<PAGE>
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STATE STREET RESEARCH
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GROWTH FUND
----------------
ANNUAL REPORT
December 31, 1998
--------------------
WHAT'S INSIDE
--------------------
FROM THE CHAIRMAN
Financial markets delivered
strong gains in 1998
PORTFOLIO MANAGER'S REVIEW
Large-cap growth stocks
lead market
FUND INFORMATION
Facts and figures
PLUS, COMPLETE PORTFOLIO HOLDINGS
AND FINANCIAL STATEMENTS
- ----------------------
DALBAR
HONORS COMMITMENT TO:
INVESTORS
1998
- ----------------------
For Excellence
in
Shareholder Service
STATE STREET RESEARCH FUNDS
<PAGE>
FROM THE CHAIRMAN
[Photo of Ralph F. Verni]
DEAR SHAREHOLDER:
In 1998, financial markets in the United States and most developed foreign
nations delivered strong gains. The U.S. economy boosted personal income
and kept unemployment low. Yet growth was moderate enough to hold inflation
down to a mere 1.5% for the year. During the summer, the collapse of
Russia's currency sent waves through the world's markets, but a fast-acting
Federal Reserve Board helped stem a crisis. Currencies continued to slump
in many emerging markets. In some, devaluation threatened, with Brazil in
the hot seat at year-end.
STOCKS
A steep U.S. stock market correction late in the summer was short-lived. Despite
signs of slower profit growth, the market staged a comeback in the fourth
quarter. Technology stocks and large company growth stocks were the strongest
performers, led by Internet stocks which delivered surprising gains. The S&P 500
was up by more than 20% for an unprecedented fourth consecutive year.(1)
However, gains were concentrated in a narrow band of stocks. The average stock
on the New York Stock Exchange actually lost ground for the year. And the stocks
of small and medium-sized companies continued to lag despite a fourth-quarter
comeback.
BONDS
Bonds benefited from the Federal Reserve Board's three quick interest rate
cuts in autumn. The yield on the bellwether 30-year U.S. Treasury bond fell
below 5.0%, then rose slightly at year-end. Not surprisingly, U.S. Treasury
bonds led fixed income market performance for the year. Most other segments
of the bond market delivered attractive single-digit gains. High-yield
bonds disappointed investors, gaining only 0.6% as measured by the First
Boston High Yield Index.
INTERNATIONAL
Foreign markets delivered mixed returns in 1998. In Europe, expectations
for the new common currency, the euro, ran high. Although this helped
European markets, they did better in the first half of the year than in the
second. Most emerging markets were hurt by currencies that continued to
slump against the dollar, or by fears of devaluation, which materialized in
Russia, then threatened in Brazil. Japan showed some willingness to address
its lingering economic problems. But the modest gains attributed to
Japanese stocks owned by U.S. investors were primarily the result of a
weaker dollar.
OUTLOOK AND OPPORTUNITIES
As investors, you may be asking where the opportunities are in a stock
market that has soared for the better part of a decade and a bond market
where interest rates are at or near historic lows. My reply: in
diversification - and in markets that have been beaten down, such as small
and mid-cap stocks, high-yield bonds, and foreign markets. But every
investor has individual goals. Now is a good time to consult your financial
professional. And as always, thank you for your confidence in State Street
Research funds.
Sincerely,
[Graphic Omitted]
Ralph F. Verni
Chairman
December 31, 1998
(1) The S&P 500 (officially the "Standard and Poor's 500 Composite 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) 24.76% for Class B shares; 24.94% for Class C shares; 26.18% 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.
Performance reflects a maximum 4.5% Class A share front-end sales charge, or
5% Class B share or 1% Class C share contingent deferred sales charge, where
applicable.
(4) Class S shares, offered without a sales charge, are available through
certain employee benefit plans and special programs.
(5) 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.
(6) During the periods prior to 1993 that shares of the Fund were not available
to the 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.
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 December 31, 1998)
- --------------------------------------------------------------------------------
TOTAL VALUE OF $10,000 INVESTED ON DECEMBER 31, 1988(3)
(Class A shares, at maximum applicable sales charge)
12/31/88 $ 9,550
12/31/89 13,354
12/31/90 12,531
12/31/91 15,886
12/31/92 16,793
12/31/93 18,251
12/31/94 17,552
12/31/95 23,269
12/31/96 26,213
12/31/97 28 870
12/31/98 36,348
AVERAGE ANNUAL TOTAL RETURN
(at maximum applicable sales charge)(3)(4)(5)(6)
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LIFE OF FUND
(since 3/24/61) 10 YEARS 5 YEARS 1 YEAR
- ------------------------------------------------------------------------------
Class A 10.37% 13.78% 13.72% 20.23%
- ------------------------------------------------------------------------------
Class B 10.37% 13.77% 13.61% 19.76%
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Class C 10.37% 13.79% 13.89% 23.94%
- ------------------------------------------------------------------------------
Class S 10.54% 14.44% 15.00% 26.18%
- ------------------------------------------------------------------------------
The performance data shown above do not reflect an increase in the maximum Class
A sales charge from 4.5% to 5.75%, effective as of 1/1/99. At the new, higher
Class A sales charge, the performance would have been lower. Assuming the
increased sales charge was in effect, performance would have been as follows:
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LIFE OF FUND
(since 3/24/61) 10 YEARS 5 YEARS 1 YEAR
- ------------------------------------------------------------------------------
Class A 10.33% 13.63% 13.42% 18.66%
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<PAGE>
PORTFOLIO MANAGER'S REVIEW
Growth Fund: Large-cap growth stocks lead market
[Photo of Kennard "Pete" Woodworth]
Kennard "Pete"
Woodworth
Portfolio Manager
We spoke with Kennard "Pete" Woodworth, portfolio manager of State Street
Research Growth Fund, about the year ended December 31, 1998 and his views on
the period ahead.
