<PAGE>
Prospectus
Dated May 3, 1999
MML Series Investment Fund
This prospectus describes the following funds.
MML Equity Fund seeks to achieve a superior rate of return over time from both
capital appreciation and current income and to preserve capital by investing in
equity securities.
MML Money Market Fund seeks to maximize current income, preserve capital and
maintain liquidity by investing in money market instruments.
MML Managed Bond Fund seeks a high rate of return consistent with capital
preservation, by investing primarily in investment grade, publicly-traded, fixed
income securities.
MML Blend Fund seeks a high total rate of return over time consistent with
prudent investment risk and capital preservation, by investing in equity, fixed
income and money market securities.
The Securities and Exchange Commission has not approved or disapproved these
securities or passed upon the adequacy of this Prospectus. Any statement to the
contrary is a crime.
1
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Table Of Contents
Summary Information ....................................................... 3
About the Funds
MML Equity Fund ...................................................... 4
MML Money Market Fund ................................................ 6
MML Managed Bond Fund ................................................ 8
MML Blend Fund ....................................................... 10
Summary of Principal Risks ................................................ 12
Principal Risks by Fund ................................................... 15
Fees and Expenses ......................................................... 16
About the Investment Adviser and Sub-Adviser
Massachusetts Mutual Life Insurance Company .......................... 17
David L. Babson and Company, Inc. .................................... 17
Investing in the Funds
Buying and Redeeming Shares .......................................... 18
Determining Net Asset Value .......................................... 18
Distributions and Taxation ................................................ 19
Investment Performance .................................................... 21
Financial Highlights ...................................................... 22
Appendix - Additional Investment Policies and Risk Considerations ......... 25
2
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Summary Information
The MML Series Investment Fund provides a broad range of investment choices. The
following summary identifies each Fund's investment objectives, principal
investment strategies, and principal investment risks. A "Summary of Principal
Risks" of investing in the Funds begins on page 12.
For each Fund in existence for more than one year, we have provided a bar chart
showing how the investment returns of that Fund have varied in the past ten
years, or in the years since the Fund began if it is less than ten years old.
The table following each bar chart shows how that Fund's average annual returns
for the last one, five and ten years (or, for newer Funds, for shorter periods)
compares to returns of broad-based securities market indices.
Past performance is not necessarily an indication of future performance. It is
possible to lose money on investments in the Funds.
3
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About The Funds
MML Equity Fund
Investment Objectives
This Fund's primary objective is to achieve a superior total rate of return over
an extended period of time from both capital appreciation and current income.
Its secondary objective is the preservation of capital when business and
economic conditions indicate that investing for defensive purposes is
appropriate.
Principal Investment Strategies
The Fund invests primarily in dividend paying stocks, securities convertible
into stocks, and other securities (such as warrants and stock rights) whose
value is based on stock prices. The Fund's portfolio manager follows a "value"
approach that favors the stocks of companies having below-average-share-price to
company earnings ("P/E") ratios and higher dividend yields relative to their
industry groups. The Fund generally invests in publicly traded stocks of
companies with market capitalizations greater than $2 billion and a history of
operations of five years or more.
Principal Investment Risks
Among the principal risks of investing in the Fund are:
o Market Risk,
o Credit Risk,
o Management Risk,
o Derivatives Risk,
o Liquidity Risk,
o Foreign Investment Risk, and
o Leveraging Risk
These risks, and others that may affect your investment in the Fund, are
discussed in more detail in the Summary of Principal Risks following this
section.
Past Performance
The bar chart and table below show the Fund's annual returns and its long-term
performance. The bar chart shows you how the Fund's performance has varied from
year to year. The table compares the Fund's performance over time to the S&P
500, a widely recognized unmanaged index of stock performance. The Fund's
returns are net of its expenses, but do not reflect additional fees and expenses
that are deducted by the variable annuity or variable life contracts through
which you invest. Keep in mind that the Fund's past performance does not
indicate how it will perform in the future.
Average Annual Total Returns
(for the periods ended December 31, 1998)
- --------------------------------------------------------------------------------
One Five Ten
Year Years Years
- --------------------------------------------------------------------------------
MML Equity Fund 16.20% 19.66% 16.39%
- --------------------------------------------------------------------------------
S&P 500* 28.58% 24.70% 19.29%
- --------------------------------------------------------------------------------
* The S&P 500(R) is the Standard & Poor's Composite 500 Stock Price Index, a
widely recognized, unmanaged measure of common stock total return performance.
4
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MML Equity Fund
Annual Performance
[GRAPHIC]
1989 .........................23.04%
1990 .........................-0.51%
1991 .........................25.56%
1992 .........................10.48%
1993 ......................... 9.52%
1994 ......................... 4.10%
1995 .........................31.13%
1996 .........................20.25%
1997 .........................28.59%
1998 .........................16.20%
Best Quarter: Q 12/31/98 16.16%
Worst Quarter: Q 9/30/90 -11.66%
5
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MML Money Market Fund
Investment Objectives
This Fund's investment objectives are to achieve high current income, the
preservation of capital, and liquidity. These objectives are of equal
importance.
Principal Investment Strategies
The Fund invests in high quality debt instruments that have a remaining maturity
not exceeding 397 days. The Fund invests principally in the following types of
short-term securities:
o commercial and other corporate obligations
o securities issued or guaranteed by the U.S. Government or its agencies
o certificates evidencing participation in bank loans
o certificates of deposit and bankers' acceptances.
It is important to note that this Fund seeks to maintain, but does not
guarantee, a stable net asset value of $1 per share. An investment in the Fund
is neither insured nor guaranteed by the Federal Deposit Insurance Corporation
or any other government agency. Although the Fund seeks to preserve the value of
your investment at $1.00 per share, you could lose money if you invest in the
Fund.
Other Principal Investment Strategies
The Fund's policy is to invest 100% of its net assets in securities having the
highest rating of at least one nationally recognized statistical rating
organization or, if unrated, that MassMutual judges to be of equivalent quality.
The Fund may invest no more than 5% of its net assets in securities that have
the second highest rating, or, if unrated, that MassMutual judges to be of
second highest quality.
Principal Investment Risks
Among the principal risks of investing in the Fund are:
o Market Risk,
o Credit Risk,
o Management Risk,
o Derivatives Risk, and
o Leveraging Risk
These risks, and others that may affect your investment in the Fund, are
discussed in more detail in the Summary of Principal Risks following this
section.
Past Performance
The bar chart and table below show the Fund's annual returns and its long-term
performance. The table shows you how the Fund's performance has varied from year
to year. The table compares the Fund's performance over time to a broad-based
money market fund index. The Fund's returns are net of its expenses, but do not
reflect additional fees and expenses that are deducted by the variable annuity
or variable life contracts through which you invest. Keep in mind that the
Fund's past performance does not indicate how it will perform in the future.
Average Annual Total Returns
(for the periods ended December 31, 1998)
- --------------------------------------------------------------------------------
One Five Ten
Year Years Years
- --------------------------------------------------------------------------------
MML Money
Market Fund 5.16% 4.95% 5.41%
- --------------------------------------------------------------------------------
Lipper Taxable
Money Market
Funds Index* 4.86% 4.78% 5.22%
- --------------------------------------------------------------------------------
* Lipper Taxable Money Market Funds Index is an unmanaged index of taxable money
market mutual funds.
The Fund's 7-day yield on December 31, 1998 was 4.79%.
6
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MML Money Market Fund
Annual Performance
[GRAPHIC]
1989 .........................9.16%
1990 .........................8.12%
1991 .........................6.01%
1992 .........................3.48%
1993 .........................2.75%
1994 .........................3.84%
1995 .........................5.58%
1996 .........................5.01%
1997 .........................5.18%
1998 .........................5.16%
Best Quarter: Q 6/30/89 2.35%
Worst Quarter: Q 6/30/93 .67%
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MML Managed Bond Fund
Investment Objective
This Fund's investment objective is to achieve as high a total rate of return on
an annual basis as is considered consistent with the preservation of capital.
