STATE STREET RESEARCH INSTITUTIONAL FUNDS, 485BPOS, 2000-05-26

STATE STREET RESEARCH INSTITUTIONAL FUNDS
485BPOS, 2000-05-26

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As filed with the Securities and Exchange Commission on May 26, 2000

Securities Act of 1933 Registration No. 333-73433
Investment Company Act of 1940 File No. 811-09247
================================================================================

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

--------------------

FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [ ]

Pre-Effective Amendment No. [ ]
---

Post-Effective Amendment No. 1 [X]
---

and/or

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [ ]

Amendment No. 2 [X]
---

--------------------

STATE STREET RESEARCH INSTITUTIONAL FUNDS
--------------------------------------
(Exact Name of Registrant as Specified in Charter)

One Financial Center, Boston, Massachusetts 02111
--------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)

Registrant's Telephone Number, Including Area Code: (617) 357-1200

Francis J. McNamara, III
Executive Vice President, Secretary & General Counsel
State Street Research & Management Company
One Financial Center
Boston, Massachusetts 02111
--------------------------------------------------------
(Name and Address of Agent for Service)

Copy to:

Gregory D. Sheehan, Esq.
Ropes & Gray
One International Place, Boston, Massachusetts 02111

It is proposed that this filing will become effective under Rule 485:

[ ] Immediately upon filing pursuant to paragraph (b).

[X] On June 1, 2000 pursuant to paragraph (b).

[ ] 60 days after filing pursuant to paragraph (a)(1).

[ ] 75 days after filing pursuant to paragraph (a)(2).

[ ] On _______________ pursuant to paragraph (a)(2).

If appropriate, check the following box:

[ ] This post-effective amendment designates a new effective date for a
previously filed post-effective amendment.

<PAGE>

STATE STREET RESEARCH
INSTITUTIONAL FUNDS

CORE FIXED INCOME FUND CORE LARGE CAP GROWTH FUND

A BOND FUND FOCUSING A STOCK FUND SEEKING COMPETITIVE
ON U.S. INVESTMENT GRADE TOTAL RETURNS RELATIVE TO THE
FIXED-INCOME SECURITIES. STANDARD & POOR'S 500 COMPOSITE
STOCK INDEX

CORE PLUS FIXED INCOME FUND LARGE CAP GROWTH FUND

A BOND FUND INVESTING IN INVESTMENT A STOCK FUND SEEKING COMPETITIVE
GRADE FIXED-INCOME SECURITIES AND TOTAL RETURNS RELATIVE TO THE
USING AN OPPORTUNISTIC APPROACH TO RUSSELL 1000 GROWTH INDEX
HIGH YIELD AND FOREIGN SECURITIES.

MANAGED BY STATE STREET RESEARCH & MANAGEMENT COMPANY

PROSPECTUS

June 1, 2000

THIS PROSPECTUS CONTAINS INFORMATION YOU SHOULD KNOW BEFORE YOU INVEST. PLEASE
READ IT CAREFULLY AND KEEP IT WITH YOUR INVESTMENT RECORDS.

THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED THESE
SECURITIES OR PASSED UPON THE ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.

<PAGE>

Contents

THE FUNDS.......................................................1
OBJECTIVES AND PRINCIPAL STRATEGIES........................1
Fixed Income Funds...............................1
Equity Funds.....................................3
PRINCIPAL RISKS............................................4
Fixed Income Funds...............................4
Equity Funds.....................................5
INVESTOR EXPENSES..........................................5
INVESTMENT MANAGER........................................10

CLASSES OF SHARES..............................................10
Share Classes.............................................10
Eligibility for Classes -- New Investors..................11
Eligibility and Conversion Between Classes --
Existing Shareholders....................................11

BUYING, EXCHANGING AND SELLING SHARES..........................12
General Information.......................................12
Opening an Account........................................12
Buying Shares.............................................13
Cash Purchase Option............................13
In-Kind Purchase Option.........................14
Exchanging Shares.........................................14
Selling Shares............................................14
Methods for Selling Shares......................15
Payment Options.................................15
In-Kind Redemption of Shares....................15
Other Information on Selling Shares.............15

DISTRIBUTIONS..................................................16

VALUATION AND OTHER POLICIES...................................17

TAX CONSIDERATIONS.............................................18

OTHER SECURITIES AND RISKS.....................................19

FINANCIAL HIGHLIGHTS...........................................23

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<PAGE>

THE FUNDS

This prospectus describes four State Street Research Institutional Funds
(the "Funds") that are available to institutional investors and private clients.
The Funds' Objectives and Principal Strategies are described below, followed by
a discussion of the Principal Risks of investing in the Funds.

Additional information about other Fund investment strategies, securities
and risks begins on page 19.

OBJECTIVES AND PRINCIPAL STRATEGIES

FIXED INCOME FUNDS

STATE STREET RESEARCH CORE FIXED INCOME FUND

OBJECTIVE. The State Street Research Core Fixed Income Fund (the "Core
Fixed Fund") seeks competitive total returns primarily from investing in fixed
income securities.

BENCHMARK. The investment manager measures the performance of the Core
Fixed Fund by comparing its total return to the Lehman Brothers Aggregate Bond
Index and to the performance of other investment managers on similar accounts.

PRINCIPAL STRATEGIES. In constructing the Core Fixed Fund's portfolio,
the investment manager seeks a combination of yield and potential for price
appreciation. In order to manage the price sensitivity of the overall
portfolio to changes in interest rates, the investment manager establishes
duration targets based on economic and monetary factors affecting interest
rates and bond market returns. The investment manager also allocates the
Fund's investments among bond market sectors (such as U.S. Treasury
securities, U.S. government agency securities, mortgage-backed or
asset-backed securities and corporate debt securities) based upon its
evaluation of the relative price and yield attractiveness of the various
sectors. The investment manager also decides how the Fund's portfolio should
be positioned along the yield curve by selecting securities in certain
maturity ranges based upon the relative price and yield attractiveness of
those maturities. When selecting particular fixed income securities that will
satisfy the desired duration, yield curve positioning and sector weighting
for the overall portfolio, the investment manager relies primarily on its own
research regarding the credit quality, yield characteristics and interest
rate sensitivity of individual securities.

The Core Fixed Fund invests primarily in securities rated, at the time of
purchase, investment grade by at least one nationally recognized rating agency
or considered to be of comparable quality by the investment manager ("investment
grade securities"). Currently, such securities are those rated within or above
the Standard & Poor's BBB- or the Moody's Baa3 rating categories, or within
comparable categories of other rating agencies.

The Core Fixed Fund's investment grade securities may include debt
securities issued by the U.S. Treasury or any U.S. government agency, mortgage
and asset-backed securities (including Collateralized Mortgage Obligations
("CMOs")), U.S. dollar-denominated debt

-1-

<PAGE>

securities of foreign issuers, corporate debt and cash equivalents.
Additionally, the Core Fixed Fund also may use futures, options, swaps and other
derivatives for hedging purposes and for portfolio duration or yield curve
management. Additionally, the Core Fixed Fund may invest in Rule 144A and other
unregistered securities.

The investment manager monitors and adjusts the Core Fixed Fund's
investments to maintain a weighted average asset quality of A or higher, and a
duration generally within 1 1/2 years of the Lehman Brothers Aggregate Bond
Index. Securities downgraded below investment grade will be sold within one year
of such downgrade or as the investment manager believes market conditions
reasonably permit.

STATE STREET RESEARCH CORE PLUS FIXED INCOME FUND

OBJECTIVE. The State Street Research Core Plus Fixed Income Fund (the "Core
Plus Fund") seeks competitive total returns primarily from investing in fixed
income securities.

BENCHMARK. The investment manager measures the performance of the Core Plus
Fund by comparing its total return to the Lehman Brothers Aggregate Bond Index
and to the performance of other investment managers on similar accounts.

PRINCIPAL STRATEGIES. The investment manager follows the same overall
management strategy as with the Core Fixed Income Fund, but the Core Plus Fund
seeks to outperform the Lehman Brothers Aggregate Bond Index by a somewhat
greater margin than the Core Fixed Fund by assuming the additional risks (and
additional opportunities for loss) inherent in non-U.S. dollar-denominated,
lower quality and emerging market securities.

The Core Plus Fund may invest in any of the same types of securities and
derivative instruments (including for the same purposes) as the Core Fixed Fund.
In addition, the Core Plus Fund may invest up to 30% of its total assets
(measured at the time of purchase) in total in (i) non-U.S. dollar-denominated
securities not exceeding 20% of the Fund's total assets (measured at the time of
purchase), (ii) lower quality securities not exceeding 20% of the Fund's total
assets (measured at the time of purchase), and (iii) securities of issuers
located in developing or emerging market countries not exceeding 10% of its
total assets (measured at the time of purchase). (Securities purchased by the
Fund within the 10% limit in clause (iii) will not be counted toward the limits
in clauses (i) or (ii), but will be counted toward the preceding 30% limit.)

The Core Plus Fund's lower quality securities may include high yield bonds,
convertible bonds, convertible preferred stocks and warrants and other
securities attached to high yield bonds or other fixed income securities. Lower
quality securities are securities that, at the time of purchase, are not rated
investment grade by any nationally recognized rating agency and are not
considered to be of investment grade quality by the investment manager. Although
the Core Plus Fund does not generally seek to eliminate all foreign currency
risk, it may at times use foreign currencies, forward currency contracts and
currency-related derivative instruments, including cross-hedging techniques, to
hedge some or all of its foreign currency exposure.

In managing the Fund's portfolio, the investment manager monitors and
adjusts the Fund's investments to maintain a weighted average asset quality of
BBB or higher, and a duration generally within 1 1/2 years of the Lehman
Brothers Aggregate Bond Index.

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<PAGE>

EQUITY FUNDS

STATE STREET RESEARCH CORE LARGE CAP GROWTH FUND

OBJECTIVE. The State Street Research Core Large Cap Growth Fund (the "Core
Large Cap Growth Fund") seeks to provide long-term growth of capital.

BENCHMARK. The investment manager measures the performance of the Core
Large Cap Growth Fund by comparing its return to the Standard & Poor's 500
Composite Stock Index (the "S&P 500 Index") and to the performance of other
investment managers on similar accounts

PRINCIPAL STRATEGIES. The Core Large Cap Growth Fund invests primarily in
stocks believed by the investment manager to have long-term growth potential. In
selecting stocks, the investment manager seeks to identify large capitalization
stocks with sustainable above average earnings growth. Generally, the Core Large
Cap Growth Fund invests in no more than 60 different stocks, with the
investments weighted to reflect the investment manager's highest confidence
ideas. The investment manager may also adjust the sector allocations of the
portfolio relative to the S&P 500 Index. The investment manager attempts to
manage risk by maintaining a moderate predicted tracking error relative to the
S&P 500 Index. While the Core Large Cap Growth Fund emphasizes established
companies, it may also invest in other sizes or types of companies. Current
income is not a significant factor in stock selection.

For cash management purposes, the Core Large Cap Growth Fund may also
invest in U.S. government securities, commercial paper rated A-1 or better by
Standard & Poor's or P-1 or better by Moody's, and other cash equivalents.

STATE STREET RESEARCH LARGE CAP GROWTH FUND

OBJECTIVE. The State Street Research Large Cap Growth Fund (the "Large Cap
Growth Fund") seeks to provide long-term growth of capital.

BENCHMARK. The investment manager measures the performance of the Large Cap
Growth Fund by comparing its total return to the Russell 1000 Growth Index and
to the performance of other investment managers on similar accounts.

PRINCIPAL STRATEGIES. The Large Cap Growth Fund invests primarily in the
same types of securities as the Core Large Cap Growth Fund. This Fund may be
more volatile than the Core Large Cap Growth Fund, however, because a higher
percentage of the Large Cap Growth Fund's assets are expected to be invested in
stocks of companies listed in the Russell 1000 Growth Index, which tracks growth
companies included among the 1,000 largest U.S. companies based on total market
capitalization. The Large Cap Growth Fund's more aggressive growth style is also
reflected in its greater emphasis on growth sectors, currently including
technology and health care, relative to the S&P 500 Index.

-3-

<PAGE>

PRINCIPAL RISKS

The Funds' shares will change in value, and you could lose money by
investing in the Funds. The Funds may not achieve their respective Objectives.

PRINCIPAL RISKS -- FIXED INCOME FUNDS

Because the Core Fixed Fund and the Core Plus Fund (together, the "Fixed
Income Funds") invest primarily in bonds and other fixed income securities,
their major risks are those of bond investing, including the tendency of prices
to fall when interest rates rise. There is also the risk that bond issuers may
default on principal or interest payments. In general, the risks associated with
fixed income investing are greater for bonds with longer maturities.

Lower quality fixed income securities, such as may be held by the Core Plus
Fund, generally are considered to be speculative investments and involve greater
risks and market price fluctuations than higher quality securities. The prices
of most lower quality securities are vulnerable to economic recessions, when it
becomes difficult for issuers to generate sufficient cash flow to pay principal
and interest. Many lower quality securities are also affected by weak equity
markets, when issuers find it hard to improve their financial condition by
replacing debt with equity and when investors, such as the Funds, find it hard
to sell their lower quality securities at desirable prices. In addition, the
value of a lower quality security will usually fall substantially if an issuer
defaults or goes bankrupt. Even anticipation of defaults by certain issuers, or
the perception of economic or financial weakness, may cause the market for lower
quality securities to fall.

Both U.S. dollar-denominated and non-U.S. dollar-denominated securities of
non-U.S. issuers involve additional risks to those presented by securities of
U.S. issuers. They are generally more volatile and less liquid than similar U.S.
securities, in part because of higher political and economic risks, lack of
reliable information and fluctuations in currency exchange rates. For non-U.S.
dollar-denominated securities, such as may be held by the Core Plus Fund,
changes in currency exchange rates have the potential to reduce or eliminate
gains achieved in securities markets or to create net losses. These risks are
usually higher for investments in developing and emerging market countries.

Mortgage-related securities, which represent interests in pools of
mortgages, may offer attractive yields but generally carry additional risks. The
prices and yields of mortgage-related securities typically assume that the
securities will be redeemed at a given time before maturity. When interest rates
fall substantially, these securities usually are redeemed early because the
underlying mortgages are often prepaid. The Funds would then have to reinvest
the money at a lower rate. In addition, the price or yield of mortgage-related
securities may fall if they are redeemed later than expected.

Like mortgage-related securities, other types of asset-backed securities
represent interests in pools of assets, for example retail installment loans and
revolving credit receivables such as credit card receivables. They are subject
to prepayment risks similar to those of mortgage-related securities, and to
delays in payment due to unanticipated legal or administrative costs.

-4-

<PAGE>

Certain types of derivatives, including some derivatives that may be used
by the Fixed Income Funds, can amplify a gain or loss, potentially earning or
losing substantially more money than the actual cost of the derivative. With
some derivatives, whether used for hedging or investment, there is also the risk
that the counterparty may fail to honor its contract terms, causing a loss for a
Fund. The Fixed Income Funds' use of derivatives will be consistent with their
portfolio credit quality and duration management policies described above.

PRINCIPAL RISKS -- EQUITY FUNDS

Because the Core Large Cap Growth and Large Cap Growth Funds (together, the
"Equity Funds") invest primarily in stocks, their major risks are those of stock
investing, including sudden, unpredictable drops in value and the potential for
periods of lackluster performance. In addition, growth stocks are generally more
volatile than many other types of equity investments, such as value stocks and
general stock indices, because more of their present market value is derived
from future earnings expectations. At times when it appears these expectations
may not be met, growth stock prices typically fall.

There are particular risks associated with investing in companies of a
given size. Larger, more established companies may be less able to respond
quickly to competitive challenges, such as changes in technology and consumer
tastes. Smaller companies may be particularly sensitive to adverse market and
other developments, since they often have limited product lines or resources
compared to their larger competitors, and may depend on a small or less
experienced management group. Stocks of these companies may be thinly traded and
the companies may be less able to withstand short-term or long-term adverse
economic conditions than larger companies.

Because of these and other risks, the Equity Funds may under-perform
certain other stock funds (those emphasizing value stocks, for example) during
periods when growth stocks are out of favor. The success of each Fund's
investment strategy relative to its benchmark depends largely on the investment
manager's skill in assessing the potential of the stocks the Fund buys.

INVESTOR EXPENSES

The information in the following expense tables describes the expenses that
will be incurred by investors in the Funds. Investors should keep in mind that
the examples are for comparison purposes only. A Fund's actual performance and
expenses may be higher or lower.

-5-

<PAGE>

INVESTOR EXPENSES
CORE FIXED INCOME FUND

<TABLE>
<CAPTION>
ANNUAL FUND EXPENSES (deducted from the Fund's assets, and EXPENSES DEDUCTED FROM FUND ASSETS -- AS A % OF
therefore paid indirectly by all Fund investors) AVERAGE NET ASSETS
- ------------------------------------------------------------------------------------------------------------------------------
CLASS I* CLASS II* CLASS III* CLASS IV*
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Management Fee(1) 0.40 0.40 0.40 0.40
Other Expenses
Shareholder Service Fee 0.30 0.20 0.10 0.05
Other(1) 0.45 0.45 0.45 0.45
Total Other Expenses 0.75 0.65 0.55 0.50
Total Annual Fund Operating Expenses 1.15 1.05 0.95 0.90
Fee Waiver and Expense Reimbursement 0.65 0.65 0.65 0.65
NET ANNUAL FUND EXPENSES 0.50 0.40 0.30 0.25

EXAMPLE YEARS HELD EXPENSES DEDUCTED FROM FUND ASSETS -- AS A DOLLAR
AMOUNT ON $10,000 INVESTED
- ------------------------------------------------------------------------------------------------------------------------------
CLASS I* CLASS II* CLASS III* CLASS IV*
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1 $51 $41 $31 $26
3(2) $301 $269 $238 $222
</TABLE>

The Example converts the "Net Annual Fund Expenses" shown in the expense table
into dollar amounts, and is designed to allow investors to compare the estimated
costs of each Fund with those of other mutual funds. The example illustrates the
costs an investor would incur on an initial investment of $10,000 held for the
number of years indicated, assuming the investor reinvests all distributions and
earns a hypothetical 5% annual return. Investors should keep in mind that the
example is for comparison purposes only. A Fund's actual performance and
expenses may be higher or lower.

(1) THE INVESTMENT MANAGER HAS CONTRACTUALLY AGREED TO WAIVE MANAGEMENT FEES AND
BEAR OR REIMBURSE CERTAIN OTHER FUND OPERATING EXPENSES SUCH THAT TOTAL ANNUAL
FUND OPERATING EXPENSES DO NOT EXCEED 0.20%, EXCLUDING SHAREHOLDER SERVICE FEES,
BROKERAGE COSTS, TAXES AND CERTAIN OTHER EXPENSES THROUGH JUNE 1, 2001.

(2) THESE DOLLAR AMOUNTS ASSUME THAT THE INVESTMENT MANAGER'S FEE WAIVER AND
EXPENSE REIMBURSEMENT ARRANGEMENTS DISCUSSED IN FOOTNOTE (1) ABOVE ARE NOT
EXTENDED BEYOND JUNE 1, 2001. ALTHOUGH THE FUND EXPECTS THESE ARRANGEMENTS TO
CONTINUE THROUGH THE 3 YEAR PERIOD, THERE CAN BE NO ASSURANCES IN THIS REGARD.

* Class descriptions begin on page 10.

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INVESTOR EXPENSES
CORE PLUS FIXED INCOME FUND

ANNUAL FUND EXPENSES (deducted from the Fund's assets, and EXPENSES DEDUCTED FROM FUND ASSETS -- AS A % OF
therefore paid indirectly by all Fund investors) AVERAGE NET ASSETS
- ------------------------------------------------------------------------------------------------------------------------------
CLASS I* CLASS II* CLASS III* CLASS IV*
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Management Fee(1) 0.40 0.40 0.40 0.40
Other Expenses
Shareholder Service Fee 0.30 0.20 0.10 0.05
Other(1) 0.45 0.45 0.45 0.45
Total Other Expenses 0.75 0.65 0.55 0.50
Total Annual Fund Operating Expenses 1.15 1.05 0.95 0.90
Fee Waiver and Expense Reimbursement 0.65 0.65 0.65 0.65
NET ANNUAL FUND EXPENSES 0.50 0.40 0.30 0.25

* Class descriptions begin on page 10.

-7-

<PAGE>

INVESTOR EXPENSES
CORE LARGE CAP GROWTH FUND

ANNUAL FUND EXPENSES (deducted from the Fund's assets, and (EXPENSES DEDUCTED FROM FUND ASSETS -- AS A % OF
therefore paid indirectly by all Fund investors) AVERAGE NET ASSETS)
- ------------------------------------------------------------------------------------------------------------------------------
CLASS I* CLASS II* CLASS III* CLASS IV*
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Management Fee(1) 0.55 0.55 0.55 0.55
Other Expenses
Shareholder Service Fee 0.30 0.20 0.10 0.05
Other(1) 0.45 0.45 0.45 0.45
Total Other Expenses 0.75 0.65 0.55 0.50
Total Annual Fund Operating Expenses 1.30 1.20 1.10 1.05
Fee Waiver and Expense Reimbursement 0.65 0.65 0.65 0.65
NET ANNUAL FUND EXPENSES 0.65 0.55 0.45 0.40

</TABLE>

(1) THE INVESTMENT MANAGER HAS CONTRACTUALLY AGREED TO WAIVE MANAGEMENT FEES AND
BEAR OR REIMBURSE CERTAIN OTHER FUND OPERATING EXPENSES SUCH THAT TOTAL ANNUAL
FUND OPERATING EXPENSES DO NOT EXCEED 0.35%, EXCLUDING SHAREHOLDER SERVICE FEES,
BROKERAGE COSTS, TAXES AND CERTAIN OTHER EXPENSES THROUGH JUNE 1, 2001.

* Class descriptions begin on page 10.

-8-

<PAGE>

INVESTOR EXPENSES
LARGE CAP GROWTH FUND

</TABLE>

(1) THE INVESTMENT MANAGER HAS CONTRACTUALLY AGREED TO WAIVE MANAGEMENT FEES AND
BEAR OR REIMBURSE CERTAIN OTHER FUND OPERATING EXPENSES SUCH THAT TOTAL ANNUAL
FUND OPERATING EXPENSES DO NOT EXCEED 0.35%, EXCLUDING SHAREHOLDER SERVICE FEES,
BROKERAGE COSTS, TAXES AND CERTAIN OTHER EXPENSES THROUGH JUNE 1, 2001.

* Class descriptions begin on page 10.

-9-

<PAGE>

INVESTMENT MANAGER

The Funds' investment manager is State Street Research & Management
Company, One Financial Center, Boston, MA 02111. The firm traces its heritage
back to 1924 and the founding of one of America's first mutual funds. Today the
firm has more than $55 billion in assets under management (as of March 31,
2000).

The investment manager is responsible for the Funds' investment and
business activities, and receives the management fee from each Fund. The
investment manager has contractually agreed to waive management fees and bear or
reimburse certain other Fund operating expenses such that Total Annual Fund
Operating Expenses do not exceed 0.20% (Fixed Income Funds) and 0.35% (Equity
Funds), excluding shareholder service fees, brokerage costs, taxes and certain
other expenses through June 1, 2001. The investment manager is a subsidiary of
Met Life, Inc.

The investment manager's Core Fixed Income team is responsible for managing
the Core Fixed Income and the Core Plus Fixed Income Funds and making decisions
with regard to duration targets, yield curve positioning and weightings of
sectors and types of securities. Mark Marinella, a senior member of the Core
Fixed Income team, is responsible for implementing the strategy of the team with
respect to specific decisions relating to security purchases and sales. A senior
vice president, Mr. Marinella joined the investment manager in August 1998.
Before joining the investment manager, Mr. Marinella served as a principal and
senior portfolio manager at STW Fixed Income Management Ltd., director of fixed
income at CS First Boston Corp., and senior portfolio manager at Dewey Square
Investors and Massachusetts Financial Services. Mr. Marinella has worked as an
investment professional since 1985.

The investment manager's Large Cap Growth Team has been responsible for the
Core Large Cap and Large Cap Funds' day-to-day portfolio management since each
Fund's inception in June 1999.

CLASSES OF SHARES

SHARE CLASSES

Each Fund offers four classes of shares: Class I, Class II, Class III and
Class IV. The sole economic difference among the classes is the level of
shareholder service fee borne by each for shareholder service, reporting and
other support. These differences reflect the lower costs of servicing
shareholder accounts as a percentage of assets for larger accounts. Class I
shares of the Equity Funds may only be purchased by certain institutional
investors, such as retirement plans, foundations, endowments, corporations,
partnerships, trusts, or similar institutional investors ("Institutional
Investors"). Institutional Investors, as well as natural persons with existing
advisory relationships with the investment manager ("Private Clients"), may
purchase Class I shares of the Fixed Income Funds and Class II, Class III and
Class IV shares of all Funds.

-10-

<PAGE>

The Funds have entered into a Servicing Agreement with State Street
Research & Management Company under which the classes pay the following
shareholder service fees, (expressed as an annual percentage of the average
daily net assets of each class of shares): Class I shares -- 0.30%, Class II
shares -- 0.20%, Class III shares -- 0.10%, and Class IV shares -- 0.05%.

ELIGIBILITY FOR CLASSES -- NEW INVESTORS

A new investor's eligibility for a particular class of shares of the Funds
depends primarily on the investor's aggregate amount invested in all of the
Funds (the "Initial Investment"). The Initial Investment must equal the "Minimum
Total Investment" shown in the table below to be eligible for a particular class
of shares of the Funds. As noted above, only Institutional Investors may
purchase Class I shares of the Equity Funds.

ALL FUNDS MINIMUM TOTAL
INVESTMENT
-----------------------------
<S> <C>
Class I $ 1 million
Class II $ 5 million
Class III $15 million
Class IV $25 million
-----------------------------
</TABLE>

ELIGIBILITY AND CONVERSION BETWEEN CLASSES -- EXISTING SHAREHOLDERS

To be eligible to purchase a particular class of shares of any Fund, an
existing shareholder's "Total Investment" must equal the applicable Minimum
Total Investment shown in the table above. The Total Investment for a
shareholder will be determined by the investment manager on the last business
day of each calendar quarter, or on such other dates as the investment manager
may select (each a "Measuring Date"). A shareholder's Total Investment will
equal the aggregate net asset value of the shareholder's shares of all the Funds
as of a particular Measuring Date.

Depending on a shareholder's Total Investment, the shareholder's shares in
any Fund will automatically convert to a different class of shares of that same
Fund, as follows:

- If the shareholder's Total Investment is less than 95% of the Minimum
Total Investment for the shareholder's existing class of shares, the
shares will convert to the class of shares with the lowest shareholder
service fee for which the shareholder is eligible on the Measuring
Date. 95% of the Minimum Total Investment for the four classes of
shares equals $950,000 (Class I), $4.75 million (Class II), $14.25
million (Class III) and $23.75 million (Class IV). Although not
available to Private Clients when making an initial investment in the
Equity

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<PAGE>

Funds, shares held by current Private Client shareholders may convert
to Class I shares as described.

- If the shareholder's Total Investment is equal to or greater than the
Minimum Total Investment for a class of shares with a lower
shareholder service fee than that which is borne by the shareholder's
existing class, the shares will convert to the class of shares with
the lowest shareholder service fee for which the shareholder is
eligible on the Measuring Date.

All conversions will occur within 10 business days following the Measuring Date.

BUYING, EXCHANGING AND SELLING SHARES

GENERAL INFORMATION

If you have questions regarding how to purchase, exchange or sell Fund
shares, contact your State Street Research institutional client service
representative. If for any reason you are unable to reach your State Street
Research institutional client service representative, please call
1-800-521-6548. Whenever communicating in writing, please address all
correspondence to State Street Research Institutional Funds at One Financial
Center, Boston, MA 02111.

TIMING OF REQUESTS. All requests to buy or sell shares received in good
order by State Street Research before the close of regular trading on the New
York Stock Exchange (normally 4:00 p.m. eastern time) will be executed the same
day, at the day's closing share price. Requests received thereafter will be
executed the following day, at that day's closing share price.

TELEPHONE REQUESTS. When you open an account you automatically receive
telephone privileges, allowing you to place requests for your account by
telephone. For your protection, all telephone calls may be recorded. As long as
State Street Research takes certain measures to authenticate telephone requests
on your account, you may be held responsible for unauthorized requests.
Unauthorized telephone requests are rare, but if you want to protect yourself
completely, you can decline the telephone privilege on your application. A Fund
may suspend or eliminate the telephone privilege at any time.

CONFIRMATIONS. Each Fund will send shareholders written confirmation
(including a statement of shares owned) at the time of each transaction.

OPENING AN ACCOUNT

A State Street Research Institutional Funds account (an "Account") may be
opened by calling or writing your State Street Research institutional client
service representative to obtain an application.

-12-

<PAGE>

BUYING SHARES

The Core Fixed and Core Plus Fixed Funds require initial purchases of
shares to be in minimum amounts of $1,000,000 for all investors. The Core Large
Cap Growth and Large Cap Growth Funds require initial purchases to be in minimum
amounts of $1,000,000 for Institutional Investors and $5,000,000 for Private
Clients. For more information about your eligibility for different classes of
shares, see the preceding "Classes of Shares" section.

All orders to purchase shares are subject to acceptance by a Fund.
Purchases will be made in full and fractional shares, calculated to three
decimal places.

Investors should contact their State Street Research institutional
client service representative or call 1-800-521-6548 before attempting to
place an order for Fund shares. Investors have the following two options for
buying shares:

CASH PURCHASE OPTION

TO OPEN AN ACCOUNT TO ADD TO AN ACCOUNT
<S> <C> <C>
BY FEDERAL FUNDS WIRE Call State Street Research to Call State Street Research
obtain an account number and to obtain a control number.
forward your application to Instruct your bank to wire funds
State Street Research to:
Institutional Funds. Wire funds
using the instructions at right. - State Street Bank and
Trust Company, Boston,
MA
- ABA: 011000028
- BNF: Fund name and
share class you want to
buy
- AC: 99029761
- OBI: your name and your
account number
- Control: the number given
to you by State Street
Research

BY MAIL Make your check payable to Fill out investment instructions
"State Street Research or indicate the Fund name and
Institutional Funds." Forward account number on your check.
the check and your application Make your check payable to
to State Street Research "State Street Research
Institutional Funds. Institutional Funds." Forward
the check and instructions to
State Street Research
Institutional Funds.

</TABLE>

-13-

<PAGE>

IN-KIND PURCHASE OPTION

Shares of each Fund may be purchased partly or entirely in exchange for
securities, but only subject to the investment manager's determination that the
securities to be exchanged are acceptable. In all cases, the investment manager
reserves the right to reject any particular investment. Securities accepted by
the investment manager in exchange for Fund shares will be valued as set forth
under "Determination of Net Asset Value" as of the time of the next
determination of net asset value. All dividends, interest, subscription or other
rights which are accrued or reflected in the market value of accepted securities
plus any accrued income at the time of valuation become the property of the
relevant Fund and must be delivered to the Fund upon receipt by the investor
from the issuer. A gain or loss for federal income tax purposes may be realized
by investors subject to federal income taxation upon the exchange, depending
upon the investor's basis in the securities tendered.

The investment manager will not approve the acceptance of securities in
exchange for Fund shares unless (1) the investment manager, in its sole
discretion, believes the securities are appropriate investments for the Fund;
(2) the investor represents and agrees that all securities offered to the Fund
are not subject to any restrictions upon their sale by the Fund under the
Securities Act of 1933, or otherwise; and (3) the securities may be acquired
under the relevant Fund's investment restrictions. Investors interested in
making in-kind purchases should telephone their State Street Research
institutional client service representative or call 1-800-521-6548.

PAYING FOR SHARES BY WIRE. Funds may be wired between 8:00 a.m. and 4:00
p.m. eastern time. To make a same day wire investment, please notify State
Street Research by 12:00 noon eastern time of your intention to wire funds, and
make sure your wire arrives prior to the close of trading that day on the New
York Stock Exchange (normally 4:00 p.m. eastern time).

EXCHANGING SHARES

Shareholders of any Institutional Fund may exchange their shares for
shares of any other Institutional Fund without payment of any exchange fees.
Shareholders interested in exchanging shares of one Fund for shares of a
different Fund should contact their State Street Research institutional client
service representative or call 1-800-521-6548.

SELLING SHARES

Shares of each Fund may be redeemed on any day when the New York Stock
Exchange is open for regular trading. The redemption price is the net asset
value per share next determined after receipt of the redemption request in good
order. In order to help facilitate the timely payment of redemption proceeds, it
is recommended that investors telephone their State Street Research
institutional client services representative at least two days prior to
submitting a request.

-14-

<PAGE>

METHODS FOR SELLING SHARES

BY TELEPHONE As long as the transaction does not require a written
request, you can sell shares by calling State Street
Research.

BY MAIL Send a letter of instruction to State Street Research
Institutional Funds. Specify the Fund, the account
number, the dollar value or number of shares and
your desired payment option (see below). Be sure to
include all necessary signatures and any additional
documents as may be requested by the Fund.

PAYMENT OPTIONS

BY FEDERAL FUNDS WIRE Check with State Street Research to make sure that a wire
redemption privilege, including a bank designation, is in
place on your account. Once this is established, you may
place your request to sell shares with State Street
Research. Proceeds will be wired to your predesignated
bank account. Proceeds sent by federal funds wire must
total at least $5,000.

BY CHECK A check will be mailed to the account's address of record.

IN-KIND REDEMPTION OF SHARES

With respect to any shareholder, a Fund is only obligated to satisfy
redemption requests in cash to the extent of the lesser of 1% of the Fund's
total assets or $250,000 in any 90 day period. If the investment manager
determines, in its sole discretion, that it would be detrimental to the best
interests of the remaining shareholders of a Fund to make payment wholly or
partly in cash, the Fund may satisfy any redemption request in excess of such
amount in whole or in part by a distribution in kind of readily marketable
securities held by the Fund in lieu of cash. Securities used to redeem Fund
shares in kind will be valued in accordance with the relevant Fund's procedures
for valuation described under "Valuation and Other Policies - Calculating Share
Price." Investors generally will incur brokerage charges on the sale of any such
securities so received in payment of redemptions. In-kind redemptions will be
transferred and delivered as directed by the investor.

OTHER INFORMATION ON SELLING SHARES

Payment on redemption will generally be made as promptly as possible.
However, a Fund may delay sending you redemption proceeds for up to seven days
after the request for a redemption is received by the Fund in good order, and
may under certain circumstances suspend the right of redemption. See "Valuation
and Other Policies -- Additional Policies". A redemption request is in good
order if it includes the correct name in which shares are registered, the
investor's account number and the number of shares or the dollar amount of
shares to be redeemed and if it is signed correctly in accordance with the form
of registration. Persons acting

-15-

<PAGE>

in a fiduciary capacity, or on behalf of a corporation, partnership or
trust, must specify, in full, the capacity in which they are acting.

If you sell shares before the check for those shares has been collected,
you will not receive the proceeds until your initial payment has cleared. This
may take up to 15 days after your purchase was recorded (in rare cases, longer).
If you open an account with shares purchased by wire, you cannot sell those
shares until your application has been processed.

Circumstances that Require Written Requests. Please submit instructions in
writing when any of the following apply:

- the name, authorized signatory, mailing address or client bank account
has changed within the last 30 days

- you want the proceeds to go to a name or address not on the account
registration

- you are transferring shares to an account with a different
registration

When opening an account with the Funds, shareholders will be required to
designate the account(s) to which funds or securities may be transferred upon
redemption. Designation of additional accounts and any change in the accounts
originally designated must be made in writing, together with such documentation
as may be requested by the Fund. All redemption proceeds and other distributions
will be sent to the account or address of record, unless the Fund is instructed
otherwise in writing, together with such documentation as may be requested by
the Fund.

State Street Research will attempt to notify you promptly if any
information necessary to process your request is missing.

DISTRIBUTIONS

Each Fund distributes its net investment income and net capital gains
(collectively "distributions") to shareholders. The Fixed Income Funds declare
and pay dividends from net investment income quarterly. Net capital gains, if
any, are distributed around the end of a Fixed Income Fund's fiscal year, which
is January 31. The Equity Funds typically distribute both their net investment
income and net capital gains, if any, around the end of their fiscal year, which
is also January 31. To comply with tax regulations, a Fund may also pay an
additional capital gains distribution in December.

A shareholder may have distributions from a Fund reinvested in the Fund or
paid in cash. Distributions will be automatically reinvested in the Fund unless
other instructions are given to State Street Research. Cash distributions will
be mailed out by check or routed directly to the bank account designated by the
investor.

-16-

<PAGE>

VALUATION AND OTHER POLICIES

CALCULATING SHARE PRICE. The Funds calculate their share price every
business day at the close of regular trading on the New York Stock Exchange
(normally 4:00 p.m. eastern time). The share price is a Fund's total assets
minus its liabilities divided by the number of existing shares (net asset value,
or NAV).

In calculating its NAV, a Fund uses the last reported sale price or
quotation for portfolio securities at the close of regular trading on the New
York Stock Exchange that day. However, in cases where these are unavailable, or
when the investment manager believes that subsequent events have rendered them
unreliable, a Fund may use fair-value estimates instead.

Because foreign securities markets are sometimes open on different days
from U.S. markets, there may be instances when the value of a Fund's portfolio
changes on days when you cannot buy or sell Fund shares.

ACCOUNTS WITH LOW BALANCES. If the value of a shareholder's account in any
Fund falls below $500,000, State Street Research may, if the shareholder's
account in that Fund is not increased to at least $1,000,000 within 60 days
after notice is mailed to the shareholder, sell the shareholder's shares and
mail the proceeds to the shareholder's address of record.

THE FUNDS' BUSINESS HOURS. The Funds are open the same days as the New York
Stock Exchange (generally Monday through Friday). State Street Research
institutional client service representatives are available from 9:00 a.m. to
5:00 p.m. eastern time on these days.

ADDITIONAL POLICIES. Please note that the Funds maintain additional
policies and reserve certain rights, including:

- A Fund may vary its requirements for initial or additional
investments, exchanges, and reinvestments.

- At any time, a Fund may change any of its order acceptance practices,
and may suspend the sale of its shares.

- Each Fund may suspend the right of redemption and may postpone payment
for more than seven days when the New York Stock Exchange is closed
for other than weekends or holidays, or during any other period
permitted by the SEC for the protection of investors.

- Certificates are not available to be issued for any Fund or class.

-17-

<PAGE>

TAX CONSIDERATIONS

An investor subject to federal income tax whose investment is not in a
tax-deferred or non-taxable account may want to avoid:

- investing a large amount in a Fund close to the end of the fiscal year
or a calendar year (if the Fund makes a capital gains distribution,
the investor will receive some of the investor's investment back, as a
taxable distribution);

- selling shares at a loss for tax purposes and investing in a
substantially identical investment (such as the same Fund or a similar
Fund) within 30 days before or after such sale (such a transaction is
usually considered a "wash sale," and an investor will not be allowed
to claim a tax loss on a wash sale).

The Funds have been advised by counsel that the conversion of a
shareholder's investment from one class of shares to another class of shares in
the same Fund should not result in the recognition of gain or loss in the
converted Fund's shares. The shareholder's tax basis in the new class of shares
immediately after the conversion should equal the shareholder's basis in the
converted shares immediately before conversion, and the holding period of the
new class of shares should include the holding period of the converted shares.

TAX EFFECTS OF DISTRIBUTIONS AND TRANSACTIONS. Each Fund intends to qualify
as a regulated investment company under the Internal Revenue Code and to meet
all other requirements necessary in order for the Fund not to be subject to
federal income taxes on the ordinary income and net realized capital gain that
it distributes to its shareholders.

In general, distributions of investment income and short-term capital gains
(I.E., gains from assets that the Fund has held for one year or less) will be
taxable to shareholders subject to federal income tax as ordinary income.
Corporate shareholders may be entitled to a dividends received deduction with
respect to certain designated dividends. Capital gain distributions relating to
gains from assets held by the Fund for more than one year will be taxable to
shareholders subject to federal income tax as long-term capital gain.

Distributions will be taxable to a shareholder as described above even if
they are paid from income earned or gains realized by a Fund prior to the
shareholder's investment and thus were included in the price paid by the
shareholder for its shares. In addition, distributions by a Fund will be taxable
as described above regardless of whether the shareholder receives the
distributions in cash or has them reinvested in the Fund. Every year, each Fund
will provide each shareholder with information detailing the amount of ordinary
income and capital gains distributed to the shareholder for the previous year.

A Fund's investments in foreign securities may be subject to foreign
withholding taxes. In that case, the Fund's yield on those securities would be
decreased. Shareholders generally will not be entitled to claim a credit or
deduction with respect to foreign taxes. In addition, the Fund's
investment in foreign securities or foreign currencies may affect the amount or
timing of taxes payable by shareholders.

-18-

<PAGE>

The exchange or redemption of shares may produce a gain or loss, and is a
taxable event. A loss incurred with respect to shares of a Fund held for six
months or less will be treated as a long-term capital loss to the extent of any
capital gains distributions with respect to such shares.

A shareholder's investment in a Fund could be subject to state, local or
foreign taxes and could have additional tax consequences. Shareholders should
consult their tax advisers regardingthe precise tax consequences of investing in
a Fund in light of each shareholder's particular tax situation.

BACKUP WITHHOLDING. Certain shareholders may be subject to backup
withholding at a rate of 31% of distributions and proceeds if incomplete or
incorrect taxpayer information has been provided, if the shareholder has
underreported dividends or interest income in the past, or if proper
certification that the shareholder is not subject to withholding is not
provided.

OTHER SECURITIES AND RISKS

The Funds' portfolio securities and investment practices offer certain
opportunities and impose various risks. Major investments and risk factors are
outlined in the Fund descriptions starting on page 1. Each Fund may also use
some or all of the securities and practices that, together with their associated
risks, are described below. Because the types of investments a Fund makes may
change over time, the types of risks affecting the Fund may change as well.

ADRS (AMERICAN DEPOSITARY RECEIPTS). The Equity Funds may invest in ADRs,
which are U.S. dollar-denominated securities backed by foreign securities
deposited in the United States. ADRs are created for trading in U.S. markets,
will fluctuate with the value of the underlying security, reflect changes in
exchange rates and otherwise involve risks associated with foreign securities.

ASSET-BACKED SECURITIES. The Fixed Income Funds may invest in asset-backed
securities, which represent interests in pools of debt (including interests in
pools of debt other than mortgage notes), such as credit card accounts. The
principal risks of asset-backed securities are that payments may be made more
slowly, and rates of default may be higher, than expected on the underlying
obligations. In addition, because some of these securities are new or complex,
unanticipated problems may affect their value or liquidity.

CONVERTIBLE SECURITIES. The Equity Funds and the Core Plus Fixed Income
Fund may invest in convertible securities, which are fixed income securities
that may later convert to an underlying equity security. Prior to conversion,
convertible securities have the same general characteristics as other fixed
income securities, and the price of a convertible security will normally
fluctuate in response to interest rates and other factors bearing on the price
of fixed income securities when the price of the underlying equity security is
less than the conversion

-19-

<PAGE>

price ("out of the money"). When the price of the underlying equity security is
greater than the conversion price ("in the money"), the value of the convertible
security will normally tend to fluctuate to a greater extent in conjunction with
the price of the underlying equity security.

DERIVATIVES. All Funds may use derivatives, which are financial instruments
whose value derives from another security, an index, an interest rate or a
currency. Derivatives include options contracts, futures contracts, swap
contracts and other instruments. All Funds may use derivatives for hedging
(attempting to offset a potential loss in one position by establishing an
interest in an opposite position). This includes the use of currency-based
derivatives for hedging a Fund's positions in non-U.S. dollar-denominated
securities, including cross-currency hedging between two currencies other than
the U.S. dollar. All Funds may also use derivatives for liquidity and for
investment purposes (investing for potential income or capital gain).

While hedging can guard against potential risk, it adds to a Fund's
expenses and can eliminate some opportunities for gains. There is also a risk
that a derivative intended as a hedge may not perform as expected. In addition,
a Fund's use of derivatives may affect the timing and amount of taxes payable by
shareholders. With some derivatives, whether used for hedging or investment,
there is also the risk that the counterparty may fail to honor its contract
terms, causing a loss for a Fund.

The main risk with derivatives is that some types can amplify a gain or
loss, potentially earning or losing substantially more money than the actual
cost of the derivative. In addition, a Fund's use of derivatives may affect
the amount and timing of taxes payable by Shareholders.

FOREIGN AND NON-U.S. DOLLAR-DOMINATED SECURITIES. All Funds may invest in
foreign securities, and all Funds except the Core Fixed Fund may invest in
non-U.S. dollar-denominated securities. Both U.S. dollar-denominated and
non-U.S. dollar-denominated securities of non- U.S. issuers involve additional
risks to those presented by securities of U.S. issuers. They are generally more
volatile and less liquid than their U.S. counterparts, in part because of higher
political and economic risks, lack of reliable information and fluctuations in
currency exchange rates. For non-U.S. dollar-denominated securities, changes in
currency exchange rates have the potential to reduce or eliminate certain gains
achieved in a Fund's securities or to create net losses. These risks are usually
higher for investments in developing and emerging market countries.

INVESTMENT COMPANIES. When permitted by applicable laws and subject to
certain limits and conditions, the Funds may invest in other investment
companies managed by the investment manager, thereby gaining exposure to certain
types of assets on a more diversified basis than might otherwise be the case.

NEW SECURITIES. The Fixed Income Funds may invest in newly developed types
of securities and related instruments which have characteristics similar to
other fixed income investments, are being traded through the institutional
trading desks of broker-dealers and asset managers, and have attributes and
risk profiles consistent with the Fund's objective and strategies.

-20-

<PAGE>

PAYMENT-IN-KIND (PIK) SECURITIES. The Fixed Income Funds may invest in
payment-inkind securities, such as bonds paying current interest payments in
additional bonds instead of cash. Because PIKs do not pay current interest in
cash, their values may fluctuate more widely in response to interest rate
changes than do the values of ordinary bonds.

PORTFOLIO TURNOVER. From time to time, the portfolio turnover rates of
the Fixed Income Funds may be greater than 100% in connection with portfolio
restructurings and other events. High turnover will increase the Funds'
brokerage costs and may increase tax liability if there are capital gains.

REPURCHASE AGREEMENTS. All Funds may buy securities with the understanding
that the seller will buy them back with interest at a later date. If the seller
is unable to honor its commitment to repurchase the securities, the Fund could
lose money.

RESTRICTED AND ILLIQUID SECURITIES. All Funds may purchase restricted
securities, including Rule 144A securities. All Funds may purchase illiquid
securities. Any securities whose resale is restricted or that are thinly traded
can be difficult to sell at a desired time and price. Some of these securities
are new and complex, and trade only among institutions; the markets for these
securities are still developing, and may not function as efficiently as
established markets. Owning a large percentage of restricted and illiquid
securities could hamper a Fund's ability to raise cash to meet redemptions.
Also, because there may not be an established market price for these securities,
the Fund may have to estimate their value, which means that their valuation --
and the valuation of the Fund -- may have a subjective element.

SECURITIES LENDING. All Funds may seek additional income by lending
portfolio securities to qualified institutions. By reinvesting any cash
collateral it receives in these transactions, a Fund could realize additional
gains or losses. If the borrower fails to return the securities and the
collateral has declined in value, the Fund could lose money.

STANDARD & POOR'S DEPOSITORY RECEIPTS (SPDRS). The Equity Funds may invest
in SPDRs, which represent ownership interests in unit investment trusts holding
a portfolio of securities closely reflecting the price performance and dividend
yield of the S&P 500 Index. SPDRs are subject to the same risks as other types
of equity investments. The Equity Funds may also invest in other, similar
securities representing portfolios of index-based pooled investments, including
investments in foreign countries or regions.

STRUCTURED SECURITIES. The Fixed Income Funds may invest in structured
securities, which are securities issued by an entity holding underlying
instruments producing cash flows. The cash flows of the underlying instruments
may be apportioned among classes of structured securities to create securities
with different investment characteristics. Other types of structured securities
may be linked by a formula to the price of an underlying instrument. These types
of structured securities are generally more volatile than direct investments in
their underlying instruments.

WARRANTS. The Fixed Income Funds may invest in warrants and other equity
securities attached to high yield bonds and other fixed income securities.
Warrants are rights to purchase securities at specific prices valid for a
specific period of time. A warrant's price will normally fluctuate in the same
direction as the prices of its underlying securities, but may have

-21-

<PAGE>

substantially more volatility. Warrant holders receive no dividends and have no
voting rights with respect to the underlying security.

WHEN-ISSUED SECURITIES. All Funds may invest in securities prior to their
date of issue. These securities could fall in value by the time they are
actually issued, which may be any time from a few days to over a year.

ZERO (OR STEP) COUPONS. The Fixed Income Funds may invest in zero coupon
securities. A zero coupon security is a debt security that is purchased and
traded at a discount to its face value because it pays no interest for some or
all of its life. Interest, however, is reported as income to a Fund and the Fund
is required to distribute to shareholders an amount equal to the amount
reported. Those distributions may force the Fund to liquidate portfolio
securities at a disadvantageous time. These securities involve special credit
and duration risks, as their value could decline substantially by the time
interest is actually paid, which may be at any time from a few days to a number
of years.

--------------------------------------------

CHANGES IN POLICIES. Unless otherwise noted, the Funds' policies (including
each Fund's Objective) are non-fundamental and may be changed without a
shareholder vote.

DEFENSIVE INVESTING. During unusual market conditions, each Fund may place
significant assets in cash or high-quality, short-term debt securities. To the
extent that a Fund does this, it may not be pursuing its Objective. A Fund's
investment manager may choose to keep the Fund fully or primarily invested in
non-cash instruments, irrespective of market conditions.

MANAGEMENT RISK. Although a Fund may have the flexibility to use some or
all of the investment strategies, securities and derivative instruments
described in this prospectus and in the SAI, the Fund's investment manager may
choose not to use a particular strategy or type of security for a variety of
reasons. These choices may cause the Fund to miss opportunities, lose money or
not achieve its Objective.

SECURITIES RATINGS. When securities are rated by one or more independent
rating agencies, a Fund uses these ratings to determine credit quality. In cases
where a security is rated in conflicting categories by different rating
agencies, a Fund may choose to follow the higher rating.

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<PAGE>

State Street Research
Core Fixed Fund

FINANCIAL HIGHLIGHTS

These highlights are intended to help investors understand the Core
Fixed Fund's performance from August 2, 1999 (commencement of operations) to
January 31, 2000. Certain information reflects financial results for a single
Core Fixed Fund Share. The total returns in the table represent the rate that
an investor would have earned on an investment in the Core Fixed Fund
(assuming reinvestment of all dividends and distributions). This information
has been audited by PricewaterhouseCoopers LLP, whose report, along with the
Core Fixed Fund's financial statements, are included in the Core Fixed
Fund's annual report, which is available upon request.

<TABLE>
<CAPTION>
Per Share Data(1) Class I Class II Class III Class IV
- -------------- ------- -------- --------- --------
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD ($) 10.00 10.00 10.00 10.00
------- ------- --------- ---------

Net investment income ($) * 0.27 0.29 0.30 0.30
Net realized and unrealized loss on
investments, and futures contracts ($) (0.15) (0.17) (0.17) (0.17)
-------- -------- ---------- ----------

TOTAL FROM INVESTMENT OPERATIONS ($) 0.12 0.12 0.13 0.13
------- ------- --------- ---------

Dividend from net investment income ($) (0.23) (0.23) (0.24) (0.24)
Distribution from net realized gains ($) (0.03) (0.03) (0.03) (0.03)

TOTAL DISTRIBUTIONS ($) (0.26) (0.26) (0.27) (0.27)
-------- -------- ---------- ----------

NET ASSET VALUE, END OF PERIOD ($) 9.86 9.86 9.86 9.86
======= ======= ========= =========

Total return (%)(2) 1.19(3) 1.22(3) 1.26(3) 1.28(3)
RATIOS/SUPPLEMENTAL DATA:
Net assets at end of period ($ thousands) 5,433 495 495 8,435
Ratio of operating expenses
to average net assets (%)* 0.50(4) 0.40(4) 0.30(4) 0.25(4)
Ratio of net investment income
to average net assets (%) * 5.78(4) 5.81(4) 5.91(4) 5.93(4)
Portfolio turnover rate (%) 213.41 213.41 213.41 213.41
* Reflects voluntary reduction of
expenses per share of these amounts ($) 0.04 0.04 0.04 0.04
</TABLE>

- --------
(1) Per-share figures have been calculated using the average shares method.
(2) Total return would be lower if the Distributor and its affiliates had not
reduced a portion of the Core Fixed Fund's expenses.
(3) Not annualized.
(4) Annualized.

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<PAGE>

State Street Research
Core Plus Fund

FINANCIAL HIGHLIGHTS

These highlights are intended to help investors understand the Core
Plus Fund's performance from August 2, 1999 (commencement of operations) to
January 31, 2000. Certain information reflects financial results for a single
Core Plus Fund Share. The total returns in the table represent the rate that
an investor would have earned on an investment in the Core Plus Fund
(assuming reinvestment of all dividends and distributions). This information
has been audited by PricewaterhouseCoopersLLP, whose report, along with the
Core Plus Fund's financial statements, are included in the Core Plus Fund's
annual report, which is available upon request.

Net investment income ($) * 0.30 0.30 0.31 0.31
Net realized and unrealized loss on
investments, foreign currency,
and forward contracts ($) (0.14) (0.14) (0.14) (0.14)
-------- -------- ---------- ----------

TOTAL FROM INVESTMENT OPERATIONS ($) 0.16 0.16 0.17 0.17
------- ------- --------- ---------

Dividend from net investment income ($) (0.25) (0.25) (0.26) (0.26)
Distribution from net realized gains ($) (0.05) (0.05) (0.05) (0.05)

TOTAL DISTRIBUTIONS ($) (0.30) (0.30) (0.31) (0.31)
-------- -------- ---------- ----------

NET ASSET VALUE, END OF PERIOD ($) 9.86 9.86 9.86 9.86
======= ======= ========= =========

Total return (%)(2) 1.62(3) 1.66(3) 1.70(3) 1.72(3)
RATIOS/SUPPLEMENTAL DATA:
Net assets at end of period ($ thousands) 496 496 496 11,426
Ratio of operating expenses
to average net assets (%)* 0.50(4) 0.40(4) 0.30(4) 0.25(4)
Ratio of net investment income
to average net assets (%) * 5.88(4) 5.98(4) 6.08(4) 6.13(4)
Portfolio turnover rate (%) 234.12 234.12 234.12 234.12
* Reflects voluntary reduction of
expenses per share of these amounts ($) 0.04 0.04 0.04 0.04
</TABLE>
- --------
(1) Per-share figures have been calculated using the average shares method.
(2) Total return would be lower if the Distributor and its affiliates had not
reduced a portion of the Core Plus Fund's expenses.
(3) Not annualized.
(4) Annualized.

