-----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, MzTUPBU4Imp71TzbOsOu7PJaCAcOv526QNuXdq7xRDzHnHJfOX37prRYXMquWcVb sgcyvYFLKLfBc9mDWGB40g== 0001047469-05-000305.txt : 20050107 0001047469-05-000305.hdr.sgml : 20050107 20050107110610 ACCESSION NUMBER: 0001047469-05-000305 CONFORMED SUBMISSION TYPE: N-CSR PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20041031 FILED AS OF DATE: 20050107 DATE AS OF CHANGE: 20050107 EFFECTIVENESS DATE: 20050107 FILER: COMPANY DATA: COMPANY CONFORMED NAME: STATE STREET RESEARCH SECURITIES TRUST CENTRAL INDEX KEY: 0000918572 IRS NUMBER: 000000000 STATE OF INCORPORATION: MA FISCAL YEAR END: 0430 FILING VALUES: FORM TYPE: N-CSR SEC ACT: 1940 Act SEC FILE NUMBER: 811-08322 FILM NUMBER: 05517265 BUSINESS ADDRESS: STREET 1: ONE FINANCIAL CENTER CITY: BOSTON STATE: MA ZIP: 02111 BUSINESS PHONE: 6173571340 MAIL ADDRESS: STREET 1: ONE FINANCIAL CENTER CITY: BOSTON STATE: MA ZIP: 02111 N-CSR 1 a2149463zn-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 811-8322 ---------------------------------------------- State Street Research Securities Trust ------------------------------------------------------------------------ (Exact name of registrant as specified in charter) One Financial Center, Boston, MA 02111 ------------------------------------------------------------------------ (Address of principal executive offices) (Zip code) Richard S. Davis, President and Chief Executive Officer State Street Research & Management Company One Financial Center, Boston, MA 02111 ------------------------------------------------------------------------ (Name and address of agent for service) Registrant's telephone number, including area code: 617-357-1200 ------------------ Date of fiscal year end: 10/31/04 ----------------- Date of reporting period: 11/1/03 - 10/31/04 ---------------------------- Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection, and policymaking roles. ITEM 1 (REPORT TO SHAREHOLDERS): The Annual Report is attached. [LOGO] STATE STREET RESEARCH [PHOTO] Legacy Fund October 31, 2004 Annual Report to Shareholders
Table of Contents 3 Performance Discussion 6 About Your Fund Expenses 7 Portfolio Holdings 9 Financial Statements 13 Financial Highlights 15 Report of Independent Registered Public Accounting Firm 17 Trustees and Officers
FROM THE CHAIRMAN State Street Research The pace of U.S. economic growth was robust over the twelve-month period ended October 31, 2004, as the economy advanced on all fronts. Gross domestic product (GDP) growth, a common measure of economic growth, averaged just short of 4.0% for the period, solidly above the economy's long-term trend rate of 3.0%. We expect the economy to grow between 3.5% and 4.0% for the remainder of 2004 and into 2005. Consumers continued to play a key role in the economy. Spending on retail goods, autos and housing remained generally strong throughout the period. Retail sales slowed during the summer months of 2004 as a result of higher energy prices and weather-related events, but the pace of consumer spending picked back up in the fall. The number of new jobs continued to fall short of expectations. In the spring, more than one million new jobs were added to the economy. But job growth was disappointing again during the summer months. The economy has yet to replace all the jobs lost in the downturn of 2000-2001. Although business spending fell short of expectations, given the economy's relatively strong growth cycle, a pick-up in business spending was one bright spot in the economy. Industrial production moved steadily higher, as did manufacturing capacity utilization. Outlays for new equipment and construction enjoyed double-digit growth in the second half of the period. Strong spending by businesses helped offset some of the slowdown in consumer-spending growth. Stocks Stumble, Bonds Edge Higher The U.S. stock market began the period on a strong note. However, the gains it achieved early in the period were whittled away over the twelve months covered by this report. By contrast, the bond market has held up in the face of three increases in the federal funds rate (a key short-term interest rate) that occurred late in the period. The yield on the 10-year benchmark U.S. Treasury ended the period just about where it began, and bond prices moved higher across all sectors. Investing Despite Uncertainty By all accounts, news on the economy and the markets has been overshadowed over the past year by external events. As a result, many investors have remained on the sidelines. With so much uncertainty, it may feel safer to wait out the storm. Yet, it can be even more risky to try to time your entrances and exits as the markets move through their natural cycles. If you're feeling uncertain about your financial strategy, talk to your financial professional. With their advice and guidance, you can keep your financial goals on track. Sincerely, /s/ Richard S. Davis Richard S. Davis Chairman October 31, 2004 2 - ------------- PERFORMANCE - ------------- Discussion as of October 31, 2004 How State Street Research Legacy Fund Performed State Street Research Legacy Fund (Class A shares, without sales charge) returned 4.70% for the twelve-month period ended October 31, 2004. That was better than the return of the Russell 1000[RegTM] Growth Index, which returned 3.38% over the same period. The fund also outperformed the Lipper Large-Cap Growth Funds Average, which was 2.67% for the twelve-month period. - -------------------------------------------------------------------------------- Performance: Class A - -------------------------------------------------------------------------------- Fund average annual total return as of 10/31/04 (does not reflect sales charge)
Life of Fund 1 Year 5 Years (12/31/97) - -------------------------------------------------------------- Return Before Taxes 4.70% -3.14% 3.29% - -------------------------------------------------------------- Return After Taxes on Distributions 4.70% -3.14% 3.29% - -------------------------------------------------------------- Return After Taxes on Distributions and Sale of Fund Shares 3.06% -2.64% 2.83% - --------------------------------------------------------------
Fund average annual total return as of 9/30/04 (at maximum applicable sales charge)
Life of Fund 1 Year 5 Years (12/31/97) - -------------------------------------------------------------- Return Before Taxes 4.36% -3.68% 2.19% - -------------------------------------------------------------- Return After Taxes on Distributions 4.36% -3.68% 2.19% - -------------------------------------------------------------- Return After Taxes on Distributions and Sale of Fund Shares 2.84% -3.09% 1.88% - --------------------------------------------------------------
See pages 4,5 and 16 for additional performance data for Class A shares and for performance data on other share classes. Keep in mind that the performance data quoted represents past performance and is no guarantee of future results. Current performance may be lower or higher than the performance data quoted herein. For the most recent month-end performance results, visit our website at www.ssrfunds.com. The fund's share price, yield and return will fluctuate, and you may have a gain or loss when you sell your shares. All returns assume reinvestment of capital gains distributions and income dividends at net asset value. Average annual total return without sales charge does not reflect the maximum applicable sales charges. If the applicable sales charges were deducted, performance results would be lower. Average annual total return at maximum applicable sales charge reflects a maximum 5.75% Class A share front-end sales charge. After-tax returns are calculated using the highest historical federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor's tax situation and may differ from those shown, and after-tax returns shown are not relevant to investors who hold their fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts (IRAs). Return After Taxes on Distributions and Sale of Fund Shares for a period may be greater than or equal to Return After Taxes on Distributions for the same period because of losses realized on the sale of fund shares. The Russell 1000 Growth Index contains those stocks within the complete Russell 1000[RegTM] Index (a large-company index) that show above-average growth. The index is unmanaged and does not take transaction charges into consideration. It is not possible to invest directly in an index. The Lipper Large-Cap Growth Funds Average shows the performance of a category of mutual funds with similar goals. The Lipper average shows you how well the fund has done compared to competing funds. - -------------------------------------------------------------------------------- Reasons for the Fund's Performance In a choppy market, the fund's balanced positioning helped it outperform its benchmark and peer-group average. An emphasis on energy stocks, coupled with strong stock selection in the consumer discretionary and health care sectors, drove returns during the period. Disappointments from technology and producer durable holdings were not enough to offset gains from these other sectors. As oil prices rose above $50/barrel during the period, energy stocks soared to the top of the performance list. The fund benefited from a decision to overweight energy stocks and to focus on coal- and crude-producing companies, which were among the sector's best performers. While it is unlikely that the price of oil will remain as high as it was near the end of the period, we continue to believe that oil will trade at prices above its historical norm. If prices remain relatively high, we believe that energy stocks continue to have additional return potential. The fund also benefited from good stock selection in the consumer discretionary and health care sectors. Among consumer names, Yahoo! and Target delivered solid results, helping fund returns. Yahoo!, the leading Internet search engine, has benefited by its willingness to spend freely on advertising. Within health care, the fund's pharmaceutical holdings tended to outperform their benchmark counterparts. Our exposure to Merck was significantly lower than its weight in the index, which helped performance when the drugmaker hit an eight-year low after announcing the withdrawal of its arthritis drug and painkiller, Vioxx. Stock selection within the producer durables and technology sectors modestly detracted from the fund's relative performance. Semiconductor holdings, such as PMC-Sierra and Cypress Semiconductor, generated disappointing results, reflecting investors' concerns that the semiconductor cycle may have peaked. Amid producer durables names, power supply device maker American Power Conversion and aerospace giant Boeing also disappointed. Looking Ahead We remain committed to our bottom-up strategy and believe the fund is well positioned to outperform its benchmark regardless of market direction. We believe the balanced makeup of the fund has been critical to its relative gains. As a result of our bottom-up portfolio construction process, the fund continues to place an increased emphasis on companies exhibiting stable growth rates. A Word about Risk The major risks of stock investing include sudden and unpredictable drops in value and period of lackluster performance. The fund's emphasis on keeping portfolio turnover low means that the fund may continue to hold various stocks through adverse markets, which may cause it to incur deeper losses than other funds. To the extent the fund does sell securities during times of volatility, portfolio turnover and capital gains are likely to increase. The fund's buy-and-hold approach is designed to allow it to capture long-term gains, but the prices of some stocks may not return to their previous highs. By continuing to hold these stocks, the fund may miss opportunities to realize gains and long-term performance may be reduced. Because financial markets and mutual fund strategies are constantly evolving, it is possible that the fund's holdings, market stance, outlook for various industries or securities and other matters discussed in this report have changed since this information was prepared. Portfolio changes should not be considered recommendations for action by individual investors. State Street Research Legacy Fund 3 - --------------- PERFORMANCE - --------------- Discussion as of October 31, 2004 These two pages focus on the fund's long-term track record. While a mutual fund's past performance is not a guarantee of future results, long-term returns can serve as an important context for evaluating recent performance. There are three ways of measuring long-term performance: cumulative total returns, average annual total returns and the change in dollar value over time of a given investment. Information about these measures follows, while the share class boxes contain the results of these measures for each share class. Cumulative Total Return Represents the total percentage you would have earned or lost if you had invested a lump sum in the fund and left it there until the end of the period indicated. Average Annual Total Return Represents the rate you would have had to earn during each year of a given time period in order to end up with the fund's actual cumulative return for those years. In reality, of course, fund performance varies from year to year. Because of this, a fund's actual performance for a given year may be higher or lower than an average annual performance figure. $10,000 Over Life of Fund Similar to cumulative total return, but uses dollars rather than percentages, and assumes that the lump sum you invested was $10,000 (less the applicable maximum sales charge, if any) and compares fund performance to the performance of a market index. - -------------------------------------------------------------------------------- Class A
Life of Fund 1 Year 5 Years (12/31/97) - -------------------------------------------------------------------------- Cumulative Total Return (does not reflect sales charge) 4.70% -14.76% 24.76% - -------------------------------------------------------------------------- Cumulative Total Return (at maximum applicable sales charge) -1.32% -19.67% 17.59% - -------------------------------------------------------------------------- Average Annual Total Return (at maximum applicable sales charge) -1.32% -4.28% 2.40% - --------------------------------------------------------------------------
$10,000 Over Life of Fund (reflects maximum applicable sales charge) [The following table was depicted as a line chart in the printed material.]
Class A Russell 1000 Growth Index ------- ------------------------- 97 9425 10112 98 10829 11955 99 13796 16050 00 15455 17547 01 10910 10539 02 9392 8471 03 11231 10319 04 11759 10668
- -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Class B(1)
Life of Fund 1 Year 5 Years (12/31/97) - --------------------------------------------------------------------------- Cumulative Total Return (does not reflect sales charge) 3.94% -17.81% 18.66% - --------------------------------------------------------------------------- Cumulative Total Return (at maximum applicable sales charge) -1.06% -19.45% 18.66% - --------------------------------------------------------------------------- Average Annual Total Return (at maximum applicable sales charge) -1.06% -4.23% 2.53% - ---------------------------------------------------------------------------
$10,000 Over Life of Fund (reflects maximum applicable sales charge) [The following table was depicted as a line chart in the printed material.]
