State Street Research Growth Fund
Investment Update
Investment Environment
The Economy
(bullet) The economy was stronger than expected in the first half of the
year. This jolted the bond market and pushed interest rates
significantly higher.
(bullet) Despite stronger economic growth, inflation remained quite low.
Energy and food prices jumped higher but, for the most part,
consumer prices were well contained.
(bullet) Consumer confidence improved, perhaps the result of falling
unemployment and rising average hourly wages.
The Markets
(bullet) Stocks performed well through the first six months of 1996,
rebounding from several market corrections. The Standard & Poor's
500 Index provided a total return of +10.09% through June 30, 1996.1
Small-company growth stocks also rewarded investors, with the
Russell 2000 Growth Index up +11.92% for the same period.1
(bullet) Bond performance was mixed over the six-months ended June 30, 1996.
High-yield bonds performed well in the strengthening economy, while
high-quality bonds remained relatively flat.
The Fund
Over the past six months
(bullet) For the six months ended June 30, 1996, Growth Fund's Class A shares
provided a total return of +17.38% (does not reflect sales charge).2
The Fund beat the average total return for 668 funds in Lipper
Analytical Services' Growth Funds category, which was +10.08% (does
not reflect sales charge).
(bullet) The Fund benefited from our position in retail and textile/apparel
stocks, where we emphasized specialty companies that do their own
design and manufacturing.
(bullet) After paring our holdings in technology stocks early in 1996, we
added to the computer software and services component, concentrating
on companies offering products to increase productivity.
(bullet) The portfolio's holdings in larger-company stocks helped the Fund
during the market's flight to quality early in the year. Our
smaller-company holdings helped propel the Fund in the second
quarter.
Current strategy
(bullet) We have structured the Fund to include a broad mix of large- and
small-company stocks.
(bullet) We have almost 8% of the portfolio invested in stocks of drug
companies, including some of the larger, more seasoned firms in this
area.
(bullet) 1996 has so far proven to be a more challenging stock-investing
environment. We will continue to rely on our research capabilities
to help us uncover good stock values.
(1)The Standard & Poor's 500 Composite Index (S&P 500) includes 500 widely
traded common stocks and is a commonly used measure of U.S. stock market
performance. The Russell 2000 Growth Index includes 2,000 small-company
stocks and is a commonly used measure of small-stock performance. The indices
are unmanaged and do not take sales charges into consideration. Direct
investment in the indices is not possible; results are for illustrative
purposes only.
(2)+16.84% for Class B shares; +17.47% for Class C shares; +17.01% for Class
D shares.
(3)All returns represent past performance, which is no guarantee of future
results. The investment return and principal value of an investment made in
the Fund will fluctuate and shares, when redeemed, may be worth more or less
than their original cost. All returns assume reinvestment of capital gain
distributions and income dividends. During the periods prior to 1993 that
shares of the Fund were not offered to the general public, the Fund was not
subject to the cash inflows and higher redemptions and expenses that have
occurred during the Fund's current, continuous public offering. Performance
for a class includes periods prior to the adoption of class designations.
Performance prior to class designations in 1993 does not reflect annual 12b-1
fees of .25% for "A" shares and 1% for "B" and "D" shares, which will reduce
subsequent performance. "C" shares, offered without a sales charge, are
available only to certain employee benefit plans and large institutions.
(4)Performance reflects maximum 4.5% "A" share front-end, or 5% "B" share or
1% "D" share contingent deferred, sales charges.
(5)Cumulative total returns are not annualized, nor do they reflect sales
charges, which, if reflected, would reduce performance.
Please note that the discussion throughout this shareholder report is dated
as indicated and because of possible changes in viewpoint, data and
transactions, should not be relied upon as being current thereafter.
SEC Average Annual Compound Rates of Return
(at maximum applicable sales charge)(3,4)
10 Years 5 Years 1 Year
- -------- --------- --------- -----------
Class A +12.00% +13.51% +19.16%
- -------- ------- ------- ---------
Class B +12.21% +13.70% +19.27%
- -------- ------- ------- ---------
Class C +12.60% +14.71% +25.15%
- -------- ------- ------- ---------
Class D +12.23% +13.96% +23.01%
Cumulative Total Returns
(do not reflect sales charge)3,5
10 Years 5 Years 1 Year
- -------- --------- --------- -----------
Class A +225.36% +97.35% +24.78%
- -------- ------- ------- ---------
Class B +216.56% +92.02% +23.88%
- -------- ------- ------- ---------
Class C +227.49% +98.65% +25.15%
- -------- ------- ------- ---------
Class D +216.91% +92.23% +23.93%
Top 10 Stock Positions
(by percentage of net assets)
1 HFS Hotel reservation service 5.6%
2 Gucci Apparel designer/manufacturer 5.4%
3 Republic Industries Waste management company 4.5%
4 Pfizer Pharmaceutical company 3.3%
5 Sunglass Hut Specialty retailer 3.0%
6 Newbridge Networks Telecommunications firm 2.9%
7 Networking
Cascade Communications software company 2.7%
8 Eli Lilly Pharmaceutical manufacturer 2.4%
9 Guidant Hospital supply company 2.4%
10 Corporate Express Specialty retailer 2.3%
These securities represent an aggregate of 34.5% of the portfolio. Because of
active management, there is no guarantee that the Fund currently invests, or
will continue to invest, in the securities listed in this table or in the
text above.
