<PAGE>
[METLIFE LOGO APPEARS HERE]
[JANUS LOGO APPEARS HERE]
PROSPECTUS
FOR
METROPOLITAN SERIES FUND, INC.
November 1, 1999
The investment options currently offered by the Metropolitan Series Fund (the
"Fund") under this prospectus are the MetLife Stock Index Portfolio and the
Janus Mid Cap Portfolio.
TABLE OF CONTENTS FOR THIS PROSPECTUS
<TABLE>
<CAPTION>
Page
in this
Subject Prospectus
------- ----------
<S> <C>
Risk/Return Summary............................................... 2
Performance and Volatility........................................ 4
About the Investment Managers..................................... 6
Portfolio Turnover Rates.......................................... 7
Dividends, Distributions and Taxes................................ 7
General Information About the Fund and its Purpose................ 8
Sale and Redemption of Shares..................................... 8
Financial Highlights.............................................. 9
Appendix A--Certain Investment Practices.......................... 11
Appendix B--Description of Some Investments,
Techniques, and Risks............................................ 14
</TABLE>
As with all mutual fund shares, neither the Securities and Exchange Commission
nor any state securities authority have approved or disapproved these
securities, nor have they determined if this Prospectus is accurate or
complete. Any representation otherwise is a criminal offense.
<PAGE>
Carefully review the objectives and investment practices of the Portfolios and
consider your ability to assume the risks involved before allocating payments
to either Portfolio.
MetLife Stock Index Portfolio
Risk/Return Summary
About Both the Portfolios
Each Portfolio of the Fund has its own investment objective. Since investment
in any Portfolio involves both opportunities for gain and risks of loss, we
cannot give you assurance that the Portfolio will achieve its objectives. You
should carefully review the objectives and investment practices of the
Portfolios and consider your ability to assume the risks involved before
allocating payments to a particular Portfolio.
While certain of the investment techniques, instruments and risks associated
with each Portfolio are referred to in the discussion that follows, additional
information on these subjects appears in Appendix A and B to this Prospectus.
However, those discussions do not list every type of investment, technique, or
risk to which a Portfolio may be exposed. Further, the Portfolios may change
their investment practices at any time without notice, except for those
policies that this Prospectus or the Statement of Additional Information
("SAI") specifically identify as requiring a shareholder vote to change. Unless
otherwise indicated, all percentage limitations, as well as characterization of
a company's capitalization, are evaluated as of the date of purchase of the
security.
About the MetLife Stock Index Portfolio
Investment objective: to equal the performance of the Standard & Poor's 500
Composite Stock Price Index ("S&P 500 Index").
Principal investment strategies: The Portfolio will normally invest most of its
assets in common stocks included in the S&P 500 Index. The S&P 500 Index
consists of 500 common stocks, most of which are listed on the New York Stock
Exchange. The stocks included in the S&P 500 Index are issued by companies
among those whose outstanding stock have the largest aggregate market value,
although stocks that are not among the 500 largest are included in the S&P 500
Index for diversification purposes. In addition to securities of the type
contained in its index, the Portfolio also expects to invest, as a principal
investment strategy, in securities index futures contracts to simulate full
investment in the index while retaining liquidity, to facilitate trading, to
reduce transaction costs or to seek higher return when these derivatives are
priced more attractively than the underlying security. Also, since the
Portfolio attempts to keep transaction costs low, the portfolio manager
generally will rebalance the Portfolio only if it deviates from the actual
index by a certain percent, depending on the company, industry, and country, as
applicable. MetLife monitors the tracking performance of the Portfolio through
examination of the "correlation coefficient." A perfect correlation would
produce a coefficient of 1.00. The Portfolio will attempt to maintain a target
correlation coefficient of at least .95.
Principal risks: The risks described after the following captions under
"Principal Risks of Investing in the Fund:" "Equity investing;" "Investing in
larger companies;" and "Index investing." Volatility may be indicative of risk.
Please refer to the discussion under "Performance and Volatility."
2
<PAGE>
Janus Mid Cap Portfolio
About the Janus Mid Cap Portfolio
Investment objective: long-term growth of capital.
Principal investment strategies: The Portfolio normally invests at least 65% of
its total assets in common stocks of medium capitalization companies selected
for their growth potential. The portfolio manager defines medium capitalization
("mid-cap") companies as those whose market capitalization falls within the
range of companies included in the S&P MidCap 400 Index at the time of the
purchase. As of December 31, 1998, this included companies with capitalizations
between approximately $142 million and $73.303 billion. The Portfolio is non-
diversified, so that it can own larger positions in a smaller number of
issuers. This means the appreciation or depreciation of a single investment can
have a greater impact on the Portfolio's share price. The portfolio manager
generally takes a "bottom up" approach to building the Portfolio by identifying
companies with earnings growth potential that may not be recognized by the
market at large, without regard to any industry sector or other similar
selection procedure.
Principal risks: The Portfolio is nondiversified which means it may hold larger
positions in a smaller number of securities than would a diversified portfolio.
Thus, a single security's increase or decrease in value may have a greater
impact on the value of the Portfolio and its total return. The Portfolio's
other principal risks are described after the following captions, under
"Principal Risks of Investing in the Fund:" "Equity investing;" "Investing in
less mature companies, smaller companies and companies with "special
situations';" "Investing in larger companies;" "Investing in securities of
foreign issuers;" "Investing in medium sized companies;" and "Growth
investing." Volatility may be indicative of risk. Please refer to the
discussion under "Performance and Volatility."
3
<PAGE>
Performance and Volatility
The following table and chart are provided to illustrate the variability of the
investment returns that each Portfolio has earned in the past.
. Average annual total return measures a Portfolio's performance over time,
and compares those returns to a representative index. Periods of 1 year, 5
years (if applicable) and since inception are presented.
. The graph of year-by-year returns examines volatility by illustrating a
Portfolio's historic highs and lows, as well as the consistency of returns.
