<PAGE>
MML Series Investment Fund
Table of Contents
<TABLE>
<CAPTION>
Page
----
<S> <C>
To Our Shareholders..................................................... 2-6
Statement of Assets and Liabilities as of December 31, 1996............. 7
MML Equity Fund
MML Money Market Fund
MML Managed Bond Fund
MML Blend Fund
Statement of Operations For the Year of December 31, 1996............... 8
MML Equity Fund
MML Money Market Fund
MML Managed Bond Fund
MML Blend Fund
Statement of Changes in Net Assets For the Year Ended
December 31, 1996 and 1995............................................ 9
MML Equity Fund
MML Money Market Fund
MML Managed Bond Fund
MML Blend Fund
Financial Highlights
MML Equity Fund................................................. 10
MML Money Market Fund........................................... 10
MML Managed Bond Fund........................................... 11
MML Blend Fund.................................................. 12
Schedule of Investments as of December 31, 1996
MML Equity Fund................................................. 13-14
MML Money Market Fund........................................... 15
MML Managed Bond Fund........................................... 16-18
MML Blend Fund.................................................. 19-24
Notes to Financial Statements........................................... 25-27
Report of Independent Accountants....................................... 28
</TABLE>
1
<PAGE>
MML Series Investment Fund
To Our Shareholders
Another Year of Solid Economic Growth with Low Inflation
Though figures released throughout the year were often contradictory, 1996
closed as the sixth consecutive year of the current U.S. economic expansion.
Growth during the year was driven by consumption and household sales, and by
capital investment by businesses; it was slowed only by relatively weak foreign
trade.
Even with continued growth, however, inflation has remained subdued. In
addition, because prices were stronger during 1996 than they had been in 1995,
the Federal Reserve stopped lowering interest rates after January. The
achievement of an "orchestrated economy" - growth without inflationary pressures
- - meant the Federal Reserve did not have to intervene again during the year. As
a consequence, interest rates rose only slightly.
A Banner Year for Stocks
More efficient and competitive every year, corporate America enjoyed another
period of profitability. The stock market, reflecting this plus the favorable
economic environment and tremendous demand for stocks from investors, climbed to
new record highs throughout the year. While larger stocks gained most over the
course of the year, nearly all sectors of the market outperformed their long-
term averages.
Underlying the market's tremendous positives, it is important to recognize that
an ongoing trend toward more selective markets continued over the year. So,
while market sectors were generally up, there was often disparity between how
well the best and weakest stocks within an industry performed, and expert stock
picking was the identifying trademark of the year's real winners.
Volatility Limits the Bond Market
The bond market, on the other hand, had a difficult year. In contrast to 1995,
when declining interest rates spurred a broad bond rally, 1996's increase in
rates hurt bond prices. Especially in Treasuries, which tend to be most
sensitive to changes in rates, price performance eroded returns. After its
strong run in 1995, the bond market was also subject to changing investor
emotions throughout the past year.
Volatility was the rule in the market during 1996, with the release of changing
economic data alternately sending investors chasing and then running from the
market. In this climate, the best performers were shorter-term securities,
which generally have less price sensitivity than their longer counterparts.
Value Investing in Selective Markets
The stock and bond markets required selectivity during 1996. In selective
markets, value investors like us benefit from the extensive research that is an
inherent part of our strategy. We view temporary price fluctuations as a chance
to buy the stocks and bonds we feel represent strong opportunities over time.
And by the same token, our value requirements mean that we tend not to buy into
or hold stocks and bonds that have already appreciated significantly during a
given cycle. This helps keep us from paying too much for a security, or holding
it too long.
Throughout 1996, our value approach was a benefit. While more growth-oriented
stock strategies often outperform during strong bull markets, at the market's
current price levels, we feel a more conservative approach is appropriate. In
bonds our careful strategies helped us successfully navigate the changing
markets and avoid their pitfalls.
We Enter 1997 Cautiously Optimistic
As we head into 1997, we are entering the seventh year of economic expansion in
the U.S. While such a prolonged cycle is unusual, and the likelihood exists
that growth in the coming year may be slower than what we experienced in 1996,
there are still very few reasons to expect we are moving toward a recession.
Not all data has been finalized at this point, but it appears that the Christmas
season at the end of 1996, though a week shorter than usual, was fair. And
while announcements of layoffs repeatedly made news over the year, there is very
little net change in employment. While consumer debt has risen, consumer
confidence remains quite high. And finally, wages and prices are fairly stable,
with core inflation estimated to be a low three percent.
2
<PAGE>
We believe these factors support cautious optimism for the financial markets in
1997. Until the scenario detailed above changes significantly, the Federal
Reserve should not feel pressure to change monetary policy dramatically.
Without more interest rate increases, the bond market should stabilize, so that
income can dictate returns without a drag from price performance. If rates are
less volatile, then stocks have a better chance of continued positive results.
We will continue to do as we always do . . . look for value in whatever markets
prevail.
/s/ Stuart H. Reese
Stuart H. Reese
President
MML Series Investment Fund
January 31, 1997
3
<PAGE>
MML EQUITY FUND
How has the Fund performed over the past year?
The Fund performed well in 1996. The one year total return was 20.25% as
compared to the S & P 500 Index which was up 22.96%. The Fund's conservative
construction caused it to lag behind the market somewhat for the full year, but
its pattern of performance was consistent with its low risk strategy. The Fund
participated in the continuing advance of stock prices, and in those few months
when the market paused, the Fund retained its value better than the stock market
overall. With the market now entering the seventh year since the most recent
bull market began, we believe that this strategy of maintaining relatively low
portfolio risk will be beneficial to the Fund in future periods.
What was your strategy over the past year's strong, but volatile market?
Our strategy remained consistent over the past year. We maintained a well-
diversified portfolio by following our investment decision process of stock
selection one-by-one. We find stocks through fundamental analysis, a `bottom up
approach' to researching a company. We believe this approach is less risky and
wiser than making investments based on less reliable economic forecasts.
What types of stocks performed best for you over the year?
The Fund's results benefited from strong performance by several of the largest
holdings, such as Bristol Myers, General Electric, and Pfizer. The financial
holdings were outstanding performers, particularly the banks. Contributing to
bank stock gains were an accommodative Fed policy, continued good loan loss
experience, and the relentless trend toward industry consolidation.
Were there any investments that didn't perform as you'd expected?
The telephone industry was a disappointment last year. The major factor here
was the telecommunications deregulation bill which was signed into law in the
spring of 1996. This provides for the eventual opening up of the industry to
competition, and as companies prepare for this, increased marketing spending
will restrain earnings growth. Early in 1996, the Fund had a relatively small
commitment to this industry, but we steadily increased its weighting during the
year as we found companies with competitive advantages which were undervalued
relative to the market. In the long run, the surviving companies will prosper
due to strong growth of telecommunications traffic.
What changes, if any, are you currently making to the portfolio?
As the economic expansion is aging, and valuations are clearly on the high side,
we are trying to minimize risk in the portfolio. We are reducing holdings whose
prices are full, and adding to stocks that we feel are currently underpriced and
can offer good long-term return through a combination of capital appreciation
and current income. In fact, well positioned electric utilities appear
attractive for the first time in a considerable period, and we are modestly
increasing our commitment there.
What is your outlook for the Fund?
We are optimistic about the long term outlook for stocks in general and the Fund
in particular. After a long period of exceptional stock market returns such as
we have seen, a pause in the market's up trend would not be a surprise.
However, the Fund is structured recognizing that there are risks in equity
investing as well as returns, and the conservative nature of the Fund is
intended to help the Fund hold up well in any weakness which might take place.
We believe that by participating in the gains of a rising market and conserving
asset value in a less positive environment, the Fund should show superior
returns over the long term.
MML MONEY MARKET FUND
How has the Fund performed over the past year?
The Fund performed well. This has been another period of consistently good
performance both on an absolute basis and versus other money market type
investments. The yields from the very short maturity fixed income securities we
invest in remained competitive over the year, and that has helped us. For the
purpose of comparison, 91-day Treasuries returned 5.03% for the year while the
Fund was up 5.01%. In all, during a year in which conflicting economic
statistics caused volatility in the longer end of the bond market, "cash"
investments like this one have been a good place for investors.
How are you currently positioning the portfolio?
As a money market fund, we own securities with a relatively short maturity. If
rates were to increase, owning securities that mature quickly would enable us to
replace them with newer, higher-yielding issues more rapidly. That in turn
would boost the portfolio's yield. Beyond maturity considerations, as we always
have, we continue to conduct extensive research into both issuers and specific
issues in an effort to provide stability and competitive income in a highly
liquid investment portfolio.
4
<PAGE>
What is your outlook for the Fund?
Our outlook continues to be positive both for the economy and for the Fund. We
believe the U.S. economy is still strong and growing but at a sustainable,
orchestrated rate with little evidence of inflation. If signs of inflation
should arise - and so far they haven't, even six years into the current growth
phase - we'd expect the Federal Reserve might raise rates slightly in reaction.
If interest rates were increased, it could potentially hurt stocks and the long
bond market. Funds like this one, however, would benefit from higher current
yields. Having said that, economic results for the fourth quarter of 1996 will
not be confirmed before February 1997. We believe the Federal Reserve is
unlikely to make any changes to rates until the statistical data to back such
decisions is available.
MML Managed Bond
How did the Fund perform over the past year?
1996 was a trying year for the bond market, in part because interest rates rose
somewhat over the course of the year, and also because releases of conflicting
economic data filled the market with a high degree of volatility. Even so, the
Fund's performance was positive with a one year total return of 3.25% compared
to the Lehman Brothers Government/Corporate Bond Index which was up 2.90%.
How did the bond market change over the past year?
Although there was a good degree of volatility throughout the year, conditions
changed most during the first half of 1996. During 1995, interest rates fell,
leading to excellent performance. In contrast, as rates increased over the past
year, prices, especially in longer bonds and Treasuries, were damaged. So even
though we were fully diversified across bond market sectors and maturities, this
downturn had a temporary dampening effect on our portfolio's performance.
What investments worked best under these conditions?
Though the impact of the rate increase was felt immediately, the resulting
steepening of the yield curve created value in the market over the longer term.
But not all areas of the market suffered during the year. Non-investment grade
bonds performed particularly well. While we avoid this sector of the market
because of the relative risks associated with it, we were pleased with our
holdings of investment grade corporate bonds and mortgage-backed securities.
Investment grade corporate bonds, which made up 54.8 percent of the portfolio as
of December 31, 1996, remained strong regardless of the broader market's
difficulties. Corporate profits held steady, and as a result, demand in the
bond market supported prices.
In addition to our successes with corporate bonds, mortgage-backed securities
performed well. We tend to buy well-structured, seasoned issues, and, as their
behavior tends to mimic corporate bonds, they worked well for us again this
year. Since concerns about the prepayment of all types of mortgages are
greatest when rates are falling, these securities paid competitive income and
avoided significant price declines during the past year. Mortgage-backed
securities were 21.4 percent of the Fund's portfolio at year end.
What changes, if any, are you currently making within the portfolio?
Because of their strong performance, we would have liked to have owned more
mortgage-backed securities and corporate bonds than we did over the year. After
their dramatic 1996 movements, however, they are currently less compelling as
value investments. So, at this time, we're not really making any major changes
to our sector holdings.
Looking for value is an inherent part of our strategy, and we've continued to do
that. With an impressive growth in assets under management this year, we are
generally sticking with our bottom-up investment approach. We're keeping our
duration neutral relative to our benchmark and constantly performing extensive
credit analyses across the investment grade bond market. We work to add value
for investors by looking at individual issues from a critical risk/reward
perspective, hoping to discover outstanding opportunities for both income and
appreciation.
What is your outlook for the Fund?
Our outlook for both the Fund and the bond market is positive. The economy,
even in the sixth year of an expansion, appears steady, and shows little in the
way of inflation. With that as a background, we expect the coming year to be a
good one. Without threats of inflation, it is unlikely that the Federal Reserve
will move aggressively, so while we may see minor volatility in the market, we'd
expect improvements going forward and a market whose performance is primarily a
product of coupon income.
MML Blend Fund
How did the Fund perform over the past year?
