[Front Cover]
[State Street logo] State Street Research
State Street Research
International Fixed Income Fund
Semiannual Report [cartoon of a man with umbrella circling the world]
April 30, 1995
What's Inside
New and Improved:
A new design that's
easier to read
Investment Update:
About the Fund,
economy and markets
Fund Information:
Facts and Figures
Plus, Complete Portfolio Holdings
and Financial Statements
<PAGE>
State Street Research International Fixed Income Fund
Investment Update
Investment Environment
The Economy
(bullet) The U.S. dollar weakened sharply against the Japanese yen and German
mark. A weak dollar is usually beneficial to investors in an
international fund because it makes securities denominated in other
currencies more valuable.
(bullet) The economies of Europe and Japan have been sluggish, leading to
expectations that foreign central banks will lower interest rates.
The Markets
(bullet) Overseas bond markets performed extremely well for the six months
ended April 30, 1995. The Salomon Brothers Non-U.S. Dollar World
Government Bond Index, which is a commonly-used indicator of
international bond performance, provided a total return of
+14.60%.(1)
(bullet) The Bundesbank (German central bank) lowered its discount rate,
which benefited bonds in Germany, France and Belgium.
(bullet) The Japanese bond market performed well because of the strong yen
and expectations of lower interest rates.
The Fund
Over the past six months
(bullet) For the six months ended April 30, 1995, International Fixed Income
Fund's Class A shares provided a total return of +13.52% (does not
include sales charge).(2) The average total return for 130 funds in
Lipper Analytical Services' world income funds category was +3.84%
(does not include sales charge).
(bullet) Because of turmoil regarding monetary union for the European
Community, the Fund sold its holdings in bonds denominated in
European Currency Units.
Current strategy
(bullet) As a short-term defensive measure after such strong performance, the
Fund held 17% of its assets in cash (of various currencies) on April
30, 1995.
(bullet) The portfolio's focus continues to be on the securities and
currencies of continental Europe and Japan.
(bullet) The portfolio primarily holds securities that are issued by foreign
governments and have the highest credit quality.
(1)The Salomon Brothers Non-U.S. Dollar World Government Bond Index is
unmanaged and does not take sales charges into account. Direct investment in
the index is not possible; results are for illustrative purposes only.
(2)+13.30% for Class B shares; +13.64% for Class C shares; +13.13% for Class
D shares.
(3)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.
(4)Shares of the Fund had no class designations until March 1, 1994, when
designations were assigned based on the pricing and 12b-1 fees applicable to
shares sold thereafter. Performance data for a specified class include
periods prior to the adoption of class designations. "A" share returns for
each of the periods reflect the maximum 4.5% sales charge. Performance prior
to March 1, 1994, does not reflect annual 12b-1 fees of .25%, which will
reduce subsequent performance. "B" share returns for the 1-year and Life of
Fund periods reflect a 5% and a 3% contingent deferred sales charge,
respectively. "C" shares, offered without a sales charge, are available only
to certain employee benefit plans and large institutions. "D" share return
for the 1-year period reflects a 1% contingent deferred sales charge.
Performance for "B" and "D" shares prior to March 1, 1994, does not reflect
annual 12b-1 fees of 1%, which will reduce subsequent performance.
Fund Information (all data are for periods ended April 30, 1995, except for
SEC Average Annual Compound Rates of Return)
SEC Average Annual Compound Rates of
Return for periods ended March 31, 1995
(at maximum applicable sales charge)(3,4)
<TABLE>
<CAPTION>
- ---------------------------------------------------
Life of Fund
(since 1/22/92) 1 year
- ----------- ---------------- -----------------
<S> <C> <C>
Class A +9.53%/+9.10% +12.04%/+11.86%
- ----------- --------------- ---------------
Class B +10.12%/+9.60% +11.58%/+11.17%
- ----------- --------------- ---------------
Class C +11.23%/+10.72% +17.67%/+17.26%
- ----------- --------------- ---------------
Class D +10.84%/+10.40% +15.50%/+15.31%
- ---------------------------------------------------
</TABLE>
Cumulative Total Returns
(do not reflect sales charge)(3)
<TABLE>
<CAPTION>
- --------------------------------------------------
Life of Fund
(since 1/22/92) 1 year
- ----------- --------------- -----------------
<S> <C> <C>
Class A +42.39%/+40.58% +19.47%/+19.28%
- ----------- --------------- ---------------
Class B +41.33%/+39.23% +18.77%/+18.36%
- ----------- --------------- ---------------
Class C +42.81%/+40.70% +19.80%/+19.39%
- ----------- --------------- ---------------
Class D +41.22%/+39.42% +18.71%/+18.52%
- --------------------------------------------------
</TABLE>
Performance results for the Fund are increased by the investment manager's
voluntary reduction of fees and expenses related to the Fund. The first
figure reflects expense reduction; the second shows what results would have
been without subsidization.
SEC Yield
<TABLE>
<CAPTION>
<S> <C>
- -----------------------
Class A 4.47%
- ----------- ------
Class B 3.96%
- ----------- ------
Class C 4.93%
- ----------- ------
Class D 3.95%
- -----------------------
</TABLE>
SEC yield is calculated according to Securities and Exchange Commission
requirements and is based on the net investment income produced for the 30
days ended April 30, 1995. Yields shown reflect voluntary reduction of Fund
fees and expenses. Without a reduction in Fund fees and expenses, the SEC
yield would have been 4.29% for Class A shares; 3.76% for Class B shares;
4.73% for Class C shares; and 3.76% for Class D shares.
Currency Allocation
(by percentage of net assets)
[pie chart]
<TABLE>
<CAPTION>
<S> <C>
European currencies 59%
German mark 26%
French franc 19%
Spanish peseta 4%
Italian lira 3%
Belgian franc 3%
British pound 2%
Danish krone 2%
Japanese yen 24%
Cash (in various currencies) 17%
</TABLE>
1
<PAGE>
State Street Research International Fixed Income Fund
Investment Portfolio
April 30, 1995
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
Principal Maturity Value
Amount Date (Note 1)
<S> <C> <C> <C>
- ---------------------------- ----------------- ---------- -------------
Fixed Income Securities 83.3%
Austria 4.5% Japanese Yen
Republic of Austria, 5.00% 100,000,000 1/22/2001 $ 1,310,466
-------------
Belgium 2.8% Belgian Franc
Kingdom of Belgium, 7.50% 25,000,000 7/29/2008 823,607
-------------
Denmark 2.0% Danish Krone
Kingdom of Denmark, 9.00% 3,000,000 11/15/2000 568,825
-------------
France 23.5% French Franc
Government of France, 8.50% 4,500,000 11/25/2002 956,960
Government of France, 6.75% 6,500,000 10/25/2003 1,243,386
Government of France, 6.75% 6,000,000 10/25/2004 1,138,462
Government of France, 8.50% 5,000,000 10/25/2008 1,066,341
Credit Local de France, Japanese Yen
6.00% 100,000,000 10/31/2001 1,378,890
Credit Foncier de France, Deutsche Mark
7.25% 1,500,000 2/24/2003 1,085,804
-------------
6,869,843
-------------
Germany 15.4%
Federal Republic of Germany, Deutsche Mark
6.50% 1,500,000 7/15/2003 1,049,340
KFW International Finance,
6.25% 2,000,000 10/15/2003 1,356,488
LKB Baden Wurttemb, 6.625% 1,500,000 8/20/2003 1,047,392
Sudwest Landesbank, 6.75% 1,500,000 8/26/2003 1,042,848
-------------
4,496,068
-------------
Italy 3.6% Italian Lira
Republic of Italy, 12.00% 1,800,000,000 9/01/2002 1,058,858
-------------
Japan 2.3%
Japan Development Bank, Japanese Yen
6.50% 23,000,000 9/20/2001 326,211
Tokyo Electric Power Co. Pound Sterling
Inc., 11.00% 200,000 6/05/2001 353,034
-------------
679,245
-------------
Spain 3.7% Spanish Peseta
Government of Spain, 10.50% 145,000,000 10/30/2003 1,075,208
-------------
Sweden 2.9% Deutsche Mark
Kingdom of Sweden, 10.25% 6,500,000 5/05/2003 856,998
-------------
United Kingdom 1.2% Pound Sterling
British Gas PLC, 10.875% 200,000 3/26/2001 350,620
-------------
Supranational 21.4% French Franc
Eurofima, 8.625% 5,000,000 9/01/1999 1,058,837
European Investment Bank, Japanese Yen
6.625% 100,000,000 3/15/2000 1,398,227
Inter-American Development
Bank, 6.75% 100,000,000 2/20/2001 1,419,051
International Bank for
Reconstruction &
Development, 4.50% 100,000,000 6/20/2000 1,291,872
European Economic Community, Deutsche Mark
6.50% 1,500,000 3/10/2000 1,091,755
-------------
6,259,742
-------------
Total Fixed Income Securities and Investments
(Cost $20,715,731)--83.3% 24,349,480
Cash and Other Assets, Less Liabilities--16.7% 4,898,221
-------------
Net Assets--100.0% $29,247,701
=============
Federal Income Tax Information:
At April 30, 1995, the net unrealized appreciation of
investments based on cost for Federal income tax purposes of
$20,715,731 was as follows:
Aggregate gross unrealized appreciation for all investments in
which there is an excess of value
over tax cost $3,998,416
Aggregate gross unrealized depreciation for all investments in
which there is an excess of
tax cost over value (364,667)
-------------
$3,633,749
=============
</TABLE>
The principal amount of each security is stated in the currency in which the
security is denominated.