. In general, as reflected in this section, a Portfolio with higher average
annual total returns tends to be more volatile.
. Return calculations do not reflect insurance product fees or other charges,
and if included these charges would reduce each Portfolio's past
performance. Also, past performance does not necessarily indicate how a
particular Portfolio will perform in the future.
MetLife Stock Index
Investment Results
Average Annual Total Returns
As of December 31, 1998
-----------------------
1 Year 5 Years Inception
------ ------- ---------
MetLife
Stock Index 28.23% 23.55% 18.88%
- ---------------------------------------------------
S&P 28.60% 24.05% 19.39%
[METLIFE STOCK INDEX CHART APPEARS HERE]
91 92 93 94 95 96 97 98
- ------ ----- ----- ----- ------ ------ ------ ------
29.76% 7.44% 9.54% 1.18% 36.87% 22.66% 32.19% 28.23%
During the period shown in the bar chart, the highest return for a quarter was
21.3% (quarter ended Dec. 31, 1998) and the lowest return for a quarter was
- -13.6% (quarter ended Sept. 30, 1990).
Janus Mid Cap
Investment Results
Average Annual Total Returns
As of December 31, 1998
-----------------------
1 Year Inception
------ ---------
Janus Mid Cap 37.19% 36.09%
- -------------------------------------------
S&P 400 MidCap 19.11% 26.19%
[JANUS MID CAP CHART APPEARS HERE]
97* 98
- ------ ------
28.22% 37.19%
* For the period March 3, 1997 to December 31, 1997.
During the period shown in the bar chart, the highest return for a quarter was
25.7% (quarter ended Dec. 31, 1998) and the lowest return for a quarter was
- -14.5% (quarter ended Sept. 30, 1998).
4
<PAGE>
Carefully review the principal risks associated with investing in the
Portfolios.
Principal Risks of Investing in the Fund
The following briefly describes the principal risks that are associated with
the MetLife Stock Index Portfolio or the Janus Mid Cap Portfolio.
Equity investing: Portfolios that invest in equities could lose money due to
sudden unpredictable drops in value and the potential for periods of lackluster
performance. Such adverse developments could result from general market or
economic conditions and/or developments at a particular company that the
portfolio managers do not foresee or circumstances that they do not evaluate
correctly. Historically, investments in equities have been more volatile than
many other investments.
This is a principal risk for both the MetLife Stock Index Portfolio and the
Janus Mid Cap Portfolio.
Investing in larger companies: Larger more established companies may be unable
to respond quickly to new competitive challenges such as changes in technology
and consumer tastes. Many larger companies also may not be able to attain the
high growth rates of successful smaller companies, especially during extended
period of economic expansion.
This is a principal risk for both the MetLife Stock Index Portfolio and the
Janus Mid Cap Portfolio.
Index investing: Unlike actively managed portfolios, portfolios that attempt to
match the return of an index generally will not use any defensive strategies.
You, therefore, will bear the risk of adverse market conditions with respect to
the market segment that the index seeks to match. In addition, transaction
costs, other Portfolio or Fund expenses, brief delays that occur until a
Portfolio can invest cash it receives and other tracking errors may result in a
Portfolio's return being lower than the return of the applicable index.
This a principal risk of investing in the MetLife Stock Index Portfolio.
Investing in securities of foreign issuers: Investments in securities that are
traded outside the U.S. have additional risks beyond those of investing in U.S.
securities. Foreign securities are frequently more volatile and less liquid
than their U.S. counterparts for reasons that may include unstable political
and economic climates, lack of standardized accounting practices, limited
information available to investors and smaller markets that are more sensitive
to trading activity. Also, changes in currency exchange rates have the
potential of reducing gains or creating losses. There also can be risks of
expropriation, currency controls, foreign taxation or withholding, and less
secure procedures for transacting business in securities. The risks of
investing in foreign securities are usually higher in emerging markets such as
most countries in Southeast Asia, Eastern Europe, Latin America and Africa.
This is a principal risk of investing in the Janus Mid Cap Portfolio.
Investing in less mature companies, smaller companies and companies with
"special situations": These investments can be particularly sensitive to market
movements, because they may be thinly traded and their market prices tend to
reflect future expectations. Also, these companies often have limited product
lines, markets or financial resources and their management
5
<PAGE>
About MetLife
Portfolio management of the Janus Mid Cap Portfolio
personnel may lack depth and experience. (For an explanation of "special
situations" see "investment styles" in Appendix B.)
This is a principal risk of investing in the Janus Mid Cap Portfolio.
Growth investing: This investment approach has additional risk associated with
it due to the volatility of growth stocks. Growth companies usually invest a
high portion of earnings in their businesses, and may lack the dividends of
value stocks that can cushion prices in a falling market. Also, earnings
disappointments often lead to sharply falling prices because investors buy
growth stocks in anticipation of superior earnings growth.
This is a principal risk of investing in the Janus Mid Cap Portfolio.
Investing in Medium Sized Companies: These companies present additional risks
because their earnings are less predictable, their share prices more volatile,
and their securities less liquid than larger, more established companies.
This is a principal risk of investing in the Janus Mid Cap Portfolio.
Defensive Strategies
With respect to the Janus Mid Cap Portfolio, the portfolio manager may use
defensive strategies. These include holding greater cash positions, short-term
money market instruments or similar investments that are not within the
Portfolio's usual investment strategy, but do not violate any prohibition to
which the Portfolio is subject. The Portfolio manager may use defensive
strategies when it believes that market conditions are not favorable for
profitable investing or when the portfolio manager is otherwise unable to
locate favorable investment opportunities. Adopting a defensive position,
however, can mean that the Portfolio would be unable to meet its investment
objective.
About The Investment Managers
Metropolitan Life Insurance Company ("MetLife") has day-to-day investment
management responsibility for the Portfolio. (MetLife also performs general
administrative and management services for the Fund.) In addition, MetLife is
the Fund's principal underwriter and distributor. MetLife also manages its own
investment assets and those of certain affiliated companies and other entities.
