Supplement No. 1 dated March 17, 1997
to
Prospectus dated November 1, 1996
for
STATE STREET RESEARCH CAPITAL APPRECIATION FUND
a series of State Street Research Equity Trust
Proposed Reorganization
A Special Meeting of Shareholders of the State Street Research Capital
Appreciation Fund (the "Capital Appreciation Fund") has been tentatively
scheduled for June 1997. At this meeting, shareholders will be asked to consider
and approve an Agreement and Plan of Reorganization between the Capital
Appreciation Fund and the State Street Research Capital Fund (the "Capital
Fund").
If the proposal is approved by the shareholders of the Capital Appreciation
Fund, the Capital Fund would acquire substantially all of the assets and
liabilities of the Capital Appreciation Fund. As a result of this transaction,
shareholders of the Capital Appreciation Fund would receive in exchange for
shares of their Fund, shares of the corresponding class of the Capital Fund with
an aggregate value equivalent to the aggregate net asset value of their Capital
Appreciation Fund investment at the time of the transaction. The transaction is
conditioned upon the receipt of an opinion of counsel to the effect that the
transaction would be free from federal income taxes to the shareholders of the
Capital Appreciation Fund and the Capital Appreciation Fund itself. After the
transaction, the Capital Appreciation Fund would be dissolved.