The accompanying notes are an integral part of the financial statements.
2
<PAGE>
State Street Research International Fixed Income Fund
Statement of Assets and Liabilities
April 30, 1995
<TABLE>
<CAPTION>
<S> <C>
Assets
Investments, at value (Cost $20,715,731) (Note 1) $24,349,480
Foreign currency, at value (Cost $3,569,177) 3,730,779
Cash 178,436
Interest receivable 843,591
Receivable for fund shares sold 176,226
Receivable from investment manager (Note 3) 27,025
Foreign tax receivable 16,350
Deferred organization costs and other assets (Note 1) 44,788
-------------
29,366,675
Liabilities
Accrued directors' fees (Note 2) 21,377
Accrued management fee (Note 2) 17,881
Payable for fund shares redeemed 4,377
Accrued transfer agent and shareholder services (Note 2) 4,373
Accrued distribution fee (Note 5) 2,273
Other accrued expenses 68,693
-------------
118,974
-------------
Net Assets $29,247,701
=============
Net Assets consist of:
Undistributed net investment income $ 565,126
Unrealized appreciation of investments and foreign currency 3,842,081
Accumulated net realized gain on investments and foreign currency 616,401
Shares of beneficial interest 24,224,093
-------------
$29,247,701
=============
Net Asset Value and redemption price per share of Class A shares
($1,316,472 / 145,598 shares of beneficial interest) $9.04
=============
Maximum Offering Price per share of Class A shares ($9.04 / .955) $9.47
=============
Net Asset Value and offering price per share of Class B shares
($1,948,000 / 216,027 shares of beneficial interest)* $9.02
=============
Net Asset Value, offering price and redemption price per share of
Class C shares ($25,322,551 / 2,797,122 shares of beneficial
interest) $9.05
=============
Net Asset Value and offering price per share of Class D shares
($660,678 / 73,279 shares of beneficial interest)* $9.02
=============
</TABLE>
*Redemption price per share for Class B and Class D is equal to net asset
value less any applicable contingent deferred sales charge.
Statement of Operations
For the six months ended April 30, 1995
<TABLE>
<CAPTION>
<S> <C>
Investment Income
Interest, net of foreign taxes of $8,124 $ 988,440
Expenses
Management fee (Note 2) 98,018
Custodian fee 79,000
Registration fees 55,251
Audit fee 22,031
Directors' fees (Note 2) 20,698
Reports to shareholders 13,656
Transfer agent and shareholder services (Note 2) 12,961
Amortization of organization costs (Note 1) 8,554
Distribution fee--Class A (Note 5) 1,392
Distribution fees--Class B (Note 5) 7,704
Distribution fees--Class D (Note 5) 2,829
------------
322,094
Expenses borne by the investment manager (Note 3) (118,747)
------------
203,347
------------
Net investment income 785,093
------------
Realized and Unrealized Gain on Investments and
Foreign Currency
Net realized gain on investments (Notes 1 and 4) 133,533
Net realized gain on foreign currency (Note 1) 483,164
------------
Total net realized gain 616,697
------------
Net unrealized appreciation of investments 1,939,275
Net unrealized appreciation of foreign currency 123,540
------------
Total net unrealized appreciation 2,062,815
------------
Net gain on investments and foreign currency 2,679,512
------------
Net increase in net assets resulting from operations $3,464,605
============
</TABLE>
The accompanying notes are an integral part of the financial statements.
3
<PAGE>
State Street Research International Fixed Income Fund
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
Six months
ended Year ended
April 30, 1995 October 31, 1994
- ---------------------------------------- --------------- ------------------
<S> <C> <C>
Increase (Decrease) in Net Assets
Operations:
Net investment income $ 785,093 $ 1,409,678
Net realized gain on investments and
foreign currency* 616,697 505,691
Net unrealized appreciation
(depreciation) of investments and
foreign currency 2,062,815 (43,817)
------------- ----------------
Net increase resulting from operations 3,464,605 1,871,552
------------- ----------------
Dividends from net investment income:
Class A (39,233) (26,264)
Class B (48,035) (31,489)
Class C (853,772) (1,451,541)
Class D (17,661) (14,910)
------------- ----------------
(958,701) (1,524,204)
------------- ----------------
Distributions from net realized gains:
Class A (5,975) --
Class B (8,086) --
Class C (123,136) (90,111)
Class D (2,986) --
------------- ----------------
(140,183) (90,111)
------------- ----------------
Net increase from fund share
transactions (Note 6) 509,513 1,150,573
------------- ----------------
Total increase in net assets 2,875,234 1,407,810
Net Assets
Beginning of period 26,372,467 24,964,657
------------- ----------------
End of period (including undistributed
net investment income of $565,126 and
$738,734, respectively) $29,247,701 $26,372,467
============= ================
*Net realized gain for Federal
income tax purposes (Note 1) $ 133,533 $ 139,887
============= ================
</TABLE>
Notes to Financial Statements
April 30, 1995
Note 1
State Street Research International Fixed Income Fund (the "Fund"), formerly
MetLife International Fixed Income Fund, is a diversified series of State
Street Research Portfolios, Inc. ("Portfolios"), formerly MetLife Portfolios,
Inc., which was organized as a Maryland corporation in April, 1991 and is
registered under the Investment Company Act of 1940, as amended, as an
open-end management investment company. The Fund commenced operations in
January, 1992. Portfolios consists presently of two separate funds: State
Street Research International Fixed Income Fund and State Street Research
International Equity Fund.
The Fund offers four classes of shares. Class A shares are subject to an
initial sales charge of up to 4.50% and annual service fees of 0.25% of
average daily net assets. Class B shares are subject to a contingent deferred
sales charge on certain redemptions made within five years of purchase and
pay annual distribution and service fees of 1.00%. Class B shares
automatically convert into Class A shares (which pay lower ongoing expenses)
at the end of eight years after the issuance of the Class B shares. Class C
shares are only offered to certain employee benefit plans and large
institutions. 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 Directors
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
Securities traded on domestic stock exchanges are valued at the last sale
price as of the close of business on the day the securities are being valued,
or, lacking any sales, at the mean between closing bid and asked prices.