We're very pleased with the Fund's performance. Our one year total return was
13.95% as compared to the Lipper Balanced Index which was up 13.01%. With 58% of
the portfolio invested in stocks, we participated in the strong performance of
the
5
<PAGE>
equity market over the period. But with 19% of the portfolio in bonds and the
remaining 23% in cash and short-term fixed income investments, we were able to
do so with far less risk than pure stock investments.
What types of stocks worked best over the period?
The stocks of the large, well-established companies we tend to own performed
best over the year, and that was a benefit. Within the portfolio, some of our
top performers were financial services, capital spending and technology stocks.
Many of our bank stocks did well due to strong profits and ongoing
consolidations. Capital spending stocks were also strong. We owned a full
position in GE, which was one of our best performers, up approximately 40
percent for the year. And though we tend to be underweighted in technology
stocks since few have the reasonable valuations and dividend records we require,
we added to our position in IBM over the course of the year, and that benefited
us.
On the whole, our stock strategy remained consistent over the past year. We
maintained a well-diversified portfolio of what we considered the best stocks
across numerous industries rather than making investments based on current
economic forecasts. We worked to buy good value wherever we found it in the
market, and we sold stocks that we felt had become risky, reaching what we'd
targeted as peaks for their performance cycles.
What was your bond strategy during the year?
The bond portfolio turned in positive performance for the year, but it fell far
short of the returns generated by stocks. The investment grade fixed income
market had a somewhat difficult year due primarily to two factors. First,
interest rates rose slightly, and that negatively impacted price performance.
Second, a high level of volatility resulting from continuously changing economic
expectations colored the market and investor emotion throughout the year. Our
strategy inside this uneasy environment was to remain diversified between
Treasuries, mortgage-backed securities, asset-backed securities, and corporate
bonds, searching for opportunities to add value over time. This, plus
maintaining a duration of approximately five years, kept our performance closely
in line with our benchmark, the Lehman Brothers Government/Corporate Bond Index.
What is your outlook for the Fund?
We continue to expect that the coming year will be more typical than 1996 or
1995 was for both markets. The economy remains healthy, corporate America is
efficient and competitive, and even after the sixth year of economic expansion,
there are very few signs suggesting inflation is on the rise. As a result, we
believe stocks will have another positive year, but after an impressive two-year
run, one that is more in line with the market's long-term history. In the bond
market, without seeing a need for the Federal Reserve to aggressively tighten
money supply, we expect a better year than last, with income the major component
driving returns. Since it is under historically "normal" conditions like these
that this portfolio typically performs best, our outlook is quite favorable.
6
<PAGE>
MML Series Investment Fund
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1996
<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: $1,065,014,489;
$729,315,396 respectively) .................................... $1,639,975,490 $ -- $ -- $1,255,371,097
Bonds and notes (Identified cost: $179,247,302;
$405,340,706 respectively) .................................... -- -- 181,012,920 410,946,072
Short-term investments (Identified cost: $137,806,906;
$145,993,740; $1,379,722; $492,181,705 respectively) .......... 137,753,233 145,993,740 1,379,722 492,100,212
-------------- -------------- -------------- --------------
Total investments ............................................. 1,777,728,723 145,993,740 182,392,642 2,158,417,381
Cash ............................................................ -- 4,354 1,389 --
Interest and dividends receivable ............................... 3,878,415 -- 2,287,822 8,303,276
Receivable for investments sold ................................. 1,700,089 -- -- 1,091,101
Prepaid trustees' fees .......................................... 1,849 1,177 1,177 1,177
-------------- -------------- -------------- --------------
Total assets .................................................. 1,783,309,076 145,999,271 184,683,030 2,167,812,935
-------------- -------------- -------------- --------------
LIABILITIES
Payable for investments purchased ............................... 356,569 -- 1,400 255,381
Payable for settlement of investments
purchased on a forward commitment basis (Note 2D) .............. -- -- -- 6,345
Dividends payable (Note 2C) ..................................... 79,270,107 595,036 2,885,188 71,526,248
Investment management fee payable (Note 4) ...................... 1,628,095 170,636 221,600 2,005,626
Accrued liabilities ............................................. 55,936 2,557 2,557 29,095
-------------- -------------- -------------- --------------
Total liabilities ............................................. 81,310,707 768,229 3,110,745 73,822,695
-------------- -------------- -------------- --------------
NET ASSETS ...................................................... $1,701,998,369 $ 145,231,042 $ 181,572,285 $2,093,990,240
============== ============== ============== ==============
Net assets consist of:
Series shares (par value $.01 per share; an unlimited number
authorized) (Note 6) ........................................... $ 571,402 $ 1,452,311 $ 150,703 $ 952,969
Additional paid-in capital ...................................... 1,126,515,524 143,778,731 180,809,583 1,561,810,884
Undistributed net investment income (Note 2C) ................... 15,927 9,702 (64,100) (870)
Undistributed net realized loss on investments and
forward commitments (Notes 2D and 3) ........................... (11,812) (9,702) (1,089,519) (345,972)
Net unrealized appreciation (depreciation) on:
Investments (Note 2A) .......................................... 574,907,328 -- 1,765,618 531,579,574
Forward commitments (Note 2D) .................................. -- -- -- (6,345)
-------------- -------------- -------------- --------------
NET ASSETS ...................................................... $1,701,998,369 $ 145,231,042 $ 181,572,285 $2,093,990,240
============== ============== ============== ==============
Outstanding series shares ....................................... 57,140,244 145,231,042 15,070,294 95,296,912
============== ============== ============== ==============
Net asset value per share ....................................... $ 29.79 $ 1.00 $ 12.05 $ 21.97
============== ============== ============== ==============
</TABLE>
See Notes to Financial Statements.
7
<PAGE>
MML Series Investment Fund
STATEMENT OF OPERATIONS
For the Year Ended December 31, 1996
<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 ........................................................ $ 37,210,441 $ -- $ -- $ 30,120,486
Interest ........................................................ 8,806,524 6,814,072 12,067,185 55,389,729
-------------- -------------- -------------- --------------
Total income ................................................... 46,016,965 6,814,072 12,067,185 85,510,215
-------------- -------------- -------------- --------------
Expenses
Investment management fee (Note 4) ............................... 5,787,673 612,946 820,434 7,525,674
Trustees' fees ................................................... 25,833 21,042 21,042 20,758
Audit fees ....................................................... 28,450 19,700 25,200 30,950
Other ............................................................ 1,043 776 651 663
-------------- -------------- -------------- --------------
Total expenses ................................................. 5,842,999 654,464 867,327 7,578,045
-------------- -------------- -------------- --------------
Net investment income (Note 2C) .................................. 40,173,966 6,159,608 11,199,858 77,932,170
-------------- -------------- -------------- --------------
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) ................................... 39,133,328 32 (404,955) 52,920,562
Forward commitments (Note 2D) ................................... -- -- -- (1,636,934)
-------------- -------------- -------------- --------------
Net realized gain (loss) ....................................... 39,133,328 32 (404,955) 51,283,628
-------------- -------------- -------------- --------------
Change in net unrealized appreciation/depreciation on:
Investments (Note 2A) ........................................... 204,554,604 -- (4,664,274) 138,844,519
Forward commitments (Note 2D) ................................... -- -- -- (1,394,717)
-------------- -------------- -------------- --------------
Total change in net unrealized appreciation/depreciation ....... 204,554,604 -- (4,664,274) 137,449,802
-------------- -------------- -------------- --------------
Net gain (loss) .................................................. 243,687,932 32 (5,069,229) 188,733,430
-------------- -------------- -------------- --------------
Net increase in net assets resulting from operations ............. $ 283,861,898 $ 6,159,640 $ 6,130,629 $ 266,665,600
============== ============== ============== ==============
</TABLE>
See Notes to Financial Statements.
8
<PAGE>
MML Series Investment Fund
STATEMENT OF CHANGES IN NET ASSETS
For the Years Ended December 31, 1995
<TABLE>
<CAPTION>
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 in capital share
transactions (Note 6) 248,532,571 36,310,841 27,842,588 133,050,174
------------ ----------- ------------ --------------
Total increase 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 year $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 year $ 15,927 $ 9,702 $ (64,100) $ (870)
============= =========== ============ ==============
<CAPTION>
1995
----------------------------------------------------------
MML MML
MML Money Managed MML
Equity Market Bond Blend
Fund Fund Fund Fund
------ ------ ------ -----
<C> <C> <C> <C>
Increase (decrease)
in net assets
Operations:
Net investment income $ 30,576,154 $ 5,460,140 $ 9,299,421 $ 70,293,462
Net realized gain (loss)
on investments and
forward commitments 16,898,835 (841) 1,319,095 35,795,663
Change in net unrealized
appreciation/depreciation on
investments and forward
commitments 237,559,436 -- 13,704,932 243,603,590
------------- ------------- ------------ -------------
Net increase in net assets
resulting from operations 285,034,425 5,459,299 24,323,448 349,692,715
Dividends to shareholders
from: (Note 2C)
Distribution of net investment
income (30,563,214) (5,459,299) (9,294,583) (70,291,011)
Distribution of net realized gains (16,854,045) -- -- (35,463,987)
Net increase in capital share
transactions (Note 6) 190,498,822 17,134,168 22,459,621 134,942,076
------------- ------------ ----------- ------------
Total increase 428,115,988 17,134,168 37,488,486 378,879,793
NET ASSETS, at beginning
of the year 820,783,018 91,786,033 121,209,652 1,444,261,137
------------- ------------ ----------- -------------
NET ASSETS, at end
of the year $1,248,899,006 $ 108,920,201 $158,698,138 $1,823,140,930
============= ============ =========== =============
Undistributed net investment
income (loss) included in net
assets at end of the year $ 3,739 $ 9,734 $ (72,567) $ (7,094)
============= ============ =========== =============
</TABLE>
See Notes to Financial Statements.
