METROPOLITAN SERIES FUND INC, 497, 1998-05-01

METROPOLITAN SERIES FUND INC
497, 1998-05-01

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<PAGE>

PROSPECTUS
for
THE STATE STREET RESEARCH GROWTH,
STATE STREET RESEARCH INCOME,
STATE STREET RESEARCH MONEY MARKET,
STATE STREET RESEARCH DIVERSIFIED,
STATE STREET RESEARCH AGGRESSIVE GROWTH
and METLIFE STOCK INDEX PORTFOLIOS
of the METROPOLITAN SERIES FUND, INC.

Metropolitan Series Fund, Inc. ("Fund") is an investment company designed to
meet a wide range of investment objectives with its separate Portfolios. Each
Portfolio resembles a separate fund issuing its own shares. This prospectus
describes those portfolios listed below. Metropolitan Life Insurance Company
("Metropolitan Life") is the investment manager for the Fund. State Street
Research & Management Company ("State Street Research"), a wholly-owned
subsidiary of Metropolitan Life, is the sub-investment manager with respect to
the State Street Research Growth, State Street Research Income, State Street
Research Diversified, State Street Research Money Market and State Street
Research Aggressive Growth Portfolios.

The investment objectives of the Portfolios described in this Prospectus are
as follows:

STATE STREET RESEARCH GROWTH PORTFOLIO: to achieve long-term growth of capital
and income, and moderate current income, by investing primarily in common
stocks that are believed to be of good quality or to have good growth
potential or which are considered to be undervalued based on historical
investment standards.

STATE STREET RESEARCH INCOME PORTFOLIO: to achieve the highest possible total
return, by combining current income with capital gains, consistent with
prudent investment risk and preservation of capital, by investing primarily in
fixed-income, high-quality debt securities. (The term "high-quality" is used
to describe certain debt securities rated within the highest grades by credit
rating services as explained under "State Street Research Income Portfolio.")

STATE STREET RESEARCH MONEY MARKET PORTFOLIO (formerly named the MetLife Money
Market Portfolio): to achieve the highest possible current income consistent
with preservation of capital and maintenance of liquidity, by investing
primarily in short-term money market instruments. INVESTMENT IN THIS PORTFOLIO
IS NEITHER INSURED NOR GUARANTEED BY THE UNITED STATES GOVERNMENT.

STATE STREET RESEARCH DIVERSIFIED PORTFOLIO: to achieve a high total return
while attempting to limit investment risk and preserve capital by investing in
equity securities, fixed-income debt securities, or short-term money market
instruments, or any combination thereof, at the discretion of State Street
Research.

STATE STREET RESEARCH AGGRESSIVE GROWTH PORTFOLIO: to achieve maximum capital
appreciation by investing primarily in common stocks (and equity and debt
securities convertible into or carrying the right to acquire common stocks) of
emerging growth companies, undervalued securities or special situations.

METLIFE STOCK INDEX PORTFOLIO: to equal the performance of the Standard &
Poor's 500 Composite Stock Price Index (adjusted to assume reinvestment of
dividends) by investing in the common stock of companies which are included in
the index.

There can be no assurance that the objectives of any Portfolio will be
realized.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR INSURED, ENDORSED
OR GUARANTEED BY, THE UNITED STATES GOVERNMENT, ANY BANK OR OTHER DEPOSITORY
INSTITUTION, SHARES ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE COMPANY,
THE FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY, ENTITY OR PERSON AND ARE
SUBJECT TO INVESTMENT RISK, INCLUDING THE POSSIBLE LOSS OF THE PRINCIPAL
AMOUNT INVESTED.

This Prospectus sets forth concisely information about the Fund that a
prospective investor ought to know before investing. Additional information
about the Fund has been filed with the Securities and Exchange Commission in a
Statement of Additional Information which is incorporated herein by reference.
The Statement of Additional Information is available upon request and without
charge from Metropolitan Life Insurance Company, One Madison Avenue, New York,
New York 10010, Attention: Retirement and Savings Center, Area 2H; telephone
number (800) 553-4459. Inquiries may be made to the same address or telephone
number. This Prospectus should be read and retained for future reference.

The date of this Prospectus is May 1, 1998. The date of the Statement of
Additional Information is May 1, 1998.
<PAGE>

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
The Fund and its Purpose............................................ 2
Financial Highlights................................................ 3
Investments in the Portfolios....................................... 7
Investment Objectives and General Investment Policies.............. 7
State Street Research Growth Portfolio............................ 7
State Street Research Income Portfolio............................ 8
State Street Research Money Market Portfolio...................... 8
State Street Research Diversified Portfolio....................... 9
State Street Research Aggressive Growth Portfolio................. 9
MetLife Stock Index Portfolio..................................... 10
Fundamental Investment Policies.................................... 11
Other Investment Practices......................................... 11
Management of the Fund.............................................. 16
General Information About the Fund and its Shares................... 17
Dividends, Distributions and Taxes.................................. 18
Sale and Redemption of Shares....................................... 18
</TABLE>

THE FUND AND ITS PURPOSE

Metropolitan Series Fund, Inc. is an open-end management investment company.
The Fund is a "series" type of mutual fund which issues separate classes (or
series) of stock, each of which currently represents a separate portfolio of
investments. The Fund's classes of shares are issued and redeemed at net asset
value without a sales load.

The shares of the Fund are offered to Metropolitan Life and its affiliated
insurance companies ("Insurance Companies"), including Metropolitan Tower Life
Insurance Company ("Metropolitan Tower"), in order to fund certain of their
separate accounts used to support various insurance contracts including
variable life insurance policies, whether scheduled premium, flexible premium
or single premium policies, or variable annuity contracts (such policies and
contracts being hereinafter referred to as the "Contracts"). Not all of the
Portfolios of the Fund are available to each of the separate accounts which
hold shares of the Fund. The rights of an Insurance Company holding Fund
shares for a separate account are different from the rights of the owner of a
Contract. The terms "shareholder" or "shareholders" in this Prospectus shall
refer to the Insurance Companies, and not to any Contract owner.

The structure of the Fund permits Contract owners, within the limitations
described in the appropriate Contract, to allocate the amounts under the
Contracts for ultimate investment in the various Portfolios of the Fund. See
the prospectus or other material which is attached at the front of this
Prospectus for a description of the appropriate Contract, which Portfolios of
the Fund are available to such Contract owners and the relationship between
increases or decreases in the net asset value of Fund shares (and any
dividends and distributions on such shares) and the benefits provided under
such Contract.

It is conceivable that in the future it may be disadvantageous for scheduled,
flexible and single premium variable life insurance separate accounts and
variable annuity separate accounts to invest simultaneously in the Fund.
However, the Fund, Metropolitan Tower and Metropolitan Life do not currently
foresee any such disadvantages to variable annuity contract owners or to
flexible premium, scheduled premium or single premium variable life insurance
policy owners. The Fund's Board of Directors intends to monitor events for the
existence of any material irreconcilable conflict between or among such
owners, and the Insurance Companies will take whatever remedial action may be
necessary.

PROSPECTUS 2
<PAGE>

FINANCIAL HIGHLIGHTS

The table below* has been audited by Deloitte & Touche LLP, independent
auditors, as stated in their report appearing with the full financial statements
and notes thereto in the Statement of Additional Information or as previously
stated in earlier reports. For further information about the performance of the
Portfolios, see the Fund's December 31, 1997 Management Discussion and Analysis
which appears under the caption "Financial Statements" in the Statement of
Additional Information.

<TABLE>
<CAPTION>
State Street Research Growth Portfolio
-----------------------------------------------------------------------------
For the Year Ended December 31,
SELECTED DATA FOR A SHARE OF CAPITAL -----------------------------------------------------------------------------
STOCK OUTSTANDING THROUGHOUT PERIOD: 1997 1996 1995 1994 1993 1992
---------- ---------- ---------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE: Beginning of period ........ $ 30.51 $ 27.56 $ 21.81 $ 23.27 $ 21.72 $ 21.56
- -----------------------------------------------------------------------------------------------------------------------------
Investment Operations:
- ---------------------
Net investment income ..................... 0.44 0.36 0.35 0.30 0.28 0.34
Net realized and unrealized gain/(loss) ... 7.72 5.78 6.83 (1.06) 3.24 2.13
---------- ---------- ---------- -------- -------- --------
Total From Investment Operations ...... 8.16 6.14 7.18 (0.76) 3.52 2.47
---------- ---------- ---------- -------- -------- --------

Less Distributions:
- ------------------
Dividends from net investment income ...... (0.44) (0.36) (0.35) (0.30) (0.28) (0.29)
Distributions from net realized
capital gains............................. (6.31) (2.83) (1.08) (0.40) (1.69) (2.02)
---------- ---------- ---------- -------- -------- --------
Total Distributions ................... (6.75) (3.19) (1.43) (0.70) (1.97) (2.31)
---------- ---------- ---------- -------- -------- --------
- -----------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE: End of period .............. $ 31.92 $ 30.51 $ 27.56 $ 21.81 $ 23.27 $ 21.72
- -----------------------------------------------------------------------------------------------------------------------------
Total Return .............................. 28.36% 22.18% 33.14% (3.25)% 14.40% 11.56%
Net assets at end of period (000's) ....... $2,349,062 $1,597,728 $1,094,751 $746,433 $640,413 $351,028

Supplemental Data/Significant Ratios:
- ------------------------------------
Operating expenses to average net assets .. 0.43% 0.29% 0.31% 0.32% 0.28% 0.25%
Net investment income to average net assets 1.37% 1.29% 1.46% 1.40% 1.19% 1.52%
Portfolio turnover (1) .................... 82.81% 93.05% 45.52% 57.27% 66.27% 63.74%
Average broker commission rate (2) ........ $ 0.0590 $ 0.0578 -- -- -- --

Less Distributions:
- ------------------
Dividends from net investment income ...... (0.42) (0.50) (0.52) (0.74)
Distributions from net realized
capital gains............................. (1.02) -- (0.13) --
-------- -------- -------- --------
Total Distributions ................... (1.44) (0.50) (0.65) (0.74)
-------- -------- -------- --------
- -----------------------------------------------------------------------------------------------
NET ASSET VALUE: End of period .............. $ 21.56 $ 17.20 $ 19.34 $ 14.64
- -----------------------------------------------------------------------------------------------
Total Return .............................. 33.09% (8.50)% 36.64% 10.69%
Net assets at end of period (000's) ....... $232,160 $153,255 $140,279 $ 99,982

Supplemental Data/Significant Ratios:
- ------------------------------------
Operating expenses to average net assets .. 0.25% 0.25% 0.25% 0.25%
Net investment income to average net assets 2.04% 2.83% 2.98% 4.83%
Portfolio turnover (1) .................... 62.29% 39.86% 58.01% 51.21%
Average broker commission rate (2) ........ -- -- -- --
</TABLE>

<TABLE>
<CAPTION>
State Street Research Income Portfolio
-----------------------------------------------------------------------------
For the Year Ended December 31,
SELECTED DATA FOR A SHARE OF CAPITAL -----------------------------------------------------------------------------
STOCK OUTSTANDING THROUGHOUT PERIOD: 1997 1996 1995 1994 1993 1992
---------- ---------- ---------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE: Beginning of period ........ $ 12.36 $ 12.73 $ 11.32 $ 12.59 $ 12.22 $ 12.32
- -----------------------------------------------------------------------------------------------------------------------------
Investment Operations:
---------------------
Net investment income ................... 0.83 0.82 0.83 0.91 0.83 0.90
Net realized and unrealized gain/(loss) . 0.38 (0.36) 1.38 (1.31) 0.86 (0.05)
---------- ---------- ---------- -------- -------- --------
Total From Investment Operations .... 1.21 0.46 2.21 (0.40) 1.69 0.85
---------- ---------- ---------- -------- -------- --------
Less Distributions:
- ------------------
Dividends from net investment income ...... (0.87) (0.81) (0.80) (0.87) (0.88) (0.71)
Distributions from net realized capital gains (0.04) (0.02) -- -- (0.44) (0.24)
---------- ---------- ---------- -------- -------- --------
Total Distributions ................. (0.91) (0.83) (0.80) (0.87) (1.32) (0.95)
---------- ---------- ---------- -------- -------- --------
- -----------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE: End of period .............. $ 12.66 $ 12.36 $ 12.73 $ 11.32 $ 12.59 $ 12.22
- -----------------------------------------------------------------------------------------------------------------------------
Total Return .............................. 9.83% 3.60% 19.55% (3.15)% 11.36% 6.91%
Net assets at end of period (000's) ....... $ 412,191 $ 383,395 $349,913 $275,659 $299,976 $156,245

Supplemental Data/Significant Ratios:
- ------------------------------------
Operating expenses to average net assets .. 0.38% 0.32% 0.34% 0.35% 0.32 0.25%
Net investment income to average net assets 6.57% 6.64% 7.01% 7.02% 6.39% 7.16%
Portfolio turnover (1) .................... 121.92% 92.90% 102.88% 141.15% 136.98% 151.74%

<CAPTION>
1991 1990 1989 1988
-------- -------- -------- --------
<S> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------
NET ASSET VALUE: Beginning of period ........ $ 11.16 $ 11.10 $ 10.58 $ 10.47
- -------------------------------------------------------------------------------------------------
Investment Operations:
- ---------------------
Net investment income ..................... 0.94 1.16 0.99 0.95
Net realized and unrealized gain/(loss) ... 1.14 (0.05) 0.41 0.02
-------- -------- -------- --------
Total From Investment Operations ...... 2.08 1.11 1.40 0.97
-------- -------- -------- --------
Less Distributions:
- ------------------
Dividends from net investment income ...... (0.92) (1.05) (0.88) (0.86)
Distributions from net realized capital gains -- -- -- --
-------- -------- -------- --------
Total Distributions ................. (0.92) (1.05) (0.88) (0.86)
-------- -------- -------- --------
- -------------------------------------------------------------------------------------------------
NET ASSET VALUE: End of period .............. $ 12.32 $ 11.16 $ 11.10 $ 10.58
- -------------------------------------------------------------------------------------------------
Total Return .............................. 17.31% 10.03% 13.35% 9.28%
Net assets at end of period (000's) ....... $ 87,412 $ 54,531 $ 48,629 $ 35,670

Supplemental Data/Significant Ratios:
- ------------------------------------
Operating expenses to average net assets .. 0.25% 0.25% 0.25% 0.25%
Net investment income to average net assets 7.61% 9.80% 8.81% 8.26%
Portfolio turnover (1) .................... 78.87% 82.93% 51.03% 74.10%
</TABLE>

- ----------
Footnotes appear on Prospectus 6.

PROSPECTUS 3
<PAGE>

FINANCIAL HIGHLIGHTS-(continued)

<TABLE>
<CAPTION>
State Street Research Money Market Portfolio
-----------------------------------------------------------------------------
For the Year Ended December 31,
SELECTED DATA FOR A SHARE OF CAPITAL -----------------------------------------------------------------------------
STOCK OUTSTANDING THROUGHOUT PERIOD: 1997 1996 1995 1994 1993 1992
---------- ---------- ---------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE: Beginning of period ........ $ 10.44 $ 10.45 $ 10.48 $ 10.49 $ 10.52 $ 10.59
- -----------------------------------------------------------------------------------------------------------------------------
Investment Operations:
- ---------------------
Net investment income ..................... 0.54 0.53 0.59 0.40 0.28 0.39
---------- ---------- ---------- -------- -------- --------
Total From Investment Operations ...... 0.54 0.53 0.59 0.40 0.28 0.39
---------- ---------- ---------- -------- -------- --------
Less Distributions:
- ------------------
Dividends from net investment income ...... (0.60) (0.54) (0.62) (0.41) (0.31) (0.46)
---------- ---------- ---------- -------- -------- --------
Total Distributions ................... (0.60) (0.54) (0.62) (0.41) (0.31) (0.46)
---------- ---------- ---------- -------- -------- --------
- -----------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE: End of period .............. $ 10.38 $ 10.44 $ 10.45 $ 10.48 $ 10.49 $ 10.52
- -----------------------------------------------------------------------------------------------------------------------------
Total Return .............................. 5.21% 5.01% 5.59% 3.85% 2.90% 3.73%
Net assets at end of period (000's) ....... $ 39,480 $ 41,637 $ 40,456 $ 39,961 $ 44,321 $ 55,412

Supplemental Data/Significant Ratios:
- ------------------------------------
Operating expenses to average net assets .. 0.49% 0.43% 0.49% 0.44% 0.38% 0.25%
Net investment income to average net assets 5.08% 4.92% 5.39% 3.76% 2.85% 3.68%

<CAPTION>
1991 1990 1989 1988
-------- -------- -------- --------
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------
NET ASSET VALUE: Beginning of period ........ $ 10.67 $ 10.49 $ 10.32 $ 10.18
- ------------------------------------------------------------------------------------------------
Investment Operations:
- ---------------------
Net investment income ..................... 0.57 0.86 0.95 0.76
-------- -------- -------- --------
Total From Investment Operations ...... 0.57 0.86 0.95 0.76
-------- -------- -------- --------
Less Distributions:
- ------------------
Dividends from net investment income ...... (0.65) (0.68) (0.78) (0.62)
-------- -------- -------- --------
Total Distributions ................... (0.65) (0.68) (0.78) (0.62)
-------- -------- -------- --------
- ------------------------------------------------------------------------------------------------
NET ASSET VALUE: End of period .............. $ 10.59 $ 10.67 $ 10.49 $ 10.32
- ------------------------------------------------------------------------------------------------
Total Return .............................. 6.10% 8.23% 9.28% 7.55%
Net assets at end of period (000's) ....... $ 70,946 $ 78,014 $ 41,779 $ 26,907

<TABLE>
<CAPTION>
State Street Research Diversified Portfolio
-----------------------------------------------------------------------------
For the Year Ended December 31,
SELECTED DATA FOR A SHARE OF CAPITAL -----------------------------------------------------------------------------
STOCK OUTSTANDING THROUGHOUT PERIOD: 1997 1996 1995 1994 1993 1992
---------- ---------- ---------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE: Beginning of period ........ $ 16.67 $ 15.95 $ 13.40 $ 14.41 $ 13.58 $ 13.61
- -----------------------------------------------------------------------------------------------------------------------------
Investment Operations:
- ---------------------
Net investment income ..................... 0.60 0.55 0.59 0.51 0.46 0.53
Net realized and unrealized gain/(loss) ... 2.71 1.77 3.02 (0.95) 1.58 0.74
---------- ---------- ---------- -------- -------- --------
Total From Investment Operations ...... 3.31 2.32 3.61 (0.44) 2.04 1.27
---------- ---------- ---------- -------- -------- --------
Less Distributions:
- ------------------
Dividends from net investment income ...... (0.60) (0.53) (0.58) (0.50) (0.54) (0.55)
Distributions from net realized capital gains (2.40) (1.07) (0.48) (0.07) (0.67) (0.75)
---------- ---------- ---------- -------- -------- --------
Total Distributions ................... (3.00) (1.60) (1.06) (0.57) (1.21) (1.30)
- -----------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE: End of period .............. $ 16.98 $ 16.67 $ 15.95 $ 13.40 $ 14.41 $ 13.58
- -----------------------------------------------------------------------------------------------------------------------------
Total Return .............................. 20.58% 14.52% 27.03% (3.06)% 12.75% 9.48%
Net assets at end of period (000's) ....... $1,982,232 $1,448,841 $1,114,834 $892,826 $743,798 $334,480

Supplemental Data/Significant Ratios:
- ------------------------------------
Operating expenses to average net assets .. 0.40% 0.29% 0.31% 0.32% 0.29% 0.25%
Net investment income to average net assets 3.50% 3.38% 3.92% 3.66% 3.16% 3.85%
Portfolio turnover (1) .................... 114.79% 91.07% 79.29% 96.49% 95.84% 114.67%
Average broker commission rate (2) ........ $ 0.0590 $ 0.0578 -- -- -- --

<CAPTION>
1991 1990 1989 1988
-------- -------- -------- --------
<S> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------
NET ASSET VALUE: Beginning of period ........ $ 11.47 $ 12.16 $ 10.58 $ 10.34
- -----------------------------------------------------------------------------------------------
Investment Operations:
- ---------------------
Net investment income ..................... 0.62 0.68 0.75 0.73
Net realized and unrealized gain/(loss) ... 2.23 (0.68) 1.54 0.23
-------- -------- -------- --------
Total From Investment Operations ...... 2.85 0.00 2.29 0.96
-------- -------- -------- --------
Less Distributions:
- ------------------
Dividends from net investment income ...... (0.62) (0.69) (0.71) (0.72)
Distributions from net realized capital
gains ..................................... (0.09) -- -- --
-------- -------- -------- --------
Total Distributions ................... (0.71) (0.69) (0.71) (0.72)
- -----------------------------------------------------------------------------------------------
NET ASSET VALUE: End of period .............. $ 13.61 $ 11.47 $ 12.16 $ 10.58
- -----------------------------------------------------------------------------------------------
Total Return .............................. 24.84% 0.00% 21.76% 9.25%
Net assets at end of period (000's) ....... $232,276 $184,879 $172,968 $134,303

Supplemental Data/Significant Ratios:
- ------------------------------------
Operating expenses to average net assets .. 0.25% 0.25% 0.25% 0.25%
Net investment income to average net assets 4.94% 5.74% 6.30% 6.64%
Portfolio turnover (1) .................... 70.56% 62.51% 50.61% 70.14%
Average broker commission rate (2) ........ $ 0.0590 $ 0.0578 -- --
</TABLE>

- ----------
* Footnotes appear on Prospectus 6.

PROSPECTUS 4
<PAGE>

<TABLE>
<CAPTION>
State Street Research Aggressive Growth Portfolio
-----------------------------------------------------------------------------
For the Year Ended December 31,
SELECTED DATA FOR A SHARE OF CAPITAL -----------------------------------------------------------------------------
STOCK OUTSTANDING THROUGHOUT PERIOD: 1997 1996 1995 1994 1993 1992
---------- ---------- ---------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE: Beginning of period ........ $ 27.11 $ 25.87 $ 22.05 $ 22.54 $ 19.52 $ 18.11
- -----------------------------------------------------------------------------------------------------------------------------
Investment Operations:
- ---------------------
Net investment income/(loss) .............. (0.03) (0.02) (0.01) 0.05 0.04 0.08
Net realized and unrealized gain/(loss) ... 1.67 2.01 6.50 (0.48) 5.06 1.77
---------- ---------- ---------- -------- -------- --------
Total From Investment Operations ...... 1.64 1.99 6.49 (0.43) 5.10 1.85
---------- ---------- ---------- -------- -------- --------
Less Distributions:
- ------------------
Dividends from net investment income ...... -- -- -- (0.05) (0.06) (0.10)
Distributions from net realized capital gains (1.14) (0.75) (2.67) (0.01) (2.02) (0.34)
---------- ---------- ---------- -------- -------- --------
Total Distributions ................... (1.14) (0.75) (2.67) (0.06) (2.08) (0.44)
---------- ---------- ---------- -------- -------- --------
- -----------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE: End of period .............. $ 27.61 $ 27.11 $ 25.87 $ 22.05 $ 22.54 $ 19.52
- -----------------------------------------------------------------------------------------------------------------------------
Total Return .............................. 6.67% 7.72 29.50% (1.88)% 22.63% 10.39%
Net assets at end of period (000's) ....... $1,391,956 $1,321,849 $958,915 $590,047 $387,949 $129,249

Supplemental Data/Significant Ratios:
- ------------------------------------
Operating expenses to average net assets .. 0.81% 0.79% 0.81% 0.82% 0.79% 0.75%
Net investment income/(loss) to average
net assets (1) ........................... (0.10)% (0.11)% (0.06)% 0.24% 0.18% 0.46%
Portfolio turnover (1) .................... 219.08% 221.23% 255.83% 186.52% 120.82% 100.95%
Average broker commission rate (2) ........ $ 0.0567 $ 0.0576 -- -- -- --

<CAPTION>
1991 1990 1989 1988
-------- -------- -------- --------
<S> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------
NET ASSET VALUE: Beginning of period ........ $ 10.95 $ 12.41 $ 10.42 $ 10.00
Investment Operations:
- ---------------------
Net investment income/(loss) .............. 0.06 0.15 0.20 0.16
Net realized and unrealized gain/(loss) ... 7.25 (1.43) 3.00 0.36
-------- -------- -------- --------
Total From Investment Operations ...... 7.31 (1.28) 3.20 0.52
-------- -------- -------- --------
Less Distributions:
- ------------------
Dividends from net investment income ...... (0.07) (0.14) (0.14) (0.10)
Distributions from net realized capital gains (0.08) (0.04) (1.07) --
-------- -------- -------- --------
Total Distributions ................... (0.15) (0.18) (1.21) (0.10)
-------- -------- -------- --------
- -----------------------------------------------------------------------------------------------
NET ASSET VALUE: End of period .............. $ 18.11 $ 10.95 $ 12.41 $ 10.42
- -----------------------------------------------------------------------------------------------
Total Return .............................. 66.41% (10.34)% 30.94% 5.21%
Net assets at end of period (000's) ....... $ 45,858 $ 15,409 $ 11,280 $ 4,738

Supplemental Data/Significant Ratios:
- ------------------------------------
Operating expenses to average net assets .. 0.75% 0.75% 0.75% 0.75%
Net investment income/(loss) to average
net assets (1) ........................... 0.45% 1.41% 1.41% 2.06%
Portfolio turnover (1) .................... 146.12% 271.31% 226.39% 94.35%
Average broker commission rate (2) ........ -- -- -- --
</TABLE>

<TABLE>
<CAPTION>
MetLife Stock Index Portfolio
-----------------------------------------------------------------------------------------
For the Year Ended December 31,
SELECTED DATA FOR A SHARE OF CAPITAL -----------------------------------------------------------------------------------------
STOCK OUTSTANDING THROUGHOUT PERIOD: 1997 1996 1995 1994 1993 1992 1991 1990
---------- ---------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE: Beginning of period .... $ 22.23 $ 18.56 $ 13.87 $ 14.25 $ 13.27 $ 12.76 $ 9.96 $ 10.00
Investment Operations:
- ---------------------
Net investment income ................. 0.34 0.33 0.32 0.33 0.35 0.36 0.35 0.23
Net realized and unrealized gain/(loss) 6.79 3.88 4.79 (0.17) 0.98 0.60 2.82 (0.05)
---------- ---------- -------- -------- -------- -------- -------- --------
Total From Investment Operations .. 7.13 4.21 5.11 0.16 1.33 0.96 3.17 10.18
---------- ---------- -------- -------- -------- -------- -------- --------
Less Distributions:
- ------------------
Dividends from net investment income .. (0.34) (0.33) (0.32) (0.32) (0.35) (0.26) (0.37) (0.22)
Distributions from net realized
capital gain.......................... (0.24) (0.21) (0.10) (0.22) -- (0.19) -- --
---------- ---------- -------- -------- -------- -------- -------- --------
Total Distributions ............... (0.58) (0.54) (0.42) (0.54) (0.35) (0.45) (0.37) (0.22)
---------- ---------- -------- -------- -------- -------- -------- --------

NET ASSET VALUE: End of period .......... $ 28.78 $ 22.23 $ 18.56 $ 13.87 $ 14.25 $ 13.27 $ 12.76 $ 9.96
Total Return .......................... 32.19% 22.66% 36.87% 1.18% 9.54% 7.44% 29.76% 1.95%
Net assets at end of period (000's) ... $2,020,480 $1,122,297 $635,823 $363,001 $282,700 $144,692 $ 54,183 $ 6,956

Supplemental Data/Significant Ratios:
- ------------------------------------
Operating expenses to average net assets 0.33% 0.30% 0.32% 0.33% 0.32% 0.25% 0.24% 0.25%
Net investment income to average
net assets............................ 1.47% 1.91% 2.22% 2.51% 2.51% 2.74% 2.98% 4.12%
Portfolio turnover (1) ................ 10.69% 11.48% 6.35% 6.66% 13.99% 17.54% 1.18% 3.50%
Average broker commission rate (2) .... $ 0.0201 $ 0.0204 -- -- -- -- -- --
</TABLE>

- ----------
* Footnotes appear on Prospectus 6.
/A/ For the period April 29, 1988 to December 31, 1988
/B/ For the period May 1, 1990 to December 31, 1990

PROSPECTUS 5
<PAGE>

FINANCIAL HIGHLIGHTS-(continued)

* Ratios have been determined based on annualized operating results for
the period. Twelve months result may be different for those periods
less than a year.

<TABLE>
<CAPTION>
Purchases Sales of securities
-------------- -------------------
<S> <C> <C>
State Street Research Growth Portfolio .......... $1,726,435,425 $1,541,608,452
State Street Research Income Portfolio .......... 470,696,082 451,405,517
State Street Research Diversified Portfolio ..... 1,901,224,776 1,701,514,366
State Street Research Aggressive Growth Portfolio 2,843,460,476 2,804,444,982
MetLife Stock Index Portfolio ................... 658,470,953 167,841,221
</TABLE>

(2) Total brokerage commissions paid on purchases and sales of portfolio
securities for the period divided by the total number of related
shares purchased and sold.

See notes to Financial Statements.

PROSPECTUS 6
<PAGE>

...............................................................
INVESTMENTS IN THE PORTFOLIOS
...............................................................................

INVESTMENT OBJECTIVES AND GENERAL INVESTMENT POLICIES

Each Portfolio of the Fund has different general investment objectives,
which are described below, and different rates of portfolio turnover. The rate
of portfolio turnover, however, will not be a limiting factor when it is
deemed appropriate to purchase or sell securities for a Portfolio. Portfolio
turnover may vary from year to year or within a year depending upon economic,
market and business conditions. To the extent that brokerage commissions and
transaction costs are incurred in buying and selling portfolio securities, the
rate of portfolio turnover could affect each Portfolio's net asset value. The
historical rates of portfolio turnover for the Portfolios are set forth in the
Financial Highlights.

Also, the Fund intends to comply with the various requirements of the
Internal Revenue Code so as to qualify as a "regulated investment company"
thereunder. (See "Dividends, Distributions and Taxes.") Accordingly, the
ability of any Portfolio to effect certain transactions may be limited. The
Fund also intends to comply with the diversification requirements of the
Internal Revenue Code (see "Taxes" in the Statement of Additional
Information).

Each Portfolio which invests in equity securities may invest up to 10% of
its total assets in shares of other investment companies (up to 5% of which
may be invested in any single investment company), including unit investment
trusts that issue shares representing separate rights to capital appreciation
and dividends in respect of the common stock of various issuers. Such
investments may in effect include the payment of duplicative management or
other fees. Other limitations may apply (see "Certain Investment Limitations"
in the Statement of Additional Information).

Since investment involves both opportunities for gain and risks of loss, no
assurance can be given that the Portfolios will achieve their objectives.
Contract owners should carefully review the objectives and policies of the
Portfolios and consider their ability to assume the risks involved before
purchasing a Contract and allocating amounts thereunder to particular
Portfolios.

The prices of the types of securities usually purchased for the State Street
Research Growth, State Street Research Aggressive Growth, Metlife Stock Index
and, to some extent, for the State Street Research Diversified Portfolio tend
to fluctuate more than the prices of the securities usually purchased for the
State Street Research Income Portfolio or the State Street Research Money
Market Portfolio. Therefore, the net asset value of these first four
Portfolios may experience greater short-term and long-term variations than the
last two listed Portfolios.

While certain of the investment techniques, instruments and risks associated
with each Portfolio are included in the discussion that follows, further
information on these subjects appears under the headings "Fundamental
Investment Policies" and "Certain Investment Practices" in this Prospectus.

State Street Research Growth Portfolio

The State Street Research Growth Portfolio seeks long-term growth of capital
and income, and moderate current income.

It is anticipated that there will be a mix of assets in the State Street
Research Growth Portfolio. A portion of the State Street Research Growth
Portfolio may be invested in equity securities of good quality and in well-
established companies where the stock price is considered to represent good
value, based on factors including historical investment standards, such as
price/book value ratios and price/earnings ratios. Another portion of the
State Street Research Growth Portfolio may be invested in smaller emerging
growth companies. These are companies that are in the development stage of
their life cycles with potential for above-average earnings growth. Included
are companies which may be benefiting from new developments in advanced
technology or are providing new products and services to consumers. A third
portion of the State Street Research Growth Portfolio may be held in short-
term fixed income investments.

The mix of assets in the State Street Research Growth Portfolio will vary
with prevailing economic and market conditions. Consequently, the three
portions of the State Street Research Growth Portfolio's assets will not be
invested in any specified proportions. Generally, the greater portion of
assets will be invested in equity securities of established companies. Up to
25% of the assets may be invested in securities convertible into common
stocks. The State Street Research Growth Portfolio may also acquire other
convertible securities and warrants.

Investments in relatively smaller companies involve greater risk than is
customarily associated with more established companies. These risks are
discussed below under "State Street Research Aggressive Growth Portfolio."
However, the State Street Research Growth Portfolio will endeavor to manage
risk by investing in a

PROSPECTUS 7
<PAGE>

...............................................................
diversified group of companies and industries. The State Street Research
Growth Portfolio may also seek to shift funds into short-term instruments of
the type described in the first paragraph under "State Street Research Money
Market Portfolio" for defensive purposes in periods of adverse market
conditions and in periods when short-term rates appear more attractive than
prospective equity returns.

State Street Research Income Portfolio

The primary investment objective of the State Street Research Income
Portfolio is to achieve the highest possible total return, by combining
current income with capital gains, consistent with prudent investment risk. An
additional objective is preservation of capital. In seeking to achieve these
objectives, the Portfolio will invest at least 75% of the value of its assets
in straight debt securities which have a rating within the three highest
grades as determined by Standard & Poor's Ratings Group (Standard & Poor's) or
Moody's Investor Services Inc. (Moody's). (See "Investment Practices and
Policies" in the Statement of Additional Information for a discussion of these
ratings.) In the event that securities held by the Portfolio fall below those
ratings, the Portfolio will not be obligated to dispose of such securities and
may continue to hold such securities if, in the opinion of Metropolitan Life
or State Street Research, such investment is considered appropriate under the
circumstances.

From time to time, up to 25% of the State Street Research Income Portfolio's
total assets may be invested in straight debt securities which are not rated
within the three highest grades of Standard & Poor's or Moody's as described
above, or in convertible debt securities, convertible preferred and preferred
stocks of companies, the senior securities of which have a rating within the
three highest grades of Standard & Poor's or Moody's applicable to such
securities. Debt securities within the top credit categories (i.e., rated AAA
or AA by Standard & Poor's or Aaa or Aa by Moody's) comprise what are
generally known as high-grade bonds. Debt securities in the medium credit
categories (i.e., rated A or BBB by Standard & Poor's or A or Baa by Moody's)
comprise what are generally known as medium grade bonds. Such debt securities,
as well as those in higher grade categories, are generally known as investment
grade securities. A discussion of the characteristics of and risks of
investing in securities that are less than investment grade is included below
under "Loomis Sayles High Yield Bond Portfolio."

If at any time the State Street Research Income Portfolio purchases unrated
investments, such investments would be purchased only if considered by the
State Street Research to be of comparable quality to the portfolio investments
rated by a nationally recognized statistical rating organization ("NRSRO").

The maturity of debt securities is considered long (ten years or more),
intermediate (one to ten years), or short-term (twelve months or less). The
proportion invested by the Portfolio in each category will generally vary
depending upon an analysis of market values and trends by State Street
Research.

The State Street Research Income Portfolio will be subject to market risks
resulting from changes in interest rates. However, the Portfolio's emphasis on
bonds with the three highest grades should, overall, minimize the financial
risks of its investments. Moreover, the State Street Research Income Portfolio
may forego attempting to achieve the highest levels of income in the short
term in order to limit risk of loss.

The State Street Research Income Portfolio will not directly purchase common
stocks or warrants. However, it may retain up to 10% of the value of its total
assets in common stocks acquired either by conversion of fixed income
securities or by the exercise of warrants attached thereto.

When prevailing market or economic conditions warrant, a portion of the
State Street Research Income Portfolio may be invested in short-term
instruments of the type described in the first paragraph under "State Street
Research Money Market Portfolio" below, to effectively utilize cash reserves.

State Street Research Money Market Portfolio

The investment objective of the State Street Research Money Market Portfolio
is to achieve the highest possible current income consistent with preservation
of capital and maintenance of liquidity, by investing primarily in short-term
money market instruments. The State Street Research Money Market Portfolio
will invest in short-term United States government securities, government
agency securities, bank certificates of deposit and bankers' acceptances,
short-term corporate debt securities (such as commercial paper), variable
amount master demand notes and repurchase and reverse repurchase agreements.
The types of money market instruments in which the State Street Research Money
Market Portfolio may invest are described more fully in "Investment Practices
and Policies," in the Statement of Additional Information.

The State Street Research Money Market Portfolio will limit its investments
to securities that are determined

PROSPECTUS 8
<PAGE>

...............................................................
to have "minimal credit risks" and that are "Eligible Securities." Eligible
Securities have a remaining maturity at the time of purchase of not more than
thirteen months. They are rated in one of the two highest rating categories by
at least two NRSROs (or by the only NRSRO that has rated the security), or, if
unrated, are of comparable quality. The State Street Research Money Market
Portfolio will not invest more than five percent of its assets in Eligible
Securities which are not rated in the highest short-term rating category by at
least two NRSROs (or by the only NRSRO that has rated the instrument), or
comparable unrated securities ("Second Level Securities").

In addition to the requirements set forth in fundamental investment policy
number 1 under "Investment Practices and Policies" in the Statement of
Additional Information, the State Street Research Money Market Portfolio
generally will not invest more than five percent of its assets in the
securities of any one issuer, excluding United States government securities,
measured at the time of purchase. Moreover, the Portfolio will invest no more
than the greater of (i) one percent of its assets and (ii) one million
dollars, in the Second Level Securities of any one issuer. Finally, the
Portfolio will maintain a dollar weighted average maturity of not more than
ninety days.

The value of the securities in the State Street Research Money Market
Portfolio can be expected to vary inversely with the changes in prevailing
interest rates. Thus, if interest rates increase after a security is
purchased, that security, if sold, might be sold at less than cost.
Conversely, if interest rates decline after purchase, the security, if sold,
might be sold at a profit. In either instance, if the security were held to
maturity, no gain or loss would normally be realized as a result of these
fluctuations. Substantial redemptions of shares of the State Street Research
Money Market Portfolio could require the sale of portfolio investments at a
time when a sale might not be desirable.

State Street Research Diversified Portfolio

The investment objective of the State Street Research Diversified Portfolio
is to achieve a high total return while attempting to limit investment risk
and preserve capital by investing in equity securities, fixed-income debt
securities, or short-term money market instruments, or any combination
thereof, at the discretion of State Street Research. It is anticipated that
State Street Research will vary the portion of the State Street Research
Diversified Portfolio's assets invested in each type of security after
considering economic conditions, the general level of common stock prices,
interest rates, and other relevant considerations, including the risks of each
type of security. The equity securities portion of the Portfolio will be
similar in composition to and consist of securities that are permissible
investments for the State Street Research Growth Portfolio, the fixed-income
debt securities portion will be similar in composition to and consist of
securities that are permissible investments for the State Street Research
Income Portfolio, and the short-term money market instruments portion will
consist of securities of a type described in the first paragraph under "State
Street Research Money Market Portfolio" above.

There are no limitations with respect to the percent of the assets of the
State Street Research Diversified Portfolio that may be invested in each of
the three portions described above. Thus, from time to time it may invest
entirely in equity securities, entirely in fixed-income debt securities,
entirely in short-term money market instruments, or any combination of these
types of securities in accordance with the full, complete and total discretion
of State Street Research, subject to the oversight of Metropolitan Life and
the Board of Directors of the Fund.

The State Street Research Diversified Portfolio seeks to diversify
investments across a broad range of equity and debt securities which range
changes over time. depending on the current economic environment. This
difficult task depends on the ability to select appropriate investments at the
appropriate time in light of anticipated changes in market conditions. The
State Street Research Diversified Portfolio also is designed to reduce the
risks associated with investments in any one type of security by utilizing a
variety of investments. However, the performance of the Portfolio will depend
upon State Street Research's judgment and ability to structure the investments
in the Portfolio in anticipation of changing market conditions. Obviously,
there is no assurance that such goals will be achieved.

State Street Research Aggressive Growth Portfolio

The primary investment objective of the State Street Research Aggressive
Growth Portfolio is to achieve maximum capital appreciation by investing
primarily in common stocks (and equity and debt securities convertible into or
carrying the right to acquire common stocks) of emerging growth companies,
undervalued securities or special situations. Current income is not a
consideration in the selection of investments for the Portfolio.

The Portfolio seeks to invest in less mature companies with the potential
for rapid growth. The

PROSPECTUS 9
<PAGE>

...............................................................
Portfolio also invests in securities of companies considered to be undervalued
or to be special situations. A special situation can include, the stock of
larger and more mature companies that trade at prices below what State Street
Research believes to be the companies' intrinsic value, and therefore offer
the potential for above-average investment returns. The Portfolio also seeks
to identify securities that are undervalued due to adverse operating results,
economic or industry conditions or unfavorable publicity. Capitalization of
the companies in which the Portfolio invests can range across the full
spectrum from small to large capitalization.

The State Street Research Aggressive Growth Portfolio may not be suitable
for all investors because of the risks described below. Investing in stocks of
companies that offer high appreciation potential involves greater risk than is
customarily associated with investing in more established companies.
Investment in relatively less mature companies involves certain risks since
such companies often have limited product lines, markets or financial
resources, and their management may lack depth of experience. The common
stocks of less mature companies frequently are traded only on smaller
securities exchanges or in the over-the-counter market. Therefore, the
securities of smaller companies may have limited marketability and may be
subject to more abrupt or erratic market movements than securities of larger
companies or the market averages in general.

MetLife Stock Index Portfolio

The investment objective of the MetLife Stock Index Portfolio is to equal
the performance of the Standard & Poor's 500 Composite Stock Price Index ("S&P
Index") (adjusted to assume reinvestment of dividends) by investing in the
common stock of companies which are included in the S&P Index. The S&P Index
consists of 500 common stocks, most of which are listed on the New York Stock
Exchange. In choosing the 500 stocks which are included in the S&P Index,
Standard & Poor's Equity Services considers market values and industry
diversification. Most of the stocks in the S&P Index are issued by companies
among the largest, in terms of the aggregate market value of their outstanding
stock, measured by the market price per share multiplied by the number of
shares outstanding. Stocks that are not among the five hundred largest are
included in the S&P Index for diversification purposes. Standard & Poor's
Equity Services may, from time to time, add or remove stocks from the S&P
Index. Standard & Poor's Equity Services is not a sponsor of, or in any other
way affiliated with, the Fund.

The MetLife Stock Index Portfolio attempts to duplicate the total return of
the S&P Index while maintaining low transaction costs. The Portfolio will
invest in equity securities that, as a group, reflect the composite
performance of the S&P Index based on a computer program that tracks the
performance of the various stocks in the S&P Index. As is the case with the
S&P Index, the Portfolio will invest in both dividend paying and non-dividend
paying common stocks. The Portfolio may not own, at the same time, each
individual stock in the S&P Index. The Portfolio, upon commencement of
operations, held about 350 of the stocks included in the S&P Index. Since the
commencement of operations, the number has increased to include approximately
all of the stocks in the S&P Index as the Portfolio has grown in total assets.

The MetLife Stock Index Portfolio uses a correlation coefficient to measure
the relationship between the performance of the Portfolio and the S&P Index. A
perfect correlation would produce a coefficient of 1.00 which would be
achieved when the Portfolio's net asset value, including the value of its
dividends, increases or decreases in exact proportion to the change in the S&P
Index. The Portfolio will attempt to maintain a target correlation coefficient
of at least .95. If this target is in danger of not being achieved, the
components of total return of both the Portfolio and the S&P Index would be
broken down to determine the source of the difference so that corrective steps
could be taken.

The Portfolio may also diversify differently by industry segment (such as
automotive industry, airline industry, electronics industry) than does the S&P
Index. Initially approximately 60% of the assets in the Portfolio were
allocated based on a simple capitalization basis, with the remaining assets
allocated on an industry weighted basis. The Portfolio will be rebalanced only
if it deviates from the appropriate weightings by a certain percent depending
on the particular stock or industry. The Portfolio will not purchase any
common stock that is not included in the S&P Index.

Under normal circumstances, at least 75% of the total assets of the
Portfolio will be common stocks included in the S&P Index. (Circumstances that
would not be considered normal include an unusual cash flow pattern such as an
unexpectedly large inflow of cash which the portfolio manager is unable to
invest quickly and completely in such stocks because of the amount of the
cash, or a major catastrophe like atomic war or a natural disaster which
prevents investment in common stocks.) A portion of the Portfolio may
temporarily be invested in short-term investments of the type described in the
first paragraph under "State Street Research Money Market Portfolio," pending
withdrawal or investment.

PROSPECTUS 10
<PAGE>

...............................................................
The MetLife Stock Index Portfolio will not utilize a defensive investment
approach in periods of adverse market conditions such as generally declining
stock prices. Therefore, an investor participating in the Portfolio bears the
risk of such adverse market conditions. The Portfolio's return may be lower
than the return of the S&P Index because of brokerage and other transaction
costs, other Portfolio or Fund expenses, and tracking error.

The MetLife Stock Index Portfolio will not trade in securities for short-
term profits. Generally, the Portfolio will only trade securities to reflect
changes in the S&P Index or to carry out appropriate rebalancing for
diversification purposes or to more closely track the return of the S&P Index.

FUNDAMENTAL INVESTMENT POLICIES

The Fund has adopted the following fundamental policies relating to the
investment of assets of the Portfolios and their activities. Additional
fundamental investment policies are described in the Fund's Statement of
Additional Information at "Investment Practices and Policies." The fundamental
policies discussed below and in the Statement of Additional Information,
unlike the general objectives and policies discussed above, may not be changed
without approval by the requisite vote of the outstanding voting shares of
each Portfolio affected. Unless otherwise indicated, all restrictions apply at
the time of purchase.

No Portfolio may:

1. write call options which are not covered options (see "Writing Covered
Put and Call Options and Purchasing Put and Call Options" under "Other
Investment Practices");

2. write put options, except to close out option positions previously
entered into;

3. invest in commodities or commodity contracts, except that: (i) any
Portfolio that invests in equity securities may purchase and sell stock
index futures contracts, may write covered call options and purchase put and
call options on such stock index futures contracts and may enter into
closing transactions with respect to such options; (ii) all Portfolios may
purchase and sell interest rate futures contracts, may write covered call
options and purchase put and call options on such interest rate futures
contracts and may enter into closing transactions with respect to such
options; and (iii) all Portfolios may write covered call options and
purchase put and call options on indices and may enter into closing
transactions with respect to such options, to the extent that investment in
a particular index is economically appropriate for the management of the
Portfolio's underlying securities and consistent with its investment
objective(s) and policies;

4. make loans, provided, however, that this restriction shall not prohibit
a Portfolio from (a) entering into repurchase agreements (see "Investment
Practices and Policies" in the Statement of Additional Information), (b)
purchasing bonds, notes, debentures or other obligations of a character
customarily purchased by institutional or individual investors (whether or
not publicly distributed) and (c) making loans of its portfolio securities
or other assets which do not thereupon cause in excess of 20% of the value
of the Portfolio's total assets to consist of loaned securities or assets
(see "Lending of Portfolio Securities" in the Statement of Additional
Information for a discussion of additional risks associated with such
practice); or

5. purchase securities of foreign issuers if more than 10% of the value of
the Portfolio's total assets would thereupon be invested in such securities.
However, up to 25% of the value of the Portfolio's total assets may be
invested in securities (i) issued, assumed or guaranteed by foreign
governments, or political subdivisions or instrumentalities thereof,
(ii) assumed or guaranteed by domestic issuers or (iii) issued, assumed or
guaranteed by foreign issuers having a class of securities listed for
trading on the New York Stock Exchange. (See "Foreign Securities" for a
discussion of additional risks associated with such investments.)

OTHER INVESTMENT PRACTICES

Writing Covered Put and Call Options and Purchasing Put and Call Options. In
order to earn additional income or as a hedge against or to minimize
anticipated declines in the value of its securities, each Portfolio may write
(sell) covered call options on securities and stock indices and may purchase
call options to close out covered call options previously entered into.

As a general matter, a call option gives the holder (purchaser) the right to
buy and obligates the writer (seller) to sell, in return for a premium paid,
the underlying security or currency at the exercise price during the option
period. As a general matter, a put option gives the holder (purchaser) the
right to sell and

PROSPECTUS 11
<PAGE>

...............................................................
obligates the writer (seller) to purchase, in return for a premium paid, the
underlying security or currency at the exercise price during the option
period. In economic effect, a stock index call or put option is similar to an
option on a particular security, except that the value of the option depends
on the weighted value of the group of securities comprising the index, rather
than a particular security, and settlements are made in cash rather than by
delivery of a particular security. The Portfolios will write covered call
options only with respect to equity securities, bonds, stock and bond indices
and currencies which correlate with that Portfolio's particular portfolio
securities.

Options written by the Portfolios will be "covered" by segregating liquid
assets with the Fund custodian that at all times at least equal the Fund's
obligations under options it has written, by purchasing an appropriate
offsetting option or other derivative instruments, or (in the case of a call
option written by the Fund) owning the securities or other investments subject
to the options.

Each Portfolio may also purchase put and call options with respect to
securities and indices that correlate with that Portfolio's securities. A
Portfolio may purchase put options for defensive purposes in order to protect
against an anticipated decline in the value of its portfolio securities. As
the holder of a put option with respect to individual securities, the
Portfolio has the right to sell the securities underlying the options and to
receive a cash payment at the exercise price at any time during the option
period. As the holder of a put option on an index, the Portfolio has the right
to receive, upon exercise of the option, a cash payment equal to a multiple of
any excess of the strike price specified by the option over the value of the
index. A Portfolio may purchase call options in order to acquire the
securities underlying the option or, with respect to options on indices, to
receive income equal to the value of such index over the strike price. As the
holder of a call option with respect to individual securities, the Portfolio
obtains the right to purchase the underlying security at the exercise price at
any time during the option period. With respect to options on an index, the
holder of a call option obtains the right to receive, upon exercise of the
option, a cash payment equal to the multiple of any excess of the value of the
index on the exercise date over the strike price specified in the option. The
Portfolios will write only covered options that are listed on recognized
securities exchanges.

Although these investment practices may be used to generate additional
income and to attempt to reduce the effect of any adverse price movement in
the security subject to the option, they do involve certain risks that are
different in some respects from investment risks associated with similar funds
which do not engage in such activities. These risks include the following:
writing covered call options--the inability to effect closing transactions at
favorable prices and the inability to participate in the appreciation of the
underlying securities above the exercise price; writing covered put options--
the inability to effect closing transactions at favorable prices and the
obligation to purchase the specified securities or to make a cash settlement
on the stock index at prices which may not reflect current market values or
exchange rates; and purchasing put and call options--possible loss of the
entire premium paid. In addition, the effectiveness of hedging through the
purchase or sale of index options will depend upon the extent to which price
movements in the portion of the securities portfolios being hedged correlate
with price movements in the selected index. Perfect correlation may not be
possible because the securities held or to be acquired by a Portfolio may not
exactly match the composition of the index on which options are written. If
the forecasts of the manager or a sub-investment manager, as applicable,
regarding movements in securities prices or interest rates are incorrect, the
Portfolio's investment results may have been better without the hedge. A more
thorough description of these investment practices and their associated risks
is contained in the Fund's Statement of Additional Information.

The options and futures markets of foreign countries are small compared to
those of the United States and consequently are characterized in most cases by
less liquidity than are the U.S. markets. In addition, foreign markets may be
subject to less detailed reporting requirements and regulatory controls than
U.S. markets. Furthermore, investments in options in foreign markets are
subject to many of the same risks as other foreign investments. See "Foreign
Securities" below.

Futures Contracts and Options on Futures Contracts. All the Portfolios
except the MetLife Stock Index Portfolio may purchase and sell futures
contracts on debt securities and indices of debt securities (i.e. interest
rate futures contracts) as a hedge against or to minimize adverse principal
fluctuations resulting from anticipated interest rate changes or as an
efficient means to adjust their exposure to the bond market. The State Street
Research Growth, State Street Research Diversified, State Street Research
Aggressive Growth and MetLife Stock Index may, where appropriate, enter into
futures contracts on equity securities or stock indices to provide a hedge for
a portion of that particular Portfolio's equity holdings or to enhance return.
Stock index futures contracts may be used as a way to implement either an
increase or decrease in portfolio exposure to the equity markets in response
to changing market conditions.

PROSPECTUS 12
<PAGE>

...............................................................

Each Portfolio may also write (sell) covered call options on, and purchase
put and call options on, futures contracts of the type which that Portfolio is
permitted to purchase or sell, and may enter into closing transactions with
respect to such options on futures contracts purchased or sold. In each case,
options on futures contracts will be used only for the same purposes that the
Portfolio may use futures contracts. The Portfolios will not enter into
futures contracts or write options on futures for leveraging purposes and will
only enter into futures contracts or related options that are traded on a
recognized futures exchange. No Portfolio will enter into futures contracts or
options thereon if immediately thereafter the sum of the amounts of initial
margin deposits on the Portfolio's open futures contracts and options written
on futures and premiums paid for unexpired options on futures contracts would
exceed 5% of the value of that Portfolio's total assets; provided, however,
that in the case of an option that is "in-the-money" at the time of purchase,
the "in-the-money" amount may be excluded in calculating the 5% limitation.

The use of futures contracts by the Portfolios entails certain risks,
including but not limited to the following: no assurance that futures
contracts transactions can be offset at favorable prices; possible reduction
of a Portfolio's income due to the use of hedging; possible reduction in value
of both the securities or currency hedged and the hedging instrument; possible
lack of liquidity due to daily limits on price fluctuations; imperfect
correlation between the contract and the securities or currencies being
hedged; and potential losses in excess of the amount initially invested in
futures contracts themselves. If the expectations of the investment manager or
a sub-investment manager, as applicable, regarding movements in securities
prices, interest rates or exchange rates are incorrect, a Portfolio may have
experienced better investment results without use of these instruments. The
use of futures contracts and options on futures contracts requires special
skills in addition to those needed to select portfolio securities. A further
discussion of futures contracts and options and their associated risks is
contained in the Statement of Additional Information.

Foreign Securities. Subject to the restrictions contained in fundamental
investment policy number 5 and each Portfolio's investment objectives and
policies, each Portfolio may purchase securities of foreign issuers (including
foreign governments) or securities denominated in foreign currencies.

When investing in common stocks and equity-related securities of foreign
issuers, the Portfolios may purchase ADRs, EDRs, IDRs and GDRs. ADRs are U.S.
dollar-denominated certificates issued by a U.S. bank or trust company and
represent the right to receive securities of a foreign issuer deposited in a
domestic bank or foreign branch of a U.S. bank. EDRs and IDRs are receipts
issued in Europe, generally by a non-U.S. bank, or trust company, that
evidence ownership of non-U.S. securities. GDRs are securities convertible
into equity securities of foreign issuers. ADRs are traded on domestic
exchanges or in the U.S. over-the-counter market and, generally, are in
registered form. EDRs, GDRs and IDRs are traded on non-U.S. exchanges or in
non-U.S. over-the-counter markets and, generally, are in bearer form.
Investment in ADRs has certain advantages over direct investment in the
underlying non-U.S. securities because (i) ADRs are U.S. dollar-denominated
investments which are registered domestically, easily transferable, and for
which market quotations are generally readily available, and (ii) issuers
whose securities are represented by ADRs are subject to the same auditing,
accounting, and financial reporting standards as domestic issuers.

Each Portfolio may also, in accordance with its specific investment
objectives, policies and restrictions, purchase high-quality U.S. dollar-
denominated money market securities of foreign issuers. Such money market
securities may be registered domestically and traded on domestic exchanges or
in the U.S. over-the-counter market (e.g. Yankee securities), or may be
registered abroad and traded exclusively in foreign markets (e.g. Eurodollar
securities).

Although investments in foreign securities by each Portfolio may reduce
overall risk by providing further diversification, investments in securities
of foreign issuers, particularly non-governmental issuers, involve certain
specific risks which are not ordinarily associated with investments in
domestic issuers. The securities of non-U.S. issuers held by the Portfolios
generally will not be registered under, nor will the issuers thereof be
subject to, the reporting requirements of the SEC. Accordingly, there may be
less publicly available information about the securities and about the foreign
company or government issuing them than is available about a domestic company
or government entity. Companies outside the United States are not subject to
the same accounting, auditing, and financial reporting standards, practices,
and requirements applicable to domestic companies. Stock markets outside the
United States may not be as developed or as efficient as those in the United
States, and government supervision and regulation of those stock markets and
brokers is not identical to that in the United States. The securities of some
non-U.S. companies may be less liquid and more volatile than securities of
comparable U.S. companies, and settlement of transactions with respect to such
securities may sometimes be delayed beyond periods

PROSPECTUS 13
<PAGE>

...............................................................
customary in the United States, which might present liquidity concerns.
Further, fixed brokerage commissions on certain non-U.S. stock exchanges are
generally higher than negotiated commissions on United States exchange-listed
securities, and custodial costs with respect to these securities generally
exceed domestic costs. In addition, with respect to some countries, there is
the possibility of unfavorable changes in investment or exchange control
regulations, expropriation, or confiscatory taxation, limitations on the
removal of funds or other assets of the Portfolios, political or social
instability, or diplomatic developments that could adversely affect
investments in those countries. Further, the value of each Portfolio's
securities denominated in foreign currencies will be affected favorably or
unfavorably by changes in currency exchange rates and exchange control
regulations, and the Portfolios may incur costs in connection with conversions
between various currencies.

The portfolio managers will consider these and other factors before
investing in foreign securities, and no such investments will be made unless,
in their view, the potential benefits to a Portfolio are deemed to outweigh
the risks and such investments will meet the policies, standards and
objectives of a particular Portfolio.

Forward Foreign Currency Exchange Contracts. When the Portfolios invest in
securities denominated in currencies other than U.S. dollars, such securities
may be affected favorably or unfavorably by changes in currency rates. Each
Portfolio (except the MetLife Stock Index Portfolio) may use forward foreign
currency exchange contracts ("forward currency contracts") to hedge the
currency risk relating to securities denominated or traded in a foreign
currency that are purchased, sold, or held by that Portfolio. A forward
currency contract involves an obligation to purchase or sell a specific
currency at a future date, which may be any fixed number of days from the date
of the forward currency contract agreed upon by the parties, at a price set at
the time of the contract. These forward currency contracts are principally
traded in the interbank market conducted directly between currency traders
(usually large commercial banks) and their customers. Except as discussed in
the following paragraph, the Portfolios may enter into forward currency
contracts under two circumstances. First, when a Portfolio has entered into a
contract to purchase or sell a security denominated in or exposed to a foreign
currency, that Portfolio may be able to protect itself against a possible
loss, between the trade date and the settlement date for such security,
resulting from an adverse change in the relationship between the U.S. dollar
and the foreign currency in which such security is denominated or exposed, by
entering into a forward currency contract in U.S. dollars for the purchase or
sale of foreign currency. However, this practice may limit potential gains
which might result from a positive change in such currency relationships.
Second, when the management for a Portfolio believes that the currency of a
particular country may suffer or enjoy a substantial movement against the U.S.
dollar (or another currency), that Portfolio may enter into a forward currency
contract to sell or buy an amount of foreign currency approximating the value
of some or all of that Portfolio's securities denominated in or exposed to
foreign currency. Portfolios that invest in foreign securities may "hedge"
their exposure to potentially unfavorable currency changes by purchasing a
contract to exchange one currency for another on some future date at a
specified exchange rate. In certain circumstances, a "proxy currency" may be
substituted for the currency in which the investment is denominated or traded,
a strategy known as "proxy hedging." Although foreign currency transactions
will be used primarily to protect a Portfolio's foreign securities from
adverse currency movements relative to the dollar, they involve the risk that
anticipated currency movements will not occur and the Portfolio's total return
could be reduced. The forecasting of currency market movements is extremely
difficult and whether such a hedging strategy will be successful is highly
uncertain.

Mortgage-Related Securities. The Portfolios may invest in Fannie Maes,
Freddie Macs, Collateralized Mortgage Obligations ("CMOs"), and related
securities, including Ginnie Maes and mortgage-backed securities. Such
mortgage-related securities represent a direct or indirect interest in a pool
of mortgages. They may be issued or guaranteed by U.S. Government
instrumentalities or by non-governmental entities. The issuer's obligation to
make interest and principal payments is secured by the underlying portfolio of
mortgages or mortgage-backed securities. In the event of sufficient early
prepayments on the underlying mortgages, the mortgage-related securities owned
by the Portfolio may be retired prior to their maturity. Such early retirement
could involve the loss of any premium the Portfolio paid when it acquired the
investment and could result in the Portfolio's reinvesting the proceeds at a
lower interest rate than the retired security paid. Because of the early
retirement feature, mortgage-related securities may be more volatile than many
other fixed-income investments.

Also CMOs and other mortgage-related securities are valued based on expected
prepayment rates. Changing expectations about prepayment rates (due to
changing interest rates or other factors) will result in higher or lower
market values for these securities after they are purchased by a Portfolio.
The foregoing

PROSPECTUS 14
<PAGE>

...............................................................
characteristics can cause the market value of CMOs and other mortgage-related
securities to increase less in a decreasing interest rate environment and to
decrease more in an increasing interest rate environment than would be the
case with respect to otherwise comparable debt securities that are not subject
to prepayment features.

All of the Portfolios except for the State Street Research Money Market
Portfolio and MetLife Stock Index Portfolio may also purchase "IOs," which are
entitled to the interest payments from a class or series of mortgage-related
securities, and "POs," which are entitled to the principal payments. As
compared with mortgage-related securities that provide for periodic interest
payments, POs generally will experience greater increases in value in response
to falling interest rates or increases in prepayment rates as originally
estimated. Conversely, they will decrease in value more as a result of
increasing interest rates or reductions from originally estimated prepayment
rates. IOs also are highly volatile, and their value will generally change in
the opposite direction from changes in the related POs' value as a result of
changes in interest rates or prepayment rates as originally estimated. If the
underlying mortgages are prepaid, the IOs have no further value and a
Portfolio, therefore, may not recover all of its investment.

Common and Preferred Stocks. Stocks represent shares of ownership in a
company. Equity securities of companies with relatively small market
capitalization may be more volatile than the securities of larger, more
established companies and than the broad equity market indices. Generally,
preferred stock has a specified dividend and ranks after bonds and before
common stocks in its claim on income for dividend payments and on assets
should the company be liquidated. After other claims are satisfied, common
stockholders participate in company profits on a pro rata basis; profits may
be paid out in dividends or reinvested in the company to help it grow.
Increases and decreases in earnings are usually reflected in a company's stock
price, so common stocks generally have the greatest appreciation and
depreciation potential of all corporate securities. While most preferred
stocks pay a dividend, a Portfolio may purchase preferred stock where the
issuer has omitted, or is in danger of omitting, payment of its dividend. Such
investments would be made primarily for their capital appreciation potential.

Convertible Securities and Warrants. Securities convertible into common
stocks consist primarily of bonds or preferred stocks which have warrants
attached or which are exchangeable into a specified number of shares of common
stock. Traditionally, convertible securities have paid dividends or interest
at rates higher than common stocks but lower than nonconvertible securities.
They generally participate in the appreciation or depreciation of the
underlying stock into which they are convertible, but to a lesser degree. In
recent years, convertibles have been developed which combine higher or lower
current income with options and other features. Warrants are options to buy a
stated number of shares of common stock at a specified price anytime during
the life of the warrants (generally, two or more years).

Private Placements. These securities are sold directly to a small number of
investors, usually institutions. Unlike public offerings, such securities are
not registered with the SEC. Certain privately offered securities are Rule
144A securities which can be resold only to certain qualified institutional
buyers. Private Placements may be illiquid and their sale may involve
substantial delays and additional costs. The absence of a trading market may
make it difficult to ascertain a market value for an illiquid or restricted
investment. Rule 144A securities may be considered liquid under procedures
adopted by the Fund's Board of Directors.

Zero Coupon Securities. These securities accrue interest at a specified
rate, but do not pay interest in cash on a current basis. A Portfolio is
required to distribute the income on zero coupon securities to Portfolio
shareholders as the income accrues, even though the Portfolio is not receiving
the income in cash on a current basis. Thus the Portfolio may have to sell
other investments to obtain cash to make income distributions. Zero coupon
securities are subject to greater market fluctuations from changing interest
rates than debt obligations of comparable maturities which make current cash
distributions of interest.

Purchasing Securities on a "When-Issued" Basis. The purchase of securities
on a "when-issued" basis means that a Portfolio will enter into a commitment
to buy the security before the security has been issued. The Portfolio's
payment obligation and the interest rate on the security are determined when
the Portfolio enters into the commitment. The security is typically delivered
to the Portfolio 15 to 120 days later. No interest accrues on the security
between the time the Portfolio enters into the commitment and the time the
security is delivered. If the value of the security being purchased falls
between the time a Portfolio commits to buy it and the payment date, the
Portfolio may sustain a loss. The risk of the loss is in addition to the
Portfolio's risk of loss on the securities actually in its portfolio at the
time. In addition, when the Portfolio buys a security on a when-issued basis,
it is subject to the risk that market rates of interest will increase before
the time the security is delivered, with the result that the yield on the
security delivered to the Portfolio may be lower than the yield available on

PROSPECTUS 15
<PAGE>

...............................................................
other, comparable securities at the time of delivery. If the Portfolio has
outstanding obligations to buy when-issued securities, it will maintain liquid
assets in a segregated account at its custodian bank in an amount sufficient
to satisfy these obligations.