Top 5 Equity Industries
(by percentage of net assets)
- ---------------------------------[Bar Chart]---------------------------------
Retail 21.0%
Computer software and service 10.4%
Hotel and restaurant 10.0%
Recreation 8.0%
Drug 7.8%
Total:57.2%
-----------------------------------------------------------------------------
<PAGE>
INVESTMENT PORTFOLIO
June 30, 1996 (Unaudited)
Value
Shares (Note 1)
- --------------------------------------- ------ -------------
COMMON STOCKS 98.5%
Basic Industries 2.1%
Machinery 1.6%
Cincinnati Milacron, Inc. 42,000 $1,008,000
UCAR International, Inc.* 69,100 2,876,287
-----------
3,884,287
-----------
Metal & Mining 0.5%
SGL Carbon AG ADR* 35,200 1,346,400
-----------
Total Basic Industries 5,230,687
-----------
Consumer Cyclical 52.5%
Airline 5.7%
AMR Corp.* 25,300 2,302,300
Continental Airlines, Inc. Cl. B* 84,600 5,224,050
Delta Air Lines, Inc. 16,500 1,369,500
TWA Inc. Cum. Cv. Exch. Pfd.+* 25,000 1,234,375
UAL Corp.* 70,800 3,805,500
-----------
13,935,725
-----------
Automotive 1.0%
AutoZone, Inc.* 73,600 2,557,600
-----------
Hotel & Restaurant 10.0%
Extended Stay America, Inc.* 133,600 4,208,400
HFS, Inc.* 194,200 13,594,000
ITT Corp. 18,400 1,219,000
MGM Grand, Inc.* 26,200 1,044,725
Mirage Resorts, Inc.* 46,700 2,521,800
Sun International Hotels Ltd.* 37,500 1,818,750
-----------
24,406,675
-----------
Recreation 8.0%
American Radio Systems Corp.* 54,700 2,352,100
Chancellor Corp. Cl. A* 14,200 443,750
Clear Channel Communications, Inc.* 39,500 3,253,813
Walt Disney Co. 51,600 3,244,350
Emmis Broadcasting Corp.* 12,700 635,000
Evergreen Media Corp. 93,200 3,984,300
Heftel Broadcasting Corp. Cl. A* 13,100 388,087
News Corp. Ltd. ADR 73,100 1,717,850
Oakley, Inc.* 70,300 3,198,650
Silver King Communications, Inc.* 10,400 312,000
19,529,900
-----------
Retail Trade 21.0%
Ann Taylor Stores Corp.* 113,700 2,302,425
Borders Group, Inc.* 67,400 2,173,650
BT Office Products International, Inc.* 77,900 1,392,462
Retail Trade (cont'd)
Corporate Express, Inc.* 139,200 $5,568,000
Gucci Group N.V.* 204,200 13,170,900
Home Depot, Inc. 91,200 4,924,800
Just For Feet, Inc.* 73,400 3,881,025
Melville Corp. 50,000 2,025,000
Micro Warehouse, Inc.* 26,300 526,000
Office Depot, Inc.* 160,800 3,276,300
Price-Costco, Inc.* 75,000 1,621,875
Rich Foods Holding Co., Inc.* 51,000 1,657,500
Staples, Inc.* 59,550 1,161,225
Sunglass Hut International, Inc.* 300,000 7,312,500
-----------
50,993,662
-----------
Textile & Apparel 6.8%
Authentic Fitness Corp. 19,500 363,188
Fila Holdings S.P.A. ADR 64,300 5,545,875
Tommy Hilfiger Corp.* 79,800 4,279,275
Men's Wearhouse, Inc.* 156,900 5,060,025
Nautica Enterprises, Inc.* 46,400 1,334,000
16,582,363
-----------
Total Consumer Cyclical 128,005,925
-----------
Consumer Staple 22.7%
Business Service 6.8%
Apache Medical Systems, Inc.* 18,400 230,000
HBO & Co. 64,200 4,349,550
Metro Mail Corp.* 10,600 237,175
Republic Industries, Inc.* 253,400 7,380,275
Republic Industries, Inc.++* 132,000 3,696,106
U.S. Office Products Co.* 15,500 651,000
-----------
16,544,106
-----------
Drug 7.8%
Centocor Corp.* 40,800 1,218,900
Eli Lilly & Co. 90,100 5,856,500
Liposome Company, Inc.* 60,000 1,125,000
Pfizer, Inc. 113,300 8,086,787
SmithKline Beecham PLC ADR 50,000 2,718,750
-----------
19,005,937
-----------
Food & Beverage 2.6%
Boston Chicken, Inc.* 100,100 3,253,250
Starbucks Corp.* 108,900 3,076,425
-----------
6,329,675
-----------
The accompanying notes are an integral part of the financial
statements.
