<PAGE>
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STATE STREET RESEARCH
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GROWTH FUND
----------------
SEMIANNUAL REPORT
June 30, 1998
--------------------
WHAT'S INSIDE
--------------------
INVESTMENT UPDATE
About the Fund,
economy and markets
FUND INFORMATION
Facts and figures
PLUS, COMPLETE PORTFOLIO HOLDINGS
AND FINANCIAL STATEMENTS
- ----------------------
DALBAR
HONORS COMMITMENT TO:
INVESTORS
1997
- ----------------------
For Excellence
in
Shareholder Service
STATE STREET RESEARCH FUNDS
<PAGE>
STATE STREET RESEARCH GROWTH FUND
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INVESTMENT UPDATE
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INVESTMENT ENVIRONMENT
THE ECONOMY
o The first six months of 1998 provided solid economic growth, marked by low
inflation and good investment returns. Consumer confidence was high, personal
income rose, and interest rates remained stable.
o Favorable economic factors stimulated a boom in the housing market and strong
retail sales. Lower energy costs helped keep inflation in check.
o The economic crisis in Southeast Asia raised concerns about U.S. exports and
profits at companies with sizable foreign markets.
THE MARKETS
o The S&P 500, a broad measure of common stock performance, gained 17.72% for
the six months ended June 30, 1998.(1) Investors preferred large-cap stocks
and were willing to pay a premium for potential earnings stability. Small-cap
stocks delivered modest gains. The Russell 2000 Index, a common measure of
small company stock performance, was up 4.38% over the six-month period.
o U.S. Treasury bonds rallied as the yield on the 30-year benchmark fell to
5.6%. High-yield bonds continued to deliver relatively strong gains.
THE FUND
OVER THE PAST SIX MONTHS
o For the six months ended June 30, 1998, Class A shares of State Street
Research Growth Fund returned 16.41% [does not reflect sales charge](2). That
was higher than the average growth fund, which returned 15.10%, according to
Lipper Analytical Services, Inc.
o The Fund's emphasis on technology stocks, especially Cisco and Microsoft, and
pharmaceutical companies, contributed significantly to performance.
o Disappointments were concentrated in the consumer discretionary sector, where
three companies -- Cendant, IKON, and Caribiner -- reported accounting or
earnings problems and their stocks' prices suffered.
CURRENT STRATEGY
o We continue to restructure the portfolio to emphasize larger, high-quality
growth companies. Our goal is to manage the volatility of portfolio.
o We recognize that the full impact of the Asian economic slowdown has not yet
been absorbed in the U.S. However, we believe that market leaders with
consistent records have the potential to remain strong even if earnings growth
slows.
June 30, 1998
(1)The S&P 500 (officially the "Standard and Poor's 500 Stock Price Index") is
an unmanaged index of 500 U.S. stocks. The index does not take transaction
charges into consideration. It is not possible to invest directly in the
index.
(2)15.91% for Class B shares; 15.93% for Class C shares; 16.60% for Class S
shares.
(3)Keep in mind that past performance is no guarantee of future results. The
fund's share price, yield and return will fluctuate, and you may have a gain
or loss when you sell your shares. All returns assume reinvestment of capital
gain distributions and income dividends t net asset value. During the periods
prior to 1993 that shares of the Fund were not offered to the general public,
the Fund was not subject to the cash inflows and higher redemptions and
expenses that have occurred during the Fund's current, continuous public
offering. Performance for a class includes periods prior to the adoption of
class designations in 1993. S shares, offered without a sales charge, are
available only through certain employee benefit plans and special programs.
(4)Performance reflects up to maximum 4.5% A share front-end sales charge, or 5%
B share or 1% C share contingent deferred sales charges, where applicable.
(5)Before November 1, 1997, Class C shares were designated Class D, and Class S
shares were designated Class C.
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.
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FUND INFORMATION (all data are for periods ended June 30, 1998)
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN
(at maximum applicable sales charge)(3)(4)(5)
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LIFE OF FUND
(since 3/24/61) 10 YEARS 5 YEARS 1 YEAR
- ------------------------------------------------------------------------------
Class A 10.29% 13.07% 13.43% 15.96%
- ------------------------------------------------------------------------------
Class B 10.30% 13.12% 13.39% 15.60%
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Class C 10.30% 13.12% 13.58% 19.47%
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Class S 10.46% 13.73% 14.72% 21.75%
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Top 10 Stock Positions
(by percentage of net assets)
(1) WARNER-LAMBERT Pharmaceuticals 4.3%
(2) TYCO INTERNATIONAL Diversified manufacturer 4.2%
(3) MICROSOFT Computer software & service 3.8%
(4) GUIDANT Medical instruments 3.4%
(5) CHANCELLOR MEDIA Radio stations 3.0%
(6) SCHERING-PLOUGH Pharmaceuticals 2.9%
(7) COLGATE-PALMOLIVE Household & personal care 2.7%
(8) MEN'S WEARHOUSE Retail clothing 2.6%
(9) CISCO SYSTEMS Computer network products 2.6%
(10)CENDANT Consumer & business services 2.6%
These securities represent an aggregate of 32.1% of the portfolio. Because of
active management, there is no guarantee that the Fund currently invests, or
will continue to invest, in the securities listed in this table or in the text
above.