9
<PAGE>
MML Series Investment Fund
FINANCIAL HIGHLIGHTS
Selected per share data for each series share outstanding throughout each year
ended December 31:
MML EQUITY FUND
<TABLE>
<CAPTION>
1996 1995 1994 1993 1992 1991 1990 1989
---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value:
Beginning of year..................... $ 25.924 $ 20.520 $ 20.510 $ 19.862 $ 18.735 $ 15.659 $ 16.764 $ 14.929
-------- ---------- ---------- --------- --------- ---------- ---------- --------
Income from investment operations:
Net investment income.................. .703 .634 .594 .524 .543 .563 .636 .694
Net realized and unrealized
gain (loss) on investments............ 4.547 5.754 .248 1.365 1.420 3.440 (.722) 2.746
-------- ---------- ---------- --------- --------- ---------- ---------- --------
Total from investment operations....... 5.250 6.388 .842 1.889 1.963 4.003 (.086) 3.440
-------- ---------- ---------- --------- --------- ---------- ---------- --------
Less distributions:
Dividends from net investment income... (.703) (.634) (.594) (.524) (.543) (.562) (.665) (.711)
Distribution from net realized gains... (.685) (.350) (.238) (.717) (.288) (.365) (.354) (.894)
Distribution in excess of net
realized gains........................ -- -- -- -- (.005) -- -- --
-------- ---------- ----------- --------- -------- ---------- ---------- --------
Total distributions.................... (1.388) (.984) (.832) (1.241) (.836) (.927) (1.019) (1.605)
Net asset value:
End of year........................... $ 29.786 $ 25.924 $ 20.520 $ 20.510 $ 19.862 $ 18.735 $ 15.659 $16.764
======== ========== ========= ========= ========= ======== ======== =======
Total return........................... 20.25% 31.13% 4.10% 9.52% 10.48% 25.56% (.51%) 23.04%
Net assets (in millions):
End of year........................... $1,701.99 $1,248.90 $ 820.78 $ 663.09 $ 490.62 $ 355.04 $ 235.45 $226.41
Ratio of expenses to average net
assets................................ .38% .41% .43% .44% .46% .48% .49% .50%
Ratio of net investment income to
average net assets.................... 2.65% 2.89% 3.04% 3.23% 3.09% 3.43% 4.09% 4.30%
Portfolio turnover rate................ 11.42% 11.72% 9.99% 11.28% 9.07% 9.37% 13.50% 15.71%
<CAPTION>
1988 1987
---- ----
Net asset value:
Beginning of year................... $ 13.828 $ 15.591
---------- ---------
Income from investment operations:
Net investment income................ .646 .525
Net realized and unrealized
gain (loss) on investments.......... 1.660 (.066)
--------- ---------
Total from investment operations..... 2.306 .459
--------- ---------
Less distributions:
Dividends from net investment income. (.639) (.988)
Distribution from net realized gains. (.566) (1.234)
Distribution in excess of net realized
gains............................... -- --
--------- ---------
Total distributions.................. (1.205) (2.222)
--------- ---------
Net asset value:
End of year......................... $ 14.929 $ 13.828
========= =========
Total return......................... 16.68% 2.10%
Net assets (in millions):
End of year......................... $ 172.80 $ 150.41
Ratio of expenses to average net
assets.............................. .50% .51%
Ratio of net investment income to
average net assets.................. 4.05% 3.44%
Portfolio turnover rate.............. 15.97% 15.73%
<CAPTION>
MML MONEY MARKET FUND
1996 1995 1994 1993 1992 1991 1990 1989
---- ---- ---- ---- ---- ---- ---- ----
<S> <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
Income from investment operations:
Net investment income................. .049 .054 .038 .027 .034 .059 .078 .088
Total from investment operations...... .049 .054 .038 .027 .034 .059 .078 .088
Less distributions:
Dividends from net investment income.. (.049) (.054) (.038) (.027) (.034) (.059) (.078) (.088)
Total distributions................... (.049) (.054) (.038) (.027) (.034) (.059) (.078) (.088)
Net asset value:
End of year.......................... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
Total return.......................... 5.01% 5.58% 3.84% 2.75% 3.48% 6.01% 8.12% 9.16%
Net assets (in millions):
End of year.......................... $ 145.23 $ 108.92 $ 91.79 $ 73.66 $ 84.56 $ 94.41 $ 114.59 $ 70.16
Ratio of expenses to average net
assets............................... .52% .54% .55% .54% .53% .52% .54% .54%
Ratio of net investment income to
average net assets................... 4.92% 5.43% 3.81% 2.71% 3.42% 5.91% 7.80% 8.79%
<CAPTION>
1988 1987
---- ----
<S> <C>
Net asset value:
Beginning of year ................. $ 1.000 $ 1.000
----------- ----------
Income from investment operations:
Net investment income .............. .072 .063
----------- ----------
Total from investment operations ... .072 .063
----------- ----------
Less distributions:
Dividends from net investment income (.072) (.063)
----------- ----------
Total distributions ................ (.072) (.063)
----------- ----------
Net asset value:
End of year ....................... $ 1.000 $ 1.000
=========== ==========
Total return ....................... 7.39% 6.49%
Net assets (in millions):
End of year ....................... $ 66.35 $ 52.35
Ratio of expenses to average net
assets ............................ .55% .57%
Ratio of net investment income to
average net assets ................ 7.20% 6.35%
</TABLE>
See Notes to Financial Statements.
10
<PAGE>
MML Series Investment Fund
FINANCIAL HIGHLIGHTS (Continued)
MML MANAGED BOND FUND
<TABLE>
<CAPTION>
1996 1995 1994 1993 1992 1991 1990
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value:
Beginning of year.................. $ 12.448 $ 11.141 $ 12.405 $ 12.041 $ 12.219 $ 11.318 $ 11.354
---------- ---------- ---------- --------- --------- ---------- ----------
Income from investment operations:
Net investment income............... .776 .782 .792 .785 .870 .903 .943
Net realized and unrealized
gain (loss) on investments
and forward commitments............ (.401) 1.307 (1.264) .618 .001 .916 (.036)
---------- ---------- ---------- --------- --------- ---------- ----------
Total from investment operations.... .375 2.089 (.472) 1.403 .871 1.819 .907
---------- ---------- ---------- --------- --------- ---------- ----------
Less distributions:
Dividends from net investment income (.775) (.782) (.792) (.784) (.869) (.902) (.943)
Distribution from net realized gains -- -- -- (.255) (.158) (.016) --
Distribution in excess of net realized
gains.............................. -- -- -- -- (.022) -- --
---------- ---------- ---------- --------- --------- ---------- ----------
Total distributions................. (.775) (.782) (.792) (1.039) (1.049) (.918) (.943)
---------- ---------- ---------- --------- --------- ---------- ----------
Net asset value:
End of year........................ $ 12.048 $ 12.448 $ 11.141 $ 12.405 $ 12.041 $ 12.219 $ 11.318
========== ========== ========== ========= ========= ========== ==========
Total return........................ 3.25% 19.14% (3.76%) 11.81% 7.31% 16.66% 8.38%
Net assets (in millions):
End of year........................ $ 181.57 $ 158.70 $ 121.21 $ 129.11 $ 88.15 $ 66.98 $ 43.07
Ratio of expenses to average
net assets......................... .51% .52% .52% .54% .56% .57% .57%
Ratio of net investment income to
average net assets................. 6.54% 6.63% 6.69% 6.37% 7.28% 7.96% 8.40%
Portfolio turnover rate............. 46.12% 70.00% 32.77% 58.81% 39.51% 61.85% 69.93%
<CAPTION>
1989 1988 1987
---- ---- ----
<S> <C> <C> <C>
Net asset value:
Beginning of year.................. $ 10.919 $ 11.052 $ 12.541
---------- ---------- ----------
Income from investment operations:
Net investment income............... .918 .906 .969
Net realized and unrealized
gain (loss) on investments
and forward commitments............ .454 (.133) (.673)
---------- ---------- ----------
Total from investment operations.... 1.372 .773 .296
---------- ---------- ----------
Less distributions:
Dividends from net investment income (.918) (.906) (1.229)
Distribution from net realized gains (.019) -- (.556)
Distribution in excess of net realized
gains.............................. -- -- --
---------- ---------- ----------
Total distributions................. (.937) (.906) (1.785)
---------- ---------- ----------
Net asset value:
End of year........................ $ 11.354 $ 10.919 $ 11.052
========== ========== ==========
Total return........................ 12.83% 7.13% 2.60%
Net assets (in millions):
End of year........................ $ 40.03 $ 31.35 $ 26.16
Ratio of expenses to average
net assets......................... .59% .61% .60%
Ratio of net investment income to
average net assets................. 8.35% 8.25% 8.24%
Portfolio turnover rate............. 64.77% 74.92% 55.60%
</TABLE>
See Notes to Financial Statements.
11
<PAGE>
MML Series Investment Fund
FINANCIAL HIGHLIGHTS (Continued)
MML BLEND FUND
<TABLE>
<CAPTION>
1996 1995 1994 1993 1992 1991 1990
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value:
Beginning of year $ 20.519 $ 17.672 $ 18.305 $ 17.846 $ 17.307 $ 14.839 $ 15.428
---------- ---------- ---------- --------- --------- ---------- ----------
Income from investment operations:
Net investment income .824 .811 .707 .655 .707 .736 .792
Net realized and unrealized
gain (loss) on investments
and forward commitments 1.990 3.246 (.271) 1.057 .880 2.771 (.445)
---------- ---------- ---------- --------- --------- ---------- ----------
Total from investment operations 2.814 4.057 .436 1.712 1.587 3.507 .347
---------- ---------- ---------- --------- --------- ---------- ----------
Less distributions:
Dividends from net investment income (.824) (.811) (.707) (.655) (.707) (.736) (.811)
Distribution from net realized gains (.536) (.399) (.359) (.598) (.326) (.303) (.125)
Distribution in excess of net realized
gains -- -- (.003) -- (.015) -- --
---------- ---------- ---------- --------- --------- ---------- ----------
Total distributions (1.360) (1.210) (1.069) (1.253) (1.048) (1.039) (.936)
---------- ---------- ---------- --------- --------- ---------- ----------
Net asset value:
End of year $ 21.973 $ 20.519 $ 17.672 $ 18.305 $ 17.846 $ 17.307 $ 14.839
========== ========== ========== ========= ========= ========== ==========
Total return 13.95% 23.28% 2.48% 9.70% 9.36% 24.00% 2.37%
Net assets (in millions):
End of year $ 2,093.99 $ 1,823.14 $ 1,444.26 $1,296.54 $1,013.28 $ 797.04 $ 574.15
Ratio of expenses to average
net assets .38% .38% .39% .40% .41% .42% .44%
Ratio of net investment income to
average net assets 3.87% 4.19% 3.93% 3.60% 4.07% 4.54% 5.37%
Portfolio turnover rate 19.10% 30.78% 26.59% 20.20% 25.43% 26.92% 24.55%
<CAPTION>
1989 1988 1987
---- ---- ----
<S> <C> <C> <C>
Net asset value:
Beginning of year $ 13.876 $ 13.095 $ 13.774
---------- ---------- ----------
Income from investment operations:
Net investment income .823 .734 .624
Net realized and unrealized
gain (loss) on investments
and forward commitments 1.921 1.000 (.148)
---------- ---------- ----------
Total from investment operations 2.744 1.734 .476
---------- ---------- ----------
Less distributions:
Dividends from net investment income (.835) (.728) (.747)
Distribution from net realized gains (.357) (.225) (.408)
Distribution in excess of net realized
gains -- -- --
---------- ---------- ----------
Total distributions (1.192) (.953) (1.155)
---------- ---------- ----------
Net asset value:
End of year $ 15.428 $ 13.876 $ 13.095
========== ========== ==========
Total return 19.96% 13.40% 3.12%
Net assets (in millions):
End of year $ 524.29 $ 401.22 $ 346.12
Ratio of expenses to average
net assets .45% .46% .48%
Ratio of net investment income to
average net assets 5.57% 5.29% 4.77%
Portfolio turnover rate 22.39% 25.70% 36.56%
</TABLE>
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.
