<PAGE>
A Message To Our Contract Owners:
We are pleased to forward this combined Semiannual Report of the segment of
Massachusetts Mutual Variable Annuity Separate Account 1 ("Separate Account 1")
pertaining to Flex Extra (Qualified) (the "Segment"), the four series of the MML
Series Investment Fund, and the three Funds of the Oppenheimer Variable Account
Funds available to owners of Flex Extra Contracts. These reports are for the
period ended June 30, 1997.
The Semiannual Report for the Segment begins on page 3. The Segment has net
assets of $3,583,782,438 as of June 30, 1997. Net asset values per accumulation
unit for the MML Equity, MML Money Market, MML Managed Bond, MML Blend,
Oppenheimer Capital Appreciation, Oppenheimer Global Securities and Oppenheimer
Strategic Bond Divisions as of June 30, 1997 are shown in detail in the table on
page 3.
The Semiannual Report for four series of the MML Series Investment Fund begins
on page 11. This report contains a detailed description of the financial
results of the MML Equity Fund, MML Money Market Fund, MML Managed Bond Fund and
MML Blend Fund for the period ended June 30, 1997.
The Semiannual Report for the Oppenheimer Variable Account Funds begins on page
36. This report contains a detailed description of the financial results of the
Oppenheimer Capital Appreciation Fund, Oppenheimer Global Securities Fund and
Oppenheimer Strategic Bond Fund for the period ended June 30, 1997.
We appreciate the interest and confidence you have shown in Separate Account 1.
MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY
/s/ Thomas B. Wheeler
Thomas B. Wheeler
Chairman and Chief Executive Officer
August 1, 1997
1
<PAGE>
Table of Contents
Massachusetts Mutual Variable Annuity Separate Account 1
<TABLE>
<S> <C>
Flex Extra (Qualified)
Statement of Assets and Liabilities as of June 30, 1997.................................... 3
Statement of Operations For the Six Months Ended June 30, 1997............................. 4
Statement of Changes in Net Assets For the Six Months Ended June 30, 1997 and 1996......... 5-6
Notes to Financial Statements.............................................................. 7-10
MML Series Investment Fund
To Our Shareholders........................................................................ 11-14
Statement of Assets and Liabilities as of June 30, 1997.................................... 15
Statement of Operations For the Six Months Ended June 30, 1997............................. 16
Statement of Changes in Net Assets For the Six Months Ended June 30, 1997 and
For the Year Ended December 31, 1996..................................................... 17
Financial Highlights....................................................................... 18-20
Schedule of Investments as of June 30, 1997
MML Equity Fund.......................................................................... 21-22
MML Money Market Fund.................................................................... 23
MML Managed Bond Fund.................................................................... 24-26
MML Blend Fund........................................................................... 27-32
Notes to Financial Statements.............................................................. 33-35
Oppenheimer Variable Account Funds
Oppenheimer Fund Managers' Message......................................................... 36-39
Statement of Assets and Liabilities as of June 30, 1997.................................... 40-42
Statement of Operations For the Six Months Ended June 30, 1997............................. 43-45
Statement of Changes in Net Assets For the Six Months Ended June 30, 1997 and
For the Year Ended December 31, 1996..................................................... 46-48
Financial Highlights....................................................................... 49-51
Statement of Investments as of June 30, 1997
Oppenheimer Capital Appreciation Fund.................................................... 52-56
Oppenheimer Global Securities Fund....................................................... 57-63
Oppenheimer Strategic Bond Fund.......................................................... 64-84
Notes to Financial Statements............................................................ 85-94
</TABLE>
2
<PAGE>
Massacusetts Mutual Variable Annuity Separtate Account 1 - Flex Extra
(Qualified)
STATEMENT OF ASSETS AND LIABILITIES
June 30, 1997
(Unaudited)
<TABLE>
<CAPTION>
MML MML Oppenheimer
MML Money Managed MML Capital
Equity Market Bond Blend Appreciation
Division Division Division Division Division
------------ ------------ ------------ ----------- ------------
<S> <C> <C> <C> <C> <C>
ASSETS
Investments
Number of shares (Note 2)......................... 38,429,030 74,077,904 8,554,964 66,526,244 6,736,647
============== ============ ============ ============== ============
Identified cost (Note 3B)......................... $ 865,652,239 $ 74,077,904 $104,790,707 $1,205,606,528 $235,251,772
============== ============ ============ ============== ============
Value (Note 3A)................................... $1,328,923,429 $ 74,077,904 $104,424,642 $1,612,953,212 $262,998,715
Dividends receivable................................ -- 314,667 -- -- --
Receivable for accumulation units sold.............. 963,903 319,537 188,811 628,066 484,878
Divisional transfers pending settlement............. (274,706) 277,446 (53,819) (11,921) 14,868
Other assets........................................ 1,429 -- 171 3,926 212
-------------- ------------ ------------ -------------- ------------
Total assets...................................... 1,329,614,055 74,989,554 104,559,805 1,613,573,283 263,498,673
-------------- ------------ ------------ -------------- ------------
LIABILITIES
Redemptions pending settlement...................... 1,893,975 122,997 69,897 2,488,158 258,377
Annuitant mortality fluctuation reserve (Note 3D)... 9,043 349 1,233 40,319 133
Payable to Massachusetts Mutual
Life Insurance Company............................ 4,103,799 249,758 330,496 5,263,995 787,069
-------------- ------------ ------------ -------------- ------------
Total liabilities................................. 6,006,817 373,104 401,626 7,792,472 1,045,579
-------------- ------------ ------------ -------------- ------------
NET ASSETS.......................................... $1,323,607,238 $ 74,616,450 $104,158,179 $1,605,780,811 $262,453,094
============== ============ ============ ============== ============
Net assets:
Accumulation units - Value.......................... $1,323,305,821 $ 74,604,839 $104,117,070 $1,604,436,845 $262,448,673
Annuity reserves (Note 3E).......................... 301,417 11,611 41,109 1,343,966 4,421
-------------- ------------ ------------ -------------- ------------
Net assets........................................ $1,323,607,238 $ 74,616,450 $104,158,179 $1,605,780,811 $262,453,094
============== ============ ============ ============== ============
Accumulation units (Note 7)
Contractowners.................................... 394,039,277 48,139,522 50,952,995 573,296,929 158,785,491
Massachusetts Mutual Life Insurance Company...... -- -- -- -- 5,000
-------------- ------------ ------------ -------------- ------------
Total units..................................... 394,039,277 48,139,522 50,952,995 573,296,929 158,790,491
============== ============ ============ ============== ============
NET ASSET VALUE PER ACCUMULATION UNIT
June 30, 1997....................................... $3.36 $1.55 $2.04 $2.80 $1.65
June 30, 1996....................................... 2.64 1.49 1.91 2.36 1.56
June 30, 1995....................................... 2.18 1.44 1.85 2.06 1.13
June 30, 1994....................................... 1.83 1.39 1.66 1.80 --
June 30, 1993....................................... 1.78 1.36 1.71 1.77 --
<CAPTION>
Oppenheimer Oppenheimer
Global Strategic
Securities Bond
Division Division
------------ ------------
<S> <C> <C>
ASSETS
Investments
Number of shares (Note 2)......................... 7,988,271 10,381,884
============ ============
Identified cost (Note 3B)......................... $130,306,502 $ 51,361,047
============ ============
Value (Note 3A)................................... $162,161,892 $ 52,739,970
Dividends receivable................................ -- --
Receivable for accumulation units sold.............. 261,752 133,443
Divisional transfers pending settlement............. 61,028 (12,896)
Other assets........................................ 182 183
------------ ------------
Total assets...................................... 162,484,854 52,860,700
============ ============
LIABILITIES
Redemptions pending settlement...................... 65,245 3,218
Annuitant mortality fluctuation reserve (Note 3D)... -- --
Payable to Massachusetts Mutual
Life Insurance Company............................ 1,946,804 163,621
------------ ------------
Total liabilities................................. 2,012,049 166,839
------------ ------------
NET ASSETS.......................................... $160,472,805 $ 52,693,861
============ ============
Net assets:
Accumulation units - Value.......................... $160,472,805 $ 52,693,861
Annuity reserves (Note 3E).......................... -- --
------------ ------------
Net assets........................................ $160,472,805 $ 52,693,861
============ ============
Accumulation units (Note 7)
Contractowners...................................... $132,935,274 41,303,318
Massachusetts Mutual Life Insurance Company......... 5,000 5,000
------------ ------------
Total units......................................... 132,940,274 41,308,318
============ ============
NET ASSET VALUE PER ACCUMULATION UNIT
June 30, 1997....................................... $1.21 $1.28
June 30, 1996....................................... 0.98 1.15
June 30, 1995....................................... 0.91 1.05
June 30, 1994....................................... -- --
June 30, 1993....................................... -- --
</TABLE>
See Notes to Financial Statements.
3
<PAGE>
Massachusetts Mutual Variable Annuity Separate Account 1 - Flex Extra
(Qualified)
STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 1997
(Unaudited)
<TABLE>
<CAPTION>
MML MML
MML Money Managed MML
Equity Market Bond Blend
Division Division Division Division
------------ ------------ ------------ -----------
<S> <C> <C> <C> <C>
Investment income
Dividends (Note 3B)......................................... $ 15,218 $ 1,872,220 $ 1,671,708 $ 13,078,867
Expenses
Mortality and expense risk fees and
administrative expenses (Note 4).......................... 7,662,897 488,576 666,158 9,685,455
------------- ------------ ------------ --------------
Net investment income (loss) (Note 3C)...................... (7,647,679) 1,383,644 1,005,550 3,393,412
------------- ------------ ------------ --------------
Net realized and unrealized gain (loss) on investments
Net realized gain on investments
(Notes 3B, 3C and 6)...................................... 5,773,363 -- 14,933 7,789,304
Change in net unrealized appreciation/
depreciation of investments............................... 175,009,634 -- 1,372,539 142,697,262
------------- ------------ ------------ --------------
Net gain (loss) on investments.............................. 180,782,997 -- 1,387,472 150,486,566
------------- ------------ ------------ --------------
Net increase in net assets
resulting from operations................................. $ 173,135,318 $ 1,383,644 $ 2,393,022 $ 153,879,978
============= ============ ============ ==============
<CAPTION>
Oppenheimer Oppenheimer Oppenheimer
Capital Global Strategic
Appreciation Securities Bond
Division Division Division
------------ ----------- ------------
<S> <C> <C> <C>
Investment income
Dividends (Note 3B)......................................... $ 10,620,416 $ 1,580,928 $ 1,914,043
Expenses
Mortality and expense risk fees and
administrative expenses (Note 4).......................... 1,397,575 872,325 286,977
------------- ----------- ----------
Net investment income (loss) (Note 3C)...................... 9,222,841 708,603 1,627,066
------------- ----------- ----------
Net realized and unrealized gain (loss) on investments
Net realized gain on investments
(Notes 3B, 3C and 6)...................................... 1,210,894 727,170 70,924
Change in net unrealized appreciation/
depreciation of investments............................... 5,850,707 18,714,771 (85,183)
------------- ----------- ----------
Net gain (loss) on investments.............................. 7,061,601 19,441,941 (14,259)
------------- ----------- ----------
Net increase in net assets
resulting from operations................................. $ 16,284,442 $ 20,150,544 $ 1,612,807
============= ============ ===========
</TABLE>
See Notes to Financial Statements
4
<PAGE>
Massachusetts Mutual Variable Annuity Separate Account 1 - Flex Extra
(Qualified)
STATEMENT OF CHANGES IN NET ASSETS
For the Six Months Ended June 30, 1997
(Unaudited)
<TABLE>
<CAPTION>
MML MML
MML Money Managed MML
Equity Market Bond Blend
Division Division Division Division
----------- ------------ -------------- ------------
<S> <C> <C> <C> <C>
Increase (decrease) in net assets
Operations:
Net investment income (loss).............................. $ (7,647,679) $ 1,383,644 $ 1,005,550 $ 3,393,412
Net realized gain on investments.......................... 5,773,363 -- 14,933 7,789,304
Change in net unrealized
appreciation/depreciation of investments................ 175,009,634 -- 1,372,539 142,697,262
-------------- ------------ ------------ --------------
Net increase in net assets
resulting from operations............................... 173,135,318 1,383,644 2,393,022 153,879,978
-------------- ------------ ------------ --------------
Capital transactions: (Note 7)
Net contract payments (Note 5)............................ 107,873,010 20,699,400 8,348,446 106,738,513
Transfer to Guaranteed Principal Account.................. (2,877,347) (1,301,846) (516,973) (2,199,434)
Withdrawal of funds....................................... (54,788,884) (5,237,163) (4,804,539) (73,030,131)
Reimbursement (payment) of accumulation unit value
fluctuation............................................. 287,811 (16,836) (9,816) 237,947
Net charge (credit) to annuitant mortality
fluctuation reserve (Note 3D)........................... (22,742) 61 2,618 (318,044)
Annuity benefit payments.................................. (15,654) (552) (1,860) (68,980)
Withdrawals due to administrative and contingent
deferred sales charges (Note 5)......................... (1,649,317) (94,355) (399,901) (2,365,739)
Divisional transfers...................................... 12,462,141 (18,848,875) (5,520,596) (10,258,605)
-------------- ------------ ------------ --------------
Net increase (decrease) in net assets resulting from
capital transactions.................................... 61,269,018 (4,800,166) (2,902,621) 18,735,527
-------------- ------------ ------------ --------------
Total increase.............................................. 234,404,336 (3,416,522) (509,599) 172,615,505
NET ASSETS, at beginning of the year........................ 1,089,202,902 78,032,972 104,667,778 1,433,165,306
-------------- ------------ ------------ --------------
NET ASSETS, at end of the period............................ $1,323,607,238 $ 74,616,450 $104,158,179 $1,605,780,811
============== ============ ============ ==============
<CAPTION>
Oppenheimer Oppenheimer Oppenheimer
Capital Global Strategic
Appreciation Securities Bond
Division Division Division
----------- ----------- ------------
<S> <C> <C> <C>
Increase (decrease) in net assets
Operations:
Net investment income (loss).............................. $ 9,222,841 $ 708,603 $ 1,627,066
Net realized gain on investments.......................... 1,210,894 727,170 70,924
Change in net unrealized appreciation/depreciation
of investments.......................................... 5,850,707 18,714,771 (85,183)
-------------- ------------ ------------
Net increase in net assets
resulting from operations................................. 16,284,442 20,150,544 1,612,807
-------------- ------------ ------------
Capital transactions: (Note 7)
Net contract payments (Note 5)............................ 45,700,722 25,022,327 12,787,871
Transfer to Guaranteed Principal Account.................. (349,157) (135,968) (196,249)
Withdrawal of funds....................................... (7,289,992) (4,881,511) (1,196,284)
Reimbursement (payment) of accumulation unit value
fluctuation............................................. (98,627) (1,354,762) (17,073)
Net charge (credit) to annuitant mortality fluctuation
reserve (Note 3D)....................................... (22,166) -- --
Annuity benefit payments.................................. (1,484) (1,024) (1,117)
Withdrawals due to administrative and contingent
deferred sales charges (Note 5)......................... (220,143) (101,976) (22,940)
Divisional transfers...................................... 11,605,767 8,380,011 2,180,157
-------------- ------------ ------------
Net increase (decrease) in net assets resulting from
capital transactions.................................... 49,324,920 26,927,097 13,534,365
-------------- ------------ ------------
Total increase.............................................. 65,609,362 47,077,641 15,147,172
NET ASSETS, at beginning of the year........................ 196,843,732 113,395,164 37,546,689
-------------- ------------ ------------
NET ASSETS, at end of the period............................ $ 262,453,094 $ 160,472,805 $ 52,693,861
============== ============= ============
</TABLE>
See Notes to Financial Statements.
5
<PAGE>
Massachusetts Mutual Variable Annuity Separate Account 1 -
Flex Extra (Qualified)
STATEMENT OF CHANGES IN NET ASSETS
For the Six Months Ended June 30, 1996
(Unaudited)
<TABLE>
<CAPTION>
MML MML Oppenheimer Oppenheimer Oppenheimer
MML Money Managed MML Capital Global Strategic
Equity Market Bond Blend Appreciation Securities Bond
Division Division Division Division Division Division Division
-------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Increase (decrease) in net assets
Operations:
Net investment income (loss)... $ (5,608,228) $ 1,114,407 $ 943,395 $ 3,879,007 $ 4,473,626 $ (443,235) $ 778,887
Net realized gain (loss)
on investments................ 2,805,054 -- 31,246 6,297,091 376,609 (20,094) 21,691
Change in net unrealized
appreciation/depreciation
of investments................ 67,194,910 -- (3,390,697) 50,523,384 9,654,407 5,270,283 (20,795)
------------ ----------- ------------ -------------- ------------ ----------- -----------
Net increase (decrease) in
net assets resulting from
operations.................... 64,391,736 1,114,407 (2,416,056) 60,699,482 14,504,642 4,806,954 779,783
------------ ----------- ------------ -------------- ------------ ----------- -----------
Capital transactions: (Note 7)
Net contract payments (Note 5). 102,398,404 20,843,612 13,847,940 113,474,022 33,922,902 19,027,395 7,386,360
Transfer to Guaranteed
Principal Account............. (1,300,972) (1,008,906) (391,768) (1,931,389) (80,826) (246,990) (113,973)
Withdrawal of funds............ (35,212,575) (6,755,907) (4,132,986) (59,637,139) (3,154,694) (2,372,773) (625,079)
Reimbursement (payment) of
accumulation unit value
fluctuation.................. 267,023 1,428 (15,191) 82,436 302,800 27,107 933
Net charge (credit) to
annuitant mortality fluctuation
reserve (Note 3D)............. 533 51 308 (2,716) (172) -- --
Annuity benefit payments....... (11,853) (554) (1,615) (32,825) (104) -- --
Withdrawals due to
administrative and contingent
deferred sales charges
(Note 5)...................... (1,345,193) (144,258) (363,425) (2,145,996) (82,764) (61,308) (17,325)
Divisional transfers........... 9,795,361 (13,041,737) (3,639,850) (20,501,974) 19,889,223 7,031,409 467,568
------------ ----------- ------------ -------------- ------------ ----------- -----------
Net increase (decrease) in
net assets resulting from
capital transactions.......... 74,590,728 (106,271) 5,303,413 29,304,419 50,796,365 23,404,840 7,098,484
------------ ----------- ------------ -------------- ------------ ----------- -----------
Total Increase.................. 138,982,464 1,008,136 2,887,357 90,003,901 65,301,007 28,211,794 7,878,267
NET ASSETS, at beginning of
the year....................... 792,905,807 61,362,416 97,432,892 1,228,700,379 64,912,233 54,391,407 18,470,606
------------ ----------- ------------ -------------- ------------ ----------- -----------
NET ASSETS, at end of the
period......................... $931,888,271 $62,370,552 $100,320,249 $1,318,704,280 $130,213,240 $82,603,201 $26,348,873
============ =========== ============ ============== ============ =========== ===========
</TABLE>
See Notes to Financial Statements.