MANAGEMENT OF THE FUND
...............................................................................

The directors, in addition to reviewing the actions of the Fund's investment
manager and sub-investment manager as set forth below, decide upon matters of
general policy. The Fund's officers supervise the daily business operations of
the Fund. A listing of the Board of Directors and the officers of the Fund is
set forth under "Directors and Officers" in the Statement of Additional
Information.

Metropolitan Life is the investment manager and principal underwriter and
distributor for the Fund. Metropolitan Life also manages investment assets
owned by it, by certain companies affiliated with it and by certain other
entities. Metropolitan Life is a mutual life insurance company which sells
insurance policies and annuity contracts. On December 31, 1997, it had total
life insurance in force of approximately $1.7 trillion and total assets under
management of approximately $330.3 billion. Metropolitan Life is the parent of
Metropolitan Tower.

State Street Research is the sub-investment manager with respect to the
State Street Research Growth, State Street Research Income, State Street
Research Diversified, State Street Research Money Market and State Street
Research Aggressive Growth Portfolios. State Street Research is a Delaware
corporation, and is a wholly-owned indirect subsidiary of Metropolitan Life,
which currently provides investment research and management services to a
family of mutual funds and a limited number of other substantial institutional
clients, such as trustees for corporate pension plans, endowments and
foundations. State Street Research has a history that dates to 1924, with the
founding of America's second mutual fund. On December 31, 1997, State Street
Research and its subsidiaries had investment arrangements in effect for about
$47.3 billion in assets. State Street Research's fees for sub-investment
management services are paid by Metropolitan Life.

Metropolitan Life, subject to review by the Fund's Board of Directors, is
responsible for the overall management of each Portfolio and has ultimate
responsibility for making decisions to buy, sell or hold any particular
security for each Portfolio and day-to-day responsibility for making such
decisions for the MetLife Stock Index Portfolios. The sub-investment manager
that has been appointed for each Portfolio have the day-to-day responsibility
for making decisions to buy, sell or hold any particular security for that
Portfolio. Metropolitan Life is also obligated to perform general
administrative and management services for the Fund.

For providing investment management services, Metropolitan Life receives
monthly compensation from each Portfolio computed by applying the following
annual percentages to the average daily value of the aggregate net assets of
that Portfolio:

<TABLE>
<S> <C>
State Street Research Money Market Portfolio; .25%
MetLife Stock Index Portfolio
State Street Research Growth Portfolio .55% of the first $500 million,
.50% of the next $500 million;
and .45% over $1 billion
State Street Research Income Portfolio .35% of the first $250 million,
.30% of the next $250 million;
and .25% over $500 million
State Street Research Diversified Portfolio .50% of the first $500 million,
.45% of the next $500 million;
and .40% over $1 billion
State Street Research Aggressive Growth .75% of the first $500 million,
Portfolio .70% of the next $500 million;
and .65% over $1 billion
</TABLE>

During 1995, 1996 and 1997, fees aggregated $12,612,476, $18,514,310, and
$28,217,594, respectively, for the six Portfolios described in this
Prospectus.

During 1995, 1996 and 1997, sub-investment management fees for the State
Street Research Growth, State Street Research Income, State Street Research
Diversified, and State Street Research Aggressive Growth Portfolios aggregated
$10,412,734, $14,979,746 and $19,202,150, respectively. During 1997, sub-
investment management fees for the State Street Research Money Market
Portfolio aggregated $44,247. No sub-investment management fees were paid to
State Street Research with respect to the State Street Research Money Market
Portfolio during 1995 and 1996, because State Street Research did not become
sub-investment manager for such Portfolio until August 1, 1997.

The Fund has no responsibility for the payment of fees to State Street
Research:

John T. Wilson is the portfolio manager for the State Street Research Growth
Portfolio and for the equity portion of the State Street Research Diversified
Portfolio. Mr. Wilson is a member of the State Street Research Equity Group's
Growth Team and a Senior Vice President of the Firm. Mr. Wilson joined the
Firm in 1996 as a portfolio manager. Before joining State Street

PROSPECTUS 16
<PAGE>

...............................................................
Research, Mr. Wilson served as a portfolio manager with Phoenix Investment
Counsel, Inc. He received a B.A. from Trinity College and an M.B.A. from Duke
University. Mr. Wilson has six years of investment experience.

Kim M. Peters manages the State Street Research Income Portfolio and the
fixed income portion of the State Street Research Diversified Portfolio. Mr.
Peters is the lead portfolio manager for the State Street Research Fixed
Income Group's Corporate Team and is a Senior Vice President of the firm. He
joined State Street Research in 1986 as a security analyst, was named Vice
President in 1993 and became Senior Vice President in 1994. Mr. Peters
previously served as Registration and Compliance Specialist at the State
Historical Society of Wisconsin. He earned an A.B. from Clark University, an
M.S. from the University of Wisconsin and an M.B.A. from the University of
Wisconsin Graduate School of Business. He has ten years of investment
experience.

Commencing in February, 1998, Richard J. Jodka became portfolio manager for
the State Street Research Aggressive Growth Portfolio. Mr. Jodka is currently
Senior Vice President of State Street Research. During the past five years he
was an officer and portfolio manager with Frontier Capital Management and
Putnam Investments, Inc. Mr. Jodka received a B.A. from Villanova University
and an M.B.A. from Boston University.

Prior to May 16, 1993, Metropolitan Life was obligated to pay all expenses
of each Portfolio that was in operation at the time. Since that date, the Fund
has been obligated to pay all of its own expenses. However, Metropolitan Life
reserves the right, in its sole discretion, to pay all or a portion of the
expenses of the Fund or any of the Portfolios, and to terminate such voluntary
payment at any time upon notice to the Board of Directors and affected
shareholders of the Fund.

GENERAL INFORMATION ABOUT THE FUND AND ITS SHARES
...............................................................................

The Fund was incorporated under the laws of the State of Maryland on
November 23, 1982 and filed articles supplementary with the State of Maryland
with respect to the State Street Research Diversified Portfolio on October 25,
1984, with respect to the State Street Research Aggressive Growth and three
other Portfolios on October 19, 1987 and February 2, 1988, with respect to the
MetLife Stock Index Portfolio on January 30, 1990. The authorized capital
stock of the Fund consists of 2,000,000,000 shares of common stock, par value
$0.01 per share. The shares of common stock are presently divided into
thirteen classes (or series) including: State Street Research Growth Portfolio
common stock, State Street Research Income Portfolio common stock, State
Street Research Money Market Portfolio common stock, State Street Research
Diversified Portfolio common stock, State Street Research Aggressive Growth
Portfolio common stock, MetLife Stock Index Portfolio common stock, State
Street Research International Stock Portfolio common stock, Loomis Sayles High
Yield Bond Portfolio common stock, T. Rowe Price Small Cap Growth Portfolio
common stock, Janus Mid Cap Portfolio common stock and Scudder Global Equity
Portfolio common stock. Each class currently consists of 100,000,000 shares.
The Board of Directors of the Fund may classify and reclassify any authorized
and unissued shares of capital stock, and the Fund reserves the right to issue
additional classes of shares without the consent of shareholders.

As a Maryland corporation, the Fund is not required to hold regular annual
shareholder meetings and, in the normal course, does not expect to hold such
meetings. The Fund, is, however, required to hold shareholder meetings for
such purposes as, for example: (i) approving certain agreements as required by
the 1940 Act; (ii) changing fundamental investment objectives and restrictions
of the Portfolios; and (iii) filling vacancies on the Board of Directors in
the event that less than a majority of the directors have been elected by
shareholders. The Fund expects that there will be no meetings of shareholders
for the purpose of electing directors unless and until such time as less than
a majority of the directors holding office have been elected by shareholders.
At such time, the directors then in office will call a shareholder meeting for
the election of directors. In addition, holders of record of not less than
two-thirds of the outstanding shares of the Fund may remove a director from
office by a vote cast in person or by proxy at a shareholder meeting called
for that purpose at the request of holders of 10% or more of the outstanding
shares of the Fund. The Fund has the obligation to assist in such shareholder
communications. Except as set forth above, directors will continue in office
and may appoint successor directors.

All shares of common stock, of whatever class, are entitled to one vote, and
the votes of all classes are cast on an aggregate basis, except on matters
where the interests of the Portfolios differ. In such a case, the voting is on
a Portfolio-by-Portfolio basis. Approval or disapproval by the shares in one
Portfolio on such a matter would not generally be a prerequisite to approval
or disapproval by shares in another Portfolio; and shares in a Portfolio not
affected by a matter generally would not be entitled to vote on that matter.
Examples of matters which would require a Portfolio-by-Portfolio vote are
changes in fundamental investment policies of a particular Portfolio and
approval of changes in any investment management agreement relating to a
particular Portfolio.
PROSPECTUS 17
<PAGE>

...............................................................

Each issued and outstanding share in a Portfolio is entitled to participate
equally in dividends and distributions declared by such Portfolio and to
receive its pro rata share of the assets of such Portfolio remaining after
satisfaction of outstanding liabilities upon liquidation or dissolution. For
these purposes, and for purposes of determining the sale and redemption prices
of shares, any assets which are not clearly allocable to a particular Portfolio
or Portfolios are allocated in the manner determined by the Board of Directors.
Accrued liabilities which are not clearly allocable to one or more Portfolios
would generally be allocated among the Portfolios in proportion to their
relative net assets before adjustment for such unallocated liability. In the
unlikely event that any Portfolio incurred liabilities in excess of its assets,
the other Portfolios could be held liable for such excess.

Metropolitan Life provided the initial capital for the Fund by purchasing for
its general account an amount of shares of each of the Portfolios. Metropolitan
Life has withdrawn portions of such investments from time to time, but has
agreed not to make any redemption request if it would reduce the Fund's net
worth below $100,000. Metropolitan Life has paid all of the organizational
expenses of the Fund and will not be reimbursed by the Fund.

Owners of Contracts supported by separate accounts registered as unit
investment trusts under the Investment Company Act of 1940 have certain voting
interests in respect of Fund shares. See the prospectus for the Contracts or
other material which is attached at the front of this Prospectus for a
description of the rights granted such Contract owners to instruct voting of
Fund shares. The Fund has been advised that shares held by Metropolitan Life in
its general account and in a separate account not registered as a unit
investment trust will be voted in the same proportion as the shares held by the
Insurance Companies in their separate accounts registered as unit investment
trusts. As of March 10, 1998, Metropolitan Life owned in its general account
and in the separate account not registered as a unit investment trust
approximately 3.42%, 2.93%, 3.52%, 26.89%, 4.40% and 4.22%, respectively, of
the outstanding shares of the State Street Research Growth Portfolio, State
Street Research Income Portfolio, State Street Research Diversified Portfolio,
State Street Research Money Market Portfolio, State Street Research Aggressive
Growth Portfolio, and MetLife Stock Index Portfolio.

The Fund's Transfer and Dividend Paying Agent is State Street Bank and Trust
Company, 225 Franklin Street, Boston, Massachusetts 02110. State Street
Research is not affiliated with State Street Bank and Trust Company.

DIVIDENDS, DISTRIBUTIONS AND TAXES
................................................................................

The Fund intends to qualify as a "regulated investment company" under certain
provisions of the Internal Revenue Code (the "Code"). Under such provisions,
the Fund will not be subject to federal income tax on such part of its net
ordinary income and net realized capital gains which it distributes to
shareholders.

It is the Fund's intention to distribute substantially all the net investment
income, if any, of each Portfolio. The Fund must distribute by the end of each
calendar year substantially all the ordinary income and capital gains of each
Portfolio to avoid the imposition of an excise tax on certain undistributed
amounts (see "Taxes" in the Statement of Additional Information). For dividend
purposes, net investment income of each Portfolio will consist of all payments
of dividends or interest received by such Portfolio (plus or minus any
amortized purchase discount or premium, less the estimated expenses of such
Portfolio). Dividends from investment income of the Portfolios are expected to
be declared annually and reinvested in additional full and fractional shares of
the Portfolio. However, the Board of Directors may decide to declare dividends
at other intervals.

All net realized long or short-term capital gains of the Fund, if any, are
declared and distributed at least annually either during or after the close of
the Fund's fiscal year to the shareholders of the Portfolio or Portfolios to
which such gains are attributable and are reinvested in additional full and
fractional shares of the Portfolio.

For a discussion of the impact on Contract owners of income taxes the
Insurance Companies may owe as a result of (a) their ownership of Fund shares,
(b) their receipt of dividends and distributions thereon, and (c) their gains
from the purchase and sale thereof, reference should be made to the prospectus
or other material for the Contracts attached at the front of this Prospectus.

SALE AND REDEMPTION OF SHARES
................................................................................

Metropolitan Life is the principal underwriter and distributor of the Fund's
shares. Metropolitan Life is also the principal underwriter and distributor of
the Contracts.

The Insurance Companies place orders for the purchase or redemption of shares
of each Portfolio, based on, among other things, the amount of net Contract
premiums or purchase payments transferred to the separate accounts, transfers
to or from a separate account investment division, policy loans, loan
repayments, and benefit payments to be effected on a given date pursuant to the
terms of the Contracts. Such

PROSPECTUS 18
<PAGE>

...............................................................
orders are effected, without sales charge, at the net asset value per share
for each Portfolio determined as of 4:00 p.m., Eastern time, on that same
date.

The net asset value of the shares of each Portfolio of the Fund is
determined once daily immediately after the declaration of dividends, if any,
and is currently determined at the close of regular trading on the New York
Stock Exchange. Absent extraordinary circumstances, regular trading on the New
York Stock Exchange ends at 4:00 p.m., Eastern time, on each day during which
the New York Stock Exchange is open for trading or, on days other than when
the New York Stock Exchange is open, on which it is determined that there is a
sufficient degree of trading in the Fund's portfolio securities that the
current net asset value of its shares might be materially affected.

Net asset value per share of each Portfolio is calculated by dividing the
value of all of that Portfolio's securities plus the value of its other assets
(including dividends and interest received or accrued), less all liabilities
(including accrued expenses and dividends payable), by the number of
outstanding shares of the Portfolio. For purposes of determining the value of
a Portfolio's assets, cash and receivables will be valued at their face
amounts. Interest will be recorded as accrued and dividends will be recorded
on the ex-dividend date.

Except with respect to short-term debt instruments having a remaining
maturity of 60 days or less, securities, options and futures contracts held by
the State Street Research Growth, State Street Research Income, State Street
Research Diversified, State Street Research Aggressive Growth and MetLife
Stock Index Portfolios will be valued at market value. Securities and assets
for which market quotations are not readily available will be valued at fair
value as determined in good faith by or under the direction of the Board of
Directors of the Fund. Short-term debt instruments with a remaining maturity
of 60 days or less will be valued on an amortized cost basis.

The Fund will value all debt instruments held by the State Street Research
Money Market Portfolio utilizing the amortized cost method of valuation. All
other securities and assets of the State Street Research Money Market
Portfolio will be valued in accordance with the preceding paragraph.

PROSPECTUS 19
<PAGE>

METROPOLITAN SERIES FUND, INC.

---------------------

Principal Office of the Fund
1 Madison Avenue
New York, New York 10010

---------------------

Investment Manager
Metropolitan Life Insurance Company
1 Madison Avenue
New York, New York 10010
(Principal Business Address)

Sub-Investment Manager
State Street Research &
Management Company
One Financial Center
Boston, Massachusetts 02111
(Principal Business Address)

Custodian and Transfer Agent
State Street Bank and Trust Company
225 Franklin Street
Boston, Massachusetts 02110
(Principal Business Address)

NO DEALER, SALESMAN, OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMA-
TION OR TO MAKE ANY REPRESENTATIONS, OTHER THAN THOSE CONTAINED IN THIS PRO-
SPECTUS, IN CONNECTION WITH THE OFFER MADE BY THIS PROSPECTUS, AND, IF GIVEN OR
MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAV-
ING BEEN AUTHORIZED BY THE FUND, METROPOLITAN LIFE OR STATE STREET RESEARCH.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING IN ANY STATE IN WHICH SUCH OF-
FERING MAY NOT LAWFULLY BE MADE.

98042GKZ(exp0599)MLIC-LD
<PAGE>

STATEMENT OF ADDITIONAL INFORMATION
for
METROPOLITAN SERIES FUND, INC.

Metropolitan Series Fund, Inc., is an investment company designed to meet a
wide range of investment objectives with its separate Portfolios. The eleven
Portfolios currently available are: State Street Research Growth Portfolio,
State Street Research Income Portfolio, State Street Research Money Market
Portfolio, State Street Research Diversified Portfolio, State Street Research
Aggressive Growth Portfolio, MetLife Stock Index Portfolio, State Street
Research International Stock Portfolio, Loomis Sayles High Yield Bond
Portfolio, Janus Mid Cap Portfolio, T. Rowe Price Small Cap Growth Portfolio
and Scudder Global Equity Portfolio.

This Statement of Additional Information is not a prospectus. It should be
read in conjunction with the Prospectus dated May 1, 1998. A copy of the
Prospectus may be obtained from Metropolitan Life Insurance Company, One
Madison Avenue, New York, New York 10010, Area 2H, telephone number (212) 578-
4057.

The date of this Statement of Additional Information is May 1, 1998.

One Madison Avenue, New York, New York 10010 Telephone (800) 553-4459

18000100038(0598)
98042 FXL(exp0599)MLIC-LD

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TABLE OF CONTENTS

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PAGE
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<S> <C>
Investment Practices and Policies....................................... B- 3
Money Market Instruments............................................... B- 3
Mortgage-Related Securities............................................ B- 5
Stripped Agency Mortgage-Backed Securities............................. B- 6
High Yield Securities.................................................. B- 6
Illiquid or Restricted Securities...................................... B- 7
Warrants............................................................... B- 8
Debt Instrument Ratings................................................ B- 8
Certain Investment Limitations......................................... B-10
Insurance Law Restrictions............................................. B-11
Certain Investment Practices........................................... B-11
Lending of Portfolio Securities....................................... B-11
Options and Futures................................................... B-12
Forward Foreign Currency Exchange Contracts........................... B-17
Other Derivative Transactions......................................... B-19
Industry Classifications............................................... B-20
Directors and Officers.................................................. B-24
Investment Management Arrangements...................................... B-25
Investment Management Agreements and Sub-Investment Management Agree-
ments................................................................. B-25
Payment of Expenses.................................................... B-26
Allocation of Portfolio Brokerage...................................... B-27
Sale and Redemption of Shares........................................... B-33
Taxes................................................................... B-35
General Information..................................................... B-36
Experts................................................................ B-36
Custodian and Transfer Agent........................................... B-36
Financial Statements.................................................... B-37
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INVESTMENT PRACTICES AND POLICIES
...............................................................................

MONEY MARKET INSTRUMENTS

Certain money market instruments in which the State Street Research Money
Market Portfolio and the State Street Research Diversified Portfolio may
invest are described below. The State Street Research Income Portfolio, the
State Street Research Growth Portfolio, the State Street Research Aggressive
Growth Portfolio, the MetLife Stock Index Portfolio, the State Street Research
International Stock Portfolio the Loomis Sayles High Yield Bond Portfolio, the
Janus Mid Cap Portfolio, the T. Rowe Price Small Cap Growth Portfolio and the
Scudder Global Equity Portfolio may also invest in such instruments to the
extent otherwise consistent with their investment objectives. See "Investment
Objectives and General Investment Policies" in the Prospectus.

United States Government Securities: These consist of various types of
marketable securities issued by the United States Treasury, i.e., bills, notes
and bonds. Such securities are direct obligations of the United States
Government and differ mainly in the length of their maturity. Treasury bills,
the most frequently issued marketable government security, have a maturity of
up to one year and are issued on a discount basis.

Government Agency Securities: These consist of debt securities issued by
agencies and instrumentalities of the United States Government, including the
various types of instruments currently outstanding or which may be offered in
the future. Agencies include, among others, the Federal Housing
Administration, Government National Mortgage Association, Farmers Home
Administration, Export-Import Bank of the United States, Maritime
Administration, General Services Administration and Tennessee Valley
Authority. Instrumentalities include, for example, the National Bank for
Cooperatives, each of the Federal Home Loan Banks, Federal Home Loan Mortgage
Corporation, Farm Credit Banks, Federal National Mortgage Association and the
United States Postal Service. Such securities are backed by the full faith and
credit of the United States (e.g. U.S. Treasury Bills), guaranteed by the
United States Treasury (e.g. Government National Mortgage Association
mortgage-backed securities), supported by the issuing agency's or
instrumentality's right to borrow from the United States Treasury (e.g.
Federal National Mortgage Association Discount Notes) or supported by the
issuing agency's or instrumentality's credit. Certain of the foregoing
instruments which constitute mortgage-related securities are discussed under
"Mortgage--Related Securities" below.

Bank Money Investments: These include certificates of deposit and bankers'
acceptances. Certificates of deposit are generally short-term, interest-
bearing negotiable certificates issued by commercial banks or savings and loan
associations against funds deposited in the issuing institution. A bankers'
acceptance is a time draft drawn on a commercial bank by a borrower, usually
in connection with an international commercial transaction (to finance the
import, export, transfer or storage of goods). The borrower is liable for
payment as well as the bank, which unconditionally guarantees to pay the draft
at its face amount on the maturity date. Most acceptances have maturities of
six months or less and are traded in secondary markets prior to maturity.
Except for the Loomis Sayles High Yield Bond, T. Rowe Price Small Cap Growth,
Janus Mid Cap and Scudder Global Equity Portfolios, a Portfolio will not
invest in any security issued by a commercial bank or a savings and loan
association unless the bank or association is organized and operating in the
United States, has total assets of at least $1 billion and is a member of the
Federal Deposit Insurance Corporation; provided that this limitation shall not
prohibit investments in foreign branches or agencies of banks which meet the
foregoing requirements. No Portfolio will invest in non-negotiable time-
deposits maturing in more than seven days.

Short-Term Corporate Debt Instruments: These include commercial paper
(including variable amount master demand notes); i.e., short-term, unsecured
promissory notes issued by corporations to finance short-term credit needs.
Commercial paper is usually sold on a discount basis and has a maturity at the
time of issuance not exceeding nine months.

Variable amount master demand notes are obligations of companies that permit
the Fund to invest fluctuating amounts at varying rates of interest pursuant
to arrangements between the Fund, as lender, and the companies, as borrowers.
The Fund will have the right, at any time, to increase the amount lent up to
the full amount provided by a note or to decrease the amount. The borrower
will have the right, at any time, to prepay up to the full amount of the
amount borrowed without penalty. Because the notes are direct lending
obligations between the Fund and borrowers, they are generally not traded and
there is no secondary market. However, the Fund will have the right to redeem
a note at any time and receive face value plus accrued interest. Consequently,
the Fund's ability to receive repayment will depend upon the borrower's
ability to pay principal and interest on the Fund's demand. The Fund will
invest only in either notes that have the ratings described below for
commercial paper, or (because notes are not typically rated by credit rating
agencies) unrated notes that are issued by companies that have the rating
described below for issuers of commercial paper. The Fund does not expect that
the notes will be backed by bank letters of credit. The Fund's investment
manager or
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sub-investment managers, as applicable, will value the notes held by the Fund,
taking into account such factors as the issuer's earning power, cash flows and
other liquidity ratios.

Also included are non-convertible corporate debt securities (e.g., bonds and
debentures) with no more than two years (thirteen months with respect to the
State Street Research Money Market Portfolio) remaining to maturity at the
date of settlement. Corporate debt securities with a remaining maturity of
less than thirteen months are liquid (and tend to become more liquid as their
maturities lessen) and are traded as money market securities. Issues with
between thirteen months and two years remaining to maturity tend to have
greater liquidity and considerably less market value fluctuation than longer
term issues.

Commercial paper investments at the time of purchase will be rated "A" ("A-
1" or "A-2" with respect to the State Street Research Money Market Portfolio)
by Standard & Poor's Ratings Group (Standard & Poor's) or "Prime" ("Prime-1"
or "Prime-2" with respect to the State Street Research Money Market Portfolio)
by Moody's Investor Services, Inc. (Moody's), or, if not rated, issued by
companies having an outstanding debt issue rated at least "A" ("AA" or "Aa"
with respect to the State Street Research Money Market Portfolio) by Standard
& Poor's or by Moody's. The State Street Research Money Market Portfolio's
investments in corporate bonds and debentures (which must have maturities at
the date of settlement of thirteen months or less) must be rated at the time
of purchase at least "AA" or its equivalent by at least two nationally
recognized statistical rating organizations ("NRSROs") or by one NRSRO if only
one has rated such securities ("Requisite NRSROs") or if unrated are of
comparable investment quality. See below for a discussion of the
aforementioned corporate bond and commercial paper ratings.

Repurchase Agreements: Under these arrangements, a Portfolio would invest in
securities subject to repurchase agreements with a bank or dealer. A
repurchase agreement is an instrument under which the purchaser (i.e., the
Portfolio) acquires ownership of the obligation (debt security) and the seller
agrees, at the time of the sale, to repurchase the obligation at a mutually
agreed upon time and price, thereby determining the yield during the
purchaser's holding period. This results in a fixed rate of return insulated
from market fluctuations during such period, unless the seller defaults on its
repurchase obligations.

The underlying securities will consist only of U.S. Government or Government
Agency Securities, certificates of deposit, commercial paper or bankers'
acceptances or other money market instruments. For the State Street Research
Money Market Portfolio, the underlying securities will consist of either (i)
U.S. Government or Government Agency Securities or (ii) a security rated in
the highest rating category by the requisite NRSROs' as defined above.
Repurchase agreements will be collateralized by cash or the purchased (or
equivalent) securities, and, during the term of a repurchase agreement, the
seller will be required to provide such additional collateral as is necessary
to maintain the value of all of the collateral at a level at least equal to
the repurchase price. Repurchase agreements usually are for short periods,
such as under one week. Repurchase agreements will be entered into with
primary dealers for periods not to exceed 30 days and only with respect to
underlying money market securities in which the Fund may otherwise invest as
described above. Repurchase agreements will not be entered into for a duration
of more than seven days if, as a result, more than 15% (10% for the State
Street Research Money Market and Scudder Global Equity Portfolios) of the
value of a Portfolio's total assets would be invested in such agreements or
other illiquid securities.

Repurchase agreements could be viewed as a form of loan made by the Fund to
the seller of the agreement, with the security subject to repurchase, in
effect, serving as "collateral" for the loan. The Fund will in all cases seek
to assure that the amount of collateral with respect to any repurchase
agreement is adequate. As with a true extension of credit, however, there is
risk of delay in recovery or inadequacy of the "collateral," should the seller
of the repurchase agreement fail financially. Also, the Fund could incur
disposition costs in connection with disposition of the collateral if the
seller defaults. The Fund will enter into repurchase agreements only with
sellers deemed to be creditworthy and only when the economic benefit to the
Fund is believed to justify the attendant risks. The Fund has adopted
standards for the sellers with whom it will enter into repurchase agreements
which it believes are reasonably designed to assure that such a party presents
no serious risk of becoming involved in bankruptcy proceedings within the time
frame contemplated by the repurchase agreement.

Reverse Repurchase Agreements: These agreements involve the sale of money
market securities held by a Portfolio, with an agreement to repurchase the
securities at an agreed upon price, date and interest payment. The proceeds of
the reverse repurchase agreement would be used to purchase other money market
securities either maturing, or under an agreement to resell, at a date
simultaneous with or prior to the expiration of the reverse repurchase
agreement. Reverse repurchase agreements will be utilized only when the
interest income to be earned from the

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investment of the proceeds from the transaction is greater than the interest
expense of the reverse repurchase transaction.

Reverse repurchase agreements could be viewed as a form of borrowing by the
Fund and are therefore subject to the Fund's restrictions with respect to
borrowing generally. See fundamental investment policy number 2. The Fund
intends to take reasonable steps to ensure against the risk that it will have
insufficient assets to repurchase securities subject to such agreements. With
regard to each reverse repurchase agreement, therefore, the Fund intends to
maintain in a segregated account liquid assets (such as cash, U.S. Government
securities or other appropriate liquid assets) equal in value to the specified
repurchase price or, if there is no specified price, to the proceeds received
on the sale subject to repurchase plus accrued interest.

MORTGAGE-RELATED SECURITIES

The Portfolios may invest in certain mortgage-related securities to the
extent otherwise consistent with their investment objectives and policies.

A mortgage-related security is an interest in a pool of mortgages. Most
mortgage-related securities are pass-through securities, which means that they
provide investors with payments consisting of both interest and principal as
the mortgages in the underlying mortgage pool are paid off. The following
types of mortgage-related securities, which represent the majority of the
mortgage securities currently available, are issued by government-sponsored
organizations formed to increase the availability of mortgage credit.

Ginnie Maes: These are mortgage-backed pass-through certificates (Ginnie
Maes) that are issued by the Government National Mortgage Association (GNMA)
and are guaranteed as to timely payment of interest and principal by GNMA and
backed by the full faith and credit of the United States Government. Ginnie
Maes represent partial ownership interests in a pool of mortgage loans which
are individually insured by the Federal Housing Administration or by the
Farmers Home Administration, or guaranteed by the Veterans Administration.
GNMA is a U.S. Government corporation within the Department of Housing and
Urban Development.

Fannie Maes and Freddie Macs: These are pass-through securities issued by
the Federal National Mortgage Association (FNMA) and the Federal Home Loan
Mortgage Corporation (FHLMC). FNMA guarantees full and timely payment of
interest and principal on Fannie Maes and FHLMC guarantees full and timely
payment of interest and full and ultimate payment of principal on Freddie
Macs. These guarantees are backed, respectively, by the credit of FNMA, a
federally chartered, privately owned corporation, and FHLMC, a federally
chartered corporation owned by the Federal Home Loan Banks. In no
circumstances does the full faith and credit of the United States Government
guarantee any payments on the FNMA or FHLMC certificates. Although the
Secretary of the Treasury of the United States has discretionary authority to
lend FNMA up to $2.25 billion outstanding at any time, neither the United
States Government nor any agency thereof is obligated to finance FNMA's or
FHLMC's operations or to assist FNMA or FHLMC in any other manner.

The following types of mortgage-related securities may be issued by
governmental or non-governmental entities such as banks and other mortgage
lenders. Non-governmental securities may offer a higher yield but may also be
subject to greater price fluctuation and risk than governmental securities.

Mortgage-Backed Securities: These include mortgage pass-through bonds and
mortgage-backed bonds. A mortgage pass-through bond is an interest in a pool
of mortgages where the cash flow generated from the mortgage collateral pool
is dedicated to bond repayment. Mortgage-backed bonds are general obligations
of their issuers, payable out of the issuers' general funds and additionally
secured by a first lien on a pool of single-family detached properties.

Mortgage-related securities also include other debt obligations secured by
mortgages on commercial real estate or residential properties.

Many issuers or servicers of mortgage-related securities guarantee timely
payment of interest and principal on the securities, whether or not payments
are made when due on the underlying mortgages. This kind of guarantee
generally increases the quality of a security, but does not mean that the
security's market value and yield will not change. Like other bond
investments, the value of mortgage-related securities will tend to rise when
interest rates fall, and fall when rates rise. Their value may also change
because of changes in the market's perception of the creditworthiness of the
organization that issued or guarantees them or changes in the value of the
underlying mortgages. In addition, the mortgage securities market in general
may be adversely affected by changes in governmental regulation or tax
policies.

Mortgage-related securities can have stated maturities of up to thirty
years, depending on the length of the mortgages underlying the securities. In
practice, unscheduled or early payments of principal on the underlying
mortgages may make the securities' effective maturity shorter than this. For
example, a security based on a pool of thirty-year mortgages is generally
estimated to have an average life of twelve years. The relationship

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between mortgage prepayments and interest rates may give some high-yielding
mortgage-related securities less potential for growth in value than
conventional bonds with comparable maturities.

Certain mortgage-related securities may only be settled through privately
owned clearing corporations whose solvency and creditworthiness are not backed
by the United States Government or its agencies or instrumentalities. Certain
operational problems of such clearing corporations may result in delays in
settlement of mortgage-related securities transactions and may also result in
losses to a Portfolio.

STRIPPED AGENCY MORTGAGE-BACKED SECURITIES

Stripped Agency Mortgage-Backed securities represent interests in a pool of
mortgages, the cash flow of which has been separated into its interest and
principal components. "IOs" (interest only securities) receive the interest
portion of the cash flow while "POs" (principal only securities) receive the
principal portion. Stripped Agency Mortgage-Backed Securities may be issued by
U.S. Government Agencies or by private issuers similar to those described
under "Collateralized Mortgage Obligations" in the Prospectus with respect to
CMOs. As interest rates rise and fall, the value of IOs tends to move in the
same direction as interest rates. The value of the other mortgage-backed
securities described herein, like other debt instruments, will tend to move in
the opposite direction compared to interest rates.

The cash flows and yields on IO and PO classes are extremely sensitive to
the rate of principal payments (including prepayments) on the related
underlying mortgage assets. For example, a rapid or slow rate of principal
payments may have a material adverse effect on the prices of IOs or POs,
respectively. If the underlying mortgage assets experience greater than
anticipated prepayments of principal, an investor may fail to recoup fully its
initial investment in an IO class of a stripped mortgage-backed security, even
if the IO class is rated AAA or Aaa or is derived from a full faith and credit
obligation. Conversely, if the underlying mortgage assets experience slower
than anticipated prepayments of principal, the price on a PO class will be
affected more severely than would be the case with a traditional mortgage-
backed security.

IOs and POs, other than government-issued IOs or POs backed by fixed rate
mortgages, are considered illiquid securities and, accordingly, a Portfolio
must limit investments in such securities, together with all other illiquid
securities, to 15% of a Portfolio's net assets. The determination of whether
to purchase a particular government-issued IO and PO backed by fixed rate
mortgages may be made on a case-by-case basis under guidelines and standards
established by the Fund's Board of Directors. The Fund's Board of Directors
has delegated to the manager and sub-investment managers, as applicable, the
authority to determine the liquidity of these investments based on the
following guidelines: the type of issuer; type of collateral, including age
and prepayment characteristics; rate of interest on coupon relative to current
market rates and the effect of the rate on the potential for prepayments;
complexity of the issue's structure, including the number of tranches; size of
the issue; and the number of dealers who make a market in the IO or PO.

HIGH YIELD SECURITIES

The State Street Research Income, State Street Research Diversified, Loomis
Sayles High Yield Bond, Janus Mid Cap, T. Rowe Price Small Cap Growth and
Scudder Global Equity Portfolios, as described in the Prospectus, invest or
can invest in securities rated BBB or below by one of the nationally
recognized statistical rating organizations ("NRSROs") or if unrated, will be
of similar investment quality as determined by the manager or sub-investment
manager, as applicable. Medium-grade bonds (rated, for example, BBB major
rating category by an NRSRO) lack outstanding investment characteristics, but
are regarded as having an adequate capacity to pay principal and interest.
Such debt securities, as well as those in higher grade categories, are
generally known as investment grade securities.

Bonds rated BB or lower are generally known as high yield securities or
"junk bonds." Such high yield securities are regarded, on balance, as
predominantly speculative with respect to the issuer's capacity to pay
interest and principal in accordance with the terms of the obligation.

The market values of such high yield securities tend to reflect individual
corporate developments to a greater extent than higher rated securities, which
react primarily to fluctuations in the general level of interest rates. Such
high yield securities also tend to be more sensitive to real or perceived
adverse economic conditions or changes in interest rates than higher rated
securities.

Companies that issue high yield debt securities are often highly leveraged
and may not have available to them more traditional methods of financing.
Therefore, the risk associated with acquiring the debt securities of such
issuers generally is greater than is the case with higher rated bonds. For
example, during an economic downturn or a sustained period of rising interest
rates, highly leveraged issuers of high yield securities may experience
"financial stress" and may not have sufficient revenues to meet their payment
obligations. Such an issuer's ability to service its debt obligations may also
be adversely affected by specific corporate developments,

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or the issuer's inability to meet specific projected business forecasts, or
the unavailability of additional financing. Risk of loss due to default by the
issuer is also significantly greater for the holders of high yield securities
because such securities are generally unsecured and are generally subordinated
to the debts of other creditors of the issuer.

The Portfolios that invest in high yield securities may have difficulty
disposing of certain high yield securities, particularly those perceived to
have a high credit risk, because there may be a thin trading market for such
securities. Because not all dealers maintain markets in all high yield
securities, there is not an established retail secondary market for certain of
these securities, and it is anticipated that such securities could be sold
only to a limited number of dealers or institutional investors. Moreover, to
the extent a secondary trading market for high yield debt securities does
exist, it is generally less liquid than the secondary market for higher rated
debt securities. The lack of a highly liquid secondary market for certain high
yield securities may have an adverse impact on the market price for such debt
securities and the Portfolio's ability to dispose of particular issues when
necessary to meet its liquidity needs or in response to a specific economic
event such as a deterioration in the creditworthiness of the issuer. Adverse
publicity and investor perceptions, whether or not based on fundamental
analysis, may decrease the values and liquidity of high yield securities,
especially in a thinly traded market. The lack of a liquid secondary market
for certain debt securities may also make it more difficult to obtain accurate
market quotations for purposes of valuing certain of its high yield portfolio
securities. Market quotations are generally available on many high yield
issues only from a limited number of dealers and may not necessarily represent
firm bids of such dealers or prices for actual sales.

In addition, it is possible that an economic recession could severely
disrupt the market for such securities. In addition, it is possible that an
economic downturn could adversely affect the ability of the issuers of such
securities to repay principal and pay interest on such securities.

Factors adversely impacting the market value of high yield securities may
adversely impact the net asset values of each Portfolio that invest in them,
to the extent the Portfolio owns such securities. In addition, each such
Portfolio may incur additional expenses to the extent it is required to seek
recovery upon a default in the payment of principal or interest on its
portfolio securities. These Portfolios will not rely primarily on ratings of
NRSROs, but, rather, will rely primarily on the judgment, analysis, and
experience of the manager or sub-investment manager, as applicable, in
evaluating the creditworthiness of any issuer of high yield securities. In
their evaluation, the manager or sub-investment manager, as applicable, will
take into consideration, among other things, the issuer's financial resources,
its sensitivity to economic conditions and trends, its operating history, the
quality of the issuer's management, and regulatory matters.

From time to time, proposals have been discussed regarding new legislation
designed to limit the use of certain high yield securities by issuers in
connection with leveraged buy-outs, mergers and acquisitions, or to limit the
deductibility of interest payments on such securities. Such proposals if
enacted into law could: (i) reduce the market for such securities generally;
(ii) negatively affect the financial condition of issuers of high yield
securities by removing or reducing a source of future financing; and (iii)
negatively affect the value of specific high yield issuers and the high yield
market in general. However, the likelihood of any such legislation being
enacted in the near future or the actual effect of such legislation is
uncertain.

ILLIQUID OR RESTRICTED SECURITIES

Restricted securities may be sold only in privately negotiated transactions
or in a public offering with respect to which a registration statement is in
effect under the Securities Act of 1933 (the "1933 Act"). Where registration
is required, a Portfolio may be obligated to pay all or part of the
registration expenses and a considerable period may elapse between the time of
the decision to sell and the time a Portfolio may be permitted to sell a
security under an effective registration statement. If, during such a period,
adverse market conditions were to develop, a Portfolio might obtain a less
favorable price than prevailed when it decided to sell. Restricted securities
will be priced at fair value as determined in accordance with procedures
prescribed by the Fund's Board of Directors. If through the appreciation of
illiquid securities or the depreciation of liquid securities, a Portfolio
should be in a position where more than 15% of the value of its net assets
(10% as to the State Street Research Money Market and Scudder Global Equity
Portfolios) is invested in illiquid assets, including illiquid restricted
securities, such Portfolio will take appropriate steps to protect liquidity.

Notwithstanding the above, a Portfolio may purchase securities which, while
privately placed, are eligible for purchase and sale under Rule 144A under the
1933 Act. This rule permits certain qualified institutional buyers, such as
the Fund, to trade in privately placed securities even though such securities
are not registered under the 1933 Act. The manager and sub-investment
managers, as applicable, under the supervision of the Fund's Board of
Directors, will consider whether securities purchased under Rule 144A

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are illiquid and thus subject to such Portfolio's restriction of investing no
more than 15% of a Portfolio's net assets (10% as to the State Street Research
Money Market and Scudder Global Equity Portfolios) in illiquid securities. A
determination of whether a Rule 144A security is liquid or not is a question of
fact. In making this determination, the manager and sub-investment managers, as
applicable, will consider the trading markets for the specific security, taking
into account the unregistered nature of a Rule 144A security. In addition, the
manager and sub-investment managers, as applicable, could consider the (1)
frequency of trades and quotes, (2) number of dealers and potential purchases,
(3) dealer undertakings to make a market, and (4) nature of the security and of
marketplace trades (e.g., the time needed to dispose of the security, the
method of soliciting offers and the mechanics of transfer). The liquidity of
Rule 144A securities would be monitored, and if as a result of changed
conditions it is determined that a Rule 144A security is no longer liquid, a
review of the Portfolio that holds such security holdings of illiquid
securities would be made to determine what, if any, steps are required to
assure that such Portfolio does not invest more than 15% of its net assets (10%
as to the State Street Research Money Market and Scudder Global Equity
Portfolios) in illiquid securities. Investing in Rule 144A securities could
have the effect of increasing the amount of a Portfolio's assets invested in
illiquid securities if qualified institutional buyers are unwilling to purchase
such securities.

WARRANTS

Warrants have no voting rights, pay no dividends and have no rights with
respect to the assets of the corporation issuing them. Warrants basically are
options to purchase equity securities at a specific price valid for a specific
period of time. They do not represent ownership of the securities, but only the
right to buy them. Warrants differ from call options in that warrants are
issued by the issuer of the security which may be purchased on their exercise,
whereas call options may be written or issued by anyone. The prices of warrants
do not necessarily move parallel to the prices of the underlying securities.

DEBT INSTRUMENT RATINGS

The ratings of certain debt instruments in which the Portfolios may invest
are described below.

DESCRIPTION OF CERTAIN CORPORATE BOND AND DEBENTURE RATINGS OF MOODY'S INVESTOR
SERVICES, INC.:
................................................................................

Aaa--Bonds which are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to as
"gilt edged." Interest payments are protected by a large or by an exceptionally
stable margin and principal is secure. While the various protective elements
are likely to change, such changes as can be visualized are most unlikely to
impair the fundamentally strong position of such issues.

Aa--Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally known
as high-grade bonds. They are rated lower than the best bonds because margins
of protection may not be as large as in Aaa securities or fluctuation of
protective elements may be of greater amplitude or there may be other elements
present which make the long-term risks appear somewhat greater than in Aaa
securities.

A--Bonds which are rated A possess many favorable investment attributes and
are to be considered as upper-medium-grade obligations. Factors giving security
to principal and interest are considered adequate, but elements may be present
which suggest a susceptibility to impairment sometime in the future.

Baa--Bonds which are rated Baa are considered as medium grade obligations,
i.e., they are neither highly protected nor poorly secured. Interest payments
and principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.

Ba--Bonds which are rated Ba are judged to have speculative elements; their
future cannot be considered as well-assured. Often the protection of interest
and principal payments may be very moderate, and thereby not well safeguarded
during both good and bad times over the future. Uncertainty of position
characterizes bonds in this class.

B--Bonds which are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small.

Caa--Bonds which are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to principal or
interest.

Ca--Bonds which are rated Ca represent obligations which are speculative in a
high degree. Such issues are often in default or have other marked
shortcomings.

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C--Bonds which are rated C are the lowest rated class of bonds, and issues so
rated can be regarded as having extremely poor prospects of ever attaining any
real investment standing.

Should no rating be assigned by Moody's, the reason may be one of the
following:

1. An application for rating was not received or accepted.

2. The issue or issuer belongs to a group of securities that are not rated
as a matter of policy.

3. There is a lack of essential data pertaining to the issue or issuer.

4. The issue was privately placed in which case the rating is not
published in Moody's publications.

Suspension or withdrawal may occur if new and material circumstances arise,
the effects of which preclude satisfactory analysis; if there is no longer
available reasonable up-to-date data to permit a judgment to be formed; if a
bond is called for redemption; or for other reasons.

NOTE: Those bonds in the Aa, A, Baa, Ba and B groups which Moody's believes
possess the strongest investment attributes are designated by the symbols Aa1,
A1, Baa1, Ba1 and B1.

DESCRIPTION OF CERTAIN CORPORATE BOND AND DEBENTURE RATINGS OF STANDARD &
POOR'S RATINGS GROUP:

AAA--An obligation rated AAA has the highest rating assigned by Standard &
Poor's. The obligor's capacity to meet its financial commitment on the
obligation is extremely strong.

AA--An obligation rated AA differs from the highest-rated obligations only in
small degree. The obligor's capacity to meet its financial commitment on the
obligation is very strong.

A--An obligation rated A is somewhat more susceptible to the adverse effects
of changes in circumstances and economic conditions than obligations in higher-
rated categories. However, the obligor's capacity to meet its financial
commitment on the obligation is still strong.

BBB--An obligation rated BBB exhibits adequate protection parameters.
However, adverse economic conditions or changing circumstances are more likely
to lead to a weakened capacity of the obligor to meet its financial commitment
on the obligation.

Obligations rated BB, B, CCC, CC, and C are regarded as having significant
speculative characteristics. BB indicates the least degree of speculation and C
the highest. While such obligations will likely have some quality and
protective characteristics, these may be outweighed by large uncertainties or
major exposures to adverse conditions.

BB--An obligation rated BB is less vulnerable to nonpayment than other
speculative issues. However, it faces major ongoing uncertainties or exposure
to adverse business, financial, or economic conditions which could lead to the
obligor's inadequate capacity to meet its financial commitment on the
obligation.

B--An obligation rated B is more vulnerable to nonpayment than obligations
rated BB, but the obligor currently has the capacity to meet its financial
commitment on the obligation. Adverse business, financial, or economic
conditions will likely impair the obligor's capacity or willingness to meet its
financial commitment on the obligation.

CCC--An obligation rated CCC is currently vulnerable to nonpayment, and is
dependent upon favorable business, financial, and economic conditions for the
obligor to meet its financial commitment on the obligation. In the event of
adverse business, financial, or economic conditions, the obligor is not likely
to have the capacity to meet its financial commitment on the obligation.

CC--An obligation rated CC is currently highly vulnerable to nonpayment.

C--The C rating may be used to cover a situation where a bankruptcy petition
has been filed or similar action has been taken, but payments on this
obligation are being continued.

D--An obligation rated D is in payment default. The D rating category is used
when payments on an obligation are not made on the date due even if the
applicable grace period has not expired, unless Standard & Poor's believes that
such payments will be made during such grace period. The D rating also will be
used upon the filing of a bankruptcy petition or the taking of a similar action
if payments on an obligation are jeopardized.

Plus (+) or Minus (-): The ratings from AA to CCC may be modified by the
addition of a plus or minus sign to show relative standing within the major
rating categories.

r--This symbol is attached to the ratings of instruments with significant
noncredit risks. It highlights risks to principal or volatility of expected
returns which

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are NOT addressed in the credit rating. Examples include: obligations linked
or indexed to equities, currencies, or commodities; obligations exposed to
severe prepayment risk--such as interest-only or principal-only mortgage
securities; and obligations with unusually risky interest terms, such as
inverse floaters.

DESCRIPTION OF COMMERCIAL PAPER RATINGS:
...............................................................................

Commercial paper rated A (highest quality) by Standard & Poor's has the
following characteristics: Liquidity ratios are adequate to meet cash
requirements. Long-term senior debt is rated "A" or better, although in some
cases "BBB" credits may be allowed. The issuer has access to at least two
additional channels of borrowing. Basic earnings and cash flow have an upward
trend with allowance made for unusual circumstances. Typically, the issuer's
industry is well established and the issuer has a strong position within the
industry. The reliability and quality of management are unquestioned. The
relative strength or weakness of the above factors determine whether the
issuer's commercial paper is rated A-1, A-2 or A-3. (Those A-1 issues
determined to possess overwhelming safety characteristics are denoted with a
plus (+) sign: A-1+.)

The rating Prime is the highest commercial paper rating assigned by Moody's.
Among the factors considered by Moody's in assigning ratings are the
following: evaluation of the management of the issuer; economic evaluation of
the issuer's industry or industries and an appraisal of speculative-type risks
which may be inherent in certain areas; evaluation of the issuer's products in
relation to competition and customer acceptance; liquidity; amount and quality
of long-term debt; trend of earnings over a period of 10 years; financial
strength of any parent company and the relationships which exist with the
issuer; and recognition by the management of obligations which may be present
or may arise as a result of public interest questions and preparations to meet
such obligations. These factors are all considered in determining whether the
commercial paper is rated Prime-1, Prime-2 or Prime-3.

CERTAIN INVESTMENT LIMITATIONS

The investment limitations not described in the Prospectus and generally
common to the Portfolios are described below. The following four fundamental
policies may not be changed without approval by the requisite vote of the
outstanding voting shares of each Portfolio affected. Unless otherwise
indicated, all restrictions apply at the time of purchase.

No Portfolio may:

1. make any investment which would thereupon cause more than 25% of the
value of the total assets of the Portfolio to be invested in securities
issued by companies principally engaged in any one industry, provided,
however, that (a) utilities will be divided according to their services so
that, for example, gas, gas transmission, electric and telephone will each
be deemed a separate industry, (b) oil and oil related companies will be
divided by type so that, for example, domestic crude oil and gas producers,
domestic integrated oil companies, international oil companies and oil
service companies will each be deemed a separate industry, (c) savings and
loan associations and finance companies will each be deemed a separate
industry, and (d) with respect to the money market portion of the State
Street Research Diversified Portfolio and the State Street Research Money
Market Portfolio, securities issued or guaranteed by the United States
Government, its agencies or instrumentalities, and with respect to the State
Street Research Money Market Portfolio and the State Street Research
Diversified Portfolio, debt securities issued by domestic banks (excluding
foreign branches of domestic banks), shall not be subject to this
restriction;

2. borrow money or purchase securities on margin, provided, however, that
this restriction shall not prohibit a Portfolio from (a) obtaining such
short-term credits as are necessary for the clearance of portfolio
transactions, (b) temporarily borrowing up to 5% (33 1/3% in the case of the
Scudder Global Equity Portfolio) of the value of the Portfolio's total
assets for extraordinary or emergency purposes, such as for permitting
redemption requests to be honored which might otherwise require the sale of
securities at a time when it is not in the Portfolio's best interests, (c)
entering into reverse repurchase agreements with banks, or (d) with respect
to the State Street Research International Stock, Loomis Sayles High Yield
Bond, T. Rowe Price Small Cap Growth, Janus Mid Cap and Scudder Global
Equity Portfolios, purchasing securities on a "when-issued" basis.
Collateral arrangements entered into by the Portfolios to make margin
deposits in connection with futures contracts, including options on futures
contracts, are not for these purposes deemed to be the purchase of a
security on margin. The aggregate amount of obligations identified in (a),
(b) and (c) above, when incurred, will not exceed one-third of the amount by
which the Portfolio's total assets exceed its total liabilities (excluding
the liabilities represented by such obligations). If at any time a
Portfolio's obligations of such type exceed the foregoing limitation, such
obligations will be promptly reduced to the extent necessary to comply with
the limitation. Scudder will not purchase

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additional securities for the Scudder Global Equity Portfolio unless the
aggregate amount of obligations identified in (b) and (c) above do not
exceed 5%. The Fund will not issue senior securities, other than those which
represent such type obligations. For purposes hereof, writing covered call
and put options and entering into futures contracts and options thereon to
the extent permitted in fundamental investment policy numbers 1, 2 and 3 in
the Prospectus shall not be deemed to involve the issuance of senior
securities or borrowings;

3. engage in the underwriting of securities of other issuers, except to
the extent that in selling portfolio securities, it may be deemed to be a
"statutory" underwriter for purposes of the Securities Act of 1933; or

4. make any investment in real estate interests that would thereupon cause
more than 10% of the value of the Portfolio's total assets to be invested in
real estate interests, including real estate mortgage loans, but this policy
shall not be deemed to restrict investment in real estate investment trusts
listed on stock exchanges or shares of real estate companies.

The following investment restrictions may be changed without approval of
shareholders.

To the extent that 25% of the total assets of any Portfolio may become
invested in the four oil related industries listed in paragraph 1.(b) above in
the aggregate, the Fund will disclose such fact.

No Portfolio will acquire securities for the purpose of exercising control
over the management of any company or, except for the Janus Mid Cap Portfolio,
if such acquisition would thereupon cause more than 25% of the value of the
Portfolio's total assets to consist of (1) securities (other than securities
issued or guaranteed by the United States Government, its agencies and
instrumentalities) which, together with other securities of the same issuer,
constitute more than 5% of the value of the Portfolio's total assets and (2)
voting securities of issuers more than 10% of whose outstanding voting
securities are owned by the Fund. With respect to the State Street Research
Money Market Portfolio, no more than 5% of the Portfolio's total assets, at
the time of purchase, will be invested in the securities of any one issuer
(other than securities issued or guaranteed by the United States Government,
its agencies and instrumentalities), except that it may invest up to 25% of
its total assets in First Tier Securities (as defined in Rule 2a-7 under the
1940 Act) of a single issuer for a period of three business days after the
purchase of such securities. See "State Street Research Money Market
Portfolio" in the Prospectus for additional limitations concerning
diversification with respect to the State Street Research Money Market
Portfolio.

No Portfolio will purchase securities of other investment companies if such
purchase would thereupon cause more than 10% of the value of the total assets
in the Portfolio to be invested in the securities of investment companies or
more than 5% of such value to be invested in the securities of any one
investment company, or would cause the Fund to own more than 3% of the total
outstanding voting stock of any such company (or together with other
investment companies having the same investment adviser to own more than 10%
of the total outstanding voting stock of any closed-end investment company).
Securities of investment companies may also be acquired as part of a merger,
consolidation, acquisition of assets or reorganization. In addition, no
Portfolio will make any investment in repurchase agreements having a maturity
of more than seven days or any other illiquid assets if, as a result, more
than 15% (10% as to the State Street Research Money Market and Scudder Global
Equity Portfolios) of the Portfolio's total assets would be invested in
illiquid assets.

The Fund will not make any short sale or, except for the Janus Mid Cap
Portfolio, participate on a joint or joint and several basis in any trading
account in securities. The latter policy, however, does not prohibit combining
orders for portfolio securities as described in "Investment Management
Agreements and Sub-Investment Management Agreements."

INSURANCE LAW RESTRICTIONS

In order to be able to sell Contracts in New York, the investment manager
for the Fund and each sub-investment manager for a Portfolio have agreed to
use their best efforts to assure that each Portfolio of the Fund complies with
the investment restrictions and limitations prescribed by Sections 1405 and
4240 of the New York State Insurance Law, and the regulations promulgated
thereunder, insofar as such investment restrictions and limitations are
applicable to the investment of separate account assets in mutual funds. If
any Portfolio fails to comply with such restrictions or limitations, the
Insurance Companies will cease making investments in that Portfolio for the
separate accounts.

Currently, the Fund is permitted by New York State law to make any purchase
if made on the basis of good faith and with that degree of care that an
ordinarily prudent person in a like position would use under similar
circumstances. Also, Delaware Insurance Law, which governs Metropolitan
Tower's investments, currently contains no requirements or limitations on the
investments of assets held in a separate account formed for the purpose of
issuing variable contracts.

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CERTAIN INVESTMENT PRACTICES

LENDING OF PORTFOLIO SECURITIES:

Subject to the restriction contained in fundamental investment policy number
4 in the Prospectus, each Portfolio from time to time may lend some of its
securities to brokers, dealers and financial institutions and receive as
collateral cash or United States Treasury securities which at all times while
the loan is outstanding will be maintained by the borrower in amounts equal to
at least 100% of the current market value of the loaned securities. Any cash
collateral will be invested in short-term high-grade securities, or in a
mutual fund that invests in such investments which can increase the current
income of the Portfolio lending its securities, since the Portfolio continues
to receive payments equal to interest and dividends on the loaned securities
during the period of the loan. Any gain or loss in the market value of loaned
securities or securities in which cash collateral is invested during the term
of the loan would also enure to the Portfolio.

Loans of portfolio securities will not have terms longer than 30 days and
will be terminable at any time. The Fund may pay reasonable finders,
administrative and custodial fees to persons unaffiliated with the Fund for
services in connection with such loans.

Payments equal to the dividends, interest, and other distributions received
by a Portfolio on loaned securities may, for tax purposes, be treated as
income other than qualified income for the 90% test discussed under "Taxes"
below. The Fund intends to lend portfolio securities only to the extent that
such activity does not jeopardize the Fund's qualification as a regulated
investment company under the Internal Revenue Code (the "Code").

If the borrower fails to maintain the requisite amount of collateral, the
loan automatically terminates, and the Fund could use the collateral to
replace the securities, while holding the borrower liable for any excess of
the replacement cost over the amount of collateral. As with any extension of
credit, there are risks of delay in recovery, and in some cases even loss of
rights in the collateral, should the borrower of the securities fail
financially. However, loans of portfolio securities will be made only to firms
deemed to be creditworthy and only when the economic benefit to the Fund is
believed to justify the attendant risks. On termination of a loan, the
borrower is required to return the loaned securities to the Fund.

OPTIONS AND FUTURES:

Options on Portfolio Securities and Currencies: Subject to the restrictions
contained in fundamental investment policies numbers 1, 2 and 3 in the Pros-
pectus, all the Portfolios may write (sell) covered call options and may
purchase put and call options with respect to securities in their portfolio.
In addition, the State Street Research International Stock Portfolio, Loomis
Sayles High Yield Bond Portfolio, T. Rowe Price Small Cap Growth Portfolio,
Janus Mid Cap Portfolio and Scudder Global Equity Portfolio may purchase put
and call options on currencies and write covered put and call options on
securities or currencies. The other Portfolios may write put options only to
the extent necessary to close out option positions previously entered into. At
the present time, the State Street Research Money Market Portfolio and the
MetLife Stock Index Portfolio do not intend to write or purchase such options.

A call option gives the purchaser of such option, in exchange for the option
premium, the right to buy (and obligates the writer to sell) the underlying
security or currency at the price specified in the option (the "exercise
price") at any time until the option expires, generally within three to nine
months. The exercise price, plus the option premium paid, will always be
greater than the market price of the underlying security or currency at the
time the option is written. A put option gives the purchaser of such option,
in exchange for the option premium, the right to sell (and obligates the
writer to purchase) the underlying security or currency at the exercise price
at any time before the option expires.

If a covered call or put option written by a Portfolio expires unexercised,
the Portfolio will realize as income, in the form of a short-term capital
gain, the premium it received for the sale of the option, less the brokerage
commission it paid i.e., the "net premium." If a call option written by a
Portfolio is exercised, a decision over which the Portfolio has no control,
the Portfolio must sell the underlying security or currency to the option
holder at the exercise price. By writing a covered call option, the Portfolio
foregoes, in exchange for the net premium, the opportunity to profit from any
increase in the value of the underlying security or currency above the
exercise price plus the premium paid. Therefore, call options may be written
when the manager or a sub-investment manager, as applicable, believe that the
security or currency should be held, but no increase in price or only a
moderate increase within the option period is expected.

By writing a covered put option, a Portfolio receives premium income but
obligates itself to purchase from the option holder, at the price specified in
the option, the particular security or currency underlying the option at any
time prior to the expiration of the option period, regardless of the market
value of the security or currency during the option period. Therefore, put
options will be written when the manager or sub-investment manager, as
applicable, believes that the security's or

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................................................................
currency's price will rise during the exercise period and, consequently, the
option will not be exercised.

If an option purchased by a Portfolio expires unexercised, the Portfolio will
experience a loss in the amount of the premium paid for the option. A put
option will generally be exercised if the market price of the underlying
security or currency falls below the exercise price. A call option will
generally be exercised if the market price of the underlying security or
currency exceeds the exercise price. Therefore, options may be purchased when
the manager or sub-investment manager, as applicable, believes that, in the
case of a put, the security or currency should be held but its market price may
fall, or, in the case of a call, the security or currency should be purchased
in the future and its market price may rise.

In order to reduce the risk of loss, a Portfolio will write an option only if
there is an organized market for the option on a recognized securities exchange
except that the Janus Mid Cap and Scudder Global Equity Portfolios may write
covered options "over the counter." A Portfolio will not sell the securities or
currencies against which options have been written until after the option
period has expired, a closing purchase transaction, if available, has been
executed, a corresponding put or call option has been purchased or the written
option is otherwise covered.

Options are traded on certain recognized securities exchanges, including the
Chicago Board Options Exchange, the American Stock Exchange, the Philadelphia
Stock Exchange, the Pacific Stock Exchange and the Midwest Stock Exchange. The
Portfolio may terminate its obligation as the writer of an option by purchasing
on such exchange an option with the same exercise price and expiration date as
the option previously written (a "closing purchase transaction"). If the
Portfolio cannot enter into a closing purchase transaction (for example,
because no such options are available for purchase), the Portfolio will
continue to bear the risk of loss of the appreciation, if any, in the price of
the underlying security or currency during the remaining term of the option, if
it has written a call option, or the Portfolio will continue to be obligated to
purchase the specified securities or currencies at the exercise price,
regardless of the market value or exchange rate, if it has written a put
option.

Both sales and purchases of options require the Portfolio to pay brokerage
commissions. To the extent that an option sold by the Portfolio is exercised,
the Portfolio may incur brokerage commissions or other transaction costs in
reinvesting the proceeds received upon such exercise. Also, writing covered
call options can increase a Portfolio's turnover rate.

When a Portfolio sells a covered call or put option, an amount equal to the
net premium (the premium less the commission) received by the Portfolio is
included in the liability section of the Portfolio's statement of assets and
liabilities as a deferred credit. The amount of the deferred credit
subsequently will be marked-to-market to reflect the current value of the
option written. If an option expires on its stipulated expiration date or if
the Portfolio enters into a closing purchase transaction, the Portfolio will
realize a gain (or loss, if the cost of a closing purchase transaction exceeds
the net premium received when the option was sold), and the deferred credit
related to such option will be eliminated. If a call option sold by the
Portfolio is exercised, the Portfolio will realize a long-term or short-term
gain or loss from the sale of the underlying security or currency, and the
proceeds of the sale will be increased by the premium previously received on
the option. The writing of such call options will not affect the holding period
of the underlying security. If a put option sold by the Portfolio is exercised,
the Portfolio's cost for the security or currency purchased will be reduced by
the premium previously received on the option written.

Options on Indices: The State Street Research Growth, State Street Research
Diversified, State Street Research Aggressive Growth, State Street Research
International Stock, Loomis Sayles High Yield Bond, T. Rowe Price Small Cap
Growth, Janus Mid Cap, and Scudder Global Equity Portfolios may utilize options
on stock indices. While it has no present intention to do so, the MetLife Stock
Index Portfolio may in the future utilize such options. Options on stock
indices are similar to options on stock, except that all settlements are made
in cash rather than by delivery of the stock, and gains or losses depend on
price movements in the stock market generally (or in a particular industry or
segment of the market represented by the index) rather than price movements in
individual stocks.

Upon payment of a specified premium at the time an option on a stock index is
entered into, the purchaser of a call option on a stock index obtains the right
to receive, upon exercise of the option, a sum of money equal to a multiple of
any excess of the value of the specified stock index, on the exercise date,
over the exercise or "strike" price specified by the option. The purchaser of a
put option on a stock index obtains the right to receive, upon exercise of the
option, a sum of money equal to a multiple of any excess of the strike price
over the value of the stock index.

The writer of a stock index option has obligations which correspond to the
purchaser's rights. Thus, for example, the writer of a call option on a stock
index, in consideration of the option premium received, has the

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obligation to pay, upon exercise, a dollar amount equal to a multiple of any
excess of the value of the specified stock index on the date of exercise over
the strike price specified in the option. The writer of a put option on a
stock index, in consideration of the option premium received, has the
obligation to pay, upon exercise, a dollar amount equal to a multiple of any
excess of the value of the strike price specified in the option over the value
of the specified stock index on the date of exercise.

The Portfolios will cover call options written on a stock index by, for
example, holding in a segregated account, with the custodian for the Fund,
portfolio securities that substantially replicate the movement of the
particular index upon which the call option was written or sufficient cash or
liquid assets to cover the outstanding position. In addition, the Portfolios
may also choose to cover call options written by holding a separate call
option permitting the purchase of the same stock index at the same strike
price. The Portfolios will cover put options on a stock index written by, for
example, holding in a segregated account, with the custodian for the Fund,
cash or liquid assets equal to the strike price of the put option or by
holding a separate put option permitting the purchase of the same stock index
at the same strike price.

The State Street Research Growth, State Street Research Diversified and
State Street Research Aggressive Growth Portfolios may write covered call
options on a stock index and the State Street Research International Stock,
Loomis Sayles High Yield Bond, T. Rowe Price Small Cap Growth, Janus Mid Cap
and Scudder Global Equity Portfolios may write covered call and put options on
a stock index for the same purposes as they might write covered call and put
options on their portfolio securities.

A securities index fluctuates with changes in the market values of the
securities included in the index. For example, some options on securities
indices are based on a broad market index such as the Standard & Poor's 500 or
the NYSE Composite Index, or a narrower market index such as the Standard &
Poor's 100. Indices may also be based on an industry or market segment such as
the AMEX Oil and Gas Index or the Computer and Business Equipment Index.
Options on stock indices are currently traded on the following exchanges,
among others: The Chicago Board Options Exchange; New York Stock Exchange; and
American Stock Exchange. Options on other types of securities indices, which
do not currently exist, may be introduced and traded on exchanges in the
future.