12
<PAGE>
MML Equity Fund
SCHEDULE OF INVESTMENTS
December 31, 1996
<TABLE>
<CAPTION>
Number Market
of Value
Shares (Note 2A)
---------- ------------
<S> <C> <C>
EQUITIES - 96.36%
Aerospace & Defense - 1.76%
Boeing Company....................... 162,500 $ 17,285,938
Raytheon Company..................... 7,400 356,125
TRW, Inc............................. 250,400 12,394,800
---------- ------------
420,300 30,036,863
---------- ------------
Agribusiness - .97%
Pioneer Hi-Bred International, Inc... 235,000 16,450,000
---------- ------------
Apparel, Textiles, Shoes - .91%
VF Corporation....................... 230,000 15,525,000
---------- ------------
Automotive & Parts - 5.12%
Ford Motor Company................... 875,000 27,890,625
Genuine Parts Company................ 573,500 25,520,750
Goodyear Tire & Rubber Company....... 656,000 33,702,000
---------- ------------
2,104,500 87,113,375
---------- ------------
Banking, Savings & Loans - 6.15%
The Bank of New York Company,
Incorporated........................ 870,000 29,362,500
Comerica, Incorporated............... 223,500 11,705,812
CoreStates Financial Corporation..... 585,500 30,372,813
Norwest Corporation.................. 391,000 17,008,500
Wachovia Corporation................. 288,200 16,283,300
---------- ------------
2,358,200 104,732,925
---------- ------------
Beverages - 1.65%
Brown-Forman Corporation (Class B)... 337,300 15,431,475
Pepsico, Incorporated................ 430,000 12,577,500
---------- ------------
767,300 28,008,975
---------- ------------
Chemicals - 4.48%
E.I. du Pont de Nemours and Company.. 166,500 15,713,437
The Lubrizol Corporation............. 565,000 17,515,000
Nalco Chemical Company............... 445,000 16,075,625
Rohm & Haas.......................... 330,000 26,936,250
---------- ------------
1,506,500 76,240,312
---------- ------------
Communications - 3.00%
AT&T Corporation..................... 511,000 22,228,500
GTE Corporation...................... 635,000 28,892,500
---------- ------------
1,146,000 51,121,000
---------- ------------
Computers & Office Equipment - 7.47%
Hewlett-Packard Company 640,000 32,160,000
International Business Machines Corporation 245,000 36,995,000
Pitney Bowes, Inc.................... 552,000 30,084,000
Xerox Corporation.................... 530,000 27,891,250
---------- ------------
1,967,000 127,130,250
---------- ------------
Containers - 1.05%
Temple-Inland, Inc................... 330,000 17,861,250
---------- ------------
Cosmetics & Personal Care - 2.02%
Kimberly-Clark Corporation........... 360,000 34,290,000
---------- ------------
Electric Utilities - 1.57%
NIPSCO Industries, Inc............... 208,000 8,242,000
SCANA Corporation.................... 394,000 10,539,500
Teco Energy Inc...................... 331,400 7,995,025
---------- ------------
933,400 26,776,525
---------- ------------
Electrical Equipment & Electronics - 7.05%
AMP, Incorporated.................... 900,000 34,537,500
General Electric Company............. 488,500 48,300,437
Honeywell Inc........................ 232,500 15,286,875
Hubbell, Incorporated (Class B)...... 504,144 21,804,228
---------- ------------
2,125,144 119,929,040
---------- ------------
Energy - 9.28%
Amoco Corporation.................... 387,500 31,193,750
Atlantic Richfield Company........... 107,300 14,217,250
Chevron Corporation.................. 378,000 24,570,000
Kerr-McGee Corporation............... 226,000 16,272,000
Mobil Corporation.................... 180,000 22,005,000
Occidental Petroleum Corp............ 754,600 17,638,775
Union Pacific Resources Group........ 492,500 14,405,625
Unocal Corporation .................. 432,100 17,554,063
---------- ------------
2,958,000 157,856,463
---------- ------------
Financial Services - 1.33%
American Express Company............. 400,000 22,600,000
---------- ------------
Foods - 2.70%
ConAgra, Inc......................... 470,500 23,407,375
CPC International, Inc............... 291,500 22,591,250
---------- ------------
762,000 45,998,625
---------- ------------
Forest Products & Paper - 2.59%
Westvaco Corporation................. 680,055 19,551,581
Weyerhaeuser Company................. 519,500 24,611,313
---------- ------------
1,199,555 44,162,894
---------- ------------
Hardware & Tools - 1.00%
The Stanley Works.................... 631,000 17,037,000
---------- ------------
Healthcare - 9.37%
Becton, Dickinson and Company........ 536,000 23,249,000
Bristol-Myers Squibb Company......... 520,000 56,550,000
Pfizer, Incorporated................. 400,000 33,150,000
Pharmacia & Upjohn Inc............... 605,000 23,973,125
Schering-Plough Corp................. 347,500 22,500,625
---------- ------------
2,408,500 159,422,750
---------- ------------
Industrial Distribution - 1.16%
W. W. Grainger, Inc.................. 246,000 19,741,500
---------- ------------
Industrial Transportation - 1.26%
Norfolk Southern Corporation......... 246,000 21,525,000
---------- ------------
Insurance - 6.95%
Allstate Corporation................. 192,682 11,151,471
Jefferson-Pilot Corporation.......... 207,000 11,721,375
Marsh & McLennan Companies, Inc...... 280,500 29,172,000
MBIA, Inc............................ 268,000 27,135,000
SAFECO Corporation................... 782,500 30,860,235
Unitrin, Inc......................... 148,000 8,251,000
---------- ------------
1,878,682 118,291,081
---------- ------------
Machinery & Components - 1.61%
Dover Corporation.................... 325,000 16,331,250
Parker-Hannifin Corporation.......... 284,650 11,030,187
---------- ------------
609,650 27,361,437
---------- ------------
</TABLE>
13
<PAGE>
MML Equity Fund
SCHEDULE OF INVESTMENTS (Continued)
December 31, 1996
<TABLE>
<CAPTION>
Number Market
of Value
Shares (Note 2A)
------ ---------
<S> <C> <C>
EQUITIES (Continued)
Miscellaneous - 2.42%
Harsco Corporation.............................. 169,500 $ 11,610,750
Minnesota Mining &
Manufacturing Company......................... 356,000 29,503,500
-------------- --------------
525,500 41,114,250
-------------- --------------
Photography - 1.27%
Eastman Kodak Company........................... 268,800 21,571,200
-------------- --------------
Publishing & Printing - 2.27%
McGraw-Hill Companies, Inc...................... 500,000 23,062,500
R. R. Donnelley & Sons Company.................. 497,000 15,593,375
-------------- --------------
997,000 38,655,875
-------------- --------------
Retail - 1.66%
The May Department Stores Company............... 363,000 16,970,250
Sears Roebuck and Company....................... 246,000 11,346,750
-------------- --------------
609,000 28,317,000
-------------- --------------
Retail - Grocery - 2.17%
Albertson's, Inc................................ 847,000 30,174,375
American Stores Company......................... 164,800 6,736,200
-------------- --------------
1,011,800 36,910,575
-------------- --------------
Telephone Utilities - 3.24%
Ameritech Corporation........................... 347,000 21,036,875
Frontier Corporation............................ 884,600 20,014,075
Southern New England
Telecommunications Corporation................ 362,000 14,072,750
-------------- --------------
1,593,600 55,123,700
-------------- --------------
Tobacco - 2.88%
American Brands, Inc............................ 463,000 22,976,375
UST, Inc........................................ 806,000 26,094,250
-------------- --------------
1,269,000 49,070,625
-------------- --------------
Total Equities
(Cost $1,065,014,489)........................... 1,639,975,490
-------------
<CAPTION>
Principal
Amount
---------
<S> <C> <C>
SHORT-TERM INVESTMENTS - 8.09%
Commercial Paper
AIG Funding, Inc.
5.280% 2/28/97............................ $ 5,399,000 $ 5,349,463
AIG Funding, Inc.
5.850% 1/6/97............................. 8,000,000 7,993,500
Corestates Bank
5.270% 4/28/97............................ 2,000,000 1,963,289
E.I. du Pont de Nemours and Company
5.250% 5/9/97............................. 9,000,000 8,819,400
E.I. du Pont de Nemours and Company
5.250% 5/19/97............................ 5,000,000 4,891,889
First Union Bank, North Carolina
5.280% 3/28/97............................ 4,000,000 3,945,867
First Union Bank, North Carolina
5.270% 4/23/97............................ 3,000,000 2,947,267
Ford Motor Credit Company
5.290% 3/10/97............................ 14,000,000 13,849,733
<CAPTION>
Market
Principal Value
Amount (Note 2A)
--------- ---------
<S> <C> <C>
SHORT-TERM INVESTMENTS (Continued)
Commercial Paper (Continued)
H J Heinz Company
5.330% 1/21/97............................ $ 3,000,000 $ 2,991,117
H J Heinz Company
5.400% 1/21/97............................ 11,000,000 10,967,000
Minnesota Mining & Manufacturing Company
5.290% 1/28/97............................ 11,359,000 11,313,933
J P Morgan
5.280% 2/3/97............................. 14,000,000 13,932,240
Shell Oil Company
6.500% 1/2/97............................. 10,325,000 10,323,136
Sonoco Products Company
5.320% 2/4/97............................. 8,000,000 7,957,740
Sonoco Products Company
5.370% 1/21/97............................ 4,183,000 4,170,521
Transamerica Finance Corp.
5.270% 3/14/97............................ 4,297,000 4,248,205
Walt Disney Company
5.320% 1/24/97............................ 10,000,000 9,966,011
Weyerhaeuser Company
5.300% 2/12/97............................ 3,000,000 2,980,097
Weyerhaeuser Company
5.300% 2/10/97............................ 9,200,000 9,142,825
-------------- --------------
Total Short-Term Investments
(Cost $137,806,906)..........................$ 138,763,000 137,753,233
============== --------------
Total Investments -
(Cost $1,202,821,395) (a) 104.45% $1,777,728,723
======= ==============
(a) Federal Income Tax Information: At
December 31, 1996 the net unrealized
appreciation on investments based on cost
of $1,202,833,207 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...................... $ 576,523,219
Aggregate gross unrealized depreciation for
all investments in which there is an excess
of tax cost over market value...................... (1,627,703)
-------------
Net unrealized appreciation........................ $ 574,895,516
=============
</TABLE>
See Notes to Financial Statements.
14
<PAGE>
MML Money Market Fund
SCHEDULE OF INVESTMENTS
December 31, 1996
<TABLE>
<CAPTION>
Market
Principal Value
Amount (Note 2A)
--------- -----------
<S> <C> <C>
SHORT-TERM INVESTMENTS - 100.53%
Commercial Paper - 97.28%
American Brands, Inc.
5.560% 1/17/97................... $ 3,745,000 $ 3,735,745
Anheuser-Busch Companies, Inc.
5.220% 1/9/97.................... 4,580,000 4,574,687
Aristar, Inc.
5.410% 2/7/97.................... 1,590,000 1,581,159
Aristar, Inc.
5.410% 2/7/97.................... 1,060,000 1,054,106
Atlantic Richfield Corp.
5.240% 2/3/97.................... 4,295,000 4,274,370
Baltimore Gas & Electric Company
6.100% 1/3/97.................... 3,210,000 3,208,912
Bay State Gas Company
5.400% 1/16/97................... 595,000 593,661
Bay State Gas Company
5.380% 1/30/97................... 870,000 866,230
Becton, Dickinson and Company
5.350% 6/19/97................... 3,280,000 3,197,622
Bellsouth Telecommunications, Inc.
5.270% 2/27/97................... 2,300,000 2,280,808
Bellsouth Telecommunications, Inc.
5.270% 3/21/97................... 1,840,000 1,818,721
Carolina Power & Light Company
5.310% 2/14/97................... 1,535,000 1,525,038
Carolina Power & Light Company
5.300% 2/25/97................... 3,650,000 3,620,445
Caterpillar Financial Services Corp.
5.530% 1/13/97................... 2,465,000 2,460,456
Caterpillar Financial Services Corp.
5.280% 1/28/97................... 2,925,000 2,913,417
CIT Group Holdings Inc.
5.290% 1/27/97................... 3,540,000 3,526,475
Coca Cola Company
5.180% 1/21/97................... 2,300,000 2,293,381
Coca Cola Company
5.260% 2/21/97................... 3,375,000 3,349,851
Dean Witter, Discover & Company
5.380% 1/10/97................... 2,715,000 2,711,348
Dean Witter, Discover & Company
5.380% 1/31/97................... 2,585,000 2,573,410
Dean Witter, Discover & Company
6.000% 1/3/97.................... 275,000 274,908
E.I. du Pont de Nemours and Company
5.420% 1/14/97................... 3,700,000 3,692,759
General Electric Capital Corp.
5.320% 1/22/97................... 3,065,000 3,055,488
General Electric Company
5.260% 3/25/97................... 1,985,000 1,960,927
General Motors Acceptance Corporation
5.500% 1/21/97................... 1,390,000 1,385,753
General Motors Acceptance Corporation
5.300% 5/23/97................... 3,055,000 2,991,134
Georgia Power Company
5.450% 2/5/97.................... 5,200,000 5,172,447
Goldman Sachs & Company
5.330% 2/21/97................... 1,290,000 1,280,259
Goldman Sachs & Company
5.260% 6/20/97................... 2,235,000 2,179,485
GTE California
5.540% 1/29/97................... 2,010,000 2,001,339
H J Heinz Company
5.320% 6/18/97................... 4,300,000 4,193,245
IBM Credit Corporation
5.360% 4/16/97................... 2,520,000 2,480,604
Minnesota Mining & Manufacturing Company
5.270% 2/26/97................... 4,320,000 4,284,586
Monsanto Company
5.300% 1/16/97................... 2,000,000 1,995,583
Motorola Incorporated
5.250% 4/7/97.................... 2,140,000 2,110,040
Motorola Incorporated
5.500% 1/23/97................... 3,650,000 3,637,732
Nestle Capital Corporation
5.220% 2/4/97.................... 3,185,000 3,169,298
Nestle Capital Corporation
5.250% 1/24/97................... 1,675,000 1,669,382
Northern Illinois Gas Company
5.310% 2/12/97................... 2,380,000 2,365,256
Northern Indiana Public Service
5.340% 1/30/97................... 4,700,000 4,679,782
Northern States Power Company
5.300% 1/8/97.................... 3,400,000 3,396,496
Pacific Gas & Electric Company
5.520% 2/10/97................... 4,770,000 4,740,744
Pioneer Hi-Bred International, Inc.
5.320% 1/7/97.................... 3,000,000 2,997,340
Pitney Bowes Credit Corporation
5.330% 2/18/97................... 4,190,000 4,160,223
PPG Industries Inc.