6
<PAGE>
Massachusetts Mutual Variable Annuity Separate Account 1 --
Flex Extra (Qualified)
Notes To Financial Statements
(Unaudited)
1. HISTORY
Massachusetts Mutual Variable Annuity Separate Account 1 ("Separate Account
1") is a separate investment account established on April 8, 1981 by
Massachusetts Mutual Life Insurance Company ("MassMutual"). Separate
Account 1 operates as a registered unit investment trust pursuant to the
Investment Company Act of 1940 and the rules promulgated thereunder.
MassMutual maintains three segments within Separate Account 1. The segments
are Variable Annuity Fund 4, Flex-Annuity IV (Qualified) and Flex Extra
(Qualified.) These notes and the financial statements presented herein,
with the exception of Note 8, describe and consist only of the Flex Extra
(Qualified) segment (the "Segment").
On September 13, 1994, MassMutual paid $15,000 to provide the initial
capital for the Segment's three new divisions: 1,516 shares were purchased
in the management investment company described in Note 2 supporting the
three new Oppenheimer divisions of the Segment.
2. INVESTMENT OF THE SEGMENT'S ASSETS
The Flex Extra (Qualified) Segment maintains seven divisions. The MML
Equity Division invests in shares of MML Equity Fund, the MML Money Market
Division invests in shares of MML Money Market Fund, the MML Managed Bond
Division invests in shares of MML Managed Bond Fund, the MML Blend Division
invests in shares of MML Blend Fund, the Oppenheimer Capital Appreciation
Division invests in shares of Oppenheimer Capital Appreciation Fund, the
Oppenheimer Global Securities Division invests in shares of Oppenheimer
Global Securities Fund and the Oppenheimer Strategic Bond Division invests
in shares of Oppenheimer Strategic Bond Fund.
MML Equity Fund, MML Money Market Fund, MML Managed Bond Fund and MML Blend
Fund are four series of shares of MML Series Investment Fund (the "MML
Trust"). The MML Trust is a no-load, registered, open-end, management
investment company for which MassMutual serves as investment manager.
Concert Capital Management, Inc. ("Concert") served as the investment sub-
adviser to MML Equity Fund and the Equity Sector of the MML Blend Fund from
1993-1996. Concert merged with and into David L. Babson & Company, Inc.
("Babson") effective December 31, 1996. At such time, both Concert and
Babson were wholly-owned subsidiaries of Babson Acquisition Corporation,
which is a controlled subsidiary of MassMutual. Thus, effective January 1,
1997, Babson serves as the investment sub-adviser to MML Equity Fund and
the Equity Sector of the MML Blend Fund. MassMutual pays Babson a quarterly
fee equal to an annual rate of .13% of the average daily net asset value of
MML Equity Fund and the Equity Sector of MML Blend Fund.
Oppenheimer Capital Appreciation Fund, Oppenheimer Global Securities Fund
and Oppenheimer Strategic Bond Fund (the "Oppenheimer Funds") are part of
the Oppenheimer Variable Account Funds (the "Oppenheimer Trust"). The
Oppenheimer Trust is a registered, open-end, diversified management
investment company, for which OppenheimerFunds, Inc. ("OFI"), a controlled
subsidiary of MassMutual, serves as investment adviser.
In addition to the seven divisions of the Segment, a contractowner may also
allocate funds to the Guaranteed Principal Account, which is part of
MassMutual's general account. Because of exemptive and exclusionary
provisions, interests in the Guaranteed Principal Account, which is part of
MassMutual's general account, are not registered under the Securities Act
of 1933; and the general account is not registered as an investment company
under the Investment Company Act of 1940.
3. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed
consistently by the Segment in preparation of the financial statements in
conformity with generally accepted accounting principles.
A. Investment Valuation
The investments in MML Trust and Oppenheimer Trust are each stated at
market value which is the net asset value of each of the respective
underlying funds.
B. Accounting for Investments
Investment transactions are accounted for on trade date and identified cost
is the basis followed in determining the cost of investments sold for
financial statement purposes. Dividend income is recorded on the ex-
dividend date.
7
<PAGE>
Notes To Financial Statements (Continued)
C. Federal Income Taxes
Operations of the Segment form a part of the total operations of
MassMutual, and the Segment is not taxed separately. MassMutual is taxed as
a life insurance company under the provisions of the 1986 Internal Revenue
Code, as amended. The Segment will not be taxed as a "regulated investment
company" under Subchapter M of the Internal Revenue Code. Under existing
federal law, no taxes are payable on investment income and realized capital
gains attributable to contracts which depend on the Segment's investment
performance (the "Contracts"). Accordingly, no provision for federal
income tax has been made. MassMutual may, however, make such a charge in
the future if an unanticipated change of current law results in a company
tax liability attributable to the Segment.
D. Annuitant Mortality Fluctuation Reserve
The Segment maintains a reserve as required by regulatory authorities to
provide for mortality losses incurred. The reserve is increased quarterly
for mortality gains and its proportionate share of any increases in value.
The reserve is charged quarterly for mortality losses and its proportionate
share of any decreases in value. Transfers to or from MassMutual are then
made quarterly to adjust the Segment. Net transfers from the Segment to
MassMutual totaled $336,784 for the six months ended June 30, 1997 and net
transfers from MassMutual to the Segment totaled $1,311 for the six months
ended June 30, 1996. The reserve is subject to a maximum of 3% of the
Segment's annuity reserves. Any mortality losses in excess of this reserve
will be assumed by MassMutual. The reserve is not available to owners of
Contracts except to the extent necessary to cover mortality losses under
the Contracts.
E. Annuity Reserves
Annuity reserves are developed by using accepted actuarial methods and are
computed using the 1971 Individual Annuity Mortality Table, as modified.
F. 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 revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
4. CHARGES FOR MORTALITY AND EXPENSE RISKS AND ADMINISTRATIVE EXPENSES
Daily charges are made which are currently equivalent on an annual basis to
1.30% of the net asset value of the Segment (the "Net Asset Value"). The
mortality and expense risk part of this charge is made daily at an annual
rate which is currently equal to 1.15%, and will not exceed 1.25% of the
Net Asset Value. The administrative expense part of this charge is made
daily at an annual rate of 0.15% of the Net Asset Value.
5. CHARGES/DEDUCTIONS FOR ADMINISTRATIVE CHARGES, CONTINGENT DEFERRED SALES
CHARGES AND PREMIUM TAXES
<TABLE>
<CAPTION>
MML MML Oppenheimer Oppenheimer Oppenheimer
MML Money Managed MML Capital Global Strategic
For the Six Months Equity Market Bond Blend Appreciation Securities Bond
Ended June 30, 1997 Division Division Division Division Division Division Division
- ------------------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Gross contract payments............... $107,912,932 $20,707,060 $ 8,351,535 $106,778,014 $45,717,635 $25,031,587 $12,792,603
Less deduction for premium taxes...... 39,922 7,660 3,089 39,501 16,913 9,260 4,732
------------ ----------- ----------- ------------ ----------- ----------- -----------
Net contract payments................. $107,873,010 $20,699,400 $ 8,348,446 $106,738,513 $45,700,722 $25,022,327 $12,787,871
============ =========== =========== ============ =========== =========== ===========
Administrative and contingent
deferred sales charges............... $ 1,649,317 $ 94,355 $ 399,901 $ 2,365,739 $ 220,143 $ 101,976 $ 22,940
============ =========== =========== ============ =========== =========== ===========
</TABLE>
8
<PAGE>
Notes To Financial Statements
(Continued)
<TABLE>
<CAPTION>
MML MML Oppenheimer Oppenheimer Oppenheimer
MML Money Managed MML Capital Global Strategic
For the Six Months Equity Market Bond Blend Appreciation Securities Bond
Ended June 30, 1996 Division Division Division Division Division Division Division
- ------------------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Gross contract payments............... $102,429,273 $20,849,896 $13,852,115 $113,508,230 $33,933,128 $19,033,131 $ 7,388,587
Less deduction for premium taxes...... 30,869 6,284 4,175 34,208 10,226 5,736 2,227
------------ ----------- ----------- ------------ ----------- ----------- -----------
Net contract payments................. $102,398,404 $20,843,612 $13,847,940 $113,474,022 $33,922,902 $19,027,395 $ 7,386,360
============ =========== =========== ============ =========== =========== ===========
Administrative and contingent
deferred sales charges............... $ 1,345,193 $ 144,258 $ 363,425 $ 2,145,996 $ 82,764 $ 61,308 $ 17,325
============ =========== =========== ============ =========== =========== ===========
</TABLE>
6. PURCHASES AND SALES OF INVESTMENTS
<TABLE>
<CAPTION>
For the Six Months Cost of Proceeds
Ended June 30, 1997 Purchases from Sales
- ------------------- --------- ----------
<S> <C> <C>
MML Equity Fund.......................................................................................... $119,191,737 $11,735,347
MML Money Market Fund.................................................................................... 22,493,964 26,064,483
MML Managed Bond Fund.................................................................................... 6,628,309 6,617,808
MML Blend Fund........................................................................................... 97,066,686 19,874,991
Oppenheimer Capital Appreciation Fund.................................................................... 64,355,649 4,949,073
Oppenheimer Global Securities Fund....................................................................... 35,915,003 6,358,413
Oppenheimer Strategic Bond Fund.......................................................................... 16,632,155 1,340,133
</TABLE>
7. NET INCREASE (DECREASE) IN ACCUMULATION UNITS
<TABLE>
<CAPTION>
MML MML Oppenheimer Oppenheimer Oppenheimer
MML Money Managed MML Capital Global Strategic
For the Six Months Equity Market Bond Blend Appreciation Securities Bond
Ended June 30, 1997 Division Division Division Division Division Division Division
- ------------------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Units purchased....................... 35,150,102 13,636,359 4,175,704 40,680,148 30,525,480 22,370,628 10,300,007
Units withdrawn and transferred
to Guaranteed Principal
Account.............................. (19,204,245) (4,476,319) (2,861,315) (29,395,578) (5,258,493) (4,567,033) (1,137,785)
Units transferred
between divisions.................... 4,018,558 (12,291,608) (2,762,369) (3,934,793) 7,551,084 7,450,383 1,757,552
Units transferred
to annuity reserves.................. (8,684) -- (2,569) (353,046) (16,873) (16,307) (16,538)
------------ ----------- ----------- ------------ ----------- ----------- -----------
Net increase (decrease)............... 19,955,731 (3,131,568) (1,450,549) 6,996,731 32,801,198 25,237,671 10,903,236
Units, at beginning of the year....... 374,083,546 51,271,090 52,403,544 566,300,198 125,989,293 107,702,603 30,405,082
------------ ----------- ----------- ------------ ----------- ----------- -----------
Units, at end of the period........... 394,039,277 48,139,522 50,952,995 573,296,929 158,790,491 132,940,274 41,308,318
============ =========== =========== ============ =========== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
MML MML Oppenheimer Oppenheimer Oppenheimer
MML Money Managed MML Capital Global Strategic
For the Six Months Equity Market Bond Blend Appreciation Securities Bond
Ended June 30, 1996 Division Division Division Division Division Division Division
- ------------------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Units purchased....................... 39,834,542 14,322,211 7,226,876 49,156,019 23,335,014 20,076,554 6,521,332
Units withdrawn and transferred
to Guaranteed Principal
Account.............................. (14,707,139) (5,589,966) (2,562,438) (27,558,846) (2,259,069) (2,822,477) (667,025)
Units transferred
between divisions.................... 3,821,732 (8,801,369) (1,923,691) (8,834,743) 13,294,370 7,427,147 412,258
Units transferred
to annuity reserves.................. (4,196) -- (1,265) (41,395) (1,900) -- --
------------ ----------- ----------- ------------ ----------- ----------- -----------
Net increase (decrease)............... 28,944,939 (69,124) 2,739,482 12,721,035 34,368,415 24,681,224 6,266,565
Units, at beginning of the year....... 323,311,630 41,803,873 49,720,989 546,216,626 49,289,518 59,951,410 16,550,444
------------ ----------- ----------- ------------ ----------- ----------- -----------
Units, at end of the period........... 352,256,569 41,734,749 52,460,471 558,937,661 83,657,933 84,632,634 22,817,009
============ =========== =========== ============ =========== =========== ===========
</TABLE>
9
<PAGE>
Notes To Financial Statements (Continued)
8. CONSOLIDATED MASSACHUSETTS MUTUAL VARIABLE ANNUITY SEPARATE ACCOUNT 1
As discussed in Note 1, the financial statements only represent activity of
the Flex Extra (Qualified) segment of the Massachusetts Mutual Variable
Annuity Separate Account 1. The combined net assets as of June 30, 1997 for
the Massachusetts Mutual Variable Annuity Separate Account 1, which
includes the segments pertaining to the Variable Annuity Fund 4, Flex-
Annuity IV (Qualified) and Flex Extra (Qualified) are as follows:
<TABLE>
<CAPTION>
MML MML *Oppenheimer *Oppenheimer *Oppenheimer
MML Money Managed MML Capital Global Strategic
For the Six Months Equity Market Bond Blend Appreciation Securities Bond
Ended June 30, 1997 Division Division Division Division Division Division Division
- ------------------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Total assets....................... $1,468,746,665 $87,222,516 $118,502,889 $1,863,607,494 $263,498,673 $162,484,854 $52,860,700
Total liabilities.................. 6,438,258 542,440 476,436 8,742,453 1,045,579 2,012,049 166,839
-------------- ----------- ------------ -------------- ------------ ------------ -----------
Net assets......................... $1,462,308,407 $86,680,076 $118,026,453 $1,854,865,041 $262,453,094 $160,472,805 $52,693,861
============== =========== ============ ============== ============ ============ ===========
Net assets consist of:
Accumulation units - Value......... $1,461,676,380 $86,585,577 $117,872,446 $1,853,093,105 $262,448,673 $160,472,805 $52,693,861
Annuity reserves................... 632,027 94,499 154,007 1,771,936 4,421 -- --
-------------- ----------- ------------ -------------- ------------ ------------ -----------
Net assets......................... $1,462,308,407 $86,680,076 $118,026,453 $1,854,865,041 $262,453,094 $160,472,805 $52,693,861
============== =========== ============ ============== ============ ============ ===========
</TABLE>
*Offered on the Flex Extra (Qualified) Contracts only.
9. DISTRIBUTION AGREEMENT
Effective May 1, 1996, MML Distributors, LLC ("MML Distributors"), a
wholly-owned subsidiary of MassMutual, serves as principal underwriter of
the contracts pursuant to an underwriting and servicing agreement among MML
Distributors, MassMutual and Separate Account I. MML Distributors is
registered with the Securities and Exchange Commission (the "SEC") as a
broker-dealer under the Securities Exchange Act of 1934 and is a member of
the National Association of Securities Dealers, Inc. (the "NASD"). MML
Distributors may enter into selling agreements with other broker-dealers
who are registered with the SEC and are members of the NASD in order to
sell the contracts.
Prior to May 1, 1996, MML Investors Services, Inc. ("MMLISI") a wholly-
owned subsidiary of MassMutual, served as principal underwriter of the
contracts. Effective May 1, 1996, MMLISI serves as co-underwriter of the
policies pursuant to underwriting and servicing agreements among MMLISI,
MassMutual and Separate Account 1, MMLISI is registered with the SEC as a
broker-dealer under the Securities Exchange Act of 1934 and is a member of
the NASD. Registered representatives of MMLISI sell the contracts as
authorized variable life insurance agents under applicable state insurance
laws.
Under the sales agreement among MMLISI, MassMutual and Separate Account 1,
agents receive commissions and service fees from MMLISI for selling and
servicing the contracts. MassMutual reimburses MMLISI for such compensation
and for other expenses incurred in marketing and selling the contracts.
10
<PAGE>
MML Series Investment Fund
Table of Contents
<TABLE>
<CAPTION>
Page
----
<S> <C>
To Our Shareholders...................................................... 2-5
Statement of Assets and Liabilities as of June 30, 1997.................. 6
MML Equity Fund
MML Money Market Fund
MML Managed Bond Fund
MML Blend Fund
Statement of Operations For the Six Months Ended June 30, 1997........... 7
MML Equity Fund
MML Money Market Fund
MML Managed Bond Fund
MML Blend Fund
Statement of Changes in Net Assets For the Six Months Ended June 30, 1997
and For the Year Ended December 31, 1996............................... 8
MML Equity Fund
MML Money Market Fund
MML Managed Bond Fund
MML Blend Fund
Financial Highlights
MML Equity Fund..................................................... 9
MML Money Market Fund............................................... 9
MML Managed Bond Fund............................................... 10
MML Blend Fund...................................................... 11
Schedule of Investments as of June 30, 1997
MML Equity Fund..................................................... 12-13
MML Money Market Fund............................................... 14
MML Managed Bond Fund............................................... 15-17
MML Blend Fund...................................................... 18-23
Notes to Financial Statements............................................ 24-26
</TABLE>
1
<PAGE>
MML Series Investment Fund
To Our Shareholders
Economic Strength Continues
Over seven and a half years into the current expansion and the factors that have
been critical in shaping economic behavior - a broad-based expansion free of
major excesses, low inflation, a Federal budget deficit that has been falling,
now down to $50-$60 billion, and a Federal Reserve that is sensitive to
potential price pressures but not given to aggressiveness are still in place.