Class B(1) Russell 1000 Growth Index ---------- ------------------------- 97 10000 10000 98 11420 11955 99 14437 16050 00 16048 17547 01 11246 10539 02 9615 8471 03 11416 10319 04 11866 10668
- -------------------------------------------------------------------------------- Keep in mind that the performance data quoted represents past performance and is no guarantee of future results. Current performance may be lower or higher than the performance data quoted herein. For the most recent month-end performance results, visit our website at www.ssrfunds.com. The fund's share price, yield and return will fluctuate, and you may have a gain or a loss when you sell your shares. All returns assume reinvestment of capital gains distributions and income dividends at net asset value. The returns shown do not reflect the deduction of taxes that a shareholder would pay on fund distributions, or the redemption of fund shares. Cumulative Total Return without sales charge does not reflect the maximum applicable sales charges. If the applicable sales charges were deducted, performance results would be lower. 4 - -------------------------------------------------------------------------------- Class B (only available through exchanges from another Class B account)
Life of Fund 1 Year 5 Years (12/31/97) - --------------------------------------------------------------------------- Cumulative Total Return (does not reflect sales charge) 4.98% -15.25% 22.36% - --------------------------------------------------------------------------- Cumulative Total Return (at maximum applicable sales charge) -0.02% -16.94% 22.36% - --------------------------------------------------------------------------- Average Annual Total Return (at maximum applicable sales charge) -0.02% -3.64% 3.00% - ---------------------------------------------------------------------------
$10,000 Over Life of Fund (reflects maximum applicable sales charge) [The following table was depicted as a line chart in the printed material.]
Class B Russell 1000 Growth Index ------- ------------------------- 97 10000 10112 98 11420 11955 99 14437 16050 00 16118 17547 01 11326 10539 02 9725 8471 03 11656 10319 04 12236 10668
- -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Class C
Life of Fund 1 Year 5 Years (12/31/97) - --------------------------------------------------------------------------- Cumulative Total Return (does not reflect sales charge) 3.94% -17.81% 18.66% - --------------------------------------------------------------------------- Cumulative Total Return (at maximum applicable sales charge) 2.94% -17.81% 18.66% - --------------------------------------------------------------------------- Average Annual Total Return (at maximum applicable sales charge) 2.94% -3.85% 2.53% - ---------------------------------------------------------------------------
$10,000 Over Life of Fund (reflects maximum applicable sales charge) [The following table was depicted as a line chart in the printed material.]
Class C Russell 1000 Growth Index ------- ------------------------- 97 10000 10112 98 11420 11955 99 14437 16050 00 16058 17547 01 11246 10539 02 9615 8471 03 11416 10319 04 11866 10668
- -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Class R
Life of Fund 1 Year 5 Years (12/31/97) - --------------------------------------------------------------------------- Cumulative Total Return (does not reflect sales charge) 4.37% -15.11% 24.26% - --------------------------------------------------------------------------- Cumulative Total Return (at maximum applicable sales charge) 4.37% -15.11% 24.26% - --------------------------------------------------------------------------- Average Annual Total Return (at maximum applicable sales charge) 4.37% -3.22% 3.23% - ---------------------------------------------------------------------------
$10,000 Over Life of Fund (reflects maximum applicable sales charge) [The following table was depicted as a line chart in the printed material.]
Class R Russell 1000 Growth Index ------- ------------------------- 97 10000 10000 98 11490 11955 99 14637 16050 00 16398 17547 01 11576 10539 02 9965 8471 03 11906 10319 04 12426 10668
- -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Class S
Life of Fund 1 Year 5 Years (12/31/97) - --------------------------------------------------------------------------- Cumulative Total Return (does not reflect sales charge) 5.01% -13.06% 27.87% - --------------------------------------------------------------------------- Cumulative Total Return (at maximum applicable sales charge) 5.01% -13.06% 27.87% - --------------------------------------------------------------------------- Average Annual Total Return (at maximum applicable sales charge) 5.01% -2.76% 3.66% - ---------------------------------------------------------------------------
$10,000 Over Life of Fund (reflects maximum applicable sales charge) [The following table was depicted as a line chart in the printed material.]
Class S Russell 1000 Growth Index ------- ------------------------- 97 10000 10000 98 11520 11955 99 14707 16050 00 16618 17547 01 11756 10539 02 10145 8471 03 12176 10319 04 12787 10668
- -------------------------------------------------------------------------------- Cumulative and Average Annual Total Returns at maximum applicable sales charge reflect a maximum 5.75% Class A share front-end sales charge or 5% Class B(1) or Class B share or 1% Class C share contingent deferred sales charge, where applicable. Performance for Class B(1) shares reflects Class B share performance through December 31, 1998, and Class B(1) performance thereafter. Performance for Class R shares reflects Class A share performance through April 2, 2003, and Class R share performance thereafter. If the returns for Class B(1) and Class R shares had reflected their current service/distribution (Rule 12b-1) fees for the entire period, these returns would have been lower. Class R and Class S shares, offered without sales charge, are available through certain retirement plans and special programs. The Russell 1000 Growth Index contains those stocks within the complete Russell 1000 Index (a large-company index) that show above-average growth. The index is unmanaged and does not take transaction charges into consideration. It is not possible to invest directly in an index. State Street Research Legacy Fund 5 - -------------------------------------------------------------------------------- Summary Portfolio Schedule - --------------------------------------------------------------------------------
Industries % of Fund Net Assets Consumer Discretionary 24.1% - -------------------------------------------------------------------------------- Technology 20.7% - -------------------------------------------------------------------------------- Health Care 20.1% - -------------------------------------------------------------------------------- Financial Services 13.1% - -------------------------------------------------------------------------------- Other 6.4% - -------------------------------------------------------------------------------- Consumer Staples 5.4% - -------------------------------------------------------------------------------- Other Energy 4.7% - -------------------------------------------------------------------------------- Utilities 2.5% - -------------------------------------------------------------------------------- Materials and Processing 1.5% - -------------------------------------------------------------------------------- Automobiles and Transportation 0.7% - -------------------------------------------------------------------------------- Net Cash 0.8% - -------------------------------------------------------------------------------- Total 100.0%
Because of active management, there is no guarantee that the fund currently invests, or will continue to invest, in the industries referenced. - -------------------------------------------------------------------------------- About Your Fund Expenses As a fund shareholder, you incur two types of costs: (1) Transaction costs, which include sales charges, and (2) ongoing expenses, which include management fees, service/distribution fees (12b-1) and "other" expenses. The examples below illustrate the ongoing cost in dollars of investing in the fund and allow you to compare these costs with the expenses of other funds. The examples are based on a $1,000 investment at the beginning of the period and held for the entire period from April 30, 2004, to October 31, 2004. Actual Fund Return is based on the fund's actual return and expenses. To estimate the ongoing expenses you paid during the entire period shown, 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 shown for your fund under the column "Expenses Paid during the Period." Hypothetical 5% Return is based on the fund's actual expense ratio and an assumed rate of 5% per year before expenses. Please note that the return used is not the fund's actual return; therefore, this information may not be used to estimate your actual ending account balance and expenses paid during the period. To compare your fund's ongoing expenses with those of other funds, simply compare this 5% hypothetical example with the 5% hypothetical examples shown in the shareholder reports of other funds.
Beginning Ending Expenses Account Account Paid Annualized Six months ended Value Value during Expense 10/31/04 4/30/04 10/31/04 Period* Ratio - -------------------------------------------------------------------------------- Actual Fund Return - -------------------------------------------------------------------------------- Class A $1,000 $ 1,017.35 $ 7.36 1.45% - -------------------------------------------------------------------------------- Class B(1) $1,000 $ 1,010.73 $ 10.86 2.15% - -------------------------------------------------------------------------------- Class B $1,000 $ 1,020.01 $ 6.06 1.19% - -------------------------------------------------------------------------------- Class C $1,000 $ 1,009.85 $ 10.85 2.15% - -------------------------------------------------------------------------------- Class R $1,000 $ 1,014.76 $ 8.36 1.65% - -------------------------------------------------------------------------------- Class S $1,000 $ 1,020.71 $ 5.86 1.15% - -------------------------------------------------------------------------------- Hypothetical 5% Return - -------------------------------------------------------------------------------- Class A $1,000 $ 1,017.70 $ 7.36 1.45% - -------------------------------------------------------------------------------- Class B(1) $1,000 $ 1,014.20 $ 10.88 2.15% - -------------------------------------------------------------------------------- Class B $1,000 $ 1,019.00 $ 6.06 1.19% - -------------------------------------------------------------------------------- Class C $1,000 $ 1,014.20 $ 10.88 2.15% - -------------------------------------------------------------------------------- Class R $1,000 $ 1,016.70 $ 8.37 1.65% - -------------------------------------------------------------------------------- Class S $1,000 $ 1,019.20 $ 5.86 1.15%
* Expenses are equal to the fund's annualized expense ratio multiplied by the average account value over the period, multiplied by the number of days in the period and then divided by the number of days in the year. Please note that the expenses shown in the table are meant to highlight and help you compare ongoing costs only and do not reflect transactional expenses such as sales charges, which would result in higher total expenses. It should also be noted that, for certain funds, expenses have been subsidized or reduced through expense offset arrangements, which reduces costs for shareholders. Generally, the fund expects that the expense subsidy or expense offset arrangement will continue although there is no guarantee that it will. Please see the fund's prospectus for more information. 6 PORTFOLIO Holdings October 31, 2004
Issuer Shares Value - ----------------------------------------------------------------------------------------------- Common Stocks 99.2% Automobiles & Transportation 0.7% Air Transport 0.7% Expeditors International of Washington Inc. ........................................ 39,000 $ 2,226,900 ------------ Total Automobiles & Transportation ............................................ 2,226,900 ------------ Consumer Discretionary 24.1% Casinos/Gambling, Hotel/Motel 3.3% International Game Technology Inc. ...................... 45,400 1,500,016 Marriott International Inc. Cl. A ....................... 97,400 5,307,326 Starwood Hotels & Resorts Inc. .......................... 72,300 3,450,879 ------------ 10,258,221 ------------ Commercial Services 3.6% eBay Inc.* .............................................. 73,000 7,125,530 Manpower Inc. ........................................... 85,500 3,868,875 ------------ 10,994,405 ------------ Communications, Media & Entertainment 0.6% Walt Disney Co. ......................................... 69,800 1,760,356 ------------ Consumer Electronics 3.7% Harman International Inc. ............................... 29,100 3,497,238 Yahoo! Inc.* ............................................ 218,800 7,918,372 ------------ 11,415,610 ------------ Printing & Publishing 2.1% News Corp. Ltd. ADR^ .................................... 206,200 6,652,012 ------------ Restaurants 1.1% Starbucks Corp.* ........................................ 62,500 3,305,000 ------------ Retail 6.8% Kohl's Corp.* ........................................... 79,200 4,020,192 Lowes Companies Inc. .................................... 62,900 3,540,012 PETsMART Inc. ........................................... 51,900 1,659,762 Staples Inc. ............................................ 118,100 3,512,294 Target Corp. ............................................ 162,500 8,128,250 ------------ 20,860,510 ------------ Shoes 1.2% Nike Inc. Cl. B ......................................... 47,400 3,854,094 ------------ Textile Apparel Manufacturers 1.7% Coach Inc.* ............................................. 39,900 1,860,537 Polo Ralph Lauren Corp.* ................................ 94,500 3,489,885 ------------ 5,350,422 ------------ Total Consumer Discretionary .................................................. 74,450,630 ------------ Consumer Staples 5.4% Beverages 1.5% Anheuser-Busch Cos. Inc. ................................ 91,100 4,550,445 ------------