Q: HOW DID THE FUND PERFORM LAST YEAR?
A: It was a good year for the Fund. Class A shares gained 25.90%, [does not
reflect sales charge](2) for the 12 months ended December 31, 1998. It surpassed
the Lipper average growth fund, which gained 22.91% over the same period.
However, it lagged the S&P 500, a broad measure of common stock performance,
which gained 28.60% for the year.
Q: WHAT ACCOUNTED FOR THE FUND'S STRONG PERFORMANCE RELATIVE TO ITS PEER GROUP?
A: The portfolio restructuring that we began a year ago really paid off in 1998.
The market accorded the highest valuations to the type of companies we have
added to the portfolio: large-cap growth stocks with strong, steady earnings
growth. We continued to move away from more volatile, mid-cap stocks, which
were, in fact, laggards during the year.
Q: WHAT SECTORS CONTRIBUTED TO THE FUND'S PERFORMANCE?
A: The Fund has significant positions in technology, health care, and consumer
stocks, all of which delivered outstanding performance for the year. Technology
stocks had a rocky third quarter, but they led the market rally in the fourth
quarter. In a year when economic uncertainty plagued much of the world,
investors favored large drug companies whose earnings are less vulnerable to
economic factors. And large, consumer products companies with strong brand
franchises also did well.
Q: DOES THE FUND OWN ANY INTERNET STOCKS?
A: Yes. One of the Fund's largest investments is in America Online. However,
that is the only one that fits our criteria for the Fund. It's an area of
technology that bears watching; but right now, we believe many Internet stocks
are difficult to value. Most of them have no earnings.
Q: WERE THERE ANY DISAPPOINTMENTS DURING THE YEAR?
A: We were disappointed in the performance of several key stocks: Cendant, which
had represented a large position for the Fund, lost ground on the announcement
of accounting irregularities. IKON, an office technology company, was another
laggard. We sold both positions by year's end. The Fund's investment in oil
stocks was also a drag on performance, despite its rather modest weighting in
the portfolio. The energy sector was affected by declining oil prices.
Q: DID YOU MAKE ANY SIGNIFICANT PURCHASES FOR THE FUND?
A: Throughout the year, we continued to add to our investment in large-cap
growth stocks that fit our criteria for long-term earnings growth. For example,
we added Bristol-Myers Squibb, Lucent, McDonald's, and Coca-Cola Enterprises --
that's the bottling company, not the beverage firm. Each one is a high quality
company, and an industry leader.
Q: WHAT IS YOUR OUTLOOK FOR GROWTH STOCKS AND FOR THE FUND?
A: Our outlook for the stock market is favorable for the year ahead. Some parts
of the world economy are slowing down, but other parts have been picking up
again. The U.S. economy actually looks like it could have a healthy year. The
outlook for interest rates is favorable because there does not appear to be any
imminent threat from inflation. That type of environment favors the kind of
companies the Fund invests in: larger growth companies.
December 31, 1998
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TOP 10 STOCK POSITIONS
(by percentage of net assets)
(1) AMERICA ONLINE Internet software 5.4%
(2) TYCO INTERNATIONAL Diversified manufacturer 4.8%
(3) MICROSOFT Computer software & service 4.6%
(4) CISCO SYSTEMS Computer network products 3.8%
(5) GUIDANT Medical instruments 3.6%
(6) SAFEWAY Food supermarket chain 3.6%
(7) SCHERING-PLOUGH Pharmaceuticals 3.4%
(8) MCI WORLDCOM Telecommunication services 3.2%
(9) CHANCELLOR MEDIA Radio stations 2.8%
(10) COLGATE-PALMOLIVE Household & personal care 2.7%
TOP 5 INDUSTRIES
(by percentage of net assets)
COMPUTER SOFTWARE & SERVICE 18.6%
RETAIL TRADE 8.6%
HOSPITAL SUPPLY 7.5%
DRUG 7.4%
MACHINERY 6.6%
Total: 48.7%
BEST AND WORST CONTRIBUTORS TO PERFORMANCE
(January 1, 1998 through December 31, 1998)
BEST /\
---------------------------------------------------------
AMERICA ONLINE
Fast growth of subscribers and revenue
MICROSOFT
Strong sales, earnings growth, new products
CISCO SYSTEMS
Dominates router market for communications networks
WORST \/
------------------------------------------
CENDANT
Write-offs, restatement of earnings
SEAGULL ENERGY
Plummeting oil and natural gas prices
CARIBINER
Growth expectations sharply reduced
These securities represent an aggregate of 37.9% 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.