Options on indices relating to certain debt securities, referred to as
interest rate indices, may be introduced in the future. In the event that a
liquid market develops for options on an interest rate index, and the Board of
Directors of the Fund authorizes a particular Portfolio to use such an option,
the Portfolio may do so. Where permitted, all the Portfolios may utilize
options on interest rate indices in a manner similar to that described above
with respect to options on stock indices.

The Portfolios' purchase and sale of options on indices will be subject to
the same risks as those applicable to options on individual securities. In
addition, the distinctive characteristics of options on indices create certain
risks that are not present with options on individual securities. For example,
index prices may be distorted if trading of certain securities included in the
index is interrupted. Trading in the index options may also be interrupted in
certain circumstances, such as, for example, if trading were halted in a
substantial number of securities included in the index. If this occurred, a
Portfolio would not be able to close out options which it had purchased or
written and, if restrictions on exercise were imposed, would be unable to
exercise an option it holds, which could result in substantial losses to the
Portfolio. The Portfolios may purchase or write options only on indices which
include a sufficient number of securities to minimize the likelihood of a
trading halt in such options. In addition, the ability to establish and close
out positions on options on indices will be subject to the development and
maintenance of a liquid secondary market for such options. The Portfolios will
not purchase or sell any option on an index unless and until, in the opinion
of the investment manager or sub-investment manager, as applicable, the market
for such options has developed sufficiently that the risk in connection with
such transactions is acceptable.

The effectiveness of hedging through the purchase of options on indices will
depend upon the extent to which price movements in the portion of the
securities portfolio being hedged correlate with price movements in the
selected index. Perfect correlation is not possible because the securities
held or to be acquired by a Portfolio will not exactly match the composition
of the indices on which options are written. In the purchase of options on
indices the principal risk is that the premium and transaction costs paid by a
Portfolio in purchasing an option will be lost as a result of unanticipated
movements in the price of the securities comprising the index for which the
option has been purchased. In writing call options on indices, the principal
risks are the inability to effect closing transactions at favorable prices and
the inability to participate in the appreciation of the underlying securities.
In writing put options on indices, the principal risks are the inability to
effect closing transactions at favorable prices and the obligation to make a
cash settlement relating to the stock index at prices which may not reflect
current market values.

Futures Transactions: A futures contract is an agreement to buy or sell a
security or currency (or deliver

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a final cash settlement price, in the case of a contract relating to an index
or otherwise not calling for physical delivery at the end of trading in the
contract) for a set price in the future. Trading in futures is regulated in the
U.S. under the Commodity Exchange Act by the Commodity Futures Trading
Commission ("CFTC"). Futures contracts trade on certain regulated contract
markets through an open outcry auction on the exchange floor. Consistent with
their investment objectives and policies, the Portfolios may purchase or sell
futures contracts to effect hedging transactions, to establish or decrease
market exposure in an efficient manner or to enhance income. A hedge includes
transactions in which the Portfolios utilize futures contracts in order to
protect the value of underlying portfolio securities or the currencies in which
they are denominated from adverse fluctuations in the financial markets.

Positions taken in the futures markets are not normally held until delivery
or cash settlement is required, but instead are liquidated through offsetting
transactions that may result in a gain or a loss. While futures positions taken
by a Portfolio will usually be liquidated in this manner, the Portfolio may
instead make or take delivery of underlying securities or currencies whenever
it appears economically advantageous for the Portfolio to do so. A clearing
organization associated with the exchange on which futures are traded assumes
responsibility for closing out transactions and guarantees that, as between the
clearing members of an exchange, the sale and purchase obligations will be
performed with regard to all positions that remain open at the termination of
the contract.

Upon entering into a futures contract, a Portfolio is required to deposit
with a futures commission merchant or in a segregated custodial account a
certain percentage (presently less than 10%) of the futures contract's market
value as "initial margin." Initial margin is in the nature of a performance
bond or good faith deposit on the contract which is returned upon termination
of the futures contract if all contractual obligations have been satisfied. The
initial margin in most cases consists of cash or U.S. Government securities.
Subsequent cash payments, called "variation margin," may be required as a
result of marking the contracts to market on a daily basis as the contract
value fluctuates.

The use of futures contracts entails certain risks in addition to those
stated below, including but not limited to: possible reduction in the
Portfolio's income; possible reduction in value of both the securities or
currencies hedged and the related futures contract; and potential losses in
excess of the amount initially invested in the futures contracts themselves.
The use of futures contracts requires special skills in addition to those
needed to select portfolio securities or currencies.

Stock Index Futures Contracts: The State Street Research Growth, State Street
Research Diversified, State Street Research Aggressive Growth, MetLife Stock
Index, State Street Research International Stock, Loomis Sayles High Yield
Bond, T. Rowe Price Small Cap Growth, Janus Mid Cap and Scudder Global Equity
Portfolios, consistent with their investment objectives and policies, may use
stock index futures to establish or decrease market exposure in an efficient
manner, to attempt to reduce the risk of investments in equity securities by
hedging portions of their underlying portfolios or to enhance income. A stock
index futures contract is an agreement in which the seller of the contract
agrees to deliver to the buyer an amount of cash equal to a specific dollar
amount times the difference between the value of a specific stock index at the
close of the last trading day of the contract and the price at which the
agreement is made. No physical delivery of the underlying stocks in the index
is made.

The State Street Research Growth, State Street Research Diversified, State
Street Research Aggressive Growth, MetLife Stock Index, State Street Research
International Stock, Loomis Sayles High Yield Bond, T. Rowe Price Small Cap
Growth, Janus Mid Cap and Scudder Global Equity Portfolios may engage in stock
index futures transactions as a hedge against market risk resulting from market
conditions and over-all economic prospects with respect to the value of
portfolio securities held by the Portfolios or which the Portfolios intend to
purchase, as distinguished from stock-specific risk resulting from the market's
evaluation of the merits of a particular security. For example, a Portfolio
might sell stock index futures contracts to hedge against a decline in the
value of securities held in the Portfolio. Alternatively, a Portfolio might buy
stock index futures contracts to hedge against a rise in the value of
securities the Portfolio intends to acquire. A Portfolio may also use stock
index futures to enhance income.

A Portfolio's successful use of stock index futures contracts depends upon
the ability of the manager or sub-investment manager, as applicable, to
accurately assess the direction of the stock market and is subject to various
additional risks. The correlation between movement in the price of the stock
index futures contract and the price of the securities being hedged is
imperfect and the risk from imperfect correlation increases as the composition
of the Portfolio's securities diverges from the composition of the relevant
index. In addition, the ability of a Portfolio to close out a futures position
depends on a liquid secondary market. There is no assurance that liquid
secondary markets will exist for any particular futures contract at any
particular time. See also the risks noted above under "Futures Transactions."

Interest Rate Futures Contracts: Each of the Fund's Portfolios, consistent
with its investment objective

B-15
<PAGE>

................................................................
and policies, may buy and sell futures contracts on interest-bearing
securities (such as U.S. Treasury Bonds, U.S. Treasury Notes, three-month U.S.
Treasury Bills, Eurodollar Certificates of Deposit, and GNMA certificates) for
hedging purposes or to establish or decrease market exposure in an efficient
manner. Further, in the event that a liquid market develops for futures
contracts based on an interest rate index, and the Board of Directors of the
Fund authorizes a particular Portfolio to use such futures contracts, the
Portfolio may do so. Futures contracts on interest-bearing securities and
interest rate indices are referred to collectively as "interest rate futures
contracts." The Portfolios may engage in transactions in only those interest
rate futures contracts that are traded on a commodities exchange or a board of
trade and are standardized as to maturity date and underlying financial
instrument.

For example, a Portfolio might sell an interest rate futures contract to
hedge against a decline in the market value of debt securities the Portfolio
owns. A Portfolio might also purchase an interest rate futures contract to
hedge against an anticipated increase in the value of debt securities the
Portfolio intends to acquire. The risks of interest rate futures contracts are
briefly described above in connection with the proposed use of stock index
futures contracts and in the general description of "Futures Transactions." In
addition, a Portfolio's successful use of interest rate futures contracts
depends upon the ability of the manager or sub-investment manager, as
applicable, to accurately assess interest rate moves. Further, because there
are a limited number of types of interest rate futures contracts, it is likely
that the financial futures contracts available to a Portfolio will not exactly
match any debt securities the Portfolio intends to hedge or acquire. To
compensate for differences in historical volatility between securities a
Portfolio intends to hedge or acquire and the interest rate futures contracts
available to it, the Portfolio could purchase or sell futures contracts with a
greater or lesser value than any debt securities it wished to hedge or
intended to purchase. This imperfect correlation between the interest rate
futures contract and the debt securities being hedged is another risk.

Currency Futures Contracts: The State Street Research International Stock,
Loomis Sayles High Yield Bond, Scudder Global Equity, T. Rowe Price Small Cap
Growth and Janus Mid Cap Portfolios may buy and sell futures contracts on
currencies, to the extent described in the Fund's prospectus. The Portfolios
may engage in transactions in only those currency futures contracts that are
traded on a national or foreign commodities exchange or a board of trade and
are standardized as to maturity date and the underlying financial instrument.

Currency futures contracts may be used as a hedge against changes in
prevailing currency exchange rates in order to establish more definitively the
return on foreign securities held or intended to be acquired by the Portfolio.
In this regard, the Portfolio could sell currency futures contracts to offset
the effect of expected decreases in currency exchange rates and purchase such
contracts to offset the effect of expected increases in currency exchange
rates. A Portfolio may also use currency futures for any other purpose that it
could use forward currency contracts. Although techniques other than the sale
and purchase of currency futures contracts could be used for these purposes,
currency futures contracts may be an effective and relatively low cost means
of implementing these strategies.

Options on Futures: Each Portfolio may purchase put and call options on the
same types of futures contracts as it is permitted to purchase or sell
directly, write (i.e., sell) covered call options on such futures contracts
and enter into closing transactions with respect to such options. The State
Street Research International Stock, T. Rowe Price Small Cap Growth, Loomis
Sayles High Yield Bond, Janus Mid Cap and Scudder Global Equity Portfolios may
also write covered put options on such futures contracts.

A call option on a futures contract gives the purchaser the right, in return
for the premium paid, to purchase a futures contract (assume a "long"
position) at a specified exercise price at any time before the option expires.
A put option gives the purchaser the right, in return for the premium paid, to
sell a futures contract (assume a "short" position), for a specified exercise
price, at any time before the option expires. Upon the exercise of a call, the
writer of the option is obligated to sell the futures contract (to deliver a
"long" position to the option holder) at the option exercise price, which will
presumably be lower than the current market price of the contract in the
futures market. Upon exercise of a put, the writer of the option is obligated
to purchase the futures contract (to deliver a "short" position to the option
holder) at the option exercise price, which will presumably be higher than the
current market price of the contract in the futures market.

When a Portfolio as a purchaser of an option on a futures contract exercises
such option and assumes a long futures position in the case of a call, or a
short futures position in the case of a put, its gain will be credited to its
futures margin account. Any loss suffered by the writer of the option on a
futures contract will be debited to its futures variation margin account.
However, as with the trading of futures, most participants in the options
markets do not seek to realize their gains or losses by exercise of their
option rights. Instead, the holder of an option will usually realize a gain or
loss by buying or selling an offsetting option (i.e., entering into a closing
transaction) at a market price that will reflect an

B-16
<PAGE>

................................................................
increase or a decrease from the premium originally paid as a purchaser or
required as a writer.

Options on futures contracts can be used by a Portfolio for the same purposes
as might be addressed by the direct purchase or sale of the underlying futures
contracts themselves. Depending on the pricing of the option, compared to
either the futures contract upon which it is based or upon the price of the
underlying securities or currencies themselves, it may or may not be less risky
then direct ownership of the futures contract or the underlying securities or
currencies.

In contrast to a futures transaction, in which only transaction costs are
involved, benefits received by a Portfolio as a purchaser in an option
transaction will be reduced by the amount of the premium paid as well as by
transaction costs. In the event of an adverse market movement, however, a
Portfolio which purchased an option will not be subject to a risk of loss on
the option transaction beyond the price of the premium it paid plus its
transaction costs. Purchasers of options who do not exercise their options
prior to the expiration date will suffer a loss of the entire premium.

If a Portfolio writes covered call or put options on futures contracts, the
Portfolio will receive a premium but will assume a risk of adverse movement in
the price of the underlying futures contract comparable to that involved in
holding a futures position. If the option is not exercised, the Portfolio will
realize a gain in the amount of the premium, which may partially offset
unfavorable changes in the value of securities held in the Portfolio or to be
acquired for the Portfolio. If the option is exercised, the Portfolio will
incur a loss in the option transaction, which will be reduced by the amount of
the premium it has received, but which may also partially offset favorable
changes in the value of its portfolio securities or currencies. For example,
the writing of a call option on a futures contract can constitute a partial
hedge against declining prices of underlying securities or currencies. If the
futures price at expiration is below the exercise price, the Portfolio will
retain the full amount of the option premium, which provides a partial hedge
against any decline that may have occurred in the value of the Portfolio's
holdings of securities or currencies.

While the purchaser or writer of an option on a futures contract may normally
terminate its position by selling or purchasing an offsetting option of the
same series, a Portfolio's ability to establish and close out options at fairly
established prices will be subject to the existence of a liquid market. A
Portfolio will not purchase or write options on futures contracts unless, in
the opinion of the manager or sub-investment manager, as applicable, the market
for such options has sufficient liquidity that the risks associated with such
options transactions are not unacceptable.

Limitations on the Use of Futures Contracts and Options Thereon and Options
on Indices: In instances involving the purchase or sale of a futures contract
or the writing of covered call options on futures contracts, each Portfolio
will be required to either (i) segregate cash or liquid assets that, together
with any related margin deposits, are sufficient to cover the outstanding
position or (ii) cover the futures contract or option written on such contract
by owning the instruments or currency underlying the futures contract or option
thereon or by holding a separate option permitting it to purchase or sell the
same futures contract or option at the same strike price or better. In
instances involving the writing of covered put options on futures contracts,
the Portfolios will be required to (i) segregate cash or liquid assets that,
together with any related margin deposits, at least equal the strike price of
the put options written or (ii) purchase a put option on the same futures
contract at the same strike price as that written by the Portfolio. Where such
positions are covered by the segregation of sufficient cash, cash equivalents,
other liquid securities or underlying securities, such amounts will be held in
a segregated account with the Fund's custodian to collateralize the position,
thereby insuring that the use of such futures contracts and options thereon is
unleveraged.

A Portfolio may not establish a position in a futures contract or an option
thereon if immediately thereafter the sum of the amount of initial margin
deposits on all open futures contracts and options the Portfolio has written
thereon, and premiums paid for unexpired options on futures contracts would
exceed 5% of the market value of that Portfolio's total assets; provided,
however, that in the case of an option that is "in-the-money" at the time of
the purchase, the "in-the-money" amount may be excluded in calculating the 5%
limitation. This restriction, however, does not apply to positions that the T.
Rowe Price Small Cap Growth, Loomis Sayles High Yield Bond, Janus Mid Cap and
Scudder Global Equity Portfolios may take that are within the CFTC's definition
of "bona fide hedging" transactions. In addition, shares of the Portfolios may
not be sold or advertised as a participation in a commodity pool or other
vehicle for trading in the commodity futures or options markets. Finally, the
Portfolios must agree to submit information to the CFTC, as requested, to
demonstrate compliance with applicable regulations and to assist the CFTC in
collecting data and refining its hedging standards.

With respect to options on indices, in order to insure that call options
written by the Portfolios on indices are covered and, therefore, unleveraged,
the Portfolios would be required to: (i) hold in a segregated account, with the
Fund's custodian, portfolio securities that substantially replicate the
movement of the particular index upon which the call option was written or
sufficient

B-17
<PAGE>

................................................................
cash or liquid assets to cover the outstanding position, or (ii) hold a
separate option permitting the purchase or sale of the same stock index at the
same strike price or better. With respect to put options written on stock
indices, the Portfolios will (i) segregate sufficient cash or liquid assets
equal to the strike price of the put option written or (ii) purchase a put
option on the same index at the same strike price as that written by the
Portfolio.

FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS:

Each Portfolio, except for the MetLife Stock Index Portfolio, may use
forward foreign currency exchange contracts ("forward currency contracts") to
hedge the currency risk relating to securities denominated in or exposed to
foreign currency that are purchased, sold, or held by that Portfolio.

A forward currency contract involves an obligation to purchase or sell a
specific currency at a future date, which may be any fixed number of days from
the date of the contract as agreed by the parties, at a price set at the time
of the contract. In the case of a cancelable forward currency contract, the
holder has the unilateral right to cancel the contract at maturity by paying a
specified fee. Forward currency contracts are traded in the interbank market
conducted directly between currency traders (usually large commercial banks)
and their customers. They generally have no deposit requirement, and no
commissions are charged at any stage for trades. Although foreign exchange
traders do not charge a fee for currency conversion, they do realize a profit
based on the difference (the "spread") between prices at which they are buying
and selling various currencies. Thus, a trader may offer to sell a foreign
currency to a Portfolio at one rate, while offering a lower rate of exchange
should the Portfolio desire to resell that currency to the dealer.

At the maturity of a forward currency contract, a Portfolio may either
accept or make delivery of the currency specified in the contract, or at or
prior to maturity, a Portfolio may enter into a closing transaction involving
the purchase or sale of an offsetting contract. Closing transactions with
respect to forward currency contracts are usually effected with the currency
trader that is a party to the original forward contract.

As described in the Prospectus, each Portfolio may enter into a forward
currency contract under two circumstances. First, when a Portfolio has entered
into a contract to purchase or sell a security denominated in or traded in a
foreign currency, it may protect itself against a possible loss between the
trade date and the settlement date resulting from an adverse change in the
relationship between the U.S. dollar and the foreign currency by entering into
a forward currency contract in U.S. dollars for the purchase or sale of
foreign currency. Second, when management of a Portfolio believes a particular
foreign currency may suffer or enjoy a substantial movement against the U.S.
dollar (or another currency in a cross hedging transaction), the Portfolio may
enter into a forward currency contract to sell or buy an amount of such
currency approximating the value of some or all of the Portfolio's securities
denominated in or exposed to such foreign currency. A Portfolio may also use a
proxy currency for one of the currencies in these transactions. (A proxy
currency is one whose value the investment manager or sub-investment manager
believes will maintain a close relationship to the value of the currency for
which it is being substituted.) However, the precise matching of the amounts
of forward currency contracts and the value of any portfolio securities being
hedged will not generally be possible, because the future value of such
securities in foreign currencies will change as a consequence of movements in
the market value of those securities between the dates the forward currency
contracts are entered into and the dates they mature.

As set forth in the Prospectus, the State Street Research International
Stock, Loomis Sayles High Yield Bond, T. Rowe Price Small Cap Growth, Janus
Mid Cap and Scudder Global Equity Portfolios may also invest a limited amount
of their assets in forward currency contracts used for non-hedging purposes.

Since it is impossible to forecast with precision the market value of
portfolio securities at the expiration or maturity of a forward currency
contract, it may be necessary for a Portfolio to purchase additional foreign
currency on the spot (i.e., cash) market (and bear the expense of such
purchase) if the market value of the securities being hedged is less than the
amount of foreign currency the Portfolio would be obligated to deliver upon
the sale of such securities. Conversely, it may be necessary for the Portfolio
to sell some of the foreign currency received upon the sale of Portfolio
securities on the spot market if the market value of such securities exceeds
the amount of foreign currency the Portfolio is obligated to deliver.

The Portfolios will cover outstanding forward currency contracts by
maintaining liquid portfolio securities denominated in or exposed to the
currency underlying the forward contract or the currency being hedged. To the
extent that a Portfolio is not able to cover its forward currency positions
with underlying portfolio securities, the Portfolio's custodian will segregate
cash or liquid assets having a value equal to the aggregate amount of such
Portfolio's commitments under forward contracts entered into with respect to
position hedges, cross-hedges and anticipatory hedges. If the value of the
securities used to cover a position or the value of segregated assets
declines, a Portfolio will find alternative

B-18
<PAGE>

................................................................
cover or segregate additional cash or high-grade liquid assets on a daily basis
so that the value of the covered and segregated assets will be equal to the
amount of such Portfolio's commitments with respect to such contracts. As an
alternative to segregating assets, a Portfolio may buy call options permitting
such Portfolio to buy the amount of foreign currency being hedged by a forward
sale contract or a Portfolio may buy put options permitting it to sell the
amount of foreign currency subject to a forward buy contract.

The use of forward currency contracts involves various risks. A Portfolio may
not always be able to enter into a forward currency contract when management
deems it advantageous to do so, for instance, if the Portfolio is unable to
find a counterparty to the transaction at an attractive price. Furthermore, a
Portfolio may not be able to purchase forward currency contracts with respect
to all of the foreign currencies in which its portfolio securities may be
denominated. In those circumstances, and in a cross hedging forward currency
contract, the correlation between the movements in the exchange rates of the
subject currency and the currency in which the portfolio security is
denominated (or traded) may not be precise. Forward currency contracts are not
guaranteed by a third party and, accordingly, each party to a forward currency
contract is dependent upon the creditworthiness and good faith of the other
party. A default on the contract would deprive a Portfolio of unrealized
profits or force the Portfolio to cover its commitments for purchase or sale of
currency, if any, at the current market price. Finally, the cost of purchasing
forward currency contracts in a particular currency will reflect, in part, the
rate of return available on instruments denominated in that currency. The cost
of purchasing forward currencies that in general yield high rates of return may
thus tend to reduce the rate of return toward the rate of return that would be
earned on assets denominated in U.S. dollars.

OTHER DERIVATIVE TRANSACTIONS

Subject to the conditions set forth in the Prospectus, the Loomis Sayles High
Yield Bond, T. Rowe Price Small Cap Growth, Janus Mid Cap and Scudder Global
Equity Portfolios may use swaps, caps, floors and collars. A Portfolio will
usually enter into swaps on a net basis; that is, the two payment streams are
netted out in a cash settlement on the payment date or dates specified in the
instrument, with the Portfolio receiving or paying, as the case may be, only
the net amount of the two payments.

Each Portfolio will maintain cash or liquid assets in a segregated account
with its custodian in an amount sufficient at all times to cover its current
obligations under swaps, caps, floors and collars. If a Portfolio enters into a
swap agreement on a net basis, it will segregate assets with a daily value at
least equal to the excess, if any, of the Portfolio's accrued obligations under
the swap agreement over the accrued amount the Portfolio is entitled to receive
under the agreement. If a Portfolio enters into a swap agreement on other than
a net basis, or sells a cap, floor or collar, it will segregate assets with a
daily value at least equal to the full amount of the Portfolio's accrued
obligations under the agreement.

The Portfolios will not enter into any swap, cap, floor or collar, unless the
other party to the transaction (the "Counterparty") is deemed creditworthy by
the portfolio manager. If a Counterparty defaults, the Portfolio may have
contractual remedies pursuant to the agreements related to the transaction. The
swap market has grown substantially in recent years, with a large number of
banks and investment banking firms acting both as principals and as agents
utilizing standardized swap documentation. As a result, the swap market has
become relatively liquid. Caps, floors and collars are more recent innovations
for which standardized documentation has not yet been fully developed and, for
that reason, they are less liquid than swaps.

The liquidity of swaps, caps, floors and collars will be determined by the
portfolio manager based on various factors, including (1) the frequency of
trades and quotations, (2) the number of dealers and prospective purchasers in
the marketplace, (3) dealer undertakings to make a market, (4) the nature of
the instrument (including any demand or tender features) and (5) the nature of
the marketplace for trades (including the ability to assign or offset a
Portfolio's rights and obligations relating to the investment). Such
determination will govern whether the instrument will be deemed within the 15%
(or 10% for the Scudder Global Equity Portfolio) restriction on investments in
securities that are not readily marketable.

The Portfolios may enter credit protection swap arrangements involving the
sale by a Portfolio of a put option on a debt security which is exercisable by
the buyer upon certain events, such as a default by the referenced creditor on
the underlying debt or a bankruptcy event of the creditor.

B-19
<PAGE>

INDUSTRY CLASSIFICATIONS

In determining how much of each of the State Street Research Growth and
State Street Research Aggressive Growth Portfolios are invested in a given
industry, the following industry classifications are currently used.
Securities issued or guaranteed as to principal or interest by the U.S.
Government or its agencies or instrumentalities or mixed-ownership Government
corporations or sponsored enterprises (including repurchase agreements
involving U.S. Government securities to the extent excludable under relevant
regulatory interpretations) are excluded. Securities issued by foreign
governments are also excluded. Companies engaged in the business of financing
will be classified according to the industries of their parent companies or
industries that otherwise most affect such financing companies. Issuers of
asset-backed pools will be classified as separate industries based on the
nature of the underlying assets, such as mortgages and credit card
receivables. "Asset-backed--Mortgages" includes private pools of non-
government-backed mortgages.

BASIC INDUSTRIES CONSUMER STAPLE SCIENCE & TECHNOLOGY

Chemical Business Service Aerospace
Diversified Container Computer Software &
Electrical Equipment Drug Service
Forest Products Food & Beverage Electronic
Machinery Hospital Supply Components
Metal & Mining Personal Care Electronic Equipment
Railroad Printing & Publishing Office Equipment
Truckers Tobacco

UTILITY ENERGY CONSUMER CYCLICAL

Electric Oil Refining and Marketing Airline
Gas Oil Production Automotive
Gas Transmission Oil Service Building
Telephone Hotel & Restaurant

FINANCE Photography
Recreation

OTHER Bank Retail Trade

Financial Service Textile & Apparel
Trust Certificates-- Government Related Lending
Insurance
Asset-backed--Mortgages
Asset-backed--Credit Card Receivables

In determining how much of each of the State Street Research Income and the
State Street Research Diversified Portfolios are invested in a given industry,
the following industry classifications are currently used. Securities issued
or guaranteed as to principal or interest by the U.S. Government or its
agencies or instrumentalities or mixed-ownership Government corporations or
sponsored enterprises (including repurchase agreements involving U.S.
Government securities to the extent excludable under relevant regulatory
interpretations) are excluded. Securities issued by foreign governments are
also excluded. Companies engaged in the business of financing will be
classified according to the industries of their parent companies or industries
that otherwise most affect such financing companies. Issuers of asset-backed
pools will be classified as separate industries based on the nature of the
underlying assets, such as mortgages, credit card receivables, etc. "Asset-
backed--Mortgages" includes private pools of non-government-backed mortgages.

Aerospace Electronic Components Oil Service
Airline Electronic Equipment Paper Products
Asset-backed--Mortgages Entertainment Personal Care
Asset-backed--Credit Card Receivables
Financial Service Photography
Food & Beverage Plastics

B-20
<PAGE>

Automotive Forest Products Printing &
Automotive Parts Gaming & Lodging Publishing
Bank Gas Railroad
Building Gas Transmission Real Estate &
Business Service Grocery Building
Cable Recreation
Healthcare & Hospital Management
Capital Goods & Equipment Hospital Supply Retail Trade
Chemical Hotel & Restaurant Savings & Loan
Computer Software & Service Insurance Shipping &
Conglomerate Machinery Transportation
Consumer Goods & Services Media Technology &
Container Metal & Mining Communications
Cosmetics Office Equipment Telephone
Diversified Oil Production Textile & Apparel
Drug Oil Refining & Marketing Tobacco
Electric Truckers
Electric Equipment Trust Certificates--
Government Related
Lending

In determining how much of the State Street Research International Stock
Portfolio is invested in a given industry, the industry classifications set
forth below, grouped by sectors, are currently used.

ENERGY RESOURCES
MATERIALS CAPITAL EQUIPMENT

Energy Resources (includes all oils)
Building Materials and Components
Utilities Electrical, Gas, Water Aerospace and
Chemicals Military Technology

CONSUMER GOODS Forest Products and Paper Construction and
Housing

Metals--Non ferrous
Appliances and Household Durables Data Processing and
Metals--Steel Reproduction
Automobiles
Misc. Materials and Commodities
Electrical and
Electronics

Beverages and Tobacco
Food and Household Products SERVICES
Electrical
Components and
Instruments

Health and Personal Care
Broadcasting and Publishing
Recreation, Other Consumer Goods
Textiles and Apparel Business and Public Services
Leisure and Tourism Energy Equipment and
Services

MULTI-INDUSTRY Merchandising
Industrial
Components

Telecommunications
Multi-Industry Transportation--Airlines
Machinery and
Engineering

Transportation--Road and Rail
MINING Transportation--Shipping

Wholesale and International Trade
Gold Mines FINANCE

Banking
Financial Services
Insurance
Real Estate
Collective
Investment Programs

B-21
<PAGE>

In determining how much of the Loomis Sayles High Yield Bond Portfolio is
invested in a given industry, the industry classifications set forth below,
grouped by sectors, are currently used.

GOVERNMENTS

TELEPHONE

UTILITIES

MORTGAGE-RELATED (CMO)
Gas
Electric

In determining how much of the T. Rowe Price Small Cap Growth Portfolio is
invested in a given industry, the T. Rowe Price Small Cap Growth Portfolio will
rely primarily on industry classifications as published by BARRA, Inc. To the
extent that BARRA, Inc. classifications are so broad that the primary economic
characteristics in a single class are materially different, the Portfolio may
further classify issuers in accordance with industry classifications as
published by the SEC as well as the Emerging Company Investment Service (ECIS).

In determining how much of the Janus Mid Cap Portfolio is invested in a given
industry, the Janus Mid Cap Portfolio will rely primarily on industry
classifications as published by Bloomberg L.P., provided that financial service
companies will be classified according to the end users of their services (for
example, automobile finance, bank finance and diversified finance are each
considered to be a separate industry). To the extent that Bloomberg L.P.
classifications are so broad that the primary economic characteristics in a
single class are materially different, the Portfolio may further classify
issuers in accordance with industry classifications as published by the SEC.

B-22
<PAGE>

In determining how much of the Scudder Global Equity Portfolio is invested in
a given industry, the industry classifications set forth below, grouped by
sectors, are currently used.

CONSUMER DISCRETIONARY MEDIA ENERGY
Advertising Engineering
Apparel & Shoes Broadcasting & Entertainment Oil & Gas Production
Department & Chain Cable Television Oil Companies
Stores Print Media Oil/Gas Transmission
Home Furnishings Miscellaneous Oilfield
Hotels & Casinos Services/Equipment

Recreational Products SERVICE INDUSTRIES Miscellaneous
Restaurants

Specialty Retail METALS & MINERALS
Miscellaneous Asset Management

EDP Services Coal Mining
CONSUMER STAPLES Environmental Services Precious Metals
Investment Steel & Metals
Alcohol & Tobacco Miscellaneous Commercial Services
Miscellaneous
Consumer Electronic &
Photographic Products

Miscellaneous Consumer Services
Printing/Publishing CONSTRUCTION
Consumer Specialties Miscellaneous
Farming Building Materials

Food & Beverage DURABLES Building Products
Package Goods/Cosmetics Forest Products
Textiles Aerospace Homebuilding
Miscellaneous Automobiles Miscellaneous

Construction/Agricultural Equipment
HEALTH Leasing Companies TRANSPORTATION
Telecommunications Equipment Air Freight
Biotechnology Tires Airlines
Generic Drugs Miscellaneous Marine
Health Industry Services Transportation

Hospital Management MANUFACTURING Railroads
Medical Supply & Trucking
Specialty Chemicals Miscellaneous
Pharmaceuticals

Containers & Paper
Miscellaneous Diversified Manufacturing UTILITIES

Electrical Products Electric Utilities
COMMUNICATIONS Hand Tools Natural Gas
Industrial Specialty Distribution
Cellular Telephone Machinery/Components/ControlsWater Supply
Telephone/Communications Office Equipment/Supplies Miscellaneous
Miscellaneous

Specialty Chemicals

Wholesale Distributors MISCELLANEOUS
Miscellaneous
FINANCIAL

Miscellaneous

CREDIT CARD
Banks TECHNOLOGY RECEIVABLES
Insurance
Business Finance
Consumer Finance Miscellaneous

Other Financial Computer Software
Companies Diverse Electronic Products AUTOMOBILE
Real Estate EDP Peripherals RECEIVABLES
Miscellaneous Miscellaneous
Electronic Components/Distributors

Electronic Data Processing
Military Electronics HOME EQUITY LOANS
Miscellaneous

Office/Plant Automation
Precision Instruments MANUFACTURED HOUSING
Semiconductors RECEIVABLES
Miscellaneous Miscellaneous

B-23
<PAGE>

DIRECTORS AND OFFICERS

The directors and officers of the Fund and their principal occupations for
at least the last five years are set forth below. Unless otherwise noted, the
address of each executive officer and director is One Madison Avenue, New
York, New York 10010.

<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION(S)
NAME, (AGE) AND ADDRESS POSITION(S) DURING PAST 5 YEARS
----------------------- ----------- ------------------------
<C> <S> <C>
Steve A. Garban (60)+............ Director Retired, formerly Senior Vice-President
The Pennsylvania State University Finance and Operations and Treasurer,
208 Old Main The Pennsylvania State University
University Park, PA 16802
David A. Levene (58)(*)+......... Chairman of the Board, Executive Vice-President, Metropolitan
Chief Executive Life Insurance Company ("Metropolitan
Officer and Director Life,") since 1996; prior thereto,
Senior Vice-President and Chief Actuary
Malcolm T. Hopkins (70)+......... Director Private Investor, formerly Vice-Chairman
14 Brookside Road of the Board and Chief Financial
Biltmore Forest Officer, St. Regis Corp. (forest and
Asheville, NC 28803 paper products)
Robert A. Lawrence (71)+......... Director Retired, formerly Partner, Saltonstall &
175 Federal Street, Co. (private investment firm)
16th Floor
Boston, MA 02110
Dean O. Morton (66)+............. Director Retired, formerly Executive Vice-
3200 Hillview Avenue President, Chief Operating Officer and
Palo Alto, CA 94304 Director, Hewlett--Packard Company
Michael S. Scott Morton (60)+.... Director Jay W. Forrester Professor of Management
Massachusetts Institute of at Sloan School of Management, MIT
Technology ("MIT")
50 Memorial Drive
Cambridge, MA 02139-4307
Arthur G. Typermass (60)*........ Director Retired, formerly Senior Vice-President
and Treasurer, Metropolitan Life
Bradford W. White (31)+*......... Controller Senior Technical Consultant--Pensions,
Metropolitan Life since 1993; Senior
Financial Analyst--Retirement and
Savings Center, 1992-1993; prior
thereto, Financial Analyst
Christopher P. Nicholas (48)+*... President and Associate General Counsel, Metropolitan
Chief Operating Officer Life
Janet Morgan (35)*............... Treasurer Assistant Vice-President, Metropolitan
Life since 1997; prior thereto, Director
Elaine Stevenson (38)*........... Vice-President Vice-President, Metropolitan Life since
1996; Assistant Vice-President, 1993-
1996; prior thereto, Director--
Retirement and Savings Center
Lawrence A. Vranka (57)*......... Vice-President Vice-President, Metropolitan Life
Robin Wagner (37)*............... Secretary Assistant General Counsel, Metropolitan
Life since 1997, Counsel, 1995-1997;
prior thereto, Associate Counsel
Patricia S. Worthington (41)*.... Assistant Secretary Assistant Vice-President and Assistant
Compliance Director of Metropolitan Life
since 1997; prior thereto Associate
Counsel
Nancy A. Margadonna (29)*........ Assistant Secretary Legal Assistant, Metropolitan Life since
1994; prior thereto, legal assistant
Cadwalader, Wickersham & Taft
Harold Lerner (62)*.............. Assistant Controller Technical Consultant--Financial
Management, Metropolitan Life since
1996; prior thereto, Pricing/Contracts
Analyst--Retirement and Savings Center
Dianne Johnson (46)*............. Assistant Controller Senior Technical Consultant--Financial
Management, Metropolitan Life since
1997; Technical Consultant-- Retirement
and Savings Center, 1994-1997; prior
thereto, Accounting Supervisor--
Retirement and Savings Center
</TABLE>
- -------
(*) Interested Person, as defined in the Investment Company Act of 1940 ("1940
Act"), of the Fund.
(+) Serves as a trustee, director and/or officer of one or more of the
following investment companies, each of which has a direct or indirect
advisory relationship with the Investment Manager or its affiliates: State
Street Research Financial Trust, State Street Research Income Trust, State
Street Research Money Market Trust, State Street Research Tax-Exempt
Trust, State Street Research Capital Trust, State Street Research Master
Investment Trust, State Street Research Equity Trust, State Street
Research Securities Trust, State Street Research Growth Trust, State
Street Research Exchange Trust and State Street Research Portfolios, Inc.

B-24
<PAGE>

........................................

The Directors have been compensated as follows:

<TABLE>
- -------------------------------------------------------------------------------
<CAPTION>
(5)
(3) TOTAL
PENSION OR COMPENSATION
RETIREMENT (4) FROM THE
(2) BENEFITS ESTIMATED FUND
AGGREGATE ACCRUED AS ANNUAL AND FUND
(1) COMPENSATION PART OF BENEFITS COMPLEX PAID
NAME OF FROM FUND UPON TO DIRECTORS
DIRECTOR(B) FUND(A)(C) EXPENSE RETIREMENT (B)
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Jeffrey J. Hodgman (d)......... 0 0 0 0
Steve A. Garban................ $24,000 0 0 $75,899
Malcolm T. Hopkins............. $22,500 0 0 $78,499
Robert A. Lawrence............. $21,000 0 0 $93,125
Dean O. Morton................. $21,000 0 0 $97,125
Michael S. Scott Morton........ $21,000 0 0 $103,625
John H. Tweedie (d)............ 0 0 0 0
David A. Levene................ 0 0 0 0
</TABLE>
- -------
(a) For the fiscal year ended December 31, 1997.
(b) Complex is comprised of 10 trusts and two corporations with a total of 31
funds and/or series. "Total Compensation from the Fund and Fund Complex Paid
to Directors" is for the 12 months ended December 31, 1997.
(c) Directors and officers who are affiliated with Metropolitan Life or State
Street Research or their affiliates ("interested persons" as defined under
the Investment Company Act of 1940) do not receive any compensation for
services rendered to the Fund in addition to their compensation for services
rendered to Metropolitan Life or such affiliated companies. As of January 1,
1997, the Directors who are not affiliated with Metropolitan Life or State
Street Research or their affiliates are paid a fee of $10,000 for each full
calendar year during which services are rendered to the Fund. In addition,
they are paid a fee of $2,500 for attending each of the directors' meetings,
$500 for attending each audit committee meeting and are reimbursed for out-
of-pocket expenses. Messrs. Garban and Hopkins also are each paid $1,500 for
attending any contract committee meeting. The chairman of the audit
committee receives a fee of $1,500 for each full calendar year during which
he/she serves as chairman.
(d) Jeffrey J. Hodgman resigned as a director effective May 1, 1998. John H.
Tweedie resigned as director effective April 24, 1997.
- -------
A separate charge is not made against the Fund for any compensation paid to
officers and directors that are interested persons of the Fund. Such
compensation is being paid by Metropolitan Life pursuant to the Investment
Management Agreements between the Fund and Metropolitan Life discussed below.

None of the above officers and directors of the Fund owns any stock of the
Fund.

INVESTMENT MANAGEMENT ARRANGEMENTS
...............................................................................

INVESTMENT MANAGEMENT AGREEMENTS AND SUB-INVESTMENT MANAGEMENT AGREEMENTS

The Fund has entered into a separate Investment Management Agreement with
Metropolitan Life with respect to each Portfolio, a separate Sub-Investment
Management Agreement with Metropolitan Life and State Street Research with
respect to each of the State Street Research Growth, State Street Research
Money Market, State Street Research Income, State Street Research Diversified,
State Street Research International Stock and State Street Research Aggressive
Growth Portfolios, a separate Sub-Sub-Investment Management Agreement with
Metropolitan Life, State Street Research and GFM with respect to the State
Street Research International Stock Portfolio, a separate Sub-Investment
Management Agreement with Metropolitan Life and Loomis Sayles with respect to
the Loomis Sayles High Yield Bond Portfolio, a separate Sub-Investment
Management Agreement with Metropolitan Life and T. Rowe Price with respect to
the T. Rowe Price Small Cap Growth Portfolio, a separate Sub-Investment
Management Agreement with Metropolitan Life and Janus with respect to the
Janus Mid Cap Portfolio, and a separate Sub-Investment Management Agreement
with Metropolitan Life and Scudder with respect to the Scudder Global Equity
Portfolio. In addition to the other functions described in the Prospectus, the
manager, the sub-investment managers and the sub-sub investment manager, as
applicable, provide the portfolio managers for the Portfolios. The portfolio
managers consider analyses from various sources, make the necessary investment
decisions and effect transactions accordingly. In addition, the manager and
sub-investment managers are obligated to provide all the office space,
facilities, equipment and personnel necessary to perform their respective
duties under the Agreements. They also utilize their securities and economic
research facilities to perform their duties under the Agreements.

Securities held by any Portfolio may also be held by other accounts managed
by the manager or a sub-investment manager or the sub-sub investment

B-25
<PAGE>

................................................................
manager, including Metropolitan Life's own general and separate accounts, the
other Fund Portfolios, and advisory clients of the manager or a sub-investment
manager. When selecting securities for purchase or sale for a Portfolio, the
manager, sub-investment managers, and the sub-sub investment manager as
applicable, may at the same time be purchasing or selling the same securities
for one or more of such other accounts. It is the policy of the manager, the
sub-investment managers and the sub-sub investment manager not to favor any
one account over the other, and any purchase or sale orders executed
contemporaneously are allocated at the average price and as nearly as
practicable on a pro-rata basis in proportion to the amounts desired to be
purchased or sold by each account. While it is conceivable that in certain
instances this procedure could adversely affect the price or number of shares
involved in the Portfolio's transaction, it is believed that the procedure
generally contributes to better overall execution of the Fund's portfolio
transactions. The Board of Directors has adopted guidelines governing the
procedure and will monitor the procedure to determine that the guidelines are
being followed and that the procedure continues to be in the best interests of
the Fund and its shareholders. For providing investment management services to
the Fund, the manager and sub-investment managers receive compensation that is
described in the Prospectus under "Management of the Fund."

The Investment Management Agreements relating to the State Street Research
Growth, State Street Research Income, State Street Research Diversified, State
Street Research Aggressive Growth and State Street Research International
Stock Portfolios, the Sub-Investment Management Agreements and the Sub-Sub
Investment Management Agreement relating to these Portfolios and the State
Street Money Market Portfolio were approved by the shareholders of the
appropriate Portfolio at the special meeting of Fund shareholders held on July
30, 1997. The Investment Management Agreement relating to the State Street
Research Money Market Portfolio and the MetLife Stock Index Portfolio were
approved by the holders of the shares of each Portfolio at a meeting of the
shareholders of such Portfolio held on April 29, 1987 and April 2, 1991,
respectively. The Investment Management Agreements and Sub-Investment
Management Agreements relating to the Loomis Sayles High Yield Bond Portfolio,
the T. Rowe Price Small Cap Growth Portfolio and the Janus Mid Cap Portfolio
were approved by the unanimous written consent of shareholders on March 3,
1997. The Investment Management Agreement relating to the Scudder Global
Equity Portfolio was approved by the unanimous consent of shareholders on
March 3, 1997. The Sub-Investment Management Agreement relating to the Scudder
Global Equity Portfolio was approved at a Special Meeting of Shareholders on
October 21, 1997. Unless earlier terminated, each Agreement will continue in
effect from year to year with respect to each Portfolio, if approved annually
(a) by the Board of Directors of the Fund or by a majority of the outstanding
shares of that Portfolio (as determined pursuant to the 1940 Act), and (b) by
a majority of the Board of Directors who are not "interested persons" (within
the meaning of the 1940 Act) of any party of such Agreement. The Agreements
may not be "assigned" as defined in the 1940 Act and may be terminated without
penalty on 60 days' written notice at the option of either party or, with
respect to any Portfolio, by the requisite vote of the shareholders of that
Portfolio. (See "General Information About the Fund and its Shares" in the
Prospectus.)

For providing sub-investment management services with respect to the State
Street Research Money Market Portfolio, State Street Research receives from
Metropolitan Life an annual percentage fee, calculated on the month ending
value of the aggregate net assets of the Portfolio, of .25%. For providing
sub-investment management services with respect to the State Street Research
Income Portfolio, State Street Research receives from Metropolitan Life an
annual percentage fee, calculated on the month ending value of the aggregate
net assets of the Portfolio, of .27% up to $250 million, .22% on the next $250
million and .17% on amounts over $500 million. For providing sub-investment
management services with respect to the State Street Research Diversified
Portfolio, State Street Research receives from Metropolitan Life an annual
percentage fee, calculated on the month ending value of the aggregate net
assets of the Portfolio, of .35% up to $500 million, .30% on the next $500
million and .25% on amounts over $1 billion. For providing sub-investment
management services with respect to the State Street Research Growth
Portfolio, State Street Research receives from Metropolitan Life an annual
percentage fee, calculated on the month ending value of the aggregate net
assets of the Portfolio, of .40% up to $500 million, .35% on the next $500
million and .30% on amounts over $1 billion. For providing sub-investment
management services with respect to the State Street Research Aggressive
Growth Portfolio and the State Street Research International Stock Portfolio,
State Street Research receives from Metropolitan Life an annual percentage
fee, calculated on the month ending value of the aggregate net assets of each
such Portfolio of .55% up to $500 million, .50% on the next $500 million and
.45% on amounts over $1 billion. For providing sub-sub-investment management
services with respect to the State Street Research International Stock
Portfolio, GFM receives from State Street Research an annual percentage fee
calculated on the month ending value of the aggregate net assets of .50% up to
$500 million, .45% on the next $500 million and .40% on amounts over $1
billion.

B-26
<PAGE>

................................................................

For providing sub-investment management services for the Loomis Sayles High
Yield Bond Portfolio, Loomis Sayles receives from Metropolitan Life an annual
percentage fee, calculated on the average daily value of the aggregate net
assets of the Portfolio, of .50%. For sub-investment management services with
respect to the T. Rowe Price Small Cap Growth Portfolio, T. Rowe Price receives
from Metropolitan Life an annual percentage fee, calculated daily on the
average daily value of the aggregate net assets of the Portfolio, of .35% up to
$100 million, .30% of such assets on the next $300 million and .25% of such
assets on amounts in excess of $400 million. For sub-investment management
services with respect to the Janus Mid Cap Portfolio, Janus receives from
Metropolitan Life an annual percentage fee, calculated daily on the average
daily value of the aggregate net assets of the Portfolio, of .55% up to $100
million, .50% of such assets on the next $400 million and .45% of such assets
on amounts in excess of $500 million. For sub-investment management services
with respect to the Scudder Global Equity Portfolio, Scudder receives from
Metropolitan Life an annual percentage fee, calculated daily on the average
daily value of the aggregate net assets of the Portfolio, of .70% up to $50
million, .35% of such assets on the next $50 million, .30% of such assets on
the next $400 million and .275% of such assets on amounts in excess of $500
million.

PAYMENT OF EXPENSES

The Investment Management Agreements obligate Metropolitan Life to provide
investment management services to the Fund and to pay the organization costs of
the Fund. Prior to May 16, 1993, pursuant to those Agreements for each of the
then existing Portfolios, Metropolitan Life was also obligated to pay all
expenses of the Fund, including but not limited to, furnishing the facilities,
equipment and office space for carrying out its obligations under the
Investment Management Agreements and paying the compensation of officers of the
Fund, the fees and expenses of all directors of the Fund, custodian and
transfer agent fees, and audit and attorney's fees; provided, however, the
following expenses of the Fund were borne by the Fund: the investment
management fee payable to Metropolitan Life, brokerage commissions on portfolio
transactions (including any other direct costs related to the acquisition,
disposition, lending or borrowing of portfolio investments), taxes payable by
the Fund, interest and any other costs related to borrowings by the Fund, and
any extraordinary or non-recurring expenses (such as legal claims and
liabilities and litigation costs and any indemnification related thereto).
Certain other expenses were and are assumed by Metropolitan Life pursuant to a
distribution agreement with the Fund (see "Sale and Redemption of Shares").

As of May 16, 1993, pursuant to an amendment to each of the Investment
Management Agreements for each of the then existing Portfolios, Metropolitan
Life is no longer obligated to pay the expenses of the Fund as described above.
The amendment was approved in each case by the shareholders of each such
Portfolio at the annual meeting of Fund shareholders held on April 28, 1993.
Thus, as of May 16, 1993, the Fund is responsible for paying its own expenses.
However, Metropolitan Life reserves the right, in its sole discretion, to pay
all or a portion of the expenses of the Fund or any of its Portfolios, and to
terminate such voluntary payment at any time upon notice to the Board of
Directors and shareholders of the Fund.

Metropolitan Life has agreed to subsidize all expenses (excluding management
fees, brokerage commission, taxes, interest and extraordinary or non-recurring
expenses, as described in the Prospectus) in excess of .20% for each of the
Loomis Sayles High Yield Bond, T. Rowe Price Small Cap Growth, Janus Mid Cap
and Scudder Global Equity Portfolios until such Portfolio's total net assets
are at least $100 million, or March 3, 1999, whichever is earlier. Metropolitan
Life ceased subsidizing such expenses for the Janus Mid Cap Portfolio as of
December 31, 1997 and for the T. Rowe Price Small Cap Growth Portfolio as of
January 23, 1998.

ALLOCATION OF PORTFOLIO BROKERAGE

Under the Investment Management Agreements, Metropolitan Life has ultimate
responsibility for selecting broker-dealers through which investments are to be
purchased and sold for the Fund and day-to-day responsibility for making such
determinations for the MetLife Stock Index Portfolio. State Street Research has
day-to-day responsibility for selecting broker-dealers through which securities
or other investments are to be purchased and sold for the State Street Research
Growth, State Street Research Income, State Street Research Diversified, State
Street Research Money Market and State Street Research Aggressive Growth
Portfolios. GFM has day-to-day responsibility for selecting broker-dealers
through which securities or other investments are to be purchased and sold for
the State Street Research International Stock Portfolio. Loomis Sayles has day-
to-day responsibility for selecting broker-dealers through which securities or
other investments are to be purchased and sold for the Loomis Sayles High Yield
Bond Portfolio. T. Rowe Price has day-to-day responsibility for selecting
broker-dealers through which securities or other investments are to be
purchased and sold for the T. Rowe Price Small Cap Growth Portfolio. Janus has
day-to-day responsibility for selecting broker-dealers through which securities
or other investments are to be purchased and sold for the

B-27
<PAGE>

................................................................
Janus Mid Cap Portfolio. Scudder has day-to-day responsibility for selecting
broker-dealers through which securities or other investments are to be
purchased and sold for the Scudder Global Equity Portfolio.

With respect to portfolio transactions for the MetLife Stock Index
Portfolio, Metropolitan Life's policy is to endeavor to obtain the most
favorable overall prices and executions of orders. Purchases from an
underwriter generally include a commission or concession paid by the issuer,
and transactions with a dealer usually include the dealer's mark-up. In
selecting broker-dealers to execute portfolio transactions, Metropolitan Life
considers such factors as the price of the instrument or security, the size of
the broker-dealer's "spread" or rate of commission, the size and difficulty of
the order, the nature of the market for the instrument or security, the
willingness of the broker-dealer to position and the reliability, financial
condition and general execution and operational capabilities of the broker-
dealer and the research, statistical and other services furnished by the
broker-dealer to Metropolitan Life. Such research and statistical information
may be used by Metropolitan Life in connection with the other investment
accounts managed by it. Conversely, research and statistical information
received from the placement of brokerage business for such other accounts, the
aggregate assets of which substantially exceed the assets of the Fund, may be
used by Metropolitan Life in managing the investments of the Fund.

It is the policy of State Street Research to seek for its clients, including
the State Street Research Growth, State Street Research Income, State Street
Research Diversified, State Street Research Aggressive Growth and State Street
Research Money Market Portfolios, and the policy of GFM to seek for its
clients, including the State Street International Stock Portfolio what in
their judgment will be the best overall execution of purchase or sale orders
and the most favorable net prices in securities transactions consistent with
their judgment as to the business qualifications of the various broker or
dealer firms with whom State Street Research and GFM may do business, and they
may not necessarily choose the broker offering the lowest available commission
rate. (The State Street Research Money Market Portfolio's investments usually
will be purchased on a principal basis directly from issuers, underwriters or
dealers. Accordingly, minimal brokerage charges are expected to be paid on
such transactions.) Decisions with respect to the market where the transaction
is to be completed, to the form of transaction (whether principal or agency),
and to the allocation of orders among brokers or dealers are made in
accordance with this policy. In selecting brokers or dealers to effect
portfolio transactions, consideration is given to their proven integrity and
financial responsibility, their demonstrated execution experience and
capabilities both generally and with respect to particular markets or
securities, the competitiveness of their commission rates in agency
transactions (and their net prices in principal transactions), their
willingness to commit capital, and their clearance and settlement capability.
State Street Research and GFM make every effort to keep informed of commission
rate structures and prevalent bid/ask spread characteristics of the markets
and securities in which transactions for the Portfolios occur. Against this
background, State Street Research and GFM evaluate the reasonableness of a
commission or a net price with respect to a particular transaction by
considering such factors as difficulty of execution or security positioning by
the executing firm. State Street Research and GFM may or may not solicit
competitive bids based on their judgment of the expected benefit or harm to
the execution process for that transaction.

When more than one client of State Street Research or GFM is seeking to buy
or sell the same security, the sale or purchase is carried out in a manner
which is considered fair and equitable to all accounts of each respective
investment manager. In allocating investments among various clients (including
in what sequence orders for trades are placed), State Street Research and GFM
will use their best business judgment and will take into account such factors
as the investment objectives of the clients, the amount of investment funds
available to each, the size of the order, the amount already committed for
each client to a specific investment and the relative risks of the
investments, all in order to provide on balance a fair and equitable result to
each client over time. Although sharing in large transactions may sometimes
affect price or volume of shares acquired or sold, overall it is believed
there may be an advantage in execution. State Street Research and GFM may
follow the practice of grouping orders of various clients for execution to get
the benefit of lower prices or commission rates. In certain cases where the
aggregate order may be executed in a series of transactions at various prices,
the transactions are allocated as to amount and price in a manner considered
equitable to each so that each receives, to the extent practicable, the
average price of such transactions. Exceptions may be made based on such
factors as the size of the account and the size of the trade. For example,
State Street Research and GFM may not aggregate trades where they believe that
it is in the best interests of clients not to do so, including situations
where aggregation might result in a large number of small transactions with
consequent increased custodial and other transactional costs which may
disproportionately impact smaller accounts. Such disaggregation, depending on
the circumstances, may or may not result in such accounts receiving more or
less favorable execution relative to other clients.

B-28
<PAGE>

................................................................

When it appears that a number of firms could satisfy the required standards
in respect of a particular transaction, consideration may also be given by
State Street Research to services other than execution services which certain
of such firms have provided in the past or may provide in the future.
Negotiated commission rates and prices, however, are based upon State Street
Research's judgment of the rate which reflects the execution requirements of
the transaction without regard to whether the broker provides services in
addition to execution. Among such other services are the supplying of
supplemental investment research; general economic, political and business
information; analytical and statistical data; relevant market information,
quotation equipment and services; reports and information about specific
companies, industries and securities; purchase and sale recommendations for
stocks and bonds; portfolio strategy services; historical statistical
information; market data services providing information on specific issues and
prices; financial publications; proxy voting data and analysis services;
technical analysis of various aspects of the securities markets, including
technical charts; computer hardware used for brokerage and research purposes;
computer software and databases (including those contained in certain trading
systems and used for portfolio analysis and modelling, and also including
software providing investment personnel with efficient access to current and
historical data from a variety of internal and external sources); portfolio
evaluation services; and the relative performance of accounts.

In the case of the Portfolios and other registered investment companies
advised by State Street Research or its affiliates, the above services may
include data relating to performance, expenses and fees of those investment
companies and other investment companies; this information is used by the
Trustees or Directors of the investment companies to fulfill their
responsibility to oversee the quality of State Street Research's advisory
services and to review the fees and other provisions contained in the advisory
contracts between the investment companies and State Street Research. State
Street Research considers these investment company services only in connection
with the execution of transactions on behalf of its investment company clients
and not its other clients. Certain of the nonexecution services provided by
broker-dealers may in turn be obtained by the broker-dealers from third
parties who are paid for such services by the broker-dealers.

State Street Research regularly reviews and evaluates the services furnished
by broker-dealers. State Street Research's investment management personnel
conduct internal surveys and use other methods to evaluate the quality of the
research and other services provided by various broker-dealer firms, and the
results of these efforts are made available to the equity trading department
which uses this information as consideration to the extent described above in
the selection of brokers to execute portfolio transactions. Some services
furnished by broker-dealers may be used for research and investment decision-
making purposes, and also for marketing or administrative purposes. Under
these circumstances, State Street Research allocates the cost of the services
to determine the proportion which is allocable to research or investment
decision-making and the proportion allocable to other purposes. State Street
Research pays directly from its own funds for the portion allocable to uses
other than research or investment decision-making. Some research and execution
services may benefit State Street Research's clients as a whole, while others
may benefit a specific segment of clients. Not all such services will
necessarily be used exclusively in connection with the accounts which pay the
commissions to the broker-dealer providing the services.

State Street Research has no fixed agreements or understandings with any
broker-dealer as to the amount of brokerage business which that firm may
expect to receive for services supplied to State Street Research or otherwise.
There may be, however, understandings with certain firms that in order for
such firms to be able to continuously supply certain services, they need to
receive allocation of a specified amount of brokerage business. These
understandings are honored to the extent possible in accordance with the
policies set forth above.

It is not State Street Research's policy to intentionally pay a firm a
brokerage commission higher than that which another firm would charge for
handling the same transaction in a recognition of services (other than
execution services) provided. However, State Street Research is aware that
this is an area where differences of opinion as to fact and circumstances may
exist, and in such circumstances, if any, relies on the provisions of Section
28(e) of the Securities Exchange Act of 1934.

In the case of the purchase of fixed income securities in underwriting
transactions, State Street Research follows any instructions received from its
clients as to the allocation of new issue discounts, selling concessions and
designations to brokers or dealers which provide the client with research,
performance evaluation, master trustee and other services. In the absence of
instructions from the client, State Street Research may make such allocations
to broker-dealers which have provided it with research and brokerage services.

B-29
<PAGE>

................................................................

With respect to portfolio transactions for the T. Rowe Price Small Cap
Growth Portfolio, it is T. Rowe Price's policy to obtain quality execution at
the most favorable prices through responsible brokers and dealers and, in the
case of agency transactions, at competitive commission rates. However, under
certain conditions, the Portfolio may pay higher brokerage commissions in
return for brokerage and research services. As a general practice, over-the-
counter orders are executed with market-makers. In selecting among market-
makers, T. Rowe Price generally seeks to select those it believes to be
actively and effectively trading the security being purchased or sold. In
selecting broker-dealers to execute the Portfolio's transactions,
consideration is given to such factors as the price of the security, the rate
of the commission, the size and difficulty of the order, the reliability,
integrity, financial condition, general execution and operational capabilities
of competing brokers and dealers, and brokerage and research services provided
by them. It is not the policy of T. Rowe Price to seek the lowest available
commission rate where it is believed that a broker or dealer charging a higher
commission rate would offer greater reliability or provide better price or
execution.

Fixed income securities are generally purchased from the issuer or a primary
market-maker acting as principal for the securities on a net basis, with no
brokerage commission being paid by the client although the price usually
includes an undisclosed compensation. Transactions placed through dealers
serving as primary market-makers reflect the spread between the bid and asked
prices. Securities may also be purchased from underwriters at prices which
include underwriting fees.

With respect to equity and fixed income securities, T. Rowe Price may effect
principal transactions on behalf of the Portfolio with a broker or dealer who
furnishes brokerage and/or research service, designate any such broker or
dealer to receive selling concessions, discounts or other allowances, or
otherwise deal with any such broker or dealer in connection with the
acquisition of securities in underwritings. T. Rowe Price may receive research
services in connection with brokerage transactions, including designations in
fixed price offerings.

On a continuing basis, T. Rowe Price seeks to determine what levels of
commission rates are reasonable in the marketplace for transactions executed
on behalf of the Fund. In evaluating the reasonableness of commission rates,
T. Rowe Price considers: (a) historical commission rates, both before and
since rates have been fully negotiable; (b) rates which other institutional
investors are paying, based on available public information; (c) rates quoted
by brokers and dealers; (d) the size of a particular transaction, in terms of
the number of shares, dollar amount, and number of clients involved; (e) the
complexity of a particular transaction in terms of both execution and
settlement; (f) the level and type of business done with a particular firm
over a period of time; and (g) the extent to which the broker or dealer has
capital at risk in the transaction.

T. Rowe Price receives a wide range of research services from brokers and
dealers. These services include information on the economy, industries, groups
of securities, individual companies, statistical information, accounting and
tax law interpretations, political developments, legal developments affecting
portfolio securities, technical market action, pricing and appraisal services,
credit analysis, risk measurement analysis, performance analysis and analysis
of corporate responsibility issues. These services provide both domestic and
international perspective. Research services are received primarily in the
form of written reports, computer generated services, telephone contacts and
personal meetings with security analysts. In addition, such services may be
provided in the form of meetings arranged with corporate and industry
spokespersons, economists, academicians and government representatives. In
some cases, research services are generated by third parties but are provided
to T. Rowe Price by or through broker-dealers.

Research services received from brokers and dealers are supplemental to T.
Rowe Prices's own research effort and, when utilized, are subject to internal
analysis before being incorporated by T. Rowe Price into its investment
process. As a practical matter, it would not be possible for T. Rowe Price's
Equity Research Division to generate all of the information presently provided
by brokers and dealers. T. Rowe Price pays cash for certain research services
received from external sources. T. Rowe Price also allocates brokerage for
research services which are available for cash. While receipt of research
services from brokerage firms has not reduced T. Rowe Price's normal research
activities, the expenses of T. Rowe Price could be materially increased if it
attempted to generate such additional information through its own staff. To
the extent that research services of value are provided by brokers or dealers,
T. Rowe Price may be relieved of expenses which it might otherwise bear.

T. Rowe Price has a policy of not allocating brokerage business in return
for products or services other than brokerage or research services. In
accordance with the provisions of Section 28(e) of the Securities Exchange Act
of 1934, T. Rowe Price may from time to time receive services and products
which serve both research and non-research functions. In such

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event, T. Rowe Price makes a good faith determination of the anticipated
research and non-research use of the product or service and allocates
brokerage only with respect to the research component.

Certain brokers and dealers who provide quality brokerage and execution
services also furnish research services to T. Rowe Price. With regard to the
payment of brokerage commissions, T. Rowe Price has adopted a brokerage
allocation policy embodying the concepts of Section 28(e) of the Securities
Exchange Act of 1934, which permits an investment adviser to cause an account
to pay commission rates in excess of those another broker or dealer would have
charged for effecting the same transaction, if the adviser determines in good
faith that the commission paid is reasonable in relation to the value of the
brokerage and research services provided. The determination may be viewed in
terms of either the particular transaction involved or the overall
responsibilities of the adviser with respect to the accounts over which it
exercises investment discretion. Accordingly, while T. Rowe Price cannot
readily determine the extent to which commission rates or net prices charged
by broker-dealers reflect the value of their research services, T. Rowe Price
would expect to assess the reasonableness of commissions in light of the total
brokerage and research services provided by each particular broker. T. Rowe
Price may receive research, as defined in Section 28(e), in connection with
selling concessions and designations in fixed price offerings in which the
Funds participate.

T. Rowe Price has a policy of not precommitting a specific amount of
business to any broker or dealer over any specific time period. Historically,
the majority of brokerage placement has been determined by the needs of a
specific transaction such as market-making, availability of a buyer or seller
of a particular security, or specialized execution skills. However, T. Rowe
Price does have an internal brokerage allocation procedure for that portion of
its discretionary client brokerage business where special needs do not exist,
or where the business may be allocated among several brokers or dealers which
are able to meet the needs of the transaction.

Each year, T. Rowe Price assesses the contribution of the brokerage and
research services provided by brokers or dealers, and attempts to allocate a
portion of its brokerage business in response to these assessments. Research
analysts, counselors, various investment committees, and the Trading
Department each seek to evaluate the brokerage and research services they
receive from brokers or dealers and make judgments as to the level of business
which would recognize such services. In addition, brokers or dealers sometimes
suggest a level of business they would like to receive in return for the
various brokerage and research services they provide. Actual brokerage
received by any firm may be less than the suggested allocations but can, and
often does, exceed the suggestions, because the total business is allocated on
the basis of all the considerations described above. In no case is a broker or
dealer excluded from receiving business from T. Rowe Price because it has not
been identified as providing research services.

T. Rowe Price's brokerage allocation policy is consistently applied to all
its fully discretionary accounts, which represent a substantial majority of
all assets under management. Research services furnished by brokers or dealers
through which T. Rowe Price effects securities transactions may be used in
servicing all accounts (including non-mutual fund accounts) managed by T. Rowe
Price. Conversely, research services received from brokers or dealers which
execute transactions for the Portfolio are not necessarily used by T. Rowe
Price exclusively in connection with the management of the Portfolio.

From time to time orders for the Portfolio's transactions may be placed
through an electronic communication network.