Principal Investment Strategies
The Fund invests primarily in investment grade debt securities, including:
o domestic and foreign corporate bonds
o bonds issued or guaranteed by the U.S. Government or its agencies
o mortgage-backed and other asset-backed securities
o money market securities, including commercial paper
Some of these investments may be in securities that are not denominated in U.S.
dollars and others may be purchased subject to legal restrictions on resale, but
no more than 15% may be illiquid at the time of purchase. If the Fund purchases
a security that is not denominated in U.S. dollars, the Fund will enter into a
currency transaction either to hedge the foreign currency risk or effectively
convert the debt security to U.S. dollars.
Principal Investment Risks
Among the principal risks of investing in the Fund are:
o Market Risk,
o Credit Risk,
o Management Risk,
o Prepayment Risk,
o Liquidity Risk,
o Derivatives Risk,
o Foreign Investment Risk,
o Emerging Markets Risk,
o Currency Risk, and
o Leveraging Risk
These risks, and others that may affect your investment in the Fund, are
discussed in more detail in the Summary of Principal Risks following this
section.
Past Performance
The bar chart and table below show the Fund's annual returns and its long-term
performance. The bar chart shows you how the Fund's performance has varied from
year to year. The table compares the Fund's performance over time to a
broad-based bond market index. The Fund's returns are net of its expenses, but
do not reflect additional fees and expenses that are deducted by the variable
annuity or variable life contracts through which you invest. Keep in mind that
the Fund's past performance does not indicate how it will perform in the future.
Average Annual Total Returns
(for the periods ended December 31, 1998)
- --------------------------------------------------------------------------------
One Five Ten
Year Years Years
- --------------------------------------------------------------------------------
MML Managed
Bond Fund 8.14% 7.07% 9.19%
- --------------------------------------------------------------------------------
Lehman Brothers
Government/
Corporate Index* 9.46% 7.30% 9.33%
- --------------------------------------------------------------------------------
* The Lehman Brothers Government/Corporate Index is an unmanaged measure of
major U.S. government and investment grade corporate bonds with more than one
year remaining until the scheduled payment of principal.
8
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MML Managed Bond Fund
Annual Performance
[GRAPHIC]
1989 .........................12.83%
1990 ......................... 8.37%
1991 .........................16.66%
1992 ......................... 7.31%
1993 .........................11.81%
1994 .........................-3.76%
1995 .........................19.14%
1996 ......................... 3.25%
1997 ......................... 9.91%
1998 ......................... 8.14%
Best Quarter: Q 6/30/89 6.81%
Worst Quarter: Q 3/31/94 -3.43%
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MML Blend Fund
Investment Objective
This Fund seeks to achieve as high a level of total rate of return over an
extended period of time as is considered consistent with prudent investment risk
and the preservation of capital.
Principal Investment Strategies
The Fund's portfolio consists of three segments:
o Money Market Segment's objectives are to achieve high current income and
to preserve capital.
o Bond Segment's objective is to achieve as high a total rate of return on
an annual basis as is considered consistent with the preservation of
capital.
o Equity Segment's primary objective is to achieve a superior rate of return
over time from both capital appreciation and current income.
The Fund adjusts the mix of investments among these three market segments based
on MassMutual's judgment about each segment's potential for returns related to
the corresponding risk. These adjustments normally will be made in a gradual
manner over a period of time. Under normal circumstances at least 25% of the
Fund's total assets will be invested in debt securities. In addition, under
normal circumstances, no investment will be made that would result in more than
90% of the Fund's net assets being invested in the Equity Segment or more than
50% of the Fund's net assets being invested in the Bond Segment. Up to 100% of
the Fund's net assets may be invested in the Money Market Segment. No minimum
percentage has been established for any of the segments.
Principal Investment Risks
Among the principal risks of investing in the Fund are:
o Market Risk,
o Credit Risk,
o Management Risk,
o Prepayment Risk,
o Liquidity Risk,
o Derivatives Risk,
o Foreign Investment Risk,
o Emerging Markets Risk,
o Currency Risk, and
o Leveraging Risk
These risks, and others that may affect your investment in the Fund, are
discussed in more detail in the Summary of Principal Risks following this
section.
Past Performance
The bar chart and table below show the Fund's annual returns and its long-term
performance. The bar chart shows you how the Fund's performance has varied from
year to year. The table compares the Fund's performance over time to two
broad-based market indices, as well as a more specialized index. The Fund's
returns are net of its expenses, but do not reflect additional fees and expenses
that are deducted by the variable annuity or variable life contracts through
which you invest. Keep in mind that the Fund's past performance does not
indicate how it will perform in the future.
10
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Average Annual Total Returns
(for the periods ended December 31, 1998)
- --------------------------------------------------------------------------------
One Five Ten
Year Years Years
- --------------------------------------------------------------------------------
MML Blend Fund 13.56% 14.60% 13.70%
- --------------------------------------------------------------------------------
S&P 500 Index* 28.58% 24.70% 19.29%
- --------------------------------------------------------------------------------
Lehman Brothers
Government/
Corporate Index** 9.46% 7.30% 9.33%
- --------------------------------------------------------------------------------
Lipper Balanced Fund
Index*** 15.09% 13.87% 13.32%
- --------------------------------------------------------------------------------
* The S&P 500(R) is the Standard & Poor's Composite 500 Stock Price Index, a
widely recognized, unmanaged measure of common stock total return performance.
**The Lehman Brothers Government/Corporate Index is an unmanaged measure of
major U.S. government and investment grade corporate bonds with more than one
year remaining until the scheduled payment of principal.
***The Lipper Balanced Fund Index is an unmanaged, equally weighted measure of
the 30 largest mutual funds within their investment objective category.
MML Blend Fund
Annual Performance
[GRAPHIC]
1989 .........................19.96%
1990 ......................... 2.37%
1991 .........................24.00%
1992 ......................... 9.36%
1993 ......................... 9.70%
1994 ......................... 2.48%
1995 .........................23.28%
1996 .........................13.95%
1997 .........................20.89%
1998 .........................13.56%
Best Quarter: Q 6/30/97 10.03%
Worst Quarter: Q 9/30/90 -7.96%
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Summary Of Principal Risks
The value of your investment in a Fund changes with the values of the
investments in a Fund's portfolio. Many factors can affect those values. Factors
that may affect a particular Fund's portfolio as a whole are called "principal
risks." They are summarized in this section. The chart at the end of this
section displays similar information. All Funds could be subject to additional
principal risks because the types of investments made by each Fund can change
over time. Investments mentioned in this summary and described in greater detail
under "Additional Investment Policies and Risk Considerations" appear in bold
type. This section also includes more information about the Funds, their
investments and the related risks. Although the Funds strive to reach their
stated goals, they cannot offer guaranteed results. You could make money in
these Funds, but you also have the potential to lose money.
o Market Risk. All the Funds are subject to market risk, which is the
general risk of unfavorable market-induced changes in the value of a
security. MML Money Market Fund, MML Managed Bond Fund and MML Blend
Fund's Bond and Money Market Segments are subject to market risk because
they invest some or all of their assets in debt securities such as bonds,
notes and asset-backed securities. Debt securities are obligations of the
issuer to make payments of principal and/or interest on future dates. As
interest rates rise, your investment in these Funds is likely to be worth
less because their debt securities are likely to be worth less.
This kind of market risk, also called interest rate risk, is generally
greater for debt securities with longer maturities and portfolios with
longer durations. Even the highest quality debt securities are subject to
market risk which is generally greater for lower-rated securities or
comparable unrated securities.