5.280% 2/24/97................... 3,950,000 3,918,716
Walt Disney Company
5.280% 3/14/97................... 4,000,000 3,957,760
Walt Disney Company
5.260% 2/28/97................... 1,230,000 1,219,577
Weyerhaeuser Company
5.300% 2/6/97.................... 4,585,000 4,560,699
Wisconsin Gas Company
5.300% 2/20/97................... 3,440,000 3,414,678
Wisconsin Gas Company
5.350% 2/28/97................... 2,185,000 2,166,167
------------- -------------
Total Commercial Paper
(Cost $141,272,249).................. 142,280,000 141,272,249
------------- -------------
U.S. Government Agency Obligations - 3.25%
Federal National Mortgage Association
5.270% 2/11/97................... 4,750,000 4,721,491
------------- -------------
Total U.S. Government Agency Obligations
(Cost $4,721,491) 4,750,000 4,721,491
------------- -------------
Total Short-Term Investments
(Cost $145,993,740)(a) $ 147,030,000 145,993,740
============= -------------
Total Investments -
(Cost $145,993,740)(a) 100.53% $ 145,993,740
======== =============
</TABLE>
(a) Federal Income Tax Information: The aggregate cost for investments
for the MML Money Market Fund as of December 31, 1996 is the same
for financial reporting and federal income tax purposes.
December 31, 1996 seven-day average yield for the portfolio: 4.95%
See Notes to Financial Statements.
15
<PAGE>
MML Managed Bond Fund
SCHEDULE OF INVESTMENTS
December 31, 1996
<TABLE>
<CAPTION>
Market
Principal Value
Amount (Note 2A)
--------- -----------
<S> <C> <C>
BONDS AND NOTES - 99.69%
Asset Backed Securities - 10.84%
Auto Receivables
Capita Equipment Receivables Trust 1996-1,
Class A4
6.280% 6/15/00................... $ 2,000,000 $ 2,003,120
Chase Manhattan Auto Grantor Trust 1996-B,
Class A
6.280% 6/15/00................... 4,572,638 4,604,053
Daimler-Benz Auto Grantor Trust 1995-A,
Class A
5.850% 5/15/02................... 1,670,193 1,669,141
Daimler-Benz Vehicle Trust 1994-A
5.950% 12/15/00.................. 220,873 221,079
Ford Credit 1994-B Grantor Trust
7.300% 10/15/99.................. 536,247 542,280
Jet Equipment Trust 1995-A
8.235% 5/1/15.................... 1,943,350 2,086,070
Keystone Auto Grantor Trust 1996-B,
Class A 144A
6.150% 4/15/03................... 1,400,795 1,399,675
Nissan Auto Receivables 1994-A Grantor Trust,
Class A
6.450% 9/15/99................... 752,300 754,181
Railcar Trust No. 1992-1
7.750% 6/1/04.................... 1,595,220 1,667,005
World Omni 1995-A Automobile Lease
Securitization Trust, Class A
6.050% 11/25/01.................. 2,838,939 2,842,487
World Omni 1996-A Automobile Lease
Securitization Trust, Class A1
6.300% 6/25/02................... 1,900,000 1,906,517
------------ ------------
Total Asset Backed Securities
(Cost $19,639,638)..................... 19,430,555 19,695,608
------------ ------------
Corporate Debt - 54.80%
AirTouch Communications, Inc.
7.500% 7/15/06................... 1,500,000 1,539,720
American West Airlines 1996-1, Class A
6.850% 7/2/09.................... 1,750,000 1,715,000
American Airlines, Inc.
9.780% 11/26/11.................. 2,000,000 2,277,500
AMR Corporation
9.000% 8/1/12.................... 1,000,000 1,131,940
Analog Devices, Inc.
6.625% 3/1/00.................... 1,000,000 987,300
Associates Corporation of North America
6.750% 8/1/01.................... 1,000,000 1,003,670
Associates Corporation of North America
7.875% 9/30/01................... 2,000,000 2,097,700
Atlantic Richfield Company
7.770% 2/13/02................... 3,000,000 3,134,400
Bell Atlantic Financial Services, Inc.
6.610% 2/4/00.................... 2,000,000 2,012,420
BHP Finance (USA) Limited
6.420% 3/1/26.................... 2,000,000 1,979,820
Champion International Corporation
6.400% 2/15/26................... 1,500,000 1,432,035
Charles Schwab Corporation
6.250% 1/23/03................... 2,000,000 1,927,500
CITGO Petroleum Corporation
7.875% 5/15/06................... 750,000 764,700
Columbia Gas System, Inc.
6.610% 11/28/02.................. 2,000,000 1,984,500
Commercial Credit Company
7.750% 3/1/05.................... 3,000,000 3,133,380
Continental Airlines, Inc. Series 1996-B
7.820% 10/15/13.................. 1,500,000 1,550,550
Continental Airlines, Inc. Series 1996-2B
8.560% 7/2/14.................... 999,795 1,088,526
Corning Glass Works
8.875% 3/15/16................... 500,000 564,120
CSC Enterprises 144A
6.500% 11/15/01.................. 2,000,000 1,992,380
Dow Capital
7.125% 1/15/03................... 4,000,000 4,033,880
English China Clays Delaware Inc.
7.375% 10/1/02................... 1,000,000 1,027,760
Equifax, Inc.
6.500% 6/15/03................... 1,250,000 1,216,575
ERAC USA Finance Company 144A
6.950% 1/15/06................... 1,500,000 1,475,625
FBG Finance Ltd. 144A
7.875% 6/1/16.................... 1,250,000 1,270,763
Fletcher Challenge Ltd.
7.750% 6/20/06................... 1,500,000 1,555,575
Foster Wheeler Corporation
6.750% 11/15/05.................. 2,000,000 1,932,440
General American Transportation Corporation
6.750% 3/1/06.................... 2,000,000 1,943,800
General Electric Capital Corporation
8.750% 5/21/07................... 1,000,000 1,133,580
General Motors Acceptance Corporation
6.300% 9/10/97................... 2,500,000 2,508,800
Hercules Incorporated
6.625% 6/1/03.................... 2,000,000 1,979,860
IMCERA Group, Inc.
6.000% 10/15/03.................. 2,000,000 1,915,400
Leucadia National Corporation
7.750% 8/15/13................... 2,000,000 1,977,140
Lockheed Martin Corporation
5.650% 4/1/97.................... 2,000,000 1,999,460
Lockheed Martin Corporation
7.700% 6/15/08................... 1,500,000 1,569,345
McDonnell Douglas Corporation
9.250% 4/1/02.................... 1,400,000 1,563,660
McDonnell Douglas Corporation
6.875% 11/1/06................... 1,000,000 981,260
Newmont Mining Corporation
8.625% 4/1/02.................... 2,000,000 2,111,380
News America Holdings Incorporated
9.250% 2/1/13.................... 2,000,000 2,240,580
Norfolk Southern Corporation
7.220% 9/15/06................... 1,500,000 1,528,290
Norfolk Southern Corporation
7.400% 9/15/06................... 1,000,000 1,015,570
Pearson Inc. 144A
7.375% 9/15/06................... 1,500,000 1,506,450
Penske Truck Leasing Co., L.P.
7.750% 5/15/99................... 1,250,000 1,290,175
Polaroid Corporation
7.250% 1/15/97................... 1,000,000 1,000,220
Polaroid Corporation
8.000% 3/15/99................... 1,000,000 1,026,420
</TABLE>
16
<PAGE>
MML Managed Bond Fund
SCHEDULE OF INVESTMENTS (Continued)
December 31, 1996
<TABLE>
<CAPTION>
Market
Principal Value
Amount (Note 2A)
--------- -----------
<S> <C> <C>
BONDS AND NOTES (Continued)
Corporate Debt (Continued)
Ralston Purina Company
7.750% 10/1/15................... $ 3,000,000 $ 3,076,380
Rite Aid Corporation
6.700% 12/15/01.................. 1,000,000 998,090
Rolls-Royce Capital Inc.
7.125% 7/29/03................... 1,500,000 1,502,235
Scholastic Corporation
7.000% 12/15/03.................. 2,000,000 1,996,140
Textron Inc.
9.550% 3/19/01................... 1,000,000 1,108,750
Thomas & Betts Corporation
8.250% 1/15/04................... 1,500,000 1,558,695
Time Warner, Inc.
7.750% 6/15/05................... 3,000,000 3,017,790
United Air Lines, Inc.
10.110% 2/19/06................... 469,855 520,195
US Air, Inc.
7.500% 10/15/09.................. 974,038 983,778
US West Capital Funding Corporation
8.375% 10/18/99.................. 3,000,000 3,150,300
Union Oil of California
8.750% 8/15/01................... 1,500,000 1,619,970
Valassis Communications, Inc.
9.550% 12/1/03................... 2,000,000 2,081,280
Westinghouse Electric Corporation
8.375% 6/15/02................... 500,000 509,835
W.R. Grace & Co.
7.750% 10/1/02................... 2,100,000 2,190,132
W.R. Grace & Co.
8.000% 8/15/04................... 1,000,000 1,058,720
-------------- -------------
Total Corporate Debt
(Cost $99,093,971)................... 97,193,688 99,493,459
-------------- -------------
U.S. Government Agency Obligations - 23.62%
Federal Home Loan Mortgage
Corporation (FHLMC) - 3.43%
Collateralized Mortgage Obligations - 3.32%
FHLMC Series 1322
Class G
7.500% 2/15/07................... 2,000,000 2,048,120
FHLMC Series 1460 Class H
7.000% 5/15/07................... 2,000,000 2,020,000
FHLMC Series 1080 Class D
7.000% 7/15/20................... 1,933,546 1,955,898
-------------- -------------
5,933,546 6,024,018
Pass-Through Securities - .11%
FHLMC
9.000% 3/1/17.................... 182,705 194,409
-------------- -------------
6,116,251 6,218,427
-------------- -------------
Federal National Mortgage
Association (FNMA) - 7.73%
Collateralized Mortgage Obligations - 7.32%
FNMA Series 1993-175 Class PL
5.000% 10/25/02.................. 1,390,908 1,381,770
FNMA Series 1993-191 Class PD
5.400% 3/25/04................... 1,500,000 1,487,340
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 1,985,620
FNMA Series 1996-54 Class C
6.000% 9/25/08................... 4,000,000 3,840,000
FNMA Series 1993-186 Class G
6.250% 3/25/08................... 3,700,000 3,637,544
-------------- -------------
13,590,908 13,288,524
Pass-Through Securities - .41%
FNMA
9.000% 5/1/09.................... 697,896 741,075
-------------- -------------
14,288,804 14,029,599
-------------- -------------
Government National Mortgage
Association (GNMA) - 10.27%
Collateralized Mortgage Obligations - .47%
JHM Acceptance Corporation, Series E,.Class 5
8.960% 4/1/19.................... 816,874 859,245
-------------- -------------
Pass-Through Securities - 9.80%
GNMA
8.000% 12/15/03 - 4/15/08........ 6,620,004 6,841,309
GNMA
7.500% 3/15/17 - 7/15/17......... 4,610,426 4,640,071
GNMA - ARMS
6.000% 7/20/25 - 12/20/25........ 6,180,532 6,316,677
-------------- -------------
17,410,962 17,798,057
-------------- -------------
18,227,836 18,657,302
-------------- -------------
U.S. Government Guaranteed Notes - 2.19%
1994-A Atlanta, GA
5.780% 8/1/98.................... 130,000 129,433
1994-A Baxter Springs, KS
5.780% 8/1/98.................... 700,000 696,948
1994-A Boston, MA
5.780% 8/1/98.................... 745,000 741,752
1994-A Detroit, MI
5.780% 8/1/98.................... 385,000 383,321
1994-A Egg Harbor, NJ
5.780% 8/1/98.................... 260,000 258,866
1994-A Kansas City, MO
5.780% 8/1/98.................... 550,000 547,602
1994-A Mayaguez, PR
5.780% 8/1/98.................... 295,000 293,714
1994-A Rochester, NY
5.780% 8/1/98.................... 300,000 298,692
1994-A Sacramento, CA
5.780% 8/1/98.................... 55,000 54,760
1994-A Saginaw, MI
5.780% 8/1/98.................... 315,000 313,627
1994-A Youngstown, OH
5.780% 8/1/98.................... 265,000 263,845
-------------- -------------
4,000,000 3,982,560
-------------- -------------
Total U.S. Government Agency Obligations
(Cost $42,228,622)................... 42,632,891 42,887,888
-------------- -------------
</TABLE>
17
<PAGE>
MML Managed Bond Fund
SCHEDULE OF INVESTMENTS (Continued)
December 31, 1996
<TABLE>
<CAPTION>
Market
Principal Value
Amount (Note 2A)
--------- -----------
<S> <C> <C>
BONDS AND NOTES (Continued)
U.S. Treasury Obligations - 10.43%
U.S. Treasury Bonds - 8.46%
U.S. Treasury Bond
7.250% 5/15/16.................... $ 14,550,000 $ 15,363,927
-------------- -------------
U.S. Treasury Strips - 1.97%
U.S. Treasury Strip - Principal Only
0.000% 2/15/15.................... 12,200,000 3,572,038
-------------- -------------
Total U.S. Treasury Obligations
(Cost $18,285,071) 26,750,000 18,935,965
-------------- -------------
Total Bonds and Notes
(Cost $179,247,302) $ 186,007,134 181,012,920
============== -------------
SHORT-TERM INVESTMENTS - .76%
Commercial Paper
Texas Utilities Electric Co.