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<PAGE>

State Street Research
Core Large Cap Growth Fund

FINANCIAL HIGHLIGHTS

These highlights are intended to help investors understand the Core
Large Cap Growth Fund's performance from August 2, 1999 (commencement of
operations) to January 31, 2000. Certain information reflects financial
results for a single Core Large Cap Growth Fund Share. The total returns in
the table represent the rate that an investor would have earned on an
investment in the Core Large Cap Growth Fund (assuming reinvestment of all
dividends and distributions). This information has been audited by
PricewaterhouseCoopersLLP, whose report, along with the Core Large Cap Growth
Fund's financial statements, are included in the Core Large Cap Growth Fund's
annual report, which is available upon request.

Net investment income ($) * 0.01 0.01 0.02 0.02
Net realized and unrealized gain on
investments ($) 0.93 0.94 0.93 0.94
------- ------- --------- ---------

TOTAL FROM INVESTMENT OPERATIONS ($) 0.94 0.95 0.95 0.96
------- ------- --------- ---------

NET ASSET VALUE, END OF PERIOD ($) 10.94 10.95 10.95 10.96
======= ======= ========= =========

Total return (%)(2) 9.40(3) 9.50(3) 9.50(3) 9.60(3)
RATIOS/SUPPLEMENTAL DATA:
Net assets at end of period ($ thousands) 274 274 274 301
Ratio of operating expenses
to average net assets (%)* 0.65(4) 0.55(4) 0.45(4) 0.40(4)
Ratio of net investment income
to average net assets (%) * 0.12(4) 0.22(4) 0.32(4) 0.37(4)
Portfolio turnover rate (%) 40.53 40.53 40.53 40.53
* Reflects voluntary reduction of
expenses per share of these amounts ($) 0.41 0.41 0.41 0.41
</TABLE>
- --------
(1) Per-share figures have been calculated using the average shares method.
(2) Total return would be lower if the Distributor and its affiliates had not
reduced a portion of the Core Large Cap Growth Fund's expenses.
(3) Not annualized.
(4) Annualized.

-25-

<PAGE>

State Street Research
Large Cap Growth Fund

FINANCIAL HIGHLIGHTS

These highlights are intended to help investors understand the Large
Cap Growth Fund's performance from August 2, 1999 (commencement of
operations) to January 31, 2000. Certain information reflects financial
results for a single Large Cap Growth Fund Share. The total returns in the
table represent the rate that an investor would have earned on an investment
in the Large Cap Growth Fund (assuming reinvestment of all dividends and
distributions). This information has been audited by
PricewaterhouseCoopersLLP, whose report, along with the Large Cap Growth
Fund's financial statements, are included in the Large Cap Growth Fund's
annual report, which is available upon request.

Net investment income (loss) ($) * (0.01) (0.00) 0.01 0.01
Net realized and unrealized gain on
investments ($) 2.32 2.32 2.32 2.32
------- ------- --------- ---------

TOTAL FROM INVESTMENT OPERATIONS ($) 2.31 2.32 2.33 2.33
------- ------- --------- ---------

NET ASSET VALUE, END OF PERIOD ($) 12.31 12.32 12.33 12.33
======= ======= ========= =========

Total return (%)(2) 23.10(3) 23.20(3) 23.30(3) 23.30(3)
RATIOS/SUPPLEMENTAL DATA:
Net assets at end of period ($ thousands) 308 308 308 339
Ratio of operating expenses
to average net assets (%)* 0.65(4) 0.55(4) 0.45(4) 0.40(4)
Ratio of net investment income (loss)
to average net assets (%) * (0.11)(4) (0.01)(4) 0.09(4) 0.14(4)
Portfolio turnover rate (%) 41.57 41.57 41.57 41.57
* Reflects voluntary reduction of
expenses per share of these amounts ($) 0.41 0.41 0.41 0.41
</TABLE>
- --------
(1) Per-share figures have been calculated using the average shares method.
(2) Total return would be lower if the Distributor and its affiliates had not
reduced a portion of the Large Cap Growth Fund's expenses.
(3) Not annualized.
(4) Annualized.

-26-

<PAGE>

For Additional Information

IF YOU HAVE QUESTIONS ABOUT THE FUNDS OR WOULD LIKE TO REQUEST A FREE COPY OF
THE CURRENT ANNUAL/SEMIANNUAL REPORT OR SAI, CONTACT STATE STREET RESEARCH.

STATE STREET RESEARCH INSTITUTIONAL FUNDS
One Financial Center
Boston, MA 02111
Telephone: 1-800-521-6548

YOU CAN ALSO OBTAIN INFORMATION ABOUT THE FUNDS, INCLUDING THE SAI AND CERTAIN
OTHER FUND DOCUMENTS, ON THE SEC'S EDGAR DATABASE ON THE INTERNET AT
WWW.SEC.GOV, BY ELECTRONIC REQUEST AT [email protected], IN PERSON AT THE SEC'S
PUBLIC REFERENCE ROOM IN WASHINGTON, DC (TELEPHONE 1-202-942-8090) OR BY MAIL BY
SENDING YOUR REQUEST, ALONG WITH A DUPLICATING FEE, TO THE SEC'S PUBLIC
REFERENCE SECTION, WASHINGTON, DC 20549-0102.

You can find additional information on the Funds' structure and their
performance in the STATEMENT OF ADDITIONAL INFORMATION (SAI). The SAI
contains further information about the Funds and their investment limitations
and policies. A current SAI for these Funds is on file with the Securities
and Exchange Commission and is incorporated by reference into (is legally
part of) this prospectus.

Additional information about the Funds' investments is available in the
Funds' annual and semi-annual reports to shareholders.

811-9247

<PAGE>

STATE STREET RESEARCH
INSTITUTIONAL FUNDS

STATEMENT OF ADDITIONAL INFORMATION

June 1, 2000

The Statement of Additional Information is not a Prospectus. It should be
read only in conjunction with the Prospectus of the State Street Research
Institutional Funds (the "Trust") dated June 1, 2000 (the "Prospectus").

Financial statements for the State Street Research Institutional Funds, as
of and for the most recently completed fiscal year, are included in its Annual
Report to Shareholders for that year. The financial statements include the
Investment Portfolios, Statement of Assets and Liabilities, Statements of
Operations, Statement of Changes in Net Assets, Notes to Financial Statements,
Financial Highlights and Report of Independent Accountants. The financial
statements are hereby incorporated by reference from the following Annual
Report.

- --------------------------------------------------------------------------------
EDGAR
Annual Report Fiscal Year Ended Accession Number
- --------------------------------------------------------------------------------
State Street Research
Institutional Funds January 31, 2000 0000950146-00-000366
- --------------------------------------------------------------------------------

A State Street Research Institutional Funds prospectus and shareholder
report may be obtained without charge by calling 1-800-521-6548. You may also
obtain copies from the offices of State Street Research Institutional Funds, One
Financial Center, Boston, Massachusetts 02111-2690.

<PAGE>
TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page
----
<S> <C>
TRUST HISTORY AND CLASSIFICATION . . . . . . . . . . . . . . . . . . . . . . . . . .3

ADDITIONAL INVESTMENT POLICIES AND RESTRICTIONS. . . . . . . . . . . . . . . . . . .3

ADDITIONAL INFORMATION CONCERNING
INVESTMENTS AND RISKS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5

DEBT INSTRUMENTS AND
PERMITTED CASH INVESTMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

CLASSES OF SHARES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

TRUSTEES AND OFFICERS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

MANAGEMENT OF THE FUND AND INVESTMENT ADVISORY AND OTHER SERVICES. . . . . . . . . 35

PURCHASE AND REDEMPTION OF SHARES. . . . . . . . . . . . . . . . . . . . . . . . . 37

SHAREHOLDER ACCOUNTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38

NET ASSET VALUE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39

PORTFOLIO TRANSACTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40

CERTAIN TAX MATTERS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43

CALCULATION OF PERFORMANCE DATA. . . . . . . . . . . . . . . . . . . . . . . . . . 47

TRANSFER AGENT AND DIVIDEND DISBURSING AGENT . . . . . . . . . . . . . . . . . . . 51

CUSTODIAN. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52

DISTRIBUTOR. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52

INDEPENDENT ACCOUNTANTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
</TABLE>

2
<PAGE>

TRUST HISTORY AND CLASSIFICATION

State Street Research Institutional Funds (the "Trust") is a Massachusetts
business trust organized on March 3, 1999. The Trust is an open-end management
investment company with an unlimited number of authorized shares of beneficial
interest. These shares may be divided into different "series," each of which is
a separately managed pool of assets of the Trust that may have a different
investment objective and different investment policies from the objective and
policies of another series. The Trust's shares are currently divided into four
series: the State Street Research Core Fixed Income Fund, the State Street
Research Core Plus Fixed Income Fund, the State Street Research Core Large Cap
Growth Fund and the State Street Research Large Cap Growth Fund (each a "Fund,"
and collectively, the "Funds"). The Trustees may, without shareholder approval,
create additional series of shares representing additional investment
portfolios. Any such series may, without shareholder approval, be divided into
two or more classes of shares having such preferences and special or relative
rights and privileges as the Trustees determine. Each Fund's shares are
currently divided into four classes: Class I, Class II, Class III and Class IV
shares.

ADDITIONAL INVESTMENT POLICIES AND RESTRICTIONS

The Trust has adopted certain investment restrictions with respect to each
Fund, and those investment restrictions are either fundamental or not
fundamental. Fundamental restrictions with respect to each Fund may not be
changed by the Trust except by the affirmative vote of a majority of the
outstanding voting securities of such Fund. Restrictions that are not
fundamental may be changed by a vote of the Trustees of the Trust. With respect
to the investment restrictions described below, all percentage limitations on
investments apply at the time of investment and shall not be considered violated
unless an excess or deficiency occurs or exists immediately after and as a
result of such investment.

The fundamental and nonfundamental policies of the Fund do not apply to any
matters involving the issuance of multiple classes of shares of the Fund or the
creation or use of structures (such as a fund of funds or master-feeder
structure) allowing the Fund to invest any or all of its assets in collective
investment vehicles or allowing the Fund to serve as such a collective
investment vehicle for other funds, to the extent permitted by law and
regulatory authorities.

The Trust's fundamental investment restrictions with respect to each Fund
are set forth below. Under these restrictions, it is the Trust's policy with
respect to each Fund:

(1) not to purchase a security of any one issuer (other than securities
issued or guaranteed as to principal or interest by the U.S.
Government or its agencies or instrumentalities or mixed-ownership
U.S. Government corporations or sponsored enterprises) if such
purchase would, with respect to 75% of the Fund's total assets, cause
more than 5% of the Fund's total assets to be invested

3
<PAGE>

in the securities of such issuer or cause more than 10% of the voting
securities of such issuer to be held by the Fund;

(2) not to issue senior securities as defined in the 1940 Act, except as
permitted by that Act and the rules, regulations or pronouncements
thereunder or as permitted by the Securities and Exchange Commission
(the creation of general liens or security interests under industry
practices for transactions in portfolio assets are not deemed to
involve the issuance of senior securities);

(3) not to underwrite or participate in the marketing of securities of
other issuers, except (a) the Fund may, acting alone or in syndicates
or groups, purchase or otherwise acquire securities of other issuers
for investment, either from the issuers or from persons in a control
relationship with the issuers or from underwriters of such securities;
and (b) to the extent that, in connection with the disposition of the
Fund's securities, the Fund may be a selling shareholder in an
offering or deemed to be an underwriter under certain federal
securities laws;

(4) not to purchase fee simple interests in real estate unless acquired as
a result of ownership of securities or other instruments, although the
Fund may purchase and sell other interests in real estate including
securities which are secured by real estate, or securities of
companies which make real estate loans or own, or invest or deal in,
real estate;

(5) not to invest in physical commodities or physical commodity contracts
and not to invest in options in excess of 10% of the Fund's total
assets, except that investments in essentially financial items or
arrangements such as, but not limited to, swap arrangements, hybrids,
currencies, currency and other forward contracts, delayed delivery and
when-issued contracts, futures contracts and options on futures
contracts on securities, securities indices, interest rates and
currencies shall not be deemed investments in commodities or
commodities contracts;

(6) not to lend money; however, the Fund may lend portfolio securities and
purchase bonds, debentures, notes, bills and any other debt related
instruments or interests (and enter into repurchase agreements with
respect thereto);

(7) not to make any investment which would cause more than 25% of the
value of the Fund's total assets to be invested in securities of
non-U.S. Government-related issuers principally engaged in any one
industry, as described in the Fund's Prospectus or Statement of
Additional Information as amended from time to time; and

(8) not to borrow money, including reverse repurchase agreements in so far
as such agreements may be regarded as borrowings, except for
borrowings not in an

4
<PAGE>

amount in excess of 33 1/3% of the value of its total assets
(including the proceeds of any such borrowings).

The following investment restrictions are not fundamental and may be
changed with respect to each Fund without shareholder approval. Under these
restrictions, it is the Trust's policy with respect to each Fund:

(1) not to purchase any security or enter into a repurchase agreement if
as a result more than 15% of its net assets would be invested in
securities that are illiquid (including repurchase agreements not
entitling the holder to payment of principal and interest within seven
days);

(2) not to engage in transactions in options except in connection with
options on securities, securities indices, currencies and interest
rates, and options on futures on securities, securities indices,
currencies and interest rates;

(3) not to purchase securities on margin or make short sales of securities
or maintain a short position except for short sales "against the box"
(for the purpose of this restriction, escrow or custodian receipts or
letters, margin or safekeeping accounts, or similar arrangements used
in the industry in connection with the trading of futures, options and
forward commitments are not deemed to involve the use of margin); and

(4) not to purchase a security issued by another investment company,
except to the extent permitted under the 1940 Act or any exemptive
order from the Securities and Exchange Commission or except by
purchases in the open market involving only customary brokers'
commissions, or securities acquired as dividends or distributions or
in connection with a merger, consolidation or similar transaction or
other exchange.

ADDITIONAL INFORMATION CONCERNING
INVESTMENTS AND RISKS

DERIVATIVES

To the extent described in the Prospectus, all of the Funds may buy and
sell certain types of derivatives, such as options, futures contracts, options
on futures contracts, and swaps under circumstances in which such instruments
are expected by State Street Research & Management Company, the Fund's
investment manager (the "Investment Manager"), to aid in achieving a Funds'
investment objective. A Fund may also purchase instruments with characteristics
of both futures and securities (e.g., debt instruments with interest and
principal payments determined by reference to the value of a commodity or a
currency at a future time) and which, therefore, possess the risks of both
futures and securities investments.

5
<PAGE>

Derivatives, such as options, futures contracts, options on futures
contracts, and swaps enable a Fund to take both "short" positions (positions
which anticipate a decline in the market value of a particular asset or index)
and "long" positions (positions which anticipate an increase in the market value
of a particular asset or index). A Fund may also use strategies which involve
simultaneous short and long positions in response to specific market conditions,
such as where the Investment Manager anticipates unusually high or low market
volatility.

All Funds may use derivatives for hedging. The term hedging is applied to
defensive strategies designed to protect a Fund from an expected decline in the
market value of an asset or group of assets that the Fund owns (in the case of a
short hedge) or to protect a Fund from an expected rise in the market value of
an asset or group of assets which it intends to acquire in the future (in the
case of a long or "anticipatory" hedge). This includes the use of currency
based derivatives for hedging a Fund's positions in non-U.S. dollar-denominated
securities, including cross-currency hedging between two currencies other than
the U.S. dollar. See "Currency Transactions." All Funds may also use
derivatives for liquidity purposes. All Funds may use derivatives for
investment purposes, including non-hedging strategies designed to produce
incremental income (such as the option writing strategy described below) or
strategies which are undertaken to profit from (i) an expected decline in the
market value of an asset or group of assets which a Fund does not own or (ii)
expected increases in the market value of an asset which it does not plan to
acquire. Information about specific types of instruments is provided below.

FUTURES CONTRACTS

Futures contracts are publicly traded contracts to buy or sell an
underlying asset or group of assets, such as a currency or an index of
securities, at a future time at a specified price. A contract to buy
establishes a long position while a contract to sell establishes a short
position.

The purchase of a futures contract on an equity security or an index of
equity securities normally enables a buyer to participate in the market movement
of the underlying asset or index after paying a transaction charge and posting
margin in an amount equal to a small percentage of the value of the underlying
asset or index. A Fund will initially be required to deposit with the Trust's
custodian or the futures commission merchant effecting the futures transaction
an amount of "initial margin" in cash or securities, as permitted under
applicable regulatory policies.

Initial margin in futures transactions is different from margin in
securities transactions in that the former does not involve the borrowing of
funds by the customer to finance the transaction. Rather, the initial margin is
like a performance bond or good faith deposit on the contract. Subsequent
payments (called "maintenance margin") to and from the broker will be made on a
daily basis as the price of the underlying asset fluctuates. This process is
known as "marking to market." For example, when a Fund has taken a long
position in a futures contract and the value of the underlying asset has risen,
that position will have increased in value and the Fund will receive from the
broker a maintenance margin payment equal to the

6
<PAGE>

increase in value of the underlying asset. Conversely, when a Fund has taken a
long position in a futures contract and the value of the underlying instrument
has declined, the position would be less valuable, and the Fund would be
required to make a maintenance margin payment to the broker.

At any time prior to expiration of the futures contract, a Fund may elect
to close the position by taking an opposite position which will terminate the
Fund's position in the futures contract. A final determination of maintenance
margin is then made, additional cash is required to be paid by or released to
the Fund, and the Fund realizes a loss or a gain. While futures contracts with
respect to securities do provide for the delivery and acceptance of such
securities, such delivery and acceptance are seldom made.

In transactions establishing a long position in a futures contract, assets
equal to the face value of the futures contract will be identified by a Fund to
the Trust's custodian for maintenance in a separate account to insure that the
Fund can meet its obligations under the futures contract, and to minimize the
risk that leverage could cause the Fund's assets to be inadequate to cover its
obligations. Similarly, assets having a value equal to the aggregate face value
of the futures contract will be identified with respect to each short position.
A Fund will utilize such assets and methods of cover as appropriate under
applicable exchange and regulatory policies.

OPTIONS

A Fund may use options to implement its investment strategy. There are two
basic types of options: "puts" and "calls." Each type of option can establish
either a long or a short position, depending upon whether the Fund is the
purchaser or the writer of the option. A call option on a security, for
example, gives the purchaser of the option the right to buy, and the writer the
obligation to sell, the underlying asset at the exercise price during the option
period. Conversely, a put option on a security gives the purchaser the right to
sell, and the writer the obligation to buy, the underlying asset at the exercise
price during the option period.

The risk of purchasing an option is equal to the premium paid, regardless
of how the price of the underlying asset changes. The opportunity for gain or
loss from a purchased option is dependent upon increases or decreases in the
value of the underlying asset. In general, a purchased put increases in value
as the value of the underlying security falls and a purchased call increases in
value as the value of the underlying security rises.

The principal reason to write options is to generate extra income (the
premium paid by the buyer). Written options have varying degrees of risk. An
uncovered written call option theoretically carries unlimited risk, as the
market price of the underlying asset could rise far above the exercise price
before its expiration. This risk is tempered when the call option is covered,
that is, when the option writer owns the underlying asset. In this case, the
writer runs the risk of the lost opportunity to participate in the appreciation
in value of the asset rather than the risk of an out-of-pocket loss. A written
put option has defined risk, that is, the

7
<PAGE>

difference between the agreed-upon price that a Fund must pay to the buyer upon
exercise of the put and the value, which could be zero, of the asset at the time
of exercise.

The obligation of the writer of an option continues until the writer
effects a closing purchase transaction or until the option expires. To secure
its obligation to deliver the underlying asset in the case of a call option, or
to pay for the underlying asset in the case of a put option, a covered writer is
required to deposit in escrow the underlying security or other assets in
accordance with the rules of the applicable clearing corporation and exchanges.

Among the options which a Fund may enter are options on securities indices.
A securities index assigns relative values to the securities included in the
index. In general, options on indices of securities are similar to options on
the securities themselves except that delivery requirements are different. For
example, a put option on an index of securities does not give the holder the
right to make actual delivery of a basket of securities but instead gives the
holder the right to receive an amount of cash upon exercise of the option if the
value of the underlying index has fallen below the exercise price. The amount
of cash received will be equal to the difference between the closing price of
the index and the exercise price of the option expressed in dollars times a
specified multiple. As with options on equity securities or futures contracts,
a Fund may offset its position in index options prior to expiration by entering
into a closing transaction on an exchange or it may let the option expire
unexercised. In connection with the use of such options, a Fund may cover its
position by identifying assets having a value equal to the aggregate face value
of the option position taken.

OPTIONS ON FUTURES CONTRACTS

An option on a futures contract gives the purchaser the right, in return
for the premium paid, to assume a position in a futures contract (a long
position if the option is a call and a short position if the option is a put) at
a specified exercise price at any time during the period of the option.

LIMITATIONS AND RISKS OF OPTIONS AND FUTURES ACTIVITY

A Fund may not establish a position in a commodity futures contract or
purchase or sell a commodity option contract for other than bona fide hedging
purposes if immediately thereafter the sum of the amount of initial margin
deposits and premiums required to establish such positions for such non-hedging
purposes would exceed 5% of the market value of the Fund's net assets. The
Funds apply a similar policy to options that are not commodities.

As noted above, a Fund may engage in both hedging and nonhedging
strategies. Although effective hedging can generally capture the bulk of a
desired risk adjustment, no hedge is completely effective. A Fund's ability to
hedge effectively through transactions in futures and options depends on the
degree to which price movements in its holdings correlate with price movements
of the futures and options.

8
<PAGE>

Non-hedging strategies typically involve special risks. The profitability
of a Fund's non-hedging strategies will depend on the ability of the Investment
Manager to analyze both the applicable derivatives market and the market for the
underlying asset or group of assets. Derivatives markets are often more volatile
than corresponding securities markets and a relatively small change in the price
of the underlying asset or group of assets can have a magnified effect upon the
price of a related derivative instrument.

Derivatives markets also are often less liquid than the market for the
underlying asset or group of assets. Some positions in futures and options may
be closed out only on an exchange which provides a secondary market therefor.
There can be no assurance that a liquid secondary market will exist for any
particular futures contract or option at any specific time. Thus, it may not
be possible to close such an option or futures position prior to maturity. The
inability to close options and futures positions also could have an adverse
impact on a Fund's ability to effectively carry out their derivative strategies
and might, in some cases, require the Fund to deposit cash to meet applicable
margin requirements. A Fund will enter into an option or futures position only
if it appears to be a liquid investment.

SHORT SALES AGAINST THE BOX

The Core Large Cap Growth and Large Cap Growth Funds (the "Equity Funds")
may effect short sales, but only if such transactions are short sale
transactions known as short sales "against the box." A short sale is a
transaction in which the Fund sells a security it does not own by borrowing it
from a broker, and consequently becomes obligated to replace that security. A
short sale against the box is a short sale where the fund owns the security sold
short or has an immediate and unconditional right to acquire that security
without additional cash consideration upon conversation, exercise or exchange of
options with respect to securities held in its portfolio. The effect of selling
a security short against the box is to insulate that security against any future
gain or loss.

SWAP ARRANGEMENTS

All Funds may enter into various forms of swap arrangements with
counterparties with respect to, among other things, interest rates, currency
rates, indices or specific securities (or baskets of securities identified
by, among other things, issuers or credit ratings), including purchase of
caps, floors and collars as described below. The Funds, however, do not
expect to invest more than 5% of their net assets in such items. In an
interest rate swap, a Fund could agree for a specified period to pay a bank
or investment banker the floating rate of interest on a so-called notional
principal amount (i.e., an assumed figure selected by the parties for this
purpose) in exchange for agreement by the bank or investment banker to pay a
Fund a fixed rate of interest on the notional principal amount. In a
currency swap, a Fund would agree with the other party to exchange cash flows
based on the relative differences in values of a notional amount of two (or
more) currencies; in an index swap, the Fund would agree to exchange cash
flows on a notional amount based on changes in the values of the selected
indices. Purchase of a cap entitles the purchaser to receive payments from
the seller on a notional amount to the extent that the selected index exceeds
an agreed upon interest rate or amount whereas purchase of a floor entitles
the purchaser to receive such payments to the extent the selected index falls
below an agreed upon interest rate or amount. A collar combines a cap and a
floor.

9
<PAGE>

A Fund may enter credit protection swap arrangements involving the sale by
the Fund of a put option on a debt security which is exercisable by the buyer
upon certain events, such as a default by the referenced creditor on the
underlying debt or a bankruptcy event of the creditor.

Most swaps entered into by a Fund will be on a net basis; for example, in
an interest rate swap, amounts generated by application of the fixed rate and
the floating rate to the notional principal amount would first offset one
another, with the Fund either receiving or paying the difference between such
amounts. In order to be in a position to meet any obligations resulting from
swaps, a Fund will designate appropriate liquid assets, including cash or other
portfolio securities; for swaps entered into on a net basis, assets will be
segregated having a daily net asset value equal to any excess of the Fund's
accrued obligations over the accrued obligations of the other party, while for
swaps on other than a net basis assets will be segregated having a value equal
to the total amount of the Fund's obligations.

These arrangements will be made primarily for hedging purposes, to preserve
the return on an investment or on a portion of a Fund's portfolio. However, the
Fund may, as noted above, enter into such arrangements for income purposes to
the extent permitted by the Commodities Futures Trading Commission (the "CFTC")
for entities which are not commodity pool operators, such as the Fund. In
entering a swap arrangement, a Fund is dependent upon the creditworthiness and
good faith of the counterparty. The Fund attempts to reduce the risks of
nonperformance by the counterparty by dealing only with established, reputable
institutions. The swap market is still relatively new and emerging; positions
in swap arrangements may become illiquid to the extent that nonstandard
arrangements with one counterparty are not readily transferable to another
counterparty or if a market for the transfer of swap positions does not develop.
The use of interest rate swaps is a highly specialized activity which involves
investment techniques and risks different from those associated with ordinary
portfolio securities transactions. If the Investment Manager is incorrect in
its forecasts of market values, interest rates and other applicable factors, the
investment performance of a Fund would diminish compared with what it would have
been if these investment techniques were not used. Moreover, even if the
Investment Manager is correct in its forecasts, there is a risk that the swap
position may correlate imperfectly with the price of the asset or liability
being hedged.

REPURCHASE AGREEMENTS

All Funds may enter into repurchase agreements. Repurchase agreements
occur when the Fund acquires a security and the seller, which may be either (i)
a primary dealer in U.S. Government securities or (ii) an FDIC-insured bank
having gross assets in excess of $500 million, simultaneously commits to
repurchase it at an agreed-upon price on an agreed-upon date within a specified
number of days (usually not more than seven) from the date of purchase. The
repurchase price reflects the purchase price plus an agreed-upon market rate of
interest which is unrelated to coupon rate or maturity of the acquired security.
A Fund will only enter into repurchase agreements involving U.S. Government
securities. Repurchase agreements could involve certain risks in the event of
default or insolvency of the other party, including possible delays or
restrictions upon a Fund's ability to dispose of the underlying securities.

10
<PAGE>

REVERSE REPURCHASE AGREEMENTS

All Funds may enter into reverse repurchase agreements. However, the Fund
has no present intention of engaging in reverse repurchase agreements in excess
of 5% of the Fund's total assets. In a reverse repurchase agreement, the Fund
transfers a portfolio instrument to another person, such as a financial
institution, broker or dealer, in return for a percentage of the instrument's
market value in cash, and agrees that on a stipulated date in the future the
Fund will repurchase the portfolio instrument by remitting the original
consideration plus interest at an agreed-upon rate. The ability to use reverse
repurchase agreements may enable, but does not ensure the ability of, the Fund
to avoid selling portfolio instruments at a time when a sale may be deemed to be
disadvantageous.

When effecting reverse repurchase agreements, assets of the Fund in a
dollar amount sufficient to make payment of the obligations to be purchased are
segregated on the Fund's records at the trade date and maintained until the
transaction is settled.

WHEN-ISSUED SECURITIES

All Funds may purchase "when-issued" securities, which are traded on a
price or yield basis prior to actual issuance. Such purchases will be made only
to achieve a Fund's investment objective and not for leverage. The when-issued
trading period generally lasts from a few days to months, or over a year or
more; during this period dividends or interest on the securities are not
payable. A frequent form of when-issued trading occurs when corporate
securities to be created by a merger of companies are traded prior to the actual
consummation of the merger. Such transactions may involve a risk of loss if the
value of the securities falls below the price committed to prior to actual
issuance. The Trust's custodian will establish a segregated account when a Fund
purchases securities on a when-issued basis consisting of cash or liquid
securities equal to the amount of the when-issued commitments. Securities
transactions involving delayed deliveries or forward commitments are frequently
characterized as when-issued transactions and are similarly treated by a Fund.

RESTRICTED SECURITIES

Although all Funds may invest in restricted securities, it is each Funds'
policy not to make an investment in restricted securities, including restricted
securities sold in accordance with Rule 144A under the Securities Act of 1933
("Rule 144A Securities") if, as a result, more than 50% of the Fund's total
assets are invested in restricted securities, provided not more than 15% of the
Fund's total assets are invested in illiquid securities.

Securities may be resold pursuant to Rule 144A under certain circumstances
only to qualified institutional buyers as defined in the rule, and the markets
and trading practices for such securities are relatively new and still
developing; depending on the development of such markets, Rule 144A Securities
may be deemed to be liquid as determined by or in accordance with methods
adopted by the Trustees. Under such methods the following factors are
considered, among others: the frequency of trades and quotes for the security,
the number of dealers and potential purchasers in the market, market making
activity, and the nature of the security and marketplace trades. Investments in
Rule 144A Securities could have the effect of increasing the level of a Fund's
illiquidity to the extent that qualified institutional buyers

11
<PAGE>

become, for a time, uninterested in purchasing such securities. Also, a Fund
may be adversely impacted by the subjective valuation of such securities in
the absence of a market for them. Restricted securities that are not
resalable under Rule 144A may be subject to risks of illiquidity and
subjective valuations to a greater degree than Rule 144A Securities.

OTHER INVESTMENT COMPANIES

All Funds may invest in securities of other investment companies, such as
closed-end management investment companies, hub and spoke (master/feeder) funds,
fund of funds, or in pooled accounts or other similar investment vehicles. As a
shareholder of an investment company, a Fund may indirectly bear fees and
expenses in addition to the fees the Fund pays its service providers.

MORTGAGE-RELATED SECURITIES

The Core Fixed Income and Core Plus Fixed Income Funds (the "Fixed Income
Funds") may invest in mortgage-related securities. Mortgage-related securities
represent interests in pools of commercial or residential mortgage loans. Some
mortgage-related securities provide a Fund with a flow-through of interest and
principal payments as such payments are received with respect to the mortgages
in the pool. Mortgage-related securities may be issued by U.S. Government
agencies, instrumentalities or mixed-ownership corporations or sponsored
enterprises, and the securities may or may not be supported by the credit of
such entities. Mortgage-related securities may also be issued by private
entities such as investment banking firms, insurance companies, mortgage bankers
and home builders. An issuer may offer senior or subordinated securities backed
by the same pool of mortgages. The senior securities have priority to the
interest and/or principal payments on the mortgages in the pool; the subordinate
securities have a lower priority with respect to such payments on the mortgages
in the pool.

Mortgage-related securities also include stripped securities which have
been divided into separate interest and principal components. Holders of the
interest components of mortgage related securities will receive payments of the
interest only on the current face amount of the mortgages and holders of the
principal components will receive payments of the principal on the mortgages.
"Interest only" securities are known as IOs; "principal only" securities are
known as POs.

In the case of mortgage-related securities, the possibility of prepayment
of the underlying mortgages which might be motivated, for instance, by declining
interest rates, could lessen the potential for total return in mortgage-backed
securities. When prepayments of mortgages occur during periods of declining
interest rates, a Fund will have to reinvest the proceeds in instruments with
lower effective interest rates.

In the case of stripped securities, in periods of low interest rates and
rapid mortgage prepayments, the value of IOs for mortgage-related securities can
decrease significantly. There is no assurance that the market for IOs and POs
will operate efficiently or provide liquidity in the future. Stripped
securities are extremely volatile in certain interest rate environments.

12
<PAGE>

INDEXED SECURITIES

A Fund may purchase securities the value of which is indexed to interest
rates, foreign currencies and various indices and financial indicators. These
securities are generally short- to intermediate-term debt securities. The
interest rates or values at maturity fluctuate with the
index to which they are connected and may be more volatile than such index.

ASSET-BACKED SECURITIES

The Fixed Income Funds may invest in asset-backed securities, which are
securities that represent interests in pools of consumer loans such as credit
card receivables, automobile loans and leases, leases on equipment such as
computers, and other financial instruments. These securities provide a
flow-through of interest and principal payments as payments are received on the
loans or leases and may be supported by letters of credit or similar guarantees
of payment by a financial institution.

FOREIGN INVESTMENTS

All Funds may invest in securities of foreign issuers denominated in U.S.
dollars. All Funds except the Core Fixed Income Fund may invest in securities
denominated in foreign currencies issued or guaranteed by governments,
governmental agencies and similar bodies, and supranational organizations,
corporations, financial institutions, trusts, and other entities.

The Funds invest in foreign securities based on the attractiveness of the
issuer, the general economic climate, the interest rate environment, and the
relative strength of the U.S. dollar and relevant currency. The securities of
foreign governmental entities have various kinds of government support and
include obligations issued or guaranteed by foreign governmental entities with
taxing powers. These obligations may or may not be supported by the full faith
and credit of a foreign government. The securities of foreign corporations are
subject to many of the same business, industry and other fundamental variables
that affect the creditworthiness of domestic corporations. All foreign
securities, both governmental and nongovernmental, are also affected by the
inter-relationships of interest rates in the U.S. and abroad and exchange rates
among currencies.

Supranational debt may be denominated in U.S. dollars, a foreign currency
or a multi-national currently unit. Examples of supranational entities include
the World Bank, the European Investment Bank, the Asian Development Bank and the
Inter-American Development Bank. The governmental members, or "stockholders",
usually make initial capital contributions to the supranational entity and in
many cases are committed to make additional capital contributions if the
supranational entity is unable to repay its borrowings.

The Core Fixed Income and Core Plus Fixed Income Funds may also invest in
"Yankee" bonds. Yankee bonds are bonds denominated in U.S. dollars and issued
by foreign entities for sale in the United States. Yankee bonds are affected by
interest rates in the U.S. and by the economic, political and other forces which
impact the issuer locally.

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<PAGE>

The Funds may invest without limitation in securities of non-U.S. issuers
directly, or indirectly in the form of American Depositary Receipts ("ADRs"),
European Depositary Receipts ("EDRs") and Global Depositary Receipts ("GDRs").

ADRs are receipts, typically issued by a U.S. bank or trust company, which
evidence ownership of underlying securities issued by a foreign corporation or
other entity. EDRs are receipts issued in Europe which evidence a similar
ownership arrangement. GDRs are receipts issued in one country which also
evidence a similar ownership arrangement. Generally, ADRs in registered form
are designed for use in U.S. securities markets and EDRs are designed for use in
European securities markets. GDRs are designed for use when the issuer is
raising capital in more than one market simultaneously, such as the issuer's
local market and the U.S., and have been used to overcome local selling
restrictions to foreign investors. In addition, many GDRs are eligible for
book-entry settlement through Cedel, Euroclear and DTC. The underlying
securities are not always denominated in the same currency as the ADRs, EDRs or
GDRs. Although investment in the form of ADRs, EDRs or GDRs facilitates trading
in foreign securities, it does not mitigate all the risks associated with
investing in foreign securities.

ADRs are available through facilities which may be either "sponsored" or
"unsponsored." In a sponsored arrangement, the foreign issuer establishes the
facility, pays some or all of the depository's fees, and usually agrees to
provide shareholder communications. In an unsponsored arrangement, the foreign
issuer is not involved, and the ADR holders pay the fees of the depository.
Sponsored ADRs are generally more advantageous to the ADR holders and the issuer
than are unsponsored ADRs. More and higher fees are generally charged in an
unsponsored program compared to a sponsored facility. Only sponsored ADRs may
be listed on the New York or American Stock Exchanges. Unsponsored ADRs may
prove to be more risky due to (a) the additional costs involved to the Fund; (b)
the relative illiquidity of the issue in U.S. markets; and (c) the possibility
of higher trading costs in the over-the-counter market as opposed to exchange
based tradings. The Fund will take these and other risk considerations into
account before making an investment in an unsponsored ADR.

The risks associated with investments in foreign securities include those
resulting from fluctuations in currency exchange rates, revaluation of
currencies, future political and economic developments, including the risks of
nationalization or expropriation, the possible imposition of currency exchange
blockages, higher operating expenses, foreign withholding and other taxes which
may reduce investment return, reduced availability of public information
concerning issuers, the difficulties in obtaining and enforcing a judgment
against a foreign issuer and the fact that foreign issuers are not generally
subject to uniform accounting, auditing and financial reporting standards or to
other regulatory practices and requirements comparable to those applicable to
domestic issuers. Moreover, securities of many foreign issuers may be less
liquid and their prices more volatile than those of securities of comparable
domestic issuers.

These risks are usually higher in less-developed countries. Such countries
include countries that have an emerging stock market on which trade a small
number of securities and/or countries with economies that are based on only a
few industries. The Core Plus Fixed Income Fund, for example, may invest in the
securities of issuers in countries with less developed economies.

14
<PAGE>

CURRENCY TRANSACTIONS

A Fund may engage in currency exchange transactions in order to protect
against the effect of uncertain future exchange rates on securities denominated
in foreign currencies. A Fund will conduct its currency exchange transactions
either on a spot (i.e., cash) basis at the rate prevailing in the currency
exchange market, or by entering into forward contracts to purchase or sell
currencies. A Fund's dealings in forward currency contracts and other currency
transactions such as futures contracts, options, options on futures contracts
and swaps will be limited to hedging purposes, including transaction hedging and
position hedging, and also cross-hedging (as described in the next paragraph).
Transaction hedging is entering into a currency transaction with respect to
specific assets or liabilities of a Fund, which will generally arise in
connection with the purchase or sale of the Fund's portfolio securities or the
receipt of income from them. Position hedging is entering into a currency
transaction with respect to portfolio securities positions denominated or
generally quoted in that currency. A Fund will not enter into a transaction to
hedge currency exposure to an extent greater, after netting all transactions
intended wholly or partially to offset other transactions, than the aggregate
market value (at the time of entering into the transaction) of the securities
held by the Fund that are denominated or generally quoted in or currently
convertible into the currency, other than with respect to proxy hedging as
described below.

A Fund may cross-hedge currencies by entering into transactions to
purchase or sell one or more currencies that are expected to increase or
decline in value relative to other currencies to which the Fund has or in
which the Fund expects to have exposure. In most cases, the effect of
cross-hedging is not to eliminate currency risk, but to change exposure from
one currency to another. To reduce the effect of currency fluctuations on the
value of existing or anticipated holdings of its securities, a Fund may also
engage in proxy hedging. Proxy hedging is often used when the currency to
which a Fund's holdings are exposed is difficult to hedge generally or
difficult to hedge against the dollar. Proxy hedging entails entering into a
forward contract to sell a currency, the changes in the value of which are
generally considered to be linked to a currency or currencies in which some
or all of a Fund's securities are or are expected to be denominated, and to
buy dollars. The amount of the contract would not exceed the market value of
the Fund's securities denominated in linked currencies.

A forward currency contract involves an obligation to purchase or sell a
specific currency at a future date, which may be any fixed number of days from
the date of the contract agreed upon by the parties, at a price set at the time
of the contract. These contracts are not commodities and are entered into in
the interbank market conducted directly between currency traders (usually large
commercial banks) and their customers. In entering a forward currency contract,
a Fund is dependent upon the creditworthiness and good faith of the
counterparty. A Fund attempts to reduce the risks of nonperformance by the
counterparty by dealing only with established, reputable institutions. Although
spot and forward contracts will be used primarily to protect a Fund from adverse
currency movements, they also involve the risk that anticipated currency
movements will not be accurately predicted, which may result in losses to the
Fund. This method of protecting the value of a Fund's portfolio securities
against a decline in the value of a currency does not eliminate fluctuations in
the underlying prices of the securities. It simply establishes a rate of
exchange that can be achieved at some future point in time. Although such
contracts tend to minimize the risk of loss due to a decline in the value of
hedged currency, they tend to limit any potential gain that might result should
the value of such currency increase.

15
<PAGE>

Except for the Core Fixed Income Fund, the Funds may invest in securities
denominated in multi-national currencies.

SECURITIES LENDING

All Funds may lend portfolio securities with a value of up to 33 1/3% of
its total assets. A Fund will receive cash or cash equivalents (e.g., U.S.
Government obligations) as collateral in an amount equal to at least 100% of the
current market value of any loaned securities plus accrued interest. Collateral
received by a Fund will generally be held in the form tendered, although cash
may be invested in unaffiliated mutual funds with quality short-term portfolios,
securities issued or guaranteed by the U.S. Government or its agencies or
instrumentalities or certain unaffiliated mutual funds, repurchase agreements or
other similar investments. The investing of cash collateral received from
loaning portfolio securities involves leverage which magnifies the potential for
gain or loss on monies invested and, therefore, results in an increase in the
volatility of a Fund's outstanding securities. Such loans may be terminated at
any time.

A Fund may receive a lending fee and will retain rights to dividends,
interest or other distributions, on the loaned securities. Voting rights pass
with the lending, although a Fund may call loans to vote proxies if desired.
Should the borrower of the securities fail financially, there is a risk of delay
in recovery of the securities or loss of rights in the collateral. Loans are
made only to borrowers which are deemed by the Investment Manager or its agents
to be of good financial standing.

SHORT-TERM TRADING

All Funds may engage in short-term trading of securities and reserve full
freedom with respect to portfolio turnover. In periods where there are rapid
changes in economic conditions and security price levels or when reinvestment
strategy changes significantly, portfolio turnover may be higher than during
times of economic and market price stability or when investment strategy remains
relatively constant. A Fund's portfolio turnover rate may involve greater
transaction costs, relative to other funds in general, and may have tax and
other consequences.

TEMPORARY DEFENSIVE INVESTMENTS

A Fund may hold a significant portion of its assets in cash or high-quality
debt securities for temporary defensive purposes. A Fund may, but is not
required to, adopt a temporary defensive position when, in the opinion of the
Investment Manager, such a position is more likely to provide protection against
adverse market conditions than adherence to the Fund's other investment
policies. The types of high-quality instruments in which a Fund may invest for
such purposes include money market securities, such as repurchase agreements,
and securities issued or guaranteed by the U.S. Government or its agencies or
instrumentalities, certificates of deposit, time deposits and bankers'
acceptances of certain qualified financial institutions and corporate commercial
paper, which at the time of purchase are rated at least within the "A" major
rating category by Standard & Poor's Ratings Service ("S&P") or the "Prime"
major rating category by Moody's Investor's Service, Inc. ("Moody's"), or, if
not rated, issued by companies having an outstanding long-term unsecured debt
issued rated at least within the "A" category by S&P or Moody's.

16
<PAGE>

INDUSTRY AND SECTOR CLASSIFICATIONS

In determining how much of a Fund's portfolio is invested in a given
industry or sector, the following industry classifications are currently used.
Securities issued or guaranteed as to principal or interest by the U.S.
Government or its agencies or instrumentalities or mixed-ownership Government
corporations or sponsored enterprises (including repurchase agreements involving
U.S. Government securities to the extent excludable under relevant regulatory
interpretations) are excluded. Securities issued by foreign governments are
also excluded. Companies engaged in the business of financing may be classified
according to the industries of their parent or sponsor companies, or industries
that otherwise most affect such financing companies. Issuers of asset-backed
pools will be classified as separate industries based on the nature of the
underlying assets, such as mortgages and credit card receivables.
"Asset-backed--Mortgages" includes private pools of nongovernment backed
mortgages.

Autos & Transportation
- ----------------------
Air Transport
Auto Parts
Automobiles
Miscellaneous
Transportation
Railroad Equipment
Railroads
Recreational Vehicles & Boats
Tires & Rubber
Truckers

Consumer Directory
- ------------------
Advertising Agencies
Casino/Gambling,
Hotel/Motel
Commercial Services
Communication, Media & Entertainment
Consumer Electronics
Consumer Products
Consumer Services
Household Furnishings
Leisure Time
Photography
Printing & Publishing
Restaurants Retail
Shoes
Textile Apparel
Manufacturers
Toys

Consumer Staples
- ----------------
Beverages
Drug & Grocery Store
Chains
Foods
Household Products
Tobacco

Financial Services
- ------------------
Banks & Savings and Loans
Financial Data Processing Services & Systems
Insurance
Miscellaneous Financial
Real Estate Investment
Trusts
Rental & Leasing Services: Commercial
Securities Brokerage &Services

Health Care
- -----------
Drugs & Biotechnology
Health Care Facilities
Health Care Services
Hospital Supply
Service Miscellaneous

Integrated Oils
- ---------------
Oil: Integrated Domestic
Oil: Integrated International

Materials & Processing
- ----------------------
Agriculture
Building & Construction
Chemicals
Containers & Packaging
Diversified Manufacturing
Engineering & Contracting Serv.
Fertilizers
Forest Products
Gold & Precious Metals
Miscellaneous Materials & Processing
Non-Ferrous Metals
Office Supplies
Paper and Forest Productions
Real Estate & Construction
Steel
Textile Products

Other
- -----
Trust Certificates-Government Related
Lending
Asset-backed-Mortgages
Asset-backed-Credit Card Receivables
Asset-backed-Manufacturing & Housing

17
<PAGE>

Asset-backed-Home Equity
Asset-backed-Commercial
Asset-backed-Other
Other Energy
Gas Pipelines
Miscellaneous Energy
Offshore Drilling
Oil and Gas Producers
Oil Well Equipment & Services

Producer Durables
Aerospace
Electrical Equipment & Components
Electronics: Industrial
Homebuilding
Industrial Products
Machine Tools
Machinery
Miscellaneous Equipment
Miscellaneous Producer Durables
Office Furniture & Business Equipment
Pollution Control and Environmental Services
Production Technology Equipment
Telecommunications
Equipment

Technology
Communications Technology
Computer Software
Computer Technology
Electronics
Electronics: Semi-Conductors/Components
Miscellaneous Technology

Utilities
Miscellaneous Utilities
Utilities: Cable TV & Radio
Utilities: Electrical
Utilities: Gas distribution
Utilities: Telecommunications
Utilities: Water

<PAGE>

DEBT INSTRUMENTS AND
PERMITTED CASH INVESTMENTS

The Fixed Income Funds, and in certain circumstances the Equity Funds, in
certain circumstances, may invest in debt securities to the extent described in
the Prospectus and in other sections of this Statement of Additional
Information. Certain debt securities and money market instruments in which the
Funds may invest are described below.

MANAGING VOLATILITY- FIXED INCOME FUNDS

In administering the Core Fixed Income and Core Plus Fixed Income Funds'
investments, the Investment Manager generally attempts to maintain volatility
within targeted ranges by managing the duration and weighted average maturity of
each Fund's bond position.

Duration is an indicator of the expected volatility of a bond position in
response to changes in interest rates. In calculating duration, a Fund measures
the average time required to receive all cash flows associated with those debt
securities -- representing payments of principal and interest -- by considering
the timing, frequency and amount of payment expected from each portfolio debt
security. The higher the duration, the greater the gains and losses when
interest rates change. Duration generally is a more accurate measure of
potential volatility with a portfolio composed of high-quality debt securities,
such as U.S. government securities, municipal securities and high-grade U.S.
corporate bonds, than with lower-grade securities.

The Investment Manager may use several methods to manage the duration of
a Fund's bond positions in order to increase or decrease its exposure to
changes in interest rates. First, the Investment Manager may adjust duration
by adjusting the mix of debt securities held by the Fund. For example, if
the Investment Manager intends to shorten duration, it may sell debt
instruments that individually have a long duration and purchase other debt
instruments that individually have a shorter duration. Among the factors
that will affect a debt security's duration are the length of time to
maturity, the timing of interest and principal payments, and whether the
terms of the security give the issuer of the security the right to call the
security prior to maturity. Second, the Investment Manager may adjust bond
duration using derivative transactions, especially with interest rate futures
and options contracts. For example, if the Investment Manager wants to
lengthen the duration of a Fund's bond position, it could purchase interest
rate futures contracts instead of buying longer-term bonds or selling
shorter-term bonds. Similarly, during periods of lower interest rate
volatility, the Investment Manager may use a technique to extend duration in
the event rates rise by writing an out-of-the-money put option and receiving
premium income with the expectation that the option could be exercised. In
managing duration, the use of such derivatives may be faster and more
efficient than trading specific portfolio securities.

<PAGE>

U.S. GOVERNMENT AND RELATED SECURITIES

U.S. Government securities are securities which are issued or guaranteed as
to principal or interest by the U.S. Government, a U.S. Government agency or
instrumentality, or certain mixed-ownership U.S. Government corporations or
sponsored enterprises as described herein. The U.S. Government securities in
which the Funds may invest include, among others:

- direct obligations of the U.S. Treasury, i.e., U.S. Treasury bills,
notes, certificates and bonds;

- obligations of U.S. Government agencies or instrumentalities such as
the Federal Home Loan Banks, the Federal Farm Credit Banks, the
Federal National Mortgage Association, the Government National
Mortgage Association and the Federal Home Loan Mortgage Corporation;
and

- obligations of mixed-ownership Government corporations such as
Resolution Funding Corporation.

U.S. Government securities which a Fund may buy are backed in a variety
of ways by the U.S. Government, its agencies or instrumentalities. Some of
these obligations, such as Government National Mortgage Association
mortgage-backed securities, are backed by the full faith and credit of the
U.S. Treasury. Other obligations, such as those of the Federal National
Mortgage Association, are backed by the discretionary authority of the U.S.
Government to purchase certain obligations of agencies or instrumentalities,
although the U.S. Government has no legal obligation to do so. Obligations
such as those of the Federal Home Loan Bank, the Federal Farm Credit Bank,
the Federal National Mortgage Association and the Federal Home Loan Mortgage
Corporation are backed by the credit of the agency or instrumentality issuing
the obligations. Certain obligations of Resolution Funding Corporation, a
mixed-ownership Government corporation, are backed with respect to interest
payments by the U.S. Treasury, and with respect to principal payments by U.S.
Treasury obligations held in a segregated account with a Federal Reserve
Bank. Except for certain mortgage-related securities, a Fund will only
invest in obligations issued by mixed-ownership Government corporations where
such securities are guaranteed as to payment of principal or interest by the
U.S. Government or a U.S. Government agency or instrumentality, and any
unguaranteed principal or interest is otherwise supported by U.S. Government
obligations held in a segregated account.

U.S. Government securities may be acquired by a Fund in the form of
separately traded principal and interest components of securities issued or
guaranteed by the U.S. Treasury. The principal and interest components of
selected securities are traded independently under the Separate Trading of
Registered Interest and Principal of Securities ("STRIPS") program. Under the
STRIPS program, the principal and interest components are individually numbered
and separately issued by the U.S. Treasury at the request of depository
financial institutions, which then trade the component parts independently.
Obligations of Resolution Funding Corporation are similarly divided into
principal and interest components and maintained as such on the book entry
records of the Federal Reserve Banks.

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<PAGE>

In addition, a Fund may invest in custodial receipts that evidence
ownership of future interest payments, principal payments or both on certain
U.S. Treasury notes or bonds in connection with programs sponsored by banks and
brokerage firms. Such notes and bonds are held in custody by a bank on behalf
of the owners of the receipts. These custodial receipts are known by various
names, including "Treasury Receipts" ("TRs"), "Treasury Investment Growth
Receipts" ("TIGRs") and "Certificates of Accrual on Treasury Securities"
("CATS"), and may not be deemed U.S. Government securities.

A Fund may also invest from time to time in collective investment vehicles,
the assets of which consist principally of U.S. Government securities or other
assets substantially collateralized or supported by such securities, such as
Government trust certificates.

BANK MONEY INVESTMENTS

Bank money investments include, but are not limited to, certificates of
deposit, bankers' acceptances and time deposits. Certificates of deposit are
generally short-term (i.e., less than one year), interest-bearing negotiable
certificates issued by commercial banks or savings and loan associations
against funds deposited in the issuing institution. A banker's acceptance is
a time draft drawn on a commercial bank by a borrower, usually in connection
with an international commercial transaction (to finance the import, export,
transfer or storage of goods). A banker's acceptance may be obtained from a
domestic or foreign bank, including a U.S. branch or agency of a foreign
bank. The borrower is liable for payment as well as the bank, which
unconditionally guarantees to pay the draft at its face amount on the
maturity date. Most acceptances have maturities of six months or less and
are traded in secondary markets prior to maturity. Time deposits are
nonnegotiable deposits for a fixed period of time at a stated interest rate.
A Fund will not invest in any such bank money investment unless the
investment is issued by a U.S. bank that is a member of the Federal Deposit
Insurance Corporation ("FDIC"), including any foreign branch thereof, a U.S.
branch or agency of a foreign bank, a foreign branch of a foreign bank, or a
savings bank or savings and loan association that is a member of the FDIC and
which at the date of investment has capital, surplus and undivided profits
(as of the date of its most recently published financial statements) in
excess of $50 million. The Fund will not invest in time deposits maturing in
more than seven days and will not invest more than 15% of its total assets in
time deposits maturing in two to seven days.