2
<PAGE>
Hospital Supply 4.8%
Caremark International, Inc. 32,100 $810,525
Guidant Corp. 117,900 5,806,575
MedPartners/Mullikin, Inc.* 59,000 1,231,625
Medtronic, Inc. 58,000 3,248,000
Neopath, Inc.* 26,400 666,600
-----------
11,763,325
-----------
Personal Care 0.3%
Polymer Group, Inc.* 38,000 665,000
-----------
Printing & Publishing 0.4%
Hollinger International, Inc.* 55,900 635,862
The Providence Journal Co. Cl. A* 19,200 295,200
-----------
931,062
-----------
Total Consumer Staple 55,239,105
-----------
Energy 0.4%
Oil 0.2%
Chesapeake Energy Corp.* 5,400 485,325
-----------
Oil Service 0.2%
Varco International, Inc.* 21,500 389,687
-----------
Total Energy 875,012
-----------
Finance 2.4%
Financial Service 1.1%
Associated First Capital Corp. Cl. A* 75,000 2,821,875
-----------
Insurance 1.3%
AMBAC, Inc. 47,900 2,496,786
W.R. Berkley Corp. 15,000 626,250
-----------
3,123,036
-----------
Total Finance 5,944,911
-----------
Science & Technology 13.5%
Computer Software & Service 10.4%
Ascend Communications, Inc.* 83,500 4,696,875
Cascade Communications Corp.* 95,900 6,521,200
Checkpoint Software Technologies Ltd.* 12,100 290,400
Dassault Systemes S.A. ADR* 7,400 229,400
Fore Systems, Inc.* 57,200 2,066,350
Geoworks* 2,300 81,650
Microsoft Corp.* 32,900 3,952,112
Open Text Corp.* 39,700 411,887
Parametric Technology Corp.* 54,300 2,355,263
Westell Technologies, Inc. Cl. A* 60,100 2,358,925
Western Digital Corp.* 89,000 2,325,125
-----------
25,289,187
-----------
Electronic Components 1.4%
CHS Electronics, Inc.* 16,300 $220,050
Sanmina Holdings, Inc.* 117,800 3,180,600
-----------
3,400,650
-----------
Electronic Equipment 0.7%
Lucent Technologies, Inc.* 15,500 587,063
Octel Communications Corp.* 51,800 1,023,050
Perkin-Elmer Corp. 200 9,650
Thermo Optek Corp.* 13,800 179,400
-----------
1,799,163
-----------
Office Equipment 1.0%
Dell Computer Corp.* 26,200 1,332,925
3Com Corp.* 24,000 1,098,000
-----------
2,430,925
-----------
Total Science & Technology 32,919,925
-----------
Utility 4.9%
Telephone 4.9%
ADC Telecommunications, Inc.* 63,500 2,857,500
Excel Communications, Inc.* 6,400 172,800
McLeod, Inc.* 15,600 374,400
Newbridge Networks Corp.* 107,500 7,041,250
Omnipoint Corp.* 30,400 792,300
Teleport Communications Group Inc. Cl.
A* 31,000 593,030
-----------
11,831,280
-----------
Total Utility 11,831,280
-----------
Total Common Stocks (Cost $184,175,142) 240,046,845
-----------
Principal Maturity
Amount Date
- ----------------------------- -------- ------- ------------
Commercial Paper 2.3%
American Express Credit
Corp., 5.32% $747,000 7/1/1996 747,000
American Express Credit
Corp., 5.39% 2,495,000 7/2/1996 2,495,000
Ford Motor Credit Co., 5.32% 2,272,000 7/1/1996 2,272,000
----------
Total Commercial Paper (Cost $5,514,000) 5,514,000
----------
Total Investments (Cost $189,689,142)--100.8% 245,560,845
Cash and Other Assets, Less Liabilities--(0.8)% (1,829,834)
----------
Net Assets--100.0% $243,731,011
==========
The accompanying notes are an integral part of the financial statements.