In the case of stocks and other equity securities, market risk is the
result of a number of factors, including general economic and market
conditions, prospects of the securities' issuer, changing interest rates,
and real or perceived economic and competitive industry conditions.
MML Equity Fund and the Equity Segment of MML Blend Fund maintain
substantial exposure to equities and do not attempt to time the market.
Because of this exposure, the possibility that stock market prices in
general will decline over short or even extended periods subjects these
Funds to unpredictable declines in the value of their shares, as well as
periods of poor performance. Market risk also includes more specific risks
affecting the issuer, such as management performance, financial leverage,
industry problems and reduced demand for the issuer's goods or services.
o Credit Risk. All of the Funds are subject to credit risk. This is the risk
that the issuer or the guarantor of a debt security, or the counterparty
to a derivatives contract or securities loan, will be unable or unwilling
to make timely principal and/or interest payments, or to otherwise honor
its obligations. There are varying degrees of credit risk, which are often
reflected in credit ratings. Credit risk is particularly significant for
MML Managed Bond Fund and the Bond Segment of MML Blend Fund to the extent
they invest in below investment-grade securities. These debt securities
and similar unrated securities, which are commonly known as "junk bonds,"
have speculative elements or are predominantly speculative credit risks.
MML Managed Bond Fund and the Bond Segment of MML Blend Fund invest in
foreign debt securities and, accordingly, are also subject to increased
credit risk because of the difficulties of requiring foreign entities,
including issuers of sovereign debt, to honor their contractual
commitments, and because a number of foreign governments and other issuers
are already in default.
12
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o Management Risk. Each Fund is subject to management risk because it is an
actively managed investment portfolio. Management risk is the chance that
poor security selection will cause the Fund to underperform other funds
with similar investment objectives. The Funds' investment advisers manage
the Funds according to the traditional methods of active investment
management, that is, by buying and selling of securities based upon
economic, financial and market analysis and investment judgment. The
Funds' investment advisers apply their investment techniques and risk
analyses in making investment decisions for the Funds, but there can be no
guarantee they will produce the desired result.
o Prepayment and Reinvestment Risk. Prepayment risk is the risk that
principal will be repaid at a different rate than anticipated, causing the
return on mortgage-backed securities to be less than expected when
purchased. MML Managed Bond Fund and the Bond Segment of MML Blend Fund
may be subject to prepayment risk if they invest in mortgage-related or
other asset-backed securities that may be prepaid. These securities have
variable maturities that tend to lengthen when interest rates are rising,
which is the least desirable time. These Funds are also subject to
reinvestment risk, which is the chance that cash flows from securities
will be reinvested at lower rates in a falling interest rate environment.
o Liquidity Risk. Liquidity risk exists when particular investments are
difficult to purchase or sell, possibly preventing a Fund from selling
these illiquid securities at an advantageous price. Investments in
derivatives, foreign securities, private placements and securities with
small market capitalization and substantial market and/or credit risk tend
to have greater liquidity risk. Accordingly, MML Managed Bond Fund and the
Bond Segment of MML Blend Fund may be subject to liquidity risk.
o Derivatives Risk. All Funds may use derivatives, which are financial
contracts whose value depends on, or is derived from, the value of an
underlying asset, reference rate or index. The Funds will sometimes use
derivatives as part of a strategy designed to reduce other risks and
sometimes will use derivatives for leverage, which increases opportunities
for gain but also involves greater risk. In addition to other risks such
as the credit risk of the counterparty, derivatives involve the risk of
mispricing or improper valuation and the risk that changes in the value of
the derivative may not correlate perfectly with relevant assets, rates and
indices. In addition, a Fund's use of derivatives may affect the timing
and amount of taxes payable by shareholders.
o Foreign Investment Risk. Funds investing in foreign securities may
experience more rapid and extreme changes in value than Funds with
investments solely in securities of U.S. companies. This is because the
securities markets of many foreign countries are relatively small, with a
limited number of companies representing a small number of industries. In
addition, foreign securities issuers are not usually subject to the same
degree of regulation as U.S. issuers. Reporting, accounting and auditing
standards of foreign countries differ, in some cases significantly, from
U.S. standards. Also, nationalization, expropriation or confiscatory
taxation, currency blockage, political changes or diplomatic developments
could adversely affect a Fund's investments in a foreign country. In the
event of nationalization, expropriation or other confiscation, a Fund
could lose its entire investment. Adverse developments in certain regions,
such as Southeast Asia, can also adversely affect securities of other
countries whose economies appear to be unrelated.
MML Equity Fund, MML Managed Bond Fund and the Bond Segment of MML Blend
Fund are subject to foreign investment risk.
o Currency Risk. MML Managed Bond Fund and the Bond Segment of MML Blend
Fund are subject to currency risk to the extent that they invest in
securities of foreign companies that are traded in, and receive revenues
in, foreign currencies. Currency risk is caused by uncertainty in foreign
currency exchange rates. Fluctuations in the value of the U.S.
13
<PAGE>
dollar relative to foreign currencies may enhance or diminish returns a
U.S. investor would receive on foreign investments. The Funds may, but
will not necessarily, engage in foreign currency transactions in order to
protect the value of portfolio holdings denominated in particular
currencies against fluctuations in value. There is a risk that those
currencies will decline in value relative to the U.S. dollar, or, in the
case of hedging positions, that the U.S. dollar will decline in value
relative to the currency hedged.
The Bond Segment of MML Blend Fund and MML Managed Bond Fund intend to
invest in foreign securities if (i) such securities are denominated in
U.S. dollars, or (ii) if not denominated in U.S. dollars, these Funds will
enter into a foreign currency transaction intended to hedge the currency
risk associated with a particular foreign security.
o Emerging Markets Risk. When the Adviser or Sub-Adviser deems those
investments are consistent with the Fund's investment objectives and
policies, MML Blend Fund and MML Managed Bond Fund may invest in emerging
markets, subject to the applicable restrictions on foreign investments.
Emerging markets are generally considered to be the countries having
"emerging market economies" based on factors such as the country's foreign
currency debt rating, its political and economic stability, the
development of its financial and capital markets and the level of its
economy. Investing in foreign securities in emerging markets involves
special risks, including less liquidity and more price volatility than
securities of comparable domestic issuers or in established foreign
markets. Emerging markets also may be concentrated towards particular
industries. There may also be different clearing and settlement
procedures, or an inability to handle large volumes of transactions. These
could result in settlement delays and temporary periods when a portion of
a Fund's assets are not invested, or a loss in value due to illiquidity.
o Leveraging Risk. When a Fund borrows money or otherwise leverages its
portfolio, the value of an investment in that Fund will be more volatile
and all other risks will tend to be compounded. All of the Funds may take
on leveraging risk by investing collateral from securities loans, by using
derivatives and by borrowing money to repurchase shares or to meet
redemption requests.
14
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Principal Risks by Fund
The following chart summarizes the Principal Risks of each Fund. Risks not
marked for a particular Fund may, however, still apply to some extent to that
Fund at various times.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Pre Foreign Emerging
Market Credit Management payment Liquidity Derivative Investment Markets Currency Leveraging
Fund Risk Risk Risk Risk Risk Risk Risk Risk Risk Risk
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
MML Equity
Fund X X X X X X
- ------------------------------------------------------------------------------------------------------------------------------------
MML Money
Market Fund X X X X X
- ------------------------------------------------------------------------------------------------------------------------------------
MML Managed
Bond Fund X X X X X X X X X X
- ------------------------------------------------------------------------------------------------------------------------------------
MML Blend
Fund X X X X X X X X X X
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
15
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Fees and Expenses
As an investor, you pay certain fees and expenses in connection with your
investment. These fees and expenses will vary depending on the Fund in which you
invest. The fee tables shown below are meant to assist you in understanding
these fees and expenses. Annual Fund Operating Expenses refer to the costs of
operating the Funds. These costs are deducted from a Fund's assets, which means
you pay them indirectly.
