<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 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.
MML Equity Index Fund seeks investment results that correspond to the price and
yield performance of publicly traded common stocks in the aggregate, as
represented by the Standard & Poor's 500 Composite Stock Price Index.(1)
MML Small Cap Value Equity Fund seeks long-term growth of capital and income by
investing primarily in small company stocks.
MML Growth Equity Fund seeks growth of capital and income over time by investing
primarily in equity securities of large companies with long-term growth
potential.
MML Small Cap Growth Equity Fund seeks growth of capital over time by investing
primarily in equity securities of smaller and medium-size companies with
long-term growth potential.
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) "Standard & Poor's," "Standard & Poor's 500" and "S&P 500" are trademarks of
The McGraw-Hill Companies and have been licensed for use by the Fund. The Fund
is not sponsored, endorsed, sold or promoted by Standard & Poor's, a division of
The McGraw-Hill Companies ("S&P"), or The McGraw Hill Companies, Inc. Standard &
Poor's makes no representation regarding the advisability of investing in the
Fund.
1
<PAGE>
Table Of Contents
Summary Information ....................................................... 3
About the Funds
MML Equity Fund ...................................................... 4
MML Blend Fund ....................................................... 6
MML Equity Index Fund ................................................ 8
MML Small Cap Value Equity Fund ...................................... 10
MML Growth Equity Fund ............................................... 11
MML Small Cap Growth Equity Fund ..................................... 12
Summary of Principal Risks ................................................ 13
Principal Risks by Fund ................................................... 16
Fees and Expenses ......................................................... 17
About the Investment Adviser and Sub-Advisers
Massachusetts Mutual Life Insurance Company .......................... 18
David L. Babson and Company, Inc. .................................... 18
Mellon Equity Associates, LLP ........................................ 18
Massachusetts Financial Services Company ............................. 18
J.P. Morgan Investment Management Inc. ............................... 19
Waddell & Reed Investment Management Company ......................... 19
Advisers' Prior Performance
Babson ............................................................... 20
MFS .................................................................. 22
J.P. Morgan and Waddell & Reed ....................................... 24
Investing in the Funds
Buying and Redeeming Shares .......................................... 26
Determining Net Asset Value .......................................... 26
Distributions and Taxation ................................................ 27
Investment Performance .................................................... 28
Financial Highlights ...................................................... 29
Appendix - Additional Investment Policies and Risk Considerations ......... 33
2
<PAGE>
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 13.
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.
MML Growth Equity Fund, MML Small Cap Growth Equity Fund and MML Small Cap Value
Equity Fund recently commenced operations, and consequently cannot provide
annual total return information. For these Funds, we have provided performance
information based on a composite of portfolios managed with similar investment
objectives by the investment sub-adviser, set forth in the section called
"Advisers' Prior Performance."
Past performance is not necessarily an indication of future performance. It is
possible to lose money on investments in the Funds.
3
<PAGE>
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)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
One Five Ten
Year Years Years
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
MML Equity Fund 16.20% 19.66% 16.39%
- --------------------------------------------------------------------------------
S&P 500* 28.58% 24.70% 19.29%
- --------------------------------------------------------------------------------
</TABLE>
* 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
<PAGE>
MML Equity Fund
Annual Performance
[THE FOLLOWING TABLE WAS REPRESENTED BY A BAR CHART IN THE PRINTED MATERIAL.]
<TABLE>
<CAPTION>
Average Annual
Years Total Returns
----- -------------
<S> <C>
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%
</TABLE>
Best Quarter: Q 12/31/98 16.16%
Worst Quarter: Q 9/30/90 -11.66%
5
<PAGE>
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.
6
<PAGE>
Average Annual Total Returns
(for the periods ended December 31, 1998)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
One Five Ten
Year Years Years
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
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%
- --------------------------------------------------------------------------------
</TABLE>
* 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
[THE FOLLOWING TABLE WAS REPRESENTED BY A BAR CHART IN THE PRINTED MATERIAL.]
<TABLE>
<CAPTION>
Average Annual
Years Total Returns
----- -------------
<S> <C>
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%
</TABLE>
Best Quarter: Q 6/30/97 10.03%
Worst Quarter: Q 9/30/90 -7.96%
7
<PAGE>
MML Equity Index Fund
Investment Objective
The Fund's investment objective is to provide investment results that correspond
to the price and yield performance of publicly traded common stocks in the
aggregate, as represented by Standard & Poor's 500 Composite Stock Price Index.
Principal Investment Strategies
The Fund seeks to duplicate the investment results of the Standard & Poor's 500
Composite Stock Price Index by investing primarily in the following securities:
o 500 selected common stocks that comprise the index, most of which are
listed on the New York Stock Exchange
o Standard & Poor's Depositary Receipts
o stock index futures
Under normal circumstances, at least 80% of the Fund's total assets will be
invested in these securities. The percentage of the Fund's assets invested in
each stock in the index is approximately the same as the percentage it
represents in the Index. There may be circumstances when the Fund is not
invested in every stock included in the Index.
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 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 a
broad-based stock 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 period ending December 31, 1998)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
One Since
Year Inception
- --------------------------------------------------------------------------------
<S> <C> <C>
MML Equity Index Fund 28.22% 31.03%
- --------------------------------------------------------------------------------
S&P 500** 28.58% 31.23%
- --------------------------------------------------------------------------------
</TABLE>
*MML Equity Index Fund commenced operations on May 1, 1997.
**The S&P 500(R) is the Standard & Poor's Composite Index of 500 Stocks, a
widely recognized, unmanaged index of common stock prices.
8
<PAGE>
MML Equity Index Fund
Annual Performance
<TABLE>
<CAPTION>
Average Annual
Years Total Returns
----- -------------
<S> <C>
1998 28.22%
</TABLE>
Best Quarter: Q 12/30/98 21.2%
Worst Quarter: Q 9/30/98 -10.13%
9
<PAGE>
MML Small Cap Value Equity
Fund
Investment Objective
This Fund seeks to achieve long-term growth of capital and income by investing
primarily in a diversified portfolio of equity securities of smaller companies.
Principal Investment Strategies
The Fund invests primarily in stocks, securities convertible into stocks, and
other securities such as warrants and stock rights, whose value is based on
stock prices. The Fund generally invests in publicly traded stocks of companies
with a market capitalization, at the time of purchase, of $750 million or less.