Securities traded on the National Association of Securities Dealers Automated
Quotation ("NASDAQ") system are valued at the last reported sales price. Each
security traded primarily on non-domestic securities exchanges is generally
valued at the preceding closing value of such security on the exchange where
it is primarily traded. A security that is listed or traded on more than one
exchange is valued at the quotation on the exchange determined to be the
primary market for such security by the Directors or its delegates. If no
closing price is available, then such security is valued at the mean between
the last current bid and asked prices or by using the last available closing
price. Domestic securities traded in the over-the-counter market are valued
at the mean between the bid and asked prices or yield equivalent as obtained
from two or more dealers that make markets in the securities. All non-U.S.
securities traded in the over-the-counter market are valued at the last sale
quote or the last closing bid price, if there is no active trading in a
particular security for a given day. Portfolio securities traded both in the
over-the-
The accompanying notes are an integral part of the financial statements.
4
<PAGE>
State Street Research International Fixed Income Fund
Notes (cont'd)
counter market and on a securities exchange are valued according to the
broadest and most representative market. Securities for which market
quotations are not readily available are valued as determined in good faith
by or under the authority of the Directors. Short-term securities maturing
within sixty days are valued at amortized cost. Securities quoted in foreign
currencies are translated into U.S. dollars at the current exchange rate.
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. 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.
C. Net Investment Income
Investment income is accrued daily as earned. The Fund is charged for
expenses directly attributable to it, while indirect expenses are allocated
among all funds in the Portfolios.
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. The difference is primarily due to differing
treatments for foreign currency transactions.
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.
F. Deferred Organization Costs
Certain costs incurred in the organization and registration of the Fund were
capitalized and are being amortized under the straight-line method over a
period of five years.
Note 2
The Fund and State Street Research Investment Services, Inc., the Fund's
investment manager and principal underwriter (the "Investment Manager" and
"Distributor"), a wholly-owned indirect subsidiary of Metropolitan Life
Insurance Company ("Metropolitan"), have entered into an agreement under
which the Investment Manager receives monthly fees at an annual rate of 0.75%
of the Fund's average daily net assets. The Investment Manager has entered
into a Sub-Investment Management Agreement with GFM International Investors
Limited (the "Sub-Investment Manager"), a substantially wholly-owned,
indirect subsidiary of Metropolitan, pursuant to which the Sub-Investment
Manager has assumed the overall responsibility for managing the investments
of the Fund. During the six months ended April 30, 1995, the Fund paid the
Investment Manager $98,018 in management fees. The Fund has no responsibility
for the payment of fees to the Sub-Investment Manager.
State Street Research Shareholder Services, a division of the Distributor,
provides certain shareholder services to the Fund such as responding to
inquiries and instructions from investors with respect to the purchase and
redemption of shares of the Fund. In addition, Metropolitan receives a fee
for maintenance of the accounts of certain shareholders who are participants
in sponsored arrangements, employee benefit plans and similar programs or
plans, through or under which shares of the Fund may be purchased. During the
six months ended April 30, 1995, the amount of such expenses was $4,512.
The fees of the Directors not currently affiliated with the Investment
Manager amounted to $20,698 during the six months ended April 30, 1995.
Note 3
The Investment Manager or affiliates may from time to time and in varying
amounts voluntarily assume some portion of fees or expenses relating to the
Fund. During the six months ended April 30, 1995, the amount of such assumed
expenses was $118,747.
Note 4
For the six months ended April 30, 1995, purchases and sales of securities,
exclusive of short-term obligations, aggregated $4,259,186 and $7,153,030,
respectively.
Note 5
The Portfolios 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. The Distributor uses such payments
for personal services and/or the maintenance of shareholder accounts, to
reimburse securities dealers for distribution and marketing services, to
furnish ongoing assistance to investors and to defray a portion of its
distribution and marketing expenses. For the six months ended April 30, 1995,
fees pursuant to such plan amounted to $1,392, $7,704 and $2,829 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 $590 and $3,814, respectively on sales of Class A shares of the
Fund during the six months ended April 30, 1995, and that MetLife Securities,
Inc. earned commissions aggregating $590 on sales of Class B shares, and that
the Distributor collected contingent deferred sales charges of $2,208 and
$104 on redemptions of Class B and Class D, respectively, during the same
period.
5
<PAGE>
State Street Research International Fixed Income Fund
Note 6
The authorized capital stock of the Fund currently consists of 100,000,000
shares, $.01 par value per share. The Fund reserves the right to issue
additional classes of shares. At April 30, 1995, Metropolitan owned 62,933
Class A shares, 62,933 Class B shares, 2,539,382 Class C shares and 62,933
Class D shares of the Fund.
Share transactions were as follows:
<TABLE>
<CAPTION>
March 1, 1994
(Commencement of
Six months ended Share Class Designations) to
April 30, 1995 October 31, 1994
------------------------- -------------------------------
Class A Shares Amount Shares Amount
- --------------------------------------- ---------- ----------- ----------- ----------------
<S> <C> <C> <C> <C>
Shares sold 31,242 $261,383 143,778 $ 1,152,383
Issued upon reinvestment of:
Distribution from net realized gains 737 5,712 -- --
Dividends from net investment income 2,462 19,420 1,077 8,636
Shares repurchased (18,690) (153,192) (15,008) (119,770)
-------- --------- --------- --------------
Net increase 15,751 $133,323 129,847 $ 1,041,249
======== ========= ========= ==============
Class B Shares Amount Shares Amount
- --------------------------------------- -------- --------- --------- --------------
Shares sold 64,504 $536,959 180,601 $ 1,449,373
Issued upon reinvestment of:
Distribution from net realized gains 931 7,205 -- --
Dividends from net investment income 1,889 14,620 1,683 13,466
Shares repurchased (25,012) (199,334) (8,569) (70,408)
-------- --------- --------- --------------
Net increase 42,312 $359,450 173,715 $ 1,392,431
======== ========= ========= ==============
Year ended
October 31, 1994
-----------------------------
Class C Shares Amount Shares Amount
- --------------------------------------- -------- --------- --------- --------------
Shares sold 6,456 $ 55,567 101,016 $ 817,898
Issued upon reinvestment of:
Distribution from net realized gains 15,646 121,415 11,332 90,111
Dividends from net investment income 9,097 72,153 17,188 139,150
Shares repurchased (37,070) (302,115) (354,407) (2,846,802)
-------- --------- --------- --------------
Net decrease (5,871) $(52,980) (224,871) $(1,799,643)
======== ========= ========= ==============
March 1, 1994
(Commencement of
Share Class Designations) to
October 31, 1994
-----------------------------
Class D Shares Amount Shares Amount
- --------------------------------------- -------- --------- --------- --------------
Shares sold 9,517 $ 76,492 64,589 $ 516,298
Issued upon reinvestment of:
Distribution from net realized gains 385 1,279 -- --
Dividends from net investment income 160 2,985 30 238
Shares repurchased (1,402) (11,036) -- --
-------- --------- --------- --------------
Net increase 8,660 $ 69,720 64,619 $ 516,536
======== ========= ========= ==============
</TABLE>
6
<PAGE>
