[cover]
[State Street logo] STATE STREET RESEARCH
METLIFE-STATE STREET RESEARCH
EQUITY INVESTMENT FUND
ANNUAL REPORT [picture of man climbing mountains
June 30, 1995 and looking at stars]
WHAT'S INSIDE
New and Improved:
A new design that's
easier to read
From the Chairman:
The markets have
come full circle
Portfolio Manager's Review:
The Fund benefited
from 1995's market rally
Fund Information:
Facts and figures
Plus, Complete Portfolio Holdings
and Financial Statements
<PAGE>
FROM THE CHAIRMAN
To Our Shareholders:
[picture of Ralph F. Verni]
For investors, events have now come full circle. Last year, the Federal
Reserve raised rates repeatedly to slow the booming U.S. economy. Today, the
economy has slowed to the point that the Fed actually cut interest rates
slightly on July 6.
This turnabout makes all the difference in your mutual fund's short-term
performance. The Fed's rate hikes hurt your Fund in 1994. Falling interest
rates and strong corporate earnings have made 1995 the best year for stock
mutual funds since 1991.
Stocks have been the investment of choice this year. The Standard & Poor's
500 Index gained more than 26% in the 12 months ended June 30, 1995, with
nearly all of these gains occurring in 1995.(1) The biggest gainers were
technology and financial stocks. Large-company stocks continue to outperform
small- and medium-capitalization stocks, although the lead is narrowing.
Bond performance has also been outstanding. The combination of low inflation
and a slowing economy is a very positive environment for bonds. U.S. Treasury
securities performed strongly, as they respond better to falling interest
rates than other types of bonds. Municipal bonds, high-yield bonds and
mortgage securities also performed well.
We believe the investment outlook is positive, especially now that the Fed
has lowered interest rates. One concern is that the economy could slow too
quickly and plunge into recession. In addition, after such strong
performance, it's always possible for the markets to experience declines.
Regardless, we think the best policy is to maintain a long-term outlook and
remain invested.
Thank you again for investing with State Street Research.
Sincerely,
[signature of Ralph F. Verni]
Ralph F. Verni
Chairman
July 31, 1995
(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 index is unmanaged and does not take sales charges into
consideration. Direct investment in the index is not possible; results are
for illustrative purposes only.
(2)+17.70% for Class B shares; +18.83% for Class C shares; +17.53% for
Class D shares.
(3)Investment result is based on a $10,000 investment in Class A shares at
the maximum sales charge of 4.5% with reinvestment of capital gain
distributions and income dividends. No adjustment has been made for income
taxes payable by shareholders on income dividends or capital gain
distributions.
(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)Performance for a class includes periods prior to the adoption of class
designations in 1993. Performance reflects up to a maximum 4.5% front-end
sales charge or 5% contingent deferred sales charge. "C" shares, offered
without a sales charge, are available only to certain employee benefit plans
and institutions. Performance for "B" and "D" shares prior to class
designations in 1993 reflects annual 12b-1 fees of .50% and subsequent
performance reflects annual 12b-1 fees of 1%.
Fund Performance (all data are for periods ended June 30, 1995)
Total value of $10,000 invested on August 25, 1986(3)
(Class A shares, at maximum applicable sales charge)
[typeset representation of mountain chart]
8/86 9550
6/87 11760
6/88 10952
6/89 12690
6/90 14789
6/91 13887
6/92 16424
6/93 19769
6/94 19954
6/95 23612
SEC Average Annual Compound Rates
of Return
(at maximum applicable sales charge)(4,5)
<TABLE>
<CAPTION>
Life of Fund
(since 8/25/86) 5 years 1 year
<S> <C> <C> <C>
Class A +10.19% +8.80% +13.01%
Class B +10.62% +9.27% +12.70%
Class C +10.87% +10.00% +18.83%
Class D +10.61% +9.54% +16.53%
</TABLE>
Cumulative Total Returns
(do not reflect sales charge)(4)
<TABLE>
<CAPTION>
Life of Fund
(since 8/25/86) 5 years 1 year
<S> <C> <C> <C>
Class A +147.25% +59.66% +18.34%
Class B +144.36% +57.80% +17.70%
Class C +149.45% +61.08% +18.83%
Class D +144.18% +57.68% +17.53%
</TABLE>
Top 5 Industries
(by percentage of net assets)
<TABLE>
<S> <C>
Retail 7.1%
Oil 6.1%
Hospital supply 6.0%
Office equipment 6.0%
Telephone 6.0%
</TABLE>
Total net assets: 31.2%
<PAGE>
Portfolio Manager's Review
[picture of Steven P. Somes]
Steven P. Somes
Portfolio Manager
In November 1994, Steven P. Somes became the Fund's portfolio manager. Mr.
Somes has 11 years of investment experience.
The soaring stock market had a big impact on Equity Investment Fund. For the
12 months ended June 30, 1995, Class A shares of the Fund provided a total
return of +18.34% (does not reflect sales charge).(2) The Fund trailed the
19.74% average total return for 374 funds in Lipper Analytical Services'
growth and income fund category (does not reflect sales charges). The Fund's
underperformance can be partially attributed to the fact that the portfolio
held a number of small- and medium-sized stocks--a situation we are changing.
Portfolio adjustments
We have worked to improve the quality and consistency of the Fund's portfolio
over time. In many industries, we sold smaller or more volatile stocks and
replaced them with larger-company stocks we believed would be steadier
performers. We also added more income to the portfolio by adding larger,
dividend-paying stocks and by investing in convertible bonds.
Moving from cyclical stocks
In response to the slowing economy, we reduced the Fund's holdings in
cyclical stocks--which tend to perform best when the economy and consumer
spending are strong. In particular, we reduced positions in automotive,
recreation (TV and broadcasting) and retail stocks. We didn't do this across
the board, however. We added to holdings in gaming and forest products stocks
because of their attractive prospects.
Adding to "steady growers"
We have targeted stocks we believe offer the potential for steady earnings
gains, even if the economy slows. One area is drug stocks, which we believe
will benefit from a number of new prescription products and from decreased
regulation. As a result, we increased our holdings in drug stocks to more
than 5% of the portfolio, including Merck (1.7% of the portfolio) and
American Home Products (0.9%).
Technology stocks also offer attractive growth. In computer software and
service, we hold Microsoft (1.2%), the software giant, and Parametric
Technology (0.5%). We nearly tripled our holdings in office equipment stocks,
where our holdings include Diebold (1.0%) and Xerox (1.8%).
Reducing financial stocks
We eliminated several bank stocks from the portfolio, taking profits after
the decline in interest rates boosted the value of these holdings. We also
trimmed our holdings in insurance stocks, which did not perform as well as
the overall market.
Overall, we believe the Fund is well positioned for the current market. With
interest rates and inflation low, and earnings growth strong, the outlook for
stocks is generally positive. Even with this year's strong performance, we
see many attractive investment opportunities for the Fund.
Top 10 Stock Positions
(by percentage of net assets)
1 General Electric Electronics giant 2.4%
2 Citicorp Nation's largest bank 2.3%
3 Abbott Laboratories Hospital supply firm 2.3%
4 AT&T Telephone giant 2.2%
5 Du Pont Chemical company 2.1%
6 Philip Morris Tobacco giant 2.1%
7 Wal-Mart National retailer 2.0%
8 Monsanto Chemical company 2.0%
9 Procter & Gamble Personal care company 2.0%
10 SBC Communications Cellular phone service 2.0%
These securities represent an aggregate of 21.4% 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 or in the
text above.
Best and Worst Contributors to Performance
(July 1, 1994 through June 30, 1995)
Best [arrow up]
Viacom
Purchase of Blockbuster Entertainment and Paramount paid off.
L.M. Ericsson Telephone
Demand boomed for this Swedish company's cellular phones.
Citicorp
This leading national bank profited from falling interest rates.
Worst [arrow down]
Grupo Televisa
Weak Mexican market hurt this quality broadcasting company.
Anadarko Petroleum
Volatile energy prices slowed this petroleum producer.
General Motors
Disappointing results for largest U.S. automaker.
2
<PAGE>
MetLife-State Street Research Equity Investment Fund
Investment Portfolio
June 30, 1995
<TABLE>
<CAPTION>
Value
Shares (Note 1)
-------------------------------------------- ----- ------------
<S> <C> <C>
COMMON STOCKS 89.8%
Basic Industries 14.8%
Chemical 5.0%
E.I. du Pont de Nemours & Co. 27,000 $ 1,856,250
Monsanto Co. 19,800 1,784,475
Rohm & Haas Co. 14,300 784,713
------------
4,425,438
------------
Diversified 1.4%
Corning Inc. 39,200 1,283,800
------------
Electrical Equipment 2.4%
General Electric Co. 37,600 2,119,700
------------
Forest Product 0.7%
Champion International Corp. 9,600 500,400
Westvaco Corp. 3,000 132,750
------------
633,150
------------
Machinery 3.5%
Caterpillar, Inc. 14,400 925,200
Fluor Corp. 19,300 1,003,600
Pall Corp. 50,900 1,132,525
------------
3,061,325
------------
Metal & Mining 0.9%
Nucor Corp. 14,800 791,800
------------
Railroad 0.9%
CSX Corp. 10,400 781,300
------------
Total Basic Industries 13,096,513
------------
Consumer Cyclical 15.2%
Automotive 1.1%
Chrysler Corp. 10,000 478,750
Magna International, Inc. Cl. A 11,000 485,375
------------
964,125
------------
Hotel & Restaurant 3.1%
Circus Circus Enterprises, Inc.* 14,300 504,075
Mirage Resorts, Inc.* 41,800 1,280,125
Promus Companies, Inc.* 23,050 898,950
------------
2,683,150
------------
Recreation 3.9%
Comcast Corp. Cl. A 10,600 192,788
Comcast Corp. Cl. A Sp. 36,900 684,956
Walt Disney Co. 22,800 1,268,250
Mattel, Inc. 28,531 741,806
Tele-Communications, Inc. Cl. A* 23,900 560,156
------------
3,447,956
------------
Retail Trade 7.1%
Home Depot, Inc. 40,800 $ 1,657,500
J.C. Penney Company, Inc. 24,400 1,171,200
Office Depot, Inc.* 15,900 447,187
Tandy Corp. 8,800 456,500
Toys "R" Us, Inc.* 24,000 702,000
Wal-Mart Stores, Inc. 67,500 1,805,625
------------
6,240,012
------------
Total Consumer Cyclical 13,335,243
------------
Consumer Staple 19.5%
Business Service 1.5%
First Data Corp. 22,900 1,302,438
------------
Drug 5.1%
American Home Products Corp. 10,800 835,650
Eli Lilly & Co. 10,900 855,650
Merck & Co. 29,800 1,460,200
Pfizer, Inc. 14,600 1,348,675
------------
4,500,175
------------
Food & Beverage 2.3%
Coca-Cola Co. 11,500 733,125
Darden Restaurants, Inc.* 39,000 424,125
PepsiCo., Inc. 19,100 871,437
------------
2,028,687
------------
Hospital Supply 6.0%
Abbott Laboratories 50,000 2,025,000
Columbia/HCA Healthcare Corp.* 18,000 778,500
Healthsource, Inc.* 8,900 311,500
Johnson & Johnson 13,000 879,125
Medtronic, Inc. 4,200 323,925
United Healthcare Corp. 24,500 1,013,688
------------
5,331,738
------------
Personal Care 2.5%
Gillette Co. 10,800 481,950
Procter & Gamble Co. 24,500 1,760,937
------------
2,242,887
------------
Tobacco 2.1%
Philip Morris Companies, Inc. 24,600 1,829,625
------------
Total Consumer Staple 17,235,550
------------
Energy 6.6%
Oil 6.0%
Exxon Corp. 23,300 1,645,562
Louisiana Land & Exploration Co. 18,800 749,650
Phillips Petroleum Co. 30,000 1,001,250
The accompanying notes are an integral part of the financial statements.
3
<PAGE>
Oil (cont'd)
Royal Dutch Petroleum Co. 10,600 $ 1,291,875
Total S.A. Cl. B ADR 21,800 659,450
------------
5,347,787
------------
Oil Service 0.6%
Rowan Companies, Inc.* 61,500 499,688
------------
Total Energy 5,847,475
------------
Finance 9.8%
Bank 3.4%
BankAmerica Corp. 18,200 957,775
Citicorp* 35,200 2,037,200
------------
2,994,975
------------
Financial Service 3.0%
Federal Home Loan Mortgage Corp. 17,200 1,182,500
Federal National Mortgage Association 15,400 1,453,375
------------
2,635,875
------------
Insurance 3.4%
Ace Ltd. 19,100 553,900
AMBAC Inc. 6,900 276,863
American International Group, Inc. 7,500 855,000
American Re Corp.* 20,100 748,725
Chubb Corp. 2,800 224,350
General Re Corp. 2,700 361,462
------------
3,020,300
------------
Total Finance 8,651,150
------------
Science & Technology 16.9%
Aerospace 2.8%
Boeing Co. 18,900 1,183,612
Raytheon Co. 16,500 1,280,813
------------
2,464,425
------------
Computer Software & Service 3.2%
General Motors Corp. Cl. E 20,300 883,050
Informix Corp.* 19,000 482,125
Microsoft Corp.* 11,400 1,030,275
Parametric Technology Corp.* 9,000 447,750
------------
2,843,200
------------
Electronic 4.9%
L.M. Ericsson Telephone Co. Cl. B ADR* 66,400 1,328,000
General Motors Corp. Cl. H 7,000 276,500
Intel Corp. 17,200 1,088,975
Motorola, Inc. 10,300 691,387
Perkin-Elmer Corp. 26,800 951,400
------------
4,336,262
------------
Office Equipment 6.0%
Diebold, Inc. 21,100 $ 917,850
Hewlett-Packard Co. 20,700 1,542,150
International Business Machines Corp. 12,800 1,228,800
Xerox Corp. 13,900 1,629,775
------------
5,318,575
------------
Total Science & Technology 14,962,462
------------
Utility 7.0%
Electric 1.0%
FPL Group, Inc. 21,800 842,025
------------
Telephone 6.0%
AirTouch Communications, Inc.* 42,800 1,219,800
AT&T Corp. 37,200 1,976,250
SBC Communications, Inc. 36,800 1,752,600
Tele Danmark Cl. B ADR* 12,700 355,600
------------
5,304,250
------------
Total Utility 6,146,275
------------
Total Common Stocks (Cost $64,671,426) 79,274,668
------------
</TABLE>
<TABLE>
<CAPTION>
Principal Maturity
Amount Date
- ------------------------------- --------- --------- -----------
<S> <C> <C> <C>
CONVERTIBLE BONDS 2.6%
Equitable Company, Inc. Cv.
Sub. Deb., 6.125% $1,191,000 12/15/2024 1,256,505
Price Co. Cv. Sub. Deb., 5.50% 80,000 2/28/2012 75,000
Time Warner, Inc. Cv. Sub.
Deb., 8.75% 910,000 1/10/2015 947,538
-----------
Total Convertible Bonds (Cost $2,213,060) 2,279,043
-----------
COMMERCIAL PAPER 7.0%
Associates Corp. of North
America, 6.00% 2,517,000 7/03/1995 2,517,000
Commercial Credit Co., 5.92% 3,142,000 7/05/1995 3,142,000
Ford Motor Credit Co., 5.92% 109,000 7/03/1995 109,000
Ford Motor Credit Co., 5.90% 305,000 7/03/1995 305,000
Norwest Financial Inc., 5.90% 160,000 7/03/1995 160,000
-----------
Total Commercial Paper (Cost $6,233,000) 6,233,000
-----------
Total Investments (Cost $73,117,486)--99.4% 87,786,711
Cash and Other Assets, Less Liabilities--0.6% 522,293
-----------
Net Assets--100.0% $88,309,004
===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
4
<PAGE>
MetLife-State Street Research Equity Investment Fund
Investment Portfolio (cont'd)
<TABLE>
<S> <C>
Federal Income Tax Information:
At June 30, 1995, the net unrealized
appreciation of investments based on cost for
Federal income tax purposes of $73,187,612 was
as follows:
Aggregate gross unrealized appreciation for all
investments in which there is an excess of
value over tax cost. $14,808,573
Aggregate gross unrealized depreciation for all
investments in which there is an excess of tax
cost over value. (209,474)
-------------
$14,599,099
=============
</TABLE>
* Nonincome-producing securities.
ADR stands for American Depositary Receipt, representing ownership of
foreign securities.
Statement of Assets and Liabilities
June 30, 1995
<TABLE>
<S> <C>
Assets
Investments, at value (Cost $73,117,486) (Note 1) $87,786,711
Cash 305
Receivable for fund shares sold 1,230,535
Dividends and interest receivable 178,010
Receivable for securities sold 92,648
Receivable from Distributor (Note 3) 33,210
Other assets 22,640
------------
89,344,059
Liabilities
Payable for securities purchased 773,909
Accrued transfer agent and shareholder services
(Note 2) 74,433
Accrued management fee (Note 2) 48,825
Payable for fund shares redeemed 43,559
Accrued distribution fee (Note 5) 12,000
Accrued trustees' fees (Note 2) 6,872
Dividends payable 2,290
Other accrued expenses 73,167
------------
1,035,055
------------
Net Assets $88,309,004
============
Net Assets consist of:
Undistributed net investment income $ 135,113
Unrealized appreciation of investments 14,669,225
Accumulated net realized gain 1,517,874
Shares of beneficial interest 71,986,792
------------
$88,309,004
============
Net Asset Value and redemption price per share of
Class A shares ($31,173,724 / 2,183,290 shares
of beneficial interest) $14.28
==========
Maximum Offering Price per share of Class A shares
($14.28 / .955) $14.95
==========
Net Asset Value and offering price per share of
Class B shares ($5,932,890 / 419,101 shares of
beneficial interest)* $14.16
==========
Net Asset Value, offering price and redemption
price per share of Class C shares ($50,503,260 /
3,540,302 shares of beneficial interest) $14.27
==========
Net Asset Value and offering price per share of
Class D shares ($699,130 / 49,409 shares of
beneficial interest)* $14.15
==========
</TABLE>
* 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.