Issuer Shares Value - ----------------------------------------------------------------------------------------------- Household Products 3.9% Clorox Co. .............................................. 80,200 $ 4,378,920 Procter & Gamble Co. .................................... 153,600 7,861,248 ------------ 12,240,168 ------------ Total Consumer Staples ........................................................ 16,790,613 ------------ Financial Services 13.1% Banks & Savings & Loan 2.0% Goldman Sachs Group Inc. ................................ 31,600 3,108,808 J.P. Morgan Chase & Co. ................................. 79,000 3,049,400 ------------ 6,158,208 ------------ Financial Data Processing Services & Systems 2.6% Alliance Data Systems Corp.* ............................ 77,100 3,259,788 First Data Corp. ........................................ 113,100 4,668,768 ------------ 7,928,556 ------------ Insurance 0.9% American International Group Inc. ....................... 47,800 2,901,938 ------------ Miscellaneous Financial 7.6% American Express Co. .................................... 121,450 6,445,352 Citigroup Inc. .......................................... 105,106 4,663,553 MBNA Corp. .............................................. 183,600 4,705,668 Providian Financial Corp.* .............................. 194,100 3,018,255 SLM Corp. ............................................... 102,100 4,621,046 ------------ 23,453,874 ------------ Total Financial Services ..................................................... 40,442,576 ------------ Health Care 20.1% Drugs & Biotechnology 13.9% Allergan Inc. ........................................... 51,000 3,649,560 Amgen Inc.* ............................................. 29,450 1,672,760 Biogen Idec Inc.* ....................................... 72,500 4,216,600 Charles River Laboratories International Inc.*^ ................................... 75,300 3,523,287 Elan Corp. ADR*^ ........................................ 27,000 696,600 Genentech Inc.* ......................................... 48,200 2,194,546 Invitrogen Corp.* ....................................... 28,400 1,644,360 IVAX Corp.* ............................................. 87,250 1,579,225 Johnson & Johnson Inc. .................................. 133,820 7,812,412 Novartis AG ADR ......................................... 199,300 9,568,393 Pfizer Inc. ............................................. 216,454 6,266,343 ------------ 42,824,086 ------------ Health Care Services 4.0% Caremark Rx Inc.* ....................................... 174,700 5,235,759 Unitedhealth Group Inc. ................................. 96,200 6,964,880 ------------ 12,200,639 ------------ Hospital Supply 2.2% Boston Scientific Corp.* ................................ 40,600 1,433,180 Guidant Corp. ........................................... 44,100 2,937,942 Zimmer Holdings Inc.* ................................... 32,600 2,529,434 ------------ 6,900,556 ------------ Total Health Care ............................................................ 61,925,281 ------------ Materials & Processing 1.5% Agriculture 1.5% Monsanto Co. ............................................ 105,400 4,505,850 ------------ Total Materials & Processing ................................................. 4,505,850 ------------
The notes are an integral part of the financial statements. State Street Research Legacy Fund 7
Issuer Shares Value - ----------------------------------------------------------------------------------------------- Other 6.4% Multi-Sector 6.4% General Electric Co. .................................... 340,930 $ 11,632,531 Tyco International Ltd. ................................. 257,600 8,024,240 ------------ Total Other ................................................................... 19,656,771 ------------ Other Energy 4.7% Miscellaneous Energy 1.3% Consol Energy Inc.^ ..................................... 116,700 4,131,180 ------------ Oil & Gas Producers 2.7% EOG Resources Inc. ...................................... 81,500 5,424,640 Newfield Exploration Co.* ............................... 47,500 2,764,500 ------------ 8,189,140 ------------ Oil Well Equipment & Services 0.7% Schlumberger Ltd. ....................................... 36,100 2,272,134 ------------ Total Other Energy ............................................................ 14,592,454 ------------ Technology 20.7% Communications Technology 4.3% Cisco Systems Inc.* ..................................... 340,280 6,536,779 Juniper Networks Inc.*^ ................................. 100,900 2,684,949 QUALCOMM Inc. ........................................... 96,900 4,051,389 ------------ 13,273,117 ------------ Computer Software 7.9% Microsoft Corp. ......................................... 485,540 13,590,264 Oracle Systems Corp.* ................................... 545,900 6,911,094 Red Hat Inc.* ........................................... 83,500 1,072,140 Symantec Corp. .......................................... 51,700 2,943,798 ------------ 24,517,296 ------------ Computer Technology 3.1% Dell Inc.* .............................................. 213,400 7,481,804 Zebra Technologies Corp. Cl. A* ......................... 37,600 1,992,424 ------------ 9,474,228 ------------ Electronics 1.5% General Dynamics Corp. .................................. 44,400 4,534,128 ------------ Electronics: Semiconductors/Components 3.9% Intel Corp. ............................................. 342,360 7,620,934 Linear Technology Corp. ................................. 80,800 3,060,704 PMC-Sierra Inc.* ........................................ 132,000 1,354,320 ------------ 12,035,958 ------------ Total Technology .............................................................. 63,834,727 ------------ Utilities 2.5% Cable Television & Radio 0.8% Comcast Corp.* .......................................... 80,990 2,351,950 ------------ Telecommunications 1.7% Sprint Corp. ............................................ 254,500 5,331,775 ------------ Total Utilities ............................................................... 7,683,725 ------------ Total Common Stocks (Cost $273,387,777) ....................................... 306,109,527 ------------
Issuer Shares Value - ----------------------------------------------------------------------------------------------- Short-Term Investments 4.9% State Street Navigator Securities Lending Prime Portfolio ....................................... 15,168,558 $ 15,168,558 ------------ Total Short-Term Investments (Cost $15,168,558)............................... 15,168,558 ------------
Maturity Amount of Coupon Rate Date Principal - ----------------------------------------------------------------------------------------------- Commercial Paper 1.6% UBS Finance Inc., 1.84% 11/01/2004 $ 790,000 790,000 UBS Finance Inc., 1.77% 11/02/2004 4,100,000 4,099,799 --------- Total Commercial Paper (Cost $4,889,799) 4,889,799 ---------
% of Net Assets - ----------------------------------------------------------------------------------------------- Summary of Portfolio Assets Investments (Cost $293,446,134).................. 105.7% $326,167,884 Cash and Other Assets, Less Liabilities ......... ( 5.7%) (17,536,570) ----- ------------ Net Assets ...................................... 100.0% $308,631,314 ===== ============
KEY TO SYMBOLS * Denotes a security which has not paid a dividend during the last year. ^ All or a portion of this security was being held on loan. As of October 31, 2004, the value of securities loaned was $14,705,714. ADR Stands for American Depositary Receipt. Federal Income Tax Information At October 31, 2004, the net unrealized appreciation of investments based on cost for federal income tax purposes of $293,831,296 was as follows: Aggregate gross unrealized appreciation for all investments in which there is an excess of value over tax cost $39,264,958 Aggregate gross unrealized depreciation for all investments in which there is an excess of tax cost over value (6,928,370) ----------- $32,336,588 ===========
8 The notes are an integral part of the financial statements. FINANCIAL Statements Statement of Assets and Liabilities - -------------------------------------------------------------------------------- October 31, 2004
Assets Investments, at value (Cost $293,446,134) (Note 1) .............. $326,167,884 Cash ............................................................ 1,858 Receivable for fund shares sold ................................. 222,669 Dividends receivable ............................................ 180,091 Other assets .................................................... 118,672 ------------ 326,691,174 ------------ Liabilities Payable for collateral received on securities loaned ............ 15,168,558 Payable for securities purchased ................................ 1,146,404 Payable for fund shares redeemed ................................ 969,072 Accrued transfer agent and shareholder services ................. 334,396 Accrued management fee .......................................... 164,541 Accrued distribution and service fees ........................... 139,394 Accrued administration fee ...................................... 13,553 Accrued trustees' fees .......................................... 12,192 Other accrued expenses .......................................... 111,750 ------------ 18,059,860 ------------ Net Assets ...................................................... $308,631,314 ============ Net Assets consist of: Unrealized appreciation of investments ........................ $ 32,721,750 Accumulated net realized loss ................................. (127,339,175) Paid-in capital ............................................... 403,248,739 ------------ $308,631,314 ============
Net Asset Value (NAV) of Each Share Class Except where noted, the NAV is the offering and the redemption price for each class.
Class Net Assets [divided by] Number of Shares = NAV A $99,435,427 7,977,160 $ 12.47* B(1) $97,938,293 8,259,224 $ 11.86** B $34,647,864 2,833,749 $ 12.23** C $23,854,121 2,011,135 $ 11.86** R $ 356,690 28,712 $ 12.42 S $52,398,919 4,101,521 $ 12.78
* Maximum offering price per share = $13.23 ($12.47 [divided by] 0.9425) ** When you sell Class B(1), Class B or Class C shares, you receive the net asset value minus deferred sales charge, if any. Statement of Operations - -------------------------------------------------------------------------------- For the year ended October 31, 2004
Investment Income Dividends, net of foreign taxes of $32,242 (Note 1) ............. $ 2,628,698 Securities lending income (Note 1) .............................. 71,531 Interest (Note 1) ............................................... 58,904 ----------- 2,759,133 ----------- Expenses Management fee (Note 2) ......................................... 2,172,192 Transfer agent and shareholder services (Note 2) ................ 1,089,375 Distribution and services fees - Class A (Note 4) ............... 312,444 Distribution and service fees - Class B(1) (Note 4) ............. 1,047,293 Distribution and service fees - Class B (Note 4) ................ 7,295 Distribution and service fees - Class C (Note 4) ................ 271,737 Distribution and service fees - Class R (Note 4) ................ 1,187 Custodian fee ................................................... 153,507 Administration fee (Note 2) ..................................... 107,908 Reports to shareholders ......................................... 103,808 Registration fees ............................................... 61,750 Audit fee ....................................................... 46,000 Trustees' fees (Note 2) ......................................... 28,442 Legal fees ...................................................... 17,000 Miscellaneous ................................................... 38,210 ----------- 5,458,148 Fees paid indirectly (Note 2) ................................... (9,261) ----------- 5,448,887 ----------- Net investment loss ............................................. (2,689,754) ----------- Realized and Unrealized Gain (Loss) on Investments Net increase from payment by affiliate (Note 2) ................. 15,707 Net realized gain on investments (Notes 1 and 3) ................ 49,361,911 Change in unrealized depreciation of investments ................ (32,508,263) ----------- Net gain on investments ......................................... 16,869,355 ----------- Net increase in net assets resulting from operations ............ $14,179,601 ===========
The notes are an integral part of the financial statements. State Street Research Legacy Fund 9 Statement of Changes in Net Assets - --------------------------------------------------------------------------------
Years ended October 31 --------------------------------------- 2004 2003 --------------------------------------- Increase (Decrease) In Net Assets Operations: Net investment loss ......... $ (2,689,754) $ (1,952,085) Net increase from payment by affiliate .............. 15,707 -- Net realized gain (loss) on investments ............... 49,361,911 (16,699,994) Change in unrealized appreciation (depreciation) of investments ............ (32,508,263) 80,572,206 -------------------------------------- Net increase resulting from operations ................ 14,179,601 61,920,127 -------------------------------------- Net increase (decrease) from fund share transactions (Note 7) .................. (55,470,941) 46,837,642 -------------------------------------- Total increase (decrease) in net assets ............. (41,291,340) 108,757,769 Net Assets Beginning of year ........... 349,922,654 241,164,885 -------------------------------------- End of year ................. $ 308,631,314 $ 349,922,654 ======================================