TOP 5 INDUSTRIES
(by percentage of net asses)
COMPUTER SOFTWARE
& SERVICE 17.8%
RETAIL TRADE 10.3%
DRUG 7.3%
PERSONAL CARE 6.9%
INSURANCE 6.2%
Total: 48.5%
<PAGE>
STATE STREET RESEARCH GROWTH FUND
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INVESTMENT PORTFOLIO
- --------------------------------------------------------------------------------
June 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
Value
Shares (Note 1)
- -------------------------------------------------------------------------------
COMMON STOCKS 97.7%
BASIC INDUSTRIES 7.1%
FOREST PRODUCT 0.9%
IKON Office Solutions Inc. ....... ...... 140,500 $ 2,046,031
-------------
MACHINERY 4.2%
Tyco International Ltd. .................. 157,200 9,903,600
-------------
ELECTRICAL 2.0%
General Electric Co. ..................... 53,000 4,823,000
-------------
Total Basic Industries ................... 16,772,631
-------------
CONSUMER CYCLICAL 19.1%
RECREATION 6.2%
CBS Corp. ................................ 154,000 4,889,500
Chancellor Media Corp. ................... 144,400 7,170,363
International Game Technology Inc. ....... 102,300 2,480,775
-------------
14,540,638
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RETAIL TRADE 10.3%
Borders Group Inc.* ...................... 77,000 2,849,000
Cendant Corp.* ........................... 296,232 6,183,843
CVS Corp. ................................ 76,200 2,967,037
Dayton Hudson Corp. ...................... 75,000 3,637,500
Proffitts Inc.* .......................... 69,600 2,810,100
Safeway Inc. ............................. 145,200 5,907,825
------------
24,355,305
------------
TEXTILE & APPAREL 2.6%
Men's Wearhouse, Inc.* ................... 188,100 6,207,300
-------------
Total Consumer Cyclical .................. 45,103,243
-------------
CONSUMER STAPLE 24.4%
BUSINESS SERVICE 4.2%
Apollo Group Inc. Cl. A* ................. 91,500 3,025,219
Caribiner International Inc.* ............ 125,000 2,187,500
HBO & Co. ................................ 131,600 4,638,900
-------------
9,851,619
-------------
DRUG 7.3%
Schering-Plough Corp. .................... 75,600 6,926,850
Warner-Lambert Co. ....................... 148,200 10,281,375
-------------
17,208,225
-------------
FOOD & BEVERAGE 0.7%
Starbucks Corp.* ......................... 32,100 1,715,344
-------------
HOSPITAL SUPPLY 5.3%
Guidant Corp. ............................ 113,600 8,101,100
Johnson & Johnson ........................ 62,000 4,572,500
-------------
12,673,600
-------------
PERSONAL CARE 6.9%
Colgate-Palmolive Co. .................... 73,000 6,424,000
Gillette Co. ............................. 92,000 5,215,250
Procter & Gamble Co. ..................... 52,000 4,735,250
-------------
16,374,500
-------------
Total Consumer Staple .................... 57,823,288
-------------
ENERGY 2.2%
OIL 2.2%
Seagull Energy Corp.* .................... 312,000 $ 5,167,500
-------------
Total Energy ............................. 5,167,500
-------------
FINANCE 10.8%
BANK 2.9%
BankAmerica Corp. ........................ 56,800 4,909,650
NationsBank Corp. ........................ 25,900 1,981,350
-------------
6,891,000
-------------
FINANCIAL SERVICE 1.7%
Merrill Lynch & Company Inc. ............. 43,400 4,003,650
-------------
INSURANCE 6.2%
Ace Ltd. ................................. 67,800 2,644,200
AMBAC Inc. ............................... 95,800 5,604,300
Hartford Financial Services Group, Inc.* . 14,600 1,669,875
Travelers Group Inc. ..................... 76,650 4,646,906
-------------
14,565,281
-------------
Total Finance ............................ 25,459,931
-------------
SCIENCE & TECHNOLOGY 31.0%
COMPUTER SOFTWARE & SERVICE 17.8%
America Online Inc.* ..................... 42,000 4,452,000
Cisco Systems Inc.* ...................... 67,350 6,200,409
Citrix Systems Inc. ...................... 36,000 2,461,500
EMC Corp.* ............................... 62,800 2,814,225
i2 Technologies Inc.* .................... 64,000 2,248,000
J.D. Edwards & Co.* ...................... 111,800 4,800,413
Microsoft Corp.* ......................... 82,400 8,930,100
PeopleSoft Inc.* ......................... 128,000 6,016,000
SAP AG ADR ............................... 19,400 4,358,792
-------------
42,281,439
-------------
ELECTRONIC COMPONENTS 2.5%
Analog Devices Inc.* ..................... 102,500 2,517,656
Sanmina Corp.* ........................... 78,200 3,391,925
-------------
5,909,581
-------------
ELECTRONIC EQUIPMENT 5.6%
Advanced Fibre Communications, Inc.* ..... 119,800 4,799,488
Tellabs Inc.* ............................ 60,800 4,354,800
Teradyne Inc.* ........................... 152,300 4,074,025
-------------
13,228,313
-------------
OFFICE EQUIPMENT 5.1%
Gateway 2000 Inc.* ....................... 81,000 4,100,625
International Business Machines Corp. .... 29,600 3,398,450
Xerox Corp. .............................. 45,000 4,573,125