Principal Investment Risks
Among the principal risks of investing in the Fund are:
o Market Risk,
o Small Company Risk,
o Credit Risk,
o Management Risk,
o Liquidity Risk,
o Derivatives 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
This Fund commenced operations on June 1, 1998, and therefore cannot provide
annual total return information. Performance information for the Fund's
sub-adviser, David L. Babson and Company, Inc., is provided in the "Advisers'
Prior Performance" section of this Prospectus.
10
<PAGE>
MML Growth Equity Fund
Investment Objective
This Fund seeks long-term growth of capital and future income.
Principal Investment Strategies
The Fund seeks to achieve its objective by investing its assets, except for
working cash balances, primarily in the common stocks and securities convertible
into common stocks of companies which the investment sub-adviser, Massachusetts
Financial Services Company ("MFS"), believes offer better than average prospects
for long-term growth.
The sub-adviser uses a bottom-up investment style, which means that securities
are selected based upon fundamental analysis performed by the portfolio manager
and the sub-adviser's large group of equity research analysts.
In managing the Fund, MFS seeks to purchase securities of companies that it
considers well-run and poised for growth, particularly companies which
demonstrate:
o a strong franchise, strong cash flows and a recurring revenue stream
o a strong industry position, where there is potential for high profit
margins and/or substantial barriers to new entry in the industry
o a strong management with a clearly defined strategy
o new products or services
The Fund may invest up to 30% of its net assets in foreign securities, including
companies in emerging markets. The Fund may have exposure to foreign currencies
through its foreign investments, its direct holdings of foreign currencies, or
through its use of foreign currency exchange contracts for the purchase or sale
of a fixed quantity of foreign currency at a future date.
Principal Investment Risks
Among the principal risks of investing in the Fund are:
o Market Risk,
o Growth Company Risk,
o Credit Risk,
o Management 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
This Fund commenced operations on May 3, 1999, and therefore cannot provide
annual total return information. Performance information for the Fund's
sub-adviser, Massachusetts Financial Services Company, is provided in the
"Advisers' Prior Performance" section of this Prospectus.
11
<PAGE>
MML Small Cap Growth Equity Fund
Investment Objective
This Fund seeks long-term capital appreciation.
Principal Investment Strategies
This Fund seeks to achieve its objective by keeping its assets invested in
common stocks and securities which are convertible into stock, as market
conditions warrant. The Fund may maintain cash reserves for liquidity and
defensive purposes. The Fund will generally buy securities of companies whose
market capitalization is greater than $100 million but less than $1.5 billion at
the time of purchase. The Fund is not required to invest in dividend-paying
stocks, since current income is not an objective of the Fund.
MassMutual has retained two sub-advisers to manage the Fund, each being
responsible to manage 50% of the assets of the portfolio.
J.P. Morgan Investment Management Inc.'s ("J.P. Morgan") investment process
emphasizes in-depth proprietary research and stock valuation and selection. The
sub-adviser's research analysts forecast companies' prospects over a relatively
long period - often as much as five years - in an effort to gain insight into a
company's real growth potential. J.P. Morgan uses a variety of valuation models
to quantify the research team's findings and rank companies in each industry
according to their relative value. Using the research and rankings, companies
are chosen focusing on each company's business strategy and competitive
environment. The sub-adviser seeks to buy stocks for the Fund that are ranked as
undervalued or fairly valued and are poised for long-term growth. While J.P.
Morgan holds stocks in many industries, it tends to emphasize industries with
higher growth potential, such as technology, health care and consumer services.
Waddell & Reed Investment Management Company ("Waddell & Reed") uses a bottom-up
process, generally emphasizing long-term growth potential and superior financial
characteristics, such as: annual revenue and earnings growth rate of 25%+,
pre-tax margins of 20%+, and debt-free capital structure.
Generally, companies also are considered which are strong niche players with a
defensible market position, have active involvement of the founder-entrepreneur,
and demonstrate commitment to their employees, customers, suppliers and
shareholders.
Waddell & Reed typically buys companies with an anticipated three-year holding
period, and therefore expects this portion of the Fund's portfolio to have lower
than 50% annual turnover.
Principal Investment Risks
Among the principal risks of investing in the Fund are:
o Market Risk,
o Small Company Risk
o Growth Company Risk,
o Credit Risk,
o Management 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
This Fund commenced operations on May 3, 1999, and therefore cannot provide
annual total return information. Performance information for the Fund's two
sub-advisers, J.P. Morgan and Waddell & Reed, is provided in the "Advisers'
Prior Performance" section of this Prospectus.
12
<PAGE>
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
Managed Bond Fund, MML Equity Index 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, the Equity Segment of MML Blend Fund, MML Growth Fund, MML
Small Cap Value Fund and MML Small Cap Growth 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 Smaller Company Risk. Market risk and liquidity risk are particularly
pronounced for stocks of companies with relatively small market
capitalizations. These companies may have limited product lines, markets or
financial resources or they may depend on a few key employees. MML Small
Cap Value Equity Fund and MML Small Cap Growth Equity Fund generally have
the greatest exposure to this risk.
o Growth Company Risk. Market risk is also particularly pronounced for
"growth" companies. The prices of growth company securities held by MML
Growth Equity Fund and MML Small Cap Growth Equity Fund may fall to a
greater extent than the overall equity markets (e.g. as represented by the
S&P 500 Index) because of changing economic, political or market factors.
Growth company securities tend to be more volatile in terms of price swings
and trading volume.
o Credit Risk. All of the Funds are subject to credit risk. This is the risk
that the issuer or
13
<PAGE>
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 the Bond
Segment of MML Blend Fund to the extent it invests 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. The Bond Segment of
MML Blend Fund invests in foreign debt securities and, accordingly, is 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.
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. The Bond Segment of MML Blend Fund may be subject to prepayment
risk if it invests 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.
