<PAGE>
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STATE STREET RESEARCH
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GROWTH FUND
----------------
SEMIANNUAL REPORT
June 30, 1999
--------------------
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
[LOGO] STATE STREET RESEARCH
<PAGE>
STATE STREET RESEARCH GROWTH FUND
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INVESTMENT UPDATE
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INVESTMENT ENVIRONMENT
THE ECONOMY
o The U.S. economy surprised market watchers with an annualized 6.1%
growth rate in the last quarter of 1998. Growth slowed in the first half of
1999, ending at an annualized 2.3%.
o Inflation remained low, but spiked its first real advance in more than a year
as the price of crude oil rose more than 40% in the first half of the year.
o Americans earned more -- and spent more. Meanwhile, the nation's savings rate
slipped further into negative territory. It stood at -1.2% at mid year.
THE MARKETS
o The S&P 500, a broad measure of common stock performance, gained 12.38% for
the six months ended June 30, 1999.(1) The gap between large company growth
stocks and the rest of the market narrowed, the result of growing concern
over their premium valuations plus the Fed's announced predilection for an
interest rate hike -- which it delivered at the end of the period.
o U.S. Treasury bonds lost ground as the yield on the 30-year benchmark rose
above 6.0%. High-yield bonds, which had weakened late in 1998, rebounded in
the first half of 1999.
THE FUND
OVER THE PAST SIX MONTHS
o For the six months ended June 30, 1999, Class A shares of State Street
Research Growth Fund returned 9.33% (does not reflect sales charge).(2) The
Fund underperformed the Lipper average growth fund, which returned 11.65%.
o In terms of industry and sector holdings, the Fund was not positioned as
aggressively as many peer funds. The portfolio was underweighted in
technology.
CURRENT STRATEGY
o We continue to believe that the U.S. stock market will show low double-digit
returns for 1999, with small- and mid-cap stocks narrowing the performance
gap with large company stocks.
o Attractive investments may include companies with opportunities to improve
productivity by restructuring, substituting capital for labor and cutting
costs, as well as companies with improving fundamentals that favor the
business cycle.
June 30, 1999
(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) 9.09% for Class B(1) shares; 8.97% for Class B shares; 8.97% for Class C
shares; 9.48% 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 at 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. Class S shares, offered
without a sales charge, are available through certain employee benefit plans
and special programs.
(4) Performance reflects up to maximum 5.75% Class A share front-end sales
charge, or 5% Class B(1) or Class B share or 1% Class C share contingent
deferred sales charges, where applicable. The Fund's returns include
performance before the creation of share classes. If this performance
reflected the share classes' current 12b-1 fees, the Fund's returns may have
been lower.
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, 1999)
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN
(at maximum applicable sales charge)(3)(4)
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LIFE OF FUND
(since 3/24/61) 10 YEARS 5 YEARS 1 YEAR
- -----------------------------------------------------------------------------
Class A 10.45% 12.63% 16.72% 11.44%
- -----------------------------------------------------------------------------
Class B(1) 10.48% 12.75% 17.00% 12.42%
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Class B 10.48% 12.73% 16.97% 12.30%
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Class C 10.48% 12.75% 17.20% 16.45%
- -----------------------------------------------------------------------------
Class S 10.66% 13.45% 18.36% 18.47%
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TOP 10 STOCK POSITIONS
(by percentage of net assets)
(1) MICROSOFT Computer software & service 5.0%
(2) CISCO SYSTEMS Computer network products 4.9%
(3) TYCO INTERNATIONAL Diversified manufacturer 4.4%
(4) CHANCELLOR MEDIA Radio stations 3.8%
(5) MCI WORLDCOM Telecommunication services 3.6%
(6) GUIDANT Medical instruments 3.1%
(7) SCHERING-PLOUGH Pharmaceuticals 3.0%
(8) INTEL Semiconductor chips 2.8%
(9) SAFEWAY Food supermarket chain 2.7%
(10) EMC Computer storage systems 2.6%
These securities represent an aggregate of 35.9% 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 assets)
DRUGS & BIOTECHNOLOGY 14.5%
COMPUTER TECHNOLOGY 10.7%
MULTI-SECTOR COMPANIES 8.7%
COMPUTER SOFTWARE 8.4%
TELECOMMUNICATIONS 5.1%
Total: 47.4%
<PAGE>
STATE STREET RESEARCH GROWTH FUND
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INVESTMENT PORTFOLIO
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June 30, 1999 (Unaudited)