5
<PAGE>
MetLife-State Street Research Equity Investment Fund
Statement of Operations
For the year ended June 30, 1995
<TABLE>
<S> <C>
Investment Income
Dividends, net of foreign taxes of $15,277 $ 1,278,500
Interest 277,147
-----------
1,555,647
Expenses
Management fee (Note 2) 486,807
Transfer agent and shareholder services (Note 2) 350,453
Custodian fee 108,497
Registration fees 62,925
Reports to shareholders 38,916
Audit fee 32,622
Trustees' fees (Note 2) 16,992
Distribution fee--Class A (Note 5) 124,247
Distribution fee--Class B (Note 5) 49,256
Distribution fee--Class D (Note 5) 6,248
Legal fees 3,935
Miscellaneous 10,251
-----------
1,291,149
Expenses borne by the Distributor (Note 3) (362,010)
-----------
929,139
-----------
Net investment income 626,508
-----------
Realized and Unrealized Gain on Investments
Net realized gain on investments (Notes 1 and 4) 1,524,460
Net unrealized appreciation of investments 11,229,657
-----------
Net gain on investments 12,754,117
-----------
Net increase in net assets resulting from operations $13,380,625
===========
</TABLE>
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
Year ended June 30
-----------------------------
1995 1994
---------------------------------------- ------------- -------------
<S> <C> <C>
Increase (Decrease) in Net Assets
Operations:
Net investment income $ 626,508 $ 166,051
Net realized gain on investments* 1,524,460 2,585,284
Net unrealized appreciation
(depreciation) of investments 11,229,657 (3,189,634)
------------- -------------
Net increase (decrease) resulting from
operations 13,380,625 (438,299)
------------- -------------
Dividend from net
investment income:
Class A (111,024) --
Class C (535,596) --
------------- -------------
(646,620) --
------------- -------------
Distributions from net realized gains:
Class A (778,560) (4,304,262)
Class B (112,505) (134,949)
Class C (859,567) (3,132,084)
Class D (15,072) (78,088)
------------- -------------
(1,765,704) (7,649,383)
------------- -------------
Net increase from fund share
transactions (Note 6) 9,948,321 28,597,010
------------- -------------
Total increase in net assets 20,916,622 20,509,328
Net Assets
Beginning of year 67,392,382 46,883,054
------------- -------------
End of year (including undistributed net
investment income of $135,113 and
$155,225, respectively) $ 88,309,004 $ 67,392,382
============= =============
* Net realized gain for Federal income
tax purposes (Note 1) $ 1,567,315 $ 2,585,405
============= =============
</TABLE>
The accompanying notes are an integral part of the financial statements.
6
<PAGE>
MetLife-State Street Research Equity Investment Fund
Notes to Financial Statements
June 30, 1995
Note 1
MetLife-State Street Research Equity Investment Fund, formerly MetLife-State
Street Equity Investment Fund (the "Fund") is a series of MetLife-State
Street Equity Trust (the "Trust"), which was organized as a Massachusetts
business trust in March, 1986 and is registered under the Investment Company
Act of 1940, as amended, as an open-end management investment company. The
Trust commenced operations in August, 1986. The Trust consists presently of
four separate funds: MetLife-State Street Research Equity Investment Fund,
MetLife-State Street Research Capital Appreciation Fund, MetLife-State Street
Research Equity Income Fund and State Street Research Global Resources Fund.
The Fund offers four classes of shares. Class A shares are subject to an initial
sales charge of up to 4.50% and an annual service fee of 0.25% of average daily
net assets. Prior to March 10, 1995, Class A shares paid annual distribution
and service fees of 0.50% 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. No sales charge is imposed at the time of purchase or
redemption of Class C shares. Class C shares do not pay any distribution or
service fees. 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 Valuation
Values for listed securities reflect final sales 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 closing prices 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. Short-term securities maturing within
sixty days are valued at amortized cost. Other securities, if any, are valued
at their fair value as determined in accordance with established methods
consistently applied.
B. Security Transactions
Security transactions are accounted for on the trade date (date the order to
buy or sell is executed). Realized gains or losses are reported on the basis
of identified cost of securities delivered.
C. Net Investment Income
Interest income is accrued daily as earned. Dividend income is accrued on the
ex-dividend date. The Fund is charged for expenses directly attributable to
it, while indirect expenses are allocated among all funds in the Trust.
D. Dividends
Dividends from net investment income, if any, are declared and paid or
reinvested quarterly. 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.
E. Federal Income Taxes
No provision for Federal income taxes is necessary because 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.
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 0.65% 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.
During the year ended June 30, 1995, the fees pursuant to such agreement
amounted to $486,807.
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 year ended June 30,
1995, the amount of such shareholder servicing and account maintenance expenses
was $154,664.
The fees of the Trustees not currently affiliated with the Adviser amounted
to $16,992 during the year ended June 30, 1995.
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 year ended June 30, 1995, the amount of such expenses assumed by the
Distributor and its affiliates was $362,010.
7
<PAGE>
Note 4
For the year ended June 30, 1995, purchases and sales of securities, exclusive
of short-term obligations, aggregated $40,614,076 and $33,532,680, 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, as amended. 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. Prior to March 10, 1995, the Fund paid an annual distribution
fee of 0.25% of average daily net assets for Class A 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 year ended June 30, 1995, fees
pursuant to such plan amounted to $124,247, $49,256 and $6,248 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 $9,124 and $61,338, respectively on sales of Class A shares of the
Fund during the year ended June 30, 1995, and that MetLife Securities, Inc.
earned commissions aggregating $57,654 on sales of Class B shares, and that the
Distributor collected contingent deferred sales charges of $18,766 and $260 on
redemptions of Class B and Class D shares, respectively during the same period.
Note 6
The Trustees have the authority to issue an unlimited number of shares of
beneficial interest, $.001 par value per share. At June 30, 1995, Metropolitan
owned 40,952 Class D shares of the Fund and the Distributor owned 3,603 Class A
shares of the Fund.
Share transactions were as follows:
<TABLE>
<CAPTION>
Year ended June 30
---------------------------------------------------
1995 1994
----------------------- ------------------------
<S> <C> <C> <C> <C>
Class A Shares Amount Shares Amount
- -------------------------------------- -------- ----------- -------- ------------
Shares sold 348,182 $ 4,474,313 701,787 $ 9,391,518
Issued upon reinvestment of:
Distributions from net realized gains 60,210 746,003 326,568 4,203,916
Dividend from net investment income 7,369 105,228 -- --
Shares repurchased (630,567) (8,019,412) (485,491) (6,490,962)
-------- ----------- -------- ------------
Net increase (decrease) (214,806) $ (2,693,868) 542,864 $ 7,104,472
======== =========== ======== ============
Class B Shares Amount Shares Amount
- -------------------------------------- -------- ----------- -------- ------------
Shares sold 147,104 $ 1,868,350 331,579 $ 4,391,724
Issued upon reinvestment of
distributions from net realized gains 9,061 111,547 10,458 134,629
Shares repurchased (63,119) (791,085) (61,636) (856,953)
-------- ----------- -------- ------------
Net increase 93,046 $ 1,188,812 280,401 $ 3,669,400
======== =========== ======== ============
Class C Shares Amount Shares Amount
- -------------------------------------- -------- ----------- -------- ------------
Shares sold 1,589,454 $ 20,294,474 1,535,586 $20,225,914
Issued upon reinvestment of:
Distributions from net realized gains 69,042 859,569 243,304 3,132,093
Dividend from net investment income 24,036 342,993 -- --
Shares repurchased (784,881) (10,102,310) (431,626) (5,675,170)
-------- ----------- -------- ------------
Net increase (decrease) 897,651 $ 11,394,726 1,347,264 $17,682,837
======== =========== ======== ============
Class D Shares Amount Shares Amount
- -------------------------------------- -------- ----------- -------- ------------
Shares sold 5,152 $ 64,522 4,702 $ 62,348
Issued upon reinvestment of
distributions from net realized gains 1,172 14,429 6,065 77,953
Shares repurchased (1,525) (20,300) -- --
-------- ----------- -------- ------------
Net increase 4,799 $ 58,651 10,767 $ 140,301
======== =========== ======== ============
</TABLE>
8
<PAGE>
Financial Highlights
For a share outstanding throughout each year.
<TABLE>
<CAPTION>
Class A Class B
----------------------------------------------- ---------------------------------
June 1, 1993
(Commencement
Year ended June 30 Year ended June 30 of Share Class
----------------------------------------------- ---------------- Designations) to
1995** 1994 1993 1992 1991 1995** 1994 June 30, 1993
- ---------------------------------------- ------ ------ ------ ------ ------- ------ ------ -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year $ 12.44 $ 14.52 $ 13.16 $ 11.19 $ 12.15 $12.36 $14.51 $14.78
Net investment income (loss)* .08 .01 .04 .05 .14 .01 (.02) .00
Net realized and unrealized gain (loss)
on investments 2.14 .18 2.48 1.99 (.89) 2.12 .14 (.26)
Distributions from net investment income (.05) -- (.04) (.07) (.19) -- -- (.01)
Distributions from net realized gains (.33) (2.27) (1.12) -- (.02) (.33) (2.27) --
------ ------ ------ ------ ------- ------ ------ -------------
Net asset value, end of year $14.28 $12.44 $14.52 $13.16 $11.19 $14.16 $12.36 $14.51
====== ====== ====== ====== ======= ====== ====== =============
Total return 18.34%+ 0.93%+ 20.37%+ 18.27%+ (6.10)%+ 17.70%+ 0.37%+ (1.77)%+++
Net assets at end of year (000s) $31,174 $29,821 $26,933 $48,473 $35,733 $5,933 $4,029 $663
Ratio of operating expenses to average
net assets* 1.42% 1.50% 1.50% 1.50% 1.50% 2.00% 2.00% 2.00%++
Ratio of net investment income (loss) to
average net assets* 0.64% 0.08% 0.23% 0.43% 1.29% 0.08% (0.39)% 0.03%++
Portfolio turnover rate 47.93% 62.93% 92.35% 81.89% 72.03% 47.93% 62.93% 92.35%
*Reflects voluntary assumption of fees
or expenses per share in each year
(Note 3). $.06 $.04 $.02 $.02 $.03 $.06 $.04 $.00
</TABLE>
<TABLE>
<CAPTION>
Class C Class D
--------------------------------------- ----------------------------------------
June 1, 1993 June 1, 1993
(Commencement (Commencement
Year ended June 30 of Share Class Year ended June 30 of Share Class
------------------ Designations) to ------------------ Designations) to
1995** 1994 June 30, 1993 1995** 1994 June 30, 1993
- ----------------------------------------- ------- ------- ----------------- ------- ------- ------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year $12.48 $14.51 $14.78 $12.36 $14.51 $14.78
Net investment income (loss)* .14 .07 (.00) .01 (.05) .00
Net realized and unrealized gain (loss)
on investments 2.15 .17 (.25) 2.11 .17 (.26)
Dividends from net investment income (.17) -- (.02) -- -- (.01)
Distributions from net realized gains (.33) (2.27) -- (.33) (2.27) --
------- ------- ----------------- ------- ------- ------------------
Net asset value, end of year $14.27 $12.48 $14.51 $14.15 $12.36 $14.51
======= ======= ================= ======= ======= ==================
Total return 18.83%+ 1.41%+ (1.69)%+++ 17.53%+ 0.45%+ (1.77)%+++
Net assets at end of year (000s) $50,503 $32,991 $18,796 $699 $551 $491
Ratio of operating expenses to
average net assets* 1.00% 1.00% 1.00%++ 2.00% 2.00% 2.00%++
Ratio of net investment income (loss) to
average net assets* 1.09% 0.59% (0.39)%++ 0.08% (0.41)% 0.12%++
Portfolio turnover rate 47.93% 62.93% 92.35% 47.93% 62.93% 92.35%
*Reflects voluntary assumption of fees or
expenses per share in each year (Note 3). $.06 $.06 $.00 $.06 $.06 $.00
</TABLE>
**Per-share figures have been calculated using the average shares method.
++Annualized
+Total return figures do 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.
+++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.
9
<PAGE>
Report of Independent Accountants
To the Trustees of MetLife-State Street
Equity Trust and the Shareholders of
MetLife-State Street Research Equity Investment Fund
In our opinion, the accompanying statement of assets and liabilities,
including the investment portfolio, and the related statements of operations
and of changes in net assets and the financial highlights present fairly, in
all material respects, the financial position of MetLife-State Street
Research Equity Investment Fund (formerly MetLife-State Street Equity
Investment Fund) (a series of MetLife-State Street Equity Trust, hereafter
referred to as the "Trust") at June 30, 1995, and the results of its
operations, the changes in its net assets and the financial highlights for
the periods indicated, in conformity with generally accepted accounting
principles. These financial statements and financial highlights (hereafter
referred to as "financial statements") are the responsibility of the Trust's
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these financial
statements in accordance with generally accepted auditing standards which
require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements, assessing the accounting
principles used and significant estimates made by management, and evaluating
the overall financial statement presentation. We believe that our audits,
which included confirmation of securities at June 30, 1995 by correspondence
with the custodian and brokers and the application of alternative auditing
procedures where confirmations from brokers were not received, provide a
reasonable basis for the opinion expressed above.
Price Waterhouse LLP
Boston, Massachusetts
August 4, 1995
10
<PAGE>
MetLife-State Street Research Equity Investment Fund
Management's Discussion of Fund Performance
Equity Investment Fund trailed the average total return for Lipper Analytical
Services' growth and income fund category for the 12 months ended June 30,
1995 (does not reflect sales charge).
We have worked to improve the quality and consistency of the Fund's portfolio
over time. In many industries, we sold smaller or more volatile stocks and
replaced them with larger-company stocks. We also added more income to the
portfolio by adding larger, dividend-paying stocks and by investing in
convertible bonds.
In response to the slowing economy, we reduced the Fund's holdings in
cyclical stocks, particularly in automotive, recreation (TV and broadcasting)
and retail stocks. However, because of their attractive prospects, we added
to holdings in gaming and forest products stocks. We also targeted stocks we
believe offer potential even if the economy slows, such as drug stocks.
The decline in interest rates in 1995 benefited most finance stocks and we
sold some of our holdings. Bank stocks performed particularly well. Insurance
stocks did not perform as well.
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 index is unmanaged and does not take sales charges
into consideration. Direct investment in the index is not possible; results
are for illustrative purposes only.
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.
Performance for a class includes periods prior to the adoption of class
designations in 1993. Performance reflects up to a maximum 4.5% front-end
sales charge or 5% contingent deferred sales charge. "C" shares, offered
without a sales charge, are available only to certain employee benefit plans
and institutions. Performance for "B" and "D" shares prior to class
designations in 1993 reflects annual 12b-1 fees of .50% and subsequent
performance reflects annual 12b-1 fees of 1%.
Comparison Of Change In Value Of
A $10,000 Investment In Equity
Investment Fund and The S&P 500
Class A Shares
Average Annual Total Return
1 Year 5 Years Life of Fund
+13.01% +8.80% +10.19%
8/86 9550 10000
6/87 11760.1 12605.6
6/88 10952.5 11730.2
6/89 12690.4 14135.1
6/90 14789 16462.6
6/91 13887.3 17678.8
6/92 16423.8 20048.4
6/93 19769.4 22779.9
6/94 19953.5 23099.6
6/95 23612.3 29112.4
Class B
Average Annual Total Return
1 Year 5 Years Life of Fund
+12.70% +9.27% +10.62%
8/86 10000 10000
6/87 12314.2 12605.6
6/88 11468.5 11730.2
6/89 13288.4 14135.1
6/90 15485.9 16462.6
6/91 14541.7 17678.8
6/92 17197.7 20048.4
6/93 20685.3 22779.9
6/94 20761.2 23099.6
6/95 24436.3 29112.4
Class C
Average Annual Total Return
1 Year 5 Years Life of Fund
+18.83% +10.00% +10.87%
8/86 10000 10000
6/87 12314.2 12605.6
6/88 11468.5 11730.2
6/89 13288.4 14135.1
6/90 15485.9 16462.6
6/91 14541.7 17678.8
6/92 17197.7 20048.4
6/93 20700.9 22779.9
6/94 20991.8 23099.6
6/95 24945.1 29112.4
Class D
Average Annual Total Return
1 Year 5 Years Life of Fund
+16.53% +9.54% +10.61%
8/86 10000 10000
6/87 12314.2 12605.6
6/88 11468.5 11730.2
6/89 13288.4 14135.1
6/90 15485.9 16462.6
6/91 14541.7 17678.8
6/92 17197.7 20048.4
6/93 20683.8 22779.9
6/94 20776.6 23099.6
6/95 24417.9 29112.4
[Key to charts:
solid line = Equity Investment Fund
dashed line = S&P 500]
11
<PAGE>
MetLife-State Street Research Equity Investment Fund
Fund Information, Officers and Trustees of MetLife-State Street Equity Trust
Fund Information
MetLife-State Street Research
Equity Investment Fund
One Financial Center
Boston, MA 02111
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
Goodwin, Procter & Hoar
Exchange Place
Boston, MA 02109
Independent Accountants
Price Waterhouse LLP
160 Federal Street
Boston, MA 02110
Officers
Ralph F. Verni
Chairman of the Board,
President and Chief
Executive Officer
Peter C. Bennett
Vice President
Bartlett R. Geer
Vice President
Frederick R. Kobrick
Vice President
Thomas P. Moore, Jr.
Vice President
Daniel J. Rice III
Vice President
Steven P. Somes
Vice President
Gerard P. Maus
Treasurer
Joseph W. Canavan
Assistant Treasurer
Douglas A. Romich
Assistant Treasurer
Francis J. McNamara, III
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
Edward M. Lamont
Formerly in banking (Morgan
Guaranty Trust Company of
New York); presently engaged in
private investments and civic affairs
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
Toby Rosenblatt
President,
The Glen Ellen Company
Vice President,
Founders Investments Ltd.
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
12
<PAGE>
[back cover]
MetLife-State Street Research Equity Investment Fund Bulk Rate
One Financial Center U.S. Postage
Boston, MA 02111 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 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: 2513-950818(0996)SSR-LD
Cover illustration by Dorothy Cullinan
EIV-382D-895
<PAGE>
(Start of Equity Income Fund)
[cover]
[State Street logo] STATE STREET RESEARCH
METLIFE-STATE STREET RESEARCH
EQUITY INCOME FUND
ANNUAL REPORT [picture of man climbing mountains
June 30, 1995 and looking at stars]
WHAT'S INSIDE
New and Improved:
A new design that's
easier to read
From the Chairman:
The markets have
come full circle
Portfolio Manager's Review:
Strong performance
with moderate risk
Fund Information:
Facts and figures
Plus, Complete Portfolio Holdings
and Financial Statements
<PAGE>
From the Chairman
[Picture of Ralph F. Verni]
To Our Shareholders:
For investors, events have now come full circle. Last year, the Federal
Reserve raised rates repeatedly to slow the booming U.S. economy. Today, the
economy has slowed to the point that the Fed actually cut interest rates
slightly on July 6.
This turnabout makes all the difference in your mutual fund's short-term
performance. The Fed's rate hikes hurt your Fund in 1994. Falling interest
rates and strong corporate earnings have made 1995 the best year for stock
mutual funds since 1991.
Stocks have been the investment of choice this year. The Standard & Poor's
500 Index gained more than 26% in the 12 months ended June 30, 1995, with
nearly all of these gains occurring in 1995.(1) The biggest gainers were
technology and financial stocks. Large-company stocks continue to outperform
small-and medium-capitalization stocks, although the lead is narrowing.
Bond performance has also been outstanding. The combination of low inflation
and a slowing economy is a very positive environment for bonds. U.S. Treasury
securities performed strongly, as they respond better to falling interest
rates than other types of bonds. Municipal bonds, high-yield bonds and
mortgage securities also performed well.
We believe the investment outlook is positive, especially now that the Fed
has lowered interest rates. One concern is that the economy could slow too
quickly and plunge into recession. In addition, after such strong
performance, it's always possible for the markets to experience declines.
Regardless, we think the best policy is to maintain a long-term outlook and
remain invested.
Thank you again for investing with State Street Research.