U.S. branches and agencies of foreign banks are offices of foreign banks
and are not separately incorporated entities. They are chartered and regulated
either federally or under state law. U.S. federal branches or agencies of
foreign banks are chartered and regulated by the Comptroller of the Currency,
while state branches and agencies are chartered and regulated by authorities of
the respective states or the District of Columbia. U.S. branches of foreign
banks may accept deposits and thus are eligible for FDIC insurance; however, not
all such branches elect FDIC insurance. Unlike U.S. branches of foreign banks,
U.S. agencies of foreign banks may not accept deposits and thus are not eligible
for FDIC insurance. Both branches and agencies can maintain credit balances,
which are funds received by the office incidental to or arising out of the
exercise of their banking powers and can exercise other commercial functions,
such as lending activities.

21
<PAGE>

CAPITAL SECURITIES

The Fixed Income Funds may invest in capital securities, which are
securities issued by a trust having as its only assets junior subordinated
debentures of a corporation, typically a bank holding company. This structure
provides tax advantages to a bank holding company while generally providing
investors, such as the Funds, a higher yield than is offered by investing
directly in a bank holding company's subordinated debt.

SHORT-TERM CORPORATE DEBT INSTRUMENTS

Short-term corporate debt instruments include commercial paper to finance
short-term credit needs (i.e., short-term, unsecured promissory notes) issued
by, among others, (a) corporations and (b) domestic or foreign bank holding
companies or their subsidiaries or affiliates where the debt instrument is
guaranteed by the bank holding company or an affiliated bank or where the bank
holding company or the affiliated bank is unconditionally liable for the debt
instrument. Commercial paper is usually sold on a discounted basis and has a
maturity at the time of issuance not exceeding nine months.

LOWER RATED DEBT SECURITIES

The Core Plus Fund may invest in lower quality debt securities not rated
above the BB major rating category by S&P or above the Ba major rating category
by Moody's, or above similar levels by other rating agencies, or debt securities
that are unrated but considered by the Investment Manager to be of equivalent
investment quality to comparable rated securities.

Such securities generally involve more credit risk than higher rated
securities and are considered by S&P and Moody's to be predominantly
speculative with respect to capacity to pay interest and repay principal in
accordance with the terms of the obligation. Further, such securities may be
subject to greater market fluctuations and risk of loss of income and
principal than lower yielding, higher rated debt securities. Risk of lower
quality debt securities include (i) limited liquidity and secondary market
support, (ii) substantial market price volatility resulting from changes in
prevailing interest rates and/or investor perception, (iii) subordination to
the prior claims of banks and other senior lenders, (iv) the operation of
mandatory sinking fund or call/redemption provisions during periods of
declining interest rates when the fund may be required to reinvest premature
redemption proceeds in lower yielding portfolio securities; (v) the
possibility that earnings of the issuer may be insufficient to meet its debt
service; and (vi) the issuer's low creditworthiness and potential for
insolvency during periods of rising interest rates and economic downturn.
For further information concerning the ratings of debt securities, see
"--Commercial Paper Ratings" below.

ZERO (OR STEP) COUPON SECURITIES

The Fixed Income Funds may invest in zero and step coupon securities. Zero
(or step) coupon securities are debt securities that may pay no interest for all
or a portion of their life but are purchased at a discount to face value at
maturity. Their return consists of the amortization of the discount between
their purchase price and their maturity value, plus, in the case of a step
coupon, any fixed rate interest income. Zero coupon securities pay no interest
to holders prior to maturity even though interest on these securities is
reported as income to the Fund. The Fund

22
<PAGE>

will be required to distribute all or substantially all of such amounts
annually to its shareholders. These distributions may cause the Fund to
liquidate portfolio assets in order to make such distributions at a time when
the Fund may have otherwise chosen not to sell such securities. The market
value of such securities may be more volatile than that of securities which
pay interest at regular intervals.

MASTER LOAN PARTICIPATION AGREEMENTS

The Fixed Income Funds may invest in loan participations. These investments
represent interests in floating or variable rate loans to foreign countries,
corporations or other entities. Loan participations will generally be acquired
by the Fixed Income Funds from a lender, usually a bank or other similar
financial services entity. The underlying loans may pay interest at rates which
are periodically redetermined on the basis of a base lending rate plus a
premium. These base lending rates are generally the Prime Rate offered by a
major U.S. bank, the London InterBank Offered Rate or other base rates used by
commercial lenders.

The Fixed Income Funds may invest in loans which are not secured by any
collateral. Uncollateralized loans pose a greater risk of nonpayment of interest
or loss of principal than do collateralized loans. Interest and principal
payments on these loan participations may be reduced, deferred, suspended or
eliminated. While loan participations generally trade at par value, the Funds
will also be able to acquire loan participations that sell at a discount because
of the borrower's credit standing.

The loan participations generally are not rated by nationally recognized
statistical rating organizations. Participation interests generally are not
listed on any national securities exchange and no regular market has developed
for such interests. The loans may be subject to restrictions on resale and any
secondary purchases and sales generally are conducted in private transactions.

When acquiring a loan participation, the Funds will have a contractual
relationship only with the lender, not with the borrower. The Funds have the
right to receive payments of principal and interest only from the lender selling
the loan participation and only upon receipt by such lender of such payments
from the borrower. As a result, the Funds may assume the credit risk of both the
borrower and the lender selling the loan participation.

CERTAIN SECURITIES RATINGS

COMMERCIAL PAPER RATINGS

Commercial paper investments at the time of purchase will be rated within
the "A" major rating category by S&P, within the "Prime" major rating category
by Moody's, within comparable categories of other rating agencies or considered
to be of comparable quality by the Investment Manager, or, if not rated, issued
by companies having an outstanding long-term unsecured debt issue rated at least
within the "A" category by S&P, by Moody's, within comparable categories of
other rating agencies or considered to be of comparable quality by the
Investment Manager. The money market investments in corporate bonds and
debentures (which must have maturities at the date of settlement of one year or
less) must be rated at the time of purchase at least within the "A" category by
S&P, within the "Prime" category by Moody's,

23
<PAGE>

within comparable categories of other rating agencies or considered to be of
comparable quality by the Investment Manager.

Commercial paper rated within the "A" category (highest quality) by S&P
is issued by entities which have liquidity ratios which are adequate to meet
cash requirements. Long-term senior debt is rated within the "A" category or
better, although in some cases credits within the "BBB" category may be
allowed. The issuer has access to at least two additional channels of
borrowing. Basic earnings and cash flow have an upward trend with allowance
made for unusual circumstances. Typically, the issuer's industry is well
established and the issuer has a strong position within the industry. The
reliability and quality of management are unquestioned. The relative
strength or weakness of the above factors determines whether the issuer's
commercial paper is rated A-1, A-2 or A-3. (Those A-1 issues determined to
possess overwhelming safety characteristics are denoted with a plus (+) sign:
A-1+.)

The rating "Prime" is the highest commercial paper rating category assigned
by Moody's. Among the factors considered by Moody's in assigning ratings are
the following: evaluation of the management of the issuer; economic evaluation
of the issuer's industry or industries and an appraisal of speculative-type
risks which may be inherent in certain areas; evaluation of the issuer's
products in relation to competition and customer acceptance; liquidity; amount
and quality of long-term debt; trend of earnings over a period of 10 years;
financial management of obligations which may be present or may arise as a
result of public interest questions and preparations to meet such obligations.
These factors are all considered in determining whether the commercial paper is
rated Prime-1, Prime-2 or Prime-3.

RATING CATEGORIES OF DEBT SECURITIES

Set forth below is a description of S&P corporate bond and debenture rating
categories:

AAA: An obligation rated within the AAA category has the highest rating
assigned by S&P. Capacity to meet the financial commitment on the obligation is
extremely strong.

AA: An obligation rated within the AA category differs from the highest
rated obligation only in small degree. Capacity to meet the financial
obligation is very strong.

A: An obligation rated within the A category is somewhat more susceptible
to the adverse effects of changes in circumstances and economic conditions than
debt in higher rated categories. However, capacity to meet the financial
commitment on the obligation is still strong.

BBB: An obligation rated within the BBB category exhibits adequate
protection parameters. However, adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity to meet the
financial commitment on the obligation.

Obligations rated within the BB, B, CCC, CC and C categories are regarded
as having significant speculative characteristics. BB indicates the least
degree of speculation and C the highest. While such obligations will likely
have some quality and protective characteristics, these may be outweighed by
large uncertainties or major exposures to adverse conditions.

24
<PAGE>

BB: An obligation rated within the BB category is less vulnerable to
nonpayment than other speculative issues. However, it faces major ongoing
uncertainties or exposure to adverse business, financial or economic
conditions which could lead to inadequate capacity to meet the financial
commitment on the obligation. The BB rating category is also used for debt
subordinated to senior debt that is assigned an actual or implied BBB rating.

B: An obligation rated within the B category is more vulnerable to
nonpayment than obligations rated within the BB category, but currently has the
capacity to meet the financial commitment on the obligation. Adverse business,
financial or economic conditions will likely impair capacity or willingness to
meet the financial commitment on the obligation. The B rating category is also
used for debt subordinated to senior debt that is assigned an actual or implied
BB or BB- rating.

CCC: An obligation rated within the CCC category is vulnerable to
nonpayment and is dependent upon favorable business, financial and economic
conditions to meet the financial commitment on the obligation. In the event of
adverse business, financial or economic conditions, it is not likely to have the
capacity to meet the financial commitment on the obligation.

CC: An obligation rated within the CC category is currently highly
vulnerable to nonpayment.

C: The C rating may be used to cover a situation where a bankruptcy
petition has been filed, but payments on this obligation are being continued.

D: An obligation rated within the D category is in payment default. The D
rating category is used when payments on an obligation are not made on the date
due even if the applicable grace period has not expired, unless S&P believes
that such payments will be made during such grace period. The D rating also
will be used upon the filing of a bankruptcy petition or the taking of a similar
action if payments on an obligation are jeopardized.

Plus (+) or Minus (-): The ratings from AA to CCC may be modified by the
addition of a plus or minus sign to show relative standing within the major
rating categories.

S&P may attach the "r" symbol to the ratings of instruments with
significant noncredit risks. It highlights risks to principal or volatility of
expected returns which are not addressed in the credit rating. Examples
include: obligations linked or indexed to equities, currencies, or commodities;
obligations exposed to severe prepayment risks-such as interest only (IO) and

25
<PAGE>

principal only (PO) mortgage securities; and obligations with unusually risky
terms, such as inverse floaters.

Set forth below is a description of Moody's corporate bond and debenture
rating categories:

Aaa: Bonds which are rated within the Aaa category are judged to be of
the best quality. They carry the smallest degree of investment risk and are
generally referred to as "gilt-edge." Interest payments are protected by a
large or by an exceptionally stable margin, and principal is secure. While
the various protective elements are likely to change, such changes as can be
visualized are most unlikely to impair the fundamentally strong position of
such issues.

Aa: Bonds which are rated within the Aa category are judged to be of high
quality by all standards. Together with the Aaa group they comprise what are
generally known as high-grade bonds. They are rated lower than the best bonds
because margins of protection may not be as large as in Aaa securities or
fluctuation of protective elements may be of greater amplitude or there may be
other elements present which make the long-term risks appear somewhat larger
than in Aaa securities.

A: Bonds which are rated within the A category possess many favorable
investment attributes and are to be considered as upper medium grade
obligations. Factors giving security to principal and interest are considered
adequate, but elements may be present which suggest a susceptibility to
impairment sometime in the future.

Baa: Bonds which are rated within the Baa category are considered as
medium grade obligations, i.e., they are neither highly protected nor poorly
secured. Interest payments and principal security appear adequate for the
present, but certain protective elements may be lacking or may be
characteristically unreliable over any great length of time. Such bonds lack
outstanding investment characteristics and in fact have speculative
characteristics as well.

Ba: Bonds which are rated within the Ba category are judged to have
speculative elements; their future cannot be considered as well assured. Often
the protection of interest and principal payments may be very moderate and
thereby not well safeguarded during other good and bad times over the future.
Uncertainty of position characterizes bonds in this class.

B: Bonds which are rated within the B category generally lack
characteristics of the desirable investment. Assurance of interest and
principal payments or of maintenance of other terms of the contract over any
long period of time may be small.

Caa: Bonds which are rated within the Caa category are of poor standing.
Such issues may be in default or there may be present elements of danger with
respect to principal or interest.

Ca: Bonds which are rated within the Ca category represent obligations
which are speculative in a high degree. Such issues are often in default or
have other marked shortcomings.

26
<PAGE>

C: Bonds which are rated within the C category are the lowest rated class
of bonds, and issues so rated can be regarded as having extremely poor prospects
of ever attaining any real investment standing.

1, 2 or 3: The ratings from Aa through B may be modified by the addition
of a numeral indicating a bond's rank within its rating category.

27
<PAGE>

CLASSES OF SHARES

The Trustees have authorized shares of each Fund to be issued in four
classes: Class I, Class II, Class III and Class IV shares. The Trustees may
authorize additional classes or terminate existing classes, without shareholder
approval, in the future.

The eligibility requirements for each class of shares are described in
detail in the Prospectus. Notwithstanding such eligibility requirements, the
Investment Manager and its affiliates may invest in any class of shares of any
Fund without regard to any stated minimum investment requirements.

Each share of each class of shares represents an identical legal interest
in the same portfolio of investments of a Fund, has the same rights and is
identical in all respects, except that the classes pay different levels of
shareholder service fees. Although the legal rights of holders of each class of
shares are identical, it is likely that the different expenses borne by each
class will result in different net asset values and dividends. Except for those
differences between classes of shares described above, in the Funds' Prospectus
and otherwise in this Statement of Additional Information, each share of a Fund
has equal dividend, redemption and liquidation rights with other shares of the
Fund and, when issued, is fully paid and nonassessable by the Fund.

Shareholder rights granted under the Agreement and Declaration of Trust may
be modified by the Trustees, provided, however, that the Agreement and
Declaration of Trust may not be amended if such amendment (a) repeals the
limitations on personal liability of any shareholder, or repeals the prohibition
of assessment upon the shareholders, without the express consent of each
shareholder involved or (b) materially adversely modifies any shareholder right
without the consent of the holders of a majority of the outstanding shares
entitled to vote. Under the Agreement and Declaration of Trust, the Trustees
may reorganize, merge or liquidate a Fund without prior shareholder approval and
subject to compliance with applicable law. On any matter submitted to the
shareholders of a Fund, the holder of a Fund share is entitled to one vote per
share (with proportionate voting for fractional shares) regardless of the
relative net asset value thereof. Except as provided by law, the Trustees may
otherwise modify the rights of shareholders at any time.

Under the Agreement and Declaration of Trust, no annual or regular meeting
of shareholders is required. Thus, there ordinarily will be no shareholder
meetings unless required by Investment Company Act of 1940, as amended (the
"1940 Act"). Except as otherwise provided under the 1940 Act, the Board of
Trustees will be a self-perpetuating body until fewer than two-thirds of the
Trustees serving as such are Trustees who were elected by shareholders of the
Trust. In the event less than a majority of the Trustees serving as such were
elected by shareholders of the Trust, a meeting of shareholders will be called
to elect Trustees. Under the Agreement and Declaration of Trust, any Trustee
may be removed by vote of two-thirds of the outstanding Trust shares. In
connection with such meetings called by shareholders, shareholders will be
assisted in shareholder communications to the extent required by applicable law.

28
<PAGE>

Under Massachusetts law, the shareholders of the Trust could, under certain
circumstances, be held personally liable for the obligations of the Trust.
However, the Agreement and Declaration of Trust disclaims shareholder liability
for acts or obligations of the Trust and provides for indemnification for all
losses and expenses of any shareholder of a Fund held personally liable for the
obligations of the Trust. Thus, the risk of a shareholder incurring financial
loss on account of shareholder liability is limited to circumstances in which
the Fund would be unable to meet its obligations. The Investment Manager
believes that, in view of the above, the risk of personal liability to
shareholders is remote.

29
<PAGE>

TRUSTEES AND OFFICERS

The Trustees and principal officers of the Trust, their addresses, and
their principal occupations and positions with certain affiliates of the
Investment Manager are set forth below.

*+Catherine Dudley, One Financial Center, Boston, MA 02111, serves as Vice
President of the Trust. She is 40. Her principal occupation is Senior Vice
President of State Street Research & Management Company. During the past five
years she has also served as an investment manager at Chancellor Capital
Management and Phoenix Investment Counsel.

*Bruce A. Ebel, One Financial Center, Boston, MA 02111, serves as Vice
President of the Trust. He is 43. His principal occupation is Senior Vice
President of State Street Research & Management Company. During the past five
years he has also served as Vice President of Loomis, Sayles & Company, L.P.
and as Senior Vice President of Kemper Asset Management.

*+F. Gardner Jackson, Jr., One Financial Center, Boston, MA 02111,
serves as Vice President of the Trust. He is 57. His principal occupation
is currently, and during the past five years has been, Senior Vice President
of State Street Research & Management Company.

*+John H. Kallis, One Financial Center, Boston, MA 02111, serves as Vice
President of the Trust. He is 59. His principal occupation is currently, and
during the past five years has been, Senior Vice President of State Street
Research & Management Company.

Robert A. Lawrence, 175 Federal Street, Boston, MA 02110, serves as a
Trustee of the Trust. He is 73. He is retired and was formerly a Partner in
Saltonstall & Co., a private investment firm.

*+Gerard P. Maus, One Financial Center, Boston, MA 02111, serves as
Trustee, Chairman of the Board, President, Chief Executive Officer and
Treasurer of the Trust. He is 49. His principal occupation is currently,
and during the past five years has been, Executive Vice President, Treasurer,
Chief Financial Officer, Chief Administrative Officer and Director of State
Street Research & Management Company. Mr. Maus's other principal business
affiliations include President, Treasurer, Chief Financial Officer, Chief
Administrative Officer and Director of State Street Research Investment
Services, Inc.

*Mark Marinella, One Financial Center, Boston, MA 02111, serves as Vice
President of the Trust. He is 42. His principal occupation is Senior Vice
President of State Street Research & Management Company. During the past
five years he has also served as a principal and senior portfolio manager at
STW Fixed Income Management Ltd. and director of fixed income at CS First
Boston Corp.

*+Francis J. McNamara, III, One Financial Center, Boston, MA 02111, serves
as Secretary and General Counsel of the Trust. He is 44. His principal
occupation is Executive Vice President, General Counsel and Secretary of State
Street Research & Management

_________________
* or + see footnotes on page 32

<PAGE>

Company. During the past five years he has also served as Senior Vice
President of State Street Research & Management Company, Senior Vice
President of State Street Research Investment Services, Inc. Mr. McNamara's
other principal business affiliations include Executive Vice President, Clerk
and General Counsel of State Street Research Investment Services, Inc.

*James C. Pannell, One Financial Center, Boston, MA 02111, serves as
Vice President of the Trust. He is 46. His principal occupation is
Executive Vice President of State Street Research & Management Company.
During the past five years he has also served as Senior Vice President and
Vice President of State Street Research & Management Company.

*+Kim M. Peters, One Financial Center, Boston, MA 02111, serves as Vice
President of the Trust. He is 47. His principal occupation currently, and
during the past five years, has been Senior Vice President of State Street
Research & Management Company.

*Jeffrey A. Rawlins, One Financial Center, Boston, MA 02111, serves as Vice
President of the Trust. He is 38. His principal occupation currently, and
during the past five years, has been Senior Vice President of State Street
Research & Management Company.

*+Thomas A. Shively, One Financial Center, Boston, MA 02111, serves as
Vice President of the Trust. He is 46. His principal occupation currently,
and during the past five years, has been Executive Vice President, Director
and Chief Investment Officer - Fixed Income of State Street Research &
Management Company. Mr. Shively's other principal business affiliation is
Director of State Street Research Investment Services, Inc.

James M. Storey, Ten Post Office Square South, Boston, MA 02109, serves as
Trustee of the Trust. He is 69. He is retired and was formerly a partner at
Dechert, Price & Rhoads (1987-1993).

*Amy McDermott Swanson, One Financial Center, Boston, MA 02111, serves as
Vice President of the Trust. She is 42. Her principal occupation is currently,
and during the past five years has been, Senior Vice President of State Street
Research & Management Company.

*+James M. Weiss, One Financial Center, Boston, MA 02111, serves as
Vice President of the Trust. He is 53. His principal occupation is
Executive Vice President of State Street Research & Management Company.
During the past five years he has also served as Senior Vice President of
State Street Research & Management Company and as President and Chief
Investment Officer of IDS Advisory Group, Inc.

*+Elizabeth M. Westvold, One Financial Center, Boston, MA 02111, serves as
Vice President of the Trust. She is 39. Her principal occupation is Senior
Vice President of State Street Research & Management Company. During the past
five years, she also has served as Vice President and as an analyst for State
Street Research & Management Company.

_________________
* or + see footnotes on page 32

<PAGE>

*+John T. Wilson, One Financial Center, Boston, MA 02111, serves as Vice
President of the Trust. He is 36. His principal occupation is Senior Vice
President of State Street Research & Management Company. During the past
five years he has also served as Vice President for State Street Research &
Management Company, as an analyst and portfolio manager at Phoenix Home Life
Mutual Insurance Company and, from 1995 to 1996, as a Vice President of
Phoenix Investment Counsel, Inc.

*+Kennard P. Woodworth, Jr., One Financial Center, Boston, MA 02111,
serves as Vice President of the Trust. He is 61. His principal occupation is
currently, and during the past five years has been, Senior Vice President of
State Street Research & Management Company.

_________________

* These Trustees and/or officers are or may be deemed to be "interested
persons" of the Trust under the 1940 Act because of their affiliations with
the Fund's investment adviser.

+ Serves as a Trustee/Director and/or officer of one or more of the following
investment companies, each of which has an advisory relationship with the
Investment Manager or its parent, MetLife, Inc.: State Street Research
Equity Trust, State Street Research Financial Trust, State Street Research
Income Trust, State Street Research Money Market Trust, State Street
Research Tax-Exempt Trust, State Street Research Capital Trust, State
Street Research Exchange Trust, State Street Research Growth Trust,
State Street Research Master Investment Trust, State Street Research
Securities Trust, and Metropolitan Series Fund, Inc.

_________________
* or + see footnotes on page 32

<PAGE>

CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES

TRUSTEES AND OFFICERS

As of May 1, 2000, the Trustees and principal officers of the Trust as a
group owned no shares of the Funds' outstanding shares.

OTHER PERSONS

The following persons or entities were the record and/or beneficial owners
of the following approximate percentages of the Funds' outstanding shares. All
information is as of May 1, 2000.

CORE FIXED INCOME FUND

Class Holder % of Class
- ----- ------- ----------
I Citibank NA 90.89
Metropolitan Life Insurance Company 9.11
II Metropolitan Life Insurance Company 99.98
III Metropolitan Life Insurance Company 99.98
IV Metropolitan Life Insurance Company 99.98

CORE PLUS FIXED INCOME FUND

Class Holder % of Class
- ----- ------ ----------
I Metropolitan Life Insurance Company 99.98
II Metropolitan Life Insurance Company 99.98
III Metropolitan Life Insurance Company 99.98
IV Metropolitan Life Insurance Company 99.78

CORE LARGE CAP GROWTH FUND

Class Holder % of Class
- ----- ------ ----------
I Metropolitan Life Insurance Company 99.96
II Metropolitan Life Insurance Company 99.96
III Metropolitan Life Insurance Company 99.96
IV State Street Research & Management Co. 9.09
Metropolitan Life Insurance Company 90.88

<PAGE>

LARGE CAP GROWTH FUND

The full name and address of the above persons or institutions are:

State Street Research & Management Company
One Financial Center, 30th Floor
Boston, MA 02111-2621

Metropolitan Life Insurance Company
600 Parsippany Road
Parsippany, NJ 07054-3715

Citibank NA
111 Wall Street
New York, NY 10005-3509

Ownership of 25% or more of a voting security is deemed "control," as defined in
the 1940 Act. So long as 25% of a class of shares is so owned, such owners will
be presumed to be in control of such class of shares for purposes of voting
certain matters submitted to a vote of shareholders of that class.

<PAGE>

TRUSTEE COMPENSATION

The Trustees of State Street Research Institutional Funds were
compensated as follows:

<TABLE>
<CAPTION>
- -----------------------------------------------------------------
Total
Compensation
Aggregate From Fund and Fund
Name of Compensation Complex Paid
Trustee From Trust(a) to Trustees(b)
- -----------------------------------------------------------------
<S> <C> <C>
Ralph F. Verni(c) $ 0 $ 0
Robert A. Lawrence $7,000 $7,000
James M. Storey $7,000 $7,000
Gerard P. Maus(d) $ 0 $ 0
</TABLE>

____________________

(a) For the period June 30, 1999 (date of the Trust's organizational meeting)
to the Trust's first fiscal year ended January 31, 2000. The Trust does
not provide any pension or retirement benefits for the Trustees.

(b) For the 12 months ended January 31, 2000.

(c) Mr. Verni resigned in his positions as Chairman of the Board,
President, Chief Executive Officer and Trustee of the Trust as of May 5,
2000.

(d) Mr. Maus was elected as Chairman of the Board, President, Chief
Executive Officer and Trustee of the Trust as of May 17, 2000.

MANAGEMENT OF THE FUND AND INVESTMENT ADVISORY AND OTHER SERVICES

Under the provisions of the Trust's Agreement and Declaration of Trust and
the laws of Massachusetts, responsibility for the management and supervision of
the Funds rests with the Trustees.

State Street Research & Management Company, the Investment Manager, a
Delaware corporation, with offices at One Financial Center, Boston,
Massachusetts 02111-2690, acts as investment adviser to the Fund. The
Investment Manager was founded by Paul Cabot, Richard Saltonstall and Richard
Paine to serve as investment adviser to one of the nation's first mutual funds,
presently known as State Street Research Investment Trust, which they had formed
in 1924. Their investment management philosophy emphasized comprehensive
fundamental research and analysis, including meetings with the management of
companies under consideration for investment. The Investment Manager's
portfolio management group has extensive investment industry experience managing
equity and debt securities.

The Investment Manager is charged with the overall responsibility for
managing the investments and business affairs of the Funds, subject to the
authority of the Board of Trustees. The Advisory Agreement provides that the
Investment Manager will furnish each Fund with an investment program, suitable
office space and facilities and such investment advisory, research and
administrative services as may be required from time to time. The Investment
Manager compensates all executive and clerical personnel and Trustees of the
Trust if such persons are employees of the Investment Manager or its affiliates.
The Investment Manager is an indirect

<PAGE>

wholly-owned subsidiary of MetLife, Inc. ("MetLife"). MetLife is a life
insurance and financial services company which sells insurance policies,
annuity contracts, and retirement and investment products.

The advisory fee payable monthly by each Fund to the Investment Manager is
computed as a percentage of the average of the value of the net assets of the
Fund as determined at the close of regular trading on the New York Stock
Exchange (the "NYSE") on each day the NYSE is open for trading, at the annual
rate of the percentage of the net assets of the Fund set forth below:

<TABLE>

<S> <C>
Core Fixed Income Fund 0.40%
Core Plus Fixed Income Fund 0.40%
Core Large Cap Growth Fund 0.55%
Large Cap Growth Fund 0.55%
</TABLE>

The advisory fees paid by the Funds to the Investment Manager for the period
August 2, 1999 (commencement of operations) to the Funds' first fiscal year
ended January 31, 2000, prior to the assumption of fees or expenses, were as
follows:
<TABLE>
<CAPTION>
Fees Waived
Advisory Fees Paid or Expenses Assumed
<S> <C> <C>
Core Fixed Income Fund $29,486 $55,191
Core Plus Fixed Income Fund $26,562 $53,729
Core Large Cap Growth Fund $2,961 $41,525
Large Cap Growth Fund $3,157 $41,596
</TABLE>

Pursuant to a Fee Waiver and Expense Limitation Agreement, the Investment
Manager agrees, with respect to the expense limitation applicable to each Fund,
to (i) waive a portion of its fee under the Advisory Agreement, (ii) reimburse
the Fund or (iii) directly pay expenses, such that the expense limitation for a
Fund will not be exceeded. The expense limitations are 0.20% for the Fixed
Income Funds and 0.35% for the Equity Funds, and do not include certain
commissions, taxes, shareholder servicing fees and other fees and other
expenses. The Fee Waiver and Expense Limitation Agreement has an initial term
ending June 1, 2001.

The Advisory Agreement provides that it shall continue in effect with
respect to the Fund for a period of two years after its initial effectiveness
and will continue from year to year thereafter as long as it is approved at
least annually both (i) by a vote of a majority of the outstanding voting
securities of the Fund (as defined in the 1940 Act) or by the Trustees of the
Trust, and (ii) in either event by a vote of a majority of the Trustees who are
not parties to the Advisory Agreement or "interested persons" of any party
thereto, cast in person at a meeting called for the purpose of voting on such
approval. The Advisory Agreement may be terminated on 60 days' written notice
by either party and will terminate automatically in the event of its assignment,
as defined under the 1940 Act and regulations thereunder. Such regulations
provide that a transaction which does not result in a change of actual control
or management of an adviser is not deemed an assignment.

36
<PAGE>

The Funds, the Investment Manager and the Distributor have adopted a
Code of Ethics pursuant to the requirement of the 1940 Act. Under the Code
of Ethics, personnel are only permitted to engage in personal securities
transactions in accordance with certain conditions relating to such person's
position, the identity of the security, the timing of the transaction, and
similar factors. Transactions in securities that may be held by the Funds are
permitted, subject to compliance with applicable provisions of the Code.
Personal securities transactions must be reported quarterly and broker
confirmations of such transactions must be provided for review.

The Trust has entered into a Servicing Agreement with the Investment
Manager pursuant to which the Investment Manager provides shareholder and
administrative services in respect of the Funds. These services include,
among others, informative reporting, client account information maintenance,
responding to shareholder inquiries, and certain transaction related
administration. As compensation for providing such services, the Investment
Manager is paid a monthly fee, computed and accrued daily, at annual rate of
each Class' average daily net asset value as follows: Class I - 0.30%, Class
II - 0.20%, Class III - 0.10% and Class IV - 0.05%. The fees paid by the
Funds to the Investment Manager for such services for the period August 2,
1999 (commencement of operations) to the Funds' first fiscal year ended
January 31, 2000 were as follows:
<TABLE>
<CAPTION>
Fees Paid
<S> <C>
Core Fixed Income Fund $10,497
Core Plus Fixed Income Fund $4,467
Core Large Cap Growth Fund $860
Large Cap Growth Fund $917
</TABLE>

PURCHASE AND REDEMPTION OF SHARES

Shares of the Fund may be purchased by contacting your State Street
Research institutional client service representative or, if you are unable to
reach your representative, by calling 1-800-521-6548. The Fund offers four
classes of shares which may be purchased at the next determined net asset
value per share. General information on how to buy shares of the Fund is set
forth in the Prospectus. The following supplements that information.

PUBLIC OFFERING PRICE. The public offering price for each class of
shares is based on their net asset value determined as of the close of
regular trading on the NYSE on the day the purchase order is received by the
Investment Manager, provided that the order is received prior to the close of
regular trading on the NYSE on that day; otherwise the net asset value used
is that determined as of the close of the NYSE on the next day it is open for
unrestricted trading.

RULE 18f-1 ELECTION. The Funds are committed to paying in cash all
requests for redemptions by any shareholder of record of a Fund, limited in
amount with respect to each shareholder during any 90-day period to the lesser
of (i) $250,000, or (ii) 1% of the net asset value of the Fund at the beginning
of such period. Although a Fund will normally redeem all shares for cash, it may
redeem amounts in excess of the lesser of (i) or (ii) above by payment in kind
of securities held by the particular Fund.

37
<PAGE>

REORGANIZATIONS. In the event of mergers or reorganizations with other
public or private collective investment entities, including investment companies
as defined in the 1940 Act, a Fund may issue its shares at net asset value (or
more) to such entities or to their security holders.

DISHONORED CHECKS. If a purchaser's check is not honored for its full
amount, the purchaser could be subject to additional charges to cover collection
costs and any investment loss, and the purchase may be canceled.

SHAREHOLDER ACCOUNTS

General information on shareholder accounts is included in the Fund's
Prospectus. The following supplements that information.

INVOLUNTARY REDEMPTION. Each Fund reserves the right to redeem at its
option any shareholder account which falls below $500,000 and remains below
$1,000,000 for a period of 60 days after notice is mailed to the applicable
shareholder. A Fund may increase such minimum account value above such amount
in the future after notice to affected shareholders. Involuntarily redeemed
shares will be priced at the net asset value on the date fixed for redemption by
a Fund, and the proceeds of the redemption will be mailed to the affected
shareholder at the address of record.

The Fund may not suspend the right of redemption or postpone the date of
payment of redemption proceeds for more than seven days, except that it may
elect to suspend the redemption of shares or postpone the date of payment of
redemption proceeds: (1) during any period that the NYSE is closed (other than
customary weekend and holiday closings) or trading on the NYSE is restricted;
(2) during any period in which an emergency exists as a result of which disposal
of portfolio securities is not reasonably practicable or it is not reasonably
practicable to fairly determine the Fund's net asset values; or (3) during such
other periods as the Securities and Exchange Commission (the "SEC") may by order
permit for the protection of investors.

Full and fractional shares of each Fund owned by shareholders are credited
to their accounts by the Transfer Agent, State Street Bank and Trust Company,
225 Franklin Street, Boston, Massachusetts 02110. Certificates will not be
issued. Shareholders will receive periodic statements of transactions in their
accounts.

ALTERNATIVE MEANS OF CONTACTING THE FUNDS. It is unlikely, during
periods of extraordinary market conditions, that a shareholder may have
difficulty in reaching the State Street Research institutional client service
representative. In that event, however, the shareholder should contact the
Service Center at 1-800-521-6548 or otherwise at the Funds' main office at
One Financial Center, Boston, Massachusetts 02111-2690.

38
<PAGE>

NET ASSET VALUE

The net asset value of the shares of each Fund is determined once daily
as of the close of regular trading on the NYSE, but not later than 4 p.m. New
York City time, Monday through Friday, on each day during which the NYSE is
open for unrestricted trading.

The net asset value per share of each Fund is computed by dividing the sum
of the value of the securities held by the Fund plus any cash or other assets
minus all liabilities by the total number of outstanding shares of the Fund at
such time. Any expenses, except for extraordinary or nonrecurring expenses,
borne by the Fund, including the investment management fee payable to the
Investment Manager, are accrued daily.

In determining the values of portfolio assets as provided below, the
Trustees may utilize one or more pricing services in lieu of market
quotations for certain securities which are not readily available on a daily
basis. Such services utilize information with respect to market
transactions, quotations from dealers and various relationships among
securities in determining value and may provide prices determined as of times
prior to the close of the NYSE.

In general, securities are valued as follows. Securities which are listed
or traded on the New York or American Stock Exchange are valued at the price of
the last quoted sale on the respective exchange as of the close of regular
trading on such exchange for that day, but not later than 4 p.m. New York
City time. Securities which are listed or traded on a national securities
exchange or exchanges, but not on the New York or American Stock Exchange,
are valued at the price of the last quoted sale on the exchange for that day
prior to the close of regular trading on the NYSE, but not later than 4 p.m.
New York City time. Securities not listed on any national securities
exchange which are traded "over the counter" and for which quotations are
available on the National Association of Securities Dealers, Inc.'s (the
"NASD") NASDAQ System, or other system, are valued at the closing price
supplied through such system for that day at the close of regular trading on
the NYSE, but not later than 4 p.m. New York City time. Other securities
are, in general, valued at the mean of the bid and asked quotations last
quoted prior to the close of regular trading on the NYSE if there are market
quotations readily available, or in the absence of such market quotations,
then at the fair value thereof as determined by or under authority of the
Trustees of the Trust with the use of such pricing services as may be deemed
appropriate or methodologies approved by the Trustees. The Trustees also
reserve the right to adopt other valuations based on fair value pricing in
unusual circumstances when use of other methods as described in part above
could otherwise have a material adverse effect on a Fund as a whole.

The Trustees have authorized the use of the amortized cost method to value
short-term debt instruments issued with a maturity of one year or less and
having a remaining maturity of 60 days or less when the value obtained is fair
value, provided that during any period in which more than 25% a the Fund's total
assets is invested in short-term debt securities the current market value of
such securities will be used in calculating net asset value per share in lieu of
the amortized cost method. Under the amortized cost method of valuation, the
security is initially valued at cost on the date of purchase (or in the case of
short-term debt instruments purchased with more than 60 days remaining to
maturity, the market value on the 61st day prior to

39
<PAGE>

maturity), and thereafter a constant amortization to maturity of any discount
or premium is assumed regardless of the impact of fluctuating interest rates
on the market value of the security.

PORTFOLIO TRANSACTIONS

PORTFOLIO TURNOVER

The Funds' portfolio turnover rate is determined by dividing the lesser of
securities purchases or sales for a year by the monthly average value of
securities held by the Funds (excluding, for purposes of this determination,
securities the maturities of which as of the time of their acquisition were one
year or less). The portfolio turnover rates for the Funds for the period
August 2, 1999 (commencement of operations) to the Fund's first fiscal year
ended January 31, 2000, were as follows:

<TABLE>
<CAPTION>
Portfolio Turnover Rates
<S> <C>
Core Fixed Income Fund 213.41%
Core Plus Fixed Income Fund 234.12%
Core Large Cap Growth Fund 40.53%
Large Cap Growth Fund 41.57%
</TABLE>

BROKERAGE ALLOCATION

The Investment Manager's policy is to seek for its clients, including
each Fund, what in the Investment Manager's judgment will be the best overall
execution of purchase or sale orders and the most favorable net prices in
securities transactions consistent with its judgment as to the business
qualifications of the various broker or dealer firms with whom the Investment
Manager may do business, and the Investment Manager may not necessarily
choose the broker offering the lowest available commission rate. Decisions
with respect to the market where the transaction is to be completed, to the
form of transaction (whether principal or agency), and to the allocation of
orders among brokers or dealers are made in accordance with this policy. In
selecting brokers or dealers to effect portfolio transactions, consideration
is given to their proven integrity and financial responsibility, their
demonstrated execution experience and capabilities both generally and with
respect to particular markets or securities, the competitiveness of their
commission rates in agency transactions (and their net prices in principal
transactions), their willingness to commit capital, and their clearance and
settlement capability. The Investment Manager makes every effort to keep
informed of commission rate structures and prevalent bid/ask spread
characteristics of the markets and securities in which transactions for a
Fund occur. Against this background, the Investment Manager evaluates the
reasonableness of a commission or a net price with respect to a particular
transaction by considering such factors as difficulty of execution or
security positioning by the executing firm. The Investment Manager may or
may not solicit competitive bids based on its judgment of the expected
benefit or harm to the execution process for that transaction.

When it appears that a number of firms could satisfy the required standards
in respect of a particular transaction, consideration may also be given by the
Investment Manager to services other than execution services which certain of
such firms have provided in the past or may

40
<PAGE>

provide in the future. Negotiated commission rates and prices, however, are
based upon the Investment Manager's judgment of the rate which reflects the
execution requirements of the transaction without regard to whether the
broker provides services in addition to execution. Among such other services
are the supplying of supplemental investment research; general economic,
political and business information; analytical and statistical data; relevant
market information, quotation equipment and services; reports and information
about specific companies, industries and securities; purchase and sale
recommendations for stocks and bonds; portfolio strategy services; historical
statistical information; market data services providing information on
specific issues and prices; financial publications; proxy voting data and
analysis services; technical analysis of various aspects of the securities
markets, including technical charts; computer hardware used for brokerage and
research purposes; computer software and databases (including those contained
in certain trading systems used for portfolio analysis and modeling, and also
including software providing investment personnel with efficient access to
current and historical data from a variety of internal and external sources);
portfolio evaluation services, and data relating to the relative performance
of accounts.

In the case of each Fund and other registered investment companies advised
by the Investment Manager or its affiliates, the above services may include data
relating to performance, expenses and fees of those investment companies and
other investment companies. This information is used by the Trustees or
Directors of the investment companies to fulfill their responsibility to oversee
the quality of the Investment Manager's advisory contracts between the
investment companies and the Investment Manager. The Investment Manager
considers these investment company services only in connection with the
execution of transactions on behalf of its investment company clients and not
its other clients. Certain of the nonexecution services provided by
broker-dealers may in turn be obtained by the broker-dealers from third parties
who are paid for such services by the broker-dealers.

The Investment Manager regularly reviews and evaluates the services
furnished by broker-dealers. The Investment Manager's investment management
personnel conduct internal surveys and use other methods to evaluate the quality
of the research and other services provided by various broker-dealer firms, and
the results of these efforts are made available to the equity trading department
which uses this information as a consideration to the extent described above in
the selection of brokers to execute portfolio transactions.

Some services furnished by broker-dealers may be used for research and
investment decision-making purposes, and also for marketing or administrative
purposes. Under these circumstances, the Investment Manager allocates the cost
of the services to determine the proportion which is allocable to research or
investment decision-making and the proportion allocable to other purposes. The
Investment Manager pays directly from its own funds for that portion allocable
to uses other than research or investment decision-making. Some research and
execution services may benefit the Investment Manager's clients as a whole,
while others may benefit a specific segment of clients. Not all such services
will necessarily be used exclusively in connection with the accounts which pay
the commissions to the broker-dealer providing the services.

The Investment Manager has no fixed agreements or understandings with any
broker-dealer as to the amount of brokerage business which the firm may expect
to receive for services

41
<PAGE>

supplied to the Investment Manager or otherwise. There may be, however,
understandings with certain firms that in order for such firms to be able to
continuously supply certain services, they need to receive an allocation of a
specified amount of brokerage business. These understandings are honored to
the extent possible in accordance with the policies set forth above.

It is not the Investment Manager's policy to intentionally pay a firm a
brokerage commission higher than that which another firm would charge for
handling the same transaction in recognition of services (other than
execution services) provided. However, the Investment Manager is aware that
this is an area where differences of opinion as to fact and circumstances may
exist, and in such circumstances, if any, the Investment Manager relies on
the provisions of Section 28(e) of the Securities Exchange Act of 1934.

In the case of the purchase of fixed income securities in underwriting
transactions, the Investment Manager follows any instructions received from its
clients as to the allocation of new issue discounts, selling commissions and
designations to brokers or dealers which provide the client with research,
performance evaluation, master trustee and other services. In the absence of
instructions from the client, the Investment Manager may make such allocations
to broker-dealers which have provided the Investment Manager with research and
brokerage services.

In some instances, certain clients of the Investment Manager request
that it place all or part of the orders for their account with certain
brokers or dealers, which in some cases provide services to those clients.
The Investment Manager generally agrees to honor those requests to the extent
practicable. Clients may request that the Investment Manager only effect
transactions with the specified broker-dealers if the broker-dealers are
competitive as to price and execution. Where the request is not so
conditioned, the Investment Manager may be unable to negotiate commissions or
obtain volume discounts or best execution. In cases where the Investment
Manager is requested to use a particular broker-dealer, different commissions
may be charged to clients making the request. A client who requests the use
of a particular broker-dealer should understand that it may lose the possible
advantage which non-requesting clients derive from aggregation of orders for
several clients as a single transaction for the purchase or sale of a
particular security. Among other reasons why best execution may not be
achieved with directed brokerage is that, in an effort to achieve orderly
execution of transactions, execution of orders that have designated
particular brokers may, at the discretion of the trading desk, be delayed
until execution of other non-designated orders has been completed.

When more than one client of the Investment Manager is seeking to buy or
sell the same security, the sale or purchase is carried out in a manner which is
considered fair and equitable to all accounts. In allocating investments among
various clients (including in what sequence orders for trades are placed), the
Investment Manager will use its best business judgment and will take into
account such factors as the investment objectives of the clients, the
amount of investment funds available to each, the size of the order, the
relative sizes of the accounts, the amount already committed for each client
to a specific investment and the relative risks of the investments, all in
order to provide on balance a fair and equitable result to each client over
time.

In addition, when the Investment Manager is seeking to buy or sell the same
security on behalf of more than one client at approximately the same time, the
Investment Manager may follow the practice of grouping orders of various clients
for execution to get the benefit of lower

42
<PAGE>

prices or commission rates. Although sharing large transactions may sometimes
affect price or volume of shares acquired or sold, the Investment Manager
believes that grouping orders generally provides an advantage in execution.
Where an aggregate order is executed in a series of transactions at various
prices on a given day, each participating account's proportionate share of
such order will reflect the average price paid or received with respect to
the total order. The Investment Manager may decide not to group orders,
however, based on such factors as the size of the account and the size of the
trade. For example, the Investment Manager may not aggregate trades where it
believes that it is in the best interest of clients not to do so, including
situations where aggregation might result in a large number of small
transactions with consequent increased custodial and other transactional
costs which may disproportionately impact smaller accounts. Such
disaggregation, depending on the circumstances, may or may not result in such
accounts receiving more or less favorable overall execution (including
transaction costs) relative to other clients.

The Investment Manager has developed certain internal policies governing
its short sale trading activities, including prior notification in certain
circumstances to portfolio managers of accounts holding long positions in the
same security. Generally, however, sales of long positions will take precedence
over short sales, regardless of the order in which the trade orders are
received.

Subject to the policy of seeking best overall price and execution as stated
above, sales of shares of investment companies under the Investment Manager's
management may be considered by the Investment Manager in the selection of
broker or dealer firms to execute portfolio transactions for investment
companies under its management.

CERTAIN TAX MATTERS

TAXATION OF THE FUNDS--IN GENERAL

Each Fund intends to qualify and elect to be treated each taxable year
as a "regulated investment company" under Subchapter M of the Internal
Revenue Code of 1986, as amended (the "Code"), although it cannot give
complete assurance that it will qualify to do so. Each Fund also intends to
meet all requirements necessary to be entitled to the beneficial tax
treatment accorded regulated investment companies and their shareholders.
Accordingly, each Fund must, among other things, (a) derive at least 90% of
its gross income in each taxable year from dividends, interest, payments with
respect to securities loans, gains from the sale or other disposition of
stock, securities or foreign currencies, or other income (including, but not
limited to, gains from options, futures or forward contracts) derived with
respect to its business of investing in such stock, securities or currencies
(the "90% test"); (b) diversify its holdings so that, at the close of each
quarter of the taxable year, (i) at least 50% of the market value of its
total assets consists of cash, cash items, U.S. government securities,
securities of other regulated investment companies, and other securities
limited generally with respect to any one issuer to not more than 5% of the
total assets of the Fund and not more than 10% of the outstanding voting
securities of such issuer, and (ii) not more than 25% of the value of its
total assets is invested in the securities (other than those of the U.S.
government or other regulated investment companies) of any issuer or of two
or more issuers which the Fund controls and which are engaged in the same,
similar or related trades or businesses; and (c) distribute at least 90% of
the sum of its

43
<PAGE>

taxable net investment income, its net tax-exempt income, and
the excess, if any, of net short-term capital gains over net long-term
capital losses for each taxable year.

If a Fund should fail to qualify as a regulated investment company accorded
beneficial tax treatment under the Code in any year, all of its taxable income
would be subject to tax at regular corporate rates without any deduction for
distributions to shareholders, and such distributions would be taxable to
shareholders as ordinary income to the extent of the Fund's current or
accumulated earnings and profits. Also, the shareholders, if they received a
distribution in excess of current or accumulated earnings and profits, would
receive a return of capital that would reduce the basis of their shares of the
Fund to the extent thereof. Any distribution in excess of a shareholder's basis
in the shareholder's shares would be taxable as gain realized from the sale of
such shares.

Each Fund will be liable for a nondeductible 4% excise tax on amounts
not distributed on a timely basis in accordance with a calendar year
distribution requirement. To avoid the tax, during each calendar year, a
Fund must distribute an amount equal to at least the sum of 98% of its
ordinary income (not taking into account any capital gains or losses) for the
calendar year, and 98% of its capital gain net income for the 12-month period
ending on October 31, in addition to any undistributed portion of the
respective balances from the prior year. Each Fund intends to make
sufficient distributions to avoid this 4% excise tax.

TAXATION OF CERTAIN INVESTMENTS

ORIGINAL ISSUE DISCOUNT; MARKET DISCOUNT. For federal income tax
purposes, debt securities purchased by a Fund may be treated as having
original issue discount. Original issue discount represents interest for
federal income tax purposes and can generally be defined as the excess of the
stated redemption price at maturity of a debt obligation over the issue
price. Original issue discount is treated for federal income tax purposes as
income earned by the Fund, whether or not any income is actually received,
and therefore is subject to the distribution requirements of the Code.
Generally, the amount of original issue discount is determined on the basis
of a constant yield to maturity which takes into account the compounding of
accrued interest. Under section 1286 of the Code, an investment in a
stripped bond or stripped coupon may result in original issue discount.
Because a Fund must include original issue discount in income as it accrues,
it will be more difficult for the Fund to make the distributions required for
the Fund to maintain its status as a regulated investment company accorded
beneficial tax treatment under Subchapter M of the Code or to avoid the 4%
excise tax described above, and the Fund may be required to sell securities
in its portfolio that it otherwise would have continued to hold.

Debt securities may be purchased by a Fund at a discount that exceeds
the original issue discount, if any, at the time the Fund purchases the
securities. This additional discount represents market discount for income
tax purposes. In the case of any debt security having a maturity date of
more than one year from the date of issue and having market discount, the
gain realized on disposition will be treated as interest to the extent it
does not exceed the accrued market discount on the security (unless the Fund
elects to include such accrued market discount in income in the tax year to
which it is attributable). Generally, market discount is accrued on a daily
basis. A Fund may be required to capitalize, rather than deduct currently,
part or all of any

<PAGE>

direct interest expense incurred or continued to purchase or carry any debt
security having market discount, unless the Fund makes the election to
include market discount in income currently.

OPTIONS AND FUTURES TRANSACTIONS. Certain of a Fund's investments
(including hedging transactions in options, futures and straddles, or other
similar transactions) may be subject to provisions of the Code that (i) require
inclusion of unrealized gains or losses in the Fund's income for purposes of the
90% test and require inclusion of unrealized gains in the Fund's income for
purposes of the excise tax and the distribution requirements applicable to
regulated investment companies; (ii) defer recognition of realized losses; and
(iii) characterize both realized and unrealized gain or loss as short-term and
long-term gain or loss irrespective of the holding period of the investment.
Such provisions generally apply to, among other investments, options on debt
securities, indices on securities and futures contracts. Each Fund will monitor
its transactions and may make certain tax elections available to it in order to
mitigate the impact of these rules and prevent disqualification of the Fund as a
regulated investment company.

INVESTMENTS IN FOREIGN CURRENCIES AND FOREIGN SECURITIES. Gains or losses
attributable to foreign currency contracts or fluctuations in exchange rates
that occur between the time a Fund accrues income or expenses denominated in a
foreign currency and the time the Fund actually collects such income or pays
such expenses are treated as ordinary income or loss. The portion of any gain
or loss on the disposition of a debt security denominated in a foreign currency
that is attributable to fluctuations in the value of the foreign currency during
the holding period of the debt security will likewise be treated as ordinary
income or loss. Such ordinary income or loss will increase or decrease the
amount of the Fund's net investment income.

If a Fund invests in the stock of certain "passive foreign investment
companies" ("PFICs"), ordinary income taxes and interest charges may be
imposed on the Fund on "excess distributions" received by the Fund or on gain
from the disposition of such investments by the Fund. In certain
circumstances, this tax treatment can be avoided by making an election to
mark such investments to market annually or to treat the PFIC as a "qualified
electing fund." The Funds do not intend to invest in PFICs. Because of the
broad scope of the PFIC rules, however, there can be no assurance that the
Funds can avoid doing so.

TAXATION OF SHAREHOLDERS

Distributions from a Fund will be taxable to shareholders as ordinary
income to the extent derived from the Fund's investment income and net
short-term capital gain. The Fund's net long-term capital gain that is
distributed and designated as a capital gain dividend will be taxable to
shareholders as long-term capital gain, regardless of the length of time the
Fund's shares have been held by a shareholder. Distributions from a Fund will
be taxable to a shareholder regardless of whether they are received in cash or
reinvested in additional shares.

Distributions by a Fund result in a reduction in the fair market value of
the Fund's shares. Should a distribution reduce the fair market value below a
shareholder's cost basis, such distribution nevertheless may be taxable to the
shareholder as ordinary income or long-term capital gain, even though, from an
investment standpoint, it may constitute a partial return of capital. In
particular, investors should be careful to consider the tax implications of
buying

<PAGE>

shares just prior to a taxable distribution. The price of shares purchased
at that time includes the amount of any forthcoming distribution. Those
investors purchasing shares just prior to a taxable distribution will receive
a return of investment upon distribution which nevertheless will be taxable
to them.

Each of the Funds may be subject to foreign taxes, including foreign
income or withholding taxes. Since it is likely that, with respect to each
Fund, less than 50% of the value of the Fund's total assets will consist of
stock or securities of foreign corporations, shareholders generally will not
be entitled to claim a credit or deduction with respect to such foreign taxes.

If dividends from domestic corporations are earned by a Fund, then a
portion of the dividends paid by the Fund may qualify for the 70% deduction for
dividends received which is available to corporate shareholders of the Fund.
Shareholders will be informed of any portion of the dividends paid by the Fund
which qualifies for this deduction. The dividends-received deduction is reduced
to the extent the dividends received are treated as debt-financed under the
Code, and is eliminated if the stock is held for less than 46 days.

Any dividend declared in October, November or December and made payable to
shareholders of record in any such month is treated as received by the
shareholders on December 31, if the Fund pays the dividend during January of the
following calendar year.

The sale, exchange or redemption of a Fund's shares may give rise to a
gain or loss. In general, any gain realized upon a taxable disposition of
shares held for more than one year will be taxed as long-term capital gain.
If a shareholder sells shares at a loss within six months of purchase, any
loss will be treated as long-term, rather than short-term, capital loss to
the extent of any long-term capital gain distributions received by the
shareholder with respect to the shares. All or a portion of any loss
realized upon a taxable disposition of a Fund's shares will be disallowed if
other shares of the Fund are purchased within 30 days before or after the
disposition. In such a case, the basis of the newly purchased shares will be
adjusted to reflect the disallowed loss.

Special tax rules apply to investments through defined contribution plans
and other tax-qualified plans. Shareholders should consult their tax advisers
to determine the suitability of shares of a Fund as an investment through such
plans and the precise effect of an investment on their particular tax
situations.

The foregoing discussion of United States federal income tax law relates
solely to the application of that law to United States persons, that is, United
States citizens and residents and United States corporations, partnerships,
trusts and estates. Each shareholder who is not a United States person should
consider the United States and foreign tax consequences of ownership of shares
of a Fund, including the possibility that such a shareholder may be subject to
United States withholding at a rate of 30% (or at a lower rate under an
applicable treaty) on distributions.