MetLife is a mutual life insurance company which sells insurance policies and
annuity contracts. On December 31, 1998, it had total life insurance in force
of approximately $1.7 trillion and total assets under management of
approximately $359 billion. MetLife is the parent of Metropolitan Tower Life
Insurance Company ("Metropolitan Tower").
Janus Capital Corporation ("Janus") is the sub-investment manager for the Janus
Mid Cap Portfolio. It is a Colorado corporation that began providing investment
management services at its inception in 1970. In addition to the Fund, it
provides investment management services to several mutual funds and several
individual and institutional clients. As of December 31, 1998, Janus managed
approximately $108 billion in assets.
James P. Goff, Vice President since December 1993 and Portfolio Manager, joined
Janus in 1988. He is the portfolio manager for the Portfolio and has been
primarily responsible for its day-to-day management since its inception in
6
<PAGE>
Investment Management Fees
Dividends are reinvested
March, 1997. He is also a portfolio manager for other investment portfolios.
Over the past five years, he has also been Portfolio Manager at Janus.
The Fund pays MetLife monthly for its investment management services. MetLife
pays Janus for its investment management services to the Janus Mid Cap
Portfolio. There is no separate charge to the Fund for such services.
The investment management fee for the MetLife Stock Index Portfolio for the
year ending December 31, 1998 was .25% as an annual percentage of the average
daily net assets of that Portfolio.
The investment management fee and sub-investment management fee for the Janus
Mid Cap Portfolio for the year ending December 31, 1998 were .72% and total
.51%, respectively as an annual percentage of the average daily net assets of
that Portfolio.
The Fund is responsible for paying its own expenses. However, until December
30, 1997 MetLife voluntarily paid expenses of the Janus Mid Cap Portfolio in
excess of a certain percentage of net assets. This arrangement increased the
performance of the Portfolio.
Portfolio Turnover Rates
The rate of portfolio turnover is the annual amount, expressed as a percentage,
of a Portfolio's securities that it replaces in one year. The portfolio
turnover rate 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 or business
conditions and client contributions and withdrawals. 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
each Portfolio are set forth in the Prospectus under the Financial Highlights.
Dividends, Distributions and Taxes
The Fund intends to qualify as a regulated investment company under the tax law
and, as such distributes substantially all of each Portfolio's ordinary net
income and capital gains each calendar year as a dividend to the separate
accounts funding the Contracts to avoid an excise tax on certain undistributed
amounts. The Fund expects to pay no income tax. Dividends are reinvested in
additional full and partial shares of the Portfolio as of the dividend payment
date.
The Fund and its Portfolios intend to comply with special diversification and
other tax law requirements that apply to investments under variable life
insurance and annuity contracts. Under these rules, shares of the Fund will
generally only be available through the purchase of a variable life insurance
or annuity contract. Income tax consequences to Contract owners who allocate
premiums to Fund shares are discussed in the prospectus for the Contracts that
is attached at the front of this Prospectus.
7
<PAGE>
Contract owners may allocate the amounts under the Contracts for ultimate
investment in the Portfolios.
Fund shares are available only through variable life and variable annuity
contracts.
General Information about the Fund and its Purpose
The Fund is an open-end management investment company (or "mutual fund"). The
Fund is a "series" type of mutual fund, which issues separate classes (or
series) of stock. Each class or series represents an interest in a separate
portfolio of Fund investments.
The Fund offers its shares to MetLife and its affiliated insurance companies
("Insurance Companies"), including Metropolitan Tower. The Insurance Companies
hold the Fund's shares in separate accounts that they use to support variable
life insurance policies and variable annuity contracts (together, the
"Contracts"). Not all of the Portfolios of the Fund are available to each of
these separate accounts. An Insurance Company holding Fund shares for a
separate account has different rights from those of the owner of a Contract.
The terms "shareholder" or "shareholders" in this Prospectus refer to the
Insurance Companies, and not to any Contract owner.
Within limitations described in the appropriate Contract, owners may allocate
the amounts under the Contracts for ultimate investment in the Portfolios. See
the prospectus which is attached at the front of this Prospectus for a
description of (a) the Contract, (b) the Portfolios of the Fund that are
available under that Contract and (c) 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 that Contract.
Some of the Portfolios have names and investment objectives that are very
similar to certain publicly available mutual funds that are managed by the same
money managers. These Portfolios are not those publicly available mutual funds
and will not have the same performance. Different performance will result from
such factors as different implementation of investment policies, different cash
flows into and out of the Portfolios, different fees, and different sizes.
It is conceivable that in the future it may be disadvantageous for different
types of variable life insurance and variable annuity separate accounts to
invest simultaneously in the Fund. However, the Fund, Metropolitan Tower and
MetLife do not currently foresee any such disadvantages. The Fund's Board of
Directors intends to monitor 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.
Sale and Redemption of Shares
Shares are sold and redeemed at a price equal to the net asset value without
any sales charges. The Insurance Companies purchase or redeem shares of each
Portfolio, based on, among other things: (1) the amount of net Contract
premiums or purchase payments transferred to the separate accounts; (2)
transfers to or from separate account investment divisions; (3) policy loans;
(4) loan repayments; and (5) benefit payments to be effected on a given date
under the Contracts. Generally, these purchases and redemptions are priced
using the Portfolio net asset value computed for the same date and time as are
used to price the corresponding Contract transaction.
8
<PAGE>
A Portfolio's net asset value per share is determined once daily.
Each Portfolio's net asset value per share is calculated by taking its assets
(including dividends and interest received or accrued), deducting its
liabilities (including accrued expenses and dividends payable) and dividing the
result by the total number of the Portfolio's outstanding shares. To determine
the value of a Portfolio's assets, cash and receivables are valued at their
face amounts. Interest is recorded as accrued and dividends are recorded on the
ex-dividend date.