Notes to Financial Statements - -------------------------------------------------------------------------------- October 31, 2004 Note 1 State Street Research Legacy Fund is a series of State Street Research Securities Trust (the "Trust"), which is organized as a Massachusetts business trust and is registered under the Investment Company Act of 1940, as amended, as an open-end management investment company. The Trust presently consists of two separate funds: State Street Research Legacy Fund and State Street Research Large-Cap Analyst Fund. The fund seeks to provide long-term growth of capital. In seeking to achieve its investment objective, the fund invests at least 65% of its total assets in stocks and convertible securities of mid- and large-size companies. The fund employs a tax-managed strategy, generally seeking to identify stocks with long-term growth potential and holding them for extended periods. The fund offers six classes of shares. Class A shares are subject to an initial sales charge of up to 5.75% and pay annual service and distribution fees equal to 0.30% of average daily net assets. Class B(1) shares pay annual service and distribution fees equal to 1.00% of average daily net assets and automatically convert into Class A shares (which pay lower ongoing expenses) at the end of eight years. Class B(1) shares are subject to a contingent deferred sales charge on certain redemptions made within six years of purchase. Class B shares are offered only to current shareholders through reinvestment of dividends and distributions or through exchanges from existing Class B accounts of State Street Research funds. For the period November 1, 2003 through September 30, 2004, the annual service and distribution fees paid by Class B shares had been voluntarily reduced to 0.00%. For the period from October 1, 2004, through October 31, 2004, the annual service and distribution fees paid by Class B shares are 0.25%. Class B shares automatically convert into Class A shares at the end of eight years. Class B shares are subject to a contingent deferred sales charge on certain redemptions made within five years of purchase. Class C shares are subject to a contingent deferred sales charge of 1.00% on any shares redeemed within one year of purchase. Class C shares also pay annual service and distribution fees equal to 1.00% of average daily net assets. Class R shares are offered to retirement plans participating in certain platforms sponsored by broker-dealers which may involve multiple fund families. Class R shares pay a service and distribution fee of 0.50%. No sales charge is imposed at the time of purchase or redemption of Class R shares. Class S shares are only offered through certain retirement accounts, advisory accounts of State Street Research & Management Company (the "Adviser"), an investment management subsidiary of MetLife, Inc. ("MetLife"), and special programs. No sales charge is imposed at the time of purchase or redemption of Class S shares. Class S shares do not pay any service or distribution fees. The fund's expenses are borne prorata by each class, except that each class bears expenses, and has exclusive voting rights with respect to provisions of the plans of distribution, related specifically to that class. Income, expenses (other than service and distribution fees), and realized and unrealized gains or losses on investments are allocated to each class of shares based on its relative net assets. The Trustees declare separate dividends on each class of shares. The following significant accounting policies are consistently followed by the fund in preparing its financial statements, and such policies are in conformity with accounting principles generally accepted in the United States of America. A. Investment Valuation Values for listed equity securities reflect final sales on national securities exchanges quoted prior to the close of the New York Stock Exchange. Over-the-counter securities quoted on the National Association of Securities Dealers Automated Quotation ("Nasdaq") system are valued at closing prices supplied through such system. If not quoted on the Nasdaq system, such securities are valued at prices obtained from independent brokers. In the absence of recorded sales, valuations are at the mean of the closing bid and asked quotations. Short-term securities maturing within sixty days are valued at amortized cost. Other securities, if any, are valued at their fair value as determined in good faith under consistently applied procedures established by and under the supervision of the Trustees. In the event that the market quotations for a portfolio instrument are not deemed to be readily available, the Adviser's Valuation Committee determines the fair value for such portfolio instrument. The fair value of any such portfolio instruments are determined based upon a consideration of all available facts and information. The fair valuation of a restricted portfolio instrument reflects the inherent worth of the portfolio instrument, without regard to the restrictive feature, adjusted for any diminution in value resulting from the restrictive feature. The Adviser and the custodian also monitor domestic and foreign markets 10 The notes are an integral part of the financial statements. Notes (continued) - -------------------------------------------------------------------------------- and news information for any developing events that may have an impact on the valuation of portfolio instruments. Such monitoring includes general market news and financial market information sources currently utilized in making investment decisions, trading and investment personnel located abroad, foreign regional brokers, and/or foreign custodians. The value assigned to these securities is based upon available information at the time, and does not necessarily represent the amount which might ultimately be realized upon sale. B. Security Transactions Security transactions are accounted for on the trade date (date the order to buy or sell is executed). Realized gains or losses are reported on the basis of identified cost of securities delivered. C. Net Investment Income Net investment income is determined daily and consists of interest and dividends accrued and discount earned, less the estimated daily expenses of the fund. Interest income is accrued daily as earned. Dividend income is accrued on the ex-dividend date. The fund is charged for expenses directly attributable to it, while indirect expenses are allocated among all funds in the Trust. D. Dividends Dividends from net investment income are declared and paid or reinvested annually. Net realized capital gains, if any, are distributed annually, unless additional distributions are required for compliance with applicable tax regulations. Income dividends and capital gains distributions are determined in accordance with federal income tax regulations which may differ from accounting principles generally accepted in the United States of America. The difference is primarily due to differing treatments for wash sale deferrals. E. Federal Income Taxes No provision for federal income taxes is necessary because the fund has elected to qualify under Subchapter M of the Internal Revenue Code and its policy is to distribute all of its taxable income, including net realized capital gains, within the prescribed time periods. At October 31, 2004, the fund had a capital loss carryforward of $126,954,013 available, to the extent provided in regulations, to offset future capital gains, if any, of which $32,276,168, $76,300,059 and $18,377,786 expire on October 31, 2009, 2010 and 2011, respectively. A portion of the losses expiring in 2009, 2010 and 2011, which amounted to $32,276,168, $30,166,954 and $2,078,939, respectively, were acquired in connection with the merger of the State Street Research Large-Cap Growth Fund. Future utilization of these losses may be limited under current tax laws. To the extent book/tax differences are permanent in nature, such amounts are reclassified within the capital accounts based on federal tax basis treatment. The fund reclassified for book purposes amounts arising from permanent book/tax differences primarily relating to net operating losses. At October 31, 2004, the components of distributable earnings on a tax basis differ from the amounts reflected in the Statement of Assets and Liabilities by temporary book/tax differences largely arising from wash sales and capital loss carryforwards. At October 31, 2004, the tax basis distributable earnings were $0 in undistributed ordinary income, $0 in undistributed short-term capital gains and $0 in undistributed long-term gains. F. Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from these estimates. G. Securities Lending The fund may seek additional income by lending portfolio securities to qualified institutions. The fund will receive cash or securities as collateral in an amount equal to at least 100% of the current market value of any loaned securities plus accrued interest. By reinvesting any cash collateral it receives in these transactions, the fund could realize additional gains and losses. If the borrower fails to return the securities and the value of the collateral has declined during the term of the loan, the fund will bear the loss. At October 31, 2004, the value of the securities loaned and the value of collateral were $14,705,714 and $15,168,558 (consisting entirely of cash collateral invested in State Street Navigator Securities Lending Prime Portfolio), respectively. The collateral was marked to market the next business day and made equal to at least 100% of the current market value of the loaned securities and accrued interest. During the year ended October 31, 2004, income from securities lending amounted to $71,531. Note 2 The Trust and the Adviser have entered into an agreement under which the Adviser earns monthly fees at an annual rate of 0.65% of the fund's average net assets. In consideration of these fees, the Adviser furnishes the fund with management, investment advisory, statistical and research facilities and services. The Adviser also pays all salaries, rent and certain other expenses of management. During the year ended October 31, 2004, the fees pursuant to such agreement amounted to $2,172,192. State Street Research Service Center, a division of State Street Research Investment Services, Inc., the Trust's principal underwriter (the "Distributor"), provides certain shareholder services to the fund such as responding to inquiries and instructions from investors with respect to the purchase and redemption of shares of the fund. In addition, MetLife receives a fee for maintenance of the accounts of certain shareholders who are participants in sponsored arrangements, such as employee benefit plans, through or under which shares of the fund may be purchased. Total shareholder service costs are allocated to each fund in the same ratios as the transfer agent costs. During the year ended October 31, 2004, the amount of such expenses allocated to the fund was $276,028. The fund has entered into an arrangement with its custodian whereby credits realized as a result of directed brokerage commissions were used to reduce a portion of the fund's expenses. During the year ended October 31, 2004, the fund's custodian fees were reduced by $9,261 under this arrangement. The fees of the Trustees not currently affiliated with the Adviser amounted to $28,442 during the year ended October 31, 2004. The fund has agreed to pay the Adviser for certain administrative costs incurred in providing other assistance and services to the fund. The fee was based on a fixed amount that has been allocated equally among the State Street Research funds. During the year ended October 31, 2004, the amount of such expenses was $107,908. On February 19, 2004, the Distributor entered into an agreement with the NASD resolving all outstanding issues relating to an investigation by the NASD of the Distributor's email retention practices and supervision of trading activity in shares of the State Street Research funds. The Distributor, without admitting or denying the allegations or the findings set forth in the agreement, and solely for the purposes of the settlement, agreed to the entry of certain findings by the NASD relating to the Distributor's compliance with document retention requirements and the Distributor's supervision of enforcement of shareholder exchange limitations set forth in the funds' prospectuses. The agreement contains no allegations or findings of fraudulent conduct by the Distributor. As part of this agreement the Distributor made a payment to the fund to compensate the fund for losses relating to the exchange of fund shares beyond the annual limit set forth in the fund's prospectus. The payment was allocated among the fund's share classes as follows: $4,676 to Class A; $4,979 to Class B(1); $1,991 to Class B; $1,298 to Class C and $2,763 to Class S. These amounts are shown in the total amount of $15,707 as "Net increase from payment by affiliate" in the Statement of Operations. Note 3 For the year ended October 31, 2004, purchases and sales of securities, exclusive of short-term obligations, aggregated $302,317,661, and $358,435,292, respectively. Note 4 The Trust has adopted plans of distribution pursuant to Rule 12b-1 under the Investment Company Act of 1940. Under the plans, the fund pays annual service fees to the Distributor at a rate of 0.25% of average daily net assets for Class A, Class B(1), Class B, Class C and Class R shares. In addition, the fund pays annual distribution fees of 0.05% of average daily net assets for Class A shares. The fund pays annual distribution fees of 0.75% of average daily net assets for Class B(1), Class B and Class C shares and 0.25% of average net assets for Class R shares. For the period November 1, 2003 through September 30, 2004, the annual service and distribution fees paid by Class B shares had been voluntarily reduced to 0.00%. For the period from October 1, 2004, through October 31, 2004, the annual service and distribution fees paid by Class B shares are 0.25%. The Distributor uses such payments for personal services and/or the maintenance of shareholder accounts, to reimburse securities dealers for distribution and marketing services, to furnish ongoing assistance to investors and to defray a portion of its distribution and marketing expenses. For the year ended October 31, 2004, fees pursuant to such plans amounted to $312,444, $1,047,293, $7,295, $271,737 and $1,187 for Class A, Class B(1), Class B, Class C and Class R shares, respectively. For Class A, Class B and Class C shares, the payments are intended to reimburse the distributor for expenditures incurred under the plan, and any unused payments are returnable to the fund. As of October 31, 2004, there were $2,332,948, $241,187, and $2,895,855 for Class A, B and Class C shares, respectively, of unreimbursed distribution and shareholder servicing related expenses State Street Research Legacy Fund 11 to be carried forward to future plan years. For Class B(1) and Class R shares, the payments compensate the distributor for services and expenditures incurred under the plan, and none of the payments are returnable to the fund. The fund has been informed that the Distributor and MetLife Securities, Inc., a wholly owned subsidiary of MetLife, earned initial sales charges aggregating $119,052 and $513,697, respectively, on sales of Class A shares of the fund during the year ended October 31, 2004, and that MetLife Securities, Inc. earned commissions aggregating $734,473 and $3,391 on sales of Class B(1) and Class C shares, and the Distributor collected contingent deferred sales charges aggregating $239,861, $1,127 and $1,817 on redemptions of Class B(1), Class B and Class C shares, respectively, during the same period. Note 5 MetLife announced that it has entered into an agreement to sell the Adviser as part of a larger transaction to sell MetLife's asset management business to BlackRock, Inc. ("BlackRock"). The acquisition by BlackRock of MetLife's asset management business is expected to occur in the first quarter of 2005. At the time of the closing, the advisory agreement between the fund and the Adviser and the distribution agreement between the fund and the Distributor will be terminated. BlackRock Advisors, Inc. and BlackRock Distributors, Inc., wholly owned subsidiaries of BlackRock, will serve as investment adviser and distributor, respectively. A Special Meeting of Shareholders of the fund has been tentatively scheduled for December 27, 2004. At this meeting, shareholders of the fund will be asked to consider and approve a plan of reorganization between the fund and the BlackRock Legacy Portfolio, a newly created series of the BlackRock Funds. If the proposed reorganization is approved by shareholders of the fund, the BlackRock Legacy Portfolio would acquire substantially all of the assets and liabilities of the fund. In exchange, shareholders of the fund would receive shares of the BlackRock Legacy Portfolio with an aggregate value equivalent to the aggregate net asset value of their fund shares at the time of the transaction. If the proposed reorganization is not approved by shareholders of the fund, the Board of Trustees will need to consider other alternatives relating to the management and operations of the fund, including without limitations, seeking an alternative investment adviser for the fund or seeking shareholder approval to liquidate the fund.