECT TO AN AGREEMENT BY MASSMUTUAL TO WAIVE CERTAIN FEES AND EXPENSES OF THE FUND FOR THE PERIOD MAY 1, 2000 THROUGH DECEMBER 31, 2000, AND THE YEARS ENDED DECEMBER 31, 2001, 2002, 2003, AND 2004. (a) TOTAL RETURN INFORMATION SHOWN IN THE FINANCIAL HIGHLIGHTS TABLE DOES NOT REFLECT EXPENSES THAT APPLY AT THE SEPARATE ACCOUNT LEVEL OR TO RELATED INSURANCE PRODUCTS. INCLUSION OF THESE CHARGES WOULD REDUCE THE TOTAL RETURN FIGURES FOR ALL PERIODS SHOWN. The accompanying notes are an integral part of the financial statements. 78 NOTES TO FINANCIAL STATEMENTS 1. THE FUND MML Series Investment Fund ("MML Trust") is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as a no-load, open-end, management investment company. The Trust is organized under the laws of the Commonwealth of Massachusetts as a Massachusetts business trust pursuant to an Agreement and Declaration of Trust dated May 14, 1993, as amended. The following are ten series of the Trust (each individually referred to as a "Fund" or collectively as the "Funds"): MML Inflation-Protected Bond Fund ("Inflation-Protected Bond Fund"), MML Large Cap Value Fund ("Large Cap Value Fund"), MML Equity Index Fund ("Equity Index Fund"), MML Enhanced Index Core Equity Fund ("Enhanced Index Core Equity Fund"), MML Growth Equity Fund ("Growth Equity Fund"), MML OTC 100 Fund ("OTC 100 Fund"), MML Small Cap Equity Fund ("Small Cap Equity Fund"), MML Small Company Opportunities Fund ("Small Company Opportunities Fund"), MML Small Cap Growth Equity Fund ("Small Cap Growth Equity Fund") and MML Emerging Growth Fund ("Emerging Growth Fund"). The MML Trust was established by Massachusetts Mutual Life Insurance Company ("MassMutual") for the purpose of providing vehicles for the investment of assets of various separate investment accounts established by MassMutual and by life insurance companies which are subsidiaries of MassMutual. Shares of MML Trust are not offered to the general public. The Equity Index Fund offers three classes of shares: Class I, Class II and Class III. Each share class invests in the same portfolio of assets. The principal difference among the classes is the level of service and administration fees borne by the classes. Because each class will have different fees and expenses, performance and share prices among the classes will vary. The classes of shares are offered to different types of investors, as outlined in the Fund's Prospectus. 2. SIGNIFICANT ACCOUNTING POLICIES The following is a summary of significant accounting policies followed consistently by each Fund in the preparation of the financial statements in conformity with accounting principles generally accepted in the United States of America ("generally accepted accounting principles"). The preparation of the financial statements in accordance with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates. INVESTMENT VALUATION Equity securities are valued on the basis of valuations furnished by a pricing service, authorized by the Trustees, which provides the last reported sale price for securities listed on a national securities exchange or the official closing price on the NASDAQ National Market System, or in the case of over-the-counter securities not so listed, the last reported bid price. Debt securities (other than short-term obligations with a remaining maturity of sixty days or less) are valued on the basis of valuations furnished by a pricing service, authorized by the Trustees, which determines valuations taking into account appropriate factors such as institutional-size trading in similar groups of securities, yield, quality, coupon rate, maturity, type of issue, trading characteristics and other market data. Short-term securities with a remaining maturity of sixty days or less are valued at either amortized cost or at original cost plus accrued interest, whichever approximates current market value. All other securities and other assets, including debt securities for which the prices supplied by a pricing agent are deemed by MassMutual not to be representative of market values, including restricted securities and securities for which no market quotation is available, are valued at fair value in accordance with procedures approved by and determined in good faith by the Trustees, although the actual calculation may be done by others. Securities are typically valued on the basis of valuations furnished by a primary pricing service or, if no such valuation is available, from a secondary pricing service. However, valuation methods approved by the Trust's Board of Trustees which are intended to reflect fair value may be used when pricing service information is not readily available or when a security's value is believed to have been materially affected by a significant event, such as a natural disaster, an economic event like a bankruptcy filing, or a substantial fluctuation in domestic or foreign markets, that has occurred after the close of the exchange or market on which the security is principally traded (for example, a foreign exchange or market). In such a case, a Fund's value for a security is likely to be different from the last 79 quoted market price or pricing service information. Due to the subjective and variable nature of fair value pricing, it is possible that the value determined for a particular asset may be materially different from the value realized upon such asset's sale. Portfolio securities traded on more than one national securities exchange are valued at the last price on the business day as of which such value is being determined at the close of the exchange representing the principal market for such securities. All assets and liabilities expressed in foreign currencies are converted into U.S. dollars at the mean between the buying and selling rates of such currencies against U.S. dollars last quoted by any major bank. If such quotations are not available, the rate of exchange is determined in accordance with policies established by the Trustees. SECURITIES LENDING Each Fund may lend its securities to qualified brokers; however, securities lending cannot exceed 33% of the total assets of the Funds taken at current value. The loans are collateralized at all times with cash or securities with a market value at least equal to 100% of the market value of the securities on loan. The market value of the loaned securities is determined at the close of business of the Fund and any additional collateral is delivered to the Fund the next business day. As with other extensions of credit, the Funds may bear the risk of delay in recovery or even loss of rights in the collateral should the borrower of the securities fail financially. The Funds receive compensation for lending their securities. At December 31, 2004, the Funds loaned securities having the following market values, collateralized by cash, which was invested in short-term instruments in the following amounts:
SECURITIES ON LOAN COLLATERAL ------------------ --------------- Large Cap Value Fund $ 5,273,924 $ 5,467,401 Equity Index Fund 26,729,027 27,884,535 Enhanced Index Core Equity Fund 924,618 961,016 Growth Equity Fund 996,564 1,024,710 Small Cap Equity Fund 11,715,677 12,147,678 Small Company Opportunities Fund 1,954,329 2,096,200 Small Cap Growth Equity Fund 13,693,919 14,245,648
REPURCHASE AGREEMENTS Each Fund may enter into repurchase agreements with certain banks and broker/dealers whereby a Fund acquires a security for cash and obtains a simultaneous commitment from the seller to repurchase the security at an agreed upon price and date. The Funds, through their custodian, take possession of the securities collateralizing the repurchase agreement. The collateral is marked to market daily to ensure that the market value of the underlying assets remains sufficient to protect the Funds in the event of default by the seller. Collateral for certain tri-party repurchase agreements is held at the counterparty's custodian in a segregated account for the benefit of the Funds and the counterparty. In connection with transactions in repurchase agreements, if the seller defaults and the value of the collateral declines or if the seller enters insolvency proceedings, realization of collateral by the Funds may be delayed or limited. ACCOUNTING FOR INVESTMENTS Investment transactions are accounted for on the trade date. Realized gains and losses on sales of investments and unrealized appreciation and depreciation of investments are computed on the specific identification cost method. Interest income, adjusted for amortization of discounts and premiums on debt securities, is earned from the settlement date and is recorded on the accrual basis. Dividend income is recorded on the ex-dividend date. FEDERAL INCOME TAX It is each Fund's intent to continue to comply with the provisions of subchapter M of the Internal Revenue Code of 1986, as amended (the "Code"), applicable to a regulated investment company. Under such provisions, the Funds will not be subject to federal income taxes on their ordinary income and net realized capital gains to the extent they are distributed or deemed to have been distributed to their shareholders. Therefore, no Federal income tax provision is required. 80 DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS Dividends from net investment income are declared and paid quarterly for the Inflation-Protected Bond Fund. Dividends from net investment income are declared and paid annually and at other times as may be required to satisfy tax or regulatory requirements for the Large Cap Value Fund, Equity Index Fund, Enhanced Index Core Equity Fund, Growth Equity Fund, OTC 100 Fund, Small Cap Equity Fund, Small Company Opportunities Fund, Small Cap Growth Equity Fund and Emerging Growth Fund. Distributions of any net realized capital gains of each Fund are declared and paid annually and at other times as may be required to satisfy tax or regulatory requirements. Distributions to shareholders are recorded on the ex-dividend date. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from generally accepted accounting principles. These differences are primarily due to investments in forward contracts, passive foreign investment companies, the deferral of wash sale losses, and paydowns on certain mortgage-backed securities. As a result, net investment income and net realized gain on investment transactions for a reporting period may differ significantly from distributions during such period. Accordingly, the Funds may periodically make reclassifications among certain of their capital accounts without impacting the net asset value of the Funds. During the year ended December 31, 2004, the following amounts were reclassified due to differences between book and tax accounting:
ACCUMULATED NET REALIZED UNDISTRIBUTED PAID-IN GAIN (LOSS) ON NET INVESTMENT CAPITAL INVESTMENTS INCOME (LOSS) -------------- -------------- -------------- Inflation-Protected Bond Fund $ (1,081) $ (349,348) $ 350,429 Large Cap Value Fund (810) 1,899 (1,089) Equity Index Fund (48,163) 47,226 937 Enhanced Index Core Equity Fund (1,026) 1,238 (212) Growth Equity Fund (1,938) 1,141 797 OTC 100 Fund (753) 434 319 Small Cap Equity Fund 1 (2,385) 2,384 Small Company Opportunities Fund 1 (270,801) 270,800 Small Cap Growth Equity Fund (369,659) 50,589 319,070 Emerging Growth Fund (114,282) - 114,282
FOREIGN CURRENCY TRANSLATION The books and records of the Funds are maintained in U.S. dollars. The market values of foreign currencies, foreign securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollars at the mean of the buying and selling rates of such currencies against the U.S. dollar at the end of each business day. Purchases and sales of foreign securities and income and expense items are translated at the rates of exchange prevailing on the respective dates of such transactions. The Funds do not isolate that portion of the results of operations arising from changes in the exchange rates from that portion arising from changes in the market prices of securities. Net realized foreign currency gains and losses resulting from changes in exchange rates include foreign currency gains and losses between trade date and settlement date on investment securities transactions, foreign currency transactions and the difference between the amounts of dividends recorded on the books of the Funds and the amount actually received. 81 FORWARD FOREIGN CURRENCY CONTRACTS Each Fund may enter into forward foreign currency contracts in order to hedge the effect of currency movements of foreign denominated securities or obligations. A forward foreign currency contract is an agreement between two parties to buy and sell a currency at a set price on a future date. The market value of a forward foreign currency contract fluctuates with changes in foreign currency exchange and interest rates. Forward foreign currency contracts are marked to market daily and the change in their value is recorded by the Funds as an unrealized gain or loss. When a forward foreign currency contract is extinguished, through delivery or offset by entering into another forward foreign currency contract, the Funds record a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value of the contract at the time it was extinguished or offset. Forward foreign currency contracts involve a risk of loss from the potential inability of counterparties to meet the terms of their contracts and from unanticipated movements in foreign currency values and interest rates. The notional or contractual amounts of these instruments represent the investments the Funds have in particular classes of financial instruments and do not necessarily represent the amounts potentially subject to risk. The measurement of the risk associated with these instruments is meaningful only when all related and offsetting transactions are considered. At December 31, 2004, the Funds had no open forward foreign currency contracts. FORWARD COMMITMENTS Each Fund may purchase or sell securities on a "when issued" or delayed delivery or on a forward commitment basis. The Funds use forward commitments to manage interest rate exposure or as a temporary substitute for purchasing or selling particular debt securities. Delivery and payment for securities purchased on a forward commitment basis can take place a month or more after the date of the transaction. The Funds instruct the custodian to segregate assets in a separate account with a current market value at least equal to the amount of its forward purchase commitments. The price of the underlying security and the date when the securities will be delivered and paid for are fixed at the time the transaction is negotiated. Forward commitments are valued on the basis of valuations furnished by a pricing service, authorized by the Trustees, which determines valuations taking into account appropriate factors such as institutional-size trading in similar groups of securities, yield, quality, coupon rate, maturity, type of issue, trading characteristics and other market data. Securities for which no market quotation is available, are valued at fair value in accordance with procedures approved by and determined in good faith by the Trustees, although the actual calculation may be done by others. The Funds record on a daily basis the unrealized appreciation (depreciation) based upon changes in the value of the forward commitment. When a forward commitment contract is closed, the Funds record a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value of the contract at the time it was extinguished. Forward commitments involve a risk of loss if the value of the security to be purchased declines prior to the settlement date. The Funds could also be exposed to loss if they cannot close out their forward commitments because of an illiquid secondary market, or the inability of counterparties to perform. The Funds monitor exposure to ensure counterparties are creditworthy and concentration of exposure is minimized. At December 31, 2004, the Funds had no open forward commitments. 82 FINANCIAL FUTURES CONTRACTS The Funds may purchase or sell financial futures contracts and options on such futures contracts for the purpose of hedging the market risk on existing securities or as a substitute for the purchase of securities. Futures contracts are contracts for delayed delivery of securities at a specific future date and at a specific price or yield. Upon entering into a contract, the Funds deposit and maintain as collateral such initial margin as required by the exchange on which the transaction is effected. Pursuant to the contract, the Fund agrees to receive from or pay to the broker an amount of cash equal to the daily fluctuation in value of the contract. Such receipts or payments are known as variation margin and are recorded by the Funds as unrealized gains or losses. When the contract is closed, each Fund records a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed. Futures contracts are valued at the settlement price established each day by the board of trade or exchange on which they are traded. A summary of open futures contracts for the Equity Index Fund and the OTC 100 Fund at December 31, 2004, is as follows:
NOTIONAL NUMBER OF CONTRACT NET UNREALIZED CONTRACTS TYPE EXPIRATION DATE VALUE APPRECIATION - ----------------- ---------------- ---------------- --------------- ---------------- EQUITY INDEX FUND BUYS 11 S&P 500 Index 03/17/05 $ 3,337,675 $ 78,546 OTC 100 FUND BUYS 6 NASDAQ 100 Index 03/18/05 195,420 1,264