7.250% 1/2/97..................... $ 1,380,000 $ 1,379,722
-------------- ------------
Total Short-Term Investments
(Cost $1,379,722) $ 1,380,000 1,379,722
============== ------------
Total Investments
(Cost $180,627,024) (a) 100.45% $182,392,642
======== ============
</TABLE>
(a) Federal Income Tax Information: At
December 31, 1996 the net unrealized
depreciation on investments based on
cost of $180,627,024 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................................................ $ 3,618,521
Aggregate gross unrealized depreciation for
all investments and forward commitments in
which there is an excess of tax cost over
market value............................................ (1,852,903)
------------
Net unrealized appreciation............................ $ 1,765,618
============
See Notes to Financial Statements.
18
<PAGE>
MML Blend Fund
SCHEDULE OF INVESTMENTS
December 31, 1996
<TABLE>
<CAPTION>
Number Market
of Value
Shares (Note 2A)
--------- -----------
<S> <C> <C>
EQUITIES - 59.95%
Aerospace & Defense - 1.16%
Boeing Company......................... 125,000 $ 13,296,875
Raytheon Company....................... 5,300 255,062
TRW, Inc............................... 218,600 10,820,700
-------------- ------------
348,900 24,372,637
-------------- ------------
Agribusiness - .67%
Pioneer Hi-Bred International, Inc..... 200,000 14,000,000
-------------- ------------
Apparel, Textiles, Shoes - .64%
VF Corporation......................... 200,000 13,500,000
-------------- ------------
Automotive & Parts - 2.92%
Ford Motor Company..................... 465,600 14,841,000
Genuine Parts Company.................. 457,000 20,336,500
Goodyear Tire & Rubber Company......... 505,000 25,944,375
-------------- ------------
1,427,600 61,121,875
-------------- ------------
Banking, Savings & Loans - 3.81%
The Bank of New York Company,
Incorporated 750,000 25,312,500
Comerica, Incorporated................. 180,000 9,427,500
CoreStates Financial Corporation....... 374,800 19,442,750
Norwest Corporation.................... 252,000 10,962,000
Wachovia Corporation................... 260,000 14,690,000
-------------- ------------
1,816,800 79,834,750
-------------- ------------
Beverages - 1.17%
Brown-Forman Corporation (Class B)..... 300,000 13,725,000
Pepsico, Incorporated.................. 365,000 10,676,250
-------------- ------------
665,000 24,401,250
-------------- ------------
Chemicals - 2.54%
E.I. du Pont de Nemours and Company.... 146,000 13,778,750
The Lubrizol Corporation............... 277,800 8,611,800
Nalco Chemical Company................. 355,000 12,824,375
Rohm & Haas............................ 220,000 17,957,500
-------------- ------------
998,800 53,172,425
-------------- ------------
Communications - 1.33%
AT&T Corporation....................... 380,000 16,530,000
GTE Corporation........................ 250,000 11,375,000
-------------- ------------
630,000 27,905,000
-------------- ------------
Computers & Office Equipment - 4.33%
Hewlett-Packard Company................ 536,000 26,934,000
International Business Machines
Corporation 151,000 22,801,000
Pitney Bowes, Inc...................... 371,000 20,219,500
Xerox Corporation...................... 396,000 20,839,500
-------------- ------------
1,454,000 90,794,000
-------------- ------------
Containers - .37%
Temple-Inland, Inc..................... 145,000 7,848,125
-------------- ------------
Cosmetic & Personal Care - .96%
Kimberly-Clark Corporation............. 211,000 20,097,750
-------------- ------------
Electric Utilities - 1.05%
NIPSCO Industries, Inc................. 178,000 7,053,250
SCANA Corporation...................... 326,000 8,720,500
Teco Energy Inc........................ 254,900 6,149,463
-------------- ------------
758,900 21,923,213
-------------- ------------
Electrical Equipment & Electronics - 4.51%
AMP, Inc............................... 700,000 26,862,500
General Electric Company............... 360,000 35,595,000
Honeywell Inc.......................... 203,000 13,347,250
Hubbell, Incorporated (Class B)........ 431,880 18,678,810
-------------- ------------
1,694,880 94,483,560
-------------- ------------
Energy - 6.15%
Amoco Corporation...................... 332,000 26,726,000
Atlantic Richfield Company............. 90,100 11,938,250
Chevron Corporation.................... 324,000 21,060,000
Kerr-McGee Corporation................. 190,000 13,680,000
Mobil Corporation...................... 150,000 18,337,500
Occidental Petroleum Corp.............. 568,300 13,284,013
Union Pacific Resources Group.......... 389,400 11,389,950
Unocal Corporation..................... 304,200 12,358,125
-------------- ------------
2,348,000 128,773,838
-------------- ------------
Financial Services - .93%
American Express Company............... 346,000 19,549,000
-------------- ------------
Foods - 1.70%
ConAgra, Inc........................... 270,100 13,437,475
CPC International, Inc................. 285,000 22,087,500
-------------- ------------
555,100 35,524,975
-------------- ------------
Forest Products & Paper - 1.56%
Westvaco Corporation................... 450,012 12,937,845
Weyerhaeuser Company................... 415,000 19,660,625
-------------- ------------
865,012 32,598,470
-------------- ------------
Hardware & Tools - .69%
The Stanley Works...................... 536,000 14,472,000
-------------- ------------
Healthcare - 6.00%
Becton, Dickinson and Company.......... 468,000 20,299,500
Bristol-Myers Squibb Company........... 400,000 43,500,000
Pfizer, Incorporated................... 322,000 26,685,750
Pharmacia & Upjohn Inc................. 380,000 15,057,500
Schering-Plough Corp................... 310,000 20,072,500
-------------- ------------
1,880,000 125,615,250
-------------- ------------
Industrial Distribution - .80%
W. W. Grainger, Inc.................... 208,000 16,692,000
-------------- ------------
Industrial Transportation - .88%
Norfolk Southern Corporation........... 210,000 18,375,000
-------------- ------------
Insurance - 4.84%
Allstate Corporation................... 165,501 9,578,370
Jefferson-Pilot Corporation............ 183,000 10,362,375
Marsh & McLennan Companies, Inc........ 240,000 24,960,000
MBIA, Inc.............................. 225,500 22,831,875
SAFECO Corporation..................... 668,000 26,344,584
Unitrin, Inc........................... 129,500 7,219,625
-------------- ------------
1,611,501 101,296,829
-------------- ------------
Machinery & Components - 1.07%
Dover Corporation...................... 286,000 14,371,500
Parker-Hannifin Corporation............ 208,750 8,089,063
-------------- ------------
494,750 22,460,563
-------------- ------------
</TABLE>
19
<PAGE>
MML Blend Fund
SCHEDULE OF INVESTMENTS (Continued)
December 31, 1996
<TABLE>
<CAPTION>
Number Market
of Value
Shares (Note 2A)
--------- -----------
<S> <C> <C>
EQUITIES (Continued)
Miscellaneous - 1.72%
Harsco Corporation........................ 156,050 $ 10,689,425
Minnesota Mining &
Manufacturing Company..................... 305,000 25,276,875
------------- -------------
461,050 35,966,300
------------- -------------
Photography - .83%
Eastman Kodak Company..................... 217,300 17,438,325
------------- -------------
Publishing & Printing - 1.37%
McGraw-Hill Companies, Inc................ 400,000 18,450,000
R.R. Donnelley & Sons Company............. 326,500 10,243,937
------------- -------------
726,500 28,693,937
------------- -------------
Retail - 1.18%
The May Department Stores Company......... 312,000 14,586,000
Sears Roebuck and Company................. 220,000 10,147,500
------------- -------------
532,000 24,733,500
------------- -------------
Retail - Grocery - 1.17%
Albertson's, Inc.......................... 528,000 18,810,000
American Stores Company................... 138,200 5,648,925
------------- -------------
666,200 24,458,925
------------- -------------
Telephone Utilities - 1.76%
Ameritech Corporation..................... 198,000 12,003,750
Frontier Corporation...................... 596,800 13,502,600
Southern New England
Telecommunications Corporation............ 291,000 11,312,625
------------- -------------
1,085,800 36,818,975
------------- -------------
Tobacco - 1.84%
American Brands, Inc...................... 384,000 19,056,000
UST, Inc.................................. 599,000 19,392,625
------------- -------------
983,000 38,448,625
------------- -------------
Total Equities
(Cost $729,315,396)....................... 1,255,371,097
-------------
<CAPTION>
Principal
Amount
---------
<S> <C> <C>
BONDS AND NOTES - 19.62%
Asset Backed Securities - 1.53%
Auto Receivables
Capita Equipment Receivables Trust 1996-1,
Class A4
6.280% 6/15/00...................... $ 4,000,000 4,006,240
Chase Manhattan Auto Grantor Trust 1996-B,
Class A
6.610% 9/15/02...................... 4,572,638 4,604,053
Daimler-Benz Auto Grantor Trust 1995-A,
Class A
5.850% 5/15/02...................... 1,391,828 1,390,951
Daimler-Benz Vehicle Trust 1994-A
5.950% 12/15/00..................... 441,747 442,157
Ford Credit Auto Loan Master Trust,
Series 1992-1
6.875% 1/15/99...................... 1,500,000 1,500,465
Ford Credit Auto Owner Trust 1996-B,
Class A-4
6.300% 1/15/01...................... 6,000,000 6,023,940
Ford Credit 1994-B Grantor Trust
7.300% 10/15/99..................... 714,996 723,040
Auto Receivables (Continued)
Keystone Auto Grantor Trust 1996-B,
Class A 144A
6.150% 4/15/03...................... $ 2,334,659 $ 2,332,791
Nissan Auto Receivables 1994-A Grantor
Trust, Class A
6.450% 9/15/99...................... 2,031,209 2,036,287
Railcar Trust No. 1992-1
7.750% 6/1/04....................... 1,443,674 1,508,639
World Omni 1995-A Automobile Lease
Securitization Trust, Class A
6.050% 11/25/01..................... 3,312,095 3,316,235
World Omni 1996-A Automobile Lease
Securitization Trust, Class A1
6.300% 6/25/02...................... 4,200,000 4,214,406
------------- -------------
Total Asset Backed Securities
(Cost $32,097,133)...................... 31,942,846 32,099,204
------------- -------------
Corporate Debt - 7.16%
AirTouch Communications, Inc.
7.500% 7/15/06...................... 4,000,000 4,105,920
America West Airlines 1996-1, Class A
6.850% 7/2/09....................... 4,250,000 4,165,000
American Airlines, Inc.
9.780% 11/26/11..................... 5,000,000 5,693,750
American General Finance Corporation
7.750% 1/15/97...................... 2,000,000 2,000,820
AMR Corporation
9.000% 8/1/12....................... 2,000,000 2,263,880
Analog Devices, Inc.
6.625% 3/1/00....................... 1,500,000 1,480,950
Associates Corporation of North America
6.750% 8/1/01....................... 4,000,000 4,014,680
Bell Atlantic Financial Services, Inc.
6.610% 2/4/00....................... 1,000,000 1,006,210
BHP Finance (USA) Limited
6.420% 3/1/26....................... 4,500,000 4,454,595
Cardinal Distribution, Inc.