* * The foregoing is not an offer to sell, nor a solicitation of an offer to buy, shares of any fund, nor is it a solicitation of any proxy. Note 6 The Adviser recently conducted an internal review regarding the use of fund brokerage commissions in consideration of the distribution of fund shares. In connection with this review, the Adviser determined to reimburse to the fund the entire amount of any such identified brokerage commissions, and reviewed this matter with the Board of Trustees of the fund. On November 30, 2004, a reimbursement in the amount of $294,363 ($0.01 per share) to the fund was made by the Adviser. Note 7 The Trustees have the authority to issue an unlimited number of shares of beneficial interest at $0.001 par value per share. At October 31, 2004, the Adviser held 10,215 Class R shares. These transactions break down by share class as follows: Years ended October 31 ---------------------------------------------------------------- 2004 2003 ---------------------------------------------------------------- Class A Shares Amount Shares Amount - ---------------------------------------------------------------------------------------------------------------------------------- Shares sold 3,279,404 $ 40,701,227 2,808,906 $ 29,638,800 Issued in connection with acquisition of Large-Cap Growth Fund -- -- 1,381,114 12,873,626 Shares redeemed (3,971,029) (48,434,139) (3,231,893) (32,827,334) ------------ ------------ ------------ ------------ Net increase (decrease) (691,625) $ (7,732,912) 958,127 $ 9,685,092 ============ ============ ============ ============
Class B(1) Shares Amount Shares Amount - ---------------------------------------------------------------------------------------------------------------------------------- Shares sold 475,624 $ 5,595,734 915,478 $ 9,067,543 Issued in connection with acquisition of Large-Cap Growth Fund -- -- 1,052,996 9,449,657 Shares redeemed (1,692,058) (19,854,531) (1,917,706) (18,595,910) ------------ ------------ ------------ ------------ Net increase (decrease) (1,216,434) $(14,258,797) 50,768 $ (78,710) ============ ============ ============ ============ Class B Shares Amount Shares Amount - ---------------------------------------------------------------------------------------------------------------------------------- Shares sold 34,539 $ 418,256 147,808 $ 1,489,996 Issued in connection with acquisition of Large-Cap Growth Fund -- -- 1,177,017 10,711,357 Shares redeemed (1,237,599) (14,929,874) (1,237,332) (12,313,930) ------------ ------------ ------------ ------------ Net increase (decrease) (1,203,060) $(14,511,618) 87,493 $ (112,577) ============ ============ ============ ============ Class C Shares Amount Shares Amount - ---------------------------------------------------------------------------------------------------------------------------------- Shares sold 277,077 $ 3,269,502 539,004 $ 5,333,886 Issued in connection with acquisition of Large-Cap Growth Fund -- -- 189,286 1,699,127 Shares redeemed (939,768) (11,076,996) (1,308,159) (12,850,337) ------------ ------------ ------------ ------------ Net decrease (662,691) $ (7,807,494) (579,869) $ (5,817,324) ============ ============ ============ ============ Class R Shares Amount Shares Amount - ---------------------------------------------------------------------------------------------------------------------------------- Shares sold 28,210 $ 349,828 10,222 $ 100,075 Shares redeemed (9,720) (121,213) -- -- ------------ ------------ ------------ ------------ Net increase 18,490 $ 228,615 10,222 $ 100,075 Class R Shares Amount Shares Amount - ---------------------------------------------------------------------------------------------------------------------------------- Shares sold 28,583 $ 361,227 15,143 $ 150,862 Issued in connection with acquisition of Large-Cap Growth Fund -- -- 5,164,031 49,094,754 Shares redeemed (928,675) (11,749,962) (587,753) (6,184,530) ------------ ------------ ------------ ------------ Net increase (decrease) (900,092) $(11,388,735) 4,591,421 $ 43,061,086 ============ ============ ============ ============
12 - ----------- FINANCIAL - ----------- Highlights For a share outstanding throughout each year:
Class A -------------------------------------------------------- Years ended October 31 -------------------------------------------------------- 2004(a)(e) 2003(a) 2002(a)(g ) 2001(a)(g) - ------------------------------------------------------------------------------------------------------------------------ Net asset value, beginning of year ($) 11.91 9.96 11.56 16.39 ---------- ---------- ---------- ---------- Net investment loss ($) (0.08) (0.05) (0.03) (0.05) Net realized and unrealized gain (loss) on investments ($) 0.64 2.00 (1.57) (4.78) ---------- ---------- ---------- ---------- Total from investment operations ($) 0.56 1.95 (1.60) (4.83) ---------- ---------- ---------- ---------- Net asset value, end of year ($) 12.47 11.91 9.96 11.56 ========== ========== ========== ========== Total return (%)(b) 4.70 19.58 (13.84) (29.47) Ratios/Supplemental Data - ------------------------------------------------------------------------------------------------------------------------ Net assets at end of year ($ thousands) 99,435 103,247 76,798 103,774 Expense ratio (%) 1.44 1.38 1.39 1.35 Expense ratio after expense reductions (%) 1.44 1.38 1.38 1.33 Ratio of net investment loss to average net assets (%) (0.62) (0.47) (0.28) (0.39) Portfolio turnover rate (%) 90.86 112.57 30.87 21.61 Class A ----------------------------------------------------- Six months ended Year ended October 31, 2000(a)(f)(g) April 30, 2000(a)(g) - ---------------------------------------------------------------------------------------------------------------- Net asset value, beginning of year ($) 15.99 14.42 ---------- ---------- Net investment loss ($) (0.04) (0.05) Net realized and unrealized gain (loss) on investments ($) 0.44 1.62 ---------- ---------- Total from investment operations ($) 0.40 1.57 ---------- ---------- Net asset value, end of year ($) 16.39 15.99 ========== ========== Total return (%)(b) 2.50 (c) 10.89 Ratios/Supplemental Data - ---------------------------------------------------------------------------------------------------------- Net assets at end of year ($ thousands) 151,920 143,037 Expense ratio (%) 1.34 (d) 1.22 Expense ratio after expense reductions (%) 1.34 (d) 1.21 Ratio of net investment loss to average net assets (%) (0.54)(d) (0.34) Portfolio turnover rate (%) 11.07 33.23
Class B(1) -------------------------------------------------------- Years ended October 31 -------------------------------------------------------- 2004(a)(e) 2003(a) 2002(a)(g) 2001(a)(g) - ------------------------------------------------------------------------------------------------------------------------ Net asset value, beginning of year ($) 11.41 9.61 11.23 16.04 ---------- ---------- ---------- ---------- Net investment loss ($) (0.15) (0.12) (0.11) (0.15) Net realized and unrealized gain (loss) on investments ($) 0.60 1.92 (1.51) (4.66) ---------- ---------- ---------- ---------- Total from investment operations ($) 0.45 1.80 (1.62) (4.81) ---------- ---------- ---------- ---------- Net asset value, end of year ($) 11.86 11.41 9.61 11.23 ========== ========== ========== ========== Total return (%)(b) 3.94 18.73 (14.43) (29.99) Ratios/Supplemental Data - ------------------------------------------------------------------------------------------------------------------------ Net assets at end of year ($ thousands) 97,938 108,125 90,564 129,464 Expense ratio (%) 2.14 2.08 2.09 2.05 Expense ratio after expense reductions (%) 2.14 2.08 2.08 2.03 Ratio of net investment loss to average net assets (%) (1.31) (1.17) (0.98) (1.09) Portfolio turnover rate (%) 90.86 112.57 30.87 21.61 Class B(1) ----------------------------------------------------- Six months ended Year ended October 31, 2000(a)(f)(g) April 30, 2000(a)(g) ----------------------------------------------------- Net asset value, beginning of year ($) 15.71 14.28 ---------- ---------- Net investment loss ($) (0.10) (0.17) Net realized and unrealized gain (loss) on investments ($) 0.43 1.60 ---------- ---------- Total from investment operations ($) 0.33 1.43 ---------- ---------- Net asset value, end of year ($) 16.04 15.71 ========== ========== Total return (%)(b) 2.10 (c) 10.01 Ratios/Supplemental Data - ---------------------------------------------------------------------------------------------------------- Net assets at end of year ($ thousands) 184,818 153,359 Expense ratio (%) 2.04 (d) 1.97 Expense ratio after expense reductions (%) 2.04 (d) 1.96 Ratio of net investment loss to average net assets (%) (1.25)(d) (1.13) Portfolio turnover rate (%) 11.07 33.23
Class B -------------------------------------------------------- Years ended October 31 -------------------------------------------------------- 2004(a)(e) 2003(a) 2002(a)(g) 2001(a)(g) - ------------------------------------------------------------------------------------------------------------------------ Net asset value, beginning of year ($) 11.65 9.72 11.31 16.11 --------- --------- --------- --------- Net investment loss ($) (0.04) (0.01) (0.07) (0.11) Net realized and unrealized gain (loss) on investments ($) 0.62 1.94 (1.52) (4.69) --------- --------- --------- --------- Total from investment operations ($) 0.58 1.93 (1.59) (4.80) --------- --------- --------- --------- Net asset value, end of year ($) 12.23 11.65 9.72 11.31 ========= ========= ========= ========= Total return (%)(b) 4.98 19.86 (14.06) (29.80) Ratios/Supplemental Data: - ------------------------------------------------------------------------------------------------------------------------ Net assets at end of year ($ thousands) 34,648 47,034 38,368 62,244 Expense ratio (%) 1.16 1.08 1.74 1.76 Expense ratio after expense reductions (%) 1.16 1.08 1.73 1.74 Ratio of net investment loss to average net assets (%) (0.33) (0.13) (0.66) (0.80) Portfolio turnover rate (%) 90.86 112.57 30.87 21.61 Class B ----------------------------------------------------- Six months ended Year ended October 31, 2000(a)(f)(g) April 30, 2000(a)(g) - ---------------------------------------------------------------------------------------------------------------- Net asset value, beginning of year ($) 15.74 14.28 ---------- ---------- Net investment loss ($) (0.07) (0.12) Net realized and unrealized gain (loss) on investments ($) 0.44 1.58 ---------- ---------- Total from investment operations ($) 0.37 1.46 ---------- ---------- Net asset value, end of year ($) 16.11 15.74 ========== ========== Total return (%)(b) 2.35 (c) 10.22 Ratios/Supplemental Data: - ---------------------------------------------------------------------------------------------------------- Net assets at end of year ($ thousands) 106,027 109,135 Expense ratio (%) 1.69 (d) 1.77 Expense ratio after expense reductions (%) 1.69 (d) 1.76 Ratio of net investment loss to average net assets (%) (0.89)(d) (0.87) Portfolio turnover rate (%) 11.07 33.23
State Street Research Legacy Fund 13
Class C -------------------------------------------------------- Years ended October 31 -------------------------------------------------------- 2004(a)(e) 2003(a) 2002(a)(g) 2001(a)(g) - ------------------------------------------------------------------------------------------------------------------------ Net asset value, beginning of year ($) 11.41 9.61 11.23 16.05 --------- --------- --------- --------- Net investment loss ($) (0.15) (0.11) (0.11) (0.15) Net realized and unrealized gain (loss) on investments ($) 0.60 1.91 (1.51) (4.67) --------- --------- --------- --------- Total from investment operations ($) 0.45 1.80 (1.62) (4.82) --------- --------- --------- --------- Net asset value, end of year ($) 11.86 11.41 9.61 11.23 ========= ========= ========= ========= Total return (%)(b) 3.94 18.73 (14.43) (30.03) Ratios/Supplemental Data: - ---------------------------------------------------------------------------------------------------------------------- Net assets at end of year ($ thousands) 23,854 30,516 31,274 46,809 Expense ratio (%) 2.14 2.08 2.09 2.05 Expense ratio after expense reductions (%) 2.14 2.08 2.08 2.03 Ratio of net investment loss to average net assets (%) (1.30) (1.15) (0.99) (1.08) Portfolio turnover rate (%) 90.86 112.57 30.87 21.61 Class C ----------------------------------------------------- Six months ended Year ended October 31, 2000(a)(f)(g) April 30, 2000(a)(g) - ---------------------------------------------------------------------------------------------------------------- Net asset value, beginning of year ($) 15.71 14.28 ---------- ---------- Net investment loss ($) (0.10) (0.16) Net realized and unrealized gain (loss) on investments ($) 0.44 1.59 ---------- ---------- Total from investment operations ($) 0.34 1.43 ---------- ---------- Net asset value, end of year ($) 16.05 15.71 ========== ========== Total return (%)(b) 2.16 (c) 10.01 Ratios/Supplemental Data: - ---------------------------------------------------------------------------------------------------------- Net assets at end of year ($ thousands) 76,137 69,061 Expense ratio (%) 2.04 (d) 1.97 Expense ratio after expense reductions (%) 2.04 (d) 1.96 Ratio of net investment loss to average net assets (%) (1.24)(d) (1.10) Portfolio turnover rate (%) 11.07 33.23