In the first half of 1997, consumption drove economic gains, with solid support
from private investment. Employment continued to grow, as did personal income,
and consumer confidence reached a long-time high. These factors allowed
businesses to build up inventories in the first quarter to meet consumer demand,
which in turn supported the consumer behavior.
With Little Concern About Inflation
Even with unemployment as low as it has been, there are few signs that inflation
is a concern. During the first half of the year, even while Chairman Greenspan
built a case for raising rates during several appearances before congressional
committees, the Federal Reserve made only one interest rate move - a quarter-
point tightening on March 25, 1997.
Domestic Stocks Surge
With a steady economy, lean, competitive and profitable corporations and
favorable monetary policy, the stock market soared to new heights. Both the Dow
Jones Industrial Average and the Standard & Poor's 500 set and then surpassed
records during the past six months. When you consider that the U.S. market has
effectively doubled over the past two and a half years, nightly reports of the
markets new records are almost old news.
Even while the major market indices have made news, it's only been recently that
the bullishness has broadened. Particularly during the first quarter, it was
predominately the very largest growth companies that were leading the market.
The `Nifty Fifty' largest U.S. companies' stocks pushed both index performance
and their own prices to new highs. In the second quarter, however, we began to
see investors once again include smaller company stocks and some previously out-
of-favor companies in their focus.
During the first half of this year, international stock markets have also done
well. Major markets in continental Europe, with the exception of the United
Kingdom, have been quite strong, benefiting from corporate belt-tightening and
favorable exchange rates. Japan has rebounded nicely, and Latin American
markets have performed well on rapid growth and political stability.
International index performance has lagged that reported by the domestic market
primarily because of difficulties in emerging Southeast Asian markets over the
period.
A Positive Environment for Bonds
The past six months have been positive for the debt markets as well, though
response to economic news has not been nearly as dramatic as stock market
reaction. The first quarter was somewhat difficult for most areas of the bond
market, due to uncertainty about interest rates and then the Federal Reserve's
March tightening. But in the second quarter, after expectations of further
tightening were not realized, rates began to drop and bonds recouped their
losses.
Some areas of the bond market have been very positive, particularly corporate
bonds, with performance that is tied to many of the factors supporting stocks.
Triple B-rated issues have also done well. Triple B bonds tend to have higher
yields than higher-rated bonds, and since income has been the major component of
bond total returns so far this year, they've been very strong.
Balancing Risk and Reward in a High Priced Market
At this time, there is nothing in the forecast to shake our view that economic
growth can continue throughout 1997. However, particularly in the case of
large-cap domestic stocks, there is risk associated with any market that's
enjoyed the terrific run ours has over the past several years. MassMutual's
investment philosophy is grounded in the belief that protecting capital against
downturns is just as important over the long term as is participating in the
advances of bull markets.
We look for value when we evaluate both stocks and bonds, seeking to avoid the
risk that follows buying a security that has reached or is nearing a peak high.
As a result, while we take advantage of the opportunities a fast-paced market
provides, we tend to be more cautious than some of our more growth-oriented
peers. Over the market's history, the benefits of this approach have been borne
out, and we expect that to continue in the future.
/s/ Stuart H. Reese
Stuart H. Reese
President
MML Series Investment Fund
July 31, 1997
2
<PAGE>
MML EQUITY
How has the Fund performed over the past six months?
Even though the Fund has a relatively conservative approach to the stock market,
the Fund participated considerably in the market's strong upswing. The
portfolio's total return for the six months ended June 30, 1997 is slightly
lower than that of the S&P 500, which we'd expect during a strong bull market.
Still, we've outperformed many of our value-oriented peers, and in six months
have already surpassed the historical average one-year return on stock
investments.
How would you characterize the equity market over the period?
This has been a market in which the largest stocks have performed best. The
fact that the largest companies in the major indices such as the S&P and the Dow
Jones Industrial Average have appreciated dramatically has skewed the indices'
returns, giving the impression that all stocks are doing remarkably well. This
market has basically doubled in the past two and a half years, and the economy
has been growing far longer than historical cyclical patterns. As a result,
investors have been willing to pay high prices to own the largest companies.
They're attracted by these firms' reliable, growing earnings and hope to be
protected from any weakness in future earnings should the economy change.
What investment decisions were most successful during the period?
As always, we've emphasized high quality companies selling at reasonable prices
compared to their earnings. In the past six months, we've been very pleased
that our two largest positions have been among our top performers. We've done
extremely well with our holdings in Bristol-Myers and GE - two strong companies
with excellent earnings that have been beneficiaries of the current market
psychology.
Even though the market has done very well over the first half of 1997, there was
a temporary dip after the Federal Reserve's interest rate increase at the end of
March. We used this as an opportunity to buy new stocks when they were selling
far from their recent highs. One example, Burlington Northern, a Fort Worth-
based railroad system, purchased the Santa Fe system and received favorable
investor response. However, expected cost reductions came more slowly than
expected, and weather problems hurt normally stable revenues. We saw Burlington
Northern as a major player in coal and grain haulage, and expected the stock was
poised for a rebound. We bought it and it has worked out very well for us so
far this year.
Are you making any changes to the portfolio at this time?
The portfolio is already well diversified, and we feel it is structured
appropriately to prosper in the future. On the margin, we have reduced our
health care holdings, since their performance has been so strong.
Two areas that were relatively weak so far in 1997 are telecommunications and
electric utility stocks. We're currently making a gradual increase to our
electric utility holdings. We believe selected electric stocks - those with low
operating costs, strong competitive positions and the ability to increase
dividend payments - offer good total return potential with relatively low risk.
What is your outlook for the next several months?
Because the economy continues to be strong, with none of the classic signs of a
slowdown on the horizon, our outlook is encouraging. Added to that is the fact
that corporate managements are making better business decisions now in terms of
focussing on their competitive advantages and placing great emphasis on
shareholder value.
Within this positive outlook, however, there is a risk that the Federal Reserve
will make another upward adjustment to interest rates. This market, while
incredibly strong over the past several years, is very sensitive to interest
rates, as we saw in March. That's why we believe a strategy like ours, with a
value focus that can limit price risk, is an intelligent way to approach the
stock market in any environment.
MML MONEY MARKET FUND
How did the Fund perform over the past six months?
The Fund continues to perform well, reporting returns that are superior to
Lipper Analytical's average for money market funds.
What have been the most significant events in your market over the past six
months and how was the portfolio positioned for them?
Short-term interest rates are impacted by the changes in the nation's monetary
policy. The Federal Reserve raised interest rates only once during the first
six months of the year. A twenty-five basis point increase in the Federal Funds
rate occurred in March. This rise in rates was prompted by the length of the
economic expansion and the record highs reached by the stock market.
3
<PAGE>
The shorter the average life a portfolio has the faster its instruments can be
replaced with higher yielding investments. Prior to the Federal Reserve's
policy meeting in March, the MML Money Market's average life was shorter than a
universe of our peers. This factor gave the Fund an advantage in quickly
replacing maturing issues with higher yielding issues.
The second major impact on our market during the first half of 1997 was a
default on $500 million of Tier one commercial paper issued by Mercury Finance.
Because it was highly rated, all money market funds were permitted to own the
issue, and many did. We never rely solely on rating services' evaluations of
securities when making purchases. We conduct proprietary research into all of
the securities we buy, and monitor them for any changes on a daily basis. Our
own analysis of Mercury kept us from investing in the commercial paper offering,
and that protected us when Mercury defaulted.
Are you making any changes to the portfolio at this time?
Not really. We're planning to keep the average life of our portfolio closely in
line with that of our benchmark.
What is your outlook for the coming months at this time?
The economy remains strong, with little evidence to suggest inflation is on the
rise. As a result, we believe the Federal Reserve is keeping any movement in
rates on hold for the time being. We've very recently seen rates on short-term
securities drop slightly as the market has begun to share this belief. Until
news on the economic forecast changes significantly, we will continue with our
current strategy - working to capture the highest yields available without
increasing exposure to risk.
MML MANAGED BOND FUND
How did the Fund perform over the past six months?
The Fund has turned in a very solid performance for the first half of 1997,
outpacing its benchmark, the Lehman Government/Corporate index and many of its
peers. We're also pleased to have seen a substantial increase in assets under
management during the first six months of the year.
What was the most significant event in your market during that time?
Although the market experienced a mild correction as a result of the Federal
Reserve's March interest rate increase, interest rates have remained within a
very tight band. In this environment, where overall price volatility has
decreased, we've done well by investing in securities that can provide a yield
advantage over Treasuries.
What investment decisions were most successful over the period?
We were very well positioned for the first half of the year, and outperformed
our index and our peers for several reasons. Again, our primary advantage came
from owning securities that offered a generous yield spread over Treasuries. In
a tight trading range market, you can not expect much of a portfolio's total
return to come from price appreciation. That makes any extra income you can
garner a real benefit.
During the first half of 1997, mortgage-backed securities, approximately 22.8
percent of the portfolio, performed very well for us for just that reason.
Mortgage-backed securities have higher yields and also tend to outperform other
fixed income products when interest rates are relatively unchanging. This
characteristic made them an excellent asset class to own during the full period.
Another asset class with spread advantages over Treasuries was corporate bonds.
By June 30, our allocation to corporate bonds was increased from 54.8 percent of
the portfolio at the beginning of the year to 59.3 percent. Due to the strength
of both the economy and the stock market as well as the financial health of
corporate America, we felt confident enough to move some of our assets into the
lower quality areas of the investment grade corporate bond market. Our
increased exposure to corporate bonds in general coupled with a thoroughly-
researched move toward higher-yielding bonds provided a significant boost to
performance.
Are you making any changes to the portfolio at this time?
We're very comfortable with our sector allocations as they are now, and do not
plan on making any significant changes in the near future. We believe the
portfolio's existing positioning, with a focus on the areas of the market that
offer advantageous yields, will continue to benefit us as the year proceeds. In
addition to a consistent sector allocation, we plan to keep our duration - which
represents the portfolio's sensitivity to changes in interest rates - close to
that of the Lehman Brother's Government/Corporate Bond Index.
What is your outlook for the coming months?
In our opinion, the normal trade-off between strong economic growth or low
inflation is not happening. Though the domestic economy is in the seventh year
of its current expansion, there are many reasons to believe its strength will
continue. Inflation is at a 34-year low, consumer confidence has reached a 28-
year high, the budget deficit is at a 16-year low, and in the three meetings of
the Federal Reserve's Open Market Committee during the first half of the year,
rates were only increased once.
4
<PAGE>
We believe these factors suggest a continued favorable environment for a Fund
like ours where we are focusing on the generation of return from income.
MML BLEND FUND
How did the Fund perform over the past six months?
The Fund has done very well, both in absolute terms and relative to the average
for balanced funds. Our combination of the benefits of strong stock selection
during a very bullish market and a timely bond strategy allowed us to come close
to matching in six months our performance for the entire year of 1996.
What types of stocks worked well for you during the period?
This has been a market in which the largest stocks have performed best. Since
the market has basically doubled in the past two and a half years, and the
economy has been growing far longer than expected, investors have been willing
to pay high prices to own the largest companies. They're attracted by these
firms' reliable, growing earnings and hope to be protected from any weakness in
future earnings should the economy change.
We take a relatively conservative approach to the market, emphasizing high
quality companies selling at relatively low prices compared to their earnings.
This generally keeps us from chasing the large growth companies that have pushed
the major indices to new highs so far this year. Even so, two such companies
were both our two largest positions and our top two performers during the
period. We've done extremely well with our holdings in Bristol-Myers and GE -
each a high growth company with excellent earnings and a beneficiary of the
current market psychology.
We also added some strong stocks during the temporary decline that followed the
Federal Reserve's interest rate increase at the end of March. One such stock,
Burlington Northern, a Fort Worth-based railroad system, purchased the Santa Fe
system and received favorable investor response. However, expected cost
reductions came more slowly than expected, and weather problems hurt normally
stable revenues. We saw Burlington Northern as a major player in coal and grain
haulage, and expected the stock was poised for a rebound. We bought it and it
has worked out very well for us so far this year.
How was your bond portfolio positioned?
Our bond portfolio was very well-positioned for the trading range market that
defined the first half of the year. Our strategy over the period was to look
for securities that offered a generous yield spread over Treasuries. Mortgage-
backed securities, approximately 19 percent of the bond portfolio, performed
very well for us. They offer higher yields than Treasuries and tend to
outperform other fixed income products when interest rates are increasing. This
characteristic made them an excellent asset class to own during the full period,
and especially after the Federal Reserve's tightening at the end of the first
quarter.
Are you making any changes to either your portfolio holdings or allocations at
this time?
Nothing significant other than keeping vigilant for any new opportunities in
both stocks and bonds. In terms of our asset allocation, while we review it
weekly, we see nothing on the horizon to suggest the need to alter it at this
time. Our current allocation, 61 percent stocks, 19.6 percent bonds and 19.4
percent cash and short-term securities is slightly more aggressive than what
we'd originally set as a target. This is because we've allowed our stock
position to grow on the strength of the market. A higher allocation to stocks
has helped performance so far this year, and we're still quite comfortable with
it.
What is your outlook for the next several months?
Because the economy continues to be strong, with none of the classic signs of
either a slowdown or an increase in inflation on the horizon, our outlook
remains very favorable for both the stock and bond markets. In this environment,
and especially with stocks at their current record highs, we believe a
relatively conservative balanced fund like this one makes sense as a way to both
capture gains and limit risk.
5
<PAGE>
MML Series Investment Fund
STATEMENT OF ASSETS AND LIABILITIES
June 30, 1997
(Unaudited)
<TABLE>
<CAPTION>
MML MML
MML Money Managed MML
Equity Market Bond Blend
Fund Fund Fund Fund
-------- -------- -------- --------
<S> <C> <C> <C> <C>
ASSETS
Investments at value (See Schedule of Investments)
(Notes 2A, 2B and 5)
Equities (Identified cost: $1,251,426,499;
$809,526,978 respectively)................................. $2,045,219,025 $ -- $ -- $1,485,309,027
Bonds and notes (Identified cost: $183,956,089;
$468,859,129 respectively)................................. -- -- 185,372,867 473,397,860
Short-term investments (Identified cost: $159,680,514;
$144,699,930; $417,929; $483,786,841 respectively)......... 159,642,248 144,699,930 417,929 483,766,181
-------------- -------------- ------------ --------------
Total investments.......................................... 2,204,861,273 144,699,930 185,790,796 2,442,473,068
Cash......................................................... -- 13,940 74,233 --
Interest and dividends receivable............................ 3,843,636 -- 2,554,269 9,868,750
Receivable for investments sold.............................. 9,672,040 -- 2,008,394 9,965,125
Prepaid trustees' fees....................................... 2,724 1,667 1,667 1,667
-------------- -------------- ------------ --------------
Total assets............................................... 2,218,379,673 144,715,537 190,429,359 2,462,308,610
-------------- -------------- ------------ --------------
LIABILITIES
Payable for investments purchased............................ 20,505,674 -- 1,074,537 17,208,523
Payable for settlement of investments
purchased on a forward commitment basis (Note 2D)........... -- -- -- 12,756
Dividends payable (Note 2C).................................. -- 606,813 -- --
Investment management fee payable (Note 4)................... 1,879,879 178,507 222,999 2,133,047
Accrued liabilities.......................................... 2,527,146 4,631 15,378 1,032,409
-------------- -------------- ------------ --------------
Total liabilities.......................................... 24,912,699 789,951 1,312,914 20,386,735
-------------- -------------- ------------ --------------
NET ASSETS................................................... $2,193,466,974 $ 143,925,586 $189,116,445 $2,441,921,875
============== ============== ============ ==============
Net assets consist of:
Series shares (par value $.01 per share; an unlimited number
authorized) (Note 6)........................................ $ 634,251 $ 1,439,256 $ 154,933 $ 1,007,130
Additional paid-in capital................................... 1,320,577,874 142,486,330 185,800,154 1,681,945,434
Undistributed net investment income (Note 2C)................ 21,906,303 802 3,059,925 20,994,420
Undistributed net realized gain (loss) on investments and
forward commitments (Notes 2D and 3)........................ 56,594,286 (802) (1,315,345) 57,687,527
Net unrealized appreciation (depreciation) on:
Investments (Note 2A)....................................... 793,754,260 -- 1,416,778 680,300,120
Forward commitments (Note 2D)............................... -- -- -- (12,756)
-------------- -------------- ------------ --------------
NET ASSETS................................................... $2,193,466,974 $ 143,925,586 $189,116,445 $2,441,921,875
============== ============== ============ ==============
Outstanding series shares.................................... 63,425,085 143,925,586 15,493,320 100,713,016
============== ============== ============ ==============
Net asset value per share.................................... $ 34.58 $ 1.00 $ 12.21 $ 24.25
============== ============== ============ ==============
</TABLE>
See Notes to Financial Statements.