Sincerely,
[Ralph F.Verni signature]
Ralph F. Verni
Chairman
July 31, 1995
(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 index is unmanaged and does not take sales charges into
consideration. Direct investment in the index is not possible; results are
for illustrative purposes only.
(2) +15.43% for Class B shares; +16.64% for Class C shares; +15.33% for
Class D shares.
(3) Investment result is based on a $10,000 investment in Class A shares at
the maximum sales charge of 4.5% with reinvestment of capital gain
distributions and income dividends. No adjustment has been made for income
taxes payable by shareholders on income dividends or capital gain
distributions.
(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) Performance for a class includes periods prior to the adoption of class
designations in 1993. Performance reflects up to a maximum 4.5% front-end
sales charge or 5% contingent deferred sales charge. "C" shares, offered
without a sales charge, are available only to certain employee benefit plans
and institutions. Performance for "B" and "D" shares prior to class
designations in 1993 reflects annual 12b-1 fees of .50% and subsequent
performance reflects annual 12b-1 fees of 1%.
Fund Performance (all data are for periods ended June 30, 1995)
Total value of $10,000 invested on August 25, 19863(3))
(Class A shares, at maximum applicable sales charge)
[typeset representation of mountain chart]
<TABLE>
<CAPTION>
<S> <C>
8/86 9,550
6/87 10,832
6/88 10,569
6/89 12,351
6/90 13,768
6/91 12,903
6/92 14,814
6/93 18,037
6/94 18,815
6/95 21,850
</TABLE>
SEC Average Annual Compound Rates of Return
(at maximum applicable sales charge)(4,5)
<TABLE>
<CAPTION>
Life of Fund
(since 8/25/86) 5 years 1 year
<S> <C> <C> <C>
Class A +9.23% +8.63% +10.90%
Class B +9.63% +9.08% +10.43%
Class C +9.89% +9.83% +16.64%
Class D +9.62% +9.34% +14.33%
</TABLE>
Cumulative Total Returns
(do not reflect sales charge)(4)
<TABLE>
<CAPTION>
Life of Fund
(since 5
8/25/86) years 1 year
<S> <C> <C> <C>
Class A +128.49% +58.37% +16.12%
Class B +125.69% +56.43% +15.43%
Class C +130.57% +59.81% +16.64%
Class D +125.47% +56.28% +15.33%
</TABLE>
Asset Allocation
(by percentage of net assets)
[pie chart]
<TABLE>
<CAPTION>
<S> <C>
Convertible bonds 3%
Bonds 13%
Preferred stocks 13%
Stocks 71%
</TABLE>
<PAGE>
Portfolio Manager's Review
[picture of Bartlett R. Geer]
Bartlett R. Geer
Portfolio Manager
The strong stock and bond markets had a big impact on Equity Income Fund. For
the 12 months ended June 30, 1995, Class A shares of the Fund provided a
total return of +16.12% (does not reflect sales charge). The Fund's
performance slightly bettered the +15.89% average total return for 109 funds
in Lipper Analytical Services' equity income fund category (does not reflect
sales charges).
Equity Income Fund and funds like it trailed the stock market's return over
the past year. Equity Income Fund is conservatively managed and holds
approximately 16% of its portfolio in corporate and convertible bonds. Bonds
have performed well in 1995, but they have not kept pace with stocks.
A diversified portfolio
We diversify the portfolio to moderate risk. In addition to stocks, we invest
in corporate and convertible bonds, which provide more income and tend to
offer less price fluctuation than stocks. We also select our stock holdings
on a value basis--targeting stocks that are available at attractive prices
relative to certain indicators, such as cash flow or asset value.
Chemicals and paper
Even though the economy appears to be slowing down, we believe certain
cyclical stocks will continue to perform well. For example, paper prices have
risen rapidly despite low inflation. As a result, we hold forest products
stocks such as Champion International (0.8%) and James River (0.3%). We more
than doubled our position in chemical stocks, where we own Atlantic Richfield
(2.5%) and DuPont (0.3%).
Retail and recreation
One of our largest industry position is in retail stocks, which we began to
emphasize late in 1994 after retail stocks declined sharply. Woolworth, the
national discount chain, is one of our top ten holdings at 2.2% of the
portfolio. We see opportunity in recreation holdings as well, especially
broadcasting companies. We own preferred stock issued by Granite Broadcasting
(3.2%), a network of television stations, and Pyramid Communications (0.5%).
Technology and finance
Equity Income Fund also participated in the two strongest sectors of the
market: technology and finance. In technology, our focus is on aerospace,
including Boeing (2.1%) and Honeywell (0.9%), and electronics stocks, such as
Tektronix (2.3%) and Thomas and Betts (0.8%). Financial stocks performed
poorly last year when interest rates rose, but recovered in 1995 as rates
declined. Our financial holdings were concentrated in insurance stocks.
With interest rates and inflation low, and earnings growth strong, the
outlook for stocks is generally positive. If the economy continues to slow,
we would expect to gradually reduce the Fund's cyclical exposure--provided
non-cyclical stocks offer sufficient value.
Top 10 Holdings
(by percentage of net assets)
1 Granite Broadcasting Television station network 3.2%
2 Computervision Computer software firm 3.0%
3 Atlantic Richfield Chemical company 2.5%
4 Tektronix Electronics company 2.3%
5 ENSERCH Natural gas company 2.3%
6 Woolworth National discount retailer 2.2%
7 Boeing Aerospace company 2.1%
8 Louisiana Land & Exploration Oil company 2.1%
9 Perkin-Elmer Electronics firm 2.0%
10 Federal Home Loan Mtg. Finance company 1.9%
These securities represent an aggregate of 23.6% 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 or in the
text above.
Best and Worst Contributors to Performance
(July 1, 1994 through June 30, 1995)
Best [arrow up]
Computervision
Strong profit gains for software company.
Potash Corp. of Saskatchewan
Company benefited from boom in fertilizer prices.
Granite Broadcasting
Strong performance for this regional TV network.
Worst [arrow down]
La Petite
Disappointing results for child-care centers.
Woolworth
Disappointing results for discount retailer.
WHX
Steelmaker's diversification efforts were not well-received.
2
<PAGE>
MetLife-State Street Research Equity Income Fund
Investment Portfolio
June 30, 1995
<TABLE>
<CAPTION>
Value
Shares (Note 1)
- ---------------------------------------------- --------- ----------
<S> <C> <C>
Common Stocks 70.6%
Basic Industries 21.2%
Chemical 8.6%
Atlantic Richfield Co. 87,600 $ 2,277,600
E.I. du Pont de Nemours and Co. 3,500 240,625
FMC Corp.* 24,000 1,614,000
Monsanto Co. 8,400 757,050
Potash Corp. of Saskatchewan, Inc. 29,000 1,620,375
PPG Industries, Inc. 13,000 559,000
Rohm & Haas Co. 11,100 609,113
----------
7,677,763
----------
Diversified 2.6%
Coltec Industries, Inc.* 49,000 845,250
Corning, Inc. 25,000 818,750
Johnson Controls, Inc. 12,000 678,000
----------
2,342,000
----------
Forest Product 2.3%
Bowater, Inc. 11,200 502,600
Champion International Corp. 13,300 693,262
James River Corp. 10,000 276,250
Westvaco Corp. 14,000 619,500
----------
2,091,612
----------
Machinery 3.7%
CBI Industries, Inc. 63,100 1,585,388
Cincinnati Milacron, Inc. 9,000 243,000
Cooper Industries, Inc. 4,000 158,000
Harsco Corp. 4,000 211,000
Sundstrand Corp. 19,000 1,135,250
----------
3,332,638
----------
Metal & Mining 3.9%
Alumax, Inc.* 20,000 622,500
Cyprus Amax Minerals Co. 53,000 1,510,500
Quanex Corp.* 40,000 990,000
Timken Co. 9,000 415,125
----------
3,538,125
----------
Railroad 0.1%
Southern Pacific Rail Corp.* 3,000 47,250
----------
Total Basic Industries 19,029,388
----------
Consumer Cyclical 11.5%
Automotive 2.5%
Exide Corp. 20,000 860,000
Lear Seating Corp.* 60,000 1,372,500
----------
2,232,500
----------
Building 0.5%
Fleetwood Enterprises Inc. 23,000 454,250
----------
Hotel & Restaurant 0.1%
Motels of America, Inc.+* 500 $ 35,000
----------
Recreation 0.0%
Pyramid Communications, Inc. Cl. B+* 525 23,550
----------
Retail Trade 8.4%
Federated Department Stores 14,100 363,075
Finlay Enterprises, Inc. Cl. A* 667 9,421
May Department Stores Co. 10,000 416,250
Penn Traffic Co.* 23,800 841,925
J.C. Penney, Inc. 29,800 1,430,400
Stop & Shop Cos., Inc.* 39,600 1,014,750
Tandy Corp. 28,000 1,452,500
Vons Companies, Inc.* 2,500 50,313
Woolworth Corp. 130,800 1,978,350
----------
7,556,984
----------
Total Consumer Cyclical 10,302,284
----------
Consumer Staple 4.0%
Business Service 0.1%
Vestar/LPA Investment Corp.+* 3,125 46,875
----------
Container 0.7%
Ball Corp. 18,300 638,213
----------
Drug 0.5%
Merck & Company, Inc. 9,200 450,800
----------
Food & Beverage 1.6%
Coca-Cola Enterprises, Inc. 60,000 1,312,500
Darden Restaurants, Inc.* 7,000 76,125
----------
1,388,625
----------
Printing & Publishing 1.1%
American Greetings Corp. Cl. A 15,500 455,313
Deluxe Corp. 15,000 496,875
Dimac Corp.* 4,756 71,340
----------
1,023,528
----------
Total Consumer Staple 3,548,041
----------
Energy 5.8%
Oil 5.8%
Crystal Oil Corp.* 4,200 129,150
Louisiana Land & Exploration Co. 46,600 1,858,175
Mitchell Energy & Development Corp. Cl. B 18,000 321,750
Oryx Energy Co.* 9,100 125,125
Phillips Petroleum Co. 38,200 1,274,925
Tosco Corp. 45,000 1,434,375
Ultramar Corp. 3,600 90,900
----------
5,234,400
----------
Total Energy 5,234,400
----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
3
<PAGE>
MetLife-State Street Research Equity Income Fund
<TABLE>
<CAPTION>
Value
Shares (Note 1)
- ---------------------------------------------- --------- ----------
<S> <C> <C>
Finance 9.6%
Bank 0.6%
Chase Manhattan Corp. 5,000 $ 235,000
Mellon Bank Corp. 6,600 274,725
West One Bancorp 1,000 33,375
----------
543,100
----------
Financial Service 2.6%
Federal Home Loan Mortgage Corp. 25,000 1,718,750
Federal National Mortgage Association 7,000 660,625
----------
2,379,375
----------
Insurance 6.4%
Ace, Ltd. 38,100 1,104,900
AMBAC Industries, Inc. 21,900 878,738
American Re Corp.* 39,600 1,475,100
Mid Ocean Ltd.* 30,000 948,750
Progressive Corp. 7,000 268,625
Safeco Corp. 18,000 1,033,875
----------
5,709,988
----------
Total Finance 8,632,463
----------
Science & Technology 13.4%
Aerospace 3.9%
Boeing Co. 30,000 1,878,750
Honeywell, Inc. 18,100 780,563
Sequa Corp. Cl. A 30,000 877,500
----------
3,536,813
----------
Computer Software & Service 3.0%
Computervision Corp. 400,000 2,650,000
----------
Electronic 6.3%
AMP, Inc. 24,600 1,039,350
Perkin-Elmer Corp. 50,000 1,775,000
Tektronix, Inc. 42,000 2,068,500
Thomas & Betts Corp. 10,900 745,288
----------
5,628,138
----------
Office Equipment 0.2%
Diebold, Inc. 4,300 187,050
----------
Total Science & Technology 12,002,001
----------
Utility 5.1%
Natural Gas 3.6%
Coastal Corp. 13,000 394,875
ENSERCH Corp. 120,400 2,061,850
Trans Texas Gas Corp.* 49,100 742,638
----------
3,199,363
----------
Telephone 1.5%
Sprint Corp. 38,000 $ 1,320,500
----------
Total Utility 4,519,863
----------
Total Common Stocks (Cost $53,854,476) 63,268,440
----------
PREFERRED STOCKS & OTHER 13.4%
Anacomp, Inc. Wts.* 908,099 340,537
Ashland Oil Inc. Cum. Cv. Pfd. 18,000 1,037,250
Boomtown, Inc. Wts.* 250 125
Color Tile, Inc. Pfd.* 10,000 30,000
Crown Packaging Holdings Ltd. Wts.*+ 2,000 42,500
Food 4 Less Supermarkets, Inc. Wts.*++ 1,344 50,064
Ford Motor Co. Cum. Cv. Pfd. A 15,000 1,456,875
Lewis Galoob Toys, Inc. Cv. Exch. Pfd.* 62,000 1,085,000
Geneva Steel Co. Series B Exch. Pfd.* 4,000 368,000
Granite Broadcasting Corp. Cum. Cv. Exch. Pfd.* 68,000 2,890,000
Kaiser Aluminum Corp. Cv. Pfd. 37,500 506,250
Kaiser Aluminum Corp. Series A Pfd. 58,300 561,138
La Petite Holdings Co. Cum. Exch. Pfd.* 45,000 832,500
PageMart, Inc. Wts.*+ 3,450 13,800
Pyramid Communications, Inc. Pfd.+ 16,434 410,856
SDW Holdings Corp. Wts.*+ 27,000 162,000
S.D. Warren Co. Series B Sr. Exch. Pfd.[diamond] 27,000 756,000
Sheffield Steel Corp. Wts.* 2,500 7,500
Supermarkets General Holding Corp. Exch.
Pfd.[diamond] 55,000 1,485,000
----------
Total Preferred Stocks (Cost $11,604,478) 12,035,395
----------
</TABLE>
<TABLE>
<CAPTION>
Principal Maturity
Amount Date
- ---------------------------------- --------- --------- ----------
<S> <C> <C> <C>
CONVERTIBLE BONDS 3.0%
Anacomp International N.V. Cv.
Sub. Deb., 9.00% $650,000 1/15/1996 331,500
Rohr, Inc. Cv. Sub. Note, 7.75% 650,000 5/15/2004 949,000
West One Bancorp. Cv. Sub. Deb.,
7.75% 840,000 6/30/2006 1,428,000
----------
Total Convertible Bonds (Cost $2,122,649) 2,708,500
----------
NON-CONVERTIBLE BONDS 12.6%
Anacomp Inc. Sr. Sub. Note, 15.00% 250,000 11/01/2000 192,500
Bayou Steel Corp. First Mortgage
Note, 10.25% 150,000 3/01/2001 139,500
Belle Casinos, Inc. First Mortgage
Notes, 12.00%+[open box] 175,000 10/15/2000 52,500
Boomtown, Inc. First Mortgage
Note, 11.50% 250,000 11/01/2003 220,000
Celcaribe S.A. Units, 0.00% to
3/14/98, 13.50% from 3/15/98 to
maturity+ 43,000 3/15/2004 365,500
</TABLE>
The accompanying notes are an integral part of the financial statements.
4
<PAGE>
MetLife-State Street Research Equity Income Fund
Investment Portfolio (cont'd)
<TABLE>
<CAPTION>
Principal Maturity Value
Amount Date (Note 1)
- --------------------------------- --------- --------- ----------
<S> <C> <C> <C>
Non-Convertible Bonds (cont'd)
Computervision Corp. Sr. Sub.
Notes, 11.375% $ 250,000 8/15/1999 $ 230,000
Crown Packaging Holdings Ltd. Sr.
Sub. Notes, 0.00% to 10/31/2000,
12.25% from 11/1/2000 to maturity 2,000,000 11/01/2003 915,000
Dual Drilling Co. Sr. Sub. Notes,
9.875% 400,000 1/15/2004 374,500
Finlay Enterprises, Inc. Sr.
Disc. Deb., 0.00% to 4/30/98,
12.00% from 5/1/98 to maturity 250,000 5/01/2005 165,000
Granite Broadcasting Corp. Sr.
Sub. Deb., 12.75% 500,000 9/01/2002 537,500
Haynes International, Inc. Sr.
Sec. Notes, 11.25% 800,000 6/15/1998 759,200
Heartland Wireless
Communications, Inc. Units,
13.00%+ 250,000 4/15/2003 264,375
Horsehead Industries Sub. Note,
14.00% 250,000 6/01/1999 255,625
Marcus Cable Capital Co. Sr.
Disc. Note, 0.00% to 7/31/99,
13.50% from 8/1/99 to maturity 100,000 8/01/2004 63,250
Motels of America, Inc. Sr. Sub.
Notes, 12.00% 500,000 4/15/2004 502,500
PageMart, Inc. Sr. Disc. Notes,
0.00% to 10/31/98, 12.25% from
11/1/98 to maturity 750,000 11/01/2003 474,375
PageMart Nationwide, Inc. Units,
0.00% to 1/31/2000, 15.00% from
2/1/2000 to maturity+ 500,000 2/01/2005 301,250
Presidio Oil Co. Sr. Sub. Indexed
Notes, 14.05%[open box] 400,000 7/15/2002 360,000
Presidio Oil Co. Sr. Sec. Notes,
11.50%[open box] 650,000 9/15/2000 617,500
Ralphs Grocery Co. Sr. Note,
10.45% 1,000,000 6/15/2004 1,000,000
Seven-Up/RC Bottling Co. of
Southern California, Inc., 11.50% 250,000 8/01/1999 220,000
Sheffield Steel Corp. First
Mortgage Note, 12.00% 500,000 11/01/2001 470,000
Sullivan Graphics, Inc., 15.00% 650,000 2/01/2001 689,000
U.S.A. Mobile Communications,
Inc. Sr. Notes, 14.00% $ 750,000 11/01/2004 $ 832,500
Viatel, Inc. Sr. Disc. Units,
0.00% to 1/14/2000, 15.00% from
1/15/2000 to maturity+ 75,000 1/15/2005 487,500
Wilrig A.S. Sr. Sec. Notes,
11.25% 750,000 3/15/2004 772,500
----------
Total Non-Convertible Bonds (Cost $11,496,505) 11,261,575
----------
COMMERCIAL PAPER 1.1%
American Express Credit Corp.,
5.85% 458,000 7/05/1995 458,000
American Express Credit Corp.,
5.80% 440,000 7/06/1995 440,000
Household Finance Corp., 5.95% 102,000 7/10/1995 102,000
----------
Total Commercial Paper (Cost $1,000,000) 1,000,000
----------
Total Investments (Cost $80,078,108)--100.7% 90,273,910
Cash and Other Assets, Less Liabilities--(0.7)% (623,896)
----------
Net Assets--100.0% $89,650,014
==========
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
Federal Income Tax Information:
At June 30, 1995, the net unrealized appreciation of
investments based on cost for Federal income tax purposes
of $80,130,888 was as follows:
Aggregate gross unrealized appreciation for all
investments in which there is an excess of value over tax
cost $13,543,345
Aggregate gross unrealized depreciation for all
investments in which there is an excess of tax cost over
value (3,400,323)
----------
$10,143,022
==========
</TABLE>
* Nonincome-producing securities.