State Street Research International Fixed Income Fund
Financial Highlights
For a share outstanding throughout each period:
<TABLE>
<CAPTION>
Class A Class B
----------------------------- -------------------------------
Six months ended Six months ended
April 30, 1995 1994** April 30, 1995 1994**
- ----------------------------------- ---------------- --------- ---------------- -----------
<S> <C> <C> <C> <C>
Net asset value, beginning of
period $8.31 $7.99 $8.28 $7.99
Net investment income* .23 .30 .20 .27
Net realized and unrealized gain on
investments .84 .27 .85 .26
Dividends from net investment
income (.30) (.25) (.27) (.24)
Distributions from net realized
gains (.04) -- (.04) --
-------------- ------- -------------- ---------
Net asset value, end of period $9.04 $8.31 $9.02 $8.28
============== ======= ============== =========
Total return 13.52%+++ 7.33%+++ 13.30%+++ 6.73%+++
Net assets at end of period (000s) $1,316 $1,079 $1,948 $1,439
Ratio of operating expenses to
average net assets* 1.71%++ 1.69%++ 2.46%++ 2.43%++
Ratio of net investment income to
average net assets* 5.83%++ 5.79%++ 5.08%++ 5.06%++
Portfolio turnover rate 17.54% 38.84% 17.54% 38.84%
*Reflects voluntary assumption of
fees or expenses per share in
each period (Note 3). $.04 $.01 $.04 $.02
</TABLE>
<TABLE>
<CAPTION>
Class C
---------------------------------------------------------------------
January 22, 1992
(Commencement
Six months ended Year ended October 31 of Operations) to
April 30, 1995 1994 1993 October 31, 1992
- ----------------------------------- ---------------- --------- --------- ----------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of
period $8.32 $8.24 $7.85 $7.40
Net investment income* .25 .14 .41 .32
Net realized and unrealized gain on
investments .83 .46 .34 .13
Dividends from net investment
income (.31) (.49) (.36) --
Distributions from net realized
gains (.04) (.03) -- --
-------------- -------- -------- ---------------------
Net asset value, end of period $9.05 $8.32 $8.24 $7.85
============== ======== ======== =====================
Total return 13.64%+++ 7.72%+ 9.98%+ 6.08%+++
Net assets at end of period (000s) $25,323 $23,319 $24,965 $22,299
Ratio of operating expenses to
average net assets* 1.46%++ 1.47% 1.50% 1.50%++
Ratio of net investment income to
average net assets* 6.10%++ 5.62% 5.48% 5.63%++
Portfolio turnover rate 17.54% 38.84% 20.44% 56.31%
*Reflects voluntary assumption of
fees or expenses per share in
each period (Note 3). $.04 $.03 $.03 $.04
- ------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Class D
-----------------------------
Six months ended
April 30, 1995 1994**
- ----------------------------------- ---------------- ---------
<S> <C> <C>
Net asset value, beginning of
period $ 8.29 $ 7.99
Net investment income* .20 .27
Net realized and unrealized gain on
investments .84 .26
Dividends from net investment
income (.27) (.23)
Distributions from net realized
gains (.04) --
-------------- -------
Net asset value, end of period $ 9.02 $ 8.29
============== =======
Total return 13.13%+++ 6.81%+++
Net assets at end of period (000s) $661 $536
Ratio of operating expenses to
average net assets* 2.46%++ 2.45%++
Ratio of net investment income to
average net assets* 5.08%++ 4.98%++
Portfolio turnover rate 17.54% 38.84%
*Reflects voluntary assumption of
fees or expenses per share in
each period (Note 3). $ .04 $ .01
- --------------------------------------------------------------------
</TABLE>
**March 1, 1994 (commencement of share class designations) to October 31,
1994.
++Annualized.
+Total return figures do not reflect any front-end or contingent deferred
sales charges. Total return would be lower if the Investment Manager 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 Investment Manager and its affiliates had not
voluntarily assumed a portion of the Fund's expenses.
7
<PAGE>
Independent Auditors' Report
To the Board of Directors of State Street
Research Portfolios, Inc. and the Shareholders of
State Street Research International Fixed Income Fund
We have audited the accompanying statement of assets and liabilities,
including the investment portfolio, of State Street Research International
Fixed Income Fund, formerly State Street Research International Fixed Income
Fund, (a series of State Street Research Portfolios, Inc., formerly MetLife
Portfolios, Inc.), as of April 30, 1995, and the related statement of
operations for the six months then ended, the statement of changes in net
assets for the six months then ended and the year ended October 31, 1994 and
the financial highlights for the six months ended April 30, 1995 and for each
of the years in the three year period ended October 31, 1994. These financial
statements and financial highlights are the responsibility of the Fund's
management. Our responsibility is to express an opinion on the financial
statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included confirmation of
securities owned at April 30 1995, by correspondence with the custodian. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the financial position of State Street
Research International Fixed Income Fund (a series of State Street Research
Portfolios, Inc.) at April 30, 1995, the results of its operations, the
changes in its net assets, and its financial highlights for the respective
stated periods, in conformity with generally accepted accounting principles.
Deloitte & Touche LLP
Boston, Massachusetts
June 9, 1995
8
<PAGE>
State Street Research International Fixed Income Fund
Fund Information, Officers and Directors of State Street Research Portfolios,
Inc.
Fund Information
State Street Research
International Fixed
Income Fund
One Madison Avenue
New York, NY 10010
Investment Manager
and Distributor
State Street Research
Investment Services, Inc.
One Financial Center
Boston, MA 02111
Sub-Investment Manager
GFM International
Investors Limited
5 Upper St. Martins Lane
London, WC2H 9EA
England
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
Sullivan & Worcester
1025 Connecticut Avenue, N.W.
Washington, D.C. 20036
Independent Accountants
Deloitte & Touche LLP
125 Summer Street
Boston, MA 02110
Officers
Jeffrey J. Hodgman
President and
Chief Executive Officer
Gary Lineberry
Vice President
Albert Rosenthal
Vice President and Chief
Operating Officer
Elliot Reiter
Treasurer
Ronald Zito
Controller
Christopher P. Nicholas
Secretary
Directors
Steve A. Garban
Retired; formerly Senior Vice President for Finance and
Operations and Treasurer, The Pennsylvania State University
Jeffrey J. Hodgman, Chairman
Senior Vice President,
Metropolitan Life Insurance
Company
Malcolm T. Hopkins
Former Vice Chairman of the
Board and Chief Financial
Officer, St. Regis Corp.
Robert A. Lawrence
Partner, Saltonstall & Co.
Dean O. Morton
Retired; formerly Executive
Vice President, Chief
Operating Officer and Director,
Hewlett-Packard Company
Michael S. Scott Morton
Jay W. Forrester Professor of
Management, Sloan School
of Management, Massachusetts Institute of Technology
John H. Tweedie
Senior Vice President,
Metropolitan Life Insurance
Company
9
<PAGE>
[Back Cover]
State Street Research Investment Services
One Financial Center
Boston, MA 02111
Bulk Rate
U.S. Postage
PAID
Brockton, MA
Permit No. 600
Questions? Comments?
Call us at 1-800-562-0032,
or write us at:
State Street Research
Shareholder Services
P.O. Box 8408
Boston, MA 02266-8408
[State Street 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: 2386-950620/(0796) SSB-LD
Cover Illustration by Dorothy Cullinan
IE-816D-695
<PAGE>
[Front Cover]
[State Street logo] State Street Research
State Street Research
International Equity Fund
Semiannual Report [cartoon of man with umbrella circling the world]
April 30, 1995
What's Inside
New and Improved:
A new design that's
easier to read
Investment Update:
About the Fund,
economy and markets
Fund Information:
Facts and Figures
Plus, Complete Portfolio Holdings
and Financial Statements
<PAGE>
Investment Environment
The Economy
* The U.S. dollar weakened sharply against the Japanese yen and German mark.
A weak dollar is usually beneficial to investors in an international fund
because it makes securities denominated in other currencies more valuable.
* The economies of Europe and Japan have been sluggish, leading to
expectations that foreign central banks will lower interest rates.
