State Street Research Capital Fund
Investment Update
Investment Environment
The Economy
* The economy continues to show signs of slowing, and inflation remains low.
* The U.S. dollar remains weak against the German mark and Japanese yen.
The Markets
* Stocks rallied in the first quarter of 1995. The best performance was provided
by large company stocks--the S&P 500 was up 9.73%(1) for the quarter. Small
company stocks significantly trailed big stocks--the Russell 2000 Index was up
4.70%.(1)
* The bond market also recovered strongly, and stocks have benefited as a
result.
The Fund
Over the past six months
(bullet) Class A shares of the fund provided a total return of +5.57% (not
including sales charge) for the 6 months ended March 31, 1995.(2)
This performance was ahead of the +4.59% average return for Lipper
Analytical Services' capital appreciation funds.(3) Fund performance trailed
the S&P 500 because small stocks (a significant portion of the portfolio) have
not performed as well as big stocks.
* We took profits and sold many of our holdings in the computer software and
service area, which we believed would weaken as consumer spending slowed.
* We added significantly to financial services and insurance stocks, which we
believed would benefit from stable or declining interest rates.
Current strategy
* More than 25% of the portfolio is in technology, including electronics,
computer software, and telephone stocks.
* More than 16% of the portfolio is in retail stocks, primarily small, specialty
retailers.
(1)The Standard & Poor's 500 Composite Index (S&P 500) includes 500
widely-traded common stocks and is a commonly-used measure of U.S. stock market
performance. The Russell 2000 Index includes 2,000 small company stocks and is a
commonly-used measure of small-company stock performance. The indices are
unmanaged and do not take sales charges into consideration. Direct investment in
the indices is not possible; results are for illustrative purposes only.
(2)+5.22% for Class B shares; +5.74% for Class C shares; +5.32% for Class D
shares.
(3)Source: Lipper Analytical Services, (does not reflect sales charges) for 143
funds in Lipper's Capital Appreciation Category.
(4)All returns represent past performance, which is no guarantee of future
results. The investment return and principal value of an investment made in the
Fund will fluctuate and shares, when redeemed, may be worth more or less than
their original cost. All returns assume reinvestment of capital gain
distributions and income dividends. Although Capital Fund was established as a
personal holding company in October 1967, performance results cover the period
since the Fund commenced operations as a registered investment company on March
25, 1984. Shares of the Fund were first made publicly available in 1987, to
institutions and existing shareholders only. The fund commenced a continuous
offering to the general public on February 17, 1993. During the period that
shares of the Fund were not offered to the public, the Fund was not subject to
the cash inflows and higher level of redemptions or expenses that could occur
when shares are continuously offered to the public.
(5)Shares of the Fund had no class designations until February 17, 1993, when
designations were assigned based on the pricing and 12b-1 fees applicable to
shares sold thereafter. Performance data for a specified class include periods
prior to the adoption of class designations. "A" share returns for each of the
periods reflect the maximum 4.5% sales charge. Performance prior to February
17, 1993, does not reflect annual 12b-1 fees of .25%, which will reduce
subsequent performance. "B" share returns for the 1- and 5-year periods reflect
a 5% and a 2% contingent deferred sales charge, respectively. "C" shares,
offered without a sales charge, are available only to certain employee benefit
plans and large institutions. "D" share return for the 1-year period reflects a
1% contingent deferred sales charge. Performance for "B" and "D" shares prior
to March 15, 1993, does not reflect annual 12b-1 fees of 1%, which will reduce
subsequent performance.
<PAGE>
Fund Information (all data are for periods ended March 31, 1995)
SEC Average Annual Compound
Rates of Return
(at maximum applicable sales charge)(4,5)
10 years 5 years 1 year
Class A +17.40% +16.47% +5.28%
Class B +17.80% +17.05% +4.57%
Class C +18.04% +17.74% +10.72%
Class D +17.82% +17.31% +8.67%
Cumulative Total Returns
(do not reflect sales charge)(4)
10 years 5 years 1 year
Class A +420.66% +124.43% +10.24%
Class B +414.40% +121.74% +9.57%
Class C +425.01% +126.31% +10.72%
Class D +415.43% +122.18% +9.67%
10 Largest Stock Positions
(by percentage of net assets)
1 Nokia Cellular phone maker 2.6%
2 Sunglass Hut Int'l Specialty retailer 2.6%
3 General Re Reinsurance company 2.4%
4 L.M. Ericsson Cellular phone maker 2.3%
5 Hewlett-Packard Electronics company 2.2%
6 Mobil Oil company 2.0%
7 Promus Casino/gaming company 2.0%
8 Chevron Oil company 1.6%
9 Exide Battery maker 1.6%
10 Office Depot Specialty retailer 1.6%
These stocks represent an aggregate of 20.9% of the portfolio. Because of
active management, there is no guarantee that the Fund currently invests, or
will continue to invest, in the securities listed in this table.
5 Largest Industry Positions
(by percentage of net assets)
Retail 16.8%
Electronics 14.4%
Insurance 8.8%
Hospital Supply 7.4%
Hotel & Restaurant 4.9%
Total net assets: 52.3%
<PAGE>
State Street Research Capital Fund
Investment Portfolio
March 31, 1995 (Unaudited)
Value
Shares (Note 1)
COMMON STOCKS 95.6%
Basic Industries 3.9%
Chemical 0.6%
Air Products & Chemicals, Inc. 12,000 $ 625,500
Praxair, Inc. 27,900 648,675
1,274,175
Diversified 0.1%
Thermedics, Inc.* 8,100 126,563
Forest Product 2.0%
Boise Cascade Corp. 23,100 802,725
Bowater, Inc. 23,500 840,125
Champion International Corp. 24,800 1,072,600
Fort Howard Corp.* 15,000 189,375
Stone Container Corp. 34,900 798,337
Westvaco Corp. 5,100 211,650
Willamette Industries, Inc. 3,900 212,550
4,127,362
Machinery 1.2%
AGCO Corp.* 11,500 380,938
Case Corp. 26,700 667,500
Deere & Co. 12,700 1,031,875
Detroit Diesel Corp.* 19,300 463,200
2,543,513
Total Basic Industries 8,071,613
Consumer Cyclical 30.1%
Airline 1.4%
Northwest Airlines Corp. Cl. A* 110,000 2,983,750
Automotive 0.5%
Danaher Corp. 24,800 709,900
Team Rental Group, Inc. Cl. A* 32,600 268,950
978,850
Building 0.5%
Stimsonite Corp.* 80,300 963,600
Hotel & Restaurant 4.9%
Hospitality Franchise Systems, Inc.* 79,600 2,547,200
La Quinta Inns, Inc. 54,125 1,468,140
Mirage Resorts, Inc.* 73,500 2,058,000
Promus Companies, Inc.* 108,200 4,057,500
10,130,840
Recreation 1.3%
Walt Disney Co. 34,800 $ 1,857,450
United International Holdings Inc. Cl. A* 47,000 763,750
2,621,200
Retail Trade 16.8%
Cyrk, Inc.* 43,600 746,650
Department 56, Inc.* 38,500 1,535,188
Dollar General Corp. 79,125 2,077,031
EZ Corp., Inc. Cl. A* 64,900 486,750
Federated Department Stores, Inc.* 84,500 1,869,562
Gap, Inc. 30,100 1,068,550
Gymboree Corp.* 41,400 1,050,525
Home Depot, Inc. 69,200 3,062,100
Industrie Natuzzi SPA ADR 37,200 1,371,750
Just For Feet, Inc.* 68,500 1,721,063
Micro Warehouse, Inc.* 6,000 186,000
Nine West Group, Inc.* 64,100 1,890,950
Office Depot Inc.* 131,650 3,208,969
Office Max, Inc.* 68,300 1,750,188
Palmer Wireless, Inc. Cl. A* 15,800 227,125
Petsmart, Inc.* 47,200 1,652,000
Pier 1 Imports, Inc. 94,100 870,425
Staples, Inc.* 70,700 1,864,712
Sunglass Hut International, Inc.* 178,000 5,273,250
Wal-Mart Stores, Inc. 78,300 1,996,650
Woolworth Corp. 45,400 834,225
34,743,663
Textile & Apparel 4.7%
Fila Holdings SPA ADR* 61,900 1,261,213
Men's Wearhouse, Inc.* 95,050 2,150,506
Nautica Enterprises, Inc.* 42,300 1,321,875
Tommy Hilfiger Corp.* 142,700 3,139,400
Wolverine World Wide, Inc. 59,200 1,813,000
9,685,994
Total Consumer Cyclical 62,107,897
Consumer Staple 16.0%
Business Service 3.9%
Career Horizons, Inc.* 21,600 421,200
HBO & Co. 24,200 1,052,700
Medaphis Corp.* 33,300 2,097,900
Norrell Corp.* 29,400 646,800
Tellabs, Inc.* 22,000 1,281,500
Viking Office Products Inc.* 81,700 2,532,700
8,032,800
The accompanying notes are an integral part of the financial statements.