The Bond Segment of MML Blend Fund is 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, the Bond Segment of MML Blend
Fund, MML Small Cap Value Equity Fund and MML Small Cap Growth 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
14
<PAGE>
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, the Bond Segment of MML Blend Fund, MML Growth Equity Fund
and MML Small Cap Growth Equity Fund are subject to foreign investment
risk. Because the Standard & Poor's 500 Composite Stock Price Index
includes the stocks of some foreign issuers, MML Equity Index Fund may also
invest in these foreign securities, subjecting this Fund to foreign
investment risk.
o Emerging Markets Risk. When the Adviser or Sub-Adviser deems those
investments are consistent with the Fund's investment objectives and
policies, MML Growth Equity Fund, MML Small Cap Growth Equity Fund and MML
Blend 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 Currency Risk. The Bond Segment of MML Blend Fund, MML Growth Equity Fund
and MML Small Cap Growth Equity 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. 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 intends to invest in foreign securities
if (i) such securities are denominated in U.S. dollars, or (ii) if not
denominated in U.S. dollars, this Fund will enter into a foreign currency
transaction intended to hedge the currency risk associated with a
particular foreign security.
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.
15
<PAGE>
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>
- ------------------------------------------------------------------------------------------------------------------------------------
Smaller Growth Manage- Pre Foreign Emerging
Market Company Company Credit ment payment Liquidity Derivative Investment Markets Currency Leveraging
Fund Risk Risk Risk Risk Risk Risk Risk Risk Risk Risk Risk Risk
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
MML Equity
Fund X X X X X X
- ------------------------------------------------------------------------------------------------------------------------------------
MML Blend Fund X X X X X X X X X X
- ------------------------------------------------------------------------------------------------------------------------------------
MML Equity
Index Fund X X X X X X
- ------------------------------------------------------------------------------------------------------------------------------------
MML Small
Cap Value
Equity Fund X X X X X X X X X
- ------------------------------------------------------------------------------------------------------------------------------------
MML Growth
Equity Fund X X X X X X X X X
- ------------------------------------------------------------------------------------------------------------------------------------
MML Small
Cap Growth
Equity Fund X X X X X X X X X X X
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
16
<PAGE>
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 MM
MML Small Cap MML Small Cap
MML MML Equity Value Growth Growth
Equity Blend Index Equity Equity Equity
============================================================================================
<S> <C> <C> <C> <C> <C> <C>
Annual Fund
Operating
Expenses
(expenses that
are deducted
from Fund
assets)
% of average daily
net assets 0.0039% 0.0042% 0.1992% 0.6179% 0.25% 0.25%
Management
Fees 0.3672% 0.3672% 0.3996% 0.6715% 0.80% 1.075%
Other Expenses -- -- -- -0.507%* -0.14%* -0.14%*
Total** 0.3710% 0.3714% 0.4965% 0.7815% 0.91% 1.185%
============================================================================================
</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 Blend Fund, MML Small Cap Value Equity Fund, MML Growth Equity Fund
and MML Small Cap Growth Equity Fund. Such agreement cannot be terminated
unilaterally by MassMutual.
**Other Expenses and Total Operating Expenses for MML Growth Equity Fund and MML
Small Cap Growth Equity Fund are based on estimated amounts for the first fiscal
year of these Funds.
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 MM
MML Small Cap MML Small Cap
MML MML Equity Value Growth Growth
Equity Blend Index Equity Equity Equity
============================================================================================
<S> <C> <C> <C> <C> <C> <C>
1 Year $38.96 $39.00 $62.86 $82.06 $95.55 $124.43
3 Years $122.34 $122.47 $196.95 $369.00 $326.47 $388.80
5 Years $213.59 $213.81 $343.02 $677.57 N/A N/A
10 Years $481.16 $481.67 $767.87 $1,552.99 N/A N/A
============================================================================================
</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.
17
<PAGE>
About The Investment Adviser and Sub-Advisers
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 Blend Fund, .37%; MML Equity Index Fund, .40%; MML Small Cap Value Equity
Fund, .39%.
Ms. Mary Wilson Kibbe is the person principally responsible for the
day-to-day management of 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, the Equity Segment of MML Blend Fund, and MML Small Cap Value 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.
George M. Ulrich is the person principally responsible for the day-to-day
management of MML Small Cap Value Equity Fund. He has managed the Fund
since its inception and has 32 years of investment experience. He joined
Babson in 1996 and has been associated with the MassMutual organization as
a portfolio manager since 1983.
Mellon Equity Associates, LLP ("Mellon Equity") serves as MML Equity Index
Fund's investment sub-adviser, providing day-to-day management of the Fund's
investments. Mellon Equity is a Pennsylvania business trust founded in 1987
whose beneficial owners are Mellon Bank N.A. and MMIP, Inc. (a wholly owned
subsidiary of Mellon Bank Corporation ("Mellon Bank")). Mellon Equity is a
registered investment adviser. As of December 31, 1998, Mellon Equity had
approximately $9 billion assets under management, and serves as the investment
adviser or sub-adviser of 18 other investment companies.
Massachusetts Financial Services Company ("MFS") manages the investments of the
MML Growth Equity Fund. MFS has approximately $95 billion in assets under
management. MFS is an indirect, wholly-owned subsidiary of Sun Life Assurance
Company of Canada.
Mr. Stephen Pesek is primarily responsible for the day-to-day management of
the portfolio of MML Growth Equity Fund. He has been a with MFS since 1994,
and is a Vice President of MFS. He manages other portfolios with similar
objectives to the Fund.
18
<PAGE>
J.P. Morgan Investment Management Inc. ("J.P. Morgan") manages 50% of the
portfolio of MML Small Cap Growth Equity Fund. J.P. Morgan manages over $277
billion in assets, and $56.4 billion in U.S. institutional equity assets.
Ms. Candice Eggress is primarily responsible for the day-to-day management
of the portfolio of the Fund. Ms. Eggress has been with J.P. Morgan since
May of 1996 as a member of the U.S. small company portfolio management
team, and from June of 1993 to May of 1996 held a similar position with
Weiss, Peck & Greer. Ms. Eggress manages other portfolios for J.P. Morgan
with similar investment objectives to the Fund.
Ms. Saira Malik is a J.P. Morgan professional who assists Ms. Eggress with
the day-to-day management of the portfolio of the Fund. Ms. Malik has been
with J.P. Morgan since July of 1995 as a small company equity analyst and
portfolio manager after graduating from the University of Wisconsin with an
M.S. in finance. Ms. Malik manages or assists with managing other
portfolios for J.P. Morgan with similar investment objectives to the Fund.