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12,072,200
-------------
Total Science & Technology ............... 73,491,533
-------------
UTILITY 3.1%
TELEPHONE 3.1%
Qwest Communications International Inc.* . 59,100 2,061,112
WorldCom Inc.* ........................... 111,300 5,391,094
-------------
7,452,206
-------------
Total Utility ............................ 7,452,206
-------------
Total Common Stocks (Cost $165,973,140) .. 231,270,332
-------------
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Principal Maturity Value
Amount Date (Note 1)
- --------------------------------------------------------------------------------
COMMERCIAL PAPER 1.9%
American Express Credit Corp., 5.57% ... $1,416,000 7/01/1998 $ 1,416,000
American Express Credit Corp., 5.75% ... 2,003,000 7/06/1998 2,003,000
Ford Motor Credit Co., 5.61% ........... 1,201,000 7/06/1998 1,201,000
-------------
Total Commercial Paper (Cost
$4,620,000) .................................................... 4,620,000
-------------
REPURCHASE AGREEMENTS 0.5%
State Street Bank and Trust Co., dated
6/30/98, repurchase proceeds
$1,081,128, collateralized by $1,100,000
U.S. Treasury Note, 5.75% due
4/30/2003, market value $1,118,003 ... 1,081,000 7/01/1998 1,081,000
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Total Repurchase Agreements (Cost $1,081,000) ................... 1,081,000
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Total Investments (Cost $171,674,140) - 100.1% .................. 236,971,332
Cash and Other Assets, Less Liabilities - (0.1%) ................ (198,919)
-------------
Net Assets - 100.0% ............................................. $236,772,413
=============
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Federal Income Tax Information:
At June 30, 1998, the net unrealized appreciation
of investments based on cost for Federal income tax
purposes of $171,374,899 was as follows:
Aggregate gross unrealized appreciation for all
investments in which there is an excess of value
over tax cost .................................................. $ 73,137,682
Aggregate gross unrealized depreciation for all
investments in which there is an excess of tax
cost over value ................................................ (7,541,249)
-------------
$ 65,596,433
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* Non-income-producing securities.
ADR stands for American Depositary Receipt, representing ownership of foreign
securities.
The accompanying notes are an integral part of the financial statements.
<PAGE>
STATE STREET RESEARCH GROWTH FUND
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STATEMENT OF ASSETS AND LIABILITIES
- --------------------------------------------------------------------------------
June 30, 1998 (Unaudited)
ASSETS
Investments, at value (Cost $171,674,140) (Note 1) ................$236,971,332
Cash .............................................................. 587
Receivable for fund shares sold ................................... 94,170
Dividends and interest receivable ................................. 37,267
Other assets ...................................................... 30,286
------------
237,133,642
LIABILITIES
Accrued management fee (Note 2) ................................... 94,745
Accrued transfer agent and shareholder services
(Note 2) ........................................................ 74,280
Accrued distribution and service fees (Note 4) .................... 40,881
Payable for fund shares redeemed .................................. 40,337
Accrued trustees' fees (Note 2) ................................... 18,509
Other accrued expenses ............................................ 92,477
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361,229
------------
NET ASSETS $236,772,413
============
Net Assets consist of:
Unrealized appreciation of investments .......................... 65,297,192
Accumulated net realized gain ................................... 3,840,922
Paid-in capital ................................................. 167,634,299
------------
$236,772,413
============
Net Asset Value and redemption price per share of Class A shares
($19,061,181 / 2,316,999 shares) $8.23
=====
Maximum Offering Price per share of Class A shares ($8.23 / .955) . $8.62
=====
Net Asset Value and offering price per share of Class B shares
($39,759,282 / 5,053,633 shares)* ............................... $7.87
=====
Net Asset Value and offering price per share of Class C shares
($4,534,411 / 576,664 shares)* .................................. $7.86
=====
Net Asset Value, offering price and redemption price per share
of Class S shares ($173,417,539 / 20,930,357 shares) ............ $8.29
=====
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*Redemption price per share for Class B and Class C is equal to net asset value
less any applicable contingent deferred sales charge.