This table describes the fees and expenses you may pay if you invest in the
Funds.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------
MML MML MML MML
Equity Money Market Managed Bond Blend
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Annual Fund
Operating Expenses
(expenses that are
deducted from Fund
assets)
% of average daily net
assets 0.0039% 0.0380% 0.0287% 0.0042%
Management Fees 0.3672% 0.4563% 0.4525% 0.3672%
Other Expenses* -- -- -- --
Total 0.3710% 0.4942% 0.4812% 0.3714%
- ------------------------------------------------------------------------------------------------------------
</TABLE>
*MassMutual has agreed to bear the expenses (other than the management fees,
interest, taxes, brokerage commissions and extraordinary expenses) in excess of
.11% of the average daily net asset values through April 30, 2000 for MML Equity
Fund, MML Money Market Fund, MML Managed Bond Fund and MML Blend Fund. Such
agreement cannot be terminated unilaterally by MassMutual.
EXAMPLES. These examples are intended to help you compare the cost of investing
in MML Series Investment Fund with the cost of investing in other mutual funds.
The examples assume you invest $10,000 in the shares of the Funds for the time
periods indicated, that your investment earns a 5% return each year and that
each Fund's operating expenses remain the same. Although your actual costs may
be higher or lower, based on these assumptions your costs would be:
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------
MML MML MML MML
Equity Money Market Managed Bond Blend
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1 Year $38.96 $51.89 $50.53 $39.00
3 Years $122.34 $162.75 $158.50 $122.47
5 Years $213.59 $283.77 $276.39 $213.81
10 Years $481.16 $637.09 $620.73 $481.67
- ------------------------------------------------------------------------------------------------------------
</TABLE>
Since the Funds do not impose any shareholder fees, the figures shown would be
the same whether you sold your shares at the end of a period or kept them.
16
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About The Investment Adviser and Sub-Adviser
MassMutual is the Funds' investment manager and is responsible for providing all
necessary investment management and administrative services. Founded in 1851,
MassMutual is a mutual life insurance company that provides a broad portfolio of
insurance, money management, retirement and asset accumulation products and
services for individuals and businesses. MassMutual, together with its
subsidiaries, has assets in excess of $67 billion and assets under management in
excess of $176 billion. MassMutual uses its subsidiary, David L. Babson and
Company, Inc., to help manage certain Funds.
In 1998, each Fund paid MassMutual an investment management fee based on a
percentage of its average daily net assets as follows: MML Equity Fund, .37%;
MML Money Market Fund, .46%; MML Managed Bond Fund, .45%; and MML Blend Fund,
.37%.
Ms. Mary Wilson Kibbe is the person principally responsible for the
day-to-day management of MML Money Market Fund, MML Managed Bond Fund and
the Money Market and Bond Segments of MML Blend Fund. She has managed
these accounts since their inception. She has been associated with
MassMutual since 1982 and is responsible for overseeing all public fixed
income trading for MassMutual and its insurance company subsidiaries.
David L. Babson and Company, Inc.
("Babson") manages the investments of MML Equity Fund and the Equity Segment of
MML Blend Fund. Babson has provided investment advice to individual and
institutional investors for more than 50 years and manages more than $19
billion.
Mr. Walter T. McCormick is the person principally responsible for the
day-to-day management of MML Equity Fund and the Equity Segment of MML
Blend Fund. Mr. McCormick, who has 14 years of investment experience,
joined Babson and began managing these accounts in July 1998. Prior to
that, he managed equity portfolios for Keystone Investments, Inc.
17
<PAGE>
Investing In The Funds
Buying and Redeeming Shares
MML Series Investment Fund provides an investment vehicle for the separate
investment accounts of variable life and variable annuity contracts offered by
companies such as MassMutual. Shares of MML Series Investment Fund are not
offered to the general public.
The shares of each Fund are sold at their net asset value (NAV) as next computed
after receipt of the purchase order, without the deduction of any selling
commission or "sales load." The Funds' generally determine their NAV at 4:00
p.m. Eastern time every day the New York Stock Exchange is open. Your purchase
order will be priced at the next net asset value calculated after your order is
accepted by the Funds. The Funds will suspend selling their shares during any
period when the determination of NAV is suspended.
The Funds redeem their shares at their next NAV computed after the Funds'
transfer agent receives your redemption request. You will usually receive
payment for your shares within 7 days after the transfer agent receives your
written redemption request. The Funds can also suspend or postpone payment, when
permitted by applicable law and regulations.
The redemption price may be paid in cash or wholly or partly in kind if the
Funds' determine that such payment is advisable in the interest of the remaining
shareholders. In making such payment wholly or partly in kind, a Fund will, as
far as may be practicable, deliver securities or property which approximate the
diversification of its entire assets at the time. No fee is charged on
redemption.
Determining Net Asset Value
The Funds generally determine their NAV's at 4:00 p.m. Eastern time on each day
the New York Stock Exchange is open.
The Funds generally value portfolio securities based on market value. For
example, equity securities and long-term bonds are valued on the basis of
valuations provided by one or more pricing services approved by the Funds' Board
of Trustees. Short-term securities with more than 60 days to maturity from the
date of purchase are valued at fair market value. Money market securities with a
maturity of 60 days or less are generally valued at their amortized cost.
18
<PAGE>
Distributions and Taxation
Distributions
The declaration and distribution policies specific to each Fund are outlined
below.
o MML Equity Fund. Distributions, if any, are declared and paid annually.
Distributions may be taken either in cash or in additional shares of the
respective Funds at net asset value on the first business day after the
record date for the distribution, at the option of the shareholder.
o MML Managed Bond and MML Blend Funds. Dividends from net investment income
are declared and paid quarterly. Capital gains declarations and
distributions of net capital gains, if any, are made annually.
Distributions may be taken either in cash or in additional shares of the
applicable Fund at the option of the shareholder shares are valued at net
asset value on the first business day after the record date for the
distribution.
o MML Money Market Fund. The net income of MML Money Market Fund, as defined
below, is determined as of the normal close of trading on the New York
Stock Exchange on each day the Exchange is open. All the net income is
declared as a dividend to shareholders of record as of that time.
Dividends are distributed promptly after the end of each calendar month in
additional shares of MML Money Market Fund at the then current net asset
value, or in cash, at the option of the shareholder.
For this purpose the net income of MML Money Market Fund consists of all
interest income accrued on its portfolio, plus realized gains or minus
realized losses, and less all expenses and liabilities chargeable against
income. Interest income includes discount earned (including both original
issue and market discount) on paper purchased at a discount, less
amortization of premium, accrued to the date of maturity. Expenses,
including the compensation payable to MassMutual, are accrued each day.
If MML Money Market Fund incurs or anticipates any unusual expense, loss
or depreciation that would adversely affect its net asset value per share
or income for a particular period, the Fund would consider whether to
adhere to the dividend policy described above or to revise it in the light
of the then prevailing circumstances. For example, if MML Money Market
Fund's net asset value per share were reduced, or were anticipated to be
reduced, below $1.00, the Fund might suspend further dividend payments
until the net asset value returned to $1.00. Thus, such expenses, losses
or depreciation might result in an investor receiving no dividends for the
period during which the shares were held and in receiving upon redemption
a price per share lower than the purchase price.
Taxation
Each Fund intends to continue to qualify as a regulated investment company under
Subchapter M of the Internal Revenue Code. As a result, none of the Funds will
be subject to federal income tax on any net income or any capital gains to the
extent they are distributed or are deemed to have been distributed to
shareholders.
Generally, owners of variable life and variable annuity contracts are not taxed
currently on income or gains realized with respect to such contracts. However,
some distributions from such contracts may be taxable at ordinary income tax
rates. In addition, distributions made to an owner who is younger than 59 1/2
years may be subject to a 10% penalty tax. Investors should ask their own tax
advisors for more information on their own tax situation, including possible
foreign, state or local taxes.