Shareholders should consult their tax advisers about the application of the
provisions of federal tax law described in this Statement of Additional
Information in light of their particular tax situations and about the possible
applicability of state, local or foreign taxes.

46
<PAGE>

CALCULATION OF PERFORMANCE DATA

From time to time, in advertisements or in communications to shareholders
or prospective investors, each Fund may compare the performance of its Class I,
Class II, Class III or Class IV shares to the performance of other mutual funds
with similar investment objectives, to certificates of deposit and/or to other
financial alternatives. A Fund may also compare its performance to appropriate
indices, such as Standard & Poor's 500 Index, Russell 1000 Growth Index, Lehman
Brothers Aggregate Bond Index, Consumer Price Index and Dow Jones Industrial
Average and/or to appropriate rankings and averages such as those compiled by
Lipper Analytical Services, Inc., Morningstar, Inc., Money Magazine, Business
Week, Forbes Magazine, The Wall Street Journal and Investor's Daily.

The average annual total return ("standard total return") of the Class I,
Class II, Class III and Class IV shares of a Fund will be calculated as set
forth below. Total return is computed separately for each class of shares of a
Fund.

All calculations of performance data in this section will reflect the
voluntary measures, if any, by the Fund's affiliates to reduce fees or expenses
relating to the Fund; see "Accrued Expenses and Recurring Charges" later in this
section.

TOTAL RETURN

For the period August 2, 1999 (commencement of operations) to the Funds'
first fiscal year ended January 31, 2000, the Funds' standard average annual
total returns ("standard total return") of each class of shares were as follows:

Core Fixed Income Fund

Class I 1.19%
Class II 1.22%
Class III 1.26%
Class IV 1.28%

Core Plus Fixed Income Fund

Class I 1.62%
Class II 1.66%
Class III 1.70%
Class IV 1.72%

<PAGE>

Core Large Cap Growth Fund

Class I 9.40%
Class II 9.50%
Class III 9.50%
Class IV 9.60%

Large Cap Growth Fund

Class I 23.10%
Class II 23.20%
Class III 23.30%
Class IV 23.30%

Standard total return is computed separately for each class of shares by
determining the average annual compounded rates of return over the designated
periods that, if applied to the initial amount invested, would produce the
ending redeemable value in accordance with the following formula:

n
P(1+T) = ERV

Where: P = a hypothetical initial payment of $1,000

T = average annual total return

n = number of years

ERV = ending redeemable value at the end of the designated period
assuming a hypothetical $1,000 payment made at the beginning
of the designated period

The calculation is based on the further assumptions that the highest
applicable initial or contingent deferred sales charge is deducted, and that all
dividends and distributions by the Fund are reinvested at net asset value on the
reinvestment dates during the periods. All accrued expenses and recurring
charges are also taken into account as described later herein.

48
<PAGE>

YIELD

A Fund may quote its yield for each class of shares. Yield for each of
the Fixed Income Fund's Class I, Class II, Class III and Class IV shares is
computed by dividing the net investment income per share earned during a
recent month or other specified 30-day period by the maximum offering price
per share on the last day of the period and annualizing the result in
accordance with the following formula:

6
YIELD = 2[(A-B + 1) -1]
---
cd

Where a = dividends and interest earned during the period

b = expenses accrued for the period (net of voluntary expense
reductions by the Investment Manager)

c = the average daily number of shares outstanding during the
period that were entitled to receive dividends

d = the maximum offering price per share on the last day of the
period

To calculate interest earned (for the purpose of "a" above) on debt
obligations, a Fund computes the yield to effective maturity of each
obligation held by the Fund based on the market value of the obligation
(including actual accrued interest) at the close of the last business day of
the preceding period, or, with respect to obligations purchased during the
period, the purchase price (plus actual accrued interest). The yield to
effective maturity is then divided by 360 and the quotient is multiplied by
the market value of the obligation (including actual accrued interest) to
determine the interest income on the obligation for each day of the period
that the obligation is in the portfolio. Dividend income is recognized daily
based on published rates.

With respect to the treatment of discount and premium on mortgage or other
receivables-backed obligations which are expected to be subject to monthly
payments of principal and interest ("paydowns"), a Fund accounts for gain or
loss attributable to actual monthly paydowns as a realized capital gain or loss
during the period. The Funds have elected not to amortize discount or premium
on such securities.

Undeclared earned income, computed in accordance with generally accepted
accounting principles, may be subtracted from the maximum offering price.
Undeclared earned income is the net investment income which, at the end of the
base period, has not been declared as a dividend, but is reasonably expected to
be declared as a dividend shortly thereafter.

All accrued expenses are taken into account as described later herein.

Yield information is useful in reviewing a Fund's performance, but
because yields fluctuate, such information cannot necessarily be used to
compare an investment in the Fund's shares with bank deposits, savings
accounts and similar investment alternatives which often are

49
<PAGE>

insured and/or provide an agreed or guaranteed fixed yield for
a stated period of time. Shareholders should remember that yield is a function
of the kind and quality of the instruments in a Fund's portfolio, portfolio
maturity and operating expenses and market conditions.

ACCRUED EXPENSES AND RECURRING CHARGES

Accrued expenses include all recurring charges that are charged to all
shareholder accounts during the length of the performance period. The standard
total return results do not take into account recurring and nonrecurring charges
for optional services which only certain shareholders elect and which involve
nominal fees.

In calculating performance, the accrued expenses are reduced by the amount
of subsidy, if any, of fees or expenses during the subject period, paid by
affiliates. In the absence of such subsidization, the performance of a Fund
would have been lower.

NONSTANDARDIZED TOTAL RETURN

Each Fund may provide the above described standard total return results
for Class I, Class II, Class III and Class IV shares for periods which end no
earlier than the most recent calendar quarter end and which begin twelve
months before and at the time of commencement of such Fund's operations. In
addition, a Fund may provide nonstandardized total return results for
differing periods, such as for the most recent six months, and/or without
taking sales charges into account. Such nonstandardized total return is
computed as otherwise described under "Total Return" except the result may or
may not be annualized, and as noted any applicable sales charge, if any, may
not be taken into account and therefore not deducted from the hypothetical
initial payment of $10,000.

For example, the Funds' nonstandardized total returns for the period
August 2, 1999 to the Funds' first fiscal year ended January 31, 2000 were as
follows:

Core Fixed Income Fund

Class I 1.19%
Class II 1.22%
Class III 1.26%
Class IV 1.28%

Core Plus Fixed Income Fund

Class I 1.62%
Class II 1.66%
Class III 1.70%
Class IV 1.72%

50
<PAGE>

Core Large Cap Growth Fund

Class I 9.40%
Class II 9.50%
Class III 9.50%
Class IV 9.60%

Large Cap Growth Fund

Class I 23.10%
Class II 23.20%
Class III 23.30%
Class IV 23.30%

DISTRIBUTION RATES

A Fund may also quote its distribution rate for each class of shares. The
distribution rate is calculated by annualizing the latest per-share distribution
from ordinary income and dividing the result by the offering price per share as
of the end of the period to which the distribution relates. A distribution can
include gross investment income from debt obligations purchased at a premium
and in effect include a portion of the premium paid. A distribution can also
include nonrecurring, gross short-term capital gains without recognition of any
unrealized capital losses. Further, a distribution can include income from the
sale of options by a Fund even though such option income is not considered
investment income under generally accepted accounting principles.

Because a distribution can include such premiums, capital gains and
option income, the amount of the distribution may be susceptible to control
by the Investment Manager through transactions designed to increase the
amount of such items. Also, because the distribution rate is calculated in
part by dividing the latest distribution by the offering price, which is
based on net asset value plus any applicable sales charge, the distribution
rate will increase as the net asset value declines. A distribution rate can
be greater than the yield rate calculated as described above.

TRANSFER AGENT AND DIVIDEND DISBURSING AGENT

State Street Bank and Trust Company, 225 Franklin Street, Boston,
Massachusetts 02110, is the Trust's transfer agent and dividend disbursing
agent. State Street Bank and Trust Company is not an affiliate of the
Investment Manager or its affiliates.

51
<PAGE>

CUSTODIAN

State Street Bank and Trust Company, 225 Franklin Street, Boston,
Massachusetts 02110, is the Trust's custodian. As custodian State Street Bank
and Trust Company is responsible for, among other things, safeguarding and
controlling each Fund's cash and securities, handling the receipt and delivery
of securities and collecting interest and dividends on each Fund's investments.
State Street Bank and Trust Company is not an affiliate of the Investment
Manager or its affiliates.

DISTRIBUTOR

State Street Research Investment Services, Inc. ("SSR Investment Services")
serves as principal distributor of the Trust's shares under a Distribution
Agreement. Pursuant to the Distribution Agreement, SSR Investment Services
agrees to bear the expenses of printing and distributing the Trust's prospectus
and any other literature used in connection with the continuous offering of the
Trust's shares for sale to the public, and any advertising in connection with
such offering. The Trust or SSR Investment Services may terminate the
Distribution Agreement on 60 days written notice without penalty.

INDEPENDENT ACCOUNTANTS

PricewaterhouseCoopers LLP, 160 Federal Street, Boston, Massachusetts
02110, serves as the Trust's independent accountants, providing professional
services including (1) audits of the Fund's annual financial statements, (2)
assistance and consultation in connection with SEC filings and (3) review of the
annual income tax returns filed on behalf of the Funds.

52
<PAGE>

STATE STREET RESEARCH INSTITUTIONAL FUNDS

PART C
------

OTHER INFORMATION

<PAGE>

Item 23. Exhibits
--------

(a) Agreement and Declaration of Trust of the Registrant.

(b) Bylaws of the Registrant.

(d) Advisory Agreement between the Registrant, on behalf of each of
its Core Fixed Income, Core Plus Fixed Income, Core Large Cap
Growth and Large Cap Growth Funds, and State Street Research &
Management Company.

(e) Distribution Agreement between the Registrant and State Street
Research Investment Services, Inc.

(f) Not applicable.

(g) (1) Custodian Agreement.
(2) Data Access Services Addendum to Custodian Agreement.

(h) (1) Servicing Agreement between the Trust and State Street
Research & Management Company.
(3) Fee Waiver and Expense Limitation Agreement.

(i) Opinion of Ropes & Gray regarding the Core Fixed Income, Core
Plus Fixed Income, Core Large Cap Growth and Large Cap Growth
Funds.

(j) Consent of Independent Accountants.

(k) None.

(l) None.

(m) Not applicable.

(n) Rule 18f-3 Plan.

(p) Code of Ethics.

(q) (1) Power of Attorney dated June 30, 1999.
(2) Certificate of Board Resolution respecting Powers of Attorney.
(3) Power of Attorney for Gerard P. Maus.

C-1
<PAGE>

Item 24. Persons Controlled by or Under Common Control with Registrant
-------------------------------------------------------------

As of May 1, 2000, Metropolitan Life Insurance Company was the beneficial
owner of a greater than 25% interest of all outstanding shares of Class I,
Class II, Class III and Class IV of each of the Funds, with the exception of
Class I of the Core Fixed Income Fund, and may be deemed to be in control of
the Funds as "control" is defined in the 1940 Act. Metropolitan Life
Insurance Company is the indirect parent company of State Street Research &
Management Company, the Investment Manager to the Funds. State Street
Research & Management Company (a Delaware corporation) is a wholly-owned
subsidiary of SSRM Holdings, Inc. (a Delaware corporation), which is in turn
a wholly-owned subsidiary of Metropolitan Tower Corp. (a Delaware
corporation), which is in turn a wholly-owned subsidiary of Metropolitan Life
Insurance Company (a New York stock life insurance company), which is in
turn a wholly-owned subsidiary of MetLife, Inc. (a Delaware corporation). As
a result, the Funds could be deemed to be under common control with the
subsidiaries of Metropolitan Life Insurance Company listed above, as well as
the other subsidiaries in which Metropolitan Life Insurance Company owns a
greater than 25% interest. A complete list of the subsidiaries of MetLife,
Inc. and Metropolitan Life Insurance Company is filed as Exhibit 21.1 of the
Registration Statement on Form S-1 (Registration No. 333-91517) of MetLife,
Inc. and is incorporated herein by reference.

Item 25. Indemnification
---------------

Article IV of the Bylaws of the Registrant provides that the Registrant
shall indemnify each of its Trustees and officers against all liabilities and
expenses, including but not limited to amounts paid in satisfaction of
judgments, in compromise or as fines and penalties, and against all expenses,
including but not limited to accountants and counsel fees, reasonably incurred
in connection with the defense or disposition of any action, suit or other
proceeding, whether civil or criminal, before any court or administrative or
legislative body, in which such trustee or officer may be or may have been
involved as a party or otherwise or with which such person may be or may have
been threatened, while in office or thereafter, by reason of being or having
been such a trustee or officer, except that indemnification shall not be
provided if it shall have been finally adjudicated in any such action, suit or
proceeding that such trustee or officer (i) did not act in good faith in the
reasonable belief that his or her action was in the best interests of the
Registrant or (ii) is liable to the Registrant or its shareholders by reason of
willful misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of such person's office.

C-2
<PAGE>

Item 26. Business and Other Connections of Investment Adviser

Describe any other business, profession, vocation or employment of a substantial
nature in which each investment adviser of the Registrant, and each director,
officer or partner of any such investment adviser, is or has been, at any time
during the past two fiscal years, engaged for his own account or in the capacity
of director, officer, employee, partner or trustee.

<TABLE>
<CAPTION>
Principal business
Name Connection Organization address of organization
<S> <C> <C> <C>
State Street Research & Investment Adviser Various investment advisory Boston, MA
Management Company clients

Abbott, Christopher C. Senior Managing Pioneer Investment Mgmt. Boston, MA
Executive Vice Director
President (until 10/99)

Arpiarian, Tanya None
Vice President

Bangs, Linda L. None
Vice President

Barghaan, Dennis C. Senior Vice President State Street Research Investment Services, Inc. Boston, MA
Senior Vice President Senior Vice President Metropolitan Life Insurance Company New York, NY
(until 12/1998)

Barnwell, Amy F. Vice President State Street Research Investment Services, Inc. Boston, MA
Vice President

Beatty, T. Kevin Vice President Fleet Investment Advisors Boston, MA
Vice President (until 9/99)

Bennett, Peter C. Vice President State Street Research Capital Trust Boston, MA
Director and Vice President State Street Research Exchange Trust Boston, MA
Executive Vice Vice President State Street Research Financial Trust Boston, MA
President Vice President State Street Research Growth Trust Boston, MA
Vice President State Street Research Institutional Funds Boston, MA
Vice President State Street Research Master Investment Trust Boston, MA
Vice President State Street Research Equity Trust Boston, MA
Director State Street Research Investment Services, Inc. Boston, MA
Director and Chairman Boston Private Bank & Trust Co. Boston, MA
of Exec. Comm.
Vice President State Street Research Income Trust Boston, MA
Vice President State Street Research Securities Trust Boston, MA
President and Director Christian Camps & Conferences, Inc. Boston, MA
Chairman and Trustee Gordon College Wenham, MA

Bigley, Gary M. None
Vice President

Bochman, Kathleen M. None
Vice President

Borzilleri, John Vice President State Street Research Financial Trust Boston, MA
Senior Vice President
(Vice President
until 4/98)

Bray, Michael J. None
Senior Vice President
(Vice President
until 4/98)

Brezinski, Karen None
Vice President

Brown, Susan H. None
Vice President

Buffum, Andrea L. None
Vice President

Burbank, John F. None
Senior Vice President
</TABLE>
C-3

<PAGE>
<TABLE>
<CAPTION>
Principal business
Name Connection Organization address of organization
<S> <C> <C> <C>
Calame, Mara D. Assistant Secretary State Street Research Institutional Funds Boston, MA
Vice President, Assistant Vice President, Assistant State Street Research Investment Services, Inc. Boston, MA
Secretary and Counsel Secretary and Counsel

Carley, Linda Cook Vice President State Street Research Investment Services, Inc. Boston, MA
Vice President

Canavan, Joseph W. Assistant Treasurer State Street Research Equity Trust Boston, MA
Senior Vice President Assistant Treasurer State Street Research Financial Trust Boston, MA
(Vice President Assistant Treasurer State Street Research Income Trust Boston, MA
until 4/98) Assistant Treasurer State Street Research Money Market Trust Boston, MA
Assistant Treasurer State Street Research Tax-Exempt Trust Boston, MA
Assistant Treasurer State Street Research Capital Trust Boston, MA
Assistant Treasurer State Street Research Exchange Trust Boston, MA
Assistant Treasurer State Street Research Growth Trust Boston, MA
Assistant Treasurer State Street Research Institutional Funds Boston, MA
Assistant Treasurer State Street Research Master Investment Trust Boston, MA
Assistant Treasurer State Street Research Securities Trust Boston, MA
Assistant Treasurer State Street Research Portfolios, Inc. Boston, MA

Carstens, Linda C. Vice President State Street Research Investment Services, Inc. Boston, MA
Vice President

Clifford, Jr., Paul J. Vice President State Street Research Tax-Exempt Trust Boston, MA
Senior Vice President

Coleman, Thomas J. None
Vice President

Cullen, Terrence J. Vice President and State Street Research Investment Services, Inc. Boston, MA
Vice President, Assistant Assistant Counsel
Secretary and Counsel

D'Vari, Ronald None
Senior Vice President

Depp, Maureen G. None
Vice President

DeVeuve, Donald None
Vice President

Dudley, Catherine Vice President State Street Research Capital Trust Boston, MA
Senior Vice President Vice President State Street Research Institutional Funds Boston, MA

Duggan, Peter J. None
Senior Vice President

Ebel, Bruce A.
Senior Vice President Vice President Loomis, Sayles & Company, L.P. Chicago, IL
(since 3/99)
Vice President State Street Research Institutional Funds Boston, MA

Egel, David J. Vice President Sun Life of Canada Boston, MA
Vice President (since 4/98)
Vice President State Street Research Investment Services, Inc. Boston, MA

Even, Karen L. None
Vice President

Fazo, Steven A. None
Vice President

Federoff, Alex G. None
Senior Vice President
(Vice President until 4/00)

Fee, Richard E. Vice President State Street Research Investment Services, Inc. Boston, MA
Vice President

Feeney, Kimberly Vice President State Street Research Investment Services, Inc. Boston, MA
Vice President

Feliciano, Rosalina None
Vice President

Ficco, Bonnie A. None
Vice President
</TABLE>
C-4

<PAGE>
<TABLE>
<CAPTION>
Principal business
Name Connection Organization address of organization
<S> <C> <C> <C>
Fochtman, Jr., Leo None
Vice President

Forcione, Anthony F. None
Vice President

Frank, Christopher None
Vice President

Frey, Kenneth Analyst The Boston Company Boston, MA
Vice President (until 10/99)

Gallivan, Jr., Edward T. Vice President State Street Research Investment Services, Inc. Boston, MA
Vice President

Gardner, Michael D. None
Senior Vice President

Geer, Bartlett R. Vice President State Street Research Equity Trust Boston, MA
Senior Vice President Vice President State Street Research Income Trust Boston, MA

Giroux, June M. None
Vice President

Goganian, David Vice President Scudder-Kemper Investments Boston, MA
Vice President (until 6/99)
Vice President State Street Research Investment Services, Inc. Boston, MA

Goodman, Stephanie B. Vice President State Street Research Investment Services, Inc. Boston, MA
Vice President

Govoni, Electra None
Vice President

Grace, Evan None
Vice President

Granger, Allison None
Vice President

Haggerty, Bryan D. None
Vice President

Hamilton, Jr., William A. Treasurer and Director Ellis Memorial and Eldredge House Boston, MA
Senior Vice President Treasurer and Director Nautical and Aviation Publishing Company, Inc. Baltimore, MD
Treasurer and Director North Conway Institute Boston, MA

Hasson, Ira P. Vice President State Street Research Investment Services, Inc. Boston, MA
Vice President

Haverty, Jr., Lawrence J. Vice President State Street Research Capital Trust Boston, MA
Senior Vice President

Heineke, George R. None
Vice President

Hickman, Joanne Managing Director Zurich Investment Management Chicago, IL
Senior Vice President (until 1/98)
Senior Vice President State Street Research Investment Services, Inc. Boston, MA

Holland, Thomas Senior Vice President Putnam Investments Boston, MA
Vice President (until 6/99)
Senior Vice President State Street Research Investment Services, Inc. Boston, MA

Huang, Jesse C. None
Vice President

Jackson, Jr., Vice President State Street Research Equity Trust Boston, MA
F. Gardner Trustee Certain trusts of related and
Senior Vice President non-related individuals
Trustee and Chairman of the Vincent Memorial Hospital Boston, MA
Board

Joseph, Robert I. None
Vice President
</TABLE>
C-5
<PAGE>
<TABLE>
<CAPTION>
Principal business
Name Connection Organization address of organization
<S> <C> <C> <C>
Kallis, John H. Vice President State Street Research Financial Trust Boston, MA
Senior Vice President Vice President State Street Research Income Trust Boston, MA
Vice President State Street Research Institutional Funds Boston, MA
Vice President State Street Research Money Market Trust Boston, MA
Vice President State Street Research Tax-Exempt Trust Boston, MA
Vice President State Street Research Securities Trust Boston, MA
Trustee 705 Realty Trust Washington, D.C.

Kasper, M. Katherine Vice President State Street Research Investment Services, Inc. Boston, MA
Vice President

Keelan, David
Vice President

Keen, C. Miyeko Vice President State Street Research Investment Services, Inc. Boston, MA
Vice President

Kern, Stephen F. None
Vice President

Kiessling, Dyann H. Vice President State Street Research Money Market Trust Boston, MA
Vice President

Kluiber, Rudolph K. Vice President State Street Research Capital Trust Boston, MA
Senior Vice President
(Vice President
until 4/98)

Kuhn, Stephen P. Vice President State Street Research Investment Services, Inc. Boston, MA
Vice President

Langholm, Knut Director State Street Research Luxembourg
Senior Vice President
(Vice President
until 4/99)

Leary, Eileen M. None
Vice President

Ledbury, Richard C. Vice President State Street Research Investment Services, Inc. Boston, Ma
Vice President

Lomasney, Mary T. None
Vice President

Lubas, Amy None
Vice President

Marinella, Mark A. Portfolio Manager STW Fixed Income Management, Ltd. Boston, MA
Senior Vice President (Until 8/98)
Vice President State Street Research Institutional Funds Boston, MA

Markel, Gregory S. None
Vice President

Marsh, Eleanor H. Portfolio Manager Evergreen Investment Management Company Boston, MA
Vice President (Until 3/00)

McGrath, Ann E. None
Vice President

McKown, Elizabeth Vice President State Street Research Investment Services, Inc. Boston, MA
Vice President
</TABLE>

C-6

<PAGE>
<TABLE>
<CAPTION>
Principal business
Name Connection Organization address of organization
<S> <C> <C> <C>
McNamara, III, Francis J. Executive Vice President, State Street Research Investment Boston, MA
Executive Vice Clerk and General Counsel Services, Inc.
President, Secretary Secretary and General Counsel State Street Research Master Boston, MA
and General Counsel Investment Trust
Secretary and General Counsel State Street Research Capital Trust Boston, MA
Secretary and General Counsel State Street Research Exchange Trust Boston, MA
Secretary and General Counsel State Street Research Growth Trust Boston, MA
Secretary and General Counsel State Street Research Securities Trust Boston, MA
Secretary and General Counsel State Street Research Equity Trust Boston, MA
Secretary and General Counsel State Street Research Financial Trust Boston, MA
Secretary and General Counsel State Street Research Income Trust Boston, MA
Secretary and General Counsel State Street Research Money Market Trust Boston, MA
Secretary and General Counsel State Street Research Tax-Exempt Trust Boston, MA
Secretary and General Counsel SSRM Holdings, Inc. Boston, MA
Secretary and General Counsel State Street Research Institutional Boston, MA
Funds

Maus, Gerard P. Director, President, Treasurer, State Street Research Equity Trust Boston, MA
Director, Executive Chief Financial Officer, and
Vice President, Chief Administrative Officer
Treasurer, Chief Director, President, Treasurer, State Street Research Financial Trust Boston, MA
Financial Officer and Chief Financial Officer, and
Chief Administrative Chief Administrative Officer
Officer Director, President, Treasurer, State Street Research Income Trust Boston, MA
Chief Financial Officer, and
Chief Administrative Officer
Director, President, Treasurer, State Street Research Money Market Trust Boston, MA
Chief Financial Officer, and
Chief Administrative Officer
Director, President, Treasurer, State Street Research Tax-Exempt Trust Boston, MA
Chief Financial Officer, and
Chief Administrative Officer
Director, President, Treasurer, State Street Research Capital Trust Boston, MA
Chief Financial Officer, and
Chief Administrative Officer
Director, President, Treasurer, State Street Research Exchange Trust Boston, MA
Chief Financial Officer, and
Chief Administrative Officer
Director, President, Treasurer, State Street Research Growth Trust Boston, MA
Chief Financial Officer, and
Chief Administrative Officer
Director, President, Treasurer, State Street Research Master Investment Trust Boston, MA
Chief Financial Officer, and
Chief Administrative Officer
Director, President, Treasurer, State Street Research Institutional Funds Boston, MA
Chief Financial Officer, and
Chief Administrative Officer
Director, President, Treasurer, State Street Research Securities Trust Boston, MA
Chief Financial Officer, and
Chief Administrative Officer
Director, President, Treasurer, State Street Research Investment Services, Inc. Boston, MA
Chief Financial Officer, and
Chief Adminstrative Officer
Director Metric Holdings, Inc. San Francisco, CA
Director Certain wholly-owned subsidiaries
of Metric Holdings, Inc.
Treasurer and Chief SSRM Holdings, Inc. Boston, MA
Financial Officer
Director State Street Research Luxembourg

Moore, Jr., Thomas P. Vice President State Street Research Financial Trust Boston, MA
Senior Vice Vice President State Street Research Equity Trust Boston, MA
President Director Hibernia Savings Bank Quincy, MA
Governor on the Board Association for Investment Management Charlottesville, VA
of Governors and Research

Morey, Andrew None
Vice President

Mulligan, JoAnne C. None
Senior Vice President

Orr, Stephen C. Member Technology Analysts of Boston Boston, MA
Vice President Member Electro-Science Analysts (of NYC) New York, NY

Paddon, Steven W. Vice President State Street Research Investment Services, Inc. Boston, MA
Vice President

Pannell, James C. Vice President State Street Research Institutional Funds Boston, MA
Executive Vice President
</TABLE>
C-7

<PAGE>
<TABLE>
<CAPTION>
Principal business
Name Connection Organization address of organization
<S> <C> <C> <C>
Peters, Kim M. Vice President State Street Research Securities Trust Boston, MA
Senior Vice President Vice President State Street Research Institutional Funds Boston, MA

Pierce, James D. None
Vice President

Poritzky, Dean E. None
Senior Vice President
(Vice President 4/00)

Pyle, David J. None
Vice President

Ragsdale, E.K. Easton Vice President State Street Research Financial Trust Boston, MA
Senior Vice President

Ransom, Clifford F. Director of NatWest Markets
Vice President Special Situations

Rawlins, Jeffrey A. Vice President State Street Research Institutional Funds Boston, MA
Senior Vice President

Rice III, Daniel Joseph Vice President State Street Research Equity Trust Boston, MA
Senior Vice President

Rolnick, Michael A. None
Vice President

Romich, Douglas A. Assistant Treasurer State Street Research Equity Trust Boston, MA
Senior Vice President Assistant Treasurer State Street Research Financial Trust Boston, MA
(Vice President Assistant Treasurer State Street Research Income Trust Boston, MA
until 4/98) Assistant Treasurer State Street Research Money Market Trust Boston, MA
Assistant Treasurer State Street Research Tax-Exempt Trust Boston, MA
Assistant Treasurer State Street Research Capital Trust Boston, MA
Assistant Treasurer State Street Research Exchange Trust Boston, MA
Assistant Treasurer State Street Research Growth Trust Boston, MA
Assistant Treasurer State Street Research Institutional Funds Boston, MA
Assistant Treasurer State Street Research Master Investment Trust Boston, MA
Assistant Treasurer State Street Research Securities Trust Boston, MA

Ryan, Michael J. None
Senior Vice President

Sanderson, Derek None
Senior Vice President

Schrage, Michael M. None
Senior Vice President
(Vice President until 4/00)

Shean, William G. None
Senior Vice President
(Vice President until 4/00)

Sheldon, Michael A. None
Vice President

Shively, Thomas A. Vice President State Street Research Financial Trust Boston, MA
Director and Vice President State Street Research Income Trust Boston, MA
Executive Vice Vice President State Street Research Money Market Trust Boston, MA
President Vice President State Street Research Tax-Exempt Trust Boston, MA
Director State Street Research Investment Services, Inc. Boston, MA
Vice President State Street Research Securities Trust Boston, MA
Vice President State Street Research Institutional Funds Boston, MA

Shoemaker, Richard D. None
Senior Vice President

Silverstein, Jill S. None
Vice President

Simi, Susan None
Vice President

Simmons, Amy L. Vice President State Street Research Investment Services, Inc.
Vice President Boston, MA
</TABLE>
C-8

<PAGE>
<TABLE>
<CAPTION>
Principal business
Name Connection Organization address of organization
<S> <C> <C> <C>
Stambaugh, Kenneth None
Vice President

Stolberg, Thomas B. None
Vice President

Strelow, Daniel R. None
Senior Vice President

Swanson, Amy McDermott Vice President State Street Research Institutional Funds Boston, MA
Senior Vice President

Tice, Robyn S. None
Vice President

Trebino, Anne M. Vice President SSRM Holdings, Inc. Boston, MA
Senior Vice President

Wallace, Julie K. None
Vice President

Walsh, Denis J. None
Vice President

Walsh, Tucker Vice President State Street Research Capital Trust Boston, MA
Vice President

Watts, Evan D., Jr. Vice President State Street Research Investment Services, Inc. Boston, MA
Vice President

Weiss, James M. Vice President State Street Research Exchange Trust Boston, MA
Director Vice President State Street Research Financial Trust Boston, MA
(Executive Vice President) Vice President State Street Research Growth Trust Boston, MA
until 4/00) Vice President State Street Research Institutional Funds Boston, MA
Vice President State Street Research Securities Trust Boston, MA
Vice President State Street Research Capital Trust Boston, MA
Vice President State Street Research Equity Trust Boston, MA
Vice President State Street Research Income Trust Boston, MA
Vice President State Street Research Master Investment Trust Boston, MA
Director State Street Research Investment
Services, Inc. Boston, MA

Welch, Timothy M. None
Vice President

Westvold, Vice President State Street Research Institutional Funds Boston, MA
Elizabeth McCombs Vice President State Street Research Securities Trust Boston, MA
Senior Vice President

Wilkins, Kevin Senior Vice President State Street Research Investment Services, Inc. Boston, MA
Executive Vice President
(Senior Vice President
until 4/00)

Wilson, John T. Vice President State Street Research Master Investment Trust Boston, MA
Senior Vice President Vice President State Street Research Institutional Funds Boston, MA
(Vice President
until 4/98)

Winandy, Angela L. Vice President State Street Research Investment Services, Inc. Boston, MA
Vice President
</TABLE>
C-9

<PAGE>
<TABLE>
<CAPTION>
Principal business
Name Connection Organization address of organization
<S> <C> <C> <C>
Wing, Darman A. Senior Vice President and State Street Research Investment Services, Inc. Boston, MA
Senior Vice President, Asst. Clerk
Assistant Secretary Assistant Secretary and State Street Research Capital Trust Boston, MA
and Assistant Assistant General Counsel
General Counsel Assistant Secretary and State Street Research Exchange Trust Boston, MA
(Vice President Assistant General Counsel
until 4/98) Assistant Secretary and State Street Research Growth Trust Boston, MA
Assistant General Counsel
Assistant Secretary and State Street Research Master Investment Trust Boston, MA
Assistant General Counsel
Assistant Secretary and State Street Research Securities Trust Boston, MA
Assistant General Counsel
Assistant Secretary and State Street Research Equity Trust Boston, MA
Assistant General Counsel
Assistant Secretary and State Street Research Financial Trust Boston, MA
Assistant General Counsel
Assistant Secretary and State Street Research Income Trust Boston, MA
Assistant General Counsel
Assistant Secretary and State Street Research Money Market Trust Boston, MA
Assistant General Counsel
Assistant Secretary and State Street Research Tax-Exempt Trust Boston, MA
Assistant General Counsel
Assistant Secretary and SSRM Holdings, Inc. Boston, MA
Assistant General Counsel

Woodbury, Robert S. Vice President State Street Research Investment Services, Inc. Boston, MA
Vice President

Woodworth, Jr., Kennard Vice President State Street Research Exchange Trust Boston, MA
Senior Vice Vice President State Street Research Financial Trust Boston, MA
President Vice President State Street Research Growth Trust Boston, MA
Vice President State Street Research Institutional Funds Boston, MA
Vice President State Street Research Securities Trust Boston, MA

Wu, Norman N. Partner Atlantic-Acton Realty Framingham, MA
Senior Vice President Director Bond Analysts Society of Boston Boston, MA

Yalamanchili, Kishore K. None
Vice President

Yannone, John T. Vice President State Street Research Investment Services, Inc. Boston, MA
Vice President Vice President John Hancock Company Boston, MA
(until 1/00)

Yu, Manady M. None
Vice President

Zuger, Peter A. Vice President State Street Research Equity Trust Boston, MA
Senior Vice Portfolio Manager American Century
President (until 9/98) Investment Management
</TABLE>
C-10

<PAGE>

Item 27. Principal Underwriters

(a) State Street Research Investment Services, Inc., Registrant's
principal underwriter, also acts as principal underwriter for State
Street Research Financial Trust, State Street Research Income Trust,
State Street Research Money Market Trust, State Street Research
Tax-Exempt Trust, State Street Research Capital Trust, State Street
Research Master Investment Trust, State Street Research Equity Trust,
State Street Research Securities Trust, State Street Research Growth
Trust, and State Street Research Portfolios, Inc.

(b) Directors and Officers of State Street Research Investment Services,
Inc. are as follows:

<TABLE>
<CAPTION>
(1) (2) (3)
Name And Principal Positions and Positions and
Business Address Offices with Offices with
Underwriter Registrant
<S> <C> <C>
Gerard P. Maus President, Treasurer, Chief Treasurer, President,
One Financial Center Financial Officer, Chief Chairman, Chief
Boston, MA 02111 Administrative Officer and Executive Officer,
Director and Trustee

Thomas A. Shively Director Vice President
One Financial Center
Boston, MA 02111

Francis J. McNamara, III Executive Vice President, Secretary and General
One Financial Center General Counsel and Counsel
Boston, MA 02111 Clerk
</TABLE>

C-11
<PAGE>

Dennis C. Barghaan Senior Vice President None
One Financial Center
Boston, MA 02111

Peter Borghi Senior Vice President None
One Financial Center
Boston, MA 02111

Paul V. Daly Senior Vice President None
One Financial Center
Boston, MA 02111

Joanne Hickman Senior Vice President None
One Financial Center
Boston, MA 02111

Thomas Holland Senior Vice President None
One Financial Center
Boston, MA 02111

Russell A. LaBrasca Senior Vice President None
One Financial Center
Boston, MA 02111

Kevin Wilkins Executive Vice President None
One Financial Center
Boston, MA 02111

Darman A. Wing Senior Vice President, None
One Financial Center Assistant General Counsel
Boston, MA 02111 and Assistant Clerk

Amy F. Barnwell Vice President None
One Financial Center
Boston, MA 02111

Mara D. Calame Vice President, Assistant Secretary
One Financial Center Assistant Clerk,
Boston, MA 02111 and Counsel

Linda C. Carstens Vice President None
One Financial Center
Boston, MA 02111

C-12
<PAGE>

<TABLE>
<S> <C> <C>
Linda Cook Carley Vice President Assistant Secretary
One Financial Center
Boston, MA 02111

Terrence J. Cullen Vice President, None
One Financial Center Counsel and
Boston, MA 02111 Assistant Clerk

David J. Egel Senior Vice President None
One Financial Center
Boston, MA 02111

Richard E. Fee Vice President None
One Financial Center
Boston, MA 02111

Kimberly Feeney Vice President None
One Financial Center
Boston, MA 02111

David Goganian Vice President None
One Financial Center
Boston, MA 02111

Edward T. Gallivan, Jr. Vice President None
One Financial Center
Boston, MA 02111

Stephanie B. Goodman Vice President None
One Financial Center
Boston, MA 02111

Ira P. Hasson Vice President None
One Financial Center
Boston, MA 02111

M. Katharine Kasper Vice President None
One Financial Center
Boston, MA 02111

C. Miyeko Keen Vice President None
One Financial Center
Boston, MA 02111

Stephen F. Kuhn Vice President None
One Financial Center
Boston, MA 02111

Richard C. Ledbury Vice President None
One Financial Center
Boston, MA 02111

Elizabeth G. McKown Vice President None
One Financial Center
Boston, MA 02111

Steven W. Paddon Vice President None
One Financial Center
Boston, MA 02111

Amy L. Simmons Vice President None
One Financial Center
Boston, MA 02111

Evan D. Watts, Jr. Vice President None
One Financial Center
Boston, MA 02111

Angela L. Winandy Vice President None
One Financial Center
Boston, MA 02111

Robert S. Woodbury Vice President None
One Financial Center
Boston, MA 02111

John T. Yannone Vice President None
One Financial Center
Boston, MA 02111
</TABLE>

C-13
<PAGE>

Item 28. Location of Accounts and Records
--------------------------------

Gerard P. Maus, State Street Research & Management Company, One Financial
Center, Boston, Massachusetts 02211.

Item 29. Management Services
-------------------

Not applicable.

Item 30. Undertakings
------------

The Registrant undertakes to furnish to each person to whom a prospectus of
the Registrant is delivered a copy of the Registrant's latest annual report to
shareholders, upon request and without charge.

C-14
<PAGE>

*********************

NOTICE

A copy of the Agreement and Declaration of Trust of State Street Research
Institutional Funds (the "Trust") is on file with the Secretary of The
Commonwealth of Massachusetts and notice is hereby given that this Registration
Statement has been executed on behalf of the Trust by an officer of the Trust as
an officer and by its Trustees as trustees and not individually and the
obligations of or arising out of this Registration Statement are not binding
upon any of the Trustees, officers or shareholders individually but are binding
only upon the assets and property of the Trust.

C-15
<PAGE>

SIGNATURES
----------

Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all
of the requirements for effectiveness of this Registration Statement pursuant
to Rule 485(b) under the Securities Act of 1933 and has duly caused this
Post-Effective Amendment No. 1 to its Registration Statement on Form N-1A to
be signed on its behalf by the undersigned, duly authorized, in the City of
Boston, and the Commonwealth of Massachusetts on the 26th day of May, 2000.

STATE STREET RESEARCH
INSTITUTIONAL FUNDS

By: *
---------------------------------
Name: Gerard P. Maus
Title: President and Chief
Executive Officer

Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed on the above date by the following
persons in the capacities indicated.

Signature Title
--------- -----

* Trustee, Chairman of the Board,
- ------------------------------- President and Chief Executive Officer
Gerard P. Maus (Principal Executive Officer)

* Treasurer (Principal Financial and
- ------------------------------- Accounting Officer)
Gerard P. Maus

* Trustee
- -------------------------------
Robert A. Lawrence

* Trustee
- -------------------------------
James M. Storey

*By: /s/ Francis J. McNamara, III
----------------------------
Francis J. McNamara, III
Attorney-in-Fact under
Powers of Attorney filed
herein.

C-16

<PAGE>

1933 Act Registration No. 333-73433
1940 Act File No. 811-09247

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

----------------------

FORM N-1A

REGISTRATION STATEMENT
UNDER THE SECURITIES ACT [ ]
OF 1933

Pre-Effective Amendment No. __ [ ]

Post-Effective Amendment No. 1 [X]

and/or

REGISTRATION STATEMENT
UNDER THE INVESTMENT COMPANY
ACT OF 1940 [ ]

Amendment No. 2 [X]

----------------------

STATE STREET RESEARCH INSTITUTIONAL FUNDS
(Exact Name of Registrant as Specified in Declaration of Trust)

----------------------

EXHIBITS

<PAGE>

Exhibit Index
-------------

(a) Agreement and Declaration of Trust of the Registrant.

(b) Bylaws of the Registrant.

(d) Advisory Agreement between the Registrant, on behalf of each of its Core
Fixed Income, Core Plus Fixed Income, Core Large Cap Growth and Large
Cap Growth Funds, and State Street Research & Management Company.

(e) Distribution Agreement between the Registrant and State Street Research
Investment Services, Inc.

(g) (1) Custodian Agreement.

(2) Data Access Services Addendum to Custodian Agreement.

(h) (1) Servicing Agreement between the Trust and State Street Research &
Management Company.

(3) Fee Waiver and Expense Limitation Agreement.

(i) Opinion of Ropes & Gray regarding the Core Fixed Income, Core Plus Fixed
Income, Core Large Cap Growth and Large Cap Growth Funds.

(j) Consent of Independent Accountants.

(n) Rule 18f-3 Plan.

(p) Code of Ethics.

(q) (1) Power of Attorney dated June 30, 1999.

(2) Certificate of Board Resolution Respecting Powers of Attorney.

(3) Power of Attorney for Gerard P. Maus.

<PAGE>

STATE STREET RESEARCH INSTITUTIONAL FUNDS

AGREEMENT AND DECLARATION OF TRUST

This AGREEMENT AND DECLARATION OF TRUST made at Boston, Massachusetts, this
3rd day of March, 1999, by the Trustees hereunder, and by the holders of shares
of beneficial interest to be issued hereunder as provided herein.

WITNESSETH that

WHEREAS, this Trust has been formed to carry on the business of an
investment company; and

WHEREAS, the Trustees have agreed to manage all property coming into their
hands as trustees of a Massachusetts voluntary association with transferable
shares in accordance with the provisions hereinafter set forth.

NOW, THEREFORE, the Trustees hereby declare that they will hold all cash,
securities and other assets, which they may from time to time acquire in any
manner as Trustees hereunder IN TRUST to manage and dispose of the same upon the
following terms and conditions for the pro rata benefit of the holders from time
to time of Shares in this Trust as hereinafter set forth.

ARTICLE I
Name and Definitions

Name

Section 1. This Trust shall be known as "State Street Research
Institutional Funds", and the Trustees shall conduct the business of the Trust
under that name or any other name as they may from time to time determine.

Definitions

Section 2. Whenever used herein, unless otherwise required by the context
or specifically provided:

(a) The "Trust" refers to the Massachusetts business trust established by
this Agreement

1
<PAGE>

and Declaration of Trust, as amended from time to time;

(b) "Trustees" refers to the Trustees of the Trust named herein or elected
in accordance with Article IV;

(c) "Shares" means the equal proportionate transferable units of interest
into which the beneficial interest in the Trust shall be divided from time
to time or, if more than one series or class of Shares is authorized by the
Trustees, the equal proportionate transferable units into which each series
or class of Shares shall be divided from time to time;

(d) "Shareholder" means a record owner of Shares;

(e) The "1940 Act" refers to the Investment Company Act of 1940 and the
Rules and Regulations thereunder, all as amended from time to time;

(f) The terms "Affiliated Person", "Assignment", "Commission", "Interested
Person", "Principal Underwriter" and "Majority Shareholder Vote" (the 67%
or 50% requirement of the third sentence of Section 2(a)(42) of the 1940
Act, whichever may be applicable) shall have the meanings given them in the
1940 Act;

(g) "Declaration of Trust" shall mean this Agreement and Declaration of
Trust as amended or restated from time to time;

(h) "Bylaws" shall mean the Bylaws of the Trust as amended from time to
time;

(i) The term "series" or "series of Shares" refers to the one or more
separate investment portfolios of the Trust into which the assets and
liabilities of the Trust may be divided and the Shares of the Trust
representing the beneficial interest of Shareholders in such respective
portfolios; and

(j) The term "class" or "class of Shares" refers to the division of Shares
into two or more classes as provided in Article III, Section 1 hereof.

ARTICLE II
Purpose of Trust

The purpose of the Trust is to provide investors a managed investment
primarily in securities, debt instruments and other instruments and rights of a
financial character.

2
<PAGE>

ARTICLE III
Shares

Division of Beneficial Interest

Section 1. The Shares of the Trust shall be issued in one or more series as
the Trustees may, without shareholder approval, authorize. Each series shall be
preferred over all other series in respect of the assets allocated to that
series within the meaning of the 1940 Act and shall represent a separate
investment portfolio of the Trust. The beneficial interest in each series shall
at all times be divided into Shares, without par value, each of which shall,
except as provided in the following sentence, represent an equal proportionate
interest in the series with each other Share of the same series, none having
priority or preference over another. The Trustees may, without shareholder
approval, divide the Shares of any series into two or more classes, Shares of
each such class having such preferences and special or relative rights and
privileges (including conversion rights, if any) as the Trustees may determine
from time to time. The number of Shares authorized shall be unlimited. The
Trustees may from time to time divide or combine the Shares of any series or
class into a greater or lesser number without thereby changing the proportionate
beneficial interest in the series or class.

Ownership of Shares

Section 2. The ownership of Shares shall be recorded on the books of the
Trust or a transfer or similar agent. No certificates certifying the ownership
of Shares shall be issued except as the Trustees may otherwise determine from
time to time. The Trustees may make such rules as they consider appropriate for
the issuance of Share certificates, the transfer of Shares and similar matters.
The record books of the Trust as kept by the Trust or any transfer or similar
agent, as the case may be, shall be conclusive as to who are the Shareholders of
each series and class and as to the number of Shares of each series and class
held from time to time by each Shareholder.

Investment in the Trust

Section 3. The Trustees shall accept investments in the Trust from such
persons and on such terms and for such consideration, which may consist of cash
or tangible or intangible property or a combination thereof, as they or the
Bylaws from time to time authorize.

All consideration received by the Trust for the issue or sale of Shares of
each series, together with all income, earnings, profits, and proceeds thereof,
including any proceeds derived from the sale, exchange or liquidation thereof,
and any funds or payments derived from any reinvestment of such proceeds in
whatever form the same may be, shall irrevocably belong to the series of Shares
with respect to which the same were received by the Trust for all

3
<PAGE>

purposes, subject only to the rights of creditors, and shall be so handled upon
the books of account of the Trust and are herein referred to as "assets of" such
series.

No Preemptive Rights

Section 4. Shareholders shall have no preemptive or other right to
subscribe to any additional Shares or other securities issued by the Trust.

Status of Shares and Limitation of Personal Liability

Section 5. Shares shall be deemed to be personal property giving only the
rights provided in this Declaration of Trust or the Bylaws. Every Shareholder by
virtue of having become a Shareholder shall be held to have expressly assented
and agreed to the terms of this Declaration of Trust and the Bylaws and to have
become a party thereto. The death of a Shareholder during the continuance of the
Trust shall not operate to terminate the Trust nor entitle the representative of
any deceased Shareholder to an accounting or to take any action in court or
elsewhere against the Trust or the Trustees, but only to the rights of said
decedent under this Trust. Ownership of Shares shall not entitle the Shareholder
to any title in or to the whole or any part of the Trust property or right to
call for a partition or division of the same or for an accounting, nor shall the
ownership of Shares constitute the Shareholders partners. Neither the Trust nor
the Trustees, nor any officer, employee or agent of the Trust shall have any
power to bind personally any Shareholder, nor except as specifically provided
herein to call upon any Shareholder for the payment of any sum of money or
assessment whatsoever other than such as the Shareholder may at any time
personally agree to pay.

Powers of Trustees to Change Provisions Relating to Shares

Section 6. Notwithstanding any other provisions of this Declaration of
Trust and without limiting the power of the Trustees to amend the Declaration of
Trust as provided elsewhere herein, the Trustees shall have the power to amend
this Declaration of Trust, at any time and from time to time, in such manner as
the Trustees may determine in their sole discretion, without the need for
Shareholder action, so as to add to, delete, replace or otherwise modify any
provisions relating to the Shares contained in this Declaration of Trust for the
purpose of (i) responding to or complying with any regulations, orders, rulings
or interpretations of any governmental agency or any laws, now or hereafter
applicable to the Trust, or (ii) designating and establishing series and classes
in addition to the series and classes established in Section 7 of this Article
III; provided that before adopting any such amendment without Shareholder
approval the Trustees shall determine that it is consistent with the fair and
equitable treatment of all Shareholders. The establishment and designation of
any series or class of Shares in addition to the series and classes established
and designated in Section 7 of this Article III shall be effective upon the
execution by a majority of the then Trustees of an

4
<PAGE>

amendment to this Declaration of Trust, taking the form of a complete
restatement or otherwise, setting forth such establishment and designation and
the relative rights and preferences of such series or class, as the case may be,
or as otherwise provided in such instrument.

Without limiting the generality of the foregoing, the Trustees may take any
of the following actions from time to time (which actions may be taken by
amendment to this Declaration of Trust or otherwise, unless an amendment to this
Declaration of Trust is specifically required by applicable law or by the terms
of this Declaration of Trust):

i. create one or more series or classes of Shares (in addition to any
series or classes already existing or otherwise) with such rights
and preferences and such eligibility requirements for investment
therein as the Trustees shall determine and reclassify any or all
outstanding Shares as shares of particular series or classes in
accordance with such eligibility requirements;

ii. amend any of the provisions set forth in Section 7 of this Article
III;

iii. combine one or more series or classes of Shares into a single series
or class on such terms and conditions as the Trustees shall
determine;

iv. change or eliminate any eligibility requirements for investment in
Shares of any series or class, including without limitation the
power to provide for the issue of Shares of any series or class in
connection with any merger or consolidation of the Trust with
another trust or company or any acquisition by the Trust of part or
all of the assets of another trust or company;

v. change the designation of any series or class of Shares;

vi. change the method of allocating dividends among the various series
and classes of Shares;

vii. allocate any specific assets or liabilities of the Trust or any
specific items of income or expense of the Trust to one or more
series or classes of Shares; and

viii. specifically allocate assets to any or all series or classes of
Shares or create one or more additional series or classes of Shares
which are preferred over all other series or classes of Shares in
respect of assets specifically allocated thereto or any dividends
paid by the Trust with respect to any net income, however
determined, earned from the investment and reinvestment of any
assets so allocated or otherwise and provide for any special voting
or other rights with

5
<PAGE>

respect to such series or classes.

Establishment and Designation of Series

Section 7. Without limiting the authority of the Trustees set forth in
Section 6, inter alia, to establish and designate any further series or classes
or to modify the rights and preferences of any series, each series set forth on
Schedule I hereto (as may be amended from time to time by the Trustees) shall
be, and are hereby, established and designated. In addition, with respect to
each such series, the Class I Shares, Class II Shares, Class III Shares and
Class IV Shares, which each such series may issue from time to time, shall be,
and are hereby, established and designated, which classes shall have the
respective rights and preferences as may be determined from time to time by the
Trustees.

Shares of each series (or class, as the case may be) established in this Section
7 shall have the following relative rights and preferences, and every other
series (or class) established by the Trustees from time to time shall also have
the following rights and preferences unless different rights and preferences are
established by the Trustees for such series (or class):

i Assets belonging to Series. All consideration received by the Trust
for the issue or sale of Shares of a particular series, together
with all assets in which such consideration is invested or
reinvested, all income, earnings, profits, and proceeds thereof from
whatever source derived, including, without limitation, any proceeds
derived from the sale, exchange or liquidation of such assets, and
any funds or payments derived from any reinvestment of such proceeds
in whatever form the same may be, shall irrevocably belong to that
series for all purposes, subject only to the rights of creditors,
and shall be so recorded upon the books of account of the Trust.
Such consideration, assets, income, earnings, profits and proceeds
thereof, from whatever source derived, including, without limitation,
any proceeds derived from the sale, exchange or liquidation of such
assets, and any funds or payments derived from any reinvestment of
such proceeds, in whatever form the same may be, are herein referred
to as "assets belonging to" that series. In the event that there are
any assets, income, earnings, profits and proceeds thereof, funds or
payments which are not readily identifiable as belonging to any
particular series (collectively "General Assets"), the Trustees shall
allocate such General Assets to, between or among any one or more of
the series established and designated from time to time in such
manner and on such basis as they, in their sole discretion, deem fair
and equitable, and any General Asset so allocated to a particular
series shall belong to that series. Each such allocation by the
Trustees shall be conclusive and binding upon the Shareholders of all
series for all purposes.

6
<PAGE>

ii. Liabilities Belonging to Series. The assets belonging to each
particular series shall be charged solely with the liabilities of the
Trust in respect to that series, expenses, costs, charges and
reserves attributable to that series, and any general liabilities of
the Trust which are not readily identifiable as belonging to any
particular series but which are allocated and charged by the Trustees
to and among any one or more of the series established and designated
from time to time in a manner and on such basis as the Trustees in
their sole discretion deem fair and equitable. The liabilities,
expenses, costs, charges, and reserves so charged to a series are
herein referred to as "liabilities belonging to" that series. Each
allocation of liabilities, expenses, costs, charges and reserves by
the Trustees shall be conclusive and binding upon the holders of all
series for all purposes.

iii. Dividends, Distributions, Redemptions, and Repurchases.
Notwithstanding any other provisions of this Declaration, including,
without limitation, Article VI, no dividend or distribution
(including, without limitation, any distribution paid upon
termination of the Trust or of any series or class) with respect to,
nor any redemption or repurchase of, the Shares of any series shall
be effected by the Trust other than from the assets belonging to such
series, nor shall any Shareholder of any particular series otherwise
have any right or claim against the assets belonging to any other
series except to the extent that such Shareholder has such a right or
claim hereunder as a Shareholder of such other series.

iv. Voting. Notwithstanding any of the other provisions of this
Declaration, including, without limitation, Section 1 of Article V,
the Shareholders of any particular series or class shall not be
entitled to vote on any matters as to which such series or class is
not affected except as otherwise required by the 1940 Act or other
applicable law. On any matter submitted to a vote of Shareholders,
all Shares of the Trust then entitled to vote shall be voted by
individual series, unless otherwise required by the 1940 Act or other
applicable law.

v. Equality. All the Shares of each particular class of a series shall
represent an equal proportionate interest in the assets allocable to
that class, and each Share of any particular series shall be equal to
each other Share of that series (subject to the liabilities allocated
to each class of that series).

vi. Fractions. Any fractional Share of a series or class shall carry
proportionately all the rights and obligations of a whole share of
that series or class, including rights with respect to voting,
receipt of dividends and distributions, redemption of Shares and
termination of the Trust.