Securities, options and futures contracts held by the Portfolios are valued at
market value. Short-term debt instruments with a maturity of 60 days or less
held by all Portfolios are valued on an amortized cost basis. When market
quotations are not readily available for securities and assets, or when the
Board of Directors determines that customary pricing procedures would result in
an unreliable valuation, they are valued at fair value as determined by the
Board of Directors. Such a fair value procedure could be followed, for example,
if (1) an event occurs after the time of the most recent available market
quotations that is likely to have affected the value of those securities or (2)
such market quotations for other reasons do not reflect information material to
the value of those securities. The possibility of fair value pricing means that
changes in a Portfolio's net asset value may not always correspond to changes
in quoted prices of a Portfolio's investments.
A Portfolio's net asset value per share is determined once daily immediately
after any dividends are declared and is currently determined at the close of
regular trading on the New York Stock Exchange. When it is open, regular
trading on the New York Stock Exchange usually ends at 4:00 p.m., Eastern time.
The net asset value may also be determined on days when the New York Stock
Exchange is closed when there has been trading in a Portfolio's securities
which would result in a material change in the net asset value.
Computer Software Systems
The services provided to the Fund by MetLife as investment manager and
distributor, Janus and the transfer agent, 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 negatively impact handling of
securities trades, pricing and account services and otherwise adversely impact
the companies, organizations, and markets in which the Portfolios may invest
and may reduce a Portfolio's returns. MetLife and the transfer agent are
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.
Financial Highlights
The financial highlights table is intended to help you understand each
Portfolio's financial performance for the past five years, or since inception
of the Portfolio if shorter. Certain information reflects financial results for
a single share of the Portfolio. The total returns in the table represent the
rate that a shareholder would have earned or lost on an investment in a
Portfolio (assuming reinvestment of all dividends and distributions). This
information has been audited by Deloitte & Touche LLP, whose report, along with
the Fund's financial statements, are included in the annual report, which is
available upon request.
9
<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. For further information about the performance of the Portfolios, see
the Fund's December 31, 1998 Management Discussion and Analysis which appears in
the Fund's annual report, which is incorporated by reference into the Statement
of Additional Information.
<TABLE>
<CAPTION>
Selected Data For a Share of Capital METLIFE STOCK INDEX PORTFOLIO
-------------------------------------------------------------------------
Stock Outstanding Throughout Period: YEAR ENDED DECEMBER 31,
------------------------------------------------------------------------------
1998 1997 1996 1995 1994
----------- ----------- ----------- ---------- ----------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE: Beginning of period..... $28.78 $22.23 $18.56 $13.87 $14.25
--------------------------------------------------------------------------------------------------------------------------
Investment Operations:
Net investment income................... 0.37 0.34 0.33 0.32 0.33
Net realized and unrealized gain/(loss). 7.75 6.79 3.88 4.79 (0.17 )
----------- ----------- ----------- ---------- ----------
Total From Investment Operations........ 8.12 7.13 4.21 5.11 0.16
----------- ----------- ----------- ---------- ----------
Less Distributions:
Dividends from net investment income.... (0.36) (0.34) (0.33) (0.32) (0.32)
Distributions from net realized capital
gains................................... (1.16) (0.24) (0.21) (0.10) (0.22)
----------- ----------- ----------- ---------- ----------
Total Distributions..................... (1.52) (0.58) (0.54) (0.42) (0.54)
----------- ----------- ----------- ---------- ----------
NET ASSET VALUE: End of period........... $35.38 $28.78 $22.23 $18.56 $13.87
--------------------------------------------------------------------------------------------------------------------------
Total return............................ 28.23% 32.19% 22.66% 36.87% 1.18%
Net assets at end of period (000's)..... $3,111,919 $2,020,480 $1,122,297 $635,823 $363,001
Supplemental Data/Significant Ratios:
Operating expenses to average net assets 0.30% 0.33% 0.30% 0.32% 0.33%
Net investment income to average net
assets................................... 1.21% 1.47% 1.91% 2.22% 2.51%
Portfolio turnover (1).................. 15.07% 10.69% 11.48% 6.35% 6.66%
</TABLE>
<TABLE>
<CAPTION>
JANUS MID CAP PORTFOLIO
Selected Data For a Share of Capital
------------------------------
Stock Outstanding Throughout Period: YEAR ENDED DECEMBER 31,
------------------------------
1998 1997/A/
---------- ----------
<S> <C> <C>
NET ASSET VALUE: Beginning of period..... $12.77 $10.00
---------------------------------------------------------------------
Investment Operations:
Net investment income................... (0.02) 0.01
Net realized and unrealized gain/(loss). 4.77 2.81
---------- ----------
Total From Investment Operations........ 4.75 2.82
---------- ----------
Less Distributions:
Dividends from net investment income..... -- (0.01)
Distributions from
net realized capital gains.............. (0.08) (0.04)
---------- ----------
Total Distributions..................... (0.08) (0.05)
---------- ----------
NET ASSET VALUE: End of period........... $17.44 $12.77
---------------------------------------------------------------------
Total return............................ 37.19 % 28.22%
Supplemental Data/Significant Ratios:
Net assets at end of period (000's)....$371,504 $103,852
Net expenses to average net assets...... 0.81 % 0.85%
Operating expenses to average net assets
before voluntaryexpense reimbursements.. N/A 0.99%
Net investment income to average
net assets.............................. (0.22)% 0.10%
Net investment income to average
net assets before voluntary
expense reimbursements................... N/A (0.04)%
Portfolio turnover(1)................... 106.66 % 74.70%
- ---------------------------------------------------------------------------------------------
</TABLE>
/A/ For the period March 8, 1997 (commencement of operations) to December 31,
1997
(1) The lesser of purchases or sales of portfolio securities for a period,
divided by the montly average of the market value of portfolio securities
owned during the period. Securities with a maturity or expiration date at
the time of acquiation 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, 1998 are as follows:
Purchases Sales of Securities
--------- -------------------
MetLife Stock Index.. 863,635,727 382,070,345
Janus Mid Cap........ 399,290,044 228,305,175
<PAGE>
Appendix A To Prospectus
Certain Investment Practices
The Table that follows sets forth certain investment practices in which either
or both of the Portfolios may engage. These practices will not be the primary
activity of either Portfolio, however, except if noted under "Risk/Return
Summary" in the Prospectus. The following Portfolio numbers are used in the
table:
<TABLE>
<CAPTION>
Portfolio
Number Portfolio Name
--------- --------------
<C> <S>
1. Janus Mid Cap
</TABLE>
<TABLE>
<CAPTION>
Portfolio
Number Portfolio Name
--------- --------------
<C> <S>
2. MetLife Stock Index
</TABLE>
<TABLE>
<CAPTION>
Percentage limit per Portfolio
Item Investment practice Portfolios on assets/1/
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1 Sell covered call options on securities and Both None
stock indices as a hedge against or to
minimize anticipated loss in value.