VALUE
SHARES (NOTE 1)
- --------------------------------------------------------------------------------
COMMON STOCKS 95.8%
CONSUMER DISCRETIONARY 15.7%
ADVERTISING AGENCIES 1.6%
Omnicom Group Inc. ............................ 52,000 $ 4,160,000
------------
COMMERCIAL SERVICES 2.2%
eBay Inc.* .................................... 13,900 2,098,900
Waste Management Inc.* ........................ 68,400 3,676,500
------------
5,775,400
------------
COMMUNICATIONS, MEDIA & ENTERTAINMENT 3.7%
Chancellor Media Corp.* ....................... 180,200 9,933,525
------------
CONSUMER SERVICES 0.9%
Apollo Group Inc. Cl. A* ...................... 91,500 2,430,469
------------
HOUSEHOLD FURNISHINGS 1.8%
Black & Decker Corp. .......................... 77,000 4,860,625
------------
RESTAURANTS 1.8%
McDonald's Corp. .............................. 114,000 4,709,625
------------
RETAIL 3.7%
Dayton Hudson Corp. ........................... 75,000 4,875,000
Men's Wearhouse, Inc.* ........................ 188,100 4,796,550
------------
9,671,550
------------
Total Consumer Discretionary .................. 41,541,194
------------
CONSUMER STAPLES 10.5%
BEVERAGES 3.4%
Anheuser-Busch Companies, Inc. ................ 50,000 3,546,875
Coca-Cola Enterprises Inc. .................... 183,300 5,453,175
------------
9,000,050
------------
DRUG & GROCERY STORE CHAINS 4.2%
CVS Corp. ..................................... 76,200 3,867,150
Safeway Inc.* ................................. 145,200 7,187,400
------------
11,054,550
------------
HOUSEHOLD PRODUCTS 2.9%
Colgate-Palmolive Co. ......................... 30,000 2,962,500
Procter & Gamble Co. .......................... 52,000 4,641,000
------------
7,603,500
------------
Total Consumer Staples ........................ 27,658,100
------------
FINANCIAL SERVICES 8.1%
BANKS & SAVINGS & LOAN 2.5%
Bank of America Corp. ......................... 90,174 6,610,881
------------
INSURANCE 1.5%
Ace Ltd. ...................................... 67,800 1,915,350
Unum Provident Corp. .......................... 36,700 2,009,325
------------
3,924,675
------------
MISCELLANEOUS FINANCIAL 4.1%
AMBAC Inc. .................................... 95,800 5,472,575
Citigroup, Inc. ............................... 114,975 5,461,313
------------
10,933,888
------------
Total Financial Services ...................... 21,469,444
------------
HEALTH CARE 17.6%
DRUGS & BIOTECHNOLOGY 14.5%
Amgen Inc.* ................................... 72,600 4,419,525
Baxter International Inc. ..................... 70,000 4,243,750
Bristol-Myers Squibb Co. ...................... 74,000 5,212,375
Johnson & Johnson ............................. 62,000 6,076,000
Pfizer Inc. ................................... 40,000 4,390,000
Pharmacia & Upjohn Inc. ....................... 102,100 5,800,556
Schering-Plough Corp. ......................... 151,200 8,013,600
------------
38,155,806
------------
HOSPITAL SUPPLY 3.1%
Guidant Corp.* ................................ 160,800 8,271,150
------------
Total Health Care ............................. 46,426,956
------------
OTHER 8.7%
MULTI-SECTOR 8.7%
AlliedSignal Inc. ............................. 85,300 5,373,900
General Electric Co. .......................... 53,000 5,989,000
Tyco International Ltd. ....................... 123,000 11,654,250
------------
Total Other ................................... 23,017,150
------------
OTHER ENERGY 1.9%
OIL & GAS PRODUCERS 1.9%
Ocean Energy Inc.* ............................ 511,600 4,924,150
------------
Total Other Energy ............................ 4,924,150
------------
TECHNOLOGY 28.2%
COMMUNICATIONS TECHNOLOGY 2.1%
Lucent Technologies Inc. ...................... 81,000 5,462,437
------------
COMPUTER SOFTWARE 8.4%
Citrix Systems Inc.* .......................... 109,700 6,198,050
i2 Technologies Inc.* ......................... 64,000 2,752,000
Microsoft Corp.* .............................. 147,400 13,293,637
------------
22,243,687
------------
COMPUTER TECHNOLOGY 10.7%
Cisco Systems Inc.* ........................... 202,050 13,032,225
EMC Corp.* .................................... 125,600 6,908,000
International Business Machines Corp. ......... 28,600 3,696,550
Sun Microsystems Inc.* ........................ 67,000 4,614,625
------------
28,251,400
------------
ELECTRONICS 2.2%
Sanmina Corp.* ................................ 78,200 5,933,425
------------
ELECTRONICS: SEMI-CONDUCTORS/COMPONENTS 4.8%
Analog Devices Inc.* .......................... 102,500 5,144,219
Intel Corp. ................................... 126,400 7,520,800
------------
12,665,019
------------
Total Technology .............................. 74,555,968
------------
UTILITIES 5.1%
TELECOMMUNICATIONS 5.1%
MCI WorldCom Inc.* ............................ 111,300 9,578,756
Qwest Communications International Inc.* ...... 118,200 3,907,988
------------
13,486,744