<PAGE>
STATE STREET RESEARCH GROWTH FUND
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INVESTMENT PORTFOLIO
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December 31, 1998
- -------------------------------------------------------------------------------
VALUE
SHARES (NOTE 1)
- -------------------------------------------------------------------------------
COMMON STOCKS 99.3%
BASIC INDUSTRIES 8.8%
ELECTRICAL EQUIPMENT 2.2%
General Electric Co. ............................... 53,000 $ 5,409,313
------------
MACHINERY 6.6%
Black & Decker Corp. ............................... 77,000 4,316,812
Tyco International Ltd. ............................ 157,200 11,858,775
------------
16,175,587
------------
Total Basic Industries ............................. 21,584,900
------------
CONSUMER CYCLICAL 15.6%
HOTEL & RESTAURANT 1.8%
McDonald's Corp. ................................... 57,000 4,367,625
------------
RECREATION 2.8%
Chancellor Media Corp.* ............................ 144,400 6,913,150
------------
RETAIL TRADE 8.6%
Borders Group Inc.* ................................ 77,000 1,920,187
CVS Corp. .......................................... 76,200 4,191,000
Dayton Hudson Corp. ................................ 75,000 4,068,750
Safeway Inc.* ...................................... 145,200 8,848,125
Saks Inc.* ......................................... 69,600 2,196,750
------------
21,224,812
------------
TEXTILE & APPAREL 2.4%
Men's Wearhouse, Inc.* ............................. 188,100 5,972,175
------------
Total Consumer Cyclical ............................ 38,477,762
------------
CONSUMER STAPLE 27.3%
BUSINESS SERVICE 1.3%
Apollo Group Inc. Cl. A* ........................... 91,500 3,099,563
------------
DRUG 7.4%
Bristol-Myers Squibb Co. ........................... 37,000 4,951,063
Schering-Plough Corp. .............................. 151,200 8,353,800
Warner-Lambert Co. ................................. 66,600 5,007,487
------------
18,312,350
------------
FOOD & BEVERAGE 2.9%
Coca-Cola Enterprises Inc. ......................... 149,000 5,326,750
Starbucks Corp.* ................................... 32,100 1,801,612
------------
7,128,362
------------
HOSPITAL SUPPLY 7.5%
Baxter International Inc. .......................... 70,000 4,501,875
Guidant Corp. ...................................... 80,400 8,864,100
Johnson & Johnson .................................. 62,000 5,200,250
------------
18,566,225
------------
PERSONAL CARE 6.5%
Colgate-Palmolive Co. .............................. 73,000 6,779,875
Gillette Co. ....................................... 92,000 4,444,750
Procter & Gamble Co. ............................... 52,000 4,748,250
------------
15,972,875
------------
TOBACCO 1.7%
Philip Morris Companies, Inc. ...................... 80,000 4,280,000
------------
Total Consumer Staple .............................. 67,359,375
------------
ENERGY 2.2%
OIL 2.2%
Anadarko Petroleum Corp. ........................... 115,000 3,550,625
Seagull Energy Corp.* .............................. 312,000 1,969,500
------------
5,520,125
------------
Total Energy ....................................... 5,520,125
------------
FINANCE 8.8%
BANK 2.2%
BankAmerica Corp. .................................. 90,174 5,421,712
------------
FINANCIAL SERVICE 1.2%
Merrill Lynch & Company Inc. ....................... 43,400 2,896,950
------------
INSURANCE 5.4%
Ace Ltd. ........................................... 67,800 2,334,863
AMBAC Inc. ......................................... 95,800 5,765,962
Citigroup, Inc. .................................... 76,650 3,794,175
Hartford Financial Services Group, Inc. ............ 29,200 1,602,350
------------
13,497,350
------------
Total Finance ...................................... 21,816,012
------------
SCIENCE & TECHNOLOGY 32.2%
COMPUTER SOFTWARE & SERVICE 18.6%
America Online Inc.* ............................... 84,000 13,440,000
Cadence Design Systems Inc.* ....................... 90,000 2,677,500
Cisco Systems Inc.* ................................ 101,025 9,376,383
EMC Corp.* ......................................... 62,800 5,338,000
i2 Technologies Inc.* .............................. 64,000 1,944,000
J.D. Edwards & Co.* ................................ 61,800 1,753,575
Microsoft Corp.* ................................... 82,400 11,427,850
------------
45,957,308
------------
ELECTRONIC COMPONENTS 5.7%
Analog Devices Inc.* ............................... 102,500 3,215,938
Intel Corp. ........................................ 50,000 5,928,125
Sanmina Corp.* ..................................... 78,200 4,887,500
------------
14,031,563
------------
ELECTRONIC EQUIPMENT 1.8%
Lucent Technologies Inc. ........................... 40,500 4,455,000
------------
OFFICE EQUIPMENT 6.1%
Gateway 2000 Inc.* ................................. 81,000 4,146,187
International Business Machines Corp. .............. 29,600 5,468,600
Xerox Corp. ........................................ 45,000 5,310,000
------------
14,924,787
------------
Total Science & Technology ......................... 79,368,658
------------
UTILITY 4.4%
TELEPHONE 4.4%