3
<PAGE>
Federal Income Tax Information:
At June 30, 1996, the net unrealized
appreciation of investments based on
cost for Federal income tax purposes
of $188,234,174 was as follows:
Aggregate gross unrealized appreciation
for all investments in which there is
an excess of value
over tax cost $61,254,655
Aggregate gross unrealized depreciation
for all investments in which there is
an excess of tax
cost over value (3,927,984)
----------
$57,326,671
==========
*Nonincome-producing securities
ADR stands for American Depositary Receipt, representing ownership of
foreign securities.
+Security restricted in accordance with Rule 144A under the Securities Act
of 1933, which allows for the resale of such securities among certain
qualified institutional buyers. The total cost and market value of Rule
144A securities owned at June 30, 1996 were $1,250,000 and $1,234,375
(0.51% of net assets), respectively.
++Security valued under consistently applied procedures established by the
Trustees. Security restricted as to public resale. At June 30, 1996, there
were no outstanding unrestricted securities of the same class as those
held. The total cost and market value of restricted securities owned at
June 30, 1996 were $2,673,000 and $3,696,106 (1.52% of net assets),
respectively.
Statement of Assets and Liabilities
June 30, 1996 (Unaudited)
Assets
Investments, at value (Cost $189,689,142) (Note 1) $245,560,845
Cash 128
Receivable for securities sold 6,098,089
Receivable for fund shares sold 566,796
Dividends and interest receivable 40,908
Other assets 52,171
-----------
252,318,937
Liabilities
Payable for securities purchased 8,204,226
Dividends payable 164,450
Accrued management fee (Note 2) 92,927
Accrued distribution and service fees (Note 4) 21,945
Payable for fund shares redeemed 15,335
Accrued transfer agent and shareholder services (Note
2) 13,893
Accrued trustees' fees (Note 2) 11,818
Other accrued expenses 63,332
-----------
8,587,926
-----------
$243,731,011
===========
Net Assets
Net Assets consist of:
Distribution in excess of net investment income $ (98,995)
Unrealized appreciation of investments 55,871,703
Accumulated net realized gain 10,451,278
Shares of beneficial interest 177,507,025
-----------
$243,731,011
===========
Net Asset Value and redemption price per share of
Class A shares ($9,412,178 / 1,142,188 shares of
beneficial interest) $8.24
======
Maximum Offering Price per share of Class A shares
($8.24 / .955) $8.63
======
Net Asset Value and offering price per share of
Class B shares ($21,974,605 / 2,728,729 shares of
beneficial interest)* $8.05
======
Net Asset Value, offering price and redemption price
per share of Class C shares ($207,476,309 /
25,156,789 shares of beneficial interest) $8.25
======
Net Asset Value and offering price per share of
Class D shares ($4,867,919 / 604,548 shares of
beneficial interest)* $8.05
======
* Redemption price per share for Class B and Class D is equal to net asset
value less any applicable contingent deferred sales charge.
The accompanying notes are an integral part of the financial statements.
4
<PAGE>
Statement of Operations
For the six months ended June 30, 1996 (Unaudited)
Investment Income
Dividends, net of foreign taxes of $7,742 $535,321
Interest 167,171
---------
702,492
Expenses
Management fee (Note 2) 525,935
Custodian fee 67,802
Transfer agent and shareholder services (Note 2) 31,444
Trustees' fees (Note 2) 16,044
Registration fees 14,644
Reports to shareholders 12,796
Audit fee 8,470
Service fee--Class A (Note 4) 6,740
Distribution and service fees--Class B (Note 4) 76,482
Distribution and service fees--Class D (Note 4) 16,259
Legal fee 5,446
Miscellaneous 16,642
---------
798,704
---------
Net investment loss (96,212)
---------
Realized and Unrealized Gain on Investments
Net realized gain on investments (Notes 1 and 3) 11,113,933
Net unrealized appreciation of investments 24,522,782
---------
Net gain on investments 35,636,715
---------
Net increase in net assets resulting from
operations $35,540,503
=========
Statement of Changes in Net Assets
Six months
ended
June 30, Year ended
1996 December 31,
(Unaudited) 1995
- ----------------------------- ------------ ----------------
Increase (Decrease) in Net Assets
Operations:
Net investment income (loss) $(96,212) $921,337
Net realized gain on
investments* 11,113,933 57,615,231
Net unrealized appreciation
of investments 24,522,782 2,561,460
---------- --------------
Net increase resulting from
operations 35,540,503 61,098,028
---------- --------------
Dividends from net investment income:
Class A -- (2,898)
Class C (209,312) (756,996)
---------- --------------
(209,312) (759,894)
---------- --------------
Distribution from net realized gains:
Class A -- (568,862)
Class B -- (2,759,387)
Class C -- (56,277,393)
Class D -- (549,837)
---------- --------------
-- (60,155,479)
---------- --------------
Net increase from fund share
transactions (Note 5) 6,531,828 12,930,239
---------- --------------
Total increase in net assets 41,863,019 13,112,894
Net Assets
Beginning of period 201,867,992 188,755,098
---------- --------------
End of period (including
(overdistributed)
undistributed net
investment income of
($98,995) and $206,529,
respectively) $243,731,011 $201,867,992
========== ==============
* Net realized gain for
Federal income tax purposes
(Note 1) $10,393,116 $60,297,725
========== ==============
The accompanying notes are an integral part of the financial statements.