7
<PAGE>

vii. Exchange Privilege. The Trustees shall have the authority to provide
that the holders of Shares of any series or class shall have the
right to exchange said Shares for Shares of one or more other series
or class of Shares in accordance with such requirements and
procedures as may be established by the Trustees.

viii. Combination of Series or Classes. The Trustees shall have the
authority, without the approval of the Shareholders of any series or
class unless otherwise required by applicable law, to combine the
assets and liabilities belonging to any two or more series (or the
assets allocable to any two or more classes) into assets and
liabilities belonging (or allocable) to a single series (or class).

ix. Elimination of Series or Classes. At any time that there are no
Shares outstanding of any particular series or class previously
established and designated, the Trustees may amend this Declaration
of Trust to abolish that series or class and to rescind the
establishment and designation thereof, such amendment to be effected
in the manner provided in Section 6 of this Article III.

x. Assets and Liabilities Allocable to a Class. The assets and
liabilities belonging to a series shall be proportionately allocated
among all the classes of that series according to the percentage of
net assets allocated to each particular class. For purposes of
determining the assets and liabilities belonging to a series that are
allocable to a class of that series, subject to the provisions of
paragraph (vii) of Section 6 of this Article III, expenses shall be
accrued in accordance with such procedures as the Trustees may adopt
from time to time.

8
<PAGE>

ARTICLE IV
The Trustees

Election

Section 1. A Trustee may be elected either by the Trustees or by the
Shareholders. There shall be not less than three Trustees. The number of
Trustees shall be fixed by the Trustees. Each Trustee elected by the Trustees or
the Shareholders shall serve until he or she retires, resigns, is removed or
dies or until the next meeting of Shareholders called for the purpose of
electing Trustees and until the election and qualification of his or her
successor. At any meeting called for the purpose, a Trustee may be removed by
vote of two-thirds of the outstanding shares. The initial Trustee, who shall
serve until the first meeting of Shareholders at which Trustees are elected and
until his successor is elected and qualified, or until he sooner dies, resigns
or is removed shall be Ralph F. Verni.

Effect of Death, Resignation, etc. of a Trustee

Section 2. The death, declination, resignation, retirement, removal or
incapacity of the Trustees, or any one of them, shall not operate to annul the
Trust or to revoke any existing agency created pursuant to the terms of this
Declaration of Trust.

Powers

Section 3. Subject to the provisions of this Declaration of Trust, the
business of the Trust shall be managed by the Trustees, and they shall have all
powers necessary or convenient to carry out that responsibility. Without
limiting the foregoing, the Trustees may adopt Bylaws not inconsistent with this
Declaration of Trust providing for the conduct of the business of the Trust and
may amend and repeal them to the extent that such Bylaws do not reserve that
right to the Shareholders; they may fill vacancies in or add to their number,
and may elect and remove such officers and appoint and terminate such agents as
they consider appropriate; they may appoint from their own number, and
terminate, any one or more committees consisting of two or more Trustees,
including an executive committee which may, when the Trustees are not in
session, exercise some or all of the power and authority of the Trustees as the
Trustees may determine; they may employ one or more custodians of the assets of
the Trust and may authorize such custodians to employ subcustodians and to
deposit all or any part of such assets in a system or systems for the central
handling of securities, retain a transfer agent or a Shareholder servicing
agent, or both, provide for the distribution of Shares by the Trust, through one
or more principal underwriters or otherwise, set record dates for the
determination of Shareholders with respect to various matters, and in general
delegate such authority as they consider desirable to any officer of the Trust,
to any committee of the Trustees and to any agent or employee of the Trust or to
any such custodian or underwriter.

9
<PAGE>

Without limiting the foregoing, the Trustees shall have power and
authority:

(a) To invest and reinvest cash, and to hold cash uninvested;

(b) To sell, exchange, lend, pledge, mortgage, hypothecate, lease, write
options with respect to or otherwise deal in property rights relating to
any or all of the assets of the Trust;

(d) To vote or give assent, or exercise any rights of ownership, with
respect to stock or other securities or property; and to execute and
deliver proxies or powers of attorney to such person or persons as the
Trustees shall deem proper, granting to such person or persons such power
and discretion with relation to securities or property as the Trustees
shall deem proper;

(e) To exercise powers and rights of subscription or otherwise which in any
manner arise out of ownership of securities, including without limitation
the pursuit of legal claims arising out of ownership of securities;

(f) To hold any security or property in a form not indicating any trust,
whether in bearer, unregistered or other negotiable form, or in the name of
the Trustees or of the Trust or in the name of a custodian, subcustodian or
other depositary or a nominee or nominees or otherwise;

(g) Subject to the provisions of Article III, Section 3, to allocate
assets, liabilities, income and expenses of the Trust to a particular
series of Shares or to apportion the same among two or more series,
provided that any liabilities or expenses incurred by or arising in
connection with a particular series of Shares shall be payable solely out
of the assets of that series; and to the extent necessary or appropriate to
give effect to the preferences and special or relative rights and
privileges of any classes of Shares, to allocate assets, liabilities,
income and expenses of a series to a particular class of Shares of that
series or to apportion the same among two or more classes of Shares of that
series;

(h) To consent to or participate in any plan for the reorganization,
consolidation or merger of any corporation or issuer, any security of which
is or was held in the Trust; to consent to any contract, lease, mortgage,
purchase or sale of property by such corporation or issuer, and to pay
calls or subscriptions with respect to any security held in the Trust;

10
<PAGE>

(i) To join with other security holders in acting through a committee,
depositary, voting trustee or otherwise, and in that connection to deposit
any security with, or transfer any security to, any such committee,
depositary or trustee, and to delegate to them such power and authority
with relation to any security (whether or not so deposited or transferred)
as the Trustees shall deem proper, and to agree to pay, and to pay, such
portion of the expenses and compensation of such committee, depositary or
trustee as the Trustees shall deem proper;

(j) To compromise, arbitrate or otherwise adjust claims in favor of or
against the Trust or any matter in controversy, including but not limited
to claims for taxes;

(k) To enter into joint ventures, general or limited partnerships and any
other combinations or associations;

(l) To borrow funds or other property;

(m) To endorse or guarantee the payment of any notes or other obligations
of any person; to make contracts of guaranty or suretyship, or otherwise
assume liability for payment thereof; and to mortgage and pledge the Trust
property or any part thereof to secure any of or all such obligations;

(n) To purchase and pay for entirely out of Trust property such insurance
as they may deem necessary or appropriate for the conduct of the business,
including without limitation, insurance policies insuring the assets of the
Trust and payment of distributions and principal on its portfolio
investments, and insurance policies insuring the Shareholders, Trustees,
officers, employees, agents, investment advisers or managers, principal
underwriters, or independent contractors of the Trust individually against
all claims and liabilities of every nature arising by reason of holding,
being or having held any such office or position, or by reason of any
action alleged to have been taken or omitted by any such person as
Shareholder, Trustee, officer, employee, agent, investment adviser or
manager, principal underwriter, or independent contractor, including any
action taken or omitted that may be determined to constitute negligence,
whether or not the Trust would have the power to indemnify such person
against such liability; and

(o) To pay pensions as deemed appropriate by the Trustees, and to adopt,
establish and carry out pension, profit-sharing, share bonus, share
purchase, savings, thrift and other retirement, incentive and benefit
plans, trusts and provisions, including the purchasing of life insurance
and annuity contracts as a means of providing such retirement and other
benefits, for any or all of the Trustees, officers, employees and agents of
the Trust;

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<PAGE>

(p) In furtherance but not in limitation of (a) above, to enter into
forward commitments, futures contracts and swap contracts and to buy and
sell options on futures contracts or swap contracts and to buy and or to
enter into transactions with respect to any other securities or derivative
instruments; and

(q) To engage in any other lawful act or activity in which corporations
organized under the Massachusetts Business Corporations Act may engage.

The Trustees shall not in any way be bound or limited by any present or
future law or custom in regard to investments by trustees. Except as otherwise
provided herein or from time to time in the Bylaws, any action to be taken by
the Trustees may be taken (A) by a majority of the Trustees present at a meeting
of Trustees (a quorum being present), within or without Massachusetts, including
any meeting held by means of a conference telephone or other communications
equipment by means of which all persons participating in the meeting can hear
each other at the same time (participation by such means shall for all purposes
constitute presence in person at a meeting), or (B) by written consents of a
majority of the Trustees then in office (which written consents shall be filed
with the records of the meetings of the Trustees and shall be treated for all
purposes as a vote taken at a meeting of Trustees).

Payment of Expenses by Trust and by Shareholders

Section 4. The Trustees are authorized to pay or to cause to be paid out of
the principal or income of the Trust, or partly out of principal and partly out
of income, as the Trustees deem fair, all expenses, fees, charges, taxes and
liabilities incurred or arising in connection with the Trust, or in connection
with the management thereof, including, but not limited to, the Trustees'
compensation and such expenses and charges for the services of the Trust's
officers, employees, investment adviser or manager, principal underwriter,
auditor, counsel, custodian, transfer agent, shareholder servicing agent, and
such other agents or independent contractors and such other expenses and charges
as the Trustees may deem necessary or proper to incur, provided, however, that
all expenses, fees, charges, taxes and liabilities incurred or arising in
connection with a particular series of Shares shall be payable solely out of the
assets of that series and may, as the Trustees from time to time determine, be
allocated to a particular class of a series or apportioned among two or more
classes of a series.

The Trustees shall have the power, as frequently as they may determine, to
cause each Shareholder, or each Shareholder of any particular series or class,
to pay directly, in advance or arrears, for charges of the Trust's custodian or
transfer, shareholder servicing or similar agent, an amount fixed from time to
time by the Trustees, by setting off such charges due from such Shareholder from
declared but unpaid dividends owed such Shareholder and/or by reducing the
number of Shares in the account of such Shareholder by that number of full
and/or fractional Shares which represents the outstanding amount of such charges
due from such Shareholder.

12
<PAGE>

Ownership of Assets of the Trust

Section 5. Title to all of the assets of each series of Shares and of the
Trust shall at all times be considered as vested in the Trustees.

Advisory, Management and Distribution

Section 6. Subject to any shareholder approval as may be required by the
1940 Act, the Trustees may, at any time and from time to time, contract for
exclusive or nonexclusive advisory and/or management services with any
corporation, trust, association or other organization (the "Manager"), every
such contract to comply with such requirements and restrictions as may be set
forth in the Bylaws; and any such contract may provide for one or more
sub-advisers who shall perform all or part of the obligations of the Manager
under such contract and may contain such other terms interpretive of or in
addition to said requirements and restrictions as the Trustees may determine,
including, without limitation, authority to determine from time to time what
investments shall be purchased, held, sold or exchanged and what portion, if
any, of the assets of the Trust shall be held uninvested and to make changes in
the Trust's investments. The Trustees may also, at any time and from time to
time, contract with the Manager or any other corporation, trust, association or
other organization, appointing it exclusive or nonexclusive distributor or
principal underwriter for the Shares, every such contract to comply with such
requirements and restrictions as may be set forth in the Bylaws; and any such
contract may contain such other terms interpretive of or in addition to said
requirements and restrictions as the Trustees may determine.

The fact that:

(i) any of the Shareholders, Trustees or officers of the Trust is a
shareholder, director, officer, partner, trustee, employee, manager,
adviser, principal underwriter or distributor or agent of or for any
corporation, trust, association, or other organization, or of or for any
parent or affiliate of any organization, with which an advisory or
management contract, or principal underwriter's or distributor's contract,
or transfer, Shareholder servicing or other agency contract may have been
or may hereafter be made, or that any such organization, or any parent or
affiliate thereof, is a Shareholder or has an interest in the Trust, or
that

(ii) any corporation, trust, association or other organization with which
an advisory or management contract or principal underwriter's or
distributor's contract, or transfer, Shareholder servicing or other agency
contract may have been or may hereafter be made also has an advisory or
management contract, or transfer, Shareholder servicing or other agency
contract with one or more other corporations, trusts, associations, or
other organizations, or has other business or interests

13
<PAGE>

shall not affect the validity of any such contract or disqualify any
Shareholder, Trustee or officer of the Trust from voting upon or executing
the same or create any liability or accountability to the Trust or its
Shareholders.

ARTICLE V
Shareholders' Voting Powers and Meetings

Voting Powers

Section 1. Subject to the voting powers of one or more classes of shares as
set forth in this Declaration of Trust or in the Bylaws, the Shareholders shall
have power to vote only (i) for the election of Trustees as provided in Article
IV, Section 1, provided, however, that no meeting of Shareholders is required to
be called for the purpose of electing Trustees unless and until such time as
less than a majority of the Trustees have been elected by the Shareholders, (ii)
for the removal of Trustees as provided in Article IV, Section 1, to the extent
required by the 1940 Act, (iii) with respect to any Manager as provided in
Article IV, Section 6, to the extent required by the 1940 Act, (iv) with respect
to any termination of this Trust to the extent and as provided in Article IX,
Section 4, (v) with respect to any amendment of this Declaration of Trust to the
extent and as provided in Article IX, Section 9, (vi) to the same extent as the
stockholders of a Massachusetts business corporation as to whether or not a
court action, proceeding or claim should or should not be brought or maintained
derivatively or as a class action on behalf of the Trust or the Shareholders,
and (vii) with respect to such additional matters relating to the Trust as may
be required by applicable law, this Declaration of Trust, the Bylaws or any
registration of the Trust with the Securities and Exchange Commission (or any
successor agency) or any state, or as the Trustees may consider necessary or
desirable. Each whole Share shall be entitled to one vote as to any matter on
which it is entitled to vote and each fractional Share shall be entitled to a
proportionate fractional vote. Notwithstanding any other provision of this
Declaration of Trust, on any matter submitted to a vote of Shareholders, all
Shares of the Trust then entitled to vote shall be voted in the aggregate as a
single class without regard to series or classes of shares, except (1) when
required by the 1940 Act or when the Trustees shall have determined that the
matter affects one or more series or classes of Shares materially differently,
Shares shall be voted by individual series or class; and (2) when the Trustees
have determined that the matter affects only the interests of one or more series
or classes, then only Shareholders of such series or classes shall be entitled
to vote thereon. There shall be no cumulative voting in the election of
Trustees. Shares may be voted in person or by proxy. A proxy with respect to
Shares held in the name of two or more persons shall be valid if executed by any
one of them unless at or prior to exercise of the proxy the Trust receives
notice to the contrary from any one of them in any form as may be permitted by
the Bylaws. A proxy purporting to be executed by or on behalf of a Shareholder
shall be deemed valid unless challenged at or prior to its exercise and the
burden of proving invalidity shall rest on the challenger. Until Shares of any
series or class are issued, the Trustees may

14
<PAGE>

exercise all rights of Shareholders and may take any action required by law,
this Declaration of Trust or the Bylaws to be taken by Shareholders as to such
series or class.

Meetings

Section 2. Meetings of the Shareholders may be called by the Trustees for
the purpose of electing Trustees as provided in Article IV, Section 1 of this
Declaration of Trust and for such other purposes as may be prescribed by law, by
this Declaration of Trust or by the By-Laws. Meetings of the Shareholders may
also be called by the Trustees from time to time for the purpose of taking
action upon any other matter deemed by the Trustees to be necessary or
desirable. A meeting of Shareholders may be held at any place designated by the
Trustees. Written notice of any meeting of Shareholders shall be given or caused
to be given by the Trustees by mailing such notice at least seven days before
such meeting, postage prepaid, stating the time and place of the meeting, to
each Shareholder entitled to vote at such meeting at the Shareholder's address
as it appears on the records of the Trust. Whenever notice of a meeting is
required to be given to a Shareholder under this Declaration of Trust or the
By-Laws, a written waiver thereof, executed before or after the meeting by such
Shareholder or his or her attorney thereunto authorized and filed with the
records of the meeting, shall be deemed equivalent to such notice.

Quorum and Required Vote

Section 3. Thirty percent of Shares entitled to vote on a particular matter
shall be a quorum for the transaction of business on that matter at a
Shareholders' meeting, except that where any provision of law or of this
Declaration of Trust permits or requires that holders of any series or class
shall vote as an individual series or class, then thirty percent of the
aggregate number of Shares of that series or class entitled to vote shall be
necessary to constitute a quorum for the transaction of business by that series
or class. Any lesser number shall be sufficient for adjournments. Any adjourned
session or sessions may be held, within a reasonable time after the date set for
the original meeting, without the necessity of further notice. Except when a
larger vote is required by any provision of this Declaration of Trust or the
Bylaws, or by the 1940 Act, a majority of the Shares voted shall decide any
questions and a plurality shall elect a Trustee, provided that where any
provision of law or of this Declaration of Trust permits or requires that the
holders of any series or class shall vote as an individual series or class, then
a majority of the Shares of that series or class voted on the matter (or a
plurality with respect to the election of a Trustee) shall decide that matter
insofar as that series or class is concerned.

Action by Written Consent

Section 4. Any action taken by Shareholders may be taken without a meeting
if a majority of Shareholders entitled to vote on the matter (or such larger
proportion thereof as shall be required by any express provision of this
Declaration of Trust or the Bylaws) consent

15
<PAGE>

to the action in writing and such written consents are filed with the records of
the meetings of Shareholders. Such consent shall be treated for all purposes as
a vote taken at a meeting of Shareholders.

Additional Provisions

Section 5. The Bylaws may include further provisions not inconsistent with
this Declaration of Trust, regarding Shareholders' voting powers, the conduct of
meetings and related matters.

ARTICLE VI
Distributions, Redemptions and Repurchases

Distributions

Section 1. The Trustees may each year, or more frequently if they so
determine, distribute to the Shareholders of each series out of the assets of
such series such amounts as the Trustees may determine. Any such distribution to
the Shareholders of a particular series shall be made to said Shareholders pro
rata in proportion to the number of Shares of such series held by each of them,
except to the extent otherwise required or permitted by the preferences and
special or relative rights and privileges of any classes of Shares of that
series, and any distribution to the Shareholders of a particular class of Shares
shall be made to such Shareholders pro rata in proportion to the number of
Shares of such class held by each of them. Such distributions shall be made in
cash or Shares or a combination thereof as determined by the Trustees. Any such
distribution paid in Shares will be paid at the net asset value thereof as
determined in accordance with the Bylaws.

Redemptions and Repurchases

Section 2. The Trust shall purchase such Shares as are offered by any
Shareholder for redemption, upon the presentation of any certificate for the
Shares to be purchased, a proper instrument of transfer and a request directed
to the Trust or a person designated by the Trust that the Trust purchase such
Shares, or in accordance with such other procedures for redemption as the
Trustees may from time to time authorize; and the Trust will pay therefor the
net asset value thereof, as next determined in accordance with the Bylaws.
Payment for said Shares shall be made by the Trust to the Shareholder within
seven days after the date on which the request is made. The obligation set forth
in this Section 2 is subject to the provision that in the event that any time
the New York Stock Exchange is closed for other than customary weekends or
holidays, or, if permitted by rules of the Securities and Exchange Commission,
during periods when trading on the Exchange is restricted or during any
emergency which makes it impractical for the Trust to dispose of its investments
or to determine fairly the value of its net assets, or during any other period
permitted by order of the

16
<PAGE>

Securities and Exchange Commission for the protection of investors, such
obligation may be suspended or postponed by the Trustees. The Trust may also
purchase or repurchase Shares at a price not exceeding the net asset value of
such Shares in effect when the purchase or repurchase or any contract to
purchase or repurchase is made.

Redemptions at the Option of the Trust

Section 3. The Trust shall have the right at its option and at any time to
redeem Shares of any Shareholder at the net asset value thereof as determined in
accordance with the Bylaws: (i) if at such time such Shareholder owns fewer
Shares than, or Shares having an aggregate net asset value of less than, an
amount determined from time to time by the Trustees as set forth in the
Prospectus from time to time; or (ii) to the extent that such Shareholder owns
Shares of a particular series or class of Shares equal to or in excess of a
percentage of the outstanding Shares of that series or class determined from
time to time by the Trustees; or (iii) to the extent that such Shareholder owns
Shares of the Trust representing a percentage equal to or in excess of such
percentage of the aggregate number of outstanding Shares of the Trust or the
aggregate net asset value of the Trust determined from time to time by the
Trustees.

ARTICLE VII
Compensation and Limitation of Liability of Trustees

Compensation

Section 1. The Trustees as such shall be entitled to reasonable
compensation from the Trust; they may fix the amount of their compensation.
Nothing herein shall in any way prevent the employment of any Trustee for
advisory, management, legal, accounting, investment banking, underwriting,
brokerage or other services and payment for the same by the Trust.

Limitation of Liability

Section 2. The Trustees shall not be responsible or liable in any event for
any neglect or wrongdoing of any officer, agent, employee, manager or principal
underwriter of the Trust, nor shall any Trustee be responsible for the act or
omission of any other Trustee, but nothing herein contained shall protect any
Trustee against any liability to which he or she would otherwise be subject by
reason of willful misfeasance, bad faith, gross negligence or reckless disregard
of the duties involved in the conduct of his or her office.

Every note, bond, contract, instrument, certificate or undertaking and
every other act or thing whatsoever executed or done by or on behalf of the
Trust or the Trustees or any of them in connection with the Trust shall be
conclusively deemed to have been executed or done only in or with respect to
their or his or her capacity as Trustees or Trustee, and such Trustees or
Trustee shall not be personally liable thereon.

17
<PAGE>

ARTICLE VIII
Indemnification

Trustees, Officers, etc.

Section 1. The Bylaws may include provisions whereby the Trust may provide
indemnity to its Trustees and officers, including persons who serve at the
Trust's request as directors, officers or trustees of another organization in
which the Trust has any interest as a shareholder, creditor or otherwise (each
such Trustee, officer or person hereinafter referred to as a "Covered Person"),
against all liabilities and expenses, including but not limited to amounts paid
in satisfaction of judgments, in compromise or as fines and penalties, and
counsel fees reasonably incurred by any Covered Person in connection with the
defense or disposition of any action, suit or other proceeding, whether civil or
criminal, before any court or administrative or legislative body, in which such
Covered Person may be or may have been involved as a party or otherwise or with
which such Covered Person may be or may have been threatened, while in office or
thereafter, by reason of being or having been such a Covered Person. Any
indemnity provided to Covered Persons by the Bylaws may, if the Bylaws so
provide, be in addition to any other indemnity to which such persons may be
entitled by law, contract or otherwise.

ARTICLE IX
Miscellaneous

Trustees, Shareholders, etc. Not Personally Liable; Notice

Section 1. All persons extending credit to, contracting with or having any
claim against the Trust or a particular series of Shares shall look only to the
assets of the Trust or the assets of that particular series of Shares for
payment under such credit, contract or claim, and neither the Shareholders nor
the Trustees, nor any of the Trust's officers, employees or agents, whether
past, present or future, shall be personally liable therefor. Nothing in this
Declaration of Trust shall protect any Trustee against any liability to which
such Trustee would otherwise be subject by reason of willful misfeasance, bad
faith, gross negligence or reckless disregard of the duties involved in the
conduct of the office of Trustee.

Every note, bond, contract, instrument, certificate or undertaking made or
issued by the Trustees or by any officer or officers shall give notice that this
Declaration of Trust is on file with the Secretary of The Commonwealth of
Massachusetts and shall recite that the same was executed or made by or on
behalf of the Trust or by them as Trustee or Trustees or as officer or officers
and not individually and that the obligations of such instrument are not binding
upon any of them or the Shareholders individually but are binding only upon the
assets and property of the Trust, and may contain such further recital as he or
she or they may deem appropriate, but the omission thereof shall not operate to
bind any Trustee or Trustees or officer or officers or Shareholder or
Shareholders individually.

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<PAGE>

Shareholders

Section 2. In case any Shareholder or former Shareholder shall be held to
be personally liable solely by reason of his or her being or having been a
Shareholder of the Trust or of a particular series or class and not because of
his or her acts or omissions or for some other reason, the Shareholder or former
Shareholder (or his or her heirs, executors, administrators or other legal
representatives or in the case of a corporation or other entity, its corporate
or other general successor) shall be entitled out of the assets of the series
(or attributable to the class) of which he or she is a Shareholder or former
Shareholder to be held harmless from and indemnified against all loss and
expense arising from such liability.

Trustee's Good Faith Action, Expert Advice, No Bond or Surety

Section 3. The exercise by the Trustees of their powers and discretions
hereunder shall be binding upon everyone interested. A Trustee shall be liable
for his or her own willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of the office of Trustee, and
for nothing else, and shall not be liable for errors of judgment or mistakes of
fact or law. The Trustees may take advice of counsel or other experts with
respect to the meaning and operation of this Declaration of Trust, and shall be
under no liability for any act or omission in accordance with such advice or for
failing to follow such advice. The Trustees shall not be required to give any
bond as such, nor any surety if a bond is required.

Liability of Third Persons Dealing with Trustees

Section 4. No person dealing with the Trustees shall be bound to make any
inquiry concerning the validity of any transaction made or to be made by the
Trustees or to see to the application of any payments made or property
transferred to the Trust or upon its order.

Duration and Termination of Trust

Section 5. Unless terminated as provided herein, the Trust shall continue
without limitation of time. The Trust may be terminated at any time by vote of
Shareholders holding at least 66-2/3% of the Shares entitled to vote or by the
Trustees by written notice to the Shareholders. Any series or class of Shares
may be terminated at any time by vote of Shareholders holding at least 66-2/3%
of the Shares of such series or class entitled to vote or by the Trustees by
written notice to the Shareholders of such series or class, as the case may be.

Upon termination of the Trust or of any one or more series or classes of
Shares, after paying or otherwise providing for all charges, taxes, expenses and
liabilities, whether due or accrued or anticipated of the Trust or of the
particular series or class as may be determined by

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<PAGE>

the Trustees, the Trust shall in accordance with such procedures as the Trustees
consider appropriate reduce the remaining assets to distributable form in cash
or shares or other securities, or any combination thereof, and distribute the
proceeds to the Shareholders of the series involved, ratably according to the
number of Shares of such series held by the several Shareholders of such series
on the date of termination, except to the extent otherwise required or permitted
by the preferences and special or relative rights and privileges of any classes
of any series of Shares of the Trust, provided that any distribution to the
Shareholders of a particular class of any series of Shares shall be made to such
Shareholders pro rata in proportion to the number of Shares of such class held
by each of them.

Derivative and Class Actions

Section 6. No Shareholder shall bring or maintain any action, proceeding or
claim derivatively or as a class action on behalf of the Trust or the
Shareholders unless approved by the Trustees and, to the same extent required as
to stockholders of a Massachusetts business corporation, by the Shareholders. A
Trustee who is not an "interested person" of the Trust, as defined in the 1940
Act, shall not be disqualified from acting on such matter by reason of such
Trustee's service as a director or trustee of one or more other registered
investment companies having the same Manager or distributor.

Filing of Copies, References, Headings

Section 7. The original or a copy of this instrument and of each amendment
hereto shall be kept at the office of the Trust where it may be inspected by any
Shareholder. A copy of this instrument and of each amendment hereto shall be
filed by the Trust with the Secretary of State of The Commonwealth of
Massachusetts and with the Boston City Clerk, as well as any other governmental
office where such filing may from time to time be required. Anyone dealing with
the Trust may rely on a certificate by an officer of the Trust as to whether or
not any such amendments have been made and as to any matters in connection with
the Trust hereunder, and, with the same effect as if it were the original, may
rely on a copy certified by an officer of the Trust to be a copy of this
instrument or of any such amendments. In this instrument and in any such
amendment, references to this instrument, and all expressions like "herein",
"hereof" and "hereunder" shall be deemed to refer to this instrument as amended
or affected by any such amendments. Headings are placed herein for convenience
of reference only and shall not be taken as a part hereof or control or affect
the meaning, construction or effect of this instrument. This instrument may be
executed in any number of counterparts each of which shall be deemed an
original.

Reorganizations

Section 8. The Trust, or any one or more series or "sub-trusts" of the
Trust, may, either as the successor, survivor, or non-survivor, (1) consolidate
or merge with one or more other trusts, series, sub-trusts, partnerships,
limited liability companies, associations or

20
<PAGE>

corporations organized under the laws of the Commonwealth of Massachusetts or
any other state of the United States, to form a consolidated or merged trust,
series, sub-trust, partnership, limited liability company, association or
corporation under the laws of which any one of the constituent entities is
organized, with the Trust to be the survivor or non-survivor of such
consolidation or merger or (2) transfer a substantial portion of its assets to
one or more other trusts, series, sub-trusts, partnerships, limited liability
companies, associations or corporations organized under the laws of the
Commonwealth of Massachusetts or any other state of the United States, or have
one or more such trusts, series, sub-trusts, partnerships, limited liability
companies, associations or corporations transfer a substantial portion of its
assets to it, any such consolidation, merger or transfer to be upon such terms
and conditions as are specified in an agreement and plan of reorganization
authorized and approved by the Trustees and entered into by the Trust, or one or
more series, as the case may be, in connection therewith. Subject to applicable
law, any such consolidation, merger or transfer may be authorized by vote of a
majority of the Trustees then in office without the approval of shareholders of
the Trust or relevant series.

Applicable Law

Section 9. This Declaration of Trust is made in The Commonwealth of
Massachusetts, and it is created under and is to be governed by and construed
and administered according to the laws of said Commonwealth. The Trust shall be
of the type commonly called a Massachusetts business trust, and without limiting
the provisions hereof, the Trust may exercise all powers which are ordinarily
exercised by such a trust.

Amendments

Section 10. All rights granted to the Shareholders under this Declaration
of Trust are granted subject to the reservation of the right to amend this
Declaration of Trust as herein provided, except that no amendment shall repeal
the limitations on personal liability of any Shareholder or Trustee or repeal
the prohibition of assessment upon the Shareholders without the express consent
of each Shareholder or Trustee involved. Subject to the foregoing, the
provisions of this Declaration of Trust (whether or not related to the rights of
Shareholders) may be amended at any time, so long as such amendment does not
have a material adverse effect on the rights of any Shareholder with respect to
which such amendment is or purports to be applicable and so long as such
amendment is not in contravention of applicable law, including the 1940 Act, by
an instrument in writing signed by a majority of the then Trustees (or by an
officer of the Trust pursuant to the vote of a majority of such Trustees). Any
amendment to this Declaration of Trust that does have a material adverse effect
on the rights of Shareholders may be adopted at any time by an instrument in
writing signed by a majority of the then Trustees (or by an officer of the Trust
pursuant to a vote of a majority of such Trustees) when authorized to do so by a
vote of Shareholders holding a majority of Shares entitled to vote. Subject to
the foregoing, any such amendment shall be effective as provided in the
instrument containing the terms of such amendment or, if there is no provision
therein

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<PAGE>

with respect to effectiveness, upon the execution of such instrument and of a
certificate (which may be a part of such instrument) executed by a Trustee or
officer of the Trust to the effect that such amendment has been duly adopted.

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<PAGE>

IN WITNESS WHEREOF, the undersigned has hereunto set his hand and seal in
the City of Boston, Massachusetts for himself and his assigns, as of the day and
year first above written.

/s/ Ralph F. Verni
--------------------------
(SEAL) Ralph F. Verni, Trustee

Trust Address: Business Address:
c/o State Street Research & c/o State Street Research &
Management Company Management Company
One Financial Center One Financial Center
Boston, MA 02111 Boston, MA 02111

THE COMMONWEALTH OF MASSACHUSETTS
COUNTY OF SUFFOLK

March 3, 1999

Then personally appeared the above-named Trustee of State Street Research
Institutional Funds and acknowledged the foregoing instrument to be his free act
and deed, before me,

/s/ Amy L. Simmons
---------------------------
Notary Public
My commission expires:
AMY L. SIMMONS, Notary Public
My Commission Expires July 20, 2001

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<PAGE>

SCHEDULE I
----------

State Street Research Core Fixed Income Fund
State Street Research Core Plus Fixed Income Fund
State Street Research Core Large Cap Growth Fund
State Street Research Large Cap Growth Fund

<PAGE>

BY-LAWS
OF
STATE STREET RESEARCH INSTITUTIONAL FUNDS

ARTICLE 1

Agreement and Declaration
of Trust and Principal Office

1.1 Agreement and Declaration of Trust. These By-Laws shall be subject to the
Agreement and Declaration of Trust, as from time to time in effect (the
"Declaration of Trust"), of State Street Research Institutional Funds (the
"Trust"), the Massachusetts business trust established by the Declaration of
Trust.

1.2 Principal Office of the Trust. The principal office of the Trust shall be
located in Boston, Massachusetts.

ARTICLE 2

Meetings of Trustees

2.1 Regular Meetings. Regular meetings of the Trustees may be held without call
or notice at such places and at such times as the Trustees may from time to time
determine, provided that notice of the first regular meeting following any such
determination shall be given to absent Trustees.

2.2 Special Meetings. Special meetings of the Trustees may be held, at any time
and at any place designated in the call of the meeting, when called by the
Chairman of the Board, if any, the President or the Treasurer or by two or more
Trustees, sufficient notice thereof being given to each Trustee by the Secretary
or an Assistant Secretary or by the officer or the Trustees calling the meeting.

2.3 Notice. It shall be sufficient notice to a Trustee of a special meeting to
send notice by mail or courier at least forty-eight hours or by telegram,
facsimile or electronic mail at least twenty-four hours before the meeting
addressed to the Trustee at his or her usual or last known business or residence
address or to give notice to him or her in person or by telephone at least
twenty-four hours before the meeting. Notice of a meeting need not be given to
any Trustee if a written waiver of notice, executed by him or her before or
after the meeting, is filed with the records of the meeting, or to any Trustee
who attends the meeting without protesting prior thereto or at its commencement
the lack of notice to him or her. Except as required by law, neither notice of a
meeting nor a waiver of a notice need specify the purposes of the meeting.
<PAGE>

2.4 Quorum. Subject to Section 4.1 of htese By-Laws, at any meeting of the
Trustees a majority of the Trustees then in office shall constitute a quorum.
Any meeting may be adjourned from time to time by a majority of the votes
cast upon the question, whether or not a quorum is present, and the meeting
may be held as adjourned without further notice to any Trustee who was
present at the time of such adjournment; notice of the time and place of any
adjourned session of such meeting shall, however, be given in the manner
provided in Section 2.3 of these By-Laws to each Trustee who was not present
at the time of such adjournment.

2.5 Action by Vote. When a quorum is present at any meeting, a majority of
Trustees present may take any action, except when a larger vote is expressly
required by law, by the Declaration of Trust or by these By-Laws.

2.6 Action by Writing. Except as required by law, any action required or
permitted to be taken at any meeting of the Trustees may be taken without a
meeting if a majority of the Trustees (or such larger proportion thereof as
shall be required by any express provision of the Declaration of Trust or these
By-Laws) consent to the action in writing and such written consents are filed
with the records of the meetings of the Trustees. Such consent shall be treated
for all purposes as a vote taken at a meeting of Trustees.

2.7 Presence through Communications Equipment. Except as required by law, the
Trustees may participate in a meeting of Trustees by means of a conference
telephone or similar communications equipment by means of which all persons
participating in the meeting can hear each other at the same time, and
participation by such means shall constitute presence in person at a meeting.

2.8 Resignations and Removals. Any Trustee may resign at any time by written
instrument signed by him or her and delivered to the Chairman of the
Trustees, the President or Secretary of the Trust, or to a meeting of the
Trustees. Such resignation shall be effective upon receipt unless specified
to be effective at some other time. The Trustees may remove any Trustee, with
or without cause, by vote of a majority of the Trustees then in office. Except
to the extent expressly provided in a written agreement with the Trust, no
Trustee resigning shall have any right to any compensation for any period
following his or her resignation or removal, or any right to damages on
account of such removal.

ARTICLE 3

Officers

3.1 Enumeration; Qualification. The officers of the Trust shall be a President,
a Treasurer, a Secretary and such other officers, if any, as the Trustees from
time to time may in their discretion elect. The Trust may also have such agents
as the Trustees from time to time may in their discretion appoint. If a Chairman
of the Board is elected, he or she shall be a Trustee and may but need not be a
Shareholder; and any other officer may be but none need be a Trustee or
Shareholder. Any two or more offices may be held by the same person.

3.2 Election and Tenure. The President, the Treasurer, the Secretary and such
other officers as the Trustees may in their discretion from time to time elect
shall each be elected by the Trustees to serve until his or her successor is
elected or qualified, or until he or she sooner dies, resigns, is removed or
becomes disqualified. Each officer shall hold office and each agent shall retain
authority at the pleasure of the Trustees.

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<PAGE>

3.3 Powers. Subject to the other provisions of these By-Laws, each officer shall
have, in addition to the duties and powers herein and in the Declaration of
Trust set forth, such duties and powers as are commonly incident to the office
occupied by him or her as if the Trust were organized as a Massachusetts
business corporation and such other duties and powers as the Trustees may from
time to time designate.

3.4 President and Vice Presidents. The President shall have the duties and
powers specified in these By-Laws and shall have such other duties and powers as
may be determined by the Trustees. Any Vice Presidents shall have such duties
and powers as shall be designated from time to time by the Trustees.

3.5 Chief Executive Officer. The Chief Executive Officer of the Trust shall be
the Chairman of the Board, the President or such other officer as is designated
by the Trustees and shall, subject to the control of the Trustees, have general
charge and supervision of the business of the Trust and, except as the Trustees
shall otherwise determine, preside at all meetings of the Shareholders and of
the Trustees. If no such designation is made, the President shall be the Chief
Executive Officer.

3.6 Chairman of the Board. If a Chairman of the Board of Trustees is elected, he
shall have the duties and powers specified in these By-Laws and shall have such
other duties and powers as may be determined by the Trustees.

3.7 Treasurer. The Treasurer shall be the chief financial and accounting officer
of the Trust, and shall, subject to the provisions of the Declaration of Trust
and to any arrangement made by the Trustees with a custodian, investment adviser
or manager, administrator or transfer, shareholder servicing or similar agent,
be in charge of the valuable papers, books of account and accounting records of
the Trust, and shall have such other duties and powers as may be designated from
time to time by the Trustees or by the President.

3.8 Secretary. The Secretary shall record all proceedings of the Shareholders
and the Trustees in books to be kept therefor, which books or a copy thereof
shall be kept at the principal office of the Trust. In the absence of the
Secretary from any meeting of the Shareholders or Trustees, an Assistant
Secretary, or if there be none or if he or she is absent, a temporary secretary
chosen at such meeting shall record the proceedings thereof in the aforesaid
books.

3.9 Resignations and Removals. Any officer may resign at any time by written
instrument signed by him or her and delivered to the President or the Secretary
or to a meeting of the Trustees. Such resignation shall be effective upon
receipt unless specified to be effective at some other time. The Trustees may
remove any officer with or without cause. Except to the extent expressly
provided in a written agreement with the Trust, no officer resigning and no
officer removed shall have any right to any compensation for any period
following his or her resignation or removal, or any right to damages on account
of such removal.

ARTICLE 4

Committes
---------

4.1 Committees. Fifty percent (50%) of the members of any Committee of the
Trustees shall constitute a quorum for the transaction of business, and any
action of such a committee may be taken at a meeting by a vote of a majority
of the members present (a quorum being present) or evidenced by one or more
writings signed by such a majority. Members of a Committee may participate in
a meeting of such Committee by means of a conference telephone or other
communications equipment by means of which all persons participating in the
meeting can hear each other at the same time and participation by such means
shall constitute presence in person at a meeting.

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<PAGE>

ARTICLE 5

Indemnification

5.1 Trustees, Officers, etc. The Trust shall indemnify each of its Trustees and
officers (including persons who serve at the Trust's request as directors,
officers or trustees of another organization in which the Trust has any interest
as a shareholder, creditor or otherwise) (each such Trustee, officer or person
hereinafter referred to as a "Covered Person") against all liabilities and
expenses, including but not limited to amounts paid in satisfaction of
judgments, in compromise or as fines and penalties, and counsel fees reasonably
incurred by any Covered Person in connection with the defense or disposition of
any action, suit or other proceeding, whether civil or criminal, before any
court or administrative or legislative body, in which such Covered Person may be
or may have been involved as a party or otherwise or with which such Covered
Person may be or may have been threatened, while in office or thereafter, by
reason of any alleged act or omission as a Trustee or officer or by reason of
his or her being or having been such a Trustee or officer, except with respect
to any matter as to which such Covered Person shall have been finally
adjudicated in any such action, suit or other proceeding not to have acted in
good faith in the reasonable belief that such Covered Person's action was in the
best interest of the Trust and except that no Covered Person shall be
indemnified against any liability to the Trust or its Shareholders to which such
Covered Person would otherwise be subject by reason of willful misfeasance, bad
faith, gross negligence or reckless disregard of the duties involved in the
conduct of such Covered Person's office. Expenses, including counsel fees so
incurred by any such Covered Person, may be paid from time to time by the Trust
in advance of the final disposition of any such action, suit or proceeding on
the condition that the amounts so paid shall be repaid to the Trust if it is
ultimately determined that indemnification of such expenses is not authorized
under this Article.

5.2 Compromise Payment. As to any matter disposed of by a compromise payment by
any such Covered Person referred to in Section 5.1 above, pursuant to a consent
decree or otherwise, no such indemnification either for said payment or for any
other expenses shall be provided unless such compromise shall be approved as in
the best interests of the Trust, after notice that it involved such
indemnification, (a) by a disinterested majority of the Trustees then in office;
or (b) by a majority of the disinterested Trustees then in office; or (c) by any
disinterested person or persons to whom the question may be referred by the
Trustees, or (d) by vote of Shareholders holding a majority of the Shares
entitled to vote thereon, exclusive of any Shares beneficially owned by any
interested Covered Person; provided, however, that such indemnification would
not protect such person against any liability to the Trust or its Shareholders
to which such person would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of office. Approval by the Trustees pursuant to clause
(a) or (b) or by any disinterested person or persons pursuant to clause (c) of
this Section shall not prevent the recovery from any Covered Person of any
amount paid as indemnification to such Covered Person in accordance with any of
such clauses if such Covered Person is subsequently

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<PAGE>

adjudicated by a court of competent jurisdiction not to have acted in good faith
in the reasonable belief that such Covered Person's action was in the best
interests of the Trust or to have been liable to the Trust or its Shareholders
by reason of willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of such Covered Person's office.

5.3 Indemnification Not Exclusive. The right of indemnification hereby provided
shall not be exclusive of or affect any other rights to which any such Covered
Person may be entitled. As used in this Article 5, the term "Covered Person"
shall include such person's heirs, executors and administrators; an "interested
Covered Person" is one against whom the action, suit or other proceeding in
question or another action, suit or other proceeding on the same or similar
grounds is then or has been pending; and a "disinterested Trustee" or
"disinterested person" is a Trustee or a person against whom none of such
actions, suits or other proceedings or another action, suit or other proceeding
on the same or similar grounds is then or has been pending. Nothing contained in
this Article shall affect any rights to indemnification to which personnel of
the Trust, other than Trustees and officers, and other persons may be entitled
by contract or otherwise under law, nor the power of the Trust to purchase and
maintain liability insurance on behalf of any such person.

ARTICLE 6

Reports

6.1 General. The Trustees and officers shall render reports at the time and
in the manner required by the Declaration of Trust or any applicable law.
Officers and Committees shall render such additional reports as they may deem
desirable or as may from time to time be required by the Trustees.

ARTICLE 7

Fiscal Year

7.1 General. Except as from time to time otherwise provided by the Trustees, the
fiscal year of the Trust shall end on January 31 in each year. The Trustees may
also designate different fiscal year ends for one or more series of the Trust.

ARTICLE 8

Seal

8.1 General. The seal of the Trust shall consist of a flat-faced die with the
word "Massachusetts," together with the name of the Trust and the year of its
organization cut or engraved thereon, but, unless otherwise required by the
Trustees, the seal shall not be

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<PAGE>

necessary to be placed on, and its absence shall not impair the validity of, any
document, instrument or other paper executed and delivered by or on behalf of
the Trust.

ARTICLE 9

Execution of Papers

9.1 General. Except as the Trustees may generally or in particular cases
authorize the execution thereof in some other manner, all checks, notes, drafts
and other obligations and all registration statements and amendments thereto and
all applications and amendments thereto to the Securities and Exchange
Commission shall be signed by the Chairman, if any, the President, any Vice
President, the Treasurer, the Secretary or any of such other officers or agents
as shall be designated for that purpose by a vote of the Trustees.

ARTICLE 10

Issuance of Share Certificates

10.1 Share Certificates. In lieu of issuing certificates for Shares, the
Trustees or the transfer agent may either issue receipts therefor or may keep
accounts upon the books of the Trust for the record holders of such Shares,
who shall in either case be deemed, for all purposes hereunder, to be the
holders of certificates for such Shares as if they had accepted such
certificates and shall be held to have expressly assented and agreed to the
terms of this Article 10.

The Trustees may at any time authorize the issuance of Share certificates. In
that event, each Shareholder shall be entitled to a certificate stating the
number of Shares owned by him or her, in such form as shall be prescribed from
time to time by the Trustees. Such certificates shall be signed by the President
or any Vice-President and by the Treasurer or any Assistant Treasurer. Such
signatures may be facsimile if the certificate is signed by a transfer agent, or
by a registrar, other than a Trustee, officer or employee of the Trust. In case
any officer who has signed or whose facsimile signature has been placed on such
certificate shall cease to be such officer before such certificate is issued, it
may be issued by the Trust with the same effect as if he or she were such
officer at the time of its issue.

10.2 Loss of Certificates. In case of the alleged loss or destruction or the
mutilation of a Share certificate, a duplicate certificate may be issued in
place thereof, upon such terms as the Trustees shall prescribe.

10.3 Issuance of New Certificates to Pledgee. A pledgee of Shares transferred as
collateral security shall be entitled to a new certificate if the instrument of
transfer substantially describes the debt or duty that is intended to be secured
thereby. Such new certificate shall express on

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<PAGE>

its face that it is held as collateral security, and the name of the pledgor
shall be stated thereon, who alone shall be liable as a Shareholder and entitled
to vote thereon.

10.4 Discontinuance of Issuance of Certificates. The Trustees may at any time
discontinue the issuance of Share certificates and may, by written notice to
each Shareholder, require the surrender of Share certificates to the Trust for
cancellation. Such surrender and cancellation shall not effect the ownership of
Shares in the Trust.

ARTICLE 11

Provisions Relating to the
Conduct of the Trust's Business

11.1 Determination of Net Asset Value. The net asset value per Share of each
series or class of Shares of the Trust shall be determined at the times and in
the manner specified from time to time by the Trustees.

ARTICLE 12

Shareholders' Voting Powers and Meetings

12.1 Record Dates. For the purpose of determining the Shareholders who are
entitled to vote or act at any meeting or any adjournment thereof, or who are
entitled to receive payment of any dividend or of any other distribution, the
Trustees may from time to time fix a reasonable date and time before the date of
any meeting of Shareholders or the date for the payment of any dividend or of
any other distribution, as the record date for determining the Shareholders
having the right to notice of and to vote at such meeting and any adjournment
thereof or the right to receive such dividend or distribution, and in such case
only Shareholders of record on such record date shall have such right
notwithstanding any transfer of Shares on the books of the Trust after the
record date; or without fixing such record date the Trustees may for any of such
purposes close the register or transfer books for all or any part of such
period.

ARTICLE 13

Amendments to the By-Laws

13.1 General. These By-Laws may be amended or repealed, in whole or in part, by
a majority of the Trustees then in office at any meeting of the Trustees, or by
written consent in lieu thereof.

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<PAGE>

ARTICLE 14

14.1 Proxies. To the extent permitted by law, Shareholders entitled to vote may
vote either in person or by proxy. The delivery of a proxy on behalf of a
Shareholder consistent with telephonic or electronically transmitted
instructions obtained pursuant to procedures of the Trust reasonably designed to
verify that such instructions have been authorized by such Shareholder, shall
constitute execution and delivery of the proxy by or on behalf of the
Shareholder. Except to the extent permitted by law, no proxy dated more than six
months before the meeting named therein shall be valid, and unless otherwise
expressly limited by its terms, a proxy shall entitle the holder or holders of
the proxy to vote at any adjournment of such meeting but shall not be valid
after the final adjournment of such meeting. A proxy with respect to Shares held
in the name of two or more persons shall be valid if authorized by or on behalf
of any one of them unless at or prior to the exercise of the proxy, the Trust
receives (including receipt by electronic transmission as provided in the second
sentence of this Section 14.1) a written notice to the contrary from any one of
them. A proxy purporting to be authorized by or on behalf of a Shareholder, if
accepted by the Trust in its discretion, shall be deemed valid unless challenged
at or prior to its exercise, and the burden of proving invalidity shall rest on
the challenger.

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<PAGE>

ADVISORY AGREEMENT
------------------

ADVISORY AGREEMENT, made as of June 30, 1999, by and between STATE STREET
RESEARCH & MANAGEMENT COMPANY, a corporation organized under the laws of
Delaware having its principal place of business in Boston, Massachusetts (the
"Manager"), and STATE STREET RESEARCH INSTITUTIONAL FUNDS, a Massachusetts
business trust having its principal place of business in Boston, Massachusetts
(the "Trust").

WHEREAS, the Trust is engaged in business as an open-end management
investment company and is registered as such under the Investment Company Act of
1940, as amended (the "1940 Act"); and

WHEREAS, the Manager is engaged principally in the business of rendering
investment management services and is registered as an investment adviser under
the Investment Advisers Act of 1940, as amended; and

WHEREAS, the Trust is authorized to issue shares of beneficial interest in
separate series with each such series representing interests in a separate
portfolio of securities and other assets; and

WHEREAS, the Trust established four series known as State Street Research
Core Fixed Income Fund, State Street Research Core Plus Fixed Income Fund, State
Street Research Core Large Cap Growth Fund and State Street Research Large Cap
Growth Fund ("Initial Funds"), together with all other series established by the
Trust after the date of this Agreement with respect to which the Manager renders
management and investment advisory services pursuant to the terms of this
Agreement, being herein collectively referred to as the "Funds" and individually
as a "Fund."

<PAGE>

NOW, THEREFORE, WITNESSETH: That it is hereby agreed between the parties
hereto as follows:

1. APPOINTMENT OF MANAGER.

(a) Initial Funds. The Trust hereby appoints the Manager to act as
manager and investment adviser to the Initial Funds for the period and on
the terms herein set forth. The Manager accepts such appointment and agrees
to render the services herein set forth, for the compensation herein
provided.

(b) Additional Funds. In the event that the Trust establishes one or
more series of shares other than the Initial Funds with respect to which it
desires to retain the Manager to render management and investment advisory
services hereunder, it shall so notify the Manager in writing, indicating
the advisory fee to be payable with respect to the additional series of
shares. If the Manager is willing to render such services, it shall so
notify the Trust in writing, whereupon such series of shares shall become a
Fund hereunder. In such event a writing signed by both the Trust and the
Manager shall be annexed hereto as a part hereof indicating that such
additional series of shares has become a Fund hereunder and reflecting the
agreed-upon fee schedule for such Fund to the extent the provisions of
Section 4 shall not apply with respect thereto.

2. DUTIES OF MANAGER.

The Manager, at its own expense, shall furnish the following services
and facilities to the Trust:

2
<PAGE>

(a) Investment Program. The Manager shall (i) furnish continuously an
investment program for each Fund, (ii) determine (subject to the overall
supervision and review of the Board of Trustees of the Trust) what
investments shall be purchased, held, sold or exchanged by each Fund and
what portion, if any, of the assets of each Fund shall be held uninvested,
and (iii) make changes on behalf of the Trust in the investments of each
Fund. The Manager shall also manage, supervise and conduct the other
affairs and business of the Trust and each Fund thereof and matters
incidental thereto, subject always to the control of the Board of Trustees
of the Trust and to the provisions of the Agreement and Declaration of
Trust and By-Laws of the Trust, as amended, the prospectuses of the Trust
as from time to time amended and in effect and the 1940 Act. Subject to the
foregoing, the Manager shall have the authority to engage one or more
sub-advisers in connection with the management of the Funds, which
sub-advisers may be affiliates of the Manager.

(b) Regulatory Reports. The Manager shall furnish to the Trust
necessary assistance in:

(i) the preparation of all reports now or hereafter required by
federal or other laws (not including any reports prepared pursuant to
the terms of the Servicing Agreement between the Trust and the Manager
(the "Servicing Agreement")); and

(ii) the preparation of prospectuses, registration statements and
amendments thereto that may be required by federal or other laws or by
the rules or regulations of any duly authorized commission or
administrative body.

3
<PAGE>

(c) Office Space and Facilities. The Manager shall furnish the Trust
office space in the offices of the Manager, or in such other place or
places as may be agreed upon from time to time, and all necessary office
facilities, business equipment, supplies, utilities, and telephone service
for managing the affairs and investments of the Trust.

(d) Services of Personnel. The Manager shall provide all necessary
executive and administrative personnel for managing the affairs of the
Trust, including personnel to perform clerical, bookkeeping, accounting and
other office functions. These services are exclusive of the bookkeeping and
accounting services of any dividend disbursing agent, transfer agent,
registrar or custodian, are also exclusive of the services provided under
the Servicing Agreement. The Manager shall compensate all personnel,
officers and Trustees of the Trust if such persons are also employees of
the Manager or its affiliates.

(e) Fidelity Bond. The Manager shall arrange for providing and
maintaining a bond issued by a reputable insurance company authorized to do
business in the place where the bond is issued against larceny and
embezzlement covering each officer and employee of the Trust and/or the
Manager who may singly or jointly with others have access to funds or
securities of the Trust, with direct or indirect authority to draw upon
such funds or to direct generally the disposition of such funds. The bond
shall be in such reasonable amount as a majority of the Trustees who are
not "interested persons" of the Trust, as defined in the 1940 Act, shall
determine, with due consideration given to the aggregate assets of the
Trust to which any such officer or employee may have access. The premium
for the bond shall be payable by the Trust in accordance with paragraph
3(o).

4
<PAGE>

(f) Portfolio Transactions. The Manager shall place all orders for the
purchase and sale of portfolio securities for the account of each Fund with
brokers or dealers selected by the Manager, although the Trust will pay the
actual brokerage commissions on portfolio transactions in accordance with
paragraph 3(d).