[diamond] Payments of income may be made in cash or in the form of additional
securities.
++ Security valued under consistently applied procedures established by the
Trustees. Security restricted as to public resale. At June 30, 1995, there
were no outstanding unrestricted securities of the same class as those held.
The total cost and market value of restricted securities owned at June 30,
1995 was $0 and $50,064 (0.1% of net assets), respectively.
+ Security restricted in accordance with Rule 144A under the Securities Act
of 1933, which allows for the resale of such securities among certain
qualified institutional buyers. The total cost and market value of Rule 144A
securities owned at June 30, 1995 was $2,124,525 and $2,205,706 (2.5% of net
assets), respectively.
[open box] Security is in default.
The accompanying note are an integral part of the financial statements.
5
<PAGE>
MetLife-State Street Research Equity Income Fund
Statement of Assets and Liabilities
June 30, 1995
<TABLE>
<CAPTION>
<S> <C>
Assets
Investments, at value (Cost $80,078,108) (Note 1) $90,273,910
Cash 3,367
Receivable for securities sold 1,786,405
Dividends and interest receivable 407,754
Receivable for fund shares sold 43,467
Receivable from Distributor (Note 3) 38,622
Other assets 943
------------
92,554,468
Liabilities
Payable for securities purchased 2,548,321
Accrued transfer agent and shareholder services
(Note 2) 86,325
Payable for fund shares redeemed 59,723
Accrued management fee (Note 2) 50,234
Dividends payable 34,823
Accrued distribution fee (Note 5) 24,012
Accrued trustees' fees (Note 2) 6,730
Other accrued expenses 94,286
------------
2,904,454
------------
Net Assets $89,650,014
============
Net Assets consist of:
Undistributed net investment income $ 322,548
Unrealized appreciation of investments 10,195,802
Accumulated net realized gain 1,165,002
Shares of beneficial interest 77,966,662
------------
$89,650,014
============
Net Asset Value and redemption price per share of
Class A shares ($37,327,119 / 3,189,399 shares of
beneficial interest) $11.70
============
Maximum Offering Price per share of Class A shares
($11.70 / .955) $12.25
============
Net Asset Value and offering price per share of
Class B shares ($16,130,232 / 1,381,341 shares of
beneficial interest)* $11.68
============
Net Asset Value, offering price and redemption
price per share of Class C shares ($34,827,097 /
2,977,684 shares of beneficial interest) $11.70
============
Net Asset Value and offering price per share of
Class D shares ($1,365,566 / 116,997 shares of
beneficial interest)* $11.67
============
</TABLE>
* 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 year ended June 30, 1995
<TABLE>
<CAPTION>
<S> <C>
Investment Income
Dividends, net of foreign taxes of $13,689 $ 1,446,184
Interest 1,731,840
------------
3,178,024
Expenses
Management fee (Note 2) 521,730
Transfer agent and shareholder services (Note 2) 347,078
Custodian fee 120,859
Registration fees 48,026
Reports to shareholders 39,974
Audit fee 32,294
Trustees' fees (Note 2) 15,303
Distribution fee--Class A (Note 5) 169,569
Distribution fee--Class B (Note 5) 134,121
Distribution fee--Class D (Note 5) 13,692
Legal fees 4,299
Miscellaneous 9,867
------------
1,456,812
Expenses borne by the Distributor (Note 3) (333,725)
------------
1,123,087
------------
Net investment income 2,054,937
------------
Realized and Unrealized Gain on Investments
Net realized gain on investments (Notes 1 and 4) 1,155,735
Net unrealized appreciation of investments 9,032,370
------------
Net gain on investments 10,188,105
------------
Net increase in net assets resulting from operations $12,243,042
============
</TABLE>
The accompanying notes are an integral part of the financial statements.
6
<PAGE>
MetLife-State Street Research Equity Income Fund
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
Year ended June 30
---------------------------
<S> <C> <C>
1995 1994
- ------------------------------------- ----------- ------------
Increase (Decrease) in Net Assets
Operations:
Net investment income $ 2,054,937 $ 1,597,466
Net realized gain on investments* 1,155,735 4,575,566
Net unrealized appreciation
(depreciation) of investments 9,032,370 (4,848,144)
----------- ------------
Net increase resulting from
operations 12,243,042 1,324,888
----------- ------------
Dividend from net investment income:
Class A (984,856) (879,098)
Class B (285,324) (103,663)
Class C (808,655) (513,407)
Class D (28,201) (16,964)
----------- ------------
(2,107,036) (1,513,132)
----------- ------------
Distributions from net realized gains:
Class A (2,006,103) (508,404)
Class B (563,723) (61,922)
Class C (1,043,962) (225,556)
Class D (63,626) (11,728)
----------- ------------
(3,677,414) (807,610)
----------- ------------
Net increase from fund share
transactions (Note 6) 10,409,654 27,105,811
----------- ------------
Total increase in net assets 16,868,246 26,109,957
Net Assets
Beginning of year 72,781,768 46,671,811
----------- ------------
End of year (including undistributed
net investment income of $322,548
and $374,647, respectively) $ 89,650,014 $ 72,781,768
=========== ============
* Net realized gain for Federal
income tax purposes (Note 1) $ 1,208,383 $ 4,553,748
=========== ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
Notes to Financial Statements
June 30, 1995
Note 1
MetLife-State Street Research Equity Income Fund, formerly MetLife-State
Street Equity Income Fund (the "Fund") is a series of MetLife-State Street
Equity Trust (the "Trust"), which was organized as a Massachusetts business
trust in March, 1986 and is registered under the Investment Company Act of
1940, as amended, as an open-end management investment company. The Trust
commenced operations in August, 1986. The Trust consists presently of four
separate funds: MetLife-State Street Research Equity Income Fund,
MetLife-State Street Research Capital Appreciation Fund, MetLife-State Street
Research Equity Investment Fund and State Street Research Global Resources
Fund.
The Fund offers four classes of shares. Class A shares are subject to an
initial sales charge of up to 4.50% and an annual service fee of 0.25% of
average daily net assets. Prior to March 10, 1995, Class A shares paid annual
distribution and service fees of 0.50% of average daily net assets.
Investments of $1 million or more in Class A shares, which are not subject to
any initial sales charge, are subject to a 1.00% contingent deferred sales
charge if redeemed within one year of purchase. 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. No sales charge is imposed at the time of purchase or
redemption of Class C shares. Class C shares do not pay any distribution or
service fees. 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 accounting 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 Valuation
Values for listed securities reflect final sales 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 closing prices
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. Fixed income securities
are valued by a pricing service, approved by the Trustees, which utilizes
market transactions, quotations from dealers, and various relationships among
securities in determining value. Short-term securities maturing within sixty
days are valued at amortized cost. Other securities, if any, are valued at
their fair value as determined in accordance with established methods
consistently applied.
The accompanying notes are an integral part of the financial statements.
7
<PAGE>
MetLife-State Street Research Equity Income Fund
B. Security Transactions
Security transactions are accounted for on the trade date (date the order to
buy or sell is executed). Realized gains or losses are reported on the basis
of identified cost of securities delivered.
C. Net Investment Income
Interest income is accrued daily as earned. Dividend income is accrued on the
ex-dividend date. Discount on debt obligations is amortized under the effective
yield method. Certain preferred securities held by the Fund pay dividends in the
form of additional securities (payment-in-kind securities). Dividend income on
payment-in-kind preferred securities is recorded at the market value of
securities received. Differences between the market value of securities received
and the corresponding amounts of income accrued are recorded as adjustments to
income. The Fund is charged for expenses directly attributable to it, while
indirect expenses are allocated among all funds in the Trust.
D. Dividends
Dividends from net investment income are declared and paid or reinvested
quarterly. 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.
E. Federal Income Taxes
No provision for Federal income taxes is necessary because 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.
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 0.65% 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. During the year ended June 30, 1995, the fees pursuant to such
agreement amounted to $521,730.
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 year ended June 30,
1995, the amount of such shareholder servicing and account maintenance expenses
was $152,719.
The fees of the Trustees not currently affiliated with the Adviser amounted
to $15,303 during the year ended June 30, 1995.
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 year ended June 30, 1995, the amount of such expenses
assumed by the Distributor and its affiliates was $333,725.
Note 4
For the year ended June 30, 1995, purchases and sales of securities,
exclusive of short-term obligations, aggregated $60,348,734 and $52,696,221,
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, as amended. 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. Prior to March 10, 1995, the Fund
paid an annual distribution fee of 0.25% of average daily net assets for
Class A 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 year ended June 30, 1995, fees pursuant to such
plan amounted to $169,569, $134,121 and $13,692 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 $11,212 and $72,165, respectively, on sales of shares of Class A
shares of the Fund during the year ended June 30, 1995, and that MetLife
Securities, Inc. earned commissions aggregating $130,203 on sales of Class B
shares, and that the Distributor collected contingent deferred sales charges
of $265, $50,949 and $632 on redemptions of Class A, Class B and Class D
shares, respectively during the same period.
8
<PAGE>
MetLife-State Street Research Equity Income Fund
Notes (cont'd)
Note 6
The Trustees have the authority to issue an unlimited number of shares of
beneficial interest, $.001 par value per share. At June 30, 1995,
Metropolitan owned 49,237 Class D shares of the Fund and the Distributor
owned 3,614 Class A shares of the Fund.
Share transactions were as follows:
<TABLE>
<CAPTION>
Year ended June 30
---------------------------------------------------------------
1995 1994
----------------------------- ------------------------------
Class A Shares Amount Shares Amount
- -------------------------------------------- ------------ ------------ ------------ --------------
<S> <C> <C> <C> <C>
Shares sold 398,649 $ 4,285,947 1,584,700 $18,024,978
Issued upon reinvestment of:
Distributions from net realized gains 179,249 1,907,857 40,997 476,381
Dividends from net investment income 82,151 897,184 71,938 812,948
Shares repurchased (1,195,595) (12,867,093) (659,533) (7,545,419)
------------ ------------ ------------ --------------
Net increase (decrease) (535,546) $ (5,776,105) 1,038,102 $11,768,888
============ ============ ============ ==============
Class B Shares Amount Shares Amount
- -------------------------------------------- ------------ ------------ ------------ --------------
Shares sold 532,548 $ 5,717,454 988,855 $11,262,723
Issued upon reinvestment of:
Distributions from net realized gains 48,954 520,771 5,001 58,066
Dividends from net investment income 23,498 257,756 8,247 91,949
Shares repurchased (213,874) (2,294,678) (110,124) (1,236,154)
------------ ------------ ------------ --------------
Net increase 391,126 $ 4,201,303 891,979 $10,176,584
============ ============ ============ ==============
</TABLE>
<TABLE>
<CAPTION>
Class C Shares Amount Shares Amount
- -------------------------------------------- ------------ ------------ ------------ --------------
<S> <C> <C> <C> <C>
Shares sold 1,452,407 $15,677,247 817,270 $ 9,352,116
Issued upon reinvestment of:
Distributions from net realized gains 98,117 1,043,974 19,415 225,406
Dividends from net investment income 73,413 806,458 45,182 509,180
Shares repurchased (512,040) (5,526,511) (498,017) (5,610,959)
------------ ------------ ------------ --------------
Net increase 1,111,897 $12,001,168 383,850 $ 4,475,743
============ ============ ============ ==============
</TABLE>
<TABLE>
<CAPTION>
Class D Shares Amount Shares Amount
- -------------------------------------------- ------------ ------------ ------------ --------------
<S> <C> <C> <C> <C>
Shares sold 24,855 $ 265,512 71,712 $ 819,093
Issued upon reinvestment of:
Distributions from net realized gains 5,541 58,959 857 9,945
Dividends from net investment income 1,154 12,472 540 6,076
Shares repurchased (32,405) (353,655) (13,472) (150,518)
------------ ------------ ------------ --------------
Net increase (decrease) (855) $ (16,712) 59,637 $ 684,596
============ ============ ============ ==============
</TABLE>
9
<PAGE>
Financial Highlights
For a share outstanding throughout each year.
<TABLE>
<CAPTION>
Class A Class B
----------------------------------------------- ---------------------------------
June 1, 1993
(Commencement of
Year ended June 30 Year ended June 30 Share Class
----------------------------------------------- ---------------- Designations) to
1995** 1994 1993 1992 1991 1995** 1994 June 30, 1993
- ---------------------------------------- ------ ------ ------ ------ ------- ------ ------ -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year $10.87 $10.79 $9.19 $8.33 $9.83 $10.86 $10.79 $10.81
Net investment income* .28 .24 .44 .39 .45 .21 .21 .02
Net realized and unrealized gain
(loss) on investments 1.37 .25 1.52 .83 (1.08) 1.38 .21 (.02)
Dividends from net investment income (.28) (.26) (.36) (.36) (.48) (.23) (.20) (.02)
Distributions from net realized gains (.54) (.15) -- -- (.39) (.54) (.15) --
------ ------ ------ ------ ------- ------ ------ -------------
Net asset value, end of year $11.70 $10.87 $10.79 $9.19 $8.33 $11.68 $10.86 $10.79
====== ====== ====== ====== ======= ====== ====== =============
Total return 16.12%+ 4.30%+ 21.64%+ 14.81%+ (6.51)%+ 15.43%+ 3.79%+ 0.05%+++
Net assets at end of year (000s) $37,327 $40,484 $28,995 $51,585 $45,233 $16,130 $10,752 $1,060
Ratio of operating expenses to average
net assets* 1.42% 1.50% 1.50% 1.50% 1.50% 2.00% 2.00% 2.00%++
Ratio of net investment income to
average net assets* 2.55% 2.42% 3.76% 4.27% 5.30% 1.95% 1.80% 1.53%++
Portfolio turnover rate 67.50% 73.96% 80.42% 102.39% 131.43% 67.50% 73.96% 80.42%
*Reflects voluntary assumption of fees or
expenses per share in each year (Note 3). $.05 $.05 $.01 $.01 $.01 $.05 $.07 $.00
</TABLE>
<TABLE>
<CAPTION>
Class C Class D
------------------------------- --------------------------------
June 1, 1993 June 1, 1993
(Commencement of (Commencement of
Year ended June 30 Share Class Year ended June 30 Share Class
---------------- Designations) to ------------------ Designations) to
1995** 1994 1993 1995** 1994 June 30, 1993
- -------------------------------------------- ------ ------ ----------- ------ ----- -------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year $10.86 $10.79 $10.81 $10.86 $10.79 $10.81
Net investment income* .32 .33 .03 .22 .21 .02
Net realized and unrealized gain (loss) on
investments 1.39 .21 (.02) 1.36 .21 (.02)
Dividends from net investment income (.33) (.32) (.03) (.23) (.20) (.02)
Distributions from net realized gains (.54) (.15) -- (.54) (.15) --
------ ------ ----------- ------ ----- -------------
Net asset value, end of year $11.70 $10.86 $10.79 $11.67 $10.86 $10.79
====== ====== =========== ====== ===== =============
Total return 16.64%+ 4.84%+ 0.14%+++ 15.33%+ 3.78%+ 0.04%+++
Net assets at end of year (000s) $34,827 $20,266 $15,988 $1,366 $1,280 $628
Ratio of operating expenses to average net
assets* 1.00% 1.00% 1.00%++ 2.00% 2.00% 2.00%++
Ratio of net investment income to average
net assets* 2.93% 2.92% 1.65%++ 1.96% 1.88% 1.49%++
Portfolio turnover rate 67.50% 73.96% 80.42% 67.50% 73.96% 80.42%
*Reflects voluntary assumption of fees or
expenses per share in each year (Note 3). $.05 $.06 $.00 $.05 $.06 $.00
</TABLE>
**Per-share figures have been calculated using the average shares method.
++Annualized
+Total return figures do 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.
+++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.
10
<PAGE>
Report of Independent Accountants
To the Trustees of MetLife-State Street
Equity Trust and the Shareholders of
MetLife-State Street Research Equity Income Fund
In our opinion, the accompanying statement of assets and liabilities,
including the investment portfolio, and the related statements of operations
and of changes in net assets and the financial highlights present fairly, in
all material respects, the financial position of MetLife-State Street
Research Equity Income Fund, (formerly MetLife-State Street Equity Income
Fund) (a series of MetLife-State Street Equity Trust, hereafter referred to
as the "Trust") at June 30, 1995, and the results of its operations, the
changes in its net assets and the financial highlights for the periods
indicated, in conformity with generally accepted accounting principles. These
financial statements and financial highlights (hereafter referred to as
"financial statements") are the responsibility of the Trust's management; our
responsibility is to express an opinion on these financial statements based
on our audits. We conducted our audits of these financial statements in
accordance with generally accepted auditing standards which require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which included
confirmation of securities at June 30, 1995 by correspondence with the
custodian and brokers and the application of alternative auditing procedures
where confirmations from brokers were not received, provide a reasonable
basis for the opinion expressed above.
Price Waterhouse LLP
Boston, Massachusetts
August 4, 1995
11
<PAGE>
Management's Discussion of Fund Performance
Equity Income Fund outperformed the average for Lipper Analytical Services'
equity income fund category for the 12 months ended June 30, 1995 (does not
reflect sales charge).
The Fund's portfolio is diversified into corporate and convertible bonds,
which provide more income and tend to offer less price fluctuation than
stocks. Stocks are selected on a value basis.
One of our largest industry positions was in retail stocks, which we began to
emphasize late in 1994 after retail stocks declined sharply. Even though the
economy appears to be slowing down, the Fund has targeted certain cyclical
stocks that could benefit from rising chemical and paper prices.
Equity Income Fund also participated in the two strongest sectors of the
market: technology and finance. In technology, our focus was on aerospace and
electronics stocks. Financial stocks performed poorly last year when interest
rates rose, but recovered in 1995 as rates declined. Our financial holdings
were concentrated in insurance stocks.
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 index is unmanaged and does not take sales charges into
consideration. Direct investment in the index is not possible; results are
for illustrative purposes only. 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. Performance
for a class includes periods prior to the adoption of class designations in
1993. Performance reflects up to a maximum 4.5% front-end sales charge or 5%
contingent deferred sales charge. "C" shares, offered without a sales charge,
are available only to certain employee benefit plans and institutions.
Performance for "B" and "D" shares prior to class designations in 1993
reflects annual 12b-1 fees of .50% and subsequent performance reflects annual
12b-1 fees of 1%.