The Markets
* Overseas stock markets did not perform particularly well for the six months
ended April 30, 1995. The Morgan Stanley EAFE (Europe, Australia, Far East)
Index, which is a commonly-used indicator of overseas stock market
performance, provided a total return of +1.24%.(1)
* Generally, the markets of larger, industrialized economies have performed
better than many emerging markets, such as Mexico.
The Fund
Over the past six months
* For the six months ended April 30, 1995, International Equity Fund's Class
A shares provided a total return of -8.55% (does not reflect sales
charge).(2) The average total return for 183 funds in Lipper Analytical
Services' international funds category was -4.55% (does not reflect sales
charge).
* In addition to weak overseas stock performance, the Fund's large position
in cyclical stocks performed poorly because of market anticipation of
slower economic growth.
* The Fund's Canadian and Australian holdings were doubly negative: mining
stocks performed poorly, plus the Canadian and Australian dollars weakened
relative to the U.S. dollar.
* The Fund took advantage of market weakness and increased positions in
German, French, Japanese and Australian stocks.
Current strategy
* GFM continues to expect accelerating growth worldwide. As a result, the
Fund is emphasizing stocks of companies in industries tied to raw materials
(gold, chemicals, agriculture), and under-emphasizing interest-rate
sensitive stocks.
* The Fund has significant positions in Germany, France and Japan, which are
still early in their economic cycles.
* The Fund continues to de-emphasize stocks in emerging markets, particularly
Latin America.
(1) The Morgan Stanley Europe, Australia, Far East Index is a commonly-used
measure of international stock market performance. The index is unmanaged and
does not take sales charges into account. Direct investment in the index is
not possible; results are for illustrative purposes only.
(2) -8.78% for Class B shares; -8.34% for Class C shares; -8.88% for Class D
shares.
(3) 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.
(4) Shares of the Fund had no class designations until March 1, 1994, when
designations were assigned based on the pricing and 12b-1 fees applicable to
shares sold thereafter. Performance data for a specified class include
periods prior to the adoption of class designations. "A" share returns for
each of the periods reflect the maximum 4.5% sales charge. Performance prior
to March 1, 1994, does not reflect annual 12b-1 fees of .25%, which will
reduce subsequent performance. "B" share returns for the 1-year and Life of
Fund periods reflect a 5% and a 3% contingent deferred sales charge,
respectively. "C" shares, offered without a sales charge, are available only
to certain employee benefit plans and large institutions. "D" share return
for the 1-year period reflects a 1% contingent deferred sales charge.
Performance for "B" and "D" shares prior to March 1, 1994, does not reflect
annual 12b-1 fees of 1%, which will reduce subsequent performance.
Fund Information (all data are for periods ended April 30, 1995, except for
SEC Average Annual Compound Rates of Return)
SEC Average Annual Compound Rates of Return for periods ended March 31, 1995
(at maximum applicable sales charge)(3,4)
- ------------------------------------------------------
Life of Fund
(since 1/22/92) 1 year
- ------------------------------------------------------
Class A +9.90%/+8.75% -9.63%/-10.03%
- ------------------------------------------------------
Class B +10.51%/+9.32% -10.42%/-10.84%
- ------------------------------------------------------
Class C +11.64%/+10.35% -4.98%/-5.72%
- ------------------------------------------------------
Class D +11.21%/+10.04% -6.96%/-7.37%
- ------------------------------------------------------
Cumulative Total Returns
(do not reflect sales charge)(3)
- ------------------------------------------------------
Life of Fund
(since 1/22/92) 1 year
- ------------------------------------------------------
Class A +45.68%/+40.80% -5.36%/-5.78%
- ------------------------------------------------------
Class B +44.65%/+39.81% -5.94%/-6.36%
- ------------------------------------------------------
Class C +46.41%/+40.94% -5.07%/-5.82%
- ------------------------------------------------------
Class D +44.50%/+39.66% -6.04%/-6.46%
- -----------------------------------------------------
Performance results for the Fund are increased by the investment manager's
voluntary reduction of fees and expenses related to the Fund. The first
figure reflects expense reduction; the second shows what results would have
been without subsidization.
10 Largest Equity Positions
(by percentage of net assets)
1 Waverley Mining United Kingdom 3.0%
2 Avocet Ventures Canada 2.9%
3 Epicore Networks Canada 1.6%
4 Tokio Marine & Fire Japan 1.4%
5 Mitsubishi Estate Japan 1.4%
6 Emtech Canada 1.3%
7 Asia Pacific Resources Canada 1.2%
8 Prospect Japan Fund Japan 1.2%
9 Taiwan Index Fund Taiwan 1.2%
10 Black Hawk Mining Canada 1.1%
These stocks represent an aggregate of 16.3% of the portfolio. Because of
active management, there is no guarantee that the Fund currently invests, or
will continue to invest, in the securities listed in this table.
5 Largest Country Positions
(by percentage of net assets)
[Bar chart]
Canada 14.6%
United Kingdom 13.1%
Japan 12.3%
Germany 9.2%
Australia 7.4%
<PAGE>
Investment Portfolio
April 30, 1995
Value
Shares (Note 1)
- --------------------------------------------- ------------ ---------------
Common Stocks 78.5%
Australia 7.4%
Austpac Gold NL 2,000,000 $ 290,930
Elders Australia Ltd. 600,000 715,688
Gold Mines of Australia Ltd. 2,396,447 522,899
Henry Walker Group 225,000 201,287
ISR Group Ltd. 775,500 547,120
MIM Holdings Ltd. 300,000 438,577
Pima Mining NL 3,000,000 21,820
Rhodes Mining NL 2,000,000 247,291
Savage Resources 1,150,000 752,782
SBS Iama Ltd. 200,000 270,565
Simeon Wines 100,000 94,552
Star Mining Corp. 3,872,000 760,375
Sydney Aquarium 145,250 237,699
Vanguard Petroleum Ltd. 615,000 331,006
Western Mining Corp. 135,000 763,910
-------------
6,196,501
-------------
Austria 1.3%
Creditanstalt Bank AG 3,040 181,264
Flughafen Wien AG 2,500 111,351
OMV Handels AG 7,500 775,862
-------------
1,068,477
-------------
Belgium 1.0%
GIB NPV 9,500 463,512
Union Miniere SA 5,000 385,559
-------------
849,071
-------------
Canada 14.6%
Advanced Material Resources Ltd. 750,000 358,561
Akiko Gold Resources Ltd. 545,500 156,476
Asia Pacific Resources Ltd. 475,000 1,048,102
Avocet Ventures Inc. 637,500 2,403,051
Black Hawk Mining Inc. 1,565,000 920,859
Canadian Crew Energy Corp. 210,000 525,154
Emtech Ltd. Units 1,250,000 1,103,266
Epicore Networks Inc. 300,000 1,351,500
International Euromin Corp. 750,000 496,470
Nelson Trade & Finance Ltd. 365,000 483,230
Master Plan Mineral & Petroleum 3,020,000 399,823
Petersburg Long Distance Inc. 70,500 337,048
Reclamation Management Ltd. 150,000 6,620
Siam Trading Ltd. 550,000 606,796
Tan Range Exploration Corp. CL. A 922,000 298,382
Terrenex Ventures Inc. 175,000 257,429
TVI Pacific Inc. 680,500 455,469
United Reef Ltd. 1,000,000 426,596
Xavier Mines Ltd. 650,000 693,219
-------------
12,328,051
-------------
Finland 0.1%
Finnair 15,000 $ 117,930
-------------
France 6.4%
Bouygues 1,500 182,845
Cerus SA 14,000 240,741
Credit Comm France 13,800 611,929
Eaux (Cie Generale) SA 4,750 500,712
Eramet 5,000 347,375
Erid Beghin SA 3,500 541,311
LaFarge Coppee SA 6,000 467,643
Metaleurop SA 25,000 295,584
Pechiney International NV 20,000 512,821
Total SA 10,000 625,153
Ugine SA 7,500 531,136
Vallourec (Usin) SA 10,000 499,593
-------------
5,356,843
-------------
Germany 9.2%
Allianz AG Holdings 421 771,059
Ava Allg Handels AG 1,250 468,874
BASF AG 3,000 666,522
Bayer Motoren Werk AG 500 256,077
Bremer Vulkan Verbund 2,500 144,810
Buderus AG 1,000 538,844
Daimler-Benz AG 1,500 686,864
Deutsche Bank AG 1,500 735,555
Klockner Humboldt Deut AG 4,500 108,418
Krupp Fried Hoesch AG 2,500 367,886
Linde AG 750 431,995
Linde AG 150 84,397
Man AG 2,500 619,455
Mannesmann AG 1,100 298,348
Siemens AG 1,200 582,558
Springer Verlag AG 861 394,384
Veba AG 1,500 558,321
-------------
7,714,367
-------------
Hong Kong 1.6%
Cathay Pacific Airways 165,000 231,269
China Merchants China Direct 375,000 242,217
China North Industries 240,000 240,000
Hong Kong Aircraft 76,000 194,393
Paul Y ITC Construction 1,350,000 209,275
Shanghai Lujiazui 370,000 248,640
-------------
1,365,794
-------------
The accompanying notes are an integral part of the financial statements.