------------
Total Utilities ............................... 13,486,744
------------
Total Common Stocks (Cost $161,417,907) ....... 253,079,706
------------
SHORT-TERM INVESTMENTS 3.8%
AIM Liquid Assets Portfolio ................... 10,194,997 10,194,997
------------
Total Short-Term Investments (Cost $10,194,997) 10,194,997
------------
<TABLE>
<CAPTION>
PRINCIPAL MATURITY VALUE
AMOUNT DATE (NOTE 1)
- -----------------------------------------------------------------------------------------------------------------
COMMERCIAL PAPER 4.3%
<S> <C> <C> <C>
American Express Credit Corp., 5.05% ................ $2,483,000 7/01/1999 $ 2,483,000
American Express Credit Corp., 5.25% ................ 1,173,000 7/01/1999 1,173,000
American Express Credit Corp., 5.06% ................ 1,505,000 7/07/1999 1,505,000
American Express Credit Corp., 5.28% ................ 1,371,000 7/08/1999 1,371,000
Ford Motor Credit Co., 4.94% ........................ 1,270,000 7/02/1999 1,270,000
Ford Motor Credit Co., 5.09% ........................ 3,000,000 7/09/1999 3,000,000
General Electric Capital Corp., 5.20% ............... 600,000 7/07/1999 600,000
------------
Total Commercial Paper (Cost $11,402,000) ................................................ 11,402,000
------------
Total Investments (Cost $183,014,904) - 103.9% ........................................... 274,676,703
Cash and Other Assets, Less Liabilities - (3.9%) ......................................... (10,436,547)
------------
Net Assets - 100.0% ...................................................................... $264,240,156
============
Federal Income Tax Information:
At June 30, 1999, the net unrealized appreciation of investments based on
cost for Federal income tax purposes of $182,636,102 was as follows:
Aggregate gross unrealized appreciation for all investments in which there
is an excess of value over tax cost..................................................... $ 97,628,776
Aggregate gross unrealized depreciation for all investments in which there is an
excess of tax cost over value ............................................................ (5,588,175)
------------
$ 92,040,601
============
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* Non-income-producing securities.
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
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STATEMENT OF ASSETS AND LIABILITIES
- --------------------------------------------------------------------------------
June 30, 1999 (Unaudited)
ASSETS
Investments, at value (Cost $183,014,904) (Note 1) .... $274,676,703
Cash .................................................. 141,328
Dividends and interest receivable ..................... 81,394
Receivable for fund shares sold ....................... 77,473
Other assets .......................................... 54,785
------------
275,031,683
LIABILITIES
Payable for collateral received on securities loaned .. 10,194,997
Accrued transfer agent and shareholder services
(Note 2) ............................................ 118,113
Accrued management fee (Note 2) ....................... 105,788
Payable for fund shares redeemed ...................... 87,799
Accrued distribution and services fees (Note 4) ....... 53,065
Accrued trustees' fees (Note 2) ....................... 31,377
Other accrued expenses ................................ 200,388
------------
10,791,527
------------
NET ASSETS $264,240,156
============
Net Assets consist of:
Unrealized appreciation of investments .............. $ 91,661,799
Accumulated net realized gain ....................... 18,767,109
Paid-in capital ..................................... 153,811,248
------------
$264,240,156
============
Net Asset Value and redemption price per share of
Class A shares ($24,407,929 / 2,508,350 shares) ..... $ 9.73
======
Maximum Offering Price per share of Class A shares
($9.73 / .9425) ..................................... $10.32
======
Net Asset Value and offering price per share of
Class B(1) shares ($4,802,277 / 519,760 shares)* .... $ 9.24
======
Net Asset Value and offering price per share of
Class B shares ($46,838,297 / 5,073,938 shares)* .... $ 9.23
======
Net Asset Value and offering price per share of
Class C shares
($5,296,410 / 573,663 shares)* ...................... $ 9.23
======
Net Asset Value, offering price and redemption
price per share of Class S shares
($182,895,243 / 18,617,895 shares) .................. $ 9.82
======
- ---------------------------------------------------------------------
*Redemption price per share for Class B(1), 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, 1999 (Unaudited)
INVESTMENT INCOME
Dividends ........................................................ $ 635,453
Interest (Note 1) ................................................ 157,794
-----------
793,247
EXPENSES
Management fee (Note 2) .......................................... 589,131