6
<PAGE>
MML Series Investment Fund
STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 1997
(Unaudited)
<TABLE>
<CAPTION>
MML MML
MML Money Managed MML
Equity Market Bond Blend
Fund Fund Fund Fund
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Investment income (Note 2B)
Dividends.................................................... $ 21,944,135 $ -- $ -- $ 15,932,701
Interest..................................................... 3,630,945 3,924,447 6,620,031 29,052,238
-------------- -------------- ------------ --------------
Total income............................................... 25,575,080 3,924,447 6,620,031 44,984,939
-------------- -------------- ------------ --------------
Expenses
Investment management fee (Note 4)........................... 3,624,437 345,589 439,510 4,168,922
Trustees' fees............................................... 20,963 16,848 16,848 16,848
Audit fees................................................... 13,996 9,781 12,543 15,100
Other........................................................ 307 208 208 244
-------------- -------------- ------------ --------------
Total expenses............................................. 3,659,703 372,426 469,109 4,201,114
-------------- -------------- ------------ --------------
Net investment income (Note 2C).............................. 21,915,377 3,552,021 6,150,922 40,783,825
-------------- -------------- ------------ --------------
Net realized and unrealized gain (loss) on investments and
forward commitments (Notes 2A, 2B and 2D)
Net realized gain (loss) on:
Investments (Notes 2B and 2C)............................... 56,606,098 (833) (225,826) 58,024,321
Forward commitments (Note 2D)............................... -- -- -- 9,180
-------------- -------------- ------------ --------------
Net realized gain (loss)................................... 56,606,098 (833) (225,826) 58,033,501
-------------- -------------- ------------ --------------
Change in net unrealized appreciation/depreciation on:
Investments (Note 2A)....................................... 218,846,932 -- (348,840) 148,720,545
Forward commitments (Note 2D)............................... -- -- -- (6,411)
-------------- -------------- ------------ --------------
Total change in net unrealized appreciation/depreciation... 218,846,932 -- (348,840) 148,714,134
-------------- -------------- ------------ --------------
Net gain (loss).............................................. 275,453,030 (833) (574,666) 206,747,635
-------------- -------------- ------------ --------------
Net increase in net assets resulting from operations......... $ 297,368,407 $ 3,551,188 $ 5,576,256 $ 247,531,460
============== ============== ============ ==============
</TABLE>
See Notes to Financial Statements.
7
<PAGE>
MML Series Investment Fund
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
For the Six Months Ended June 30, 1997
-------------------------------------------------------------
(Unaudited)
MML MML
MML Money Managed MML
Equity Market Bond Blend
Fund Fund Fund Fund
--------- -------- --------- --------
<S> <C> <C> <C> <C>
Increase (decrease)
in net assets
Operations:
Net investment income.................. $ 21,915,377 $ 3,552,021 $ 6,150,922 $ 40,783,825
Net realized gain (loss)
on investments and
forward commitments................... 56,606,098 (833) (225,826) 58,033,501
Change in net unrealized
appreciation/depreciation on
investments and forward
commitments........................... 218,846,932 -- (348,840) 148,714,134
-------------- ------------ ------------ --------------
Net increase in net assets
resulting from operations............. 297,368,407 3,551,188 5,576,256 247,531,460
Dividends to shareholders
from: (Note 2C)
Distribution of net investment
income.............................. (25,000) (3,551,188) (3,026,896) (19,788,536)
Distribution of net realized gains -- -- -- --
Net increase (decrease) in capital
share transactions (Note 6).......... 194,125,198 (1,305,456) 4,994,800 120,188,711
-------------- ------------ ------------ --------------
Total increase (decrease)............ 491,468,605 (1,305,456) 7,544,160 347,931,635
NET ASSETS, at beginning
of the year........................... 1,701,998,369 145,231,042 181,572,285 2,093,990,240
-------------- ------------ ------------ --------------
NET ASSETS, at end
of the period......................... $2,193,466,974 $143,925,586 $189,116,445 $2,441,921,875
============== ============ ============ ==============
Undistributed net investment
income (loss) included in net
assets at end of the period.......... $ 21,906,303 $ 802 $ 3,059,925 $ 20,994,420
============== ============ ============ ==============
<CAPTION>
For the Year Ended December 31, 1996
---------------------------------------------------------------
MML MML
MML Money Managed MML
Equity Market Bond Blend
Fund Fund Fund Fund
-------- -------- --------- ---------
<S> <C> <C> <C> <C>
Increase (decrease)
in net assets
Operations:
Net investment income.................. $ 40,173,966 $ 6,159,608 $ 11,199,858 $ 77,932,170
Net realized gain (loss)
on investments and
forward commitments................... 39,133,328 32 (404,955) 51,283,628
Change in net unrealized
appreciation/depreciation on
investments and forward
commitments........................... 204,554,604 -- (4,664,274) 137,449,802
-------------- -------------- ------------ --------------
Net increase in net assets
resulting from operations 283,861,898 6,159,640 6,130,629 266,665,600
Dividends to shareholders
from: (Note 2C)
Distribution of net investment
income.............................. (40,161,778) (6,159,640) (11,099,070) (77,800,925)
Distribution of net realized gains... (39,133,328) -- -- (51,065,539)
Net increase (decrease) in capital
share transactions (Note 6).......... 248,532,571 36,310,841 27,842,588 133,050,174
-------------- -------------- ------------ --------------
Total increase (decrease)............. 453,099,363 36,310,841 22,874,147 270,849,310
NET ASSETS, at beginning
of the year........................... 1,248,899,006 108,920,201 158,698,138 1,823,140,930
-------------- -------------- ------------ --------------
NET ASSETS, at end
of the period......................... $1,701,998,369 $ 145,231,042 $181,572,285 $2,093,990,240
============== ============== ============ ==============
Undistributed net investment
income (loss) included in net
assets at end of the period.......... $ 15,927 $ 9,702 $ (64,100) $ (870)
============== ============== ============ ==============
</TABLE>
See Notes to Financial Statements.
8
<PAGE>
FINANCIAL HIGHLIGHTS
Selected per share data for each series share outstanding throughout:
MML EQUITY FUND
<TABLE>
<CAPTION>
Six Months
Ended Year Ended December 31,
June 30, ------------------------------------------------------------------------------------------
1997 1996 1995 1994 1993 1992 1991 1990 1989 1988
---- ---- ---- ---- ---- ---- ---- ---- ---- ----
(Unaudited)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value:
Beginning of year....... $ 29.786 $ 25.924 $ 20.520 $20.510 $19.862 $18.735 $15.659 $16.764 $14.929 $13.828
--------- --------- --------- ------- ------- ------- ------- ------- ------- -------
Income from
investment operations:
Net investment income.... .180 .703 .634 .594 .524 .543 .563 .636 .694 .646
Net realized and
unrealized gain (loss)
on investments.......... 4.618 4.547 5.754 .248 1.365 1.420 3.440 (.722) 2.746 1.660
--------- --------- --------- ------- ------- ------- ------- ------- ------- -------
Total from investment
operations.............. 4.798 5.250 6.388 .842 1.889 1.963 4.003 (.086) 3.440 2.306
--------- --------- --------- ------- ------- ------- ------- ------- ------- -------
Less distributions:
Dividends from net
investment income....... (.001) (.703) (.634) (.594) (.524) (.543) (.562) (.665) (.711) (.639)
Distribution from net
realized gains.......... -- (.685) (.350) (.238) (.717) (.288) (.365) (.354) (.894) (.566)
Distribution in excess
of net realized gains... -- -- -- -- -- (.005) -- -- -- --
--------- --------- --------- ------- ------- ------- ------- ------- ------- -------
Total distributions...... (.001) (1.388) (.984) (.832) (1.241) (.836) (.927) (1.019) (1.605) (1.205)
--------- --------- --------- ------- ------- ------- ------- ------- ------- -------
Net asset value:
End of period........... $ 34.583 $ 29.786 $ 25.924 $20.520 $20.510 $19.862 $18.735 $15.659 $16.764 $14.929
========= ========= ========= ======= ======= ======= ======= ======= ======= =======
Total return............. 16.11%* 20.25% 31.13% 4.10% 9.52% 10.48% 25.56% (.51%) 23.04% 16.68%
Net assets (in millions):
End of period........... $2,193.47 $1,701.99 $1,248.90 $820.78 $663.09 $490.62 $355.04 $235.45 $226.41 $172.80
Ratio of expenses to
average net assets...... .19%* .38% .41% .43% .44% .46% .48% .49% .50% .50%
Ratio of net investment
income to average net
assets.................. 1.12%* 2.65% 2.89% 3.04% 3.23% 3.09% 3.43% 4.09% 4.30% 4.05%
Portfolio turnover rate.. 7.51%* 11.42% 11.72% 9.99% 11.28% 9.07% 9.37% 13.50% 15.71% 15.97%
</TABLE>
MML MONEY MARKET FUND
<TABLE>
<CAPTION>
Six Months
Ended Year Ended December 31,
June 30, ------------------------------------------------------------------------------------------
1997 1996 1995 1994 1993 1992 1991 1990 1989 1988
---- ---- ---- ---- ---- ---- ---- ---- ---- ----
(Unaudited)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value:
Beginning of year....... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Income from investment
operations:
Net investment income.... .025 .049 .054 .038 .027 .034 .059 .078 .088 .072
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Total from investment
operations.............. .025 .049 .054 .038 .027 .034 .059 .078 .088 .072
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Less distributions:
Dividends from net
investment income....... (.025) (.049) (.054) (.038) (.027) (.034) (.059) (.078) (.088) (.072)
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Total distributions...... (.025) (.049) (.054) (.038) (.027) (.034) (.059) (.078) (.088) (.072)
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Net asset value:
End of period........... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
======= ======= ======= ======= ======= ======= ======= ======= ======= =======
Total return............. 2.49%* 5.01% 5.58% 3.84% 2.75% 3.48% 6.01% 8.12% 9.16% 7.39%
Net assets (in millions):
End of period........... $143.93 $145.23 $108.92 $ 91.79 $ 73.66 $ 84.56 $ 94.41 $114.59 $ 70.16 $ 66.35
Ratio of expenses to
average net assets...... .26%* .52% .54% .55% .54% .53% .52% .54% .54% .55%
Ratio of net investment
income to average net
assets.................. 2.47%* 4.92% 5.43% 3.81% 2.71% 3.42% 5.91% 7.80% 8.79% 7.20%
</TABLE>
See Notes to Financial Statements.
9
<PAGE>
FINANCIAL HIGHLIGHTS (Continued)
MML MANAGED BOND FUND
<TABLE>
<CAPTION>
Six Months
Ended
June 30, Year Ended December 31,
--------------------------------------------------------------------------------------------
1997 1996 1995 1994 1993 1992 1991 1990 1989 1988
---- ---- ---- ---- ---- ---- ---- ---- ---- ----
(Unaudited)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value:
Beginning of year....... $ 12.048 $ 12.448 $ 11.141 $ 12.405 $ 12.041 $ 12.219 $ 11.318 $ 11.354 $ 10.919 $ 11.052
-------- -------- -------- -------- -------- -------- -------- -------- -------- --------
Income from investment
operations:
Net investment income.... .402 .776 .782 .792 .785 .870 .903 .943 .918 .906
Net realized and
unrealized gain (loss)
on investments and
forward commitments..... (.048) (.401) 1.307 (1.264) .618 .001 .916 (.036) .454 (.133)
-------- -------- -------- -------- -------- -------- -------- -------- -------- --------
Total from investment
operations.............. .354 .375 2.089 (.472) 1.403 .871 1.819 .907 1.372 .773
-------- -------- -------- -------- -------- -------- -------- -------- -------- --------
Less distributions:
Dividends from net
investment income....... (.196) (.775) (.782) (.792) (.784) (.869) (.902) (.943) (.918) (.906)
Distribution from net
realized gains.......... -- -- -- -- (.255) (.158) (.016) -- (.019) --
Distribution in excess
of net realized gains... -- -- -- -- -- (.022) -- -- -- --
-------- -------- -------- -------- -------- -------- -------- -------- -------- --------
Total distributions...... (.196) (.775) (.782) (.792) (1.039) (1.049) (.918) (.943) (.937) (.906)
-------- -------- -------- -------- -------- -------- -------- -------- -------- --------
Net asset value:
End of period........... $ 12.206 $ 12.048 $ 12.448 $ 11.141 $ 12.405 $ 12.041 $ 12.219 $ 11.318 $ 11.354 $ 10.919
======== ======== ======== ======== ======== ======== ======== ======== ======== ========
Total return............. 3.00%* 3.25% 19.14% (3.76%) 11.81% 7.31% 16.66% 8.38% 12.83% 7.13%
Net assets (in millions):
End of period........... $ 189.12 $ 181.57 $ 158.70 $ 121.21 $ 129.11 $ 88.15 $ 66.98 $ 43.07 $ 40.03 $ 31.35
Ratio of expenses to
average net assets...... .25%* .51% .52% .52% .54% .56% .57% .57% .59% .61%
Ratio of net investment
income to average net
assets.................. 3.31%* 6.54% 6.63% 6.69% 6.37% 7.28% 7.96% 8.40% 8.35% 8.25%
Portfolio turnover rate.. 22.60%* 46.12% 70.00% 32.77% 58.81% 39.51% 61.85% 69.93% 64.77% 74.92%
</TABLE>
See Notes to Financial Statements.
10
<PAGE>
FINANCIAL HIGHLIGHTS (Continued)
MML BLEND FUND
<TABLE>
<CAPTION>
Six Months
Ended Year Ended December 31,
June 30, -----------------------------------------------------------------------------------------------
1997 1996 1995 1994 1993 1992 1991 1990 1989 1988
---- ---- ---- ---- ---- ---- ---- ---- ---- ----
(Unaudited)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value:
Beginning of
year............... $ 21.973 $ 20.519 $ 17.672 $ 18.305 $ 17.846 $ 17.307 $14.839 $15.428 $13.876 $13.095
-------- --------- --------- --------- --------- --------- ------- ------- ------- -------
Income from
investment
operations:
Net investment
income.............. .409 .824 .811 .707 .655 .707 .736 .792 .823 .734
Net realized and
unrealized gain
(loss) on invest-
ments and forward
commitments......... 2.064 1.990 3.246 (.271) 1.057 .880 2.771 (.445) 1.921 1.000
-------- --------- --------- --------- --------- --------- ------- ------- ------- -------
Total from
investment
operations.......... 2.473 2.814 4.057 .436 1.712 1.587 3.507 .347 2.744 1.734
-------- --------- --------- --------- --------- --------- ------- ------- ------- -------
Less distributions:
Dividends from net
investment income... (.200) (.824) (.811) (.707) (.655) (.707) (.736) (.811) (.835) (.728)
Distribution from
net realized gains.. -- (.536) (.399) (.359) (.598) (.326) (.303) (.125) (.357) (.225)
Distribution in
excess of net
realized gains...... -- -- -- (.003) -- (.015) -- -- -- --
-------- --------- --------- --------- --------- --------- ------- ------- ------- -------
Total distributions.. (.200) (1.360) (1.210) (1.069) (1.253) (1.048) (1.039) (.936) (1.192) (.953)
-------- --------- --------- --------- --------- --------- ------- ------- ------- -------
Net asset value:
End of period....... $ 24.246 $ 21.973 $ 20.519 $ 17.672 $ 18.305 $ 17.846 $17.307 $14.839 $15.428 $13.876
======== ========= ========= ========= ========= ========= ======= ======= ======= =======
Total return......... 11.34%* 13.95% 23.28% 2.48% 9.70% 9.36% 24.00% 2.37% 19.96% 13.40%
Net assets
(in millions):
End of period....... $2441.92 $2,093.99 $1,823.14 $1,444.26 $1,296.54 $1,013.28 $797.04 $574.15 $524.29 $401.22
Ratio of expenses
to average net
assets.............. .18%* .38% .38% .39% .40% .41% .42% .44% .45% .46%
Ratio of net invest-
ment income to
average net assets.. 1.79%* 3.87% 4.19% 3.93% 3.60% 4.07% 4.54% 5.37% 5.57% 5.29%
Portfolio turnover
rate................ 11.67%* 19.10% 30.78% 26.59% 20.20% 25.43% 26.92% 24.55% 22.39% 25.70%
</TABLE>
*Percentages represent results for the period and are not annualized.
Total return information shown in the Financial Highlights tables does not
reflect expenses that apply at the separate account level or to related
insurance products. Inclusion of these charges would reduce the total return
figures for all periods shown.
See Notes to Financial Statements.