3. ALLOCATION OF EXPENSE.

Except for the services and facilities to be provided by the Manager
as set forth in paragraph 2 above, the Trust assumes and shall pay all
expenses for all other Trust operations and activities and shall reimburse
the Manager for any such expenses incurred by the Manager (it being
understood that the Trust shall allocate such expenses between or among its
Funds to the extent contemplated by its Agreement and Declaration of
Trust). The expenses to be borne by the Trust shall include, without
limitation:

(a) all expenses of organizing the Trust or forming any Fund thereof;

(b) the charges and expenses of any registrar, share transfer or
dividend disbursing agent, shareholder servicing agent, custodian,
administrator, fund accounting agent, or depository appointed by the Trust
for the safekeeping of its cash, portfolio securities and other property,
including the costs of servicing shareholder investment accounts and
bookkeeping, accounting and pricing services;

(d) brokerage commissions and other costs incurred in connection with
transactions in the portfolio securities of the Trust, including any
portion of such

5
<PAGE>

commissions attributable to brokerage and research services as defined in
Section 28(e) of the Securities Exchange Act of 1934;

(e) taxes, including issuance and transfer taxes and registration,
filing or other fees payable by the Trust to federal, state or other
governmental agencies;

(f) expenses, including the cost of printing certificates, relating to
the issuance of shares of the Trust;

(g) expenses involved in registering and maintaining registrations of
the Trust and of its shares with the Securities and Exchange Commission and
various states and other jurisdictions, including reimbursement of actual
expenses incurred by the Manager in performing such functions for the
Trust, which may include compensation of persons who are employees of the
Manager, in proportion to the relative time spent on such matters;

(h) expenses related to the redemption of shares of the Trust,
including expenses attributable to any program of periodic redemption;

(i) expenses of shareholders' and Trustees' meetings, including
meetings of committees, and of preparing, printing and mailing proxy
statements, quarterly reports, semiannual reports, annual reports and other
communications to existing shareholders;

(j) expenses of preparing and setting in type prospectuses, and
expenses of printing and mailing the same to existing shareholders (but not
expenses of printing and mailing of prospectuses and literature used for
promotional purposes);

6
<PAGE>

(k) compensation and expenses of Trustees who are not "interested
persons" within the meaning of the 1940 Act;

(l) expense of maintaining shareholder accounts and furnishing, or
causing to be furnished, to each shareholder a statement of his account,
including the expense of mailing;

(m) charges and expenses of legal counsel in connection with matters
relating to the Trust, including, without limitation, legal services
rendered in connection with the Trust's legal and financial structure and
relations with its shareholders, issuance of shares of the Trust, and
registration and qualification of securities under federal, state and other
laws;

(n) the cost and expense of maintaining the books and records of the
Trust, including general ledger accounting;

(o) insurance premiums on fidelity, errors and omissions and other
coverages including the expense of obtaining and maintaining a fidelity
bond as required by Section 17(g) of the 1940 Act;

(p) interest payable on Trust borrowings; and

(q) such other nonrecurring expenses of the Trust as may arise,
including expenses of actions, suits, or proceedings to which the Trust is
a party and expenses resulting from the legal obligation which the Trust
may have to provide indemnity with respect thereto.

7
<PAGE>

4. ADVISORY FEE.

For the services and facilities to be provided by the Manager as set
forth in paragraph 2 hereof, the Trust agrees that each Fund shall pay to
the Manager a monthly fee as soon as practical after the last day of each
calendar month according to the fee schedule attached hereto as Exhibit A.

In the case of commencement or termination of this Agreement with
respect to any Fund during any calendar month, the fee with respect to such
Fund for that month shall be reduced proportionately based upon the number
of calendar days during which this Agreement is in effect with respect to
such Fund, and the fee shall be computed based upon the average daily net
asset value of such Fund during such period.

In the event that this Agreement (i) is terminated with respect to any
one or more Funds as of a date other than the last day of the fiscal year
of the Trust or (ii) commences with respect to one or more Funds as of a
date other than the first day of the fiscal year of the Trust, then the
expenses of such Fund or Funds shall be annualized and the Manager shall
pay to, or receive from, the applicable Fund or Funds a pro rata portion of
the amount that the Manager would have been required to pay or would have
been entitled to receive, if any, had this Agreement been in effect with
respect to such Fund or Funds for the full fiscal year.

5. RELATIONS WITH TRUST.

Subject to and in accordance with the Agreement and Declaration of
Trust and By-laws of the Trust and the Certificate of Incorporation and
By-laws of the Manager, it is understood that Trustees, officers, agents
and shareholders of the Trust are or may be

8
<PAGE>

interested in the Manager (or any successor thereof) as directors, officers
or otherwise, that directors, officers, agents and shareholders of the
Manager (or any successor thereof) are or may be interested in the Trust as
Trustees, officers, agents, shareholders or otherwise, that the Manager (or
any such successor thereof) is or may be interested in the Trust as a
shareholder or otherwise and that the effect of any such adverse interests
shall be governed by said Agreement and Declaration of Trust, Certificate
of Incorporation and By-laws.

6. LIABILITY OF MANAGER.

The Manager shall not be liable to the Trust for any error of judgment
or mistake of law or for any loss suffered by the Trust in connection with
the matters to which this Agreement relates; provided, however, that no
provision of this Agreement shall be deemed to protect the Manager against
any liability to the Trust or its shareholders to which it might otherwise
be subject by reason of any willful misfeasance, bad faith or gross
negligence in the performance of its duties or the reckless disregard of
its obligations and duties under this Agreement, nor shall any provision
hereof be deemed to protect any Trustee or officer of the Trust against any
such liability to which he might otherwise be subject by reason of any
willful misfeasance, bad faith or gross negligence in the performance of
his duties or the reckless disregard of his obligations and duties. If any
provision of this Agreement shall be held or made invalid by a court
decision, statute, rule or otherwise, the remainder of this Agreement shall
not be affected thereby.

9
<PAGE>

7. DURATION AND TERMINATION OF THIS AGREEMENT.

(a) Duration. This Agreement shall become effective with respect to
each of the Initial Funds on the later of (i) the date on which a
Registration Statement with respect to shares of the Initial Fund under the
Securities Act of 1933, as amended, is first declared effective by the
Securities and Exchange Commission or (ii) the date on which the Initial
Fund commences operations, and, with respect to any additional Fund, on the
date of receipt by the Trust of notice from the Manager in accordance with
paragraph 1(b) hereof that the Manager is willing to serve as Manager with
respect to such Fund. Unless terminated as herein provided, this Agreement
shall remain in full force and effect with respect to the Initial Funds
until the date which is two years after the effective date of this
Agreement, and with respect to each additional Fund, for two years from the
date on which this Agreement becomes effective for such Fund. Subsequent to
such initial periods of effectiveness this Agreement shall continue in full
force and effect, subject to Section 7(c), for successive one-year periods
with respect to each Fund so long as such continuance with respect to such
Fund is approved at least annually (a) by either the Trustees of the Trust
or by vote of a majority of the outstanding voting securities (as defined
in the 1940 Act) of such Fund, and (b) in either event, by the vote of a
majority of the Trustees of the Trust who are not parties to this Agreement
or "interested persons" (as defined in the 1940 Act) of any such party,
cast in person at a meeting called for the purpose of voting on such
approval.

(b) Amendment. No provision of this Agreement may be changed, waived,
discharged or terminated orally, but only by an instrument in writing
signed by the party

10
<PAGE>

against which enforcement of the change, waiver, discharge or termination
is sought, and no amendment of this Agreement shall be effective with
respect to any Fund until approved by vote of the holders of a majority of
that Fund's outstanding voting securities (as defined in the 1940 Act) if
such a vote is required under the 1940 Act for such amendment.

(c) Termination. This Agreement may be terminated with respect to any
Fund at any time, without payment of any penalty, by vote of the Trustees
(including a vote of a majority of the Trustees of such Fund who are not
"interested persons" within the meaning of the 1940 Act) or by vote of a
majority of the outstanding voting securities (as defined in the 1940 Act)
of that Fund, or by the Manager, in each case on 60 days' prior written
notice to the other party.

(d) Automatic Termination. This Agreement shall automatically and
immediately terminate in the event of its assignment (as defined in the
1940 Act).

(e) Approval, Amendment or Termination by Individual Fund. Any
approval, amendment or termination of this Agreement shall be effective to
continue, amend or terminate this Agreement with respect to such Fund
notwithstanding (i) that such action has not been approved by the holders
of a majority of the outstanding voting securities of any other Fund
affected thereby, and (ii) that such action has not been approved by the
vote of a majority of the outstanding voting securities of the Trust,
unless such action shall be required by any applicable law or otherwise.

11
<PAGE>

8. SERVICES NOT EXCLUSIVE.

The services of the Manager to the Trust hereunder are not to be
deemed exclusive, and the Manager shall be free to render similar services
to others so long as its services hereunder are not impaired thereby.

9. NAME OF TRUST.

It is understood that the phrases "State Street" and "State Street
Research" and any logos associated with that name are the valuable property
of State Street Research & Management Company, and that the Trust has the
right to include such phrases as a part of its name and the names of its
Funds only so long as State Street Research & Management shall continue to
serve as the Manager this Agreement. Upon termination of this Agreement the
Trust shall forthwith cease to use such phrases and logos.

10. PRIOR AGREEMENTS SUPERSEDED.

This Agreement supersedes any prior agreement relating to the subject
matter hereof between the parties hereto.

11. NOTICES.

Notices under this Agreement shall be in writing and shall be
addressed, and delivered or mailed postage prepaid, to the other party at
such address as such other party may designate from time to time for the
receipt of such notices. Until further notice to the other party, the
address of each party to this Agreement for this purpose shall be One
Financial Center, Boston, Massachusetts 02111.

12
<PAGE>

12. GOVERNING LAW; COUNTERPARTS.

This Agreement shall be construed in accordance with the laws of the
Commonwealth of Massachusetts. This Agreement may be executed in any number
of counterparts, each of which shall be deemed to be an original, but such
counterparts shall, together, constitute only one instrument.

13. LIMITATION OF LIABILITY.

The term "State Street Research Institutional Funds" means and refers
to the Trustees from time to time serving under the Agreement and
Declaration of Trust of the Trust dated March 3, 1999 as the same may have
been or may be amended. It is expressly agreed that the obligations of the
Trust hereunder shall not be binding upon any of the Trustees,
shareholders, nominees, officers, agents or employees of the Trust as
individuals or personally, but shall bind only the trust property of the
Trust, as provided in the Agreement and Declaration of Trust of the Trust.
The execution and delivery of this Agreement have been authorized by the
Trustees of the Trust and signed by a duly authorized officer of the Trust,
acting as such, and neither such authorization nor such execution and
delivery shall be deemed to have been made individually or to impose any
personal liability, but shall bind only the trust property of the Trust as
provided in its Agreement and Declaration of Trust. The Agreement and
Declaration of Trust of the Trust provides, and it is expressly agreed,
that each Fund of the Trust shall be solely and exclusively responsible for
the payment of its debts, liabilities and obligations, and that no other
Fund shall be responsible for the same.

13
<PAGE>

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first set forth above.

STATE STREET RESEARCH & STATE STREET RESEARCH
MANAGEMENT COMPANY INSTITUTIONAL FUNDS

/s/ Ralph F. Verni /s/ Francis J. McNamara, III
- ------------------------------------ ------------------------------------
Ralph F. Verni Francis J. McNamara, III
President Secretary

14
<PAGE>

Exhibit A
---------

The fee for investment management services will be paid monthly by each of the
Funds and computed on the basis of the average daily net asset value of such
Fund for such calendar month at the following annual rates:

State Street Research Core Large Cap Growth Fund 0.55% of all assets
State Street Research Large Cap Growth Fund 0.55% of all assets
State Street Research Core Fixed Income Fund 0.40% of all assets
State Street Research Core Plus Fixed Income Fund 0.40% of all assets

A-1

<PAGE>

DISTRIBUTION AGREEMENT

DISTRIBUTION AGREEMENT effective as of June 30, 1999, by and between
State Street Research Investment Services, Inc., a corporation organized
under the laws of the Commonwealth of Massachusetts having its place of
business in Boston, Massachusetts (the "Distributor"), and State Street
Research Institutional Funds, a Massachusetts business trust having its
principal place of business in Boston, Massachusetts (the "Trust"), which
Trust proposes to offer shares of beneficial interest in different series
representing interests in separate portfolios of assets (each series being
referred to herein as a "Fund" and such series being referred to herein
collectively as the "Funds").

WITNESSETH:

In consideration of the agreements herein contained and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged by the parties, it is agreed:

1. Appointment of Distributor.

(a) Appointment. The Trust hereby appoints the Distributor as its agent to
sell and distribute shares of each of the State Street Research Core Fixed
Income Fund, the State Street Research Core Plus Fixed Income Fund, the State
Street Research Core Large Cap Growth Fund and the State Street Research Large
Cap Growth Fund (the "Initial Funds") and the Distributor hereby accepts such
appointment and agrees during the term of this Agreement to provide the services
and to assume the obligations herein set forth. In the event that the Trust
establishes one or more series of shares other than the Initial Funds with
respect to which it desires to retain the Distributor to serve as distributor
and principal underwriter hereunder, it shall so notify the Distributor in
writing. If the Distributor is willing to render such services, it shall so
notify the Trust in

<PAGE>

writing, whereupon such series of shares shall become a Fund hereunder. In such
event a writing signed by both the Trust and the Distributor shall be annexed
hereto as a part hereof indicating that such additional series of shares has
become a Fund hereunder.

(b) Sales of Shares. Shares of each Fund shall be sold at the offering
price thereof as from time to time determined in the manner herein provided. The
Trust agrees that it will not, without the Distributor's consent, sell or agree
to sell any shares of a Fund otherwise than through the Distributor, except that
the Trust may (a) sell shares for not less than the net asset value thereof as
an investment to such persons or classes of persons as may be indicated in the
prospectus of the Trust as amended and in effect from time to time; (b) issue or
sell shares for not less than the net asset value thereof directly to holders of
shares of any Fund upon such terms and for such consideration, if any, as it may
determine, whether in connection with the distribution of subscription or
purchase rights, the payment or reinvestment of distributions or dividends, the
exercise of any applicable reinvestment privilege, or otherwise; (c) issue or
sell shares for not less than the net asset value thereof of any Fund to the
shareholders of any other Fund or investment company in connection with the
exercise of exchange privileges offered by the Trust; and (d) issue shares for
not less than the net asset value thereof in connection with a merger,
consolidation or acquisition of assets on such basis as may be authorized or
permitted under the Investment Company Act of 1940, as amended (the "1940 Act").

2. Basis of Sale of Shares; Selected Dealers. The Distributor does not
agree to sell any specific number of shares. Shares will be sold by the
Distributor as agent for the Funds and the Trust only against orders therefor.
The Distributor will not purchase shares except as agent for the Trust.
Notwithstanding anything herein to the contrary, the Trust may terminate,
suspend or withdraw the offering of shares whenever, in its sole

2
<PAGE>

discretion, it deems such action desirable. In connection with its performance
of services hereunder, the Distributor may engage other persons to act as
selected dealers.

3. Compensation.

(a) Offering Price/Sales Charge. The offering price for shares of any Fund
of the Trust shall be the "net asset value per share" for that Fund determined
in accordance with the Agreement and Declaration of Trust of the Trust, as may
be amended from time to time (the "Declaration of Trust"), plus a sales charge,
if any, payable to the Distributor as set forth in the Trust's prospectus as
from time to time amended and in effect. The Distributor may reallow such
portions of such sales charges as dealer concessions to dealers through whom
sales are made as the Distributor may determine consistent with the terms of the
Trust's prospectus as from time to time amended and in effect; provided,
however, that the sales charge to each purchaser of shares shall not exceed that
set forth for such category of purchaser in the Trust's prospectus as from time
to time amended and in effect. The Distributor may also pay from its own funds a
commission, if any, with respect to sales to the extent consistent with and as
contemplated by the Trust's prospectus as from time to time amended and in
effect. The net asset value per share for each Fund shall be determined at such
time and on such days as are established by the Board of Trustees of the Trust
from time to time.

(b) 12b-1 Expenses. In the event that the Trust adopts a distribution plan
pursuant to Rule 12b-1 under the 1940 Act (the "12b-1 Plan"), the Distributor
agrees to fulfill any obligations it may have under the 12b-1 Plan.

4. Manner of Offering. The Distributor will comply with the securities laws
of any jurisdiction in which it sells, directly or indirectly, any shares of the
Trust. The Distributor also agrees to furnish to the Trust sufficient copies of
any sales literature it

3
<PAGE>

intends to use in connection with any sales of shares in adequate time for the
Trust to review such sales literature. The Distributor agrees that it will be
responsible for filing and clearing all such sales literature with the proper
authorities before or after use as required by applicable law.

The Distributor and the Trust each shall have the right to accept or reject
orders for the purchase of shares of the Trust. Any consideration which the
Distributor may receive in connection with a rejected purchase order will be
returned promptly to the prospective purchaser. The Distributor agrees promptly
to issue confirmations of all accepted purchase orders and to transmit a copy of
such confirmations to the Trust, or, if so directed, to any duly appointed
transfer or shareholder servicing agent of the Trust. If the originating dealer,
if any, shall fail to make timely settlement of its purchase order in accordance
with the rules of the National Association of Securities Dealers, Inc. or other
applicable requirements, the Distributor shall have the right to cancel such
purchase order and to hold the originating dealer responsible. The Distributor
agrees promptly to reimburse the Trust for any amount by which the Trust's
losses attributable to any such cancellations or to accepted purchase orders
exceed gains realized by the Trust for either of such reasons in respect of
other purchase orders. The Trust shall register or cause to be registered all
shares sold by the Distributor pursuant to the provisions hereof in such name or
names and amounts as the Distributor may request from time to time.

The Distributor agrees that if any person tenders to the Trust for
redemption of any shares purchased from the Trust within seven days of the
redemption request, the Distributor will promptly pay to the Trust the full
sales commission paid, if any, with respect to the shares so tendered for
redemption (in the case of sales by selected dealers,

4
<PAGE>

if any, such payment shall be made promptly after the Distributor's receipt of
the same from the selected dealer responsible for the sale).

The Distributor hereby agrees to act as agent for the Trust in connection
with any share repurchase arrangements from time to time offered by the Trust in
accordance with the terms of the Trust's prospectus as from time to time
amended.

5. Securities Law. The Trust has delivered to the Distributor a copy of its
current prospectus. The Trust agrees that it will use its best efforts to
continue the effectiveness of its registration statement under the Securities
Act of 1933, as amended (the "Securities Act"), and the 1940 Act. The Trust
further agrees to prepare and file any amendments to such registration statement
and any supplemental data as may be necessary in order to comply with the
Securities Act and the 1940 Act. The Trust is presently registered under the
1940 Act as an investment company, and it will use its best efforts to maintain
such registration and to comply with the requirements of said Act.

At the Distributor's request, the Trust will take such steps as may be
necessary and feasible to make available shares of the Funds for sale in states,
territories or dependencies of the United States of America, in the District of
Columbia and in foreign countries, in accordance with the laws thereof;
provided, however, that the Trust shall not be required to make available shares
in any state, territory, dependency, district or country where it shall deem
disadvantageous to the Trust.

The Distributor agrees that it will (i) not use, distribute or disseminate
or authorize the use, distribution or dissemination by others in connection with
the sale of shares of the Funds, any statement, other than those contained in
the Trust's current prospectus, except such supplemental literature or
advertising as shall be approved by the Trust, (ii) conform to the requirements
of all state and federal laws and the Rules of Fair

5
<PAGE>

Practice of the National Association of Securities Dealers, Inc. relating to the
sale of shares of the Trust (including, without limitation, the maintenance of
effective broker-dealer registrations as required), and (iii) observe and be
bound by all the provisions of the Declaration of Trust (and of any fundamental
policies adopted by the Trust pursuant to the 1940 Act, notice of which shall
have been given to the Distributor) which at the time in any way require, limit,
restrict or prohibit or otherwise regulate any action on the part of the
Distributor.

The Distributor further agrees that: (a) the Distributor shall furnish to
the Trust any information with respect to the Distributor within the purview of
any reports or registrations required to be filed with any governmental
authority; and (b) the Distributor will not make any representations
inconsistent with the registration statement of the Trust filed under the
Securities Act, as from time to time amended and in effect.

6. Allocation of Expenses.

(a) The Funds, either directly or through their investment adviser or
investment advisers, will be responsible for, and shall pay their allocable
portions of the expenses of:

(i) providing all necessary services, including fees and
disbursements of counsel, related to the preparation, setting in
type, printing and filing of any registration statement and/or
prospectus required under the Securities Act or the 1940 Act or
under state securities laws covering their shares, and all
amendments and supplements thereto, the mailing of any such
prospectus to existing shareholders, and preparing, setting in
type, printing and mailing of periodic reports to existing
shareholders;

6
<PAGE>

(ii) the cost of all registration and filing fees relating to the
Funds' shares, including the fees or expenses of qualifying the
Trust as a broker or dealer under laws of any state, if any;

(iii) the cost of preparing temporary and permanent share certificates
for shares, if any; and

(iv) any and all federal and state issue and/or transfer taxes
payable upon the issue by or (in the case of treasury shares)
transfer from a Fund of the shares distributed hereunder.

(b) The Distributor agrees that, after the Trust's prospectus and periodic
reports have been set in type or otherwise finalized, it will bear the expense
of printing (or otherwise producing) and distributing any copies thereof which
are to be used in connection with the offering of shares to prospective
investors. The Distributor further agrees that it will bear the expenses of
preparing, printing (or otherwise producing) and distributing any other
literature used by the Distributor or furnished by it for use in connection with
the offering of the shares for sale to the public, and any expenses of
advertising in connection with such offering. The Distributor will also pay fees
and expenses related to its registrations as a broker dealer and fees for
services rendered by the Trust's transfer agent on behalf of the Distributor.

(c) The Funds will be responsible for, and shall pay the expenses of,
maintaining shareholder accounts and furnishing or causing to be furnished to
each shareholder a statement of his account.

7. Distributor Is Independent Contractor. The Distributor shall be an
independent contractor. The Distributor is responsible for its own conduct, for
the employment, control and conduct of its agents and employees and for injury
to such

7
<PAGE>

agents or employees or to others through its agents or employees. The
Distributor assumes full responsibility for its agents and employees under
applicable laws and agrees to pay all employer taxes relating thereto.

8. Term and Termination; Amendment.

(a) Term and Termination. This Agreement shall become effective as of the
effective date noted above with respect to each Initial Fund; and, with respect
to any additional Fund, (i) on the date of receipt by the Trust of notice from
the Distributor in accordance with Section 1(a) hereof that the Distributor is
willing to serve as Distributor with respect to such Fund, or (ii) such other
date with respect to an additional Fund as the Trust and the Distributor
mutually agree. Unless terminated as herein provided, this Agreement shall
remain in full force and effect with respect to each Initial Fund until the date
which is two years after the effective date of this Agreement with respect to
such Initial Fund, and, with respect to each additional Fund, for two years from
the date on which such Fund becomes a Fund hereunder. Subsequent to such initial
periods of effectiveness this Agreement shall continue in full force and effect,
subject to the last sentence of this Section 8(a), for successive one-year
periods with respect to each Fund so long as such continuance with respect to
such Fund is approved at least annually (a) by either the Trustees of the Trust
or by vote of a majority of the outstanding voting securities (as defined in the
1940 Act) of such Fund, and (b) in either event, by the vote of a majority of
the Trustees of the Trust who are not parties to this Agreement or "interested
persons" (as defined in the 1940 Act) of any such party of the Trust and who
have no direct or indirect interest in the operation of any 12b-1 Plan or this
Agreement, cast in person at a meeting called for the purpose of voting on such
approval. This Agreement may be terminated with respect to the Trust or any Fund
at any time, without

8
<PAGE>

payment of any penalty, by a vote of (a) a majority of the Trustees who are not
"interested persons" of the Trust (as defined in the 1940 Act) and who have no
direct or indirect financial interest in the operation of any 12b-1 Plan or this
Agreement or (b) a majority of the outstanding voting securities of the Trust or
that Fund, or by the Distributor, as the case may be, in each case on sixty
days' prior written notice of the other party.

(b) Amendment. Any amendment to this Agreement shall become effective with
respect to a Fund upon approval in writing of the Distributor and the Trust
(subject in the latter case to approval by a majority of the Trustees and a
majority of the Trustees who are not "interested persons" of the Trust (as
defined in the 1940 Act) and who have no direct or indirect financial interest
in the operation of any 12b-1 Plan); provided, however, that amendments relating
to any 12b-1 Plan shall not require the consent of the Distributor.

(c) Approval, Amendment or Termination for Individual Fund. Any approval,
amendment or termination of this Agreement with respect to any Fund shall be
effective to continue, amend or terminate this Agreement with respect to such
Fund notwithstanding (i) that such action has not been approved with respect to
any other Fund affected thereby, and (ii) that such action has not been approved
by the shareholders of such Fund, unless such action shall be required by any
applicable law or otherwise.

9. Assignment. The Distributor may not make any assignment, as defined
under the 1940 Act, of this Agreement and this Agreement shall automatically
terminate in the event of an attempted assignment by the Distributor; provided,
however, that the Distributor may employ or enter into agreements with such
other person, persons, corporation or corporations, as it shall determine in
order to assist it in carrying out this

9
<PAGE>

Agreement, including, without limitation, selected dealers as contemplated by
Section 2.

10. Indemnification by Distributor. The Distributor agrees to indemnify and
hold harmless the Trust and each person who has been, is, or may hereafter be an
officer, Trustee, employee or agent of the Trust against any loss, damage or
expense reasonably incurred by any of them in connection with any claim or in
connection with any action, suit or proceeding to which any of them may be a
party, which arises out of or is alleged to arise out of or is based upon any
violation of any of its representations or covenants herein contained or any
untrue statement or alleged untrue statement of a material fact, or the omission
or alleged omission to state a material fact necessary to make the statements
made not misleading, on the part of the Distributor or any agent or employee of
the Distributor or any other person for whose acts the Distributor is
responsible or is alleged to be responsible (such as any selected dealer or
person through whom sales are made pursuant to an agreement with the
Distributor), whether made orally or in writing, unless such statement or
omission was made in or in reliance upon written information furnished by the
Trust. The term "expenses" for purposes of this and the next paragraph includes
reasonable attorneys' fees and amounts paid in satisfaction of judgments or in
settlements which are made with the Distributor's consent. The foregoing rights
of indemnification shall be in addition to any other rights to which any of the
foregoing indemnified parties may be entitled as a matter of law.

11. Indemnification by Trust. The Trust agrees to indemnify and hold
harmless the Distributor and each person who has been, is, or may hereafter be
an officer, director, employee or agent of the Distributor against any loss,
damage or expense reasonably incurred by any of them in connection with any
claim or in connection with any action, suit or proceeding to which any of them
may be party, which arises out of or

10
<PAGE>

is alleged to arise out of or is based upon a violation of any of its covenants
herein contained or any untrue or alleged untrue statement of material fact, or
the omission or alleged omission to state a material fact necessary to make the
statements made not misleading, in a registration statement or prospectus of the
Trust, or any amendment or supplement thereto, unless such statement or omission
was made in reliance upon written information furnished by the Distributor. The
foregoing rights of indemnification shall be in addition to any other rights to
which any of the foregoing indemnified parties may be entitled as a matter of
law. Nothing contained herein shall relieve the Distributor of any liability to
the Trust or its shareholders to which the Distributor would otherwise be
subject by reason of willful misfeasance, bad faith or gross negligence in the
performance of its duties or reckless disregard of its obligations and duties
hereunder.

12. Non-Exclusive Agreement. The services of the Distributor to the Trust
hereunder shall not be deemed to be exclusive, and the Distributor shall be free
to (a) render similar services to, and act as underwriter or distributor in
connection with the distribution of shares of, other investment companies, and
(b) engage in any other businesses and activities from time to time.

13. Governing Law; Counterparts. This Agreement shall be construed in
accordance with the laws of the Commonwealth of Massachusetts. This Agreement
may be executed in any number of counterparts, each of which shall be deemed to
be an original, but such counterparts shall, together, constitute only one
instrument.

14. Prior Agreements Superseded; Construction. This Agreement supersedes
any prior agreement relating to the subject matter hereof between the parties
hereto. Where the context of this Agreement so permits, each of the masculine,
feminine and neuter genders shall be deemed to denote the other two genders, the
singular to denote the

11
<PAGE>

plural and the plural to denote the singular. Without limiting the generality of
the foregoing, all references to the Trust's prospectus shall include all
prospectuses of the Trust or any of its Funds.

15. Notices. Notices under this Agreement shall be in writing and shall be
addressed, and delivered or mailed postage prepaid, to the other party at such
address as such other party may designate from time to time for the receipt of
such notices. Until further notice to the other party, the address of each party
to this Agreement for this purpose shall be One Financial Center, Boston,
Massachusetts 02111.

16. Limitation of Liability. The term "State Street Research Institutional
Funds" means and refers to the Trustees from time to time serving under
Declaration of Trust. It is expressly agreed that the obligations of the Trust
hereunder shall not be binding upon any of the Trustees, shareholders, nominees,
officers, agents or employees of the Trust as individuals or personally, but
shall bind only the trust property of the Trust, as provided in the Declaration
of Trust. The execution and delivery of this Agreement have been authorized by
the Trustees of the Trust and signed by an officer of the Trust, acting as such,
and neither such authorization nor such execution and delivery shall be deemed
to have been made individually or to impose any personal liability, but shall
bind only the trust property of the Trust as provided in the Declaration of
Trust. The Declaration of Trust further provides, and it is expressly agreed,
that each Fund of the Trust shall be solely and exclusively responsible for the
payment of its debts, liabilities and obligations and that no other Fund shall
be responsible or liable for the same.

12
<PAGE>

IN WITNESS WHEREOF, this Agreement has been executed for the Distributor
and the Trust by their duly authorized officers, as of the date first set forth
above.

STATE STREET RESEARCH INVESTMENT
SERVICES, INC.

/s/ Gerard P. Maus
--------------------------------------------
Gerard P. Maus

STATE STREET RESEARCH
INSTITUTIONAL FUNDS

/s/ Ralph F. Verni
--------------------------------------------
Ralph F. Verni

<PAGE>

CUSTODIAN CONTRACT

This Contract between State Street Research Institutional Funds, a
business trust organized and existing under the laws of The Commonwealth of
Massachusetts, hereinafter called the "Fund," and State Street Bank and Trust
Company, a Massachusetts trust company, hereinafter called the "Custodian"

WITNESSETH:

WHEREAS, the Fund is authorized to issue shares in separate series,
with each such series representing interests in a separate portfolio of
securities and other assets; and

WHEREAS, the Fund intends to initially offer shares in four (4)
series, the State Street Research Core Fixed Income Fund, the State Street
Research Core Plus Fixed Income Fund, the State Street Research Core Large
Cap Growth Fund and the State Street Research Large Cap Growth Fund (such
series together with all other series subsequently established by the Fund
and made subject to this Contract in accordance with paragraph 18, being
herein referred to as the "Portfolio(s)").

NOW, THEREFORE, in consideration of the mutual covenants and
agreements hereinafter contained, the parties hereto agree as follows:

1. EMPLOYMENT OF CUSTODIAN AND PROPERTY TO BE HELD BY IT

The Fund hereby employs the Custodian as the custodian of the assets
of the Portfolios of the Fund, including securities which the Fund, on behalf
of the applicable Portfolio desires to be held in places within the United
States ("domestic securities") and securities it desires to be held outside
the United States ("foreign securities") pursuant to the provisions of the
Agreement and Declaration of Trust. The Fund on behalf of the Portfolio(s)
agrees to deliver to the Custodian all securities and cash of the Portfolios,
and all payments of income, payments of principal or capital distributions
received by it with respect to all securities owned by the Portfolio(s) from
time to time, and the cash consideration received by it for such new or
treasury shares of beneficial interest of the Fund representing interests in
the Portfolios, ("Shares") as may be issued or sold from time to time. The
Custodian shall not be responsible for any property of a Portfolio held or
received by the Portfolio and not delivered to the Custodian.

Upon receipt of "Proper Instructions" (within the meaning of Article
5), the Custodian shall on behalf of the applicable Portfolio(s) from time to
time employ one or more sub-custodians, located in the United States but only
in accordance with an applicable vote by the Board of Trustees of the Fund on
behalf of the applicable Portfolio(s), and provided that the Custodian shall
have no more or less responsibility or liability to the Fund on account of
any actions or omissions of any sub-custodian so employed than any such
sub-custodian has to the Custodian. The Custodian may employ as sub-custodian
for the Fund's foreign securities on behalf of the applicable Portfolio(s) the

<PAGE>

foreign banking institutions and foreign securities depositories
designated in Schedule A hereto but only in accordance with the provisions of
Article 3.

2. DUTIES OF THE CUSTODIAN WITH RESPECT TO PROPERTY OF THE FUND HELD BY
THE CUSTODIAN IN THE UNITED STATES

2.1 HOLDING SECURITIES. The Custodian shall hold and physically segregate
for the account of each Portfolio all non-cash property, to be held by
it in the United States including all domestic securities owned by such
Portfolio, other than (a) securities which are maintained pursuant to
Section 2.10 in a clearing agency which acts as a securities depository
or in a book-entry system authorized by the U.S. Department of the
Treasury (each, a "U.S. Securities System") and (b) commercial paper of
an issuer for which State Street Bank and Trust Company acts as issuing
and paying agent ("Direct Paper") which is deposited and/or maintained
in the Direct Paper System of the Custodian (the "Direct Paper System")
pursuant to Section 2.11.

2.2 DELIVERY OF SECURITIES. The Custodian shall release and deliver
domestic securities owned by a Portfolio held by the Custodian or in a
U.S. Securities System account of the Custodian or in the Custodian's
Direct Paper book entry system account ("Direct Paper System Account")
only upon receipt of Proper Instructions from the Fund on behalf of the
applicable Portfolio, which may be continuing instructions when deemed
appropriate by the parties, and only in the following cases:

1) Upon sale of such securities for the account of the Portfolio
and receipt of payment therefor;

2) Upon the receipt of payment in connection with any repurchase
agreement related to such securities entered into by the
Portfolio;

3) In the case of a sale effected through a U.S. Securities
System, in accordance with the provisions of Section 2.10
hereof;

4) To the depository agent in connection with tender or other
similar offers for securities of the Portfolio;

5) To the issuer thereof or its agent when such securities are
called, redeemed, retired or otherwise become payable;
provided that, in any such case, the cash or other
consideration is to be delivered to the Custodian;

6) To the issuer thereof, or its agent, for transfer into the
name of the Portfolio or into the name of any nominee or
nominees of the Custodian or into the name or nominee name of
any agent appointed pursuant to Section 2.9 or into the name
or nominee name of any sub-custodian appointed pursuant to
Article 1; or for exchange for a different number of bonds,
certificates or other evidence representing the same

2
<PAGE>

aggregate face amount or number of units; PROVIDED that, in
any such case, the new securities are to be delivered to
the Custodian;

7) Upon the sale of such securities for the account of the
Portfolio, to the broker or its clearing agent, against a
receipt, for examination in accordance with "street delivery"
custom; provided that in any such case, the Custodian shall
have no responsibility or liability for any loss arising from
the delivery of such securities prior to receiving payment for
such securities except as may arise from the Custodian's own
negligence or willful misconduct;

8) For exchange or conversion pursuant to any plan of merger,
consolidation, recapitalization, reorganization or
readjustment of the securities of the issuer of such
securities, or pursuant to provisions for conversion contained
in such securities, or pursuant to any deposit agreement;
provided that, in any such case, the new securities and cash,
if any, are to be delivered to the Custodian;

9) In the case of warrants, rights or similar securities, the
surrender thereof in the exercise of such warrants, rights or
similar securities or the surrender of interim receipts or
temporary securities for definitive securities; provided that,
in any such case, the new securities and cash, if any, are to
be delivered to the Custodian;

10) For delivery in connection with any loans of securities made
by the Portfolio, BUT ONLY against receipt of adequate
collateral as agreed upon from time to time by the Custodian
and the Fund on behalf of the Portfolio, which may be in the
form of cash or obligations issued by the United States
government, its agencies or instrumentalities, except that in
connection with any loans for which collateral is to be
credited to the Custodian's account in the book-entry system
authorized by the U.S. Department of the Treasury, the
Custodian will not be held liable or responsible for the
delivery of securities owned by the Portfolio prior to the
receipt of such collateral;

11) For delivery as security in connection with any borrowings by
the Fund on behalf of the Portfolio requiring a pledge of
assets by the Fund on behalf of the Portfolio, BUT ONLY
against receipt of amounts borrowed;

12) For delivery in accordance with the provisions of any
agreement among the Fund on behalf of the Portfolio, the
Custodian and a broker-dealer registered under the Securities
Exchange Act of 1934 (the "Exchange Act") and a member of The
National Association of Securities Dealers, Inc. ("NASD"),
relating to compliance with the rules of The Options Clearing
Corporation and of any registered national securities
exchange, or of any similar organization or organizations,
regarding escrow or other arrangements in connection with
transactions by the Portfolio of the Fund;

<PAGE>

13) For delivery in accordance with the provisions of any
agreement among the Fund on behalf of the Portfolio, the
Custodian, and a Futures Commission Merchant registered under
the Commodity Exchange Act, relating to compliance with the
rules of the Commodity Futures Trading Commission and/or any
Contract Market, or any similar organization or organizations,
regarding account deposits in connection with transactions by
the Portfolio of the Fund;

14) Upon receipt of instructions from the transfer agent
("Transfer Agent") for the Fund, for delivery to such Transfer
Agent or to the holders of shares in connection with
distributions in kind, as may be described from time to time
in the currently effective prospectus and statement of
additional information of the Fund, related to the Portfolio
("Prospectus"), in satisfaction of requests by holders of
Shares for repurchase or redemption; and

15) For any other proper corporate purpose, BUT ONLY upon receipt
of Proper Instructions from the Fund on behalf of the
applicable Portfolio specifying the securities of the
Portfolio to be delivered, setting forth the purpose for which
such delivery is to be made, declaring such purpose to be a
proper corporate purpose, and naming the person or persons to
whom delivery of such securities shall be made.

2.3 REGISTRATION OF SECURITIES. Domestic securities held by the Custodian
(other than bearer securities) shall be registered in the name of the
Portfolio or in the name of any nominee of the Fund on behalf of the
Portfolio or of any nominee of the Custodian which nominee shall be
assigned exclusively to the Portfolio, UNLESS the Fund has authorized
in writing the appointment of a nominee to be used in common with other
registered investment companies having the same investment adviser as
the Portfolio, or in the name or nominee name of any agent appointed
pursuant to Section 2.9 or in the name or nominee name of any
sub-custodian appointed pursuant to Article 1. All securities accepted
by the Custodian on behalf of the Portfolio under the terms of this
Contract shall be in "street name" or other good delivery form. If,
however, the Fund directs the Custodian to maintain securities in
"street name", the Custodian shall utilize its best efforts only to
timely collect income due the Fund on such securities and to notify the
Fund on a best efforts basis only of relevant corporate actions
including, without limitation, pendency of calls, maturities, tender or
exchange offers.

2.4 BANK ACCOUNTS. The Custodian shall open and maintain a separate bank
account or accounts in the United States in the name of each Portfolio
of the Fund, subject only to draft or order by the Custodian acting
pursuant to the terms of this Contract, and shall hold in such account
or accounts, subject to the provisions hereof, all cash received by it
from or for the account of the Portfolio, other than cash maintained by
the Portfolio in a bank account established and used in accordance with
Rule 17f-3 under the Investment Company Act of 1940. Funds held by the
Custodian for a Portfolio may be deposited by it to its credit as
Custodian in the Banking Department of the Custodian or in such other
banks or trust companies as it may in its discretion deem necessary or
desirable; PROVIDED, HOWEVER, that every such bank or trust company
shall be qualified to act as a custodian under the

<PAGE>

Investment Company Act of 1940 and that each such bank or trust
company and the funds to be deposited with each such bank or trust
company shall on behalf of each applicable Portfolio be approved by
vote of a majority of the Board of Trustees of the Fund. Such funds
shall be deposited by the Custodian in its capacity as Custodian
and shall be withdrawable by the Custodian only in that capacity.

2.5 AVAILABILITY OF FEDERAL FUNDS. Upon mutual agreement between the Fund
on behalf of each applicable Portfolio and the Custodian, the Custodian
shall, upon the receipt of Proper Instructions from the Fund on behalf
of a Portfolio, make federal funds available to such Portfolio as of
specified times agreed upon from time to time by the Fund and the
Custodian in the amount of checks received in payment for Shares of
such Portfolio which are deposited into the Portfolio's account.

2.6 COLLECTION OF INCOME. Subject to the provisions of Section 2.3, the
Custodian shall collect on a timely basis all income and other payments
with respect to registered domestic securities held hereunder to which
each Portfolio shall be entitled either by law or pursuant to custom in
the securities business, and shall collect on a timely basis all income
and other payments with respect to bearer domestic securities if, on
the date of payment by the issuer, such securities are held by the
Custodian or its agent and shall credit such income, as collected, to
such Portfolio's custodian account. Without limiting the generality of
the foregoing, the Custodian shall detach and present for payment all
coupons and other income items requiring presentation as and when they
become due and shall collect interest when due on securities held
hereunder. Income due each Portfolio on securities loaned pursuant to
the provisions of Section 2.2 (10) shall be the responsibility of the
Fund. The Custodian will have no duty or responsibility in connection
therewith, other than to provide the Fund with such information or data
as may be necessary to assist the Fund in arranging for the timely
delivery to the Custodian of the income to which the Portfolio is
properly entitled.

2.7 PAYMENT OF FUND MONIES. Upon receipt of Proper Instructions from the
Fund on behalf of the applicable Portfolio, which may be continuing
instructions when deemed appropriate by the parties, the Custodian
shall pay out monies of a Portfolio in the following cases only:

1) Upon the purchase of domestic securities, options, futures
contracts or options on futures contracts for the account of
the Portfolio but only (a) against the delivery of such
securities or evidence of title to such options, futures
contracts or options on futures contracts to the Custodian (or
any bank, banking firm or trust company doing business in the
United States or abroad which is qualified under the
Investment Company Act of 1940, as amended, to act as a
custodian and has been designated by the Custodian as its
agent for this purpose) registered in the name of the
Portfolio or in the name of a nominee of the Custodian
referred to in Section 2.3 hereof or in proper form for
transfer; (b) in the case of a purchase effected through a
U.S. Securities System, in accordance with the conditions set
forth in Section 2.10 hereof; (c) in the case of a purchase
involving the Direct Paper System, in accordance with the
conditions set forth in Section 2.11; (d) in the case of
repurchase agreements entered into between the Fund on behalf
of the Portfolio and

<PAGE>

the Custodian, or another bank, or a broker-dealer which
is a member of NASD, (i) against delivery of the securities
either in certificate form or through an entry crediting
the Custodian's account at the Federal Reserve Bank with
such securities or (ii) against delivery of the receipt
evidencing purchase by the Portfolio of securities owned
by the Custodian along with written evidence of the
agreement by the Custodian to repurchase such securities from
the Portfolio; or (e) for transfer to a time deposit account
of the Fund in any bank, whether domestic or foreign; such
transfer may be effected prior to receipt of a confirmation
from a broker and/or the applicable bank pursuant to Proper
Instructions from the Fund as defined in Article 5;

2) In connection with conversion, exchange or surrender of
securities owned by the Portfolio as set forth in Section 2.2
hereof;

3) For the redemption or repurchase of Shares issued by
the Portfolio as set forth in Article 4 hereof;

4) For the payment of any expense or liability incurred by the
Portfolio, including but not limited to the following payments
for the account of the Portfolio: interest, taxes, management,
accounting, transfer agent and legal fees, and operating
expenses of the Fund whether or not such expenses are to be in
whole or part capitalized or treated as deferred expenses;

5) For the payment of any dividends on Shares of the Portfolio
declared pursuant to the governing documents of the Fund;

6) For payment of the amount of dividends received in respect of
securities sold short; and

7) For any other proper corporate purpose, BUT ONLY upon receipt
of Proper Instructions from the Fund on behalf of the
Portfolio specifying the amount of such payment, setting forth
the purpose for which such payment is to be made, declaring
such purpose to be a proper corporate purpose, and naming the
person or persons to whom such payment is to be made.

2.8 LIABILITY FOR PAYMENT ON ADVANCE OF RECEIPT OF SECURITIES PURCHASED.
Except as specifically stated otherwise in this Contract, in any and
every case where payment for purchase of domestic securities for the
account of a Portfolio is made by the Custodian in advance of receipt
of the securities purchased in the absence of specific written
instructions from the Fund on behalf of such Portfolio to so pay in
advance, the Custodian shall be absolutely liable to the Fund for such
securities to the same extent as if the securities had been received by
the Custodian.

2.9 APPOINTMENT OF AGENTS. The Custodian may at any time or times in its
discretion appoint (and may at any time remove) any other bank or trust
company which is itself qualified

<PAGE>

under the Investment Company Act of 1940, as amended, to act as
a custodian, as its agent to carry out such of the provisions of
this Article 2 as the Custodian may from time to time direct;
PROVIDED, HOWEVER, that the appointment of any agent shall not
relieve the Custodian of its responsibilities or liabilities
hereunder.

2.10 DEPOSIT OF FUND ASSETS IN U.S. SECURITIES SYSTEMS. The Custodian may
deposit and/or maintain securities owned by a Portfolio in a clearing
agency registered with the Securities and Exchange Commission under
Section 17A of the Securities Exchange Act of 1934, which acts as a
securities depository, or in the book-entry system authorized by the
U.S. Department of the Treasury and certain federal agencies,
collectively referred to herein as "U.S. Securities System" in
accordance with applicable Federal Reserve Board and Securities and
Exchange Commission rules and regulations, if any, and subject to the
following provisions:

1) The Custodian may keep securities of the Portfolio in a U.S.
Securities System provided that such securities are
represented in an account ("Account") of the Custodian in the
U.S. Securities System which shall not include any assets of
the Custodian other than assets held as a fiduciary, custodian
or otherwise for customers;

2) The records of the Custodian with respect to securities of the
Portfolio which are maintained in a U.S. Securities System
shall identify by book-entry those securities belonging to the
Portfolio;

3) The Custodian shall pay for securities purchased for the
account of the Portfolio upon (i) receipt of advice from the
U.S. Securities System that such securities have been
transferred to the Account, and (ii) the making of an entry on
the records of the Custodian to reflect such payment and
transfer for the account of the Portfolio. The Custodian shall
transfer securities sold for the account of the Portfolio upon
(i) receipt of advice from the U.S. Securities System that
payment for such securities has been transferred to the
Account, and (ii) the making of an entry on the records of the
Custodian to reflect such transfer and payment for the account
of the Portfolio. Copies of all advices from the U.S.
Securities System of transfers of securities for the account
of the Portfolio shall identify the Portfolio, be maintained
for the Portfolio by the Custodian and be provided to the Fund
at its request. Upon request, the Custodian shall furnish the
Fund on behalf of the Portfolio confirmation of each transfer
to or from the account of the Portfolio in the form of a
written advice or notice and shall furnish to the Fund on
behalf of the Portfolio copies of daily transaction sheets
reflecting each day's transactions in the U.S. Securities
System for the account of the Portfolio;

4) The Custodian shall provide the Fund for the Portfolio with
any report obtained by the Custodian on the U.S. Securities
System's accounting system, internal accounting control and
procedures for safeguarding securities deposited in the U.S.
Securities System; and

<PAGE>

5) Anything to the contrary in this Contract notwithstanding, the
Custodian shall be liable to the Fund for the benefit of the
Portfolio for any loss or damage to the Portfolio resulting
from use of the U.S. Securities System by reason of any
negligence, misfeasance or misconduct of the Custodian or any
of its agents or of any of its or their employees or from
failure of the Custodian or any such agent to enforce
effectively such rights as it may have against the U.S.
Securities System; at the election of the Fund, it shall be
entitled to be subrogated to the rights of the Custodian with
respect to any claim against the U.S. Securities System or any
other person which the Custodian may have as a consequence of
any such loss or damage if and to the extent that the
Portfolio has not been made whole for any such loss or damage.

2.11 FUND ASSETS HELD IN THE CUSTODIAN'S DIRECT PAPER SYSTEM. The Custodian
may deposit and/or maintain securities owned by a Portfolio in the
Direct Paper System of the Custodian subject to the following
provisions:

1) No transaction relating to securities in the Direct Paper
System will be effected in the absence of Proper Instructions
from the Fund on behalf of the Portfolio;

2) The Custodian may keep securities of the Portfolio in the
Direct Paper System only if such securities are represented in
an account ("Account") of the Custodian in the Direct Paper
System which shall not include any assets of the Custodian
other than assets held as a fiduciary, custodian or otherwise
for customers;

3) The records of the Custodian with respect to securities of the
Portfolio which are maintained in the Direct Paper System
shall identify by book-entry those securities belonging to the
Portfolio;

4) The Custodian shall pay for securities purchased for the
account of the Portfolio upon the making of an entry on the
records of the Custodian to reflect such payment and transfer
of securities to the account of the Portfolio. The Custodian
shall transfer securities sold for the account of the
Portfolio upon the making of an entry on the records of the
Custodian to reflect such transfer and receipt of payment for
the account of the Portfolio;

5) The Custodian shall furnish the Fund on behalf of the
Portfolio confirmation of each transfer to or from the account
of the Portfolio, in the form of a written advice or notice,
of Direct Paper on the next business day following such
transfer and shall furnish to the Fund on behalf of the
Portfolio copies of daily transaction sheets reflecting each
day's transaction in the U.S. Securities System for the
account of the Portfolio; and

<PAGE>

6) The Custodian shall provide the Fund on behalf of the
Portfolio with any report on its system of internal accounting
control as the Fund may reasonably request from time to time.

2.12 SEGREGATED ACCOUNT. The Custodian shall upon receipt of Proper
Instructions from the Fund on behalf of each applicable Portfolio
establish and maintain a segregated account or accounts for and on
behalf of each such Portfolio, into which account or accounts may be
transferred cash and/or securities, including securities maintained in
an account by the Custodian pursuant to Section 2.10 hereof, (i) in
accordance with the provisions of any agreement among the Fund on
behalf of the Portfolio, the Custodian and a broker-dealer registered
under the Exchange Act and a member of the NASD (or any futures
commission merchant registered under the Commodity Exchange Act),
relating to compliance with the rules of The Options Clearing
Corporation and of any registered national securities exchange (or the
Commodity Futures Trading Commission or any registered contract
market), or of any similar organization or organizations, regarding
escrow or other arrangements in connection with transactions by the
Portfolio, (ii) for purposes of segregating cash or government
securities in connection with options purchased, sold or written by the
Portfolio or commodity futures contracts or options thereon purchased
or sold by the Portfolio, (iii) for the purposes of compliance by the
Portfolio with the procedures required by Investment Company Act
Release No. 10666, or any subsequent release or releases of the
Securities and Exchange Commission relating to the maintenance of
segregated accounts by registered investment companies and (iv) for
other proper corporate purposes, BUT ONLY, in the case of clause (iv),
upon receipt of Proper Instructions from the Fund on behalf of the
applicable Portfolio setting forth the purpose or purposes of such
segregated account and declaring such purposes to be a proper corporate
purpose.

2.13 OWNERSHIP CERTIFICATES FOR TAX PURPOSES. The Custodian shall execute
ownership and other certificates and affidavits for all federal and
state tax purposes in connection with receipt of income or other
payments with respect to domestic securities of each Portfolio held by
it and in connection with transfers of securities.

2.14 PROXIES. The Custodian shall, with respect to the domestic securities
held hereunder, cause to be promptly executed by the registered holder
of such securities, if the securities are registered otherwise than in
the name of the Portfolio or a nominee of the Portfolio, all proxies,
without indication of the manner in which such proxies are to be voted,
and shall promptly deliver to the Fund on behalf of the Portfolio such
proxies, all proxy soliciting materials and all notices relating to
such securities.

2.15 COMMUNICATIONS RELATING TO PORTFOLIO SECURITIES. Subject to the
provisions of Section 2.3, the Custodian shall transmit promptly to the
Fund for each Portfolio all written information (including, without
limitation, pendency of calls and maturities of domestic securities and
expirations of rights in connection therewith and notices of exercise
of call and put options written by the Fund on behalf of the Portfolio
and the maturity of futures contracts purchased or sold by the
Portfolio) received by the Custodian from issuers of the securities
being held for the Fund on behalf of the Portfolio. With respect to
tender or exchange

<PAGE>

offers, the Custodian shall transmit promptly to the Fund on
behalf of the Portfolio all written information received by the
Custodian from issuers of the securities whose tender or exchange is
sought and from the party (or his agents) making the tender or exchange
offer. If the Fund on behalf of the Portfolio desires to take action
with respect to any tender offer, exchange offer or any other similar
transaction, the Fund shall notify the Custodian at least three
business days prior to the date on which the Custodian is to take such
action.

3. DUTIES OF THE CUSTODIAN WITH RESPECT TO PROPERTY OF THE FUND HELD
OUTSIDE OF THE UNITED STATES

3.1 APPOINTMENT OF FOREIGN SUB-CUSTODIANS. The Fund hereby authorizes and
instructs the Custodian to employ as sub-custodians for the Portfolio's
securities and other assets maintained outside the United States the
foreign banking institutions and foreign securities depositories
designated on Schedule A hereto ("foreign sub-custodians"). Upon
receipt of "Proper Instructions", as defined in Section 5 of this
Contract, the Custodian and the Fund may agree to amend Schedule A
hereto from time to time to designate additional foreign banking
institutions and foreign securities depositories to act as
sub-custodian. Upon receipt of Proper Instructions, the Fund may
instruct the Custodian to cease the employment of any one or more such
sub-custodians for maintaining custody of the Portfolio's assets.

3.2 ASSETS TO BE HELD. The Custodian shall limit the securities and other
assets maintained in the custody of the foreign sub-custodians to: (a)
"foreign securities", as defined in paragraph (c)(1) of Rule 17f-5
under the Investment Company Act of 1940, and (b) cash and cash
equivalents in such amounts as the Custodian or the Fund may determine
to be reasonably necessary to effect the Portfolio's foreign securities
transactions. The Custodian shall identify on its books as belonging to
the Fund, the foreign securities of the Fund held by each foreign
sub-custodian.