2
<PAGE>
Value
Shares (Note 1)
Drug 0.4%
Cephalon, Inc.* 31,600 $ 221,200
Vertex Pharmaceuticals, Inc.* 36,200 488,700
709,900
Food & Beverage 0.5%
Starbucks Corp.* 40,800 979,200
Hospital Supply 7.4%
Columbia/HCA Healthcare Corp.* 44,100 1,896,300
Coram Healthcare Corp.* 86,900 2,205,087
Genesis Health Ventures, Inc.* 40,200 1,256,250
Healthsource Inc.* 45,300 2,146,088
Horizon Healthcare Corp.* 32,000 856,000
KLA Instruments Corp.* 39,700 2,511,025
Medisense, Inc.* 73,900 1,459,525
PacifiCare Health Systems, Inc. Cl. B* 37,100 2,680,475
Theratx, Inc.* 15,500 259,625
15,270,375
Personal Care 3.0%
Exide Corp. 88,300 3,245,025
Interim Services, Inc.* 21,900 651,525
Oxford Health Plans, Inc.* 36,600 2,049,600
Robert Half International Inc.* 8,600 219,300
6,165,450
Printing & Publishing 0.8%
British Sky Broadcasting Group ADR 12,200 300,425
News Corp. Ltd. ADR 52,100 996,412
News Corp. Ltd. Pfd. ADR* 24,000 414,000
1,710,837
Total Consumer Staple 32,868,562
Energy 5.0%
Oil 3.6%
Chevron Corp. 70,700 3,393,600
Mobil Corp. 44,100 4,084,762
7,478,362
Oil Service 1.4%
Halliburton Co. 79,200 2,880,900
Total Energy 10,359,262
Finance 14.4%
Bank 0.9%
NationsBank Corp. 36,200 1,837,150
Financial Service 4.7%
Federal Home Loan Mortgage Corp. 15,300 $ 925,650
Federal National Mortgage Association 32,000 2,604,000
First USA, Inc. 44,600 1,711,525
Franklin Resources Inc. 26,300 1,022,413
Lehman Brothers Holdings Inc.* 74,600 1,342,800
Merrill Lynch & Co., Inc. 33,100 1,410,887
Charles Schwab Corp. 21,400 682,125
9,699,400
Insurance 8.8%
American International Group, Inc. 23,700 2,470,725
American Re Corp.* 29,800 1,043,000
CIGNA Corp. 13,000 971,750
Equitable Companies, Inc. 44,600 981,200
General Re Corp. 37,600 4,963,200
Lincoln National Corp. 22,800 917,700
Mid Ocean Ltd.* 15,700 427,825
Progressive Corp. Ohio 55,800 2,266,875
SAFECO Corp. 25,500 1,396,125
Saint Paul Companies, Inc. 37,700 1,885,000
UNUM Corp. 20,600 932,150
18,255,550
Total Finance 29,792,100
Science & Technology 21.3%
Aerospace 2.0%
Boeing Co. 58,000 3,124,750
Honeywell, Inc. 24,800 926,900
4,051,650
Computer Software & Service 3.4%
C.ATS Software Inc.* 17,100 256,500
Electronic Arts Inc.* 68,800 1,556,600
Geoworks* 150,000 1,218,750
Informix Corp.* 22,600 776,875
Integrated Silicon Systems, Inc.* 10,100 292,900
Lotus Development Corp.* 26,200 1,002,150
Oracle Systems Corp.* 60,000 1,875,000
6,978,775
Electronic 14.4%
ASM Lithography Holdings N.V.* 38,100 1,071,563
Analog Devices Inc.* 111,200 2,835,600
Applied Materials, Inc.* 35,200 1,940,400
L.M. Ericsson Telephone Co. Cl. B ADR* 76,000 4,697,750
Hewlett-Packard Co. 37,000 4,453,875
The accompanying notes are an integral part of the financial statements.
3
<PAGE>
Value
Shares (Note 1)
Electronic (cont'd)
LSI Logic Corp.* 40,700 $ 2,136,750
Novellus Systems Inc.* 30,600 1,897,200
SDL, Inc.* 14,800 381,100
Sanmina Holdings, Inc.* 64,300 2,089,750
Scientific-Atlanta, Inc. 67,200 1,570,800
Silicon Graphics Inc.* 64,300 2,282,650
Telxon Corp. 135,100 2,009,612
Teradyne, Inc.* 35,500 1,473,250
Texas Instruments, Inc. 10,500 929,250
29,769,550
Office Equipment 1.5%
Digital Equipment Corp. 38,400 1,454,400
Sun Microsystems, Inc.* 47,700 1,657,575
3,111,975
Total Science & Technology 43,911,950
Utility 4.9%
Telephone 4.9%
Cidco, Inc.* 56,500 1,702,062
General Instrument Corp.* 29,600 1,028,600
MCI Communications Corp. 45,600 940,500
Nokia Corp. ADR 74,000 5,439,000
Vodafone Group PLC ADR 30,300 1,003,688
10,113,850
Total Utility 10,113,850
Total Common Stocks (Cost $176,871,533) 197,225,234
Principal Maturity Value
Amount Date (Note 1)
COMMERCIAL PAPER 14.7%
American Express Credit Corp.,
5.90% $1,786,000 4/04/1995 $ 1,786,000
Associates Corp., 6.02% 8,980,000 4/03/1995 8,980,000
Commerical Credit Co., 5.93% 9,836,000 4/12/1995 9,836,000
Deere & Co., 5.88% 1,706,000 4/04/1995 1,706,000
Ford Motor Credit Co., 5.77% 690,000 4/06/1995 690,000
Northwest Financial Inc., 5.95% 7,379,000 4/20/1995 7,379,000
Total Commercial Paper (Cost $30,377,000) 30,377,000
Total Investments (Cost $207,248,533)--110.3% 227,602,234
Cash and Other Assets, Less Liabilities--(10.3)% (21,261,505)
Net Assets--100.0% $206,340,729
Federal Income Tax Information:
At March 31, 1995, the net unrealized appreciation of
investments based on cost for Federal income tax purposes of
$207,392,102 was as follows:
Aggregate gross unrealized appreciation for all investments in
which there is an excess of value over tax cost $ 23,031,625
Aggregate gross unrealized depreciation for all investments in
which there is an excess of tax cost over value (2,821,493)
$ 20,210,132
* Nonincome-producing securities
ADR stands for American Depositary Receipt, representing ownership of foreign
securities.
The accompanying notes are an integral part of the financial statements.
4
<PAGE>
Statement of Assets and Liabilities
March 31, 1995 (Unaudited)
Assets
Investments, at value (Cost $207,248,533) (Note 1) $227,602,234
Cash 6,924
Receivable for securities sold 9,193,404
Receivable for fund shares sold 2,844,900
Dividends and interest receivable 187,506
Other assets 53,737
239,888,705
Liabilities
Payable for securities purchased 32,999,080
Payable for fund shares redeemed 241,852
Accrued distribution fee (Note 4) 140,714
Accrued management fee (Note 2) 136,233
Accrued transfer agent and shareholder services (Note
2) 17,226
Accrued trustees' fees (Note 2) 732
Other accrued expenses 12,139
33,547,976
Net Assets $206,340,729
Net Assets consist of:
Unrealized appreciation of investments $ 20,353,701
Accumulated net realized gain 932,867
Shares of beneficial interest (Note 5) 185,054,161
$206,340,729
Net Asset Value and redemption price per share of
Class A shares ($29,724,763 / 2,850,692 shares of
beneficial interest) $10.43
Maximum Offering Price per share of Class A shares
($10.43 / .955) $10.92
Net Asset Value and offering price per share of Class
B shares ($102,258,054 / 9,942,749 shares of
beneficial interest)* $10.28
Net Asset Value, offering price and redemption price
per share of Class C shares ($23,540,773 / 2,239,455
shares of beneficial interest) $10.51
Net Asset Value and offering price per share of Class
D shares ($50,817,139 / 4,933,598 shares of
beneficial interest)* $10.30
* Redemption price per share for Class B and Class D is equal to net asset
value less any applicable contingent deferred sales charge.
Statement of Operations
For the six months ended March 31, 1995 (Unaudited)
Investment Income
Dividends, net of foreign taxes of $15,430 $ 660,507
Interest 462,779
1,123,286
Expenses
Management fee (Note 2) 652,412
Transfer agent and shareholder services (Note 2) 154,638
Custodian fee 76,014
Registration fees 32,382
Distribution fee--Class A (Note 4) 30,372
Distribution fee--Class B (Note 4) 416,987
Distribution fee--Class D (Note 4) 213,879
Reports to shareholders 15,552
Audit fee 11,676
Legal fees 7,512
Trustees' fees (Note 2) 6,474
Miscellaneous 6,306
1,624,204
Net investment loss (500,918)
Realized and Unrealized Gain
on Investments
Net realized gain on investments (Notes 1 and 3) 1,128,207
Net unrealized appreciation of investments 9,392,638
Net gain on investments 10,520,845
Net increase in net assets resulting from operations $10,019,927
The accompanying notes are an integral part of the financial statements.
5
<PAGE>
State Street Research Capital Fund
Statement of Changes in Net Assets
Six months
ended
March 31, 1995 Year ended
(Unaudited) September 30, 1994
Increase (Decrease) in Net Assets
Operations:
Net investment loss $ (500,918) $ (1,070,897)
Net realized gain on
investments* 1,128,207 1,127,123
Net unrealized appreciation of
investments 9,392,638 3,083,463
Net increase resulting from
operations 10,019,927 3,139,689
Distributions from net realized
gains:
Class A (92,618) (575,640)
Class B (320,406) (1,273,467)
Class C (93,107) (1,330,595)
Class D (164,154) (477,827)
(670,285) (3,657,529)
Net increase from fund share
transactions (Note 5) 41,995,124 108,866,368
Total increase in net assets 51,344,766 108,348,528
Net Assets
Beginning of period 154,995,963 46,647,435
End of period $206,340,729 $154,995,963
* Net realized gain for Federal
income tax purposes
(Note 1) $ 1,080,078 $ 1,269,665
The accompanying notes are an integral part of the financial statements.
Notes to Unaudited Financial Statements
March 31, 1995
Note 1
State Street Research Capital Fund (the "Fund"), is a series of State Street
Research Capital Trust (the "Trust"), formerly State Street Capital Trust,
which is a Massachusetts business trust registered under the Investment Company
Act of 1940, as amended, as a diversified, open-end management investment
company. The Trust was organized in November, 1988 as a successor to State
Street Capital Fund, Inc., a Massachusetts corporation. The Trust consists
presently of three separate funds: State Street Research Capital Fund, State
Street Research Small Capitalization Growth Fund and State Street Research
Small Capitalization Value Fund.
The Fund offers four classes of shares. Class A shares are subject to an
initial sales charge of up to 4.50% and pay an annual service fee equal to
0.25% of average daily net assets. Class B shares are subject to a contingent
deferred sales charge on certain redemptions made within five years of purchase
and pay annual distribution and service fees of 1.00%. Class B shares
automatically convert into Class A shares (which pay lower ongoing expenses) at
the end of eight years after the issuance of the Class B shares. Class C shares
are only offered to certain employee benefit plans and large institutions.