19
<PAGE>
In order for investors to receive the favorable tax treatment available to
holders of variable annuity and variable life contracts, the separate accounts
underlying such contracts, as well as the Funds in which these accounts invest,
must meet certain diversification requirements. Each Fund intends to comply with
these requirements. If a Fund does not meet these requirements, income from the
contracts would be taxable currently to the holders of such contracts.
A Fund's investment in foreign securities may be subject to foreign withholding
taxes. In that case, the Fund's yield on those securities would be decreased.
Please refer to the Statement of Additional Information for more information
regarding the tax treatment of the Funds. Please refer to the prospectuses of
the separate accounts with interests in the Funds for a discussion of the tax
consequences of variable annuity and variable life contracts.
20
<PAGE>
Investment Performance
From time to time, each of the Funds may advertise investment performance
figures. These figures are based on historical earnings and should not be used
to predict the future performance of a Fund.
Yields and total returns shown for the Funds are net of the Funds' operating
expenses, but do not take into account charges and expenses attributable to the
variable annuity or variable life insurance contracts through which you invest.
These expenses reduce the returns and yields you ultimately receive, so you
should bear those expenses in mind when evaluating the performance of the Funds
and when comparing the yields and returns of the Funds with those of other
mutual funds.
MML Money Market Fund may advertise its yield and its effective yield. The yield
of MML Money Market Fund refers to the income generated by the Fund over a
seven-day period (the specific period will be stated in the advertisement). This
income is then assumed to be earned each week over a 52-week period. The
effective yield is calculated similarly, but the income earned by an investment
in the Fund is assumed to be reinvested.
MML Managed Bond Fund, MML Blend Fund and MML Equity Fund may also quote yield.
The yield for each of these Funds refers to the net investment income earned by
the Fund over a 30-day period (which period will be stated in the
advertisement). This income is then assumed to be earned for a full year and to
be reinvested each month for six months. The resulting semi-annual yield is
doubled.
Each of the Funds may advertise its total return and its holding period return
for various periods of time. Total return is calculated by determining the
average annual compounded rate of return that an investment in the Fund earned
over a specified period, assuming reinvestment of all distributions. Holding
period return refers to the percentage change in the value of an investment in a
Fund over a period of time assuming reinvestment of all distributions. Total
return and holding period return differ from yield. The return figures include
capital changes in an investment while yield measures the rate of net income
generated by a Fund. The difference between total return and holding period
return is that total return is an average annual figure while holding period
return is an aggregate figure for the entire period.
For more information about the investment performance of the Funds, see the
Statement of Additional Information.
21
<PAGE>
Financial Highlights
The financial highlights table is intended to help you understand the Funds'
financial performance for the past 5 years. Certain information reflects
financial results for a single Fund share. The total returns in the table
represent the rate that an investor would have earned on an investment in the
Fund (assuming reinvestment of all dividends and distributions). This
information has been audited by PricewaterhouseCoopers LLP, whose report, along
with the Funds' financial statements, are included in the Annual Report, which
is available on request.
Selected per share data for each series share outstanding throughout each year
ended December 31:
MML EQUITY FUND
<TABLE>
<CAPTION>
1998 1997 1996 1995 1994 1993
--------- --------- --------- --------- ------ ---------
<S> <C> <C> <C> <C> <C> <C>
Net asset value:
Beginning of year $ 35.443 $ 29.786 $ 25.924 $ 20.520 20.510 $ 19.862
--------- --------- --------- --------- ------ ---------
Income from investment operations:
Net investment income 0.724 0.709 0.703 0.634 0.594 0.524
Net realized and unrealized
gain (loss) on investments 5.016 7.806 4.547 5.754 0.248 1.365
--------- --------- --------- --------- ------ ---------
Total from investment operations 5.740 8.515 5.250 6.388 0.842 1.889
--------- --------- --------- --------- ------ ---------
Less distributions:
Dividends from net investment income (0.724) (0.709) (0.703) (0.634) (0.594) (0.524)
Distribution from net realized gains (1.261) (2.149) (0.685) (0.350) (0.238) (0.717)
Distribution in excess of net realized
gains -- -- -- -- -- --
--------- --------- --------- --------- ------ ---------
Total distributions (1.985) (2.858) (1.388) (0.984) (0.832) (1.241)
--------- --------- --------- --------- ------ ---------
Net asset value:
End of year $ 39.198 $ 35.443 $ 29.786 $ 25.924 $ 20.520 $ 20.510
========= ========= ========= ========= ====== =========
Total return 16.20% 28.59% 20.25% 31.13% 4.10% 9.52%
Net assets (in millions)
End of year $2,938.11 $2,363.44 $1,701.88 $1,248.90 $ 820.78 $ 663.09
Ratio of expenses to average
net assets 0.37% 0.35% 0.38% 0.41% 0.43% 0.44%
Ratio of net investment income
to average net assets 1.95% 2.03% 2.65% 2.89% 3.04% 3.23%
Portfolio turnover rate 14.03% 15.30% 11.42% 11.72% 9.99% 11.28%
<CAPTION>
1992 1991 1990 1989
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Net asset value:
Beginning of year $ 18.735 $ 15.659 $ 16.764 $ 14.929
--------- --------- --------- ---------
Income from investment operations:
Net investment income 0.543 0.563 0.636 0.694
Net realized and unrealized
gain (loss) on investments 1.420 3.440 (0.722) 2.746
--------- --------- --------- ---------
Total from investment operations 1.963 4.003 (0.086) 3.440
--------- --------- --------- ---------
Less distributions:
Dividends from net investment income (0.543) (0.562) (0.6650 (0.711)
Distribution from net realized gains (0.288) (0.365) (0.354) (0.894)
Distribution in excess of net realized
gains (0.005) -- -- --
--------- --------- --------- ---------
Total distributions (0.836) (0.927) (1.019) (1.606)
--------- --------- --------- ---------
Net asset value:
End of year $ 19.862 $ 18.735 $ 15.659 $ 16.764
========= ========= ========= =========
Total return 10.48% 25.56% (0.51%) 23.04%
Net assets (in millions)
End of year $ 490.62 $ 355.04 $ 235.45 $ 226.41
Ratio of expenses to average
net assets 0.46% 0.48% 0.49% 0.50%
Ratio of net investment income
to average net assets 3.09% 3.43% 4.09% 4.30%
Portfolio turnover rate 9.07% 9.37% 13.50% 15.71%
</TABLE>
22
<PAGE>
MML MONEY MARKET FUND
<TABLE>
<CAPTION>
1998 1997 1996 1995 1994 1993 1992 1991
------- ------- ------- ------- ------- ------- ------- -------
<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 0.500 0.051 0.049 0.054 0.038 0.027 0.034 0.059
------- ------- ------- ------- ------- ------- ------- -------
Total from investment operations 0.500 0.051 0.049 0.054 0.038 0.027 0.034 0.059
------- ------- ------- ------- ------- ------- ------- -------
Less distributions:
Dividends from net investment income (0.500) (0.051) (0.049) (0.054) (0.038) (0.027) (0.034) (0.059)
------- ------- ------- ------- ------- ------- ------- -------