- -------------------------------------------------------------------------------------------------
2 Sell covered put options on securities and 1 None
stock indices to earn additional income, as a
hedge against or to minimize anticipated loss
in value.
- -------------------------------------------------------------------------------------------------
3 Sell covered put and covered call options on 1 None
currencies as a hedge against anticipated
declines in currency exchange rates in which
securities are held or to be purchased or to
earn additional income.
- -------------------------------------------------------------------------------------------------
4 Purchase put options on securities and Both None
indices that correlate with a Portfolio's
securities for defensive purposes in order to
protect against anticipated declines in
values.
- -------------------------------------------------------------------------------------------------
5 Purchase call options on securities and Both None
indices that correlate with that Portfolio's
securities.
- -------------------------------------------------------------------------------------------------
6 Purchase put options on currencies for 1 None
defensive purposes in order to protect
against anticipated declines in values on
currencies in which a Portfolio's securities
are or may be denominated.
- -------------------------------------------------------------------------------------------------
7 Purchase call options on currencies that 1 None
correlate with the currencies in which the
Portfolio's securities may be denominated.
- -------------------------------------------------------------------------------------------------
8 Purchase and sell otherwise permitted stock, 1 None
currency and index put and call options "over
the counter" (rather than only on established
exchanges)
- -------------------------------------------------------------------------------------------------
9 Purchase and sell futures contracts (on 1 Combined limit on the sum of
recognized futures exchanges) on debt the initial margin for
securities and indices of debt securities as futures and options sold on
a hedge against or to minimize adverse futures, plus premiums paid
principal fluctuations resulting from for unexpired options on
anticipated interest rate changes or to futures, is 5% of total
adjust exposure to the bond market. assets (excluding "in the
money" and "bona fide
hedging" as defined by the
Commodity Futures Trading
Commission)
- -------------------------------------------------------------------------------------------------
10 Purchase and sell future contracts (on Both Same as Item 9, except "bona
recognized futures exchanges) on equity fide hedging" exclusion only
securities or stock indices as a hedge or to applies to Portfolio 1
enhance return.
- -------------------------------------------------------------------------------------------------
11 Purchase and sell currency futures contracts 1 Same as Item 9
(on recognized futures exchanges) as a hedge
or to adjust exposure to the currency market.
- -------------------------------------------------------------------------------------------------
12 Sell covered call options on and purchase put Both Same as Item 10
and call options contracts on futures
contracts (on recognized futures exchanges)
of the type and for the same reasons the
Portfolio is permitted to enter futures
contracts.
- -------------------------------------------------------------------------------------------------
13 Sell covered put options on futures contracts 1 Same as Item 9
(on recognized futures exchanges) of the type
and for the same reasons the Portfolio is
permitted to enter into futures contracts.
- -------------------------------------------------------------------------------------------------
14 Enter into forward foreign currency exchange 1 None
contracts to hedge currency risk relating to
securities denominated, exposed to, or traded
in a foreign currency in which the Portfolio
may invest.
</TABLE>
11
<PAGE>
<TABLE>
<CAPTION>
Percentage limit per Portfolio
Item Investment practice Portfolios on assets/1/
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
15 Enter into forward foreign currency exchange 1 5% of total assets
contracts for non hedging purposes.
- -------------------------------------------------------------------------------------------------
16 Enter into transactions to offset or close Both None
out any of the above.
- -------------------------------------------------------------------------------------------------
17 Mortgage-related securities (except for IOs Both None
and POs).
- -------------------------------------------------------------------------------------------------
18 Mortgage related interest only (IOs) and 1 None
principal only (POs) securities.
- -------------------------------------------------------------------------------------------------
19 Use swaps, caps, floors and collars on 1 None
interest rates, currencies and indices as a
risk management tool.
- -------------------------------------------------------------------------------------------------
20 Invest in foreign securities (including A. 1 A. Foreign securities
investments through European Depository denominated in a foreign
Receipts ("EDRs") and International currency and not publicly
Depository Receipts ("IDRs")). traded in U.S. limited to
30% of total assets*
B. 2 B. Not more than 10% of its
total assets in securities
of foreign issuers, except
up to 25% of its total
assets may be invested in
securities: issued,
assumed or guaranteed by
foreign governments or
their political
subdivisions or
instrumentalities; assumed
or guaranteed by domestic
issuers; or issued,
assumed or guaranteed by
foreign issuers with a
class securities listed on
the New York Stock
Exchange.*
- -------------------------------------------------------------------------------------------------
21 Lend Portfolio securities. A. 1 A. 25% of total assets*
B. 2 B. 20% of total assets*
- -------------------------------------------------------------------------------------------------
22 Invest in securities that are illiquid. Both 15% of total assets
- -------------------------------------------------------------------------------------------------
23 Invest in other investment companies, which A. Both A. 10% of total assets
may involve payment of duplicate fees. except as in B below
(except that only 5% of
total assets may be
invested in a single
investment company and no
portfolio can purchase
more than 3% of the total
outstanding voting
securities of any one
investment company or,
together with other
investment companies
having the same investment
adviser, purchase more
than 10% of the voting
stock of any "closed-end"
investment company).