Class D shares are subject to a contingent deferred sales charge of 1.00% on
any shares redeemed within one year of their purchase. Class D shares also pay
annual distribution and service fees of 1.00%. The Fund's expenses are borne
pro-rata by each class, except that each class bears expenses, and has
exclusive voting rights with respect to provisions of the Plan of Distribution,
related specifically to that class. The Trustees declare separate dividends on
each class of shares.
The following significant policies are consistently followed by the Fund in
preparing its financial statements, and such policies are in conformity with
generally accepted accounting principles for investment companies.
A. Investments in Securities
Values for listed securities represent the last sale on national securities
exchanges quoted prior to the close of the New York Stock Exchange.
Over-the-counter securities quoted on the National Association of Securities
Dealers Automated Quotation ("NASDAQ") system are valued at the closing price
supplied through such system. In the absence of recorded sales and for those
over-the-counter securities not quoted on the NASDAQ system, valuations are at
the mean of the closing bid and asked quotations, except for certain securities
that may be restricted as to public resale, which are valued in accordance with
methods adopted by the Trustees. Security transactions are accounted for on the
trade date (date the order to buy or sell is executed), and dividends declared
but not received are accrued on the ex-dividend date. Interest income is
determined on the accrual basis. Realized gains and losses from security
transactions are reported on the basis of identified cost of securities
delivered for both financial reporting and Federal income tax purposes.
6
<PAGE>
B. Federal Income Taxes
No provision for Federal income taxes is necessary since the Fund has elected
to qualify under Subchapter M of the Internal Revenue Code and its policy is to
distribute all of its taxable income, including net realized capital gains,
within the prescribed time periods.
C. Dividends
Dividends from net investment income, if any, are declared and paid or
reinvested annually. Net realized capital gains, if any, are distributed
annually, unless additional distributions are required for compliance with
applicable tax regulations.
Income dividends and capital gain distributions are determined in accordance
with Federal income tax regulations which may differ from generally accepted
accounting principles.
Note 2
The Trust and State Street Research & Management Company (the "Adviser"), an
indirect wholly-owned subsidiary of Metropolitan Life Insurance Company
("Metropolitan"), have entered into an agreement under which the Adviser earns
monthly fees equal to 1/16 of 1% (3/4 of 1% on an annual basis) of average daily
net assets. In consideration of these fees, the Adviser furnishes the Fund with
management, investment advisory, statistical and research facilities and
services. The Adviser also pays all salaries, rent and certain other expenses
of management. The fees of the Trustees not currently affiliated with the
Adviser amounted to $6,474 during the six months ended March 31, 1995.
State Street Research Shareholder Services, a division of State Street Research
Investment Services, Inc., the Trust's principal underwriter (the
"Distributor"), an indirect wholly-owned subsidiary of Metropolitan, provides
certain shareholder services to the Fund such as responding to inquiries and
instructions from investors with respect to the purchase and redemption of
shares of the Fund. During the six months ended March 31, 1995, the amount of
such expenses was $79,328.
Note 3
For the six months ended March 31, 1995, exclusive of short-term investments
and U.S. Government obligations, purchases and sales of securities aggregated
$214,537,308 and $167,936,686, respectively.
Note 4
The Trust has adopted a Plan of Distribution pursuant to Rule 12b-1 (the
"Plan") under the Investment Company Act of 1940. Under the Plan, the Fund pays
annual service fees to the Distributor at a rate of 0.25% of average daily net
assets for Class A, Class B and Class D shares. In addition, the Fund pays
annual distribution fees of 0.75% of average daily net assets for Class B and
Class D shares. The Distributor uses such payments for personal services and/or
the maintenance of shareholder accounts, to reimburse securities dealers for
distribution and marketing services, to furnish ongoing assistance to investors
and to defray a portion of its distribution and marketing expenses. For the six
months ended March 31, 1995, fees pursuant to such plan amounted to $30,372,
$416,987 and $213,879 for Class A, Class B and Class D, respectively.
The Fund has been informed that the Distributor and MetLife Securities, Inc., a
wholly-owned subsidiary of Metropolitan, earned initial sales charges
aggregating $22,573 and $525, respectively, on sales of Class A shares of the
Fund during the six months ended March 31, 1995, and that MetLife Securities,
Inc. earned commissions aggregating $2,498 on sales of Class B shares, and that
the Distributor collected contingent deferred sales charges of $66,676 and
$4,480 on redemptions of Class B and Class D shares, respectively, during the
same period.
7
<PAGE>
Note 5
The Trustees have the authority to issue an unlimited number of shares of
beneficial interest, $.001 par value per share.
At March 31, 1995, Metropolitan held of record 1,084,790 Class C shares of the
Fund.
Share transactions were as follows:
<TABLE>
<CAPTION>
Six months ended
March 31, 1995 Year ended
(Unaudited) September 30, 1994
Class A Shares Amount Shares Amount
<S> <C> <C> <C> <C>
Shares sold 1,169,698 $11,611,199 1,741,014 $16,876,522
Issued upon reinvestment of
distributions from net realized
gains 8,771 82,615 45,553 443,337
Shares repurchased (332,744) (3,314,631) (477,056) (4,581,945)
Net increase 845,725 $ 8,379,183 1,309,511 $12,737,914
Class B Shares Amount Shares Amount
Shares sold 3,167,042 $31,233,371 6,253,883 $59,862,105
Issued upon reinvestment of
distributions from net realized
gains 31,685 294,989 56,834 551,032
Shares repurchased (725,600) (7,115,468) (384,236) (3,668,935)
Net increase 2,473,127 $24,412,892 5,926,481 $56,744,202
Class C Shares Amount Shares Amount
Shares sold 3,843 $ 37,919 601,695 $ 6,274,545
Issued upon reinvestment of
distributions from net realized
gains 8,899 84,452 131,398 1,284,834
Shares repurchased (173,539) (1,701,869) (87,138) (849,817)
Net increase (decrease) (160,797) $(1,579,498) 645,955 $ 6,709,562
Class D Shares Amount Shares Amount
Shares sold 1,425,004 $14,060,665 3,746,426 $36,243,191
Issued upon reinvestment of
distributions from net realized
gains 16,713 155,761 22,846 220,144
Shares repurchased (350,686) (3,433,879) (408,826) (3,788,645)
Net increase 1,091,031 $10,782,547 3,360,446 $32,674,690
</TABLE>
8
<PAGE>
Financial Highlights
For a share outstanding throughout each period:
<TABLE>
<CAPTION>
Class A
February 17, 1993
Six months (Commencement
ended of Share Class
March 31, 1995 Year ended Designations) to
(Unaudited)** September 30, 1994 September 30, 1993
<S> <C> <C> <C>
Net asset value, beginning of period $ 9.92 $10.43 $ 8.03
Net investment loss (.00) (.04) (.03)
Net realized and unrealized gain on
investments .55 .28 2.43
Distributions from net realized gains (.04) (.75) --
Net asset value, end of period $10.43 $9.92 $10.43
Total return 5.57%+++ 2.51%+ 24.61%+++
Net assets at end of period (000s) $29,725 $19,891 $7,251
Ratio of expenses to average
net assets 1.36%++ 1.41% 2.43%++
Ratio of net investment loss to
average net assets (0.01)%++ (0.55)% (1.43)%++
Portfolio turnover rate 105.67% 167.08% 129.57%
</TABLE>
<TABLE>
<CAPTION>
Class B
March 15, 1993
Six months (Commencement
ended of Share Class
March 31, 1995 Year ended Designations) to
(Unaudited)** September 30, 1994 September 30, 1993
<S> <C> <C> <C>
Net asset value, beginning of period $ 9.82 $10.40 $ 8.68
Net investment loss (.04) (.08) (.04)
Net realized and unrealized gain on
investments .54 .25 1.76
Distributions from net realized gains (.04) (.75) --
Net asset value, end of period $10.28 $ 9.82 $10.40
Total return 5.22%+++ 1.79%+ 19.82%+++
Net assets at end of period (000s) $102,258 $73,354 $16,044
Ratio of expenses to average
net assets 2.11%++ 2.16% 3.16%++
Ratio of net investment loss to
average net assets (0.81)%++ (1.28)% (2.15)%++
Portfolio turnover rate 105.67% 167.08% 129.57%
</TABLE>
<TABLE>
<CAPTION>
Class C
Year ended September 30
Six months
ended
March 31, 1995
(Unaudited)** 1994 1993 1992 1991 1990
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $ 9.99 $10.46 $ 7.96 $7.74 $5.03 $6.72
Net investment income (loss) .01 (.03) (.06) (.06) (.08) (.03)
Net realized and unrealized gain
(loss) on investments .55 .31 3.90 .63 2.79 (1.31)
Distributions from net realized
gains (.04) (.75) (1.34) (.35) -- (.35)
Net asset value, end of period $10.51 $ 9.99 $10.46 $7.96 $7.74 $5.03
Total return 5.74%+++ 2.91%+ 55.46%+ 7.34%+ 53.88%+ (20.81)%+
Net assets at end of period
(000s) $23,541 $23,967 $18,342 $11,654 $10,939 $7,440
Ratio of expenses to average net
assets 1.11%++ 1.16% 2.11% 1.54% 1.88% 1.93%
Ratio of net investment income
(loss) to average net assets 0.17%++ (0.32)% (1.30)% (0.86)% (1.14)% (0.54)%
Portfolio turnover rate 105.67% 167.08% 129.57% 124.94% 219.62% 259.27%
</TABLE>
<TABLE>
<CAPTION>
Class D
March 15, 1993
Six months (Commencement
ended of Share Class
March 31, 1995 Year ended Designations) to
(Unaudited)** September 30, 1994 September 30, 1993
<S> <C> <C> <C>
Net asset value,
beginning of period $ 9.83 $10.39 $ 8.68
Net investment income (loss) (.04) (.09) (.04)
Net realized and unrealized gain
(loss) on investments .55 .28 1.75
Distributions from net realized
gains (.04) (.75) --
Net asset value, end of period $10.30 $ 9.83 $10.39
Total return 5.32%+++ 2.00%+ 19.70%+++
Net assets at end of period
(000s) $50,817 $37,783 $5,011
Ratio of expenses to average net
assets 2.11%++ 2.16% 3.16%++
Ratio of net investment income
(loss) to average net assets (0.82)%++ (1.28)% (2.16)%++
Portfolio turnover rate 105.67% 167.08% 129.57%
</TABLE>
++Annualized
**Per-share figures have been calculated using the average shares method.
+Total return figures do not reflect any front-end or contingent deferred
sales charges.