Waddell & Reed Investment Management Company ("Waddell & Reed") manages 50% of
the portfolio of MML Small Cap Growth Equity Fund. Waddell & Reed has
approximately $27 billion in assets under management, including approximately
$3.4 billion in institutional assets.
Mr. Mark Seferovich, CFA is primarily responsible for the day-to-day
management of the portfolio of MML Small Cap Growth Equity Fund. Mr.
Seferovich is a senior vice president of Waddell & Reed and the lead
portfolio manager of its small cap style. He joined Waddell & Reed in
February 1989 as manager of small capitalization growth equity funds. From
1982 to 1988 he was a portfolio manager for Security Management Company and
prior to that was security analyst/portfolio manager with Reimer & Koger
Associates.
Mr. Grant Sarris, CFA is a Waddell & Reed professional who assists Mr.
Seferovich in the day-to-day management of the portfolio of the Fund. Mr.
Sarris is currently a vice president and portfolio manager for Waddell &
Reed. He joined Waddell & Reed in 1991 as an investment analyst. In 1996 he
was named assistant portfolio manager of the small capitalization growth
equity style. Prior to joining Waddell & Reed, he was an intern with
Shin-Nihon Kohan, Ltd. in Tokyo.
19
<PAGE>
Advisers' Prior Performance
Babson
Babson serves as the investment manager of other accounts that have investment
objectives, policies and strategies that are substantially similar to those of
MML Small Cap Value Equity Fund (collectively, the "Small Cap Value Accounts").
The performance information shown below is based on a composite of the Small Cap
Value Accounts and has been adjusted to give effect to the estimated fees and
expenses (without giving effect to any expense waivers or reimbursements) of the
Fund during its first year of operation.
The performance information shown below has not been adjusted to give effect to
charges imposed by the separate investment accounts that invest in the Fund,
which, if included, would decrease the performance figures shown. The
performance of the Small Cap Value Accounts composite has been calculated in
accordance with standards established by the Association for Investment
Management and Research.
The performance represents total return, which includes capital appreciation and
income. During the entire ten year period ended December 31, 1998, George M.
Ulrich, the individual responsible for the day-to-day portfolio management of
the Fund, has been the portfolio manager of the Small Cap Value Accounts. Unlike
the Fund, the Small Cap Value Accounts include accounts that were not registered
under the 1940 Act and therefore were not subject to certain investment
restrictions imposed by the 1940 Act. In addition, the Small Cap Value Accounts
include accounts that were not subject to Subchapter M of the Internal Revenue
Code (the "Code"), which imposes certain limitations on the investment
operations of the Fund. If the Small Cap Value Accounts had all been registered
under the 1940 Act, and subject to Subchapter M of the Code, their performance
might have been adversely affected. The Fund's expenses, timing of purchases and
sales of portfolio securities, availability of cash flows, and brokerage
commissions are all additional reasons that the performance results of the Fund
may vary from that of the Small Cap Value Accounts.
The following table also shows the average annual total return of the Russell
2000 Index(R) for the same periods.
The quoted performance does not represent the historical performance of the Fund
and should not be interpreted as being indicative of the future performance of
the Fund.
Composite Performance of
Small Cap Value Accounts
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------
1 Yr. Period 3 Yr. Period 5 Yr. Period 10 Yr. Period
Ended Ended Ended Ended
12/31/98 12/31/98 12/31/98 12/31/98
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Small Cap
Value
Accounts -8.93% 15.18% 11.91% 13.08%
- -------------------------------------------------------------------------------------------
Russell 2000
Index* -2.55% 11.58% 11.87% 12.92%
- -------------------------------------------------------------------------------------------
</TABLE>
*The Russell 2000 Index(R) is a widely recognized unmanaged index consisting of
2,000 small capitalization common stocks.
20
<PAGE>
Composite Performance of Small Cap Value Accounts
[THE FOLLOWING TABLE WAS REPRESENTED AS A BAR CHART IN THE PRINTED MATERIAL.]
<TABLE>
<CAPTION>
Average Annual
Years Total Returns
----- -------------
<S> <C>
1989 18.61%
1990 -5.46%
1991 29.21%
1992 17.45%
1993 14.46%
1994 -4.31%
1995 20.07%
1996 22.93%
1997 36.48%
1998 -8.93%
</TABLE>
Best Quarter: Q 6/30/97 18.65%
Worst Quarter: Q 9/30/98 -19.08
Set forth below is the composite annual performance and average annual total
returns for the Small Cap Value Accounts, without considering investment
management, administrative or custody fees.
<TABLE>
<CAPTION>
1989 1990 1991 1992 1993
---- ---- ---- ---- ----
<S> <C> <C> <C> <C>
19.27% -4.91% 29.87% 17.87% 14.89%
<CAPTION>
1994 1995 1996 1997 1998
---- ---- ---- ---- ----
<S> <C> <C> <C> <C>
-3.9% 20.63% 23.67% 37.35% -8.3%
<CAPTION>
One Year Three Year Five Year Ten Year
-------- ---------- --------- --------
<S> <C> <C> <C>
-8.3% 20.63% 14.89% 19.27%
</TABLE>
21
<PAGE>
MFS
Performance data shown below for MML Growth Equity Fund is based on a composite
of all other portfolios managed by MFS, the Fund's sub-adviser, adjusted to
reflect the fees and expenses of the Fund (the "Growth Equity Accounts"). Some
of these portfolios are mutual funds registered with the SEC, and some are
private accounts. All the portfolios have substantially the same investment
objectives and policies and are managed in accordance with essentially the same
investment strategies and techniques as those of the Fund. However, the private
account portfolios are not registered with the SEC and therefore are not subject
to the limitations, diversification requirements and other restrictions which
the Fund, as a registered mutual fund, will be subject to. The performance of
the private accounts may have been adversely affected if they had been
registered with the SEC.
The performance information shown below is a composite of portfolios managed by
the Fund's sub-adviser with similar investment objectives and policies and
without significant client-imposed restrictions, adjusted to reflect the fees
and expenses of the Fund. The performance information shown below has not been
adjusted to give effect to charges imposed by the separate accounts that invest
in the Fund, which, if included, would decrease the performance figures shown.