2
<PAGE>
Ireland 1.7%
Allied Irish Banks 100,000 $ 468,297
Dana Exploration 5,000,000 563,244
Kish Resources 5,000,000 241,390
World Fluids 3,521,073 198,322
-------------
1,471,253
-------------
Italy 0.7%
Fiat SPA 47,000 191,719
Montedison SPA 500,000 366,765
-------------
558,484
-------------
Japan 12.3%
Acom Co. 1,300 37,282
Amway Japan Ltd. ADR 18,000 328,500
Chugai Pharmaceutical Co. 75,000 807,699
Kahma Co. Ltd. 780 16,150
Matsushita Electric Industrial Co. Ltd. 30,000 503,362
Meitec Corp. 50,000 636,640
Mitsubishi Estate Co. Ltd. 95,000 1,141,786
Mitsukoshi 90,000 827,869
MOS Food Services 6,600 193,991
Nichiei Co. 90,000 472,303
Nintendo Co. 2,900 186,006
Oiles Corp. 11,600 427,917
Prospect Japan Fund 100,000 1,025,000
Shimadzu Corp. 115,000 721,188
Taisei Corp. 71,000 490,879
Tokio Marine & Fire 100,000 1,189,980
Tokyo Nissan Auto Sales Co. Ltd. 45,000 364,134
Tokyo Tungsten Co. 87,000 621,170
Yamato International 29,000 145,285
Yamazen Corp. 50,000 235,616
-------------
10,372,757
-------------
Korea 1.0%
CITC Frontier Fund 20,000 384,200
Yellow Sea Investment Co. 45,000 473,400
-------------
857,600
-------------
Malaysia 0.6%
UMW Holdings BHD 57,000 141,808
Malaysian International Shipping BHD 53,333 138,079
Sime Darby BHD 90,000 229,369
-------------
509,256
-------------
Mexico 0.1%
Fundo Opcion S.A. de C.V. 115,000 97,726
-------------
Netherlands 1.5%
ABN Amro Holdings NV 2,500 $ 96,160
IHC Caland NV 15,000 409,767
International Nederlander Group 5,500 287,810
KLM NV 15,000 456,156
-------------
1,249,893
-------------
New Zealand 0.7%
Corporate Investments Ltd. 2,275,000 458,546
Fernz Corp. 45,000 166,286
-------------
624,832
-------------
Norway 0.3%
Pacific Basin Bulk Ship 16,060 216,810
-------------
Singapore 0.2%
Jardine Strategic Holdings Ltd. 55,000 187,000
-------------
Spain 1.7%
Asturiana de Zinc 60,000 572,589
Banco ESP De Credito 2,279 16,085
Banco Santander SA 6,838 249,639
Empresa Nacionale Celulosas 24,750 632,193
-------------
1,470,506
-------------
Sweden 0.5%
AGA AB 35,000 407,072
-------------
Switzerland 1.3%
Adia SA 2,000 369,853
Baloise Holdings 150 324,494
Ciba Geigy AG 500 341,940
Von Roll AG 2,750 58,171
-------------
1,094,458
-------------
Taiwan 1.2%
Taiwan Index Fund 83,000 996,000
-------------
United Kingdom 13.1%
Alexon Group PLC 1,180,000 474,734
Arcadian International PLC 316,000 232,315
Ascot Holdings 200,000 482,781
Aviva Petrol Inc. 400,000 354,039
Bakyrchik Gold PLC 72,000 208,561
Birse Group PLC 500,000 144,834
British Telecom 125,000 780,496
Cedardata PLC 215,000 344,263
Celsis International PLC 100,000 136,788
DCS Group PLC 216,666 282,426
Enterprise Computer Holdings PLC 3,500 4,224
The accompanying notes are an integral part of the financial statements.
3
<PAGE>
United Kingdom (cont'd)
Exploration Co. of Louisiana, Inc. 50,000 $ 26,151
Geest PLC 50,000 132,765
Gerrard & National Holdings PLC 25,000 173,399
Grand Metropolitan 45,000 288,944
Great Western Resources, Inc. 394,737 155,633
Guangdong Development Fund Ltd. 250,000 155,000
Hampden Homecare Group 300,000 253,460
Hay (Norman) PLC 275,000 108,425
Hobson PLC 1,800,000 796,588
Lloyds Bank PLC 30,000 308,497
Mirror Group PLC 225,000 485,195
Panther Securities PLC 250,000 269,553
Premium Underwriting PLC 60,000 84,004
Prospect Industries PLC 1,750,000 309,784
Simon Engineering PLC 311,111 345,456
Sims Food Group PLC 320,000 350,177
Upton & Southern Holdings PLC 7,500,000 241,390
UTD Breweries PLC 15,000,000 279,120
Vision Group PLC 150,000 337,947
Waverley Mining Finance PLC 1,214,480 2,501,665
-------------
11,048,614
-------------
Total Common Stocks (Cost $65,774,857) 66,159,295
-------------
Equity-Related Securities 3.6%
ABN Amro Holdings NV Cv. Pfd. 464 17,608
Baltic Republics Fund Units* 5,000 510,000
Credit Saison Co. Wts* 455 22,750
Citizen Watch Co. Wts.* 725 113,281
Daio Paper Corp. 140 194,250
Dairy Farm International Hldg. Cv. Pfd. 620,000 516,150
Dainichiseika Wts.* 1,050 39,384
Godo Steel Wts.* 550 110,000
Gold Mines of Australia Ltd. Option 302,447 21,998
Guangdong Development Fund Ltd. Wts.* 50,000 11,000
Hankyu Corp. 250 75,000
Hitachi Information Systems Wts.* 1,641 21,472
Jardine Strategic Holdings Ltd. Wts.* 55,000 23,100
Kuraray Co. Wts.* 550 268,125
Nippon Ceramic Co. Ltd. Wts* 2,135 63,320
Nippon Synthetic Chemicals Industries Wts.* 240 111,000
Pacific Metals Co. Wts.* 7,200 150,733
Panther Securities PLC Wts.* 50,000 11,265
Prospect Japan Fund Wts.* 20,000 65,000
Regal Hotels International Cv. Pfd. 220,000 160,325
Ryobi Wts.* 250 125,000
SNT Corp. Wts.* 370 $ 32,598
Sumitomo Light Metals Co. Wts.* 6,750 129,536
Sumitomo Metal & Mining Co. Wts.* 360 22,500
Takashimaya Co. Wts.* 905 96,157
Toyo Engineering Wts.* 525 72,188
Von Roll AG Wts.* 2,750 21,589
Yamazen Corp. Wts.* 3,200 55,827
-------------
Total Equity-Related Securities (Cost $4,736,993) 3,061,156
-------------
Principal Maturity
Amount Date
--------------------------- --------------- ---------- --------------
CONVERTIBLE BONDS 2.4%
Cemex S.A. de C.V. Bond,
8.875% $ 300,000 6/10/1998 250,500
Lippo Treasury Ltd. Cv.