MCI WorldCom Inc.* ................................. 111,300 7,985,775
Qwest Communications International Inc.* ........... 59,100 2,955,000
------------
10,940,775
------------
Total Utility ...................................... 10,940,775
------------
Total Common Stocks (Cost $156,180,790) ............ 245,067,607
------------
SHORT-TERM INVESTMENTS 3.9%
AIM Liquid Assets Portfolio ........................ 9,591,199 9,591,199
------------
Total Short-Term Investments (Cost $9,591,199) ..... 9,591,199
------------
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PRINCIPAL MATURITY VALUE
AMOUNT DATE (NOTE 1)
- -------------------------------------------------------------------------------
COMMERCIAL PAPER 0.8%
American Express Credit
Corp., 5.25% ........... $ 1,648,000 1/05/1999 $ 1,648,000
Goldman Sachs Group LP, 5.20% 353,000 1/04/1999 352,847
------------
Total Commercial Paper (Cost $2,000,847) ....................... 2,000,847
------------
Total Investments (Cost $167,772,836) - 104.0% ................. 256,659,653
Other Assets, Less Liabilities - (4.0%) ........................ (9,765,552)
------------
Net Assets - 100.0% ............................................ $246,894,101
============
Federal Income Tax Information:
At December 31, 1998, the net unrealized appreciation of
investments based on cost for Federal income tax purposes
of $167,394,034 was as follows:
Aggregate gross unrealized appreciation for all investments
in which there is an excess of value over tax cost ........... $ 94,151,812
Aggregate gross unrealized depreciation for all investments
in which there is an excess of tax cost over value ........... (4,886,193)
------------
$ 89,265,619
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*Non-income-producing securities.
The accompanying notes are an integral part of the financial statements.
<PAGE>
STATE STREET RESEARCH GROWTH FUND
- -------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
- -------------------------------------------------------------------------------
December 31, 1998
ASSETS
Investments, at value (Cost $167,772,836) (Note 1) ............. $256,659,653
Receivable for fund shares sold ................................ 305,522
Dividends and interest receivable .............................. 72,057
Other assets ................................................... 48,729
------------
257,085,961
LIABILITIES
Payable for collateral received on securities loaned ........... 9,591,199
Payable for fund shares redeemed ............................... 191,214
Accrued transfer agent and shareholder services
(Note 2) ..................................................... 114,707
Accrued management fee (Note 2) ................................ 94,814
Accrued distribution and service fees (Note 4) ................. 42,136
Accrued trustees' fees (Note 2) ................................ 39,689
Payable to custodian ........................................... 13,238
Other accrued expenses ......................................... 104,863
------------
10,191,860
------------
NET ASSETS $246,894,101
============
NET ASSETS CONSIST OF:
Unrealized appreciation of investments ....................... $ 88,886,817
Accumulated net realized loss ................................ (1,650,687)
Paid-in capital .............................................. 159,657,971
------------
$246,894,101
============
Net Asset Value and redemption price per share of
Class A shares ($21,098,218 / 2,371,743 shares) $8.90
=====
Maximum Offering Price per share of Class A shares
($8.90 / .955) .............................................. $9.32
=====
Net Asset Value and offering price per share of
Class B shares ($42,378,621 / 5,001,429 shares)* ............. $8.47
=====
Net Asset Value and offering price per share of
Class C shares ($4,726,508 / 558,044 shares)* ................ $8.47
=====
Net Asset Value, offering price and redemption
price per share of Class S shares
($178,690,754 / 19,920,064 shares) ........................... $8.97
=====
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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 year ended December 31, 1998
INVESTMENT INCOME
Dividends, net of foreign taxes of $979 ...................... $ 968,456
Interest (Note 1) ............................................ 338,501
-----------
1,306,957
EXPENSES
Management fee (Note 2) ...................................... 1,059,512
Transfer agent and shareholder services (Note 2) ............. 219,361
Custodian fee ................................................ 115,690
Reports to shareholders ...................................... 62,572
Registration fees ............................................ 45,726
Service fee-Class A (Note 4) ................................. 44,531
Distribution and service fees-Class B (Note 4) ............... 371,919
Distribution and service fees-Class C (Note 4) ............... 43,141
Trustees' fees (Note 2) ...................................... 42,873
Audit fee .................................................... 31,415
Legal fee .................................................... 17,450
Miscellaneous ................................................ 7,639