Transfer agent and shareholder services (Note 2) ................. 156,960
Reports to shareholders .......................................... 92,816
Custodian fee .................................................... 57,825
Registration fees ................................................ 21,732
Trustees' fees (Note 2) .......................................... 31,377
Audit fee ........................................................ 15,219
Service fee-Class A (Note 4) ..................................... 28,045
Distribution and service fees-Class B(1) (Note 4) ................ 12,102
Distribution and service fees-Class B (Note 4) ................... 221,025
Distribution and service fees-Class C (Note 4) ................... 25,261
Legal fee ........................................................ 7,052
Miscellaneous .................................................... 3,253
-----------
1,261,798
Fees paid indirectly (Note 2) .................................... (9,113)
-----------
1,252,685
-----------
Net investment loss .............................................. (459,438)
-----------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Net realized gain on investments (Notes 1 and 3) ................. 20,417,796
Net unrealized appreciation of investments ....................... 2,774,982
-----------
Net gain on investments .......................................... 23,192,778
-----------
Net increase in net assets resulting from operations ............. $22,733,340
===========
The accompanying notes are an integral part of the financial statements.
<PAGE>
STATE STREET RESEARCH GROWTH FUND
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STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
SIX MONTHS ENDED
YEAR ENDED JUNE 30, 1999
DECEMBER 31, 1998 (UNAUDITED)
- ------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment loss .................. $ (741,693) $ (459,438)
Net realized gain on investments...... 562,491 20,417,796
Net unrealized appreciation
of investments ..................... 52,559,818 2,774,982
------------ ------------
Net increase resulting from
operations ......................... 52,380,616 22,733,340
------------ ------------
Distribution from net realized gains:
Class A ............................ (2,465) --
Class B ............................ (5,301) --
Class C ............................ (578) --
Class S ............................ (21,173) --
------------ ------------
(29,517) --
------------ ------------
Net decrease from fund share
transactions (Note 5) .............. (27,619,723) (5,387,285)
------------ ------------
Total increase in net assets.......... 24,731,376 17,346,055
NET ASSETS
Beginning of period .................. 222,162,725 246,894,101
------------ ------------
End of period ........................ $246,894,101 $264,240,156
============ ============
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, 1999
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 five classes of shares. Class A shares are subject to an initial
sales charge of up to 5.75% and an annual service fee equal to 0.25% of average
daily net assets. On January 1, 1999, the Fund began offering Class B(1) shares
and continued offering Class B shares but only to current shareholders through
reinvestment of dividends and distributions or through exchanges from existing
Class B accounts of State Street Research funds. Class B(1) and Class B pay
annual distribution and service fees of 1.00% and both classes automatically
convert into Class A shares (which pay lower ongoing expenses) at the end of
eight years. Class B(1) shares are subject to a contingent deferred sales charge
on certain redemptions made within six years of purchase. Class B shares are
subject to a contingent deferred sales charge on certain redemptions made within
five years of purchase. Class C shares are subject to a contingent deferred
sales charge of 1.00% on any shares redeemed within one year of 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. At December 31, 1998, the Fund
had a capital loss carryforward of $1,495,557 available, to the extent provided
in regulations, to offset future capital gains, if any, which expires on
December 31, 2006.
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. By reinvesting any cash collateral it receives
in these transactions, the Fund could realize additional gains and losses. If
the borrower fails to return the securities and the value of the collateral has
declined during the term of the loan, the Fund will bear the loss. At June 30,
1999, the value of the securities loaned and the value of cash collateral were
$10,037,925 and $10,194,997, respectively. During the six months ended June 30,
1999, income from securities lending amounted to $30,898 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, 1999, the fees pursuant to such agreement
amounted to $589,131.