B. 1 B. Up to 25% of total assets
may be invested in
affiliated money market
funds for defensive
purposes or as a means of
receiving a return on idle
cash.
- -------------------------------------------------------------------------------------------------
24 Invest in money market instruments issued by 1 None
a commercial bank or savings and loan
associations (or its foreign branch or
agency) notwithstanding that the bank or
association has less than $1 billion in total
assets, is not a member of the Federal
Deposit Insurance Corporation, is not
organized in the U.S., and/or is not
operating in the U.S.
- -------------------------------------------------------------------------------------------------
25 Invest in securities issued by companies Both 25% of total assets
primarily engaged in any one industry. (provided that the following
will be considered separate
industries: each type of
utility service; each type
of oil or oil-related
company. Also, savings and
loans are a separate
industry from finance
companies).* (The Fund will
disclose when more than 25%
of a Portfolio's total
assets are invested in four
oil related industries).
- -------------------------------------------------------------------------------------------------
26 Borrow in the form of short-term credits Both Together with items 27 and
necessary to clear Portfolio transactions; 28, up to 1/3 of the amount
enter into reverse repurchase arrangements. by which total assets exceed
total liabilities (less
those represented by such
obligations).*
</TABLE>
12
<PAGE>
<TABLE>
<CAPTION>
Percentage limit per Portfolio
Item Investment practice Portfolios on assets/1/
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
27 Borrow money for extraordinary or emergency Both 5% of total assets*
purposes (e.g. to honor redemption requests
which might otherwise require the sale of
securities at an inopportune time).
- -------------------------------------------------------------------------------------------------
28 Purchase securities on a "when-issued" basis. Both None
- -------------------------------------------------------------------------------------------------
29 Invest in real estate interests, including Both 10% of total assets*
real estate mortgage loans, but excluding
investments in exchange-traded real estate
investment trusts and shares of other real
estate companies.
- -------------------------------------------------------------------------------------------------
30 Purchase American Depository Receipts A. 1 A. None
("ADRs").
B. 2 B. 30% of total assets
- -------------------------------------------------------------------------------------------------
31 Invest in debt securities. Both None
- -------------------------------------------------------------------------------------------------
32 Invest in preferred stocks. Both None
- -------------------------------------------------------------------------------------------------
33 Invest in common stocks. Both None
- -------------------------------------------------------------------------------------------------
34 Invest in hybrid instruments. Both None
</TABLE>
- -----------
/1/ At time of investment, unless otherwise noted.
* Policy may be changed only by shareholder vote.
13
<PAGE>
Appendix B To Prospectus
To varying extents, the portfolio managers may use the following techniques and
investments in managing the Portfolios.
Capitalization
Equity Securities
Description Of Some Investments, Techniques, And Risks
Investment Styles
A value investing approach concentrates on securities that are undervalued in
relation to a company's fundamental economic values. Securities may be
undervalued for various reasons including special situations (i.e., where the
portfolio manager believes that a company's securities will appreciate when the
market recognizes a specific development at the company, such as a new product
or process, a management change or a technological breakthrough). A growth
investing approach emphasizes stocks of companies that are projected to grow at
above-average rates based on the company's earnings growth potential.
Index Portfolios attempt to equal the return of a particular index, which can
provide broad exposure to various market segments. Unlike actively managed
portfolios, they do not expect to use any defensive strategies and investors
bear the risk of adverse market conditions.
Capitalization measures the size of a company, based on the aggregate market
value of the company's outstanding stock. Different Portfolios may use
different definitions with respect to whether a company is classified as a
small-cap, mid-cap or large-cap company. Investments in companies that are less
mature or are small or mid-cap may present greater opportunities for capital
appreciation than investments in larger, more mature companies, but also
present greater risks including:
. greater price volatility because they are less broadly traded
. less available public information
. greater price volatility due to limited product lines, markets, financial
resources, and management experience.
Equity securities include common stocks, preferred stocks, convertible
securities and warrants. Equity securities may offer a higher rate of return
than debt securities. However, the risks associated with investments in equity
securities may also be higher, because the investment performance of equity
securities depends upon factors which are difficult to predict. Equity security
values may fluctuate in response to the activities of an individual company or
in response to general market, interest rate, and/or economic conditions.
Historically, equity securities have provided greater long-term returns and
have entailed greater short-term risk than other securities choices. Depending
on their terms, however, preferred stock and convertible securities may have
investment and risk characteristics more closely resembling those of debt
securities than those of other equity securities.
Common stocks represent ownership in a company and participate in company
profits through dividend payments or capital appreciation after other claims
are satisfied. Common stock generally has the greatest potential for
appreciation and depreciation of all corporate securities (other than warrants)
since the share price reflects the company's earnings.
Preferred stocks represent an ownership interest in a company of a specified
rank (after bonds and before common stocks) with respect to dividend payments
and company assets. Preferred stock generally receives a dividend,
14
<PAGE>
Foreign Investments
but may also omit or be in danger of omitting a dividend payment, in which case
it would be purchased for its capital appreciation potential.
Convertible securities generally are bonds or preferred stocks which can be
exchanged, through warrants or otherwise, into a specified number of shares of
the issuer's common stock. Convertible securities generally pay higher interest
or dividends than common stock but lower interest or dividends than non-
convertible securities.
Warrants are rights issued by the issuer of a security (usually common stock)
to purchase that security at a specified price for a specified period of time.
They do not represent an ownership interest in the issuing company, and their
prices do not necessarily parallel the prices of the underlying security.