-----------
2,061,829
Fees paid indirectly (Note 2) ................................ (13,179)
-----------
2,048,650
-----------
Net investment loss .......................................... (741,693)
-----------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Net realized gain on investments (Notes 1 and 3) ............. 562,491
Net unrealized appreciation of investments ................... 52,559,818
-----------
Net gain on investments ...................................... 53,122,309
-----------
Net increase in net assets resulting from operations ......... $52,380,616
===========
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STATEMENT OF CHANGES IN NET ASSETS
- -------------------------------------------------------------------------------
YEARS ENDED DECEMBER 31
---------------------------------
1997 1998
- -------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment loss ..................... $ (8,292) $ (741,693)
Net realized gain on investments ........ 18,610,792 562,491
Net unrealized appreciation of
investments ........................... 3,969,183 52,559,818
------------ ------------
Net increase resulting from
operations............................. 22,571,683 52,380,616
------------ ------------
Distributions from net realized gains:
Class A ............................... (1,628,897) (2,465)
Class B ............................... (3,791,004) (5,301)
Class C ............................... (470,585) (578)
Class S ............................... (17,258,290) (21,173)
------------ ------------
(23,148,776) (29,517)
------------ ------------
Net decrease from fund share
transactions (Note 5) ................. (6,291,623) (27,619,723)
------------ ------------
Total increase (decrease) in
net assets............................. (6,868,716) 24,731,376
NET ASSETS
Beginning of year ....................... 229,031,441 222,162,725
------------ ------------
End of year ............................. $222,162,725 $246,894,101
============ ============
The accompanying notes are an integral part of the financial statements.
<PAGE>
STATE STREET RESEARCH GROWTH FUND
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NOTES TO FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------
December 31, 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. Until December 31, 1998
Class A shares were subject to an initial sales charge of up to 4.50% and
effective January 1, 1999 became subject to an initial sales charge of up to
5.75%. Class A shares 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. Effective January 1, 1999, the
Fund began offering Class B(1) shares which are subject to a contingent
deferred sales charge on certain redemptions made within six years. 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.
In order to meet certain excise tax distribution requirements under Section 4982
of the Internal Revenue Code, the Fund is required to measure and distribute
annually, if necessary, net capital gains realized during a twelve- month period
ending October 31. In this connection, the Fund is permitted to defer into its
next fiscal year any net capital losses incurred between each November 1 and the
end of its fiscal year. From November 1, 1997 through December 31, 1997, the
Fund incurred net capital losses of $1,978,384 and it has deferred and treated
such losses as arising in the fiscal year ending December 31, 1998.
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. For the year ended December 31, 1998, the Fund has designated
as long-term $29,517 of the distributions from net realized gains.
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 December 31, 1998, the value of the securities loaned and the value
of collateral were $28,439,344 and $27,841,101, (including $9,591,199 of cash
collateral), respectively. During the year ended December 31, 1998, income
from securities lending amounted to $38,054 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 year ended December 31, 1998, the fees pursuant to such agreement
amounted to $1,059,512.
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 year ended
December 31, 1998, the amount of such expenses was $76,997.
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 year ended December 31, 1998 the
Fund's transfer agent fees were
reduced by $13,179 under this agreement.
The fees of the Trustees not currently affiliated with the Adviser amounted to
$42,873 during the year ended December 31, 1998.
NOTE 3
For the year ended December 31, 1998, exclusive of short-term investments and
U.S. Government obligations, purchases and sales of securities aggregated
$85,597,783 and $114,363,483, 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 year ended December 31, 1998,
fees pursuant to such plan amounted to $44,531, $371,919 and $43,141 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 $11,868 and $74,215, respectively, on sales of Class A shares of
the Fund during the year ended December 31, 1998, and that MetLife Securities,
Inc. earned commissions aggregating $193,339 on sales of Class B shares, and
that the Distributor collected contingent deferred sales charges of $95,276