5
<PAGE>
NOTES TO UNAUDITED FINANCIAL STATEMENTS
June 30, 1996
Note 1
State Street Research Growth Fund (the "Fund"), is a series of State Street
Research Growth Trust (the "Trust"), which is a Massachusetts business trust
registered under the Investment Company Act of 1940, as amended, as an
open-end management investment company. The Trust was organized in February,
1989 as a successor to State Street Growth Fund, Inc., a Massachusetts
corporation. The Fund is presently the only series of the Trust.
The investment objective of the Fund is to provide long-term growth of
capital. In seeking to achieve its investment objective, the Fund invests
primarily in equity securities believed by the Investment Adviser to have
better than average growth potential over the years.
The Fund offers four classes of shares. Class A shares are subject to an
initial sales charge of up to 4.50% and pay a service fee equal to 0.25% of
average daily net assets. Class B shares are subject to a contingent deferred
sales charge on certain redemptions made within five years of purchase and
pay annual distribution and service fees of 1.00%. Class B shares
automatically convert into Class A shares (which pay lower ongoing expenses)
at the end of eight years after the issuance of the Class B shares. Class C
shares are only offered to certain employee benefit plans and large
institutions. No sales charge is imposed at the time of purchase or
redemption of Class C shares. Class C shares do not pay any distribution or
service fees. Class D shares are subject to a contingent deferred sales
charge of 1.00% on any shares redeemed within one year of their purchase.
Class D shares also pay annual distribution and service fees of 1.00%. The
Fund's expenses are borne pro-rata by each class, except that each class
bears expenses, and has exclusive voting rights with respect to provisions of
the Plan of Distribution, related specifically to that class. The Trustees
declare separate dividends on each class of shares.
The following significant policies are consistently followed by the Fund in
preparing its financial statements, and such policies are in conformity with
generally accepted accounting principles for investment companies.
A. Investments in Securities
Values for listed securities represent the last sale on national securities
exchanges quoted prior to the close of the New York Stock Exchange.
Over-the-counter securities quoted on the National Association of Securities
Dealers Automated Quotation ("NASDAQ") system are valued at the closing price
supplied through such system. In the absence of recorded sales and for those
over-the-counter securities not quoted on the NASDAQ system, valuations are
at the mean of the closing bid and asked quotations, except for securities
that may be restricted as to public resale, which are valued in accordance
with methods adopted by the Trustees. Security transactions are accounted for
on the trade date (date the order to buy or sell is executed), and dividends
declared but not received are accrued on the ex-dividend date. Interest
income is determined on the accrual basis. Realized gains and losses from
security transactions are reported on the basis of average cost of securities
delivered.
B. Federal Income Taxes
No provision for Federal income taxes is necessary since the Fund has elected
to qualify under Subchapter M of the Internal Revenue Code and its policy is
to distribute all of its taxable income, including net realized capital
gains, within the prescribed time periods. It is also the intention of the
Fund to distribute an amount sufficient to avoid imposition of any Federal
Excise Tax under Section 4982 of the Internal Revenue Code.
C. Dividends
Dividends from net investment income, if any, are declared and paid or
reinvested semiannually. Net realized capital gains are distributed annually.
Income dividends and capital gain distributions are determined in accordance
wiith Federal income tax regulations which may differ from generally accepted
accounting principles. The difference is primarily due to the disposition of
securities that have different bases for financial reporting and tax
purposes.
D. Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of income and expenses during the reporting period.
Actual results could differ from those estimates.
Note 2
The Trust and State Street Research & Management Company (the "Adviser"), an
indirect wholly owned subsidiary of Metropolitan Life Insurance Company
("Metropolitan"), have entered into a contract that provides for an annual
fee equal to 0.475% of the Fund's average daily net assets. In consideration
of these fees, the Adviser furnishes the Fund with management, investment
advisory, statistical and research facilities and services. The Adviser also
pays all salaries, rent and certain other expenses of management. The fees of
the Trustees not currently affiliated with the Adviser amounted to $16,044
during the six months ended June 30, 1996.