Class R ----------------------------------------------------- Year ended October 31, 2004(a)(e) 2003(a)(h) - ---------------------------------------------------------------------------------------------------------------- 11.90 9.79 Net asset value, beginning of year ($) -- -- Net investment loss ($) (0.10) (0.05) Net realized and unrealized gain on investments ($) 0.62 2.16 ---------- ---------- Total from investment operations ($) 0.52 2.11 ---------- ---------- Net asset value, end of year ($) 12.42 11.90 ========== ========== Total return (%)(b) 4.37 21.55 (c) Ratios/Supplemental Data - ---------------------------------------------------------------------------------------------------------- Net assets at end of year ($ thousands) 357 122 Expense ratio (%) 1.64 1.58 (d) Expense ratio after expense reductions (%) 1.64 1.58 (d) Ratio of net investment loss to average net assets (%) (0.82) (0.79)(d) Portfolio turnover rate (%) 90.86 112.57
Class S ------------------------------------------------------ Years ended October 31 ------------------------------------------------------ 2004(a)(e) 2003(a) 2002(a)(g) 2001(a)(g) - ------------------------------------------------------------------------------------------------------------------------ Net asset value, beginning of year ($) 12.17 10.14 11.74 16.61 --------- --------- --------- --------- Net investment income (loss) ($) (0.04) (0.02) 0.00 (0.01) Net realized and unrealized gain (loss) on investments ($) 0.65 2.05 (1.60) (4.86) --------- --------- --------- --------- Total from investment operations ($) 0.61 2.03 (1.60) (4.87) --------- --------- --------- --------- Net asset value, end of year ($) 12.78 12.17 10.14 11.74 ========= ========= ========= ========= Total return (%)(b) 5.01 20.02 (13.63) (29.32) Ratios/Supplemental Data - ------------------------------------------------------------------------------------------------------------------------ Net assets at end of year ($ thousands) 52,399 60,878 4,161 5,077 Expense ratio (%) 1.14 1.08 1.09 1.05 Expense ratio after expense reductions (%) 1.14 1.08 1.08 1.03 Ratio of net investment income (loss) to average net assets (%) (0.31) (0.19) 0.03 (0.09) Portfolio turnover rate (%) 90.86 112.57 30.87 21.61 Class S ----------------------------------------------------- Six months ended Year ended October 31, 2000(a)(f)(g) April 30, 2000(a)(g) ----------------------------------------------------- Net asset value, beginning of year ($) 16.09 14.48 ---------- ---------- Net investment income (loss) ($) (0.02) (0.00) Net realized and unrealized gain (loss) on investments ($) 0.54 1.61 ---------- ---------- Total from investment operations ($) 0.52 1.61 ---------- ---------- Net asset value, end of year ($) 16.61 16.09 ========== ========== Total return (%)(b) 3.23 (c) 11.12 Ratios/Supplemental Data - ---------------------------------------------------------------------------------------------------------- Net assets at end of year ($ thousands) 7,126 8,097 Expense ratio (%) 1.04 (d) 0.97 Expense ratio after expense reductions (%) 1.04 (d) 0.96 Ratio of net investment income (loss) to average net assets (%) (0.24)(d) (0.06) Portfolio turnover rate (%) 11.07 33.23
(a) Per-share figures have been calculated using the average shares method. (b) Does not reflect any front-end or contingent deferred sales charges. (c) Not annualized (d) Annualized (e) During the year ended October 31, 2004, the Distributor made restitution payments to the fund as part of a settlement with NASD. These payments had no effect on net realized and unrealized gain on investments per share. (f) Effective August 2, 2000, the fiscal year end of the fund changed from April 30 to October 31. (g) Audited by other auditors (h) April 3, 2003 (commencement of share class) to October 31, 2003 14 - ----------- REPORT OF - ----------- Independent Registered Public Accounting Firm To the Board of Trustees and Shareholders of State Street Research Legacy Fund: We have audited the accompanying statement of assets and liabilities, including the portfolio holdings, of State Street Research Legacy Fund (the "Fund"), a series of State Street Research Securities Trust, as of October 31, 2004, and the related statement of operations for the year then ended, and the statement of changes in net assets and the financial highlights for each of the two years in the period then ended. These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. The financial highlights for each of the years in the two-year period ended October 31, 2002, the six months ended October 31, 2000, and the year ended April 30, 2000, were audited by other auditors whose report dated December 13, 2002, expressed an unqualified opinion on such financial highlights. We conducted our audits in accordance with 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 and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of October 31, 2004, by correspondence with the custodian and brokers; where replies were not received from brokers, we performed other auditing procedures. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the Fund as of October 31, 2004, the results of its operations for the year then ended and the changes in its net assets and the financial highlights for each of the two years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. DELOITTE & TOUCHE LLP Boston, Massachusetts December 17, 2004 State Street Research Legacy Fund 15 - ------------- PERFORMANCE - -------------- Discussion as of October 31, 2004 (continued from page 3) Performance: Class B(1) - -------------------------------------------------------------------------------- Fund average annual total return as of 10/31/04 (does not reflect sales charge)
Life of Fund 1 Year 5 Years (12/31/97) - -------------------------------------------------------------------------------- Return Before Taxes 3.94% -3.85% 2.53% - -------------------------------------------------------------------------------- Return After Taxes on Distributions 3.94% -3.84% 2.53% - -------------------------------------------------------------------------------- Return After Taxes on Distributions and Sale of Fund Shares 2.56% -3.23% 2.17% - --------------------------------------------------------------------------------
Fund average annual total return as of 9/30/04 (at maximum applicable sales charge)
Life of Fund 1 Year 5 Years (12/31/97) - -------------------------------------------------------------------------------- Return Before Taxes 4.97% -3.61% 2.35% - -------------------------------------------------------------------------------- Return After Taxes on Distributions 4.97% -3.61% 2.34% - -------------------------------------------------------------------------------- Return After Taxes on Distributions and Sale of Fund Shares 3.23% -3.03% 2.01% - --------------------------------------------------------------------------------
Performance: Class C - -------------------------------------------------------------------------------- Fund average annual total return as of 10/31/04 (does not reflect sales charge)
Life of Fund 1 Year 5 Years (12/31/97) - -------------------------------------------------------------------------------- Return Before Taxes 3.94% -3.85% 2.53% - -------------------------------------------------------------------------------- Return After Taxes on Distributions 3.94% -3.84% 2.53% - -------------------------------------------------------------------------------- Return After Taxes on Distributions and Sale of Fund Shares 2.56% -3.23% 2.17% - --------------------------------------------------------------------------------
Fund average annual total return as of 9/30/04 (at maximum applicable sales charge)
Life of Fund 1 Year 5 Years (12/31/97) - -------------------------------------------------------------------------------- Return Before Taxes 8.97% -3.22% 2.35% - -------------------------------------------------------------------------------- Return After Taxes on Distributions 8.97% -3.22% 2.34% - -------------------------------------------------------------------------------- Return After Taxes on Distributions and Sale of Fund Shares 5.83% -2.71% 2.01% - --------------------------------------------------------------------------------
Performance: Class S - -------------------------------------------------------------------------------- Fund average annual total return as of 10/31/04 (does not reflect sales charge)
Life of Fund 1 Year 5 Years (12/31/97) - -------------------------------------------------------------------------------- Return Before Taxes 5.01% -2.76% 3.66% - -------------------------------------------------------------------------------- Return After Taxes on Distributions 5.01% -2.76% 3.66% - -------------------------------------------------------------------------------- Return After Taxes on Distributions and Sale of Fund Shares 3.26% -2.32% 3.16% - --------------------------------------------------------------------------------
Fund average annual total return as of 9/30/04 (at maximum applicable sales charge)
Life of Fund 1 Year 5 Years (12/31/97) - -------------------------------------------------------------------------------- Return Before Taxes 11.03% -2.14% 3.46% - -------------------------------------------------------------------------------- Return After Taxes on Distributions 11.03% -2.14% 3.46% - -------------------------------------------------------------------------------- Return After Taxes on Distributions and Sale of Fund Shares 7.17% -1.81% 2.98% - --------------------------------------------------------------------------------
Performance: Class B - -------------------------------------------------------------------------------- Fund average annual total return as of 10/31/04 (does not reflect sales charge)
Life of Fund 1 Year 5 Years (12/31/97) - -------------------------------------------------------------------------------- Return Before Taxes 4.98% -3.25% 2.99% - -------------------------------------------------------------------------------- Return After Taxes on Distributions 4.98% -3.25% 2.99% - -------------------------------------------------------------------------------- Return After Taxes on Distributions and Sale of Fund Shares 3.24% -2.73% 2.58% - --------------------------------------------------------------------------------
Fund average annual total return as of 9/30/04 (at maximum applicable sales charge)
Life of Fund 1 Year 5 Years (12/31/97) - -------------------------------------------------------------------------------- Return Before Taxes 6.07% -3.06% 2.79% - -------------------------------------------------------------------------------- Return After Taxes on Distributions 6.07% -3.05% 2.79% - -------------------------------------------------------------------------------- Return After Taxes on Distributions and Sale of Fund Shares 3.95% -2.57% 2.40% - --------------------------------------------------------------------------------
Performance: Class R - -------------------------------------------------------------------------------- Fund average annual total return as of 10/31/04 (does not reflect sales charge)
Life of Fund 1 Year 5 Years (12/31/97) - -------------------------------------------------------------------------------- Return Before Taxes 4.37% -3.22% 3.23% - -------------------------------------------------------------------------------- Return After Taxes on Distributions 4.37% -3.22% 3.22% - -------------------------------------------------------------------------------- Return After Taxes on Distributions and Sale of Fund Shares 2.84% -2.71% 2.78% - --------------------------------------------------------------------------------
Fund average annual total return as of 9/30/04 (at maximum applicable sales charge) Life of Fund 1 Year 5 Years (12/31/97) - -------------------------------------------------------------------------------- Return Before Taxes 10.57% -2.60% 3.04% - -------------------------------------------------------------------------------- Return After Taxes on Distributions 10.57% -2.59% 3.04% - -------------------------------------------------------------------------------- Return After Taxes on Distributions and Sale of Fund Shares 6.87% -2.19% 2.62% - --------------------------------------------------------------------------------
Keep in mind that the performance data quoted represents past performance and is no guarantee of future results. Current performance may be lower or higher than the performance data quoted herein. For the most recent month-end performance results, visit our website at www.ssrfunds.com. The fund's share price, yield and return will fluctuate, and you may have a gain or loss when you sell your shares. All returns assume reinvestment of capital gains distributions and income dividends at net asset value. Performance for Class B(1) shares reflects Class B share performance through December 31, 1998, and Class B(1) performance thereafter. Performance for Class R shares reflects Class A share performance through April 2, 2003, and Class R share performance thereafter. If the returns for Class B(1) and Class R shares had reflected their current service/distribution (Rule 12b-1) fees for the entire period, these returns would have been lower. Average annual total return without sales charge does not reflect the maximum applicable sales charges. If the applicable sales charges were deducted, performance would be lower. Average annual total return at maximum applicable sales charge reflects a maximum 5.75% Class A front-end sales charge, or 5% Class B or Class B(1) share or 1% Class C share contingent deferred sales charge, where applicable. Ater-tax returns are calculated using the highest historical federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor's tax situation and may differ from those shown, and after-tax returns shown are not relevant to investors who hold their fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts (IRAs). Return After Taxes on Distributions and Sales of Fund Shares for a period may be greater than or equal to Return After Taxes on Distributions for the same period because of losses realized on the sale of fund shares. Class R and Class S shares, offered without sales charge, are only available through retirement plans and through special programs. 16 - ------------------------ TRUSTEES AND OFFICERS - ------------------------ State Street Research Securities Trust