11
<PAGE>
MML Equity Fund
SCHEDULE OF INVESTMENTS
June 30, 1997
(Unaudited)
<TABLE>
<CAPTION>
Number Market
of Value
Shares (Note 2A)
-------- -----------
<S> <C> <C>
EQUITIES - 93.24%
Aerospace & Defense - 2.74%
The Boeing Company ......................... 325,000 $ 17,245,150
Raytheon Company ........................... 560,000 28,560,000
TRW, Inc. .................................. 250,400 14,225,725
---------- -------------
1,135,400 60,030,875
---------- -------------
Agribusiness - .86%
Archer-Daniels-Midland...................... 75,000 1,762,500
Pioneer Hi-Bred International, Inc. ........ 235,000 18,800,000
---------- -------------
310,000 20,562,500
---------- -------------
Apparel, Textiles, Shoes - 1.02%
VF Corporation ............................. 265,000 22,458,750
---------- -------------
Automotive & Parts - 5.04%
Ford Motor Company ......................... 950,000 35,862,500
Genuine Parts Company ...................... 860,250 29,140,969
Goodyear Tire & Rubber Company ............. 720,000 45,584,640
---------- -------------
2,530,250 110,588,109
---------- -------------
Banking, Savings & Loans - 6.26%
The Bank of New York Company,
Incorporated .............................. 870,000 37,845,000
Comerica, Incorporated ..................... 323,500 21,998,000
CoreStates Financial Corporation ........... 585,500 31,470,625
Norwest Corporation ........................ 391,000 21,993,750
Pacific Century Financial Corporation ...... 156,100 7,219,625
Wachovia Corporation ....................... 288,200 16,805,518
---------- -------------
2,614,300 137,332,518
---------- -------------
Beverages - 1.74%
Brown-Forman Corporation (Class B) ......... 337,300 16,464,288
Pepsico, Incorporated ...................... 580,000 21,785,960
---------- -------------
917,300 38,250,248
---------- -------------
Chemicals - 4.48%
E.I. du Pont de Nemours and Company ........ 333,000 20,937,375
The Lubrizol Corporation ................... 565,000 23,694,405
Nalco Chemical Company ..................... 539,300 20,830,463
Rohm & Haas ................................ 365,000 32,872,630
---------- -------------
1,802,300 98,334,873
---------- -------------
Communications - 2.18%
AT&T Corporation ........................... 176,100 6,174,418
GTE Corporation ............................ 946,800 41,540,850
---------- -------------
1,122,900 47,715,268
---------- -------------
Computers & Office Equipment - 7.30%
Hewlett-Packard Company .................... 640,000 35,840,000
International Business Machines Corporation. 490,000 44,191,630
Pitney Bowes, Inc. ......................... 552,000 38,364,000
Xerox Corporation .......................... 530,000 41,803,750
---------- -------------
2,212,000 160,199,380
---------- -------------
Containers - .81%
Temple-Inland, Inc. ........................ 330,000 17,820,000
---------- -------------
Cosmetics & Personal Care - 1.63%
Kimberly-Clark Corporation ................. 720,000 35,820,000
---------- -------------
Electric Utilities - 2.10%
NIPSCO Industries, Inc. .................... 208,000 8,592,896
SCANA Corporation .......................... 785,200 19,482,382
Teco Energy Inc. ........................... 704,700 18,013,541
---------- -------------
1,697,900 46,088,819
---------- -------------
Electrical Equipment & Electronics - 6.61%
AMP, Incorporated .......................... 955,000 39,871,250
General Electric Company ................... 977,000 63,871,375
Honeywell Inc. ............................. 232,500 17,640,938
Hubbell, Incorporated (Class B) ............ 504,144 22,182,336
New England Electric ....................... 38,600 1,428,200
---------- -------------
2,707,244 144,994,099
---------- -------------
Energy - 6.27%
Amoco Corporation .......................... 387,500 33,688,088
Eni, SPA - ADR ............................. 195,100 11,096,312
Kerr-McGee Corporation ..................... 226,000 14,322,750
Mobil Corporation .......................... 360,000 25,155,000
Occidental Petroleum Corp. ................. 754,600 18,911,785
Union Pacific Resources Group .............. 703,700 17,504,538
Unocal Corporation ......................... 432,100 16,770,665
---------- -------------
3,059,000 137,449,138
---------- -------------
Financial Services - 1.36%
American Express Company ................... 400,000 29,800,000
---------- -------------
Foods - 2.73%
ConAgra, Inc. .............................. 515,500 33,056,438
CPC International, Inc. .................... 291,500 26,908,948
---------- -------------
807,000 59,965,386
---------- -------------
Forest Products & Paper - 2.27%
Westvaco Corporation ....................... 773,055 24,302,530
Weyerhaeuser Company ....................... 490,600 25,511,200
---------- -------------
1,263,655 49,813,730
---------- -------------
Hardware & Tools - .82%
The Stanley Works .......................... 451,000 18,040,000
---------- -------------
Healthcare - 8.13%
Becton, Dickinson and Company .............. 536,000 27,135,000
Bristol-Myers Squibb Company ............... 1,040,000 84,240,000
Pfizer, Incorporated ....................... 134,800 16,108,600
Pharmacia & Upjohn Inc. .................... 579,000 20,120,250
Schering-Plough Corp. ...................... 643,000 30,783,624
---------- -------------
2,932,800 178,387,474
---------- -------------
Industrial Distribution - .88%
W. W. Grainger, Inc. ....................... 246,000 19,234,002
---------- -------------
Industrial Transportation - 1.36%
Burlington Northern Sante Fe ............... 311,200 27,969,100
Norfolk Southern Corporation ............... 296,000 29,822,000
---------- -------------
607,200 57,791,100
---------- -------------
</TABLE>
12
<PAGE>
MML Equity Fund
SCHEDULE OF INVESTMENTS (Continued)
June 30, 1997
(Unaudited)
<TABLE>
<CAPTION>
Number Market
of Value
Shares (Note 2A)
-------- -----------
<S> <C> <C>
EQUITIES (Continued)
Insurance - 5.86%
Jefferson-Pilot Corporation ................ 312,000 $ 21,801,000
Marsh & McLennan Companies, Inc. ........... 561,000 40,041,375
MBIA, Inc. ................................. 268,000 30,233,616
SAFECO Corporation ......................... 782,500 36,532,578
---------- -------------
1,923,500 128,608,569
---------- -------------
Machinery & Components - 2.05%
Dover Corporation .......................... 325,000 19,987,500
Parker-Hannifin Corporation ................ 412,050 25,006,078
---------- -------------
737,050 44,993,578
---------- -------------
Miscellaneous
Harsco Corporation ......................... 339,000 13,729,500
Minnesota Mining & Manufacturing Company ... 204,500 20,859,000
Fall Corporation ........................... 604,000 14,043,000
---------- -------------
1,147,500 48,631,500
---------- -------------
Photography - .94%
Eastman Kodak Company ...................... 268,800 20,630,400
---------- -------------
Publishing & Printing - 2.34%
McGraw-Hill Companies, Inc. ................ 500,000 29,406,000
R.R. Donnelley & Sons Company .............. 600,000 21,975,000
---------- -------------
1,100,000 51,381,000
---------- -------------
Retail - 2.45%
The May Department Stores Company .......... 593,000 28,019,250
Sears Roebuck and Company .................. 479,300 25,762,375
---------- -------------
1,072,300 53,781,625
---------- -------------
Retail - Grocery - 3.35%
Albertson's, Inc. .......................... 1,148,500 41,920,250
American Stores Company .................... 639,100 31,555,563
---------- -------------
1,787,600 73,475,813
---------- -------------
Telephone Utilities - 3.50%
Ameritech Corporation ...................... 347,000 23,574,139
Frontier Corporation ....................... 1,096,200 21,854,939
Pinnacle West Capital ...................... 425,100 12,779,356
Southern New England
Telecommunications Corporation ............ 475,400 18,481,175
---------- -------------
2,343,700 76,689,609
---------- -------------
Tobacco - 2.57%
Fortune Brands, Inc. ....................... 463,000 17,275,456
Gallaher Group PLC ......................... 463,000 8,536,331
UST, Inc. .................................. 1,100,500 30,538,875
---------- -------------
2,026,500 56,350,662
---------- -------------
Total Equities
(Cost $1,251,426,499) ...................... 2,045,219,025
-------------
<CAPTION>
Principal
Amount
-----------
<S> <C> <C>
SHORT-TERM INVESTMENTS - 7.28%
Commercial Paper
AIG Funding, Inc.
5.200% 7/23/97 ....................... $ 10,000,000 $ 9,964,617
AIG Funding, Inc.
6.100% 7/1/97 ........................ 5,000,000 5,000,000
Abbott Laboratories
5.470% 7/09/97 ....................... 6,258,000 6,250,393
American Telephone & Tel
5.240% 7/18/97 ....................... 4,000,000 3,989,147
American Telephone & Tel
5.240% 8/21/97 ....................... 10,000,000 9,914,400
Anheuser Busch Cos, Inc.
5.550% 8/29/97 ....................... 5,000,000 4,952,083
Anheuser Busch Cos, Inc.
5.540% 7/7/97 ........................ 7,330,000 7,323,232
Coca Cola Company
5.450% 7/29/97........................ 9,467,000 9,426,870
E.I. du Pont de Nemours and Company
5.630% 11/12/97 ...................... 5,000,000 4,892,188
E.I. du Pont de Nemours and Company
5.610% 12/4/97 ....................... 7,014,000 6,838,114
Eastman Kodak Company
5.525% 7/21/97 ....................... 15,662,000 15,613,926
First Union National Bank
5.500% 7/3/97 ........................ 6,000,000 5,998,167
Ford Motor Credit Company
5.620% 12/08/97 ...................... 5,000,000 4,871,424
Ford Motor Credit Company
5.580% 12/9/97 ....................... 5,000,000 4,870,625
General Electric Capital Corporation
5.580% 12/8/97 ....................... 4,000,000 3,897,139
IBM Credit Corporation
5.520% 8/25/97 ....................... 3,000,000 2,973,199
IBM Corporation
5.520% 7/22/97 ....................... 12,000,000 11,961,360
J P Morgan
5.510% 7/28/97 ....................... 9,000,000 8,962,808
Pepsico, Inc.
5.500% 7/14/97 ....................... 10,000,000 9,980,139
Transamerica Finance Corp.
6.200% 7/1/97 ........................ 7,008,000 7,008,000
Walt Disney Company
5.470% 7/21/97 ....................... 15,000,000 14,954,417
------------ -------------
Total Short-Term Investments
(Cost $159,680,514) ....................... $160,739,000 159,642,248
============ -------------
<CAPTION>
<S> <C> <C>
Total Investments -
(Cost $1,411,107,013) (a) 100.52% $ 2,204,861,273
======= ===============
<CAPTION>
<S> <C>
(a) Federal Income Tax Information: At
June 30, 1997 the net unrealized
appreciation on investments based on cost
of $1,411,115,370 for federal income tax
purposes is as follows:
Aggregate gross unrealized appreciation for
all investments in which there is an excess
of market value over tax cost ........................ $ 804,534,770
Aggregate gross unrealized depreciation for
all investments in which there is an excess
of tax cost over market value ........................ (10,788,867)
---------------
Net unrealized appreciation .......................... $ 793,745,903
===============
</TABLE>
See Notes to Financial Statements.
13
<PAGE>
MML Money Market Fund
SCHEDULE OF INVESTMENTS
June 30, 1997
(Unaudited)
<TABLE>
<CAPTION>
Market
Principal Value
Amount (Note 2A)
------------ ------------
<S> <C> <C>
SHORT-TERM INVESTMENTS - 100.54%
Commercial Paper - 96.84%
Abbott Laboratories
5.480% 8/5/97 ........................ $ 4,790,000 $ 4,764,480
Anheuser-Busch Companies, Inc.
5.600% 12/15/97 ...................... 5,800,000 5,649,329
Atlantic Richfield Corp.
5.620% 11/14/97 ...................... 1,200,000 1,174,523
Becton, Dickinson and Company
5.540% 9/29/97 ....................... 2,900,000 2,859,835
Bellsouth Telecommunications, Inc.
5.520% 7/7/97 ........................ 4,060,000 4,056,265
Bemis Company Incorporated
5.570% 7/15/97 ....................... 5,740,000 5,727,567
CIT Group Holdings Incorporated
5.520% 8/07/97 ....................... 3,995,000 3,972,335
Carolina Power & Light Company
5.530% 7/23/97 ....................... 4,170,000 4,155,908
Caterpillar Financial Services Corp.
5.750% 10/7/97 ....................... 1,725,000 1,697,999
Caterpillar Financial Services Corp.
5.700% 9/16/97 ....................... 4,300,000 4,247,576
Countrywide Home Loans
5.580% 7/25/97 ....................... 3,540,000 3,526,831
Countrywide Home Loans
5.580% 8/28/97 ....................... 2,150,000 2,130,672
E.I. du Pont de Nemours and Company
5.570% 8/18/97 ....................... 3,390,000 3,364,824
E.I. du Pont de Nemours and Company
5.630% 10/30/97 ...................... 2,080,000 2,040,640
Eastman Kodak Company
5.490% 7/18/97 ....................... 2,070,000 2,064,633
Eastman Kodak Company
5.500% 7/28/97 ....................... 3,545,000 3,530,377
Emerson Electric Company
5.470% 7/24/97 ....................... 5,560,000 5,540,569
Ford Motor Credit Company
5.550% 8/25/97 ....................... 595,000 589,955
GTE Corporation
5.580% 9/12/97 ....................... 4,930,000 4,874,217
General Electric Company
5.600% 7/17/97 ....................... 2,145,000 2,139,661
General Electric Company
5.600% 9/2/97 ........................ 470,000 465,394
General Electric Company
5.610% 10/15/97 ...................... 520,000 511,410
General Electric Company
5.220% 11/14/97 ...................... 150,000 147,042
General Electric Company
5.510% 7/1/97 ........................ 2,465,000 2,465,000
General Motors Acceptance Corporation
5.700% 12/1/97 ....................... 1,570,000 1,531,967
Goldman Sachs & Company
5.570% 8/4/97 ........................ 3,035,000 3,019,034
Hershey Goods Corporation
5.510% 9/09/97 ....................... 2,785,000 2,755,162
Lilly (Eli) & Company
5.330% 8/8/97 ........................ 5,300,000 5,270,181
Monsanto Company
5.570% 8/29/97 ....................... 1,950,000 1,932,199
Nestle Capital Corporation
5.500% 8/11/97 ....................... 2,900,000 2,881,835
Nestle Capital Corporation
5.510% 9/8/97 ........................ 2,730,000 2,701,169
Northern Indiana Public Service
5.540% 8/1/97 ........................ 3,325,000 3,309,138
Northern States Power Company
5.600% 7/21/97 ....................... 3,285,000 3,274,780
Northern States Power Company
5.550% 7/14/97 ....................... 2,785,000 2,779,418
NYNEX Corporation
5.540% 7/31/97 ....................... 5,500,000 5,474,608
PPG Industries
5.510% 7/29/97 ....................... 5,000,000 4,978,572
Pacific Gas & Electric Company
5.540% 8/6/97 ........................ 4,900,000 4,872,854
Pitney Bowes Credit Corporation
5.220% 7/21/97 ....................... 4,720,000 4,706,312
Proctor & Gamble Company
5.520% 7/22/97 ....................... 2,635,000 2,626,515
Southwestern Bell Telephone Company
5.500% 8/20/97 ....................... 5,495,000 5,453,024
Walt Disney Company
5.530% 9/30/97 ....................... 3,260,000 3,214,430
Walt Disney Company
5.550% 12/1/97 ....................... 2,350,000 2,294,569
Xerox Corporation
5.540% 8/26/97 ....................... 4,645,000 4,604,970
------------ ------------
Total Commercial Paper
(Cost $139,377,799) ....................... 140,460,000 139,377,779
------------ ------------
U.S. Government Agency Obligations - 3.70%
Federal Farm Credit Bank
5.460% 11/3/97 ....................... 5,425,000 5,322,151
------------ ------------
Total U.S. Government Agency Obligations
(Cost $5,322,151) ......................... 5,425,000 5,322,151
------------ ------------
Total Short-Term Investments
(Cost $144,699,930) (a) .................... $145,885,000 144,699,930
============ ------------
Total Investments -
(Cost $144,699,930) (a) ......... 100.54% $144,699,930
======= ============
</TABLE>
(a) Federal Income Tax Information: The aggregate cost for investments for the
MML Money Market Fund as of June 30, 1997 is the same for financial
reporting and federal income tax purposes.
June 30, 1997 seven-day average yield for the portfolio: 5.15%
See Notes to Financial Statements.
14
<PAGE>
MML Managed Bond Fund
SCHEDULE OF INVESTMENTS
June 30, 1997
(Unaudited)
<TABLE>
<CAPTION>
Market
Principal Value
Amount (Note 2A)
------------ ------------
<S> <C> <C>
BONDS AND NOTES - 98.02%
Asset Backed Securities - 8.82%
Auto Receivables
Capita Equipment Receivables Trust 1996-1,
Class A4
6.280% 6/15/00 ....................... $ 2,000,000 $ 1,998,120
Chase Manhattan Auto Grantor Trust 1996-B,
Class A
6.280% 6/15/00 ....................... 3,763,035 3,777,147
Daimler-Benz Auto Grantor Trust 1995-A,
Class A
5.850% 5/15/02 ....................... 1,201,756 1,200,254
Ford Credit 1994-B Grantor Trust
7.300% 10/15/99 ...................... 373,641 376,791
Jet Equipment Trust 1995-A
8.235% 5/1/15 ........................ 1,924,039 2,061,107
Keystone Auto Grantor Trust 1996-B,
Class A 144A
6.150% 4/15/03 ....................... 1,110,042 1,108,388
Nissan Auto Receivables 1994-A Grantor Trust,
Class A
6.450% 9/15/99 ....................... 480,350 480,951
Railcar Trust No. 1992-1
7.750% 6/1/04 ........................ 1,522,820 1,578,966
World Omni 1995-A Automobile Lease
Securitization Trust, Class A
6.050% 11/25/01 ...................... 2,257,899 2,259,298
World Omni 1996-A Automobile Lease
Securitization Trust, Class A1
6.300% 6/25/02 ....................... 1,843,805 1,848,414
------------ ------------
Total Asset Backed Securities
(Cost $16,682,524) 16,477,387 16,689,436
------------ ------------
Corporate Debt - 59.28%
AirTouch Communications, Inc.
7.500% 7/15/06 ....................... 1,500,000 1,531,800
American West Airlines 1996-1, Class A
6.850% 7/2/09 ........................ 1,750,000 1,704,063
American Airlines, Inc.
9.780% 11/26/11 ...................... 2,000,000 2,275,000
AMR Corporation
9.000% 8/1/12 ........................ 1,000,000 1,120,140
Analog Devices, Inc.
6.625% 3/1/00 ........................ 1,000,000 994,310
Associates Corporation of North America
6.750% 8/1/01 ........................ 1,000,000 1,001,240
Associates Corporation of North America
7.875% 9/30/01 ....................... 2,000,000 2,084,400
Atlantic Richfield Company
7.770% 2/13/02 ....................... 3,000,000 3,104,820
Barrick Gold Corporation
7.500% 5/01/07 ....................... 2,000,000 2,046,140
Bell Atlantic Financial Services, Inc.
6.610% 2/4/00 ........................ 2,000,000 2,004,720
BHP Finance (USA) Limited
6.420% 3/1/26 ........................ 2,000,000 1,959,760
Carlisle Companies, Inc.
7.250% 1/15/07 ....................... 1,500,000 1,497,165
Champion International Corporation
6.400% 2/15/26 ....................... 1,500,000 1,427,610
Charles Schwab Corporation
6.250% 1/23/03 ....................... 2,000,000 1,925,000
CITGO Petroleum Corporation
7.875% 5/15/06 ....................... 750,000 774,900
Columbia Gas System, Inc.