8.000% 3/1/97....................... 2,000,000 2,006,260
Champion International Corporation
6.400% 2/15/26...................... 3,500,000 3,341,415
Charles Schwab Corporation
6.250% 1/23/03...................... 2,500,000 2,409,375
Chrysler Financial Corp.
6.620% 4/29/97...................... 2,000,000 2,006,060
CITGO Petroleum Corporation
7.875% 5/15/06...................... 1,000,000 1,019,600
Columbia Gas System, Inc.
6.610% 11/28/02..................... 3,000,000 2,976,750
Commercial Credit Company
7.750% 3/1/05....................... 2,500,000 2,611,150
Continental Airlines, Inc. Series 1996-B
7.820% 10/15/13..................... 2,000,000 2,067,400
Continental Airlines, Inc. Series 1996-2B
8.560% 7/2/14....................... 1,749,640 1,904,921
Corning Glass Works, Inc.
8.875% 3/15/16...................... 500,000 564,120
CSC Enterprises 144A
6.500% 11/15/01..................... 4,500,000 4,482,855
Delta Air Lines, Inc.
8.540% 1/2/07....................... 4,409,887 4,686,211
English China Clays Delaware Inc.
7.375% 10/1/02...................... 1,000,000 1,027,760
</TABLE>
20
<PAGE>
MML Blend Fund
SCHEDULE OF INVESTMENTS (Continued)
December 31, 1996
<TABLE>
<CAPTION>
Market
Principal Value
Amount (Note 2A)
--------- -----------
<S> <C> <C>
BONDS AND NOTES (Continued)
Corporate Debt (Continued)
ERAC USA Finance Company 144A
6.950% 1/15/06................. $ 1,500,000 $ 1,475,625
FBG Finance Ltd. 144A
7.875% 6/1/16.................. 4,000,000 4,066,440
Fletcher Challenge Ltd.
7.750% 6/20/06................. 2,000,000 2,074,100
Ford Motor Credit Company
8.450% 7/15/06................. 1,500,000 1,506,960
Foster Wheeler Corporation
6.750% 11/15/05................ 2,000,000 1,932,440
General American Transportation Corporation
6.750% 3/1/06.................. 3,000,000 2,915,700
General Electric Capital Corporation
8.750% 5/21/07................. 1,500,000 1,700,370
General Motors Corporation
9.125% 7/15/01................. 1,500,000 1,639,875
Goldman Sachs Group, L.P. 144A
6.200% 2/15/01................. 4,000,000 3,920,000
GTE Corporation
9.100% 6/1/03.................. 1,000,000 1,115,490
Leucadia National Corporation
7.750% 8/15/13................. 3,000,000 2,965,710
Lockheed Martin Corporation
7.700% 6/15/08................. 4,000,000 4,184,920
McDonnell Douglas Corporation
9.250% 4/1/02.................. 2,200,000 2,457,180
McDonnell Douglas Corporation
6.875% 11/1/06................. 3,000,000 2,943,780
Newmont Mining Corporation
8.625% 4/1/02.................. 5,000,000 5,278,450
News America Holdings Incorporated
9.250% 2/1/13.................. 4,000,000 4,481,160
Norfolk Southern Corporation
7.400% 9/15/06................. 2,000,000 2,031,140
Norfolk Southern Corporation
7.220% 9/15/06................. 4,000,000 4,075,440
North Finance (Bermuda) Limited 144A
7.000% 9/15/05................. 4,000,000 3,940,000
Pearson Inc. 144A
7.375% 9/15/06................. 3,000,000 3,012,900
Polaroid Corporation
7.250% 1/15/97................. 4,500,000 4,500,990
Ralston Purina Company
7.750% 10/1/15................. 2,000,000 2,050,920
Rite Aid Corporation
6.700% 12/15/01................ 2,000,000 1,996,180
Rolls-Royce Capital Inc.
7.125% 7/29/03................. 2,000,000 2,002,980
Scholastic Corporation
7.000% 12/15/03................ 4,000,000 3,992,280
TCI Communications, Inc.
7.550% 9/2/03.................. 3,000,000 3,037,380
Thomas & Betts Corporation
8.250% 1/15/04................. 1,000,000 1,039,130
Time Warner, Inc.
7.750% 6/15/05................. 3,000,000 3,017,790
The Toro Company
11.000% 8/1/17.................. 2,000,000 2,005,000
US Air, Inc.
7.500% 10/15/09................ 974,038 983,778
Valassis Communications, Inc.
9.550% 12/1/03................. 2,000,000 2,081,280
W.R. Grace & Co.
8.000% 8/15/04................. 5,000,000 5,293,600
-------------- -------------
Total Corporate Debt
(Cost $147,494,780)................ 146,583,565 150,008,670
-------------- -------------
U.S. Government Agency Obligations - 5.19%
Federal Home Loan Mortgage
Corporation (FHLMC) - 1.21%
Collateralized Mortgage Obligations -.1.18%
FHLMC Series 1322 Class G
7.500% 2/15/07................. 5,000,000 5,120,300
FHLMC Series 1460 Class H
7.000% 5/15/07................. 1,789,000 1,806,890
FHLMC Series 1080 Class D
7.000% 7/15/20................. 4,833,866 4,889,745
FHLMC Series 1490 Class PG
6.300% 5/15/07................. 5,000,000 4,965,600
FHLMC Series 1625 Class EA
5.750% 3/15/07................. 5,000,000 4,909,350
FHLMC Series 1625 Class D
5.250% 7/15/04................. 3,100,000 3,067,047
-------------- -------------
24,722,866 24,758,932
Pass-Through Securities - .03%
FHLMC
9.000% 3/1/17.................. 548,116 583,228
-------------- -------------
25,270,982 25,342,160
-------------- -------------
Federal National Mortgage
Association (FNMA) - 1.60%
Collateralized Mortgage Obligations -.1.01%
FNMA Series 1993-134 Class GA
6.500% 2/25/07................. 5,000,000 4,964,050
FNMA Series 1993-71 Class PG
6.250% 7/25/07................. 8,000,000 7,910,000
FNMA Series 1993-175 Class PL
5.000% 10/25/02................ 2,872,226 2,853,355
FNMA Series 1993-191 Class PD
5.400% 3/25/04................. 1,500,000 1,487,340
FNMA Series 1996-54 Class C
6.000% 9/25/08................. 4,000,000 3,840,000
-------------- -------------
21,372,226 21,054,745
Pass-Through Securities - .59%
FNMA
6.000% 5/1/13.................. 2,525,147 2,598,326
FNMA
6.500% 6/25/08................. 5,000,000 4,910,900
FNMA
6.250% 3/25/08................. 5,000,000 4,915,600
-------------- -------------
12,525,147 12,424,826
-------------- -------------
33,897,373 33,479,571
-------------- -------------
</TABLE>
21
<PAGE>
MML Blend Fund
SCHEDULE OF INVESTMENTS (Continued)
December 31, 1996
<TABLE>
<CAPTION>
Number Market
of Value
Shares (Note 2A)
--------- -----------
<S> <C> <C>
BONDS AND NOTES (Continued)
Government National Mortgage
Association (GNMA) - 1.48%
Collateralized Mortgage Obligations - .08%
JHM Acceptance Corporation, Series E,
Class 5
8.960% 4/1/19.................... $ 1,633,748 $ 1,718,491
-------------- -------------
Pass-Through Securities - 1.40%
GNMA
7.500% 9/15/16 - 10/15/17........ 4,185,629 4,212,542
GNMA
8.000% 1/15/04 - 5/15/08......... 7,451,353 7,700,451
GNMA
9.000% 8/15/08 - 9/15/09......... 2,173,628 2,315,588
GNMA - ARMS
6.000% 7/20/25 - 12/20/25........ 14,744,023 15,067,825
-------------- -------------
28,554,633 29,296,406
-------------- -------------
30,188,381 31,014,897
-------------- -------------
U.S. Government Guaranteed Notes - .90%
1994-A Abilene, TX
5.780% 8/1/98.................... 70,000 69,695
1994-A Bakersfield, CA
5.780% 8/1/98.................... 245,000 243,932
1994-A Barberton, OH
5.780% 8/1/98.................... 75,000 74,673
1994-A Buffalo, NY
5.780% 8/1/98.................... 375,000 373,365
1991-A Caguas, PR
8.740% 8/1/01.................... 280,000 302,924
1991-A Council Bluffs, IA
8.740% 8/1/01.................... 155,000 167,690
1994-A Cumberland, MD
5.780% 8/1/98.................... 55,000 54,760
1994-A Elizabeth, NJ
5.780% 8/1/98.................... 75,000 74,673
1994-A Erie, PA
5.780% 8/1/98.................... 70,000 69,695
1994-A Euclid, OH
5.780% 8/1/98.................... 105,000 104,542
1994-A Fairfax County, VA
5.780% 8/1/98.................... 110,000 109,520
1991-A Fairfax County, VA
8.740% 8/1/01.................... 85,000 91,959
1991-A Fajardo, PR
8.740% 8/1/01.................... 210,000 227,193
1994-A Fort Myers, FL
5.780% 8/1/98.................... 135,000 134,411
1991-A Gasden, AL
8.740% 8/1/01.................... 100,000 108,187
1994-A Lawrence, MA
5.780% 8/1/98.................... 40,000 39,826
1991-A Lorain, OH
8.740% 8/1/01.................... 30,000 32,456
1994-A Los Angeles County, CA
5.780% 8/1/98.................... 175,000 174,237
1994-A Mayaguez, PR
5.780% 8/1/98.................... 65,000 64,717
1991-A Mayaguez, PR
8.740% 8/1/01.................... 150,000 162,281
1994-A Mobile, AL
5.780% 8/1/98.................... 205,000 204,106
1994-A Montgomery County, PA
5.780% 8/1/98.................... 230,000 228,997
1994-A New Orleans, LA
5.780% 8/1/98.................... 175,000 174,237
1994-A Ocean Shores, WA
5.780% 8/1/98.................... 110,000 109,520
1994-A Pasadena, CA
5.780% 8/1/98.................... 140,000 139,390
1994-A Providence, RI
5.780% 8/1/98.................... 50,000 49,782
1994-A Reading, PA
5.780% 8/1/98.................... 65,000 64,717
1994-A Roanoke, VA
5.780% 8/1/98.................... 210,000 209,084
1994-A Rochester, NY
5.780% 8/1/98.................... 165,000 164,281
1991-A Rochester, NY
8.650% 8/1/00.................... 4,295,000 4,590,281
1994-A Sacramento, CA
5.780% 8/1/98.................... 300,000 298,692
1994-A Syracuse, NY
5.780% 8/1/98.................... 50,000 49,782
1994-A Tacoma, WA
5.780% 8/1/98.................... 155,000 154,324
1994-A Trenton, NJ
5.780% 8/1/98.................... 130,000 129,433
1994-A Virginia Beach, VA
5.780% 8/1/98.................... 260,000 258,866
1994-A Waterford Township, MI
5.780% 8/1/98.................... 55,000 54,760
1994-A West Palm Beach, FL
5.780% 8/1/98.................... 105,000 104,542
U.S. Department of Housing and Urban
Development, Series 1995-A
8.240% 8/1/02.................... 8,475,000 9,195,545
-------------- -------------
17,780,000 18,861,075
-------------- -------------
Total U.S. Government Agency Obligations
(Cost $105,983,665).................. 107,136,736 108,697,703
-------------- -------------
U.S. Treasury Obligations - 5.74%
U.S. Treasury Bonds - 3.25%
U.S. Treasury Bond
7.250% 5/15/16................... 24,500,000 25,870,530
U.S. Treasury Bond
8.750% 5/15/17................... 34,500,000 42,095,520
-------------- -------------
59,000,000 67,966,050
-------------- -------------
U.S. Treasury Notes - 1.90%
U.S. Treasury Note
6.125% 5/15/98................... 20,000,000 20,096,800
U.S. Treasury Note
6.375% 1/15/99................... 11,000,000 11,103,070
U.S. Treasury Note
6.375% 5/15/99................... 6,000,000 6,051,540
U.S. Treasury Note
7.250% 5/15/04................... 2,500,000 2,630,475
-------------- -------------
39,500,000 39,881,885
-------------- -------------
</TABLE>
22
<PAGE>
MML Blend Fund
SCHEDULE OF INVESTMENTS (Continued)
December 31, 1996
<TABLE>
<CAPTION>
Market
Principal Value
Amount (Note 2A)
--------- -----------
BONDS AND NOTES (Continued)
<S> <C> <C>
U.S. Treasury Strips - .59%
U.S. Treasury Strip - Principal only
0.000% 2/15/99.................. $ 9,750,000 $ 8,618,610
U.S. Treasury Strip - Principal only
0.000% 2/15/10.................. 8,750,000 3,673,950
-------------- -------------
18,500,000 12,292,560
-------------- -------------
Total U.S. Treasury Obligations
(Cost $119,765,128)................. 117,000,000 120,140,495
-------------- -------------
Total Bonds and Notes
(Cost $405,340,706)................. $ 402,663,147 410,946,072
============== -------------
SHORT-TERM INVESTMENTS - 23.50%
Commercial Paper
Aluminum Company of America
5.280% 1/13/97.................. 3,365,000 3,358,783
Aristar, Inc.