Comparison Of Change In Value Of
A $10,000 Investment In Equity
Income Fund and The S&P 500
Class A Shares
Average Annual Total Return
1 Year 5 Year Life of Fund
+10.90% +8.63% +9.23%
"86" 9550 10000
"87" 10832 12605
"88" 10569 11730
"89" 12351 14135
"90" 13768 16462
"91" 12903 17678
"92" 14814 20048
"93" 18037 22779
"94" 18815 23099
"95" 21850 29112
Class B Shares
Average Annual Total Return
1 Year 5 Year Life of Fund
+10.43% +9.08% +9.63%
"86" 10000 10000
"87" 11342 12605.6
"88" 11074 11730.2
"89" 12954 14135.1
"90" 14443 16462
"91" 13528 17678
"92" 15533 20048
"93" 18896 22779
"94" 19611 23099
"95" 22637 29112
Class C Shares
Average Annual Total Return
1 Year 5 Year Life of Fund
+16.64% +9.83% +9.89%
"86" 10000 10000
"87" 11342 12605.6
"88" 11074 11730.2
"89" 12954 14135.1
"90" 14443 16462
"91" 13528 17678
"92" 15533 20048
"93" 18913 22779
"94" 19827 23099
"95" 23126 29112
Class D Shares
Average Annual Total Return
1 Year 5 Year Life of Fund
+14.33% +9.34% +9.62%
"86" 10000 10000
"87" 11342 12605.6
"88" 11074 11730.2
"89" 12954 14135.1
"90" 14443 16462
"91" 13528 17678
"92" 15533 20048
"93" 18895 22779
"94" 19609 23099
"95" 22615 29112
12
<PAGE>
Fund Information, Officers and Trustees of MetLife-State Street Equity Trust
Fund Information
MetLife-State Street Research Equity Income Fund
One Financial Center
Boston, MA 02111
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
Goodwin, Procter & Hoar
Exchange Place
Boston, MA 02109
Independent Accountants
Price Waterhouse LLP
160 Federal Street
Boston, MA 02110
Officers
Ralph F. Verni
Chairman of the Board, President and Chief Executive Officer
Peter C. Bennett
Vice President
Bartlett R. Geer
Vice President
Frederick R. Kobrick
Vice President
Thomas P. Moore, Jr.
Vice President
Daniel J. Rice III
Vice President
Steven P. Somes
Vice President
Gerard P. Maus
Treasurer
Joseph W. Canavan
Assistant Treasurer
Douglas A. Romich
Assistant Treasurer
Francis J. McNamara, III
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
Edward M. Lamont
Formerly in banking (Morgan
Guaranty Trust Company of
New York); presently engaged in
private investments and civic affairs
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
Toby Rosenblatt
President,
The Glen Ellen Company
Vice President,
Founders Investments Ltd.
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
13
<PAGE>
[back cover]
MetLife-State Street Research Equity Income Fund Bulk Rate
One Financial Center U.S. Postage
Boston, MA 02111 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 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: 2514-950818(0996)SSR-LD
Cover illustration by Dorothy Cullinan
EIN-383D-895
<PAGE>
(Start of Capital Appreciation Fund)
[cover]
[State Street logo] STATE STREET RESEARCH
METLIFE-STATE STREET RESEARCH
CAPITAL APPRECIATION FUND
ANNUAL REPORT [picture of man climbing mountains
June 30, 1995 and looking at stars]
WHAT'S INSIDE
New and Improved:
A new design that's
easier to read
From the Chairman:
The markets have
come full circle
Portfolio Manager's Review:
Technology focus
propels the Fund
Fund Information:
Facts and figures
Plus, Complete Portfolio Holdings
and Financial Statements
<PAGE>
FROM THE CHAIRMAN
[photo of Ralph F. Verni]
To Our Shareholders:
For investors, events have now come full circle. Last year, the Federal
Reserve raised rates repeatedly to slow the booming U.S. economy. Today, the
economy has slowed to the point that the Fed actually cut interest rates
slightly on July 6.
This turnabout makes all the difference in your mutual fund's short-term
performance. The Fed's rate hikes hurt your Fund in 1994. Falling interest
rates and strong corporate earnings have made 1995 the best year for stock
mutual funds since 1991.
Stocks have been the investment of choice this year. The Standard & Poor's
500 Index gained more than 26% in the 12 months ended June 30, 1995, with
nearly all of these gains occurring in 1995.(1) The biggest gainers were
technology and financial stocks. Large-company stocks continue to outperform
small- and medium-capitalization stocks, although the lead is narrowing.
Bond performance has also been outstanding. The combination of low inflation
and a slowing economy is a very positive environment for bonds. U.S. Treasury
securities performed strongly, as they respond better to falling interest
rates than other types of bonds. Municipal bonds, high-yield bonds and
mortgage securities also performed well.
We believe the investment outlook is positive, especially now that the Fed
has lowered interest rates. One concern is that the economy could slow too
quickly and plunge into recession. In addition, after such strong
performance, it's always possible for the markets to experience declines.
Regardless, we think the best policy is to maintain a long-term outlook and
remain invested.
Thank you again for investing with State Street Research.
Sincerely,
[signature of Ralph F. Verni]
Ralph F. Verni
Chairman
July 31, 1995
(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. This index is unmanaged and does not take sales charges into
consideration. Direct investment in the index is not possible; results are
for illustrative purposes only.
(2)+31.86% for Class B shares; +33.06% for Class C shares; +31.79% for
Class D shares.
(3)Investment result is based on a $10,000 investment in Class A shares at
the maximum sales charge of 4.5% with reinvestment of capital gain
distributions and income dividends. No adjustment has been made for income
taxes payable by shareholders on income dividends or capital gain
distributions.
(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)Performance for a class includes periods prior to the adoption of class
designations in 1993. Performance reflects up to a maximum 4.5% front-end
sales charge or 5% contingent deferred sales charge. "C" shares, offered
without a sales charge, are available only to certain employee benefit plans
and institutions. Performance for "B" and "D" shares prior to class
designations in 1993 reflects annual 12b-1 fees of .50% and subsequent
performance reflects annual 12b-1 fees of 1%.
FUND PERFORMANCE (all data are for periods ended June 30, 1995)
Total value of $10,000 invested on August 25, 1986(3)
(Class A shares, at maximum applicable sales charge)
[typeset representation of mountain chart]
8/86 $ 9,550
6/87 12,195
6/88 11,777
6/89 13,896
6/90 16,305
6/91 16,029
6/92 20,362
6/93 27,647
6/94 27,569
6/95 36,544
SEC Average Annual Compound Rates of Return
(at maximum applicable sales charge)(4,5)
<TABLE>
<CAPTION>
Life of Fund
(since 8/25/86) 5 years 1 year
<S> <C> <C> <C>
Class A +15.76%/+15.28% +16.44%/+16.18% +26.59%/+26.34%
Class B +16.21%/+15.72% +17.03%/+16.77% +26.86%/+26.59%
Class C +16.48%/+16.00% +17.73%/+17.47% +33.06%/+32.79%
Class D +16.23%/+15.75% +17.28%/+17.02% +30.79%/+30.52%
</TABLE>
Cumulative Total Returns
(do not reflect sales charge)(4)
<TABLE>
<CAPTION>
Life of Fund
(since 8/25/86) 5 years 1 year
<S> <C> <C> <C>
Class A +282.66%/+268.71% +124.13%/+121.62% +32.56%/+32.29%
Class B +278.22%/+264.45% +121.53%/+119.05% +31.86%/+31.59%
Class C +286.15%/+272.11% +126.17%/+123.66% +33.06%/+32.79%
Class D +278.83%/+265.04% +121.89%/+119.41% +31.79%/+31.52%
</TABLE>
Performance results for the Fund are increased by the Distributor's voluntary
reduction of Fund fees and expenses. The first figure reflects expense
reduction; the second shows what results would have been without
subsidization.
<PAGE>
PORTFOLIO MANAGER'S REVIEW
[photo of Frederick R. Kobrick]
Frederick R. Kobrick
Portfolio Manager
Capital Appreciation Fund had outstanding performance over the past year,
performing ahead of similar funds and the stock market as a whole. For the 12
months ended June 30, 1995, Class A shares of the Fund provided a total
return of +32.56% (does not reflect sales charge).(2) The average return for
145 funds in Lipper Analytical Services' capital appreciation fund category
was +22.17% over the same time period (does not reflect sales charges).
Emphasis on technology
The Fund's strongest commitment is to technology stocks, with nearly 45% of
the portfolio divided among computer software, electronics and office
equipment stocks. Technology stocks have reaped the rewards of strong
earnings, demand from consumers and industry worldwide, and new product
introductions.
Electronics stocks make up a significant part of the portfolio. One example
is Intel, which is one of the Fund's ten largest holdings at 3.0% of the
portfolio. Intel has flourished from its cutting-edge position in
semiconductors, which are used in an ever-expanding array of consumer
products.
The Fund's telephone holdings also fit into its technology focus. Finland's
Nokia Corp., the Fund's largest holding at 3.9% of the portfolio, is one of
the world's leading manufacturers of cellular phones.
Specialty retail is still attractive
The retail sector offers opportunity, especially for retailers that
specialize in a particular category. In addition, retail stocks were
especially hard hit in last year's weak stock market, which hurt us at the
time but allowed us to take advantage of attractive values. The Fund's
largest retail holding, Sunglass Hut International (2.5%) has achieved
success specializing in sunglasses. Another example is Bed, Bath and Beyond
(0.2%), which focuses on housewares.
Airlines take flight
We have a new choice in transportation; we sold many of our automotive
holdings and built up the Fund's position in airline stocks. We are value
conscious in our stock selection, and airlines offered excellent value after
disappointing performance in 1994. Airlines also have enjoyed improved
profitability, largely the result of rising ticket prices and better cost
control. Among our airline holdings are AMR (3.5%), the parent of American
Airlines, and Southwest Airlines (1.1%).
Outlook
We believe the Fed's recent rate cut will benefit the market. Making such a
small cut demonstrated that the Fed was sensitive to the slowing economy, but
still determined to contain inflation. The market is now rewarding stocks
with the strongest earnings--the type of stocks Capital Appreciation Fund
targets--rather than simply the large, multinational corporations that make
up the Dow Jones Industrial Average. Looking ahead, please realize that
short-term corrections or market declines are possible, but we view such
events as opportunities to acquire stocks at better prices.
Top 10 Stock Positions
(by percentage of net assets)
1 Nokia Cellular-phone maker 3.9%
2 AMR Airline 3.5%
3 Intel Semiconductor giant 3.0%
4 L.M. Ericsson Cellular-phone maker 2.8%
5 Texas Instruments Electronics company 2.7%
6 Sunglass Hut Specialty retailer 2.5%
7 Hewlett-Packard Electronics company 2.4%
8 LSI Logic Electronics company 2.1%
9 UAL Airline 2.1%
10 Circuit City Electronics retailer 2.1%
These securities represent an aggregate of 27.1% 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 or in the
text above.
Top 5 Industry Positions
(by percentage of net assets)
Electronics 26.5%
Retail 12.1%
Airlines 9.8%
Computer software and service 9.1%
Office equipment 8.7%
Total net assets: 66.2%
Best and Worst Contributors to Performance
(July 1, 1994 through June 30, 1995)
Best [arrow up]
Nokia
Demand boomed for cellular phones.
L.S.I. Logic
Electronics maker benefited from technology rally.
Sunglass Hut International
Specialty retailer dominates its market niche.
Worst [arrow down]
Cyrk
Earnings plunged for this apparel maker.
EZ Corp.
Leading pawnshop operator saw its earnings decline.
News Corp.
Global broadcaster hit hard times.
2
<PAGE>
METLIFE-STATE STREET RESEARCH CAPITAL APPRECIATION FUND
INVESTMENT PORTFOLIO
June 30, 1995
<TABLE>
<CAPTION>
Value
Shares (Note 1)
---------- -------------
<S> <C> <C>
COMMON STOCKS 98.0%
Basic Industries 2.7%
Chemical 0.5%
Potash Corp. of Saskatchewan, Inc. 43,100 $ 2,408,212
-------------
Diversified 0.4%
Thermedics, Inc.* 102,750 2,003,625
-------------
Electrical Equipment 0.8%
Trimble Navigation Ltd.* 138,000 3,915,750
-------------
Machinery 1.0%
AGCO Corp.* 134,600 5,047,500
-------------
Total Basic Industries 13,375,087
-------------
Consumer Cyclical 33.7%
Airline 9.8%
AMR Corp.* 232,400 17,342,850
Delta Air Lines, Inc. 104,000 7,670,000
Northwest Airlines Corp. Cl. A* 232,000 8,207,000
Southwest Airlines Co. 235,000 5,610,625
UAL Corp.* 74,800 10,490,700
-------------
49,321,175
-------------
Automotive 2.2%
Danaher Corp. 71,200 2,153,800
Exide Corp. 190,300 8,182,900
Team Rental Group, Inc. Cl. A* 87,500 634,375
-------------
10,971,075
-------------
Hotel & Restaurant 2.2%
Doubletree Corp.* 75,400 1,625,813
Hospitality Franchise System, Inc.* 109,700 3,798,363
La Quinta Inns, Inc. 166,887 4,505,949
Station Casinos, Inc.* 64,300 1,109,175
-------------
11,039,300
-------------
Recreation 2.3%
American Radio Systems Corp.* 30,600 696,150
Anthony Industries, Inc. 74,500 1,368,938
Time Warner, Inc. 136,900 5,630,013
Trump Hotels & Casino Resorts, Inc.* 303,100 4,053,963
-------------
11,749,064
-------------
Retail Trade 12.1%
Bed Bath & Beyond, Inc.* 45,100 1,068,329
Circuit City Stores, Inc. 330,900 10,464,713
Corporate Express, Inc.* 105,000 2,244,375
General Nutrition Centers, Inc.* 68,100 2,392,013
Home Depot Inc. 113,600 4,615,000
Industrie Natuzzi SPA ADR 97,000 3,213,125
Just For Feet, Inc.* 134,700 5,371,163
Kohl's Corp.* 73,100 3,335,188
Retail Trade (cont'd)
Nine West Group, Inc.* 152,600 $ 5,569,900
Petsmart, Inc.* 74,800 2,150,500
Pier 1 Imports, Inc. 233,730 2,162,003
Sunglass Hut International, Inc.* 354,000 12,390,000
Toys 'R Us, Inc.* 85,300 2,495,025
Viking Office Products, Inc.* 78,200 2,864,075
-------------
60,335,409
-------------
Textile & Apparel 5.1%
Fila Holdings SPA ADR* 131,000 3,258,625
Men's Wearhouse, Inc.* 216,100 5,942,750
Nautica Enterprises, Inc.* 96,000 3,480,000
Tommy Hilfiger Corp.* 314,100 8,794,800
Wolverine World Wide, Inc. 186,450 3,868,838
-------------
25,345,013
-------------
Total Consumer Cyclical 168,761,036
-------------
Consumer Staple 8.5%
Business Service 3.5%
Fritz Companies, Inc.* 42,500 2,494,219
HBO & Co. 53,100 2,893,950
Medaphis Corp.* 284,900 6,196,575
Tellabs, Inc.* 121,400 5,842,375
-------------
17,427,119
-------------
Drug 1.0%
Amerisource Health Corp.* 40,500 923,906
Cephalon, Inc.* 113,400 2,097,900
Vertex Pharmaceuticals, Inc.* 119,700 1,960,088
-------------
4,981,894
-------------
Food & Beverage 0.3%
Starbucks Corp.* 50,300 1,791,938
-------------
Hospital Supply 1.8%
Coram Healthcare Corp.* 130,400 1,841,900
Health Management Associates, Inc.* 160,350 4,690,238
Horizon Healthcare Corp.* 6,700 119,763
Patterson Dental Co.* 71,700 1,702,875
Theratx, Inc.* 43,000 575,125
-------------
8,929,901
-------------
Personal Care 1.0%
Colgate-Palmolive Co. 65,700 4,804,313
-------------
Printing & Publishing 0.9%
British Sky Broadcasting Group ADR* 29,600 773,300
News Corp. Ltd. ADR 106,700 2,414,088
Scholastic Corp.* 21,800 1,182,650
-------------
4,370,038
-------------
Total Consumer Staple 42,305,203
-------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
3
<PAGE>
METLIFE-STATE STREET RESEARCH CAPITAL APPRECIATION FUND
<TABLE>
<CAPTION>
Value
Shares (Note 1)
---------- -------------
<S> <C> <C>
Finance 2.6%
Financial Service 2.6%
Countrywide Credit Industries, Inc. 120,000 $ 2,520,000
First USA, Inc. 132,800 5,893,000
Franklin Resources, Inc. 57,700 2,567,650
Charles Schwab Corp. 48,500 2,103,687
-------------
13,084,337
-------------
Total Finance 13,084,337
-------------
Science & Technology 44.9%
Aerospace 0.6%
Boeing Co. 45,800 2,868,225
-------------
Computer Software & Service 9.1%
ADFlex Solutions, Inc.* 41,000 1,004,500
Arcsys, Inc.* 23,200 788,800
Baan Co. NV* 49,000 1,512,875
Broderbund Software, Inc.* 95,700 6,100,875
CBT Group TLC ADR* 24,700 1,046,663
Cisco Systems, Inc.* 51,000 2,578,687
Computer Associates International, Inc. 62,600 4,241,150
Firefox Communications Inc. 11,400 293,550
General Motors Corp. Cl. E 106,000 4,611,000
Intuit, Inc.* 36,100 2,743,600
Maxis, Inc.* 14,600 388,725
Oracle Systems Corp.* 142,800 5,515,650
Plaintree Systems, Inc.* 63,300 664,650
SAP AG ADR*+ 90,600 3,793,875
3 Com Corp.* 36,800 2,465,600
Xilinx, Inc.* 83,300 7,830,200
-------------
45,580,400
-------------
Electronic 26.5%
Analog Devices, Inc.* 164,050 5,577,700
Applied Materials, Inc.* 101,300 8,775,113
ASM Lithography Holdings NV* 151,100 5,420,713
Brooks Automation, Inc.* 56,300 999,325
Cypress Semiconductor Corp.* 140,600 5,694,300
DSC Communications Corp.* 173,400 8,063,100
L.M. Ericsson Telephone Co. ADR Cl. B* 690,400 13,808,000
Exide Electronics Group, Inc.* 15,000 345,000
Intel Corp. 236,500 14,973,406
KLA Instruments Corp.* 68,400 5,283,900
LSI Logic Corp.* 270,600 10,587,225
Lam Research Corp.* 92,500 5,920,000
Micron Technology, Inc. 107,400 5,893,575
Novellus Systems, Inc.* 70,600 4,783,150
Oak Technology, Inc.* 76,300 2,804,025
S3, Inc.* 70,600 2,541,600
Sanmina Holdings, Inc.* 168,400 6,399,200
Electronic (cont'd)
Silicon Valley Group, Inc.* 145,100 $ 5,259,875
Teradyne, Inc.* 88,200 5,766,075
Texas Instruments, Inc. 100,600 13,467,825
-------------
132,363,107
-------------
Office Equipment 8.7%
Digital Equipment Corp.* 131,500 5,358,625
Hewlett-Packard Co. 163,200 12,158,400
International Business Machines Corp. 50,200 4,819,200
Silicon Graphics, Inc.* 157,300 6,272,338
Sun Microsystems, Inc.* 112,700 5,465,950
Telxon Corp. 238,900 5,196,075
U.S. Robotics Corp.* 40,000 4,360,000
-------------
43,630,588
-------------
Total Science & Technology 224,442,320
-------------
Utility 5.6%
Telephone 5.6%
ADC Telecommunications, Inc.* 65,600 2,345,200
Nera AS ADR* 22,500 632,813
Nokia Corp. ADR 330,100 19,682,212
Vodafone Group PLC ADR 144,800 5,484,300
-------------
28,144,525
-------------
Total Utility 28,144,525
-------------
Total Common Stocks (Cost $380,642,349) 490,112,508
-------------
</TABLE>
<TABLE>
<CAPTION>
Principal Maturity
Amount Date
- ---------------------------- --------- ------ ------------
<S> <C> <C> <C>
COMMERCIAL PAPER 3.4%
Associates Corp. of North
America, 6.00% $3,873,000 7/7/95 3,873,000
Commercial Credit Co., 5.92% 2,130,000 7/5/95 2,130,000
Commercial Credit Co., 5.85% 2,900,000 7/3/95 2,900,000
Ford Motor Credit Co., 5.92% 8,232,000 7/5/95 8,232,000
------------
Total Commercial Paper (Cost $17,135,000) 17,135,000
------------
Total Investments (Cost $397,777,349)--101.4% 507,247,508
Cash and Other Assets, Less Liabilities--(1.4%) (6,952,674)
------------
Net Assets--100.0% $500,294,834
============
</TABLE>
The accompanying notes are an integral part of the financial statements.