6.610% 11/28/02 ...................... 2,000,000 1,977,400
Commercial Credit Company
7.750% 3/1/05 ........................ 3,000,000 3,117,120
Comcast Cablevision-PH
8.375% 5/1/07 ........................ 1,250,000 1,322,338
Continental Airlines, Inc. Series 1996-B
7.820% 10/15/13 ...................... 1,470,588 1,516,500
Continental Airlines, Inc. Series 1996-2B
8.560% 7/2/14 ........................ 972,107 1,048,660
Corning Glass Works
8.875% 3/15/16 ....................... 500,000 556,970
CSX Corporation
7.250% 5/1/27 ........................ 2,000,000 2,040,520
Dow Capital
7.125% 1/15/03 ....................... 4,000,000 4,011,160
English China Clays Delaware Inc.
7.375% 10/1/02 ....................... 1,000,000 1,017,100
Equifax, Inc.
6.500% 6/15/03 ....................... 1,250,000 1,220,163
ERAC USA Finance Company 144A
6.950% 1/15/06 ....................... 1,500,000 1,467,345
FBG Finance Ltd. 144A
7.875% 6/1/16 ........................ 1,250,000 1,255,038
First Brands Corporation
7.250% 3/1/07 ........................ 500,000 499,240
Fletcher Challenge Ltd.
7.750% 6/20/06 ....................... 1,500,000 1,544,130
Foodbrands America, Inc.
10.750% 5/15/06 ....................... 1,500,000 1,758,480
Foster Wheeler Corporation
6.750% 11/15/05 ...................... 2,000,000 1,937,060
General American Transportation Corporation
6.750% 3/1/06 ........................ 2,000,000 1,935,440
General Electric Capital Corporation
8.750% 5/21/07 ....................... 1,000,000 1,126,040
General Mills
8.900% 6/15/06 ....................... 1,000,000 1,114,050
General Motors Acceptance Corporation
6.300% 9/10/97 ....................... 2,500,000 2,501,150
Hercules Incorporated
6.625% 6/1/03 ........................ 1,000,000 985,850
Hilton Hotels Corporation
7.375% 6/1/02 ........................ 1,000,000 1,007,170
IMCERA Group, Inc.
6.000% 10/15/03 ...................... 2,000,000 1,907,620
Leucadia National Corporation
7.750% 8/15/13 ....................... 2,000,000 1,949,560
Lockheed Martin Corporation
7.700% 6/15/08 ....................... 1,500,000 1,564,560
McDonnell Douglas Corporation
9.250% 4/1/02 ........................ 1,400,000 1,539,356
Mapco, Inc.
7.250% 3/1/09 ........................ 1,500,000 1,501,380
Metlife Capital Equipment
6.850% 5/20/08 ....................... 500,000 497,535
Millipore Corporation
7.500% 4/1/07 ........................ 1,000,000 1,013,160
Mobil Corporation
8.625% 8/15/21 ....................... 2,000,000 2,302,680
MFS Communications
0.000% 1/15/04 ....................... 1,000,000 930,800
</TABLE>
15
<PAGE>
MML Blend Fund
SCHEDULE OF INVESTMENTS (Continued)
June 30, 1997
(Unaudited)
<TABLE>
<CAPTION>
Market
Principal Value
Amount (Note 2A)
------------ ------------
BONDS AND NOTES (Continued)
<S> <C> <C>
Corporate Debt (Continued)
Newmont Mining Corporation
8.625% 4/1/02.............................. $ 2,000,000 $ 2,130,760
News America Holdings Incorporated
9.250% 2/1/13.............................. 2,000,000 2,229,940
Norfolk Southern Corporation
7.050% 5/01/37............................. 2,500,000 2,537,350
Orchard Supply Hardware
9.375% 2/15/02............................. 1,500,000 1,572,285
Penske Truck Leasing Co., L.P.
7.750% 5/15/99............................. 1,250,000 1,280,900
Petro Geo-Services
7.500% 3/31/07............................. 500,000 503,795
Polaroid Corporation
8.000% 3/15/99............................. 1,000,000 1,023,950
Ralston Purina Company
7.750% 10/1/15............................. 3,000,000 3,041,400
Rite Aid Corporation
6.700% 12/15/01............................ 1,000,000 992,410
Rolls-Royce Capital Inc.
7.125% 7/29/03............................. 1,500,000 1,506,045
Scholastic Corporation
7.000% 12/15/03............................ 2,000,000 1,984,420
Textron Inc.
9.550% 3/19/01............................. 1,000,000 1,088,750
Thomas & Betts Corporation
8.250% 1/15/04............................. 1,500,000 1,584,495
Time Warner, Inc.
7.750% 6/15/05............................. 3,000,000 3,048,750
Time Warner, Inc.
6.100% 12/30/01............................ 500,000 478,940
United Air Lines, Inc.
10.110% 2/19/06............................. 462,142 513,027
US Air, Inc.
7.500% 10/15/09............................ 962,159 968,172
US West Capital Funding Corporation
8.375% 10/18/99............................ 3,000,000 3,118,050
US West Capital Funding Corporation
6.850% 1/15/02............................. 2,000,000 1,997,860
Valassis Communications, Inc.
9.550% 12/1/03............................. 2,000,000 2,130,340
Westinghouse Electric Corporation
8.375% 6/15/02............................. 500,000 516,240
Worldcom Inc.
7.750% 4/1/07.............................. 1,000,000 1,022,680
W.R. Grace & Co.
7.750% 10/1/02............................. 2,100,000 2,167,200
W.R. Grace & Co.
8.000% 8/15/04............................. 1,000,000 1,046,780
-------------- --------------
Total Corporate Debt
(Cost $111,723,776)............................... 109,366,996 112,101,182
-------------- --------------
U.S. Government Agency Obligations - 22.81%
Federal Home Loan Mortgage
Corporation (FHLMC) - 3.07%
Collateralized Mortgage Obligations - 2.98%
FHLMC Series 1322 Class G
7.500% 2/15/07............................. $ 2,000,000 $ 2,040,620
FHLMC Series 1460 Class H
7.000% 5/15/07............................. 2,000,000 2,007,500
FHLMC Series 1080 Class D
7.000% 7/15/20............................. 1,568,665 1,584,351
-------------- --------------
5,568,665 5,632,471
Pass-Through Securities - .09%
FHLMC
9.000% 3/1/17.............................. 162,962 173,408
-------------- --------------
5,731,627 5,805,879
-------------- --------------
Federal National Mortgage
Association (FNMA) - 6.90%
Collateralized Mortgage Obligations - 6.54%
FNMA Series 1993-175 Class PL
5.000% 10/25/02............................ 468,248 466,052
FNMA Series 1993-191 Class PD
5.400% 3/25/04............................. 1,500,000 1,488,750
FNMA Series 1993-221 Class D
6.000% 12/25/08............................ 1,000,000 956,250
FNMA Series 1993-134 Class GA
6.500% 2/25/07............................. 2,000,000 1,981,860
FNMA Series 1996-54 Class C
6.000% 9/25/08............................. 4,000,000 3,835,000
FNMA Series 1993-186 Class G
6.250% 3/25/08............................. 3,700,000 3,637,544
-------------- --------------
12,668,248 12,365,456
Pass-Through Securities - .36%
FNMA
9.000% 5/1/09.............................. 643,638 680,641
-------------- --------------
13,311,886 13,046,097
-------------- --------------
Government National Mortgage
Association (GNMA) - 10.74%
Collateralized Mortgage Obligations - .44%
JHM Acceptance Corporation, Series E, Class 5
8.960% 4/1/19.............................. 801,940 838,276
-------------- --------------
Pass-Through Securities - 10.29%
GNMA
8.000% 12/15/03 - 4/15/08.................. 6,072,511 6,282,013
GNMA
7.500% 3/15/17 - 7/15/17................... 4,371,063 4,431,122
GNMA - ARMS
6.000% 7/20/25 - 12/20/25.................. 8,597,169 8,751,066
-------------- --------------
19,040,743 19,464,201
-------------- --------------
19,842,683 20,302,477
-------------- --------------
</TABLE>
16
<PAGE>
MML Managed Bond Fund
SCHEDULE OF INVESTMENTS (Continued)
June 30, 1997
(Unaudited)
<TABLE>
<CAPTION>
Market
Principal Value
Amount (Note 2A)
-------------- --------------
<S> <C> <C>
BONDS AND NOTES (Continued)
U.S. Government Guaranteed Notes - 2.11%
1994-A Atlanta, GA
5.780% 8/1/98................... $ 130,000 $ 129,513
1994-A Baxter Springs, KS
5.780% 8/1/98................... 700,000 697,375
1994-A Boston, MA
5.780% 8/1/98................... 745,000 742,206
1994-A Detroit, MI
5.780% 8/1/98................... 385,000 383,556
1994-A Egg Harbor, NJ
5.780% 8/1/98................... 260,000 259,025
1994-A Kansas City, MO
5.780% 8/1/98................... 550,000 547,938
1994-A Mayaguez, PR
5.780% 8/1/98................... 295,000 293,894
1994-A Rochester, NY
5.780% 8/1/98................... 300,000 298,874
1994-A Sacramento, CA
5.780% 8/1/98................... 55,000 54,794
1994-A Saginaw, MI
5.780% 8/1/98................... 315,000 313,819
1994-A Youngstown, OH
5.780% 8/1/98................... 265,000 264,006
-------------- --------------
4,000,000 3,985,000
-------------- --------------
Total U.S. Government Agency Obligations
(Cost $42,491,921).................... 42,886,196 43,139,453
-------------- --------------
U.S. Treasury Obligations - 7.11%
U.S. Treasury Bonds - 2.29%
U.S. Treasury Bond
7.250% 8/15/04.................. 1,000,000 1,042,500
U.S. Treasury Bond
7.250% 5/15/16.................. 3,150,000 3,284,852
-------------- --------------
4,150,000 4,327,352
U.S. Treasury Strips - 4.82%
U.S. Treasury Strip - Principal Only
0.000% 2/15/15.................. 30,700,000 9,115,444
-------------- --------------
Total U.S. Treasury Obligations
(Cost $13,057,868)..................... 34,850,000 13,442,796
-------------- --------------
Total Bonds and Notes
(Cost $183,956,089)................... $ 203,580,579 185,372,867
============== ==============
SHORT-TERM INVESTMENTS - .22%
Commercial Paper
Conagra
6.120% 7/2/97................... $ 418,000 $ 417,929
-------------- --------------
Total Short-Term Investments
(Cost $417,929)........................ $ 418,000 417,929
============== --------------
Total Investments
(Cost $184,374,018) (a)................ 98.24% $ 185,790,796
======= ==============
(a) Federal Income Tax Information: At
June 30, 1997 the net unrealized
depreciation on investments based on
cost of $184,374,018 for federal income
tax purposes is as follows:
Aggregate gross unrealized appreciation for
all investments and forward commitments in
which there is an excess of market value over
tax cost........................................................ $ 3,353,247
Aggregate gross unrealized depreciation for
all investments and forward commitments in
which there is an excess of tax cost over
market value.................................................... (1,936,469)
--------------
Net unrealized appreciation................................... $ 1,416,778
==============
</TABLE>
See Notes to Financial Statements.
17
<PAGE>
MML Blend Fund
SCHEDULE OF INVESTMENTS
June 30, 1997
(Unaudited)
<TABLE>
<CAPTION>
Number Market
of Value
Shares (Note 2A)
------ ---------
<S> <C> <C>
EQUITIES - 60.83%
Aerospace & Defense - 1.91%
Boeing Company.............................. 250,000 $ 13,265,500
Raytheon Company............................ 410,000 20,910,000
TRW, Inc.................................... 218,600 12,419,103
------------- -------------
878,600 46,594,603
------------- -------------
Agribusiness - .71%
Archer-Daniels-Midland Company.............. 54,400 1,278,400
Pioneer Hi-Bred International, Inc.......... 200,000 16,000,000
------------- -------------
254,400 17,278,400
------------- -------------
Apparel, Textiles, Shoes - .69%
VF Corporation.............................. 200,000 16,950,000
------------- -------------
Automotive & Parts - 2.98%
Ford Motor Company.......................... 465,600 17,576,400
Genuine Parts Company....................... 685,500 23,221,313
Goodyear Tire & Rubber Company.............. 505,000 31,972,560
------------- -------------
1,656,100 72,770,273
------------- -------------
Banking, Savings & Loans - 4.10%
The Bank of New York Company, Incorporated.. 675,000 29,362,500
Comerica, Incorporated...................... 237,000 16,116,000
CoreStates Financial Corporation............ 374,800 20,145,500
Norwest Corporation......................... 252,000 14,175,000
Pacific Century Finance..................... 109,100 5,045,874
Wachovia Corporation........................ 260,000 15,161,120
------------- -------------
1,907,900 100,005,994
------------- -------------
Beverages - 1.16%
Brown-Forman Corporation (Class B).......... 300,000 14,643,600
Pepsico, Incorporated....................... 365,000 13,710,130
------------- -------------
665,000 28,353,730
------------- -------------
Chemicals - 2.82%
E.I. du Pont de Nemours and Company......... 292,000 18,359,500
The Lubrizol Corporation.................... 300,300 12,593,681
Nalco Chemical Company...................... 355,000 13,711,875
Rohm & Haas................................. 268,000 24,136,616
------------- -------------
1,215,300 68,801,672
------------- -------------
Communications - 1.09%
AT&T Corporation............................ 122,100 4,281,070
GTE Corporation............................. 509,700 22,363,088
------------- -------------
631,800 26,644,158
------------- -------------
Computers & Office Equipment - 4.68%
Hewlett-Packard Company..................... 536,000 30,016,000
International Business Machines Corporation. 302,000 27,236,474
Pitney Bowes, Inc........................... 371,000 25,784,500
Xerox Corporation........................... 396,000 31,234,500
------------- -------------
1,605,000 114,271,474
------------- -------------
Containers - .32%
Temple-Inland, Inc.......................... 145,000 7,830,000
------------- -------------
Cosmetic & Personal Care - .86%
Kimberly-Clark Corporation.................. 422,000 20,994,500
------------- -------------
Electric Utilities - 1.34%
NIPSCO Industries, Inc...................... 178,000 7,353,537
SCANA Corporation........................... 579,200 14,371,110
Teco Energy Inc............................. 428,200 10,945,648
------------- -------------
1,185,400 32,670,295
------------- -------------
Electrical Equipment & Electronics - 4.57%
AMP, Inc.................................... 700,000 29,225,000
General Electric Company.................... 720,000 47,070,000
Honeywell, Inc.............................. 203,000 15,402,624
Hubbell, Incorporated (Class B)............. 431,880 19,002,720
New England Electric........................ 27,200 1,006,400
------------- -------------
2,082,080 111,706,744
------------- -------------
Energy - 4.42%
Amoco Corporation........................... 332,000 28,863,084
ENI, SPA - ADR.............................. 141,400 8,042,125
Kerr-McGee Corporation...................... 190,000 12,041,250
Mobil Corporation........................... 300,000 20,962,500
Occidental Petroleum Corp................... 568,300 14,242,735
Union Pacific Resources Group, Inc.......... 479,100 11,917,613
Unocal Corporation.......................... 304,200 11,806,610
------------- -------------
2,315,000 107,875,917
------------- -------------
Financial Services -1.06%
American Express Company.................... 346,000 25,777,000
------------- -------------
Foods - 1.93%
ConAgra, Inc................................ 325,100 20,847,038
CPC International, Inc...................... 285,000 26,308,920
------------- -------------
610,100 47,155,958
------------- -------------
Forest Products & Paper - 1.40%
Westvaco Corporation........................ 450,012 14,147,027
Weyerhaeuser Company........................ 386,500 20,098,000
------------- -------------
836,512 34,245,027
------------- -------------
Hardware & Tools - .56%
The Stanley Works........................... 342,000 13,680,000
Healthcare - 5.73%
Becton, Dickinson and Company............... 468,000 23,692,500
Bristol-Myers Squibb Company................ 800,000 64,800,000
Pfizer, Incorporated........................ 99,900 11,938,050
Pharmacia & Upjohn Inc...................... 415,000 14,421,250
Schering-Plough Corp........................ 526,000 25,182,250
------------- -------------
2,308,900 140,034,050
------------- -------------
Industrial Distribution - .67%
W. W. Grainger, Inc......................... 208,000 16,262,896
------------- -------------
Industrial Transportation - 1.71%
Burlington Northern......................... 229,200 20,599,350
Norfolk Southern Corporation................ 210,000 21,157,500
------------- -------------
439,200 41,756,850
------------- -------------
Insurance - 4.39%
Jefferson-Pilot Corporation................. 234,500 16,385,688
Marsh & McLennan Companies, Inc............. 480,000 34,260,000
MBIA, Inc................................... 225,500 25,439,106
SAFECO Corporation.......................... 668,000 31,186,916
------------- -------------
1,608,000 107,271,710
------------- -------------
</TABLE>
18
<PAGE>
MML Blend Fund
SCHEDULE OF INVESTMENTS (Continued)
June 30, 1997
(Unaudited)
<TABLE>
<CAPTION>
Number Market
of Value
Shares (Note 2A)
------ ---------
<S> <C> <C>
EQUITIES (Continued)
Machinery & Components - 1.24%
Dover Corporation.............................. 286,000 $ 17,589,000
Parker-Hannifin Corporation.................... 208,750 12,668,411
------------- --------------
494,750 30,257,411
------------- --------------
Miscellaneous - 1.57%
Harsco Corporation............................. 312,100 12,640,050
Minnesota Mining & Manufacturing Company....... 150,500 15,351,000
Pall Corp...................................... 441,500 10,264,875
------------- --------------
904,100 38,255,925
------------- --------------
Photography - .68%
Eastman Kodak Company.......................... 217,300 16,677,775
------------- --------------
Publishing & Printing - 1.45%
McGraw-Hill Companies, Inc..................... 400,000 23,524,800
R.R. Donnelley & Sons Company.................. 326,500 11,958,063
------------- --------------
726,500 35,482,863
------------- --------------
Retail - 1.58%
The May Department Stores Company.............. 442,000 20,884,500
Sears Roebuck and Company...................... 330,300 17,753,625
------------- --------------
772,300 38,638,125
------------- --------------
Retail - Grocery - 1.68%
Albertson's, Inc............................... 749,200 27,345,800
American Stores Company........................ 278,100 13,731,188
------------- --------------
1,027,300 41,076,988
------------- --------------
Telephone Utilities - 1.95%
Ameritech Corporation.......................... 198,000 13,451,526
Frontier Corporation........................... 706,000 14,075,522
Pinnacle West Capital.......................... 311,700 9,370,325
Southern New England
Telecommunications Corporation............... 278,400 10,822,800
------------- --------------
1,494,100 47,720,173
------------- --------------
Tobacco - 1.57%
Fortune Brands, Inc............................ 384,000 14,327,808
Gallaher Group PLC............................. 384,000 7,079,808
UST, Inc....................................... 607,600 16,860,900
------------- --------------
1,375,600 38,268,516
------------- --------------
Total Equities
(Cost $809,526,978)............................ 1,485,309,027
--------------
<CAPTION>
Principal
Amount
---------
<S> <C> <C>
BONDS AND NOTES - 19.39%
Asset Backed Securities - 1.15%
Auto Receivables
Capita Equipment Receivables Trust 1996-1,
Class A4
6.280% 6/15/00........................ $ 4,000,000 3,996,240
Chase Manhattan Auto Grantor Trust 1996-B,
Class A
6.610% 9/15/02........................ 3,763,036 3,777,147
Daimler-Benz Auto Grantor Trust 1995-A,
Class A
5.850% 5/15/02........................ 1,001,463 1,000,212
Ford Credit 1994-B Grantor Trust
7.300% 10/15/99....................... 498,188 502,388
Ford Credit Auto Owner Trust 1996-B,
Class A-4
6.300% 1/15/01........................ 6,000,000 5,988,720
Ford Credit Auto Loan Master Trust,
Series 1992-1
8.450% 7/15/06........................ 1,500,000 1,500,375
Keystone Auto Grantor Trust 1996-B,
Class A 144A
6.150% 4/15/03........................ 1,850,070 1,847,314
Nissan Auto Receivables 1994-A Grantor
Trust, Class A
6.450% 9/15/99........................ 1,296,946 1,298,567
Railcar Trust No. 1992-1
7.750% 6/1/04......................... 1,378,152 1,428,968
World Omni 1995-A Automobile Lease
Securitization Trust, Class A
6.050% 11/25/01....................... 2,634,215 2,635,848
World Omni 1996-A Automobile Lease
Securitization Trust, Class A1
6.300% 6/25/02....................... 4,075,779 4,085,967
------------- --------------
Total Asset Backed Securities
(Cost $28,055,028)......................... 27,997,849 28,061,746
------------- --------------
Corporate Debt - 7.27%
AirTouch Communications, Inc.