5.380% 1/29/97.................. 13,670,000 13,607,892
Baxter International Inc.
5.500% 3/20/97.................. 8,075,000 7,975,767
Central and South West Corporation
5.520% 1/16/97.................. 1,780,000 1,775,906
Central and South West Corporation
5.700% 2/24/97.................. 11,565,000 11,466,207
Central and South West Corporation
5.750% 3/7/97................... 5,890,000 5,829,529
Comdisco, Inc.
5.520% 2/13/97.................. 10,350,000 10,278,549
Comdisco, Inc.
5.580% 3/12/97.................. 8,840,000 8,742,367
Comdisco, Inc.
5.580% 3/14/97.................. 7,530,000 7,444,493
Comdisco, Inc.
5.600% 3/21/97.................. 7,355,000 7,263,471
ConAgra, Inc.
5.480% 2/11/97.................. 9,140,000 9,081,778
ConAgra, Inc.
5.490% 2/14/97.................. 8,270,000 8,213,465
ConAgra, Inc.
5.550% 1/2/97................... 4,815,000 4,814,258
Crown Cork & Seal Company, Inc.
5.510% 1/31/97.................. 10,000,000 9,953,814
Crown Cork & Seal Company, Inc.
5.510% 1/17/97.................. 5,280,000 5,267,070
Crown Cork & Seal Company, Inc.
5.650% 2/27/97.................. 14,090,000 13,958,716
Dana Credit Corporation
5.470% 1/21/97.................. 13,000,000 12,959,972
Dana Credit Corporation
5.520% 1/16/97.................. 5,795,000 5,761,672
Deere Capital Corporation
5.370% 2/28/97.................. 7,365,000 7,297,425
Dominion Resources, Inc.
5.500% 2/20/97.................. 10,000,000 9,916,267
Illinois Power Company
5.480% 2/6/97................... 5,550,000 5,517,923
Illinois Power Company
5.570% 2/19/97.................. 6,700,000 6,647,200
Illinois Power Company
5.650% 2/25/97.................. 6,290,000 6,235,274
Monsanto Company
5.320% 1/30/97.................. 8,000,000 7,961,737
Northern States Power Company
5.300% 1/10/97.................. 8,655,000 6,642,898
NYNEX Corp.
5.420% 3/27/97.................. 13,640,000 13,457,527
ORIX Credit Alliance, Inc.
5.530% 1/6/97................... 2,120,000 2,118,353
ORIX Credit Alliance, Inc.
5.470% 2/4/97................... 10,375,000 10,320,194
ORIX Credit Alliance, Inc.
5.490% 2/7/97................... 4,910,000 4,881,774
ORIX Credit Alliance, Inc.
5.480% 1/27/97.................. 6,615,000 6,587,339
ORIX Credit Alliance, Inc.
5.620% 3/13/97.................. 8,995,000 8,894,256
ORIX Credit Alliance, Inc.
5.800% 3/24/97.................. 3,855,000 3,805,228
Philip Morris Companies
5.300% 1/24/97.................. 9,385,000 9,351,768
Philip Morris Companies
5.270% 1/15/97.................. 12,180,000 12,153,310
Praxair, Inc.
5.450% 1/9/97................... 9,300,000 9,288,055
Praxair, Inc.
5.470% 2/24/97.................. 6,000,000 5,948,746
Praxair, Inc.
5.560% 3/6/97................... 9,665,000 9,765,254
Praxair, Inc.
5.540% 3/24/97.................. 4,010,000 3,958,226
Praxair, Inc.
5.540% 3/20/97.................. 7,495,000 7,402,895
Public Service Company of Colorado
5.800% 2/26/97.................. 5,800,000 5,747,763
Public Service Electric and Gas Company
5.480% 1/13/97.................. 5,245,000 5,235,310
Public Service Electric and Gas Company
5.490% 1/13/97.................. 1,425,000 1,422,367
Public Service Electric and Gas Company
5.490% 2/6/97................... 7,375,000 7,332,375
Public Service Electric and Gas Company
5.480% 2/12/97.................. 11,430,000 11,354,171
Public Service Electric and Gas Company
5.500% 2/21/97.................. 10,000,000 9,920,763
Ralston Purina Company
5.500% 1/6/97................... 5,000,000 4,996,116
Rite Aid Corporation
5.450% 2/10/97.................. 15,000,000 14,906,780
Rite Aid Corporation
5.490% 2/18/97.................. 8,000,000 7,939,254
Rite Aid Corporation
5.600% 3/4/97................... 7,890,000 7,812,678
Sierra Pacific Power Company
5.470% 1/16/97.................. 3,900,000 3,890,693
Textron Financial Corporation
5.500% 1/3/97................... 6,460,000 6,458,026
Textron Financial Corporation
5.480% 2/5/97................... 10,000,000 9,944,715
Textron Financial Corporation
5.530% 3/3/97................... 10,555,000 10,453,203
Timken Company
5.500% 1/28/97.................. 10,000,000 9,956,907
</TABLE>
23
<PAGE>
MML Blend Fund
SCHEDULE OF INVESTMENTS (Continued)
December 31, 1996
<TABLE>
<CAPTION>
Number Market
of Value
Shares (Note 2A)
--------- -----------
<S> <C> <C>
SHORT-TERM INVESTMENTS (Continued)
Commercial Paper (Continued)
Union Camp Corp.
5.650% 2/3/97..................... $ 8,980,000 $ 8,935,214
Western Resources Inc.
5.650% 1/7/97..................... 7,535,000 7,527,976
Western Resources Inc.
5.490% 1/23/97.................... 12,200,000 12,157,301
Western Resources Inc.
5.470% 1/14/97.................... 8,470,000 8,453,048
Whirlpool Financial Corporation
5.600% 1/22/97.................... 12,760,000 12,718,059
Whirlpool Financial Corporation
5.400% 1/8/97..................... 8,920,000 8,910,137
Xerox Corporation
5.300% 1/17/97.................... 8,120,000 8,099,998
-------------- --------------
Total Short-Term Investments
(Cost $492,181,705) $ 495,180,000 492,100,212
=============== --------------
Total Investments -
(Cost $1,626,837,807) (a) 103.07% $2,158,417,381
======== ==============
</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 $5,000,000 February 1997 $ (6,345)
-----------
Total Forward Commitment
Contracts $ (6,345)
===========
</TABLE>
(a) Federal Income Tax Information: At
December 31, 1996 the net unrealized
appreciation on investments and forward
commitment contracts based on cost of
$1,632,176,681 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..................................... $ 533,669,598
Aggregate gross unrealized depreciation for
all investments and forward commitments in
which there is an excess of tax cost over
market value...................................... (2,453,798)
--------------
Net unrealized appreciation...................... $ 531,215,800
==============
See Notes to Financial Statements.
24
<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.
25
<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 December 31, 1996, the cost (value) of forward commitments to
purchase securities amounted to $4,981,445 ($4,975,100) 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 $1,089,411 which is available for
federal income tax purposes to offset future capital gains. Of the total
carryforward, $766,579 expires December 31, 2002 and $322,832 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.
Concert Capital Management, Inc. ("Concert") served as the investment sub-
advisor 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-advisor to MML Equity Fund and the Equity Sector of
the MML Blend Fund. MassMutual paid Concert 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, 1997, 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 year ended December
31, 1996, MassMutual was not required to reimburse the Funds for any expenses.
26
<PAGE>
Notes To Financial Statements (Continued)
5. PURCHASES AND SALES OF INVESTMENTS AND FORWARD COMMITMENTS
<TABLE>
<CAPTION>
Proceeds
For the Year Ended Acquisition from Sales
December 31, 1996 Cost and Maturities
----------------- ----------- --------------
<S> <C> <C>
Investments
-----------
MML EQUITY FUND
Equities............................................................................. $ 397,427,240 $ 156,344,169
Short-term investments............................................................... 1,791,112,656 1,808,050,114
MML MONEY MARKET FUND
Short-term investments............................................................... 678,410,850 648,768,474
MML MANAGED BOND FUND
Bonds and notes...................................................................... 59,285,110 26,101,663
U.S. Government investments - long-term.............................................. 51,001,536 50,006,188
Short-term investments............................................................... 512,399,665 513,856,075
MML BLEND FUND
Equities............................................................................. 216,312,103 114,693,516
Bonds and notes...................................................................... 142,113,933 40,927,976
U.S. Government investments - long-term.............................................. 161,871,816 125,534,828
Short-term investments............................................................... 2,548,921,690 2,672,419,594
<CAPTION>
Cost
Forward Commitments of Contracts
------------------- ------------
<S> <C>
MML MANAGED BOND FUND
U.S. Treasury and GNMA Forward Commitment Contracts:
Contracts opened.................................................................... $ 1,579,688
Contracts closed.................................................................... 1,579,688
Outstanding at December 31, 1996................................................... --
MML BLEND FUND
U.S. Treasury and GNMA Forward Commitment Contracts:
Contracts opened.................................................................... 85,470,699
Contracts closed.................................................................... 133,595,090
Outstanding at December 31, 1996................................................... 4,981,445
</TABLE>
6. NET INCREASE FROM CAPITAL SHARE TRANSACTIONS
<TABLE>
<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 $ 27,842,588 $ 133,050,174
============== ============== ============= ===============
<CAPTION>
MML MML
MML Money Managed MML
For the Year Ended Equity Market Bond Blend
December 31, 1995 Fund Fund Fund Fund
------------------ -------- -------- --------- -------
<S> <C> <C> <C> <C>
Shares
Reinvestment of dividends.......................... 1,621,795 5,376,748 763,489 5,184,192
Sales of shares.................................... 8,464,024 92,327,266 2,219,273 6,885,480
Redemptions of shares.............................. (1,909,273) (80,569,846) (1,113,390) (4,944,135)
-------------- -------------- ------------- ---------------
Net increase....................................... 8,176,546 17,134,168 1,869,372 7,125,537
============== ============== ============= ===============
Amount
Reinvestment of dividends.......................... $ 33,282,252 $ 5,376,748 $ 8,979,443 $ 96,495,329
Sales of shares.................................... 203,078,940 92,327,266 26,776,179 135,128,246
Redemptions of shares.............................. (45,862,370) (80,569,846) (13,296,001) (96,681,499)
-------------- -------------- ------------- ---------------
Net increase....................................... $ 190,498,822 $ 17,134,168 $ 22,459,621 $ 134,942,076
============== ============== ============= ===============
</TABLE>
27
<PAGE>
Report Of Independent Accountants
To the Board of Trustees and Shareholders of
MML Series Investment Fund
We have audited the accompanying statements of assets and liabilities, including
the schedules of investments, of the MML Equity Fund, the MML Money Market Fund,
the MML Managed Bond Fund and the MML Blend Fund which comprise the MML Series
Investment Fund (a Massachusetts business trust), as of December 31, 1996, and
the related statements of operations for the year then ended, the statements of
changes in net assets for each of the two years in the period then ended, and
the financial highlights for each of the ten years in the period then ended.
These financial statements and financial highlights are the responsibility of
the Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
December 31, 1996 by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the Funds as of December 31, 1996, the results of their respective operations
for the year then ended, the changes in their respective net assets for each of
the two years in the period then ended, and the financial highlights for each of
the ten years in the period then ended, in conformity with generally accepted
accounting principles.
Coopers & Lybrand L.L.P.
Springfield, Massachusetts
January 31, 1997
28