Total distributions (0.500) (0.051) (0.049) (0.054) (0.038) (0.027) (0.034) (0.059)
------- ------- ------- ------- ------- ------- ------- -------
Net asset value:
End of year $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
======= ======= ======= ======= ======= ======= ======= =======
Total return 5.16% 5.18% 5.01% 5.58% 3.84% 2.75% 3.48% 6.01%
Net assets (in millions)
End of year $178.43 $141.17 $145.23 $108.92 $ 91.79 $ 73.66 $ 84.56 $ 94.41
Ratio of expenses to average
net assets 0.49% 0.52% 0.52% 0.54% 0.55% 0.54% 0.53% 0.52%
Ratio of net investment income
to average net assets 5.05% 5.07% 4.92% 5.43% 3.81% 2.71% 3.42% 5.91%
<CAPTION>
1990 1989
------- -------
Net asset value:
Beginning of year $ 1.000 $ 1.000
------- -------
Income from investment operations:
Net investment income 0.078 0.088
------- -------
Total from investment operations 0.078 0.088
------- -------
Less distributions:
Dividends from net investment income (0.078) (0.088)
------- -------
Total distributions (0.078) (0.088)
------- -------
Net asset value:
End of year $ 1.000 $ 1.000
======= =======
Total return 8.12% 9.16%
Net assets (in millions)
End of year $114.59 $ 70.16
Ratio of expenses to average
net assets 0.54% 0.54%
Ratio of net investment income
to average net assets 7.80% 8.79%
</TABLE>
MML MANAGED BOND FUND
<TABLE>
<CAPTION>
1998 1997 1996 1995 1994 1993 1992 1991
------- ------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value:
Beginning of year $12.410 $12.048 $12.448 $11.141 $12.405 $12.041 $12.219 $11.318
------- ------- ------- ------- ------- ------- ------- -------
Income from investment operations:
Net investment income 0.758 0.801 0.776 0.782 0.792 0.785 0.870 0.903
Net realized and unrealized
gain (loss) on investments
and forward commitments 0.236 0.356 (0.401) 1.307 (1.264) 0.618 0.001 0.916
------- ------- ------- ------- ------- ------- ------- -------
Total from investment operations 0.992 1.157 0.375 2.089 (0.472) 1.403 0.871 1.819
------- ------- ------- ------- ------- ------- ------- -------
Less distributions:
Dividends from net investment income (0.749) (0.795) (0.775) (0.782) (0.792) (0.784) (0.869) (0.902)
Distribution from net realized gains (0.057) -- -- -- -- (0.255) (0.158) (0.016)
Distribution in excess of net realized
gains -- -- -- -- -- -- (0.022) --
------- ------- ------- ------- ------- ------- ------- -------
Total distributions (0.806) (0.795) (0.775) (0.782) (0.792) (1.039) (1.049) (0.918)
------- ------- ------- ------- ------- ------- ------- -------
Net asset value:
End of year $12.596 $12.410 $12.048 $12.448 $11.141 $12.405 $12.041 $12.219
======= ======= ======= ======= ======= ======= ======= =======
Total return 8.14% 9.91% 3.25% 19.14% (3.76%) 11.81% 7.31% 16.66%
Net assets (in millions)
End of year $254.11 $205.32 $181.57 $158.70 $121.21 $129.11 $ 88.15 $ 66.98
Ratio of expenses to average
net assets 0.48% 0.47% 0.51% 0.52% 0.52% 0.54% 0.56% 0.57%
Ratio of net investment income
to average net assets 6.07% 6.06% 6.54% 6.63% 6.69% 6.37% 7.28% 7.96%
Portfolio turnover rate 41.18% 41.99% 46.12% 70.00% 32.77% 58.81% 39.51% 61.85%
<CAPTION>
1990 1989
------- -------
Net asset value:
Beginning of year $11.354 $10.919
------- -------
Income from investment operations:
Net investment income 0.943 0.918
Net realized and unrealized
gain (loss) on investments
and forward commitments (0.036) 0.454
------- -------
Total from investment operations 0.907 1.372
------- -------
Less distributions:
Dividends from net investment income (0.943) (0.918)
Distribution from net realized gains -- (0.019)
Distribution in excess of net realized
gains -- --
------- -------
Total distributions (0.943) (0.937)
------- -------
Net asset value:
End of year $11.318 $11.354
======= =======
Total return 8.38% 12.83%
Net assets (in millions)
End of year $ 43.07 $ 40.03
Ratio of expenses to average
net assets 0.57% 0.59%
Ratio of net investment income
to average net assets 8.40% 8.35%
Portfolio turnover rate 69.93% 64.77%
</TABLE>
23
<PAGE>
MML BLEND FUND
<TABLE>
<CAPTION>
1998 1997 1996 1995 1994 1993
--------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Net asset value:
Beginning of year $ 24.080 $ 21.973 $ 20.519 $ 17.672 $ 18.305 $ 17.846
--------- --------- --------- --------- --------- ---------
Income from investment operations:
Net investment income 0.417 0.843 0.824 0.811 0.707 0.655
Net realized and unrealized
gain (loss) on investments 3.246
and forward commitments 2.360 3.692 1.990 (0.271) 1.057
--------- --------- --------- --------- --------- ---------
Total from investment operations 2.77 4.535 2.814 4.057 0.436 1.712
--------- --------- --------- --------- --------- ---------
Less distributions:
Dividends from net investment income (0.416) (0.843) (0.824) (0.811) (0.707) (0.655)
Distribution from net realized gains (1.358) (1.585) (0.536) (0.399) (0.359) (0.598)
Distribution in excess of net realized
gains -- -- -- -- (0.003) --
--------- --------- --------- --------- --------- ---------
Total distributions (1.774) (2.428) (1.360) (1.210) (1.069) (1.253)
--------- --------- --------- --------- --------- ---------
Net asset value:
End of year $ 25.083 $ 24.080 $ 21.973 $ 20.519 $ 17.672 $ 18.305
========= ========= ========= ========= ========= =========
Total return 13.56% 20.89% 13.95% 23.28% 2.48% 9.70%
Net assets (in millions)
End of year $2,814.69 $2,471.83 $2,093.99 $1,823.14 $1,444.26 $1,296.54
Ratio of expenses to average
net assets 0.37% 0.38% 0.38% 0.38% 0.39% 0.40%
Ratio of net investment income
to average net assets 3.43% 3.56% 3.87% 4.19% 3.93% 3.60%
Portfolio turnover rate 28.64% 21.20% 19.10% 30.78% 26.59% 20.20%
<CAPTION>
1992 1991 1990 1989
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Net asset value:
Beginning of year $ 17.307 $ 14.839 $ 15.428 $ 13.876
--------- --------- --------- ---------
Income from investment operations:
Net investment income 0.707 0.736 0.782 0.823
Net realized and unrealized
gain (loss) on investments
and forward commitments 0.880 2.771 (0.445) 1.921
--------- --------- --------- ---------
Total from investment operations 1.587 3.507 0.347 2.744
--------- --------- --------- ---------
Less distributions:
Dividends from net investment income (0.707) (0.736) (0.811) (0.835)
Distribution from net realized gains (0.326) (0.303) (0.125) (0.357)
Distribution in excess of net realized
gains (0.015) -- -- --
--------- --------- --------- ---------
Total distributions (1.048) (1.039) (0.936) (1.192)
--------- --------- --------- ---------
Net asset value:
End of year $ 17.846 $ 17.307 $ 14.839 $ 15.428
========= ========= ========= =========
Total return 9.36% 24.00% 2.37% 19.96%
Net assets (in millions)
End of year $1,013.28 $ 797.04 $ 574.15 $ 524.29
Ratio of expenses to average
net assets 0.41% 0.42% 0.44% 0.45%
Ratio of net investment income
to average net assets 4.07% 4.54% 5.37% 5.57%
Portfolio turnover rate 25.43% 26.92% 24.55% 22.39%
</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.
24
<PAGE>
Appendix
ADDITIONAL INVESTMENT POLICIES AND RISK CONSIDERATIONS
The Funds may invest in a wide range of investments and engage in various
investment-related transactions and practices. These practices may be changed by
the Board of Trustees without the consent of shareholders. Some of the more
significant practices and some associated risks are discussed below.
Year 2000 Issue
Like other businesses and governments around the world, the Funds could be
adversely affected if the computer systems used by the Funds' service providers
and those with which they do business do not properly recognize the year 2000.