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements.
<PAGE>
STATE STREET RESEARCH GROWTH FUND
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STATEMENT OF OPERATIONS
- -------------------------------------------------------------------------------
For the six months ended June 30, 1998 (Unaudited)
INVESTMENT INCOME
Dividends, net of foreign taxes of $1,193 ..........................$ 430,876
Interest (Note 1) .................................................. 118,870
-----------
549,746
EXPENSES
Management fee (Note 2) ............................................ 540,012
Transfer agent and shareholder services (Note 2) ................... 93,912
Custodian fee ...................................................... 58,842
Registration fees .................................................. 23,418
Service fee-Class A (Note 4) ....................................... 21,872
Distribution and service fees-Class B (Note 4) ..................... 186,216
Distribution and service fees-Class C (Note 4) ..................... 22,152
Trustees' fees (Note 2) ............................................ 18,509
Reports to shareholders ............................................ 17,670
Audit fee .......................................................... 15,799
Legal fee .......................................................... 9,268
Miscellaneous ...................................................... 2,078
-----------
1,009,748
-----------
Net investment loss ................................................ (460,002)
-----------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Net realized gain on investments (Notes 1 and 3) ................... 6,025,515
Net unrealized appreciation of investments ......................... 28,970,193
-----------
Net gain on investments ............................................ 34,995,708
-----------
Net increase in net assets resulting from operations ...............$34,535,706
===========
The accompanying notes are an integral part of the financial statements.
<PAGE>
STATE STREET RESEARCH GROWTH FUND
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
Six months ended
Year ended June 30, 1998
December 31, 1997 (Unaudited)
- --------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment loss ......................... $ (8,292) $ (460,002)
Net realized gain on investments ............ 18,610,792 6,025,515
Net unrealized appreciation of
investments ............................... 3,969,183 28,970,193
------------ ------------
Net increase resulting from
operations................................. 22,571,683 34,535,706
------------ ------------
Distribution from net realized gains:
Class A ................................... (1,628,897) --
Class B ................................... (3,791,004) --
Class C ................................... (470,585) --
Class S ................................... (17,258,290) --
------------ ------------
(23,148,776) --
------------ ------------
Net decrease from fund share transactions
(Note 5) ................................... (6,291,623) (19,926,018)
------------ ------------
Total increase (decrease) in
net assets................................. (6,868,716) 14,609,688
NET ASSETS
Beginning of period ......................... 229,031,441 222,162,725
------------ ------------
End of period ............................... $222,162,725 $236,772,413
============ ============
The accompanying notes are an integral part of the financial statements.
<PAGE>
STATE STREET RESEARCH GROWTH FUND
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NOTES TO UNAUDITED FINANCIAL STATEMENTS
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June 30,1998
NOTE 1
State Street Research Growth Fund (the "Fund"), is a series of State Street
Research Growth Trust (the "Trust"), which is a Massachusetts business trust
registered under the Investment Company Act of 1940, as amended, as an open-end
management investment company. The Fund is presently the only series of the
Trust.
The investment objective of the Fund is to provide long-term growth of capital.
In seeking to achieve its investment objective, the Fund invests primarily in
equity securities believed by the Investment Adviser to have better than average
growth potential over the years.
The Fund offers four classes of shares. Before November 1, 1997, Class C shares
were designated Class D and Class S shares were designated Class C. 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 subject to a contingent deferred sales charge of 1.00% on any
shares redeemed within one year of their purchase. Class C shares also pay
annual distribution and service fees of 1.00%. Class S shares are only offered
to certain retirement accounts, advisory accounts of State Street Research &
Management Company (the "Adviser"), an indirect wholly owned subsidiary of
Metropolitan Life Insurance Company ("Metropolitan"), and special programs. No
sales charge is imposed at the time of purchase or redemption of Class S shares.
Class S shares do not pay any distribution or service fees. The Fund's expenses
are borne pro-rata by each class, except that each class bears expenses, and has
exclusive voting rights with respect to provisions of the Plan of Distribution,
related specifically to that class. The Trustees declare separate dividends on
each class of shares.
The following significant policies are consistently followed by the Fund in
preparing its financial statements, and such policies are in conformity with
generally accepted accounting principles for investment companies.