+++Represents aggregate return for the period without annualization and does not
reflect any front-end or contingent deferred sales charges.
9
<PAGE>
State Street Research Capital Trust
Fund Information, Officers and Trustees of State Street Research Capital Trust
Fund Information
Investment Adviser
State Street Research &
Management Company
One Financial Center
Boston, MA 02111
Distributor
State Street Research
Investment Services, Inc.
One Financial Center
Boston, MA 02111
Shareholder Services
State Street Research
Shareholder Services
P.O. Box 8408
Boston, MA 02266-8408
1-800-562-0032
Custodian
State Street Bank and
Trust Company
225 Franklin Street
Boston, MA 02110
Legal Counsel
Mintz, Levin, Cohn, Ferris,
Glovsky and Popeo, P.C.
One Financial Center
Boston, MA 02111
Officers
Ralph F. Verni
Chairman of the Board,
President and
Chief Executive Officer
Peter C. Bennett
Vice President
Charles S. Glovsky
Vice President
Rudolph K. Kluiber
Vice President
Frederick R. Kobrick
Vice President
Thomas P. Moore
Vice President
Gerard P. Maus
Treasurer
Joseph W. Canavan
Assistant Treasurer
Douglas A. Romich
Assistant Treasurer
Constantine Hutchins, Jr.
Secretary and General Counsel
Darman A. Wing
Assistant Secretary and
Assistant General Counsel
Trustees
Ralph F. Verni
Chairman of the Board,
President, Chief Executive
Officer and Director,
State Street Research &
Management Company
Robert A. Lawrence
Partner, Saltonstall & Co.
Dean O. Morton
Retired; formerly Executive
Vice President, Chief
Operating Officer and Director,
Hewlett-Packard Company
Thomas L. Phillips
Retired; formerly Chairman of the Board and Chief Executive Officer,
Raytheon Company
Michael S. Scott Morton
Jay W. Forrester Professor of
Management,
Sloan School of Management,
Massachusetts Institute of
Technology
Jeptha H. Wade
Retired; formerly Of Counsel, Choate, Hall & Stewart
This is for graphicText
10
<PAGE>
[Back cover]
State Street Research
Small Capitalization Value Fund
One Financial Center
Boston, MA 02111
Bulk Rate
U.S. Postage
PAID
Brockton, MA
Permit No. 600
Questions? Comments?
Call us at 1-800-562-0032,
or write us at:
State Street Research
Shareholder Services
P.O. Box 8408
Boston, MA 02266-8408
[State Street Research Logo] STATE STREET RESEARCH
This report is prepared for the general information of current shareholders
only. It is not authorized for use as sales material with prospective investors.
CONTROL NUMBER: 2356-950523(0696)SSR-LD
Cover Illustration by Dorothy Cullinan SCV-207E-595
<PAGE>
[Front cover]
[State Street Research Logo] STATE STREET RESEARCH
STATE STREET RESEARCH
SMALL CAPITALIZATION VALUE FUND
SEMIANNUAL REPORT
March 31, 1995
[Drawing of person climbing mountain towards the stars]
WHAT'S INSIDE
Complete Portfolio Holdings
Financial Statements
[Front Cover]
[State Street Research Logo] STATE STREET RESEARCH
State Street Research
Small Capitalization Value Fund
Semiannual Report
March 31, 1995
[Drawing of person running up a mountain towards the stars]
What's Inside
Complete Portfolio Holdings
Financial Statements
<PAGE>
Investment Portfolio
March 31, 1995 (Unaudited)
Value
Shares (Note 1)
Common Stocks 35.4%
Basic Industries 16.0%
Diversified 1.7%
Triton Group Ltd.* 25,000 $ 48,438
Zero Corp.* 3,000 42,375
90,813
Forest Product 2.6%
Gaylord Container Corp. Wts.* 13,000 136,500
Machinery 2.8%
Arden Industrial Products, Inc.* 8,000 48,000
Flair Corp.* 2,000 36,500
Specialty Equipment Companies, Inc.* 5,000 60,625
145,125
Metal & Mining 8.9%
Algoma Steel, Inc.* 9,000 57,090
Bayou Steel Corp. Cl. A* 5,000 21,875
Castech Aluminum Group, Inc.* 5,000 74,375
Chase Brass Industries, Inc. 6,000 63,375
Commonwealth Aluminum Corp.* 1,000 14,000
Interlake, Inc.* 21,900 49,275
Maxxam, Inc.* 1,000 28,875
Sunshine Mining & Refining Co. Pfd.* 6,000 51,000
Webco Industries, Inc.* 5,000 41,875
Wyman Gordon Co.* 8,000 62,000
463,740
Total Basic Industries 836,178
Consumer Cyclical 15.1%
Automotive 5.8%
Automotive Industries, Inc. Cl. A* 2,500 55,000
Federal-Mogul Corp. 3,500 63,000
Harvard Industries, Inc. Cl. B* 2,000 34,750
Lear Seating Corp.* 4,000 72,000
Littelfuse, Inc.* 1,000 28,500
Wescast Industries, Inc. Cl. A* 6,000 48,000
301,250
Building 2.9%
Cameron Ashley, Inc.* 4,000 64,000
Centex Construction Products, Inc. 4,000 49,500
Simpson Manufacturing, Inc.* 4,000 39,000
152,500
Recreation 2.2%
HMG Worldwide Corp.* 21,000 60,375
Hollywood Casino Corp. Cl. A* 10,000 56,250
116,625
Retail Trade 4.2%
Filene's Basement Corp.* 10,000 $ 33,750
Payless Cashways, Inc.* 5,000 44,375
Rhodes, Inc.* 9,000 101,250
TBC Corp.* 4,000 40,500
219,875
Total Consumer Cyclical 790,250
Consumer Staple 1.0%
Printing & Publishing 1.0%
American Media, Inc. Cl. A* 7,500 53,437
Total Consumer Staple 53,437
Energy 2.7%
Oil 1.9%
Crystal Oil Corp.* 700 21,875
Gerrity Oil & Gas Corp. Cv. Pfd. 6,600 78,375
100,250
Oil Service 0.8%
Global Marine, Inc.* 10,000 42,500
Total Energy 142,750
Science & Technology 0.6%
Aerospace 0.6%
BE Aerospace, Inc.* 5,000 32,500
Total Science & Technology 32,500
Total Common Stocks (Cost $1,754,584) 1,855,115
Principal Maturity
Amount Date
Short-Term Obligations 65.5%
Federal Home Loan Bank,
5.89% $3,430,000 4/3/1995 3,428,878
Total Short-Term Obligations (Cost $3,428,878) 3,428,878
Total Investments (Cost $5,183,462)--100.9% 5,283,993
Cash and Other Assets, Less Liabilities--(0.9)% (46,684)
Net Assets--100.0% $5,237,309
* Nonincome-producing securities
The accompanying notes are an integral part of the financial statements.
<PAGE>
Federal Income Tax Information:
At March 31, 1995, the net unrealized appreciation of
investments based on cost for Federal income tax
purposes of $5,183,462 was as follows:
Aggregate gross unrealized appreciation for all
investments in which there is an excess of value over tax
cost $127,654
Aggregate gross unrealized depreciation for all
investments in which there is an excess of tax cost
over value (27,123)
$100,531
Statement of Assets and Liabilities
March 31, 1995 (Unaudited)
Assets
Investments, at value (Cost $5,183,462) (Note 1) $5,283,993
Cash 34,749
Receivable from Distributor (Note 3) 10,894
Deferred organization costs and other
assets (Note 1) 75,414
5,405,050
Liabilities
Payable for securities purchased 74,170
Accrued management fee (Note 2) 3,987
Accrued trustees' fees (Note 2) 1,326
Accrued distribution fee (Note 5) 1,288
Accrued transfer agent and shareholder services (Note 2) 680
Other accrued expenses 86,290
167,741
Net Assets $5,237,309
Net Assets consist of:
Undistributed net investment income $ 21,876
Unrealized appreciation of investments 100,531
Shares of beneficial interest (Note 6) 5,114,902
$5,237,309
Net Asset Value and redemption price per share of Class A
shares ($4,929,600 / 504,030 shares of beneficial interest) $9.78
Maximum Offering Price per share of Class A shares ($9.78 /
.955) $10.24
Net Asset Value and offering price per share of Class B shares
($102,523 / 10,493 shares of beneficial interest)* $9.77
Net Asset Value, offering price and redemption price per share
of Class C shares ($102,663 / 10,493 shares of beneficial
interest) $9.78
Net Asset Value and offering price per share of Class D shares
($102,523 / 10,493 shares of beneficial interest)* $9.77
* Redemption price per share for Class B and Class D is equal to net asset
value less any applicable contingent deferred sales charge.
The accompanying notes are an integral part of the financial statements.
2
<PAGE>
Statement of Operations
For the period February 13, 1995
(commencement of operations) to
March 31, 1995 (Unaudited)
Investment Income
Interest $ 32,049
Expenses
Custodian fee 10,274
Management fee (Note 2) 5,863
Amortization of organization costs (Note 1) 1,932
Reports to shareholders 1,870
Legal fees 1,122
Audit fee 918
Transfer agent and shareholder services (Note 2) 680
Trustees' fees (Note 2) 1,326
Distribution fee--Class A (Note 5) 1,622
Distribution fee--Class B (Note 5) 137
Distribution fee--Class D (Note 5) 137
Registration fees 136
Miscellaneous 272
26,289
Expenses borne by the Distributor (Note 3) (16,116)
10,173
Net investment income 21,876
Unrealized Gain on Investments
Net unrealized appreciation of investments 100,531
Net gain on investments 100,531
Net increase in net assets resulting from operations $122,407
Statement of Changes in Net Assets
For the period February 13, 1995
(commencement of operations)
to March 31, 1995 (Unaudited)
Increase (Decrease) in Net Assets
Operations:
Net investment income $ 21,876
Net unrealized appreciation of investments 100,531
Net increase resulting from operations 122,407
Net increase from fund share transactions (Note 6) 5,114,902
Total increase in net assets 5,237,309
Net Assets
Beginning of period --
End of period (including undistributed net investment
income of $21,876) $5,237,309
The accompanying notes are an integral part of the financial statements.