Bond, 1.25% 220,000 12/31/2000 177,100
NTS Steel Group Cv. Bond,
4.00% 625,000 12/16/2008 346,875
United Micro Elect Cv.
Bond, 1.25% 200,000 6/08/2004 308,875
Lenzing AG Cv. Bond, 5.25% Austrian
Schilling
800,000 12/30/2001 75,534
NEC Corp. Cv. Bond, 1.00% Swiss Franc
900,000 3/31/1999 840,021
------------
Total Convertible Bonds (Cost $1,842,102) 1,998,905
------------
Total Investments (Cost $72,353,952)--84.5% 71,219,356
Cash and Other Assets, Less Liabilities--15.5% 13,029,929
------------
Net Assets--100.0% $84,249,285
============
Federal Income Tax Information:
At April 30, 1995, the net unrealized
depreciation of investments based on cost
for Federal income tax purposes of $72,353,952
was as follows:
Aggregate gross unrealized appreciation for all
investments in which there is an excess of
value over tax cost $ 8,692,467
Aggregate gross unrealized depreciation for all
investments in which there is an excess of tax
cost over value (9,827,063)
-------------
$(1,134,596)
=============
* Nonincome-producing securities.
ADR and GDR stand for American Depositary Receipt and Global
Depositary Receipt, representing ownership of foreign securities.
The accompanying notes are an integral part of the financial statements.
4
<PAGE>
Statement of Assets and Liabilities
April 30, 1995
Assets
Investments, at value (Cost $72,353,952) (Note 1) $71,219,356
Foreign currency, at value (Cost $10,436,964) 11,180,150
Receivable for securities sold 3,835,719
Receivable for fund shares sold 165,390
Dividends and interest receivable 157,492
Receivable from investment manager (Note 3) 49,423
Foreign Tax receivable 40,762
Deferred organization costs and other assets (Note 1) 39,712
-------------
86,688,004
Liabilities
Payable for securities purchased 1,794,976
Payable for fund shares redeemed 162,247
Payable to custodian 129,562
Accrued transfer agent and shareholder services (Note
2) 82,335
Accrued management fee (Note 2) 59,602
Accrued distribution fee (Note 5) 22,784
Accrued directors' fees (Note 2) 10,973
Other accrued expenses 176,240
-------------
2,438,719
-------------
Net Assets $84,249,285
=============
Net Assets consist of:
Accumulated net investment loss $ (852,207)
Unrealized depreciation of investments and
foreign currency (380,201)
Accumulated net realized loss on investments and
foreign currency (115,138)
Shares of beneficial interest 85,596,831
-------------
$84,249,285
=============
Net Asset Value and redemption price per share of Class
A shares ($21,026,670 / 2,205,472 shares of
beneficial interest) $9.53
=============
Maximum Offering Price per share of Class A shares
($9.53 / .955) $9.98
=============
Net Asset Value and offering price per share of
Class B shares ($22,760,795 / 2,407,312 shares of
beneficial interest)* $9.45
=============
Net Asset Value, offering price and redemption price
per share of Class C shares ($37,614,118 / 3,927,949
shares of beneficial interest) $9.58
=============
Net Asset Value and offering price per share of
Class D shares ($2,847,702 / 301,333 shares of
beneficial interest)* $9.45
=============
* Redemption price per share for Class B and Class D is equal to net asset
value less any applicable contingent deferred sales charge.
Statement of Operations
For the six months ended April 30, 1995
Investment Income
Interest $ 21,971
Dividends, net of foreign taxes of $45,293 240,369
--------------
262,340
Expenses
Management fee (Note 2) 398,742
Transfer agent and shareholder services (Note 2) 281,523
Custodian fee 150,367
Registration fees 47,963
Reports to shareholders 47,519
Audit fee 25,657
Legal fees 17,180
Distribution fee--Class A (Note 5) 26,105
Distribution fee--Class B (Note 5) 101,584
Distribution fee--Class D (Note 5) 13,015
Amortization of organization costs (Note 1) 8,561
Directors' fees (Note 2) 6,871
Miscellaneous 1,642
--------------
1,126,729
Expenses borne by the investment manager (Note 3) (293,471)
--------------
833,258
--------------
Net investment loss (570,918)
--------------
Realized and Unrealized Gain (Loss)
on Investments and Foreign Currency
Net realized loss on investments (Notes 1 and 4) (2,388,923)
Net realized gain on foreign currency (Note 1) 2,370,754
--------------
Total net realized loss (18,169)
--------------
Net unrealized depreciation of investments (8,393,723)
Net unrealized appreciation of foreign currency 469,940
--------------
Total net unrealized depreciation (7,923,783)
--------------
Net loss on investments and foreign currency (7,941,952)
--------------
Net decrease in net assets resulting from operations $(8,512,870)
==============
The accompanying notes are an integral part of the financial statements.
5
<PAGE>
Statement of Changes in Net Assets
Six months
ended Year ended
April 30, 1995 October 31, 1994
- --------------------------------------- --------------- ------------------
Increase (Decrease) in Net Assets
Operations:
Net investment loss $ (570,918) $ (544,898)
Net realized gain (loss) on investments
and foreign currency* (18,169) 4,742,053
Net unrealized appreciation
(depreciation) of investments
and foreign currency (7,923,783) 4,880,123
------------- ----------------
Net increase (decrease) resulting from
operations (8,512,870) 9,077,278
------------- ----------------
Dividend from net
investment income-Class C -- (182,135)
------------- ----------------
Distributions from net realized gains
Class A (1,133,028) --
Class B (1,086,297) --
Class C (2,059,104) (1,787,935)
Class D (137,890) --
------------- ----------------
(4,416,319) (1,787,935)
------------- ----------------
Net increase (decrease) from fund share
transactions (Note 6) (1,069,615) 63,373,570
------------- ----------------
Total increase (decrease) in net assets (13,998,804) 70,480,778
Net Assets
Beginning of period 98,248,089 27,767,311
------------- ----------------
End of period (including accumulated
net investment loss of $852,207 and
$281,289, respectively $ 84,249,285 $ 98,248,089
============= ================
* Net realized gain (loss) for Federal
income tax purposes (Note 1) $ (2,405,665) $ 4,512,616
============= ================
Notes to Financial Statements
April 30, 1995
Note 1
State Street Research International Equity Fund (the "Fund"), formerly
MetLife International Equity Fund, is a diversified series of State Street
Research Portfolios, Inc. ("Portfolios"), formerly MetLife Portfolios, Inc.,
which was organized as a Maryland corporation in April, 1991 and is
registered under the Investment Company Act of 1940, as amended, as an
open-end management investment company. The Fund commenced operations in
January, 1992. Portfolios consists presently of two separate funds: State
Street Research International Equity Fund and State Street Research
International Fixed Income Fund.
The Fund offers four classes of shares. Class A shares are subject to an
initial sales charge of up to 4.50% and annual service fees of 0.25% of
average daily net assets. Class B shares are subject to a contingent deferred
sales charge on certain redemptions made within five years of purchase and
pay annual distribution and service fees of 1.00%. Class B shares
automatically convert into Class A shares (which pay lower ongoing expenses)
at the end of eight years after the issuance of the Class B shares. Class C
shares are only offered to certain employee benefit plans and large
institutions. 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 Directors
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
Securities traded on domestic stock exchanges are valued at the last sale
price as of the close of business on the day the securities are being valued,
or, lacking any sales, at the mean between closing bid and asked prices.