and $363 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>
YEARS ENDED DECEMBER 31
-----------------------------------------------------------------
1997 1998
------------------------ ---------------------------------------
CLASS A SHARES AMOUNT SHARES AMOUNT
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold ................... 1,800,180 $ 13,267,551 849,883 $ 6,572,034
Issued upon reinvestment of
distributions from net
realized gains .............. 239,036 1,614,506 298 2,439
Shares redeemed ............... (1,828,511) (13,640,894) (807,885) (6,158,180)
---------- ------------ ---------- ------------
Net increase .................. 210,705 $ 1,241,163 42,296 $ 416,293
========== ============ ========== ============
<CAPTION>
CLASS B SHARES AMOUNT SHARES AMOUNT
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold ................... 1,677,391 $ 12,208,831 1,347,823 $ 9,980,623
Issued upon reinvestment of
distributions from net
realized gains .............. 502,614 3,255,965 634 4,933
Shares redeemed ............... (1,283,390) (9,489,085) (1,716,822) (12,469,662)
---------- ------------ ---------- ------------
Net increase (decrease) ....... 896,615 $ 5,975,711 (368,365) $ (2,484,106)
========== ============ ========== ============
<CAPTION>
CLASS C SHARES AMOUNT SHARES AMOUNT
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold ................... 331,641 $ 2,437,190 58,325 $ 430,199
Issued upon reinvestment of
distributions from net
realized gains .............. 69,801 451,609 71 557
Shares redeemed ............... (531,745) (3,958,490) (172,948) (1,252,401)
---------- ------------ ---------- ------------
Net decrease .................. (130,303) $ (1,069,691) (114,552) $ (821,645)
========== ============ ========== ============
<CAPTION>
CLASS S SHARES AMOUNT SHARES AMOUNT
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold ................... 58,742 $ 441,722 53,725 $ 407,083
Issued upon reinvestment of
distributions from net
realized gains .............. 1,059,076 7,196,912 985 8,127
Shares redeemed ............... (2,628,815) (20,077,440) (3,290,775) (25,145,475)
---------- ------------ ---------- ------------
Net decrease .................. (1,510,997) $(12,438,806) (3,236,065) $(24,730,265)
========== ============ ========== ============
</TABLE>
<PAGE>
<TABLE>
STATE STREET RESEARCH GROWTH FUND
- ----------------------------------------------------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- ----------------------------------------------------------------------------------------------------------------------------
For a share outstanding throughout each year:
<CAPTION>
CLASS A
---------------------------------------------------------------------------
YEARS ENDED DECEMBER 31
---------------------------------------------------------------------------
1994 1995(a) 1996(a) 1997(a) 1998(a)
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF YEAR ($) 8.50 7.09 7.02 7.17 7.07
---- ---- ---- ---- ----
Net investment income (loss) ($) 0.05 0.01 (0.03) (0.00) (0.03)
Net realized and unrealized gain (loss)
on investments ($) (0.38) 2.30 0.93 0.68 1.86
---- ---- ---- ---- ----
TOTAL FROM INVESTMENT OPERATIONS ($) (0.33) 2.31 0.90 0.68 1.83
---- ---- ---- ---- ----
Dividends from net investment income ($) (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 YEAR ($) 7.09 7.02 7.17 7.07 8.90
==== ==== ==== ==== ====
Total return(b) (%) (3.83) 32.57 12.65 10.14 25.90
RATIOS/SUPPLEMENTAL DATA:
Net assets at end of year ($ thousands) 719 2,379 15,181 16,470 21,098
Ratio of operating expenses to average net
assets (%) 0.90 0.89 0.90 0.93 0.97
Ratio of net investment income (loss) to
average net assets (%) 0.54 0.12 (0.34) (0.05) (0.37)
Portfolio turnover rate (%) 57.18 234.43 237.85 258.99 39.27
<CAPTION>
CLASS B
---------------------------------------------------------------------------
YEARS ENDED DECEMBER 31
---------------------------------------------------------------------------
1994 1995(a) 1996(a) 1997(a) 1998(a)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF YEAR ($) 8.46 7.02 6.89 6.96 6.79
---- ---- ---- ---- ----
Net investment loss ($) (0.00) (0.06) (0.08) (0.06) (0.08)
Net realized and unrealized gain (loss)
on investments ($) (0.41) 2.29 0.90 0.67 1.76
---- ---- ---- ---- ----
TOTAL FROM INVESTMENT OPERATIONS ($) (0.41) 2.23 0.82 0.61 1.68
---- ---- ---- ---- ----
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 YEAR ($) 7.02 6.89 6.96 6.79 8.47
==== ==== ==== ==== ====
Total return(b) (%) (4.80) 31.71 11.73 9.44 24.76
RATIOS/SUPPLEMENTAL DATA:
Net assets at end of year ($ thousands) 1,544 10,684 31,119 36,442 42,379
Ratio of operating expenses to average net
assets (%) 1.63 1.63 1.65 1.68 1.72
Ratio of net investment loss to average net
assets (%) (0.20) (0.69) (1.07) (0.82) (1.13)
Portfolio turnover rate (%) 57.18 234.43 237.85 258.99 39.27
- -----------------------------------------------------------------------------------------------------------------------------
(a) Per-share figures have been calculated using the average shares method.
(b) Does not reflect any front-end or contingent deferred sales charges.