Some of T. Rowe Price's other clients have investment objectives and
programs similar to those of the Portfolio. T. Rowe Price may occasionally
make recommendations to other clients which result in their purchasing or
selling securities simultaneously with the Portfolio. As a result, the demand
for securities being purchased or the supply of securities being sold may
increase, and this could have an adverse effect on the price of those
securities. It is T. Rowe Price's policy not to favor one client over another
in making recommendations or in placing orders. T. Rowe Price frequently
follows the practice of grouping orders of various clients for execution which
generally results in lower commission rates being attained. In certain cases,
where the aggregate order is executed in a series of transactions at various
prices on a given day, each participating client's proportionate share of such
order reflects the average price paid or received with respect to the total
order. T. Rowe Price has established a general investment policy that it will
ordinarily not make additional purchases of a common stock of a company for
its clients including the T. Rowe Price Funds if, as a result of such
purchases, 10% or more of the outstanding common stock of such company would
be held by its clients in the aggregate.

T. Rowe Price has developed written trade allocation guidelines for its
Equity, Municipal, and Taxable Fixed Income Trading Desks. Generally, when
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the amount of securities available in a public offering or the secondary market
is insufficient to satisfy the volume or price requirements for the
participating client portfolios, the guidelines require a pro rata allocation
based upon the amounts initially requested by each portfolio manager. In
allocating trades made on combined basis, the Trading Desks seek to achieve the
same net unit price of the securities for each participating client. Because a
pro rata allocation may not always adequately accommodate all facts and
circumstances, the guidelines provide for exceptions to allocate trades on an
adjusted, pro rata basis. Examples of where adjustments may be made include:
(i) reallocations to recognize the efforts of a portfolio manager in
negotiating a transaction or a private placement; (ii) reallocations to
eliminate deminimis positions; (iii) priority for accounts with specialized
investment policies and objectives; and (iv) reallocations in light of a
participating portfolio's characteristics (e.g., industry or issuer
concentration, duration, and credit exposure).

With respect to portfolio transactions for the Loomis Sayles High Yield Bond
Portfolio, Loomis Sayles always seeks the best price and execution.
Transactions in unlisted securities are carried out through broker-dealers who
make the primary market for such securities unless, in the judgment of Loomis
Sayles, a more favorable price can be obtained by carrying out such
transactions through other brokers or dealers.

Loomis Sayles selects only brokers or dealers which it believes are
financially responsible, will provide efficient and effective services in
executing, clearing and settling an order and will charge commission rates
which, when combined with the quality of the foregoing services, will produce
best price and execution for the transaction. This does not necessarily mean
that the lowest available brokerage commission will be paid. However, the
commissions are believed to be competitive with generally prevailing rates.
Loomis Sayles will use its best efforts to obtain information as to the general
level of commission rates being charged by the brokerage community from time to
time and will evaluate the overall reasonableness of brokerage commissions paid
on transactions by reference to such data. In making such evaluation, all
factors affecting liquidity and execution of the order, as well as the amount
of the capital commitment by the broker in connection with the order, are taken
into account. The Portfolio will not pay a broker a commission at a higher rate
than otherwise available for the same transaction in recognition of the value
of research services provided by the broker or in recognition of the value of
any other services provided by the broker which do not contribute to the best
price and execution of the transaction.

Receipt of research services from brokers may sometimes be a factor in
selecting a broker which Loomis Sayles believes will provide best price and
execution for a transaction. These research services include not only a wide
variety of reports on such matters as economic and political developments,
industries, companies, securities, portfolio strategy, account performance,
daily prices of securities, stock and bond market conditions and projections,
asset allocation and portfolio structure, but also meetings with management
representatives of issuers and with other analysts and specialists. Although it
is not possible to assign an exact dollar value to these services, they may, to
the extent used, tend to reduce Loomis Sayles's expenses. Such services may be
used by Loomis Sayles in servicing other client accounts and in some cases may
not be used with respect to the Portfolio. Receipt of services or products
other than research from brokers is not a factor in the selection of brokers.

With respect to the portfolio transactions for the Janus Mid Cap Portfolio,
decisions as to the assignment of portfolio business and negotiation of its
commission rates are made by Janus whose policy is to obtain the "best
execution" (prompt and reliable execution at the most favorable security price)
of all portfolio transactions. The Portfolio may trade foreign securities in
foreign countries because the best available market for these securities is
often on foreign exchanges. In transactions on foreign stock exchanges,
brokers' commissions are frequently fixed and are often higher than in the
United States, where commissions are negotiated.

In selecting brokers and dealers and in negotiating commissions, Janus
considers a number of factors, including but not limited to: Janus's knowledge
of currently available negotiated commission rates or prices of securities
currently available and other current transaction costs; the nature of the
security being traded; the size and type of the transaction; the nature and
character of the markets for the security to be purchased or sold; the desired
timing of the trade; the activity existing and expected in the market for the
particular security; confidentiality; the quality of the execution, clearance
and settlement services; financial stability of the broker or dealer; the
existence of actual or apparent operational problems of any broker or dealer;
rebates of commissions by a broker to the Portfolio or to a third party service
provider to the Portfolio to pay Portfolio expenses; and research products or
services provided. In recognition of the value of the foregoing factors, Janus
may place portfolio transactions with a broker or dealer with whom it has
negotiated a commission that is in excess of the commission another broker or
dealer would have charged for effecting that transaction if

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Janus determines in good faith that such amount of commission was reasonable
in relation to the value of the brokerage and research provided by such broker
or dealer viewed in terms of either that particular transaction or of the
overall responsibilities of Janus. Research may include furnishing advice,
either directly or through publications or writings, as to the value of
securities, the advisability of purchasing or selling specific securities and
the availability of securities or purchasers or sellers of securities;
furnishing seminars, information, analyses and reports concerning issuers,
industries, securities, trading markets and methods, legislative developments,
changes in accounting practices, economic factors and trends and portfolio
strategy; access to research analysts, corporate management personnel,
industry experts, economists and government officials; comparative performance
evaluation and technical measurement services and quotation services; and
products and other services (such as third party publications, reports and
analyses, and computer and electronic access, equipment, software, information
and accessories that deliver, process or otherwise utilize information,
including the research described above) that assist Janus in carrying out its
responsibilities.

Janus may use research products and services in servicing other accounts in
addition to the Portfolio. If Janus determines that any research product or
service has a mixed use, such that it also serves functions that do not assist
in the investment decision-making process. Janus may allocate the costs of
such service or product accordingly. Only that portion of the product or
service that Janus determines will assist it in the investment decision-making
process may be paid for in brokerage commission dollars. Such allocation may
create a conflict of interest for Janus.

Janus does not enter into agreements with any brokers regarding the
placement of securities transactions because of the research services they
provide. It does, however, have an internal procedure for allocating
transactions in a manner consistent with its execution policy to brokers that
it has identified as providing superior executions and research, research-
related products or services which benefit its advisory clients, including the
Portfolio. Research products and services incidental to effecting securities
transactions furnished by brokers or dealers may be used in servicing any or
all of Janus's clients and such research may not necessarily be used by Janus
in connection with the accounts which paid commissions to the broker-dealer
providing such research products and services.

Janus may consider payments made by brokers effecting transactions for the
Portfolio i) to the Portfolio or ii) to other persons on behalf of the
Portfolio for services provided to the Portfolio for which it would be
obligated to pay. In placing portfolio business with such broker-dealers,
Janus will seek the best execution of each transaction.

When the Portfolio purchases or sells a security in the over-the-counter
market, the transaction takes place directly with a principal market-maker,
without the use of a broker, except in those circumstances where in the
opinion of Janus better prices and executions will be achieved through the use
of a broker.

With respect to portfolio transactions for the Scudder Global Equity
Portfolio, it is Scudder's primary objective to obtain the most favorable net
results, taking into account such factors as price, commission, where
applicable, (which is negotiable in the case of U.S. national securities
exchange transactions but which is generally fixed in the case of foreign
exchange transactions), size of order, difficulty of execution and skill
required of the executing broker/dealer. Scudder seeks to evaluate the overall
reasonableness of brokerage commissions paid through the familiarity with
commissions charged on comparable transactions, as well as by comparing
commissions paid by a Portfolio to reported commissions paid by others, if
available. Scudder reviews on a routine basis commission rates, execution and
settlement services performed, making internal and external comparisons.

When it can be done consistently with the policy of obtaining the most
favorable net results, it is Scudder's practice to place such orders with
brokers and dealers who supply research, market and statistical information to
the Portfolio or Scudder. The term "research, market and statistical
information" includes advice as to the value of securities, the advisability
of investing in, purchasing or selling securities, and the availability of
securities or purchasers or sellers of securities, and furnishing analyses and
reports concerning issuers, industries, securities, economic factors and
trends, portfolio strategy and the performance of accounts. Scudder is
authorized when placing portfolio transactions for the Portfolio to pay a
brokerage commission in excess of that which another broker might have charged
for executing the same transaction solely on account of the receipt of
research, market or statistical information. In effecting transactions in
over-the-counter securities, orders are placed with the principal market
makers for the security being traded unless, after exercising care, it appears
that more favorable results are available otherwise.

Although certain research, market and statistical information from brokers
and dealers can be useful to the Portfolio and to Scudder, it is the opinion
of Scudder

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that such information is only supplementary to its own research effort since
the information must still be analyzed, weighed, and reviewed by Scudder's
staff. Such information may be useful to Scudder in providing services to
clients other than the Portfolio, and not all such information is used by
Scudder in connection with the Portfolio. Conversely, such information provided
to Scudder by brokers and dealers through whom other clients of Scudder effect
securities transactions may be useful to Scudder in providing services to the
Portfolios.

At the request of the Fund on behalf of the Portfolios, the portfolio
managers may also consider directed brokerage arrangements which involve
rebates of commissions by a broker or dealer to a Portfolio or to a third party
service provider to a Portfolio to pay Portfolio expenses. The Fund may
condition its requests by requiring that the portfolio managers only effect
transactions with the specified broker-dealers if the broker-dealers are
competitive as to price and execution. In some cases the portfolio manager may
be unable to negotiate commissions or obtain volume discounts or best
execution. In addition, a disparity may exist among commissions charged under
different directed brokerage arrangements and also between clients using
directed brokerage arrangements and those not using such arrangements. Directed
brokerage arrangements may also result in a loss of the possible advantage from
aggregation of orders for several clients as a single transaction for the
purchase or sale of a particular security. Among other reasons why best
execution may not be achieved using directed brokerage arrangements is that in
an effort to achieve orderly execution of transactions, execution of orders
using directed brokerage arrangements may, at the discretion of the trading
desk, be delayed until execution of other orders have been completed.

The total dollar amounts of brokerage commissions paid by the Fund in 1995,
1996 and 1997 were $6,329,000, $10,728,775 and $13,756,000. Substantially all
commissions were paid to firms which provided research and statistical services
either to Metropolitan Life, State Street Research or GFM.

The State Street Research International Stock Portfolio experienced a higher
portfolio turnover rate in 1997 than in 1996 as a result of some portfolio
restructuring effected in the Portfolio during 1997.

SALE AND REDEMPTION OF SHARES

The shares of each Portfolio, when issued, will be fully paid and non-
assessable, will have no preference, pre-emptive, conversion, exchange or
similar rights, and will be freely transferable. Shares do not have cumulative
voting rights.

Under the terms of the Distribution Agreement entered into by Metropolitan
Life and the Fund, Metropolitan Life is not obligated to sell any specific
number of shares of the Fund. Further, under such agreement, Metropolitan Life
will pay the distribution expenses and costs of the Fund (that is, those
arising from any activity which is primarily intended to result in the sale of
shares issued by the Fund).

As of May 16, 1993, pursuant to an amendment to the Distribution Agreement,
Metropolitan Life is no longer obligated under such Agreement to pay the
expenses and costs attributable to the Fund which are related to the printing
and mailing of its prospectuses, proxy material and periodic reports to
shareholders. The amendment was approved by the Board of Directors at a meeting
held on April 28, 1993. Metropolitan Life still may subsidize these expenses
with respect to the Loomis Sayles High Yield Bond and Scudder Global Equity
Portfolios as described under "Payment of Expenses."

Redemptions are normally made in cash, but the Fund has authority, at its
discretion, to make full or partial payment by assignment to the appropriate
separate account of portfolio securities at their value used in determining the
redemption price. The Fund, nevertheless, pursuant to Rule 18f-1 under the 1940
Act, has filed a notification of election on Form N-18f-1, by which the Fund
has committed itself to pay to any separate account in cash, all such separate
account's requests for redemption made during any 90-day period, up to the
lesser of $250,000 or 1% of the applicable Portfolio's net asset value at the
beginning of such period. The securities to be paid in-kind to any separate
account will be selected in such manner as the Board of Directors deems fair
and equitable. In such cases, the separate account would incur brokerage costs
should it wish to liquidate these portfolio securities.

The right to redeem shares or to receive payment with respect to any
redemption of shares of any Portfolio may only be suspended (a) for any period
during which trading on the New York Stock Exchange is restricted or such
Exchange is closed (other than customary weekend and holiday closing), (b) for
any period during which an emergency exists as a result of which disposal of
portfolio securities or determination of the net asset value of that Portfolio
is not reasonably practicable or (c) for such other periods as the Securities
and Exchange Commission may by order permit for the protection of shareholders
of that Portfolio.

If, in the sole determination of the Board of Directors, the continued
offering of shares in any one or more Portfolios is no longer in the best
interests of the

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................................................................
Fund (e.g., because market conditions have changed, regulatory problems have
developed or participation in such Portfolio is low), the Fund may cease
offering such shares and may, by majority vote of the Board of Directors,
require the redemption (at net asset value) of all outstanding shares in such
Portfolio or Portfolios upon 30 days' prior written notice to the holders of
such shares.

In the future, assuming appropriate regulatory clearances, it may be
possible that shares of the Fund will be offered for purchase by separate
accounts of life insurance companies not affiliated with Metropolitan Life,
which separate accounts are used to support insurance contracts issued by such
companies.

The net asset value per share of each Portfolio is computed by dividing the
sum of the value of the securities held by that Portfolio plus any cash or
other assets minus all liabilities by the total number of outstanding shares
of that Portfolio at such time. Any expenses borne by the Fund, including the
investment management fee payable to Metropolitan Life, are accrued daily
except for extraordinary or non-recurring expenses. (See "Payment of
Expenses.")

Securities held by each Portfolio will be valued as follows. Portfolio
securities which are traded on domestic stock exchanges are valued at the last
sale price as of the close of business on the day the securities are being
valued, or, lacking any sales, at the mean between closing bid and asked
prices, except for the Loomis Sayles High Yield Bond Portfolio, which in the
latter case would value such security at the last bid price. Each portfolio
security which is primarily traded on non-domestic securities exchanges is
generally valued at the preceding closing (or in the case of the Loomis Sayles
High Yield Bond and Scudder Global Equity Portfolios, the last sale) value of
such security on the exchange where it is primarily traded. A security that is
listed or traded on more than one exchange is valued at the quotation on the
exchange determined to be the primary market for such security by the Board of
Directors or its delegates. If no closing price is available, then such
security is valued first by using the mean between the last current bid and
asked prices or, second, by using the last available closing price, except for
the Scudder Global Equity Portfolio which second values such security at the
last current bid and third by using the last available closing price. Domestic
securities traded in the over-the-counter market are valued at the mean
between the bid and asked prices or yield equivalent as obtained from two or
more dealers which make markets in the securities except for the Loomis Sayles
High Yield Bond Portfolio, which, in the latter case, would value such
security at the last bid price, or in the case of the Scudder Global Equity
Portfolio for domestic equities, such securities would be valued first at the
last sale, second at the last bid price. All non-U.S. securities traded in the
over-the-counter securities market are valued at the last sale quote, if
market quotations are available, or the last closing bid price, if there is no
active trading in a particular security for a given day. Where market
quotations are not readily available for such non-domestic over-the-counter
securities, then such securities will be valued in good faith by a method that
the Board of Directors, or its delegates, believe accurately reflects fair
value. Portfolio securities which are traded both in the over-the-counter
market and on a stock exchange are valued according to the broadest and most
representative market, and it is expected that for debt securities this
ordinarily will be the over-the-counter market. Securities and assets for
which market quotations are not readily available, e.g. certain long-term
bonds and notes, are valued at fair value as determined in good faith by or
under the direction of the Board of Directors of the Fund, including
valuations furnished by a pricing service retained for this purpose and
typically utilized by other institutional-sized trading organizations. Short-
term instruments with a remaining maturity of sixty days or less are valued
utilizing the amortized cost method of valuation described below. If for any
reason the fair value of any security is not fairly reflected by such method,
such security will be valued by the same methods as securities having a
maturity of more than sixty days.

The Fund will value all debt instruments held by the State Street Research
Money Market Portfolio, and has the authority to value all debt instruments
with a remaining maturity of not more than one year held by the short-term
money market instruments portion of the State Street Research Diversified
Portfolio, utilizing the amortized cost method of valuation. However, at the
present time, the State Street Research Diversified Portfolio is not using the
amortized cost method for

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securities with a remaining maturity of greater than 60 days. All other
securities and assets of the State Street Research Money Market and State
Street Research Diversified Portfolios will be valued in accordance with the
preceding paragraphs.

Under the amortized cost method of valuation, the security is initially
valued at cost on the date of purchase (or in the case of short-term debt
securities purchased with more than 60 days remaining to maturity, the market
value on the 61st day prior to maturity), and thereafter a constant
proportionate amortization in value is assumed until maturity of any discount
or premium, regardless of the impact of fluctuating interest rates on the
market value of the security. For purposes of this method of valuation, the
maturity of a variable rate instrument is deemed to be the next date on which
the interest rate is to be adjusted.

The use of the amortized cost method of valuation can cause a Portfolio's
yield and net asset value to differ somewhat from what they would be if only
market valuation methods were used. However, the conditions outlined above are
designed to minimize these effects and any possible shareholder dilution which
might result.

TAXES
................................................................................

All realized long or short-term capital gains of the Fund, if any, are
declared and distributed at least annually either during or after the close of
the Fund's fiscal year to the shareholders of the Portfolio or Portfolios to
which such gains are attributable and are reinvested in additional full and
fractional shares of the Portfolio.

Tax attributes of the Fund are allocated among the Portfolios as if they are
separate corporations. Therefore, if a Portfolio has a net capital loss for a
taxable year, including any allocated net capital loss carryforwards, such loss
or losses will offset the net capital gains of that Portfolio only.
Furthermore, each Portfolio will stand alone for purposes of determining that
Portfolio's net ordinary income or loss.

Each individual Portfolio must qualify for treatment as a regulated
investment company. To so qualify, each Portfolio must, among other things,
derive at least 90% of its gross income from dividends, interest, payments with
respect to security loans, and gains from the sale or other disposition of
stock or securities or foreign currencies, or other income (including gains
from options, futures or forward contracts) derived with respect to each
Portfolio's business of investing in such stocks, securities or foreign
currencies.

Dividends paid by each Portfolio from its ordinary income, and distributions
of each Portfolio's net realized short-term capital gains, are taxable to the
shareholder as ordinary income. Generally, to the extent that income of a
Portfolio represents dividends on common or preferred stock of a domestic
corporation, rather than interest income, its distributions to the Insurance
Companies will be eligible for a dividend received deduction to the extent
applicable in the case of a life insurance company under the Code.

Under the Code, any distributions made from the Fund's net realized long-term
capital gains are taxable to the Insurance Companies as long-term capital
gains, regardless of the holding period of such shareholder in the stock of the
Portfolio. Long-term capital gain distributions are not eligible for the
dividends received deduction.

Dividends and capital gains distributions may also be subject to state and
local taxes.

In addition, a nondeductible excise tax applies to any regulated investment
company equal to 4% of the excess, if any, of the required distribution for the
calendar year over the amount actually distributed. The required distribution
basically is the sum of 98% of the regulated investment company's ordinary
income plus 98% of its capital gain net income. The Fund does not anticipate
that, under current law, any excise tax liability will generally be incurred.

The Fund intends to comply with section 817(h) of the Code and the
regulations issued thereunder. Pursuant to that section, the only shareholders
of the Fund and its Portfolios will be life insurance company segregated asset
accounts (also referred to in the Prospectus as separate accounts) that fund
variable life insurance or annuity contracts ("variable insurance contracts")
and the general account of Metropolitan Life which provided the initial capital
for the Portfolios of the Fund. See the prospectus or other material which is
attached at the front of the Prospectus for the Contracts for additional
discussion of the taxation of segregated asset accounts and of the owner of the
particular Contract described therein.

In addition, section 817(h) of the Code and the regulations thereunder impose
certain diversification requirements on the segregated asset accounts investing
in the Portfolios of the Fund. These requirements, which are in addition to the
diversification requirements applicable to the Fund under the Investment
Company Act of 1940, may affect the securities in which the Portfolios may
invest. The consequences of failure to meet the requirements of

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............................ ..............................
section 817(h) could have adverse tax consequences to the insurance company
offering the variable insurance contract and immediate taxation of the owner of
the contract to the extent of appreciation on the investment under the
contract.

There is a possibility that regulations may be proposed or a revenue ruling
may be issued in the future relating to the circumstances in which a contract
owner's control of the investments of a segregated asset account may cause the
contract owner, rather than the insurance company, to be treated as the owner
of the assets of a segregated asset account.

The Fund may therefore find it necessary to take action to assure that a
Contract continues to qualify as a Contract under federal tax laws. The Fund,
for example, may be required to alter the investment objectives of a Portfolio
or substitute the shares of one Portfolio for those of another. No such change
of investment objectives or substitution of securities will take place without
notice to the shareholders of the affected Portfolio and the approval of a
majority of such shareholders and without prior approval of the Securities and
Exchange Commission, to the extent legally required.

In connection with the operation of the Portfolios that may invest in foreign
securities, there are several unique tax considerations. The Portfolio may be
subject to foreign taxes that could reduce its investment performance.
Dividends of the Portfolio paid with respect to dividends of non-United States
companies will not be eligible for the dividends received deduction.

The preceding is a brief summary of some of the relevant tax considerations.
It is not intended as a complete explanation or a substitute for careful tax
planning and consultation with individual tax advisers.

GENERAL INFORMATION
................................................................................

EXPERTS

Deloitte & Touche LLP has been selected as the independent auditor of the
Fund, which selection is subject to annual approval by the Fund's Board of
Directors. The financial statements of the Fund included in this Statement of
Additional Information have been audited by Deloitte & Touche LLP, independent
auditors, as stated in their report appearing herein, and are included in
reliance upon the report of such firm as experts in accounting and auditing.

CUSTODIAN AND TRANSFER AGENT

State Street Bank and Trust Company acts as custodian of the Fund's assets
and as its transfer agent. State Street Research is not affiliated with State
Street Bank and Trust Company.

COMPUTER SOFTWARE SYSTEMS

The services provided to the Fund by Metropolitan Life as the Investment
Manager and distributor, the sub-investment managers and the transfer agent to
shareholders, depend on the smooth functioning of their computer systems. Many
computer software systems in use today cannot distinguish the year 2000 from
the year 1900 because of the way dates are encoded and calculated. That failure
could have a negative impact on handling securities trades, pricing and account
services. Metropolitan Life, the sub-investment managers, and transfer agent
have been actively working on necessary changes to their computer systems to
deal with this issue and expect that their systems will be adapted in time for
that event, although there cannot be assurance of success.

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- --------------------------------------------------------------------------------
METROPOLITAN SERIES FUNDS, INC.
- --------------------------------------------------------------------------------
INDEPENDENT AUDITORS' REPORT
- --------------------------------------------------------------------------------

The Board of Directors and Shareholders,
Metropolitan Series Fund, Inc.

We have audited the accompanying statements of assets and liabilities,
including the schedules of investments, of the State Street Research Growth,
State Street Research Income, State Street Research Money Market, State Street
Research Diversified, State Street Research Aggressive Growth, MetLife Stock
Index, State Street Research International Stock, Loomis Sayles High Yield Bond,
Janus Mid Cap, T. Rowe Price Small Cap, and Scudder Global Equity Portfolios of
the Metropolitan Series Fund, Inc. (The "Fund") as of December 31, 1997, the
related statements of operations for the year then ended, the statements of
changes in net assets for the years ended December 31, 1997 and 1996, and the
financial highlights for the applicable periods ended December 31, 1997, 1996,
1995, 1994, and 1993. These financial statements and financial highlights are
the responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned at December
31, 1997 by correspondence with the custodian and brokers; where replies were
not received from brokers, we performed other auditing procedures. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.

In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the financial position of the State Street
Research Growth, State Street Research Income, State Street Research Money
Market, State Street Research Diversified, State Street Research Aggressive
Growth, MetLife Stock Index, State Street Research International Stock, Loomis
Sayles High Yield Bond, Janus Mid Cap, T. Rowe Price Small Cap, and Scudder
Global Equity Portfolios of the Metropolitan Series Fund, Inc. at December 31,
1997 and the results of their operations, the changes in their net assets, and
the financial highlights for the respective stated periods, in conformity with
generally accepted accounting principles.

/s/ Deloitte & Auditor LLP

Denver, Colorado
February 17, 1998

B-38
<PAGE>

METROPOLITAN SERIES FUND, INC.

SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
STATE STREET RESEARCH GROWTH PORTFOLIO
DECEMBER 31,1997

<TABLE>
<CAPTION>
VALUE
SHARES ISSUE (NOTE 1A)
- --------------------------------------------------------------------------------
COMMON STOCK: 89.9%
- --------------------------------------------------------------------------------
<S> <C> <C>
AEROSPACE: 2.4%
661,200 Boeing Co. $ 32,357,475
22,970 + * Raytheon Co. Cl. A 1,132,706
435,400 + Raytheon Co. Cl. B 21,987,700
------------
55,477,881
- --------------------------------------------------------------------------------
AUTOMOTIVE: 1.8%
360,200 General Motors Corp. 21,837,125
765,800 * Renault SA 21,541,902
------------
43,379,027
- --------------------------------------------------------------------------------
BANKING: 8.7%
682,500 + Ahmanson (H.F.) & Co. 45,684,844
806,100 + Banc One Corp. 43,781,306
730,700 BankAmerica Corp. 53,341,100
601,400 + NationsBank Corp. 36,572,637
409,200 * Washington Mutual, Inc. 26,099,288
------------
205,479,175
- --------------------------------------------------------------------------------
BROADCASTING: 5.3%
818,000 CBS Corp. 24,079,875
723,700 + Time Warner, Inc. 44,869,400
1,273,400 * U.S. West, Inc.-Media Group 36,769,425
444,400 + * Viacom, Inc. Cl. B 18,414,825
------------
124,133,525
- --------------------------------------------------------------------------------
BUSINESS SERVICES: 1.1%
396,271 * Cendant Corp. 13,621,822
248,600 HBO & Co. 11,925,031
------------
25,546,853
- --------------------------------------------------------------------------------
CHEMICALS: 4.5%
800,200 + Du Pont (E.I.) de Nemours & Co. 48,062,012
116,800 Monsanto Co. 4,905,600
547,700 Rohm & Haas Co. 52,442,275
------------
105,409,887
- --------------------------------------------------------------------------------
DRUGS & HEALTH CARE: 6.4%
466,700 + Bristol-Myers Squibb Co. 44,161,487
309,544 * Novartis AG ADR 25,148,902
355,200 Pfizer, Inc. 26,484,600
349,700 Schering-Plough Corp. 21,725,113
</TABLE>

B-39
<PAGE>

METROPOLITAN SERIES FUND, INC.

SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
STATE STREET RESEARCH GROWTH PORTFOLIO
DECEMBER 31,1997

20,833,000 American Express
Credit Corp. 5.750% 1/14/98 20,833,000

5,029,000 Anheuser-Busch Co.,
Inc. 6.650% 1/02/98 5,028,071

19,081,000 Beneficial Corp. 5.870% 1/13/98 19,081,000
30,433,000 Beneficial Corp. 5.830% 1/08/98 30,433,000
49,681,000 CIT Group Holdings,
Inc. 6.050% 1/12/98 49,681,000
</TABLE>

B-40
<PAGE>

METROPOLITAN SERIES FUND, INC.

SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
STATE STREET RESEARCH GROWTH PORTFOLIO
DECEMBER 31,1997

11,077,000 Ford Motor Credit Co. 5.880% 1/13/98 11,077,000
17,998,000 Ford Motor Credit Co. 6.100% 1/08/98 17,998,000
11,386,000 General Electric
Capital Corp. 5.900% 1/13/98 11,386,000

25,000,000 General Electric
Capital Corp. 6.080% 1/05/98 25,000,000

20,000,000 Goldman Sachs Group LP 5.750% 1/12/98 19,964,861

40,000,000 Goldman Sachs Group LP 5.870% 1/05/98 39,973,911
--------------
TOTAL SHORT TERM OBLIGATIONS
(Cost: $260,576,842).......................................... 260,576,843
--------------
- -------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS: 101.0%
(Cost: $2,016,519,608)........................................ 2,372,392,230

OTHER ASSETS LESS LIABILITIES: (1.0)%......................... (23,330,647)
--------------
NET ASSETS: 100.0%............................................ $2,349,061,583
==============
- -------------------------------------------------------------------------------------------------
</TABLE>

LEGEND:
- -------
* Non-income producing security.
+ Securities on loan.

ADR (American depository receipt) represents ownership of foreign securities.

SECURITIES LENDING: (Note 7)
- ----------------------------
As of December 31, 1997, the market value of securities loaned was $141,906,486
with collateral backing valued at $145,698,568.

See Notes to Financial Statements.

B-41
<PAGE>

METROPOLITAN SERIES FUND, INC.

SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
STATE STREET RESEARCH INCOME PORTFOLIO
DECEMBER 31, 1997

3,950,000 Ford Credit Auto Owner
Tr.Ser. 1997-B A3 SEQ 6.050% 4/15/99-01 3,972,219

4,000,000 World Omni Automobile
Lease Tr. Ser. 1997-B A3
SEQ 6.180% 11/25/00-03 4,001,400
-------------
12,067,182
- -----------------------------------------------------------------------------------------------------------------------------------
BANKING: 5.6%
1,900,000 Advanta Master Trust II
Ser. 1995-F A1 6.050% 8/01/00-03 1,896,428

2,775,000 American Express Master
Trust Ser. 1996-1 A 6.800% 5/15/01 2,840,018

3,950,000 . Bank of New York 144A 7.780% 12/01/06-26 4,105,274

2,500,000 . BankAmerica
Institutional Capital
144A 7.700% 12/31/06-26 2,573,475

1,925,000 Capital One Bank Sr. 7.080% 10/30/01 1,969,698

1,400,000 NB Capital Tr. Ser. 8.250% 4/15/07-27 1,527,764
1995-1 A

1,000,000 NationsBank Master Tr.
Ser. 1995-1 A 6.450% 8/15/00 1,009,680

1,900,000 Prime Credit Card
Master Tr. Ser. 1995-1 A 6.750% 8/15/02 1,938,000

3,200,000 Standard Credit Card
Master Tr. Ser. 1991-3 A 8.875% 7/07/98 3,244,992

1,950,000 . Wells Fargo Capital
Securities 144A 7.730% 12/01/06-26 2,023,496
-------------
23,128,825
- -----------------------------------------------------------------------------------------------------------------------------------
BROADCASTING: 1.0%
3,900,000 TCI
Communications, Inc. Sr. 7.250% 6/15/99 3,944,733
- -----------------------------------------------------------------------------------------------------------------------------------
COLLATERALIZED MORTGAGE OBLIGATIONS: 6.0%
1,981,136 Amresco Commercial
Mortgage Sec. Ser. 1997-
C1 A1 SEQ 6.730% 6/17/02-04 2,014,320

2,713,732 Chase Commercial Mtg.
Sec. Ser. 1997-1 A1 7.270% 7/19/02-04 2,802,565

990,227 Countrywide Ser. 1993-E
A1 PAC 6.500% 1/25/97-24 989,608

2,025,000 Credit Suisse First
Boston Ser. 1997-C2 A2
SEQ 6.520% 7/17/05-07 2,028,797

<CAPTION>
FACE INTEREST MATURITY VALUE
AMOUNT ISSUE RATE DATE (NOTE 1A)

- -----------------------------------------------------------------------------------------------------------------------------------
CORPORATE BONDS: (CONTINUED)
- -----------------------------------------------------------------------------------------------------------------------------------
COLLATERALIZED MORTGAGE OBLIGATIONS: (CONTINUED)
$ 1,932,102 . Donaldson, Lufkin &
Jenret, Inc. 144A 6.550% 11/15/03-06 $ 1,948,706

1,950,000 First Union Lehman
Bros. Ser. 1997-C2. A2
SEQ 6.600% 05/18/05-07 1,950,609

3,850,000 First USA Credit Card
Master Tr. Ser. 1997-6 A 6.420% 7/17/02 3,887,297

3,910,825 Lehman Commercial
Mtg.Ser. 97-LL1 A1 SEQ 6.790% 6/12/02-04 3,992,708

1,420,132 Prudential Home Loan
Mortgage Ser. 93-29 A-6
PAC 6.750% 8/25/98-08 1,422,347

2,750,000 Residential Fund Corp.
Ser. 93-S37 A3 SEQ 6.400% 10/25/01-23 2,737,955

1,046,371 Residential Funding
Corp. Ser.93-S25 A1 PAC 6.500% 7/25/98-08 1,044,404
-------------
24,819,316
- -----------------------------------------------------------------------------------------------------------------------------------
FINANCIAL SERVICES: 14.8%
2,575,000 Allmerica Financial
Corp. Sr. 7.625% 10/15/25 2,729,088

1,975,000 American Express Credit
Acct. Master Tr. Ser.
1997-1 A 6.400% 9/15/00 2,001,524

1,900,000 Arcadia Auto Trust Ser.
1997-B A5 SEQ 6.700% 2/15/01-05 1,925,531

1,800,000 Associates Corp. of North
America 6.750% 7/15/01 1,830,240

2,800,000 Associates Corp. of North
America 6.375% 10/15/02 2,812,516

3,775,000 Associates Corp. of North
America Sr. 6.700% 5/29/01 3,830,455

3,229,706 Banc One Auto
Receivable Grant Trust
97-A A 6.270% 11/20/99-03 3,235,762

1,200,000 Beneficial Corp. 9.125% 2/15/98 1,203,720

1,875,000 Cigna Corp. Deb. 7.875% 5/15/27 2,010,131

1,800,000 CIT Group Hldgs., Inc. Sr. 6.700% 5/28/01 1,829,916

1,225,000 Commercial Credit
Group, Inc. 6.750% 5/15/00 1,239,320

3,075,000 Countrywide Funding
Corp. 6.580% 9/21/01 3,111,100

3,800,000 Fleet Mortgage Group,
Inc. 7.060% 7/26/02 3,888,692
</TABLE>

B-42

<PAGE>

METROPOLITAN SERIES FUND, INC.

SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
STATE STREET RESEARCH INCOME PORTFOLIO
DECEMBER 31, 1997

<TABLE>
<CAPTION>
FACE INTEREST MATURITY VALUE$
AMOUNT ISSUE RATE DATE (NOTE 1A)
- -----------------------------------------------------------------------------------------------------------------------------------

CORPORATE BONDS: (CONTINUED)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
FINANCIAL SERVICES: (CONTINUED)
$ 3,800,000 Ford Credit Auto Loan
Master Trust Ser. 95-1 6.500% 8/15/00 $ 3,830,856

1,025,000 GE Global Insurance
Holding Corp. 7.000% 2/15/26 1,064,114

1,800,000 General Motors
Acceptance Corp. 7.050% 2/02/98 1,801,242

2,050,000 GMAC Commercial
Mortgage Security, Inc. 6.550% 4/15/06-07 2,065,293

1,700,000 Household Fin. Co. Sr. 6.750% 6/01/00 1,719,142

3,750,000 Household Fin. Co. Sr. 7.125% 5/30/02 3,881,363

1,925,000 MBNA Corp. Sr. 6.875% 11/15/02 1,940,573

1,500,000 PennCorp Financial
Group Sr. 9.250% 12/15/98-03 1,571,250

3,220,755 . Railcar Leasing Ser.
1997-1 A1 SEQ 144A 6.750% 7/15/02-06 3,285,170

1,925,000 Sears Credit Account
Master Tr.II Ser. 1997-1 A 6.200% 7/15/02-07 1,926,353

2,000,000 Sears Credit Account
Master Tr.II Ser. 1995-2 A 8.100% 6/15/00-04 2,065,000

3,650,000 . Zurich Capital Trust
144A 8.376% 6/01/07-37 3,977,478
-------------
60,775,829
- -----------------------------------------------------------------------------------------------------------------------------------
GOVERNMENT SPONSORED: FEDERALLY CHARTERED: 1.3%
1,500,000 Big Rivers Electric
Cooperative Trust 10.700% 9/15/98-17 1,583,640

825,000 Cajun Electric Power
Cooperative Trust 9.520% 3/15/98-19 870,070

2,900,000 Deseret Generation
Cooperative Trust 10.110% 12/15/97-17 3,052,946
-------------
5,506,656
- -----------------------------------------------------------------------------------------------------------------------------------
GOVERNMENT SPONSORED: STATE CHARTERED: 0.5%
1,850,000 New Jersey Economic
Development Authority
State Pension Funding
Ser. A 7.425% 2/15/29 2,042,474
- ----------------------------------------------------------------------------------------------------------------------------------
HEALTHCARE SERVICES: 2.4%
2,600,000 Columbia/HCA
Healthcare Corp. 6.870% 9/15/03 2,549,274

3,800,000 Columbia/HCA
Healthcare Corp. 7.690% 6/15/25 3,658,944

3,850,000 Columbia/HCA
Healthcare Corp. 6.500% 3/15/99 3,828,247
------------
10,036,465
- ----------------------------------------------------------------------------------------------------------------------------------

<CAPTION>
FACE INTEREST MATURITY VALUE$
AMOUNT ISSUE RATE DATE (NOTE 1A)
- ----------------------------------------------------------------------------------------------------------------------------------
CORPORATE BONDS: (CONTINUED)
- ----------------------------------------------------------------------------------------------------------------------------------
HOUSEHOLD PRODUCTS: 1.0%
$ 3,950,000 Fort James Corp. Sr. 6.625% 9/15/04 $ 3,962,600
- ----------------------------------------------------------------------------------------------------------------------------------
INDUSTRIALS: 5.9%
2,050,000 Chesapeake Energy Corp.
Sr. 7.875% 3/15/04 2,014,125

1,000,000 Chevron Corp. Profit
Sharing Amort. Note 8.110% 12/01/01-04 1,067,170

2,300,000 . Electronic Data Systems
Corp. 144A 6.850% 5/15/00 2,341,423

1,900,000 HealthSouth Corp. Sr. 9.500% 4/01/98-01 2,001,175

1,500,000 . K-III Communications
Corp. 144A Sr. 8.500% 2/01/01-06 1,526,250

1,500,000 Lear Seating Corp. Sub. 8.250% 2/01/98-02 1,518,750

1,925,000 Loews Corp. Sr. 6.750% 12/15/06 1,938,533

1,950,000 Oracle Corp. Sr. 6.910% 2/15/07 1,951,950

1,400,000 Oryx Energy Co. Deb. 8.125% 10/15/05 1,493,534

1,000,000 Paging Network, Inc. Sr. 8.875% 2/01/99-06 980,000

1,000,000 Paging Network, Inc. Sr. 10.000% 10/15/01-08 1,040,000

2,300,000 Tenet Healthcare Corp.
Sr. 8.000% 1/15/05 2,340,250

3,800,000 Viacom, Inc. Sr. 7.750% 6/01/05 3,864,942
------------
24,078,102
- ----------------------------------------------------------------------------------------------------------------------------------
NEWSPAPERS: 1.1%
1,975,000 News America Holdings,
Inc. Sr. 7.750% 1/20/24 2,055,146

2,550,000 News America Holdings,
Inc. Deb. 7.375% 10/17/08 2,622,395
------------
4,677,541
- ----------------------------------------------------------------------------------------------------------------------------------
RESTAURANT: 0.8%
3,500,000 Darden Restaurants, Inc. 7.125% 2/01/16 3,362,275
Deb.
- ----------------------------------------------------------------------------------------------------------------------------------
UTILITIES-ELECTRIC: 3.0%
3,500,000 Arizona Public Service
Sr. 6.750% 11/15/06 3,559,360

2,000,000 CMS Energy Corp. Sub. 7.625% 11/15/04 1,990,460

2,850,000 . Edison Mission Energy
Funding Note 144A 7.330% 9/15/05-08 2,976,483

3,900,000 Southern California
Edison Co. 6.500% 6/01/01 3,933,579
------------
12,459,882
------------
TOTAL CORPORATE
(Cost: $188,114,732) 190,861,880
------------
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

B-43
<PAGE>

METROPOLITAN SERIES FUND, INC.

SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
STATE STREET RESEARCH INCOME PORTFOLIO
DECEMBER 31, 1997

<TABLE>
<CAPTION>
FACE INTEREST MATURITY VALUE
AMOUNT ISSUE RATE DATE (NOTE A)
- --------------------------------------------------------------------------------------------------------------------
FEDERAL AGENCY OBLIGATIONS: 5.2%
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 4,034,252 Federal Home Loan
Mortgage Corp. 7.500% 8/01/11 $ 4,144,548

640,453 Federal Home Loan
Mortgage Corp. 9.000% 12/01/09 681,442

2,600,000 Federal Home Loan
Mortgage Corp. Deb. 7.240% 5/15/98-02 2,608,944

3,900,000 Federal Home Loan
Mortgage Corp. 6.350% 5/17/01-18 3,920,709

54,351 Federal National
Mortgage Assoc. 7.750% 4/01/08 56,731

113,173 Federal National
Mortgage Assoc. 8.000% 6/01/08 118,266

131,495 Federal National
Mortgage Assoc. 9.000% 4/01/16 139,713

308,846 Federal National
Mortgage Assoc. 8.500% 9/01/09 322,812

409,502 Federal National
Mortgage Assoc. 7.750% 9/01/06 421,832

587,605 Federal National
Mortgage Assoc. 7.750% 3/01/08 609,453

848,844 Federal National
Mortgage Assoc. 8.500% 2/01/09 890,488

979,891 Federal National
Mortgage Assoc. 8.250% 7/01/08 1,020,350

2,925,000 Federal National
Mortgage Assoc. 6.800% 9/25/04-22 2,973,438

3,272,303 Government National
Mortgage Assoc. 8.000% 11/15/17 3,443,052

248,766 Government National
Mortgage Assoc. 7.500% 5/15/07 257,316
------------
TOTAL FEDERAL AGENCY OBLIGATIONS
(Cost: $21,478,189)............................................... 21,608,734
------------
- --------------------------------------------------------------------------------------------------------------------
FEDERAL TREASURY OBLIGATIONS: 29.6%
- --------------------------------------------------------------------------------------------------------------------
3,350,000 +U.S. Treasury Bond 12.000% 8/15/08-13 4,936,024
5,275,000 U.S. Treasury Bond 6.250% 8/15/23 5,433,250
15,975,000 U.S. Treasury Bond 8.750% 5/15/17 20,944,663
18,050,000 +U.S. Treasury Bond 8.125% 8/15/21 22,768,451

<CAPTION>
FACE INTEREST MATURITY VALUE
AMOUNT ISSUE RATE DATE (NOTE 1A)
- --------------------------------------------------------------------------------------------------------------------
FEDERAL TREASURY OBLIGATIONS: (CONTINUED)
- --------------------------------------------------------------------------------------------------------------------
$ 1,963,288 +U.S. Treasury Inflation
Indexed Note 3.375% 1/15/07 $ 1,911,752

3,125,000 +U.S. Treasury Note 7.125% 9/30/99 3,199,219

1,500,000 +U.S. Treasury Note 6.625% 7/31/01 1,542,180

5,225,000 +U.S. Treasury Note 6.250% 8/31/00 5,295,224

10,350,000 +U.S. Treasury Note 6.875% 8/31/99 10,544,063

12,025,000 U.S. Treasury Note 7.875% 11/15/04 13,443,589

13,425,000 +U.S. Treasury Note 6.500% 8/15/05 14,008,182

30,975,000 U.S. Treasury Strip 0.000% 5/15/07 17,966,429
-------------
TOTAL FEDERAL TREASURY OBLIGATIONS
(Cost: $117,073,813)............................................. 121,993,026
-------------
- -----------------------------------------------------------------------------------------------------------------------------------
FOREIGN OBLIGATIONS: 7.3%
- -----------------------------------------------------------------------------------------------------------------------------------
11,775,000 Australian Government 9.000% 9/15/04 8,984,213
5,000,000 New Zealand 8.000% 11/15/06 3,082,438
7,675,000 New Zealand 10.000% 3/15/02 4,879,008
7,000,000 UK Treasury 8.500% 12/07/05 12,974,205

TOTAL FOREIGN OBLIGATIONS
(Cost: $31,736,560).............................................. 29,919,864
- --------------------------------------------------------------------------------------------------------------------
YANKEE BONDS: 5.6%
- --------------------------------------------------------------------------------------------------------------------
1,900,000 .British Aerospace
Finance, Inc. 144A 7.500% 7/01/27 2,031,252

1,800,000 City of Naples Note 7.520% 7/15/01-06 1,883,916

3,800,000 .DR Investments 144A Sr. 7.100% 5/15/02 3,894,354

3,100,000 Hydro Quebec Deb. Ser.
HS 9.400% 2/01/21 4,002,720

2,000,000 .Petroliam Nasional
Berhad 144A 7.125% 8/15/05 1,907,600

2,600,000 .Petroliam Nasional
Berhad 144A 6.875% 7/01/03 2,545,946

2,025,000 Province Of Quebec Deb. 7.125% 2/09/24 2,085,568

1,925,000 Southern Investments UK
Sr. 6.375% 11/15/01 1,922,036

2,550,000 Talisman Energy Deb. 7.125% 6/01/07 2,638,205
-------------
TOTAL YANKEE BONDS
(Cost: $22,222,572).............................................. 22,911,597
-------------
</TABLE>

B-44
<PAGE>

METROPOLITAN SERIES FUND, INC.

SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
STATE STREET RESEARCH INCOME PORTFOLIO
DECEMBER 31, 1997

FACE INTEREST MATURITY VALUE
AMOUNT ISSUE RATE DATE (NOTE 1A)
- -------------------------------------------------------------------------------------------------------------------
SHORT TERM OBLIGATIONS: 4.6%
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 851,000 American Express Credit
Corp. 5.550% 1/02/98 $ 851,000

9,291,000 American Express Credit
Corp. 6.000% 1/07/98 9,291,000

8,784,000 General Electric
Capital Corp. 6.020% 1/05/98 8,784,000

-------------
TOTAL SHORT TERM OBLIGATIONS
(Cost: $18,926,000).............................................. 18,926,000
-------------
- -------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS: 98.6%
(Cost: $399,551,866)............................................. 406,221,101

OTHER ASSETS LESS LIABILITIES: 1.4% 5,969,530
-------------
NET ASSETS: 100.0%............................................... $ 412,190,631
=============
- -------------------------------------------------------------------------------------------------------------------
</TABLE>

LEGEND:
- -------
* Non-income producing security.
+ Securities on loan.
. Restricted security.

SECURITIES LENDING: (Note 7)
- ----------------------------
As of December 31, 1997, the market value of securities loaned was $31,147,268
with collateral backing valued at $31,731,201.

RESTRICTED SECURITIES: (Note 2)
- -------------------------------

<TABLE>
<CAPTION>
Valuation
ACQUISITION ACQUISITION AS OF
ISSUE DATE COST DECEMBER 31, 1997
----- ------------- ----------- -----------------
<S> <C> <C> <C>
Bank of New York 144A..... 12/11/96 3,866,121 4,105,274

BankAmerica Institutional
Capital. 144A............. 11/26/96 2,473,850 2,573,475

British Aerospace Finance,
Inc. 144A................. 6/26/97 1,885,883 2,031,252

Donaldson, Lufkin &
Jenret, Inc. 144A......... 9/26/97 1,936,631 1,948,706

DR Investments 144A Sr..... 5/6/97 3,797,834 3,894,354

Edison Mission Energy
Funding Note 144A......... 1/7/97 2,836,890 2,976,483

Electronic Data Systems
Corp. 144A................ 5/19/95 3,297,393 2,341,423

K-III Communications Corp.
144A Sr. 1/22/96 1,506,875 1,526,250

Petroliam Nasional Berthad
144A...................... 10/02/97 1,998,300 1,907,600

Petroliam Nasional Berthad
144A...................... 10/15/97 2,577,718 2,545,946

RailcarLeasing 1997-1 A1
144A SEQ.................. 4/1/97 3,309,864 3,285,170

Wells Fargo Capital
Securities 144A........... 4/9/97 1,802,171 2,023,496

Zurich Capital Trust 144A.. 6/18/97 3,804,194 3,977,478
</TABLE>

The aggregate value of restricted securities at December 31, 1997 was
$35,136,907 or 8.52% of the Income Portfolio's net assets.

See Notes to Financial Statements.

B-45
<PAGE>

METROPOLITAN SERIES FUND, INC.

SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
STATE STREET RESEARCH MONEY MARKET PORTFOLIO
December 31, 1997

TOTAL BANKERS' ACCEPTANCES
(Cost: $1,999,504)......................................... $ 1,999,504
-----------
- -----------------------------------------------------------------------------------------
COMMERCIAL PAPER: 88.9%
- -----------------------------------------------------------------------------------------
3,411,000 Anheuser Busch, Inc. 6.650% 1/02/98 3,410,370
2,000,000 Associates Corp. of North
America 6.625% 5/15/98 2,003,331
2,000,000 Bell Atlantic Financial
Services 6.250% 1/05/98 1,993,009
1,500,000 Bellsouth Telecomm, Inc. 5.750% 2/25/98 1,486,823
1,500,000 Beneficial Corp. 5.830% 1/08/98 1,483,555
2,000,000 Canadian Wheat Board 5.460% 1/06/98 1,998,483
2,000,000 DuPont (E.I.) de Nemours
& Co. 5.660% 2/09/98 1,987,737
2,000,000 General Electric Capital
Corp. 6.080% 1/05/98 1,991,752
500,000 General Motors Acceptance
Corp. 5.710% 3/02/98 495,242
1,400,000 General Motors Acceptance
Corp. 5.700% 3/31/98 1,380,272
1,950,000 Goldman Sachs Group LP 5.720% 3/13/98 1,928,002
1,000,000 Hewlett-Packard Co. 5.950% 1/21/98 996,694
1,500,000 Household Finance Corp. 5.820% 1/12/98 1,497,465
2,000,000 Merrill Lynch & Co., Inc. 5.690% 2/27/98 1,981,982
1,500,000 Morgan (J.P.) & Co., Inc. 5.600% 1/06/98 1,498,833
2,000,000 Northern Illinois Gas Co. 5.520% 1/09/98 1,997,547
2,000,000 Penney (J.C.) Funding
Corp. 5.520% 1/22/98 1,993,560
1,000,000 Procter & Gamble Co. 5.880% 1/05/98 999,347
2,000,000 Sears Roebuck Acceptance
Corp. 5.720% 2/13/98 1,986,335
2,000,000 Toronto-Dominion Holdings 5.550% 1/02/98 1,999,692
-----------

TOTAL COMMERCIAL PAPER
(Cost: $35,110,031)........................................ 35,110,031
-----------
</TABLE>
______________________________________________________________________________

TOTAL FEDERAL AGENCY OBLIGATIONS
(Cost: $1,999,174)..................................... 1,999,174
---------------
- ------------------------------------------------------------------------------------------
TOTAL INVESTMENTS: 99.1%
(Cost: $39,108,709).................................... 39,108,709

OTHER ASSETS LESS LIABILITIES: 0.9%.................... 371,130
--------------
NET ASSETS: 100.0%..................................... $39,479,839
==============
</TABLE>
_______________________________________________________________________________

See Notes to Financial Statements.

B-46
<PAGE>

METROPOLITAN SERIES FUND, INC.

SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
STATE STREET RESEARCH DIVERSIFIED PORTFOLIO
DECEMBER 31, 1997

<TABLE>
<CAPTION>
VALUE
SHARES ISSUE (NOTE 1A)
- ------------------------------------------------------------------------------------
COMMON STOCK: 49.6%
- ------------------------------------------------------------------------------------
<S> <C> <C>
AEROSPACE: 1.3%

307,600 Boeing Co. $15,053,175
10,643 +*Raytheon Co. Cl. A 524,843
203,300 +Raytheon Co. Cl. B 10,266,650
-----------
25,844,668
- ------------------------------------------------------------------------------------
AUTOMOTIVE: 1.0%

166,900 General Motors Corp. 10,118,312
354,100 *Renault SA 9,960,809
-----------
20,079,121
- ------------------------------------------------------------------------------------
BANKING: 4.8%

316,300 Ahmanson (H.F.) & Co. 21,172,331
375,000 Banc One Corp. 20,367,187
341,400 BankAmerica Corp. 24,922,200
279,200 +NationsBank Corp. 16,978,850
189,900 *Washington Mutual, Inc. 12,112,059
-----------
95,552,627
- ------------------------------------------------------------------------------------
BROADCASTING: 2.9%

341,000 CBS Corp. 10,038,187
337,800 +Time Warner, Inc. 20,943,600
592,800 +*U.S. West, Inc.-Media Group 17,117,100
208,200 *Viacom, Inc. Cl. B 8,627,287
-----------
56,726,174
- ------------------------------------------------------------------------------------
BUSINESS SERVICES: 0.6%

184,077 *Cendant Corp. 6,327,663
115,200 HBO & Co. 5,526,000
-----------
11,853,663
- ------------------------------------------------------------------------------------
CHEMICALS: 2.5%

372,800 Du Pont (E.I.) de Nemours & Co. 22,391,300
54,100 Monsanto Co. 2,272,200
251,300 Rohm & Haas Co. 24,061,975
-----------
48,725,475
- ------------------------------------------------------------------------------------
DRUGS & HEALTH CARE: 3.6%

218,700 Bristol-Myers Squibb Co. 20,694,487
146,518 *Novartis AG ADR 11,903,855
166,500 Pfizer, Inc. 12,414,656
162,800 Schering-Plough Corp. 10,113,950
124,800 Warner-Lambert Co. 15,475,200
-----------
70,602,148
- ------------------------------------------------------------------------------------
ELECTRICAL EQUIPMENT: 2.2%

242,800 AMP, Inc. $10,197,600
460,500 General Electric Co. 33,789,187
-----------
43,986,787
- ------------------------------------------------------------------------------------
ELECTRONICS: 1.8%

114,300 *Analog Devices, Inc. 3,164,681
160,320 *Ericsson (L. M.) Telephone Co. ADR Cl. B 5,986,950
99,300 *Intel Corp. 6,972,722
134,100 *Lucent Technologies, Inc. 10,711,237
164,600 *Teradyne, Inc. 5,267,200
97,000 *Texas Instruments, Inc. 4,365,000
-----------
36,467,790
- -------------------------------------------------------------------------------------
ENTERTAINMENT & LEISURE: 0.5%

104,835 Disney (Walt) Co. 10,385,217
- -------------------------------------------------------------------------------------
FINANCIAL SERVICES: 0.8%

307,899 Travelers Group, Inc. 16,588,059
- ------------------------------------------------------------------------------------
FOOD & BEVERAGES: 1.7%

107,700 Coca-Cola Co. 7,175,512
159,900 General Mills, Inc. 11,452,837
315,100 Heinz (H.J.) Co. 16,011,019
----------
34,639,368
- ------------------------------------------------------------------------------------
FOREST PRODUCTS & PAPER: 1.1%

284,600 Fort James Corp. 10,885,950
221,500 Weyerhaeuser Co. 10,867,344
-----------
21,753,294
- ------------------------------------------------------------------------------------
HOSPITAL MANAGEMENT: 0.4%

229,700 Tenet Healthcare Corp. 7,608,812
- ------------------------------------------------------------------------------------
HOUSEHOLD PRODUCTS: 0.9%

60,200 Gillette Co. 6,046,338
137,300 Procter & Gamble Co. 10,958,256
-----------
17,004,594
- ------------------------------------------------------------------------------------
INSURANCE: 2.4%

235,500 ACE, Ltd. 22,725,750
73,400 General Re Corp. 15,560,800
110,200 St. Paul Cos., Inc. 9,043,287
-----------
47,329,837
- ------------------------------------------------------------------------------------
</TABLE>

B-47
<PAGE>

METROPOLITAN SERIES FUND, INC.

SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
STATE STREET RESEARCH DIVERSIFIED PORTFOLIO
DECEMBER 31, 1997

<TABLE>
<CAPTION>
VALUE
SHARES ISSUE (NOTE 1A)
- ------------------------------------------------------------------------------------
COMMON STOCK: (CONTINUED)
- ------------------------------------------------------------------------------------
MACHINERY: 0.4%
<S> <C> <C>
205,200 Browning-Ferris Industries, Inc. $ 7,592,400
- ------------------------------------------------------------------------------------
MEDICAL SUPPLY: 1.1%
97,100 +*Boston Scientific Corp. 4,454,462
71,100 Guidant Corp. 4,425,975
186,600 Johnson & Johnson 12,292,275
-----------
21,172,712
- ------------------------------------------------------------------------------------
METALS-STEEL & IRON: 0.5%
449,500 +British Steel Corp. PLC ADR 9,636,156
55,700 *Ispat International NV Cl. A 1,204,512
-----------
10,840,668
- ------------------------------------------------------------------------------------
MISCELLANEOUS: 1.6%
707,600 Tyco International Ltd. 31,886,225
- ------------------------------------------------------------------------------------
OFFICE & BUSINESS EQUIPMENT: 2.6%
201,900 *Cisco Systems, Inc. 11,268,544
189,700 Compaq Computer Corp. 10,706,194
177,300 IKON Office Solutions, Inc. 4,986,562
125,700 International Business Machines Corp. 13,143,506
159,800 Xerox Corp. 11,795,237
-----------
51,900,043
- ------------------------------------------------------------------------------------
OIL: 1.0%
344,745 TOTAL SA ADR 19,133,347
- ------------------------------------------------------------------------------------
OIL & GAS EXPLORATION: 1.3%
149,000 Anadarko Petroleum Corp. 9,042,437
96,600 ENI SPA ADR 5,512,237
518,700 *Seagull Energy Corp. 10,698,187
-----------
25,252,861
- ------------------------------------------------------------------------------------
OIL-DOMESTIC: 1.1%
300,900 Oryx Energy Co. 7,672,950
340,800 Unocal Corp. 13,227,300
-----------
20,900,250
- ------------------------------------------------------------------------------------
OIL-INTERNATIONAL: 0.6%
202,900 +Royal Dutch Petroleum Co. 10,994,644
- ------------------------------------------------------------------------------------
RETAIL GROCERY: 1.8%
582 .*Food 4 Less Holdings, Inc. (Wts.) 144A 153,491
491,900 *Kroger Co. 18,169,556
263,200 +Safeway, Inc. 16,647,400
-----------
34,970,447
- ------------------------------------------------------------------------------------
COMMON STOCK: (CONTINUED)
- ------------------------------------------------------------------------------------
RETAIL TRADE: 4.3%
243,900 CVS Corp. $ 15,624,844
227,700 Dayton-Hudson Corp. 15,369,750
240,700 Home Depot, Inc. 14,171,212
282,800 Rite Aid Corp. 16,596,825
353,600 *Staples, Inc. 9,834,500
441,400 *Toys 'R Us, Inc. 13,876,512
------------
85,473,643
- ------------------------------------------------------------------------------------
SOFTWARE: 0.6%
5,887 *Anacomp, Inc. 91,616
1,495 *Anacomp, Inc. (Wts.) 9,998
93,000 *Microsoft Corp. 12,017,344
------------
12,118,958
- ------------------------------------------------------------------------------------
TOBACCO: 1.1%
488,000 Philip Morris Cos., Inc. 22,112,500
- ------------------------------------------------------------------------------------
TRANSPORTATION-TRUCKING: 0.0%
500 .*Crown Packaging Holdings Ltd. (Wts.) 144A 63
- ------------------------------------------------------------------------------------
UTILITIES-ELECTRIC: 1.3%
180,200 FPL Group, Inc. 10,665,587
365,000 Texas Utilities Co. 15,170,312
------------
25,835,899
- ------------------------------------------------------------------------------------
UTILITIES-TELEPHONE: 1.8%
223,900 +Bell Atlantic Corp. 20,374,900
547,300 +*WorldCom, Inc. 16,572,928
------------
36,947,828
- ------------------------------------------------------------------------------------
TOTAL COMMON STOCK
(Cost: $819,976,106)............................ 982,280,122
- ------------------------------------------------------------------------------------
</TABLE>

8,700,000 AT&T Universal Card
Master Tr. Ser. 5.950% 10/17/00 8,686,341
1995-2A

8,655,000 Ford Credit Auto
Owner Tr. Ser. 1997-B 6.050% 4/15/99-01 8,703,684
A3 SEQ

8,480,000 World Omni Automobile
Lease Tr. Ser. 1997-B 6.180% 11/25/00-03 8,482,968
A3 SEQ
------------
29,417,837
- --------------------------------------------------------------------------------------------
</TABLE>

B-48
<PAGE>

METROPOLITAN SERIES FUND, INC.

SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
STATE STREET RESEARCH DIVERSIFIED PORTFOLIO
DECEMBER 31, 1997

2,850,000 . Bank of New York 144A 7.780% 12/01/06-26 2,962,034

3,500,000 . BankAmerica
Institutional Capital
144A 7.700% 12/31/06-26 3,602,865

1,725,000 Capital One Bank Sr. 7.080% 10/30/01 1,765,055

6,675,000 First Deposit Master
Trust Ser. 1993-2 5.750% 6/15/98 6,668,726

4,600,000 + NB Capital Trust 8.250% 4/15/07-27 5,019,796
Ser.1995-1 A

2,800,000 Nations Bank Master 6.450% 8/15/00 2,827,104
Trust Ser. 1995-1

8,175,000 Prime Credit Card
Master Trust Ser. 6.750% 8/15/02 8,338,500
1995-1 A

2,100,000 Standard Credit Card
Master Tr. Ser 1991-3 A 8.875% 7/07/98 2,129,526

2,800,000 . State Street
Institutional Capital
A 144A 7.940% 12/30/06-26 2,973,768

3,000,000 . Wells Fargo Capital
Securities 144A 7.730% 12/01/06-26 3,113,070
------------
42,344,898
- ------------------------------------------------------------------------------------------------
BROADCASTING: 0.4%
7,650,000 TCI Communications,
Inc. Sr. 7.250% 6/15/99 7,737,746
- ------------------------------------------------------------------------------------------------
COLLATERALIZED MORTGAGE OBLIGATIONS: 2.5%
6,006,999 Amresco Commercial
Mortgage Sec. Ser
1997-C1 A SEQ 6.730% 6/17/02-04 6,107,616

983,397 Countrywide Ser.
1993-E A1 PAC 6.500% 1/25/97-24 982,783

2,140,215 Countrywide Ser. 7.125% 12/25/98-23 2,148,904
1993-5 A4 SEQ

4,300,000 Credit Suisse First
Boston Ser.1997-C2 A2 6.520% 7/17/05-07 4,308,063
SEQ

3,814,663 .Donaldson, Lufkin &
Jenret, Inc. 144A 6.550% 11/15/03-06 3,847,446

4,150,000 First Union Lehman
Bros. Ser 1997-C2 A-2 6.600% 05/18/05-07 4,151,297
SEQ
- ------------------------------------------------------------------------------------------------
COLLATERALIZED MORTGAGE OBLIGATIONS: (CONTINUED)
$7,425,000 First USA Credit Card
Master Tr. Ser. 6.420% 7/17/02 $ 7,496,930
1997-6 A

7,500,000 General Electric
Capital Mtg.
Services., Inc. Ser. 6.500% 1/25/00-24 7,434,375
1994-1 A6 TAC

7,672,192 Lehman Commercial
Mortgage Ser. 97-LL1 6.790% 10/12/02-04 7,832,829
A1 SEQ

3,632,799 .Morgan Stanley
Capital Ser. 7.020% 10/15/03-06 3,696,373
97-WF1-A1 144A

832,491 Prudential Home Loan
Mortgage Ser. 93-29
A-6 PAC 6.750% 8/25/98-08 833,790

773,405 Residential Funding
Corp. Ser. 1993-S25
A1 PAC 6.500% 7/25/98-08 771,951
------------
49,612,357
- ------------------------------------------------------------------------------------------------
FINANCIAL SERVICES: 6.5%
2,600,000 Allmerica Financial
Corp. Sr. 7.625% 10/15/25 2,755,584

3,850,000 American Express
Credit Account Master
Tr. Ser. 1997-1 A 6.400% 9/15/00 3,901,706

4,200,000 Associates Corp. of
North America Sr. 6.450% 10/15/01 4,230,114

4,100,000 Associates Corp. of
North America 6.375% 10/15/02 4,118,327

2,550,000 Associates Corp. of
North America 6.750% 7/15/01 2,592,840

6,047,985 Banc One Auto
Receivable Grant
Trust 97-A A 6.270% 11/20/99-03 6,059,325

1,200,000 Beneficial Corp. 9.125% 2/15/98 1,203,720

3,900,000 Chase Manhattan
Credit Card Master
Trust Ser. 1996-3 A 7.040% 5/15/01 4,012,125

3,300,000 Cigna Corp. Deb. 7.875% 5/15/27 3,537,831

3,230,000 CIT Group Holdings,
Inc. 6.750% 5/14/01 3,288,269

5,200,000 CIT Group Holdings,
Inc. Sr. 6.700% 5/28/01 5,286,424

14,600,000 Commercial Credit
Group, Inc. 6.450% 7/01/02 14,705,558

9,725,000 Countrywide Home Loan 6.580% 9/21/01 9,839,172

</TABLE>

B-49
<PAGE>

METROPOLITAN SERIES FUND, INC.