3
<PAGE>
Notes to Unaudited Financial Statements
March 31, 1995
Note 1
State Street Research Small Capitalization Value Fund (the "Fund"), is a series
of State Street Research Capital Trust (the "Trust"), formerly State Street
Capital Trust, which is a Massachusetts business trust registered under the
Investment Company Act of 1940, as amended, as a diversified, open-end
management investment company. The Trust was organized in November, 1988 as a
successor to State Street Capital Fund, Inc., a Massachusetts corporation. The
Trust consists presently of three separate funds: State Street Research Small
Capitalization Value Fund, State Street Research Small Capitalization Growth
Fund and State Street Research Capital Fund.
The Fund is authorized to issue four classes of shares. At the present time,
only Class A shares are generally available for purchase. Class B, Class C and
Class D shares are not being offered at this time. Class A shares are subject
to an initial sales charge of up to 4.50% and pay an annual service fee equal
to 0.25% of average daily net assets. Class B shares are subject to a
contingent deferred sales charge on certain redemptions made within five years
of purchase and pay annual distribution and service fees of 1.00%. Class B
shares automatically convert into Class A shares (which pay lower ongoing
expenses) at the end of eight years after the issuance of the Class B shares.
Class C shares are only offered to certain employee benefit plans and large
institutions. Class D shares are subject to a contingent deferred sales charge
of 1.00% on any shares redeemed within one year of their purchase. Class D
shares also pay annual distribution and service fees of 1.00%. The Fund's
expenses are borne pro- rata by each class, except that each class bears
expenses, and has exclusive voting rights with respect to provisions of the
Plan of Distribution, related specifically to that class. The Trustees declare
separate dividends on each class of shares.
The following significant policies are consistently followed by the Fund in
preparing its financial statements, and such policies are in conformity with
generally accepted accounting principles for investment companies.
A. Investment in Securities
Values for listed securities represent the last sale on national securities
exchanges quoted prior to the close of the New York Stock Exchange.
Over-the-counter securities quoted on the National Association of Securities
Dealers Automated Quotation ("NASDAQ") system are valued at the closing price
supplied through such system. In the absence of recorded sales and for those
over-the-counter securities not quoted on the NASDAQ system, valuations are at
the mean of the closing bid and asked quotations, except for certain securities
that may be restricted as to public resale, which are valued in accordance with
methods adopted by the Trustees. Security transactions are accounted for on the
trade date (date the order to buy or sell is executed), and dividends declared
but not received are accrued on the ex-dividend date. Interest income is
determined on the accrual basis. Realized gains and losses from security
transactions are reported on the basis of identified cost of securities
delivered for both financial reporting and Federal income tax purposes.
B. Federal Income Taxes
No provision for Federal income taxes is necessary since the Fund intends to
qualify under Subchapter M of the Internal Revenue Code and its policy is to
distribute all of its taxable income, including net realized capital gains, if
any, within the prescribed time periods.
C. Dividends
Dividends from net investment income, if any, are declared and paid or
reinvested annually. Net realized capital gains, if any, are distributed
annually, unless additional distributions are required for compliance with
applicable tax regulations.
Income dividends and capital gain distributions are determined in accordance
with Federal income tax regulations which may differ from generally accepted
accounting principles.
D. Deferred Organization Costs
Certain costs incurred in the organization and registration of the Fund were
capitalized and are being amortized under the straight-line method over a
period of five years.
Note 2
The Trust and State Street Research & Management Company (the "Adviser"), an
indirect wholly-owned subsidiary of Metropolitan Life Insurance Company
("Metropolitan"), have entered into an agreement under which the Adviser earns
monthly fees at an annual rate of 0.85% of the Fund's average daily net assets.
In consideration of these fees, the Adviser furnishes the Fund with management,
investment advisory, statistical and research facilities and services. The
Adviser also pays all salaries, rent and certain other expenses of management.
The fees of the Trustees not currently affiliated with the Adviser amounted to
$1,326 during the period February 13, 1995 (commencement of operations) to
March 31, 1995.
State Street Research Shareholder Services, a division of State Street Research
Investment Services, Inc., the Trust's principal underwriter (the
"Distributor"), an indirect wholly-owned subsidiary of Metropolitan, provides
certain shareholder services to the Fund such as responding to inquiries and
instructions from investors with respect to the purchase and redemption of
shares of the Fund. During the period February 13, 1995 (commencement of
operations) to March 31, 1995, the amount of such expenses was $19.
Note 3
The Distributor and its affiliates may from time to time and in varying amounts
voluntarily assume some portion of fees or expenses relating to the Fund.
During the period February 13, 1995 (commencement of operations) to March 31,
1995, the amount of such expenses assumed by the Distributor and its affiliates
was $16,116.
Note 4
For the period February 13, 1995 (commencement of operations) to March 31,
1995, exclusive of short-term investments and U.S. Government obligations,
purchases and sales of securities aggregated $1,789,584 and $35,000,
respectively.
4
<PAGE>
Notes to Unaudited Financial Statements
March 31, 1995 Notes (cont'd)
Note 5
The Trust has adopted a Plan of Distribution Pursuant to Rule 12b-1 (the
"Plan") under the Investment Company Act of 1940. Under the Plan, the Fund pays
annual service fees to the Distributor at a rate of 0.25% of average daily net
assets for Class A, Class B and Class D shares. In addition, the Fund pays
annual distribution fees of 0.75% of average daily net assets for Class B and
Class D shares. The Distributor uses such payments for personal services and/or
the maintenance of shareholder accounts, to reimburse securities dealers for
distribution and marketing services, to furnish ongoing assistance to investors
and to defray a portion of its distribution and marketing expenses. For the
period February 13, 1995 (commencement of operations) to March 31, 1995, fees
pursuant to such plan amounted to $1,622, $137 and $137 for Class A, Class B
and Class D, respectively.
Note 6
The Trustees have the authority to issue an unlimited number of shares of
beneficial interest, $.001 par value per share. At March 31, 1995, Metropolitan
owned one share of each of Class A, Class B, Class C and Class D shares and the
Adviser owned 492,146 Class A shares and 10,471 of each of Class B, Class C and
Class D shares of the Fund.
Share transactions were as follows:
February 13, 1995
(Commencement of Operations)
to March 31, 1995
(Unaudited)
Class A Shares Amount
Shares sold 504,030 $4,814,272
Net increase 504,030 $4,814,272
Class B Shares Amount
Shares sold 10,493 $ 100,210
Net increase 10,493 $ 100,210
Class C Shares Amount
Shares sold 10,493 $ 100,210
Net increase 10,493 $ 100,210
Class D Shares Amount
Shares sold 10,493 $ 100,210
Net increase 10,493 $ 100,210
5
<PAGE>
Financial Highlights
For a share outstanding from February 13, 1995 (commencement of operations) to
March 31, 1995 (Unaudited)
<TABLE>
<CAPTION>
Class A Class B Class C Class D
<S> <C> <C> <C> <C>
Net asset value, beginning of period $ 9.55 $9.55 $9.55 $9.55
Net investment income* .04 .03 .04 .03
Net unrealized gain on investments .19 .19 .19 .19
Net asset value, end of period $ 9.78 $9.77 $9.78 $9.77
Total return+ 2.41% 2.30% 2.41% 2.30%
Net assets at end of period (000s) $4,930 $ 103 $ 103 $ 103
Ratio of operating expenses to average net assets* 1.45%++ 2.20%++ 1.20%++ 2.20%++
Ratio of net investment income to average net assets* 3.20%++ 2.46%++ 3.44%++ 2.46%++
Portfolio turnover rate 4.16% 4.16% 4.16% 4.16%
*Reflects voluntary assumption of fees or expenses per share in
each period. (Note 3). $ .03 $ .03 $ .03 $ .03
</TABLE>
++ Annualized
+ Represents aggregate return for the period without annualization and does not
reflect any front-end or contingent deferred sales charges. Total return
would be lower if the Distributor and its affiliates had not voluntarily
assumed a portion of the Fund's expenses.
6
<PAGE>
Fund Information, Officers and Trustees of State Street Research Capital
Trust
Fund Information
Investment Adviser
State Street Research &
Management Company
One Financial Center
Boston, MA 02111
Distributor
State Street Research
Investment Services, Inc.
One Financial Center
Boston, MA 02111
Shareholder Services
State Street Research
Shareholder Services
P.O. Box 8408
Boston, MA 02266-8408
1-800-562-0032
Custodian
State Street Bank and
Trust Company
225 Franklin Street
Boston, MA 02110
Legal Counsel
Mintz, Levin, Cohn, Ferris,
Glovsky and Popeo, P.C.
One Financial Center
Boston, MA 02111
Officers
Ralph F. Verni
Chairman of the Board,
President and
Chief Executive Officer
Peter C. Bennett
Vice President
Charles S. Glovsky
Vice President
Rudolph K. Kluiber
Vice President
Frederick R. Kobrick
Vice President
Thomas P. Moore, Jr.
Vice President
Gerard P. Maus
Treasurer
Joseph W. Canavan
Assistant Treasurer
Douglas A. Romich
Assistant Treasurer
Constantine Hutchins, Jr.
Secretary and General Counsel
Darman A. Wing
Assistant Secretary and
Assistant General Counsel
Trustees
Ralph F. Verni
Chairman of the Board,
President, Chief Executive
Officer and Director,
State Street Research &
Management Company
Robert A. Lawrence
Partner, Saltonstall & Co.