Mortgage-related securities represent a direct or indirect interest in a pool
of mortgages such as FNMAs, FHLMCs, Collateralized Mortgage Obligations
("CMOs"), and related securities including GNMAs and mortgage-backed
securities. They may be issued or guaranteed by U.S. government
instrumentalities or other entities whose obligation is securitized by the
underlying portfolio of mortgages or mortgage-backed securities. These
securities are valued based on expected prepayment rates. The risks associated
with prepayment of the obligations makes these securities more volatile in
response to changing interest rates than other fixed-income securities.
Interest only securities ("IOs") are entitled to interest payments from a class
of these securities and principal only securities ("POs") are entitled to
principal payments from a class of these securities. POs are more volatile in
response to changing interest rates than mortgage-related securities that
provide for interest payments. IOs also are extremely volatile and generally
experience a loss in value in the event prepayment rates are greater than
anticipated, which occurs generally when interest rates fall, and an increase
in value when interest rates rise.
Asset-backed securities represent a direct or indirect interest in a pool of
receivables such as automobile, credit cards, equipment leases, or student
loans. The issuers of the asset-backed securities are special purpose entities
that do not have significant assets other than the receivables securitizing the
securities. The collateral supporting these securities generally is of shorter
maturity than mortgage-related securities, but exposes the Portfolio to similar
risks associated with prepayment of the receivables prior to maturity.
Zero coupon securities credit interest at a specified rate but do not
distribute cash payments for interest as it falls due. These securities
fluctuate in value due to changes in interest rates more than comparable debt
obligations that pay periodic interest.
Foreign securities include equity securities and debt securities of non-U.S.
domiciled issuers. A few of the many varieties of foreign investments are
described below.
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.
Forward Foreign Currency Exchange Contracts obligate the Portfolio to purchase
or sell a specific currency on a specified date for a specified amount.
15
<PAGE>
American Depository Receipts ("ADRs")
U.S. Dollar-Denominated Money Market Securities of Foreign Issuers
Derivative Instruments
They can be used to hedge the currency risk relating to securities traded in or
exposed to a foreign currency. When used as a hedge, substitute or proxy
currency can also be used instead of the currency in which the investment is
actually denominated. This is known as proxy hedging. These contracts can also
be used to generate income or adjust the Portfolio's exposure to various
currencies.
Synthetic Non-U.S. Money Market positions are created through the simultaneous
purchase of a U.S. dollar-denominated money market instrument and a forward
foreign currency exchange contract to deliver U.S. dollars for a foreign
currency. These are purchased instead of foreign currency denominated money
market securities because they can provide greater liquidity.
Foreign Securities Risk Considerations.
Although a Portfolio may reduce its overall risk by providing further
diversification, the Portfolio will be exposed to the risks listed below. In
addition, these risks may be heightened for investments in developing
countries:
. adverse effects from changing political, social or economic conditions,
diplomatic relations, taxation or investment regulations
. limitations on repatriation of assets
. expropriation
. costs associated with currency conversions
. less publicly available information because foreign securities and issuers
are generally not subject to the reporting requirements of the SEC
. differences in financial evaluation because foreign issuers are not subject
to the domestic accounting, auditing and financial reporting standards and
practices
. lack of development or efficiency with respect to non-domestic securities
markets and brokerage practices (including higher, non-negotiable brokerage
costs)
. less liquidity (including due to delays in transaction settlement)
. more price volatility
. smaller options and futures markets, causing lack of liquidity for these
securities
. higher custodial and settlement costs
. change in net asset value of the Portfolio's shares on days when shareholders
will not be able to purchase or redeem Fund shares.
ADRs are U.S. dollar-denominated certificates issued by a U.S. bank or trust
company which represent the right to receive securities of a foreign issuer
deposited in a domestic bank or foreign branch of a U.S. bank. ADRs are traded
on domestic exchanges or in the U.S. over-the-counter market and are registered
domestically. These factors eliminate certain risks associated with investing
in foreign securities.
These securities may be registered domestically and traded on domestic
exchanges or in the U.S. over-the-counter market (e.g., Yankee securities). If
the securities are registered domestically, certain risk factors of investing
in foreign securities are eliminated. These securities may also be registered
abroad and traded exclusively in foreign markets (e.g., Eurodollar securities).
Futures contracts are agreements to buy or sell a security, or deliver a final
cash settlement price in connection with an index, interest rate, currency, or
other contracts not calling for physical delivery, for a set price in the
future.
16
<PAGE>
A Portfolio must post an amount equal to a portion of the total market value of
the futures contract as initial margin, which is returned when a Portfolio's
obligations under the contract have been satisfied. From time to time
thereafter, the Portfolio may have to post variation margin to maintain this
amount as the market value of the contract fluctuates.
Special skill is required in order to effectively use futures contracts. No
Portfolio will use futures contracts or options thereon for leveraging
purposes. Certain risks exist when a Portfolio uses futures contracts including
the:
. inability to close out or offset futures contract transactions at favorable
prices
. reduction of the Portfolio's income
. reduction in the value of the subject of the futures contract or of the
contract itself
. imperfect correlation between the value of the futures contract and the value
of the subject of the contract
. prices moving contrary to the portfolio manager's expectation
Call options give the purchaser the right to buy and obligate the seller to
sell an underlying security, currency, stock index (which is based on the
weighted average of the securities in the index), or futures contract at a
specified "exercise" price during the option period. There are certain risks to
a Portfolio that sells call options, including the inability to effect closing
transactions at favorable prices or to participate in the appreciation of the
subject of the call option above the exercise price. Purchasing call options
exposes a Portfolio to the risk of losing the entire premium it has paid for
the option.