A. INVESTMENTS IN SECURITIES
Values for listed securities represent the last sale on national securities
exchanges quoted prior to the close of the New York Stock Exchange. Over-the-
counter securities quoted on the National Association of Securities Dealers
Automated Quotation ("NASDAQ") system are valued at the closing price supplied
through such system. In the absence of recorded sales and for those
over-the-counter securities not quoted on the NASDAQ system, valuations are at
the mean of the closing bid and asked quotations, except for securities that may
be restricted as to public resale, which are valued in accordance with methods
adopted by the Trustees. Security transactions are accounted for on the trade
date (date the order to buy or sell is executed), and dividends declared but not
received are accrued on the ex-dividend date. Interest income is determined on
the accrual basis. Realized gains and losses from security transactions are
reported on the basis of average cost of securities delivered.
B. FEDERAL INCOME TAXES
No provision for Federal income taxes is necessary since the Fund has elected to
qualify under Subchapter M of the Internal Revenue Code and maintains a policy
to distribute all of its taxable income, including net realized capital gains,
within the prescribed time periods. It is also the intention of the Fund to
distribute an amount sufficient to avoid imposition of any Federal Excise Tax
under Section 4982 of the Internal Revenue Code.
C. DIVIDENDS
Dividends from net investment income, if any, are declared and paid or
reinvested semiannually. Net realized capital gains are distributed annually,
unless additional distributions are required for compliance with applicable tax
regulations.
Income dividends and capital gain distributions are determined in accordance
with Federal income tax regulations which may differ from generally accepted
accounting principles. The difference is primarily due to the disposition of
securities that have different bases for financial reporting and tax purposes.
D. ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of income and expenses during the reporting period.
Actual results could differ from those estimates.
E. SECURITIES LENDING
The Fund may seek additional income by lending portfolio securities to qualified
institutions. The Fund will receive cash or securities as collateral in an
amount equal to at least 100% of the current market value of any loaned
securities plus accrued interest. If the borrower fails to return the securities
and the value of the collateral has declined during the term of the loan, the
Fund will bear the loss. At June 30, 1998, the value of the securities loaned
and the value of collateral were $11,696,963 and $11,778,412, respectively.
During the six months ended June 30, 1998, income from securities lending
amounted to $5,313 and is included in interest income.
NOTE 2
The Trust and the Adviser have entered into a contract that provides for an
annual fee equal to 0.475% of the Fund's average daily net assets. In
consideration of these fees, the Adviser furnishes the Fund with management,
investment advisory, statistical and research facilities and services. The
Adviser also pays all salaries, rent and certain other expenses of management.
During the six months ended June 30, 1998, the fees pursuant to such agreement
amounted to $540,012.
State Street Research Service Center, a division of State Street Research
Investment Services, Inc., the Trust's principal underwriter (the
"Distributor"), an indirect wholly owned subsidiary of Metropolitan, provides
certain shareholder services to the Fund such as responding to inquiries and
instructions from investors with respect to the purchase and redemption of
shares of the Fund. In addition, Metropolitan receives a fee for maintenance of
the accounts of certain shareholders who are participants in sponsored
arrangements, employee benefit plans and similar programs or plans, through or
under which shares of the Fund may be purchased. During the six months ended
June 30, 1998, the amount of such expenses was $20,689.
The fees of the Trustees not currently affiliated with the Adviser amounted to
$18,509 during the six months ended June 30, 1998.
NOTE 3
For the six months ended June 30, 1998, exclusive of short-term investments and
U.S. Government obligations, purchases and sales of securities aggregated
$45,352,441 and $69,788,958, respectively.
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 C shares. In addition, the Fund pays
annual distribution fees of 0.75% of average daily net assets for Class B and
Class C shares. The Distributor uses such payments for personal services and/or
the maintenance or servicing of shareholder accounts, to reimburse securities
dealers for distribution and marketing services, to furnish ongoing assistance
to investors and to defray a portion of its distribution and marketing expenses.
For the six months ended June 30, 1998, fees pursuant to such plan amounted to
$21,872, $186,216 and $22,152 for Class A, Class B and Class C shares,
respectively.
The Fund has been informed that the Distributor and MetLife Securities, Inc., a
wholly owned subsidiary of Metropolitan, earned initial sales charges
aggregating $6,047 and $37,700, respectively, on sales of Class A shares of the
Fund during the six months ended June 30, 1998, and that MetLife Securities,
Inc. earned commissions aggregating $109,340 on sales of Class B shares, and
that the Distributor collected contingent deferred sales charges of $35,068 and
$244 on redemptions of Class B and Class C 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.