ALLOCATION OF OPERATING ACTIVITY In maintaining the records for the Equity Index Fund, the income and expense accounts are allocated to each class of shares. Investment income, unrealized and realized gains or losses are prorated among the classes of shares based on the relative net assets of each. Expenses are allocated to each class of shares depending on the nature of the expenditures. Administration fees, which are directly attributable to a class of shares, are charged to that class' operations. Expenses of the Fund not directly attributable to the operations of any class of shares are prorated among the classes to which the expense relates based on the relative net assets of each. 3. MANAGEMENT FEES AND OTHER TRANSACTIONS INVESTMENT MANAGEMENT FEES Under agreements between the Trust and MassMutual on behalf of each Fund, MassMutual is responsible for providing investment management services for each Fund. In return for this service, MassMutual receives advisory fees monthly based on the following annual rates. For the Inflation-Protected Bond Fund, MassMutual receives a fee from the Fund at an annual rate of 0.60% of the first $100,000,000, 0.55% of the next $200,000,000, 0.50% of the next $200,000,000 and 0.45% on assets over $500,000,000, of the average daily net asset value of the Fund. For the Large Cap Value Fund, MassMutual receives a fee from the Fund at an annual rate of 0.80% of the first $100,000,000, 0.75% on the next $400,000,000 and 0.70% on assets over $500,000,000, of the average daily net asset value of the Fund. For the Equity Index Fund, MassMutual receives a fee from the Fund at an annual rate of 0.10% of the average daily net asset value of the Fund. 83 For the Enhanced Index Core Equity Fund, MassMutual receives a fee from the Fund at an annual rate of 0.55% of the average daily net asset value of the Fund. For the Growth Equity Fund, MassMutual receives a fee from the Fund at an annual rate of 0.80% of the first $300,000,000, 0.77% of the next $300,000,000, 0.75% of the next $300,000,0000, 0.72% of the next $600,000,000 and 0.65% of assets over $1,500,000,000, of the average daily net asset value of the Fund. For the OTC 100 Fund, MassMutual receives a fee from the Fund at an annual rate of 0.45% of the first $200,000,000, 0.44% on the next $200,000,000 and 0.42% on assets over $400,000,000, of the average daily net asset value of the Fund. For the Small Cap Equity Fund, MassMutual receives a fee from the Fund at the annual rate of 0.65% of the first $100,000,000, 0.60% of the next $100,000,000, 0.55% of the next $300,000,000 and 0.50% of any excess over $500,000,000 of the average daily net asset value of the Fund. For the Small Company Opportunities Fund, MassMutual receives a fee from the Fund at an annual rate of 1.05% of the average daily net asset value of the Fund. For the Small Cap Growth Equity Fund, MassMutual receives a fee from the Fund at the annual rate of 1.075% of the first $200,000,000, 1.05% of the next $200,000,000, 1.025% of the next $600,000,000 and 1.00% of assets over $1,000,000,000, of the average daily net asset value of the Fund. For the Emerging Growth Fund, MassMutual receives a fee from the Fund at the annual rate of 1.05% of the first $200,000,000, 1.00% on the next $200,000,000 and 0.95% on assets over $400,000,000, of the average daily net asset value of the Fund. MassMutual has entered into investment sub-advisory agreements with Babson Capital Management LLC ("Babson Capital"), (formerly known as David L. Babson & Company Inc.) pursuant to which Babson Capital serves as certain Funds' sub-adviser providing day-to-day management of the Funds' investments. Babson Capital is a wholly owned subsidiary of DLB Acquisition Corporation, which is a controlled subsidiary of MassMutual. The sub-advisory agreements with Babson Capital provide that Babson Capital manage the investment and reinvestment of the assets of the Inflation-Protected Bond Fund, Enhanced Index Core Equity Fund, Small Cap Equity Fund and Small Company Opportunities Fund. Babson Capital receives a fee from MassMutual equal to an annual rate of 0.08% of the average daily net assets under management of the Inflation-Protected Bond Fund, 0.25% of the average daily net assets under management of the Enhanced Index Core Equity Fund and Small Cap Equity Fund, and 0.75% of the average daily net assets under management of the Small Company Opportunities Fund. MassMutual has also entered into investment sub-advisory agreements with the following unaffiliated investment sub-advisers; Davis Selected Advisers, L.P. for the Large Cap Value Fund, Northern Trust Investments, Inc. for the Equity Index Fund and the OTC 100 Fund, Grantham, Mayo, Van Otterloo and Co. LLC for the Growth Equity Fund, Waddell & Reed Investment Management Company for a portion of the Small Cap Growth Equity Fund, RS Investment Management L.P. for the Emerging Growth Fund and Wellington Management Company, LLP for a portion of the Small Cap Growth Equity Fund. Prior to June 1, 2004, Massachusetts Financial Services Company managed the investment and reinvestment of the Growth Equity Fund. MassMutual pays a sub-advisory fee to each of these sub-advisers based upon the aggregate net assets under management which include (1) the average daily net assets of the specified Fund which it manages, and (2) the average daily net assets of all other funds or accounts of MassMutual or its affiliates for which the sub-adviser provides sub-advisory services and which have substantially the same investment objectives, policies and investment strategies. 84 ADMINISTRATION & SHAREHOLDER SERVICE FEES For the Equity Index Fund, under a separate administrative and shareholder services agreement between the Fund and MassMutual, MassMutual provides certain administrative and shareholder services and bears some class specific administrative expenses. In return for these services, MassMutual receives an administrative services fee monthly based upon the average daily net assets of the applicable class of shares of the Fund at the following annual rates: 0.30% on the first $100,000,000, 0.28% on the next $150,000,000 and 0.26% on assets in excess of $250,000,000 of Class I shares of the Fund, 0.19% of the average daily net assets of Class II shares of the Fund, and for Class III shares, an amount not to exceed 0.05% of the average daily net assets of the Fund. EXPENSE WAIVERS For all Funds, except the Equity Index Fund, MassMutual has agreed, at least through April 30, 2005, to bear the expenses of the Fund to the extent that the aggregate expenses (excluding the Fund's management fee, interest, taxes, brokerage commissions and extraordinary expenses) incurred during the Fund's fiscal year exceed 0.11% of the average daily net assets of the Fund for such year. For Class II and Class III of the Equity Index Fund, MassMutual has agreed, at least through April 30, 2005, to bear the expenses of the Fund, to the extent that the aggregate expenses (excluding the Fund's management and administrative fees, interest, taxes, brokerage commissions and extraordinary expenses) incurred during the Fund's fiscal year exceed 0.05% of the average daily net assets of the Fund for such year. MassMutual has also agreed to waive certain administrative and shareholder service fees payable by the Fund on account of Class II or Class III shares. EXPENSE REDUCTIONS The Large Cap Value Fund, Growth Equity Fund, Small Cap Equity Fund and the Small Cap Growth Equity Fund have entered into agreements with certain brokers whereby the brokers will rebate, in cash, a portion of brokerage commissions and such cash will be applied to reduce fund expenses. Amounts earned by the Funds under such agreements are presented as a reduction of expenses in the statement of operations. For the year ended December 31, 2004, expenses were reduced under these agreements as follows:
REDUCTIONS ---------- Large Cap Value Fund $ 23 Growth Equity Fund 5,452 Small Cap Growth Equity Fund 20,496
OTHER Certain officers and trustees of the Funds are also officers of MassMutual. The compensation of each trustee who is not an officer or employee of MassMutual is borne by the Funds. DEFERRED COMPENSATION Trustees of the Funds that are not employees of MassMutual or its subsidiaries may elect to defer receipt of their annual fees in accordance with terms of the Non-Qualified Deferred Compensation Plan. Any amounts deferred shall accrue interest at a rate equal to eight percent (8%) per annum. For the year ended December 31, 2004, no significant amounts have been deferred. 85 4. PURCHASES AND SALES OF INVESTMENTS Cost of purchases and proceeds from sales of investment securities (excluding short-term investments) for the year ended December 31, 2004, were as follows:
LONG-TERM U.S. OTHER LONG-TERM GOVERNMENT SECURITIES SECURITIES --------------------- --------------- PURCHASES Inflation-Protected Bond Fund $ 45,194,971 $ 13,256,020 Large Cap Value Fund - 18,959,639 Equity Index Fund - 15,643,905 Enhanced Index Core Equity Fund - 20,846,933 Growth Equity Fund - 40,048,901 OTC 100 Fund - 4,004,309 Small Cap Equity Fund - 36,726,714 Small Company Opportunities Fund - 35,496,725 Small Cap Growth Equity Fund - 36,847,271 Emerging Growth Fund - 22,555,137 SALES Inflation-Protected Bond Fund $ 8,721,669 $ - Large Cap Value Fund - 1,809,238 Equity Index Fund - 45,944,963 Enhanced Index Core Equity Fund - 20,082,196 Growth Equity Fund - 39,476,119 OTC 100 Fund - 4,897,575 Small Cap Equity Fund - 32,652,163 Small Company Opportunities Fund - 26,837,913 Small Cap Growth Equity Fund - 29,255,984 Emerging Growth Fund - 20,507,963
86 5. CAPITAL SHARE TRANSACTIONS The Funds are authorized to issue an unlimited number of shares, with no par value in each class of shares. Changes in shares outstanding for each Fund are as follows:
YEAR ENDED DECEMBER 31, 2004 YEAR ENDED DECEMBER 31, 2003 SHARES AMOUNT SHARES AMOUNT --------------- --------------- --------------- --------------- INFLATION-PROTECTED BOND FUND Sold 5,551,354 $ 60,432,532 2,692,560 $ 28,521,490 Issued as reinvestment of dividends 281,030 3,049,532 46,497 495,892 Redeemed (992,526) (10,793,802) (487,070) (5,160,642) --------------- --------------- --------------- --------------- Net increase (decrease) 4,839,858 $ 52,688,262 2,251,987 $ 23,856,740 =============== =============== =============== =============== LARGE CAP VALUE FUND Sold 2,631,604 $ 25,654,263 2,108,779 $ 16,987,215 Issued as reinvestment of dividends 55,176 573,534 38,468 359,133 Redeemed (829,329) (8,033,986) (692,939) (5,520,063) --------------- --------------- --------------- --------------- Net increase (decrease) 1,857,451 $ 18,193,811 1,454,308 $ 11,826,285 =============== =============== =============== =============== EQUITY INDEX FUND CLASS I Sold 1,190,416 $ 16,724,615 1,373,601 $ 16,523,967 Issued as reinvestment of dividends 90,073 1,343,884 66,793 913,733 Redeemed (1,299,529) (18,067,066) (1,104,652) (12,742,287) --------------- --------------- --------------- --------------- Net increase (decrease) (19,040) $ 1,433 335,742 $ 4,695,413 =============== =============== =============== =============== EQUITY INDEX FUND CLASS II Sold 1,537,829 $ 21,537,619 3,785,872 $ 45,312,735 Issued as reinvestment of dividends 213,984 3,190,498 181,866 2,486,104 Redeemed (3,163,722) (44,605,532) (1,822,195) (20,970,465) --------------- --------------- --------------- --------------- Net increase (decrease) (1,411,909) $ (19,877,415) 2,145,543 $ 26,828,374 =============== =============== =============== =============== EQUITY INDEX FUND CLASS III Sold 19,216 $ 267,033 766,101 $ 8,254,570 Issued as reinvestment of dividends 171,337 2,549,488 141,618 1,931,671 Redeemed (1,043,953) (14,627,174) (1,499,750) (17,541,572) --------------- --------------- --------------- --------------- Net increase (decrease) (853,400) $ (11,810,653) (592,031) $ (7,355,331) =============== =============== =============== =============== ENHANCED INDEX CORE EQUITY FUND Sold 275,790 $ 2,543,049 537,899 $ 4,237,161 Issued as reinvestment of dividends 24,396 240,282 15,472 138,749 Redeemed (243,289) (2,207,841) (119,693) (908,167) --------------- --------------- --------------- --------------- Net increase (decrease) 56,897 $ 575,490 433,678 $ 3,467,743 =============== =============== =============== =============== GROWTH EQUITY FUND Sold 623,314 $ 4,226,011 764,121 $ 4,707,919 Issued as reinvestment of dividends 14,687 103,437 605 4,061 Redeemed (567,821) (3,835,972) (601,626) (3,579,358) --------------- --------------- --------------- --------------- Net increase (decrease) 70,180 $ 493,476 163,100 $ 1,132,622 =============== =============== =============== =============== OTC 100 FUND Sold 1,371,368 $ 5,164,134 3,381,484 $ 10,712,617 Issued as reinvestment of dividends 17,232 71,288 - - Redeemed (1,689,804) (6,214,224) (1,738,007) (5,450,632) --------------- --------------- --------------- --------------- Net increase (decrease) (301,204) $ (978,802) 1,643,477 $ 5,261,985 =============== =============== =============== =============== SMALL CAP EQUITY FUND Sold 1,158,338 $ 13,270,784 1,543,870 $ 14,782,305 Issued as reinvestment of dividends 154,079 1,963,832 12,718 142,999 Redeemed (1,084,794) (12,425,250) (1,081,987) (10,032,551) --------------- --------------- --------------- --------------- Net increase (decrease) 227,623 $ 2,809,366 474,601 $ 4,892,753 =============== =============== =============== =============== SMALL COMPANY OPPORTUNITIES FUND Sold 1,115,355 $ 15,884,314 968,295 $ 11,536,096 Issued as reinvestment of dividends 298,344 4,414,393 134,135 1,853,674 Redeemed (374,453) (5,272,840) (263,399) (2,914,092) --------------- --------------- --------------- --------------- Net increase (decrease) 1,039,246 $ 15,025,867 839,031 $ 10,475,678 =============== =============== =============== =============== SMALL CAP GROWTH EQUITY FUND Sold 1,344,400 $ 15,934,204 1,211,042 $ 12,118,367 Issued as reinvestment of dividends - - - - Redeemed (738,234) (8,683,802) (533,737) (4,815,882) --------------- --------------- --------------- --------------- Net increase (decrease) 606,166 $ 7,250,402 677,305 $ 7,302,485 =============== =============== =============== ===============
87
YEAR ENDED DECEMBER 31, 2004 YEAR ENDED DECEMBER 31, 2003 SHARES AMOUNT SHARES AMOUNT --------------- --------------- --------------- --------------- EMERGING GROWTH FUND Sold 1,156,307 $ 6,126,885 1,672,583 $ 7,604,348 Issued as reinvestment of dividends - - - - Redeemed (717,582) (3,706,996) (947,231) (4,162,675) --------------- --------------- --------------- --------------- Net increase (decrease) 438,725 $ 2,419,889 725,352 $ 3,441,673 =============== =============== =============== ===============
6. FOREIGN SECURITIES The Funds may also invest in foreign securities, subject to certain percentage restrictions. Investing in securities of foreign companies and foreign governments involves special risks and considerations not typically associated with investing in securities issued by U.S. companies and the U.S. Government. These risks include revaluation of currencies and future adverse political and economic developments. Moreover, securities of many foreign companies and foreign governments and their markets may be less liquid and their prices more volatile than those of securities of comparable U.S. companies and the U.S. Government. 7. FEDERAL INCOME TAX INFORMATION At December 31, 2004, the cost of securities and the unrealized appreciation (depreciation) in the value of investments owned by the Funds, as computed on a Federal income tax basis, were as follows:
FEDERAL TAX BASIS TAX BASIS NET UNREALIZED INCOME TAX UNREALIZED UNREALIZED APPRECIATION/ COST APPRECIATION DEPRECIATION (DEPRECIATION) --------------- --------------- --------------- --------------- Inflation-Protected Bond Fund $ 86,985,976 $ 1,876,986 $ (131,187) $ 1,745,799 Large Cap Value Fund 73,913,786 15,817,741 (927,365) 14,890,376 Equity Index Fund 408,584,626 67,282,198 (42,397,641) 24,884,557 Enhanced Index Core Equity Fund 17,890,137 1,762,172 (286,223) 1,475,949 Growth Equity Fund 22,093,165 2,188,966 (610,561) 1,578,405 OTC 100 Fund 10,736,184 1,784,422 (254,801) 1,529,621 Small Cap Equity Fund 86,990,030 28,219,593 (1,528,322) 26,691,271 Small Company Opportunities Fund 52,831,703 14,055,436 (1,383,662) 12,671,774 Small Cap Growth Equity Fund 63,295,339 14,692,325 (1,121,309) 13,571,016 Emerging Growth Fund 12,594,984 2,175,291 (294,417) 1,880,874
At December 31, 2004, the following Funds had available, for Federal income tax purposes, unused capital losses:
EXPIRING EXPIRING EXPIRING EXPIRING EXPIRING 2008 2009 2010 2011 2012 ------------ ------------ ------------ ------------ ------------ Large Cap Value Fund $ 8,346 $ 1,160,333 $ 2,527,171 $ 1,015,022 $ 578,706 Equity Index Fund - - 6,501,477 110,945 2,367,627 Enhanced Index Core Equity Fund - - 88,480 374,765 - Growth Equity Fund - 16,919,579 7,953,799 - - OTC 100 Fund - 943,131 4,762,508 2,362,711 1,300,985 Small Cap Growth Equity Fund - 6,913,107 8,158,841 930,646 - Emerging Growth Fund 55,612 4,870,511 3,402,428 - -
Net capital loss carryforwards may be applied against any net realized taxable gains in each succeeding year, or until their respective expiration dates, whichever occurs first. 88 Certain differences exist from the amounts reflected in the Statement of Changes in Net Assets primarily due to the character of short-term capital gains treated as ordinary income for tax purposes. The tax character of distributions paid during the year ended December 31, 2004 was as follows:
ORDINARY LONG TERM RETURN OF INCOME CAPITAL GAIN CAPITAL -------------- -------------- -------------- Inflation-Protected Bond Fund $ 2,675,014 $ 374,518 $ - Large Cap Value Fund 573,534 - - Equity Index Fund 7,083,870 - - Enhanced Index Core Equity Fund 240,282 - - Growth Equity Fund 103,437 - - OTC 100 Fund 71,288 - - Small Cap Equity Fund 516,795 1,447,037 - Small Company Opportunities Fund 1,625,403 2,788,990 -
The tax character of distributions paid during the year ended December 31, 2003 was as follows:
ORDINARY LONG TERM RETURN OF INCOME CAPITAL GAIN CAPITAL -------------- -------------- -------------- Inflation-Protected Bond Fund $ 495,892 $ - $ - Large Cap Value Fund 359,133 - - Equity Index Fund 5,331,508 - - Enhanced Index Core Equity Fund 138,749 - - Growth Equity Fund 4,061 - - Small Cap Equity Fund 142,999 - - Small Company Opportunities Fund 599,939 1,253,735 -
At December 31, 2004, the components of distributable earnings on a tax basis were as follows:
UNDISTRIBUTED LONG TERM UNDISTRIBUTED CAPITAL GAIN/ ORDINARY (CAPITAL LOSS OTHER TEMPORARY UNREALIZED INCOME CARRYOVER) DIFFERENCES APPRECIATION* --------------- --------------- --------------- --------------- Inflation-Protected Bond Fund $ - $ - $ (2,465) $ 1,745,799 Large Cap Value Fund 29,648 (5,289,578) (196,754) 14,890,364 Equity Index Fund - (8,980,049) (1,207,997) 24,963,103 Enhanced Index Core Equity Fund 300 (463,245) (1,047) 1,475,949 Growth Equity Fund - (24,873,378) (153,226) 1,578,407 OTC 100 Fund - (9,369,335) (89,515) 1,530,885 Small Cap Equity Fund 358,180 - (128,332) 26,691,271 Small Company Opportunities Fund 23,213 1,006,310 (2,641) 12,671,774 Small Cap Growth Equity Fund - (16,002,594) (5,543) 13,571,016 Emerging Growth Fund - (8,328,551) (2,256) 1,880,874
* INCLUDES UNREALIZED APPRECIATION (DEPRECIATION) ON INVESTMENTS, DERIVATIVES AND FOREIGN CURRENCY DENOMINATED ASSETS AND LIABILITIES IF ANY. 89 The following Funds elected to defer to January 1, 2005 post-October losses:
AMOUNT ------------ Large Cap Value Fund $ 191,334 Equity Index Fund 1,178,443 Growth Equity Fund 149,187 OTC 100 Fund 87,295 Small Cap Equity Fund 120,428