</TABLE>
<PAGE>
<TABLE>
STATE STREET RESEARCH GROWTH FUND
- ----------------------------------------------------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (cont'd)
- ----------------------------------------------------------------------------------------------------------------------------
<CAPTION>
CLASS C
---------------------------------------------------------------------------
YEARS ENDED DECEMBER 31
---------------------------------------------------------------------------
1994 1995(a) 1996(a) 1997(a) 1998(a)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF YEAR ($) 8.45 7.02 6.88 6.95 6.78
---- ---- ---- ---- ----
Net investment loss ($) (0.00) (0.06) (0.08) (0.06) (0.08)
Net realized and unrealized gain
(loss) on investments ($) (0.40) 2.28 0.90 0.67 1.77
---- ---- ---- ---- ----
TOTAL FROM INVESTMENT OPERATIONS ($) (0.40) 2.22 0.82 0.61 1.69
---- ---- ---- ---- ----
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 YEAR ($) 7.02 6.88 6.95 6.78 8.47
==== ==== ==== ==== ====
Total return(b) (%) (4.68) 31.57 11.89 9.30 24.94
RATIOS/SUPPLEMENTAL DATA:
Net assets at end of year ($ thousands) 384 2,117 5,584 4,562 4,727
Ratio of operating expenses to average
net assets (%) 1.63 1.63 1.65 1.68 1.72
Ratio of net investment loss to average
net assets (%) (0.20) (0.67) (1.07) (0.79) (1.13)
Portfolio turnover rate (%) 57.18 234.43 237.85 258.99 39.27
<CAPTION>
CLASS S
---------------------------------------------------------------------------
YEARS ENDED DECEMBER 31
---------------------------------------------------------------------------
1994 1995(a) 1996(a) 1997(a) 1998(a)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF YEAR ($) 8.51 7.08 7.02 7.18 7.11
---- ---- ---- ---- ----
Net investment income (loss) ($) 0.07 0.04 (0.00) 0.01 (0.01)
Net realized and unrealized gain
(loss) on investments ($) (0.40) 2.29 0.92 0.70 1.87
---- ---- ---- ---- ----
TOTAL FROM INVESTMENT OPERATIONS ($) (0.33) 2.33 0.92 0.71 1.86
---- ---- ---- ---- ----
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 ($) (1.10) (2.39) (0.76) (0.78) (0.00)
---- ---- ---- ---- ----
NET ASSET VALUE, END OF YEAR ($) 7.08 7.02 7.18 7.11 8.97
==== ==== ==== ==== ====
Total return(b) (%) (3.82) 33.02 12.74 10.54 26.18
RATIOS/SUPPLEMENTAL DATA:
Net assets at end of year ($ thousands) 186,108 186,689 177,147 164,689 178,691
Ratio of operating expenses to average
net assets (%) 0.64 0.64 0.65 0.68 0.72
Ratio of net investment income (loss) to
average net assets (%) 0.78 0.43 (0.06) 0.19 (0.13)
Portfolio turnover rate (%) 57.18 234.43 237.85 258.99 39.27
- -----------------------------------------------------------------------------------------------------------------------------------
(a) Per-share figures have been calculated using the average shares method.
(b) Does not reflect any front-end or contingent deferred sales charges.
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
REPORT OF INDEPENDENT ACCOUNTANTS
- --------------------------------------------------------------------------------
TO THE TRUSTEES OF STATE STREET RESEARCH GROWTH TRUST
AND THE SHAREHOLDERS OF STATE STREET RESEARCH GROWTH FUND:
In our opinion, the accompanying statement of assets and liabilities,
including the investment portfolio, and the related statements of operations
and of changes in net assets and the financial highlights present fairly, in
all material respects, the financial position of State Street Research Growth
Fund (a series of State Street Research Growth Trust, hereafter referred to as
the "Trust") at December 31, 1998, and the results of its operations, the
changes in its net assets and the financial highlights for the periods
indicated, in conformity with generally accepted accounting principles. These
financial statements and financial highlights (hereafter referred to as
"financial statements") are the responsibility of the Trust's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in
accordance with generally accepted auditing standards which require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audits, which included
confirmation of securities at December 31, 1998 by correspondence with the
custodian, provide a reasonable basis for the opinion expressed above.
PricewaterhouseCoopers LLP
Boston, Massachusetts
February 12, 1999
<PAGE>
STATE STREET RESEARCH GROWTH FUND
- --------------------------------------------------------------------------------
MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE
- --------------------------------------------------------------------------------
For the year ended December 31, 1998, Class A shares of State Street Research
Growth Fund returned 25.90% [does not reflect sales charge]. That surpassed
the Lipper average growth fund, which was up 22.91%, but fell short of the
28.60% gain by the S&P 500.
The manager continued to restructure the portfolio away from small and medium-
sized companies toward the ownership of large growth companies. That strategy
was rewarded as the market accorded these companies the highest valuations
throughout the year.
The Fund's investments in technology, health care and consumer companies
helped performance. Oil stocks and selected consumer discretionary stocks were
a drag on performance.