Share transactions were as follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED
YEAR ENDED JUNE 30, 1998
DECEMBER 31, 1997 (UNAUDITED)
----------------------------- ----------------------------
CLASS A SHARES AMOUNT SHARES AMOUNT
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold ................... 1,800,180 $ 13,267,551 341,760 $ 2,652,605
Issued upon reinvestment of
distribution from net
realized gains .............. 239,036 1,614,506 -- --
Shares redeemed ............... (1,828,511) (13,640,894) (354,208) (2,689,118)
---------- ------------ --------- ------------
Net increase (decrease) ....... 210,705 $ 1,241,163 (12,448) $ (36,513)
========== ============ ========= ============
CLASS B SHARES AMOUNT SHARES AMOUNT
- ------------------------------------------------------------------------------------------------------
Shares sold ................... 1,677,391 $ 12,208,831 556,389 $ 4,121,868
Issued upon reinvestment of
distribution from net
realized gains .............. 502,614 3,255,965 -- --
Shares redeemed ............... (1,283,390) (9,489,085) (872,550) (6,270,141)
---------- ------------ --------- ------------
Net increase (decrease) ....... 896,615 $ 5,975,711 (316,161) $ (2,148,273)
========== ============ ========== ============
CLASS C (FORMERLY CLASS D) SHARES AMOUNT SHARES AMOUNT
- ------------------------------------------------------------------------------------------------------
Shares sold ................... 331,641 $ 2,437,190 21,278 $ 159,829
Issued upon reinvestment of
distribution from net
realized gains .............. 69,801 451,609 -- --
Shares redeemed ............... (531,745) (3,958,490) (117,210) (853,757)
---------- ------------ --------- ------------
Net decrease .................. (130,303) $ (1,069,691) (95,932) $ (693,928)
========== ============ ========= ============
CLASS S (FORMERLY CLASS C) SHARES AMOUNT SHARES AMOUNT
- ------------------------------------------------------------------------------------------------------
Shares sold ................... 58,742 $ 441,722 39,305 $ 297,871
Issued upon reinvestment of
distribution from net
realized gains .............. 1,059,076 7,196,912 -- --
Shares redeemed ............... (2,628,815) (20,077,440) (2,265,077) (17,345,175)
---------- ------------ --------- ------------
Net decrease .................. (1,510,997) $(12,438,806) (2,225,772) $(17,047,304)
========== ============ ========== ============
</TABLE>
<PAGE>
STATE STREET RESEARCH GROWTH FUND
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
For a share outstanding throughout each period:
<TABLE>
<CAPTION>
CLASS A
---------------------------------------------------------------
YEARS ENDED DECEMBER 31 SIX MONTHS ENDED
--------------------------------------------- JUNE 30, 1998
1993(2) 1994 1995(1) 1996(1) 1997(1) (UNAUDITED)(1)
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD ($) 9.63 8.50 7.09 7.02 7.17 7.07
----- ----- ----- ----- ----- -----
Net investment income (loss)($) 0.06 0.05 0.01 (0.03) (0.00) (0.02)
Net realized and unrealized gain (loss) on investments ($) 0.37 (0.38) 2.30 0.93 0.68 1.18
----- ----- ----- ----- ----- -----
TOTAL FROM INVESTMENT OPERATIONS($) 0.43 (0.33) 2.31 0.90 0.68 1.16
----- ----- ----- ----- ----- -----
Dividends from net investment income ($) (0.08) (0.05) (0.02) -- -- --
Distributions from net realized gains ($) (1.48) (1.03) (2.36) (0.75) (0.78) --
----- ----- ----- ----- ----- -----
TOTAL DISTRIBUTIONS ($) (1.56) (1.08) (2.38) (0.75) (0.78) --
----- ----- ----- ----- ----- -----
NET ASSET VALUE, END OF PERIOD($) 8.50 7.09 7.02 7.17 7.07 8.23
===== ===== ===== ===== ===== =====
Total return(4) (%) 4.52(5) (3.83) 32.57 12.65 10.14 16.41(5)
RATIOS/SUPPLEMENTAL DATA:
Net assets at end of period ($ thousands) 602 719 2,379 15,181 16,470 19,061
Ratio of operating expenses to average net assets (%) 0.96(6) 0.90 0.89 0.90 0.93 0.94(6)
Ratio of net investment income (loss) to average net assets (%) 0.48(6) 0.54 0.12 (0.34) (0.05) (0.45)(6)
Portfolio turnover rate (%) 68.36 57.18 234.43 237.85 258.99 20.01
</TABLE>
<TABLE>
<CAPTION>
CLASS B
---------------------------------------------------------------
YEARS ENDED DECEMBER 31 SIX MONTHS ENDED
--------------------------------------------- JUNE 30, 1998
1993(3) 1994 1995(1) 1996(1) 1997(1) (UNAUDITED)(1)
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD ($) 9.56 8.46 7.02 6.89 6.96 6.79
----- ----- ----- ----- ----- -----
Net investment income (loss)($) 0.03 (0.00) (0.06) (0.08) (0.06) (0.04)
Net realized and unrealized gain (loss) on investments ($) 0.42 (0.41) 2.29 0.90 0.67 1.12
----- ----- ----- ----- ----- -----
TOTAL FROM INVESTMENT OPERATIONS($) 0.45 (0.41) 2.23 0.82 0.61 1.08
----- ----- ----- ----- ----- -----
Dividends from net investment income ($) (0.07) -- -- -- -- --
Distributions from net realized gains ($) (1.48) (1.03) (2.36) (0.75) (0.78) --
----- ----- ----- ----- ----- -----
TOTAL DISTRIBUTIONS ($) (1.55) (1.03) (2.36) (0.75) (0.78) --
----- ----- ----- ----- ----- -----
NET ASSET VALUE, END OF PERIOD($) 8.46 7.02 6.89 6.96 6.79 7.87
===== ===== ===== ===== ===== =====
Total return(4) (%) 4.64(5) (4.80) 31.71 11.73 9.44 15.91(5)
RATIOS/SUPPLEMENTAL DATA:
Net assets at end of period ($ thousands) 986 1,544 10,684 31,119 36,442 39,759
Ratio of operating expenses to average net assets (%) 1.71(6) 1.63 1.63 1.65 1.68 1.69(6)
Ratio of net investment loss to average net assets (%) (0.36)(6) (0.20) (0.69) (1.07) (0.82) (1.20)(6)
Portfolio turnover rate (%) 68.36 57.18 234.43 237.85 258.99 20.01
- ---------------------------------------------------------------------------------------------------------------------------------
(1) Per-share figures have been calculated using the average shares method.