8. PROXY VOTING (UNAUDITED) A description of the policies and procedures that each Fund's investment adviser and sub-advisers use to vote proxies relating to the Fund's portfolio securities is available, without charge, upon request, by calling 1-888-309-3539, and on the Securities and Exchange Commission's website at http://www.sec.gov. Information regarding how the Funds voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available, without charge, upon request, on the MassMutual website at http://www.massmutual.com/retire and on the Securities and Exchange Commission's website at http://www.sec.gov. 9. QUARTERLY REPORTING (UNAUDITED) The Funds file their complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The Funds' Forms N-Q are available on the SEC website at http://www.sec.gov. The Funds' Forms N-Q may be reviewed and copied at the SEC's Public Reference Room, which may be obtained by calling 1-800-SEC-0330. 90 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM TO THE BOARD OF TRUSTEES AND SHAREHOLDERS OF MML SERIES INVESTMENT FUND We have audited the accompanying statement of assets and liabilities, including the portfolios of investments, of the MML Inflation-Protected Bond Fund, the MML Large Cap Value Fund, the MML Equity Index Fund, the MML Enhanced Index Core Equity Fund, the MML Growth Equity Fund, the MML OTC 100 Fund, the MML Small Cap Equity Fund, the MML Small Company Opportunities Fund, the MML Small Cap Growth Equity Fund and the MML Emerging Growth Fund (collectively the "Funds") which are components of the MML Series Investment Fund ("The MML Trust"), as of December 31, 2004, and the related statements of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended. These financial statements and financial highlights are the responsibility of the MML Trust's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion of the effectiveness of the Funds' internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of December 31, 2004 by correspondence with the custodian and brokers; where replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion. In our opinion, such financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the Funds as of December 31, 2004, and the results of their operations, the changes in their net assets for each of the two years in the period then ended, and their financial highlights for each of the five years in the period then ended in conformity with accounting principles generally accepted in the United States of America. /s/ Deloitte & Touche LLP Deloitte & Touche LLP Boston, Massachusetts February 11, 2005 91 TRUSTEES AND OFFICERS (UNAUDITED) The following table lists the Trust's trustees and officers as of December 31, 2004; their address and age; their position with the Trust; the length of time holding that position with the Trust; their principal occupation(s) during the past five years; the number of portfolios in the fund complex they oversee; and other directorships they hold in companies subject to registration or reporting requirements of the Securities Exchange Act of 1934 (generally called "public companies") or in registered investment companies. The Trust's Statement of Additional Information includes additional information about the Trust's trustees and is available, without charge, upon request by calling 1-888-309-3539 or by writing MML Series Investment Fund, c/o Massachusetts Mutual Life Insurance Company, 1295 State Street, Springfield, Massachusetts 01111-0111, Attention: Retirement Services Marketing. DISINTERESTED TRUSTEES
TERM NUMBER OF OF OFFICE** PORTFOLIOS IN AND FUND POSITION(S) LENGTH PRINCIPAL COMPLEX OTHER NAME, ADDRESS*, HELD WITH OF TIME OCCUPATION(S) DURING OVERSEEN BY DIRECTORSHIPS AND AGE TRUST SERVED PAST 5 YEARS TRUSTEE HELD BY TRUSTEE - ------------------------ -------------- ----------- ------------------------ ------------- ------------------------- Richard H. Ayers Trustee of Since Retired. 39 Director, Applera Age: 62 the Trust 1999 Corporation; Director (since 2002), Instron Corporation. Mary E. Boland Trustee of Since Attorney at Law (since 39 Director (since 1999), Age: 65 the Trust 1973 2004); Attorney at Law BankNorth Massachusetts; (1965-2004), Egan, Director (since 1999), Flanagan Massachusetts Educational and Cohen, P.C. (law Financing Authority. firm), Springfield, MA. Richard W. Greene Trustee of Since Retired; Vice President 39 Age: 69 the Trust 1999 for Investments and Treasurer (1998-2000), University of Rochester (private university). F. William Marshall, Jr. Trustee of Since Consultant (since 39 Trustee (since 2000), Age: 62 the Trust 1996 1999); Chairman (1999), Board II Oppenheimer Family Bank, F.S.B. Funds. (formerly SIS Bank); Executive Vice President (1999), Peoples Heritage Financial Group; President, Chief Executive Officer and Director (1993-1999), SIS Bancorp, Inc. and SIS Bank (formerly, Springfield Institution for Savings). Allan W. Blair Trustee of Since President and Chief 39 Director (since 2001), Age: 56 the Trust 2003 Executive Officer (since Future Works, Inc. 1996), Economic Development Council of Western Massachusetts; President and Chief Operating Officer (since 1993), Westmass Area Development Corporation; President and Chief Operating Officer (since 1984), Westover Metropolitan Development Corporation. R. Alan Hunter, Jr. Trustee of Since Retired. 39 Age: 58 the Trust 2003
92 INTERESTED TRUSTEES
TERM NUMBER OF OF OFFICE** PORTFOLIOS IN AND FUND POSITION(S) LENGTH PRINCIPAL COMPLEX OTHER NAME, ADDRESS*, HELD WITH OF TIME OCCUPATION(S) DURING OVERSEEN BY DIRECTORSHIPS AND AGE TRUST SERVED PAST 5 YEARS TRUSTEE HELD BY TRUSTEE - ------------------------ -------------- ----------- ------------------------ ------------- ------------------------- Stuart H. Reese Chairman and Since Executive Vice President 41 Chairman (since 1999), Age: 49 Trustee of the 1999 and Chief Investment President (1995-1999), Trust Officer (since 1999), MassMutual Corporate Chief Executive Director Investors and MassMutual (1997-1999), MassMutual; Participation Investors Chairman and Chief (closed-end investment Executive Officer (since companies); Director 2001), President and (since 1999), Merrill Chief Executive Officer Lynch Derivative (1999-2001), Babson Products; Chairman (since Capital Management LLC 1999), Director (since (investment adviser). 1996), Antares Capital Corporation (finance company); Director (since 1996), HYP Management, Inc. (managing member of MassMutual High Yield Partners LLC), and MMHC Investment, Inc. (investor in funds sponsored by MassMutual); Director (since 1994), MassMutual Corporate Value Partners Limited (investor in debt and equity securities) and MassMutual Corporate Value Limited (parent of MassMutual Corporate Value Partners Limited); President (since 1997), MassMutual/Darby CBO IM Inc. (manager of MassMutual/Darby CBO LLC, a high yield bond fund); Advisory Board Member (since 1995), Kirtland Capital Partners. Frederick C. Castellani Trustee of Since Executive Vice President 39 Age: 58 the Trust 2001 (since 2001), Senior Vice President (1996- 2001), MassMutual.
93
TERM NUMBER OF OF OFFICE** PORTFOLIOS IN AND FUND POSITION(S) LENGTH PRINCIPAL COMPLEX OTHER NAME, ADDRESS*, HELD WITH OF TIME OCCUPATION(S) DURING OVERSEEN BY DIRECTORSHIPS AND AGE TRUST SERVED PAST 5 YEARS TRUSTEE HELD BY TRUSTEE - ------------------------ -------------- ------------ -------------------------- ------------- ------------------------- Robert E. Joyal Trustee of Since Retired; President (2001- 41 Trustee (since Age: 59 the Trust 2003 2003), Managing Director 2003), President (2000-2001) and Executive (1999-2003), Director (1999-2000), MassMutual Corporate David L. Babson & Company Investors and Inc.; Executive Director MassMutual (1997-1999), Participation Massachusetts Mutual Life Investors Insurance Company. (closed-end investment companies); Director (since 1996), Antares Capital Corporation (bank loan syndication); Director (since 1996), First Israel Mezzanine Investors Ltd. (general partner and manager of The Israel Mezzanine Fund, L.P.); Director (since 2003), Pemco Aviation Group, Inc.
94 PRINCIPAL OFFICERS WHO ARE NOT TRUSTEES
NUMBER OF PORTFOLIOS IN FUND POSITION(S) LENGTH PRINCIPAL COMPLEX NAME, ADDRESS*, HELD WITH OF TIME OCCUPATION(S) DURING OVERSEEN BY AND AGE TRUST SERVED PAST 5 YEARS OFFICER - ----------------- --------------------- ----------- --------------------------------------------------- ------------- David W. O'Leary President Since Senior Vice President (since 2001), MassMutual; 14 Age: 44 of the Trust 2004 Senior Vice President (1999-2001), Vice President (1996-1999), Aetna Financial Services. James S. Collins Chief Financial Since Vice President (since 1999), Second Vice President 39 Age: 46 Officer and Treasurer 2000 (1990-1999), MassMutual. of Trust Thomas M. Kinzler Vice President and Since Vice President and Associate General Counsel (since 59 Age: 49 Secretary of the 1999 1999), Second Vice President and Associate General Trust Counsel (1996-1999), MassMutual. Toby Slodden Vice President of the Since Executive Vice President (since 2003), Senior Vice 39 Age: 47 Trust 2003 President (1999-2003), Vice President (1997-1999), MassMutual. Michael A. Chong Vice President and Since Vice President, Compliance (since 2004), Vice 59 Age: 47 Chief Compliance 2004 President and Associate General Counsel (1999- Officer of the Trust 2004), Second Vice President (1996-1999), MassMutual. Ian W. Sheridan Vice President Since Vice President (since 2003), MassMutual; Vice 39 Age: 39 of the Trust 2004 President of Marketing and Business Development (1999-2003), Automatic Data Processing (ADP).