Number of Funds in Fund Complex Name, Position(s) Term of Office Overseen Other Address Held with and Length of Principal Occupations by Trustee/ Directorships Held and Age(a) Fund Time Served(b) During Past 5 Years Officer(c) by Trustee/Officer - ------------------------------------------------------------------------------------------------------------------------------------ Independent Trustees Bruce R. Bond Trustee Since Retired; formerly Chairman of the Board, 18 Avaya Inc. (58) 1999 Chief Executive Officer and President, PictureTel Corporation (video conferencing systems) - ------------------------------------------------------------------------------------------------------------------------------------ Peter S. Drotch Trustee Since Retired, formerly Partner, 18 First Marblehead Corp. (62) 2004 PricewaterhouseCoopers LLP - ------------------------------------------------------------------------------------------------------------------------------------ Steve A. Garban Trustee Since Retired; formerly Senior Vice President 52 Metropolitan Series (67) 1997 for Finance and Operations and Treasurer, Fund, Inc. and The Pennsylvania State University Metropolitan Series Fund II - ------------------------------------------------------------------------------------------------------------------------------------ Susan M. Phillips Trustee Since Dean, School of Business and Public 18 The Kroger Co. (60) 1999 Management, George Washington University; formerly a member of the Board of Governors of the Federal Reserve System; and Chairman and Commissioner of the Commodity Futures Trading Commission - ------------------------------------------------------------------------------------------------------------------------------------ Toby Rosenblatt Trustee Since President, Founders Investments Ltd. 52 A.P. Pharma, Inc.; (66) 1994 (investments); President, Pacific Four Metropolitan Series Investments (investments); formerly Fund, Inc.; and President, The Glen Ellen Company (private Metropolitan Series investment firm) Fund II - ------------------------------------------------------------------------------------------------------------------------------------ Michael S. Scott Trustee Since Jay W. Forrester Professor of Management 52 Metropolitan Series Morton (67) 1994 (Emeritus), Sloan School of Management, Fund, Inc. and Massachusetts Institute of Technology Metropolitan Series Fund II - ------------------------------------------------------------------------------------------------------------------------------------ Interested Trustees Richard S. Davis(+) Trustee Since Chairman of the Board, President and Chief 18 None (59) 2000 Executive Officer of State Street Research & Management Company; formerly Senior Vice President, Fixed Income Investments, Metropolitan Life Insurance Company - ------------------------------------------------------------------------------------------------------------------------------------ Officers Edward Dowd Vice Since Vice President of State Street Research & 6 None (37) President 2003 Management Company, formerly Vice President, Independence Investment LLC and equity research associate, Donaldson, Lufkin and Jenrette - ------------------------------------------------------------------------------------------------------------------------------------ C. Kim Goodwin Vice Since Managing Director and Chief Investment 17 Akamai Technologies (45) President 2002 Officer - Equities of State Street Inc. Research & Management Company; formerly Chief Investment Officer - U.S. Growth Equities, American Century - ------------------------------------------------------------------------------------------------------------------------------------ Jeffrey Lindsey Vice Since Managing Director of State Street Research 6 None (42) President 2003 & Management Company, 6 (42) formerly Managing Director and Senior Vice President, Putnam Investments - ------------------------------------------------------------------------------------------------------------------------------------ John S. Lombardo Vice Since Managing Director, Chief Financial Officer 18 None (50) President 2001 and Director of State Street Research & Management Company; formerly Executive Vice President, State Street Research & Management Company; and Senior Vice President, Product and Financial Management, MetLife Auto & Home - ------------------------------------------------------------------------------------------------------------------------------------ Denis J. Walsh III Vice Since Managing Director of State Street Research 2 None (44) President 2003 & Management Company; formerly Senior Research Analyst, Fleet Investment Advisors - ------------------------------------------------------------------------------------------------------------------------------------ Douglas A. Romich Treasurer Since Senior Vice President and Treasurer of 18 None (47) 2001 State Street Research & Management Company; formerly Vice President and Assistant Treasurer, State Street Research & Management Company - ------------------------------------------------------------------------------------------------------------------------------------
The fund's Statement of Additional Information includes additional information about the fund's trustees, and is available without charge by contacting State Street Research, One Financial Center, Boston, Massachusetts 02111-2690, or by calling toll-free 1-87-SSR-FUNDS (1-877-773-8637). (a) The address of each person is c/o State Street Research & Management Company, One Financial Center, Boston, MA 02111-2690. (b) A Trustee serves until he or she retires, resigns or is removed as provided in the master trust agreement of the respective Trust. Each Trust has adopted a mandatory retirement age of 72. Each officer holds office until he or she resigns, is removed or a successor is elected. (c) Includes all series of 9 investment companies for which State Street Research & Management Company serves as sole investment adviser and all series of Metropolitan Series Fund, Inc. and Metropolitan Series Fund II. The primary adviser to Metropolitan Series Fund, Inc. and Metropolitan Series Fund II is MetLife Advisers, LLC, which has retained State Street Research & Management Company as sub-adviser to certain series of Metropolitan Series Fund, Inc. (+) Mr. Davis is an "interested person" of the Trust under the Investment Company Act of 1940 by reason of his affiliation with the Trust's Investment Manager, State Street Research & Management Company, as noted. State Street Research Legacy Fund 17 [LOGO] STATE STREET RESEARCH -------------- One Financial Center PRSRT STD Boston, MA 02111-2690 U.S. POSTAGE PAID PERMIT #6 HUDSON, MA -------------- - -------------------------------------------------------------------------------- New accounts, mutual fund purchases, exchanges and account information Internet www.ssrfunds.com E-mail info@ssrfunds.com Phone 1-87-SSR-FUNDS (1-877-773-8637), toll-free, 7 days a week, 24 hours a day Hearing-impaired: 1-800-676-7876 Fax 1-617-737-9722 (request confirmation number first from the Service Center by calling 1-877-773-8637) Mail State Street Research Service Center P.O. Box 8408, Boston, MA 02266-8408 Did You Know? State Street Research offers electronic delivery of quarterly statements, shareholder reports and fund prospectuses. If you elect this option, we will send these materials to you via e-mail. To learn more, visit us on the Web at www.ssrfunds.com and click on "Go to Your Account" or call us at 1-87-SSR-FUNDS (1-877-773-8637). Did you know that you can give a State Street Research mutual fund as a gift? Call a service center representative at 1-87-SSR-FUNDS (1-877-773-8637), Monday through Friday, 8am-6pm eastern time, to learn more. - -------------------------------------------------------------------------------- Investors should carefully consider the fund's investment objective, risks, charges and expenses before investing. The fund's prospectus contains more complete information on these and other matters. A prospectus for any State Street Research fund is available through your financial professional, by calling toll-free 1-87-SSR-FUNDS (1-877-773-8637) or by visiting our website at www.ssrfunds.com. Please read the prospectus carefully before investing. OverView For more information on the products and services we offer, refer to OverView, our quarterly shareholder newsletter. Webcasts For a professional perspective on the markets, the economy and timely investment topics, tune in to a State Street Research webcast by visiting our website at www.ssrfunds.com. Complete Fund Listing For a list of our funds, visit our website at www.ssrfunds.com under Research Our Funds. [GRAPHIC] for Excellence in Shareholder Communications [GRAPHIC] for Excellence in Service This report must be accompanied or preceded by a current prospectus. When used as sales material after December 31, 2004, this report must be accompanied by a current Quarterly Performance Update. "State Street Research Proxy Voting policies and proceures" -- which describes how we vote proxies relating to portfolio securities -- is available upon request free of charge by calling the State Street Research Center toll free at 1-87-SSR-FUNDS (1-877-773-8637) or by accessing the U.S. Security Exchange Commission website at www.sec.gov. The DALBAR awards recognize quality shareholder service and quality shareholder communications, and should not be considered a rating of fund performance. The survey included mutual fund complexes that volunteered or were otherwise selected to participate and was not industrywide. Member NASD, SIPC (C)2004 State Street Research Investment Services, Inc. One Financial Center Boston, MA 02111-2690 www.ssrfunds.com CONTROL NUMBER:(exp1205)SSR-LD LF-2851-1204 FORM N-CSR(2 OF 3) ITEM 2: CODE OF ETHICS (a) The Registrant has, as of the end of the period covered by this report, adopted a code of ethics pursuant to Section 406 of the Sarbanes-Oxley Act and as defined in the instructions to Form N-CSR that applies to the Registrant's principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the Registrant or a third party. (b) Omitted (c) During the period covered by this report, there were not any amendments to the provisions of the code of ethics adopted in 2(a) above. (d) During the period covered by this report, there were not any waivers or implicit waivers to a provision of the code of ethics adopted in 2(a) above. (e) Not applicable. (f) Not applicable. ITEM 3: AUDIT COMMITTEE FINANCIAL EXPERT The Registrant's Board of Trustees has determined that Steve A. Garban, a member of the Registrant's Board of Trustees and Audit Committee, qualifies as an "audit committee financial expert" as such term is defined in the instructions to Form N-CSR. Mr. Garban is "independent", as defined in the instructions to Form N-CSR. ITEM 4: PRINCIPAL ACCOUNTANT FEES AND SERVICES
(a) Audit Fee Fiscal year ended October 31, 2003 $23,000 Fiscal year ended October 31, 2004 $25,000 (b) Audit-Related Fees - Represents fees for assurance and related services related to the audit of the registrant's financial statements. Fiscal year ended October 31, 2003 $0 Fiscal year ended October 31, 2004 $0 (c) Tax Fees - Represents fees for professional services rendered by the principal accountant for tax compliance, tax provision review, and the tax return preparation. Fiscal year ended October 31, 2003 $3,500 Fiscal year ended October 31, 2004 $4,000 (d) All other fees - Represents fees paid to Deloitte & Touche LLP to provide a special review of late trading, market timing and related issues concerning the Registrant. Fiscal year ended October 31, 2003 $0 Fiscal year ended October 31, 2004 $14,000
The Registrant's independent accountants, Deloitte & Touche LLP, did not bill fees for audit-related, tax, or other non-audit services that required pre-approval by the Audit Committee pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X during the Registrant's last two fiscal years. (e)(1) The Audit Committee has determined that all work performed for the Registrant by Deloitte & Touche LLP will be pre-approved by the full Audit Committee and, therefore, has not adopted pre-approval procedures. (2) None. (f) Not applicable. (g) Non-Audit Fees - Represents fees for audit-related, tax and other non-audit services rendered by the principal accountant to the Registrant, the Registrant's investment adviser and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the Registrant. Fiscal Year Ended October 31, 2003 $ 3,500 Fiscal Year Ended October 31, 2004 $64,000 (h) The Audit Committee of the Registrant has considered whether the non-audit services that were rendered by the Registrant's principal accountant to the Registrant's investment adviser (not including any subadviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser) and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the Registrant and that were not pre-approved by the Audit Committee are compatible with maintaining the principal accountant's independence. ITEM 5: AUDIT COMMITTEE OF LISTED REGISTRANTS Not applicable. ITEM 6: SCHEDULE OF INVESTMENTS Not applicable. ITEM 7: DISCLOSURE OF PROXY VOTING POLICIES & PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES Not applicable. ITEM 8: PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS Not applicable. ITEM 9: SUBMISSION OF MATTERS TO A VOTE OF SECURITIY HOLDERS The Governance Committee will consider nominees recommended by shareholders. Shareholders may submit recommendations to the attention of the Secretary of the Trust, State Street Research & Management Company, One Financial Center, 30th Floor, Boston MA 02111. ITEM 10: CONTROLS AND PROCEDURES (a) The Registrant's principal executive and principal financial officers have concluded, based on their evaluation of the Registrant's disclosure controls and procedures as of a date within 90 days of the filing date of this report, that the Registrant's disclosure controls and procedures are reasonably designed to ensure that information required to be disclosed by the Registrant on Form N-CSR is recorded, processed, summarized and reported within the required time periods and that information required to be disclosed by the Registrant in the reports that it files or submits on Form N-CSR is accumulated and communicated to the Registrant's management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. (b) There were no changes in the Registrant's internal control over financial reporting during the Registrant's second fiscal half-year that have materially affected, or are reasonably likely to materially affect, the internal control over financial reporting. ITEM 11: EXHIBITS (a)(1) Code of Ethics required to be disclosed under Item 2 of Form N-CSR attached hereto as Exhibit 