Dean O. Morton
Retired; formerly Executive
Vice President, Chief
Operating Officer and Director,
Hewlett-Packard Company
Thomas L. Phillips
Retired; formerly Chairman of
the Board and Chief Executive Officer,
Raytheon Company
Michael S. Scott Morton
Jay W. Forrester Professor of
Management,
Sloan School of Management,
Massachusetts Institute of
Technology
Jeptha H. Wade
Retired; formerly Of Counsel,
Choate, Hall & Stewart
7
<PAGE>
[Back Cover]
State Street Research
Small Capitalization Value Fund
One Financial Center
Boston, MA 02111
Bulk Rate
U.S. Postage
PAID
Brockton, MA
Permit No. 600
Questions? Comments?
Call us at 1-800-562-0032,
or write us at:
State Street Research
Shareholders Services
P.O. Box 8408
Boston, MA 02266-8408
[State Street Research Logo] STATE STREET RESEARCH
This report is prepared for the general information of current shareholders
only. It is not authorized for use as sales material with prospective investors.
Control Number: 2356-950523(0696)SSR-LD Cover Illustration by Dorothy Cullinan
SCV-207E-595
<PAGE>
[FRONT COVER]
[State Street Research logo] STATE STREET RESEARCH
State Street Research
Small Capitalization Growth Fund
March 31, 1995
[Graphic of man climbing rocks in starry night]
What's Inside
New and Improved:
A new design that's
easier to read
Investment Update:
About the Fund,
economy and markets
Fund Information:
Facts and Figures
Plus, Complete Portfolio Holdings
and Financial Statements
[BACK COVER]
State Street Research
Small Capitalization Growth Fund
One Financial Center
Boston, MA 02111
Bulk Rate
U.S. Postage
PAID
Brockton, MA
Permit No. 600
Questions? Comments?
Call us at 1-800-562-0032,
or write us at:
State Street Research
Shareholder Services
P.O. Box 8408
Boston, MA 02266-8408
[State Street Research logo] STATE STREET RESEARCH
This report is prepared for the general information of current shareholders
only. It is not authorized for use as sales material with prospective investors.
CONTROL NUMBER: 2351-950523(0696)SSR-LD
Cover Illustration by Dorothy Cullinan SCG-006E-595
<PAGE>
STATE STREET RESEARCH SMALL CAPITALIZATION GROWTH FUND
Investment Update
Investment Environment
The Economy
(bullet) The economy continues to show signs of slowing, and inflation remains
low.
(bullet) The U.S. dollar remains weak against the German mark and Japanese yen.
The Markets
(bullet) Stocks rallied in the first quarter of 1995. The best performance was
provided by large company stocks--the S&P 500 was up 9.73% for the quarter.(1)
Small company stocks significantly trailed big stocks--the Russell 2000 Index
was up 4.70%.(1)
(bullet) The bond market also recovered strongly, and stocks have benefited as a
result.
The Fund
Over the past six months
(bullet) Class A shares of the fund provided a total return of -3.86%(2) (not
including sales charge) for the 6 months ended March 31, 1995. This
performance was well behind the 5.37% average return for small
capitalization growth funds.(3)
(bullet) The Fund's poor performance resulted from too great an emphasis on
consumer stocks and too little weighting in technology.
(bullet) We have renewed our focus on technology, including computer software
and electronics stocks. As we added to technology, we cut back on our
recreation and hotel and restaurant holdings.
Current strategy
(bullet) Nearly 30% of the Fund's assets are invested in technology.
(bullet) Hospital supply, including health maintenance organizations, represent
18% of the Fund's assets.
(bullet) Despite the Fund's poor performance, we believe small-cap growth stocks
offer tremendous opportunity.
1 The Standard & Poor's 500 Composite Index (S&P 500) includes 500 widely-
traded common stocks and is a commonly-used measure of U.S. stock market
performance. The Russell 2000 Index includes 2,000 small company stocks and is
a commonly-used measure of small-company stock performance. The indices are
unmanaged and do not take sales charges into consideration. Direct investment
in the indices is not possible; results are for illustrative purposes only.
2 -4.23% for Class B shares; -3.84% for Class C shares; -4.23% for Class D
shares.
3 Source: Lipper Analytical Services, (does not reflect sales charges) for 250
funds in Lipper's Small Capitalization Growth Fund Category.
4 All returns represent past performance, which is no guarantee of future
results. The investment return and principal value of an investment made in
the Fund will fluctuate and shares, when redeemed, may be worth more or less
than their original cost. All returns assume reinvestment of capital gain
distributions and income dividends.
5 Shares of the Fund had no class designations until February 1, 1994, when
designations were assigned based on the pricing and 12b-1 fees applicable to
shares sold thereafter. Performance data for a specified class include periods
prior to the adoption of class designations. "A" share returns for each of the
periods reflect the maximum 4.5% sales charge. Performance prior to February
1, 1994, does not reflect annual 12b-1 fees of .25%. "B" share return reflects
a 4% contingent deferred sales charge. "C" shares, offered without a sales
charge, are available only to certain employee benefit plans and large
institutions. "D" share return for the 1-year period reflects a 1% contingent
deferred sales charge. Performance for "B" and "D" shares prior to February 1,
1994, does not reflect annual 12b-1 fees of 1%, which will reduce subsequent
performance.
Fund Information (all data are for periods ended March 31, 1995)
SEC Average Annual Compound
Rates of Return
(at maximum applicable sales charge)(4,5)
Life of Fund 1 year
Class A -12.25%/-12.58% -13.06%/-13.37%
Class B -12.47%/-12.81% -14.05%/-14.38%
Class C -9.20%/ -9.62% -8.72%/ -9.15%
Class D -10.02%/-10.35% -10.53%/-10.86%
Cumulative Total Returns
(do not reflect sales charge)(4)
Life of Fund 1 year Year-to-date
Class A -13.82%/-14.30% -8.96%/-9.29% +1.86%/+1.76%
Class B -14.55%/-15.03% -9.53%/-9.86% +1.75%/+1.65%
Class C -13.40%/-14.00% -8.72%/-9.15% +1.85%/+1.72%
Class D -14.55%/-15.03% -9.63%/-9.96% +1.62%/+1.52%
Performance results of the Fund are increased by the voluntary reduction of
fees and expenses relating to the Fund. The first figure reflects expense
reduction; the second shows what results would have been without subsidization.
10 Largest Stock Positions
(by percentage of net assets)
1 Vencor Acute care hospital operator 2.9%
2 Hyperion Software
Computer software company 2.8%
3 Electroglas Semiconductor maker 2.7%
4 Symantec Computer software company 2.7%
5 Infinity Broadcasting Radio network 2.4%
6 Community Health Systems
Rural hospital operator 2.4%
7 Warnaco Group Apparel maker 2.3%
8 FTP Software
Computer software company 2.3%
9 Station Casinos Gaming company 2.2%
10 Sierra Health Services
Health Maintenance Organization 2.1%
These stocks represent an aggregate of 24.8% of the portfolio. Because of
active management, there is no guarantee that the Fund currently invests, or
will continue to invest, in the securities listed.
5 Largest Industry Positions
(by percentage of net assets)
[Bar chart]
Computer Software & Service 18.8%
Hospital Supply 18.5%
Electronics 8.9%
Hotel & Restaurant 7.8%
Retail 6.9%
Total net assets 60.9%
<PAGE>
Investment Portfolio
March 31, 1995 (Unaudited)
Value
Shares (Note 1)
Common Stocks 99.0%
Basic Industries 0.8%
Electrical Equipment 0.8%
Union Switch & Signal, Inc.* 42,000 $ 548,600
Total Basic Industries 548,600
Consumer Cyclical 28.2%
Airline 1.3%
Air Express International Corp.* 34,700 884,850
Automotive 0.9%
Lear Seating Corp.* 34,800 626,400
Building 0.6%
Cameron Ashley, Inc.* 24,900 398,400
Hotel & Restaurant 7.8%
Apple South, Inc.* 29,500 460,938
Au Bon Pain Company, Inc.* 40,600 553,175
IHOP Corp.* 46,300 1,362,956
Outback Steakhouse, Inc.* 25,750 653,406
Primadonna Resorts, Inc.* 28,900 722,500
Station Casinos, Inc.* 126,900 1,459,350
5,212,325
Recreation 5.2%
Acclaim Entertainment, Inc.* 37,900 658,513
Infinity Braodcasting Corp. Cl. A* 38,950 1,626,163
Radica Games Ltd.* 29,100 105,487
Renaissance Communications Corp.* 32,700 1,054,575
3,444,738
Retail Trade 6.9%
Department 56, Inc.* 33,800 1,347,775
Discount Auto Parts, Inc.* 16,100 386,400
Ethan Allen Interiors, Inc.* 37,100 774,463
Gymboree Corp.* 52,600 1,334,725
Safety 1st, Inc.* 29,800 763,625
4,606,988
Textile & Apparel 5.5%
Authentic Fitness Corp.* 84,700 1,355,200
Norton McNaughton, Inc.* 41,900 743,725
Warnaco Group, Inc.* 86,300 1,542,612
3,641,537
Total Consumer Cyclical 18,815,238
Consumer Staple 25.5%
Business Service 5.2%
Franklin Quest Co.* 22,700 $ 715,050
Healthcare Compare Corp.* 38,000 1,263,500
Pyxis Corp.* 33,100 686,825
Viking Office Products, Inc.* 25,200 781,200
3,446,575
Drug 1.8%
Arris Pharmaceutical Corp.* 69,200 484,400
Cyto Therapeutics, Inc.* 54,000 371,250
Rexall Sundown, Inc.* 35,600 364,900
1,220,550
Hospital Supply 18.5%
Advocat, Inc.* 26,700 340,425
Community Health Systems, Inc.* 50,000 1,575,000
Genesis Health Ventures, Inc.* 15,500 484,375
GranCare, Inc.* 36,900 627,300
Heart Technology, Inc.* 16,200 303,750
I Stat Corp.* 9,300 232,500
Idexx Labs, Inc.* 8,400 348,600
Mariner Health Group, Inc.* 44,400 860,250
Maxicare Health Plans, Inc.* 48,800 847,900
Multicare Companies, Inc.* 33,100 711,650
Owens and Minor, Inc.* 48,900 635,700
Right Choice Managed Care, Inc.* 11,500 387,000
Rotech Medical Corp.* 1,200 37,500
Sierra Health Services, Inc.* 43,100 1,416,913
Vencor, Inc.* 53,500 1,905,937
Vivra, Inc.* 39,700 1,280,325
WellCare Management Group, Inc.* 8,600 294,550
12,289,675
Total Consumer Staple 16,956,800
Energy 2.7%
Oil 2.2%
Tom Brown, Inc.* 28,000 434,000
Nuevo Energy Co.* 6,900 136,275
Ranger Oil Ltd.* 132,600 878,475
1,448,750
Oil Service 0.5%
Nowsco Well Service Ltd. 32,400 360,450
Total Energy 1,809,200
The accompanying notes are an integral part of the financial statements.