The following table also shows the average annual total return of the S&P 500
Index for the same periods.
The quoted performance does not represent the historical performance of the Fund
and should not be interpreted as being indicative of the future performance of
the Fund.
Composite Performance of
Growth Equity Accounts
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
1 Yr. 3 Yr. 5 Yr. 10 Yr.
Period Period Period Period
Ended Ended Ended Ended
12/31/98 12/31/98 12/31/98 12/31/98
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Growth Equity
Accounts 40.71% 36.86% 25.08% 21.59%
- --------------------------------------------------------------------------------
S&P 500* 28.58% 28.23% 24.70% 19.29%
- --------------------------------------------------------------------------------
</TABLE>
*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.
22
<PAGE>
Composite of Growth Equity Accounts'
Annual Performance
[THE FOLLOWING TABLE WAS REPRESENTED AS A BAR CHART IN THE PRINTED MATERIAL.]
<TABLE>
<CAPTION>
Average Annual
Years Total Returns
----- -------------
<S> <C>
1989 35.53%
1990 -5.17%
1991 47.70%
1992 6.31%
1993 14.51%
1994 -6.96%
1995 28.34%
1996 22.85%
1997 48.31%
1998 40.71%
</TABLE>
Best Quarter: Q 12/31/98 25.94%
Worst Quarter: Q 9/30/90 -25.22%
Set forth below is the composite annual performance and average annual total
returns for MFS for its Growth Equity Accounts, without considering investment
management, administrative or custody fees:
<TABLE>
<CAPTION>
1989 1990 1991 1992 1993
---- ---- ---- ---- ----
<S> <C> <C> <C> <C>
36.44% -4.26% 48.61% 7.22% 15.28%
<CAPTION>
1994 1995 1996 1997 1998
---- ---- ---- ---- ----
<S> <C> <C> <C> <C>
-6.05% 29.25% 23.76% 49.22% 41.62%
<CAPTION>
One Year Three Year Five Year Ten Year
-------- ---------- --------- --------
<S> <C> <C> <C>
41.62% 37.77% 26.00% 22.52%
</TABLE>
23
<PAGE>
J.P. Morgan and Waddell & Reed
Both J.P. Morgan and Waddell & Reed provide investment management services for
other accounts that have investment objectives, policies and strategies that are
similar to those of MML Small Cap Growth Equity Fund (collectively, the "Small
Cap Growth Equity Accounts").
The J.P. Morgan performance data is based on the historical performance of all
discretionary investment management accounts under its management with
substantially similar investment objectives and policies as the Fund, adjusted
to reflect the fees and expenses of the Fund. Some of these portfolios are
mutual funds registered with the SEC, and some are private accounts. The private
account portfolios are not registered with the SEC and therefore are not subject
to the limitations, diversification requirements and other restrictions which
the Fund, as a registered mutual fund, will be subject to. In addition, the
private accounts managed by J.P. Morgan includes accounts that were not subject
to Subchapter M of the Internal Revenue Code (the "Code"), which imposes certain
limitations on the investment operations of the Fund. The performance of the
private accounts may have been adversely affected if they had been registered
with the SEC and subject to Subchapter M of the Code.
From January 1, 1996, the Waddell & Reed performance data is based on a
composite of all accounts it manages with substantially similar investment
objectives and policies as the Fund, adjusted to reflect the fees and expenses
of the Fund. From inception of the Waddell & Reed's Small Cap Composite on April
1, 1989 through December 31, 1995, performance is based on data of Small Cap
style mutual fund portfolios managed by Waddell & Reed. The private account
portfolios are not registered with the SEC and therefore are not subject to the
limitations, diversification requirements and other restrictions which the Fund,
as a registered mutual fund, will be subject to. In addition, the private
accounts managed by Waddell & Reed includes accounts that were not subject to
Subchapter M of the Internal Revenue Code (the "Code"), which imposes certain
limitations on the investment operations of the Fund. The performance of the
private accounts may have been adversely affected if they had been registered
with the SEC and subject to Subchapter M of the Code.
The composite performance shown is a composite of portfolios managed by each of
the Fund's Sub-Advisers with similar investment objectives and policies and
without significant client-imposed restrictions, adjusted to reflect the fees
and expenses of the Fund. The performance information shown for both J.P. Morgan
and Waddell & Reed has not been adjusted to give effect to charges imposed by
the separate accounts that invest in the Fund, which, if included, would
decrease the performance figures shown.
Composite performance for each of the Sub-Adviser's portfolios is provided
solely to illustrate that Sub-Adviser's performance in managing portfolios with
investment objectives similar to the applicable Fund. Such performance is not
indicative of future rates of return. Prior performance of the Sub-Advisers is
no indication of future performance of any of the Funds.
Composite Performance of
Small Cap Growth Accounts
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
1 Yr. 3 Yr. 5 Yr. 10 Yr.
Period Period Period Period
Ended Ended Ended Ended
12/31/98 12/31/98 12/31/98 12/31/98
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
J.P. Morgan
Small Cap
Growth
Accounts 0.82% 17.24% N/A N/A
- --------------------------------------------------------------------------------
Waddell &
Reed
Small Cap
Growth
Accounts 54.76% 31.11% 27.57% N/A
- --------------------------------------------------------------------------------
Russell 2000
Growth Index* -2.49% 11.58% 11.88% N/A
- --------------------------------------------------------------------------------
</TABLE>
*The Russell 2000(R) Growth Index is an unmanaged index consisting of 2,000
common stocks of small-capitalization, growth-oriented companies.
24
<PAGE>
Composite of Small Cap Growth Accounts'
Annual Performance
[THE FOLLOWING TABLE WAS REPRESENTED AS A BAR CHART IN THE PRINTED MATERIAL.]