This is commonly known as the "Year 2000 Issue." In 1996, MassMutual began an
enterprise-wide process of identifying, evaluating and implementing changes to
its computer systems to address the Year 2000 Issue. MassMutual is addressing
the Year 2000 Issue internally with modifications to existing programs and
conversions to new programs. MassMutual has advised the Funds that the Year 2000
Issue is one of MassMutual's highest business operational priorities. MassMutual
is also seeking assurances from the Funds' other service providers, including
sub-advisers to the Funds, and others with which MassMutual and the Funds
conduct business to identify and resolve Year 2000 issues. In addition, because
the Year 2000 issue affects virtually all organizations, the companies in which
the Funds invest could be adversely impacted by the Year 2000 Issue. The extent
of such impact cannot be predicted.
Derivatives Transactions
Although each Fund is authorized to engage in transactions involving
derivatives, as more fully described in the Statement of Additional Information,
the Funds' use of derivatives, other than forward contracts, is minimal.
The Funds may use derivatives to attempt to:
o protect against possible declines in the market value of a Fund's
portfolio resulting from downward trends in relevant markets (for example,
in the debt securities markets generally due to increasing interest
rates);
o facilitate selling securities for investment reasons;
o protect a Fund's unrealized gains or limit unrealized losses in the value
of its securities;
o establish a position in the relevant securities markets as a temporary
substitute for purchasing or selling particular securities;
o manage the effective maturity or duration of fixed-income securities in a
Fund's portfolio; or
o manage its exposure to changing security prices (collectively,
"Derivatives Transactions").
Most, if not all, of these derivatives transactions will involve the portfolios
of MML Managed Bond Fund and the Bond Segment of MML Blend Fund as MML Series
Investment Fund has no present intent to enter into derivatives transactions
with regard to MML Equity Fund, or the Equity or Money Market Segments of MML
Blend Fund. The Funds will not use derivatives for speculative purposes.
Forward Contracts or "When Issued" Securities
Each Fund may purchase or sell securities on a "when issued" or delayed delivery
or on a forward commitment basis ("forward contracts"). When such transactions
are negotiated, the price is fixed at the time of commitment, but delivery and
payment for the securities can take place a month or more after the commitment
date. The securities purchased or sold are subject to market fluctuations, and
25
<PAGE>
no interest accrues to the purchaser during this period. At the time of
delivery, the securities may be worth more or less than the purchase or sale
price.
There can be no assurance that the use of forward contracts or other derivatives
by any of the Funds will assist it in achieving its investment objectives. Risks
inherent in the use of derivatives include:
o the risk that interest rates and securities prices will not move in the
direction anticipated;
o imperfect correlation between the prices of forward contracts and the
prices of the securities being hedged;
o the fact that skills needed to use these strategies are different from
those needed to select portfolio securities; and
o the fact that forward contracts involve a risk of loss if the value of the
security to be purchased declines prior to the settlement date. This is in
addition to the risk of decline of the Fund's other assets.
A Fund will not enter into a forward contract if, as a result, more than 25% of
the Fund's total assets would be in one or more segregated accounts covering
forward contracts.
Portfolio Management
MassMutual and Babson (collectively the "Advisers") intend to use trading as a
means of managing the portfolios of the Funds in seeking to achieve their
investment objectives. The Advisers, on behalf of the Funds, will engage in
trading when they believe that the trade, net of transaction costs, will improve
interest income or capital appreciation potential, or will lessen capital loss
potential.
Whether the goals discussed above will be achieved through trading depends on
the Advisers' ability to evaluate particular securities and anticipate relevant
market factors, including interest rate trends and variations from these trends.
Such trading places an added burden on the Advisers' ability to obtain relevant
information, evaluate it properly and take advantage of their evaluations by
completing transactions on a favorable basis. If the Advisers' evaluations and
expectations prove to be incorrect, a Fund's income or capital appreciation may
be reduced and its capital losses may be increased. Portfolio trading involves
transaction costs, but, as explained above, will be engaged in when the Advisers
believe the result of trading, net of transaction costs, will benefit the Funds.
Restricted And Illiquid Securities
None of the Funds currently expect to invest in restricted or illiquid
securities. However, each Fund may invest not more than 15% (10% in the case of
MML Money Market Fund) of its net assets in illiquid securities. These policies
do not limit the purchase of securities eligible for resale to qualified
institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as
amended, provided such securities are determined to be liquid by Funds' Board of
Trustees, or by the Advisers, pursuant to Board-approved guidelines. If there is
a lack of trading interest in particular Rule 144A securities, a Fund's holdings
of those securities may be illiquid, resulting in the possibility of undesirable
delays in selling these securities at prices representing fair value.
Securities Lending
MML Blend Fund may seek additional income by making loans of portfolio
securities of not more than 33% of their respective total assets taken at
current value. MML Managed Bond Fund may also make loans of portfolio securities
of not more than 10% of its total assets taken at current value. Lending
portfolio securities may involve the risk of delay in recovery of the securities
loaned or possible loss of rights in the collateral should the borrower fail
financially. Loans will be made only to borrowers deemed by the Advisers to be
of good standing.
Cash Positions
Each Fund, other than MML Money Market Fund, may hold cash or cash equivalents
to provide for liquidity (e.g., expenses and anticipated redemption payments) so
that an orderly investment program may be carried out in accordance with the
Fund's investment policies. To provide liquidity or for temporary defensive
purposes, each Fund may invest any portion of its assets in investment grade
debt securities and MML Equity Fund may also invest in
26
<PAGE>
non-convertible preferred stocks. Taking this type of temporary defensive
position may affect a Fund's ability to achieve its investment objective.
Roll Transactions
To take advantage of attractive financing opportunities in the mortgage market
and to enhance current income, MML Blend Fund may engage in dollar roll
transactions. A dollar roll transaction involves a sale by a Fund of a
Government National Mortgage Association certificate or other mortgage-backed
securities to a financial institution, such as a bank or a broker-dealer,
concurrent with an agreement by a Fund to repurchase a similar security from the
institution at a later date at an agreed-upon price. The securities that are
repurchased will bear the same interest rate as those sold, but generally will
be collateralized by different pools of mortgages with different prepayment
histories than those sold. Dollar roll transactions involve potential risks of
loss which are different from those related to the securities underlying the
transaction. For a more detailed description of dollar roll transactions, see
the Statement of Additional Information.
Money Market Instruments
All Funds may invest in money market instruments when they have cash reserves.
These investments consist of U.S. government securities, time deposits,
certificates of deposit, bankers' acceptances, high-grade commercial paper, and
repurchase agreements. The Statement of Additional Information describes these
instruments more fully.
Foreign Securities
Investments in foreign securities offer potential benefits not available from
investing solely in securities of domestic issuers. These include the
opportunity to invest in foreign issuers that appear to offer growth potential,
or to invest in foreign countries with economic policies or business cycles
different from those of the United States or foreign stock markets that do not
move in a manner parallel to U.S. markets, thereby diversifying risks of
fluctuations in portfolio value.
Investments in foreign securities entail certain risks, such as the possibility
of one or more of the following: imposition of dividend or interest withholding
or confiscatory taxes; currency blockages or transfer restrictions;
expropriation, nationalization, military coups or other adverse political or
economic developments; less government supervision and regulation of securities
exchanges, brokers and listed companies; and the difficulty of enforcing
obligations in other countries. Certain markets may require payment for
securities before delivery. A Fund's ability and decisions to purchase and sell
portfolio securities may be affected by laws or regulations relating to the
convertibility of currencies and repatriation of assets. Further, it may be more
difficult for a Fund's agents to keep currently informed about corporate actions
which may affect the prices of portfolio securities. Communications between the
United States and foreign countries may be less reliable than within the United
States, thus increasing the risk of delayed settlements of portfolio
transactions or loss of certificates for portfolio securities.