2
<PAGE>
Finance 7.7%
Financial Service 1.8%
The Money Store, Inc.* 45,800 $ 1,150,725
Insurance 5.9%
Horace Mann Educators Corp. 9,800 216,825
Mutual Risk Management Ltd. 43,900 1,003,500
NAC Re Corp.* 33,100 1,001,275
National Re Corp.* 28,900 845,325
20th Century Industries, Inc.* 50,700 595,725
United Companies Financial Corp. 8,080 282,800
3,945,450
Total Finance 5,096,175
Science & Technology 29.7%
Computer Software & Service 18.8%
Alantel Corp.* 17,200 769,700
FTP Software, Inc.* 47,800 1,517,650
Hyperion Software Corp.* 39,300 1,837,275
ITI Technologies, Inc.* 46,600 1,176,650
Intersolv, Inc.* 40,100 641,600
Keane, Inc.* 36,900 894,825
Mattson Technologies, Inc.* 25,500 580,125
Progress Software Corp.* 17,700 920,400
Softkey Software Products, Inc.* 37,400 1,019,150
Symantec Corp.* 78,300 1,800,900
TGV Software, Inc.* 32,200 724,500
Wonderware Corp.* 21,200 673,100
12,555,875
Electronic 8.9%
Credence Systems Corp.* 18,200 568,750
Electroglas, Inc.* 41,500 1,815,625
FSI International, Inc.* 21,800 880,175
Itron, Inc.* 37,400 878,900
Planar Systems, Inc.* 33,800 709,800
Tencor Instruments* 17,600 1,042,800
5,896,050
Office Equipment 2.0%
Sequent Computer Systems, Inc.* 42,600 $ 702,900
Syquest Technology, Inc.* 51,300 622,012
1,324,912
Total Science & Technology 19,776,837
Utility 4.4%
Telephone 4.4%
ALC Communications Corp.* 25,600 873,600
Allen Group, Inc.* 55,300 1,368,675
Cidco, Inc.* 23,500 707,938
2,950,213
Total Utility 2,950,213
Total Common Stocks (Cost $61,293,528) 65,953,063
Principal Maturity
Amount Date
Commercial Paper 0.2%
Ford Motor Credit Co., 5.96% $142,000 4/3/1995 142,000
Total Commercial Paper (Cost
$142,000) 142,000
Total Investments (Cost $61,435,528)--99.2% 66,095,063
Cash and Other Assets, Less Liabilities--0.8% 555,722
Net Assets--100.0% $66,650,785
Federal Income Tax Information:
At March 31, 1995, the net unrealized appreciation of
investments based on cost for Federal income tax purposes
of $61,468,856 was as follows:
Aggregate gross unrealized appreciation for all investments
in which there is an excess of value over tax cost $ 6,621,980
Aggregate gross unrealized depreciation for all investments
in which there is an excess of tax cost over value (1,995,773)
$ 4,626,207
*Nonincome-producing securities
The accompanying notes are an integral part of the financial statements.
3
<PAGE>
Statement of Assets and Liabilities
March 31, 1995 (Unaudited)
Assets
Investments, at value (Cost $61,435,528) (Note 1) $ 66,095,063
Cash 80,064
Receivable for securities sold 3,025,620
Receivable for fund shares sold 57,750
Receivable from Distributor (Note 3) 40,737
Dividends and interest receivable 24,578
Deferred organization costs and other assets (Note 1) 69,325
69,393,137
Liabilities
Payable for securities purchased 2,216,258
Payable for fund shares redeemed 392,013
Accrued management fee (Note 2) 46,065
Accrued distribution fee (Note 5) 39,498
Accrued trustees' fees (Note 2) 3,699
Other accrued expenses 44,819
2,742,352
Net Assets $ 66,650,785
Net Assets consist of:
Unrealized appreciation of investments $ 4,659,535
Accumulated net realized loss (10,461,649)
Shares of beneficial interest (Note 6) 72,452,899
$ 66,650,785
Net Asset Value and redemption price per share of Class
A shares ($22,127,455 / 2,688,809 shares of
beneficial interest) $8.23
Maximum Offering Price per share of Class A shares
($8.23 / .955) $8.62
Net Asset Value and offering price per share of Class B
shares ($28,162,268 / 3,451,816 shares of beneficial
interest)* $8.16
Net Asset Value, offering price and redemption price
per share of Class C shares ($7,517,035 / 908,414
shares of beneficial interest) $8.27
Net Asset Value and offering price per share of Class D
shares ($8,844,027 / 1,083,639 shares of beneficial
interest)* $8.16
*Redemption price per share for Class B and Class D is equal to net asset
value less any applicable contingent deferred sales charge.
Statement of Operations
For the six months ended March 31, 1995 (Unaudited)
Investment Income
Interest $ 150,671
Dividends, net of foreign taxes of $2,512 58,583
209,254
Expenses
Management fee (Note 2) 255,888
Transfer agent and shareholder services (Note 2) 143,455
Custodian fee 91,268
Registration fees 61,793
Distribution fee--Class A (Note 5) 28,229
Distribution fee--Class B (Note 5) 146,488
Distribution fee--Class D (Note 5) 46,751
Legal fees 21,555
Reports to shareholders 20,483
Audit fee 9,207
Trustees' fees (Note 2) 5,448
Amortization of organization costs (Note 1) 3,265
Miscellaneous 4,069
837,899
Expenses borne by the Distributor (Note 3) (240,730)
597,169
Net investment loss (387,915)
Realized and Unrealized Gain
(Loss) on Investments
Net realized loss on investments (Notes 1 and 4) (7,666,584)
Net unrealized appreciation of investments 5,163,929
Net loss on investments (2,502,655)
Net decrease in net assets resulting from operations $(2,890,570)
The accompanying notes are an integral part of the financial statements.
4
<PAGE>
Statement of Changes in Net Assets
March 31, 1995
Six months October 4, 1993
ended (Commencement of
March 31, 1995 Operations) to
(Unaudited) September 30, 1994
Increase (Decrease) in Net Assets
Operations:
Net investment loss $ (387,915) $ (356,585)
Net realized loss on investments* (7,666,584) (2,795,065)
Net unrealized appreciation
(depreciation) of investments 5,163,929 (504,394)
Net decrease resulting from
operations (2,890,570) (3,656,044)
Net increase from fund share
transactions (Note 6) 1,202,883 71,994,516
Total increase (decrease) in net
assets (1,687,687) 68,338,472
Net Assets
Beginning of period 68,338,472 --
End of period $ 66,650,785 $68,338,472
* Net realized loss for Federal
income tax purposes
(Note 1) $(10,417,486) $ (10,835)
Notes to Unaudited Financial Statements
March 31, 1995
Note 1
State Street Research Small Capitalization Growth Fund (the "Fund"), is a
series of State Street Research Capital Trust (the "Trust"), formerly State
Street Capital Trust, which is a Massachusetts business trust registered under
the Investment Company Act of 1940, as amended, as a diversified, open-end
management investment company. The Trust was organized in November, 1988 as a
successor to State Street Capital Fund, Inc., a Massachusetts corporation. The
Trust consists presently of three separate funds: State Street Research Small
Capitalization Growth Fund, State Street Research Capital Fund and State Street
Research Small Capitalization Value Fund.
The Fund offers four classes of shares. Shares of the Fund had no class
designations until February 1, 1994. Class A shares are subject to an initial
sales charge of up to 4.50% and pay an annual service fee equal to 0.25% of
average daily net assets. Class B shares are subject to a contingent deferred
sales charge on certain redemptions made within five years of purchase and pay
annual distribution and service fees of 1.00%. Class B shares automatically
convert into Class A shares (which pay lower ongoing expenses) at the end of
eight years after the issuance of the Class B shares. Class C shares are only
offered to certain employee benefit plans and large institutions. Class D
shares are subject to a contingent deferred sales charge of 1.00% on any shares
redeemed within one year of their purchase. Class D shares also pay annual
distribution and service fees of 1.00%. The Fund's expenses are borne pro-rata
by each class, except that each class bears expenses, and has exclusive voting
rights with respect to provisions of the Plan of Distribution, related
specifically to that class. The Trustees declare separate dividends on each
class of shares.
The following significant policies are consistently followed by the Fund in
preparing its financial statements, and such policies are in conformity with
generally accepted accounting principles for investment companies.
A. Investments in Securities
Values for listed securities represent the last sale on national securities
exchanges quoted prior to the close of the New York Stock Exchange.
Over-the-counter securities quoted on the National Association of Securities
Dealers Automated Quotation ("NASDAQ") system are valued at the closing price
supplied through such system. In the absence of recorded sales and for those
over-the-counter securities not quoted on the NASDAQ system, valuations are at
the mean of the closing bid and asked quotations, except for certain securities
that may be restricted as to public resale, which are valued in accordance with
methods adopted by the Trustees. Security transactions are accounted for on the
trade date (date the order to buy or sell is executed), and dividends declared
but not received are accrued on the ex-dividend date. Interest income is
determined on the accrual basis. Realized gains and losses from security
transactions are reported on the basis of identified cost of securities
delivered for both financial reporting and Federal income tax purposes.
The accompanying notes are an integral part of the financial statements.