State Street Research Shareholder Services, a division of State Street
Research Investment Services, Inc., the Trust's principal underwriter (the
"Distributor"), an indirect wholly owned subsidiary of Metropolitan, provides
certain shareholder services to the Fund such as responding to inquiries and
instructions from investors with respect to the purchase and redemption of
shares of the Fund. During the six months ended June 30, 1996, the amount of
such expenses was $11,467.
Note 3
For the six months ended June 30, 1996, exclusive of short-term investments
and U.S. Government obligations, purchases and sales of securities aggregated
$270,723,808 and $260,596,296, respectively.
6
<PAGE>
Note 4
The Fund has adopted a Plan of Distribution pursuant to Rule 12b-1 (the
"Plan") under the Investment Company Act of 1940, as amended. Under the Plan,
the Fund pays annual service fees to the Distributor at a rate of 0.25% of
average daily net assets for Class A, Class B and Class D shares. In
addition, the Fund pays annual distribution fees of 0.75% of average daily
net assets for Class B and Class D shares. The Distributor uses such payments
for personal services and/or the maintenance or servicing of shareholder
accounts, to reimburse securities dealers for distribution and marketing
services, to furnish ongoing assistance to investors and to defray a portion
of its distribution and marketing expenses. For the six months ended June 30,
1996, fees pursuant to such plan amounted to $6,740, $76,482 and $16,259 for
Class A, Class B and Class D, respectively.
The Fund has been informed that the Distributor and MetLife Securities, Inc.,
a wholly owned subsidiary of Metropolitan earned initial sales charges
aggregating $16,889 and $89,055, respectively, on sales of Class A shares of
the Fund during the six months ended June 30, 1996, and that MetLife
Securities, Inc. earned commissions aggregating $143,440 on sales of Class B
shares, and that the Distributor collected contingent deferred sales charges
of $5,519 and $118 on redemptions of Class B and Class D shares,
respectively, during the same period.
Note 5
The Trustees have the authority to issue an unlimited number of shares of
beneficial interest, $.001 par value per share.
At June 30, 1996, the Adviser owned one share each of Class A, Class B and
Class D of the Fund.
Share transactions were as follows:
Six months ended
June 30, 1996 Year ended
(Unaudited) December 31, 1995
-------------------------- ---------------------------
Class A Shares Amount Shares Amount
---------------- ---------- ------------ ---------- -------------
Shares sold 910,591 $6,958,445 208,712 $1,886,012
Issued upon
reinvestment
of:
Distribution
from net
realized gains -- -- 78,495 551,038
Dividend from
net investment
income -- -- 315 2,775
Shares redeemed (107,391) (807,539) (49,931) (451,405)
-------- ---------- -------- -----------
Net increase 803,200 $6,150,906 237,591 $1,988,420
======== ========== ======== ===========
Class B Shares Amount Shares Amount
---------------- -------- ---------- -------- -----------
Shares sold 1,301,124 $9,760,484 1,044,801 $9,544,221
Issued upon
reinvestment of
distribution
from net
realized gains -- -- 352,023 2,425,440
Shares redeemed (124,106) (903,718) (65,041) (572,546)
-------- ---------- -------- -----------
Net increase 1,177,018 $8,856,766 1,331,783 $11,397,115
======== ========== ======== ===========
Class C Shares Amount Shares Amount
---------------- -------- ---------- -------- -----------
Shares sold 69,551 $549,395 18,689 $168,373
Issued upon
reinvestment
of:
Distribution
from net
realized gains -- -- 2,691,966 18,924,523
Dividends from
net investment
income 4,457 36,774 12,393 109,179
Shares redeemed (1,494,523) (11,307,573) (2,415,508) (21,806,684)
-------- ---------- -------- -----------
Net increase
(decrease) (1,420,515) $(10,721,404) 307,540 $(2,604,609)
======== ========== ======== ===========
Class D Shares Amount Shares Amount
---------------- -------- ---------- -------- -----------
Shares sold 303,600 $2,298,738 199,449 $1,805,535
Issued upon
reinvestment of
distribution
from net
realized gains -- -- 74,313 511,275
Shares redeemed (6,743) (53,178) (20,783) (167,497)
-------- ---------- -------- -----------
Net increase 296,857 $2,245,560 252,979 $2,149,313
======== ========== ======== ===========
7
<PAGE>
FINANCIAL HIGHLIGHTS
For a share outstanding throughout each period:
Class A
---------------------------------------------
Year ended December 31
-----------------------------
Six months
ended
June 30,