3.3 FOREIGN SECURITIES SYSTEMS. Except as may otherwise be agreed upon in
writing by the Custodian and the Fund, assets of the Portfolios shall
be maintained in a clearing agency which acts as a securities
depository or in a book-entry system for the central handling of
securities located outside the United States (each a "Foreign
Securities System") only through arrangements implemented by the
foreign banking institutions serving as sub-custodians pursuant to the
terms hereof (Foreign Securities Systems and U.S. Securities Systems
are collectively referred to herein as the "Securities Systems"). Where
possible, such arrangements shall include entry into agreements
containing the provisions set forth in Section 3.5 hereof.

3.4 HOLDING SECURITIES. The Custodian may hold securities and other
non-cash property for all of its customers, including the Fund, with a
foreign sub-custodian in a single account that is identified as
belonging to the Custodian for the benefit of its customers, PROVIDED
HOWEVER, that (i) the records of the Custodian with respect to
securities and other non-cash property of the Fund which are maintained
in such account shall identify by book-entry those securities and other
non-cash property belonging to the Fund and (ii) the Custodian shall
require that

<PAGE>

securities and other non-cash property so held by the foreign
sub-custodian be held separately from any assets of the foreign
sub-custodian or of others.

3.5 AGREEMENTS WITH FOREIGN BANKING INSTITUTIONS. Each agreement with a
foreign banking institution shall provide that: (a) the assets of each
Portfolio will not be subject to any right, charge, security interest,
lien or claim of any kind in favor of the foreign banking institution
or its creditors or agent, except a claim of payment for their safe
custody or administration; (b) beneficial ownership for the assets of
each Portfolio will be freely transferable without the payment of money
or value other than for custody or administration; (c) adequate records
will be maintained identifying the assets as belonging to each
applicable Portfolio; (d) officers of or auditors employed by, or other
representatives of the Custodian, including to the extent permitted
under applicable law the independent public accountants for the Fund,
will be given access to the books and records of the foreign banking
institution relating to its actions under its agreement with the
Custodian; and (e) assets of the Portfolios held by the foreign
sub-custodian will be subject only to the instructions of the Custodian
or its agents.

3.6 ACCESS OF INDEPENDENT ACCOUNTANTS OF THE FUND. Upon request of the
Fund, the Custodian will use its best efforts to arrange for the
independent accountants of the Fund to be afforded access to the books
and records of any foreign banking institution employed as a foreign
sub-custodian insofar as such books and records relate to the
performance of such foreign banking institution under its agreement
with the Custodian.

3.7 REPORTS BY CUSTODIAN. The Custodian will supply to the Fund from time
to time, as mutually agreed upon, statements in respect of the
securities and other assets of the Portfolio(s) held by foreign
sub-custodians, including but not limited to an identification of
entities having possession of the Portfolio(s) securities and other
assets and advices or notifications of any transfers of securities to
or from each custodial account maintained by a foreign banking
institution for the Custodian on behalf of each applicable Portfolio
indicating, as to securities acquired for a Portfolio, the identity of
the entity having physical possession of such securities.

3.8 TRANSACTIONS IN FOREIGN CUSTODY ACCOUNT. (a) Except as otherwise
provided in paragraph (b) of this Section 3.8, the provision of
Sections 2.2 and 2.7 of this Contract shall apply, MUTATIS MUTANDIS to
the foreign securities of the Fund held outside the United States by
foreign sub-custodians.

(b) Notwithstanding any provision of this Contract to the contrary,
settlement and payment for securities received for the account of each
applicable Portfolio and delivery of securities maintained for the
account of each applicable Portfolio may be effected in accordance with
the customary established securities trading or securities processing
practices and procedures in the jurisdiction or market in which the
transaction occurs, including, without limitation, delivering
securities to the purchaser thereof or to a dealer therefor (or an
agent for such purchaser or dealer) against a receipt with the
expectation of receiving later payment for such securities from such
purchaser or dealer.

<PAGE>

(c) Securities maintained in the custody of a foreign sub-custodian may
be maintained in the name of such entity's nominee to the same extent
as set forth in Section 2.3 of this Contract, and the Fund agrees to
hold any such nominee harmless from any liability as a holder of record
of such securities.

3.9 LIABILITY OF FOREIGN SUB-CUSTODIANS. Each agreement pursuant to which
the Custodian employs a foreign banking institution as a foreign
sub-custodian shall require the institution to exercise reasonable care
in the performance of its duties and to indemnify, and hold harmless,
the Custodian and the Fund from and against any loss, damage, cost,
expense, liability or claim arising out of or in connection with the
institution's performance of such obligations. At the election of the
Fund, it shall be entitled to be subrogated to the rights of the
Custodian with respect to any claims against a foreign banking
institution as a consequence of any such loss, damage, cost, expense,
liability or claim if and to the extent that the Fund has not been made
whole for any such loss, damage, cost, expense, liability or claim.

3.10 LIABILITY OF CUSTODIAN. The Custodian shall be liable for the acts or
omissions of a foreign banking institution to the same extent as set
forth with respect to sub-custodians generally in this Contract and,
regardless of whether assets are maintained in the custody of a foreign
banking institution, a foreign securities depository or a branch of a
U.S. bank as contemplated by paragraph 3.13 hereof, the Custodian shall
not be liable for any loss, damage, cost, expense, liability or claim
resulting from nationalization, expropriation, currency restrictions,
or acts of war or terrorism or any loss where the sub-custodian has
otherwise exercised reasonable care.

3.11 REIMBURSEMENT FOR ADVANCES. If the Fund requires the Custodian to
advance cash or securities for any purpose for the benefit of a
Portfolio including the purchase or sale of foreign exchange or of
contracts for foreign exchange, or in the event that the Custodian or
its nominee shall incur or be assessed any taxes, charges, expenses,
assessments, claims or liabilities in connection with the performance
of this Contract, except such as may arise from its or its nominee's
own negligent action, negligent failure to act or willful misconduct,
any property at any time held for the account of the applicable
Portfolio shall be security therefor and should the Fund fail to repay
the Custodian promptly, the Custodian shall be entitled to utilize
available cash and to dispose of such Portfolio's assets to the extent
necessary to obtain reimbursement.

3.12 MONITORING RESPONSIBILITIES. The Custodian shall furnish annually to
the Fund, during the month of June, information concerning the foreign
sub-custodians employed by the Custodian. Such information shall be
similar in kind and scope to that furnished to the Fund in connection
with the initial approval of this Contract. In addition, the Custodian
will promptly inform the Fund in the event that the Custodian learns of
a material adverse change in the financial condition of a foreign
sub-custodian or any material loss of the assets of the Fund or in the
case of any foreign sub-custodian not the subject of an exemptive order
from the Securities and Exchange Commission is notified by such foreign

<PAGE>

sub-custodian that there appears to be a substantial likelihood that
its shareholders' equity will decline below $200 million (U.S. dollars
or the equivalent thereof) or that its shareholders' equity has
declined below $200 million (in each case computed in accordance with
generally accepted U.S. accounting principles).

3.13 BRANCHES OF U.S. BANKS. (a) Except as otherwise set forth in this
Contract, the provisions hereof shall not apply where the custody of
the Portfolios assets are maintained in a foreign branch of a banking
institution which is a "bank" as defined by Section 2(a)(5) of the
Investment Company Act of 1940 meeting the qualification set forth in
Section 26(a) of said Act. The appointment of any such branch as a
sub-custodian shall be governed by paragraph 1 of this Contract.

(b) Cash held for each Portfolio of the Fund in the United Kingdom
shall be maintained in an interest bearing account established for the
Fund with the Custodian's London branch, which account shall be subject
to the direction of the Custodian, State Street London Ltd. or both.

3.14 TAX LAW. The Custodian shall have no responsibility or liability for
any obligations now or hereafter imposed on the Fund or the Custodian
as custodian of the Fund by the tax law of the United States of America
or any state or political subdivision thereof. It shall be the
responsibility of the Fund to notify the Custodian of the obligations
imposed on the Fund or the Custodian as custodian of the Fund by the
tax law of jurisdictions other than those mentioned in the above
sentence, including responsibility for withholding and other taxes,
assessments or other governmental charges, certifications and
governmental reporting. The sole responsibility of the Custodian with
regard to such tax law shall be to use reasonable efforts to assist the
Fund with respect to any claim for exemption or refund under the tax
law of jurisdictions for which the Fund has provided such information.

4. PAYMENTS FOR SALES OR REPURCHASES OR REDEMPTIONS OF SHARES OF THE FUND

The Custodian shall receive from the distributor for the Shares or from
the Transfer Agent of the Fund and deposit into the account of the appropriate
Portfolio such payments as are received for Shares of that Portfolio issued or
sold from time to time by the Fund. The Custodian will provide timely
notification to the Fund on behalf of each such Portfolio and the Transfer Agent
of any receipt by it of payments for Shares of such Portfolio.

From such funds as may be available for the purpose but subject to the
limitations of the Agreement and Declaration of Trust and any applicable votes
of the Board of Trustees of the Fund pursuant thereto, the Custodian shall, upon
receipt of instructions from the Transfer Agent, make funds available for
payment to holders of Shares who have delivered to the Transfer Agent a request
for redemption or repurchase of their Shares. In connection with the redemption
or repurchase of Shares of a Portfolio, the Custodian is authorized upon receipt
of instructions from the Transfer Agent to wire funds to or through a commercial
bank designated by the redeeming shareholders. In connection with the redemption
or repurchase of Shares of the Fund, the Custodian shall honor checks drawn on
the Custodian by a holder of Shares, which checks have

<PAGE>

been furnished by the Fund to the holder of Shares, when presented to the
Custodian in accordance with such procedures and controls as are mutually
agreed upon from time to time between the Fund and the Custodian.

5. PROPER INSTRUCTIONS

Proper Instructions as used throughout this Contract means a writing
signed or initialed by one or more person or persons as the Board of Trustees
shall have from time to time authorized. Each such writing shall set forth
the specific transaction or type of transaction involved, including a
specific statement of the purpose for which such action is requested. Oral
instructions will be considered Proper Instructions if the Custodian
reasonably believes them to have been given by a person authorized to give
such instructions with respect to the transaction involved. The Fund shall
cause all oral instructions to be confirmed in writing. Proper Instructions
may include communications effected directly between electro-mechanical or
electronic devices; provided that the Fund has followed any security
procedures agreed to from time to time by Fund and the Custodian, including,
but not limited to, the security procedures selected by the Fund in the Funds
Transfer Addendum attached hereto. For purposes of this Section, Proper
Instructions shall include instructions received by the Custodian pursuant to
any three-party agreement which requires a segregated asset account in
accordance with Section 2.12.

6. ACTIONS PERMITTED WITHOUT EXPRESS AUTHORITY

The Custodian may in its discretion, without express authority from the
Fund on behalf of each applicable Portfolio:

1) make payments to itself or others for minor expenses of
handling securities or other similar items relating to its
duties under this Contract, PROVIDED that all such payments
shall be accounted for to the Fund on behalf of the Portfolio;

2) surrender securities in temporary form for securities in
definitive form;

3) endorse for collection, in the name of the Fund on behalf of
the Portfolio, checks, drafts and other negotiable
instruments; and

4) in general, attend to all non-discretionary details in
connection with the sale, exchange, substitution, purchase,
transfer and other dealings with the securities and property
of the Fund on behalf of the Portfolio except as otherwise
directed by the Board of Trustees of the Fund.

7. EVIDENCE OF AUTHORITY

The Custodian shall be protected in acting upon any instructions,
notice, request, consent, certificate or other instrument or paper believed by
it to be genuine and to have been properly executed by or on behalf of the Fund.
The Custodian may receive and accept a certified copy of a vote of the Board of
Trustees of the Fund as conclusive evidence (a) of the authority of any person

<PAGE>

to act in accordance with such vote or (b) of any determination or of any action
by the Board of Trustees pursuant to the Agreement and Declaration of Trust as
described in such vote, and such vote may be considered as in full force and
effect until receipt by the Custodian of written notice to the contrary.

8. DUTIES OF CUSTODIAN WITH RESPECT TO THE BOOKS OF ACCOUNT AND
CALCULATION OF NET ASSET VALUE AND NET INCOME

The Custodian shall cooperate with and supply necessary information to
the entity or entities appointed by the Board of Trustees of the Fund to keep
the books of account of each Portfolio and/or compute the net asset value per
Share of the outstanding Shares of each Portfolio or, if directed in writing to
do so by the Fund on behalf of the Portfolio, shall itself keep such books of
account and/or compute such net asset value per Share. If so directed, the
Custodian shall also calculate daily the net income of the Portfolio as
described in the Fund's currently effective prospectus related to such Portfolio
and shall advise the Fund and the Transfer Agent daily of the total amounts of
such net income and, if instructed in writing by an officer of the Fund to do
so, shall advise the Transfer Agent periodically of the division of such net
income among its various components. The calculations of the net asset value per
Share and the daily income of each Portfolio shall be made at the time or times
described from time to time in the Fund's currently effective prospectus related
to such Portfolio.

9. RECORDS

The Custodian shall with respect to each Portfolio create and maintain
all records relating to its activities and obligations under this Contract in
such manner as will meet the obligations of the Fund under the Investment
Company Act of 1940, with particular attention to Section 31 thereof and Rules
31a-1 and 31a-2 thereunder. All such records shall be the property of the Fund
and shall at all times during the regular business hours of the Custodian be
open for inspection by duly authorized officers, employees or agents of the Fund
and employees and agents of the Securities and Exchange Commission. The
Custodian shall, at the Fund's request, supply the Fund with a tabulation of
securities owned by each Portfolio and held by the Custodian and shall, when
requested to do so by the Fund and for such compensation as shall be agreed upon
between the Fund and the Custodian, include certificate numbers in such
tabulations.

10. OPINION OF FUND'S INDEPENDENT ACCOUNTANT

The Custodian shall take all reasonable action, as the Fund on behalf
of each applicable Portfolio may from time to time request, to obtain from year
to year favorable opinions from the Fund's independent accountants with respect
to its activities hereunder in connection with the preparation of the Fund's
Form N-1A, and Form N-SAR or other annual reports to the Securities and Exchange
Commission and with respect to any other requirements of such Commission.

<PAGE>

11. REPORTS TO FUND BY INDEPENDENT PUBLIC ACCOUNTANTS

The Custodian shall provide the Fund, on behalf of each of the
Portfolios at such times as the Fund may reasonably require, with reports by
independent public accountants on the accounting system, internal accounting
control and procedures for safeguarding securities, futures contracts and
options on futures contracts, including securities deposited and/or
maintained in a Securities System, relating to the services provided by the
Custodian under this Contract; such reports, shall be of sufficient scope and
in sufficient detail, as may reasonably be required by the Fund to provide
reasonable assurance that any material inadequacies would be disclosed by
such examination, and, if there are no such inadequacies, the reports shall
so state.

12. COMPENSATION OF CUSTODIAN

The Custodian shall be entitled to reasonable compensation for its
services and expenses as Custodian, as agreed upon from time to time between
the Fund on behalf of each applicable Portfolio and the Custodian.

13. RESPONSIBILITY OF CUSTODIAN

So long as and to the extent that it is in the exercise of
reasonable care, the Custodian shall not be responsible for the title,
validity or genuineness of any property or evidence of title thereto received
by it or delivered by it pursuant to this Contract and shall be held harmless
in acting upon any notice, request, consent, certificate or other instrument
reasonably believed by it to be genuine and to be signed by the proper party
or parties, including any futures commission merchant acting pursuant to the
terms of a three-party futures or options agreement. The Custodian shall be
held to the exercise of reasonable care in carrying out the provisions of
this Contract, but shall be kept indemnified by and shall be without
liability to the Fund for any action taken or omitted by it in good faith
without negligence. It shall be entitled to rely on and may act upon advice
of counsel (who may be counsel for the Fund) on all matters, and shall be
without liability for any action reasonably taken or omitted pursuant to such
advice.

Except as may arise from the Custodian's own negligence or willful
misconduct or the negligence or willful misconduct of a sub-custodian or
agent, the Custodian shall be without liability to the Fund for any loss,
liability, claim or expense resulting from or caused by; (i) events or
circumstances beyond the reasonable control of the Custodian or any
sub-custodian or Securities System or any agent or nominee of any of the
foregoing, including, without limitation, nationalization or expropriation,
imposition of currency controls or restrictions, the interruption, suspension
or restriction of trading on or the closure of any securities market, power
or other mechanical or technological failures or interruptions, computer
viruses or communications disruptions, acts of war or terrorism, riots,
revolutions, work stoppages, natural disasters or other similar events or
acts; (ii) errors by the Fund or the Investment Advisor in their instructions
to the Custodian provided such instructions have been in accordance with this
Contract; (iii) the insolvency of or acts or omissions by a Securities
System; (iv) any delay or failure of any broker, agent or intermediary,
central bank or other commercially prevalent payment or clearing system to
deliver to the Custodian's sub-custodian or agent securities purchased or in
the remittance or

<PAGE>

payment made in connection with securities sold; (v) any delay or failure of
any company, corporation, or other body in charge of registering or
transferring securities in the name of the Custodian, the Fund, the
Custodian's sub-custodians, nominees or agents or any consequential losses
arising out of such delay or failure to transfer such securities including
non-receipt of bonus, dividends and rights and other accretions or benefits;
(vi) delays or inability to perform its duties due to any disorder in market
infrastructure with respect to any particular security or Securities System;
and (vii) any provision of any present or future law or regulation or order
of the United States of America, or any state thereof, or any other country,
or political subdivision thereof or of any court of competent jurisdiction.

The Custodian shall be liable for the acts or omissions of a foreign
banking institution to the same extent as set forth with respect to
sub-custodians generally in this Contract.

If the Fund on behalf of a Portfolio requires the Custodian to take
any action with respect to securities, which action involves the payment of
money or which action may, in the opinion of the Custodian, result in the
Custodian or its nominee assigned to the Fund or the Portfolio being liable
for the payment of money or incurring liability of some other form, the Fund
on behalf of the Portfolio, as a prerequisite to requiring the Custodian to
take such action, shall provide indemnity to the Custodian in an amount and
form satisfactory to it.

If the Fund requires the Custodian, its affiliates, subsidiaries or
agents, to advance cash or securities for any purpose (including but not
limited to securities settlements, foreign exchange contracts and assumed
settlement) or in the event that the Custodian or its nominee shall incur or
be assessed any taxes, charges, expenses, assessments, claims or liabilities
in connection with the performance of this Contract, except such as may arise
from its or its nominee's own negligent action, negligent failure to act or
willful misconduct, any property at any time held for the account of the
applicable Portfolio shall be security therefor and should the Fund fail to
repay the Custodian promptly, the Custodian shall be entitled to utilize
available cash and to dispose of such Portfolio's assets to the extent
necessary to obtain reimbursement.

In no event shall the Custodian be liable for indirect, special or
consequential damages.

14. EFFECTIVE PERIOD, TERMINATION AND AMENDMENT

This Contract shall become effective as of its execution, shall
continue in full force and effect until terminated as hereinafter provided,
may be amended at any time by mutual agreement of the parties hereto and may
be terminated by either party by an instrument in writing delivered or
mailed, postage prepaid to the other party, such termination to take effect
not sooner than thirty (30) days after the date of such delivery or mailing;
PROVIDED, HOWEVER that the Fund shall not amend or terminate this Contract in
contravention of any applicable federal or state regulations, or any
provision of the Agreement and Declaration of Trust, and further provided,
that the Fund on behalf of one or more of the Portfolios may at any time by
action of its Board of Trustees (i) substitute another bank or trust company
for the Custodian by giving notice as described above to the Custodian, or
(ii) immediately terminate this Contract in the event of the appointment of a
conservator or receiver for the Custodian by the Comptroller of the Currency
or upon the happening of a like event at the direction of an appropriate
regulatory agency or court of competent jurisdiction.

<PAGE>

Upon termination of the Contract, the Fund on behalf of each
applicable Portfolio shall pay to the Custodian such compensation as may be
due as of the date of such termination and shall likewise reimburse the
Custodian for its costs, expenses and disbursements.

15. NOTICES

Except as otherwise provided under this Contract, notices and other
writings shall be delivered or mailed postage prepaid to:

If to the Fund: State Street Research Institutional Funds
One Financial Center
Boston, Massachusetts 02111
Attention: Joseph W. Canavan

If to the Custodian: State Street Bank and Trust Company
One Heritage Drive/JPB4N
North Quincy, Massachusetts 02171
Attention: Timothy J. Panaro

or to such other address as the parties may hereafter specify in writing and
any notice or other writing when mailed shall be deemed to have been received
on the fifth business day after it was mailed.

Telephone and facsimile notices shall be sufficient if communicated
to the party entitled to receive such notice at the following numbers:

If to the Fund:

Telephone: (617) 357-1326 Facsimile: (617) 357-7426

If to the Custodian:

Telephone: (617) 985-4513 Facsimile: (617) 985-5271

or to such other numbers as the parties may specify by written notice under
this Section and any facsimile notice shall be deemed to have been received
on the date of its transmission provided that if such day is not a business
day or it is received after normal business hours on the day of its
transmission, it shall be deemed to have been received at the opening of
business on the first business day next following the transmission thereof.

<PAGE>

16. SUCCESSOR CUSTODIAN

If a successor custodian for the Fund, of one or more of the
Portfolios shall be appointed by the Board of Trustees of the Fund, the
Custodian shall, upon termination, deliver to such successor custodian at the
office of the Custodian, duly endorsed and in the form for transfer, all
securities and other assets of each applicable Portfolio then held by it
hereunder and shall transfer to an account of the successor custodian all of
the securities and other assets of each such Portfolio held in a Securities
System.

If no such successor custodian shall be appointed, the Custodian
shall, in like manner, upon receipt of a certified copy of a vote of the
Board of Trustees of the Fund, deliver at the office of the Custodian and
transfer such securities, funds and other properties in accordance with such
vote.

In the event that no written order designating a successor custodian
or certified copy of a vote of the Board of Trustees shall have been
delivered to the Custodian on or before the date when such termination shall
become effective, then the Custodian shall have the right to deliver to a
bank or trust company, which is a "bank" as defined in the Investment Company
Act of 1940, doing business in Boston, Massachusetts, of its own selection,
having an aggregate capital, surplus, and undivided profits, as shown by its
last published report, of not less than $25,000,000, all securities, funds
and other properties held by the Custodian on behalf of each applicable
Portfolio and all instruments held by the Custodian relative thereto and all
other property held by it under this Contract on behalf of each applicable
Portfolio and to transfer to an account of such successor custodian all of
the securities of each such Portfolio held in any Securities System.
Thereafter, such bank or trust company shall be the successor of the
Custodian under this Contract.

In the event that securities, funds and other properties remain in
the possession of the Custodian after the date of termination hereof owing to
failure of the Fund to procure the certified copy of the vote referred to or
of the Board of Trustees to appoint a successor custodian, the Custodian
shall be entitled to fair compensation for its services during such period as
the Custodian retains possession of such securities, funds and other
properties and the provisions of this Contract relating to the duties and
obligations of the Custodian shall remain in full force and effect.

17. INTERPRETIVE AND ADDITIONAL PROVISIONS

In connection with the operation of this Contract, the Custodian and
the Fund on behalf of each of the Portfolios, may from time to time agree on
such provisions interpretive of or in addition to the provisions of this
Contract as may in their joint opinion be consistent with the general tenor
of this Contract. Any such interpretive or additional provisions shall be in
a writing signed by both parties and shall be annexed hereto, PROVIDED that
no such interpretive or additional provisions shall contravene any applicable
federal or state regulations or any provision of the Agreement and
Declaration of Trust of the Fund. No interpretive or additional provisions
made as provided in the preceding sentence shall be deemed to be an amendment
of this Contract.

<PAGE>

18. ADDITIONAL FUNDS

In the event that the Fund establishes one or more series of Shares
in addition to the State Street Research Core Fixed Income Fund, the State
Street Research Core Plus Fixed Income Fund, the State Street Research Core
Large Cap Growth Fund and the State Street Research Large Cap Growth Fund
with respect to which it desires to have the Custodian render services as
custodian under the terms hereof, it shall so notify the Custodian in
writing, and if the Custodian agrees in writing to provide such services,
such series of Shares shall become a Portfolio hereunder.

19. MASSACHUSETTS LAW TO APPLY

This Contract shall be construed and the provisions thereof
interpreted under and in accordance with laws of The Commonwealth of
Massachusetts.

20. PRIOR CONTRACTS

This Contract supersedes and terminates, as of the date hereof, all
prior contracts between the Fund on behalf of each of the Portfolios and the
Custodian relating to the custody of the Fund's assets.

21. COUNTERPARTS

This Contract may be executed in several counterparts, each of which
shall be deemed to be an original, and all such counterparts taken together
shall constitute but one and the same Contract.

22. REPRODUCTION OF DOCUMENTS

This Contract and all schedules, exhibits, attachments and
amendments hereto may be reproduced by any photographic, photostatic,
microfilm, micro-card, miniature photographic or other similar process. The
parties hereto all/each agree that any such reproduction shall be admissible
in evidence as the original itself in any judicial or administrative
proceeding, whether or not the original is in existence and whether or not
such reproduction was made by a party in the regular course of business, and
that any enlargement, facsimile or further reproduction of such reproduction
shall likewise be admissible in evidence.

23. SHAREHOLDER COMMUNICATIONS ELECTION

Securities and Exchange Commission Rule 14b-2 requires banks which
hold securities for the account of customers to respond to requests by
issuers of securities for the names, addresses and holdings of beneficial
owners of securities of that issuer held by the bank unless the beneficial
owner has expressly objected to disclosure of this information. In order to
comply with the rule, the Custodian needs the Fund to indicate whether it
authorizes the Custodian to provide the Fund's name, address, and share
position to requesting companies whose securities the Fund owns. If the Fund
tells the Custodian "no", the Custodian will not provide this information to
requesting

<PAGE>

companies. If the Fund tells the Custodian "yes" or does not check either
"yes" or "no" below, the Custodian is required by the rule to treat the Fund
as consenting to disclosure of this information for all securities owned by
the Fund or any funds or accounts established by the Fund. For the Fund's
protection, the Rule prohibits the requesting company from using the Fund's
name and address for any purpose other than corporate communications. Please
indicate below whether the Fund consents or objects by checking one of the
alternatives below.

YES [ ] The Custodian is authorized to release the Fund's name,
address, and share positions.

NO [X] The Custodian is not authorized to release the Fund's name,
address, and share positions.

24. LIMITATIONS OF LIABILITY OF TRUSTEES AND SHAREHOLDERS

The Agreement and Declaration of Trust as the same may be amended
from time to time is on file with the Secretary of State of the Commonwealth
of Massachusetts. It is expressly agreed that the execution and delivery of
this Contract and the obligations of the Fund hereunder shall not be binding
upon any of the Trustees, shareholders, nominees, officers, agents or
employees of the Fund as individuals or personally, but shall bind only the
property of the Fund. This Contract shall not be deemed to have been made
individually or to impose any personal liability, but shall bind only the
trust property of the Fund. The Agreement and Declaration of Trust provides,
and it is expressly agreed, that each series of the Fund shall be solely and
exclusively responsible for the payments of its debts, liabilities and
obligations, and that no other series shall be responsible for the same.

<PAGE>

IN WITNESS WHEREOF, each of the parties has caused this instrument
to be executed in its name and behalf by its duly authorized representative
and its seal to be hereunder affixed as of the 1st day of July, 1999.

ATTEST STATE STREET RESEARCH INSTITUTIONAL FUNDS

/s/ Mara D. Calame By: /s/ Gerard P. Maus
- -------------------- -----------------------------------------
Mara D. Calame Name: Gerard P. Maus
VP & Counsel Its: Executive Vice President, Treasurer,
Chief Financial Officer and Chief
Administrative Officer

ATTEST STATE STREET BANK AND TRUST COMPANY

/s/ Marc L. Parsons By: /s/ Ronald E. Logue
- -------------------- --------------------------------------
Marc L. Parsons Name: Ronald E. Logue
Associate Counsel Its: Vice Chairman

<PAGE>

DATA ACCESS SERVICES ADDENDUM TO CUSTODIAN AGREEMENT
----------------------------------------------------

AGREEMENT between each fund listed on Appendix A, (individually a "Fund"
and collectively, the "Funds") as amended from time to time, and State Street
Bank and Trust Company ("State Street").

PREAMBLE

WHEREAS, State Street has been appointed as custodian of certain assets
of each Fund pursuant to a certain Custodian Agreement (the "Custodian
Agreement") for each of the respective Funds;

WHEREAS, State Street has developed and utilizes proprietary accounting
and other systems, including State Street's proprietary Multicurrency HORIZON(R)
Accounting System, in its role as custodian of each Fund, and maintains certain
Fund-related data ("Fund Data") in databases under the control and ownership of
State Street (the "Data Access Services"); and

WHEREAS, State Street makes available to each Fund certain Data Access
Services solely for the benefit of the Fund, and intends to provide additional
services, consistent with the terms and conditions of this Agreement.

NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, and for other good and valuable consideration, the parties
agree as follows:

1. SYSTEM AND DATA ACCESS SERVICES

a. System. Subject to the terms and conditions of this Agreement, State
Street hereby agrees to provide each Fund with access to State Street's
Multicurrency HORIZON(R) Accounting System and the other information systems
(collectively, the "System") as described in Attachment A, on a remote basis for
the purpose of obtaining reports, solely on computer hardware, system software
and telecommunication links, as listed in Attachment B (the "Designated
Configuration") of the Fund, or certain third parties approved by State Street
that serve as investment advisors or investment managers (the "Investment
Advisor") or independent auditors (the "Independent Auditors") of a Fund and
solely with respect to the Fund or on any designated substitute or back-up
equipment configuration with State Street's written consent, such consent not to
be unreasonably withheld.

b. Data Access Services. State Street agrees to make available to each
Fund the Data Access Services subject to the terms and conditions of this
Agreement and data access operating standards and procedures as may be issued by
State Street from time to time. The ability of each Fund to originate electronic
instructions to State Street on behalf of each Fund in order to (i) effect the
transfer or movement of cash or securities held under custody by State Street or
(ii) transmit accounting or other information (such transactions are referred to
herein as "Client

<PAGE>

Originated Electronic Financial Instructions"), and (iii) access data for the
purpose of reporting and analysis, shall be deemed to be Data Access Services
for purposes of this Agreement.

c. Additional Services. State Street may from time to time agree to make
available to a Fund additional Systems that are not described in the attachments
to this Agreement. In the absence of any other written agreement concerning such
additional systems, the term "System" shall include, and this Agreement shall
govern, a Fund's access to and use of any additional System made available by
State Street and/or accessed by the Fund.

2. NO USE OF THIRD PARTY SOFTWARE

State Street and each Fund acknowledge that in connection with the Data
Access Services provided under this Agreement, each Fund will have access,
through the Data Access Services, to Fund Data and to functions of State
Street's proprietary systems; provided, however that in no event will the Fund
have direct access to any third party systems-level software that retrieves data
for, stores data from, or otherwise supports the System.

3 . LIMITATION ON SCOPE OF USE

a. Designated Equipment: Designated Location. The System and the
Data Access Services shall be used and accessed solely on and through
the Designated Configuration at the offices of a Fund or the Investment
Advisor or Independent Auditor located in Boston, Massachusetts
("Designated Location").

b. Designated Configuration: Trained Personnel. State Street shall be
responsible for supplying, installing and maintaining the Designated
Configuration at the Designated Location. State Street and each Fund agree that
each will engage or retain the services of trained personnel to enable both
State Street and the Fund to perform their respective obligations under this
Agreement. State Street agrees to use commercially reasonable efforts to
maintain the System so that it remains serviceable, provided, however, that
State Street does not guarantee or assure uninterrupted remote access use of the
System.

c. Scope of Use. Each Fund will use the System and the Data Access
Services only for the processing of securities transactions, the keeping of
books of account for the Fund and accessing data for purposes of reporting and
analysis. Each Fund shall not, and shall cause its employees and agents not to
(i) permit any third party to use the System or the Data Access Services, (ii)
sell, rent, license or otherwise use the System or the Data Access Services in
the operation of a service bureau or for any purpose other than as expressly
authorized under this Agreement, (iii) use the System or the Data Access
Services for any fund, trust or other investment vehicle without the prior
written consent of State Street, (iv) allow access to the System or the Data
Access Services through terminals or any other computer or telecommunications
facilities located outside the Designated Locations, (v) allow or cause any
information (other than portfolio holdings, valuations of portfolio holdings,
and other information reasonably necessary for the management or distribution of
the assets of the Fund) transmitted from State Street's databases, including
data from third party sources, available through use of the

2
<PAGE>

System or the Data Access Services to be redistributed or retransmitted to
another computer, terminal or other device for other than use for or on behalf
of the Fund or (vi) modify the System in any way, including without limitation,
developing any software for or attaching any devices or computer programs to any
equipment, system, software or database which forms a part of or is resident on
the Designated Configuration.

d. Other Locations. Except in the event of an emergency or of a planned
System shutdown, each Fund's access to services performed by the System or to
Data Access Services at the Designated Location may be transferred to a
different location only upon the prior written consent of State Street. In the
event of an emergency or System shutdown, each Fund may use any back-up site
included in the Designated Configuration or any other back-up site agreed to by
State Street, which agreement will not be unreasonably withheld. Each Fund may
secure from State Street the right to access the System or the Data Access
Services through computer and telecommunications facilities or devices complying
with the Designated Configuration at additional locations only upon the prior
written consent of State Street and on terms to be mutually agreed upon by the
parties.

e. Title. Title and all ownership and proprietary rights to the System,
including any enhancements or modifications thereto, whether or not made by
State Street, are and shall remain with State Street.

f. No Modification. Without the prior written consent of State Street, a
Fund shall not modify, enhance or otherwise create derivative works based upon
the System, nor shall the Fund reverse engineer, decompile or otherwise attempt
to secure the source code for all or any part of the System.

g. Security Procedures. Each Fund shall comply with data access operating
standards and procedures and with user identification or other password control
requirements and other security procedures as may be issued from time to time by
State Street for use of the System on a remote basis and to access the Data
Access Services. Each Fund shall have access only to the Fund Data and
authorized transactions agreed upon from time to time by State Street and, upon
notice from State Street, the Fund shall discontinue remote use of the System
and access to Data Access Services for any security reasons cited by State
Street; provided, that, in such event, State Street shall, for a period not less
than 180 days (or such other shorter period specified by the Fund) after such
discontinuance, assume responsibility to provide accounting services under the
terms of the Custodian Agreement.

h. Inspections. State Street shall have the right to inspect the use of
the System and the Data Access Services by the Fund and the Investment Advisor
to ensure compliance with this Agreement. The on-site inspections shall be upon
prior written notice to Fund and the Investment Advisor and at reasonably
convenient times and frequencies so as not to result in an unreasonable
disruption of the Fund's or the Investment Advisor's business.

3
<PAGE>

4. PROPRIETARY INFORMATION

a. Proprietary Information. Each Fund acknowledges and State Street
represents that the System and the databases, computer programs, screen formats,
report formats, interactive design techniques, documentation and other
information made available to the Fund by State Street as part of the Data
Access Services and through the use of the System constitute copyrighted, trade
secret, or other proprietary information of substantial value to State Street.
Any and all such information provided by State Street to each Fund shall be
deemed proprietary and confidential information of State Street (hereinafter
"Proprietary Information"). Each Fund agrees that it will hold such Proprietary
Information in confidence and secure and protect it in a manner consistent with
its own procedures for the protection of its own confidential information and to
take appropriate action by instruction or agreement with its employees who are
permitted access to the Proprietary Information to satisfy its obligations
hereunder. Each Fund further acknowledges that State Street shall not be
required to provide the Investment Advisor or the Investment Auditor with access
to the System unless it has first received from the Investment Advisor of the
Investment Auditor an undertaking with respect to State Street's Proprietary
Information in the form of Attachment C and/or Attachment C-1 to this Agreement.
Each Fund shall use all commercially reasonable efforts to assist State Street
in identifying and preventing any unauthorized use, copying or disclosure of the
Proprietary Information or any portions thereof or any of the logic, formats or
designs contained therein.

b. Cooperation. Without limitation of the foregoing, each Fund shall
advise State Street immediately in the event the Fund learns or has reason to
believe that any person to whom the Fund has given access to the Proprietary
Information, or any portion thereof, has violated or intends to violate the
terms of this Agreement, and each Fund will, at its expense, co-operate with
State Street in seeking injunctive or other equitable relief in the name of the
Fund or State Street against any such person.

c. Injunctive Relief. Each Fund acknowledges that the disclosure of any
Proprietary Information, or of any information which at law or equity ought to
remain confidential, will immediately give rise to continuing irreparable injury
to State Street inadequately, compensable in damages at law. In addition, State
Street shall be entitled to obtain immediate injunctive relief against the
breach or threatened breach of any of the foregoing undertakings, in addition to
any other legal remedies which may be available.

d. Survival. The provisions of this Section 4 shall survive the
termination of this Agreement.

5. LIMITATION ON LIABILITY

a. Limitation on Amount and Time for Bringing Action. Each Fund agrees
any liability of State Street to the Fund or any third party arising out of
State Street's provision of Data Access Services or the System under this
Agreement shall be limited to the amount paid by the Fund for the preceding 24
months for such services. In no event shall State Street be liable to the Fund
or any other party for any special, indirect, punitive or consequential damages
even if

4
<PAGE>

advised of the possibility of such damages. No action, regardless of form,
arising out of this Agreement may be brought by the Fund more than two years
after the Fund has knowledge that the cause of action has arisen.

b. NO OTHER WARRANTIES, WHETHER EXPRESS OR IMPLIED, INCLUDING, WITHOUT
LIMITATION, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A
PARTICULAR PURPOSE, ARE MADE BY STATE STREET. IN NO EVENT WILL STATE STREET BE
LIABLE TO THE FUND OR ANY OTHER PARTY FOR ANY CONSEQUENTIAL OR INCIDENTAL
DAMAGES WHICH MAY ARISE FROM THE FUND'S ACCESS TO THE SYSTEM OR USE OF
INFORMATION OBTAINED THEREBY.

c. Third-Party Data. Organizations from which State Street may obtain
certain data included in the System or the Data Access Services are solely
responsible for the contents of such data, and State Street shall have no
liability for claims arising out of the contents of such third-party data,
including, but not limited to, the accuracy thereof.

d. Regulatory Requirements. As between State Street and each Fund, the
Fund shall be solely responsible for the accuracy of any accounting statements
or reports produced using the Data Access Services and the System and the
conformity thereof with any requirements of law.

e. Force Majeure. Neither State Street or a Fund shall be liable for any
costs or damages due to delay or nonperformance under this Agreement arising out
of any cause or event beyond such party's control, including without limitation,
cessation of services hereunder or any damages resulting therefrom to the other
party, or the Fund as a result of work stoppage, power or other mechanical
failure, computer virus, natural disaster, governmental action, or communication
disruption.

6. INDEMNIFICATION

Each Fund agrees to indemnify and hold State Street harmless from any
loss, damage or expense including reasonable attorney's fees, (a "loss")
suffered by State Street arising from (i) the negligence or willful misconduct
in the use by the Fund of the Data Access Services or the System, including any
loss incurred by State Street resulting from a security breach at the Designated
Location or committed by the Fund's employees or agents or the Investment
Advisor or the Independent Auditor of the Fund and (ii) any loss resulting from
incorrect Client Originated Electronic Financial Instructions. State Street
shall be entitled to rely on the validity and authenticity of Client Originated
Electronic Financial Instructions without undertaking any further inquiry as
long as such instruction is undertaken in conformity with security procedures
established by State Street from time to time.

7. FEES

Fees and charges for the use of the System and the Data Access Services
and related payment terms shall be as set forth in the Custody Fee Schedule in
effect from time to time

5
<PAGE>

between the parties (the "Fee Schedule"). Any tariffs, duties or taxes imposed
or levied by any government or governmental agency by reason of the transactions
contemplated by this Agreement, including, without limitation, federal, state
and local taxes, use, value added and personal property taxes (other than
income, franchise or similar taxes which may be imposed or assessed against
State Street) shall be borne by each Fund. Any claimed exemption from such
tariffs, duties or taxes shall be supported by proper documentary evidence
delivered to State Street.

8. TRAINING, IMPLEMENTATION AND CONVERSION

a. Training. State Street agrees to provide training, at a designated
State Street training facility or at the Designated Location, to the Fund's
personnel in connection with the use of the System on the Designated
Configuration. Each Fund agrees that it will set aside, during regular business
hours or at other times agreed upon by both parties, sufficient time to enable
all operators of the System and the Data Access Services, designated by the
Fund, to receive the training offered by State Street pursuant to this
Agreement.

b. Installation and Conversion. State Street shall be responsible for the
technical installation and conversion ("Installation and Conversion") of the
Designated Configuration. Each Fund shall have the following responsibilities in
connection with Installation and Conversion of the System:

(i) The Fund shall be solely responsible for the timely acquisition and
maintenance of the hardware and software that attach to the
Designated Configuration in order to use the Data Access Services
at the Designated Location.

(ii) State Street and the Fund each agree that they will assign
qualified personnel to actively participate during the Installation
and Conversion phase of the System implementation to enable both
parties to perform their respective obligations under this
Agreement.

9. SUPPORT

During the term of this Agreement, State Street agrees to provide the
support services set out in Attachment D to this Agreement.

6
<PAGE>

10. TERM OF AGREEMENT

a. Term of Agreement. This Agreement shall become effective on the date
of its execution by State Street and shall remain in full force and effect until
terminated as herein provided.

b. Termination of Agreement. Any party may terminate this Agreement (i)
for any reason by giving the other parties at least one-hundred and eighty days'
prior written notice in the case of notice of termination by State Street to the
Fund or thirty days' notice in the case of notice from the Fund to State Street
of termination; or (ii) immediately for failure of the other party to comply
with any material term and condition of the Agreement by giving the other party
written notice of termination. In the event the Fund shall cease doing business,
shall become subject to proceedings under the bankruptcy laws (other than a
petition for reorganization or similar proceeding) or shall be adjudicated
bankrupt, this Agreement and the rights granted hereunder shall, at the option
of State Street, immediately terminate with notice to the Fund. Termination of
this Agreement with respect to any given Fund shall in no way affect the
continued validity of this Agreement with respect to any other Fund. This
Agreement shall in any event terminate as to any Fund within 90 days after the
termination of the Custodian Agreement applicable to such Fund.

c. Termination of the Right to Use. Upon termination of this Agreement
for any reason, any right to use the System and access to the Data Access
Services shall terminate and the Fund shall immediately cease use of the System
and the Data Access Services. Immediately upon termination of this Agreement for
any reason, the Fund shall return to State Street all copies of documentation
and other Proprietary Information in its possession; provided, however, that in
the event that either State Street or the Fund terminates this Agreement or the
Custodian Agreement for any reason other than the Fund's breach, State Street
shall provide the Data Access Services for a period of time and at a price to be
agreed upon by State Street and the Fund.

11. MISCELLANEOUS

a. Assignment; Successors. This Agreement and the rights and obligations
of each Fund and State Street hereunder shall not be assigned by any party
without the prior written consent of the other parties, except that State Street
may assign this Agreement to a successor of all or a substantial portion of its
business, or to a party controlling, controlled by, or under common control with
State Street.

b. Survival. All provisions regarding indemnification, warranty,
liability and limits thereon, and confidentiality and/or protection of
proprietary rights and trade secrets shall survive the termination of this
Agreement.

c. Entire Agreement. This Agreement and the attachments hereto constitute
the entire understanding of the parties hereto with respect to the Data Access
Services and the use of the System and supersedes any and all prior or
contemporaneous representations or agreements, whether oral or written, between
the parties as such may relate to the Data Access Services or the System, and
cannot be modified or altered except in a writing duly executed by the parties.
This

7
<PAGE>

Agreement is not intended to supersede or modify the duties and liabilities of
the parties hereto under the Custodian Agreement or any other agreement between
the parties hereto except to the extent that any such agreement specifically
refers to the Data Access Services or the System. No single waiver or any right
hereunder shall be deemed to be a continuing waiver.

d. Severability. If any provision or provisions of this Agreement shall
be held to be invalid, unlawful, or unenforceable, the validity, legality, and
enforceability of the remaining provisions shall not in any way be affected or
impaired.

e. Governing Law. This Agreement shall be interpreted and construed in
accordance with the internal laws of The Commonwealth of Massachusetts without
regard to the conflict of laws provisions thereof.

8
<PAGE>

IN WITNESS WHEREOF, each of the undersigned Funds severally has
caused this Agreement to be duly executed in its name and through its duly
authorized officer as of the date hereof.

STATE STREET BANK AND TRUST
COMPANY

By: /s/ Ronald E. Logue
------------------------------------

Title: Executive Vice President
------------------------------------

Date:
------------------------------------

EACH FUND LISTED ON APPENDIX A

By: /s/ Joseph W. Canavan
-----------------------------------

Title: Senior Vice President
-----------------------------------

Date: June 5, 1998
-----------------------------------
<PAGE>

APPENDIX A

Funds (each a series of investment company named in bold)
- -----

State Street Research Capital Trust
State Street Research Capital Fund
State Street Research Emerging Growth Fund
(formerly: State Street Research Small Capitalization Growth
Fund)
State Street Research Aurora Fund
(formerly: State Street Research Small Capitalization Value Fund)

State Street Research Equity Trust
State Street Research Equity Investment Fund
State Street Research Alpha Fund
(formerly: State Street Research Equity Income Fund)
State Street Research Global Resources Fund
State Street Research Athletes Fund

State Street Research Exchange Trust
State Street Research Exchange Fund

State Street Research Financial Trust
State Street Research Government Income Fund
State Street Research Strategic Portfolios: Aggressive
State Street Research Strategic Portfolios: Conservative
State Street Research Strategic Portfolios: Moderate

State Street Research Growth Trust
State Street Research Growth Fund

State Street Research Income Trust
State Street Research High Income Fund
State Street Research Managed Assets

State Street Research Master Investment Trust
State Street Research Investment Trust

State Street Research Money Market Trust
State Street Research Money Market Fund

State Street Research Tax-Exempt Trust
State Street Research Tax-Exempt Fund
State Street Research New York Tax-Free Fund

State Street Research Securities Trust
State Street Research Intermediate Bond Fund
State Street Research Strategic Income Fund
State Street Research Legacy Fund
State Street Research Galileo Fund

State Street Research Portfolios, Inc.

State Street Research International Equity Fund

Ap. A-1
<PAGE>

Status of Funds Covered By This Agreement
- -----------------------------------------

(a) Each Fund shall be regarded for all purposes as separate from any of the
other Funds. Each Fund shall be responsible for only its own transactions.
No Fund shall participate in, or effect any transaction in connection with,
any joint enterprise or other joint arrangement or profit-sharing plan.

(b) The use of this single document to memorialize the separate arrangements
under the Agreement for each of the Funds is understood to be for clerical
convenience only and shall not constitute any basis for joining the Funds
in any respect.

(c) Each trust listed above is a Massachusetts business trust. The Master Trust
Agreement of each Massachusetts business trust of which a Fund is a series,
as the same may be amended from time to time, is on file with the Secretary
of State for the Commonwealth of Massachusetts. It is expressly agreed that
the execution and delivery of this Agreement and the obligations of each
trust hereunder shall not be binding upon any of the trustees,
shareholders, nominees, officers, agents or employees of the relevant
trust as individuals, or personally, but shall bind only the trust property
of the trust. The Master Trust Agreement of each trust provides, and it is
expressly agreed, that each Fund of the trust shall be solely and
exclusively responsible for the payment of its debts, liabilities and
obligations, and that no other Funds shall be responsible for same.

Ap. A-2
<PAGE>

ATTACHMENT A

Multicurrency HORIZON(R) Accounting System
System Product Description

I. The Multicurrency HORIZON(R) Accounting System is designed to provide lot
level portfolio and general ledger accounting for SEC and ERISA type
requirements and includes the following services: 1) recording of general ledger
entries; 2) calculation of daily income and expense; 3) reconciliation of daily
activity with the trial balance, and 4) appropriate automated feeding mechanisms
to (i) domestic and international settlement systems, (ii) daily, weekly and
monthly evaluation services, (iii) portfolio performance and analytic services,
(iv) Fund's internal computing systems and (v) various State Street provided
information services products.

II. GlobalQuest(R) GlobalQuest(R) is designed to provide Fund access to the
following information maintained on The Multicurrency HORIZON(R)
Accounting System: 1) cash transactions and balances; 2) purchases and
sales; 3) income receivables; 4) tax refund receivables; 5) daily
priced positions; 6) open trades; 7) settlement status; 8) foreign
exchange transactions; 9) trade history; and 10) daily, weekly and
monthly evaluation services.

III. HORIZON(R) Gateway. HORIZON(R) Gateway provides customers with the ability
to (i) generate reports using information maintained on the Multicurrency
HORIZON(R) Accounting System which may be viewed or printed at the customer's
location; (ii) extract and download data from the Multicurrency HORIZON(R)
Accounting System; and (iii) access previous day and historical data. The
following information which may be accessed for these purposes: 1) holdings; 2)
holdings pricing; 3) transactions, 4) open trades; 5) income; 6) general ledger
and 7) cash.

IV. SaFiRe(SM). SaFiRe(SM) is designed to provide the customer with the ability
to prepare its own financial reports by permitting the customer to access
customer information maintained on the Multicurrency HORIZON(R) Accounting
System, to organize such information in a flexible reporting format and to have
such reports printed on the customer's desktop or by its printing provider.

V. State Street Interchange. State Street Interchange is an open information
delivery architecture wherein proprietary communication products, data formats
and workstation tools are replaced by industry standards and is designed to
enable the connection of State Street's network to customer networks, thereby
facilitating the sharing of information. <PAGE>

ATTACHMENT B
Designated Configuration

[Designated Configuration Graphic]
<PAGE>

ATTACHMENT C

Undertaking

The undersigned understands that in the course of its employment as
Investment Advisor to each fund listed on Appendix A (individually a, "Fund",
collectively, the "Funds") it will have access to State Street Bank and Trust
Company's ("State Street") Multicurrency HORIZON Accounting System and other
information systems (collectively, the "System").

The undersigned acknowledges that the System and the databases, computer
programs, screen formats, report formats, interactive design techniques,
documentation, and other information made available to the Undersigned by State
Street as part of the Data Access Services provided to the Fund and through the
use of the System constitute copyrighted, trade secret, or other proprietary
information of substantial value to State Street. Any and all such information
provided by State Street to the Undersigned shall be deemed proprietary and
confidential information of State Street (hereinafter "Proprietary
Information"). The Undersigned agrees that it will hold such Proprietary
Information in confidence and secure and protect it in a manner consistent with
its own procedures for the protection of its own confidential information and to
take appropriate action by instruction or agreement with its employees who are
permitted access to the Proprietary Information to satisfy its obligations
hereunder.

The Undersigned will not attempt to intercept data, gain access to data
in transmission, or attempt entry into any system or files for which it is not
authorized. It will not intentionally adversely affect the integrity of the
System through the introduction of unauthorized code or data, or through
unauthorized deletion.

Upon notice by State Street for any reason, any right to use the System
and access to the Data Access Services shall terminate and the Undersigned shall
immediately cease use of the System and the Data Access Services. Immediately
upon notice by State Street for any reason, the Undersigned shall return to
State Street all copies of documentation and other Proprietary Information in
its possession.

STATE STREET RESEARCH &
MANAGEMENT COMPANY

By: /s/ Darman A. Wing
---------------------------------------

Title: Senior Vice President
---------------------------------------

Date: June 4, 1998
---------------------------------------
<PAGE>

ATTACHMENT D
Support

During the term of this Agreement, State Street agrees to provide the
following on-going support services:

a. Telephone Support. The Fund Designated Persons may contact State
Street's HORIZON(R) Help Desk and Fund Assistance Center between the hours of 8
a.m. and 6 p.m. (Eastern time) on all business days for the purpose of obtaining
answers to questions about the use of the System, or to report apparent problems
with the System. From time to time, the Fund shall provide to State Street a
list of persons, not to exceed five in number, who shall be permitted to contact
State Street for assistance (such persons being referred to as "the Fund
Designated Persons").

b. Technical Support. State Street will provide technical support to
assist the Fund in using the System and the Data Access Services. The total
amount of technical support provided by State Street shall not exceed 10
resource days per year. State Street shall provide such additional technical
support as is expressly set forth in the fee schedule in effect from time to
time between the parties (the "Fee Schedule"). Technical support, including
during installation and testing, is subject to the fees and other terms set
forth in the Fee Schedule.

c. Maintenance Support. State Street shall use commercially reasonable
efforts to correct system functions that do not work according to the System
Product Description as set forth on Attachment A in priority order in the next
scheduled delivery release or otherwise as soon as is practicable.

d. System Enhancements. State Street will provide to the Fund any
enhancements to the System developed by State Street and made a part of the
System; provided that, sixty (60) days prior to installing any such enhancement,
State Street shall notify the Fund and shall offer the Fund reasonable training
on the enhancement. Charges for system enhancements shall be as provided in the
Fee Schedule. State Street retains the right to charge for related systems or
products that may be developed and separately made available for use other than
through the System.

e. Custom Modifications. In the event the Fund desires custom
modifications in connection with its use of the System, the Fund shall make a
written request to State Street providing specifications for the desired
modification. Any custom modifications may be undertaken by State Street in its
sole discretion in accordance with the Fee Schedule.

f. Limitation on Support. State Street shall have no obligation to
support the Fund's use of the System: (1) for use on any computer equipment or
telecommunication facilities which does not conform to the Designated
Configuration or (ii) in the event the Fund has modified the System in breach of
this Agreement.

<PAGE>

State Street Research Institutional Funds
One Financial Center
Boston, MA 02111

June 30, 1999

State Street Bank and Trust Company
1776 Heritage Drive
North Quincy, MA 02171

Re: State Street Research Institutional Funds

Gentlemen:

Each fund listed on Appendix A attached hereto (each, a "Fund" and collectively,
the "Funds") hereby requests that Appendix A to the Data Access Services
Addendum to Custodian Agreement dated June 5, 1998 between State Street Bank and
Trust Company and the Funds be hereby amended and restated in the form of
Appendix A attached hereto.

