Supplement No. 2 dated December 6, 1996
(Supplanting Supplement No. 1 dated August 31, 1996)
to
Prospectus dated February 1, 1996
for
STATE STREET RESEARCH SMALL CAPITALIZATION GROWTH FUND
a series of State Street Research Capital Trust
The Fund's Investments
The third sentence of the second paragraph under the above caption at page 5
of the Prospectus is deleted and the following is inserted in its place:
"The Fund invests in companies with market capitalizations ranging as high
as those included in the Russell 2000 Growth Index, although the
capitalizations or index could vary over time because of market conditions,
changes in the parameters of indices, etc. Presently, the Russell 2000
Growth Index is comprised of issuers ranging as high as $1.2 billion in
capitalization."
Purchase of Shares--Alternative Purchase Program--General
Immediately after the third sentence of the last paragraph under the above
caption at page 11 of the Prospectus, the following is added:
"The Distributor may also compensate brokers for maintaining investments
over a period of years."
Purchase of Shares--Alternative Purchase Program--Class C Shares--Institutional;
No Sales Charge
Under the above caption at page 14 of the Prospectus, the second and third
paragraphs are deleted, and the following is inserted in their place:
"In general, Class C shares are only available for new investments by
certain large institutions, and employee benefit plans which acquire shares
through programs or products sponsored by Metropolitan Life Insurance
Company ("Metropolitan") and/or its affiliates, for which Class C shares
have been designated. Information on the availability of Class C shares and
further conditions and limitations is available from the Distributor."
Shareholder Services--Exchange Privilege
Immediately following the first paragraph under the above caption at page 19
of the Prospectus, the following is inserted:
"Shares of the Fund may also be acquired or redeemed in exchange for
shares of the Summit Cash Reserves Fund ("Summit Cash Reserves") by
customers of Merrill Lynch, Pierce, Fenner & Smith Incorporated (subject to
completion of steps necessary to implement the program). The Fund and Summit
Cash Reserves are related mutual funds for purposes of investment and
investor services. Upon the acquisition of shares of Summit Cash Reserves by
exchange for redeemed shares of the Fund, (a) no sales charge is imposed by
Summit Cash Reserves, (b) no contingent deferred sales charge is imposed by
the Fund on the Fund shares redeemed, and (c) any applicable holding period
of the Fund shares redeemed is "tolled," that is, the holding period clock
stops running pending further transactions. Upon the acquisition of shares
of the Fund by exchange for redeemed shares of Summit Cash Reserves, (a) the
acquisition of Class A shares shall be subject to the initial sales charges
or contingent deferred sales charges applicable to an initial investment in
Class A shares, unless a prior Class A sales charge has been paid
indirectly, and (b) the acquisition of Class B or Class D shares of the Fund
shall restart any holding period previously tolled, or shall be subject to
the contingent deferred sales charge applicable to an initial investment in
such shares."
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Management of the Fund
Under the above caption at page 23 of the Prospectus, the sixth paragraph is
revised in its entirety as follows:
"The Fund is managed by Michael Carmen. Mr. Carmen has managed the Fund
since December 1996. His principal occupation currently is Vice President of
State Street Research & Management Company. During the past five years he
has also served as a portfolio manager at Montgomery Asset Management, and
as an analyst at State Street Research & Management Company and CIGNA
Investments, Inc."
Calculation of Performance Data
The second sentence of the first paragraph under the above caption at page
24 of the Prospectus is revised as follows:
"The Fund may also compare its performance to appropriate indices such
as the NASDAQ Composite Average, Small Stock Index, Russell 2000 Growth
Index, Standard & Poor's 500 Stock Index (the "S&P 500"), Consumer Price
Index and Dow Jones Industrial Average and/or to appropriate rankings and
averages, such as the Lipper Small Company Growth Funds Average, compiled by
Lipper Analytical Services, Inc., or to those compiled by Morningstar, Inc.,
Money Magazine, Business Week, Forbes Magazine, the Wall Street Journal and
Investor's Daily."