7.500% 7/15/06........................ 4,000,000 4,084,800
America West Airlines 1996-1, Class A
6.850% 7/2/09......................... 4,250,000 4,138,438
American Airlines, Inc.
9.780% 11/26/11....................... 5,000,000 5,687,500
AMR Corporation
9.000% 8/1/12......................... 2,000,000 2,240,280
Analog Devices, Inc.
6.625% 3/1/00......................... 1,500,000 1,491,465
Associates Corporation of North America
6.750% 8/1/01......................... 4,000,000 4,004,960
Barrick Gold Corporation
7.500% 5/1/07......................... 4,250,000 4,348,048
Bell Atlantic Financial Services, Inc.
6.610% 2/4/00......................... 1,000,000 1,002,360
BHP Finance (USA) Limited
6.420% 3/1/26......................... 4,500,000 4,409,460
Carlisle Companies Inc.
7.250% 1/15/07........................ 2,250,000 2,245,748
Champion International Corporation
6.400% 2/15/26........................ 3,500,000 3,331,090
Charles Schwab Corporation
6.250% 1/23/03........................ 2,500,000 2,406,250
CITGO Petroleum Corporation
7.875% 5/15/06........................ 1,000,000 1,033,200
Columbia Gas System, Inc.
6.610% 11/28/02....................... 3,000,000 2,966,100
Comcast Cablevision
8.375% 5/01/07........................ 2,500,000 2,644,674
Commercial Credit Company
7.750% 3/1/05......................... 2,500,000 2,597,600
Continental Airlines, Inc. Series 1996-B
7.820% 10/15/13....................... 1,960,784 2,022,000
Continental Airlines, Inc. Series 1996-2B
8.560% 7/2/14......................... 1,701,186 1,835,155
Corning Glass Works, Inc.
8.875% 3/15/16........................ 500,000 556,970
</TABLE>
19
<PAGE>
MML Blend Fund
SCHEDULE OF INVESTMENTS (CONTINUED)
June 30, 1997
(Unaudited)
<TABLE>
<CAPTION>
Market
Principal Value
Amount (Note 2A)
----------------- -----------------
<S> <C> <C>
BONDS AND NOTES (Continued)
Corporate Debt (Continued)
CSX Corporation
7.250% 5/1/27......................... $ 4,500,000 $ 4,591,170
Delta Air Lines, Inc.
8.540% 1/2/07......................... 4,226,618 4,495,810
English China Clays Delaware Inc.
7.375% 10/1/02........................ 1,000,000 1,017,100
ERAC USA Finance Company 144A
6.950% 1/15/06........................ 1,500,000 1,467,345
FBG Finance Ltd. 144A
7.875% 6/1/16......................... 4,000,000 4,016,120
Fletcher Challenge Ltd.
7.750% 6/20/06........................ 2,000,000 2,058,840
Foodbrands America Inc.
10.750% 5/15/06........................ 3,500,000 4,103,120
Foster Wheeler Corporation
6.750% 11/15/05....................... 2,000,000 1,937,060
General American Transportation Corporation
6.750% 3/1/06......................... 3,000,000 2,903,160
General Electric Capital Corporation
8.750% 5/21/07........................ 1,500,000 1,689,060
General Mills
8.900% 6/15/06........................ 2,250,000 2,506,612
General Motors Corporation
9.125% 7/15/01........................ 1,500,000 1,621,440
Goldman Sachs Group, L.P. 144A
6.200% 2/15/01........................ 4,000,000 3,936,160
GTE Corporation
9.100% 6/1/03......................... 1,000,000 1,106,110
Hilton Hotels Corporation
7.375% 6/1/02......................... 1,750,000 1,762,548
Leucadia National Corporation
7.750% 8/15/13........................ 3,000,000 2,924,340
Lockheed Martin Corporation
7.700% 6/15/08........................ 4,000,000 4,172,160
M.F.S. Communications Corporation
0.000% 1/15/04........................ 1,750,000 1,628,900
Mapco, Inc.
7.250% 3/1/09......................... 3,750,000 3,753,450
McDonnell Douglas Corporation
9.250% 4/1/02......................... 2,200,000 2,418,987
Metlife Capital Equipment Corporation
6.850% 5/20/08........................ 1,500,000 1,492,605
Millifpore Corporation
7.500% 4/1/07 ........................ 4,250,000 4,305,930
Mobil Corporation
8.625% 8/18/21........................ 4,500,000 5,181,030
Newmont Mining Corporation
8.625% 4/1/02 ........................ 5,000,000 5,326,900
News America Holdings Incorporated
9.250% 2/1/13......................... 4,000,000 4,459,880
Norfolk Southern Corporation
7.050% 5/1/37......................... 6,000,000 6,089,640
North Finance (Bermuda) Limited 144A
7.000% 9/15/05........................ 4,000,000 3,940,000
Petro Geo-Services
7.500% 3/31/07........................ 750,000 755,693
Ralston Purina Company
7.750% 10/1/15........................ 2,000,000 2,027,600
Rite Aid Corporation
6.700% 12/15/01....................... 2,000,000 1,984,820
Rolls-Royce Capital Inc.
7.125% 7/29/03........................ 2,000,000 2,008,060
Scholastic Corporation
7.000% 12/15/03....................... 4,000,000 3,968,840
TCI Communications, Inc.
7.550% 9/2/03......................... 3,000,000 2,990,370
Thomas & Betts Corporation
8.250% 1/15/04 ....................... 1,000,000 1,056,330
Time Warner, Inc.
7.750% 6/15/05........................ 3,000,000 3,048,750
Time Warner, Inc.
6.100% 12/30/01....................... 4,750,000 4,549,930
The Toro Company
11.000% 8/1/17......................... 2,000,000 2,126,480
US Air, Inc.
7.500% 10/15/09....................... 962,159 968,173
US West Capital Funding Inc.
6.850% 1/15/02........................ 4,250,000 4,245,452
Valassis Communications, Inc.
9.550% 12/1/03........................ 2,000,000 2,130,340
Worldcom Inc.
7.750% 4/1/07......................... 2,500,000 2,556,700
W.R. Grace & Co.
8.000% 8/15/04........................ 5,000,000 5,233,900
----------------- -----------------
Total Corporate Debt
(Cost $175,107,993) 172,800,747 177,603,013
----------------- -----------------
U.S. Government Agency Obligations - 4.48%
Federal Home Loan Mortgage
Corporation (FHLMC) - 1.00%
Collateralized Mortgage Obligations - .97%
FHLMC Series 1322 Class G
7.500% 2/15/07........................ 5,000,000 5,101,550
FHLMC Series 1460 Class H
7.000% 5/15/07........................ 1,789,000 1,795,709
FHLMC Series 1080 Class D
7.000% 7/15/20........................ 3,921,662 3,960,878
FHLMC Series 1490 Class PG
6.300% 5/15/07........................ 5,000,000 4,932,800
FHLMC Series 1625 Class EA
5.750% 3/15/07........................ 5,000,000 4,920,300
FHLMC Series 1625 Class D
5.250% 7/15/04........................ 3,100,000 3,074,797
----------------- -----------------
23,810,662 23,786,034
Pass-Through Securities - .02%
FHLMC
9.000% 3/1/17 ........................ 488,886 520,224
----------------- -----------------
24,299,548 24,306,258
----------------- -----------------
</TABLE>
20
<PAGE>
MML Blend Fund
SCHEDULE OF INVESTMENTS (CONTINUED)
June 30, 1997
(Unaudited)
<TABLE>
<CAPTION>
Market
Principal Value
Amount (Note 2A)
----------------- -----------------
<S> <C> <C>
BONDS AND NOTES (Continued)
Federal National Mortgage
Association (FNMA) - 1.27%
Collateralized Mortgage Obligations - .78%
FNMA Series 1993-134 Class GA
6.500% 2/25/07........................ $ 5,000,000 $ 4,954,650
FNMA Series 1993-71 Class PG
6.250% 7/25/07........................ 8,000,000 7,870,000
FNMA Series 1993-175 Class PL
5.000% 10/25/02....................... 966,932 962,397
FNMA Series 1993-191 Class PD
5.400% 3/25/04........................ 1,500,000 1,488,750
FNMA Series 1996-54 Class C
6.000% 9/25/08........................ 4,000,000 3,835,000
----------------- -----------------
19,466,932 19,110,797
Pass-Through Securities - .49%
FNMA
8.000% 5/1/13 ........................ 2,102,250 2,139,628
FNMA
6.500% 6/25/08 ....................... 5,000,000 4,885,900
FNMA
6.250% 3/25/08 ....................... 5,000,000 4,915,600
----------------- -----------------
12,102,250 11,941,128
----------------- -----------------
31,569,182 31,051,925
----------------- -----------------
Government National Mortgage
Association (GNMA) - 1.45%
Collateralized Mortgage Obligations - .07%
JHM Acceptance Corporation, Series E,
Class 5
8.960% 4/1/19......................... 1,603,881 1,676,553
----------------- -----------------
Pass-Through Securities - 1.38%
GNMA
7.500% 9/15/16 - 10/15/17 ............ 3,905,468 3,959,130
GNMA
8.000% 1/15/04 - 5/15/08 ............. 6,749,401 7,263,693
GNMA
9.000% 8/15/08 - 9/15/09 ............. 1,965,318 1,816,146
GNMA - ARMS
6.000% 7/20/25 - 5/20/27 ............. 20,302,369 20,669,673
----------------- -----------------
32,922,556 33,708,642
----------------- -----------------
34,526,437 35,385,195
----------------- -----------------
U.S. Government Guaranteed Notes - .77%
1994-A Abilene, TX
5.780% 8/1/98 ........................ 70,000 69,737
1994-A Bakersfield, CA
5.780% 8/1/98 ........................ 245,000 244,081
1994-A Barberton, OH
5.780% 8/1/98 ........................ 75,000 74,719
1994-A Buffalo, NY
5.780% 8/1/98 ........................ 375,000 373,594
1991-A Caguas, PR
8.740% 8/1/01 ........................ 280,000 299,250
1991-A Council Bluffs, IA
8.740% 8/1/01 ........................ 155,000 165,656
1994-A Cumberland, MD
5.780% 8/1/98 ........................ 55,000 54,794
1994-A Elizabeth, NJ
5.780% 8/1/98 ........................ 75,000 74,719
1994-A Erie, PA
5.780% 8/1/98 ........................ 70,000 69,737
1994-A Euclid, OH
5.780% 8/1/98 ........................ 105,000 104,606
1994-A Fairfax County, VA
5.780% 8/1/98 ........................ 110,000 109,588
1991-A Fairfax County, VA
8.740% 8/1/01 ........................ 85,000 90,844
1991-A Fajardo, PR
8.740% 8/1/01 ........................ 210,000 224,438
1994-A Fort Myers, FL
5.780% 8/1/98 ........................ 135,000 134,494
1991-A Gasden, AL
8.740% 8/1/01 ........................ 100,000 106,875
1994-A Lawrence, MA
5.780% 8/1/98 ........................ 40,000 39,850
1991-A Lorain, OH
8.740% 8/1/01 ........................ 30,000 32,062
1994-A Los Angeles County, CA
5.780% 8/1/98 ........................ 175,000 174,344
1994-A Mayaguez, PR
5.780% 8/1/98 ........................ 65,000 64,756
1991-A Mayaguez, PR
8.740% 8/1/01 ........................ 150,000 160,312
1994-A Mobile, AL
5.780% 8/1/98 ........................ 205,000 204,231
1994-A Montgomery County, PA
5.780% 8/1/98 ........................ 230,000 229,137
1994-A New Orleans, LA
5.780% 8/1/98......................... 175,000 174,344
1994-A Ocean Shores, WA
5.780% 8/1/98 ........................ 110,000 109,587
1994-A Pasadena, CA
5.780% 8/1/98 ........................ 140,000 139,475
1994-A Providence, RI
5.780% 8/1/98 ........................ 50,000 49,812
1994-A Reading, PA
5.780% 8/1/98 ........................ 65,000 64,756
1994-A Roanoke, VA
5.780% 8/1/98 ........................ 210,000 209,213
1994-A Rochester, NY
5.780% 8/1/98 ........................ 165,000 164,381
1991-A Rochester, NY
8.650% 8/1/00 ........................ 4,295,000 4,532,555
1994-A Sacramento, CA
5.780% 8/1/98 ........................ 300,000 298,875
1994-A Syracuse, NY
5.780% 8/1/98 ........................ 50,000 49,813
1994-A Tacoma, WA
5.780% 8/1/98 ........................ 155,000 154,419
1994-A Trenton, NJ
5.780% 8/1/98 ........................ 130,000 129,513
1994-A Virginia Beach, VA
5.780% 8/1/98 ........................ 260,000 259,024
1994-A Waterford Township, MI
5.780% 8/1/98 ........................ 55,000 54,794
1994-A West Palm Beach, FL
5.780% 8/1/98 ........................ 105,000 104,606
U.S. Department of Housing and Urban
Development, Series 1995-A
8.240% 8/1/02......................... 8,475,000 9,084,522
----------------- -----------------
17,780,000 18,681,513
----------------- -----------------
Total U.S. Government Agency Obligations
(Cost $107,071,795) 108,175,167 109,424,891
----------------- -----------------
</TABLE>
21
<PAGE>
MML Blend Fund
SCHEDULE OF INVESTMENTS (CONTINUED)
June 30, 1997
(Unaudited)
<TABLE>
<CAPTION>
Market
Principal Value
Amount (Note 2A)
----------------- -----------------
<S> <C> <C>
BONDS AND NOTES (Continued)
U.S. Treasury Obligations - 6.48%
U.S. Treasury Bonds - 2.82%
U.S. Treasury Bond
5.8750% 5/15/16........................ $ 26,250,000 $ 27,373,762
U.S. Treasury Bond
8.750% 5/15/17........................ 34,500,000 41,507,640
----------------- -----------------
60,750,000 68,881,402
----------------- -----------------
U.S. Treasury Notes - 3.16%
U.S. Treasury Note
6.125% 5/15/98........................ 10,000,000 10,029,700
U.S. Treasury Note
6.375% 1/15/99........................ 11,000,000 11,063,580
U.S. Treasury Note
5.875% 1/31/99........................ 13,000,000 12,973,610
U.S. Treasury Note
6.375% 5/15/99........................ 6,000,000 6,030,000
U.S. Treasury Note
6.500% 5/31/01........................ 1,500,000 1,508,205
U.S. Treasury Note
7.250% 5/15/04........................ 34,000,000 35,445,000
----------------- -----------------
75,500,000 77,050,095
----------------- -----------------
U.S. Treasury Strips - .51%
U.S. Treasury Strip - Principal only
0.000% 2/15/99........................ 9,750,000 8,855,243
U.S. Treasury Strip - Principal only
0.000% 2/15/10........................ 2,500,000 1,070,850
U.S. Treasury Strip - Principal only
0.000% 2/15/17........................ 9,500,000 2,450,620
----------------- -----------------
21,750,000 12,376,713
----------------- -----------------
Total U.S. Treasury Obligations
(Cost $158,624,313)...................... 158,000,000 158,308,210
----------------- -----------------
Total Bonds and Notes
(Cost $468,859,129)...................... $ 466,973,763 473,397,860
================= -----------------
SHORT-TERM INVESTMENTS - 19.81%
Commercial Paper
Aristar, Inc.