December 31, 1998
CHANGE IN VALUE OF $10,000
BASED ON THE S&P 500
COMPARED TO CHANGE IN VALUE OF $10,000
INVESTED IN GROWTH FUND
CLASS A
VALUE OF
VALUE OF ACCOUNT OF
ACCOUNT AT S&P 500
YEAR END AT YEAR END
-------- -----------
12/31/88 $ 9,550 $10,000
12/31/89 13,354 13,163
12/31/90 12,531 12,754
12/31/91 15,886 16,631
12/31/92 16,793 17,896
12/31/93 18,251 19,696
12/31/94 17,552 19,955
12/31/95 23,269 27,445
12/31/96 26,213 33,742
12/31/97 28 870 44,995
12/31/98 36,348 57,864
CLASS B
VALUE OF
VALUE OF ACCOUNT OF
ACCOUNT AT S&P 500
YEAR END AT YEAR END
-------- -----------
12/31/88 $10,000 $10,000
12/31/89 13,983 13,163
12/31/90 13,122 12,754
12/31/91 16,635 16,631
12/31/92 17,584 17,896
12/31/93 18,994 19,696
12/31/94 18,083 19,955
12/31/95 23,818 27,445
12/31/96 26,611 33,742
12/31/97 29,123 44,995
12/31/98 36,334 57,864
CLASS C
VALUE OF
VALUE OF ACCOUNT OF
ACCOUNT AT S&P 500
YEAR END AT YEAR END
-------- -----------
12/31/88 $10,000 $10,000
12/31/89 13,983 13,163
12/31/90 13,122 12,754
12/31/91 16,635 16,631
12/31/92 17,584 17,896
12/31/93 18,986 19,696
12/31/94 18,096 19,955
12/31/95 23,809 27,445
12/31/96 26,640 33,742
12/31/97 29,117 44,995
12/31/98 36,379 57,864
CLASS S
VALUE OF
VALUE OF ACCOUNT OF
ACCOUNT AT S&P 500
YEAR END AT YEAR END
-------- -----------
12/31/88 $10,000 $10,000
12/31/89 13,983 13,163
12/31/90 13,122 12,754
12/31/91 16,635 16,631
12/31/92 17,584 17,896
12/31/93 19,156 19,696
12/31/94 18,423 19,955
12/31/95 24,507 27,445
12/31/96 27,629 33,742
12/31/97 30 541 44,995
12/31/98 38,536 57,864
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. Performance
reflects a maximum 4.5% Class A share front-end sales charge, or 5% Class B
share or 1% Class C share contingent deferred sales charge, 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. During the periods prior to 1990 that
shares of the Fund were not available to the 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. Class S shares, offered
without a sales charge, are available only through certain employee benefit
plans and special programs. The S&P 500 (officially the "Standard and Poor's
500 Composite Stock Price Index") is an unmanaged index of 500 U.S. stocks.
The index does not take sales charges into consideration. Direct investment in
the index is not possible; results are for illustrative purposes only.
The performance data shown above do not reflect an increase in the maximum
Class A sales charge from 4.5% to 5.75%, effective as of 1/1/99. At the new,
higher Class A sales charge, the performance would have been lower. Assuming
the increased sales charge was in effect, performance would have been as
follows:
1 YEAR 5 YEARS 10 YEARS
- ------------------------------------------------------------------------------
Class A 18.66% 13.42% 13.63%
- ------------------------------------------------------------------------------
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
STATE STREET RESEARCH GROWTH FUND
- -------------------------------------------------------------------------------------------------------------
FUND INFORMATION, OFFICERS AND TRUSTEES OF STATE STREET RESEARCH GROWTH TRUST
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. Former Senior Vice President
Boston, MA 02111 Vice President for Finance and Operations and
Treasurer, The Pennsylvania
SHAREHOLDER SERVICES GERARD P. MAUS 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 EDWARD M. LAMONT
State Street Bank and Formerly in banking
Trust Company FRANCIS J. MCNAMARA, III (with an affiliate of
225 Franklin Street Secretary and General Counsel J.P. Morgan & Co. in New York);
Boston, MA 02110 presently engaged in private
DARMAN A. WING investments and civic affairs
INDEPENDENT ACCOUNTANTS Assistant Secretary and
PricewaterhouseCoopers LLP Assistant General Counsel ROBERT A. LAWRENCE
One Post Office Square Former Partner, Saltonstall & Co.
Boston, MA 02109 AMY L. SIMMONS
Assistant Secretary DEAN O. MORTON
Former Executive Vice President,
Chief Operating Officer and
Director, Hewlett-Packard
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
</TABLE>
<PAGE>
-------------------
STATE STREET RESEARCH GROWTH FUND Bulk Rate
One Financial Center U.S. Postage
Boston, MA 02111 PAID
PermiT #20
Holliston, Ma 01746
-------------------
QUESTIONS? COMMENTS?
Call us at 1-800-562-0032 or
[hearing-impaired 1-800-676-7876]
Write us at:
State Street Research
Service Center
P.O. Box 8408
Boston, MA 02266-8408
E-mail us at:
[email protected]
[Graphic Omitted] STATE STREET RESEARCH
This report is prepared for the general information of current shareholders.
When used as supplemental sales literature, this publication must be prededed or
accompanied by a current State Street Research Growth Fund prospectus. The
prospectus contains more complete information, including sales charges and
expenses. Please read the prospectus carefully before investing.
When used after March 31, 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: (exp0200) SSR-LD GF-750D-0299