SCHEDULE OF INVESTMENTS
- -------------------------------------------------------------------------------
STATE STREET RESEARCH DIVERSIFIED PORTFOLIO
DECEMBER 31, 1997

6,600,000 FINOVA Capital Corp.
Sr. 7.125% 5/01/02 6,788,628

4,400,000 Fleet Mortgage Group,
Inc. 7.060% 7/26/02 4,502,696

5,350,000 Ford Credit Auto Loan
Master Trust Ser.95-1 6.500% 8/15/00 5,393,442

1,800,000 GE Global Insurance
Holding Corp. 7.000% 2/15/26 1,868,688

2,500,000 General Motors
Acceptance Corp. 7.050% 2/02/98 2,501,725

4,325,000 GMAC Commercial
Mortgage Security, 6.550% 4/15/06-07 4,357,265
Inc.

2,400,000 Household Finance
Corp. Sr. 6.750% 6/01/00 2,427,024

3,775,000 MBNA Corp. Sr. 6.875% 11/15/02 3,805,540
1,500,000 PennCorp Financial
Group Sr. 9.250% 12/15/98-03 1,571,250

5,061,186 .Railcar Leasing Ser.
1997-1 A1 SEQ 144A 6.750% 7/15/02-06 5,162,410

3,700,000 Sears Credit Account
Master. Tr. II Ser. 6.200% 7/15/02-07 3,702,601
1997-1 A

2,600,000 Sears Credit Account
Master Trust II Ser. 8.100% 6/15/00-04 2,684,500
1995-2 A

4,300,000 Travelers Capital III 7.750% 12/01/06-36 4,459,229
7,175,000 .Zurich Capital Trust
144A 8.376% 6/01/07-37 7,818,741
------------
129,445,268
- ---------------------------------------------------------------------------------------------
GOVERNMENT SPONSORED: FEDERALLY CHARTERED: 0.3%
2,250,000 Big Rivers Electric
Cooperative Trust 10.700% 9/15/98-17 2,375,460

3,750,000 Deseret Generation
Cooperative Trust 10.110% 12/15/97-17 3,947,775
------------
6,323,235
- ---------------------------------------------------------------------------------------------
GOVERNMENT SPONSORED: STATE CHARTERED: 0.2%
3,675,000 New Jersey Economic
Development Authority
State Pension Funding
Ser. A 7.425% 2/15/29 4,057,347
- ---------------------------------------------------------------------------------------------
HEALTHCARE SERVICES: 0.8%
$ 4,525,000 Columbia/HCA
Healthcare Corp. 6.410% 6/15/00 $ 4,457,442

3,600,000 Columbia/HCA
Healthcare Corp. 7.690% 6/15/25 3,466,368

3,725,000 Columbia/HCA
Healthcare Corp. 7.500% 12/15/23 3,512,265

3,700,000 Columbia/HCA
Healthcare Corp. 6.870% 9/15/03 3,627,813
------------
15,063,888
- ---------------------------------------------------------------------------------------------
HOUSEHOLD PRODUCTS: 0.4%
7,700,000 Fort James Corp. 6.625% 9/15/04 7,724,563
- ---------------------------------------------------------------------------------------------
INDUSTRIALS: 3.4%
2,825,000 Chesapeake Energy
Corp. Sr. 7.875% 3/15/04 2,789,688

1,500,000 Chevron Corp. Profit
Sharing Amort. Note 8.110% 12/01/01-04 1,600,755

3,300,000 .Electronic Data
Systems Corp. 144A 6.850% 5/15/00 3,359,433

4,100,000 HealthSouth Corp. Sr. 9.500% 4/01/98-01 4,318,325

5,800,000 Honeywell, Inc. 6.750% 3/15/02 5,917,102

8,450,000 Ingersoll-Rand Co. 6.200% 11/15/99 8,469,266

2,075,000 .K-III Communications
Corp. 144A Sr. 8.500% 2/01/01-06 2,111,313

1,550,000 Lear Seating Corp. 8.250% 2/01/98-02 1,569,375
Sub.

3,400,000 Loews Corp. 6.750% 12/15/06 3,423,902

10,600,000 Oracle Corp. Sr. 6.720% 2/15/04 10,577,422

2,000,000 Oryx Energy Co. 8.125% 10/15/05 2,133,620

4,925,000 Owens Illinois, Inc. 7.850% 5/15/04 5,173,910
Sr.

2,225,000 +Paging Network, Inc.
Sr. 8.875% 2/01/99-06 2,180,500

2,000,000 Paging Network, Inc. 10.000% 10/15/01-08 2,080,000
Sr.

3,500,000 Tenet Healthcare
Corp. Sr. 7.875% 1/15/03 3,543,750

7,250,000 Viacom, Inc. Sr. 7.750% 6/01/05 7,373,903
------------
66,622,264
- ---------------------------------------------------------------------------------------------
NEWSPAPERS: 0.4%
3,825,000 News America
Holdings, Inc. Sr. 7.750% 1/20/24 3,980,219

3,900,000 News America
Holdings, Inc. 7.375% 10/17/08 4,010,721
------------
7,990,940
- ---------------------------------------------------------------------------------------------
</TABLE>

B-50
<PAGE>

METROPOLITAN SERIES FUND, INC.

SCHEDULE OF INVESTMENTS
- -------------------------------------------------------------------------------
STATE STREET RESEARCH DIVERSIFIED PORTFOLIO
DECEMBER 31, 1997

<TABLE>
<CAPTION>
FACE INTEREST MATURITY VALUE
AMOUNT ISSUE RATE DATE (NOTE 1A)
<S> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------
CORPORATE BONDS: (CONTINUED)
- ---------------------------------------------------------------------------------------------
RESTAURANT: 0.2%
$ 4,400,000 Darden Restaurants,
Inc. 7.125% 2/01/16 $ 4,226,860
- ---------------------------------------------------------------------------------------------
UTILITIES-ELECTRIC: 0.7%
3,350,000 CMS Energy Corp. Sr. 8.125% 5/15/02 3,444,269

4,150,000 .Edison Mission Energy
Funding Note 144A 7.330% 9/15/05-08 4,334,177

5,350,000 Southern California
Edison Co. 6.500% 6/01/01 5,396,064
-----------
13,174,510
- ---------------------------------------------------------------------------------------------
UTILITIES-TELEPHONE: 0.2%

5,000,000 AirTouch
Communications, Inc. 7.000% 10/01/03 5,119,400

- ---------------------------------------------------------------------------------------------
TOTAL CORPORATE BONDS
(Cost: $382,641,661).................................. 388,861,113
------------
- ---------------------------------------------------------------------------------------------
FEDERAL AGENCY OBLIGATIONS: 1.6%
- ---------------------------------------------------------------------------------------------
3,700,000 Federal Home Loan
Mortgage Corp. 7.240% 5/15/98-02 3,712,728

5,875,000 Federal National
Mortgage Assoc. 6.800% 9/25/04-22 5,972,290

43,832 Federal National
Mortgage Assoc. 9.000% 4/01/16 46,571

1,336,929 Federal National
Mortgage Assoc. 8.500% 2/01/09 1,402,519

1,120,414 Federal National
Mortgage Assoc. 8.000% 6/01/08 1,170,833

603,173 Federal National
Mortgage Assoc. 7.250% 9/01/07 620,490

2,947,672 Federal National
Mortgage Assoc. 7.000% 12/01/07 3,016,559

3,945,059 Federal National
Mortgage Assoc. 8.500% 8/01/22 4,155,844

4,908,455 Government National
Mortgage Assoc. 8.000% 11/15/17 5,164,578

5,182,103 Government National
Mortgage Assoc. ARM 6.500% 5/15/09 5,233,872

1,977,985 Government National
Mortgage Assoc. Pool 6.000% 2/15/09 1,966,849
------------
TOTAL FEDERAL AGENCY OBLIGATIONS
(Cost: $32,195,483)................................... 32,463,133
------------
- ---------------------------------------------------------------------------------------------
FEDERAL TREASURY OBLIGATIONS: 15.0%
- -------------------------------------------------------------------------------------------
$ 5,725,000 +U.S. Treasury Bond 12.000% 8/15/08-13 $ 8,435,444
24,475,000 +U.S. Treasury Bond 8.750% 5/15/17 32,088,928
60,425,000 +U.S. Treasury Bond 8.125% 8/15/21 76,220,699
3,799,090 +U.S. Treasury
Inflation Indexed 3.375% 1/15/07 3,699,364
Notes
9,000,000 +U.S. Treasury Note 6.250% 2/28/02 9,164,520
21,425,000 U.S. Treasury Note 6.750% 5/31/99 21,739,733
29,525,000 +U.S. Treasury Note 6.875% 8/31/99 30,078,594
13,625,000 +U.S. Treasury Note 7.125% 9/30/99 13,948,594
43,025,000 U.S. Treasury Note 7.875% 11/15/04 48,100,659
10,000,000 U.S. Treasury Note 6.500% 8/15/05 10,434,400
73,450,000 U.S. Treasury Note
Strip Interest 0.000% 5/15/07 42,603,204
-----------
TOTAL FEDERAL TREASURY OBLIGATIONS
(Cost: $285,767,631)................................. 296,514,139
-----------
- --------------------------------------------------------------------------------------------
FOREIGN OBLIGATIONS: 3.2%
- --------------------------------------------------------------------------------------------
25,250,000 AUD Australian Government 9.000% 9/15/04 19,265,511
11,375,000 NZD New Zealand 8.000% 11/15/06 7,012,547
17,225,000 NZD New Zealand 10.000% 3/15/02 10,949,956
14,450,000 GBP UK Treasury 8.500% 12/07/05 26,782,465
-----------
TOTAL FOREIGN OBLIGATIONS
(Cost: $67,893,769).................................. 64,010,479
-----------
- --------------------------------------------------------------------------------------------

YANKEE BONDS: 2.1%
- --------------------------------------------------------------------------------------------
3,625,000 .British Aerospace
Finance, Inc. 144A 7.500% 7/01/27 3,875,415

2,475,000 City of Naples Note 7.520% 7/15/01-06 2,590,385
6,700,000 .DR Investments 144A
Sr. 7.100% 5/15/02 6,866,361

5,450,000 Hydro Quebec Deb.
Ser. HS 9.400% 2/01/21 7,037,040

3,000,000 Norsk Hydro AS Deb. 7.150% 11/15/25 3,093,390
8,100,000 .Petroliam Nasional
Berhad 144A 7.125% 8/15/05 7,725,780

5,675,000 Province Of Quebec
Deb. 7.125% 2/09/24 5,844,739

3,600,000 Talisman Energy Deb. 7.125% 6/01/07 3,724,525
-----------
TOTAL YANKEE BONDS
(Cost: $39,280,272).................................. 40,757,635
-----------
- --------------------------------------------------------------------------------------------
</TABLE>

B-51
<PAGE>

METROPOLITAN SERIES FUND, INC.

SCHEDULE OF INVESTMENTS
- -------------------------------------------------------------------------------
STATE STREET RESEARCH DIVERSIFIED PORTFOLIO
DECEMBER 31, 1997

19,911,000 American Express
Credit Corp. 6.000% 1/13/98 19,911,000

30,000,000 Bell Atlantic
Financial Services 6.250% 1/05/98 29,979,167

28,340,000 Bell Atlantic
Financial Services 5.840% 1/23/98 28,238,858

4,258,000 Commercial Credit Co. 5.950% 1/16/98 4,258,000

1,766,000 Deere & Co. 5.750% 1/13/98 1,766,000

6,104,000 Deere (John) Capital
Corp. 5.930% 1/05/98 6,104,000

7,487,000 Ford Motor Credit Co. 6.100% 1/08/98 7,487,000

21,928,000 General Electric
Capital Corp. 5.910% 1/13/98 21,928,000

15,000,000 Goldman Sachs Group LP
5.840% 1/05/98 14,990,266
29,572,000 Household Finance
Corp. 5.820% 1/8/98 29,572,000
------------
TOTAL SHORT TERM OBLIGATIONS
(Cost: $175,117,291)................................. 175,117,291
------------
- --------------------------------------------------------------------------------------------
TOTAL INVESTMENTS: 99.9%
(Cost: $1,802,872,213)............................... 1,980,003,912
OTHER ASSETS LESS LIABILITIES: 0.1% 2,227,802
--------------
NET ASSETS: 100.0%................................... $1,982,231,714
==============
- --------------------------------------------------------------------------------------------
</TABLE>

LEGEND:
- -----------
* Non-income producing security.
+ Securities on loan.
. Restricted security.
ADR (American depository receipt) represents ownership of foreign securities.

SECURITIES LENDING: (Note 7)
- ----------------------------
As of December 31, 1997, the market value of securities loaned was $116,410,035
with collateral backing valued at $118,838,443.

<TABLE>
<CAPTION>
RESTRICTED SECURITIES: (Note 2)
- -------------------------------
Valuation
as of
Acquisition Acquisition December 31,
Issue Date Cost 1997
----- ---- ---- ----
<S> <C> <C> <C>
Bank of New York 144A..... 12/24/96 $ 2,775,074 $ 2,962,034
BankAmerica Institutional
Capital 144A.............. 11/26/96 3,463,390 3,602,865
British Aerospace Finance,
Inc. 144A................. 6/26/97 3,598,066 3,875,415
Crown Packaging Holdings,
Ltd. (Wts.) 144A.......... 6/1/94 20,000 63
Donaldson, Lufkin &
Jenret, Inc. 144A......... 9/26/97 3,823,604 3,847,446
DR Investments 144A Sr. 5/6/97 6,696,181 6,866,361
Edison Mission Energy
Funding 144A Note......... 1/7/97 4,130,910 4,334,177
Electronic Data Systems
Corp. 144A................ 5/19/95 3,297,393 3,359,433
Food For Less Holdings, Inc.
(Wts.)144A................. 6/1/94 40,478 153,491
K-III Communications Corp.
144A Sr. 1/22/96 2,084,125 2,111,313
Morgan Stanley Capital
Ser. 97-WF1-A1 144A....... 6/17/97 3,643,450 3,696,373
Petroliam Nasional Berthad 10/2/97-
144A...................... 11/19/97 7,979,799 7,725,780
RailcarLeasing Ser. 1997-1
A1 144A SEQ............... 4/1/97-4/15/97 4,989,618 5,162,410
State Street Institutional
Captial A 144A............ 12/18/96 2,757,760 2,973,768
Wells Fargo Capital
Securities 144A........... 4/8/97 2,775,570 3,113,070
Zurich Capital Trust 144A.. 6/18/97-6/26/97 7,480,202 7,818,741
</TABLE>

The aggregate value of restricted securities at December 31, 1997 was
$61,602,740 or 3.11% of the Diversified Portfolio's net assets.

See Notes to Financial Statements.

B-52
<PAGE>

METROPOLITAN SERIES FUND, INC.
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
STATE STREET RESEARCH AGGRESSIVE GROWTH PORTFOLIO

DECEMBER 31, 1997

<TABLE>
<CAPTION>
VALUE
SHARES ISSUE (NOTE 1A)
- -------------------------------------------------------------------------------
COMMON STOCK: 93.4%
- -------------------------------------------------------------------------------
<S> <C> <C>
AEROSPACE: 0.8%
230,700 + Boeing Co. $ 11,289,881
- -------------------------------------------------------------------------------
AUTOMOTIVE: 2.1%
490,000 + * Budget Group, Inc. Cl. A 16,935,625
190,600 Danaher Corp. 12,031,625
------------
28,967,250
- -------------------------------------------------------------------------------
BANKING: 3.1%
163,200 + Ahmanson (H.F.) & Co. 10,924,200
259,800 BankAmerica Corp. 18,965,400
276,600 Bank United Corp. Cl. A 13,605,262
-------------
43,485,862
- -------------------------------------------------------------------------------
BROADCASTING: 2.5%
709,400 + CBS Corp. 20,882,962
184,300 + Chancellor Media Corp. 13,759,147
-------------
34,642,109
- -------------------------------------------------------------------------------
BUSINESS SERVICES: 19.0%
875,400 + * Caribiner International, Inc. 38,955,300
2,161,829 + * Cendant Corp. 74,312,864
907,600 * Creative Technology Ltd. 19,910,475
374,800 + HBO & Co. 17,978,687
398,225 + * Outdoor Systems, Inc. 15,281,884
2,246,500 * Republic Industries, Inc. 52,371,532
560,300 + * Snyder Communications, Inc. 20,450,950
205,350 + * U.S. Office Products Co. 4,004,325
398,400 * Universal Outdoor Holdings, Inc. 20,766,600
-------------
264,032,617
- -------------------------------------------------------------------------------
COMPUTER EQUIPMENT & SERVICE: 2.5%
391,100 + * America Online, Inc. 34,881,231
- -------------------------------------------------------------------------------
CONSTRUCTION & MINING EQUIPMENT: 0.6%
353,400 * Terex Corp. 8,304,900
- -------------------------------------------------------------------------------
COSMETICS: 0.8%
189,800 + * Avon Products, Inc. 11,648,975
- -------------------------------------------------------------------------------
DRUGS & HEALTH CARE: 3.0%
46,000 Cooper Cos., Inc. 1,880,250
258,500 Schering-Plough Corp. 16,059,313
195,200 Warner-Lambert Co. 24,204,800
-------------
42,144,363
- -------------------------------------------------------------------------------
EDUCATION: 0.5%
157,000 * Apollo Group, Inc. Cl. A $ 7,437,875
- -------------------------------------------------------------------------------
ELECTRONICS: 8.5%
769,400 * Advanced Fibre Communications, Inc. 22,504,950
302,000 + * Analog Devices, Inc. 8,361,625
627,300 + * CHS Electronics, Inc. 10,624,894
207,500 * Intel Corp. 14,570,391
364,500 * Kulicke & Soffa Industries, Inc. 6,811,594
334,800 + Motorola, Inc. 19,104,525
48,700 * P-Com, Inc. 852,250
187,800 + * Sanmina Holdings, Inc. 12,782,138
207,500 + * Tellabs, Inc. 10,952,109
250,100 + Texas Instruments, Inc. 11,254,500
-------------
117,818,976
- -------------------------------------------------------------------------------
ENTERTAINMENT & LEISURE: 3.4%
218,300 * Ascent Entertainment Group, Inc. 2,237,575
524,000 * Florida Panthers Holdings, Inc. Cl. A 9,039,000
581,800 International Game Technology 14,690,450
639,900 + News Corp. Ltd. ADS 14,277,769
288,100 * Ticketmaster Group, Inc. 6,662,313
-------------
46,907,107
- -------------------------------------------------------------------------------
FINANCIAL SERVICES: 4.2%
121,600 * Hartford Financial Services Group, Inc. 11,377,200
268,600 + Merrill Lynch & Co., Inc. 19,591,013
510,050 Travelers Group, Inc. 27,478,944
-------------
58,447,157
- -------------------------------------------------------------------------------
FOOD & BEVERAGES: 0.7%
191,800 * Peapod, Inc. 1,234,713
226,400 + * Starbucks Corp. 8,695,175
-------------
9,929,888
- -------------------------------------------------------------------------------
HEALTHCARE SERVICES: 0.0%
12,905 * Coram Healthcare Corp. 43,554
- -------------------------------------------------------------------------------
HOSPITAL MANAGEMENT: 1.0%
424,000 * Tenet Healthcare Corp. 14,045,000
- -------------------------------------------------------------------------------
HOTEL & MOTEL: 1.7%
1,006,900 * Extended Stay America, Inc. 12,523,318
305,300 * Interstate Hotels Co. 10,704,581
-------------
23,227,899
- -------------------------------------------------------------------------------
</TABLE>

B-53
<PAGE>

DECEMBER 31, 1997

<TABLE>
<CAPTION>
VALUE
SHARES ISSUE (NOTE 1A)
- --------------------------------------------------------------------------------
COMMON STOCK: (CONTINUED)
- --------------------------------------------------------------------------------
<S> <C> <C>
INSURANCE: 2.5%
160,000 ACE Ltd. $ 15,440,000
70,500 Aetna, Inc. 4,974,656
382,800 + Provident Cos., Inc. 14,785,650
--------------
35,200,306
- --------------------------------------------------------------------------------
MEDICAL SUPPLY: 1.6%
155,600 + * Boston Scientific Corp. 7,138,150
553,700 * Trigon Healthcare, Inc. 14,465,413
--------------
21,603,563
- --------------------------------------------------------------------------------
METALS-STEEL & IRON: 0.1%
76,200 * Ispat International NV Cl. A 1,647,825
- --------------------------------------------------------------------------------
MINING: 0.1%
73,200 Chicago Bridge & Iron Co. NV 1,189,500
- --------------------------------------------------------------------------------
MISCELLANEOUS: 1.6%
506,800 Tyco International Ltd. 22,837,675
- --------------------------------------------------------------------------------
OFFICE & BUSINESS EQUIPMENT: 8.6%
392,400 * Cisco Systems, Inc. 21,900,825
344,900 Compaq Computer Corp. 19,465,294
114,200 Diebold, Inc. 5,781,375
462,600 * EMC Corp. 12,692,587
228,500 Hewlett-Packard Co. 14,281,250
2,156,600 + * Iomega Corp. 26,822,713
486,800 + * Sun Microsystems, Inc 19,441,575
---------------
120,385,619
- --------------------------------------------------------------------------------
OIL-SERVICES: 0.9%
113,000 + Ensco International, Inc. 3,785,500
38,000 * NewPark Resources, Inc. 665,000
94,000 Schlumberger Ltd. 7,567,000
----------------
12,017,500
- --------------------------------------------------------------------------------
POLLUTION CONTROL: 0.3%
97,900 * USA Waste Services, Inc. 3,842,575
- --------------------------------------------------------------------------------
PRINTING & PUBLISHING: 0.7%
277,800 Valassis Communications, Inc. 10,278,600
- --------------------------------------------------------------------------------
RESTAURANT: 0.2%
185,200 + Apple South, Inc. 2,436,537
- --------------------------------------------------------------------------------
RETAIL GROCERY: 1.5%
338,900 Safeway, Inc. 21,435,425
- --------------------------------------------------------------------------------
RETAIL TRADE: 9.4%
73,000 + * Abercrombie & Fitch Co. Cl. A $ 2,281,250
591,900 * Borders Group, Inc. 18,533,869
43,000 CVS Corp. 2,754,687
196,800 Dayton-Hudson Corp. 13,284,000
425,000 * Jones Apparel Group, Inc. 18,275,000
352,400 * Linens 'n Things, Inc. 15,373,450
484,575 * Men's Wearhouse, Inc. 16,960,125
457,000 + * Proffitts, Inc. 12,995,938
619,800 * Sunglass Hut International, Inc. 3,931,856
821,800 * Toys 'R Us, Inc. 25,835,338
----------------
130,225,513
- --------------------------------------------------------------------------------
SOFTWARE: 5.0%
176,000 + * Ascend Communications, Inc. 4,328,500
421,800 Computer Associates International, Inc. 22,302,675
125,100 * Geoworks 1,188,450
148,300 * i2 Technologies, Inc. 7,827,459
269,800 * Industri Matematik International Corp. 7,975,962
126,100 * Microsoft Corp. 16,294,484
406,900 * Oracle Systems Corp. 9,066,241
388 * Structural Dynamics Research Corp. 8,730
----------------
68,992,501
- --------------------------------------------------------------------------------
TELECOMMUNICATIONS EQUIPMENT & SERVICES: 1.5%
147,000 + * China Telecom (Hong Kong) Ltd. ADR 4,933,687
207,400 * Networks Associates, Inc. 10,946,831
88,300 * Qwest Communications International, Inc. 5,242,813
----------------
21,123,331
- --------------------------------------------------------------------------------
TEXTILES & APPAREL: 1.9%
452,500 * The Timberland Co. Cl. A 26,273,281
- --------------------------------------------------------------------------------
TOBACCO: 1.1%
328,400 Philip Morris Cos., Inc. 14,880,625
- --------------------------------------------------------------------------------
UTILITIES-TELEPHONE: 2.0%
651,200 MCI Communications Corp. 27,899,850
- --------------------------------------------------------------------------------
TOTAL COMMON STOCK
(Cost: $1,102,633,693)................. 1,299,533,870
------------------
- --------------------------------------------------------------------------------
</TABLE>

B-54
<PAGE>

METROPOLITAN SERIES FUND, INC.

SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
STATE STREET RESEARCH AGGRESSIVE GROWTH PORTFOLIO

DECEMBER 31, 1997

26,000,000 American Express
Credit Corp. 6.015% 1/13/98 26,000,000

9,989,000 Deere (John) Capital
Corp. 5.930% 1/05/98 9,989,000

916,000 Ford Motor Credit Co. 6.000% 1/06/98 916,000
2,745,000 Ford Motor Credit Co. 5.850% 1/09/98 2,745,000
20,819,000 Ford Motor Credit Co. 5.750% 1/06/98 20,819,000
20,000,000 General Electric
Capital Corp. 6.080% 1/08/98 20,000,000
--------------
TOTAL SHORT TERM OBLIGATIONS
(Cost: $82,499,000)........................................ 82,499,000
--------------
- ----------------------------------------------------------------------------------------------
TOTAL INVESTMENTS: 99.3%
(Cost: $1,185,132,693)..................................... 1,382,032,870

OTHER ASSETS LESS LIABILITIES: 0.7%........................ 9,922,742
--------------
NET ASSETS: 100.0%......................................... $1,391,955,612
==============
- ----------------------------------------------------------------------------------------------
</TABLE>

LEGEND:
- ------
* Non-income producing security.
+ Securities on loan.

ADR (American depository receipt) represents ownership of foreign securities.

SECURITIES LENDING: (Note 7)
- ----------------------------
As of December 31, 1997, the market value of securities loaned was $118,560,118
with collateral backing valued at $120,801,619.

See Notes to Financial Statements.

B-55
<PAGE>

METROPOLITAN SERIES FUND, INC

SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
METLIFE STOCK INDEX PORTFOLIO
DECEMBER 31, 1997

<TABLE>
<CAPTION>
Value
Shares Issue (Note 1A)
- -------------------------------------------------------------------------------
COMMON STOCK: 99.3%
- -------------------------------------------------------------------------------
<S> <C> <C>
Aerospace: 2.0%
132,600 Allied-Signal, Inc. $ 5,163,112
250,524 Boeing Co. 12,260,018
35,700 +General Dynamics Corp. 3,085,819
44,313 Lockheed Martin Corp. 4,364,831
12,400 Northrop Grumman Corp. 1,426,000
1 Raytheon Co. Cl. A 36
90,100 +Raytheon Co. Cl. B 4,550,050
48,600 +Rockwell International Corp. 2,539,350
49,800 Textron, Inc. 3,112,500
56,800 United Technologies Corp. 4,135,750
------------
40,637,466
- -------------------------------------------------------------------------------
Automotive: 2.3%
54,700 *AutoZone, Inc. 1,586,300
157,300 Chrysler Corp. 5,534,994
32,500 Dana Corp. 1,543,750
18,000 +Eaton Corp. 1,606,500
34,900 Echlin, Inc. 1,262,944
312,300 Ford Motor Co. 15,205,106
177,932 General Motors Corp. 10,787,127
42,300 Genuine Parts Co. 1,435,556
91,710 *Navistar International Corp. 2,275,554
11,730 PACCAR, Inc. 616,558
41,950 Snap-On, Inc. 1,830,069
33,200 TRW, Inc. 1,772,050
------------
45,456,508
- -------------------------------------------------------------------------------
Banking: 9.1%
32,800 Ahmanson (H.F.) & Co. 2,195,550
171,495 Banc One Corp. 9,314,322
38,640 Bank of Boston Corp. 3,629,745
87,000 Bank of New York Co., Inc. 5,029,687
192,552 BankAmerica Corp. 14,056,296
32,900 Bankers Trust New York Corp. 3,699,194
54,300 Barnett Banks, Inc. 3,902,812
35,800 *BB&T Corp. 2,293,437
111,634 Chase Manhattan Corp. 12,223,923
116,314 +Citicorp 14,706,451
39,900 +Comerica, Inc. 3,600,975
55,500 CoreStates Financial Corp. 4,443,469
33,600 Fifth Third Bancorp 2,744,700
69,358 First Chicago NBD Corp. 5,791,393
164,170 First Union Corp. 8,413,712
61,415 +Fleet Financial Group, Inc. 4,602,287
22,000 Golden West Financial Corp. 2,151,875
100,700 +Green Tree Financial Corp. 2,637,081
52,000 +Huntington Bancshares, Inc. 1,868,750
56,103 KeyCorp 3,972,794
122,962 MBNA Corp. 3,358,400
54,000 Mellon Bank Corp. 3,273,750
40,799 +Morgan (J.P.) & Co., Inc. 4,605,187
48,300 National City Corp. 3,175,725
198,128 +NationsBank Corp. 12,048,659
208,200 +Norwest Corp. 8,041,725
72,700 PNC Bank Corp. 4,148,444
16,000 Republic New York Corp. 1,827,000
39,400 State Street Corp. 2,292,588
59,200 SunTrust Banks, Inc. 4,225,400
61,500 +Synovus Financial Corp. 2,014,125
65,509 +U.S. Bancorp 7,332,914
54,100 Wachovia Corp. 4,388,863
62,680 Washington Mutual, Inc. 3,997,809
24,263 Wells Fargo & Co. 8,235,772
------------
184,244,814
- --------------------------------------------------------------------------------
Broadcastinnng: 1.7%
160,600 *CBS Corp. 4,727,662
25,800 +*Clear Channel Communications, Inc. 2,049,487
92,300 Comcast Corp. Cl. A Spl. 2,910,334
52,900 +King World Productions, Inc. 3,054,975
150,000 +*Tele-Comm TCI Group Cl. A 4,185,938
137,720 +Time Warner, Inc. 8,538,640
197,500 *U.S. West, Inc.-Media Group 5,702,813
</TABLE>

B-56
<PAGE>

METROPOLITAN SERIES FUND, INC

SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
METLIFE STOCK INDEX PORTFOLIO
DECEMBER 31, 1997

<TABLE>
<CAPTION>
Value
Shares Issue (Note 1A)
- --------------------------------------------------------------------------------
COMMON STOCK: (CONTINUED)
- --------------------------------------------------------------------------------
<S> <C> <C>
Broadcasting: (Continued)
91,426 *Viacom, Inc. Cl. B $ 3,788,465
-----------
34,958,314
- --------------------------------------------------------------------------------
Building & Construction: 0.7%
7,500 +Armstrong World Industries, Inc. 560,625
36,000 Crane Co. 1,561,500
48,800 Dover Corp. 1,762,900
42,300 +Mallinckrodt, Inc. 1,607,400
41,000 +Masco Corp. 2,085,875
17,300 Owens-Corning Fiberglas Corp. 590,363
27,200 Sherwin-Williams Co. 754,800
49,100 +Stanley Works 2,316,906
56,000 Willamette Industries, Inc. 1,802,500
-----------
13,042,869
- -------------------------------------------------------------------------------
Business Services: 1.2%
75,700 Automatic Data Processing, Inc. 4,646,087
37,000 Block (H & R), Inc. 1,658,063
184,979 *Cendant Corp. 6,358,668
33,700 +Deluxe Corp. 1,162,650
19,200 Ecolab, Inc. 1,064,400
98,900 +First Data Corp. 2,892,825
50,500 HBO & Co. 2,422,422
38,700 +Interpublic Group of Cos., Inc. 1,927,744
17,600 Safety-Kleen Corp. 482,900
65,600 Service Corp. International 2,423,100
-----------
25,038,859
- -------------------------------------------------------------------------------
Chemicals: 2.7%
20,100 Air Products & Chemicals, Inc. 1,653,225
58,500 Dow Chemical Co. 5,937,750
286,300 Du Pont (E.I.) de Nemours & Co. 17,195,894
14,675 Eastman Chemical Co. 874,080
18,700 *FMC Corp. 1,258,744
43,800 Grace (W.R.) & Co. 3,523,162
29,300 Great Lakes Chemical Corp. 1,314,837
40,500 Hercules, Inc. 2,027,531
149,900 Monsanto Co. 6,295,800
28,800 Nalco Chemical Co. 1,139,400
122,900 Pall Corp. 2,542,494
43,600 PPG Industries, Inc. 2,490,650
24,500 Praxair, Inc. 1,102,500
22,000 Rohm & Haas Co. 2,106,500
37,000 Sigma Aldrich Corp. 1,466,125
44,100 Union Carbide Corp. 1,893,544
81,600 +Williams Cos., Inc. 2,315,400
-----------
55,137,636
- -------------------------------------------------------------------------------
Containers & Glass: 0.3%
56,400 +Bemis Co., Inc. 2,485,125
59,600 Crown Cork & Seal Co., Inc. 2,987,450
-----------
5,472,575
- -------------------------------------------------------------------------------
Cosmetics: 0.3%
49,200 +Alberto-Culver Co. Cl. B Cvt. 1,577,475
29,200 Avon Products, Inc. 1,792,150
41,600 International Flavors & Fragrances, Inc. 2,142,400
-----------
5,512,025
- -------------------------------------------------------------------------------
Drugs & Health Care: 7.8%
34,100 Allergan, Inc. 1,144,481
58,300 +*ALZA Corp. 1,854,669
166,500 American Home Products Corp. 12,737,250
55,000 Amgen, Inc. 2,976,875
39,800 Bard (C.R.), Inc. 1,246,237
42,600 Bausch & Lomb, Inc. 1,688,025
62,100 Biomet, Inc. 1,587,431
254,200 Bristol-Myers Squibb Co. 24,053,675
25,800 Cardinal Health, Inc. 1,938,225
99,300 *HEALTHSOUTH Corp. 2,755,575
294,200 Lilly (Eli) & Co. 20,483,675
317,900 +Merck & Co., Inc. 33,776,875
334,100 Pfizer, Inc. 24,911,331
130,715 Pharmacia & Upjohn, Inc. 4,787,437
188,600 Schering-Plough Corp. 11,716,775
</TABLE>

B-57
<PAGE>

METROPOLITAN SERIES FUND, INC.

Schedule of Investments
- --------------------------------------------------------------------------------
METLIFE STOCK INDEX PORTFOLIO
DECEMBER 31, 1997

<TABLE>
<CAPTION>
VALUE
SHARES ISSUE (NOTE 1A)
- ----------------------------------------------------------------
COMMON STOCK: (CONTINUED)
- ----------------------------------------------------------------
<S> <C> <C>
DRUGS & HEALTH CARE: (CONTINUED)
35,100 +*St. Jude Medical, Inc. $ 1,070,550
69,400 Warner-Lambert Co. 8,605,600
-----------
157,334,686
- ---------------------------------------------------------------
ELECTRICAL EQUIPMENT: 4.1%
43,600 AMP, Inc. 1,831,200
11,200 Black & Decker Corp. 437,500
10,200 +Briggs & Stratton Corp. 495,337
113,800 Emerson Electric Co. 6,422,587
865,900 General Electric Co. 63,535,412
23,600 General Signal Corp. 995,625
20,600 Grainger (W.W.), Inc. 2,002,062
24,400 Johnson Controls, Inc. 1,165,100
29,000 National Service Industries, Inc. 1,437,313
37,200 +Raychem Corp. 1,601,925
37,000 Tandy Corp. 1,426,813
25,100 Thomas & Betts Corp. 1,185,975
-----------
82,536,849
- ---------------------------------------------------------------
ELECTRONICS: 4.2%
35,500 *Advanced Micro Devices, Inc. 636,781
86,550 +Andrew Corp. 2,074,495
81,200 *Applied Materials, Inc. 2,443,612
65,500 *DSC Communications Corp. 1,567,906
28,600 Harris Corp. 1,312,025
22,500 +Honeywell, Inc. 1,541,250
425,800 Intel Corp. 29,899,144
23,600 +*KLA Instruments Corp. 910,813
115,900 *LSI Logic Corp. 2,289,025
161,197 Lucent Technologies, Inc. 12,875,610
40,700 *Micron Technology, Inc. 1,058,200
154,800 Motorola, Inc. 8,833,275
105,000 +*National Semiconductor Corp. 2,723,438
68,200 Northern Telecom Ltd. 6,069,800
22,900 Perkin-Elmer Corp. 1,627,331
71,900 Scientific-Atlanta, Inc. 1,204,325
42,300 +*Tellabs, Inc. 2,232,647
92,000 +Texas Instruments, Inc. 4,140,000
29,500 +*Thermo Electron Corp. 1,312,750
-----------
84,752,427
- ---------------------------------------------------------------
ENTERTAINMENT & LEISURE: 0.9%
43,600 Brunswick Corp. 1,321,625
175,599 Disney (Walt) Co. 17,395,276
-----------
18,716,901
- ---------------------------------------------------------------
FINANCIAL SERVICES: 4.2%
123,387 +American Express Co. 11,012,290
17,000 Beneficial Corp. 1,413,125
60,300 Charles Schwab Corp. 2,528,831
51,400 Countrywide Credit Industries, Inc. 2,203,775
166,600 Federal Home Loan Mortgage Corp. 6,986,787
279,700 +Federal National Mortgage Assoc. 15,960,381
23,200 Hartford Financial Services Group,
Inc. 2,170,650
24,900 Household International, Inc. 3,176,306
39,100 Loews Corp. 4,149,488
84,500 Merrill Lynch & Co., Inc. 6,163,219
32,800 +MGIC Investment Corp. 2,181,200
141,241 +Morgan Stanley, Dean Witter,
Discovery & Co. 8,350,874
20,400 Transamerica Corp. 2,172,600
301,484 Travelers Group, Inc. 16,242,451
-----------
84,711,977
- ---------------------------------------------------------------
FOOD & BEVERAGES: 5.7%
127,900 Anheuser-Busch Co., Inc. 5,627,600
140,753 Archer-Daniels-Midland Co. 3,052,581
36,400 Brown-Forman Corp. Cl. B 2,011,100
113,400 Campbell Soup Co. 6,591,375
656,000 Coca-Cola Co. 43,706,000
99,700 ConAgra, Inc. 3,271,406
11,800 Coors (Adolph) Co. Cl. B 391,613
36,500 CPC International, Inc. 3,932,875
41,400 *General Mills, Inc. 2,965,275
103,700 Heinz (H.J.) Co. 5,269,256
33,600 Hershey Foods Corp. 2,081,100
</TABLE>

B-58
<PAGE>

METROPOLITAN SERIES FUND, INC.

Schedule of Investments
- --------------------------------------------------------------------------------
METLIFE STOCK INDEX PORTFOLIO
DECEMBER 31, 1997

<TABLE>
<CAPTION>
VALUE
SHARES ISSUE (NOTE 1A)
- ----------------------------------------------------------------
COMMON STOCK: (CONTINUED)
- ----------------------------------------------------------------
<S> <C> <C>
FOOD & BEVERAGES: (CONTINUED)
106,500 Kellogg Co. $ 5,285,063
381,000 PepsiCo, Inc. 13,882,688
19,200 +Pioneer Hi Bred International, Inc. 2,059,200
35,700 Quaker Oats Co. 1,883,175
122,900 Sara Lee Corp. 6,920,806
33,000 +Sysco Corp. 1,503,563
59,800 Whitman Corp. 1,558,538
29,500 Wrigley (Wm.), Jr. Co. 2,347,094
-----------
114,340,308
- ---------------------------------------------------------------
FOREST PRODUCTS & PAPER: 1.1%
37,000 Boise Cascade Corp. 1,119,250
44,500 Champion International Corp. 2,016,406
46,900 Fort James Corp. 1,793,925
14,700 +Georgia-Pacific Corp. 893,025
70,900 International Paper Co. 3,057,563
135,720 Kimberly-Clark Corp. 6,692,693
32,100 Louisiana-Pacific Corp. 609,900
49,000 +Mead Corp. 1,372,000
16,200 Temple Inland, Inc. 847,463
17,100 Union Camp Corp. 918,056
18,300 Westvaco Corp. 575,306
45,200 Weyerhaeuser Co. 2,217,625
-----------
22,113,212
- ---------------------------------------------------------------
HOSPITAL MANAGEMENT: 0.5%
148,385 Columbia/HCA Healthcare Corp. 4,395,906
48,600 *Humana, Inc. 1,008,450
57,100 Manor Care, Inc. 1,998,500
87,100 *Tenet Healthcare Corp. 2,885,188
14,900 United Healthcare Corp. 740,344
-----------
11,028,388
- ---------------------------------------------------------------
HOTEL & MOTEL: 0.3%
68,900 Hilton Hotels Corp. 2,095,938
27,100 Marriott International 1,876,675
64,700 *Mirage Resorts, Inc. 1,471,925
-----------
5,444,538
- ---------------------------------------------------------------
HOUSEHOLD APPLIANCES & HOME FURNISHINGS: 0.2%
49,800 +Maytag Corp. 1,858,163
58,400 Newell Co. 2,482,000
8,600 Whirlpool Corp. 473,000
-----------
4,813,163
- ---------------------------------------------------------------
HOUSEHOLD PRODUCTS: 3.2%
19,200 Clorox Co. 1,518,000
70,200 +Colgate-Palmolive Co. 5,159,700
45,600 Corning, Inc. 1,692,900
158,500 Gillette Co. 15,919,344
354,900 Procter & Gamble Co. 28,325,456
51,400 Rubbermaid, Inc. 1,285,000
30,200 Tupperware Corp. 841,825
157,600 +Unilever NV 9,840,150
-----------
64,582,375
- ---------------------------------------------------------------
INSURANCE: 4.0%
37,400 Aetna, Inc. 2,639,037
104,399 Allstate Corp. 9,487,259
78,770 +American General Corp. 4,258,503
182,425 American International Group, Inc. 19,838,719
42,450 Aon Corp. 2,488,631
45,600 Chubb Corp. 3,448,500
18,100 +CIGNA Corp. 3,132,431
14,600 +*Cincinnati Financial Corp. 2,053,125
33,400 +Conseco Co., Inc. 1,517,612
45,800 Equifax, Inc. 1,623,037
19,400 General Re Corp. 4,112,800
32,800 Jefferson-Pilot Corp. 2,554,300
40,000 +Lincoln National Corp. 3,125,000
35,600 Marsh & McLennan Cos., Inc. 2,654,425
26,000 MBIA, Inc. 1,737,125
17,200 Progressive Corp. 2,061,850
21,800 Providian Financial Corp. 985,088
37,900 SAFECO Corp. 1,845,256
21,700 St. Paul Cos., Inc. 1,780,756
46,650 SunAmerica, Inc. 1,994,288
</TABLE>

B-59
<PAGE>

METROPOLITAN SERIES FUND, INC.

SCHEDULE OF INVESTMENT
- --------------------------------------------------------------------------------
METLIFE STOCK INDEX PORTFOLIO
December 31, 1997

<TABLE>
<CAPTION>
Value
Shares Issue (Note 1A)
- ---------------------------------------------------------------
COMMON STOCK: (CONTINUED)
- ---------------------------------------------------------------
<S> <C> <C>
Insurance: (Continued)
49,000 Torchmark Corp. $ 2,061,063
42,200 UNUM Corp. 2,294,625
99,900 +USF&G Corp. 2,204,044
-----------
79,897,474
- ---------------------------------------------------------------
Liquor: 0.1%
83,200 Seagram Ltd. 2,688,400
- ---------------------------------------------------------------
Machinery: 1.1%
46,000 Browning-Ferris Industries, Inc. 1,702,000
40,200 +Case Corp. 2,429,587
85,000 Caterpillar, Inc. 4,127,812
34,500 Cooper Industries, Inc. 1,690,500
18,900 +Cummins Engine Co., Inc. 1,116,281
49,800 +Deere & Co. 2,903,962
14,000 +*Fluor Corp. 523,250
6,000 Foster Wheeler Corp. 162,375
59,300 Illinois Tool Works, Inc. 3,565,413
36,150 +Ingersoll-Rand Co. 1,464,075
40,200 Parker Hannifin Corp. 1,844,175
-----------
21,529,430
- ---------------------------------------------------------------
Medical Supply: 2.6%
192,600 +Abbott Laboratories, Inc. 12,627,337
62,700 +Baxter International, Inc. 3,162,431
29,600 Becton, Dickinson & Co. 1,480,000
42,400 +*Boston Scientific Corp. 1,945,100
37,800 Guidant Corp. 2,353,050
347,000 Johnson & Johnson 22,858,625
107,600 +Medtronic, Inc. 5,628,825
68,400 +United States Surgical Corp. 2,004,975
-----------
52,060,343
- ---------------------------------------------------------------
Metals-Aluminum: 0.2%
33,600 Alcan Aluminium Ltd. 928,200
37,500 Aluminum Co. of America 2,639,062
18,700 Reynolds Metals Co. 1,122,000
-----------
4,689,262
- ---------------------------------------------------------------
Metals-Gold: 0.2%
79,100 +Barrick Gold Corp. 1,473,237
42,100 +Echo Bay Mines Ltd. 102,619
67,300 +Homestake Mining Co. 597,287
35,994 Newmont Mining Corp. 1,057,324
111,000 +Placer Dome, Inc. 1,408,313
-----------
4,638,780
- ---------------------------------------------------------------
Metals-Non-Ferrous: 0.1%
12,600 +ASARCO, Inc. 282,712
76,650 Engelhard Corp. 1,331,794
30,106 Inco Ltd. 511,802
-----------
2,126,308
- ---------------------------------------------------------------
Metals-Steel & Iron: 0.2%
9,500 *Bethlehem Steel Corp. 81,938
10,400 Inland Steel Industries, Inc. 178,100
13,700 Nucor Corp. 661,881
46,394 +USX US Steel Group 1,449,823
46,600 Worthington Industries, Inc. 765,988
-----------
3,137,730
- ---------------------------------------------------------------
Mining: 0.1%
83,900 +Freeport-McMoRan Copper & Gold, Inc. 1,321,425
Cl. B
21,100 +Phelps-Dodge Corp. 1,313,475
-----------
2,634,900
- ---------------------------------------------------------------
Miscellaneous: 0.6%
43,700 +Allegheny Teldyne, Inc. 1,130,737
29,300 Cognizant Corp. 1,305,681
49,400 Fortune Brands, Inc. 1,830,887
25,100 Ralston-Purina Group 2,332,731
135,400 Tyco International Ltd. 6,101,463
-----------
12,701,499
- ---------------------------------------------------------------
Multi-Industry: 0.6%
25,400 +Harcourt General, Inc. 1,390,650
17,900 *ITT Corp. 1,483,463
31,000 ITT Industries, Inc. 972,625
108,600 Minnesota Mining & Manufacturing Co. 8,911,988
-----------
12,758,726
- ---------------------------------------------------------------
</TABLE>

B-60
<PAGE>

METROPOLITAN SERIES FUND, INC.

SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
METLIFE STOCK INDEX PORTFOLIO
DECEMBER 31, 1997

<TABLE>
<CAPTION>
VALUE
SHARES ISSUE (NOTE 1A)
- ---------------------------------------------------------------
COMMON STOCK: (CONTINUED)
- ---------------------------------------------------------------
<S> <C> <C>
Newspapers: 0.7%
50,300 Dow Jones & Co., Inc. $ 2,700,481
83,400 Gannett Co., Inc. 5,155,162
20,800 Knight-Ridder, Inc. 1,081,600
26,400 New York Times Co. Cl. A 1,745,700
18,900 +Times Mirror Co. Cl. A 1,162,350
21,400 Tribune Co. 1,332,150
------------
13,177,443
- ---------------------------------------------------------------
Office & Business Equipment: 5.4%
76,900 *3 Com Corp. 2,684,291
31,200 *Apple Computer, Inc. 408,525
39,800 +Avery Dennison Corp. 1,781,050
94,900 *Bay Networks, Inc. 2,425,881
93,900 *Cabletron Systems, Inc. 1,408,500
55,900 *Ceridian Corp. 2,560,919
252,000 *Cisco Systems, Inc. 14,064,750
210,330 Compaq Computer Corp. 11,870,499
38,400 +*Data General Corp. 669,600
79,600 +*Dell Computer Corp. 6,688,887
58,800 +*Digital Equipment Corp. 2,175,600
106,800 *EMC Corp. 2,930,325
274,200 Hewlett-Packard Co. 17,137,500
36,400 *IKON Office Solutions, Inc. 1,023,750
251,800 International Business Machines Corp. 26,328,838
38,200 Pitney Bowes, Inc. 3,435,613
50,200 *Seagate Technology 966,350
45,600 *Silicon Graphics, Inc. 567,150
79,900 *Sun Microsystems, Inc. 3,191,006
61,800 Unisys Corp. 857,475
76,200 Xerox Corp. 5,624,513
------------
108,801,022
- ---------------------------------------------------------------
Oil & Gas Exploration: 0.0%
37,350 Union Pacific Resources Group, Inc. 905,738
- ---------------------------------------------------------------
Oil-Domestic: 1.7%
41,500 +Amerada Hess Corp. 2,277,312
123,300 Amoco Corp. 10,495,912
31,100 +Ashland Oil, Inc. 1,669,681
75,900 Atlantic Richfield Co. 6,081,487
41,900 Kerr-McGee Corp. 2,652,794
83,300 +Occidental Petroleum Corp. 2,441,731
19,400 Pennzoil Co. 1,296,163
58,600 Phillips Petroleum Co. 2,849,425
26,100 Tenneco, Inc. 1,030,950
45,348 Unocal Corp. 1,760,069
62,200 USX-Marathon Group 2,099,250
------------
34,654,774
- ---------------------------------------------------------------
Oil-International: 5.3%
166,300 Chevron Corp. 12,805,100
643,500 Exxon Corp. 39,374,156
205,300 Mobil Corp. 14,820,094
588,900 +Royal Dutch Petroleum Co. 31,911,019
150,200 Texaco, Inc. 8,167,125
------------
107,077,494
- ---------------------------------------------------------------
Oil-Services: 1.2%
43,400 Baker Hughes, Inc. 1,893,325
39,400 +Coastal Corp. 2,440,337
63,200 +Dresser Industries, Inc. 2,650,450
54,000 Halliburton Co. 2,804,625
14,100 Helmerich & Payne, Inc. 957,037
21,300 McDermott International, Inc. 780,113
76,900 *Rowan Cos., Inc. 2,345,450
122,100 Schlumberger Ltd. 9,829,050
14,500 *Western Atlas, Inc. 1,073,000
------------
24,773,387
- ---------------------------------------------------------------
Photography: 0.3%
95,000 +Eastman Kodak Co. 5,777,187
21,200 +Polaroid Corp. 1,032,175
------------
6,809,362
- ---------------------------------------------------------------
Pollution Control: 0.2%
166,000 +Laidlaw, Inc. 2,261,750
</TABLE>

B-61
<PAGE>

METROPOLITAN SERIES FUND, INC

SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
METLIFE STOCK INDEX PORTFOLIO
DECEMBER 31, 1997

<TABLE>
<CAPTION>
VALUE
SHARES ISSUE (NOTE 1A)
- ---------------------------------------------------------------
COMMON STOCK: (CONTINUED)
- ---------------------------------------------------------------
<S> <C> <C>
Pollution Control: (Continued)
89,600 Waste Management, Inc. $ 2,464,000
-----------
4,725,750
- ---------------------------------------------------------------
Printing & Publishing: 0.3%
68,600 American Greetings Corp. Cl. A 2,686,119
61,700 Dun & Bradstreet Corp. 1,908,844
16,000 McGraw-Hill Cos., Inc. 1,184,000
30,400 Meredith Corp. 1,084,900
-----------
6,863,863
- ---------------------------------------------------------------
Restaurant: 0.5%
174,900 McDonald's Corp. 8,351,475
38,100 *Tricon Global Restaurants, Inc. 1,107,281
-----------
9,458,756
- ---------------------------------------------------------------
Retail Grocery: 0.5%
53,900 Albertson's, Inc. 2,553,512
50,200 American Stores Co. 1,032,237
73,800 Giant Foods, Inc. Cl. A 2,486,137
58,800 *Kroger Co. 2,171,925
48,700 +Winn-Dixie Stores, Inc. 2,127,581
-----------
10,371,392
- ---------------------------------------------------------------
Retail Trade: 4.2%
123,400 *Charming Shoppes, Inc. 574,581
35,300 Circuit City Stores, Inc. 1,255,356
53,767 *Costco Cos., Inc. 2,397,672
31,400 CVS Corp. 2,011,562
55,800 Dayton-Hudson Corp. 3,766,500
65,100 Dillards, Inc. Cl. A 2,294,775
44,500 +*Federated Department Stores 1,916,281
190,899 Home Depot, Inc. 11,239,179
220,800 *K Mart Corp. 2,553,000
59,900 Limited, Inc. 1,527,450
200 Longs Drug Stores Corp. 6,425
30,100 Lowes Cos., Inc. 1,435,394
51,900 +May Department Stores Co. 2,734,481
40,800 Nordstrom, Inc. 2,458,200
64,100 Penney (J.C.) Co., Inc. 3,866,031
38,600 Pep Boys-Manny, Moe & Jack 921,575
32,500 Rite Aid Corp. 1,907,344
85,600 Sears, Roebuck & Co. 3,873,400
65,300 SuperValu, Inc. 2,734,438
103,050 The Gap, Inc. 3,651,834
50,000 TJX Cos., Inc. 1,718,750
63,100 *Toys 'R Us, Inc. 1,983,706
592,700 Wal-Mart Stores, Inc. 23,374,606
123,600 Walgreen Co. 3,877,950
65,300 *Woolworth Corp. 1,330,488
-----------
85,410,978
- ---------------------------------------------------------------
Software: 2.9%
39,100 Adobe Systems, Inc. 1,610,431
130,350 Computer Associates International, 6,892,256
Inc.
314,300 *Microsoft Corp. 40,613,453
97,500 *Novell, Inc. 728,203
254,850 *Oracle Systems Corp. 5,678,377
30,800 +*Parametric Technology, Inc. 1,457,225
32,600 Shared Medical Systems 2,151,600
-----------
59,131,545
- ---------------------------------------------------------------
Textiles & Apparel: 0.3%
59,600 *Fruit of the Loom, Inc. Cl. A 1,527,250
23,500 +Liz Claiborne, Inc. 982,594
69,900 Nike, Inc. Cl. B 2,743,575
19,800 +*Reebok International Ltd. 570,488
4,200 +Russell Corp. 111,563
1,500 Springs Industries, Inc. 78,000
1,400 VF Corp. 64,313
-----------
6,077,783
- ---------------------------------------------------------------
Tires & Rubber: 0.3%
44,200 Cooper Tire & Rubber Co. 1,077,375
65,200 Goodrich (B.F.) Co. 2,701,725
26,400 Goodyear Tire & Rubber Co. 1,679,700
-----------
5,458,800
- ---------------------------------------------------------------
</TABLE>

B-62
<PAGE>

METROPOLTIAN SERIES FUND, INC.

SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
METLIFE STOCK INDEX PORTFOLIO
December 31, 1997

<TABLE>
<CAPTION>
VALUE
SHARES ISSUE (NOTE 1A)
- ---------------------------------------------------------------
COMMON STOCK: (CONTINUED)
- ---------------------------------------------------------------
<S> <C> <C>
Tobacco: 1.5%
630,200 Philip Morris Cos., Inc. $28,555,938
37,400 UST, Inc. 1,381,463
-----------
29,937,401
- ---------------------------------------------------------------
Toys & Amusements: 0.2%
41,850 Hasbro, Inc. 1,318,275
74,013 +Mattel, Inc. 2,756,984
-----------
4,075,259
- ----------------------------------------------------------------
Transportation-Airlines: 0.6%
22,500 *AMR Corp. 2,891,250
13,600 Delta Air Lines, Inc. 1,618,400
28,800 *Federal Express Corp. 1,758,600
104,850 Southwest Airlines Co. 2,581,931
36,700 +*USAirways Group, Inc. 2,293,750
-----------
11,143,931
- ----------------------------------------------------------------
Transportation-Railroad: 0.7%
36,101 Burlington Northern Santa Fe Corp. 3,355,137
77,200 CSX Corp. 4,168,800
87,600 Norfolk Southern Corp. 2,699,175
56,200 Union Pacific Corp. 3,508,988
-----------
13,732,100
- ----------------------------------------------------------------
Transportation-Trucking: 0.1%
35,800 Ryder Systems, Inc. 1,172,450
- ----------------------------------------------------------------
Utilities-Electric: 3.0%
48,000 American Electric Power Co., Inc. 2,478,000
28,700 +Baltimore Gas & Electric Co. 977,594
18,800 Carolina Power & Light Co. 797,825
36,000 Central & South West Corp. 974,250
66,792 CINergy Corp. 2,558,968
59,800 Consolidated Edison Co. of New York, 2,451,800
Inc.
69,000 +Dominion Resources, Inc. 2,936,812
48,000 DTE Energy Co. 1,665,000
108,534 Duke Energy Corp. 6,010,070
89,500 Edison International 2,433,281
30,400 +*FirstEnergy Corp. 881,600
46,300 FPL Group, Inc. 2,740,381
- ----------------------------------------------------------------
Utilities-Electric: (Continued)
55,100 +GPU, Inc. $ 2,321,087
75,745 Houston Industries, Inc. 2,021,445
96,000 *Niagara Mohawk Power Corp. 1,008,000
37,000 Northern States Power Co. 2,155,250
49,400 PacifiCorp 1,349,238
144,500 PG&E Corp. 4,398,219
29,800 +PP&L Resources, Inc. 713,338
100,600 Public Service Enterprise Group, Inc. 3,187,763
160,300 Southern Co. 4,147,763
53,445 Texas Utilities Co. 2,221,308
42,900 Unicom Corp. 1,319,175
21,500 +Union Electric Co. 929,875
229,800 *WorldCom, Inc. 6,958,631
------------
59,636,673
- ----------------------------------------------------------------
Utilities-Gas Distribution & Pipelines: 0.7%
41,740 +Burlington Resources, Inc. 1,870,474
17,000 Columbia Gas Systems, Inc. 1,335,562
21,100 Consolidated Natural Gas Co. 1,276,550
84,500 Enron Corp. 3,512,031
21,700 +NICOR, Inc. 915,469
35,729 ONEOK, Inc. 1,442,570
44,500 Pacific Enterprises 1,674,313
24,900 Peoples Energy Corp. 980,438
27,800 +Sonat, Inc. 1,271,850
------------
14,279,257
- ----------------------------------------------------------------
Utilities-Telephone: 6.4%
123,600 +*AirTouch Communications, Inc. 5,137,125
42,300 ALLTEL Corp. 1,736,944
161,300 +Ameritech Corp. 12,984,650
418,035 AT&T Corp. 25,604,644
204,162 +*Bell Atlantic Corp. 18,578,742
252,500 BellSouth Corp. 14,218,906
52,900 Frontier Corp. 1,272,906
248,700 GTE Corp. 12,994,575
</TABLE>

B-63
<PAGE>

METROPOLTIAN SERIES FUND, INC.

SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
METLIFE STOCK INDEX PORTFOLIO
December 31, 1997

<TABLE>
<CAPTION>
VALUE
SHARES ISSUE (NOTE 1A)
- ------------------------------------------------------------------
COMMON STOCK: (CONTINUED)
- ------------------------------------------------------------------
<S> <C> <C>
Utilities-Telephone: (Continued)
193,400 *MCI Communications Corp. $ 8,285,981
238,247 SBC Communications, Inc. - 17,451,593
111,400 +Sprint Corp. 6,530,825
118,700 U.S. West, Inc.-Communications Group 5,356,338
---------------
130,153,229
- ------------------------------------------------------------------

TOTAL COMMON STOCK
(Cost: $1,326,100,989) .............. 2,006,567,129
---------------
</TABLE>

<TABLE>
<CAPTION>
- ------------------------------------------------------------------
FACE INTEREST MATURITY VALUE
AMOUNT ISSUE RATE DATE (NOTE 1A)
- ------------------------------------------------------------------
SHORT TERM OBLIGATIONS: 0.5%
- ------------------------------------------------------------------
<S> <C> <C> <C> <C>
$8,750,000 Federal Home Loan
Bank 4.750% 1/02/98 $ 8,748,846
950,000 U.S. Treasury Bills 5.150% 1/22/98 947,146
---------------
TOTAL SHORT TERM OBLIGATIONS
(Cost: $9,695,992) .................. 9,695,992
---------------

- ------------------------------------------------------------------
TOTAL INVESTMENTS: 99.8%
(Cost: $1,335,796,981) .............. 2,016,263,121
OTHER ASSETS LESS LIABILITIES: 0.2%.. 4,216,915
---------------
NET ASSETS: 100.0%................... $ 2,020,480,036
===============
</TABLE>
- ----------------------------------------------------------------

LEGEND:
- -------
* Non-income producing security.
+ Securities on loan.
ADR (American depository receipt) represents ownership of foreign securities.

SECURITIES LENDING: (Note 7)
- ---------------------------
As of December 31, 1997, the market value of securities loaned was $145,914,149
with collateral backing valued at $149,054,407 (Note 7). Three securities on
loan were sold with a market value of $789,555 (collateral backing of $846,661),
which are reflected in the Statement of Assets and Liabilies included as
receivables for investment securities sold.

See Notes to Financial Statements.

B-64
<PAGE>

METROPOLITAN SERIES FUND, INC.

SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
STATE STREET RESEARCH INTERNATIONAL STOCK PORTFOLIO
DECEMBER 31, 1997

<TABLE>
<CAPTION>
VALUE
SHARES ISSUE (NOTE 1A)
- ----------------------------------------------------------------
COMMON STOCK: 93.0%
- ----------------------------------------------------------------
<S> <C> <C>
AUSTRALIA: 3.4%
301,200 *Amcor Ltd. $1,325,073
191,000 Australia Gas & Light Co., Ltd. 1,331,981
706,000 *Fosters Brewing Group Ltd. 1,343,595
238,200 GIO Australia Holdings Ltd. 609,033
261,400 *Mayne Nickless Ltd. 1,381,680
226,000 *QBE Insurance Group Ltd 1,017,370
120,000 *Rio Tinto Ltd. 1,400,193
1,322,500 Savage Resources C1. A 620,596
----------
Total Investments in Australia 9,029,521
- ----------------------------------------------------------------
AUSTRIA: 0.6%
6,969 EVN Energie-Versorgung AG 915,848
5,420 *OMV Handels AG 750,901
----------
Total Investments in Austria 1,666,749
- ----------------------------------------------------------------
BELGIUM: 1.4%
14,000 *Delhaize-Le Lion SA 710,372
7,518 GPE Bruxelles 1,087,595
5,395 *Petrofina SA 1,991,218
----------
Total Investments in Belgium 3,789,185
- ----------------------------------------------------------------
CANADA: 0.3%
282,330 .*Isleinvest Ltd. 37,537
615,000 .*Kemgas International Ltd. 688,569
----------
Total Investments in Canada 726,106
- ----------------------------------------------------------------
CHINA: 1.2%
595,000 .*Advanced Material Resources Ltd. 624,541
311,800 +*Beijing Enterprises Cl. A 800,725
1,472,000 *First Tractor Co. Cl. H 888,063
266,000 Shanghai Industrial Holdings 988,618
----------
Total Investments in China 3,301,947
- ----------------------------------------------------------------
DENMARK: 1.0%
22,400 *ISS International Service Systems SA
Cl. B 823,830
6,840 Novo-Nordisk AS Cl. B 978,298
12,350 *Unidanmark SA Cl. A 906,617
----------
Total Investments in Denmark 2,708,745
- ----------------------------------------------------------------
FRANCE: 9.8%
7,140 *Accor 1,327,517
13,026 Alcatel Alsthom 1,655,710
20,514 *Cap Gemini 1,682,090
24,376 Credit Commerce France 1,670,699
11,850 Dexia France 1,372,344
13,937 Eaux Cie Generale 1,945,182
19,044 Elf Aquitaine SA 2,214,971
9,650 *Havas SA 694,268
30,471 Lafarge SA 1,999,335
23,670 Michelin Cl. B 1,191,661
31,760 Pechiney International NV Cl. A 1,253,830
23,930 *Rhone-Poulenc SA Cl. A 1,071,949
10,501 Saint-Gobain 1,491,793
16,800 *Sanofi SA 1,870,233
25,509 Schneider SA 1,385,119
19,067 Total SA Cl. B 2,075,083
20,314 Valeo SA 1,377,781
----------
Total Investments in France 26,279,565
- ----------------------------------------------------------------
GERMANY: 6.4%
15,070 Allianz Holdings AG 3,903,733
51,495 *Commerzbank AG 2,026,652
15,495 Deutsche Bank AG 1,093,897
23,691 Deutsche Pfandbrief 1,403,853
78,722 Deutsche Telekom AG 1,481,275
59,205 Lufthansa AG 1,135,425
2,891 MAN AG 837,272
30,918 RWE AG 1,658,516
5,984 *SGL Carbon AG 771,721
6,016 Thyssen AG 1,287,507
2,668 *Viag AG 1,437,112
----------
Total Investments in Germany 17,036,963
- ----------------------------------------------------------------
HONG KONG: 2.2%
335,600 +*Cheung Kong Infrastructure Holdings Ltd. 948,463
429,000 +China Resources Enterprises Ltd. 957,762
240,000 +Citic Pacific Ltd. 953,930
147,000 Hutchison Whampoa Ltd. 921,951
</TABLE>

B-65
<PAGE>

METROPOLITAN SERIES FUND, INC.

SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
STATE STREET RESEARCH INTERNATIONAL STOCK PORTFOLIO
DECEMBER 31, 1997

<TABLE>
<CAPTION>
VALUE
SHARES ISSUE (NOTE 1A)
- ----------------------------------------------------------------
COMMON STOCK: (CONTINUED)
- ----------------------------------------------------------------
<S> <C> <C>
HONG KONG: (CONTINUED)
217,500 Johnson Electric Holdings Ltd. $ 625,919
178,000 New World Development Co., Ltd. 615,615
268,000 +Television Broadcasts Ltd. 764,331
-----------
Total Investments in Hong Kong 5,787,971
- ----------------------------------------------------------------
INDONESIA: 0.2%
3,296,000 *Indah Kiat Pulp & Paper Corp. 584,291
-----------
Total Investments in Indonesia 584,291
- ----------------------------------------------------------------
ITALY: 6.5%
75,000 *Aeroporti di Roma SPA 777,982
64,804 Assicuraziono Generali SPA 1,591,709
250,000 *Banca Commerciale Italiana SPA 869,135
2,350,000 *Banca di Roma SPA 2,371,255
774,128 Credito Italiano SPA 2,387,150
330,872 ENI SPA ADR 1,876,001
431,400 *Instituto Nazionale Delle 874,262
Assicurazioni SPA
300,138 *Mediaset SPA 1,474,392
1,647,717 Montedison SPA 1,480,058
183,858 *Rinascente SPA 1,371,920
332,474 *Telecom Italia SPA 2,123,774
-----------
Total Investments in Italy 17,197,638
- ----------------------------------------------------------------
JAPAN: 13.8%
178,000 *Alps Electric Co., Ltd. 1,676,802
458,000 *Amada Co., Ltd. 1,701,233
340,000 *Asahi Bank Ltd. 1,380,103
102,000 *Bank Of Tokyo 1,406,142
181,000 +Kangyo Bank Ltd. 1,067,397
577,000 *Gunze Ltd. 954,522
174,000 *Industrial Bank of Japan Ltd. 1,239,335
117,000 Ines Corp. 905,032
150,000 +Intec, Inc. 844,375
300,000 +*Izumiya Co., Ltd. 1,955,273
86,000 Kirin Brewery Co., Ltd. 625,718
788,000 *Mitsubishi Oil Co., Ltd. 1,164,770
896,000 *Mitsubishi Paper Mills Ltd. 1,255,786
31,500 *Nintendo Co., Ltd. 3,087,999
1,183,000 *Nippon Light Metal Co., Ltd. 1,721,452
722,000 *Nippon Sheet Glass Co., Ltd. 1,006,387
318 *Nippon Telephone & Telegraph 2,727,732
608,250 Nissan Fire & Marine Insurance 1,849,393
183,000 *Sankyo Seiki Manufacturing Co., Ltd. 1,146,465
252,000 *Seino Transportation Co., Ltd. 1,256,429
23,500 Shima Seiki Manufacturing Co. 880,103
56,000 Shimano, Inc. 1,029,333
135,000 *Shionogi & Co., Ltd. 618,289
129,000 *Sumitomo Bank Ltd. 1,472,084
84,000 *Tokyo Nissan Auto Sales Co., Ltd. 183,350
485,400 Tokyo Steel Manufacturing 1,639,438
72,000 *Tomy Co., Ltd. 887,800
609,000 *Toyo Ink Manufacturing Co. 1,072,758
-----------
Total Investments in Japan 36,755,500
- ----------------------------------------------------------------
MEXICO: 0.8%
64,700 +*Cemex SA de CV ADR 686,978
103,200 Grupo Carso SA de CV Cl. A 690,515
20,400 +*Grupo Televisa SA ADR 789,225
-----------
Total Investments in Mexico 2,166,718
- ----------------------------------------------------------------
NETHERLANDS: 4.4%
6,997 Akzo Nobel NV 1,206,397
31,700 *Benckiser Cl. B NV 1,311,681
37,657 ING Groep NV 1,586,027
45,000 *Koninklijke KNP BT NV 1,036,421
32,543 Koninklijke PTT 1,357,797
14,920 *Philips Electronics NV 894,766
64,187 Royal Dutch Petroleum Co. 3,523,297
13,900 *Vendex International NV 767,100
-----------
Total Investments in Netherlands 11,683,486
- ----------------------------------------------------------------
NORWAY: 1.4%
56,000 *Fred Olsen Energy ASA 1,160,064
27,365 *Nycomed Amersham 1,016,701
46,100 *Schibsted ASA 789,576
105,000 *Storebrand CL. A ASA 739,256
-----------
Total Investments in Norway 3,705,597
- ----------------------------------------------------------------
</TABLE>

B-66
<PAGE>

METROPOLITAN SERIES FUND, INC.

SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
STATE STREET RESEARCH INTERNATIONAL STOCK PORTFOLIO
DECEMBER 31, 1997

<TABLE>
<CAPTION>
VALUE
SHARES ISSUE (NOTE 1A)
- ---------------------------------------------------------------
COMMON STOCK: (CONTINUED)
- ---------------------------------------------------------------
<S> <C> <C>
PORTUGAL: 0.9%
40,880 *Banco Commercial Portugues SA $ 836,035
29,970 *Cimpor-Cimento de Portugal SA 785,522
46,850 *Electricidade de Portugal SA 887,108
----------
Total Investments in Portugal 2,508,665
- ---------------------------------------------------------------
SINGAPORE: 1.4%
167,000 City Development Ltd. 772,827
107,000 Development Bank of Singapore Ltd. 914,150
135,700 Singapore Airlines Ltd. 885,613
1,664,491 *Singapore Technologies Engineering 1,254,170
----------
Total Investments in Singapore 3,826,760
- ---------------------------------------------------------------
SOUTH KOREA: 1.5%
695,470 .*LG Electronics, Inc. GDR 144A 1,084,933
193,700 .Samsung Electronics Ltd. 144A 1,089,563
329,085 SK Telecom Ltd. ADR 1,727,696
----------
Total Investments in South Korea 3,902,192
- ---------------------------------------------------------------
SPAIN: 4.4%
27,000 *ACS Actividades SA 653,955
34,000 *Autopista Del Mare Nostrum 608,139
58,994 Banco Bilbao Vizcaya SA 1,909,028
16,232 Banco Popular Espagnol SA 1,134,695
138,800 *Corporacion Financiera Reunida SA 742,514
53,648 *Endesa SA 952,529
24,540 *Fomento de Construcciones y Contratas SA 934,243
27,449 Repsol SA 1,171,109
19,669 Tabacalera SA Cl. A 1,594,435
51,110 Telefonica de Espagna 1,459,327
60,300 *Uralita SA 688,690
-----------
Total Investments in Spain 11,848,664
- ---------------------------------------------------------------
SWEDEN: 2.5%
37,300 Autoliv AB SDR 1,214,379
20,220 *Electrolux AB Cl. B 1,403,194
31,810 *Pricer AB Cl. B 588,933
26,419 Skandia Foersaekrings AB 1,246,101
33,241 *Svenska Handelsbanken AB Cl. A 1,149,215
43,600 *Volvo AB Cl. B 1,169,637
-----------
Total Investments in Sweden 6,771,459
- ---------------------------------------------------------------
SWITZERLAND: 7.3%
10,260 Credit Suisse Group $1,586,887
884 Holderbank Financiere Glarus AG 721,139
2,400 Nestle SA 3,595,401
2,720 Novartis AG 4,411,716
500 Roche Holdings AG 4,963,386
4,927 *Swiss Bank Corp. AG 1,530,836
665 *Swiss Reinsurance AG 1,243,348
3,206 Zurich Versicherung AG 1,527,085
-----------
Total Investments in Switzerland 19,579,798
- ---------------------------------------------------------------
UKRAINE: 0.1%
1,100,000 [_]*Ashurst Technology Ltd. 230,923
-----------
Total Investments in Ukraine 230,923
- ---------------------------------------------------------------
UNITED KINGDOM: 21.5%
94,865 *Alliance & Leicester PLC 1,090,710
171,806 *Anglian Water PLC 2,342,188
128,996 *Bank of Scotland 1,171,674
56,151 *Barclays PLC 1,494,823
257,818 BAT Industries PLC 2,351,084
490,017 BG PLC 2,205,297
101,221 *Boots Co. PLC 1,457,229
83,792 *British Aerospace PLC 2,387,852
199,695 British Petroleum Co. PLC 2,641,671
264,026 British Telecom PLC 2,080,410
83,047 Commercial Union PLC 1,158,076
102,924 *Compass Group PLC 1,266,205
168,377 Energy Group PLC 1,858,478
53,081 *GKN PLC 1,087,204
147,131 Glaxo Wellcome PLC 3,507,685
184,253 Guinness PLC 1,685,680
252,107 *Hanson PLC 1,124,760
102,037 *HSBC Holdings PLC 2,648,013
106,421 *Kingfisher PLC 1,485,770
174,070 *Legal & General Group PLC 1,521,041
225,270 *Lloyds TSB Group PLC 2,930,669
53,247 *Logica PLC 1,017,139
205,518 Northern Foods PLC 891,167
</TABLE>

B-67
<PAGE>

METROPOLITAN SERIES FUND, INC.

SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
STATE STREET RESEARCH INTERNATIONAL STOCK PORTFOLIO
DECEMBER 31, 1997

<TABLE>
<CAPTION>
VALUE
SHARES ISSUE (NOTE 1A)
- ---------------------------------------------------------------
COMMON STOCK: (CONTINUED)
- ---------------------------------------------------------------
<S> <C> <C>
UNITED KINGDOM: (CONTINUED)
146,292 *Norwich Union PLC $ 877,039
74,804 *Provident Financial PLC 982,925
79,123 *Railtrack Group PLC 1,256,709
121,240 *Reuters Holdings PLC 1,324,259
256,042 *Scottish Hydro-Electric PLC 2,111,156
228,286 *SmithKline Beecham PLC 2,352,872
142,702 *Tesco PLC 1,176,722
212,729 Unilever PLC 1,829,846
215,538 *Vodafone Group PLC 1,557,693
69,731 *Zeneca Group PLC 2,469,965
-----------
TOTAL INVESTMENTS IN UNITED KINGDOM 57,344,011
-----------
TOTAL COMMON STOCK
(Cost: $253,072,695) ................. 248,432,454
-----------
- ---------------------------------------------------------------
PREFERRED STOCK: 1.5%
- ---------------------------------------------------------------
AUSTRIA: 0.7%
39,700 +*Bank of Austria AG 1,885,762
----------
Total Investments in Austria 1,885,762
- ---------------------------------------------------------------
GERMANY: 0.6%
11,200 *Henkel KGAA AG 706,634
2,470 *SAP AG 808,024
----------
Total Investments in Germany 1,514,658
- ---------------------------------------------------------------
UNITED KINGDOM: 0.2%
295,000 Upton & Southern Holdings PLC Cum.
Cvt. Pfd. 484,538
----------
Total Investments in United Kingdom 484,538
---------
TOTAL PREFERRED STOCK
(Cost: $3,476,575) ................... 3,884,958
----------
</TABLE>

<TABLE>
<CAPTION>
FACE INTEREST MATURITY VALUE
AMOUNT ISSUE RATE DATE (NOTE 1A)
- ---------------------------------------------------------------
SHORT TERM OBLIGATIONS: 4.1%
- ----------------------------------------------------------------
<S> <C> <C> <C> <C>
$11,000,00 Time Deposit 5.500% 1/05/98 $ 11,000,000
------------
TOTAL SHORT TERM OBLIGATIONS
(Cost: $11,000,000) ................. 11,000,000
------------

- ----------------------------------------------------------------
TOTAL INVESTMENTS: 98.6%
(Cost: $267,549,270) ................ 263,317,412
OTHER ASSETS LESS LIABILITIES: 1.4%.. 3,771,397
------------
NET ASSETS: 100.0%................... $267,088,809
============
- ----------------------------------------------------------------
</TABLE>

LEGEND:
- ---------
* Non-income producing security.
+ Securities on loan.
. Restricted security
[_] Illiquid security.
ADR (American depository receipt) represents ownership of foreign
securities.

SECURITIES LENDING: (Note 7)
- ----------------------------
As of December 31, 1997, the market value of securities loaned was $4,532,533
with collateral backing valued at $4,800,353.

RESTRICTED SECURITIES: (Note 2)
- -------------------------------

<TABLE>
<CAPTION>
Valuation as of
Acquisition Acquisition December 31,
Issue Date Cost 1997
----- ---- ---- ----
<S> <C> <C> <C>
Advanced Material
Resources Ltd............... 4/25/94-6/27/96 $ 1,353,869 $ 624,541
Isleinvest Ltd.............. 12/16/94-7/03/95 1,399,554 37,537
Kemgas International Ltd.... 10/18/94-10/02/95 1,405,405 688,569
LG Electronics, Inc. GDR
144A........................ 5/21/97 1,664,184 1,084,933
Samsung Electronics Ltd.
144A........................ 1/17/97 1,672,750 1,089,563
</TABLE>

The aggregate value of restricted securities at December 31, 1997 was $3,525,143
or 1.32% of the State Street Research International Stock Portfolio's net
assets.

See Notes to Financial Statements.

B-68
<PAGE>

METROPOLITAN SERIES FUND, INC.

INDUSTRY DIVERSIFICATION
- --------------------------------------------------------------------------------
STATE STREET RESEARCH INTERNATIONAL STOCK PORTFOLIO
AS A PERCENTAGE OF TOTAL VALUE OF INVESTMENTS

<TABLE>
<S> <C>
Aerospace.................... 0.9%
Automotive................... 1.9
Banking...................... 16.0
Broadcasting................. 1.1
Building & Construction...... 0.6
Business Services............ 2.3
Chemicals.................... 1.8
Construction Materials....... 2.8
Consumer Products............ 0.7
Containers & Glass........... 0.4
Drugs & Health Care.......... 8.2
Electrical Equipment......... 0.8
Electronics.................. 2.9
Energy....................... 0.4
Entertainment & Leisure...... 1.2
Financial Services........... 4.5
Food & Beverages............. 4.2
Forest Products & Paper...... 1.6
General Business............. 0.2
Household Appliances & Home
Furnishings.................. 0.9
Household Products........... 0.5
Insurance.................... 7.5
Machinery.................... 2.0
Metals-Non-Ferrous........... 1.9
Metals-Steel & Iron.......... 1.1
Mining....................... 0.2
Miscellaneous................ 0.4
Multi-Industry............... 3.7
Newspapers................... 0.3
Oil & Gas Exploration........ 1.3
Oil-International............ 5.3
Personal Care................ 0.2
Printing & Publishing........ 0.5
Real Estate.................. 1.3
Retail Trade................. 3.6
Software..................... 0.3
Telecommunications Equipment
& Services................... 1.8
Textiles & Apparel........... 0.4
Tires & Rubber............... 0.5
Toys & Amusements............ 1.2
Transportation-Airlines...... 1.1
Transportation-Railroad...... 1.5
Utilities-Electric........... 1.8
Utilities-Gas Distribution &
Pipelines.................... 0.6
Utilities-Miscellaneous...... 3.2
Utilities-Telephone.......... 4.4
-----
100.0%
=====
</TABLE>

See Notes to Financial Statements.

B-69
<PAGE>

METROPOLITAN SERIES FUNDS, INC.
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
LOOMIS SAYLES HIGH YIELD BOND PORTFOLIO
DECEMBER 31, 1997

<TABLE>
<CAPTION>
VALUE
SHARES ISSUE (NOTE 1A)
- -------------------------------------------------------------------------------------------
COMMON STOCK: 2.2%
- -------------------------------------------------------------------------------------------
<S> <C> <C>
BANKING: 0.1%
26,000 * Siam Commercial Bank PLC $ 29,699
- -------------------------------------------------------------------------------------------
FOREST PRODUCTS & PAPER: 0.6%
967,500 * Indah Kiat Paper & Pulp Corp. 171,511
- -------------------------------------------------------------------------------------------
REAL ESTATE: 1.1%
9,000 Associated Estates Realty Corp. 213,187
7,200 Berkshire Realty Co., Inc. 86,400
-------------
299,587
- -------------------------------------------------------------------------------------------
UTILITIES-ELECTRIC: 0.4%
4,000 Eastern Utilities Associates 105,000
- -------------------------------------------------------------------------------------------
UTILITIES-TELEPHONE: 0.0%
325 * Nextel Communications, Inc. Cl. A 8,409
-------------
TOTAL COMMON STOCK
(Cost: $747,917)........................................ 614,206
-------------
- -------------------------------------------------------------------------------------------
PREFERRED STOCK: 1.6%
- -------------------------------------------------------------------------------------------
METALS-STEEL & IRON: 1.0%
6,500 . Bethleham Steel Corp. Cvt. Pfd. Ser. B 144A 269,750
- -------------------------------------------------------------------------------------------
OIL-SERVICES: 0.1%
800 McDermott, Inc. Cvt. 2.20% Pfd. Ser. A 30,400
- -------------------------------------------------------------------------------------------
TRANSPORTATION-TRUCKING: 0.2%
1,600 Arkansas Best Corp. Cvt. Pfd. Ser. A 66,800
- -------------------------------------------------------------------------------------------
UTILITIES-ELECTRIC: 0.3%
505 Central Maine Power Co. 3.50% Pfd. 22,851
50 Niagara Mohawk Power Corp. 4.85% Pfd. 3,275
100 Niagara Mohawk Power Corp. Ser. B Adj. 2,544
200 Niagara Mohawk Power Corp. 3.60% Pfd. 9,300
200 Niagara Mohawk Power Corp. 3.90% Pfd. 10,200
200 Niagara Mohawk Power Corp. Ser. C Adj. 4,800
630 Niagara Mohawk Power Corp. 3.40% Pfd. 28,429
100 Toledo Edison Co. 4.25% Pfd. 5,937
-------------
87,336
-------------
TOTAL PREFERRED STOCK
(Cost: $399,309)........................................ 454,286
-------------
</TABLE>

<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------
FACE INTEREST MATURITY VALUE
AMOUNT ISSUE RATE DATE (NOTE 1A)
- -------------------------------------------------------------------------------------------
CONVERTIBLE BONDS: 26.5%
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
BROADCASTING: 0.4%
$150,000 Comcast Corp. Sub. Deb. 1.125% 4/15/98-07 96,750
- ---------------------------------------------------------------------------------------------
BUSINESS SERVICES: 0.6%
$200,000 . Physicians Resource
Group, Inc. 144A 6.000% 12/01/99-01 152,250
- ---------------------------------------------------------------------------------------------
COMPUTER EQUIPMENT & SERVICE: 3.7%
300,000 Apple Computer, Inc. Sub. 6.000% 6/01/99-01 241,500
155,000 Cray Research, Inc. Sub. 6.125% 2/01/96-11 119,350
300,000 S3, Inc. Sub. 5.750% 10/01/99-03 201,375
540,000 . Softkey International,
Inc. Sr. 144A 5.500% 11/01/98-00 476,550
---------------
1,038,775
- ---------------------------------------------------------------------------------------------
ELECTRICAL EQUIPMENT: 0.1%
40,000 Richardson Electronics,
Ltd. Sub. Deb. 7.250% 12/15/96-06 32,800

- ---------------------------------------------------------------------------------------------
ELECTRONICS: 2.3%
600,000 . Cirrus Logic, Inc. Sub. 6.000% 12/15/99-03 462,750
144A
300,000 Zenith Electric Sub. Deb. 6.250% 4/01/96-11 175,500
---------------
638,250
- ---------------------------------------------------------------------------------------------
ENTERTAINMENT & LEISURE: 0.9%
100,000 Bell Sports Corp. Sub. Deb. 4.250% 11/15/96-00 84,750

200,000 CML Group, Inc. 5.500% 1/15/95-03 150,000
---------------
234,750
- ---------------------------------------------------------------------------------------------
FOREIGN OBLIGATIONS: 4.9%
20,000 Advanced Agro Public Co. 3.500% 6/17/01 16,000
650,000 Bangkok Bank Public 3.250% 3/03/04 211,250
125,000 Banpu Public Co. 2.750% 4/10/03 80,000
150,000 Burns, Philp Sub. 5.500% 4/30/97-04 88,500
500,000 Empresas ICA Sociedad
Sub. Deb. 5.000% 3/15/98-04 394,375
50,000 Loxley Public Co. 2.500% 4/04/01 25,000
250,000 Rogers Communications,
Inc. Deb. 2.000% 11/26/98-05 149,063
100,000 Samsung Co. 0.250% 6/26/06 80,000
250,000 Sappi BVI Finance 7.500% 8/01/98-02 233,750
250,000 Siam Commercial Bank 3.250% 1/24/04 72,500
---------------
1,350,438
- ---------------------------------------------------------------------------------------------
INDUSTRIALS: 2.3%
600,000 . Exide Corp. Sr. 144A 2.900% 12/15/98-05 383,250
</TABLE>

B-70
<PAGE>

METROPOLITAN SERIES FUND, INC.

SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
LOOMIS SAYLES HIGH YIELD BOND PORTFOLIO
DECEMBER 31, 1997

<TABLE>
<CAPTION>
FACE INTEREST MATUTIRY VALUE
AMOUNT ISSUE RATE DATE (NOTE 1A)
- ---------------------------------------------------------------------------------------------------------------------
CONVERTIBLE BONDS: (CONTINUED)
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
INDUSTRIALS: (CONTINUED)
$ 50,000 Glycomed, Inc. Sub. Deb. 7.500% 1/01/97-03 $ 46,000
365,000 UroMed Corp. Sub. 6.000% 10/15/99-03 204,400
-----------
633,650
- ---------------------------------------------------------------------------------------------------------------------
MEDICAL SUPPLY: 1.1%
400,000 NABI, Inc. Sub. 6.500% 2/01/99-03 298,500
- ---------------------------------------------------------------------------------------------------------------------
METALS-STEEL & IRON: 0.0%
200,000 Molten Metal Technology, Inc.
Sub. 0.000% 5/01/06 2,000
- ---------------------------------------------------------------------------------------------------------------------
MINING: 1.9%
200,000 Ashanti Gold Capital 5.500% 3/15/00-03 149,250
325,000 Battle Mountain Gold Co.
Sub. 6.000% 1/04/05 221,000
200,000 Coeur D'Alene Mines Corp.
Sub. 6.000% 6/10/02 152,000
-----------
522,250
- ---------------------------------------------------------------------------------------------------------------------
MISCELLANEOUS: 1.6%
440,000 TPI Enterprises, Inc.
Sub. Deb. 8.250% 7/15/96-02 360,800
125,000 Veterinary Centers of
America, Inc. Sub. Deb. 5.250% 5/01/99-06 91,250
-----------
452,050
- ---------------------------------------------------------------------------------------------------------------------
OIL-INTERNATIONAL: 0.1%
100,000 Ssangyong Oil Refining Co.
Ltd. 3.000% 12/31/04 37,167
- ---------------------------------------------------------------------------------------------------------------------
POLLUTION CONTROL: 0.9%
327,000 Air & Water Technologies
Corp. Sub. Deb. 8.000% 5/15/97-15 255,469
- ---------------------------------------------------------------------------------------------------------------------
REAL ESTATE: 0.3%
100,000 Sizeler Property Inv., Inc.
Sub. Deb. 8.000% 7/15/97-03 96,000
- ---------------------------------------------------------------------------------------------------------------------
RESTAURANT: 2.5%
500,000 Boston Chicken, Inc. Sub.
Deb. 0.000% 6/01/00-15 73,125
50,000 Boston Chicken, Inc. Sub.
Deb. 7.750% 5/01/00-04 31,500
450,000 Boston Chicken, Inc. Sub.
Deb. 4.500% 2/01/98-04 220,500
325,000 Einstein/Noah Bagel Corp.
Sub. Deb. 7.250% 6/01/00-04 224,250
325,000 Shoney's, Inc. Sub. Deb. 0.000% 4/11/97-04 133,250
-----------
682,625
- ---------------------------------------------------------------------------------------------------------------------
RETAIL TRADE: 0.3%
$100,000 Jacobson Stores, Inc. Sub
Deb. 6.750% 12/15/96-11 $ 84,250
- ---------------------------------------------------------------------------------------------------------------------
TEXTILES & APPAREL: 1.1%
200,000 Converse, Inc. Sub. 7.000% 6/01/00-04 114,500
250,000 Fieldcrest Cannon, Inc.
Sub. Deb. 6.000% 3/15/96-12 202,500
-----------
317,000
- ---------------------------------------------------------------------------------------------------------------------
TRANSPORTATION-TRUCKING: 0.4%
160,000 Worldway Corp. Sub. Deb. 6.250% 4/15/96-11 116,800
- ---------------------------------------------------------------------------------------------------------------------
UTILITIES-TELEPHONE: 1.1%
500,000 Broadband Technologies,
Inc. Sub. 5.000% 5/15/99-01 310,000
-----------
TOTAL CONVERTIBLE BONDS
(Cost: $8,443,578)................................................................... 7,351,774
-----------
- ---------------------------------------------------------------------------------------------------------------------
CORPORATE BONDS: 36.9%
- ---------------------------------------------------------------------------------------------------------------------
AUTOMOTIVE: 0.6%
250,000 .Hyundai Motor Co. 144A 7.600% 7/15/07 177,500
- ---------------------------------------------------------------------------------------------------------------------
BROADCASTING: 5.2%
400,000 +Cablevision Systems Corp. 8.125% 8/15/09 412,000
100,000 CBS Inc. Sr. 7.125% 11/01/23 90,730
230,000 Century Communications
Corp. Sr. 0.000% 3/15/03 147,200

700,000 Century Communications
Corp. Sr. 8.375% 11/15/17 647,500

250,000 #.Fox Kids Worldwide, Inc.
Sr. 144A ---- 11/01/02-07 148,125
-----------
1,445,555
- ---------------------------------------------------------------------------------------------------------------------
COLLATERALIZED MORTGAGE OBLIGATIONS: 0.4%
100,000 DR Structured Finance
Corp. Ser. 1994-K1 A2 8.375% 8/15/15 98,000
- ---------------------------------------------------------------------------------------------------------------------
COMPUTER EQUIPMENT & SERVICE: 3.7%
390,000 Apple Computer, Inc. 6.500% 2/15/04 323,700
200,000 Digital Equipment Corp. 7.750% 4/01/23 201,156
450,000 Digital Equipment Corp.
Deb. 8.625% 11/01/12 492,898
-----------
1,017,754
- ---------------------------------------------------------------------------------------------------------------------
ELECTRONICS: 1.0%
275,000 Westinghouse Electric
Corp. 7.875% 9/01/23 275,525
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>

B-71
<PAGE>

METROPOLITAN SERIES FUND, INC.
SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
LOOMIS SAYLES HIGH YIELD BOND PORTFOLIO
DECEMBER 31, 1997

<TABLE>
<CAPTION>
FACE INTEREST MATURITY VALUE
AMOUNT ISSUE RATE DATE (NOTE 1A)
- ----------------------------------------------------------------------------------------
CORPORATE BONDS: (CONTINUED)
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
FINANCIAL SERVICES: 2.9%
$ 250,000 .Pindo Deli Finance
Mauritius, Ltd. Sr. 144A 10.750% 10/01/07 $ 215,000
200,000 .Pindo Deli Finance
Mauritius, Ltd. Sr. Deb.
144A 10.875% 10/01/27 160,000
500,000 .Tjiwi Kimia Finance
Maurities, Ltd. Sr. 144A 10.000% 8/01/04 418,750
-----------
793,750
- ----------------------------------------------------------------------------------------
FOOD & BEVERAGES: 3.6%
100,000 Borden, Inc. Deb. 7.875% 2/15/23 100,618
600,000 #.Del Monte Foods, Inc. Sr.
144A ---- 12/15/02-07 343,500
45,000 Flagstar Corp. Sr. Deb. 0.000% 11/01/97-04 18,000
200,000 RJR Nabisco, Inc. 8.750% 8/15/05 215,786
300,000 RJR Nabisco, Inc. 8.500% 7/01/07 319,815
-----------
997,719
- ----------------------------------------------------------------------------------------
INDUSTRIALS: 1.9%
500,000 .Pan Pacific Industrial
Investment PLC 144A 0.000% 4/28/07 149,575

150,000 Pope & Talbot, Inc. 8.375% 6/01/13 158,661
350,000 #.TFM SA de CV Sr. Deb.
144A ---- 6/15/02-09 217,000
-----------
525,236
- ----------------------------------------------------------------------------------------
METALS-STEEL & IRON: 0.5%
29,000 Midland Ross Corp. Deb. 6.000% 2/15/07 23,754
135,000 Republic Engineered
Steels, Inc. 9.875% 12/15/98-01 128,250
-----------
152,004
- ----------------------------------------------------------------------------------------
POLLUTION CONTROL: 0.4%
125,000 Envirotest Systems Corp.
Sr. 9.625% 4/01/98-03 120,000
- ----------------------------------------------------------------------------------------
REAL ESTATE: 0.9%
250,000 .Murrin Murrin Holdings,
Ltd. Sr. 144A 9.375% 8/31/02-07 247,500
- ----------------------------------------------------------------------------------------
RETAIL GROCERY: 0.6%
200,000 Penn Traffic Co. Sr. 8.625% 12/15/98-03 169,500
- ----------------------------------------------------------------------------------------
RETAIL TRADE: 1.9%
100,000 Dillon Reed Ser. 1993-K1
A2 7.430% 8/15/18 90,250
200,000 K Mart Corp. 7.950% 2/01/23 193,250
250,000 K Mart Corp. 7.750% 10/01/12 243,125
-----------
526,625
- ----------------------------------------------------------------------------------------
TELECOMMUNICATIONS EQUIPMENT & SERVICES: 1.9%
855,000 #+Arch Communications
Group, Inc. Sr. ---- 3/15/01-08 525,825
- ----------------------------------------------------------------------------------------
UTILITIES-ELECTRIC: 2.8%
300,000 AES Corp. Sr. 8.375% 8/15/02-07 299,250
500,000 .AES Corp. Sr. 144A 8.875% 11/01/27 478,750
-----------
778,000
- ----------------------------------------------------------------------------------------
UTILITIES-TELEPHONE: 8.6%
500,000 #Hyperion
Telecommunications, Inc.
Sr. ---- 4/15/01-03 366,250
300,000 #Intercel, Inc. Sr. ---- 2/01/01-06 225,000
400,000 #Intercel, Inc. Sr. ---- 5/01/01-06 292,000
160,000 Lenfest Communications,
Inc. Sr. 8.375% 11/01/05 164,400
210,000 #Nextel Communications,
Inc. Sr. ---- 8/15/99-04 186,900
185,000 #.Nextel Communications,
Inc. Sr. 144A ---- 9/15/02-07 117,013
400,000 #.Nextel Communications,
Inc. Sr. 144A ---- 10/31/02-07 245,500
650,000 #.RCN Corp. 144A 0.000% 10/15/02-07 407,875
500,000 #Telewest PLC Sr. Deb. ---- 10/01/07 388,750
-----------
2,393,688
-----------
TOTAL CORPORATE BONDS
(Cost: $9,793,563)........ 10,244,181
-----------
</TABLE>

<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------
FOREIGN OBLIGATIONS: 14.9%
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
200,000 .Bangkok Bank Public, Ltd.
Sub. 144A 8.250% 3/15/16 153,886
75,000 CAD#Clearnet Communications,
Inc. Sr. ---- 12/15/00-05 58,875
800,000 CAD#Clearnet Communications,
Inc. Sr. ---- 8/13/02-07 356,880
550,000 .Espirito Santo Centrais
Electriciadad Sr. 144A 10.000% 7/15/07 489,500
200,000 Export-Import Bank Korea 6.375% 2/15/06 149,750
800,000 #International Semi-Tech.
Microelectronics. ---- 8/15/03 288,000
250,000 Korea Electric Power Corp. 6.375% 12/01/03 191,538
</TABLE>

B-72
<PAGE>

METROPOLITAN SERIES FUND, INC.

SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
LOOMIS SAYLES HIGH YIELD BOND PORTFOLIO
DECEMBER 31,1997

1,400,000 CAD#Microcell
.Telecommunications, Inc.
Sr. 144A ---- 10/15/02-07 543,718

500,000 Philippine Long Distance
Telephone Co. 8.350% 3/06/17 413,750

200,000 .Pycsa Panama SA 144A 10.280% 12/15/12 189,660
350,000 Quezon Power, Ltd. 8.860% 6/15/17 296,310
100,000 CADRogers Cablesystems, Ltd. 9.650% 1/15/04-14 75,575
Sr.
150,000 CADRogers Communications,
Inc. Sr. 10.500% 2/14/06 115,850

450,000 CADRogers Communications,
Inc. Sr. 8.750% 7/15/02-07 308,187

425,000 . Samsung Electronics Co.,
Ltd. 144A 0.000% 12/31/02-07 296,085

200,000 .[_]Total Access Commerce
Public, Ltd. 144A 7.625% 11/04/01 104,000
-----------
TOTAL FOREIGN OBLIGATIONS
(Cost: $4,545,846)........................................... 4,150,064
-----------
- ----------------------------------------------------------------------------------------------
YANKEE BONDS:11.3%
- ----------------------------------------------------------------------------------------------
120,000 Petroleos Mexicanos 9.500% 9/15/27 117,900
700,000 Petroleos Mexicanos 8.625% 12/01/23 658,000
300,000 [_]Philipinas Bangko Sentral 8.600% 6/15/27 239,220
313,572 Republic of Brazil 8.000% 4/15/14 246,154
550,000 +Republic of Brazil 10.125% 5/15/27 515,625
325,000 Republic of Argentina 9.750% 9/19/27 310,700
500,000 Republic of South Africa 8.500% 6/23/17 484,935
650,000 Republic of Venezuela 9.250% 9/15/27 579,475

-----------
TOTAL YANKEE BONDS
(Cost: $3,113,942)........................................... 3,152,009
-----------
- ----------------------------------------------------------------------------------------------
REPURCHASE AGREEMENTS: 6.4%
- ----------------------------------------------------------------------------------------------
$1,782,000 State Street Bank
Repurchase Agreement
(U.S. Treasury Bills
collateralized, dated
12/31/97 due 1/2/98 @
5.875% with a market
value of $1,838,993) 5.000% 01/02/98 1,782,000
-----------
TOTAL REPURCHASE AGREEMENTS
(Cost: $1,782,000)........................................... 1,782,000
-----------
- ----------------------------------------------------------------------------------------------
TOTAL INVESTMENTS: 99.8%
(Cost: $28,826,155).......................................... 27,748,520
OTHER ASSETS LESS LIABILITIES: 0.2%.......................... 55,146
-----------
NET ASSETS: 100.0%........................................... $27,803,666
===========
- ----------------------------------------------------------------------------------------------
</TABLE>

LEGEND:
- ------
* Non-income producing security.
+ Securities on loan.
. Restricted security.
# Step bond: A zero coupon bond that converts to a fixed or variable interest
rate at a designated future date.
[_] Illiquid Security

SECURITIES LENDING: (Note 7)
- ----------------------------
As of December 31, 1997, the market value of securities loaned was $736,449 with
collateral backing valued at $764,110.

RESTRICTED SECURITIES (Note 2):
- -------------------------------

<TABLE>
<CAPTION>
Valuation
as of
Acquisition Acquisition December 31,
Issue Date Cost 1997
----- ---- ---- ----
<S> <C> <C> <C>
AES Corp. Sr. 144A 10/24/97 $ 485,200 $ 478,750
Bangkok Bank Public, Ltd.
Sub. 144A 8/28/97 188,290 153,886
Bethleham Steel Corp. Cvt. 3/3/97-5/6/97 255,625 269,750
Pfd. Ser. B 144A
Cirrus Logic, Inc. Sub. 4/23/97-6/13/97 444,125 462,750
144A
Espirito Santo Centrais Sr.
144A 9/9/97-10/9/97 543,600 489,500
Exide Corp. Sr. 144A 3/3/97-11/5/97 381,188 383,250
Fox Kids Worldwide, Inc. Sr.
144A 11/24/97 143,438 148,125
Del Monte Foods, Inc. Sr.
144A 12/9/97 339,152 343,500
Hyundai Motor Corp. 144A 12/23/97 172,500 177,500
Microcell
Telecommunications, Inc. Sr.
144A 10/8/97-10/17/97 597,550 543,718
Murrin Murrin Holdings, Ltd.
144A 8/22/97 250,000 247,500
</TABLE>

B-73
<PAGE>

RESTRICTED SECURITIES-(CONT.)
- -----------------------------

<TABLE>
<CAPTION>
VALUATION
AS OF
ACQUISITION ACQUISITION DECEMBER 31
ISSUE DATE COST 1997
- ----- ----------- ------------ -----------
<S> <C> <C> <C>
Nextel Communications, Inc.
Sr. 144A 9/24/97 114,469 117,013
Nextel Communications, Inc.
Sr. 144A 10/15/97 247,984 245,500
Pan Pacific Industrial
Investments PLC 144A 5/23/97 214,930 149,575
Physicians Resource Group,
Inc. 144A 6/20/97-7/18/97 164,375 152,250
Pindo Deli Finance
Mauritius, Ltd. Sr. 144A 10/6/97 248,125 215,000
Pindo Deli Finance
Mauritius, Ltd. Sr. Deb. 144A 9/25/97 185,000 160,000
Pycsa Panama SA 144A 10/1/97 200,000 189,660
RCN Corp. 144A 10/10/97-10/23/97 384,696 407,875
Samsung Electronics Co.,
Ltd. 144A 12/2/97-12/19/97 323,188 296,085
TFM SA de CV Sr. Deb. 144A 6/11/97-7/23/97 201,736 217,000
Tjiwi Kimia Finance
Maurities, Ltd. Sr. 144A 7/29/97 298,365 418,750
Total Access Commerce
Public, Ltd. 144A 12/2/97 156,000 104,000
</TABLE>

The aggregate value of restricted securities at December 31, 1997 was $6,370,937
or 22.91% of the Loomis Sayles High Yield Bond Portfolio's net assets. See
Notes to Financial Statements.

B-74
<PAGE>

METROPOLITAN SERIES FUND, INC.

SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
JANUS MID CAP PORTFOLIO
DECEMBER 31, 1997

<TABLE>
<CAPTION>
VALUE
SHARES ISSUE (NOTE 1A)
- ------------------------------------------------------------------------------------
COMMON STOCK: 95.6%
- ------------------------------------------------------------------------------------
<S> <C> <C>
AUTOMOTIVE: 0.8%

30,025 + OEA, Inc. $ 868,848
- ------------------------------------------------------------------------------------
BANKING: 2.4%

2,225 First Empire State Corp. 1,034,625
7,725 Northern Trust Corp. 540,267
12,500 Regions Financial Corp. 527,734
7,175 + Star Banc Corp. 411,666
----------
2,514,292
- ------------------------------------------------------------------------------------
BROADCASTING: 9.2%

28,800 + Chancellor Media Corp. 2,150,100
49,025 +* Clear Channel Communications, Inc. 3,894,423
49,775 Heftel Broadcasting Corp. Cl. A 2,336,314
17,350 Univision Communications, Inc. Cl. A 1,211,247
----------
9,592,084
- ------------------------------------------------------------------------------------
BUSINESS SERVICES: 8.0%

39,412 Outdoor Systems, Inc. 1,512,435
110,850 Paychex, Inc. 5,632,566
26,300 Profit Recovery Group International, Inc. 471,756
16,075 Robert Half International, Inc. 643,000
----------
8,259,757
- ------------------------------------------------------------------------------------
COMPUTER EQUIPMENT & SERVICE: 1.3%

15,200 * America Online, Inc. 1,355,650
- ------------------------------------------------------------------------------------
CONSTRUCTION & MINING EQUIPMENT: 0.5%

20,875 Rental Service Corp. 512,742
- ------------------------------------------------------------------------------------
CONSTRUCTION MATERIALS: 5.6%

92,175 Barnett, Inc. 2,050,894
96,825 + Fastenal Co. 3,721,711
----------
5,772,605
- ------------------------------------------------------------------------------------
DRUGS & HEALTH CARE: 9.1%

198,725 + Omnicare, Inc. 6,160,475
31,725 Pediatrix Medical Group, Inc. 1,356,244
30,175 Sofamor Danek Group, Inc. 1,963,261
----------
9,479,980
- ------------------------------------------------------------------------------------
EDUCATION: 4.3%

82,675 Apollo Group, Inc. Cl. A 3,916,728
5,525 + Computer Learning Centers, Inc. 338,752
4,925 DeVRY, Inc. 156,984
----------
4,412,464
- ------------------------------------------------------------------------------------
ELECTRICAL EQUIPMENT: 3.9%

89,875 Berg Electronics Corp. $2,044,656
79,225 + Littelfuse, Inc. 1,948,440
----------
3,993,096
- ------------------------------------------------------------------------------------
ELECTRONICS: 4.8%

54,150 + Maxim Integrated Products, Inc. 1,871,559
16,350 + Sanmina Holdings, Inc. 1,112,822
50,125 SIPEX Corp. 1,519,414
13,450 Vitesse Semiconductor Corp. 511,941
----------
5,015,736
- ------------------------------------------------------------------------------------
ENTERTAINMENT & LEISURE: 2.4%

15,050 + Family Golf Centers, Inc. 474,075
37,975 + Royal Caribbean Cruises Ltd. 2,024,542
----------
2,498,617
- ------------------------------------------------------------------------------------
FINANCIAL SERVICES: 8.9%

51,850 American Capital Strategies Ltd. 930,059
149,200 Amvescap PLC 1,276,204
61,412 Charles Schwab Corp. 2,575,466
15,800 Federal Agricultural Mortgage Corp. Cl. C 948,000
17,525 Healthcare Financial Partners, Inc. 617,756
94,475 Insignia Financial Group, Inc. Cl. A 2,172,925
34,325 Medallion Financial Corp. 746,569
----------
9,266,979
- ------------------------------------------------------------------------------------
FOOD & BEVERAGES: 1.8%

12,025 International Home Foods, Inc. 336,700
40,225 JP Foodservice, Inc. 1,485,811
----------
1,822,511
- ------------------------------------------------------------------------------------
HEALTHCARE SERVICES: 1.8%

108,950 AmeriPath, Inc. 1,858,959
- ------------------------------------------------------------------------------------
INSURANCE: 2.6%

14,350 Progressive Corp. 1,720,206
8,075 Protective Life Corp. 482,481
13,200 UICI 462,825
----------
2,665,512
- ------------------------------------------------------------------------------------
MULTI-INDUSTRY: 1.3%

216,530 Capita Group PLC 1,319,463
- ------------------------------------------------------------------------------------
</TABLE>

B-75

<PAGE>

METROPOLITAN SERIES FUND, INC.

SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
JANUS MID CAP PORTFOLIO
DECEMBER 31, 1997

38,700 Ceridian Corp. $ 1,772,944
- ------------------------------------------------------------------------------------
PLASTICS: 1.3%

21,975 +Sealed Air Corp. 1,356,956
- ------------------------------------------------------------------------------------
REAL ESTATE: 2.5%

34,175 Capital Trust Cl. A 384,469
42,300 +Security Capital Group, Inc. Cl. B 1,374,750
17,375 +Vornado Realty Trust 815,539
-----------
2,574,758
- ------------------------------------------------------------------------------------
RESTAURANT: 8.7%

51,650 Papa John's International, Inc. 1,804,522
271,400 Pizza Express PLC 3,325,478
704,000 Wetherspoon (J.D.) PLC 3,873,672
-----------
9,003,672
- ------------------------------------------------------------------------------------
RETAIL GROCERY: 0.3%

4,825 Quality Food Centers, Inc. 323,275
- ------------------------------------------------------------------------------------
RETAIL TRADE: 3.5%

20,275 CompUSA, Inc. 628,525
10,725 +Fred Meyer, Inc. 390,122
22,500 MSC Industrial Direct, Inc. Cl. A 953,437
70,175 Petco Animal Supplies, Inc. 1,701,744
-----------
3,673,828
- ------------------------------------------------------------------------------------
SOFTWARE: 2.9%

123,300 Cadence Design Systems, Inc. 3,020,850
- ------------------------------------------------------------------------------------
TRANSPORTATION-AIRLINES: 1.3%

55,250 Ryanair Holdings PLC ADR 1,388,156
- ------------------------------------------------------------------------------------
UTILITIES-ELECTRIC: 2.6%

58,550 +AES Corp. 2,729,894
- ------------------------------------------------------------------------------------
UTILITIES-MISCELLANEOUS: 0.5%

27,050 *Hanover Compressor Co. 552,834
- ------------------------------------------------------------------------------------
UTILITIES-TELEPHONE: 1.6%

156,925 PriCellular Corp. Cl. A 1,637,908
- ------------------------------------------------------------------------------------
TOTAL COMMON STOCK
(Cost: $88,360,653)............................ 99,244,370
--------------
- ------------------------------------------------------------------------------------
</TABLE>

4,900,000 General Electric
Capital Corp. 6.080% 1/05/98 4,899,088
------------
TOTAL SHORT TERM OBLIGATIONS
(Cost: $9,898,255)....................................... 9,898,255
------------
- ------------------------------------------------------------------------------------------
TOTAL INVESTMENTS: 105.1%
(Cost: $98,258,908)...................................... 109,142,625
OTHER ASSETS LESS LIABILITIES: (5.1)%.................... (5,290,984)
------------
NET ASSETS: 100.0%....................................... $103,851,641
============
- ------------------------------------------------------------------------------------------
</TABLE>

LEGEND:
*NON-INCOME PRODUCING SECURITY.
+SECURITIES ON LOAN.

SECURITIES LENDING: (Note 7)
- ----------------------------
AS OF DECEMBER 31, 1997, THE MARKET VALUE OF SECURITIES LOANED WAS $12,202,921
WITH COLLATERAL BACKING VALUED AT $12,396,894.

See Notes to Financial Statements.

B-76
<PAGE>

METROPOLITAN SERIES FUND, INC.
SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
T. ROWE PRICE SMALL CAP GROWTH PORTFOLIO
DECEMBER 31, 1997

<TABLE>
<CAPTION>
VALUE
SHARES ISSUE (NOTE 1A)
- --------------------------------------------------------------------------------
COMMON STOCK: 97.8%
- --------------------------------------------------------------------------------
<S> <C> <C>
AEROSPACE: 2.1%
10,700 AAR Corp. $ 414,625
7,900 *BE Aerospace 211,572
11,300 *Ducommun, Inc. 394,794
15,500 *Orbital Sciences Corp. 462,094
7,400 Precision Castparts Corp. 446,313
----------
1,929,398
- --------------------------------------------------------------------------------
AUTOMOTIVE: 1.6%
13,100 +*Gentex Corp. 352,881
28,800 *Miller Industries, Inc. 309,600
16,000 *O' Reilly Automotive, Inc. 423,000
10,700 +*Tower Automotive, Inc. 450,069
----------
1,535,550
- --------------------------------------------------------------------------------
BANKING: 4.0%
7,700 Astoria Financial Corp. 431,200
9,100 +Bay View Capital Corp. 331,581
12,300 City National Corp. 454,331
7,200 *Coast Savings Financial, Inc. 493,650
5,500 Commerce Bancorp, Inc. 280,500
8,300 Community First Bankshares 445,087
8,400 +*Imperial Bancorp 414,225
14,600 +North Fork Bancorp, Inc. 490,013
8,100 *Silicon Valley Bancshares 452,588
----------
3,793,175
- --------------------------------------------------------------------------------
BIOTECHNOLOGY: 0.8%
1,400 *Biogen, Inc. 51,012
7,300 *Dura Pharmaceuticals, Inc. 336,712
13,700 *Serologicals Corp. 350,206
----------
737,930
- --------------------------------------------------------------------------------
BROADCASTING: 2.3%
18,700 *American Business Information, Inc. Cl. A 189,337
6,200 *American Radio Systems Corp. Cl. A 330,537
5,400 *BET Holdings, Inc. Cl. A 294,975
4,200 +*Chancellor Media Corp. 313,556
1,500 +*Clear Channel Communications, Inc. 119,156
6,000 +*Jacor Communications, Inc. 319,125
3,200 *SFX Broadcasting, Inc. Cl. A $ 257,500
7,600 TCA Cable TV, Inc. 351,975
----------
2,176,161
- --------------------------------------------------------------------------------
BUILDING & CONSTRUCTION: 1.4%
22,100 *American Homestar Corp. 364,650
8,500 Apogee Enterprises, Inc. 101,734
10,400 Blount International, Inc. Cl. A 277,550
5,800 *Fairfield Communities, Inc. 255,925
9,600 *NCI Building Systems, Inc. 339,600
----------
1,339,459
- --------------------------------------------------------------------------------
BUSINESS SERVICES: 9.7%
10,300 +*AccuStaff, Inc. 236,900
14,400 *Affiliated Computer Services, Inc. Cl. A 378,900
18,500 *American Business Information, Inc. 189,625
8,900 Amresco, Inc. 266,444
9,900 +*Bisys Group, Inc. 330,412
8,700 *Caribiner International 387,150
3,000 *Cognos, Inc. 69,187
10,700 +*Concord EFS, Inc. 266,831
4,900 *Consolidated Graphics, Inc. 228,462
16,100 *COREstaff, Inc. 428,662
9,500 *Cort Business Services Corp. 378,219
7,100 Danka Business Systems ADR 113,378
12,500 *Data Processing Resources Corp. 321,094
10,300 +*Eltron International, Inc. 315,437
4,600 Fair Issac & Co., Inc. 153,237
7,100 G&K Services, Inc. Cl. A 298,200
10,300 HA-LO Industries, Inc. 267,800
8,880 HBO & Co. 425,962
8,400 Merrill Corp. 193,200
16,100 *Meta Group 359,231
9,300 Norrell Corp. 184,838
13,150 *Outdoor Systems, Inc. 504,631
1,850 Paychex, Inc. 94,003
17,500 *Payment Services, Inc. 244,453
</TABLE>

B-77
<PAGE>

METROPOLITAN SERIES FUND, INC.
SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
T. ROWE PRICE SMALL GROWTH PORTFOLIO
DECEMBER 31, 1997

<TABLE>
<CAPTION>
VALUE
SHARES ISSUE (NOTE 1A)
- --------------------------------------------------------------------------------
COMMON STOCK: (CONTINUED)
- --------------------------------------------------------------------------------
BUSINESS SERVICES: (CONTINUED)
<S> <C> <C>
12,800 *Paymentech, Inc. $ 188,800
9,500 *QuickResponse Services, Inc. 349,125
7,360 +*Registry, Inc. 340,400
17,400 +*Rent Way, Inc. 322,988
12,100 *Romac International, Inc. 295,694
8,800 *Service Experts, Inc. 251,900
13,600 *Superior Services, Inc. 396,950
16,125 *Tetra Tech, Inc. 326,531
----------
9,108,644
- --------------------------------------------------------------------------------
CHEMICALS: 0.5%
10,400 *Sybron International Corp. 488,150
- --------------------------------------------------------------------------------
COMPUTER EQUIPMENT & SERVICE: 5.2%
25,000 *Actel Corp. 317,187
7,400 Analysts International Corp. 257,150
5,200 *CBT Group Ltd. PLC ADR 427,375
9,100 *CIBER, Inc. 527,800
4,000 +*Citrix Systems, Inc. 304,125
17,200 *Computer Management Sciences, Inc. 327,875
583 *DecisionOne Holdings Corp. 13,810
9,100 *DST Systems, Inc. 388,456
2,200 +*Gateway 2000, Inc. 71,775
16,600 *Integrated Systems Consulting Group 179,487
7,100 *Legato Systems, Inc. 311,513
3,200 +*PeopleSoft, Inc. 124,400
10,000 *SanDisk Corp. 200,938
1,600 +*Solectron Corp. 66,500
10,700 *SPSS, Inc. 203,300
6,000 +*SunGard Data Systems, Inc. 186,000
9,800 +*Sykes Enterprises, Inc. 192,938
7,000 +*Systems & Computer Technology 348,688
1,100 *Trident Microsystems, Inc. 10,003
17,700 *Vanstar Corp. 200,231
7,900 *Zebra Technologies Corp. Cl. A 237,000
----------
4,896,551
- --------------------------------------------------------------------------------
CONSTRUCTION MATERIALS: 1.0%
15,900 *Barnett, Inc. 353,775
6,800 +Fastenal Co. 261,375
14,900 Valmont Industries, Inc. 296,138
----------
911,288
- --------------------------------------------------------------------------------
CONSUMER PRODUCTS: 0.4%
10,950 +*Blyth Industries, Inc. 327,816
- --------------------------------------------------------------------------------
COSMETICS: 0.3%
8,400 +Alberto-Culver Co. Cl. B Cvt. 269,325
- --------------------------------------------------------------------------------
DRUGS & HEALTH CARE: 7.8%
14,200 *ABR Information Services, Inc. 343,462
5,700 *Amerisource Health Corp. Cl. A 332,025
1,400 *Centocor Corp. 46,725
2,000 DENTSPLY International, Inc. 61,812
8,800 +*Genesis Health Ventures, Inc. 232,100
2,850 *Health Management Associates, Inc. Cl. A 71,962
6,000 *HealthCare Compare Corp. 308,250
12,800 Healthdyne Technologies, Inc. 261,200
700 *IDEXX Laboratories, Inc. 11,222
10,870 +Integrated Health Services, Inc. 339,008
7,800 +Jones Medical Industries, Inc. 299,325
6,500 +*Lincare Holdings, Inc. 372,125
11,100 *Magainin Pharmaceuticals, Inc. 89,841
7,900 +*Medicis Pharmaceutical Corp. Cl. A 404,381
8,800 Mentor Corp. 323,400
14,650 *National Surgery Centers, Inc. 383,647
9,800 *NBTY, Inc. 327,688
12,800 Omnicare, Inc. 396,800
600 *Oxford Health Plans, Inc. 9,319
12,200 *PAREXEL International Corp. 454,450
4,900 *Patterson Dental Co. 222,950
8,400 *Pediatrix Medical Group, Inc. 359,100
13,600 *Phycor, Inc. 367,625
9,800 +*Respironics, Inc. 220,806
3,900 *Sofamor Danek Group, Inc. 253,744
6,100 *Sonus Pharmaceuticals, Inc. 201,681
</TABLE>

B-78
<PAGE>

METROPOLITAN SERIES FUND, INC.

SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
T. ROWE PRICE SMALL CAP GROWTH PORTFOLIO
DECEMBER 31, 1997

<TABLE>
<CAPTION>
VALUE
SHARES ISSUE (NOTE 1A)
- ----------------------------------------------------------------
COMMON STOCK: (CONTINUED)
- ----------------------------------------------------------------
<S> <C> <C>
DRUGS & HEALTH CARE: (CONTINUED)
2,400 *Thermedics, Inc. $ 39,300
5,900 +*Universal Health Services, Inc. Cl. B 297,213
9,100 *Watson Pharmaceuticals, Inc. 295,181
----------
7,326,342
- ----------------------------------------------------------------
EDUCATION: 1.0%
8,200 *Apollo Group, Inc. Cl. A 388,475
5,900 +*Computer Learning Centers, Inc. 361,744
6,000 *Sylvan Learning Systems, Inc. 235,500
----------
985,719
- ----------------------------------------------------------------
ELECTRICAL EQUIPMENT: 2.3%
3,300 *American Power Conversion Corp. 78,169
12,700 *Anadigics, Inc. 387,350
15,800 *Berg Electronics Corp. 359,450
900 +*C-Cube Microsystems, Inc. 14,653
1,000 *Carbide/Graphite Group, Inc. 33,875
3,400 *Coherent, Inc. 119,212
10,800 +*Imnet Systems, Inc. 174,150
7,500 *Kent Electronics Corp. 188,438
9,500 *Littelfuse, Inc. 233,641
9,300 Technitrol, Inc. 279,000
11,400 Watsco, Inc. 281,438
----------
2,149,376
- ----------------------------------------------------------------
ELECTRONICS: 7.1%
1,400 +*Adaptec, Inc. 52,062
8,500 *Affymetrix, Inc. 265,625
1,200 +*Altera Corp. 39,787
12,300 *Aspen Technology, Inc. 418,969
5,500 *Burr-Brown Corp. 177,031
6,300 +*Computer Products, Inc. 143,128
7,000 +Dallas Semiconductor Corp. 285,250
7,400 +*Dionex Corp. 369,075
3,900 *Electro Scientific Industries,Inc. 149,419
6,600 *Eletronics for Imaging, Inc. 109,519
13,800 +*Encad, Inc. 382,950
7,300 *Etec Systems, Inc. 338,994
- ----------------------------------------------------------------
ELECTRONICS: (CONTINUED)
10,500 *Kulicke & Soffa Industries, Inc. $ 196,219
4,900 +*Lattice Semiconductor Corp. 232,750
1,500 Linear Technology Corp. 86,344
6,500 *Microchip Technology, Inc. 195,406
11,500 *Microtouch Systems, Inc. 182,563
3,200 *Novellus Systems, Inc. 103,500
11,700 *P-Com, Inc. 204,750
600 *Periphonics Corp. 5,231
16,400 *Photronic, Inc. 399,750
5,600 +*Sanmina Holdings, Inc. 381,150
8,100 *Sawtek, Inc. 213,131
6,700 +*SCI Systems, Inc. 291,869
14,000 *Smart Modular Technologies, Inc. 320,250
8,100 *Speedfam International, Inc. 217,688
19,900 +*Thermo Optek Corp. 305,963
10,600 *Tollgrade Communications, Inc. 250,425
8,300 *Uniphase Corp. 341,856
----------
6,660,654
- ----------------------------------------------------------------
ENERGY: 0.6%
10,500 +*CalEnergy, Inc. 301,875
14,100 +*Offshore Logistics, Inc. 304,031
----------
605,906
- ----------------------------------------------------------------
ENTERTAINMENT & LEISURE: 2.7%
12,200 +Callaway Golf Co. 348,462
15,300 *Cannondale Corp. 336,600
3,800 *Carmike Cinemas, Inc. Cl. A 109,012
11,700 *Coach USA, Inc. 391,950
9,800 *GTECH Holdings Corp. 312,987
9,300 *Hollywood Entertainment Corp. 99,103
18,200 *IMAX Corp. 395,850
5,700 International Game Technology 143,925
7,500 *Lin Television Corp. 409,219
----------
2,547,108
- ----------------------------------------------------------------
FINANCIAL SERVICES: 2.1%
13,200 +*Americredit Corp. 365,475
</TABLE>

B-79
<PAGE>

METROPOLITAN SERIES FUND, INC.

SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
T. ROWE PRICE SMALL CAP GROWTH PORTFOLIO
DECEMBER 31, 1997

13,300 * E Trade Group, Inc. $ 306,316
5,600 +* FirstPlus Financial Group, Inc. 214,550
13,400 * Imperial Credit Industries, Inc. 277,212
8,533 Legg Mason, Inc. 477,315
8,500 + Metris Cos., Inc. 295,375
-----------
1,936,243
- ------------------------------------------------------------------------------------
FOOD & BEVERAGES: 0.6%

3,400 * Mondavi (Robert) Corp. Cl. A 165,963
11,800 * Smithfield Foods, Inc. 386,819
-----------
552,782
- ------------------------------------------------------------------------------------
FOREST PRODUCTS & PAPER: 0.1%

1,375 Fort James Corp. 52,594
- ------------------------------------------------------------------------------------
HEALTHCARE SERVICES: 2.3%

3,300 * Apria Healthcare Group 44,344
11,615 +*Concentra Managed Care, Inc. 391,280
8,300 * Inhale Therapeutic Systems 214,762
19,800 * NovaCare, Inc. 258,638
6,900 * Novoste Corp. 154,388
15,700 * Orthodontic Centers of America, Inc. 261,013
3,000 * Pediatric Services of America, Inc. 56,063
6,100 * Renal Treatment Centers, Inc. 220,363
800 * Sangstat Medical Corp. 32,450
9,666 * Total Renal Care Holdings, Inc. 265,815
14,300 * Urologix, Inc. 260,081
-----------
2,159,197
- ------------------------------------------------------------------------------------
HOTEL & MOTEL: 1.0%

3,300 * Extended Stay America, Inc. 41,044
10,600 La Quinta Inns, Inc. 204,713
10,525 * Promus Hotel Corp. 442,050
13,400 +*Signature Resorts, Inc. 293,963
-----------
981,770
- ------------------------------------------------------------------------------------
HOUSEHOLD APPLIANCES & HOME FURNISHINGS: 0.7%

8,600 * Chicago Miniature Lamp, Inc. 291,862
8,600 + Libbey, Inc. 325,725
----------
617,587
- ------------------------------------------------------------------------------------

INSURANCE: 3.5%

12,600 Amerin Corp. $ 355,950
7,200 + CMAC Investment Corp. 434,700
4,800 Executive Risk, Inc. 335,100
9,700 +*FPA Medical Management, Inc. 181,875
18,200 HCC Insurance Holdings, Inc. 386,750
6,500 Protective Life Corp. 388,375
10,200 Triad Guaranty, Inc. 299,625
14,000 * UICI 490,875
15,300 Western National Corp. 453,263
-----------
3,326,513
- ------------------------------------------------------------------------------------
MACHINERY: 0.1%

1,600 Lindsay Manufacturing Co. 69,400
- ------------------------------------------------------------------------------------
MEDICAL SUPPLY: 2.0%

18,300 * Acuson Corp. 303,094
14,800 ADAC Laboratories 290,450
14,400 * Airgas, Inc. 201,600
9,000 * Gulf South Medical Supply, Inc. 336,937
8,800 * Spine-Tech, Inc. 452,925
7,200 * Theragenics Corp. 261,000
-----------
1,846,006
- ------------------------------------------------------------------------------------
METALS-GOLD: 0.0%

500 Newmont Mining Corp. 14,688
- ------------------------------------------------------------------------------------
METALS-NON-FERROUS: 0.4%

18,200 +*RMI Titanium Co. 364,000
- ------------------------------------------------------------------------------------
MISCELLANEOUS: 2.0%

10,000 * Box Hill Systems Corp. 104,375
10,950 Central Parking Corp. 496,172
17,900 * Equity Corp. International 413,937
14,600 * Learning Tree International, Inc. 424,313
7,800 Stewart Enterprises, Inc. Cl. A 364,163
3,100 * WMF Group Ltd. 39,331
-----------
1,842,291
- ------------------------------------------------------------------------------------
OFFICE & BUSINESS EQUIPMENT: 2.5%

8,200 +*Black Box Corp. 291,100
7,100 +*CSG Systems International, Inc. 285,331
1,100 * Daisytek International Corp. 38,500
</TABLE>

B-80
<PAGE>

METROPOLITAN SERIES FUND, INC.

SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
T. ROWE PRICE SMALL CAP GROWTH PORTFOLIO
DECEMBER 31, 1997

<TABLE>
<CAPTION>
SHARES ISSUE VALUE
(NOTE 1A)
- ---------------------------------------------------------------------
COMMON STOCK: (CONTINUED)
- ---------------------------------------------------------------------
<S> <C> <C>
OFFICE & BUSINESS EQUIPMENT: (CONTINUED)
9,000 *IDX Systems Corp. $ 333,562
18,800 *Micron Electronics, Inc. 170,963
8,000 Symbol Technologies, Inc. 302,000
7,000 *Tech Data Corp. 273,000
15,800 +*Transition Systems, Inc. Cl. A 351,550
14,800 +Viking Office Products, Inc. 325,138
---------
2,371,144
- ---------------------------------------------------------------------
OIL & GAS EXPLORATION: 2.0%
4,000 Cross Timbers Oil Co. 99,750
7,300 Devon Energy Corp. 281,050
5,200 +*EVI, Inc. 269,100
7,000 +*Falcon Drilling Co., Inc. 245,437
7,700 Noble Affiliates, Inc. 271,425
16,140 +*Swift Energy Co. 339,949
800 *United Meridian Corp. 22,500
19,100 Vintage Petroleum, Inc. 362,900
---------
1,892,111
- ---------------------------------------------------------------------
OIL-DOMESTIC: 0.0%
3,600 *Benton Oil & Gas Co. 46,575
- ---------------------------------------------------------------------
OIL-SERVICES: 1.4%
4,100 +*BJ Services Co. 294,944
20,700 *Newpark Resources, Inc. 362,250
5,800 +*SEACOR Holdings, Inc. 349,450
3,600 *Smith International, Inc. 220,950
1,500 *Unova, Inc. 24,656
1,500 *Western Atlas, Inc. 111,000
---------
1,363,250
- ---------------------------------------------------------------------
PLASTICS: 0.4%
5,400 +*Sealed Air Corp. 333,450
- ---------------------------------------------------------------------
POLLUTION CONTROL: 0.5%
14,900 *Allied Waste Industries, Inc. 347,822
2,000 *Culligan Water Technologies, Inc. 100,500
---------
448,322
- ---------------------------------------------------------------------
PRINTING & PUBLISHING: 0.0%
1,000 Houghton Mifflin Co. 38,375
- ---------------------------------------------------------------------
REAL ESTATE: 0.5%
6,953 Apartment Investment & Management Co. Cl. A $255,531
700 Nationwide Health Properties, Inc. 17,850
5,500 Rouse Co. 180,125
---------
453,506
- ---------------------------------------------------------------------
RESTAURANT: 1.0%
7,500 Applebee's International, Inc. 135,234
800 +*Boston Chicken, Inc. 5,137
7,300 CKE Restaurants, Inc. 307,512
7,600 *Landry's Seafood Restaurants, Inc. 183,350
4,000 +*Lone Star Steakhouse & Saloon, Inc. 70,250
8,800 *Outback Steakhouse 254,650
---------
956,133
- ---------------------------------------------------------------------
RETAIL GROCERY: 0.6%
3,500 Quality Food Centers, Inc. 234,500
11,700 Richfood Holdings, Inc. 330,525
---------
565,025
- ---------------------------------------------------------------------
RETAIL TRADE: 7.2%
3,000 +*AnnTaylor Stores Corp. 40,125
10,000 +*Bed Bath & Beyond, Inc. 384,375
11,200 *Borders Group, Inc. 350,700
4,300 +*CDW Computer Centers, Inc. 224,137
8,700 +*Central Garden & Pet Co. 229,462
7,800 *CompUSA, Inc. 241,800
1,300 *Corporate Express, Inc. 16,778
1,000 *Costco Cos., Inc. 44,594
27,800 *Damark International, Inc. Cl. A 274,525
8,500 *Dollar Tree Stores, Inc. 353,281
21,800 *Eagle Hardware & Garden, Inc. 423,737
9,500 *General Nutrition Cos., Inc. 322,406
9,100 +*Gymboree Corp. 249,681
10,100 *Insight Enterprises, Inc. 368,650
6,200 *Jones Apparel Group, Inc. 266,600
500 *Kohls Corp. 34,063
8,300 Lands' End, Inc. 291,019
7,600 *Men's Wearhouse, Inc. 266,000
</TABLE>

B-81
<PAGE>

METROPOLITAN SERIES FUND, INC

SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
T. ROWE PRICE SMALL CAP GROWTH PORTFOLIO
DECEMBER 31, 1997

<TABLE>
<CAPTION>
SHARES ISSUE VALUE
(NOTE 1A)
- ------------------------------------------------------------------------
COMMON STOCK: (CONTINUED)
- ------------------------------------------------------------------------
<S> <C> <C>
RETAIL TRADE: (CONTINUED)
2,000 *Petco Animal Supplies, Inc. $ 48,500
16,200 *Renters Choice, Inc. 334,125
14,400 +*Rexall Sundown, Inc. 435,150
10,300 Ross Stores, Inc. 375,306
12,300 *Stein Mart, Inc. 328,256
1,800 TJX Cos., Inc. 61,875
16,000 +*West Marine, Inc. 360,000
6,100 *WetSeal, Inc. Cl. A 180,331
6,100 +*Williams Sonoma, Inc. 255,438
---------
6,760,914
- ------------------------------------------------------------------------
SHIPBUILDING: 0.4%
14,000 *Avondale Industries, Inc. 416,500
- ------------------------------------------------------------------------
SOFTWARE: 6.5%
8,800 +*Advent Software, Inc. 257,950
6,900 *Arbor Software Corp. 280,744
3,440 *Ascend Communications, Inc. 84,602
6,200 Autodesk, Inc. 228,625
14,900 *AXENT Technologies, Inc. 255,162
1,600 *BMC Software, Inc. 104,900
14,200 *Cadence Design Systems, Inc. 347,900
3,400 *Compuware Corp. 108,906
7,400 *Datastream Systems, Inc. 227,550
6,100 +*Documentum, Inc. 256,962
7,200 *Electronic Arts, Inc. 272,475
8,000 *Hyperion Software Corp. 288,000
8,900 +*Intuit, Inc. 367,681
8,000 +*JDA Software Group, Inc. 277,000
8,600 *Keane, Inc. 349,375
11,350 *National Instruments Corp. 339,081
1,800 +*Parametric Technology Corp. 85,163
15,600 +*Premiere Technologies, Inc. 429,975
7,300 *Remedy Corp. 153,756
9,300 *Structural Dynamics Research Corp. 210,413
8,500 *Synopsys, Inc. 303,344
1,500 *Systemsoft Corp. 9,656
8,800 *Transaction Systems Architects, Inc. Cl. A 333,850
5,250 +*VERITAS Software Co. 267,094
6,500 *Visio Corp. 250,656
---------
6,090,820
- -------------------------------------------------------------------------
TECHNOLOGY: 0.0%
2,086 .+*Thermo Vision Corp. 16,949
- -------------------------------------------------------------------------
TELECOMMUNICATIONS EQUIPMENT & SERVICES: 4.9%
2,000 +*ADC Telecommunications, Inc. 83,625
15,300 *Aspect Telecommunications Corp. 321,300
5,000 *Avant Corp. 84,062
15,300 +*Coherent Communications Systems Corp. 431,269
3,700 *CommNet Cellular, Inc. 132,044
9,300 +*Comverse Technology, Inc. 361,537
10,400 +*Davox Corp. 337,350
6,200 *Dialogic Corp. 270,087
18,600 *Digital Microwave Corp. 270,862
8,900 *Harmonic Lightwaves, Inc. 97,344
5,400 Inter-Tel, Inc. 105,638
11,500 +*Level One Communications, Inc. 324,156
9,500 *MRV Communications, Inc. 226,219
5,900 National Data Corp. 213,138
7,300 *Networks Associates, Inc. 385,303
4,800 *Pacific Gateway Exchange, Inc. 258,300
20,500 *Paging Network, Inc. 221,016
16,000 *Pairgain Technologies, Inc. 310,500
13,200 *Proxim, Inc. 149,738
4,200 *Sitel Corp. 38,325
---------
4,621,813
- -------------------------------------------------------------------------
TEXTILES & APPAREL: 1.4%
10,500 *Nautica Enterprises, Inc. 246,750
11,200 +*North Face, Inc. 246,750
8,400 St. John Knits, Inc. 336,000
20,350 +Wolverine World Wide, Inc. 460,419
---------
1,289,919
- -------------------------------------------------------------------------
</TABLE>

B-82
<PAGE>

METROPOLITAN SERIES FUND, INC.

SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
T. ROWE PRICE SMALL CAP GROWTH PORTFOLIO
DECEMBER 31, 1997

<TABLE>
<CAPTION>
SHARES ISSUE VALUE
(NOTE 1A)
- --------------------------------------------------------------------------------------------------------------
COMMON STOCK: (CONTINUED)
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C>
TRANSPORTATION: 0.3%
12,000 * Heartland Express, Inc. $ 327,750
- --------------------------------------------------------------------------------------------------------------
TRANSPORTATION-AIRLINES: 0.6%
15,600 Comair Holdings, Inc. 378,300
6,600 * Eagle USA Airfreight, Inc. 188,925
---------
567,225
- --------------------------------------------------------------------------------------------------------------
TRANSPORTATION-RAILROAD: 0.5%
13,600 * Swift Transportation Co., Inc. 442,850
2,200 +* Wisconsin Central Transportation Corp. 51,563
---------
494,413
- --------------------------------------------------------------------------------------------------------------
TRANSPORTATION-TRUCKING: 0.4%
8,900 Expeditors International of Washington, Inc. 346,544
- --------------------------------------------------------------------------------------------------------------
UTILITIES-TELEPHONE: 1.1%
3,600 ACC Corp. 182,250
13,761 * LCI International, Inc. 423,150
10,300 * Omnipoint Corp. 240,119
9,400 +* Tel-Save Holdings, Inc. 186,239
---------
1,031,758
- --------------------------------------------------------------------------------------------------------------
TOTAL COMMON STOCK
(Cost: $86,934,347) 91,984,119
----------
- --------------------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
FACE ISSUE INTEREST MATURITY VALUE
AMOUNT RATE DATE (NOTE 1A)
<S> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------
SHORT TERM OBLIGATIONS: 3.8%
- --------------------------------------------------------------------------------------------------------------
$ 665,000 Associates Financial
Services Co. 5.580% 2/05/98 $ 661,392

1,000,000 Bell Atlantic Financial
Services 5.850% 1/27/98 995,775

413,000 Federal Farm Credit Bank 5.640% 2/12/98 410,282

1,519,000 Federal Home Loan
Mortgage Assoc.. 4.750% 1/02/98 1,518,800
---------------

TOTAL SHORT TERM OBLIGATIONS
(Cost: $3,586,249)............................................ 3,586,249
---------------
- ---------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS: 101.6%
(Cost: $90,520,596)............................................ 95,570,368
OTHER ASSETS LESS LIABILITIES: (1.6)%.......................... (1,550,362)
--------------
NET ASSETS: 100.0%............................................. $94,020,006
==============
- ---------------------------------------------------------------------------------------------------------
</TABLE>

LEGEND:
- ---------------------------
*Non-income producing security.
+Securities on loan.
.Restricted security

ADR (American depository receipt) represents ownership of foreign securities.

SECURITIES LENDING: (Note 7)
- ----------------------------
As of December 31, 1997, the market value of securities loaned was $11,383,409
with collateral backing valued at $11,584,484.

RESTRICTED SECURITIES: (Note 2)
- -------------------------------

<TABLE>
<CAPTION>
Valuation as of
Acquisition Acquisition December 31,
Issue Date Cost 1997
----- ---- ---- ----
<S> <C> <C> <C>
Thermo Vision Corp......... 12/16/97 $ 16,964 $ 16,949
</TABLE>

The aggregate value of restricted securities at December 31, 1997 was $16,949 or
.02% of the T. Rowe Price Small Cap Growth Portfolio's net assets.

See Notes to Financial Statements.

B-83
<PAGE>

METROPOLITAN SERIES FUND, INC.

SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
SCUDDER GLOBAL EQUITY PORTFOLIO
DECEMBER 31,1997

<TABLE>
<CAPTION>
VALUE
SHARES ISSUE (NOTE 1A)
- -------------------------------------------------------------------------------------
COMMON STOCK: 71.7%
- -------------------------------------------------------------------------------------
<S> <C> <C>
ARGENTINA: 0.9%
15,700 YPF SA ADR $ 536,744
----------
TOTAL INVESTMENTS IN ARGENTINA 536,744
- -------------------------------------------------------------------------------------
AUSTRALIA: 2.1%
25,200 Broken Hill Proprietary Co. 234,043
270,200 Fosters Brewing Group Ltd. 514,220
74,300 Woodside Petroleum Ltd. 523,959
----------
TOTAL INVESTMENTS IN AUSTRALIA 1,272,222
- -------------------------------------------------------------------------------------
AUSTRIA: 0.4%
5,800 Flughafen Wien AG 230,503
----------
TOTAL INVESTMENTS IN AUSTRIA 230,503
- -------------------------------------------------------------------------------------
BERMUDA: 0.6%
3,900 +EXEL Ltd. 247,163
1,600 Mid Ocean Ltd. 86,800
----------
TOTAL INVESTMENTS IN BERMUDA 333,963
- -------------------------------------------------------------------------------------
BRAZIL: 0.4%
18,200 +Aracruz Celulose SA ADR 261,625
---------
TOTAL INVESTMENTS IN BRAZIL 261,625
- -------------------------------------------------------------------------------------
CANADA: 3.0%
8,800 BCE, Inc. 293,426
15,100 Canadian National Railway Co. 711,123
18,900 Canadian Pacific Ltd. 509,184
17,300 The Molson Cos., Ltd. Cl. A ADR 308,702
----------
TOTAL INVESTMENTS IN CANADA 1,822,435
- -------------------------------------------------------------------------------------
FRANCE: 4.2%
18,075 Assurance Generale de France 957,733
9,089 AXA SA 703,289
9,104 Michelin Cl. B 458,339
7,921 Schneider SA 430,104
----------
TOTAL INVESTMENTS IN FRANCE 2,549,465
- -------------------------------------------------------------------------------------
GERMANY: 11.9%
2,320 Allianz Holdings AG 600,973
26,205 BASF AG 928,635
15,662 Bayer AG 585,056
11,777 Bayerische Vereinsbank AG 770,534
15,259 Commerzbank AG 600,538
19,000 Deutsche Telekom 357,514
2,394 Heidelberger Druckmaschinen AG 131,747
18,754 Hoechst AG 656,773
2,408 Muenchener Rueckversicherungs AG 907,543
15,345 VEBA AG 1,044,922
1,219 Viag AG 656,611
----------
TOTAL INVESTMENTS IN GERMANY 7,240,846
- -------------------------------------------------------------------------------------
GHANA: 0.1%
9,886 Ashanti Goldfields Ltd. GDR 74,145
----------
TOTAL INVESTMENTS IN GHANA 74,145
- -------------------------------------------------------------------------------------
HONG KONG: 1.5%
25,000 Cheung Kong Holdings 163,731
34,000 Citic Pacific Ltd. 135,140
68,000 Hutchison Whampoa Ltd. 426,481
47,000 New World Development Co., Ltd. 162,550
----------
TOTAL INVESTMENTS IN HONG KONG 887,902
- -------------------------------------------------------------------------------------
ITALY: 0.8%
247,300 Instituto Nazionale Delle Assicurazioni SPA 501,170
----------
TOTAL INVESTMENTS IN ITALY 501,170
- -------------------------------------------------------------------------------------
JAPAN: 3.9%
20,000 Canon, Inc. 465,651
26,000 Dai Tokyo Fire & Marine Insurance Co., Ltd. 89,209
84,000 Daiwa Securities Co., Ltd. 289,500
40,000 *Minebea Co., Ltd. 428,889
2,200 Nichiei Co., Ltd. 234,204
45,000 Nomura Securities Co., Ltd. 599,678
600 Shohkoh Fund & Co., Ltd. 182,890
28,000 Sumitomo Metal Mining Co., Ltd. 92,211
----------
TOTAL INVESTMENTS IN JAPAN 2,382,232
- -------------------------------------------------------------------------------------
NETHERLANDS: 1.8%
5,200 AEGON Insurance Group NV 462,900
9,265 ING Groep NV 390,221
4,400 Philips Electronics NV 263,872
----------
TOTAL INVESTMENTS IN NETHERLANDS 1,116,993
- -------------------------------------------------------------------------------------
</TABLE>

B-84
<PAGE>

METROPOLITAN SERIES FUND, INC.
- ------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
- ------------------------------------------------------------------------------
SCUDDER GLOBAL EQUITY PORTFOLIO
DECEMBER 31, 1997

<TABLE>
<CAPTION>
VALUE
SHARES ISSUE (NOTE 1A)
- ---------------------------------------------------------------------------------------------------
COMMON STOCK: (CONTINUED)
- ---------------------------------------------------------------------------------------------------
<S> <C> <C>
SOUTH AFRICA: 0.6%
9,100 Anglo American Platinum Corp., Ltd. ADR $ 121,549
23,287 Sasol Ltd. 244,043
----------
TOTAL INVESTMENTS IN SOUTH AFRICA 365,592
- ----------------------------------------------------------------------------------------------
SOUTH KOREA: 0.1%
2,080 Samsung Display Devices 39,268
1,230 * Samsung Electronics Co., Ltd. 27,865
----------
TOTAL INVESTMENTS IN SOUTH KOREA 67,133
- ----------------------------------------------------------------------------------------------
SWEDEN: 2.6%
35,282 Astra AB Cl. A 611,000
10,200 Autoliv, Inc. 334,050
13,512 Skandia Foersaekrings AB 637,318
----------
TOTAL INVESTMENTS IN SWEDEN 1,582,368
- ----------------------------------------------------------------------------------------------
SWITZERLAND: 7.4%
1,997 * Ciba Specialty Chemicals AG 237,803
682 Clariant AG 569,422
5,967 Credit Suisse Group 922,900
627 Holderbank Financiere Glarus AG 511,486
411 Nestle SA 615,712
562 Novartis AG 911,538
23 Schindler Holdings AG 23,957
369 Swiss Reinsurance AG 689,918
----------
TOTAL INVESTMENTS IN SWITZERLAND 4,482,736
- ----------------------------------------------------------------------------------------------
UNITED KINGDOM: 10.0%
44,737 BOC Group PLC 735,540
85,000 British Telecommunications PLC 669,763
76,400 Carlton Communications PLC 589,789
132,300 General Electric Co. PLC 857,259
122,700 National Grid Group PLC 582,435
8,000 * Norwich Union PLC 47,961
13,600 Reuters Holdings PLC 148,548
18,200 Rio Tinto-Zinc Corp. PLC 224,351
113,100 Shell Transport & Trading Co. PLC 793,224
35,956 SmithKline Beecham PLC 370,587
120,700 Unilever PLC 1,038,234
----------
TOTAL INVESTMENTS IN UNITED KINGDOM 6,057,691
- ----------------------------------------------------------------------------------------------
UNITED STATES: 19.4%
19,700 * Advanced Micro Devices, Inc. $ 353,369
5,800 Anheuser-Busch Co., Inc. 255,200
900 * Biogen, Inc. 32,738
11,900 Boeing Co. 582,356
6,300 +* Boston Scientific Corp. 289,013
4,300 Charles Schwab Corp. 180,331
4,500 * Chiron Corp. 76,500
29,100 CINergy Corp. 1,114,894
1,800 * Cisco Systems, Inc. 100,350
6,400 Duke Energy Corp. 354,400
20,400 Electronic Data Systems Corp. 896,325
14,900 Enron Corp. 619,281
9,000 + Entergy Corp. 269,438
16,200 First Data Corp. 473,850
2,700 Guidant Corp. 168,075
11,500 International Business Machines Corp. 1,202,469
7,700 MBIA, Inc. 514,456
5,900 Newmont Mining Corp. 173,313
11,600 * Parametric Technology Corp. 549,550
16,200 + Praxair, Inc. 729,000
13,600 * Sabre Group Holdings, Inc. Cl. A 392,700
3,100 +* Sterling Commerce, Inc. 119,156
11,900 +* Stillwater Mining Co. 199,325
9,100 +* Tele-Communications International, Inc. Cl. A 163,800
2,800 * Tele-Comm TCI Group Cl. A 78,225
8,400 * Toys 'R Us, Inc. 264,075
8,500 UNUM Corp. 462,188
10,800 +* USAirways Group, Inc. 675,000
18,200 + Williams Cos., Inc. 516,426
----------
TOTAL INVESTMENTS IN UNITED STATES 11,805,803
- ----------------------------------------------------------------------------------------------
TOTAL COMMON STOCK
(Cost: $42,145,283 )............................................43,571,568
</TABLE>
B-85
<PAGE>

<TABLE>
<CAPTION>
VALUE
SHARES ISSUE (NOTE 1A)
- -------------------------------------------------------------------------------------------------------
PREFERRED STOCK: 4.4%
- -------------------------------------------------------------------------------------------------------
<S> <C> <C>
BRAZIL: 1.7%
550,000 Companhia Cervejaria Brahma ADR $ 369,607
24,000 Companhia Vale do Rio Doce ADR 482,786
28,600 Usinas Siderurgicas de Minas Gerais S/A ADR 169,135
------------
TOTAL INVESTMENTS IN BRAZIL 1,021,528
- -------------------------------------------------------------------------------------------------------
GERMANY: 2.7%
22,500 RWE AG 950,554
2,100 SAP AG 686,984
------------
TOTAL INVESTMENTS IN GERMANY 1,637,538
- -------------------------------------------------------------------------------------------------------
TOTAL PREFERRED STOCK
(Cost: $2,508,933)......................................... 2,659,066
------------
- -------------------------------------------------------------------------------------------------------
</TABLE>

+ 7,600,000 U.S. Treasury Bond
Strip 0.000% 8/15/21 1,834,184

TOTAL FEDERAL TREASURY OBLIGATIONS
(Cost: $7,798,583)........................................ 8,051,582
------------
- -------------------------------------------------------------------------------------------------------
FOREIGN OBLIGATIONS: 3.1%
- -------------------------------------------------------------------------------------------------------
United
Kingdom 994,000 UK Treasury 8.500% 7/16/07 1,873,970

TOTAL FOREIGN OBLIGATIONS
(Cost: $1,760,713)........................................ 1,873,970
------------
- -------------------------------------------------------------------------------------------------------
REPURCHASE AGREEMENTS: 3.1%
- -------------------------------------------------------------------------------------------------------
$1,879,000 State Street Bank
Repurchase Agreement
(U.S. Treasury Note
collateralized, dated
12/31/97 due 1/2/98 @
12.375% with a market
value of $1,897,979) 5.000% 1/02/98 $ 1,879,000
------------
TOTAL REPURCHASE AGREEMENTS
(Cost: $1,879,000)........................................ 1,879,000
------------
- -------------------------------------------------------------------------------------------------------
SHORT TERM OBLIGATIONS: 6.6%
- -------------------------------------------------------------------------------------------------------
4,000,000 Federal Home Loan
Mortgage Assn. 4.750% 1/02/98 3,999,472

TOTAL SHORT TERM OBLIGATIONS
(Cost: $3,999,472)........................................ 3,999,472
------------
- -------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS: 102.2%
(Cost: $60,091,984)....................................... 62,034,658
OTHER ASSETS LESS LIABILITIES: (2.2%)..................... (1,322,516)
------------
TOTAL NET ASSETS: 100.0%.................................. $60,712,142
============
- -------------------------------------------------------------------------------------------------------
</TABLE>

LEGEND:
- ------
* Non-income producing security.

+ Securities on loan.
ADR (American depository receipt) represents ownership of foreign securities.

SECURITIES LENDING: (Note 7)
- ----------------------------
As of December 31, 1997, the market value of securities loaned was $5,654,717
with collateral backing valued at $5,745,499.

See Notes to Financial Statements.

B-86
<PAGE>

METROPOLITAN SERIES FUND, INC.

INDUSTRY DIVERSIFICATION
- --------------------------------------------------------------------------------
SCUDDER GLOBAL EQUITY PORTFOLIO
AS A PERCENTAGE OF TOTAL VALUE OF INVESTMENTS

<TABLE>
<S> <C>
Aerospace.................................... 0.9%
Automotive................................... 0.5
Banking...................................... 4.1
Biotechnology................................ 0.2
Broadcasting................................. 1.1
Business Services............................ 0.8
Chemicals.................................... 6.9
Construction Materials....................... 0.8
Consumer Products............................ 1.7
Consumer Services............................ 0.4
Drugs & Health Care.......................... 3.1
Electrical Equipment......................... 1.8
Electronics.................................. 1.4
Federal Agency Obligations................... 6.5
Federal Treasury Obligations................. 13.0
Financial Services........................... 5.1
Food & Beverages............................. 3.3
Forest Products & Paper...................... 0.4
Government................................... 3.0
Insurance.................................... 11.8
Machinery.................................... 0.9
Medical Supply............................... 1.8
Metals-Gold.................................. 0.4
Metals-Non-Ferrous........................... 0.3
Metals-Steel & Iron.......................... 1.8
Mining....................................... 0.7
Multi-Industry............................... 2.8
Office & Business Equipment.................. 2.9
Oil-International............................ 3.7
Oil-Services................................. 0.8
Printing & Publishing........................ 0.2
Real Estate.................................. 0.5
Retail Trade................................. 0.4
Software..................................... 3.6
Telecommunications Equipment & Services...... 0.8
Tires & Rubber............................... 0.7
Transportation-Airlines...................... 1.7
Transportation-Railroad...................... 1.2
Utilities-Electric........................... 5.4
Utilities-Gas Distribution & Pipelines....... 1.0
Utilities-Telephone.......................... 1.6
-----
100.0%
=====
</TABLE>

See Notes to Financial Statements.

B-87
<PAGE>

METROPOLITAN SERIES FUND, INC.
FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES
DECEMBER 31, 1997

<TABLE>
<CAPTION>
STATE STREET
STATE STREET STATE STREET RESEARCH STATE STREET
RESEARCH RESEARCH MONEY RESEARCH
GROWTH INCOME MARKET DIVERSIFIED
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
------------ ----------- ----------- ------------
<S> <C> <C> <C> <C>
Assets: Investments, at value (Note 1A) (1)................... 2,372,392,230 $406,221,101 $39,108,709 $1,980,003,912
Cash.................................................. 2,138 226,496 1,268 4,426
Foreign currencies held at value (2).................. -- -- -- --
Receivable for investment securities sold............. 15,150,058 -- -- 7,179,040
Receivable for fund shares sold....................... 1,627,249 -- 263,439 991,186
Receivable for dividends and interest................. 3,398,499 5,370,184 122,536 12,632,499
Unrealized appreciation on forward contacts (Note 8).. -- 1,048,862 -- 2,182,853
Collateral for securities loaned (Note 7)............. 145,698,568 31,731,201 -- 118,838,443
Other assets.......................................... 121 55 16 124
------------- ----------- ---------- -------------
TOTAL ASSETS...................... 2,538,268,863 444,597,899 39,495,968 2,121,832,483
------------- ----------- ---------- -------------

LIABILITIES: Payable for investment securities purchased........... 42,345,146 -- -- 19,775,414
Payable for capital stock repurchased................. 53,024 482,878 -- 29,613
Return of collateral for securities loaned (Note 7)... 145,698,568 31,731,201 -- 118,838,443
Accrued investment management fee (Note 3)............ 947,947 114,766 8,384 727,140
Accrued and other liabilities......................... 162,595 78,423 7,745 230,159
--------------- ------------- ------------ ---------------
TOTAL LIABILITIES................. 189,207,280 32,407,268 16,129 139,600,769
--------------- ------------- ------------ ---------------
NET ASSETS: $2,349,061,583 $412,190,631 $39,479,839 $1,982,231,714
=============== ============= ============ ===============

COMPOSITION
OF NET Paid-in-capital....................................... 1,927,904,288 405,082,154 39,490,478 1,769,131,400
ASSETS: Undistributed/(overdistributed) net investment income/
(loss)................................................ (266,642) 1,182,387 (13,004) (4,689,336)
Net unrealized appreciation/(depreciation)............ 355,872,622 7,694,955 -- 179,266,518
Accumulated net realized gain/(loss).................. 65,551,315 (1,768,865) 2,365 38,523,132
-------------- ------------ ----------- --------------
NET ASSETS........................ $2,349,061,583 $412,190,631 $39,479,839 $1,982,231,714
=============== ============= ============ ===============
SHARES OUTSTANDING................ 73,600,071 32,555,011 3,803,743 116,712,757
=============== ============= ============ ===============
NET ASSET VALUE PER SHARE......... $31.92 $12.66 $10.38 $16.98
=============== ============= ============ ===============
---------------------------------------------------------------------------------------------------------------------

Notes:
(1) Investments, at cost.............................. $2,016,519,608 $399,551,866 $39,108,709 $1,802,872,213
(2) Cost of foreign currency.......................... -- -- -- --
</TABLE>

See Notes to Financial Statements

B-88
<PAGE>

<TABLE>
<CAPTION>
STATE STREET STATE STREET LOOMIS
RESEARCH METLIFE RESEARCH SAYLES T. ROWE PRICE SCUDDER
AGGRESSIVE STOCK INTERNATIONAL HIGH YIELD JANUS SMALL CAP GLOBAL
GROWTH INDEX STOCK BOND MID CAP GROWTH EQUITY
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
- -------------- -------------- ------------ ----------- ------------ ------------- -----------
<S> <C> <C> <C> <C> <C> <C>
$1,382,032,870 $2,016,263,121 $263,317,412 $27,748,520 $109,142,625 $ 95,570,368 $62,034,658
874 27,142 2,119,921 754 82,019 933 297
-- -- 448,924 -- 115 -- 1,277
5,883,607 4,811,407 -- -- 46,012 239,044 60,669
4,355,548 2,124,004 951,886 116,488 -- 9 --
546,342 2,739,219 491,737 468,883 15,844 8,255 243,382
-- -- -- -- -- -- --
120,801,619 149,054,407 4,800,353 764,110 12,396,894 11,584,484 5,745,499
73 51 348,230 -- 4,979 -- 34,344
- -------------- -------------- ------------ ----------- ------------ ------------- -----------
1,513,620,933 2,175,019,351 272,478,463 29,098,755 121,688,488 107,403,093 68,120,126
- -------------- -------------- ------------ ----------- ------------ ------------- -----------

-- 4,987,078 270,803 510,498 5,200,052 400,793 297,369
902 381 -- -- 124,692 1,343,477 1,313,785
120,801,619 149,054,407 4,800,353 764,110 12,396,894 11,584,484 5,745,499
814,133 418,735 176,539 15,613 59,014 39,741 34,731
48,667 78,714 141,959 4,868 56,195 14,592 16,600
- -------------- -------------- ------------ ----------- ------------ ------------- -----------
121,665,321 154,539,315 5,389,654 1,295,089 17,836,847 13,383,087 7,407,984
- -------------- -------------- ------------ ----------- ------------ ------------- -----------
$1,391,955,612 $2,020,480,036 $267,088,809 $27,803,666 $103,851,641 $ 94,020,006 $60,712,142
============== ============== ============ =========== ============ ============= ===========

1,182,485,095 1,341,146,832 279,304,895 28,873,521 93,962,960 89,404,013 58,891,468

(2,215,320) (222,216) 2,309,120 (672) (31,445) (7,343) (3,455)
196,900,177 680,466,140 (4,246,703) (1,078,040) 10,847,186 5,049,772 1,942,819
14,785,660 (910,720) (10,278,503) 8,857 (927,060) (426,436) (118,690)
- -------------- -------------- ------------ ----------- ------------ ------------- -----------
$1,391,955,612 $2,020,480,036 $267,088,809 $27,803,666 $103,851,641 $ 94,020,006 $60,712,142
============== ============== ============ =========== ============ ============= ===========
50,412,220 70,203,936 22,885,826 2,741,057 8,132,247 7,915,609 5,595,122
============== ============== ============ =========== ============ ============= ===========
$27.61 $28.78 $11.67 $10.14 $12.77 $11.88 $10.85
============== ============== ============ =========== ============ ============= ===========

- --------------------------------------------------------------------------------------------------------------------

$1,185,132,693 $1,335,796,981 $267,549,270 $28,826,155 $98,258,908 $90,520,596 $60,091,984
-- -- 464,921 -- 118 -- 1,277
</TABLE>

B-89
<PAGE>

METROPOLITAN SERIES FUND, INC.

FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1997

EXPENSES: Investment management fee (Note 3A)................ 7,305,001 1,102,819 105,515 5,811,475
Printing and distribution fees..................... 927,068 186,469 20,807 675,907
Custodian and transfer agent fees.................. 299,244 146,035 41,547 347,729
Directors fees..................................... 12,097 12,793 12,097 12,097
Other operating expenses........................... 107,866 43,436 25,415 89,478
-------------- ------------- ------------ -------------
Total expenses before reimbursement............ 8,651,276 1,491,552 205,381 6,936,686
-------------- ------------- ------------ -------------
Less: expense reimbursement................... -- -- -- --
-------------- ------------- ------------ -------------
Net expenses................................... 8,651,276 1,491,552 205,381 6,936,686
-------------- ------------- ------------ -------------

NET INVESTMENT INCOME/(LOSS)................... 27,619,047 25,458,694 2,140,715 60,099,946
-------------- ------------- ------------ -------------

NET REALIZED Investments........................................ 346,762,521 2,318,758 561 215,044,518
GAIN/(LOSS) ON: Foreign currency transactions (Note 8)............. (44,837) 722,568 -- 1,625,104
-------------- ------------- ------------ -------------

NET REALIZED GAIN/(LOSS)....................... 346,717,684 3,041,326 561 216,669,622
-------------- ------------- ------------ -------------

NET UNREALIZED Beginning of period investments and foreign
APPRECIATION/ currency holdings (Notes 8, 10).................. 243,748,890 (417,499) -- 139,692,509

(DEPRECIATION): End of period investments and foreign currency
holdings (Notes 8, 10)........................... 355,872,622 7,694,955 -- 179,266,518
-------------- ------------- ------------ -------------

NET UNREALIZED APPRECIATION/(DEPRECIATION)..... 112,123,732 8,112,454 -- 39,574,009
-------------- ------------- ------------ -------------
NET INCREASE/(DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS.............................. $486,460,463 $36,612,474 $2,141,276 $316,343,577
============== ============= ============ =============

-----------------------------------------------------------------------------------------------------------------
Notes:
(1) Withholding taxes.............................. $593,357 -- -- $340,945
(2) For the Period March 3, 1997 through December
31, 1997.
</TABLE>

See Notes to Financial Statements.

B-90
<PAGE>

<TABLE>
<CAPTION>
STATE STREET STATE STREET LOOMIS
RESEARCH METLIFE RESEARCH SAYLES
AGGRESSIVE STOCK INTERNATIONAL HIGH YIELD JANUS
GROWTH INDEX STOCK BOND MID CAP
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO /2/ PORTFOLIO /2/
---------------- --------------- ------------------- ---------------------- ---------------------
<S> <C> <C> <C> <C>
$ 4,233,420 $ 404,313 $ 222,761 $ 975,310 $ 243,270
5,423,522 27,824,265 5,171,868 51,662 130,894
--------------- ----------------- --------------- -------------- -------------
9,656,942 28,228,578 5,394,629 1,026,972 374,164
--------------- ----------------- --------------- -------------- -------------

9,931,653 3,961,131 2,258,438 84,589 263,954
676,855 785,914 148,160 4,795 13,252
246,379 270,763 625,649 54,199 82,185
12,097 12,097 12,097 10,081 10,081
106,255 97,895 41,165 21,955 22,214
--------------- ----------------- --------------- -------------- -------------
10,973,239 5,127,800 3,085,509 175,619 391,686
--------------- ----------------- --------------- -------------- -------------
-- -- -- 67,120 57,892
--------------- ----------------- --------------- -------------- -------------
10,973,239 5,127,800 3,085,509 108,499 333,794
--------------- ----------------- --------------- -------------- -------------

(1,316,297) 23,100,778 2,309,120 918,473 40,370
--------------- ----------------- --------------- -------------- -------------

30,729,705 17,206,045 26,192,152 326,594 (653,942)
-- 11 (18,336,495) (658) 61,966
--------------- ----------------- --------------- -------------- -------------
30,729,705 17,206,056 7,855,657 325,936 (591,976)
--------------- ----------------- --------------- -------------- -------------

136,862,235 303,651,601 11,038,872 -- --

196,900,177 680,466,140 (4,246,703) (1,078,040) 10,847,186
--------------- ----------------- --------------- -------------- -------------
60,037,942 376,814,539 (15,285,575) (1,078,040) 10,847,186
--------------- ----------------- --------------- -------------- -------------

$ 89,451,350 $417,121,373 $ (5,120,798) $ 166,369 $10,295,580
=============== ================= =============== ============== =============

- --------------------------------------------------------------------------------------------------------------------------------

$ 12,233 $ 160,288 $ 743,374 $ 288 $ 4,537

<CAPTION>
T. ROWE PRICE SCUDDER
SMALL CAP GLOBAL
GROWTH EQUITY
PORTFOLIO /2/ PORTFOLIO /2/
-------------- ------------
<C> <C>
$ 171,116 $ 434,388
86,518 389,780
------------- -------------
257,634 824,168
------------- -------------

187,380 201,758
12,988 12,992
95,715 136,147
10,081 10,081
22,207 24,527
------------- -------------
328,371 385,505
------------- -------------
73,549 120,837
------------- -------------
254,822 264,668
------------- -------------

2,812 559,500
------------- -------------

(426,436) 93,717
-- (131,480)
------------- -------------
(426,436) (37,763)
------------- -------------

-- --

5,049,772 1,942,819
------------- -------------
5,049,772 1,942,819
------------- -------------

$4,626,148 $2,464,556
============ =============

- ----------------------------------------------------------

$139 $42,288
</TABLE>

B-91
<PAGE>

METROPOLITAN SERIES FUND, INC.

FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS

<TABLE>
<CAPTION>
STATE STREET STATE STREET
RESEARCH GROWTH RESEARCH INCOME
PORTFOLIO PORTFOLIO
-------------------------------------- --------------------------------------
INCREASE/(DECREASE) IN NET ASSETS FROM: FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR
ENDED ENDED ENDED ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1997 1996 1997 1996
----------------- ---------------- ----------------- ----------------
<S> <C> <C> <C> <C>
OPERATIONS: Net investment income/(loss).......... $ 27,619,047 $ 17,239,321 $ 25,458,694 $ 24,051,031
Net realized gain/(loss) from
investment and foreign currency
transactions........................... 346,717,684 236,501,143 3,041,326 4,419,955
Unrealized appreciation/(depreciation) of
investments and foreign currency
holdings............................... 112,123,732 15,205,595 8,112,454 (14,942,561)
--------------- ---------------- -------------- --------------
Net increase/(decrease) in net assets
resulting from operations.............. 486,460,463 268,946,059 36,612,474 13,528,425
--------------- ---------------- -------------- --------------

DISTRIBUTIONS Net investment income.................... (27,776,294) (17,239,740) (26,501,290) (23,474,190)
TO Net realized gain from investment
SHAREHOLDERS: transactions........................... (386,087,667) (134,047,463) (1,217,790) (697,717)
--------------- ---------------- -------------- --------------
Total Distributions (Note 4)............. (413,863,961) (151,287,203) (27,719,080) (24,171,907)
--------------- ---------------- -------------- --------------

CAPITAL SHARE Net proceeds from sale of shares......... 281,613,597 246,392,853 25,921,259 46,724,830
TRANSACTIONS: Net asset value of shares issued to
shareholders in reinvestment of
distributions.......................... 413,863,961 151,287,203 27,719,080 24,171,907
Shares redeemed.......................... (16,740,952) (12,361,034) (33,737,940) (26,771,445)
--------------- ---------------- -------------- --------------
Net Capital Stock Transactions (Note 9).. 678,736,606 385,319,022 19,902,399 44,125,292
--------------- ---------------- -------------- --------------
NET INCREASE/(DECREASE) IN NET ASSETS.... 751,333,108 502,977,878 28,795,793 33,481,810
NET ASSETS: Beginning of period.......... 1,597,728,475 1,094,750,597 383,394,838 349,913,028
--------------- ---------------- -------------- --------------
NET ASSETS: End of period................ $ 2,349,061,583 $ 1,597,728,475 $ 412,190,631 $ 383,394,838
=============== ================ ============== ==============

<CAPTION>
STATE STREET
RESEARCH MONEY MARKET
PORTFOLIO
--------------------------------------
INCREASE/(DECREASE) IN NET ASSETS FROM: FOR THE YEAR FOR THE YEAR
ENDED ENDED
DECEMBER 31, DECEMBER 31,
1997 1996
----------------- ----------------
<S> <C> <C>
OPERATIONS: Net investment income/(loss)............. $ 2,140,715 $ 2,028,460
Net realized gain/(loss) from
investment and foreign currency
transactions........................... 561 1,031
Unrealized appreciation/(depreciation) of
investments and foreign currency
holdings............................... -- --
------------- --------------
Net increase/(decrease) in net assets
resulting from operations.............. 2,141,276 2,029,491
------------- --------------

DISTRIBUTIONS Net investment income.................... (2,143,228) (2,045,447)
TO Net realized gain from investment
SHAREHOLDERS: transactions........................... (561) (1,192)
------------- --------------
Total Distributions (Note 4)............. (2,143,789) (2,046,639)
------------- --------------

CAPITAL SHARE Net proceeds from sale of shares......... 25,785,388 19,329,406
TRANSACTIONS: Net asset value of shares issued to
shareholders in reinvestment of
distributions.......................... 2,143,789 2,046,639
Shares redeemed.......................... (30,083,456) (20,178,541)
------------- --------------
Net Capital Stock Transactions (Note 9).. (2,154,279) 1,197,504
------------- --------------
NET INCREASE/(DECREASE) IN NET ASSETS.... (2,156,792) 1,180,356
NET ASSETS: Beginning of period.......... 41,636,631 40,456,275
------------- --------------
NET ASSETS: End of period................ $ 39,479,839 $ 41,636,631
============= ==============
</TABLE>

- --------------------------------------------------------------------------------
See Notes to Financial Statements.

B-92
<PAGE>

<TABLE>
<CAPTION>
STATE STREET RESEARCH STATE STREET RESEARCH METLIFE
DIVERSIFIED AGGRESSIVE GROWTH STOCK INDEX
PORTFOLIO PORTFOLIO PORTFOLIO
- ---------------------------------- ------------------------------------ ------------------------------------
FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1997 1996 1997 1996 1997 1996
- --------------- --------------- -------------- --------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
$ 60,099,946 $ 42,980,569 $ (1,316,297) $ (1,338,007) $ 23,100,778 $ 16,426,973

216,669,622 135,252,779 30,729,705 78,458,844 17,206,056 7,811,922

39,574,009 (3,189,270) 60,037,942 (4,364,360) 376,814,539 156,236,698
- --------------- -------------- -------------- -------------- -------------- --------------

316,343,577 175,044,078 89,451,350 72,756,477 417,121,373 180,475,593
- --------------- -------------- -------------- -------------- -------------- --------------

(61,064,178) (42,176,327) -- -- (23,568,303) (16,158,730)

(237,658,263) (84,750,798) (55,883,502) (35,104,245) (16,507,210) (10,189,362)
- --------------- -------------- -------------- -------------- -------------- --------------
(298,722,441) (126,927,125) (55,883,502) (35,104,245) (40,075,513) (26,348,092)
- --------------- -------------- -------------- -------------- -------------- --------------

226,893,034 171,456,907 103,191,357 318,837,326 496,672,317 330,175,386

298,722,441 126,927,125 55,883,502 35,104,245 40,075,513 26,348,092
(9,846,064) (12,493,415) (122,536,459) (28,659,672) (15,610,988) (24,176,884)
- --------------- -------------- -------------- -------------- -------------- --------------
515,769,411 285,890,617 36,538,400 325,281,899 521,136,842 332,346,594
- --------------- -------------- -------------- -------------- -------------- --------------

533,390,547 334,007,570 70,106,248 362,934,131 898,182,702 486,474,095
1,448,841,167 1,114,833,597 1,321,849,364 958,915,233 1,122,297,334 635,823,239
- --------------- -------------- -------------- -------------- -------------- --------------
$ 1,982,231,714 $1,448,841,167 $1,391,955,612 $1,321,849,364 $2,020,480,036 $1,122,297,334
=============== ============== ============== ============== ============== ==============

<CAPTION>
STATE STREET RESEARCH
INTERNATIONAL STOCK
PORTFOLIO
- ---------------------------------
FOR THE YEAR FOR THE YEAR
ENDED ENDED
DECEMBER 31, DECEMBER 31,
1997 1996
- ------------ --------------
<S> <C>
$ 2,309,120 $ 1,728,132

7,855,657 (25,299,526)

(15,285,575) 17,465,452
- ------------ --------------

(5,120,798) (6,105,942)
- ------------ --------------

-- (16,086)

-- (3,229,290)
- ------------ --------------
-- (3,245,376)
- ------------ --------------

49,148,625 43,194,283

-- 3,245,376
(80,764,501) (30,723,899)
- ------------ --------------

(31,615,876) 15,715,760
- ------------ --------------

(36,736,674) 6,364,442
303,825,483 297,461,041
- ------------ --------------
$267,088,809 $ 303,825,483
============ ==============
</TABLE>

B-93
<PAGE>

METROPOLITAN SERIES FUND, INC.

FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS

<TABLE>
<CAPTION>
LOOMIS SAYLES JANUS T. ROWE PRICE
HIGH YIELD BOND MID CAP SMALL CAP GROWTH
PORTFOLIO PORTFOLIO PORTFOLIO
---------------- ---------------- ---------------
INCREASE IN NET ASSETS FROM: FOR THE PERIOD FOR THE PERIOD FOR THE PERIOD
MARCH 3, 1997 TO MARCH 3, 1997 TO MARCH 3, 1997 TO
DECEMBER 31, DECEMBER 31, DECEMBER 31,
1997 1997 1997
---------------- ---------------- ---------------
<S> <C> <C> <C>
OPERATIONS: Net investment income...................... $ 918,473 $ 40,370 $ 2,812
Net realized gain/(loss) from
investment and foreign currency
transactions............................. 325,936 (591,976) (426,436)

Unrealized appreciation/
(depreciation) of investments and
foreign currency holdings................ (1,078,040) 10,847,186 5,049,772
---------------- ---------------- ---------------
Net increase in net assets resulting
from operations.......................... 166,369 10,295,580 4,626,148
---------------- ---------------- ---------------

DISTRIBUTIONS Net investment income...................... (919,145) (71,815) (10,155)
TO SHAREHOLDERS: Net realized gain from investment
transactions............................. (317,080) (335,084) --
---------------- ---------------- ---------------
Total Distributions (Note 4)............... (1,236,225) (406,899) (10,155)
---------------- ---------------- ---------------

CAPITAL SHARE Net proceeds from sale of shares........... 29,791,455 93,684,756 107,739,742
TRANSACTIONS: Net asset value of shares issued to
shareholders in reinvestment of
distributions............................ 1,236,225 406,899 10,155
Shares redeemed............................ (2,154,158) (128,695) (18,345,884)
---------------- ---------------- ---------------
Net Capital Stock Transactions
(Note 9)................................. 28,873,522 93,962,960 89,404,013
---------------- ---------------- ---------------
NET INCREASE IN
NET ASSETS............................... 27,803,666 103,851,641 94,020,006
NET ASSETS: Beginning of period............ -- -- --
---------------- ---------------- ---------------
NET ASSETS: End of period.................. $27,803,666 $103,851,641 $ 94,020,006
================ ================ ===============
<CAPTION>
SCUDDER
GLOBAL EQUITY
PORTFOLIO
----------------
INCREASE IN NET ASSETS FROM: FOR THE PERIOD
MARCH 3, 1997 TO
DECEMBER 31,
1997
----------------
<S> <C>
OPERATIONS: Net investment income...................... $ 559,500
Net realized gain/(loss) from
investment and foreign currency
transactions............................. (37,763)

Unrealized appreciation/
(depreciation) of investments and
foreign currency holdings................ 1,942,819
----------------
Net increase in net assets resulting
from operations.......................... 2,464,556
----------------

DISTRIBUTIONS Net investment income...................... (562,955)
TO SHAREHOLDERS: Net realized gain from investment
transactions............................. (80,927)
----------------
Total Distributions (Note 4)............... (643,882)
----------------

CAPITAL SHARE Net proceeds from sale of shares........... 63,644,896
TRANSACTIONS: Net asset value of shares issued to
shareholders in reinvestment of
distributions............................ 643,882
Shares redeemed............................ (5,397,310)
----------------
Net Capital Stock Transactions
(Note 9)................................. 58,891,468
----------------
NET INCREASE IN
NET ASSETS............................... 60,712,142
NET ASSETS: Beginning of period............ --
----------------
NET ASSETS: End of period.................. $ 60,712,142
================
</TABLE>

- --------------------------------------------------------------------------------
See Notes to Financial Statements.

B-94
<PAGE>

METROPOLITAN SERIES FUND, INC.

FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)

<TABLE>
<CAPTION>
STATE STREET RESEARCH GROWTH PORTFOLIO
-----------------------------------------------------------------

YEAR ENDED DECEMBER 31,
-----------------------------------------------------------------
1997 1996 1995 1994 1993
---- ---- ---- ---- ----
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE: Beginning of period..................... $ 30.51 $ 27.56 $ 21.81 $ 23.27 $ 21.72
- ----------------------------------------------------------------------------------------------------------------------------------
Investment Operations:
- ----------------------
Net investment income.................................... 0.44 0.36 0.35 0.30 0.28
Net realized and unrealized gain/(loss).................. 7.72 5.78 6.83 (1.06) 3.24
---------- ---------- ---------- ---------- ----------
Total From Investment Operations...................... 8.16 6.14 7.18 (0.76) 3.52
---------- ---------- ---------- ---------- ----------

Less Distributions:
- -------------------
Dividends from net investment income..................... (0.44) (0.36) (0.35) (0.30) (0.28)
Distributions from net realized capital gains............ (6.31) (2.83) (1.08) (0.40) (1.69)
---------- ---------- ---------- ---------- ----------
Total Distributions................................... (6.75) (3.19) (1.43) (0.70) (1.97)
---------- ---------- ---------- ---------- ----------

- ----------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE: End of period........................... $ 31.92 $ 30.51 $ 27.56 $ 21.81 $ 23.27
- ----------------------------------------------------------------------------------------------------------------------------------
Total Return............................................. 28.36% 22.18% 33.14% (3.25)% 14.40%

Supplemental Data/Significant Ratios:
- -------------------------------------
Net assets at end of period (000's)...................... $2,349,062 $1,597,728 $1,094,751 $ 746,433 $ 640,413
Operating expenses to average net assets................. 0.43% 0.29% 0.31% 0.32% 0.28%
Net investment income to average net assets.............. 1.37% 1.29% 1.46% 1.40% 1.19%
Portfolio turnover (1)................................... 82.81% 93.05% 45.52% 57.27% 66.27%
Average broker commission rate (2)....................... $ 0.0590 $ 0.0578 -- -- --
</TABLE>

________________________________________________________________________________

Notes:

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.

(1) The lesser of purchases or sales of portfolio securities for a period,
divided by the monthly average of the market value of portfolio securities
owned during the period. Securities with a maturity or expiration date at
the time of acquisition of one year or less are excluded from the
calculation. Purchases and sales of securities (excluding short-term
securities) for the year ended December 31, 1997 amounted to
$1,726,435,425 and $1,541,608,452, respectively.

(2) Total brokerage commissions paid on purchases and sales of portfolio
securities for the period divided by the total number of related shares
purchased and sold.

See Notes to Financial Statements.

B-95

<PAGE>

METROPOLITAN SERIES FUND, INC.

FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)

<TABLE>
<CAPTION>
STATE STREET RESEARCH INCOME PORTFOLIO
------------------------------------------------------------

YEAR ENDED DECEMBER 31,
------------------------------------------------------------
1997 1996 1995 1994 1993
---- ---- ---- ---- ----
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE: Beginning of period..................... $ 12.36 $ 12.73 $ 11.32 $ 12.59 $ 12.22
- -----------------------------------------------------------------------------------------------------------------------------
Investment Operations:
- ----------------------
Net investment income.................................... 0.83 0.82 0.83 0.91 0.83
Net realized and unrealized gain/(loss).................. 0.38 (0.36) 1.38 (1.31) 0.86
-------- -------- -------- -------- --------
Total From Investment Operations...................... 1.21 0.46 2.21 (0.40) 1.69
-------- -------- -------- -------- --------

Less Distributions:
- -------------------
Dividends from net investment income..................... (0.87) (0.81) (0.80) (0.87) (0.88)
Distributions from net realized capital gains............ (0.04) (0.02) -- -- (0.44)
-------- -------- -------- -------- --------
Total Distributions................................... (0.91) (0.83) (0.80) (0.87) (1.32)
-------- -------- -------- -------- --------

- -----------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE: End of period........................... $ 12.66 $ 12.36 $ 12.73 $ 11.32 $ 12.59
- -----------------------------------------------------------------------------------------------------------------------------
Total Return............................................. 9.83% 3.60% 19.55% (3.15)% 11.36%

Supplemental Data/Significant Ratios:
- -------------------------------------
Net assets at end of period (000's)...................... $412,191 $383,395 $349,913 $275,659 $299,976
Operating expenses to average net assets................. 0.38% 0.32% 0.34% 0.35% 0.32%
Net investment income to average net assets.............. 6.57% 6.64% 7.01% 7.02% 6.39%
Portfolio turnover (1)................................... 121.92% 92.90% 102.88% 141.15% 136.98%
</TABLE>

________________________________________________________________________________
Notes:
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.
(1) The lesser of purchases or sales of portfolio securities for a period,
divided by the monthly average of the market value of portfolio securities
owned during the period. Securities with a maturity or expiration date at
the time of acquisition of one year or less are excluded from the
calculation. Purchases and sales of securities (excluding short-term
securities) for the year ended December 31, 1997 amounted to $470,696,082
and $451,405,517, respectively.

See Notes to Financial Statements.

B-96
<PAGE>

METROPOLITAN SERIES FUND, INC.

FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)

<TABLE>
<CAPTION>
STATE STREET RESEARCH INCOME PORTFOLIO
------------------------------------------------------------

YEAR ENDED DECEMBER 31,
------------------------------------------------------------
1997 1996 1995 1994 1993
---- ---- ---- ---- ----
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE: Beginning of period..................... $ 10.44 $ 10.45 $ 10.48 $ 10.49 $ 10.52
- -----------------------------------------------------------------------------------------------------------------------------
Investment Operations:
- ----------------------
Net investment income.................................... 0.54 0.53 0.59 0.40 0.28
-------- -------- -------- -------- --------
Total From Investment Operations...................... 0.54 0.53 0.59 0.40 0.28
-------- -------- -------- -------- --------

Less Distributions:
- -------------------
Dividends from net investment income..................... (0.60) (0.54) (0.62) (0.41) (0.31)
-------- -------- -------- -------- --------
Total Distributions................................... (0.60) (0.54) (0.62) (0.41) (0.31)
-------- -------- -------- -------- --------

- -----------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE: End of period........................... $ 10.38 $ 10.44 $ 10.45 $ 10.48 $ 10.49
- -----------------------------------------------------------------------------------------------------------------------------
Total Return............................................. 5.21% 5.01% 5.59% 3.85% 2.90%

Supplemental Data/Significant Ratios:
- -------------------------------------
Net assets at end of period (000's)...................... $ 39,480 $ 41,637 $ 40,456 $ 39,961 $ 44,321
Operating expenses to average net assets................. 0.49% 0.43% 0.49% 0.44% 0.38%
Net investment income to average net assets.............. 5.08% 4.92% 5.39% 3.76% 2.85%
</TABLE>

________________________________________________________________________________
Note:

Total return information shown in the Financial Highlights tables does not
reflect expenses that apply at the separate account level or to related
insurance products.
Inclusion of these charges would reduce the total return figures for all
periods shown.

See Notes to Financial Statements.

B-97
<PAGE>

METROPOLITAN SERIES FUND, INC.

FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)

<TABLE>
<CAPTION>
STATE STREET RESEARCH DIVERSIFIED PORTFOLIO
-----------------------------------------------------------------

YEAR ENDED DECEMBER 31,
-----------------------------------------------------------------
1997 1996 1995 1994 1993
---- ---- ---- ---- ----
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE: Beginning of period..................... $ 16.67 $ 15.95 $ 13.40 $ 14.41 $ 13.58
- ----------------------------------------------------------------------------------------------------------------------------------
Investment Operations:
- ----------------------
Net investment income.................................... 0.60 0.55 0.59 0.51 0.46
Net realized and unrealized gain/(loss).................. 2.71 1.77 3.02 (0.95) 1.58
---------- ---------- ---------- ---------- ----------
Total From Investment Operations...................... 3.31 2.32 3.61 (0.44) 2.04
---------- ---------- ---------- ---------- ----------

Less Distributions:
- -------------------
Dividends from net investment income..................... (0.60) (0.53) (0.58) (0.50) (0.54)
Distributions from net realized capital gains............ (2.40) (1.07) (0.48) (0.07) (0.67)
---------- ---------- ---------- ---------- ----------
Total Distributions................................... (3.00) (1.60) (1.06) (0.57) (1.21)
---------- ---------- ---------- ---------- ----------

- ----------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE: End of period........................... $ 16.98 $ 16.67 $ 15.95 $ 13.40 $ 14.41
- ----------------------------------------------------------------------------------------------------------------------------------
Total Return............................................. 20.58% 14.52% 27.03% (3.06)% 12.75%

Supplemental Data/Significant Ratios:
- -------------------------------------
Net assets at end of period (000's)...................... $1,982,232 $1,448,841 $1,114,834 $ 892,826 $ 743,798
Operating expenses to average net assets................. 0.40% 0.29% 0.31% 0.32% 0.29%
Net investment income to average net assets.............. 3.50% 3.38% 3.92% 3.66% 3.16%
Portfolio turnover (1)................................... 114.79% 91.07% 79.29% 96.49% 95.84%
Average broker commission rate (2)....................... $ 0.0590 $ 0.0578 -- -- --
</TABLE>

________________________________________________________________________________
Notes:

(2) Total brokerage commissions paid on purchases and sales of portfolio
securities for the period divided by the total number of related shares
purchased and sold.

See Notes to Financial Statements.

B-98
<PAGE>

METROPOLITAN SERIES FUND, INC.

FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)

<TABLE>
<CAPTION>
STATE STREET RESEARCH AGGRESSIVE GROWTH PORTFOLIO
-----------------------------------------------------------------

YEAR ENDED DECEMBER 31,
-----------------------------------------------------------------
1997 1996 1995 1994 1993
---- ---- ---- ---- ----
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE: Beginning of period..................... $ 27.11 $ 25.87 $ 22.05 $ 22.54 $ 19.52
- ----------------------------------------------------------------------------------------------------------------------------------
Investment Operations:
- ----------------------
Net investment income/(loss)............................. (0.03) (0.02) (0.01) 0.05 0.04
Net realized and unrealized gain/(loss).................. 1.67 2.01 6.50 (0.48) 5.06
---------- ---------- ---------- ---------- ----------
Total From Investment Operations...................... 1.64 1.99 6.49 (0.43) 5.10
---------- ---------- ---------- ---------- ----------

Less Distributions:
- -------------------
Dividends from net investment income..................... -- -- -- (0.05) (0.06)
Distributions from net realized capital gains............ (1.14) (0.75) (2.67) (0.01) (2.02)
---------- ---------- ---------- ---------- ----------
Total Distributions................................... (1.14) (0.75) (2.67) (0.06) (2.08)
---------- ---------- ---------- ---------- ----------

- ----------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE: End of period........................... $ 27.61 $ 27.11 $ 25.87 $ 22.05 $ 22.54
- ----------------------------------
- ------------------------------------------------------------------------------------------------
Total Return............................................. 6.67% 7.72% 29.50% (1.88)% 22.63%

Supplemental Data/Significant Ratios:
- -------------------------------------
Net assets at end of period (000's)...................... $1,391,956 $1,321,849 $ 958,915 $ 590,047 $ 387,949
Operating expenses to average net assets................. 0.81% 0.79% 0.81% 0.82% 0.79%
Net investment income/(loss) to average net assets....... (0.10)% (0.11)% (0.06)% 0.24% 0.18%
Portfolio turnover (1)................................... 219.08% 221.23% 255.83% 186.52% 120.82%
Average broker commission rate (2)....................... $ 0.0567 $ 0.0576 -- -- --
</TABLE>

________________________________________________________________________________
Notes:

(2) Total brokerage commissions paid on purchases and sales of portfolio
securities for the period divided by the total number of related shares
purchased and sold.

See Notes to Financial Statements.

B-99

<PAGE>

METROPOLITAN SERIES FUND, INC.

FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)

<TABLE>
<CAPTION>
METLIFE STOCK INDEX PORTFOLIO
-----------------------------------------------------------
YEAR ENDED DECEMBER 31,
-----------------------------------------------------------
1997 1996 1995 1994 1993
---- ---- ---- ---- ----
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE: Beginning of period....................... $ 22.23 $ 18.56 $ 13.87 $ 14.25 $ 13.27
- -------------------------------------------------------------------------------------------------------------------------
Investment Operations:
----------------------
Net investment income...................................... 0.34 0.33 0.32 0.33 0.35
Net realized and unrealized gain/(loss).................... 6.79 3.88 4.79 (0.17) 0.98
---------- ---------- -------- -------- --------
Total From Investment Operations........................ 7.13 4.21 5.11 0.16 1.33
---------- ---------- -------- -------- --------

Less Distributions:
-------------------
Dividends from net investment income....................... (0.34) (0.33) (0.32) (0.32) (0.35)
Distributions from net realized capital gains.............. (0.24) (0.21) (0.10) (0.22) --
---------- ---------- -------- -------- --------
Total Distributions..................................... (0.58) (0.54) (0.42) (0.54) (0.35)
---------- ---------- -------- -------- --------
- -------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE: End of period............................. $ 28.78 $ 22.23 $ 18.56 $ 13.87 $ 14.25
- -------------------------------------------------------------------------------------------------------------------------
Total Return............................................... 32.19% 22.66% 36.87% 1.18% 9.54%

Supplemental Data/Significant Ratios:
-------------------------------------
Net assets at end of period (000's)........................ $2,020,480 $1,122,297 $635,823 $363,001 $282,700
Operating expenses to average net assets................... 0.33% 0.30% 0.32% 0.33% 0.32%
Net investment income to average net assets................ 1.47% 1.91% 2.22% 2.51% 2.51%
Portfolio turnover (1)..................................... 10.69% 11.48% 6.35% 6.66% 13.99%
Average broker commission rate (2)......................... $ 0.0201 $ 0.0204 -- -- --
</TABLE>

________________________________________________________________________________

Notes:

(1) The lesser of purchases or sales of portfolio securities for a period,
divided by the monthly average of the market value of portfolio
securities owned during the period. Securities with a maturity or
expiration date at the time of acquisition of one year or less are
excluded from the calculation. Purchases and sales of securities
(excluding short-term securities) for the year ended December 31, 1997
amounted to $658,470,953 and $167,841,221, respectively.
(2) Total brokerage commissions paid on purchases and sales of portfolio
securites for the period divided by the total number of related shares
purchased and sold.

See Notes to Financial Statements.

B-100
<PAGE>

METROPOLITAN SERIES FUND, INC.

FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)

<TABLE>
<CAPTION>
STATE STREET RESEARCH INTERNATIONAL STOCK PORTFOLIO
-------------------------------------------------------

YEAR ENDED DECEMBER 31,
-------------------------------------------------------
1997 1996 1995 1994 1993
---- ---- ---- ---- ----
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE: Beginning of period................ $ 11.95 $ 12.29 $ 12.30 $ 12.33 $ 8.63
- -------------------------------------------------------------------------------------------------------------------------
Investment Operations:
----------------------
Net investment income.............................. 0.10 0.07 0.03 0.08 0.02
Net realized and unrealized gain (loss)............ (0.38) (0.28) 0.07 0.54 4.52
-------- -------- -------- -------- ------------
Total From Investment Operations................ (0.28) (0.21) 0.10 0.62 4.54
-------- -------- -------- -------- ------------

Less Distributions:
-------------------
Dividends from net investment income............... -- -- (0.04) -- (0.26)
Distributions from net realized capital gains...... -- (0.13) (0.07) (0.65) (0.58)
-------- -------- -------- -------- ------------
Total Distributions............................. -- (0.13) (0.11) (0.65) (0.84)
-------- -------- -------- -------- ------------

- -------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE: End of period..................... $ 11.67 $ 11.95 $ 12.29 $ 12.30 $ 12.33
- -------------------------------------------------------------------------------------------------------------------------
Total Return....................................... (2.34)% (1.77)% 0.84% 5.08% 47.76%

Supplemental Data/Significant Ratios:
-------------------------------------
Net assets at end of period (000's)................ $ 267,089 $303,826 $297,461 $272,952 $120,781
Net expenses to average net assets (Note 3)........ 1.03% 0.97% 1.01% 1.04% 1.14%
Operating expenses to average net assets
before voluntary expense reimbursements (Note 3).. N/A N/A N/A N/A 1.15%
Net investment income to average net assets........ 0.77% 0.56% 0.21% 0.80% 0.15%
Net investment income to average net assets
before voluntary expense reimbursements (Note 3).. N/A N/A N/A N/A 0.15%
Portfolio turnover (1)............................. 182.11% 116.67% 86.24% 65.84% 88.90%
Average broker commission rate (2)................. $ 0.0039 $ 0.0037 -- -- --
</TABLE>

________________________________________________________________________________

Notes:
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.
(1) The lesser of purchases or sales of portfolio securities for a period,
divided by the monthly average of the market value of portfolio
securities owned during the period. Securities with a maturity or
expiration date at the time of acquisition of one year or less are
excluded from the calculation. Purchases and sales of securities
(excluding short-term securities) for the year ended December 31, 1997
amounted to $533,671,993 and $565,013,378, respectively.
(2) Total brokerage commissions paid on purchases and sales of portfolio
securities for the period divided by the total number of related shares
purchased and sold. Generally, non-U.S. commissions are lower than U.S.
commissions when expressed as cents per share but higher when expressed
as a percentage of transactions because of the lower per-share prices of
many non-U.S. securities.

See Notes to Financial Statements.

B-101
<PAGE>

METROPOLITAN SERIES FUND, INC.

FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)

<TABLE>
<CAPTION>
LOOMIS SAYLES T. ROWE PRICE SCUDDER
HIGH YIELD JANUS SMALL CAP GLOBAL
BOND MID CAP GROWTH EQUITY
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
--------------- ---------- ------------- --------------
FOR THE PERIOD MARCH 3, 1997 TO DECEMBER 31, 1997
-------------------------------------------------------------

<S> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE: Beginning of period................................ $ 10.00 $ 10.00 $ 10.00 $ 10.00
- ------------------------------------------------------------------------------------------------------------------------------------
Investment Operations:
---------------------
Net investment income............................................... 0.35 0.01 -- 0.10
Net realized and unrealized gain/(loss)............................. 0.26 2.81 1.88 0.86
------- ------- ------ -------
Total From Investment Operations................................. 0.61 2.82 1.88 0.96
------- ------- ------ -------

Less Distributions:
------------------
Dividends from net investment income................................ (0.35) (0.01) --(4) (0.10)
Distributions from net realized capital gains....................... (0.12) (0.04) -- (0.01)
------- ------- ------ -------
Total Distributions.............................................. (0.47) (0.05) -- (0.11)
------- ------- ------ -------
-----------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE: End of period...................................... $ 10.14 $ 12.77 $ 11.88 $ 10.85
-----------------------------------------------------------------------------------------------------------------------------------
Total Return........................................................ 6.18% 28.22% 18.81% 9.62%

Supplemental Data/Significant Ratios:
------------------------------------
Net assets at end of period (000's)................................. $27,804 $103,852 $94,020 $60,712
Net expenses to average net assets (Note 3) (1)..................... 0.83% 0.85% 0.67% 0.78%
Operating expenses to average net assets before voluntary expense
reimbursements (Note 3) (1)........................................ 1.35% 0.99% 0.86% 1.14%

Net investment income to average net assets (1)..................... 7.04% 0.10% 0.01% 1.66%
Net investment income to average net assets before voluntary
expense reimbursements (Note 3) (1)................................ 6.52% (0.04)% (0.19)% 1.30%

Portfolio turnover (2).............................................. 39.26% 74.70% 13.45% 36.04%
Average broker commission rate (3).................................. N/A $ 0.0352 $0.0255 $0.0402
</TABLE>

- --------------------------------------------------------------------------------

Notes:

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.

(1) Ratios for the ten months ended December 31, 1997 have been determined on
annualized operating results for the period. Twelve-month results may be
different.