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, 1999, the amount of such expenses was $36,651.
The Fund has entered into an arrangement with its transfer agent whereby credits
realized as a result of uninvested cash balances were used to reduce a portion
of the Fund's expense. During the six months ended June 30, 1999 the Fund's
transfer agent fees were reduced by $9,113 under this agreement.
The fees of the Trustees not currently affiliated with the Adviser amounted to
$31,377 during the six months ended June 30, 1999.
NOTE 3
For the six months ended June 30, 1999, exclusive of short-term investments and
U.S. Government obligations, purchases and sales of securities aggregated
$65,643,530 and $80,824,209, respectively.
NOTE 4
The Trust has adopted plans of distribution pursuant to Rule 12b-1 under the
Investment Company Act of 1940, as amended. Under the plans, the Fund pays
annual service fees to the Distributor at a rate of 0.25% of average daily net
assets for Class A, Class B(1), Class B and Class C shares. In addition, the
Fund pays annual distribution fees of 0.75% of average daily net assets for
Class B(1), 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, 1999,
fees pursuant to such plans amounted to $28,045, $12,102, $221,025 and $25,261
for Class A, Class B(1), 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 $8,842 and $55,295, respectively, on sales of Class A shares of the
Fund during the six months ended June 30, 1999, and that MetLife Securities,
Inc. earned commissions aggregating $28,401 and $127,857 on sales of Class B(1)
and Class B shares, and that the Distributor collected contingent deferred sales
charges of $1,526, $48,625 and $20 on redemptions of Class B(1), Class B and
Class C shares, respectively, during the same period.
<PAGE>
STATE STREET RESEARCH GROWTH FUND
- --------------------------------------------------------------------------------
NOTES (cont'd)
- --------------------------------------------------------------------------------
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, 1999, Metropolitan
owned 59,032 Class B(1) shares of the Fund.
Share transactions were as follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED
YEAR ENDED JUNE 30, 1999
DECEMBER 31, 1998 (UNAUDITED)
---------------------------- ----------------------------
CLASS A SHARES AMOUNT SHARES AMOUNT
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold ...................................... 849,883 $ 6,572,034 530,800 $ 4,896,567
Issued upon reinvestment of distribution from
net realized gains ............................. 298 2,439 -- --
Shares redeemed .................................. (807,885) (6,158,180) (394,193) (3,642,613)
------------ ------------ ------------ ------------
Net increase ..................................... 42,296 $ 416,293 136,607 $ 1,253,954
============ ============ ============ ============
<CAPTION>
CLASS B(1)* SHARES AMOUNT SHARES AMOUNT
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold ...................................... -- -- 534,867 $ 4,706,824
Shares repurchased ............................... -- -- (15,107) (145,348)
------------ ------------ ------------ ------------
Net increase ..................................... -- -- 519,760 $ 4,561,476
============ ============ ============ ============
<CAPTION>
CLASS B SHARES AMOUNT SHARES AMOUNT
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold ...................................... 1,347,823 $ 9,980,623 757,766 $ 6,600,275
Issued upon reinvestment of distribution from
net realized gains ............................. 634 4,933 -- --
Shares redeemed .................................. (1,716,822) (12,469,662) (685,257) (5,970,063)
------------ ------------ ------------ ------------
Net increase (decrease) .......................... (368,365) $ (2,484,106) 72,509 $ 630,212
============ ============ ============ ============
<CAPTION>
CLASS C SHARES AMOUNT SHARES AMOUNT
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold ...................................... 58,325 $ 430,199 111,079 $ 975,492
Issued upon reinvestment of distribution from
net realized gains ............................. 71 557 -- --
Shares redeemed .................................. (172,948) (1,252,401) (95,460) (837,682)
------------ ------------ ------------ ------------
Net increase (decrease) .......................... (114,552) $ (821,645) 15,619 $ 137,810
============ ============ ============ ============
<CAPTION>
CLASS S SHARES AMOUNT SHARES AMOUNT
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold ...................................... 53,725 $ 407,083 71,017 $ 647,222
Issued upon reinvestment of distribution from
net realized gains ............................. 985 8,127 -- --
Shares redeemed .................................. (3,290,775) (25,145,475) (1,373,186) (12,617,959)
------------ ------------ ------------ ------------
Net decrease ..................................... (3,236,065) $(24,730,265) (1,302,169) $(11,970,737)
============ ============ ============ ============
- -----------------------------------------------------------------------------------------------------------------
* January 1, 1999 (commencement of share class) to June 30, 1999.