Put options give the purchaser the right to sell and obligate the seller to
purchase an underlying security, currency, stock index (which is based on the
weighted average of the securities in the index) or futures contract at a
specified "exercise" price during the option period. There are certain risks to
a Portfolio that sells put options, including the inability to effect closing
transactions at favorable prices and the obligation to purchase the subject of
the put option at prices which may be greater than current market values or
exchange rates. Purchasing put options exposes a Portfolio to the risk of
losing the entire premium it has paid for the option if the option cannot be
exercised profitably.
Covered options involve a Portfolio's (a) segregating liquid assets with its
custodian that at all times at least equal the Portfolio's obligations under
such options, (b) holding an appropriate offsetting option or other derivative
instrument, or, (c) in the case of a call option sold by the Fund, owning the
securities or other investments subject to the option.
Hybrid instruments combine elements of futures contracts or options with
elements of debt, preferred equity, depository instruments, or other evidence
of indebtedness. A portion of or all interest payments to the Portfolio and/or
the principal or stated amount payable to the Portfolio at maturity,
redemption, or retirement of the hybrid instrument are determined by reference
to prices, changes in prices, or differences between prices of securities,
currencies, intangibles, goods, articles, or commodities or by another
benchmark such as an index or interest rate.
Hybrid instruments can be an efficient means of exposing a Portfolio to a
particular market in order to enhance total return. Hybrid instruments are
17
<PAGE>
When-Issued Securities
Securities Lending
potentially more volatile and carry greater market risks than traditional debt
instruments. The risks of investing in these instruments reflect a combination
of the risks of investing in securities, options, futures and currencies.
Hybrid securities typically do not trade on exchanges. Hybrid instruments are
frequently (or may become) less liquid than other types of investments. They
also expose the Portfolio to losses if the other party to the transaction fails
to meet its obligations.
Portfolios use swaps, caps, floors and collars as risk management tools to
protect against changes in interest rates or in security or currency values, or
to gain exposure to certain markets in an economical way. Swap transactions
involve an agreement where one party exchanges payments equal to a floating
interest rate, currency exchange rate or variation in interest rates or
currency indexes on a specified amount (the "notional amount"), and the other
party agrees to make payments equal to a fixed rate on the same amount for a
specified period. Caps give the purchaser the right to receive payments from
the seller to the extent a specified interest rate, currency exchange rate or
index exceeds a specified level during a specified period of time. Floors give
the purchaser the right to receive payments from the seller to the extent a
specified interest rate, currency exchange rate or index is less than a
specified level during a specified period of time. Collars give the purchaser
the right to receive payments from the seller to the extent a specified
interest rate, currency exchange rate or index is outside an agreed upon range
during a specified period of time.
A Portfolio will not use swaps, caps, floors or collars to leverage its
exposure to changing interest rates, currency rates, or security values. Nor
will a Portfolio sell interest rate caps, floors or collars unless it owns
securities that will provide the interest that the Portfolio may be required to
pay.
The use of swaps, caps and floors exposes the Portfolio to investment risks
different than those associated with other security transactions including:
. total loss of the Portfolio's investment in swaps and the sale of caps,
floors and collars (a Portfolio's purchase of caps, floors and collars can
result only in the loss of the purchase price)
. investment performance of the Portfolio can be worse than if these techniques
were not used if the assumptions used in entering into the transactions were
incorrect
. since these instruments generally do not trade on exchanges, a Portfolio may
not be able to enter into offsetting positions, or may suffer other losses,
if the other party to the transaction fails to meet its obligations
. more market volatility than other types of investments
Purchasing securities "when-issued" is a commitment by a Portfolio to buy a
security before the security is actually issued. The amount of the Portfolio's
payment obligation and the security's interest rate are determined when the
commitment is made, even though no interest accrues until the security is
issued, which is generally 15 to 120 days later. The Portfolio will segregate
liquid assets with its custodian sufficient at all times to satisfy these
commitments. If the value of the security is less when delivered than when the
commitment was made, the Portfolio will suffer a loss.
Securities lending involves lending some of a Portfolio's securities to
brokers, dealers and financial institutions. As collateral for the loan, the
Portfolio receives an amount that is at all times equal to at least 100% of the
current market value of the loaned securities. The Portfolio invests the
collateral in short-term high investment grade securities, or in a mutual fund
18
<PAGE>
that invests in such securities. Securities lending can increase current income
for a Portfolio because the Portfolio continues to receive payments equal to
the interest and dividends on loaned securities. Also, the investment
experience of the cash collateral will inure to the Portfolio. Loans will not
have a term longer than 30 days and will be terminable at any time. As with any
extension of credit, securities lending exposes a Portfolio to some risks
including delay in recovery and loss of rights in the collateral if the
borrower fails financially.
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
Janus Capital Corporation
100 Fillmore Street
Denver, Colorado 80206-4923
(Principal Executive Offices)
Custodian, Transfer Agent and
Dividend Paying 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, Metropolitan Tower or Ja-
nus. This Prospectus does not constitute an offering in any state in which such
offering may not lawfully be made.
<PAGE>
How to learn more:
We have incorporated the Statement of Additional Information ("SAI") into this
Prospectus. That means the SAI is considered part of this Prospectus as though
it were included in it. The SAI contains more information about the Fund. Also,
the Fund's annual and semi-annual reports to shareholders (the "reports")
contain more information including information on the Portfolio's investments
and a discussion of the market conditions and investment strategies that
affected the Portfolio's performance for the period covered by the report.
How to get copies:
To request a free copy of the SAI or the reports or to make any other
inquiries, write or call:
Metropolitan Life Insurance Company
One Madison Avenue
New York, NY 10010
Phone: (800) 553-4459
You can also get information about the Fund (including the SAI) from the
Securities and Exchange Commission (a copying fee may apply) by visiting or
writing to its Public Reference Room or using its Internet site at:
Securities and Exchange Commission
Public Reference Room
Washington, D.C. 20549
Call 1-800-SEC-0330 (for information about
using the Public Reference Room)
Internet site: http://www.sec.gov
IC# 811-3618
99042XIY (exp0500)MLIC-LD