(2) March 16, 1993 (commencement of share class designations) to December 31, 1993.
(3) March 18, 1993 (commencement of share class designations) to December 31, 1993.
(4) Does not reflect any front-end or contingent deferred sales charges.
(5) Not annualized.
(6) Annualized.
</TABLE>
<TABLE>
<CAPTION>
STATE STREET RESEARCH GROWTH FUND
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (cont'd)
- --------------------------------------------------------------------------------
CLASS C (FORMERLY CLASS D)
---------------------------------------------------------------
YEARS ENDED DECEMBER 31 SIX MONTHS ENDED
--------------------------------------------- JUNE 30, 1998
1993(3) 1994 1995(1) 1996(1) 1997(1) (UNAUDITED)(1)
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD ($) 9.56 8.45 7.02 6.88 6.95 6.78
----- ----- ----- ----- -----
Net investment income (loss)($) 0.03 (0.00) (0.06) (0.08) (0.06) (0.04)
Net realized and unrealized gain (loss) on investments ($) 0.41 (0.40) 2.28 0.90 0.67 1.12
----- ----- ----- ----- -----
TOTAL FROM INVESTMENT OPERATIONS ($) 0.44 (0.40) 2.22 0.82 0.61 1.08
----- ----- ----- ----- -----
Dividend from net investment income ($) (0.07) -- -- -- -- --
Distributions from net realized gains ($) (1.48) (1.03) (2.36) (0.75) (0.78) --
----- ----- ----- ----- -----
TOTAL DISTRIBUTIONS ($) (1.55) (1.03) (2.36) (0.75) (0.78) --
----- ----- ----- ----- -----
NET ASSET VALUE, END OF PERIOD ($) 8.45 7.02 6.88 6.95 6.78 7.86
===== ===== ===== ===== ===== =====
Total return(4) (%) 4.59(5) (4.68) 31.57 11.89 9.30 15.93(5)
RATIOS/SUPPLEMENTAL DATA:
Net assets at end of period ($ thousands) 242 384 2,117 5,584 4,562 4,534
Ratio of operating expenses to average net assets (%) 1.71(6) 1.63 1.63 1.65 1.68 1.69(6)
Ratio of net investment loss to average net assets (%) (0.34)(6) (0.20) (0.67) (1.07) (0.79) (1.20)(6)
Portfolio turnover rate (%) 68.36 57.18 234.43 237.85 258.99 20.01
</TABLE>
<TABLE>
<CAPTION>
CLASS S (FORMERLY CLASS C)
---------------------------------------------------------------
YEARS ENDED DECEMBER 31 SIX MONTHS ENDED
--------------------------------------------- JUNE 30, 1998
1993 1994 1995(1) 1996(1) 1997(1) (UNAUDITED)(1)
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD ($) 9.26 8.51 7.08 7.02 7.18 7.11
----- ----- ----- ----- ----- -----
Net investment income (loss)($) 0.09 0.07 0.04 (0.00) 0.01 (0.01)
Net realized and unrealized gain (loss) on investments($) 0.74 (0.40) 2.29 0.92 0.70 1.19
----- ----- ----- ----- ----- -----
TOTAL FROM INVESTMENT OPERATIONS($) 0.83 (0.33) 2.33 0.92 0.71 1.18
----- ----- ----- ----- ----- -----
Dividends from net investment income ($) (0.10) (0.07) (0.03) (0.01) -- --
Distributions from net realized gains ($) (1.48) (1.03) (2.36) (0.75) (0.78) --
----- ----- ----- ----- ----- -----
TOTAL DISTRIBUTIONS ($) (1.58) (1.10) (2.39) (0.76) (0.78) --
----- ----- ----- ----- ----- -----
NET ASSET VALUE, END OF PERIOD ($) 8.51 7.08 7.02 7.18 7.11 8.29
===== ===== ===== ===== ===== =====
Total return(4) (%) 8.94 (3.82) 33.02 12.74 10.54 16.60(5)
RATIOS/SUPPLEMENTAL DATA:
Net assets at end of period ($ thousands) 250,786 186,108 186,689 177,147 164,689 173,418
Ratio of operating expenses to average net assets (%) 0.66 0.64 0.64 0.65 0.68 0.69(6)
Ratio of net investment income (loss) to average net assets (%) 0.92 0.78 0.43 (0.06) 0.19 (0.20)(6)
Portfolio turnover rate (%) 68.36 57.18 234.43 237.85 258.99 20.01
- -----------------------------------------------------------------------------------------------------------------------------------
(1) Per-share figures have been calculated using the average shares method.