</TABLE>
<PAGE>
STATE STREET RESEARCH GROWTH FUND
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
For a share outstanding throughout each period:
<TABLE>
<CAPTION>
CLASS A CLASS B(1)
-------------------------------------------------------------------------------------- ----------------
SIX MONTHS SIX MONTHS
ENDED ENDED
YEARS ENDED DECEMBER 31 JULY 31, JULY 31,
---------------------------------------------------------- 1999 1999
1994 1995(a) 1996(a) 1997(a) 1998(a) (UNAUDITED)(a) (UNAUDITED)(a)(c)
- ---------------------------------------------------------------------------------------------------------- ----------------
NET ASSET VALUE,
<S> <C> <C> <C> <C> <C> <C> <C>
BEGINNING OF PERIOD ($) ................... 8.50 7.09 7.02 7.17 7.07 8.90 8.47
---- ---- ---- ---- ---- ---- ----
Net investment income (loss) ($) ........ 0.05 0.01 (0.03) (0.00) (0.03) (0.02) (0.05)
Net realized and unrealized gain
(loss) on investments ($) ............. (0.38) 2.30 0.93 0.68 1.86 0.85 0.82
---- ---- ---- ---- ---- ---- ----
TOTAL FROM INVESTMENT OPERATIONS ($) ...... (0.33) 2.31 0.90 0.68 1.83 0.83 0.77
---- ---- ---- ---- ---- ---- ----
Dividends from net investment income ($) (0.05) (0.02) -- -- -- -- --
Distributions from net realized gains ($) (1.03) (2.36) (0.75) (0.78) (0.00) -- --
---- ---- ---- ---- ---- ---- ----
TOTAL DISTRIBUTIONS ($) ................... (1.08) (2.38) (0.75) (0.78) (0.00) -- --
---- ---- ---- ---- ---- ---- ----
NET ASSET VALUE, END OF PERIOD ($) ........ 7.09 7.02 7.17 7.07 8.90 9.73 9.24
==== ==== ==== ==== ==== ==== ====
Total return (b) (%) ...................... (3.83) 32.57 12.65 10.14 25.90 9.33(d) 9.09(d)
RATIOS/SUPPLEMENTAL DATA:
Net assets at end of period ($ thousands) . 719 2,379 15,181 16,470 21,098 24,408 4,802
Ratio of operating expenses to average
net assets (%) .......................... 0.90 0.89 0.90 0.93 0.97 1.04 (e) 1.79(e)
Ratio of net investment income (loss)
to average net assets (%) ............... 0.54 0.12 (0.34) (0.05) (0.37) (0.39)(e) (1.13)(e)
Portfolio turnover rate (%) ............... 57.18 234.43 237.85 258.99 39.27 26.35 26.35
<CAPTION>
CLASS B
----------------------------------------------------------------------------
YEARS ENDED DECEMBER 31 SIX MONTHS ENDED
------------------------------------------------------------ JUNE 30, 1999
1994 1995(a) 1996(a) 1997(a) 1998(a) (UNAUDITED)(a)
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD ($) 8.46 7.02 6.89 6.96 6.79 8.47
--------- --------- --------- --------- --------- ---------
Net investment loss ($) (0.00) (0.06) (0.08) (0.06) (0.08) (0.05)
Net realized and unrealized gain (loss)
on investments ($) (0.41) 2.29 0.90 0.67 1.76 0.81
--------- --------- --------- --------- --------- ---------
TOTAL FROM INVESTMENT OPERATIONS ($) (0.41) 2.23 0.82 0.61 1.68 0.76
--------- --------- --------- --------- --------- ---------
Distributions from net realized gains ($) (1.03) (2.36) (0.75) (0.78) (0.00) --
--------- --------- --------- --------- --------- ---------
TOTAL DISTRIBUTIONS ($) (1.03) (2.36) (0.75) (0.78) (0.00) --
--------- --------- --------- --------- --------- ---------
NET ASSET VALUE, END OF PERIOD ($) 7.02 6.89 6.96 6.79 8.47 9.23
========= ========= ========= ========= ========= =========
Total return (b) (%) (4.80) 31.71 11.73 9.44 24.76 8.97 (d)
RATIOS/SUPPLEMENTAL DATA:
Net assets at end of period ($ thousands) 1,544 10,684 31,119 36,442 42,379 46,838
Ratio of operating expenses to average
net assets (%) 1.63 1.63 1.65 1.68 1.72 1.79 (e)
Ratio of net investment loss to average
net assets (%) (0.20) (0.69) (1.07) (0.82) (1.13) (1.14)(e)
Portfolio turnover rate (%) 57.18 234.43 237.85 258.99 39.27 26.35
- ------------------------------------------------------------------------------------------
(a) Per-share figures have been calculated using the average shares method.