4
<PAGE>
METLIFE-STATE STREET RESEARCH CAPITAL APPRECIATION FUND
INVESTMENT PORTFOLIO (cont'd)
<TABLE>
<CAPTION>
<S> <C>
Federal Income Tax Information:
At June 30, 1995, the net unrealized appreciation of
investments based on cost for Federal income tax
purposes of $397,795,126 was as follows:
Aggregate gross unrealized appreciation for all
investments in which there is an excess of value over
tax cost $112,598,992
Aggregate gross unrealized depreciation for all
investments in which there is an excess of tax cost
over value (3,146,610)
-------------
$109,452,382
=============
</TABLE>
* Nonincome-producing securities.
ADR stands for American Depositary Receipt, representing ownership of foreign
securities.
+ Security restricted in accordance with Rule 144A under the Securities Act
of 1933, which allows for the resale of such securities among certain
qualified institutional buyers. The total cost and market value of Rule 144A
securities owned at June 30, 1995 were $3,318,675 and $3,793,875 (0.76% of
net assets), respectively.
STATEMENT OF ASSETS AND LIABILITIES
June 30, 1995
<TABLE>
<CAPTION>
<S> <C>
Assets
Investments, at value (Cost $397,777,349) (Note 1) $507,247,508
Cash 886
Receivable for securities sold 7,958,250
Receivable for fund shares sold 682,906
Dividends and interest receivable 294,497
Other assets 31,089
-------------
516,215,136
Liabilities
Payable for securities purchased 14,342,379
Accrued transfer agent and shareholder services
(Note 2) 510,576
Payable for fund shares redeemed 438,300
Accrued management fee (Note 2) 319,334
Accrued distribution fee (Note 5) 149,621
Accrued trustees' fees (Note 2) 21,745
Other accrued expenses 138,347
-------------
15,920,302
-------------
Net Assets $500,294,834
=============
Net Assets consist of:
Unrealized appreciation of investments $109,470,159
Accumulated net realized gain 8,649,836
Shares of beneficial interest 382,174,839
-------------
$500,294,834
=============
Net Asset Value and redemption price per share of
Class A shares ($296,471,044 / 25,734,098 shares
of beneficial interest) $11.52
=============
Maximum Offering Price per share of Class A shares
($11.52 / .955) $12.06
=============
Net Asset Value and offering price per share of
Class B shares ($93,087,833 / 8,180,895 shares of
beneficial interest) $11.38
=============
Net Asset Value, offering price and redemption
price per share of Class C shares ($106,675,237 /
9,167,910 shares of beneficial interest) $11.64
=============
Net Asset Value and offering price per share of
Class D shares ($4,060,720 / 356,027 shares of
beneficial interest)* $11.41
=============
</TABLE>
* 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.
5
<PAGE>
METLIFE-STATE STREET RESEARCH CAPITAL APPRECIATION FUND
STATEMENT OF OPERATIONS
For the year ended June 30, 1995
<TABLE>
<S> <C>
Investment Income
Dividends, net of foreign taxes of $64,531 $ 2,434,824
Interest 401,245
------------
2,836,069
Expenses
Management fee (Note 2) 3,124,753
Transfer agent and shareholder services (Note 2) 2,154,152
Custodian fee 175,009
Reports to shareholders 171,924
Registration fees 88,245
Audit fee 35,029
Trustees' fees (Note 2) 33,919
Distribution fee--Class A (Note 5) 1,092,589
Distribution fee--Class B (Note 5) 693,983
Distribution fee--Class D (Note 5) 29,933
Miscellaneous 12,920
------------
7,612,456
Expenses borne by the Distributor (Note 3) (1,056,327)
------------
6,556,129
------------
Net investment loss (3,720,060)
------------
Realized and Unrealized Gain on Investments
Net realized gain on investments (Notes 1 and 4) 12,149,840
Net unrealized appreciation of investments 111,117,329
------------
Net gain on investments 123,267,169
------------
Net increase in net assets resulting from operations $119,547,109
============
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Year ended June 30
----------------------------
1995 1994
---------------------------------------------------------------------
<S> <C> <C>
Increase (Decrease) in Net Assets
Operations:
Net investment loss $ (3,720,060) $ (2,387,241)
Net realized gain on investments* 12,149,840 28,477,884
Net unrealized appreciation
(depreciation) of investments 111,117,329 (37,837,902)
----------- -------------
Net increase (decrease) resulting from
operations 119,547,109 (11,747,259)
----------- -------------
Distributions from net realized gains:
Class A (11,280,742) (25,834,464)
Class B (2,571,808) (1,417,369)
Class C (3,080,510) (5,480,030)
Class D (112,508) (103,706)
----------- -------------
(17,045,568) (32,835,569)
----------- -------------
Net increase from fund share
transactions (Note 6) 52,338,022 164,913,020
----------- -------------
Total increase in net assets 154,839,563 120,330,192
Net Assets
Beginning of year 345,455,271 225,125,079
----------- -------------
End of year $500,294,834 $345,455,271
=========== =============
* Net realized gain for Federal income
tax purposes (Note 1) $ 12,055,176 $ 28,580,457
=========== =============
</TABLE>
The accompanying notes are an integral part of the financial statements.
6
<PAGE>
METLIFE-STATE STREET RESEARCH CAPITAL APPRECIATION FUND
NOTES TO FINANCIAL STATEMENTS
June 30, 1995
Note 1
MetLife-State Street Research Capital Appreciation Fund, formerly
MetLife-State Street Capital Appreciation Fund (the "Fund"), is a series of
MetLife-State Street Equity Trust (the "Trust"), which was organized as a
Massachusetts business trust in March, 1986 and is registered under the
Investment Company Act of 1940, as amended, as an open-end management
investment company. The Trust commenced operations in August, 1986. The Trust
consists presently of four separate funds: MetLife-State Street Research
Capital Appreciation Fund, MetLife-State Street Research Equity Investment
Fund, MetLife-State Street Research Equity Income Fund and State Street
Research Global Resources Fund.
The Fund offers four classes of shares. Class A shares are subject to an
initial sales charge of up to 4.50% and an annual service fee of 0.25% of
average daily net assets. Prior to March 10, 1995, Class A shares paid annual
distribution and service fees of 0.50% of average daily net assets.
Investments of $1 million or more in Class A shares, which are not subject to
any initial sales charge, are subject to a 1.00% contingent deferred sales
charge if redeemed within one year of purchase. 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. No sales charge is imposed at the time of purchase or
redemption of Class C shares. Class C shares do not pay any distribution or
service fees. 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 accounting 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 Valuation
Values for listed securities reflect final sales 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 closing prices
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. Short- term securities
maturing within sixty days are valued at amortized cost. Other securities, if
any, are valued at their fair value as determined in accordance with
established methods consistently applied.
B. Security Transactions
Security transactions are accounted for on the trade date (date the order to
buy or sell is executed). Realized gains or losses are reported on the basis
of identified cost of securities delivered.
C. Net Investment Income
Interest income is accrued daily as earned. Dividend income is accrued on the
ex-dividend date. The Fund is charged for expenses directly attributable to
it, while indirect expenses are allocated among all funds in the Trust.
D. Dividends
Dividends from net investment income, if any, are declared and paid or
reinvested quarterly. 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.
E. Federal Income Taxes
No provision for Federal income taxes is necessary because 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.
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 0.75% 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. During the year ended June 30, 1995, the fees pursuant to such
agreement amounted to $3,124,753.
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 year ended
June 30, 1995, the amount of such shareholder servicing and account
maintenance expenses was $592,370.
The fees of the Trustees not currently affiliated with the Adviser amounted
to $33,919 during the year ended June 30, 1995.
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 July 1, 1994 through March 9, 1995, the amount of
such expenses assumed by the Distributor and its affiliates was $1,056,327.
On March 10, 1995, the Distributor eliminated the voluntary assumption of
fees or expenses incurred by the Fund.
7
<PAGE>
METLIFE-STATE STREET RESEARCH CAPITAL APPRECIATION FUND
Note 4
For the year ended June 30, 1995, purchases and sales of securities,
exclusive of short-term obligations, aggregated $918,161,732 and
$882,753,961, 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, as amended. 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. Prior to March 10, 1995, the Fund
paid an annual distribution fee of 0.25% of average daily net assets for
Class A 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 year ended June 30, 1995, fees pursuant to such
plan amounted to $1,092,589, $693,983 and $29,933 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 $129,102 and $900,446, respectively on sales of Class A shares of
the Fund during the year ended June 30, 1995, and that MetLife Securities,
Inc. earned commissions aggregating $1,033,301 on sales of Class B shares,
and that the Distributor collected contingent deferred sales charges of
$2,653, $394,360 and $305 on redemptions of Class A, Class B and Class D
shares, respectively, during the same period.
Note 6
The Trustees have the authority to issue an unlimited number of shares of
beneficial interest, $.001 par value per share.
At June 30, 1995, Metropolitan owned 57,284 Class D shares of the Fund and
the Distributor owned 7,172 Class A shares of the Fund.
Share transactions were as follows:
<TABLE>
<CAPTION>
Year ended June 30
---------------------------------------------------------------------
1995 1994
-------------------------------- ---------------------------------
Class A Shares Amount Shares Amount
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold 6,331,406 $ 61,983,784 18,207,897 $ 185,867,255
Issued upon reinvestment of distributions from
net realized gains 1,183,334 10,907,541 2,511,269 24,821,744
Shares repurchased (7,177,882) (70,964,079) (12,975,472) (132,950,619)
-------------- -------------- -------------- ----------------
Net increase 336,858 $ 1,927,246 7,743,694 $ 77,738,380
============== ============== ============== ================
Class B Shares Amount Shares Amount
- --------------------------------------------------------------------------------------------------------------------------
Shares sold 4,108,923 $ 40,145,257 5,820,801 $ 59,137,667
Issued upon reinvestment of distributions from
net realized gains 276,437 2,529,368 141,643 1,396,720
Shares repurchased (1,642,379) (16,155,301) (792,597) (8,043,910)
-------------- -------------- -------------- ----------------
Net increase 2,742,981 $ 26,519,324 5,169,847 $ 52,490,477
============== ============== ============== ================
Class C Shares Amount Shares Amount
- --------------------------------------------------------------------------------------------------------------------------
Shares sold 4,381,871 $ 43,450,467 3,959,768 $ 40,501,621
Issued upon reinvestment of distributions from
net realized gains 324,761 3,010,459 553,304 5,477,791
Shares repurchased (2,379,730) (23,674,364) (1,302,865) (13,173,546)
-------------- -------------- -------------- ----------------
Net increase 2,326,902 $ 22,786,562 3,210,207 $ 32,805,866
============== ============== ============== ================
Class D Shares Amount Shares Amount
- --------------------------------------------------------------------------------------------------------------------------
Shares sold 228,040 $ 2,226,133 210,497 $ 2,146,246
Issued upon reinvestment of distributions from
net realized gains 11,168 102,407 10,395 102,683
Shares repurchased (125,783) (1,223,650) (38,173) (370,632)
-------------- -------------- -------------- ----------------
Net increase 113,425 $ 1,104,890 182,719 $ 1,878,297
============== ============== ============== ================
</TABLE>
8
<PAGE>
METLIFE-STATE STREET RESEARCH CAPITAL APPRECIATION FUND
FINANCIAL HIGHLIGHTS
For a share outstanding throughout each year.
<TABLE>
<CAPTION>
Class A Class B
-------------------------------------------------------- ----------------------------------
June 1, 1993
(Commencement of
Year ended June 30 Year ended June 30 of Share Class
-------------------------------------------------------- -------------------- Designations) to
1995** 1994 1993 1992 1991 1995** 1994 June 30, 1993
--------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of year $ 9.11 $10.42 $ 8.33 $6.55 $6.70 $ 9.05 $10.41 $10.44
Net investment loss* (.09) (.04) (.05) (.05) (.01) (.15) (.06) (.00)
Net realized and unrealized
gain (loss) on investments 2.95 .09 2.81 1.83 (.12) 2.93 .06 (.03)
Dividends from net investment
income -- -- -- -- (.01) -- -- --
Dividends in excess of net
investment income -- -- -- -- (.01) -- -- --
Distributions from net
realized gains (.45) (1.36) (.67) -- -- (.45) (1.36) --
-------- -------- -------- -------- -------- -------- -------- ----------
Net asset value, end of year $11.52 $ 9.11 $10.42 $8.33 $6.55 $11.38 $ 9.05 $10.41
======== ======== ======== ======== ======== ======== ======== ==========
Total return 32.56%+ (0.28)%+ 35.78%+ 27.03%+ (1.69)%+ 31.86%+ (0.83)%+ (0.29)%+
Net assets at end of year
(000s) $296,471 $231,356 $183,886 $116,687 $62,898 $93,088 $49,236 $2,790
Ratio of operating expenses to
average net assets* 1.55% 1.50% 1.50% 1.50% 1.50% 2.15% 2.00% 2.00%++
Ratio of net investment loss
to average net assets* (0.87)% (0.81)% (0.63)% (0.71)% (0.13)% (1.47)% (1.29)% (0.95)%++
Portfolio turnover rate 217.28% 147.73% 135.17% 128.10% 245.55% 217.28% 147.73% 135.17%
*Reflects voluntary assumption
of fees or expenses per share
in each year (Note 3). $.03 $.02 $.01 $.01 $.03 $.02 $.02 $.00
</TABLE>
<TABLE>
<CAPTION>
Class C Class D
-------------------------------------- ---------------------------------------
June 1, 1993 June 1, 1993
(Commencement (Commencement
Year ended June 30 of Share Class Year ended June 30 of Share Class
-------------------- Designations) to ------------------- Designations) to
1995** 1994 June 30, 1993 1995** 1994 June 30, 1993
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year $ 9.16 $10.42 $10.44 $ 9.07 $10.41 $10.44
Net investment income (loss)* (.05) (.02) .00 (.15) (.07) (.01)
Net realized and unrealized gain (loss)
on investments 2.98 .12 (.02) 2.94 .09 (.02)
Distributions from net realized gains (.45) (1.36) -- (.45) (1.36) --
---------- ---------- ---------- ---------- ---------- ------------
Net asset value, end of year $11.64 $ 9.16 $10.42 $11.41 $ 9.07 $10.41
========== ========== ========== ========== ========== ============
Total return 33.06%+ 0.25%+ (0.19)%+++ 31.79%+ (0.61)%+ (0.29)%+++
Net assets at end of year (000s) $106,675 $62,662 $37,826 $4,061 $2,201 $623
Ratio of operating expenses to average
net assets* 1.15% 1.00% 1.00%++ 2.15% 2.00% 2.00%++
Ratio of net investment income (loss) to
average net assets* (0.46)% (0.30)% 0.50%++ (1.47)% (1.29)% (1.10)%++
Portfolio turnover rate 217.28% 147.73% 135.17% 217.28% 147.73% 135.17%
*Reflects voluntary assumption of fees or
expenses per share in each year (Note 3). $.02 $.02 $.00 $.02 $.02 $.00
</TABLE>
** Per-share figures have been calculated using the average shares method.
++ Annualized.
+ Total return figures do 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.
+++ 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.
9
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees of MetLife-State Street
Equity Trust and the Shareholders of
MetLife-State Street Research Capital Appreciation Fund
In our opinion, the accompanying statement of assets and liabilities,
including the investment portfolio, and the related statements of operations
and of changes in net assets and the financial highlights present fairly, in
all material respects, the financial position of MetLife-State Street
Research Capital Appreciation Fund (formerly MetLife-State Street Capital
Appreciation Fund) (a series of MetLife-State Street Equity Trust, hereafter
referred to as the "Trust") at June 30, 1995, and the results of its
operations, the changes in its net assets and the financial highlights for
the periods indicated, in conformity with generally accepted accounting
principles. These financial statements and financial highlights (hereafter
referred to as "financial statements") are the responsibility of the Trust's
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these financial
statements in accordance with generally accepted auditing standards which
require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements, assessing the accounting
principles used and significant estimates made by management, and evaluating
the overall financial statement presentation. We believe that our audits,
which included confirmation of securities at June 30, 1995 by correspondence
with the custodian and brokers and the application of alternative auditing
procedures where confirmations from brokers were not received, provide a
reasonable basis for the opinion expressed above.
Price Waterhouse LLP
Boston, Massachusetts
August 4, 1995
10
<PAGE>
METLIFE-STATE STREET RESEARCH CAPITAL APPRECIATION FUND
MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE
Capital Appreciation Fund outperformed the average return for Lipper
Analytical Services' capital appreciation fund category for the 12 months
ended June 30, 1995 (does not reflect sales charge).
The Fund's strongest commitment was to technology stocks, with nearly 45% of
the portfolio divided among computer software, electronics and office
equipment stocks. Technology stocks benefited from strong earnings and
worldwide demand from consumers and industry.
The Fund added to its retail holdings late in 1994, after such stocks had
declined. Our focus is on retailers that specialize in particular market
segments.
We also sold many of our automotive holdings and built up the Fund's position
in airline stocks. We are value conscious in our stock selection, and
airlines offered excellent value after disappointing performance in 1994.
The Standard & Poor's Composite Index (S&P 500) includes 500 widely traded
common stocks and is a commonly used measure of U.S. stock market
performance. The index is unmanaged and does not take sales charges into
consideration. Direct investment in the index is not possible; results are
for illustrative purposes only. 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. Performance
for a class includes periods prior to the adoption of class designations in
1993. Performance reflects up to a maximum 4.5% front-end sales charge or 5%
contingent deferred sales charge. "C" shares, offered without a sales charge,
are available only to certain employee benefit plans and institutions.
Performance for "B" and "D" shares prior to class designations in 1993
reflects annual 12b-1 fees of .50% and subsequent performance reflects annual
12b-1 fees of 1%. Performance results for the fund are increased by the
Distributor's voluntary reduction of Fund fees and expenses. The first figure
reflects expense reduction; the second shows what results would have been
without subsidization.