(2) March 16, 1993 (commencement of share class designations) to December 31, 1993.
(3) March 18, 1993 (commencement of share class designations) to December 31, 1993.
(4) Does not reflect any front-end or contingent deferred sales charges.
(5) Not annualized.
(6) Annualized.
</TABLE>
<PAGE>
STATE STREET RESEARCH GROWTH FUND
<TABLE>
- -----------------------------------------------------------------------------------------------------------------
FUND INFORMATION, OFFICERS AND TRUSTEES OF STATE STREET RESEARCH GROWTH TRUST
- -----------------------------------------------------------------------------------------------------------------
<CAPTION>
FUND INFORMATION OFFICERS TRUSTEES
<S> <C> <C>
STATE STREET RESEARCH RALPH F. VERNI RALPH F. VERNI
GROWTH FUND Chairman of the Board, Chairman of the Board,
One Financial Center President and President, Chief Executive
Boston, MA 02111 Chief Executive Officer Officer and Director,
State Street Research &
INVESTMENT ADVISER PETER C. BENNETT Management Company
State Street Research & Vice President
Management Company STEVE A. GARBAN
One Financial Center DUDLEY F. WADE Retired; formerly Senior Vice
Boston, MA 02111 Vice President President for Finance and
Operations and Treasurer, The
DISTRIBUTOR JAMES M. WEISS Pennsylvania State University
State Street Research Vice President
Investment Services, Inc. MALCOLM T. HOPKINS
One Financial Center KENNARD WOODWORTH, JR. Former Vice Chairman of the
Boston, MA 02111 Vice President Board and Chief Financial
Officer, St. Regis Corp.
SHAREHOLDER SERVICES GERARD P. MAUS
State Street Research Treasurer EDWARD M. LAMONT
Service Center Formerly in banking
P.O. Box 8408 JOSEPH W. CANAVAN (with an affiliate of
Boston, MA 02266-8408 Assistant Treasurer J.P. Morgan & Co. in New York);
1-800-562-0032 presently engaged in private
DOUGLAS A. ROMICH investments and civic affairs
CUSTODIAN Assistant Treasurer
State Street Bank and ROBERT A. LAWRENCE
Trust Company FRANCIS J. MCNAMARA, III Formerly Partner, Saltonstall & Co.
225 Franklin Street Secretary and General Counsel
Boston, MA 02110 DEAN O. MORTON
DARMAN A. WING Retired; formerly Executive
Assistant Secretary and Vice President, Chief
Assistant General Counsel Operating Officer and Director,
Hewlett-Packard Company
AMY L. SIMMONS
Assistant Secretary 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
</TABLE>
<PAGE>
STATE STREET RESEARCH GROWTH FUND ----------------
One Financial Center Bulk Rate
Boston, MA 02111 U.S. Postage
PAID
Permit #6
Hartford, CT
----------------
QUESTIONS? COMMENTS?
CALL us at 1-800-562-0032 or
WRITE us at:
State Street Research
Service Center
P.O. Box 8408
Boston, MA 02266-8408
E-MAIL us at:
[email protected]
INTERNET site:
www.ssrfunds.com
[LOGO] STATE STREET RESEARCH
This report is prepared for the general information of current shareholders.
When used in the general solicitation of investors, this report must be
accompanied or preceded by a current State Street Research Growth Fund
prospectus. When used after September 30, 1998, this report must be accompanied
by a current Quarterly Performance Update.
Portfolio changes should not be considered recommendations for action by
individual investors.
The Dalbar awards recognize quality shareholder service and should not be
considered a rating of fund performance. The survey included mutual fund
complexes that volunteered or were otherwise selected to participate and was not
industry-wide.
CONTROL NUMBER: 5186-980814(exp0899)SSR-LD
GF-203F-0898