* The address of each Trustee and Principal Officer is the same as that for the Trust; 1295 State Street, Springfield, Massachusetts 01111. ** Each Trustee of the Trust serves until the next meeting of shareholders called for the purpose of electing Trustees and until the election and qualification of his successor or until he dies, resigns or is removed. Notwithstanding the foregoing, a Trustee shall retire and cease to serve as a Trustee as of the first board meeting following the date on which the Trustee attains the age of seventy-two years. FEDERAL TAX INFORMATION (UNAUDITED) For corporate shareholders, a portion of the ordinary dividends paid during the Fund's year ended December 31, 2004 qualified for the dividends received deduction, as follows: Large Cap Value Fund 100.00% Equity Index Fund 100.00% Enhanced Index Core Equity Fund 100.00% Growth Equity Fund 100.00% Small Cap Equity Fund 100.00% Small Companies Opportunities Fund 9.61%
95 OTHER INFORMATION (UNAUDITED) FUND EXPENSES DECEMBER 31, 2004 EXPENSE EXAMPLES The following information is in regards to expenses for the six month period ended December 31, 2004: As a shareholder of the Funds, you incur ongoing costs, including management fees and other Fund expenses. These examples are intended to help you understand your ongoing costs (in dollars) of investing in the Funds and to compare these costs with the ongoing costs of investing in other mutual funds. These examples are based on an investment of $1,000 invested for the six month period ended December 31, 2004. ACTUAL EXPENSES The first line of each table on the following pages provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, 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 in the first line under the heading entitled "Operating Expenses Incurred" to estimate the expenses you paid on your account during this period. HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES The second line of each table on the following pages provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Please note that the expenses shown in the tables are meant to highlight your ongoing costs only. 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. 96 The Funds incur ongoing operating expenses during the normal course of business, such as management fees and other expenses. The following tables, assuming a $1,000 investment in a class of shares, disclose the ending account value and operating expenses incurred for the six months ended December 31, 2004, based on, (1) the Fund's actual return and actual expenses, and (2) a hypothetical annualized 5% return and the Fund's actual expenses: INFLATION-PROTECTED BOND FUND
OPERATING BEGINNING ENDING EXPENSE VALUE VALUE INCURRED* --------------- --------------- --------------- 1) Actual $ 1,000.00 $ 1,055.50 $ 3.31 2) Hypothetical 1,000.00 1,021.92 3.25
* EXPENSES ARE CALCULATED USING THE ANNUALIZED EXPENSE RATIO FOR THE SIX MONTHS ENDED DECEMBER 31, 2004 OF 0.64%, MULTIPLIED BY THE AVERAGE ACCOUNT VALUE OVER THE PERIOD, MULTIPLIED BY THE NUMBER OF DAYS IN THE PERIOD, DIVIDED BY THE NUMBER OF DAYS IN THE YEAR. LARGE CAP VALUE FUND
OPERATING BEGINNING ENDING EXPENSE VALUE VALUE INCURRED* --------------- --------------- --------------- 1) Actual $ 1,000.00 $ 1,069.80 $ 4.47 2) Hypothetical 1,000.00 1,020.81 4.37
* EXPENSES ARE CALCULATED USING THE ANNUALIZED EXPENSE RATIO FOR THE SIX MONTHS ENDED DECEMBER 31, 2004 OF 0.86%, MULTIPLIED BY THE AVERAGE ACCOUNT VALUE OVER THE PERIOD, MULTIPLIED BY THE NUMBER OF DAYS IN THE PERIOD, DIVIDED BY THE NUMBER OF DAYS IN THE YEAR. EQUITY INDEX FUND CLASS I
OPERATING BEGINNING ENDING EXPENSE VALUE VALUE INCURRED* --------------- --------------- --------------- 1) Actual $ 1,000.00 $ 1,069.10 $ 2.34 2) Hypothetical 1,000.00 1,022.87 2.29
* EXPENSES ARE CALCULATED USING THE ANNUALIZED EXPENSE RATIO FOR THE SIX MONTHS ENDED DECEMBER 31, 2004 OF 0.45%, MULTIPLIED BY THE AVERAGE ACCOUNT VALUE OVER THE PERIOD, MULTIPLIED BY THE NUMBER OF DAYS IN THE PERIOD, DIVIDED BY THE NUMBER OF DAYS IN THE YEAR. CLASS II
OPERATING BEGINNING ENDING EXPENSE VALUE VALUE INCURRED* --------------- --------------- --------------- 1) Actual $ 1,000.00 $ 1,070.10 $ 1.51 2) Hypothetical 1,000.00 1,023.68 1.48
* EXPENSES ARE CALCULATED USING THE ANNUALIZED EXPENSE RATIO FOR THE SIX MONTHS ENDED DECEMBER 31, 2004 OF 0.29%, MULTIPLIED BY THE AVERAGE ACCOUNT VALUE OVER THE PERIOD, MULTIPLIED BY THE NUMBER OF DAYS IN THE PERIOD, DIVIDED BY THE NUMBER OF DAYS IN THE YEAR. 97 CLASS III
OPERATING BEGINNING ENDING EXPENSE VALUE VALUE INCURRED* --------------- --------------- --------------- 1) Actual $ 1,000.00 $ 1,070.80 $ .78 2) Hypothetical 1,000.00 1,024.38 .76
* EXPENSES ARE CALCULATED USING THE ANNUALIZED EXPENSE RATIO FOR THE SIX MONTHS ENDED DECEMBER 31, 2004 OF 0.15%, MULTIPLIED BY THE AVERAGE ACCOUNT VALUE OVER THE PERIOD, MULTIPLIED BY THE NUMBER OF DAYS IN THE PERIOD, DIVIDED BY THE NUMBER OF DAYS IN THE YEAR. ENHANCED INDEX CORE EQUITY FUND
OPERATING BEGINNING ENDING EXPENSE VALUE VALUE INCURRED* --------------- --------------- --------------- 1) Actual $ 1,000.00 $ 1,071.10 $ 3.44 2) Hypothetical 1,000.00 1,021.82 3.35
* EXPENSES ARE CALCULATED USING THE ANNUALIZED EXPENSE RATIO FOR THE SIX MONTHS ENDED DECEMBER 31, 2004 OF 0.66%, MULTIPLIED BY THE AVERAGE ACCOUNT VALUE OVER THE PERIOD, MULTIPLIED BY THE NUMBER OF DAYS IN THE PERIOD, DIVIDED BY THE NUMBER OF DAYS IN THE YEAR. GROWTH EQUITY FUND
OPERATING BEGINNING ENDING EXPENSE VALUE VALUE INCURRED* --------------- --------------- --------------- 1) Actual $ 1,000.00 $ 1,023.50 $ 4.48 2) Hypothetical 1,000.00 1,020.71 4.47
* EXPENSES ARE CALCULATED USING THE ANNUALIZED EXPENSE RATIO FOR THE SIX MONTHS ENDED DECEMBER 31, 2004 OF 0.88%, MULTIPLIED BY THE AVERAGE ACCOUNT VALUE OVER THE PERIOD, MULTIPLIED BY THE NUMBER OF DAYS IN THE PERIOD, DIVIDED BY THE NUMBER OF DAYS IN THE YEAR. OTC 100 FUND
OPERATING BEGINNING ENDING EXPENSE VALUE VALUE INCURRED* --------------- --------------- --------------- 1) Actual $ 1,000.00 $ 1,067.90 $ 2.91 2) Hypothetical 1,000.00 1,022.32 2.85
* EXPENSES ARE CALCULATED USING THE ANNUALIZED EXPENSE RATIO FOR THE SIX MONTHS ENDED DECEMBER 31, 2004 OF 0.56%, MULTIPLIED BY THE AVERAGE ACCOUNT VALUE OVER THE PERIOD, MULTIPLIED BY THE NUMBER OF DAYS IN THE PERIOD, DIVIDED BY THE NUMBER OF DAYS IN THE YEAR. SMALL CAP EQUITY FUND
OPERATING BEGINNING ENDING EXPENSE VALUE VALUE INCURRED* --------------- --------------- --------------- 1) Actual $ 1,000.00 $ 1,109.90 $ 3.71 2) Hypothetical 1,000.00 1,021.62 3.56
* EXPENSES ARE CALCULATED USING THE ANNUALIZED EXPENSE RATIO FOR THE SIX MONTHS ENDED DECEMBER 31, 2004 OF 0.70%, MULTIPLIED BY THE AVERAGE ACCOUNT VALUE OVER THE PERIOD, MULTIPLIED BY THE NUMBER OF DAYS IN THE PERIOD, DIVIDED BY THE NUMBER OF DAYS IN THE YEAR. 98 SMALL COMPANY OPPORTUNITIES FUND
OPERATING BEGINNING ENDING EXPENSE VALUE VALUE INCURRED* --------------- --------------- --------------- 1) Actual $ 1,000.00 $ 1,120.10 $ 6.08 2) Hypothetical 1,000.00 1,019.41 5.79
* EXPENSES ARE CALCULATED USING THE ANNUALIZED EXPENSE RATIO FOR THE SIX MONTHS ENDED DECEMBER 31, 2004 OF 1.14%, MULTIPLIED BY THE AVERAGE ACCOUNT VALUE OVER THE PERIOD, MULTIPLIED BY THE NUMBER OF DAYS IN THE PERIOD, DIVIDED BY THE NUMBER OF DAYS IN THE YEAR. SMALL CAP GROWTH EQUITY FUND
OPERATING BEGINNING ENDING EXPENSE VALUE VALUE INCURRED* --------------- --------------- --------------- 1) Actual $ 1,000.00 $ 1,095.40 $ 6.00 2) Hypothetical 1,000.00 1,019.41 5.79
* EXPENSES ARE CALCULATED USING THE ANNUALIZED EXPENSE RATIO FOR THE SIX MONTHS ENDED DECEMBER 31, 2004 OF 1.14%, MULTIPLIED BY THE AVERAGE ACCOUNT VALUE OVER THE PERIOD, MULTIPLIED BY THE NUMBER OF DAYS IN THE PERIOD, DIVIDED BY THE NUMBER OF DAYS IN THE YEAR. EMERGING GROWTH FUND
OPERATING BEGINNING ENDING EXPENSE VALUE VALUE INCURRED* --------------- --------------- --------------- 1) Actual $ 1,000.00 $ 1,098.30 $ 6.12 2) Hypothetical 1,000.00 1,019.30 5.89
* EXPENSES ARE CALCULATED USING THE ANNUALIZED EXPENSE RATIO FOR THE SIX MONTHS ENDED DECEMBER 31, 2004 OF 1.16%, MULTIPLIED BY THE AVERAGE ACCOUNT VALUE OVER THE PERIOD, MULTIPLIED BY THE NUMBER OF DAYS IN THE PERIOD, DIVIDED BY THE NUMBER OF DAYS IN THE YEAR. 99 [This page is intentionally left blank.] [MASSMUTUAL FINANCIAL GROUP(SM) LOGO] Massachusetts Mutual Life Insurance Company and affiliates, Springfield, MA 01111-0001 www.massmutual.com MassMutual Financial Group is a marketing designation (or fleet name) for Massachusetts Mutual Life Insurance Company (MassMutual) and its affiliates. L4540A 205 ITEM 2 CODE OF ETHICS. As of December 31, 2004, the Registrant adopted a Code of Ethics that applies to the Principal Executive Officer and Principal Financial Officer pursuant to the Sarbanes-Oxley Act of 2002. For the year ended December 31, 2004, there were no amendments to a provision of the Code of Ethics. A copy of its Code of Ethics is filed with this Form N-CSR under item 10 (a). ITEM 3 AUDIT COMMITTEE FINANCIAL EXPERT. The Registrant's Board of Trustees has determined that Richard H. Ayers and Richard W. Greene, both members of the Audit Committee, are audit committee financial experts as defined by the Securities and Exchange Commission (the "SEC"). Mr. Ayers and Mr. Greene are "independent" as defined by the SEC for purposes of audit committee financial expert determinations. ITEM 4 PRINCIPAL ACCOUNTANT FEES AND SERVICES. (a) AUDIT FEES: The aggregate fees paid and accrued by the Registrant for professional services rendered by its independent auditors, Deloitte & Touche LLP, for the audit of the Registrant's annual financial statements for 2004 and 2003 were $187,500 and $175,204, respectively. (b) AUDIT RELATED FEES: No such fees were billed to the Registrant by Deloitte & Touche LLP for 2004 and 2003. (c) TAX FEES: The aggregate fees paid or accrued by the Registrant for professional services rendered by Deloitte & Touche LLP for the review of Form 1120-RIC, Form 8613, excise distribution projections, distribution calculation and reasonable out of pocket expenses for 2004 and 2003 were $27,071 and $30,286, respectively. (d) ALL OTHER FEES: No such fees were billed to the Registrant by Deloitte & Touche LLP for 2004 or 2003. (e) (1) AUDIT COMMITTEE PRE-APPROVAL POLICY: All services to be performed for the Registrant by Deloitte & Touche LLP must be pre-approved by the audit committee. All services performed during 2004 and 2003 were pre-approved by the committee. (2) Not applicable. (f) Not applicable. (g) Not applicable. (h) Not applicable. ITEM 5 AUDIT COMMITTEE OF LISTED REGISTRANTS. Not applicable to this filing. ITEM 6 SCHEDULE OF INVESTMENTS Not applicable to this filing. ITEM 7 DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES. Not applicable to this filing. ITEM 8 PURCHASE OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS. Not applicable to this filing. ITEM 9 