5
<PAGE>
B. Federal Income Taxes
No provision for Federal income taxes is necessary since the Fund intends to
qualify under Subchapter M of the Internal Revenue Code and its policy is to
distribute all of its taxable income, including net realized capital gains, if
any, within the prescribed time periods. At September 30, 1994, the Fund had a
capital loss carryforward of $10,835 available, to the extent provided in
regulations, to offset future capital gains, if any, which expires on
September 30, 2002.
In order to meet certain excise tax distribution requirements under Section
4982 of the Internal Revenue Code, the Fund is required to measure and
distribute annually, if necessary, net capital gains realized during a
twelve-month period ending October 31. In this connection, the Fund is
permitted to defer into its next fiscal year any net capital losses incurred
between each November 1 and the end of its fiscal year. From November 1, 1993
through September 30, 1994, the Fund incurred net capital losses of
approximately $2,455,000 and intends to defer and treat such losses as arising
in the fiscal year ending September 30, 1995.
C. Dividends
Dividends from net investment income, if any, are declared and paid or
reinvested annually. Net realized capital gains, if any, are distributed
annually, unless additional distributions are required for compliance with
applicable tax regulations.
Income dividends and capital gain distributions are determined in accordance
with Federal income tax regulations which may differ from generally accepted
accounting principles.
D. Deferred Organization Costs
Certain costs incurred in the organization and registration of the Fund were
capitalized and are being amortized under the straight-line method over a
period of five years.
Note 2
The Trust and State Street Research & Management Company (the "Adviser"), an
indirect wholly-owned subsidiary of Metropolitan Life
Insurance Company ("Metropolitan"), have entered into an agreement under which
the Adviser earns monthly fees equal to 1/16 of 1% (3/4 of 1% on an annual
basis) of average daily net assets. In consideration of these fees, the Adviser
furnishes the Fund with management, investment advisory, statistical and
research facilities and services. The Adviser also pays all salaries, rent and
certain other expenses of management. The fees of the Trustees not currently
affiliated with the Adviser amounted to $5,448 during the six months ended
March 31, 1995.
State Street Research Shareholder Services, a division of State Street Research
Investment Services, Inc., the Trust's principal underwriter (the
"Distributor"), an indirect wholly-owned subsidiary of Metropolitan, provides
certain shareholder services to the Fund such as responding to inquiries and
instructions from investors with respect to the purchase and redemption of
shares of the Fund. In addition, Metropolitan receives a fee for maintenance of
the accounts of certain shareholders who are participants in sponsored
arrangements, employee benefit plans and similar programs or plans, through or
under which shares of the Fund may be purchased. During the six months ended
March 31, 1995, the amount of such shareholder servicing and account
maintenance expenses was $36,959.
Note 3
The Distributor and its affiliates may from time to time and in varying amounts
voluntarily assume some portion of fees or expenses relating to the Fund.
During the six months ended March 31, 1995, the amount of such expenses assumed
by the Distributor and its affiliates was $240,730.
Note 4
For the six months ended March 31, 1995, exclusive of short-term investments
and U.S. Government obligations, purchases and sales of securities aggregated
$64,082,223 and $61,396,554, respectively.
Note 5
The Trust has adopted a Plan of Distribution Pursuant to Rule 12b-1 (the
"Plan") under the Investment Company Act of 1940. Under the Plan, the Fund pays
annual service fees to the Distributor at a rate of 0.25% of average daily net
assets for Class A, Class B and Class D shares. In addition, the Fund pays
annual distribution fees of 0.75% of average daily net assets for Class B and
Class D shares. The Distributor uses such payments for personal services and/or
the maintenance of shareholder accounts, to reimburse securities dealers for
distribution and marketing services, to furnish ongoing assistance to investors
and to defray a portion of its distribution and marketing expenses. For the six
months ended March 31, 1995, fees pursuant to such plan amounted to $28,229,
$146,488 and $46,751 for Class A, Class B and Class D, respectively.
The Fund has been informed that the Distributor and MetLife
Securities, Inc., a wholly-owned subsidiary of Metropolitan, earned initial
sales charges aggregating $8,719 and $41,248, respectively, on sales of Class A
shares of the Fund during the six months ended March 31, 1995, and that MetLife
Securities, Inc. earned commissions aggregating $44,884 on sales of Class B
shares, and that the Distributor collected contingent deferred sales charges
aggregating $38,781 and $3,593 on redemptions of Class B and Class D shares,
respectively during the same period.
6
<PAGE>
Note 6
The Trustees have the authority to issue an unlimited number of shares of
beneficial interest, $.001 par value per share. At March 31, 1995, the
Distributor owned one Class C share of the Fund.
Share transactions were as follows:
February 1, 1994
Six months ended (Commencement of
March 31, 1995 Share Class Designations)
(Unaudited) to September 30, 1994
Class A Shares Amount Shares Amount
Shares sold 498,905 $ 4,149,268 2,793,089 $24,869,158
Shares
redeemed (377,849) (3,051,610) (225,336) (1,967,087)
Net increase 121,056 $ 1,097,658 2,567,753 $22,902,071
Class B Shares Amount Shares Amount
Shares sold 386,358 $ 3,171,694 3,606,689 $32,666,242
Shares
redeemed (372,096) (2,997,848) (169,135) (1,476,529)
Net increase 14,262 $ 173,846 3,437,554 $31,189,713
October 4, 1993
(Commencement of
Operations) to
September 30, 1994
Class C Shares Amount Shares Amount
Shares sold 254,655 $ 2,071,183 1,914,962 $ 17,425,844
Shares
redeemed (164,173) (1,392,932) (1,097,030) (10,337,651)
Net increase 90,482 $ 678,251 817,932 $ 7,088,193
February 1, 1994
(Commencement of
Share Class Designations)
to September 30, 1994
Class D Shares Amount Shares Amount
Shares sold 76,656 $ 616,549 1,290,249 $11,826,451
Shares
redeemed (170,632) (1,363,421) (112,634) (1,011,912)
Net increase
(decrease) (93,976) $ (746,872) 1,177,615 $10,814,539
7
<PAGE>
Financial Highlights
For a share outstanding throughout each period:
<TABLE>
<CAPTION>
Class A Class B Class C Class D
Six months ended Six months ended Six months ended Six months ended
March 31, 1995 March 31, 1995 March 31, 1995 March 31, 1995
(Unaudited) 1994** (Unaudited) 1994** (Unaudited) 1994*** (Unaudited) 1994**
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net
asset
value,
beginning
of
period $ 8.56 $ 9.45 $ 8.52 $ 9.45 $ 8.60 $ 9.55 $ 8.52 $ 9.45
Net
investment
loss* (.03) (.02) (.06) (.06) (.03) (.06) (.06) (.06)
Net
realized
and
unrealized
loss
on
investments (.30) (.87) (.30) (.87) (.30) (.89) (.30) (.87)
Net
asset
value,
end
of
period $ 8.23 $ 8.56 $ 8.16 $ 8.52 $ 8.27 $ 8.60 $ 8.16 $ 8.52
Total
return+ (3.86)% (9.42)% (4.23)% (9.84)% (3.84)% (9.95)% (4.23)% (9.84)%
Net
assets
at
end
of
period
(000s) $22,127 $21,986 $28,162 $29,287 $7,517 $7,033 $8,844 $10,032
Ratio
of
operating
expenses
to
average
net
assets* 1.35%++ 1.35%++ 2.10%++ 2.10%++ 1.10%++ 1.10%++ 2.10%++ 2.10%++
Ratio
of
net
investment
loss
to
average
net
assets* (0.74)%++ (0.58)%++ (1.49)%++ (1.32)%++ (0.49)%++ (0.68)%++ (1.49)%++ (1.32)%++
Portfolio
turnover
rate 96.42% 83.61% 96.42% 83.61% 96.42% 83.61% 96.42% 83.61%
*Reflects
voluntary
assumption
of
fees
or
expenses
per
share
in
each
period.
(Note 3) $ .03 $ .02 $ .03 $ .02 $ .03 $ .04 $ .03 $ .02
</TABLE>
++Annualized
+Represents aggregate return for the period without annualization and does not
reflect any front-end or contingent deferred sales charges. Total return
would be lower if the Distributor and its affiliates had not voluntarily
assumed a portion of the Fund's expenses.
**February 1, 1994 (commencement of share class designations) to September 30,
1994.
***October 4, 1993 (commencement of operations) to September 30, 1994.
8
<PAGE>
Fund Information, Officers and Trustees of State Street Research Capital Trust
Fund Information
Investment Adviser
State Street Research &
Management Company
One Financial Center
Boston, MA 02111
Distributor
State Street Research
Investment Services, Inc.
One Financial Center
Boston, MA 02111
Shareholder Services
State Street Research
Shareholder Services
P.O. Box 8408
Boston, MA 02266-8408
1-800-562-0032
Custodian
State Street Bank and
Trust Company
225 Franklin Street
Boston, MA 02110
Legal Counsel
Mintz, Levin, Cohn, Ferris,
Glovsky and Popeo, P.C.
One Financial Center
Boston, MA 02111
Officers
Ralph F. Verni
Chairman of the Board,
President and
Chief Executive Officer
Peter C. Bennett
Vice President
Charles S. Glovsky
Vice President
Rudolph K. Kluiber
Vice President
Frederick R. Kobrick
Vice President
Thomas P. Moore, Jr.
Vice President
Gerard P. Maus
Treasurer
Joseph W. Canavan
Assistant Treasurer
Douglas A. Romich
Assistant Treasurer
Constantine Hutchins, Jr.
Secretary and General Counsel
Darman A. Wing
Assistant Secretary and
Assistant General Counsel
Trustees
Ralph F. Verni
Chairman of the Board,
President, Chief Executive
Officer and Director,
State Street Research &
Management Company
Robert A. Lawrence
Partner, Saltonstall & Co.
Dean O. Morton
Retired; formerly Executive
Vice President, Chief
Operating Officer and Director,
Hewlett-Packard Company
Thomas L. Phillips
Retired; formerly Chairman of the Board and Chief Executive Officer,
Raytheon Company
Michael S. Scott Morton
Jay W. Forrester Professor of
Management,
Sloan School of Management,
Massachusetts Institute of
Technology
Jeptha H. Wade
Retired; formerly Of Counsel, Choate, Hall & Stewart