1996
(Unaudited)*** 1995*** 1994 1993*
- -------------------------- ------------ ------ ------- --------
Net asset value, beginning
of period $7.02 $7.09 $8.50 $9.63
Net investment income
(loss) (.01) .01 .05 .06
Net realized and
unrealized gain (loss)
on investments 1.23 2.30 (.38) .37
Dividends from net
investment income -- (.02) (.05) (.08)
Distributions from net
realized gains -- (2.36) (1.03) (1.48)
---------- ---- ----- ------
Net asset value, end of
period $8.24 $7.02 $7.09 $8.50
========== ==== ===== ======
Total return 17.38%+++ 32.57%+ (3.83)%+ 4.52%+++
Net assets at end of
period (000s) $9,412 $2,379 $719 $602
Ratio of operating
expenses to average net
assets 0.88%++ 0.89% 0.90% 0.96%++
Ratio of net investment
income
(loss) to average net
assets (0.25)%++ 0.12% 0.54% 0.48%++
Portfolio turnover rate 122.36% 234.43% 57.18% 68.36%
Average commission rate@ $.0340 -- -- --
Class B
----------------------------------------------
Year ended December 31
------------ ------------------------------
Six months
ended
June 30,
1996
(Unaudited)*** 1995*** 1994 1993**
- -------------------------- ------------ ------ ------- ---------
Net asset value, beginning
of period $6.89 $7.02 $8.46 $9.56
Net investment income
(loss) (.04) (.06) (.00) .03
Net realized and
unrealized gain (loss)
on investments 1.20 2.29 (.41) .42
Dividends from net
investment income -- -- -- (.07)
Distributions from net
realized gains -- (2.36) (1.03) (1.48)
---------- ---- ----- -------
Net asset value, end of
period $8.05 $6.89 $7.02 $8.46
========== ==== ===== =======
Total return 16.84%+++ 31.71%+ (4.80)%+ 4.64%+++
Net assets at end of
period (000s) $21,975 $10,684 $1,544 $986
Ratio of operating
expenses to average net
assets 1.63%++ 1.63% 1.63% 1.71%++
Ratio of net investment
income
(loss) to average net
assets (1.00)%++ (0.69)% (0.20)% (0.36)%++
Portfolio turnover rate 122.36% 234.43% 57.18% 68.36%
Average commission rate@ $.0340 -- -- --
<TABLE>
<CAPTION>
Class C
--------------------------------------------------------------------
Year ended December 31
-----------------------------------------------------
Six months
ended
June 30,
1996
(Unaudited)*** 1995*** 1994 1993 1992 1991
- ------------------------ ----------- ------- ------- ------- ------- ---------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $7.02 $7.08 $8.51 $9.26 $9.14 $7.44
Net investment income
(loss) .00 .04 .07 .09 .14 .17
Net realized and
unrealized gain (loss)
on investments|BK 1.24 2.29 (.40) .74 .15 1.71
Dividends from net
investment income (.01) (.03) (.07) (.10) (.14) (.18)
Distributions from net
realized gains -- (2.36) (1.03) (1.48) (.03) --
--------- ------ ------ ------ ------ -------
Net asset value, end of
period $8.25 $7.02 $7.08 $8.51 $9.26 $9.14
========= ====== ====== ====== ====== =======
Total return 17.47%+++ 33.02%+ (3.82)%+ 8.94%+ 5.71%+ 26.77%+
Net assets at end of
period (000s) $207,476 $186,689 $186,108 $250,786 $263,781 $273,607
Ratio of operating
expenses to average
net assets 0.63%++ 0.64% 0.64% 0.66% 0.57% 0.56%
Ratio of net investment
income (loss)
to average net assets 0.00%++ 0.43% 0.78% 0.92% 1.56% 2.02%
Portfolio turnover rate 122.36% 234.43% 57.18% 68.36% 35.60% 31.89%
Average commission rate@ $.0340 -- -- -- -- --
|BKAfter provision for
Federal
tax on retained
capital gains
at end of period -- -- -- -- $.22 $.12
</TABLE>
Class D
----------------------------------------
Year ended December 31
------------ ------------------------
Six months
ended
June 30,
1996
(Unaudited)*** 1995*** 1994 1993**
- -------------------------- ------------ ---- ----- -------
Net asset value, beginning
of period $6.88 $7.02 $8.45 $9.56
Net investment income
(loss) (.04) (.06) (.00) .03
Net realized and
unrealized gain (loss)
on investments# 1.21 2.28 (.40) .41
Dividends from net
investment income -- -- -- (.07)
Distributions from net
realized gains -- (2.36) (1.03) (1.48)
---------- -- --- -----
Net asset value, end of
period $8.05 $6.88 $7.02 $8.45
========== == === =====
Total return 17.01%+++ 31.57%+ (4.68)%+ 4.59%+++
Net assets at end of
period (000s) $4,868 $2,117 $384 $242
Ratio of operating
expenses to average net
assets 1.63%++ 1.63% 1.63% 1.71%++
Ratio of net investment
income (loss)
to average net assets (1.00)%++ (0.67)% (0.20)% (0.34)%++
Portfolio turnover rate 122.36% 234.43% 57.18% 68.36%
Average commission rate@ $.0340 -- -- --
#After provision for
Federal tax on retained
capital gains at end of
period -- -- -- --
++Annualized
*March 16, 1993 (commencement of share class designations) to December 31,
1993.