<TABLE>
<CAPTION>
Average Annual
Years Total Returns
----- -------------
<S> <C>
Waddell & Reed 1989 N/A
J.P. Morgan N/A
1990 2.02%
N/A
1991 89.15%
N/A
1992 4.43%
N/A
1993 11.03%
N/A
1994 11.88%
N/A
1995 34.01%
41.92%
1996 6.50%
24.02%
1997 36.74%
28.87%
1998 54.76%
0.82%
</TABLE>
J.P. Morgan's Best Quarter: Q 12/31/98 23.92%
J.P. Morgan's Worst Quarter: Q 9/30/98 -22.02%
Waddell & Reed's Best Quarter: Q 12/31/98 36.60%
Waddell & Reed's Worst Quarter: Q 9/30/90 -18.12%
Set forth below is the composite annual performance and average annual total
returns for J.P. Morgan, without considering investment management,
administrative or custody fees:
<TABLE>
<CAPTION>
1989 1990 1991 1992 1993
---- ---- ---- ---- ----
<S> <C> <C> <C> <C>
N/A N/A N/A N/A N/A
<CAPTION>
1994 1995 1996 1997 1998
---- ---- ---- ---- ----
<S> <C> <C> <C> <C>
N/A 43.24% 25.34% 30.19% 2.14%
<CAPTION>
One Year Three Year Five Year Ten Year
-------- ---------- --------- --------
<S> <C> <C> <C>
2.14% 18.56% N/A N/A
</TABLE>
Set forth below is the composite annual performance and average annual total
returns for Waddell & Reed, without considering investment management,
administrative or custody fees:
<TABLE>
<CAPTION>
1989 1990 1991 1992 1993
---- ---- ---- ---- ----
<S> <C> <C> <C> <C>
N/A 3.34% 90.46% 5.75% 12.35%
<CAPTION>
1994 1995 1996 1997 1998
---- ---- ---- ---- ----
<S> <C> <C> <C> <C>
13.2% 35.33% 7.81% 38.06% 56.1%
<CAPTION>
One Year Three Year Five Year Ten Year
-------- ---------- --------- --------
<S> <C> <C> <C>
56.10% 32.45% 28.91% N/A
</TABLE>
25
<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.
26
<PAGE>
Distributions and Taxation
Distributions
The declaration and distribution policies specific to each Fund are outlined
below.
o MML Equity, MML Equity Index, MML Small Cap Value Equity , MML Growth
Equity and MML Small Cap Growth Equity Funds. 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.
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.
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.
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.
27
<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 Blend Fund, MML Equity Fund, MML Equity Index Fund, MML Small Cap Value
Equity Fund, MML Growth Equity Fund, and MML Small Cap Growth 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.
28
<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. Financial highlights are not available for MML Growth
Equity Fund and MML Small Cap Growth Equity Fund since they commenced operations
on May 3, 1999.
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
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Net asset value
Beginning of year $ 35.443 $ 29.786 $ 25.924 $ 20.520 $ 20.510
------------ ------------ ------------ ------------ ------------
Income from investment operations:
Net investment income 0.724 0.709 0.703 0.634 0.594
Net realized and unrealized
gain (loss) on investments 5.016 7.806 4.547 5.754 $ 0.248
------------ ------------ ------------ ------------ ------------
Total from investment operations 5.740 8.515 5.250 6.388 0.842
------------ ------------ ------------ ------------ ------------
Less distributions:
Dividends from net investment income (0.724) (0.709) (0.703) (0.634) (0.594)
Distribution from net realized gains (1.261) (2.148) (0.685) (0.350) (0.238)
Distribution in excess of net realized
gains -- -- -- -- --
------------ ------------ ------------ ------------ ------------
Total distributions (1.985) (2.858) (1.388) (0.984) (0.832)
------------ ------------ ------------ ------------ ------------
Net asset value:
End of year $ 39.198 $ 35.443 $ 29.786 $ 25.924 $ 20.520
============ ============ ============ ============ ============
Total return 16.20% 28.59% 20.25% 31.13% 4.10%
Net assets (in millions):
End of year $ 2,938.11 $ 2,363.44 1,701.99 $ 1,248.90 $ 820.78
Ratio of expenses to average
net assets 0.37% 0.35% 0.38% 0.41% 0.43%
Ratio of net investment income
to average net assets 1.95% 2.03% 2.65% 2.89% 3.04%
Portfolio turnover rate 14.03% 15.30% 11.42% 11.72% 9.99%
<CAPTION>
1993 1992 1991 1990 1989
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Net asset value
Beginning of year $ 19.862 $ 18.735 $ 15.659 $ 16.664 $ 14.929
------------ ------------ ------------ ------------ ------------
Income from investment operations:
Net investment income 0.524 0.543 $ 0.563 $ 0.636 0.694
Net realized and unrealized
gain (loss) on investments $ 1.365 1.420 3.440 (0.722) 2.746
------------ ------------ ------------ ------------ ------------
Total from investment operations 1.889 1.963 4.003 (0.086) 3.440
------------ ------------ ------------ ------------ ------------
Less distributions:
Dividends from net investment income (0.524) (0.543) (0.562) (0.665) (0.711)
Distribution from net realized gains (0.717) (0.285) (0.365) (0.354) (0.894)
Distribution in excess of net realized
gains -- (0.005) -- -- --
------------ ------------ ------------ ------------ ------------
Total distributions (1.241) (0.836) (0.927) (1.019) (1.605)
------------ ------------ ------------ ------------ ------------
Net asset value:
End of year $ 20.510 $ 19.862 $ 18.735 $ 15.659 $ 16.764
============ ============ ============ ============ ============
Total return 9.52% 10.48% 25.56% (0.51)% 23.04%
Net assets (in millions):
End of year $ 663.09 $ 490.62 $ 355.04 $ 235.45 $ 226.41
Ratio of expenses to average
net assets 0.44% 0.46% 0.48% 0.49% 0.50%
Ratio of net investment income
to average net assets 3.23% 3.09% 3.43% 4.09% 4.30%
Portfolio turnover rate 11.28% 9.07% 9.37% 13.50% 15.71%
</TABLE>
29
<PAGE>
MML BLEND FUND
<TABLE>
<CAPTION>
1998 1997 1996 1995 1994
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Net asset value
Beginning of year $ 24.080 $ 21.973 $ 20.519 $ 17.672 $ 18.305
----------- ----------- ----------- ----------- -----------
Income from investment operations:
Net investment income 0.417 0.843 0.824 0.811 0.707
Net realized and unrealized
gain (loss) on investments
and forward commitments 2.360 3.692 1.990 3.246 (0.271)
----------- ----------- ----------- ----------- -----------
Total from investment operations 2.777 4.535 2.814 4.057 0.436