(b) Does not reflect any front-end or contingent deferred sales charges.
(c) January 1, 1999 (commencement of shares class) to June 30, 1999.
(d) Not annualized.
(e) Annualized.
</TABLE>
<PAGE>
STATE STREET RESEARCH GROWTH FUND
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (cont'd)
- --------------------------------------------------------------------------------
For a share outstanding throughout each period:
<TABLE>
<CAPTION>
CLASS C
--------------------------------------------------------------------------------------------------------------
YEARS ENDED DECEMBER 31 SIX MONTHS ENDED
--------------------------------------------------------------------------------- JUNE 30, 1999
1994 1995(a) 1996(a) 1997(a) 1998(a) (UNAUDITED)(a)
- -----------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE,
<S> <C> <C> <C> <C> <C> <C>
BEGINNING OF PERIOD ($) 8.45 7.02 6.88 6.95 6.78 8.47
---- ---- ---- ---- ---- ----
Net investment loss ($) (0.00) (0.06) (0.08) (0.06) (0.08) (0.05)
Net realized and
unrealized gain
(loss) on
investments ($) (0.40) 2.28 0.90 0.67 1.77 0.81
---- ---- ---- ---- ---- ----
TOTAL FROM INVESTMENT
OPERATIONS ($) (0.40) 2.22 0.82 0.61 1.69 0.76
---- ---- ---- ---- ---- ----
Distributions from
net realized gains ($) (1.03) (2.36) (0.75) (0.78) (0.00) --
---- ---- ---- ---- ---- ----
TOTAL DISTRIBUTIONS ($) (1.03) (2.36) (0.75) (0.78) (0.00) --
---- ---- ---- ---- ---- ----
NET ASSET VALUE,
END OF PERIOD ($) 7.02 6.88 6.95 6.78 8.47 9.23
==== ==== ==== ==== ==== ====
Total return (b) (%) (4.68) 31.57 11.89 9.30 24.94 8.97 (d)
RATIOS/SUPPLEMENTAL DATA:
Net assets at end of
period ($ thousands) 384 2,117 5,584 4,562 4,727 5,296
Ratio of operating
expenses to
average net
assets (%) 1.63 1.63 1.65 1.68 1.72 1.79 (e)
Ratio of net
investment loss
to average net
assets (%) (0.20) (0.67) (1.07) (0.79) (1.13) (1.14)(e)
Portfolio turnover
rate (%) 57.18 234.43 237.85 258.99 39.27 26.35
<CAPTION>
CLASS S
--------------------------------------------------------------------------------------------------------------
YEARS ENDED DECEMBER 31 SIX MONTHS ENDED
--------------------------------------------------------------------------------- JUNE 30, 1999
1994 1995(a) 1996(a) 1997(a) 1998(a) (UNAUDITED)(a)
- -----------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE,
<S> <C> <C> <C> <C> <C> <C>
BEGINNING OF PERIOD ($) 8.51 7.08 7.02 7.18 7.11 8.97
---- ---- ---- ---- ---- ----
Net investment
income (loss) ($) 0.07 0.04 (0.00) 0.01 (0.01) (0.01)
Net realized and
unrealized gain
(loss) on
investments ($) (0.40) 2.29 0.92 0.70 1.87 0.86
---- ---- ---- ---- ---- ----
TOTAL FROM INVESTMENT
OPERATIONS ($) (0.33) 2.33 0.92 0.71 1.86 0.85
---- ---- ---- ---- ---- ----
Dividends from
net investment
income ($) (0.07) (0.03) (0.01) -- -- --
Distributions
from net realized
gains ($) (1.03) (2.36) (0.75) (0.78) (0.00) --
---- ---- ---- ---- ---- ----
TOTAL DISTRIBUTIONS ($) (1.10) (2.39) (0.76) (0.78) (0.00) --
---- ---- ---- ---- ---- ----
NET ASSET VALUE,
END OF PERIOD ($) 7.08 7.02 7.18 7.11 8.97 9.82
==== ==== ==== ==== ==== ====
Total return (b) (%) (3.82) 33.02 12.74 10.54 26.18 9.48 (d)
RATIOS/SUPPLEMENTAL DATA:
Net assets at end of
period ($ thousands) 186,108 186,689 177,147 164,689 178,691 182,895
Ratio of operating
expenses to
average net
assets (%) 0.64 0.64 0.65 0.68 0.72 0.79 (e)
Ratio of net
investment income
(loss) to average
net assets (%) 0.78 0.43 (0.06) 0.19 (0.13) (0.14)(e)
Portfolio turnover
rate (%) 57.18 234.43 237.85 258.99 39.27 26.35
- -------------------------------------------------------------------------------------------------------------------------
(a) Per-share figures have been calculated using the average shares method.