Comparison Of Change In Value Of
A $10,000 Investment In Capital
Appreciation Fund and The S&P 500
[line chart] Class A Shares
Average Annual Total Return
1 Year 5 Years Life of Fund
+26.59%/+26.34% +16.44%/+16.18% +15.76%/+15.28%
Capital
Appreciation S&P
8/86 $ 9,550 $10,000
6/87 12,195 12,606
6/88 11,777 11,730
6/89 13,896 14,135
6/90 16,305 16,463
6/91 16,029 17,679
6/92 20,362 20,048
6/93 27,647 22,780
6/94 27,569 23,100
6/95 36,544 29,112
[line chart] Class B Shares
Average Annual Total Return
1 Year 5 Years Life of Fund
+26.86%/+26.59% +17.03%/+16.77% +16.21%/+15.72%
Capital
Appreciation S&P
8/86 $10,000 $10,000
6/87 12,770 12,606
6/88 12,332 11,730
6/89 14,562 14,135
6/90 17,073 16,463
6/91 16,784 17,679
6/92 21,321 20,048
6/93 28,922 22,780
6/94 28,683 23,100
6/95 37,822 29,112
[line chart] Class C Shares
Average Annual Total Return
1 Year 5 Years Life of Fund
+33.06%/+32.79% +17.73%/+17.47% +16.48%/+16.00%
Capital
Appreciation S&P
8/86 $10,000 $10,000
6/87 12,770 12,606
6/88 12,332 11,730
6/89 14,562 14,135
6/90 17,073 16,463
6/91 16,784 17,679
6/92 21,321 20,048
6/93 28,949 22,780
6/94 29,021 23,100
6/95 38,615 29,112
[line chart] Class D Shares
Average Annual Total Return
1 Year 5 Years Life of Fund
+30.79%/+30.52% +17.28%/+17.02% +16.23%/+15.75%
Capital
Appreciation S&P
8/86 $10,000 $10,000
6/87 12,770 12,606
6/88 12,332 11,730
6/89 14,562 14,135
6/90 17,073 16,463
6/91 16,784 17,679
6/92 21,321 20,048
6/93 28,922 22,780
6/94 28,745 23,100
6/95 37,883 29,112
[legend for line charts]
solid rule=Capital Appreciation Fund
broken rule=S&P 500
11
<PAGE>
METLIFE-STATE STREET RESEARCH CAPITAL APPRECIATION FUND
FUND INFORMATION, OFFICERS AND TRUSTEES OF METLIFE-STATE STREET EQUITY TRUST
Fund Information
MetLife-State Street Research
Capital Appreciation Fund
One Financial Center
Boston, MA 02111
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
Goodwin, Procter & Hoar
Exchange Place
Boston, MA 02109
Independent Accountants
Price Waterhouse LLP
160 Federal Street
Boston, MA 02110
Officers
Ralph F. Verni
Chairman of the Board,
President and
Chief Executive Officer
Peter C. Bennett
Vice President
Bartlett R. Geer
Vice President
Frederick R. Kobrick
Vice President
Thomas P. Moore, Jr.
Vice President
Daniel J. Rice III
Vice President
Steven P. Somes
Vice President
Gerard P. Maus
Treasurer
Joseph W. Canavan
Assistant Treasurer
Douglas A. Romich
Assistant Treasurer
Francis J. McNamara, III
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
Edward M. Lamont
Formerly in banking (Morgan
Guaranty Trust Company of
New York); presently engaged
in private investments and
civic affairs
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
Toby Rosenblatt
President,
The Glen Ellen Company
Vice President,
Founders Investments Ltd.
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
12
<PAGE>
[back cover]
MetLife-State Street Research Equity Income Fund Bulk Rate
One Financial Center U.S. Postage
Boston, MA 02111 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 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: 2512-950818(0996)SSR-LD
Cover illustration by Dorothy Cullinan
CA-385D-895
<PAGE>
(Start of Global Resources Fund A/R)
[FRONT COVER]
[clock logo] STATE STREET RESEARCH
STATE STREET RESEARCH
GLOBAL RESOURCES FUND
(formerly State Street Research Global Energy Fund)
ANNUAL REPORT
June 30, 1995
[graphic--person climbing toward stars]
WHAT'S INSIDE
New and Improved:
A new design that's
easier to read
From the Chairman:
The markets have
come full circle
Portfolio Manager's Review:
Fund performance continues
to be linked to energy prices
Fund Information:
Facts and figures
Plus, Complete Portfolio Holdings
and Financial Statements
<PAGE>
FROM THE CHAIRMAN
[photo of Ralph Verni]
To Our Shareholders:
For investors, events have now come full circle. Last year, the Federal Reserve
raised rates repeatedly to slow the booming U.S. economy. Today, the economy has
slowed to the point that the Fed actually cut interest rates slightly on July 6.
Stocks have been the investment of choice this year. The Standard & Poor's
500 Index gained more than 26% in the 12 months ended June 30, 1995, with
nearly all of these gains occurring in 1995.((1)) The biggest gainers were
technology and financial stocks. Large-company stocks continue to outperform
small- and medium-capitalization stocks, although the lead is narrowing.
Bond performance has also been outstanding. The combination of low inflation
and a slowing economy is a very positive environment for bonds. U.S. Treasury
securities performed strongly, as they respond better to falling interest
rates than other types of bonds. Municipal bonds, high-yield bonds and
mortgage securities also performed well.
We believe the investment outlook is positive, especially now that the Fed has
lowered interest rates. One concern is that the economy could slow too quickly
and plunge into recession. In addition, after such strong performance, it's
always possible for the markets to experience declines. Regardless, we think the
best policy is to maintain a long-term outlook and remain invested.
Thank you again for investing with State Street Research.
Sincerely,
[signature]Ralph F. Verni
Ralph F. Verni
Chairman
July 31, 1995
((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 index is unmanaged and does not take sales charges into
consideration. Direct investment in the index is not possible; results are
for illustrative purposes only.
((2))+2.12% for Class B shares; +3.11% for Class C shares; +2.12% for Class D
shares.
((3))Investment result is based on a $10,000 investment in Class A shares at the
maximum sales charge of 4.5% with reinvestment of capital gain distributions and
income dividends. No adjustment has been made for income taxes payable by
shareholders on income dividends or capital gain distributions.
((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))Performance for a class includes periods prior to the adoption of class
designations in 1993. Performance reflects up to a maximum 4.5% front-end sales
charge or 5% contingent deferred sales charge. "C" shares, offered without a
sales charge, are available only to certain employee benefit plans and
institutions. Performance for "B" and "D" shares prior to class designations in
1993 reflects annual 12b-1 fees of .50% and subsequent performance reflects
annual 12b-1 fees of 1%.
FUND INFORMATION (all data are for periods ended June 30, 1995)
Total value of $10,000 invested on March 2, 1990((3))
(Class A shares, at maximum applicable sales charge)
[mountain chart]
3/90 $ 9,550
6/90 8,982
6/91 7,340
6/92 6,454
6/93 10,873
6/94 9,529
6/95 9,786
SEC Average Annual Compound Rates of Return
(at maximum applicable sales charge)((4,5))
<TABLE>
<CAPTION>
Life of Fund
(since 3/2/90) 5 years 1 year
<S> <C> <C> <C>
Class A -0.40%/-1.01% +0.80%/+0.16% -1.92%/-2.95%
Class B +0.26%/-0.40% +1.13%/+0.43% -2.88%/-3.96%
Class C +0.63%/-0.06% +1.91%/+1.19% +3.11%/+2.03%
Class D +0.24%/-0.40% +1.49%/+0.82% +1.12%/+0.04%
</TABLE>
Cumulative Total Returns
(do not reflect sales charge)((4))
<TABLE>
<CAPTION>
Life of Fund
(since 3/2/90) 5 years 1 year Year-to-date
<S> <C> <C> <C> <C>
Class A +2.47%/-0.81% +8.95%/+5.56% +2.70%/+1.62% +13.22%/+12.62%
Class B +1.38%/-2.11% +7.79%/+4.17% +2.12%/+1.04% +12.85%/+12.25%
Class C +3.40%/-0.30% +9.94%/+6.10% +3.11%/+2.03% +13.40%/+12.80%
Class D +1.30%/-2.11% +7.70%/+4.17% +2.12%/+1.04% +12.86%/+12.26%
</TABLE>
Performance results for the Fund are increased by the Distributor's voluntary
reduction of Fund fees and expenses. This first figure reflects expense
reduction; the second shows what results would have been without
subsidization.
<PAGE>
PORTFOLIO MANAGER'S REVIEW
[photo of Daniel J. Rice]
Daniel J. Rice
Portfolio Manager
The past year was another roller-coaster ride for Global Resources Fund
(formerly Global Energy Fund). For the 12 months ended June 30, 1995, Class A
shares of the Fund provided a total return of +2.70% (does not reflect sales
charge).((2)) The Fund's performance trailed the +6.37% average total return
for 32 funds in Lipper Analytical Services' natural resources fund category
(does not reflect sales charges).
Global Resources Fund's performance historically has been closely linked to
natural gas and oil prices. The past year was no different. Gas prices
plummeted in late 1994, and Fund performance declined. In 1995, oil prices
rebounded and Fund performance recovered--as you can see in the "year-to-date
cumulative return" provided on the previous page.
Improving outlook for energy
Demand for oil is growing, especially in third-world countries with
developing economies. The supply of oil is holding constant because OPEC
(Organization of Petroleum Exporting Countries) has adhered to its production
quotas. Iraq's oil still has not been allowed back on the world market, which
has also kept supply down.
Natural gas has not yet enjoyed the same resurgence as oil. Higher supply and
much lower demand--because of a cool summer and a warm winter last
year--resulted in sharply lower prices. We took advantage of the sharp price
declines and added to our natural gas holdings late in 1994. Longer term,
natural gas reserves are diminishing, making the outlook favorable.
Small stock focus
Currently, the Fund has substantial holdings in small-capitalization stocks,
which typically experience greater price fluctuation than larger stocks.
Generally, we target stocks that offer long-term growth, low debt levels, and
attractive valuations.
Our oil holdings focus on small exploration companies. Among our oil holdings
are Phoenix Resource Companies (7.9% of the portfolio), which drills for oil
and gas in Egypt, and XCL (0.2%).
Oil service stocks represent nearly 25% of the portfolio. This percentage is
lower than in the past because of mergers and acquisitions among many small
oil service companies. We expect this trend to continue. Among the oil
service companies in the portfolio are Noble Drilling (3.4% of the portfolio)
and Solid State Geophysical (0.1%).
Portfolio and name change
To make the Fund somewhat less dependent on energy prices and more inflation
resistant, we expanded the portfolio's investment choices in July to include
stocks linked to other natural resources, including precious metals and
timberland. We also changed the Fund's name to State Street Research Global
Resources Fund to more closely reflect its holdings.
Top 10 Stock Positions
(by percentage of net assets)
1 Phoenix Resource Oil and gas exploration firm 7.9%
2 TransTexas Oil and gas exploration firm 5.1%
3 Global Natural Res. Oil and gas exploration firm 4.6%
4 Ranger Oil Oil and gas exploration firm 4.1%
5 Tom Brown Oil and gas exploration firm 3.9%
6 Nuevo Energy Oil and gas exploration firm 3.7%
7 ENSERCH Natural gas company 3.6%
8 Noble Drilling Oil service company 3.4%
9 Crystal Oil Natural gas company 3.3%
10 CS Resources Oil producer 3.1%
These securities represent an aggregate of 42.7% 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 or in the
text above.
Best and Worst Contributors to Performance
(July 1, 1994 through June 30, 1995)
Best [arrow up]
Phoenix Resource Companies
Benefited from successful exploration in Egypt.
Global Natural Resources
Benefited from successful exploration in Egypt.
TransTexas Gas
Enjoyed favorable exploration results.
Worst [arrow down]
Gerrity Oil and Gas
Victim of low natural gas prices.
Nowsco Well Service
Hurt by concerns that Canadian drilling will decline.
Tatham Offshore
Hurt by disappointing exploration results in Gulf of Mexico.
2
<PAGE>
STATE STREET RESEARCH GLOBAL RESOURCES FUND
INVESTMENT PORTFOLIO
June 30, 1995
<TABLE>
<CAPTION>
Value
Shares (Note 1)
-------------- ----------------
<S> <C> <C>
EQUITY SECURITIES 98.6%
Basic Industries 5.3%
Metal & Mining 5.3%
Aber Resources, Ltd.* 40,000 $ 287,500
Crown Resources Corp.* 100,000 462,500
Cyprus Amax Minerals Co. 5,000 142,500
DeBeers Consolidated Mines Ltd. ADR 1,000 25,875
Dia Met Minerals Ltd. Cl. A* 5,000 47,324
Dia Met Minerals Ltd. Cl. B* 20,000 196,578
Gibraltar Mines Ltd.* 30,000 144,703
Magma Copper Co. Cl. B* 15,000 243,750
Southernera Resources Ltd.* 80,000 267,929
TVX Gold, Inc.* 30,000 217,500
----------------
2,036,159
----------------
Total Basic Industries 2,036,159
----------------
Energy 84.6%
Oil 60.8%
Abacan Resource Corp.* 129,900 392,490
Ballistic Energy Corp.* 80,000 458,682
Basin Exploration, Inc.* 55,200 327,750
Belden & Blake Corp.* 30,000 487,500
Tom Brown, Inc.* 100,000 1,487,500
CS Resources Ltd.* 200,000 1,201,311
Coda Energy, Inc.* 75,000 515,625
Crystal Oil Corp.* 41,600 1,279,200
Discovery West Corp.* 70,000 203,859
Edisto Resources Corp.* 25,000 181,250
Forest Oil Corp.* 150,000 243,750
Fortune Petroleum Corp.* 75,000 173,438
Garnet Resources Corp.* 60,000 135,000
Gerrity Oil & Gas Co.* 110,000 371,250
Global Natural Resources Inc.* 165,500 1,779,125
Intensity Resources, Ltd.* 270,400 600,451
Inverness Petroleum Ltd.* 98,967 531,403
Louisiana Land & Exploration Co. 5,000 199,375
Morgan Hydrocarbons, Inc.* 300,000 873,680
Nuevo Energy Co.* 70,000 1,408,750
Optima Petroleum Corp.* 46,700 113,831
Oryx Energy Co.* 39,700 545,875
Phoenix Resource Cos., Inc. 95,900 3,044,825
Plains Resources, Inc.* 120,000 1,050,000
Ranchmens Resources Ltd.* 60,000 196,578
Ranger Oil Ltd.* 250,000 1,562,500
Oil (cont'd)
Richland Petroleum Corp.* 40,000 $ 269,385
Summit Resources Ltd. 60,600 716,964
Swift Energy Co.* 53,110 484,629
Tatham Offshore, Inc.* 100,000 350,000
Tipperary Corp.* 20,700 120,319
Ulster Petroleum Ltd.* 275,000 1,001,092
United Meridian Corp.* 22,800 353,400
Wascana Energy, Inc.* 50,000 432,290
Clayton Williams Energy, Inc.* 40,000 120,000
XCL Ltd.* 117,200 95,225
----------------
23,308,302
----------------
Oil Service 23.8%
Atwood Oceanics, Inc.* 4,100 65,856
BJ Services Co.* 38,000 864,500
Dawson Geophysical Co.* 20,000 235,000
Dreco Energy Services Ltd.* 30,000 435,000
Energy Ventures, Inc.* 57,600 1,036,800
Ensco International, Inc.* 40,000 635,000
Grant Geophysical, Inc.* 70,000 148,750
Landmark Graphics Corp.* 15,000 382,500
J. Ray McDermott S.A.* 6,800 150,450
Nabors Industries, Inc.* 67,200 554,400
Noble Drilling Corp.* 175,000 1,290,625
Nowsco Well Service Ltd. 100,000 975,000
Oceaneering International, Inc.* 25,600 227,200
Pool Energy Services Co.* 70,000 577,500
Rowan Companies, Inc.* 50,000 406,250
Solid State Geophysical, Inc.* 9,500 40,635
TMBR/Sharp Drilling, Inc.* 50,000 346,875
Tesco Corp.* 50,000 107,390
Tuboscope Vetco International Corp.* 75,000 478,125
Unit Corp.* 50,000 181,250
----------------
9,139,106
----------------
Total Energy 32,447,408
----------------
Utility 8.7%
Natural Gas 8.7%
ENSERCH Corp. 80,000 1,370,000
TransTexas Gas Corp.* 129,500 1,958,687
----------------
3,328,687
----------------
Total Utility 3,328,687
----------------
Total Equity Securities (Cost
$34,815,947) 37,812,254
----------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
3
<PAGE>
STATE STREET RESEARCH GLOBAL RESOURCES FUND
<TABLE>
<CAPTION>
Principal Maturity Value
Amount Date (Note 1)
------------ ------------ -------------
<S> <C> <C> <C>
SHORT-TERM OBLIGATIONS 2.9%
American Express Credit
Corp., 5.85% $398,000 7/5/1995 $ 398,000
American Express Credit
Corp., 5.80% 152,000 7/6/1995 152,000
Ford Motor Credit Co., 5.92% 566,000 7/3/1995 566,000
-------------
Total Short-Term Obligations (Cost $1,116,000) 1,116,000
-------------
Total Investments (Cost $35,931,947)--101.5% 38,928,254
Cash and Other Assets, Less Liabilities--(1.5)% (569,266)
-------------
Net Assets--100.0% $38,358,988
=============
Federal Income Tax Information:
At June 30, 1995, the net unrealized appreciation of
investments based on cost for Federal income tax purposes of
$36,019,398 was as follows:
Aggregate gross unrealized appreciation for all investments
in which there is an excess of value over tax cost $ 8,104,767
Aggregate gross unrealized depreciation for all investments
in which there is an excess of tax cost over value (5,195,911)
-------------
$ 2,908,856
=============
</TABLE>
* Nonincome-producing securities
ADR stands for American Depositary Receipt, representing ownership of foreign
securities.
Diversification of Equity Securities and Short-Term Obligations at June 30,
1995 (as a percentage of net assets) was United States 80.2%, Canada 19.7%
and South Africa 0.1%.
STATEMENT OF ASSETS AND LIABILITIES
June 30, 1995
<TABLE>
<CAPTION>
<S> <C>
Assets
Investments, at value (Cost $35,931,947) (Note 1) $38,928,254
Cash 1,884
Receivable for fund shares sold 74,499
Receivable from Distributor (Note 3) 10,907
Dividends and interest receivable 4,470
Other assets 1,630
------------
39,021,644
Liabilities
Payable for securities purchased 310,240
Payable for fund shares redeemed 149,085
Accrued transfer agent and shareholder services
(Note 2) 89,605
Accrued management fee (Note 2) 25,738
Accrued distribution fee (Note 5) 14,402
Accrued trustees' fees (Note 2) 4,507
Other accrued expenses 69,079
------------
662,656
------------
Net Assets $38,358,988
============
Net Assets consist of:
Unrealized appreciation of investments $ 2,996,307
Accumulated net realized loss (4,928,307)
Shares of beneficial interest 40,290,988
------------
$38,358,988
============
Net Asset Value and redemption price per share of
Class A shares ($25,691,662 / 2,112,869 shares of
beneficial interest) $12.16
============
Maximum Offering Price per share of Class A shares
($12.16 / .955) $12.73
============
Net Asset Value and offering price per share of
Class B shares ($7,029,514 / 584,193 shares of
beneficial interest)* $12.03
============
Net Asset Value, offering price and redemption
price per share of Class C shares ($3,287,790 /
267,853 shares of beneficial interest) $12.27
============
Net Asset Value and offering price per share of
Class D shares ($2,350,022 / 195,480 shares of
beneficial interest)* $12.02
============
</TABLE>
* 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.