----------- ----------- ----------- ----------- -----------
Less distributions:
Dividends from net investment income (0.416) (0.843) (0.824) (0.811) (0.707)
Distribution from net realized gains (1.358) (1.585) (0.536) (0.399) (0.359)
Distribution in excess of net realized
gains -- -- -- -- (0.003)
----------- ----------- ----------- ----------- -----------
Total distributions (1.774) (2.428) (1.360) (1.210) (1.069)
----------- ----------- ----------- ----------- -----------
Net asset value:
End of year $ 25,083 $ 24,080 $ 21,973 $ 20,519 $ 17,672
=========== =========== =========== =========== ===========
Total return 13.56% 20.89% 13.95% 23.28% 2.48%
Net assets (in millions):
End of year $ 2,814.69 $ 2,471.83 $ 2,093.99 $ 1,823.14 $ 1,444.26
Ratio of expenses to average
net assets 0.37% 0.38% 0.38% 0.38% 0.39%
Ratio of net investment income
to average net assets 3.43% 3.56% 3.87% 4.19% 3.93%
Portfolio turnover rate 28.64% 21.20% 19.10% 30.78% 26.59%
<CAPTION>
1993 1992 1991 1990 1989
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Net asset value
Beginning of year $ 17.846 $ 17.307 $ 14.839 $ 15.428 $ 13.876
----------- ----------- ----------- ----------- -----------
Income from investment operations:
Net investment income 0.655 0.707 0.736 0.792 0.823
Net realized and unrealized
gain (loss) on investments
and forward commitments 1.057 0.880 2.771 (0.445) 1.921
----------- ----------- ----------- ----------- -----------
Total from investment operations 1.712 1.587 3.507 0.347 2.744
----------- ----------- ----------- ----------- -----------
Less distributions:
Dividends from net investment income (0.655) (0.707) (0.736) (0.811) (0.835)
Distribution from net realized gains (0.598) (0.326) (0.303) (0.125) (0.357)
Distribution in excess of net realized
gains -- (0.015) -- -- --
----------- ----------- ----------- ----------- -----------
Total distributions (1.253) (1.048) (1.039) (0.936) (1.192)
----------- ----------- ----------- ----------- -----------
Net asset value:
End of year $ 18.305 $ 17.846 $ 17.307 $ 14.839 $ 15.428
=========== =========== =========== =========== ===========
Total return 9.70% 9.36% 24.00% 2.37% 19.96%
Net assets (in millions):
End of year $ 1,296.54 $ 1,013.28 $ 797.04 $ 574.15 $ 524.29
Ratio of expenses to average
net assets 0.40% 0.41% 0.42% 0.44% 0.45%
Ratio of net investment income
to average net assets 3.60% 4.07% 4.54% 5.37% 5.57%
Portfolio turnover rate 20.20% 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.
30
<PAGE>
MML EQUITY INDEX FUND
<TABLE>
<CAPTION>
For the Period
May 1, 1997
(Commencement of
For the year Ended Operations)through
December 31, 1998 December 31, 1997*
------------------ ------------------
<S> <C> <C>
Net asset value:
Beginning of period $ 12.080 $ 10.000
----------- -----------
Income from investment operations:
Net investment income 0.128 0.092
Net realized and unrealized gain on investments 3.284 2.101
----------- -----------
Total from Investment operations 3.412 2.193
----------- -----------
Less distributions:
Dividends from net investment income (0.128) (0.092)
Distribution from net realized gains (0.104) (0.021)
----------- -----------
Total distributions (0.232) (0.113)
----------- -----------
Net asset value:
End of year $ 15.260 $ 12.080
=========== ===========
Total return*** 28.22% 21.39%**
Net assets (in millions): $ 36.07 $ 24.20
Ratio of operating expenses to average net assets:
Before expense waiver 0.60% 0.43%**
After expense waiver 0.50% --
Ratio of net investment income to average net assets:
Before expense waiver to average net assets 0.91% 0.80%**
After expense waiver 1.01% --
Portfolio turnover rate 5.19% 2.00%
</TABLE>
* The Fund commenced operations on May 1, 1997.
** Percentages represent results for the period and are not annualized.
*** Total return information shown in the Financial Highlights tables does not
reflect expenses that apply at the separate account level or to related
insurance products. Inclusion of these charges would reduce the total
return figures for the period shown.
31
<PAGE>
MML SMALL CAP VALUE EQUITY FUND
For the Period
June 1, 1998
(Commencement
of Operations
through
December 31, 1998
-----------------
Net asset value:
Beginning of period $ 10.000
-----------
Income from investment operations:
Net investment income 0.029
Net realized and unrealized gain on investments (1.506)
-----------
Total from investment operations (1.477)
-----------
Loss distributions:
Dividends from net investment income (0.030)
-----------
Total distributions (0.030)
-----------
Net asset value:
End of year $ 8.493
===========
Total return** (14.77)%
Net assets (in millions): $ 10.44
Ratio of operating expenses to average net assets:
Before expense waiver 0.85%*
After expense waiver 0.44%*
Ratio of net investment Income to average net assets:
Before expense waiver to average net assets 0.81%*
After expense waiver 0.42%*
Portfolio turnover rate 23.40%*
* Percentages represent results for the period and are not annualized.
** Total return information shown in the Financial Highlights table 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 the period shown.
32
<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 portfolio
of 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, the Equity or Money Market Segments of MML Blend Fund, MML Small Cap Value
Equity Fund, MML Growth Equity Fund or MML Small Cap Growth Equity Fund. The
Funds will not use derivatives for speculative purposes.
MML Equity Index Fund may buy or sell stock index futures and other similar
instruments, as more fully discussed in the Statement of Additional Information.
MML Equity Index Fund may purchase stock index futures in anticipation of taking
a market position when, in the opinion of Mellon Equity, available cash balances
do not permit an economically efficient trade in the cash market. The Fund also
may sell stock index futures to terminate existing positions it may have as a
result of its purchases
33
<PAGE>
of stock index futures. Investments in stock index futures typically require
greater available cash balances than do investments in Standard & Poor's
Depositary Receipts.