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. Not applicable to this filing. ITEM 10 CONTROLS AND PROCEDURES. (a) The Registrant's Principal Executive Officer and Principal Financial Officer concluded that the Registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) were effective based as of a date within 90 days prior to the filing date of this report (the "Evaluation Date"), based on their evaluation of the effectiveness of the Registrant's disclosure controls and procedures as of the Evaluation Date. (b) There were no changes in the Registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act (17 CFR 270.30a-3(d)) that occurred during the Registrant's last fiscal half-year (the Registrant's second fiscal half-year in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant's internal control over financial reporting. ITEM 11 (EXHIBITS): (a)(1) Code of Ethics Described in Item 2 is attached. (a)(2) Certifications of the Principal Executive Officer and Principal Financial Officer of the Registrant as required by Rule 30a-2(a) under the Investment Company Act of 1940 (17 CFR 270.30a-2(a) are attached hereto as Exhibit 99CERT. (a)(3) Any written solicitation to purchase securities under Rule 23c-1 under the Act (17 CFR 270.23c-1) sent or given during the period covered by the report by or on behalf of the registrant to 10 or more persons. (b) Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 as required by Rule 30a-2(b), under the Investment Company Act of 1940 (17 CFR 270.30a-2(b)), Rule 15d-14(b) under the Securities Exchange Act of 1934 (17 CFR 240.15d-14(b)) and Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. 1350) is attached hereto as Exhibit 99.906CERT. 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. (Registrant) MML Series Investment Fund By (Signature and Title): /s/ David W. O'Leary ------------------------------------------ David W. O'Leary, President and Principal Executive Officer Date 2/24/05 --------- 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 (Signature and Title): /s/ David W. O'Leary ----------------------------------------- David W. O'Leary, President and Principal Executive Officer Date 2/24/05 ---------- By (Signature and Title): /s/ James S. Collins ---------------------------------------- James S. Collins, Treasurer and Principal Financial Officer Date 3/1/05 -------- EX-99.CODEETH 2 a2152351zex-99_codeeth.txt EX 99.CODEETH Exhibit 99.Code of Ethics CODE OF ETHICS FOR PRINCIPAL EXECUTIVE AND SENIOR FINANCIAL OFFICERS OF MASSMUTUAL INSTITUIONAL FUNDS MML SERIES INVESTMENT FUND This Code of Ethics (the "Code") for Principal Executive and Senior Financial Officers has been adopted by those investment companies identified above for which Massachusetts Mutual Life Insurance Company ("MassMutual") acts as investment adviser (individually, a "Fund" and collectively, the "Funds"), to effectuate compliance with Section 406 under the Sarbanes-Oxley Act of 2002 and the rules adopted to implement Section 406. The Code applies to each Fund's principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions ("Covered Officers"). A listing of positions currently within the ambit of Covered Officers for each Fund is attached as Exhibit A.(1) 1. PURPOSES OF THE CODE This Code sets forth standards and procedures that are reasonably designed to deter wrongdoing and to promote: - honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships; - full, fair, accurate, timely, and understandable disclosure in reports and documents that the Funds file with, or submit to, the Securities and Exchange Commission ("SEC") and in other public communications made by the Funds; - compliance with applicable governmental laws, rules and regulations; - the prompt internal reporting of violations of this Code to an appropriate person identified in the Code; and - accountability for adherence to this Code. It is acknowledged that, as a result of the contractual relationship between each Fund and MassMutual, of which the Covered Officers are also officers or employees, and subject to MassMutual's fiduciary duties to each Fund, the Covered Officers will, in the normal course of their duties, be involved in establishing policies and implementing decisions that may have different effects on MassMutual and the Funds. It is further acknowledged that the participation of the Covered Officers in such activities is inherent in the contractual relationship between each Fund and MassMutual and is consistent with the expectations of each Fund's Board of Trustees with respect to the performance by the Covered Officers of their duties as officers of the Funds. In general, the principles that govern honest and ethical conduct, including the avoidance of conflicts of interest between personal and professional relationships, reflect, at the minimum, the following: (1) the duty at all times in performing any responsibilities as a financial officer, controller, - ---------- (1) The obligations imposed by this Code on Covered Officers are separate from and in addition to any obligations that may be imposed on such persons as Covered Persons under the Code of Ethics adopted by the Funds dated August 4, 2003, under Rule 17j-1 of the Investment Company Act of 1940, as amended and any other code of conduct applicable to Covered Officers in whatever capacity they serve. This Code does not incorporate by reference any provisions of the Rule 17j-1 Code of Ethics and accordingly, any violations or waivers granted under the Rule 17j-1 Code of Ethics will not be considered a violation or waiver under this Code. 1 accountant or principal executive officer of a Fund, to place the interests of the Fund ahead of personal interests; (2) the fundamental standard that Covered Officers should not take inappropriate advantage of their positions; (3) the duty to assure that each Fund's financial statements and reports to shareholders are prepared honestly and accurately in accordance with applicable rules, regulations and accounting standards; and (4) the duty to conduct the Fund's business and affairs in an honest and ethical manner. Each Covered Officer should be sensitive to situations that may give rise to actual as well as apparent conflicts of interest. 2. PROHIBITIONS The specific provisions and reporting requirements of this Code are concerned primarily with promoting honest and ethical conduct and avoiding conflicts of interest between personal and professional relationships. No Covered Officer may use information concerning the business and affairs of a Fund (including the investment intentions of a Fund), or use his or her ability to influence such investment intentions, for personal gain to himself or herself, his or her family or friends or any other person or in a manner detrimental to the interests of a Fund or its shareholders. No Covered Officer may use his or her personal influence or personal relationships to influence the preparation and issuance of financial reports of a Fund whereby the Covered Officer would benefit personally to the detriment of the Fund and its shareholders. No Covered Officer shall, in connection with carrying out his or her official duties and responsibilities on behalf of a Fund: (i) employ any device, scheme or artifice to defraud a Fund or its shareholders; (ii) intentionally cause a Fund to make any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which they are made, not misleading in its official documents, regulatory filings, financial statements or communications to the public; (iii) engage in any act, practice, or course of business which operates or would operate as a fraud or deceit upon any Fund or its shareholders; (iv) engage in any manipulative practice with respect to any Fund; (v) intentionally cause a Fund to fail to comply with applicable laws, rules and regulations, including failure to comply with the requirement of full, fair, accurate, understandable and timely disclosure in reports and documents that a Fund files with, or submits to, the SEC and in other public communications made by the Fund; (vi) intentionally mislead or omit to provide material information to the Fund's independent auditors or to the Board of Trustees or the officers of the Fund or its investment adviser in connection with Fund related matters; (vii) fail to notify the Code Administrator (as defined in Section 7 below) promptly if he or she becomes aware of any existing or potential violations of this Code or applicable laws; or (viii) retaliate against others for, or otherwise discourage, the reporting of actual or apparent violations of this Code. 3. REPORTS OF CONFLICTS OF INTERESTS If a Covered Officer becomes aware of an actual or apparent conflict of interest under this Code, he or she must immediately report the matter to the Code's Administrator. Upon receipt of 2 such report, the Code Administrator will take prompt steps to determine whether an actual conflict of interest exists or appears to exist, and if so, will take steps (if possible) to resolve the conflict or remedy the appearance thereof. If the Code Administrator determines that no actual or apparent conflict exists, the Code Administrator shall meet with the Covered Officer to advise him or her of such finding and of his or her reason for taking no action. In lieu of determining whether a conflict or appearance of conflict exists, the Code Administrator may in his or her discretion refer the matter to the affected Fund's Board of Trustees or any committee appointed by the Board to deal with such information. If the Code Administrator is involved or believed to be involved in the conflict of interest or appearance of conflict of interest, the Covered Officer shall report the matter directly to MassMutual's General Counsel, or his or her designee, who shall take the same action as described above with respect to resolving the matter. 4. WAIVERS Any Covered Officer requesting a waiver of any provision of this Code must submit a written request for such waiver to the Code Administrator, setting forth the basis of such request and all necessary facts upon which such request can be evaluated. The Code Administrator shall review such request and make a written determination thereon. In determining whether to waive any of the provisions of this Code, the Code Administrator shall consider whether the proposed action: (i) is prohibited by this Code; (ii) is consistent with honest and ethical conduct; and (iii) will result in a conflict of interest between the Covered Officer's personal and professional obligations to a Fund. In lieu of determining whether to waive any provision of this Code, the Code Administrator may in his or her discretion refer the matter to the affected Fund's Board of Trustees or any committee appointed by the Board to deal with such information. 