**March 18, 1993 (commencement of share class designations) to December 31,
1993.
***Per-share figures have been calculated using the average shares method.
+Total return figures do not reflect any front-end or contingent deferred
sales charges.
+++Represents aggregate return for the period without annualization and does
not reflect any front-end or contingent deferred sales charges.
@For fiscal years beginning on or after January 1, 1996, the Fund is
required to disclose its average commission rate per share paid for
security trades.
8
<PAGE>
FUND INFORMATION, OFFICERS AND TRUSTEES OF STATE STREET RESEARCH GROWTH TRUST
Fund Information
State Street Research
Growth Fund
One Financial Center
Boston, MA 02111
Investment Adviser
State Street Research &
Management Company
One Financial Center
Boston, MA 02111
Distributor
State Street Research
Investment Services, Inc.
One Financial Center
Boston, MA 02111
Shareholder Services
State Street Research
Shareholder Services
P.O. Box 8408
Boston, MA 02266-8408
1-800-562-0032
Custodian
State Street Bank and
Trust Company
225 Franklin Street
Boston, MA 02110
Legal Counsel
Mintz, Levin, Cohn, Ferris,
Glovsky and Popeo, P.C.
One Financial Center
Boston, MA 02111
Officers
Ralph F. Verni
Chairman of the Board,
President and
Chief Executive Officer
Peter C. Bennett
Vice President
Frederick R. Kobrick
Vice President
Thomas P. Moore, Jr.
Vice President
Dudley F. Wade
Vice President
Gerard P. Maus
Treasurer
Joseph W. Canavan
Assistant Treasurer
Douglas A. Romich
Assistant Treasurer
Francis J. McNamara, III
Secretary and General Counsel
Darman A. Wing
Assistant Secretary and
Assistant General Counsel
Amy L. Simmons
Assistant Secretary
Trustees
Ralph F. Verni
Chairman of the Board,
President, Chief Executive
Officer and Director,
State Street Research &
Management Company
Edward M. Lamont
Formerly in banking
(Morgan Guaranty Trust
Company of New York);
presently engaged in private
investments and civic affairs
Robert A. Lawrence
Partner, Saltonstall & Co.
Dean O. Morton
Retired; formerly Executive
Vice President, Chief
Operating Officer and Director,
Hewlett-Packard Company
Thomas L. Phillips
Retired; formerly Chairman of
the Board and Chief Executive
Officer, Raytheon Company
Toby Rosenblatt
President,
The Glen Ellen Company
Vice President,
Founders Investments Ltd.
Michael S. Scott Morton
Jay W. Forrester Professor of
Management, Sloan School of
Management, Massachusetts
Institute of Technology
Jeptha H. Wade
Retired; formerly Of Counsel,
Choate, Hall & Stewart
9
<PAGE>
[Back cover]
State Street Research Growth Fund
One Financial Center
Boston, MA 02111
Bulk Rate
U.S. Postage
PAID
Brockton, MA
Permit No. 600
Questions? Comments?
Call us at 1-800-562-0032,
or write us at:
State Street Research
Shareholder Services
P.O. Box 8408
Boston, MA 02266-8408
[State Street Research logo]
This report is prepared for the general information of current shareholders
only. It is not authorized for use as sales material with prospective investors.
The Dalbar awards recognize quality shareholder service and should not be
considered a rating of fund performance. The survey included mutual fund
complexes that volunteered or were otherwise selected to participate and was
not industry-wide.
CONTROL NUMBER: 3319-960822(0997)SSR-LD
Cover Illustration by Dorothy Cullinan GF-750D-896
<PAGE>
[Front cover]
[LOGO] STATE STREET RESEARCH
STATE STREET RESEARCH
GROWTH FUND
SEMIANNUAL REPORT
June 30, 1996
WHAT'S INSIDE
Investment Update:
About the Fund,
economy and markets
Fund Information:
Facts and figures
Plus, Complete Portfolio Holdings and Financial Statements
---------------------[DALBAR SEAL]---------------------
QUALITY
TESTED SERVICE
1995
DALBAR
Honors Committment To:
Investors
For Excellence
in
Shareholder Service
------------------------------------