Although MML Equity Index Fund will not be a commodity pool, derivatives subject
this Fund to the rules of the Commodity Futures Trading Commission which limit
the extent to which the Fund can invest in certain derivatives. The Fund may
invest in stock index futures contracts for hedging purposes without limit.
However, MML Equity Index Fund may not invest in such contracts for other
purposes if the sum of the amount of initial margin deposits, other than for
bona fide hedging purposes, exceeds 5% of the liquidation value of the Fund's
assets, after taking into account unrealized gains and unrealized losses on such
contracts.
Standard & Poor's Depositary Receipts
MML Equity Index Fund may invest in Standard & Poor's Depositary Receipts when,
in the opinion of Mellon Equity, available cash balances would not otherwise
allow the Fund to invest such cash balances in a manner that adequately
corresponds to the Index. Investments in these depositary receipts typically
require less available cash balances than do investments in stock index futures.
These depositary receipts represent an interest in the portfolio of S&P 500
stocks held by a unit investment trust. They trade on the American Stock
Exchange and may be bought and sold like common stock at any time during the
trading day. Holders of the depositary receipts are entitled to receive
dividends that accrue to stocks held by the unit investment trust, less trust
expenses. An investment in these depositary receipts is intended to provide
investment results that generally correspond to the price and yield performance
of the Index.
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
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.
Options and Futures Contracts
MML Growth Equity Fund and MML Small Cap Growth Equity Fund may engage in
options transactions, such as writing covered put and call options on securities
and purchasing put and call options on securities. These strategies are designed
to increase a Fund's portfolio return, or to protect the value of the portfolio,
by offsetting a decline in portfolio value through the options purchased.
Writing options, however, can only constitute a partial hedge, up to the amount
of the premium, and due to transaction costs.
These Funds may also write covered call and put options and purchase call and
put options on stock indexes in order to increase portfolio income or to protect
the Fund against declines in the value of portfolio securities. In addition,
34
<PAGE>
these Funds may also purchase and write options on foreign currencies to protect
against declines in the dollar value of portfolio securities and against
increases in the dollar cost of securities to be acquired.
MML Growth Equity Fund and MML Small Cap Growth Equity Fund may also enter into
stock index futures contracts. These Funds enter into foreign currency futures
contracts. These transactions are hedging strategies. They are designed to
protect a Fund's current or intended investments from the effects of changes in
exchange rates or market declines. A Fund will incur brokerage fees when it
purchases and sells futures contracts. Futures contracts entail risk of loss in
portfolio value, if the Sub-Adviser is incorrect in anticipating the direction
of exchange rates or the securities markets.
These Funds may also purchase and write options on these futures contracts. This
strategy also is intended to protect against declines in the values of portfolio
securities or against increases in the costs of securities to be acquired. Like
other options, options on futures contracts constitute only a partial hedge up
to the amount of the premium, and due to transaction costs.
While these strategies will generally be used by a Fund for hedging purposes,
there are risks. For example, the Sub-Adviser may incorrectly forecast the
direction of exchange rates or of the underlying securities index or markets.
When these hedging transactions are unsuccessful, the Fund may experience
losses. When a Fund enters into these transactions to increase portfolio value
(i.e., other than for hedging purposes), there is a liquidity risk that no
market will arise for resale and the Fund could also experience losses. Options
and Futures Contracts strategies and risks are described more fully in the
Statement of Additional Information.
Portfolio Management
MassMutual, Babson, MFS, J.P. Morgan and Waddell & Reed (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% 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, MML Equity Index Fund, MML Growth Equity Fund and MML Small Cap
Growth Equity 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. 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.
35
<PAGE>
Cash Positions
Each 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 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, including MML Equity Index Fund, 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.
MML Growth Equity Fund and MML Small Cap Growth Equity Fund may also invest in
foreign securities known as American Depositary Receipts ("ADRs"), Global
Depositary Receipts ("GDRs") and European Depositary Receipts ("EDRs"). ADRs,
GDRs and EDRs represent securities or a pool of securities of an underlying
foreign or, in the case of GDRs and EDRs, U.S. or non-U.S. issuer. They are
subject to many of the same risks as foreign securities. ADRs, GDRs and EDRs are
more completely described in the Statement of Additional Information.
36
<PAGE>
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 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
37
<PAGE>
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 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 exception:
o The Bond Segment of MML Blend Fund may invest up to 40% of the value of its
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
this Fund's total assets in either the electric utility or telephone
industries.
Industry Diversification
MML Equity Index Fund is classified as non-diversified, which means that the
proportion of the Fund's assets that may be invested in the securities of a
single issuer is not limited by the Investment Company Act of 1940, as amended
(the "1940 Act"). A "diversified" investment company is required by the 1940 Act
generally, with respect to 75% of its total assets, to invest not more than 5%
of such assets in the securities of a single issuer. Since a relatively high
percentage of the Fund's assets may be invested in the securities of a limited
number of issuers, some of which may be within the same economic sector, the
Fund's portfolio may be more sensitive to the changes in market value of a
single issuer or industry. However, to meet Federal tax requirements, at the
close of each quarter the Fund may not have more than 25% of its total assets
invested in any one issuer and, with respect to 50% of total assets, not more
than 5% of its total assets invested in any one issuer. These limitations do not
apply to U.S. government securities.
38
<PAGE>
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.
39
<PAGE>
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-ADVISERS
<TABLE>
<S> <C>
David L. Babson and Company, Incorporated Massachusetts Financial Services Company
One Memorial Drive 500 Boylston Street
Cambridge, Massachusetts 02142 Boston, Massachusetts 02116-3741
Mellon Equity Associates, LLP J.P. Morgan Investment Management, Inc.
500 Grant Street 522 Fifth Avenue
Suite 3700 Pittsburgh, Pennsylvania 15258 New York New York 10036
Waddell & Reed Investment Management Company
630 Lamar
Overland Park, KS 66202-4247
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP
2300 Tower Square
1500 Main Street
Springfield, Massachusetts 01101
CUSTODIANS
<CAPTION>
<S> <C> <C>
Citibank, N.A. Boston Safe Deposit and Trust Investors Bank & Trust
111 Wall Street Company Company
New York, New York One Boston Place 200 Clarendon Street
Boston, Massachusetts 02108 Boston, Massachusetts 02116
</TABLE>
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
40