99.CODE ETH (a)(2) Certification for each principal executive and principal financial officer of the Registrant required by Rule 30a-2(a) under the Investment Company Act of 1940, as amended (17 CFR 270.30a-2(a)) attached hereto as Exhibit 99.302CERT (b) Certification required by Rule 30a-2(b) under the Investment Company Act of 1940, as amended (17 CFR 270.30a-2(b)) attached hereto as Exhibit 99.906CERT 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. State Street Research Securities Trust By: /s/ Richard S. Davis ------------------------------------------------------ Richard S. Davis, President, Chairman and Chief Executive Officer Principal Executive Officer Date January 6, 2005 ------------------------------------------------------ FORM N-CSR(3 OF 3) Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities, and on the dates indicated. By: /s/ Richard S. Davis ------------------------------------------------------ Richard S. Davis, President, Chairman and Chief Executive Officer Principal Executive Officer Date January 6, 2005 ------------------------ By: /s/ Douglas A. Romich ------------------------------------------------------ Douglas A. Romich, Treasurer Principal Financial Officer Date January 6, 2005 ------------------------ EX-99.CODEETH 2 a2149463zex-99_codeeth.txt EX-99.CODE ETH Exhibit 99.CODE ETH STATE STREET RESEARCH FUNDS FINANCIAL OFFICER CODE OF PROFESSIONAL CONDUCT INTRODUCTION The reputation and integrity of the State Street Research Funds (the "Funds") are valuable assets that are vital to the Funds' success. Each Fund's senior financial officers ("SFOs") are responsible for conducting the Fund's business in a manner that demonstrates a commitment to the highest standards of integrity. A Fund's SFOs include the principal executive officer, the principal financial officer, comptroller or principal accounting officer, and any person who performs a similar function. The Sarbanes-Oxley Act of 2002 (the "Act") effected sweeping corporate disclosure and financial reporting reform on public companies, including mutual funds, to address corporate malfeasance and assure investors that the companies in which they invest are accurately and completely disclosing financial information. Under the Act, all public companies (including the Funds) must either have a code of ethics for their SFOs, or disclose why they do not. The Act was intended to foster corporate environments that encourage employees to question unethical and potentially illegal business practices. Each Fund has chosen to adopt a financial officer code of ethics to encourage its SFOs to act ethically and to question potentially unethical or illegal practices, and to strive to ensure that the Fund's financial disclosures are complete, accurate, and understandable. This Code of Ethics should be read in conjunction with the Fund's other policy statements, including the Code of Ethics adopted pursuant to Rule 17j-1 under the Investment Company Act of 1940. PURPOSES OF THE CODE The purposes of this Code are: - To promote honest and ethical conduct among the Fund's SFOs, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships; - To assist SFOs to recognize and avoid conflicts of interest, including disclosure to an appropriate person of any material transaction or relationship that reasonably could be expected to give rise to such a conflict; - To promote full, fair, accurate, timely, and understandable disclosure in reports and documents that the Fund files with, or submits to, the SEC and in other public communications the Fund makes; - To promote compliance with applicable laws, rules and regulations; - To encourage the prompt internal reporting to an appropriate person of violations of the Code; and - To establish accountability for adherence to the Code. QUESTIONS ABOUT THIS CODE The Board of Trustees of each Fund has designated the Secretary of the Fund to be the Compliance Officer for the implementation and administration of the Code. You should direct your questions about this Code to the Compliance Officer. CONDUCT GUIDELINES Each Fund has adopted the following guidelines under which its SFOs must perform their duties and conduct the business affairs of the Funds. Persons subject to this requirement include the principal executive officer, the principal financial officer, comptroller or principal accounting officer, and any person who performs a similar function. However, the Fund expects that ALL persons who participate in the preparation of any part of the Fund's financial statements follow these guidelines: - ETHICAL AND HONEST CONDUCT IS OF PARAMOUNT IMPORTANCE. The Fund's SFOs must act with honesty and integrity and avoid violations of this Code, including actual or apparent conflicts of interest with the Fund in personal and professional relationships. - SFOS MUST DISCLOSE MATERIAL TRANSACTIONS OR RELATIONSHIPS. The Fund's SFOs must disclose to the Fund's Compliance Officer any material transaction or relationship that reasonably could be expected to give rise to any violations of the Code, including actual or apparent conflicts of interest with the Fund. You should disclose these transactions or relationships whether you are involved or have only observed the transaction or relationship. If it is not possible to disclose the matter to the Compliance Officer, it should be disclosed to the Fund's Chief Financial Officer or Chief Executive Officer. - STANDARDS FOR QUALITY OF INFORMATION SHARED WITH FUND SERVICE PROVIDERS. The Fund's SFOs must at all times seek to provide information to the Fund's other employees and service providers (adviser, administrator, outside auditor, outside counsel, custodian, ETC.) that is accurate, complete, objective, relevant, timely, and understandable. - STANDARDS FOR QUALITY OF INFORMATION INCLUDED IN PERIODIC REPORTS. The Fund's SFOs must at all times endeavor to ensure full, fair, timely, accurate, and understandable disclosure in the Fund's periodic reports. 2 - COMPLIANCE WITH LAWS. The Fund's SFOs must comply with the federal securities laws and other applicable laws and rules, such as the Internal Revenue Code. - STANDARD OF CARE. The Fund's SFOs must at all times act in good faith, responsibly, and with due care, competence and diligence, without misrepresenting material facts or allowing your independent judgment to be subordinated. - CONFIDENTIALITY OF INFORMATION. The Fund's SFOs must at all times respect the confidentiality of information acquired in the course of their professional duties, except when authorized by the Fund to disclose it or where disclosure is otherwise legally mandated. You may not use confidential information acquired in the course of your work for personal advantage. - SHARING OF INFORMATION AND ETHICAL STANDARDS. The Fund's SFOs should share information with relevant parties to keep them informed of the business affairs of the Fund, as appropriate, and maintain skills important and relevant to the Fund's needs. - PROMOTE ETHICAL CONDUCT. The Fund's SFOs should at all times proactively promote ethical behavior among peers in the work environment. - STANDARDS FOR RECORDKEEPING. The Fund's SFOs must at all times endeavor to ensure that the Fund's books and records are thoroughly and accurately maintained to the best of their knowledge in a manner consistent with applicable laws and this Code. WAIVERS OF THIS CODE You may request a waiver of a provision of this Code by submitting your request in writing to the Compliance Officer for appropriate review. For example, if a family member works for a service provider that prepares the Fund's financial statements, you may have a potential conflict of interest in reviewing those statements and should seek a waiver of this Code to review the work. An executive officer of the Fund or the Audit Committee will decide whether to grant a waiver. All waivers of this Code must be disclosed to the Fund's shareholders to the extent required by SEC rules. ANNUAL CERTIFICATION To the extent necessary, the Fund's Compliance Officer will provide guidance on the conduct required by this Code and the manner in which violations must be reported and waivers must be requested. Each SFO will be asked to certify on an annual basis that he/she is in full compliance with this Code. 3 REPORTING SUSPECTED VIOLATIONS SFOs who observe, learn of, or, in good faith, suspect a violation of the Code MUST immediately report the violation to the Compliance Officer, another member of the Fund's senior management, or to the Audit Committee of the Board. An example of a possible Code violation is the preparation and filing of financial disclosure that omits material facts, or that is accurate but is written in a way that obscures its meaning. Because service providers such as the adviser, outside accounting firm, and custodian provide much of the work relating to the Fund's financial statements, the Fund's SFOs should be alert for actions by service providers that may be illegal, or that could be viewed as dishonest or unethical conduct. A SFO should report these actions to the Compliance Officer even if you know, or think, that the service provider has its own code of ethics for its SFOs or employees. SFOs who report violations or suspected violations in good faith will not be subject to retaliation of any kind. Reported violations will be investigated and addressed promptly and will be treated confidentially to the extent possible. VIOLATIONS OF THE CODE Dishonest or unethical conduct or conduct that is illegal will constitute a violation of this Code, regardless of whether this Code refers to that particular conduct. A violation of this Code may result in disciplinary action, up to and including termination of employment. A variety of laws apply to the Fund and its operations, including the Securities Act of 1933, the Investment Company Act of 1940, state laws relating to duties owed by Fund directors/trustees and officers, and criminal laws. The federal securities laws generally prohibit the Fund from making material misstatements in its prospectus and other documents filed with the SEC, or from omitting to state a material fact. These material misstatements and omissions include financial statements that are misleading or omit material facts. The Fund must and will report all suspected criminal violations to the appropriate authorities for possible prosecution, and will investigate, address and report, as appropriate, non-criminal violations. ADOPTED MAY 7, 2003 4 EX-99.CERT 3 a2149463zex-99_cert.txt EX-99.CERT Exhibit 99.302 CERT State Street Research Securities Trust Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 I, Douglas A. Romich, certify that: 1. I have reviewed this report on Form N-CSR of State Street Research Securities Trust; 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, and changes in net assets of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in rule 30a-2 (c) under the Investment Company Act) for the registrant and have: a) designed such disclosure controls and procedures 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) evaluated the effectiveness of the registrant's disclosure controls and procedures as of the date within 90 days prior to the filing date of this report (the "Evaluation Date"); and c) presented in this report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent function): a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize, and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officers and I have indicated in this report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: January 6, 2005 /s/ Douglas A. Romich Douglas A. Romich Treasurer State Street Research Securities Trust Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 I, Richard S. Davis, certify that: 1. I have reviewed this report on Form N-CSR of State Street Research Securities Trust; 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, and changes in net assets of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in rule 30a-2 (c) under the Investment Company Act) for the registrant and have: a) designed such disclosure controls and procedures 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) evaluated the effectiveness of the registrant's disclosure controls and procedures as of the date within 90 days prior to the filing date of this report (the "Evaluation Date"); and c) presented in this report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent function): a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize, and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officers and I have indicated in this report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: January 6, 2005 /s/ Richard S. Davis Richard S. Davis President, Chairman and Chief Executive Officer EX-99.906CERT 4 a2149463zex-99_906cert.txt EX-99.906CERT Exhibit 99.906 CERT State Street Research Securities Trust Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code) Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned officer of the State Street Research Securities Trust, a Massachusetts business trust, (the "Trust"), does hereby certify that the Trust's report on Form N-CSR for the period ended October 31, 2004 (the "N-CSR") fully complies with the requirements of Section 13 (a) or 15 (d), as applicable, of the Securities Exchange Act of 1934, as amended, and information contained in the N-CSR fairly presents, in all material respects, the financial condition and the results of operations of the Trust. This certification is provided solely pursuant to 18 U.S.C. 1350 and shall not be deemed a part of the N-CSR, the financial statements filed with the N-CSR or otherwise "filed" for any purpose. Date: January 6, 2005 /s/ Douglas A. Romich Douglas A. Romich Treasurer State Street Research Securities Trust Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code) Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned officer of the State Street Research Securities Trust, a Massachusetts business trust, (the "Trust"), does hereby certify that the Trust's report on Form N-CSR for the period ended October 31, 2004 (the "N-CSR") fully complies with the requirements of Section 13 (a) or 15 (d), as applicable, of the Securities Exchange Act of 1934, as amended, and information contained in the N-CSR fairly presents, in all material respects, the financial condition and the results of operations of the Trust. This certification is provided solely pursuant to 18 U.S.C. 1350 and shall not be deemed a part of the N-CSR, the financial statements filed with the N-CSR or otherwise "filed" for any purpose. Date: January 6, 2005 /s/ Richard S. Davis Richard S. Davis President, Chairman and Chief Executive Officer -----END PRIVACY-ENHANCED MESSAGE-----