Please indicate your acceptance of and agreement to the foregoing by executing
two copies of this Letter Agreement, returning one to the Funds and retaining
one copy for your records.

EACH FUND LISTED ON APPENDIX A

By: /s/ Gerard P.Maus
- ----------------------------------
Name: Gerard P. Maus
Title: Executive Vice President

Accepted and Agreed to as of the 1st day of July, 1999.

State Street Bank and Trust Company

By: /s/ Ronald E. Logue
- ----------------------------------
Title: Vice Chairman

<PAGE>

APPENDIX A

FUNDS (EACH A SERIES OF INVESTMENT COMPANY NAMED IN BOLD)

STATE STREET RESEARCH INSTITUTIONAL FUNDS
State Street Research Core Fixed Income Fund
State Street Research Core Plus Fixed Income Fund
State Street Research Large Cap Growth fund
State Street Research Core Large Cap Growth Fund

STATE STREET RESEARCH EQUITY TRUST
State Street Research Argo Fund
(formerly: State Street Research Equity Investment Fund)
State Street Research Alpha Fund
(formerly: State Street Research Equity Income Fund)
State Street Research Global Resources Fund
State Street Research Athletes Fund

STATE STREET RESEARCH FINANCIAL TRUST
State Street Research Government Income Fund
State Street Research Strategic Portfolios: Moderate
State Street Research Strategic Portfolios: Conservative
State Street Research Strategic Portfolios: Aggressive
[State Street Research IntelliQuant Portfolios: Small-Cap Value]

STATE STREET RESEARCH INCOME TRUST
State Street Research High Income Fund
State Street Research Managed Assets

STATE STREET RESEARCH TAX-EXEMPT TRUST
State Street Research Tax-Exempt Fund
State Street Research New York Tax-Free Fund

STATE STREET RESEARCH CAPITAL TRUST
State Street Research Capital Fund
State Street Research Emerging Growth Fund
(formerly: State Street Research Small Capitalization Growth Fund)
State Street Research Aurora Fund
(formerly: State Street Research Small Capitalization Value Fund)

STATE STREET RESEARCH EXCHANGE TRUST
State Street Research Exchange Fund

STATE STREET RESEARCH GROWTH TRUST
State Street Research Growth Fund

STATE STREET RESEARCH MASTER INVESTMENT TRUST
State Street Research Investment Trust

STATE STREET RESEARCH SECURITIES TRUST
State Street Research Intermediate Bond Fund
State Street Research Strategic Income Fund
State Street Research Legacy Fund
State Street Research Galileo Fund

STATE STREET RESEARCH PORTFOLIOS, INC.
State Street Research International Equity Fund

STATE STREET RESEARCH MONEY MARKET TRUST
State Street Research Money Market Fund

<PAGE>

SERVICING AGREEMENT
-------------------

SERVICING AGREEMENT executed as of June 30, 1999 between State Street
Research Institutional Funds, a Massachusetts business trust (the "Trust"), on
behalf of each of its Class I, Class II, Class III, and Class IV (each a "Class"
and collectively the "Classes") shares (the "Shares") of each Fund listed on
Exhibit I hereto (collectively, the "Funds"), and State Street Research &
Management Company, a Delaware corporation (the "Shareholder Servicer").

W I T N E S S E T H:

That in consideration of the mutual covenants herein contained, it is
agreed as follows:

1. SERVICES TO BE RENDERED BY SERVICING AGENT TO THE TRUST.

(a) The Shareholder Servicer will, at its expense, provide shareholders'
administrative services to shareholders of each Class of Shares of each Fund
set forth on Exhibit 1 hereto, as distinguished from the transfer agent and
dividend disbursing agent services otherwise provided by the Trust's transfer
agent, currently State Street Bank and Trust Company ("Transfer Agent").
Shareholders' administrative services shall include, without limitation,
professional and information reporting, client account information, personal
and electronic access to Fund information, access to analysis and
explanations of Fund reports, and assistance in the correction and
maintenance of client-related information; responding to telephone, written
or other inquiries or instructions from shareholders concerning account
balances, available shareholder services, account statements, transaction
confirmations, procedures for purchasing and redeeming shares and similar
matters and services; accepting and monitoring receipts of wire order trades
(including trades, if any, processed via the National Securities Clearing
Corporation Fund/Serv system); receiving telephone transaction instructions
and inputting such instructions into the Transfer Agent's computer system;
and performing such other functions as the Trust and the Shareholder Servicer
shall determine ("Shareholders' Administrative Services").

(b) The Shareholder Servicer shall not be obligated under this Agreement to
pay any expenses of or for the Trust or of or for any Fund not expressly assumed
by the Shareholder Servicer pursuant to this Section 1.

2. OTHER AGREEMENTS, ETC.

It is understood that any of the shareholders, trustees, officers and
employees of the Trust may be a partner, shareholder, director, officer or
employee of, or be otherwise interested in, the Shareholder Servicer, and in any
person controlled by or under common control with the Shareholder Servicer, and
that the Shareholder Servicer and any person controlled by or under common
control with the Shareholder Servicer may have an interest in the Trust. It is
also understood that the Shareholder Servicer and persons controlled by or under
common control with the Shareholder Servicer may have advisory,
<PAGE>

servicing, distribution or other contracts with other organizations and persons,
and may have other interests and businesses.

3. COMPENSATION TO BE PAID BY THE TRUST TO THE SERVICING AGENT.

Each Class of Shares of each Fund will pay to the Shareholder Servicer as
compensation for the Shareholder Servicer's services and for the expenses borne
by the Shareholder Servicer with respect to such Class of Shares of such Fund
pursuant to Section 1, a fee, computed and accrued daily, and paid monthly or at
such other intervals as the Trustees shall determine, at the annual rate of such
Class' average daily net asset value set forth on the Fee Rate Schedule attached
as Exhibit II hereto. Such fee shall be payable for each month (or such other
interval determined by the Trustees) as soon as practical after the last day of
each month (or such other interval determined by the Trustees).

If the Shareholder Servicer shall serve for less than the whole of a month
(or other interval), the foregoing compensation shall be prorated.

4. ASSIGNMENT TERMINATES THIS AGREEMENT; AMENDMENTS OF THIS CONTRACT.

This Agreement shall automatically terminate, without the payment of any
penalty, in the event of its assignment; provided, however, in the event of
consolidation or merger in which the Shareholder Servicer is not the surviving
corporation or which results in the acquisition of substantially all the
Shareholder Servicer's outstanding stock by a single person or entity or by a
group of persons and/or entities acting in concert, or in the event of the sale
or transfer of substantially all the Shareholder Servicer's assets, the
Shareholder Servicer may assign any such agreement to such surviving entity,
acquiring entity, assignee or purchaser, as the case may be. This Agreement
shall not be amended except by written agreement between the two parties hereto.

5. EFFECTIVE PERIOD.

This Agreement shall become effective with respect to each Fund on the date
on which the Fund commences operations (the "Effective Date"). The initial term
of this Agreement with respect to each Fund shall be the period commencing on
its Effective Date and ending on the first anniversary of the Effective Date.
Thereafter, the Agreement shall be renewed automatically for successive one-year
terms for each Fund unless written notice not to renew is given by the
non-renewing party to the other party at least 60 days prior to the expiration
of the then-current term.

6. TERMINATION OF THIS AGREEMENT.

This Agreement may be terminated by either party at any time on not less
than 60 days prior written notice to the other party.

2
<PAGE>

7. CERTAIN DEFINITIONS.

For the purposes of this Agreement, the terms "control", "interested
person" and "assignment" shall have their respective meanings defined in the
Investment Company Act of 1940 and the rules and regulations thereunder,
subject, however, to such exemptions as may be granted by the Securities and
Exchange Commission under said Act.

8. NONLIABILITY OF SERVICING AGENT.

In the absence of willful misfeasance, bad faith or gross negligence on the
part of the Shareholder Servicer, or reckless disregard of its obligations and
duties hereunder, the Shareholder Servicer shall not be subject to any liability
to the Trust, or to any shareholder of the Trust, for any act or omission in the
course of, or connected with, rendering services hereunder.

9. LIMITATION OF LIABILITY OF THE TRUSTEES AND SHAREHOLDERS.

A copy of the Agreement and Declaration of Trust of the Trust is on file
with the Secretary of The Commonwealth of Massachusetts, and notice is hereby
given that this instrument is executed on behalf of the Trustees of the Trust as
Trustees and not individually and that the obligations of this instrument are
not binding upon any of the Trustees or shareholders individually but are
binding only upon the assets and property of the Fund.

10. SUB-ADMINISTRATION AGREEMENTS.

The Shareholder Servicer may enter sub-administration agreements with other
parties, including State Street Research Investment Services, Inc. and other
affiliates, for the provision of sub-administration services for certain
shareholder accounts, provided that the fee payable by the Trust for such
sub-administration services shall not cause the total costs incurred by the
Trust for such sub-administration servicers, the services provided under this
Agreement and the services provided under the Transfer Agency and Service
Agreement between the Trust and the Transfer Agent (the "Transfer Agency
Agreement") to exceed the costs that would otherwise be incurred under this
Agreement and the Transfer Agency Agreement if such services were provided
directly by the Transfer Agent and the Shareholder Servicer for such accounts.
The Shareholder Servicer may also enter into sub-administration agreements where
the requisite sub-administration services are not otherwise available from the
Shareholder Servicer or the Transfer Agent.

3
<PAGE>

IN WITNESS WHEREOF, STATE STREET RESEARCH INSTITUTIONAL FUNDS and STATE
STREET RESEARCH & MANAGEMENT COMPANY have each caused this instrument to be
signed in duplicate on its behalf by its duly authorized representative, all as
of the day and year first above written.

STATE STREET RESEARCH
INSTITUTIONAL FUNDS

By /s/ Ralph F. Verni
Name: Ralph F. Verni
Title: President

STATE STREET RESEARCH &
MANAGEMENT COMPANY

By /s/ Gerard P. Maus
Title: Executive Vice President

4
<PAGE>

EXHIBIT I
---------

State Street Research Core Fixed Income Fund
State Street Research Core Plus Fixed Income Fund
State Street Research Core Large Cap Growth Fund
State Street Research Large Cap Growth Fund

5
<PAGE>

EXHIBIT II
----------

Fee Rate Schedule

<TABLE>
<CAPTION>
Fund Service Fee
- - -------------------------------------------------------------------------------------------------------------
Class I Class II Class III Class IV
- - -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
State Street Research Core Fixed Income Fund 0.30% 0.20% 0.10% 0.05%
- - -------------------------------------------------------------------------------------------------------------
State Street Research Core Plus Fixed Income Fund 0.30% 0.20% 0.10% 0.05%
- - -------------------------------------------------------------------------------------------------------------
State Street Research Core Large Cap Growth Fund 0.30% 0.20% 0.10% 0.05%
- - -------------------------------------------------------------------------------------------------------------
State Street Research Large Cap Growth Fund 0.30% 0.20% 0.10% 0.05%
- - -------------------------------------------------------------------------------------------------------------
</TABLE>

<PAGE>

FEE WAIVER AND EXPENSE LIMITATION AGREEMENT
-------------------------------------------

AGREEMENT made June 30, 1999, between STATE STREET RESEARCH & MANAGEMENT
COMPANY, a Delaware corporation (the "Advisor"), and STATE STREET RESEARCH
INSTITUTIONAL FUNDS, a Massachusetts business trust (the "Trust").

1. Recitals. The Trust has been organized to serve as an investment vehicle
primarily for certain large institutional and private client accounts, and both
the Trust and the Advisor believe that they and the Trust's shareholders would
benefit if each series of the Trust constituting a separate investment portfolio
set forth below (each a "Fund" and, collectively, the "Funds") were to achieve
and maintain an amount of assets sufficiently large to result in economies of
scale for the Fund and sufficient future revenues for the Advisor. Therefore,
the Advisor is agreeing to take certain actions more specifically described
below to reduce or eliminate certain costs otherwise borne by shareholders of
the Funds and to enhance the returns generated for shareholders of the Funds.

2. General Agreement. The Advisor will, until this Agreement is terminated
under Section 4, take one or more of the three actions described in Section 3 to
the extent that the Fund's total annual operating expenses (not including
Shareholder Service Fees, brokerage commissions, hedging transaction fees and
other investment related costs, extraordinary, non-recurring and certain other
unusual expenses such as taxes, litigation expense and other extraordinary legal
expense, securities lending fees and expenses and transfer taxes) exceed the
percentage of that Fund's average daily net assets (the "Expense Limitation")
set forth in the table below:

<TABLE>
<CAPTION>
- - -------------------------------------------------------------------------------------------------------------
Fund Expense Limitation
- - -------------------------------------------------------------------------------------------------------------
<S> <C>
State Street Research Core Fixed Income Fund 0.20%
- - -------------------------------------------------------------------------------------------------------------
State Street Research Core Plus Fixed Income Fund 0.20%
- - -------------------------------------------------------------------------------------------------------------
State Street Research Core Large Cap Growth Fund 0.35%
- - -------------------------------------------------------------------------------------------------------------
State Street Research Large Cap Growth Fund 0.35%
- - -------------------------------------------------------------------------------------------------------------
</TABLE>

3. Advisor Actions. The Advisor will use its best efforts to cause each
Fund to maintain the expense level described in Section 2 by taking one or more
of the following actions: (i) waiving a portion of its fee under the Advisory
Agreement between the Advisor and the Trust relating to the Fund; (ii)
reimbursing the Fund for expenses exceeding the Expense Limitation; or (iii)
paying directly expenses that may exceed the Expense Limitation.

4. Term. This Agreement shall have an initial term ending on June 1, 2000,
and shall automatically be continued thereafter until either the Trust or the
Advisor terminates this Agreement by giving six months prior written notice to
the other party.

5. Miscellaneous. The Advisor understands and acknowledges that the Trust
intends to rely on this Agreement, including in connection with the preparation
and printing of the Trust's prospectuses and its daily calculation of each
Fund's net asset value. <PAGE>

This Agreement constitutes the entire agreement between the Advisor and the
Trust concerning the subject matter hereof and supersedes all prior oral and
written agreements and understandings between the parties concerning such
subject matter.

IN WITNESS WHEREOF, the parties have executed this Agreement on the day and
year first above written.

STATE STREET RESEARCH &
MANAGEMENT COMPANY

By: /s/ Gerard P. Maus
-------------------------------
Name: Gerard P. Maus
Title: Executive Vice President

STATE STREET RESEARCH
INSTITUTIONAL FUNDS

By: /s/ Ralph F. Verni
------------------------------
Name: Ralph F. Verni
Title: President

<PAGE>

ROPES & GRAY
ONE INTERNATIONAL PLACE ONE FRANKLIN SQUARE
BOSTON, MASSACHUSETTS 02110-2624 1301 K STREET, N.W.
30 KENNEDY PLAZA (617) 951-7000 SUITE 800 EAST
PROVIDENCE, RI 02903-2358 FAX: (617) 951-7050 WASHINGTON, DC 20008-3333
(401) 455-4400 (202) 626-3900
FAX: (401) 455-4401 FAX: (202) 626-3961

July 13, 1999

State Street Research Institutional Funds
One Financial Center
Boston, MA 02111-2690

Ladies and Gentlemen:

You have informed us that you propose to register under the Securities Act
of 1933, as amended (the "Act"), and offer and sell from time to time shares of
beneficial interest, without par value ("Shares"), of each of your Core Fixed
Income Fund series, Core Plus Fixed Income Fund series, Core Large Cap Growth
Fund series and Large Cap Growth Fund series (each such series, a "Series").

We have examined an executed copy of your Agreement and Declaration of
Trust dated March 3, 1999 (the "Declaration of Trust") on file in the office of
the Secretary of State of The Commonwealth of Massachusetts. We are familiar
with the actions taken by your trustees to authorize the issue and sale to the
public from time to time of authorized and unissued Shares of each Series. We
have also examined a copy of your By-Laws and such other documents as we have
deemed necessary for the purpose of this opinion.

Based on the foregoing, we are of the opinion that:

1. The beneficial interest of each Series is divided into an unlimited
number of Shares.

2. The issue and sale of the authorized but unissued Shares of each Series
has been duly authorized under Massachusetts law. Upon the original issue and
sale of any of such authorized but unissued Shares and upon receipt by State
Street Research Institutional Funds (the "Trust") of the authorized
consideration therefor in an amount not less than the applicable net asset
value, the Shares so issued will be validly issued, fully paid and nonassessable
by the Trust.

The Trust is an entity of the type commonly known as a "Massachusetts
business trust." Under Massachusetts law, shareholders could, under certain
circumstances, be held personally

<PAGE>

ROPES & GRAY

State Street Research Institutional Funds -2- July 13, 1999

liable for the obligations of the Trust. However, the Declaration of Trust
disclaims shareholder liability for acts or obligations of the Trust and
requires that notice of such disclaimer be given in each agreement, obligation
or instrument entered into or executed by the Trust or its trustees. The
Declaration of Trust provides for indemnification out of the property of the
particular series of shares for all loss and expense of any shareholder held
personally liable solely by reason of his or her being or having been a
shareholder of that series. Thus, the risk of a shareholder incurring financial
loss on account of being such a shareholder is limited to circumstances in which
that series of shares itself would be unable to meet its obligations.

We understand that this opinion is to be used in connection with the
registration of an indefinite number of Shares for offering and sale pursuant to
the Act. We consent to the filing of this opinion with and as part of your
Registration Statement on Form N-lA (File No. 333-73433) relating to such
offering and sale.

Very truly yours,

/s/ Ropes & Gray
-----------------
Ropes & Gray

<PAGE>

CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby consent to the incorporation by reference in the Statement
of Additional Information constituting part of this Post-Effective Amendment
No. 1 to the Registration Statement (No. 333-73433) on Form N-1A (the
"Registration Statement") of our report dated March 17, 2000, relating to the
financial statements and financial highlights appearing in the January 31,
2000 Annual Report of State Street Research Institutional Funds, which report
is also referenced in the Prospectus. We also consent to the reference to us
under the heading "Independent Accountants" in such Statement of Additional
Information and to the references to us under the heading "Financial
Highlights" in such Prospectus.

PricewaterhouseCoopers LLP
Boston, Massachusetts
May 25, 2000

<PAGE>

STATE STREET RESEARCH INSTITUTIONAL FUNDS

Plan pursuant to Rule 18f-3 under the
Investment Company Act of 1940
-------------------------------------

June 30, 1999

This Plan (the "Plan") is adopted by State Street Research Institutional
Funds (the "Trust") pursuant to Rule 18f-3 under the Investment Company Act of
1940 (the "Act") and sets forth the general characteristics of, and the general
conditions under which the Trust may offer, multiple classes of shares of its
now existing and hereafter created portfolios ("Funds"). This Plan may be
revised or amended from time to time as provided below.

CLASS DESIGNATIONS

Each Fund of the Trust may from time to time issue one or more of the
following classes of shares: Class I Shares, Class II Shares, Class III Shares
and Class IV Shares. Each of the classes of shares of any Fund will represent
interests in the same portfolio of investments and, except as described herein,
shall have the same rights and obligations as each other class. Each class
shall be subject to such investment minimums and other conditions of eligibility
as are set forth in the Trust's prospectus or statement of additional
information as from time to time in effect (the "Prospectus").

CLASS ELIGIBILITY

A shareholder's class eligibility is generally dependent on the aggregate
size of the shareholder's total investment in all Funds of the Trust ("Total
Investment"), as described from time to time in the Prospectus. Notwithstanding
any such eligibility requirements, State Street Research & Management Company
("State Street Research") and its affiliates shall always be eligible to invest
in any class of shares of any Fund, without regard to any Total Investment or
other minimum investment requirements.

A shareholder's Total Investment will be determined by State Street
Research, the Trust's investment adviser and shareholder servicer as of the last
business day of each calendar quarter and on such other dates as may be
determined by State Street Research (each a "Measuring Date"). A shareholder's
Total Investment as of any Measuring Date will equal the aggregate net asset
value of the shareholder's assets invested in all Funds of the Trust as of such
Measuring Date.

In addition, each Fund may establish a separate minimum investment
requirement, based on assets in that Fund only, as described from time to time
in the Prospectus. Each Fund may also impose special eligibility requirements
relating to the type of investor (e.g., natural person,

<PAGE>

partnership, corporation, ERISA plan, etc.), including eligibility restrictions
and/or imposing special minimum investment requirements, as described from time
to time in the Prospectus.

CLASS CHARACTERISTICS

The sole difference among the various classes of shares is the level of
shareholder service fee ("Shareholder Service Fee") borne by the class for
client and shareholder service, reporting and other support provided to such
class by State Street Research, acting in its capacity as the Trust's
shareholder servicer.

The multiple class structure is designed to reflect that, as the size of a
particular shareholder's Total Investment increases, the cost to service that
shareholder is expected to decrease as a percentage of the shareholder's Total
Investment. Thus, the Shareholder Service Fee is lower for classes for which
eligibility criteria generally require greater assets invested in the Trust.

INCOME AND EXPENSE ALLOCATIONS

Shareholder Service Fees payable by the Trust to the shareholder servicer
of the Trust's shares (the "Shareholder Servicer") shall be allocated on a
class-by-class basis and are therefore "Class Expenses" under this Plan. Upon
any future approval by the Trust's Board of Trustees, including a majority of
the independent Trustees, the following expenses may be deemed to be "Class
Expenses" and upon such approval may (if such expense is properly assessable at
the class level) in the future be allocated on a class-by-class basis: (a)
transfer agency costs attributable to each class, (b) printing and postage
expenses related to preparing and distributing materials such as shareholder
reports, prospectuses and proxy statements to current shareholders of a specific
class, (c) SEC registration fees incurred with respect to a specific class, (d)
blue sky and foreign registration fees and expenses incurred with respect to a
specific class, (e) the expenses of administrative personnel and services
required to support shareholders of a specific class (including, but not limited
to, maintaining telephone lines and personnel to answer shareholder inquiries
about their accounts or about the Trust), (f) litigation and other legal
expenses relating to a specific class of shares, (g) Trustees' fees or expenses
incurred as a result of issues relating to a specific class of shares, (h)
accounting and consulting expenses relating to a specific class of shares, and
(i) any additional expenses, not including advisory or custodial fees or other
expenses related to the management of the Trust's assets, if these expenses are
actually incurred in a different amount with respect to a class, or if services
are provided with respect to a class that are of a different kind or to a
different degree than with respect to one or more other classes.

Each Fund's income, expenses, gain and loss accounts will be allocated to
each class of shares of the relevant Fund. On a daily basis, net investment
income and realized and unrealized gains and losses will be allocated to each
class based upon the relative percentage of net assets or "dividend assets", as
appropriate, at the beginning of the day in each class, after such assets are
adjusted for the prior business day's capital share transactions. Dividend
assets

-2-
<PAGE>

are defined as the aggregate net asset value of those shares eligible to receive
a dividend in the current day as set forth in the Fund's prospectus. The
balances of each Fund's income, expenses, gain and loss accounts will be
accumulated by class of shares.

On a daily basis, the allocation of expenses to each class of shares will
depend upon the nature of each expenditure. Expenditures fall into two
categories:

1. Class Expenses (defined above); and

2. Fund Expenses (all expenses not now or hereafter designated as Class
Expenses).

Notwithstanding the foregoing, each Fund may allocate all expenses other
than Class Expenses and income and realized and unrealized capital gains and
losses to each class on the basis of any methodology permitted by Rule 18f-3(c)
under the Act, provided, however, that until such time as this Plan is amended
with respect to the Fund's allocation methodology, the Fund will allocate all
expenses other than Class Expenses on the basis of relative net assets or
dividend assets.

WAIVERS AND REIMBURSEMENTS

State Street Research may choose to waive or reimburse Shareholder Service
Fees, Fund Expenses or any other Class Expenses, on a voluntary or temporary
basis.

CONVERSION AND EXCHANGE FEATURES

The value of each shareholder's Total Investment in the Trust will be
determined by State Street Research on each Measuring Date. Based on that
determination, each shareholder's shares of each Fund will be automatically
converted to the class of shares of such Fund which is then being offered with
the lowest Shareholder Service Fee for which the shareholder is eligible based
on the amount of the shareholder's Total Investment on the Measuring Date. The
conversion will occur within 10 business days following the Measuring Date, with
the precise date of the conversion to be determined by State Street Research in
its sole discretion. Notwithstanding the foregoing, (i) there will be no
automatic conversion from a class of shares with a lower Shareholder Service Fee
to a class of shares with a higher Shareholder Service Fee unless appropriate
disclosure regarding the higher Shareholder Service Fee has been given to the
affected shareholder(s) in the Prospectus or otherwise, and (ii) from time to
time, the Trustees may determine that there will be no conversion from a class
of shares with a lower Shareholder Service Fee to a class of shares with a
higher Shareholder Service Fee unless the shareholder's Total Investment is at
least a specified dollar amount less than the minimum Total Investment for the
shareholder's then existing class of shares on such Measuring Date, as described
in the Prospectus from time to time.

Shares of one class will always convert into shares of another class on the
basis of the relative net asset value of the two classes, without the imposition
of any sales load, fee or other

-3-
<PAGE>

charge. The conversion of a shareholder's investment from one class of shares to
another is not a taxable event, and will not result in the realization of gain
or loss that may exist in Fund shares held by the shareholder. The
shareholder's tax basis in the new class of shares will equal its tax basis in
the old class before conversion. The conversion of shares from one class to
another class of shares may be suspended if, in the opinion of counsel obtained
by the Trust, the conversion from one class of shares to another may constitute
a taxable event under then current federal income tax law.

Notwithstanding anything to the contrary in this Plan, pursuant to Article
VI, Section 3 of the Trust's Agreement and Declaration of Trust, the Trust has
the right to redeem unilaterally any shareholder of any Fund if at such time
such shareholder owns shares of any Fund or class thereof "having an aggregate
net asset value less than an amount determined from time to time by the
Trustees."

NAV AND DIVIDENDS/DISTRIBUTIONS

Net Asset Value ("NAV") by class will be determined by dividing the ending
total net assets by class by the number of shares outstanding in each class. The
calculation of dividends and distributions will be dependent upon the dividend
and distribution policy of that Fund:

1. Periodic Dividend Funds

Dividends from net investment income for periodic dividend Funds will be
determined as follows: Dividends will be determined pursuant to authority of
the Fund's Trustees, before the deduction of Class Expenses, for all classes of
shares combined. From this amount, an amount equal to the per share amount of
Class Expenses accrued during the period to which the dividend relates is
subtracted. The result is the rate per share payable to each class.

Distributions from net realized capital gains will be determined by
dividing the total amount of gains to be distributed as declared pursuant to
authority of the Trustees by the total number of shares outstanding on the
ex-dividend date.

2. Daily Dividend Funds

Dividends from net investment income for daily dividend Funds will be
determined as follows: A daily dividend per share for each class will be
determined pursuant to authority of the Trustees. From this amount, an amount
equal to the per share amount of the difference in Class Expenses for the day is
added or subtracted as appropriate. The result is the dividend per share
payable to each class.

-4-
<PAGE>

3. Money Market Funds

Daily dividends for money market Funds will be calculated as follows: The
amount of realized gain or loss for each class of shares will be added or
subtracted, as appropriate, to the daily amount of net investment income for
each class of shares, after the recording of all Fund and Class Expenses. The
result is the daily dividend for each class of shares.

VOTING RIGHTS

Each share of the Trust entitles the shareholder of record to one vote.
Each class of shares of the Trust will vote separately as a class on matters for
which class voting is required under applicable law.

RESPONSIBILITIES OF THE TRUSTEES

On an ongoing basis, the Trustees will monitor the Trust for the existence
of any material conflicts among the interests of the classes of shares. The
Trustees, including a majority of the independent Trustees, shall take such
action as is reasonably necessary to eliminate any such conflict that may
develop.

REPORTS TO THE TRUSTEES

State Street Research will be responsible for reporting any potential or
existing conflicts among the classes of shares to the Trustees.

AMENDMENTS

The Plan may be amended from time to time in accordance with the provisions
and requirements of Rule 18f-3 under the Act.

Adopted this 30th day of June, 1999

By: /s/ Ralph F. Verni
------------------------
Name: Ralph F. Verni
Title: President

-5-

<PAGE>

STATE STREET RESEARCH & MANAGEMENT COMPANY

CODE OF ETHICS

Revised March 1, 2000

This Code of Ethics establishes rules of conduct that govern the personal
investment activities of employees, officers and directors or trustees of (i)
State Street Research & Management Company and its subsidiaries (collectively,
"State Street Research" or the "Company"), and (ii) registered investment
companies (other than money market funds) for which the Company is the primary
investment adviser ("Funds").

1. General Provisions.

1.1. Purpose Statement. In pursuing its mission of being a premier
investment management organization, State Street Research has earned a
reputation for the highest integrity. An important contributor to this
reputation is our philosophy of always placing the interests of our clients
first. This Code contains uniform standards which are intended to provide us
with a high level of confidence that our personal investment activities are
consistent with our clients' interests and do not interfere with our mission.

1.2. Overriding Principles. Every Access Person who engages in Personal
Transactions must: (i) consider the interests of the Company's clients before
initiating a Personal Transaction, and place the clients' interests first,
particularly in the case of any security that might provide a suitable and
beneficial opportunity for any client; (ii) not use his or her position with the
Company to influence a broker, dealer or underwriter to effect a Personal
Transaction for the benefit of the Access Person; and (iii) conduct all Personal
Transactions in accordance with the provisions of this Code and in avoidance of
any actual or potential conflicts of interest or abuse of fiduciary
responsibilities.

2. Applicability and Definitions. The following definitions describe the
persons, securities, accounts and transactions to which this Code applies:

2.1. "Associate" means any person in the employment of the Company.

2.2. "Access Person " means any director or officer of State Street
Research or any associate of State Street Research who, in connection with his
or her regular functions or duties, participates in the selection of a client's
portfolio securities or has access to information regarding a fund's future
purchases or sales of portfolio securities on behalf of any clients.
<PAGE>

2.3. "Investment Person" means any Access Person directly involved in the
investment process of the Company, including portfolio managers, security
analysts, research associates and trading personnel.

2.4. "Portfolio Manager" means any Access Person responsible for the
overall investment management of a client's portfolio and any Access Person
assisting directly in such management, and also includes any member of the
Company's Management Committee.

2.5. "Security" means any stock, bond, debenture, note, convertible
security, or any put, call, straddle, warrant, right or option with respect to a
security, or any future or other investment contract or derivative, or, in
general, any interest or investment commonly known as a security, but does not
include securities which are direct obligations of the Government of the United
States, bankers' acceptances, bank certificates of deposit, commercial paper and
high quality short-term debt instruments (including repurchase agreements), or
shares of registered open-end investment companies.

2.6. "Personal Account" means (a) any securities account in which an Access
Person has "beneficial ownership" (as described in Exhibit A), including certain
accounts of family members and other related accounts, or (b) any account over
which the Access Person (or any member of the Access Person's immediate family
sharing the same household, except as exempted under Section 6.2) has direct or
indirect influence or control with respect to the purchase or sale of individual
securities. See Exhibit A for a fuller explanation and examples of situations
involving beneficial ownership. Unless otherwise specified, the provisions of
this Code applicable to transactions by Access Persons are applicable to
transactions in their Personal Accounts.

2.7. "Personal Transaction" means any transaction with respect to a
security for any Personal Account, including without limitation purchases and
sales, entering into or closing out futures or other derivatives, and exercising
warrants, rights or options but not including the acceptance of tender offers.

3. Prohibitions.

3.1. Restrictions Applicable to all Access Persons An Access Person should
not place an order to enter into a Personal Security Transaction during any of
the following times:

(a) When the Access Person knows, or has reason to believe, that the
security may in the near future be recommended for action or
acted upon by the Company for any client account; or

(b) For a period of ten (10) business days after a security has been
recommended for action by the Company for any client account,
including any rating change, even though no action has been taken
for the Company's clients with respect to the security during
that period; or

2
<PAGE>

(c) When the security is on order for purchase or sale for a client's
account, or has been on order at any time during the five (5)
preceding trading days (either as a completed order, an
uncompleted order or an order on hold), as reflected on the
Company's Restricted List.

3.2. Restrictions Applicable Only to Investment Persons. In addition to the
restrictions applicable to all Access Persons, an Investment Person may not:

(a) Purchase a security in an initial public offering; or

(b) Acquire a security in a private placement unless advance written
approval is obtained from the Chief Executive Officer or the
Chief Investment Officer of the Equity or Fixed Income
Department, as appropriate. In the event that the Investment
Person plays a part in any subsequent consideration of the
security for investment for a client account, he or she must
disclose the holding to the Chief Executive Officer or the
appropriate Chief Investment Officer, and any decision to make
the investment for a client account will be subject to an
independent review and approval by senior investment personnel
with no personal interest in the issuer or its securities; or

(c) Realize a profit from any transaction involving the purchase and
sale, or sale and purchase, of the same (or equivalent)
securities within a period of sixty (60) calendar days. For
purposes of this rule, transactions will be reviewed on a
first-in-first-out basis.

(d) Participate in an investment club.

3.3. Restrictions Applicable Only to Portfolio Managers. In addition to the
restrictions applicable to all Access Persons and Investment Persons, a
Portfolio Manager may not purchase or sell a security within a period of seven
(7) calendar days before or after a client account managed by the Portfolio
Manager trades in that security.

3.4. Special Provisions for Options and Futures.

(a) The general principle governing transactions in options, futures
and other derivatives is that they are treated as transactions in
the underlying security for all purposes of this Code.

(b) Purchased options must comply with the Code both at the time of
initial purchase and at the time of exercise. However, if an
Access Person buys a call or put option at a time when the
purchase is not restricted by Section 3.1, the option may be
exercised automatically at expiration by the relevant exchange or
clearing corporation without violating that provision.

3
<PAGE>

(c) Written options must comply with this Code at the time of the
transaction. Exercise by a counterparty, however, is not a
voluntary transaction by an Access Person and is not governed by
Section 3.1.

(d) In the case of a purchased call or a written put, the security
received upon exercise (whether voluntary or automatic) is
subject to the 60-day period in Section 3.2 (c) measured from the
time of purchasing the call or writing the put. As a result, if
such an option is exercised within the 60-day period, the
Investment Person cannot sell the security at a gain until
expiration of the 60-day period from the time of the original
option transaction. In these circumstances, the Investment Person
must be prepared to pay for the security, accept delivery and
bear the risk of holding the security until expiration of the
period.

(e) An Access Person may not write an uncovered call or sell an
uncovered future. An Investment Person may not write a covered
call option unless the underlying security has been held for 60
days. Where an Investment Person purchases a put option and owns
the underlying security, the put option may not expire or be
exercised within 60 days after purchase of the underlying
security. Where an Investment Person purchases a put option
without owning the underlying security, the option cannot be
exercised and can only be closed through a sale more than 60 days
after the purchase.

Futures and other derivatives will be treated consistently with
the provisions applicable to options.

3.5. Receipt of Gifts. Except for an occasional meal or ticket to a
sporting event or the theater, or comparable entertainment which is not so
frequent or extensive as to raise questions of propriety, or except with the
approval of the Company's Chief Executive Officer, an Associate must not accept
cash or non-cash gifts from any person or entity which directly or indirectly
does business with or performs services for the Company or any client, which
exceed the dollar limit imposed by the NASD from time to time under Conduct Rule
2830(1)(5)(A) or any successor rule ($100 as of February 1999), or such other
level as established from time to time by the Compliance Committee.

3.6. Service as a Director. An Investment Person may not serve on the board
of directors, or similar governing body, of an organization the shares of which
are publicly traded without obtaining prior approval of the Company's Chief
Executive Officer (or, in case such Investment Person is the Chief Executive
Officer, the Company's Board of Directors with the Chief Executive Officer
abstaining). Any such approval will be reported to the Board of Directors of
each Fund at least annually.

3.7. Promotion of Personal Investments. Associates are free to refer
investment opportunities to other Associates for their personal consideration.
However, Associates should not engage in the active promotion of securities to
other Associates and should not receive any payment or other benefit for the
sale of a security to another associate.

4
<PAGE>

3.8. Conflicts of Interest. Associates should not engage in activities that
could create a conflict of interest or the appearance of a conflict of interest
between the interests of the Company's clients and the interests of the Company
or its Associates. For example, no Associate should condition the company's
purchase or continued holding of any security for its clients on whether the
issuer of that security becomes or remains a client of the Company.

4. Pre-Clearance.

Any Access Person who plans to place an order to enter into a Personal
Transaction must first pre-clear the transaction by obtaining approval from the
Equity Trading Desk, the Fixed Income Trading Desk, the Head Municipal Bond
Trader, the Head High Yield Trader or the Head International Fixed Income
Trader, as appropriate, either directly or through other communications links
established for this purpose. The appropriate trading personnel will only
pre-clear the transaction after determining that the security is not on the
Company's Restricted List and that no order has been placed or, to their
knowledge, is about to be placed with respect to the security. All clearances
(including time of clearance) will be recorded by the appropriate trading
personnel in the Investment Clearance Database or other system used to maintain
this information.

Generally, a pre-clearance is effective only for the business day on which
it is obtained. A clearance for an open order (such as a limit order or "good
until cancelled" order) is effective until the transaction is completed, except
that any change in the terms of the order will require a new pre-clearance.

5. Disclosure and Reporting.

5.1. List of Holdings. Each Access Person shall provide a list of all of
his or her personal securities holdings to the Compliance Department within 10
days of commencement of his or her employment or within 10 days of becoming an
Access Person, and will also provide an updated list on an annual basis at the
time designated by the Compliance Department

5.2. Confirmations and Statements. Each Access Person who engages in
Personal Transactions shall instruct his or her broker(s) or dealer(s) to
deliver duplicate copies of any confirmation of a transaction, and duplicate
copies of all periodic statements with respect to his or her Personal
Account(s), to the Company, P.O. Box 2794, Boston, MA 02208-2794. (See Exhibit B
for a sample letter to a broker or dealer.

5.3. Transaction Reports. Each Access Person shall report on a quarterly
basis any Personal Transactions in his or her Personal Account(s), except for
transactions in securities which are excluded from the term "security" for
purposes of this Code under Section 2.5. The report shall be made on the
official form designed for this purpose within ten (10) calendar days following
the quarter in which the transactions occur, shall be dated and signed by the
Access Person, and shall contain the following information:

5
<PAGE>

(a) With respect to any security transaction during the quarter:
(1) The title and number of shares (or principal amount) of the
security;
(2) The date and nature of the transaction (purchase or sale or
other);
(3) The transaction price;
(4) The name of the broker (or bank or dealer); and
(5) Such additional information as may be requested on the reporting
form.

(b) With respect to any account established by the Access Person in which
any securities were held during the quarter:

(1) The name of the broker (or bank or dealer) with whom the account
was established; and

(2) The date the account was established.

The quarterly report of any Investment Person must contain a
representation that the Investment Person: as a portfolio manager, has reviewed
the suitability of the security for each of the clients whose accounts he or she
manages; or as an investment analyst, has presented any opportunity for
securities within his or her area of coverage to the firm for consideration for
client accounts.

5.4 Certification of Compliance. Each Access Person shall be required to
certify annually that he or she:

(a) Has read and understands this Code and is subject thereto;

(b) Has complied with the requirements of the Code; and

6. Exemptions.

6.1. Transactional Exemptions. The prohibitions and restrictions in Section
3 and the pre-clearance requirements in Section 4 shall not apply (but the
reporting requirements in Section 5 shall continue to apply) to:

(a) Transactions by investment clubs in which non-Investment Persons are
participants;

(b) Purchases or sales of securities which are not voluntary;

6
<PAGE>

(d) Purchases effected upon the exercise of rights issued by an issuer pro
rata to all holders of a class of its securities;

(e) Transactions in derivatives tied to the performance of a broad-based
index, and transactions in SPDR's and shares of other UIT's or
vehicles the performance of which is designed to track closely the
performance of a broad- based index;

(f) Transactions in currencies and related options, futures contracts and
forward contracts; and

(g) Transactions in other securities determined by the Compliance
Committee to present a similarly low potential for impropriety or the
appearance of impropriety.

6.2. Complete Exemption. The prohibitions and restrictions in Section 3,
the pre-clearance requirements in Section 4 and the reporting requirements in
Section 5 shall not apply to:

(a) Any transaction in an instrument which is not included in the
definition of "security" contained in Section 2.5.

(b) Transactions effected for any account which is a Personal Account
solely because it is directly or indirectly influenced or controlled
by an Access Person's immediate family member sharing the same
household, so long as neither the Access Person nor the family member
has any beneficial ownership of securities in the Account and so long
as the Access Person agrees in writing not to discuss with the family
member any specific investment ideas or transactions arising in the
course of the Access Person's employment with the Company.

(c) Transactions effected for any account over which neither the Access
Person nor any immediate family member sharing the same household has
any direct or indirect influence or control; provided that in the case
of an account exempted because it is under the discretionary
management of another person (including an interest in a hedge fund or
investment partnership or enterprise but not including an interest in
a trust that is not revocable by the Access Person or an immediate
family member sharing the same household), the Access Person must
enter into a letter agreement with that person in substantially the
form of Exhibit C at the later of the time the account is opened or
the Access Person joins the Company, and on an annual basis
thereafter, and the Access Person must provide an annual inventory of
the securities in such account.

6.3. Large Cap Stock Exemption. The prohibitions of Section 3.1 and Section
3.3 shall not apply (but the prohibitions in Section 3.2 (Restrictions
Applicable Only to Investment Persons), the preclearance requirements in Section
4 and the reporting requirements in Section 5 shall continue to apply) to equity
securities with a market capitalization of $5 billion or greater as of the end
of the previous month.

7. Compliance Committee.

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<PAGE>

The Chief Executive Officer of the Company will from time to time appoint
the members of the Company's Compliance Committee, which is charged with the
duties and responsibilities of administering the Code, ensuring compliance with
the Code, and recommending sanctions for violations of the Code. The Compliance
Committee may amend the Code, interpret its provisions, make decisions with
respect to the classes of Access Persons covered by provisions of the Code, and
grant waivers and establish exceptions, including waivers and exceptions for
particular securities or transactions and other situations it deems to require
special treatment. The Committee may appoint one or more of its members to
fulfill its duties between meetings, subject to ratification by the Committee at
its next regular meeting. The Committee has appointed the Director of Compliance
as the person responsible for monitoring compliance with the Code of Ethics,
including the review of the quarterly transaction reports and the annual
holdings reports.

8. Sanctions.

Upon the occurrence of any violation of this Code, the Company acting
through its Compliance Committee may impose such sanctions as it deems
appropriate, including disgorgement of any profit, a warning, probation,
suspension or termination of employment.

9. Reports To Trustees/Directors of Investment Companies Under Management.

A report shall be prepared annually for submission to the Board of Trustees
or Directors of each investment company under the management of the Company. The
report will:

(a) Summarize current procedures under the Code and any changes in
those procedures since the prior report;

(b) Identify all material violations of the Code or any related
procedures, and any sanctions imposed with respect thereto;

(c) List any recommended changes to the Code or procedures under the
Code as the result of experience, evolving industry practices or
changes in the applicable laws or regulations; and

(d) Certify that procedures, reasonably necessary to prevent
violations of the Code, have been adopted.

10. Provisions Applicable To Mutual Fund Trustees

10.1. General Provision. An independent trustee of an investment company
for which the Company is the primary adviser should not purchase or sell a
security in an account in which he or she may be deemed to have a direct or
indirect beneficial interest, as defined in Exhibit A hereto, when he or she
knows, or in the ordinary course of his or her duties should know, that such
security is under consideration for purchase or sale, or being purchased or
sold, by the investment company. In addition, an independent trustee must report
to the investment company

8
<PAGE>

any transactions in a security where the trustee knew, or in the ordinary course
of fulfilling his or her official duties should have known, that during the 15
day period immediately preceding or after the date of the transaction, the
investment company was buying or selling, or considering buying or selling, that
security.

10.2. Portfolio Reports. In connection with their duties, independent
trustees of an investment company are provided, prior to a trustees' meeting,
with schedules of securities transactions effected by such investment company
during a specific period (generally a calendar quarter) ended more than 15 days
prior to delivery of the schedules. Consequently, an independent trustee in the
ordinary course of fulfilling his or her duties shall be deemed to have no duty,
and would have no reason, to know of, or inquire about, a transaction in a
security by the investment company during a 15 day period immediately preceding
or after the trustee's transaction in that security. In the event an independent
trustee does become aware of such a transaction, the independent trustee shall
file a report under this Code containing the information described in Section
5.3.

10.3. Exempted Transactions. Transactions by independent trustees which do
not fall within the above restrictions and reporting requirements are
transactions in securities which are direct obligations of the Government of the
United States, bankers' acceptances, bank certificates of deposit, commercial
paper, shares of registered open-end investment companies, and transactions as
to which the trustee had no investment discretion.

9
<PAGE>

EXHIBIT A

BENEFICIAL OWNERSHIP

"Beneficial ownership" is an important concept in determining which
personal securities accounts are covered by the Code. Beneficial ownership
exists when you have a "pecuniary interest" in securities.

More specifically, beneficial ownership of securities in an account means
directly or indirectly having or sharing a direct or indirect pecuniary interest
in the securities, whether through any contract, arrangement, understanding,
relationship or otherwise. A "pecuniary interest", in turn, means the
opportunity, directly or indirectly, to profit, or share in any profit derived,
from the transactions in question.

The pecuniary interest standard looks beyond the record owner of
securities. As a result, the definition of beneficial ownership is extremely
broad and encompasses many situations which might not ordinarily be thought to
confer ownership of securities.

Set forth below are some examples of how beneficial ownership may arise in
different contexts:

Family Holdings. Securities held by members of your immediate family
sharing the same household are presumed to be beneficially owned by you. Your
"immediate family" includes any child, step-child, grandchild, parent,
step-parent, grandparent, spouse, sibling, mother-in-law, father-in-law,
son-in-law, daughter-in-law, brother-in-law, or sister-in-law (but does not
include aunts and uncles, or nieces and nephews). The definition also includes
adoptive relationships. You may also be deemed to be the beneficial owner of
securities held by an immediate family member not living in your household if
the family member is economically dependent upon you.

Partnership and Corporate Holdings. A general partner of a general or
limited partnership will generally be deemed to beneficially own securities held
by the partnership. A limited partner or a stockholder will generally not be
deemed to beneficially own securities held by a limited partnership or
corporation, respectively, provided he or she does not own a controlling voting
interest in the entity, he or she does not have or share investment control over
the entity's portfolio, and the entity is not an "alter ego" or "personal
holding company". However, see Section 6.2(c) of the Code.

Derivatives. A person having the right to acquire securities through the
exercise or conversion of any derivative security, whether or not presently
exercisable, has beneficial ownership of the underlying securities. For this
purpose the term "derivative security" means any option, future, warrant,
convertible security, stock appreciation right, or similar right with an

A-1
<PAGE>

exercise or conversion privilege at a price related to a security, or similar
security with a value derived from the value of a security.

Trust Holdings. In general, a person's interest in a trust will amount to
an indirect pecuniary interest in the securities held by that trust. Therefore,
among other examples, a beneficiary of a trust will generally be deemed the
beneficial owner of securities held by the trust. However, the following persons
will generally not be deemed beneficial owners of the securities held by a
trust:

(a) Trustees, unless the trustee has a pecuniary interest in any holding
or transaction of the trust, or unless the trustee has any direct or
indirect influence or control with respect to the purchase or sale of
individual securities. A trustee will be deemed to have a pecuniary
interest in the trust's holdings if at least one beneficiary of the
trust is a member of the trustee's immediate family;

(b) Settlors, unless a settlor reserves the right to revoke the trust
without the consent of another person.

Securities Not Beneficially Owned. You are not deemed to have beneficial
ownership of:

(a) Portfolio securities held by an investment company registered under
the Investment Company Act of 1940;

(b) Securities of which you are a pledgee with the right to sell the
pledged security, provided that you will have beneficial ownership
upon any foreclosure or exercise of the right of sale;

(c) Rights you may have which are the same as all holders of a class of
securities of any issuer to receive securities pro rata, or
obligations to dispose of securities as a result of a merger, exchange
offer, or consolidation involving the issuer of the securities;

(d) An interest in broad-based index options, broad-based index futures,
and broad-based publicly traded market baskets of stocks approved for
trading by the appropriate federal government authority, nor in an
interest in any underlying securities of these instruments. A
broad-based index is one that provides investors with a performance
indicator of the overall applicable stock or bond market (or market
segment) as appropriate. An index would not be considered to be
broad-based if it is composed of securities of firms in a particular
industry or group of related industries;

(e) A security that may be redeemed or exercised only for cash and does
not permit the receipt of equity securities in lieu of cash, if the
security either:

(i) is awarded pursuant to an employee benefit plan satisfying the
provisions of 240.16b-3(c); or

A-2
<PAGE>

(ii) may be redeemed or exercised only upon a fixed date or dates at
least six months after award, or upon death, retirement, disability or
termination of employment; or

(f) An interest or right to participate in employee benefit plans of the
issuer.

A-3
<PAGE>

EXHIBIT B

(SAMPLE LETTER TO BROKER)

(Date)

(Name and Address of Broker)

Dear :

In connection with my brokerage account (Account No. ________) at your
firm, please be advised that State Street Research & Management Company should
be designated an "interested party" with respect to my account and should,
therefore, be sent copies of all trade confirmations and account statements
relating to my account. Please send the information to:

State Street Research & Management Company
John W. McCormick Post Office
P.O. Box 2794
Boston, MA 02208-2794

Any questions should be submitted to our Director of Compliance,
(617) 357-1398.

Thank you for your attention to this matter.

Sincerely,

(SSRM Access Person)

B-1
<PAGE>

EXHIBIT C

_________ __, 2000

[Name of Investment Adviser]
[Address of Investment Adviser]

Dear Mr. _______________:

As you know, I am an employee of State Street Research & Management Company
("SSRM"), and I therefore need to comply with SSRM's Code of Ethics with respect
to all accounts in which I have a beneficial interest, including the [identify
specific account]. Accordingly, I would like to confirm with you, as investment
adviser for such account, the manner in which the assets of the account are to
be invested and the degree of communication which you and I will have with
respect to the account.

Please note that I must not be consulted about, or have any input into or
knowledge of, the transactions placed by you, as an investment adviser for the
account, in any individual securities prior to the execution of such
transactions. I am permitted, consistent with SSRM's Codes of Ethics, to discuss
with you broad policy matters, such as: overall defensive or aggressive
postures, asset allocation by broad categories, tax matters such as tolerance
for gains and losses, and cash disbursement requirements for taxes or otherwise.

Please sign in the space indicated below acknowledging your agreement with
this arrangement and return it to me.

Thank you very much for your assistance.

Sincerely,

[SSRM employee]

C-1
<PAGE>

The foregoing is accepted and agreed to:

[Name of Investment Adviser]

By:________________________
Name:
Title:

Dated: _____________ __, 2000

cc: Director of Compliance
State Street Research
& Management Company

<PAGE>

POWER OF ATTORNEY

The undersigned, the Trustees of State Street Research Institutional
Funds ("Trust"), a Delaware business trust, hereby constitute and appoint
Francis J. McNamara, III and Mara D. Calame as the true and lawful attorneys
of the undersigned, with full power to each of them alone to sign for the
undersigned, in the name and in the capacity of the undersigned indicated
below, any Registration Statements and any and all amendments thereto of the
Trust filed with the Securities and Exchange Commission and generally to do
all such things in the name and in the indicated capacity of the undersigned
as are required to enable the Trust to comply with provisions of the
Securities Act of 1933, as amended, and/or the Investment Company Act of
1940, as amended, and all requirements and regulations of the Securities and
Exchange Commission, hereby ratifying and confirming the signature of the
undersigned as it has been and may be signed by said attorneys to said
Registration Statements, and any and all amendments thereto.

IN WITNESS WHEREOF, executed the 30th day of June, 1999.

Signature Capacity
- --------- ---------

/s/ Ralph F. Verni Trustee
- ----------------------------
Ralph F. Verni

/s/ Robert A. Lawrence Trustee
- ----------------------------
Robert A. Lawrence

/s/ James M. Storey Trustee
- ----------------------------
James M. Storey, Esq.

<PAGE>

STATE STREET RESEARCH INSTITUTIONAL FUNDS

CERTIFICATE OF RESOLUTION

I, the undersigned Mara D. Calame, hereby certify that I am
Assistant Secretary of State Street Research Institutional Funds (the
"Trust"), a Massachusetts business trust duly authorized and validly existing
under Massachusetts law, and that the following is a true, correct and
complete statement of a vote duly adopted by the Trustees of said Trust on
June 30, 1999:

"VOTED: That each officer of the Trust is hereby authorized and
empowered, for and on behalf of the Trust, its principal
executive officer and its principal financial and accounting
officer, and in their name, to execute, and file a Power of
Attorney relating to the Trust's Registration Statement under
the Investment Company Act and the Securities Act or any other
documents filed with the Commission relating to the
registration of the Trust under the Investment Company Act and
the registration of shares of the Trust for sale from time to
time under the Securities Act."

I further certify that said vote has not been amended or revoked and
the same is now in full force and effect.

IN WITNESS WHEREOF, I have hereunto set my hand this 17th day of
May 2000.

/s/ Mara D. Calame
--------------------
Assistant Secretary

<PAGE>

POWER OF ATTORNEY

The undersigned, a Trustee of State Street Research Institutional
Funds ("Trust"), a Delaware business trust, hereby constitutes and appoints
Francis J. McNamara, III and Mara D. Calame as the true and lawful attorneys
of the undersigned, with full power to each of them alone to sign for the
undersigned, in the name and in the capacity of the undersigned indicated
below, any Registration Statements and any and all amendments thereto of the
Trust filed with the Securities and Exchange Commission and generally to do
all such things in the name and in the indicated capacity of the undersigned
as are required to enable the Trust to comply with provisions of the
Securities Act of 1933, as amended, and/or the Investment Company Act of
1940, as amended, and all requirements and regulations of the Securities and
Exchange Commission, hereby ratifying and confirming the signature of the
undersigned as it has been and may be signed by said attorneys to said
Registration Statements, and any and all amendments thereto.

IN WITNESS WHEREOF, executed the 17th day of May, 2000.

Signature Capacity
- --------- ----------

/s/ Gerard P. Maus Trustee
- ----------------------------
Gerard P. Maus