(2) The lesser of purchases or sales of portfolio securities for a period,
divided by the monthly average of the market value of portfolio securities
owned during the period. Securities with a maturity or expiration date at
the time of acquisition of one year or less are excluded from the
calculation. Purchases and sales of securities (excluding short-term
securities) for December 31, 1997 amounted to: $32,284,474 and $5,809,643
for the Loomis Sayles High Yield Bond Portfolio, $121,092,374 and
$32,142,353 for the Janus Mid Cap Portfolio, $93,191,967 and $5,832,933
for the T. Rowe Price Small Cap Growth Portfolio, $66,739,114 and
$12,502,673 for the Scudder Global Equity Portfolio, respectively.

(3) Total brokerage commissions paid on purchases and sales of portfolio
securities for the period divided by the total number of related shares
purchased and sold.

(4) Less than $.005 per share.

See Notes to Financial Statements.

B-102
<PAGE>

METROPOLITAN SERIES FUND, INC.

Notes to Financial Statements December 31, 1997
- --------------------------------------------------------------------------------
1. SIGNIFICANT The Metropolitan Series Fund, Inc. ("Fund") is registered
ACCOUNTING under the Investment Company Act of 1940 as an open end
POLICIES investment company. All of the portfolios of the Fund
are diversified as defined under securities laws. The
following is a summary of significant accounting policies
consistently followed by the Fund in the preparation of
its financial statements. The policies are in conformity
with generally accepted accounting principles.
----------------------------------------------------------
A. INVESTMENT SECURITY VALUATION: Portfolio securities that
are traded on domestic stock exchanges are valued at the
last price as of the close of business on the day the
securities are being valued, or, lacking any sales, at the
mean between closing bid and asked prices (except for the
Loomis Sayles High Yield Portfolio, which in the latter
case would value such securities at the last bid price).
Securities trading primarily on non-domestic exchanges are
valued at the preceding closing price on the exchange
where it primarily trades (or, in the case of the Loomis
Sayles High Yield Bond and Scudder Global Equity
Portfolios, the last sale). A security that is listed or
traded on more than one exchange is valued at the
quotation on the exchange determined to be the primary
market for that security by the Board of Directors or its
delegates. If no closing price is available, then such
securities are valued by using the mean between the last
current bid and asked prices or, second, by using the last
available closing price (except for the Scudder Global
Equity Portfolio which second values such securities at
the last current bid, and third by using the last
available price). Domestic securities traded in the over-
the-counter market are valued at the mean between the bid
and asked prices or yield equivalent as obtained from two
or more dealers that make markets in the securities
(except for the Loomis Sayles High Yield Bond Portfolio,
which, in the latter case, would value such security at
the last bid price; or the Scudder Global Equity Portfolio
which would value such security first at the last sale,
and second at the bid price). All non-U.S. securities
traded in the over-the-counter securities market are
valued at the last sale quote, if market quotations are
available, or the last closing bid price, if there is no
active trading in a particular security for a given day.
Where market quotations are not readily available for such
non-domestic over-the-counter securities, then such
securities will be valued in good faith by a method that
the Board of Directors, or its delegates, believe
accurately reflects fair value. Portfolio securities which
are traded both in the over-the-counter market and on a
stock exchange are valued according to the broadest and
most representative market, and it is expected that for
debt securities this ordinarily will be the over-the-
counter market. Securities and assets for which market
quotations are not readily available (e.g. certain long-
term bonds and notes) are valued at fair value as
determined in good faith by or under the direction of the
Board of Directors of the Fund, including valuations
furnished by a pricing service retained for this purpose
and typically utilized by other institutional-sized
trading organizations. Forward foreign currency exchange
contracts are valued based on the closing prices of the
forward currency contract rates in the London foreign
exchange markets on a daily basis as provided by a
reliable bank or dealer. Short-term instruments with a
remaining maturity of sixty days or less are valued
utilizing the amortized cost method of valuation. If for
any reason the fair value of any security is not fairly
reflected by such method, such security will be valued by
the same methods as securities having a maturity of more
than sixty days.

Options, whether on securities, indices, or futures
contracts, are valued at the last sales price available as
of the close of business on the day of valuation or, if no
sale, at the mean between the bid and asked prices.
Options on currencies are valued at the spot price each
day. As a general matter, futures contracts are marked-to-
market daily. The value of futures contracts will be the
sum of the margin deposit plus or minus the difference
between the value of the futures contract on each day the
net asset value is calculated and the value on the date
the futures contract originated, value being that
established on a recognized commodity exchange, or by
reference to other customary sources, with gain or loss
being realized when the futures contract closes or
expires.
----------------------------------------------------------
B. INVESTMENT SECURITY TRANSACTIONS: Security transactions
are recorded on the trade date. Securities denominated in
foreign currencies are translated at exchange rates
prevailing on the respective dates traded. Dividend income
is recorded on the ex-dividend date or, for certain
foreign securities, when notified; interest income is
accrued as earned. Transactions denominated in foreign
currencies are recorded at the rate prevailing when earned
or incurred. Realized gains and losses on investments and
unrealized appreciation and depreciation are determined on
the identified cost basis, which is the same basis used
for federal income tax purposes. Asset and liability
accounts that are denominated in foreign currencies are
adjusted to reflect current exchange rates prevailing on
the respective dates traded.
----------------------------------------------------------
C. FEDERAL INCOME TAXES: It is the Fund's policy to comply
with the requirements of the Internal Revenue Code and
regulations thereunder applicable to regulated investment
companies and to distribute all of its taxable income to
shareholders. Therefore, no Federal income tax provision
is required. At December 31, 1997, the State Street
Research Income, State Street Research International
Stock, and T. Rowe Price Small Cap Growth Portfolios had
available for federal income tax purposes unused capital
loss carryovers of approximately $29,822, $7,097,000, and
$69,489, respectively, which will expire on December 31,
2005, on December 31, 2004, and on December 31, 2005,
respectively.
----------------------------------------------------------
D. RETURN OF CAPITAL DISTRIBUTIONS: The Fund distributes all
of its taxable income, both net realized gains and net
investment income, to shareholders. Effective January 1,
1994 the Fund adopted Statement of Position 93-2:
Determination, Disclosure, and Financial Statement
Presentation of Income, Capital Gain, and Return of
Capital Distributions by Investment Companies. As a
result, the Fund changed the classification of
distributions to shareholders to better disclose the
differences between financial statement amounts and
distributions determined in accordance with income tax
regulations.

The State Street Research Aggressive Growth Portfolio
incurred net investment losses of $1,338,007 during 1996
and $1,659,985 during 1997, which has been reclassified to
paid-in-capital at December 31, 1996 and December 31,
1997, respectively.
----------------------------------------------------------
E. FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS: A forward
foreign currency exchange contract is an agreement between
two parties to buy or sell a specific currency for a set
price on a future date. The Fund may enter into forward
foreign currency exchange contracts to hedge security
transactions on holdings denominated in a foreign
currency. Should foreign currency exchange rates move
unexpectedly, the Fund may not achieve the anticipated
benefits of the forward foreign currency exchange
contracts and may realize a loss. The use of forward
foreign currency exchange contracts involves the risk of
imperfect correlation in movements in the price of the
underlying hedged assets and foreign currency exchange
rates. During the period that a contract is open, changes
in the value of the contract are recognized as an
unrealized gain or loss by "marking to market" on a daily
basis. A realized gain or loss will be recognized when a
contract is completed or canceled.
----------------------------------------------------------

B-103
<PAGE>

METROPOLITAN SERIES FUND, INC.

Notes to Financial Statements December 31, 1997 - (Continued)
- --------------------------------------------------------------------------------
1. SIGNIFICANT F. REPURCHASE AGREEMENTS: The Fund requires the custodian
ACCOUNTING to take possession, to have legally segregated in the
POLICIES- Federal Reserve Book Entry System, or to have segregated
(CONT.) within the custodian's vault, all securities held as
collateral for repurchase agreements. The market value of
the underlying securities is required to be at least 102%
of the resale price at the time of purchase. If the seller
of the agreement defaults, and the value of the collateral
declines, or if the seller enters an insolvency
proceeding, realization of the value of the collateral by
the Fund may be delayed or limited.
----------------------------------------------------------
G. ESTIMATES AND ASSUMPTIONS: The preparation of financial
statements in conformity with generally accepted
accounting principals requires management to make
estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent
assets and liabilities as of the date of the financial
statements and the reported amounts of income and expenses
during the reporting period. Actual results could differ
from those estimates.
- --------------------------------------------------------------------------------
2. RESTRICTED The State Street Research Income Portfolio holds thirteen
AND ILLIQUID securities, the State Street Research Diversified
SECURITIES Portfolio holds sixteen securities, the State Street
Research International Stock Portfolio holds five
securities, the Loomis Sayles High Yield Bond Portfolio
holds twenty-three securities, and the T. Rowe Price
Portfolio holds one security that were purchased in
private placement transactions. These securities may be
resold in transactions exempt from registration or to the
public if the securities are registered. The sale of these
securities may involve lengthy negotiations and additional
expense. These constraints may affect the security's
marketability, and therefore hinder prompt disposal at an
acceptable price. The Fund intends to invest no more than
15% of net assets in illiquid and restricted securities,
except for the State Street Research Money Market
Portfolio and the Scudder Global Equity Portfolio where
the restriction is 10% of net assets. Restricted
securities (including Rule 144A issues) held at December
31, 1997 are footnoted at the end of each applicable
Portfolio's schedule of investments.
- --------------------------------------------------------------------------------
3. EXPENSES A. INVESTMENT MANAGEMENT AGREEMENTS: The Fund has entered
into investment management agreements with Metropolitan
Life. For providing investment management services to the
Fund, Metropolitan Life receives monthly compensation at
the annual rate of: 0.25% of the average daily net assets
for State Street Research Money Market Portfolio and
MetLife Stock Index Portfolio; and .70% of the average
daily net assets for Loomis Sayles High Yield Bond
Portfolio. For providing investment management services to
the State Street Research Growth Portfolio, Metropolitan
Life receives monthly compensation from the Portfolio at
an annual rate of .55% of the average daily value of the
aggregate net assets of the Portfolio up to $500 million,
.50% of such assets on the next $500 million, and .45% of
such assets on amounts in excess of $1 billion. For
providing investment management services to the State
Street Research Income Portfolio, Metropolitan Life
receives monthly compensation from the Portfolio at an
annual rate of .35% of the average daily value of the
aggregate net assets of the Portfolio up to $250 million,
.30% of such assets on the next $250 million, and .25% of
such assets on amounts in excess of $500 million. For
providing investment management services to the State
Street Research Diversified Portfolio, Metropolitan Life
receives monthly compensation from the Portfolio at an
annual rate of .50% of the average daily value of the
aggregate net assets of the Portfolio up to $500 million,
.45% of such assets on the next $500 million, and .40% of
such assets on amounts in excess of $1 billion. For
providing investment management services to the State
Street Research Aggressive Growth Portfolio and State
Street Research International Stock Portfolio,
Metropolitan Life receives monthly compensation from the
Portfolio at an annual rate of .75% of the average daily
value of the aggregate net assets of the Portfolio up to
$500 million, .70% of such assets on the next $500
million, and .65% of such assets on amounts in excess of
$1 billion. For providing investment management services
to the Janus Mid Cap Portfolio, Metropolitan Life receives
monthly compensation from the Portfolio at an annual rate
of .75% of the average daily value of the aggregate net
assets of the Portfolio up to $100 million, .70% of such
assets on the next $400 million, and .65% of such assets
on amounts in excess of $500 million. For providing
investment management services to the T. Rowe Price Small
Cap Growth Portfolio, Metropolitan Life receives monthly
compensation from the Portfolio at an annual rate of .55%
of the average daily value of the aggregate net assets of
the Portfolio up to $100 million, .50% of such assets on
the next $300 million, and .45% of such assets on amounts
in excess of $400 million. For providing investment
management services to the Scudder Global Equity
Portfolio, Metropolitan Life receives monthly compensation
from the Portfolio at an annual rate of .90% of the
average daily value of the aggregate net assets of the
Portfolio up to $50 million, .55% of such assets on the
next $50 million, .50% of such assets on the next $400
million, and .475% of such assets on amounts in excess of
$500 million.

The Fund and Metropolitan Life have entered into various
sub-investment management agreements. State Street
Research & Management Company, a subsidiary of
Metropolitan Life, is compensated to provide sub-
investment management services for the State Street
Research Growth, State Street Research Income, State
Street Research Money Market, State Street Research
Diversified, State Street Research Aggressive Growth, and
the State Street Research International Stock Portfolios.
GFM International Investors Limited, a subsidiary of
Metropolitan Life, is compensated to provide sub-sub-
investment management services for the State Street
Research International Stock Portfolio. Loomis, Sayles &
Company, L.P., whose general partner is indirectly owned
by Metropolitan Life, is compensated to provide sub-
investment management services for the Loomis Sayles High
Yield Bond Portfolio. Janus Capital Corporation is
compensated to provide sub-investment management services
for the Janus Mid Cap Portfolio. T. Rowe Price Associates,
Inc. is compensated to provide sub-investment management
services for the T. Rowe Price Small Cap Growth Portfolio.
Scudder Kemper Investments, Inc. is compensated to provide
sub-investment management services for the Scudder Global
Equity Portfolio.
----------------------------------------------------------
B. INVESTMENT MANAGEMENT FEE WAIVER: Metropolitan Life has
agreed to waive a portion of its investment management fee
for the Scudder Global Equity Portfolio during the first
year of the Portfolio's operations. For the first six
months, the waiver equaled .35% of the average daily value
of the aggregate net assets of the Portfolio up to $50
million, .175% of such assets on the next $50 million,
.15% of such assets on the next $400 million and .1375% of
such assets on amounts in excess of $500 million. During
the second six months of the Portfolio's operations, such
waiver of the investment management fee is equal to .175%
of assets up to $50 million, .0875% of assets on the next
$50 million, .075% of assets on the next $400 million and
.06875% of such assets in excess of $500 million.
----------------------------------------------------------

B-104
<PAGE>

METROPOLITAN SERIES FUND, INC.

Notes to Financial Statements December 31, 1997 - (Continued)
- --------------------------------------------------------------------------------
3. EXPENSES- C. SUBSIDIZATION OF PORTFOLIOS: Metropolitan Life has agreed
(CONT.) to subsidize all expenses, excluding those listed below,
in excess of .20% of the net assets of Loomis Sayles High
Yield Bond Portfolio, Janus Mid Cap Portfolio, T. Rowe
Price Small Cap Growth Portfolio, and Scudder Global
Equity Portfolio. Subsidization will continue until either
each Portfolio's total net assets are at least $100
million, or March 2, 1999, whichever is earlier. At
December 31, 1997 Janus Mid Cap Portfolio exceeded the
$100 million threshold, and subsidization ceased. Expenses
excluded from subsidization are: investment management
fees payable to Metropolitan Life, brokerage commissions
on portfolio transactions (including any other direct
costs related to the acquisition, disposition, lending or
borrowing of portfolio investments), taxes payable by the
Fund, interest and other costs related to borrowings by
the Fund, and any extraordinary or non-recurring expenses
(such as legal claims and liabilities and litigation costs
and any indemnification related thereto).

Prior to May 16, 1993, Metropolitan Life was obligated to
pay all expenses of each Portfolio of the Fund that was in
operation at that time. Since that date, the Fund has been
obligated to pay all of its own expenses (except as
outlined in the preceding paragraph). However,
Metropolitan Life reserves the right, at its sole
discretion, to pay all or a portion of the expenses of the
Fund or any of its Portfolios, and to terminate such
voluntary payment at any time upon notice to the Board of
Directors and affected shareholders of the Fund.
- --------------------------------------------------------------------------------
4. DIVIDEND The Fund distributes, at least annually, substantially all
DISTRIBUTIONS net investment income, if any, of each Portfolio, which
will then be reinvested in additional full and fractional
shares of the Portfolio. All net realized long-term or
short-term capital gains of the Fund, if any, are declared
and distributed at least annually to the shareholders of
the Portfolio or Portfolios to which such gains are
attributable.
- --------------------------------------------------------------------------------
5. NEW PORTFOLIOS On March 3, 1997, the Fund commenced operations of four
additional Portfolios: Loomis Sayles High Yield Bond
Portfolio, Janus Mid Cap Portfolio, T. Rowe Price Small
Cap Growth Portfolio, and Scudder Global Equity Portfolio.
Metropolitan Life supplied initial start-up capital of
$22,000,000 to facilitate the operation of these
Portfolios. Metropolitan Life Insurance, therefore,
purchased 200,000 shares of the Loomis Sayles High Yield
Bond Portfolio, 500,000 shares of the Janus Mid Cap
Portfolio, 500,000 shares of the T. Rowe Price Small Cap
Growth Portfolio, and 1,000,000 shares of the Scudder
Global Equity Portfolio, with each Portfolio valued at $10
per share. Subsequently, these Portfolios were made
available for certain contracts. Since October 2, 1997,
Metropolitan Life has gradually redeemed the start-up
capital (including applicable market appreciation) so that
as of December 31, 1997 only 96,831 shares remained in the
Scudder Global Equity Portfolio with a value of
$1,050,614.
- --------------------------------------------------------------------------------
6. PORTFOLIO On March 3, 1997, the names of the Growth Portfolio,
NAME CHANGES Income Portfolio, Money Market Portfolio, Diversified
Portfolio, Aggressive Growth Portfolio, Stock Index
Portfolio, and International Stock Portfolio changed.
These Portfolios were renamed as follows: State Street
Research Growth Portfolio, State Street Research Income
Portfolio, MetLife Money Market Portfolio, State Street
Research Diversified Portfolio, State Street Research
Aggressive Growth Portfolio, MetLife Stock Index
Portfolio, and GFM International Stock Portfolio.
Subsequently, on August 1, 1997, the names of the MetLife
Money Market Portfolio and GFM International Stock
Portfolio were changed to the State Street Research Money
Market Portfolio and the State Street Research
International Stock Portfolio, respectively.
- --------------------------------------------------------------------------------
7. SECURITIES On December 15, 1997, the Fund entered into a securities
LENDING lending arrangement with the Fund's custodian, State
Street Bank and Trust Co. ("the custodian"). Under the
agreement, the custodian is authorized to loan securities
on the Fund's behalf. In exchange, the Fund receives
collateral against the loaned securities. Each Portfolio
receives collateral at least equal to 102% of the market
value of the loaned securities (105% for foreign
securities), at each loan's inception. Collateral must be
maintained at least at 100% of the market value of the
loaned securities for the duration of the loan. The
collateral is invested in the Navigator Securities Lending
Prime Portfolio, which invests in a variety of high
quality U.S. dollar-denominated instruments. The Fund
receives 70% of the annual net income from lending
transactions, which is included in interest income of the
respective Portfolios. The Fund bears the risk of any
deficiency in the amount of collateral available for
return to a borrower due to a loss in an approved
investment. Portfolios with outstanding loans at December
31, 1997 are footnoted at the end of each applicable
Portfolio's schedule of investments.
- --------------------------------------------------------------------------------
8. NET UNREALIZED As of December 31, 1997, gross unrealized appreciation
APPRECIATION/ and depreciation on investments and foreign currency were
(DEPRECIATION) as follows:

<TABLE>
<CAPTION>
STATE STREET
STATE STREET STATE STREET STATE STREET RESEARCH METLIFE
RESEARCH RESEARCH RESEARCH AGGRESSIVE STOCK
GROWTH INCOME DIVERSIFIED GROWTH INDEX
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
----------------- --------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
Gross Unrealized Appreciation......... $ 395,415,760 $ 10,420,424 $ 202,367,705 $ 262,092,674 $ 699,628,247
Gross Unrealized Depreciation......... (39,543,138) (3,751,189) (25,236,006) (65,192,497) (19,162,107)
----------------- --------------- -------------- -------------- --------------

Net Unrealized Appreciation
(Depreciation) of Investments*........ $ 355,872,622 $ 6,669,235 $ 177,131,699 $ 196,900,177 $ 680,466,140
================= =============== ============== ============== ==============
Aggregate Cost of Securities
(including short-term securities)..... $ 2,016,519,608 $ 399,551,866 $1,802,872,213 $1,185,132,693 $1,335,796,981
================= =============== ============== ============== ==============
</TABLE>

B-105
<PAGE>

METROPOLITAN SERIES FUND, INC.

Notes to Financial Statements December 31, 1997 - (Continued)
- --------------------------------------------------------------------------------
8. NET UNREALIZED
APPRECIATION/
(DEPRECIATION)-
(CONT.)

<TABLE>
<CAPTION>
State Street
Research T. Rowe Price
International Loomis Sayles Janus Small Cap Scudder Global
Stock High Yield Bond Mid Cap Growth Equity
Portfolio Portfolio Portfolio Portfolio Portfolio
-------------- -------------- ------------ -------------- --------------
<S> <C> <C> <C> <C> <C>
Gross Unrealized Appreciation.......... $ 26,421,854 $ 883,708 $ 12,614,025 $ 9,989,328 $ 4,823,242
Gross Unrealized Depreciation.......... (30,669,710) (1,961,343) (1,730,311) (4,939,556) (2,880,568)
-------------- -------------- ------------ -------------- --------------
Net Unrealized Appreciation
(Depreciation) of Investments*......... $ (4,247,856) $ (1,077,635) $ 10,883,714 $ 5,049,772 $ 1,942,674
-------------- -------------- ------------ -------------- --------------
Aggregate Cost of Securities
(including short-term securities)...... $ 267,549,270 $ 28,826,155 $ 98,258,908 $ 90,520,596 $ 60,091,984
============== ============== ============ ============== ==============
</TABLE>

*Does not include unrealized gains and (losses) related to
foreign currency contracts and translations of $1,025,720,
$2,134,819, $1,153, $(405), $(36,528), and $145 for the
State Street Research Income, State Street Research
Diversified, State Street Research International Stock,
Loomis Sayles High Yield Bond, Janus Mid Cap, and Scudder
Global Equity Portfolios, respectively. (see Note 10.)
- --------------------------------------------------------------------------------
9. CAPITAL STOCK At December 31, 1997, there were 2,000,000,000 shares of
ACTIVITY $0.01 par value common stock authorized for the Fund. The
shares of common stock are divided into eleven series:
State Street Research Growth, State Street Research
Income, State Street Research Money Market, State Street
Research Diversified, State Street Research Aggressive
Growth, MetLife Stock Index, State Street Research
International Stock, Loomis Sayles High Yield Bond, Janus
Mid Cap, T. Rowe Price Small Cap Growth, and Scudder
Global Equity Portfolios.

Transactions in shares were as follows:

<TABLE>
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31, 1997
-------------------------------------------------------------------------------------------------------------------------
STATE STREET STATE STREET STATE STREET
STATE STREET STATE STREET RESEARCH STATE STREET RESEARCH METLIFE RESEARCH
RESEARCH RESEARCH MONEY RESEARCH AGGRESSIVE STOCK INTERNATIONAL
GROWTH INCOME MARKET DIVERSIFIED GROWTH INDEX STOCK
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
------------ ------------ ------------ ------------ ------------ ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Shares sold......... 8,230,850 2,000,510 2,412,286 12,435,452 3,762,075 18,865,897 3,959,141
Shares issued in
reinvestment
of dividends........ 13,468,235 2,191,691 206,604 17,906,235 2,348,065 1,429,601 -----
------------ ------------ ------------ ------------ ------------ ---------- -----------
Total............ 21,699,085 4,192,201 2,618,890 30,341,687 6,110,140 20,295,498 3,959,141
Shares redeemed..... (470,847) (2,665,334) (2,804,937) (545,849) (4,450,372) (579,241) (6,488,877)

Net increase ------------ ------------ ------------ ----------- ------------ ---------- -----------
(decrease)........ 21,228,238 1,526,867 (186,047) 29,795,838 1,659,768 19,716,257 (2,529,736)
============ ============ ============ =========== ============ ========== ===========
</TABLE>

<TABLE>
<CAPTION>
FOR THE PERIOD MARCH 3, 1997 (COMMENCEMENT OF OPERATIONS) TO DECEMBER 31, 1997
--------------------------------------------------------------------------------------------------------------------------
T. ROWE
LOOMIS PRICE SCUDDER
SAYLES HIGH JANUS SMALL CAP GLOBAL
YIELD BOND MID CAP GROWTH EQUITY
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
----------- ----------- ------------ -----------
<S> <C> <C> <C>
Shares sold......... 2,822,530 8,109,326 9,488,942 6,023,632
Shares issued in
reinvestment
of dividends........ 122,359 33,002 885 59,518
----------- ----------- ------------ -----------
Total............. 2,944,889 8,142,328 9,489,827 6,083,150
Shares redeemed..... (203,832) (10,081) (1,574,218) (488,028)
----------- ----------- ------------ -----------
Net increase........ 2,741,057 8,132,247 7,915,609 5,595,122
=========== =========== ============ ===========
</TABLE>

B-106
<PAGE>

METROPOLITAN SERIES FUND, INC.
Notes to Financial Statements December 31, 1997 - (Continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>

9. CAPITAL STOCK
ACTIVITY-(CONT.) FOR THE YEAR ENDED DECEMBER 31, 1996
----------------------------------------------------------------------------------------------------
STATE STREET STATE STREET STATE STREET
STATE STREET STATE STREET RESEARCH STATE STREET RESEARCH METLIFE RESEARCH
RESEARCH RESEARCH MONEY RESEARCH AGGRESSIVE STOCK INTERNATIONAL
GROWTH INCOME MARKET DIVERSIFIED GROWTH INDEX STOCK
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
------------ ------------ ------------ ------------ ------------ ------------ -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Shares sold ........ 8,155,023 3,698,482 1,814,089 10,207,431 11,414,917 16,259,851 3,530,056
Shares issued in
reinvestment
of dividends........ 4,909,141 1,951,255 196,231 7,567,236 1,290,947 1,170,618 261,862
------------ ------------ ------------ ------------ ------------ ------------ -----------

Total........... 13,064,164 5,649,737 2,010,320 17,774,667 12,705,864 17,430,469 3,791,918
Shares redeemed..... (409,835) (2,111,443) (1,893,767) (755,150) (1,025,632) (1,196,783) (2,578,350
------------ ------------ ------------ ------------ ------------ ------------ -----------
Net increase........ 12,654,329 3,538,294 116,553 17,019,517 11,680,232 16,233,686 1,213,568
============ ============ ============ ============ ============ ============ ===========
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

10. FOREIGN The fair value of foreign currency contracts is the amount
CURRENCY at which the contracts could be settled based on exchange
TRANSLATIONS rates obtained from dealers. As of December 31, 1997, the
State Street Research Income Portfolio experienced an
unrealized net gain of $1,048,862 based on the following
foreign currency exchange contracts outstanding:

<TABLE>
<CAPTION>
VALUATION UNREALIZED
EXPIRATION CONTRACT AS OF APPRECIATION
SOLD DATE AMOUNT DECEMBER 31, 1997 (DEPRECIATION)
------------------------- -------------- ---------------- --------------------- ------------------
<S> <C> <C> <C> <C>
Australian Dollar 1/23/98 $ 6,501,745 $ 6,151,211 $ 350,534
Australian Dollar 2/13/98 2,947,756 2,767,367 180,389
British Pound Sterling 1/23/98 12,057,310 12,156,868 (99,558)
New Zealand Dollar 1/23/98 7,498,036 6,961,993 536,043
New Zealand Dollar 2/23/98 1,088,196 1,006,742 81,454
-------------- ---------------- -------------
$ 30,093,043 $ 29,044,181 $ 1,048,862
============== ================ =============
Net unrealized appreciation .............. .................... ....................... $ 1,048,862
=============
</TABLE>

The State Street Research Income Portfolio had an
unrealized net translation loss on foreign currency
receivables and payables as follows:

<TABLE>
<CAPTION>
<S> <C>
Net unrealized translation (loss):
Interest Receivables $ (24,560)
Tax Expense Receivables 1,418
------------
Net unrealized translation (loss)............ $ (23,142)
============
</TABLE>

As of December 31, 1997 the State Street Research
Diversified Portfolio experienced an unrealized net gain of
$2,182,853 based on the following foreign currency exchange
contracts outstanding:

<TABLE>
<CAPTION>
VALUATION UNREALIZED
EXPIRATION CONTRACT AS OF APPRECIATION
SOLD DATE AMOUNT DECEMBER 31, 1997 (DEPRECIATION)
------------------------- -------------- ---------------- --------------------- ------------------
<S> <C> <C> <C> <C>
Australian Dollar 1/23/98 $12,348,197 $11,752,056 $ 596,141
Australian Dollar 2/13/98 7,796,836 7,381,602 415,234
British Pound Sterling 1/23/98 25,127,822 25,314,503 (186,681)
New Zealand Dollar 1/23/98 15,722,357 14,571,222 1,151,135
New Zealand Dollar 2/13/98 3,678,547 3,471,523 207,024
--------------- --------------- ---------------
$64,673,759 $62,490,906 $2,182,853
=============== =============== ===============
Net unrealized appreciation ................... ..................... ................ $2,182,853
===============
</TABLE>

The State Street Research Diversified Portfolio had an
unrealized net translation loss on foreign currency
receivables and payables as follows:

<TABLE>
<CAPTION>
<S> <C>
Net unrealized translation (loss):
Interest Receivables $ (50,919)
Tax Expense Payables 2,885
-----------------
Net unrealized translation (loss) ............... $ (48,034)
=================

</TABLE>

The State Street Research International Stock Portfolio had
an unrealized net translation gain on foreign currency
receivables and payables as follows:

<TABLE>
<CAPTION>
<S> <C>
Net unrealized translation gain:
Dividend Receivables $ (4,560)
Dividend Reclaim Receivables (9,646)
Purchase Payables 14,476
Tax Expense Payables 883
----------------
Net unrealized translation gain ................. $ 1,153
=================
</TABLE>

B-107
<PAGE>

METROPOLITAN SERIES FUND, INC.

NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1997 - (Continued)
- --------------------------------------------------------------------------------

10. Foreign The Loomis Sayles High Yield Bond Portfolio had an unrealized
Currency net translation loss on foreign currency receivables and
Translations- payables as follows:
(Cont.) Net unrealized translation (loss):
Interest Receivables $(405)
-----
Net unrealized translation (loss)....... $(405)
=====

As of December 31, 1997 the Janus Mid Cap Portfolio
experienced an unrealized net loss of $36,552 based on the
following foreign currency exchange contracts outstanding:

<TABLE>
<CAPTION>
VALUATION UNREALIZED
EXPIRATION CONTRACT AS OF APPRECIATION
SOLD DATE AMOUNT DECEMBER 31, 1997 (DEPRECIATION)
------------------------------ ------------ ------------------ ------------------ ------------------
<S> <C> <C> <C> <C>
British Pound Sterling 2/19/98 $1,263,200 $1,310,889 $(47,689)
British Pound Sterling 2/25/98 1,064,198 1,105,760 (41,562)
British Pound Sterling 2/26/98 1,408,615 1,384,186 24,429
British Pound Sterling 3/04/98 215,595 221,054 (5,459)
British Pound Sterling 5/06/98 3,093,871 3,052,632 41,239
------------------ ------------------ ------------------
$7,045,479 $7,074,521 $(29,042)
================== ================== ==================

PURCHASED
------------------------------
British Pound Sterling 2/25/98 $ 16,890 $ 16,382 $ (508)
British Pound Sterling 2/26/98 228,056 221,054 (7,002)
------------------ ------------------ ------------------
$244,946 $237,436 $ (7,510)
================== ================== ==================
Net unrealized (depreciation).............................................................. $(36,552)
==================
</TABLE>

The Janus Mid Cap Portfolio had an unrealized net translation
gain on foreign currency receivables and payables as follows:

<TABLE>
<S> <C>
Net unrealized translation gain:
Dividend Reclaim Receivables $24
Pending Spot Foreign Exchange Purchases (3,743)
Pending Spot Foreign Exchange Sales 381
Purchase Payables 3,743
Sales Receivables (381)
---------
Net unrealized translation gain................. $24
=========
</TABLE>

As of December 31, 1997 the Scudder Global Equity Portfolio
experienced an unrealized net gain of $818 based on the
following foreign currency exchange contracts outstanding:

The Scudder Global Equity Portfolio had an unrealized net
translation loss on foreign currency receivables and payables
as follows:

<TABLE>
<S> <C>
Net unrealized translation (loss):
Dividend Receivables $(840)
Dividend Reclaim Receivables (152)
Interest Receivables 192
Interest Reclaim Receivables 48
Pending Spot Foreign Exchange Purchases (2,349)
Pending Spot Foreign Exchange Sales 661
Purchase Payables 2,348
Sales Receivables (663)
Tax Expense Payables 82
----------
Net unrealized translation (loss)............... $(673)
==========
</TABLE>

B-108
<PAGE>

METROPOLITAN SERIES FUND, INC.

MANAGEMENT'S DISCUSSION AND ANALYSIS
- --------------------------------------------------------------------------------
STATE STREET RESEARCH GROWTH PORTFOLIO

The Portfolio delivered good performance relative to its peers over 12 months.
This performance capped a remarkable three-year run for the stock market, driven
by continuing high corporate earnings and falling interest rates. The Portfolio
has benefited from strong technology investments, drug stock performance, and
management focus on large, high-quality, growth and income companies.

During the fourth quarter, market favor rotated to more defensive, value stocks
in industries including telephones and utilities, where the Portfolio held
smaller-than-average positions. Shortfalls in health care company earnings and
selected energy companies also hurt performance. Technology returns were also
weak, although investments had been reduced. Finally, concerns over Asian
economies adversely impacted all holdings.

Management continued to search for high-quality, reliable, conservative
investments with broad investor appeal in a volatile market.

INVESTMENT OBJECTIVE

To achieve long-term growth of capital and income and moderate current income.

UNDERLYING INVESTMENTS

Invests primarily in common stocks that are believed to be of good quality or to
have good growth potential or that are considered to be undervalued based on
historical investment standards.

PORTFOLIO COMPOSITION & TOTAL RETURN AS OF DECEMBER 31, 1997

Net Assets $2.3 billion

COMPOSITION

Top Ten Equity Holdings

<TABLE>
<CAPTION>
% of Total
Security Net Assets
-------- ----------
<S> <C>
General Electric Co........................................... 3.10
Tyco International Ltd........................................ 2.92
BankAmerica Corp.............................................. 2.27
Rohm & Haas Co. ............................................. 2.23
ACE Ltd....................................................... 2.06
DuPont (E.I.) de Nemours & Co................................. 2.05
Philip Morris Cos., Inc. .................................... 2.01
Ahmanson (H.F.) & Co.......................................... 1.94
Time Warner, Inc.............................................. 1.91
Bristol-Myers Squibb Co. .................................... 1.88
</TABLE>

Due to active management, there is no guarantee that the Portfolio currently
invests or will continue to invest in the securities or industries listed.

PERFORMANCE SUMMARY

Comparison of change in value of a $10,000 investment in the State Street
Research Growth Portfolio and the S&P 500 Index from 12/31/87 to 12/31/97.

AVERAGE ANNUAL TOTAL RETURNS

1 yr. 5 yr. 10 yr.
28.36% 18.24% 16.86%

[GRAPH APPEARS HERE]

-------------------------------------------------------
LABEL A B
-------------------------------------------------------
LABEL GROWTH PORTFOLIO S&P 500 INDEX
-------------------------------------------------------
1 12/31/87 10,000 10,000
2 11,069 11,656
3 89 15,125 15,343
4 13,840 14,866
5 91 18,402 19,386
6 20,550 20,861
7 93 23,508 22,958
8 22,744 23,260
9 95 30,280 31,990
10 36,995 39,331
11 97 47,489 52,448
-------------------------------------------------------

The above graph does not include withdrawal or surrender charges or Separate
Account expenses (general administrative expenses and mortality and expense risk
charges or cost of insurance charges). If performance information included the
effect of these additional charges, performance would have been lower. Past
performance is no guarantee of future results. Principal value and investment
return will vary and you may have a gain or loss when you withdraw your money.

B-109
<PAGE>

METROPOLITAN SERIES FUND, INC.

MANAGEMENT'S DISCUSSION AND ANALYSIS
- --------------------------------------------------------------------------------
STATE STREET RESEARCH INCOME PORTFOLIO

The Portfolio performed among the top quartile of its peers for the 12-month
period. This record continued a decade of consistent, positive performance.

The Manager took the positive outlook that interest rates would fall and
therefore kept the Portfolio's interest rate sensitivity longer than the
benchmark. High-yield bonds in the Portfolio were again an important contributor
to performance. The Manager also added mortgage-backed holdings, emphasizing
commercial mortgages and collateralized mortgage obligations, segments of the
market with a history of prepayment stability.

The year was difficult for corporate bonds, and the Portfolio maintained a more
modest exposure. Non-dollar investments were primarily in advanced countries:
the United Kingdom, Australia, New Zealand, and Canada.

INVESTMENT OBJECTIVE

To achieve the highest possible total return, by combining current income with
capital gains, consistent with prudent investment risk and preservation of
capital.

UNDERLYING INVESTMENTS

Invests primarily in fixed-income, high-quality debt securities.

PORTFOLIO COMPOSITION & TOTAL RETURN
AS OF DECEMBER 31, 1997

Net Assets $412.2 million
Average Bond Quality AA+

PERFORMANCE SUMMARY
Comparison of change in value of a
$10,000 investment in the State
Street Research Income Portfolio and
the Lehman Brothers Aggregate Index
from 12/31/87 to 12/31/97.

AVERAGE ANNUAL TOTAL RETURNS

1 yr. 5 yr. 10 yr.
9.83% 7.97% 9.63%

[GRAPH APPEARS HERE]

-------------------------------------------------------
LABEL A B
-------------------------------------------------------
Lehman Brothers
LABEL Income Portfolio Aggregate Index
-------------------------------------------------------
1 12/31/87 10,000 10,000
2 10,928 10,789
3 89 12,386 12,356
4 13,628 13,463
5 91 15,987 15,618
6 17,092 16,774
7 93 19,034 18,409
8 18,435 17,872
9 95 22,039 21,174
10 22,833 21,943
11 97 25,077 24,061
-------------------------------------------------------

The above graph does not include
withdrawal or surrender charges or
Separate Account expenses (general
administrative expenses and mortality
and expense risk charges or cost of
insurance charges). If performance
information included the effect of
these additional charges, performance
would have been lower. Past
performance is no guarantee of future
results. Principal value and
investment return will vary and you
may have a gain or loss when you
withdraw your money.

B-110
<PAGE>

METROPOLITAN SERIES FUND, INC.

MANAGEMENT'S DISCUSSION AND ANALYSIS
- --------------------------------------------------------------------------------
STATE STREET RESEARCH MONEY MARKET PORTFOLIO

The Federal Reserve's target for the Fed Funds rate for the second half of 1997
stayed firmly at 5.50%. Short rates did inch another quarter point higher in
December, which is a typical year-end response. The Portfolio's current maturity
target is in the 45- to 60-day range, awaiting a possible change in the targeted
rate for Fed Funds.

The steadiness of low inflation and the instability in overseas markets-the
factors causing the equity markets to vacillate and the bond market to continue
to rally-suggest the direction of rates going forward. In 1998, short-term rates
may fall in anticipation of a potential easing in Federal Reserve monetary
policy.

INVESTMENT OBJECTIVE

To achieve the highest possible current income consistent with preservation of
capital and maintenance of liquidity.

UNDERLYING INVESTMENTS

Invests primarily in short-term money market instruments. Instruments in this
Portfolio are neither insured nor guaranteed by the United States Government.

PORTFOLIO COMPOSITION & TOTAL RETURN AS OF DECEMBER 31, 1997

Net Assets $39.5 million

PERFORMANCE SUMMARY

Comparison of change in value of a $10,000 investment in the State Street
Research Money Market Portfolio and the IBC's Money Fund Averages (TM)/ All
Taxable 30 Day from 12/31/87 to 12/31/97.

AVERAGE ANNUAL TOTAL RETURNS

1 yr. 5 yr. 10 yr.
5.21% 4.51% 5.73%

[GRAPH APPEARS HERE]

-------------------------------------------------------
LABEL A B
-------------------------------------------------------
Money Market IBC's All Taxable
LABEL Portfolio 30 Day Index
-------------------------------------------------------
1 12/31/87 10,000 10,000
2 10,755 10,711
3 89 11,753 11,661
4 12,720 12,573
5 91 13,495 13,737
6 13,999 13,737
7 93 14,404 14,108
8 14,959 14,609
9 95 15,795 15,410
10 16,586 16,174
11 97 17,450 16,999
-------------------------------------------------------

B-111
<PAGE>

METROPOLITAN SERIES FUND, INC.

MANAGEMENT'S DISCUSSION AND ANALYSIS
- --------------------------------------------------------------------------------
STATE STREET RESEARCH DIVERSIFIED PORTFOLIO

The Portfolio delivered solid performance relative to its peers over 12 months.
The stock portion benefited from strong technology investments, drug stock
performance, and management focus on large, high quality, growth and income
companies. The bond portion continued its consistent, positive performance,
keeping interest rate sensitivity higher than the benchmark.

During the fourth quarter, market favor rotated to more defensive, value stocks,
such as telephone and utility sectors, where the Portfolio held smaller-than-
average positions. Shortfalls in health care company earnings and selected
energy companies also hurt performance. Technology returns were also weak,
although investments had been reduced. Finally, concerns over Asian economies
adversely impacted all holdings. High-yield bonds in the Portfolio were again an
important contributor to performance. The Manager also added mortgage-backed
holdings, emphasizing commercial mortgages and collateralized mortgage
obligations, segments of the market with a history of prepayment stability. The
year was difficult for corporate bonds, and the Portfolio maintained a more
modest exposure. Non-dollar investments were primarily in advanced countries:
the United Kingdom, Australia, New Zealand, and Canada.

INVESTMENT OBJECTIVE

To achieve a high total return while attempting to limit investment risk and
preserve capital.

UNDERLYING INVESTMENTS

Invests in equity securities, fixed-income debt securities, or short-term money
market instruments, or any combination thereof.

PORTFOLIO COMPOSITION & TOTAL RETURN AS OF DECEMBER 31, 1997

Net Assets $2.0 billion
Average Bond Quality AA+

COMPOSITION

Top Ten Equity Holdings
<TABLE>
<CAPTION>
% of Total
Security Net Assets
-------- --------
<S> <C>
General Electric Co........................................... 1.70
Tyco International Ltd........................................ 1.61
BankAmerica Corp.............................................. 1.26
Rohm & Haas Co. ............................................. 1.21
ACE Ltd....................................................... 1.15
Du Pont (E.I.) de Nemours & Co. ............................. 1.13
Philip Morris Cos., Inc. .................................... 1.12
Ahmanson (H.F.) & Co.......................................... 1.07
Time Warner, Inc.............................................. 1.06
Bristol-Myers Squibb Co. .................................... 1.04
</TABLE>

Due to active management, there is no guarantee that the Portfolio currently
invests or will continue to invest in the securities or industries listed.

PERFORMANCE SUMMARY

Comparison of change in value of a $10,000 investment in the State Street
Research Diversified Portfolio, the S&P 500 Index, and the Lehman Brothers
Aggregate Index from 12/31/87 to 12/31/97.

AVERAGE ANNUAL TOTAL RETURNS

1 yr. 5 yr. 10 yr.
20.58% 13.90% 13.30%

[GRAPH APPEARS HERE]

- -------------------------------------------------------------------------------
LABEL A B C D
- -------------------------------------------------------------------------------
Diversified Lehman Brothers
LABEL Portfolio S&P 500 Index Aggregate Index
- -------------------------------------------------------------------------------
1 12/31/87 10,000 10,000 10,000
2 10,925 11,656 10,789
3 89 13,302 15,343 12,356
4 13,301 14,866 13,463
5 91 16,569 19,386 15,618
6 18,180 20,861 16,774
7 93 20,499 22,958 18,409
8 19,871 23,260 17,872
9 95 25,242 31,990 21,274
10 28,906 39,331 21,943
11 97 34,855 52,448 24,061
- -------------------------------------------------------------------------------

B-112
<PAGE>

METROPOLITAN SERIES FUND, INC.

MANAGEMENT'S DISCUSSION AND ANALYSIS
- --------------------------------------------------------------------------------
STATE STREET RESEARCH AGGRESSIVE GROWTH PORTFOLIO

Portfolio performance improved in the second half of the year, relative to
competition. Small company growth stocks significantly underperformed as
investors returned to larger blue chip companies and defensive industries such
as retail food and utilities. Investments in consumer discretionary stocks
helped because of their domestic market and earnings growth. Holding fewer
consumer staples which had consistent earnings growth, as well as more producer
durables and aggressive technology companies, hindered performance in this
business cycle. Semiconductor equipment and high-end consumer goods companies
doing business in Southeast Asia were other detractors. Lower interest rates
benefited the Portfolio's financial services stocks.

Starting in September, the Manager began to eliminate smaller speculative
holdings, reduce excessive exposure to technology, and lower portfolio turnover.
This management style has the goal of more consistent, positive returns. In this
economy, the Manager is focusing on consumer discretionary services and retail
stocks, with significant domestic markets and good earnings growth potential,
and on selected technology stocks such as communications equipment and computer
software.

INVESTMENT OBJECTIVE

To achieve maximum capital appreciation.

UNDERLYING INVESTMENTS

Invests primarily in common stocks (and equity and debt securities convertible
into or carrying the right to acquire common stocks) of emerging growth
companies, undervalued securities or special situations.

PORTFOLIO COMPOSITION & TOTAL RETURN AS OF DECEMBER 31, 1997

Net Assets $1.4 billion

COMPOSITION

Top Ten Equity Holdings

<TABLE>
<CAPTION>
% of Total
Security Net Assets
-------- ----------
<S> <C>
Cendant Corp.................................................. 5.34
Caribiner International, Inc.................................. 2.80
America Online, Inc........................................... 2.51
MCI Communications Corp....................................... 2.00
Travelers Group, Inc.......................................... 1.97
Iomega Corp................................................... 1.93
The Timberland Co. Cl. A...................................... 1.89
Toys `R Us, Inc............................................... 1.86
Warner-Lambert Co............................................. 1.74
Tyco International Ltd........................................ 1.64
</TABLE>

Due to active management, there is no guarantee that the Portfolio currently
invests or will continue to invest in the securities or industries listed.

PERFORMANCE SUMMARY

Comparison of change in value of a $10,000 investment in the State Street
Research Aggressive Growth Portfolio and the S&P 500 Index from 4/29/88 to
12/31/97.

AVERAGE ANNUAL TOTAL RETURNS

1 yr. 5 yr. Inception
6.67% 12.35% 15.58%

[THE FOLLOWING TABLE WAS REPRESENTED BY A GRAPH IN THE PRINTED MATERIAL]

-------------------------------------------------------
LABEL A B
-------------------------------------------------------
Aggressive Growth
LABEL Portfolio S&P 500 Index
-------------------------------------------------------
1 4/29/88 10,000 10,000
2 10,521 10,910
3 89 13,776 14,360
4
5 90 12,351 13,914
6
7 20,553 18,144
8
9 92 22,688 19,524
10
11 27,822 21,488
12
13 94 27,298 21,770
14
15 35,350 29,941
16
17 96 38,081 36,811
18
19 97 40,619 49,088

-------------------------------------------------------

B-113
<PAGE>

METROPOLITAN SERIES FUND, INC.

MANAGEMENT'S DISCUSSION AND ANALYSIS
- --------------------------------------------------------------------------------
METLIFE STOCK INDEX PORTFOLIO

For the fourth quarter of 1997, the return for the Portfolio was 2.3%. For the
full year 1997, the return was 32.2%. These returns reflect gains in the
Standard & Poor's 500 Index, which the Portfolio is designed to track. This
follows strong gains in 1995 and 1996 for the Portfolio and for the S&P 500.
This is the first time the index has had three consecutive years of returns
exceeding 20%. Operating earnings for the companies in the S&P 500 Index rose
about 12% in 1997, reflecting good economic growth in the western hemisphere,
improving labor productivity and rising profit margins. Low inflation and
declining interest rates also helped boost stock prices.

Most of the year's gain in the S&P 500 Index occurred in the first seven months.
Weakness in Asian financial systems and sharp drops in Asian currencies began
during the summer and led to increased volatility in U.S. stocks in the fourth
quarter. This triggered a one day decline of 6.8% in the S&P 500 Index on Oct.
27 most of which was recovered the following day. Investors feared the Asian
problems would adversely affect U.S. company profits, but these problems also
lessened inflation concerns and led to a decline in interest rates. The Asian
financial crisis also appears to have prompted investors to shift funds out of
those markets considered riskier and into U.S. bonds and into large
capitalization U.S. stocks, which are a major component of the S&P 500 Index.
These factors enabled the index to have a modest gain in the final quarter.
During the fourth quarter, the strongest sectors within the S&P 500 Index were
utilities and consumer non-durables, while the weakest areas were technology and
energy. The larger companies tended to perform relatively well.

INVESTMENT OBJECTIVE

To equal the performance of the S&P 500 Index, adjusted to assume reinvestment
of dividends.

UNDERLYING INVESTMENTS

Invests in the common stock of companies which are included in the S&P 500
Index.

PORTFOLIO COMPOSITION & TOTAL RETURN AS OF DECEMBER 31, 1997

Net Assets $2.0 billion

COMPOSITION

Top Ten Equity Holdings

<TABLE>
<CAPTION>
% of
Total
Net
Security Assets
---------- --------
<S> <C>
General Electric Co........................................... 3.14
Coca-Cola Co.................................................. 2.16
Microsoft Corp................................................ 2.01
Exxon Corp.................................................... 1.95
Merck & Co., Inc.............................................. 1.67
Royal Dutch Petroleum Co...................................... 1.58
Intel Corp.................................................... 1.48
Philip Morris Cos., Inc....................................... 1.41
Procter & Gamble Co........................................... 1.40
International Business Machines Corp.......................... 1.30
</TABLE>

There is no guarantee that the Portfolio currently invests or will continue to
invest in the securities or industries listed.

PERFORMANCE SUMMARY

Comparison of change in value of a $10,000 investment in the MetLife Stock Index
Portfolio and the S&P 500 Index from 5/1/90 to 12/31/97.

AVERAGE ANNUAL TOTAL RETURNS

1 yr. 5 yr. Inception
32.19% 19.27% 17.71%

[THE FOLLOWING TABLE WAS REPRESENTED BY A GRAPH IN THE PRINTED MATERIAL]

Stock Index Portfolio S&P 500 Index
5/01/90 10,000 10,000
12/31/90 10,195 10,245
91 13,229 13,359
14,213 14,376
93 15,569 15,821
15,753 16,029
95 21,561 22,046
26,447 27,104
97 34,960 36,143

B-114
<PAGE>

- --------------------------------------------------------------------------------
METROPOLITAN SERIES FUND, INC.
- --------------------------------------------------------------------------------

MANAGEMENT'S DISCUSSION ANS ANALYSIS
- --------------------------------------------------------------------------------
STATE STREET RESEARCH INTERNATIONAL STOCK PORTFOLIO

The Portfolio trailed most of its peer group through the year. The Manager
maintained emphasis on European markets over Asia and Pacific Rim countries and
continued to underweight Japan, pending more supportive government economic
policies.

Continental Europe anticipated the advent of the European Monetary Union.
Domestic demand was expected to become the engine of European growth. At year-
end, Portfolio investments favored Spain for domestic growth, Italy for economic
recovery, and France. Exposure to the UK and Switzerland remained near benchmark
averages. Investment was reduced in cyclical businesses with global markets and
in financial firms involved in Asia.

Among Japanese holdings, the Manager reduced integrated industrials that were
vulnerable to slowdown, but kept positions in top banks that could benefit amid
competition. Investment throughout Asia was confined to selected, large, well-
managed companies with strong balance sheets.

INVESTMENT OBJECTIVE

To achieve long-term growth of capital.

UNDERLYING INVESTMENTS

Invests primarily in common stock and equity-related securities of non-United
States companies.

PORTFOLIO COMPOSITION & TOTAL RETURN AS OF DECEMBER 31, 1997

Net Assets $267.1 million

COMPOSITION
Top Ten Equity Holdings

<TABLE>
<CAPTION>
% of
Total
Net
Security Assets
-------- --------
<S> <C>
Roche Holdings AG (Switzerland)............................... 1.86
Novartis AG (Switzerland)..................................... 1.65
Allianz AG (Germany).......................................... 1.46
Nestle SA (Switzerland) ..................................... 1.35
Royal Dutch Petroleum Co. (Netherlands)....................... 1.32
Glaxo Wellcome PLC (United Kingdom)........................... 1.31
Nintendo Co. Ltd. (Japan)..................................... 1.16
Lloyds TSB Group PLC (United Kingdom)......................... 1.10
Nippon Telephone & Telegraph (Japan) ......................... 1.02
HSBC Holdings PLC (United Kingdom) .......................... 0.99
</TABLE>

DIVERSIFICATION BY COUNTRY AND REGION FOR THE STATE STREET RESEARCH
INTERNATIONAL STOCK PORTFOLIO AS OF 12/31/97

[THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL]

United Kingdom 22.9%
Other Americas 1.1%
Other Europe 6.5%
Other Asia/Pacific Basin 6.9%
Sweden 2.7%
Australia 3.6%
Netherlands 4.6%
Spain 4.7%
Italy 6.8%
Germany 7.4%
Switzerland 7.8%
France 10.4%
Japan 14.6%

Due to active management, there is no guarantee that the Portfolio currently
invests or will continue to invest in these countries, securities, or
industries.

PERFORMANCE SUMMARY

Comparison of change in value of a $10,000 investment in the State Street
Research International Stock Portfolio and the MSCI EAFE Index from 5/1/91 to
12/31/97.

AVERAGE ANNUAL TOTAL RETURNS

1yr. 5 yr. Inception
-2.34% 8.47% 4.33%

[THE FOLLOWING TABLE WAS REPRESENTED BY A GRAPH IN THE PRINTED MATERIAL]

International MSCI
Stock Portfolio EAFE Index

5/01/91 10,000 10,000
9,845 10,335
92 8,840 9,077
13,061 12,033
94 13,724 12,969
13,839 14,422
96 13,593 15,294
97 13,275 15,566

B-115
<PAGE>

METROPOLITAN SERIES FUND, INC.

MANAGEMENT'S DISCUSSION AND ANALYSIS
- --------------------------------------------------------------------------------
LOOMIS SAYLES HIGH YIELD BOND PORTFOLIO

The Portfolio lagged the benchmark Merrill Lynch High Yield Index for the fourth
quarter, returning -5.4%. Since its inception in March of 1997, it has returned
6.2%. The Portfolio's exposure to Yankees relative to the benchmark, coupled
with the underperformance of convertibles which resulted from the continued
volatility in equity markets, curtailed performance in the fourth quarter. Being
longer than the market, the Portfolio is well positioned to participate in gains
resulting from the current falling interest rate environment. At the same time,
by holding mostly non-callable or deep-discounted bonds, the Portfolio offers
protection from reinvestment risk. Since tight corporate spreads have made it
increasingly difficult to find attractive issues, the Manager must focus now
more than ever on uncovering undervalued credits with strong underlying
fundamentals. The Loomis Sayles High Yield Bond Portfolio remains well
structured for the current environment, offering good yield advantage, call
protection, and diversification.

INVESTMENT OBJECTIVE

To achieve high total investment return through a combination of current income
and capital appreciation.

UNDERLYING INVESTMENTS

Normally invests at least 65% of its assets in fixed-income securities of
below-investment-grade quality.

PORTFOLIO COMPOSITION & TOTAL RETURN AS OF DECEMBER 31, 1997

Net Assets $27.8 million
Average Bond Quality BB

PERFORMANCE SUMMARY

Comparison of change in value of a $10,000 investment in the Loomis Sayles High
Yield Bond Portfolio and the Merrill Lynch High Yield Index from 3/3/97 to
12/31/97.

AVERAGE ANNUAL TOTAL RETURNS

Inception
6.18%

[THE FOLLOWING TABLE WAS REPRESENTED BY A GRAPH IN THE PRINTED MATERIAL]

Merrill Lynch
Loomis High Yield Index

3/03/97 10,000 10,000
12/31/97 10,618 11,021

B-116
<PAGE>

METROPOLITAN SERIES FUND, INC.

MANAGEMENT'S DISCUSSION AND ANALYSIS
- --------------------------------------------------------------------------------
JANUS MID CAP PORTFOLIO

Although the Southeast Asian crisis injected new volatility into global markets,
domestic equities managed to post modest gains during the fourth quarter. The
Portfolio did well during this period, and closed out the year on a strong note.
Overall, the Portfolio continues to hold an assortment of companies with strong
earnings prospects, and a number of its top positions announced very strong
earnings gains during the quarter. The Portfolio's top 20 positions reported an
average earnings increase of over 35% during the fourth quarter 1997, which is
well in excess of the average earnings of the companies in the benchmark, the
S&P 400 MidCap Index. Meanwhile, the Portfolio also had a number of standouts
whose price appreciated over 40% during the same period, including Farmer Mac,
Outdoor Systems, Paychex, and Chancellor Media. What's interesting is that for
all four of these companies, the fundamentals remain unchanged.

For most of the year, many of the stocks' prices did not reflect their
underlying strength, but during the fourth quarter, investors began to take
notice of several of the stocks in our Portfolio. Looking ahead, Southeast
Asia's downturn will almost certainly result in slower growth, both here and
abroad. In this environment, owning companies that can consistently meet or
exceed earnings expectations should be rewarded, while those that disappoint
will be punished. Going forward, the Manager expects many of the Portfolio's
longtime holdings to deliver solid results. These include numerous domestic
consumer discretionary stocks, some U.K.-based restaurant and pub companies, and
a number of media and entertainment positions. Similarly, recent additions in
the technology sector, although small as a percentage of the Portfolio, have
tremendous potential. As a result, the Manager maintains a positive outlook for
1998.

INVESTMENT OBJECTIVE

To provide long-term growth of capital.

UNDERLYING INVESTMENTS

Invests primarily in securities issued by medium-sized companies.

PORTFOLIO COMPOSITION & TOTAL RETURN AS OF DECEMBER 31, 1997

Net Assets $103.9 million

COMPOSITION

Top Ten Equity Holdings

<TABLE>
<CAPTION>
% of
Total
Net
Security Assets
---------- ---------
<S> <C>
Omnicare, Inc................................................. 5.93
Paychex, Inc.................................................. 5.42
Apollo Group, Inc. Cl. A...................................... 3.77
Clear Channel Communications, Inc............................. 3.75
Wetherspoon (J.D.) PLC........................................ 3.73
Fastenal Co................................................... 3.58
Pizza Express PLC............................................. 3.20
Cadence Design Systems, Inc................................... 2.91
AES Corp...................................................... 2.63
Charles Schwab Corp........................................... 2.48
</TABLE>

Due to active management, there is no guarantee that the Portfolio currently
invests or will continue to invest in the securities or industries listed.

PERFORMANCE SUMMARY

Comparison of change in value of a $10,000 investment in the Janus Mid Cap
Portfolio and the S&P 400 MidCap Index from 3/3/97 to 12/31/97.

AVERAGE ANNUAL TOTAL RETURNS

Inception
28.22%

[THE FOLLOWING TABLE WAS REPRESENTED BY A GRAPH IN THE PRINTED MATERIAL]

Janus S&P 400 MidCap Index

3/03/97 10,000 10,000
12/31/97 12,822 12,852

B-117
<PAGE>

METROPOLITAN SERIES FUND, INC.

MANAGEMENT'S DISCUSSIONS AND ANALYSIS
- --------------------------------------------------------------------------------
T. ROWE PRICE SMALL CAP GROWTH PORTFOLIO

Continuing strong asset growth pushed the Portfolio past $90 million in assets.
The Portfolio's median market capitalization fell slightly to $870 million,
largely as a result of market movements. The P/E ratio of the Portfolio is now
less than 1.1 times the P/E ratio of the S&P 500, which is noteworthy for a
portfolio of companies growing considerably faster than the S&P 500.
Historically, valuations around this level have signaled attractive
opportunities for investment in small cap growth companies. The Portfolio's
largest sector exposures are in technology, services, and health care.

In the fourth quarter, most sectors in the Portfolio declined. The worst area
was technology, most notably PC related manufacturers and related equipment
companies. Natural resource stocks also fell as the price of oil declined. The
best performing sectors were finance (helped by lower interest rates) and media.
While hospital management companies were weak, other health care related
companies performed well. The Portfolio remains fully invested; at quarter end
it held 3.8% cash reserves. Fundamental performance of the Portfolio's companies
is excellent. During the fourth quarter, over 62% of the earnings estimate
changes for Portfolio companies resulted in upward revisions.

INVESTMENT OBJECTIVE

To achieve long-term capital growth.

UNDERLYING INVESTMENTS

Invests in small capitalization companies.

PORTFOLIO COMPOSITION & TOTAL RETURN AS OF DECEMBER 31, 1997

Net Assets $94.0 million

COMPOSITION

Top Ten Equity Holdings

<TABLE>
<CAPTION>
% of Total
Security Net Assets
-------- ----------
<S> <C>
CIBER, Inc. ................................................. 0.56
Outdoor Systems, Inc.......................................... 0.54
Central Parking Corp.......................................... 0.53
Coast Savings Financial, Inc. ............................... 0.53
UICI.......................................................... 0.52
North Fork Bancorp, Inc....................................... 0.52
Sybron International Corp..................................... 0.52
Legg Mason, Inc............................................... 0.51
Orbital Sciences Corp......................................... 0.49
Wolverine World Wide, Inc..................................... 0.49
</TABLE>

Due to active management, there is no guarantee that the Portfolio currently
invests or will continue to invest in the securities or industries listed.

PERFORMANCE SUMMARY

Comparison of change in value of a $10,000 investment in the T. Rowe Price Small
Cap Growth Portfolio and the Russell 2000 Growth Index from 3/3/97 to 12/31/97.

AVERAGE ANNUAL TOTAL RETURNS

Inception
18.81%

[THE FOLLOWING TABLE WAS REPRESENTED BY A GRAPH IN THE PRINTED MATERIAL]

Russell 2000
T. Rowe Price Growth Index

3/03/97 10,000 10,000
12/31/97 11,881 11,728

B-118
<PAGE>

METROPOLITAN SERIES FUND, INC.

MANAGEMENT'S DISCUSSION AND ANALYSIS
- --------------------------------------------------------------------------------
SCUDDER GLOBAL EQUITY PORTFOLIO

The fourth quarter saw the introduction of new thematic ideas as well as a minor
re-allocation between existing themes. One new theme, entitled "Secure Streams
of Income," is based on the idea that demographic change will increase the
world's demand for income-producing securities-primarily bonds and utility
stocks-at precisely the same time that fiscal austerity and deregulation will be
shrinking their supply. Therefore, the Managers have been buying those utilities
best positioned to prosper in a deregulated environment. In addition, bonds now
comprise roughly 16% of the Portfolio.

Given recent events in Asia, the Managers have reduced the capital goods
exposure in several themes as they looked to avoid the negative effects that the
crises may have on this sector. The Managers have also taken advantage of the
regional crises by adding several attractively-valued Hong Kong stocks to the
"Emerging Markets" theme.

INVESTMENT OBJECTIVE

To achieve long-term growth of capital through a diversified portfolio of
marketable securities, primarily equity securities, including common stocks,
preferred stocks, and debt securities convertible into common stocks.

UNDERLYING INVESTMENTS

Invests on a worldwide basis in equity securities of companies which are
incorporated in the U.S. or in foreign countries. The Portfolio may also invest
in the debt securities of U.S. and foreign issuers. Income is an incidental
consideration.

PORTFOLIO COMPOSITION & TOTAL RETURN AS OF DECEMBER 31, 1997

Net Assets $60.7 million

COMPOSITION

Top Ten Equity Holdings
<TABLE>
<CAPTION>
% of Total
Security Net Assets
-------- ----------
<S> <C>
International Business Machines Corp. (United States)......... 1.98
CINergy Corp. (United States)................................. 1.84
VEBA AG (Germany)............................................. 1.72
Unilever PLC (United Kingdom)................................. 1.71
Assurance Generale de France (France)......................... 1.57
RWE AG (Germany).............................................. 1.57
BASF AG (Germany)............................................. 1.53
Credit Suisse Group (Switzerland)............................. 1.52
Novartis AG (Switzerland)..................................... 1.50
Muenchener Rueckversicherungs AG (Germany).................... 1.49
</TABLE>

DIVERSIFICATION BY COUNTRY AND REGION FOR THE SCUDDER GLOBAL EQUITY PORTFOLIO
AS OF 12/31/97 BASED ON MARKET VALUE OF INVESTMENT

[THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL]

United States 35.4%
Other Americas/Africa 2.4%
Other Europe 3.3%
Other Asia/Pacific Basin 1.7%
Australia 2.3%
Brazil 2.3%
Sweden 2.8%
Canada 3.2%
Japan 4.2%
France 4.5%
Switzerland 8.0%
United Kingdom 14.1%
Germany 15.8%

Due to active management, there is no guarantee that the Portfolio currently
invests or will continue to invest in these countries, securities, or
industries.

PERFORMANCE SUMMARY

Comparison of change in value of a $10,000 investment in the Scudder Global
Equity Portfolio and the MSCI World Index from 3/3/97 to 12/31/97.

AVERAGE ANNUAL TOTAL RETURNS

Inception
9.62%

[THE FOLLOWING TABLE WAS REPRESENTED BY A GRAPH IN THE PRINTED MATERIAL]

Scudder MSCI World Index

3/03/97 10,000 10,000
12/31/97 10,962 11,350

B-119