(b) Does not reflect any front-end or contingent deferred sales charges.
(c) January 1, 1999 (commencement of shares class) to June 30, 1999.
(d) Not annualized.
(e) Annualized.
</TABLE>
<PAGE>
STATE STREET RESEARCH GROWTH FUND
- --------------------------------------------------------------------------------
REPORT ON SPECIAL MEETING OF SHAREHOLDERS
- --------------------------------------------------------------------------------
A Special Meeting of Shareholders of State Street Research Growth Fund ("Fund"),
a series of State Street Research Growth Trust ("Trust"), was convened on April
6, 1999 ("Meeting"). The results of the Meeting are set forth below.
VOTES (MILLIONS OF SHARES)
-------------------------
ACTION ON PROPOSAL FOR WITHHELD
- -------------------------------------------------------------------------------
The following persons were elected as Trustees:
Bruce R. Bond ..................................... 14.3 0.2
Steve A. Garban ................................... 14.3 0.2
Malcolm T. Hopkins ................................ 14.3 0.2
Susan M. Phillips ................................. 14.3 0.2
<PAGE>
STATE STREET RESEARCH GROWTH FUND
- --------------------------------------------------------------------------------
FUND INFORMATION, OFFICERS AND TRUSTEES OF STATE STREET RESEARCH GROWTH TRUST
- --------------------------------------------------------------------------------
<TABLE>
<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 BRUCE R. BOND
One Financial Center DUDLEY F. WADE Chairman of the Board
Boston, MA 02111 Vice President Chief Executive Officer and
President,
DISTRIBUTOR JAMES M. WEISS PictureTel Corporation
State Street Research Vice President
Investment Services, Inc. STEVE A. GARBAN
One Financial Center KENNARD WOODWORTH, JR. Retired; formerly Senior Vice
Boston, MA 02111 Vice President President for Finance and
Operations and Treasurer, The
SHAREHOLDER SERVICES GERARD P. MAUS Pennsylvania State University
State Street Research Treasurer
Service Center MALCOLM T. HOPKINS
P.O. Box 8408 JOSEPH W. CANAVAN Former Vice Chairman of the
Boston, MA 02266-8408 Assistant Treasurer Board and Chief Financial
1-800-562-0032 Officer, St. Regis Corp.
DOUGLAS A. ROMICH
CUSTODIAN Assistant Treasurer DEAN O. MORTON
State Street Bank and Retired; formerly Executive
Trust Company FRANCIS J. MCNAMARA, III Vice President, Chief
225 Franklin Street Secretary and General Counsel Operating Officer and Director,
Boston, MA 02110 Hewlett-Packard Company
DARMAN A. WING
LEGAL COUNSEL Assistant Secretary and SUSAN M. PHILLIPS
Goodwin, Procter & Hoar LLP Assistant General Counsel Dean, School of Business and
Exchange Place Public Management, George
Boston, MA 02109 AMY L. SIMMONS Washington University; former
Assistant Secretary Member of the Board of Governors
of the Federal Reserve System and
Chairman and Commissioner of
the Commodity Futures Trading
Commission
TOBY ROSENBLATT
President,
Founders Investments Ltd.
President,
The Glen Ellen Company
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
----------------
STATE STREET RESEARCH
[graphic omitted]
LASTING VALUES
--------------
LEADING IDEAS
QUESTIONS? COMMENTS?
CALL us at 1-800-562-0032 or
[hearing-impaired 1-800-676-7876]
[Chinese and Spanish-speaking 1-888-638-3193]
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, 1999, 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: (exp0800)SSR-LD
GF-017G-0899