5.670% 8/14/97........................ $ 4,980,000 4,943,542
Baltimore Gas and Electric
5.670% 9/23/97........................ 10,000,000 9,864,236
Baxter International Inc.
5.750% 8/25/97........................ 2,190,000 2,170,761
Central and South West Corporation
5.800% 8/20/97........................ 11,815,000 11,719,824
Comdisco, Inc.
5.880% 8/1/97......................... 17,100,000 17,015,393
Comdisco, Inc.
5.800% 8/18/97........................ 12,225,000 12,129,686
Comdisco, Inc.
5.810% 8/15/97........................ 6,685,000 6,636,137
Countrywide Home Loans
5.560% 8/28/97........................ 10,000,000 9,902,651
Countrywide Home Loans
5.590% 9/16/97........................ 9,170,000 9,055,757
Crown Cork & Seal Company, Inc.
5.780% 7/18/97........................ 14,525,000 14,485,590
Crown Cork & Seal Company, Inc.
5.720% 7/28/97........................ 10,000,000 9,957,288
Crown Cork & Seal Company, Inc.
5.760% 7/31/97........................ 4,050,000 4,030,139
Crown Cork & Seal Company, Inc.
5.800% 8/08/97........................ 6,330,000 6,291,246
Dominion Resources, Inc.
5.840% 7/11/97........................ 8,000,000 7,987,119
Dominion Resources, Inc.
5.770% 8/4/97......................... 16,000,000 15,913,175
Dominion Resources, Inc.
5.800% 8/13/97........................ 8,855,000 8,792,669
Enron Corporation
5.750% 7/31/97........................ 6,690,000 6,657,944
Finova Capital Corporation
5.610% 9/9/97......................... 6,525,000 6,451,005
Harris Corporation
5.800% 8/6/97......................... 11,000,000 10,935,743
Harris Corporation
5.720% 7/29/97........................ 1,240,000 1,234,508
Illinois Power Company
5.790% 7/8/97......................... 2,780,000 2,776,894
Illinois Power Company
5.800% 8/19/97........................ 10,560,000 10,476,635
Kerr-Mcgee Credit Cop
5.750% 7/29/97........................ 17,275,000 17,197,742
Mattel, Inc.
5.780% 8/22/97........................ 11,625,000 11,527,665
Mattel, Inc.
5.780% 7/25/97........................ 6,545,000 6,519,780
Ohio Power
5.85% 7/02/97........................ 11,485,000 11,483,134
ORIX Credit Alliance, Inc.
5.870% 7/22/97........................ 12,000,000 11,960,136
ORIX Credit Alliance, Inc.
5.820% 7/9/97......................... 5,825,000 5,817,438
ORIX Credit Alliance, Inc.
5.900% 7/28/97........................ 9,142,000 9,102,953
ORIX Credit Alliance, Inc.
5.850% 7/24/97........................ 10,000,000 9,962,403
Praxair Inc.
5.790% 7/3/97......................... 4,545,000 4,543,514
Praxair Inc.
5.790% 7/21/97........................ 13,870,000 13,826,117
Praxair Inc.
5.770% 7/15/97........................ 10,000,000 9,977,853
Praxair Inc.
5.740% 8/5/97......................... 6,000,000 5,966,483
Public Service Company of Colorado
5.850% 7/23/97........................ 15,025,000 14,971,838
Public Service Company of Colorado
5.800% 8/19/97........................ 1,315,000 1,304,534
Public Service Company of Colorado
5.820% 8/26/97........................ 12,000,000 11,890,847
Public Service Company of Colorado
5.840% 9/26/97........................ 11,300,000 11,141,172
Public Service Electric and Gas Company
5.800% 8/7/97......................... 12,070,000 11,996,346
Rite Aid Corporation
5.770% 7/8/97......................... 6,075,000 6,068,213
</TABLE>
22
<PAGE>
MML Blend Fund
SCHEDULE OF INVESTMENTS (CONTINUED)
June 30, 1997
(Unaudited)
<TABLE>
<CAPTION>
Market
Principal Value
Amount (Note 2A)
----------------- -----------------
<S> <C> <C>
SHORT-TERM INVESTMENTS (Continued)
Commercial Paper (Continued)
Rite Aid Corporation
5.800% 7/14/97................. $ 8,830,000 $ 8,811,841
Rite Aid Corporation
5.780% 7/17/97................. 14,965,000 14,925,860
Rite Aid Corporation
5.810% 7/25/97..................... 4,850,000 4,830,666
Textron Financial Corporation
5.820% 7/2/97..................... 2,380,000 2,379,643
Textron Financial Corporation
5.820% 7/30/97..................... 13,430,000 13,367,036
Timken Company
5.800% 7/15/97..................... 1,725,000 1,721,180
Union Camp Corp.
5.550% 7/7/97..................... 11,400,000 11,389,083
Union Camp Corp.
5.670% 7/1/97..................... 6,075,000 6,075,000
Union Camp Corp.
5.700% 7/10/97..................... 10,025,000 10,010,120
Union Camp Corp.
5.800% 8/11/97..................... 7,000,000 6,953,788
Whirlpool Financial Corporation
5.800% 7/9/97..................... 7,070,000 7,060,822
Whirlpool Financial Corporation
5.750% 7/16/97..................... 10,165,000 10,140,478
Whirlpool Financial Corporation
5.800% 8/12/97..................... 11,575,000 11,496,721
Whirlpool Financial Corporation
5.800% 8/21/97..................... 10,000,000 9,917,833
----------------- -----------------
Total Short-Term Investments
(Cost $483,786,841) $ 486,307,000 483,766,181
================= -----------------
Total Investments -
(Cost $1,762,172,948) (a) 100.02% $ 2,442,473,068
======= =================
</TABLE>
Table of Open Forward Commitment Contracts
<TABLE>
<CAPTION>
Forward Aggregate Expiration
Commitment Face Value of of Unrealized
Contracts Contracts Contracts Depreciation
---------- ------------- ---------- ------------
<S> <C> <C> <C>
United States of America
5.875% due 11/15/99 $4,978,906 August 1997 $ (12,756)
--------------
Total Forward Commitment
Contracts $ (12,756)
==============
(a) Federal Income Tax Information: At
June 30, 1997 the net unrealized
appreciation on investments and forward
commitment contracts based on cost of
$1,767,362,414 for federal income tax
purposes is as follows:
Aggregate gross unrealized appreciation for
all investments and forward commitments in
which there is an excess of market value
over tax cost .................................................... $ 689,786,175
Aggregate gross unrealized depreciation for
all investments and forward commitments in
which there is an excess of tax cost over
market value ..................................................... (9,709,371)
--------------
Net unrealized appreciation ................................... $ 680,076,804
==============
</TABLE>
See Notes to Financial Statements.
23
<PAGE>
MML SERIES INVESTMENT FUND
NOTES TO FINANCIAL STATEMENTS
1. HISTORY
MML Series Investment Fund (the "MML Trust") is registered under the Investment
Company Act of 1940 as a no-load, registered open end, diversified management
investment company. MML Equity Fund, MML Money Market Fund, MML Managed Bond
Fund and MML Blend Fund (the "Funds") are four series of shares of the MML
Trust. The MML Trust is organized as a business trust under the laws of the
Commonwealth of Massachusetts pursuant to an Agreement and Declaration of Trust.
The MML Trust was established by Massachusetts Mutual Life Insurance Company
("MassMutual") for the purpose of providing vehicles for the investment of
assets of various separate investment accounts established by MassMutual and by
life insurance companies which are subsidiaries of MassMutual. Shares of the MML
Trust are not offered to the general public.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed
consistently by each Fund in the preparation of the financial statements in
conformity with generally accepted accounting principles.
A. Investment Valuation
Equity securities are valued on the basis of valuations furnished by a
pricing service, authorized by the Board of Trustees, which provides the last
reported sale price for securities listed on a national securities exchange,
or on the NASDAQ national market system. If securities are unlisted, or there
is no reported sale price, the bid price of the prior trade date will be
used. Long-term bonds are valued on the basis of valuations furnished by a
pricing service, authorized by the Board of Trustees, which determines
valuations taking into account appropriate factors such as institutional-
size, trading in similar groups of securities, yield, quality, coupon rate,
maturity, type of issue, trading characteristics and other market data.
For MML Equity Fund, MML Managed Bond Fund, and MML Blend Fund, short-term
securities with more than sixty days to maturity from the date of purchase
are valued at market and short-term securities having a maturity from the
date of purchase of sixty days or less are valued at amortized cost. MML
Money Market Fund's portfolio securities are valued at amortized cost in
accordance with a rule of the Securities and Exchange Commission pursuant to
which MML Money Market Fund must adhere to certain conditions. It is the
intention of MML Money Market Fund to maintain a per share net asset value of
$1.00.
B. Accounting For Investments
Investment transactions are accounted for on trade date. Dividend income is
recorded on the ex-dividend date. Interest income is recorded on the accrual
basis. Premiums and discounts on short-term securities are amortized in
determining interest income.
The cost basis of long-term bonds is not adjusted for amortization of premium
or accrual of discount since MML Managed Bond Fund and MML Blend Fund do not
generally intend to hold such investments until maturity; however, the MML
Trust has elected to accrue for financial reporting purposes, certain
discounts which are required to be accrued for federal income tax purposes.
Realized gains and losses on investment transactions and unrealized
appreciation and depreciation of investments are reported for financial
statement and federal income tax purposes on the identified cost method.
C. Federal Income Tax
The MML Trust has established a policy for each of the Funds to comply with
the provisions of the Internal Revenue Code applicable to regulated
investment companies. As a result, the Funds will not be subject to federal
income tax on any net investment income and any net capital gains to the
extent they are distributed or are deemed to have been distributed to
shareholders. Distributions are determined in accordance with income tax
regulations which may differ from generally accepted accounting principles.
These differences are primarily due to the deferral of wash sale losses, and
paydowns on certain mortgage-backed securities. As a result, net investment
income (loss) and net realized gain (loss) on investment transactions for a
reporting period may differ significantly from distributions during such
period. Accordingly, the Funds may periodically make reclassifications among
certain of their capital accounts without impacting the net asset value of
the Funds.
24
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
D. Forward Commitments
Each Fund may purchase or sell securities on a "when issued" or delayed
delivery or on a forward commitment basis. The Funds use forward commitments
to manage interest rate exposure or as a temporary substitute for purchasing
or selling particular debt securities. The Funds may also use forward
commitments to take delivery of the underlying security rather than closing
out the forward contract. Forward commitments are not used for purposes of
trading. Settlement for securities purchased on a forward commitment basis
can take place a month or more after the date of the transaction. The Fund
generally does not take delivery on these forward commitments, but such
commitments are instead settled with offsetting transactions. When a forward
commitment contract is closed, the Funds record a realized gain or loss.
Forward commitments involve a risk of loss if the value of the security to be
purchased declines prior to the settlement date. The Funds could also be
exposed to loss if they cannot close out their forward commitments because of
an illiquid secondary market, or the inability of counterparties to perform.
The Fund monitors exposure to ensure counterparties are credit worthy and
concentration of exposure is minimized. The Funds instruct the custodian to
segregate liquid high quality assets in a separate account with a current
market value at least equal to the amount of its forward purchase
commitments. The price of the underlying security and the date when the
securities will be delivered and paid for are fixed at the time the
transaction is negotiated. The value of the forward commitment is determined
by management using a commonly accepted pricing model and fluctuates based
upon changes in the value of the underlying security and market repo rates.
Such rates equate the counterparty's cost to purchase and finance the
underlying security to the earnings received on the security and forward
delivery proceeds. The Funds record on a daily basis the unrealized
appreciation/depreciation based upon changes in the value of the forward
commitment. At June 30, 1997, the cost (value) of forward commitments to
purchase securities amounted to $4,978,906 ($4,966,150) for the MML Blend
Fund.
E. 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 revenues and expenses during the reporting period.
Actual results could differ from those estimates.
3. CAPITAL LOSS CARRYFORWARD
The accumulated net realized loss on investments for the MML Money Market Fund
results in a capital loss carryforward of $9,702 which is available for federal
income tax purposes to offset future capital gains. Of the total carryforward,
$453 expires December 31, 1997, $1,639 expires December 31, 1998, $1,204 expires
December 31, 2000, $201 expires December 31, 2001, $5,364 expires December 31,
2002 and $841 expires December 31, 2003.
The accumulated net realized loss on investments for the MML Managed Bond Fund
results in a capital loss carryforward of $1,163,656 which is available for
federal income tax purposes to offset future capital gains. Of the total
carryforward, $840,829 expires December 31, 2002 and $322,826 expires
December 31, 2004.
4. INVESTMENT MANAGEMENT FEE
MassMutual provides all investment advisory, management and administrative
services needed by the Funds. For acting as such, MassMutual receives a
quarterly fee from each Fund at the annual rate of .50% of the first
$100,000,000 of the average daily net asset value of each Fund, .45% of the next
$200,000,000, .40% of the next $200,000,000, and .35% of any excess over
$500,000,000.
MassMutual has entered into investment sub-advisory agreements with David L.
Babson and Company, Inc. ("Babson"), a wholly-owned subsidiary of DLB
Acquisition Corporation which is a controlled subsidiary of MassMutual. The
agreements provide that Babson manage the assets of MML Equity Fund and the
assets of the Equity Sector of the MML Blend Fund. MassMutual pays Babson a
quarterly fee equal to an annual rate of .13% of the average daily net asset
value of MML Equity Fund and the Equity Sector of MML Blend Fund.
MassMutual has agreed, at least through April 30, 1998, to bear the expenses of
the Funds to the extent that the aggregate expenses (excluding each Fund's
management fee, interest, taxes, brokerage commissions and extraordinary
expenses) incurred during each Fund's fiscal year exceed .11% of the average
daily net asset value of each Fund for such year. For the period ended
June 30, 1997, MassMutual was not required to reimburse the Funds for any
expenses.
25
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
5. PURCHASES AND SALES OF INVESTMENTS AND FORWARD COMMITMENTS
<TABLE>
<CAPTION>
Proceeds
For the Six Months Acquisition from Sales
Ended June 30, 1997 Cost and Maturities
- ------------------- -------------- --------------
Investments
- -----------
<S> <C> <C>
MML EQUITY FUND
Equities.................................................................................... $ 266,200,151 $ 136,396,893
Short-term investments...................................................................... 1,991,750,279 1,973,499,559
MML MONEY MARKET FUND
Short-term investments...................................................................... 402,081,654 407,299,078
MML MANAGED BOND FUND
Bonds and notes............................................................................. 24,498,140 16,755,511
U.S. Government investments - long-term..................................................... 20,690,123 24,391,520
Short-term investments...................................................................... 171,605,520 172,640,185
MML BLEND FUND
Equities.................................................................................... 142,376,113 120,711,228
Bonds and notes............................................................................. 56,687,758 35,769,087
U.S. Government investments - long-term..................................................... 94,177,762 51,116,861
Short-term investments...................................................................... 1,302,378,210 1,324,695,071
<CAPTION>
Cost
Forward Commitments of Contracts
- ------------------- --------------
<S> <C>
MML BLEND FUND
U.S. Treasury and GNMA Forward Commitment Contracts:
Contracts opened........................................................................... $ 4,978,906
Contracts closed........................................................................... 4,981,405
Outstanding at June 30, 1997............................................................... 4,978,906
</TABLE>
6. NET INCREASE FROM CAPITAL SHARE TRANSACTIONS
<TABLE>
<CAPTION>
MML MML
MML Money Managed MML
For the Six Months Equity Market Bond Blend
Ended June 30, 1997 Fund Fund Fund Fund
- ------------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Shares
Reinvestment of dividends................................. 2,662,123 3,539,412 496,773 4,155,800
Sales of shares........................................... 4,778,755 62,595,766 1,081,012 3,482,552
Redemptions of shares..................................... (1,156,037) (67,440,633) (1,154,759) (2,222,248)
-------------- -------------- -------------- --------------
Net increase (decrease)................................... 6,284,841 (1,305,456) 423,026 5,416,104
============== ============== ============== ==============
Amount
Reinvestment of dividends................................. $ 79,295,107 $ 3,539,412 $ 5,912,084 $ 91,314,784
Sales of shares........................................... 151,127,198 62,595,766 12,980,305 79,509,326
Redemptions of shares..................................... (36,297,106) (67,440,633) (13,897,589) (50,635,400)
-------------- -------------- -------------- --------------
Net increase (decrease)................................... $ 194,125,198 $ (1,305,456) $ 4,994,800 $ 120,188,711
============== ============== ============== ==============
<CAPTION>
MML MML
MML Money Managed MML
For the Year Ended Equity Market Bond Blend
December 31, 1996 Fund Fund Fund Fund
- ----------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Shares
Reinvestment of dividends................................. 1,828,658 6,040,304 891,160 5,306,755
Sales of shares........................................... 10,091,590 124,468,969 2,922,396 7,200,298
Redemptions of shares..................................... (2,955,578) (94,198,432) (1,491,952) (6,061,613)
-------------- -------------- -------------- --------------
Net increase.............................................. 8,964,670 36,310,841 2,321,604 6,445,440
============== ============== ============== ==============
Amount
Reinvestment of dividends................................. $ 47,407,259 $ 6,040,304 $ 10,670,172 $ 110,096,240
Sales of shares........................................... 284,667,043 124,468,969 35,191,792 154,685,163
Redemptions of shares..................................... (83,541,731) (94,198,432) (18,019,376) (131,731,229)
-------------- -------------- -------------- --------------
Net increase.............................................. $ 248,532,571 $ 36,310,841 $ 27,842,590 $ 133,050,174
============== ============== ============== ==============
</TABLE>
26