5. REPORTING REQUIREMENTS (a) Each Covered Officer shall, upon becoming subject to this Code, be presented with a copy of this Code by the Code Administrator, and shall affirm in writing to the Code Administrator that he or she has received, read, understands and shall adhere to this Code (See Exhibit B). (b) At least annually, all Covered Officers shall be provided with a copy of the current Code by the Code Administrator, and shall certify that they have read and understand the Code and recognize that they are subject thereto (See Exhibit B). (c) At least annually, all Covered Officers shall certify that they have complied with the requirements of this Code and that they have disclosed or reported any violations of this Code to the Code Administrator (See Exhibit C). (d) The Code Administrator shall submit a quarterly report to the Board of Trustees or any committee appointed by the Board to deal with such information, containing (i) a description of any report of a conflict of interest or apparent conflict and the disposition thereof; (ii) a description of any request for a waiver from this Code and the disposition thereof; (iii) any violation of the Code that has been reported or found and the sanction imposed; and (iv) any other significant information arising in connection with the Code, including any proposed amendments. (e) Each Covered Officer shall notify the Code Administrator promptly if he or she knows of 3 or has a reasonable belief that any violation of this Code has occurred or is likely to occur. Failure to do so is itself a violation of this Code. (f) Any changes to or waivers of this Code, including "implicit" waivers as defined in applicable SEC rules, will, to the extent required, be disclosed by the Funds as provided by applicable SEC rules.(2) 6. SANCTIONS Any violations of this Code shall be subject to the imposition of such sanctions by MassMutual as may be deemed appropriate under the circumstances to achieve the purpose of this Code and may include, without limitation, a letter of censure, suspension from employment or termination of employment, in the sole discretion of MassMutual, and/or removal as an officer of the Fund, in the sole discretion of the Fund's Board of Trustees or any committee appointed by the Board to deal with such information. 7. ADMINISTRATION AND CONSTRUCTION (a) The administration of this Code of Ethics shall be the responsibility of the Code Administrator of this Code, acting under the terms of this Code and the oversight of the Board of Trustees of the Fund or any committee appointed by the Board to deal with such information. (b) The Code Administrator shall be the Compliance Officer of the Funds or his or her designee. (c) The duties of such Code Administrator will include: (i) maintaining a current list of the names of all Covered Officers; (ii) furnishing all Covered Officers a copy of this Code and initially and periodically informing them of their duties and obligations thereunder; (iii) maintaining or supervising the maintenance of all records required by this Code, including records of waivers granted hereunder; (iv) issuing interpretations of this Code which appear to the Code Administrator to be consistent with the objectives of this Code and any applicable laws or regulations; (v) conducting such inspections or investigations as shall reasonably be required to detect and report any violations of this Code, with his or her recommendations to MassMutual's General Counsel, or his or her designee, and to the Board of Trustees of the affected Fund(s) or any committee appointed by them to deal with such information; and (vi) periodically conducting educational training programs as needed to explain and reinforce the terms of this Code. (d) In carrying out the duties and responsibilities described under this Code, the Code Administrator may consult with such other persons as the Code Administrator shall deem necessary or desirable, including legal counsel to the Trust, legal counsel to the Trustees who are not "interested persons," as that term is defined in the Investment Company Act of 1940, as amended (the "Disinterested Trustees"), and legal counsel to the Trust's - ---------- (2) An "implicit waiver" is the failure to take action within a reasonable period of time regarding a material departure from a provision of this Code that has been made known to the Code Administrator, MassMutual's General Counsel, or his or her designee, or an officer of the Trust. 4 investment adviser. 8. REQUIRED RECORDS The Code Administrator shall maintain and cause to be maintained in an easily accessible place the following records for the period required by applicable SEC rules (currently six years following the end of the fiscal year of the Fund in which the applicable event or report occurred): (a) a copy of any Code which has been in effect during the period; (b) a copy of each certification pursuant to the Code made by a Covered Officer during the period; (c) a copy of each report made by the Code Administrator pursuant to this Code during the period; (d) a list of all Covered Officers who are or have been required to make reports pursuant to this Code during the period, plus those person(s) who are or were responsible for reviewing these reports; (e) a record of any request to waive any requirement of this Code, the decision thereon and the reasons supporting the decision; (f) a record of any report of any conflict of interest or appearance of a conflict of interest received by the Code Administrator or discovered by the Code Administrator during the period, the decision thereon and the reasons supporting the decision; and (g) a record of any violation of any such Code and of any action taken as a result of such violation, during the period. 9. AMENDMENTS AND MODIFICATIONS This Code (other than Exhibit A and the names of the Funds identified on the first page that have adopted the Code) may not be amended or modified except by a writing that is approved or ratified by a majority vote of the Board of Trustees and the Disinterested Trustees. 10. CONFIDENTIALITY. This Code is for the internal use of the Funds. Reports and records prepared or maintained under this Code are considered confidential and shall be maintained and protected accordingly to the extent permitted by applicable laws, rules and regulations. Except as otherwise required by law or this Code, such matters shall not be disclosed to anyone other than the Trustees and their counsel, Fund counsel, Fund officers, the independent auditors of the Funds, and MassMutual or its counsel, except as such disclosure may be required pursuant to applicable judicial or regulatory process. 5 EXHIBIT A POSITIONS COVERED BY THIS CODE OF ETHICS MASSMUTUAL INSTITUTIONAL FUNDS AND MML SERIES INVESTMENT FUND Principal Executive Officer Chief Financial Officer Treasurer Assistant Treasurer PERSONNEL OF MASSMUTUAL WHO BY VIRTUE OF THEIR JOBS PERFORM CRITICAL FINANCIAL AND ACCOUNTING FUNCTIONS FOR MASSMUTUAL ON BEHALF OF A FUND, INCLUDING: Second Vice President/Fund Operations 6 EXHIBIT B INITIAL/ANNUAL CERTIFICATION By signing below I certify that I have received, read, and understand this Code of Ethics for Principal Executive and Senior Financial Officers of the Funds (the "Code"), and further certify that I shall adhere to this Code. - ----------------------------------------------------------------------- Signature - ----------------------------------------------------------------------- (Type or Print) Name and Title - --------------------------- Date Please return the executed certification to the Code Administrator. 7 EXHIBIT C ANNUAL COMPLIANCE/REPORTING CERTIFICATION By signing below, I certify that I have complied with the requirements of this Code of Ethics for Principal Executive and Senior Financial Officers of the Funds (the "Code"), and have disclosed or reported any violations of this Code to the Code Administrator for the year ended _________________. - ----------------------------------------------------------------------- Signature - ----------------------------------------------------------------------- (Type or Print) Name and Title - --------------------------- Date Please return the executed certification to the Code Administrator. 8 EX-99.CERT 3 a2152351zex-99_cert.txt EX 99.CERT EXHIBIT 99.CERT CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002: I, David W. O'Leary, certify that: 1. I have reviewed this report on Form N-CSR of MML Series Investment 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 registrant's most recent fiscal quarter 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: 2/24/05 --------- /s/ David W. O'Leary ------------------------------- David W. O'Leary President and Principal Executive Officer CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002: I, James S. Collins, certify that: 1. I have reviewed this report on Form N-CSR of MML Series Investment 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 registrant's most recent fiscal quarter 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: 3/1/05 -------- /s/ James S. Collins ---------------------------------- James S. Collins Treasurer and Principal Financial Officer EX-99.906CERT 4 a2152351zex-99_906cert.txt EX 99.906CERT EXHIBIT 99.906.CERT CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Certified Shareholder Report of the MML Series Investment Fund (the "Trust") on From N-CSR for the period ending December 31, 2004, as filed with the Securities and Exchange Commission on the date hereof ("the Report"), the undersigned hereby certifies that: 1. The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, and 2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Trust. Date: 2/24/05 /s/ David W. O'Leary -------------- ---------------------------------------------------- David W. O'Leary President and Principal Executive Officer This certification is being furnished to the Commission solely pursuant to Rule 30a-2(b) under the Investment Company Act of 1940, as amended, and 18 U.S.C. Section 1350 and is not being filed as part of the Form N-CSR with the Commission. CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Certified Shareholder Report of the MML Series Investment Fund (the "Trust") on From N-CSR for the period ending December 31, 2004, as filed with the Securities and Exchange Commission on the date hereof ("the Report"), the undersigned hereby certifies that: 3. The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, and 4. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Trust. Date: 3/1/05 /s/ James S. Collins -------------- ---------------------------------------------------- James S. Collins Treasurer and Principal Financial Officer This certification is being furnished to the Commission solely pursuant to Rule 30a-2(b) under the Investment Company Act of 1940, as amended, and 18 U.S.C. Section 1350 and is not being filed as part of the Form N-CSR with the Commission. -----END PRIVACY-ENHANCED MESSAGE-----