4
<PAGE>
STATE STREET RESEARCH GLOBAL RESOURCES FUND
STATEMENT OF OPERATIONS
For the year ended June 30, 1995
<TABLE>
<S> <C>
Investment Income
Dividends, net of foreign taxes of $7,810 $ 94,420
Interest 36,910
------------
131,330
Expenses
Transfer agent and shareholder services (Note 2) 303,332
Management fee (Note 2) 284,926
Custodian fee 71,781
Registration fees 48,427
Reports to shareholders 33,122
Audit fee 30,449
Distribution fee--Class A (Note 5) 119,988
Distribution fee--Class B (Note 5) 64,359
Distribution fee--Class D (Note 5) 20,616
Amortization of organization costs (Note 1) 15,762
Trustees' fees (Note 2) 14,971
Legal fees 3,579
Miscellaneous 7,035
------------
1,018,347
Expenses borne by the Distributor (Note 3) (307,559)
------------
710,788
------------
Net investment loss (579,458)
------------
Realized and Unrealized Gain (Loss)
on Investments
Net realized loss on investments (Notes 1 and 4) (1,268,036)
Net unrealized appreciation of investments 2,488,313
------------
Net gain on investments 1,220,277
------------
Net increase in net assets resulting from operations $ 640,819
============
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Year ended June 30
1995 1994
------------------------------------------------------------
<S> <C> <C>
Increase (Decrease) in Net Assets
Operations:
Net investment loss $ (579,458) $ (566,197)
Net realized loss on
investments and foreign
currency* (1,268,036) (93,001)
Net unrealized appreciation
(depreciation) of investments 2,488,313 (3,484,508)
----------- ------------
Net increase (decrease)
resulting from operations 640,819 (4,143,706)
----------- ------------
Net increase (decrease) from
fund share transactions
(Note 7) (2,185,277) 8,751,694
----------- ------------
Total increase (decrease) in
net assets (1,544,458) 4,607,988
Net Assets
Beginning of year 39,903,446 35,295,458
----------- ------------
End of year $38,358,988 $39,903,446
=========== ============
* Net realized loss for
Federal income tax purposes
(Note 1) $(1,203,874) $ (760,656)
=========== ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
5
<PAGE>
STATE STREET RESEARCH GLOBAL RESOURCES FUND
NOTES TO FINANCIAL STATEMENTS
June 30, 1995
Note 1
State Street Research Global Resources Fund, formerly State Street Research
Global Energy Fund (the "Fund"), is a series of MetLife-State Street Equity
Trust (the "Trust"), which was organized as a Massachusetts business trust in
March, 1986 and is registered under the Investment Company Act of 1940, as
amended, as an open-end management investment company. The Fund commenced
operations in March, 1990. The Trust presently consists of four separate
funds: State Street Research Global Resources Fund, MetLife-State Street
Research Capital Appreciation Fund, MetLife-State Street Research Equity
Income Fund and MetLife-State Street Research Equity Investment Fund.
The Fund offers four classes of shares. Class A shares are subject to an
initial sales charge of up to 4.50% and an annual service fee of 0.25% of
average daily net assets. Prior to March 10, 1995, Class A shares paid annual
distribution and service fees of 0.50% of average daily net assets.
Investments of $1 million or more in Class A shares, which are not subject to
any initial sales charge, are subject to a 1.00% contingent deferred sales
charge if redeemed within one year of purchase. 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. No sales charge is imposed at the time of purchase or
redemption of Class C shares. Class C shares do not pay any distribution or
service fees. 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, relating specifically to that class.
The Trustees declare separate dividends on each class of shares
The following significant accounting 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 Valuation
Values for listed securities reflect final sales 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 closing prices
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. Securities quoted in
foreign currencies are translated into U.S. dollars at the current exchange
rate. Gains and losses that arise from changes in exchange rates are not
segregated from gains and losses that arise from changes in market prices of
investments. Short-term securities maturing within sixty days are valued at
amortized cost. Other securities, if any, are valued at their fair value as
determined in accordance with established methods consistently applied.
B. Security Transactions
Security transactions are accounted for on the trade date (date the order to
buy or sell is executed). Realized gains or losses are reported on the basis
of identified cost of securities delivered.
C. Net Investment Income
Investment income is accrued daily as earned. Dividend income is accrued on
the ex-dividend date. The Fund is charged for expenses directly attributable
to it, while indirect expenses are allocated among all funds in the Trust.
D. Dividends
Dividends from net investment income, if any, are declared and paid or
reinvested semiannually. Net realized capital gains, if any, are distributed
annually, unless additional distributions are required for compliance with
applicable tax regulations.
Income dividends and capital gains distributions are determined in accordance
with Federal income tax regulations which may differ from generally accepted
accounting principles.
E. Federal Income Taxes
No provision for Federal income taxes is necessary because 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. At June 30, 1995, the Fund
had a capital loss carryforward of $4,210,961 available, to the extent
provided in regulations, to offset future capital gains, if any, of which
$278,720, $1,767,752, $199,959, $760,656 and $1,203,874 expire on June 30,
1999, 2000, 2001, 2002 and 2003, respectively.
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 June 30, 1994, the Fund incurred net capital losses of $649,003 and
it has deferred and treated such losses as arising in the fiscal year ending
June 30, 1995. From November 1, 1994 through June 30, 1995, the Fund incurred
net capital losses of approximately $630,000 and it intends to defer and
treat such losses as arising in the fiscal year ending June 30, 1996.
F. Deferred Organization Costs
Certain costs incurred in the organization and registration of the Fund were
capitalized and amortized under the straight-line method over a period of
five years.
6
<PAGE>
STATE STREET RESEARCH GLOBAL RESOURCES FUND
NOTES (cont'd)
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 0.75% 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. During the year ended June 30, 1995, the fees pursuant to such
agreement amounted to $284,926.
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 year ended
June 30, 1995, the amount of such shareholder servicing and account
maintenance expenses was $72,518.
The fees of the Trustees not currently affiliated with the Adviser amounted
to $14,971 during the year ended June 30, 1995.
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 year ended June 30, 1995, the amount of such expenses
assumed by the Distributor and its affiliates was $307,559.
Note 4
For the year ended June 30, 1995, purchases and sales of securities,
exclusive of short-term obligations, aggregated $23,450,521 and $26,659,165,
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, as amended. 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. Prior to March 10, 1995, the Fund
paid annual distribution fees of 0.25% of average daily net assets for Class
A 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 year ended June 30, 1995, fees pursuant to such plan amounted to
$119,988, $64,359 and $20,616 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 $10,670 and $24,466, respectively, on sales of Class A shares of
the Fund during the year ended June 30, 1995, and that MetLife Securities,
Inc. earned commissions aggregating $29,957 on sales of Class B shares, and
that the Distributor collected contingent deferred sales charges of $21,450,
$36,122 and $1,185 on redemptions of Class A, Class B and Class D shares,
respectively, during the same period.
Note 6
Under normal market conditions the Fund invests not less than 65% of its
total assets in equity securities of domestic and foreign companies in the
energy and natural resources industries. Also, the Fund may invest up to 35%
of its total assets in the securities of issuers in industries that are not
related to the energy or natural resources industries. Accordingly, the
Fund's investments will fluctuate in response to a variety of economic,
political and other factors peculiar to the energy industries and may
fluctuate more widely than a portfolio that invests in a broader range of
industries.
7
<PAGE>
STATE STREET RESEARCH GLOBAL RESOURCES FUND
Note 7
The Trustees have the authority to issue an unlimited number of shares of
beneficial interest, $.001 par value per share. At June 30, 1995,
Metropolitan owned 38,491 Class D shares and the Distributor owned one Class
A share of the Fund.
Share transactions were as follows:
<TABLE>
<CAPTION>
Year ended June 30
-------------------------------------------------------
1995 1994
------------------------- ---------------------------
Class A Shares Amount Shares Amount
- ---------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold 2,514,296 $ 28,346,425 2,293,708 $ 27,669,872
Shares repurchased (2,992,842) (33,679,131) (2,182,001) (26,635,350)
---------- ----------- ---------- -------------
Net increase
(decrease) (478,546) $ (5,332,706) 111,707 $ 1,034,522
========== =========== ========== =============
Class B Shares Amount Shares Amount
- ---------------------------------------------------------------------------------
Shares sold 314,583 $ 3,497,941 652,256 $ 7,742,089
Shares repurchased (267,978) (3,006,916) (192,274) (2,299,142)
---------- ----------- ---------- -------------
Net increase 46,605 $ 491,025 459,982 $ 5,442,947
========== =========== ========== =============
Class C Shares Amount Shares Amount
- ---------------------------------------------------------------------------------
Shares sold 280,275 $ 3,409,713 137,750 $ 1,700,753
Shares repurchased (93,086) (1,092,177) (67,902) (824,239)
---------- ----------- ---------- -------------
Net increase 187,189 $ 2,317,536 69,848 $ 876,514
========== =========== ========== =============
Class D Shares Amount Shares Amount
- ---------------------------------------------------------------------------------
Shares sold 108,958 $ 1,239,952 176,812 $ 2,112,870
Shares repurchased (77,489) (901,084) (56,352) (715,159)
---------- ----------- ---------- -------------
Net increase 31,469 $ 338,868 120,460 $ 1,397,711
========== =========== ========== =============
</TABLE>
8
<PAGE>
STATE STREET RESEARCH GLOBAL RESOURCES FUND
FINANCIAL HIGHLIGHTS
For a share outstanding throughout each year.
<TABLE>
<CAPTION>
Class A Class B
---------------------------------------------------- ---------------------------------
June 1,
1993
(Commencement
of Share
Class
Designations)
Year ended June 30 Year ended June 30 to
---------------------------------------------------- ------------------ June 30,
1995** 1994** 1993 1992 1991 1995** 1994** 1993
-----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year $11.84 $13.51 $8.02 $9.12 $11.23 $11.78 $13.51 $12.99
Net investment income (loss)* (.16) (.17) (.13) (.12) .03 (.23) (.23) (.02)
Net realized and unrealized gain
(loss) on investments .48 (1.50) 5.62 (.98) (2.07) .48 (1.50) .54
Distribution from net realized
gains -- -- -- -- (.06) -- -- --
Dividends from net investment
income -- -- -- -- (.01) -- -- --
------- ------- ------- ------- ------- ------- ------- -----------
Net asset value, end of year $12.16 $11.84 $13.51 $8.02 $9.12 $12.03 $11.78 $13.51
======= ======= ======= ======= ======= ======= ======= ===========
Total return 2.70%+ (12.36)%+ 68.45%+ (12.06)%+ (18.28)%+ 2.12%+ (12.81)%+ 4.00%++
Net assets at end of year (000s) $25,692 $30,679 $33,513 $19,227 $29,760 $7,030 $6,333 $1,048
Ratio of operating expenses to
average net assets* 1.75% 1.75% 1.75% 1.75% 1.75% 2.33% 2.25% 2.25%+++
Ratio of net investment income
(loss) to average net assets (1.41)% (1.46)% (1.44)% (1.16%) 0.25% (1.98)% (1.93)% (1.98)%+++
Portfolio turnover rate 62.94% 30.98% 61.00% 47.09% 108.18% 62.94% 30.98% 61.00%
*Reflects voluntary assumption of
fees or expenses per share in each
year (Note 3). $ .09 $ .11 $ .03 $ .05 $ .03 $ .09 $ .14 $ .00
</TABLE>
<TABLE>
<CAPTION>
Class C Class D
--------------------------------------- -----------------------------------------
June 1,
1993 June 1, 1993
(Commencement (Commencement
of of
Share Class Share Class
Designations) Designations)
Year ended June 30 to Year ended June 30 to
------------------- June 30, ------------------ June 30,
1995** 1994** 1993 1995** 1994** 1993
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year $11.90 $13.52 $12.99 $11.77 $13.51 $12.99
Net investment loss* (.11) (.15) (.00) (.23) (.23) (.02)
Net realized and unrealized gain (loss)
on investments .48 (1.47) .53 .48 (1.51) .54
----------- ----------- ----------- ----------- ----------- ------------
Net asset value, end of year $12.27 $11.90 $13.52 $12.02 $11.77 $13.51
=========== =========== =========== =========== =========== ============
Total return 3.11%+ (11.98)%+ 4.08%++ 2.12%+ (12.88)%+ 4.00%++
Net assets at end of year (000s) $3,288 $960 $146 $2,350 $1,931 $588
Ratio of operating expenses to average
net assets* 1.33% 1.25% 1.25%++ 2.33% 2.25% 2.25%+++
Ratio of net investment loss to average
net assets* (1.01)% (0.95)% (1.05)%++ (1.99)% (1.94)% (2.00)%+++
Portfolio turnover rate 62.94% 30.98% 61.00% 62.94% 30.98% 61.00%
*Reflects voluntary assumption of fees
or expenses per share in each year
(Note 3). $ .08 $ .16 $ .00 $ .09 $ .13 $ .00
</TABLE>
**Per share figures have been calculated using the average shares method.
+++Annualized
+Total return figures do 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.
++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.
9
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees of MetLife-State Street
Equity Trust and the Shareholders of
State Street Research Global Resources Fund:
In our opinion, the accompanying statement of assets and liabilities,
including the investment portfolio, and the related statements of operations
and of changes in net assets and the financial highlights present fairly, in
all material respects, the financial position of State Street Research Global
Resources Fund (formerly State Street Research Global Energy Fund) (a series
of MetLife-State Street Equity Trust, hereafter referred to as the "Trust")
at June 30, 1995, and the results of its operations, the changes in its net
assets and the financial highlights for the periods indicated, in conformity
with generally accepted accounting principles. These financial statements and
financial highlights (hereafter referred to as "financial statements") are
the responsibility of the Trust's management; our responsibility is to
express an opinion on these financial statements based on our audits. We
conducted our audits of these financial statements in accordance with
generally accepted auditing standards which require that we plan and perform
the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on
a test basis, evidence supporting the amounts and disclosures in the
financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which included
confirmation of securities at June 30, 1995 by correspondence with the
custodian and brokers and the application of alternative auditing procedures
where confirmations from brokers were not received, provide a reasonable
basis for the opinion expressed above.
Price Waterhouse LLP
Boston, Massachusetts
August 4, 1995
10
<PAGE>
STATE STREET RESEARCH GLOBAL RESOURCES FUND
MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE
Global Resources Fund (formerly Global Energy Fund) underperformed the
average for Lipper Analytical Services' natural resources fund category for
the 12 months ended June 30, 1995 (does not reflect sales charge). The sharp
drop in natural gas prices caused Fund performance to decline. Historically,
the Fund's performance has been closely linked to natural gas and oil prices.
Currently, the Fund has substantial holdings in small-capitalization stocks,
which typically experience greater price fluctuation than larger stocks.
Generally, we target stocks that offer long-term growth, low debt levels, and
attractive valuations.
Our oil holdings focus on small exploration companies. Oil service stocks
represent nearly 25% of the portfolio. This percentage is lower than in the
past because of mergers and acquisitions among the many small oil service
companies. We took advantage of sharp price declines and added to our natural
gas holdings late in 1994.
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 index is unmanaged and does not take sales charges into
consideration. Direct investment in the index is not possible; results are
for illustrative purposes only. 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. Performance
for a class includes periods prior to the adoption of class designations in
1993. Performance reflects up to a maximum 4.5% front-end sales charge or 5%
contingent deferred sales charge. "C" shares, offered without a sales charge,
are available only to certain employee benefit plans and institutions.
Performance for "B" and "D" shares prior to class designations in 1993
reflects annual 12b-1 fees of .50% and subsequent performance reflects annual
12b-1 fees of 1%. Performance results for the Fund are increased by the
Distributor's voluntary reduction of Fund fees and expenses. The first figure
reflects expense reduction; the second shows what results would have been
without subsidization.
Comparison Of Change In Value Of A $10,000
Investment In State Street Research
Global Resources Fund and The S&P 500
[line chart] Class A Shares
Average Annual Total Return
1 Year 5 Years Life of Fund
- -1.92%/-2.95% +0.80%/+0.16% -0.40%/-1.01%
Global S&P
3/90 $ 9,550 $10,000
6/90 8,982 10,913
6/91 7,339 11,720
6/92 6,454 13,290
6/93 10,872 15,101
6/94 9,528 15,313
6/95 9,786 19,299
[line chart] Class B Shares
Average Annual Total Return
1 Year 5 Years Life of Fund
- -2.88%/-3.96% +1.13%/+0.43% +0.26%/-0.40%
Global S&P
3/90 $10,000 $10,000
6/90 9,405 10,913
6/91 7,685 11,720
6/92 6,758 13,290
6/93 11,385 15,101
6/94 9,927 15,313
6/95 10,137 19,299
[line chart] Class C Shares
Average Annual Total Return
1 Year 5 Years Life of Fund
+3.11%/+2.03% +1.91%/+1.19% +0.63%/-0.06%
Global S&P
3/90 $10,000 $10,000
6/90 9,405 10,913
6/91 7,685 11,720
6/92 6,758 13,290
6/93 11,393 15,101
6/94 10,028 15,313
6/95 10,340 19,299
[line chart] Class D Shares
Average Annual Total Return
1 Year 5 Years Life of Fund
+1.12%/+0.04% +1.49%/+0.82% +0.24%/-0.40%
Global S&P
3/90 $10,000 $10,000
6/90 9,405 10,913
6/91 7,685 11,720
6/92 6,758 13,290
6/93 11,385 15,101
6/94 9,918 15,313
6/95 10,129 19,299
[legend for line charts]
solid rule=Global Resources Fund
broken rule=S&P 500
11
<PAGE>
STATE STREET RESEARCH GLOBAL RESOURCES FUND
FUND INFORMATION, OFFICERS AND TRUSTEES OF METLIFE-STATE STREET EQUITY TRUST
Fund Information
State Street Research
Global Resources Fund
One Financial Center
Boston, MA 02111
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
Goodwin, Procter & Hoar
Exchange Place
Boston, MA 02110
Independent Accountants
Price Waterhouse LLP
160 Federal Street
Boston, MA 02110
Officers
Ralph F. Verni
Chairman of the Board,
President and
Chief Executive Officer
Peter C. Bennett
Vice President
Bartlett R. Geer
Vice President
Thomas P. Moore, Jr.
Vice President
Daniel J. Rice III
Vice President
Steven P. Somes
Vice President
Gerard P. Maus
Treasurer
Joseph W. Canavan
Assistant Treasurer
Douglas A. Romich
Assistant Treasurer
Francis J. McNamara, III
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
Edward M. Lamont
Formerly in banking (Morgan
Guaranty Trust Company of
New York); presently engaged
in private investments and
civic affairs
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
Toby Rosenblatt
President,
The Glen Ellen Company
Vice President,
Founders Investments Ltd.
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
12
<PAGE>
[BACK COVER]
State Street Research Global Resources Fund
One Financial Center
Boston, MA 02111
[indicia]
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
[clock 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: 2522-950821(0996)SSR-LD
Cover Illustration by Dorothy Cullinan EG-384D-895