Mortgage-Backed U.S. Government Securities and CMOs
The Funds may invest in mortgage-backed U.S. securities and collateralized
mortgage obligations ("CMOs"). These securities represent participation
interests in pools of residential mortgage loans made by lenders such as banks
and savings and loan associations. The pools are assembled for sale to investors
(such as the Funds) by government agencies and also, in the case of CMOs, by
private issuers, which issue or guarantee the securities relating to the pool.
Such securities differ from conventional debt securities which generally provide
for periodic payment of interest in fixed or determinable amounts (usually
semi-annually) with principal payments at maturity or specified call dates. Some
mortgage-backed U.S. government securities in which a Fund may invest may be
backed by the full faith and credit of the U.S. Treasury (e.g., direct
pass-through certificates of Government National Mortgage Association); some are
supported by the right of the issuer to borrow from the U.S. Government (e.g.,
obligations of Federal Home Loan Mortgage Corporation); and some are backed by
only the credit of the issuer itself (e.g., Federal National Mortgage
Association). Those guarantees do not extend to the value or yield of
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the mortgage-backed securities themselves or to the net asset value of a Fund's
shares. These government agencies may also issue derivative mortgage backed
securities such as CMOs.
The expected yield on mortgage-backed securities is based on the average
expected life of the underlying pool of mortgage loans. The actual life of any
particular pool will be shortened by any unscheduled or early payments of
principal. Principal prepayments generally result from the sale of the
underlying property or the refinancing or foreclosure of underlying mortgages.
The occurrence of prepayments is affected by a wide range of economic,
demographic and social factors and, accordingly, it is not possible to predict
accurately the average life of a particular pool. Yield on such pools is usually
computed by using the historical record of prepayments for that pool, or, in the
case of newly-issued mortgages, the prepayment history of similar pools. The
actual prepayment experience of a pool of mortgage loans may cause the yield
realized by a Fund to differ from the yield calculated on the basis of the
expected average life of the pool.
Prepayments tend to increase during periods of falling interest rates, while
during periods of rising interest rates prepayments will most likely decline.
When prevailing interest rates rise, the value of a pass-through security may
decrease as do the values of other debt securities. When prevailing interest
rates decline, the value of a pass-through security is not likely to rise to the
extent that the values of other debt securities rise, because of the prepayment
feature of pass-through securities. A Fund's reinvestment of scheduled principal
payments and unscheduled prepayments it receives may occur at times when
available investments offer higher or lower rates than the original investment,
thus affecting the yield of the Fund. Monthly interest payments received by the
Fund have a compounding effect which may increase the yield to the Fund more
than debt obligations that pay interest semi-annually. Because of those factors,
mortgage-backed securities may be less effective than Treasury bonds of similar
maturity at maintaining yields during periods of declining interest rates. A
Fund may purchase mortgage-backed securities at a premium or at a discount.
Accelerated prepayments adversely affect yields for pass-through securities
purchased at a premium (i.e., at a price in excess of their principal amount)
and may involve additional risk of loss of principal because the premium may not
have been fully amortized when the obligation is repaid. The opposite is true
for pass-through securities purchased at a discount.
Asset-Backed Securities
These securities, issued by trusts and special purpose entities, are backed by
pools of assets, such as automobile and credit-card receivables and home equity
loans, that pass through the payments on the underlying obligations to the
security holders (less servicing fees paid to the originator or fees for any
credit enhancement). The value of an asset-backed security is affected by
changes in the market's perception of the asset backing the security, the
creditworthiness of the servicing agent for the loan pool, the originator of the
loans, or the financial institution providing any credit enhancement, and is
also affected if any credit enhancement has been exhausted. Payments of
principal and interest passed through to holders of asset-backed securities are
typically supported by some form of credit enhancement, such as a letter of
credit, surety bond, limited guarantee by another entity or having a priority to
certain of the borrower's other securities. The degree of credit enhancement
varies, and generally applies to only a fraction of the asset-backed security's
par value until exhausted. If the credit enhancement of an asset-backed security
held by a Fund has been exhausted, and if any required payments of principal and
interest are not made with respect to the underlying loans, the Fund may
experience losses or delays in receiving payment.
The risks of investing in asset-backed securities are ultimately dependent upon
payment of consumer loans by the individual borrowers. As a purchaser of an
asset-backed security, the Funds would generally have no recourse to the entity
that originated the loans in the event of default by a borrower. The underlying
loans are subject to prepayments, which shorten the weighted average life of
asset-backed securities and may lower their return, in the same manner as
described above for prepayments of a pool of mortgage loans underlying
mortgage-backed securities. However, asset-backed securities do
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not have the benefit of the same security interest in the underlying collateral
as do mortgage-backed securities.
Industry Concentration
As a general rule, a Fund will not acquire securities of issuers in any one
industry (as determined by the Board of Trustees) if as a result more than 25%
of the value of the total assets of the Fund would be invested in such industry,
with the following exceptions:
o In the case of MML Money Market Fund there is no limitation in respect of
certificates of deposit and bankers' acceptances.
o MML Money Market Fund, MML Managed Bond Fund and the Bond Segment of MML
Blend Fund each may invest up to 40% of the value of their respective
total assets in each of the electric utility and telephone industries.
However, it currently is MassMutual's intent not to invest more than 25%
of any one of these Funds' total assets in either the electric utility or
telephone industries.
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MML SERIES INVESTMENT FUND
1295 State Street
Springfield, Massachusetts 01111-0001
Learning More About the Funds
You can learn more about the Funds by reading the Funds' Annual and Semiannual
Reports and the Statement of Additional Information (SAI). This information is
available free upon request. In the Annual and Semiannual Reports, you will find
a discussion of market conditions and investment strategies that significantly
affected each Fund's performance during the period covered by the report and a
listing of portfolio securities. The SAI will provide you more detail regarding
the organization and operation of the Funds, including their investment
strategies. The SAI is incorporated by reference into this Prospectus and is
therefore legally considered a part of this Prospectus.
How to Obtain Information
From MML Series Investment Fund: You may request information about the Funds
(including the Annual/Semiannual Reports and the SAI) or make shareholder
inquiries by calling 1-800-767-1000, ext. 8480 or by writing MML Series
Investment Fund, c/o Massachusetts Mutual Life Insurance Company, 1295 State
Street, Springfield, Massachusetts 01111-0111, Attention Shareholder Services,
F471.
From the SEC: You may review information about the Funds (including the SAI) at
the SEC's Public Reference Room in Washington, D.C. (call 1-800-SEC-0330 for
information regarding the operation of the SEC's public reference room). You can
get copies of this information, upon payment of a copying fee, by writing to the
SEC's Public Reference Section, Washington, D.C. 20549-6009. Alternatively, if
you have access to the Internet, you may obtain information about the Funds from
the SEC's Internet site at http://www.sec.gov. When obtaining information about
the Funds from the SEC, you may find it useful to reference the Funds' SEC file
number: 811-2224.
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MML SERIES
INVESTMENT FUND
1295 State Street
Springfield, Massachusetts 01111
INVESTMENT MANAGER
Massachusetts Mutual Life Insurance Company
1295 State Street
Springfield, Massachusetts 01111
INVESTMENT SUB-ADVISER
David L. Babson and Company, Incorporated
One Memorial Drive
Cambridge, Massachusetts 02142
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP
2300 Tower Square
1500 Main Street
Springfield, Massachusetts 01101
CUSTODIAN
Citibank, N.A.
111 Wall Street
New York, New York
PRINCIPAL UNDERWRITER
MML Distributors, LLC
1414 Main Street
Springfield, Massachusetts 01144
CO-UNDERWRITER
MML Investors Services, Inc.
1414 Main Street
Springfield, MA 01144
LEGAL COUNSEL
Ropes & Gray
One International Place
Boston, Massachusetts 02110
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