Securities traded on the National Association of Securities Dealers Automated
Quotation ("NASDAQ") system are valued at the last reported sales price. Each
security traded primarily on non-domestic securities exchanges is generally
valued at the preceding closing value of such security on the exchange where
it is primarily traded. A security that is listed or traded on more than one
exchange is valued at the quotation on the exchange determined to be the
primary market for such security by the Directors or its delegates. If no
closing price is available, then such security is valued at the mean between
the last current bid and asked prices or by using the last available closing
price. Domestic securities traded in the over-the-counter market are valued
at the mean between the bid and asked prices or yield equivalent as obtained
from two or more dealers that make markets in the securities. All non-U.S.
securities traded in the over-the-counter market are valued at the last sale
quote or the last closing bid price, if there is no active trading in a
particular security for a given day. Portfolio securities traded both in the
over-the-
The accompanying notes are an integral part of the financial statements.
6
<PAGE>
counter market and on a securities exchange are valued according to the
broadest and most representative market. Securities for which market
quotations are not readily available are valued as determined in good faith
by or under the authority of the Directors. Short-term securities maturing
within sixty days are valued at amortized cost. Securities quoted in foreign
currencies are translated into U.S. dollars at the current exchange rate.
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. 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.
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 Portfolios.
D. Dividends
Dividends from net investment income are declared and paid or reinvested
annually. Net realized capital gains, if any, are distributed annually,
unless additional distributions are required for compliance with applicable
tax regulations.
Income dividends and capital gain distributions are determined in accordance
with Federal income tax regulations which may differ from generally accepted
accounting principles. The difference is primarily due to differing
treatments for foreign currency transactions.
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.
F. Deferred Organization Costs
Certain costs incurred in the organization and registration of the Fund were
capitalized and are being amortized under the straight-line method over a
period of five years.
Note 2
The Fund and State Street Research Investment Services, Inc., the Fund's
investment manager and principal underwriter (the "Investment Manager" and
"Distributor"), a wholly-owned, indirect subsidiary of Metropolitan Life
Insurance Company ("Metropolitan"), have entered into an agreement under
which the Investment Manager receives monthly fees at an annual rate of 0.95%
of the Fund's average daily net assets. The Investment Manager has entered
into a Sub-Investment Management Agreement with GFM International Investors
Limited (the "Sub-Investment Manager"), a substantially wholly-owned,
indirect subsidiary of Metropolitan, pursuant to which the Sub-Investment
Manager has assumed the overall responsibility for managing the investments
of the Fund. During the six months ended April 30, 1995, the Fund paid the
Investment Manager $398,742 in management fees. The Fund has no
responsibility for the payment of fees to the Sub-Investment Manager.
State Street Research Shareholder Services, a division of the Distributor,
provides certain shareholder services to the Fund such as responding to
inquiries and instructions from investors with respect to the purchase and
redemption of shares of the Fund. In addition, Metropolitan receives a fee
for maintenance of the accounts of certain shareholders who are participants
in sponsored arrangements, employee benefit plans and similar programs or
plans, through or under which shares of the Fund may be purchased. During the
six months ended April 30, 1995, the amount of such expenses was $75,189.
The fees of the Directors not currently affiliated with the Investment
Manager amounted to $6,871 during the six months ended April 30, 1995.
Note 3
The Investment Manager or affiliates may from time to time and in varying
amounts voluntarily assume some portion of fees or expenses relating to the
Fund. During the six months ended April 30, 1995, the amount of such assumed
expenses was $293,471.
Note 4
For the six months ended April 30, 1995, purchases and sales of securities,
exclusive of short-term obligations, aggregated $37,217,035 and $45,091,587,
respectively.
Note 5
The Portfolios have 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. The Distributor uses such payments
for personal services and/or the maintenance of shareholder accounts, to
reimburse securities dealers for distribution and marketing services, to
furnish ongoing assistance to investors and to defray a portion of its
distribution and marketing expenses. For the six months ended April 30, 1995,
fees pursuant to such plan amounted to $26,105, $101,584 and $13,015 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 $18,354 and $110,048, respectively, on sales of shares of Class A
shares of the Fund during the six months ended April 30, 1995, and that
MetLife Securities, Inc. earned commissions aggregating $172,220 on sales of
Class B shares, and that the Distributor collected contingent deferred sales
charges of $32,086 and $1,077 on redemptions of Class B and Class D shares,
respectively, during the same period.
7
<PAGE>
Note 6
The authorized capital stock of the Fund currently consists of 100,000,000
shares, $.01 par value per share. The Fund reserves the right to issue
additional classes of shares. At April 30, 1995, Metropolitan owned 49,982
Class A shares, 49,997 Class B shares, 96,672 Class C shares and 49,997 Class
D shares of the Fund.
Share transactions were as follows:
<TABLE>
<CAPTION>
March 1, 1994
(Commencement of
Six months ended Share Class Designations) to
April 30, 1995 October 31, 1994
---------------------------- ------------------------------
Class A Shares Amount Shares Amount
- --------------------------------------- ----------- ------------- ----------- ---------------
<S> <C> <C> <C> <C>
Shares sold 825,716 $ 8,047,829 2,513,950 $26,806,424
Issued upon reinvestment of:
Distribution from net realized gains 112,765 1,096,075 -- --
Shares repurchased (789,821) (7,521,559) (457,138) (4,879,066)
--------- ----------- --------- -------------
Net increase 148,660 $ 1,622,345 2,056,812 $21,927,358
========= =========== ========= =============
Class B Shares Amount Shares Amount
- --------------------------------------- --------- ----------- --------- -------------
Shares sold 900,413 $ 8,696,218 1,800,031 $19,220,723
Issued upon reinvestment of:
Distribution from net realized gains 108,091 1,044,159 -- --
Shares repurchased (330,746) (3,086,867) (70,477) (754,050)
--------- ----------- --------- -------------
Net increase 677,758 $ 6,653,510 1,729,554 $18,466,673
========= =========== ========== =============
</TABLE>
<TABLE>
<CAPTION>
Year ended
October 31, 1994
---------------------------------
Class C Shares Amount Shares Amount
- --------------------------------------- ------------- --------------- ------------- ----------------
<S> <C> <C> <C> <C>
Shares sold 855,074 $ 8,229,887 3,082,343 $ 31,816,155
Issued upon reinvestment of:
Distribution from net realized gains 207,681 2,026,952 187,082 1,772,926
Dividends from net investment income -- -- 11,528 109,898
Shares repurchased (2,096,586) (20,673,706) (1,223,806) (12,796,604)
----------- ------------- ----------- --------------
Net increase (decrease) (1,033,831) $(10,416,867) 2,057,147 $ 20,902,375
=========== ============= =========== ==============
</TABLE>
<TABLE>
<CAPTION>
March 1, 1994
(Commencement of
Share Class Designations)
to October 31, 1994
-------------------------------
Class D Shares Amount Shares Amount
- --------------------------------------- ----------- -------------- ----------- ----------------
<S> <C> <C> <C> <C>
Shares sold 147,848 $ 1,465,262 273,636 $ 2,922,952
Issued upon reinvestment of:
Distribution from net realized gains 13,472 130,144 -- --
Shares repurchased (55,347) (524,009) (78,276) (845,788)
--------- ------------ --------- --------------
Net increase 105,973 $ 1,071,397 195,360 $ 2,077,164
========= ============ ========= ==============
</TABLE>
8
<PAGE>
Financial Highlights
For a share outstanding throughout each period:
<TABLE>
<CAPTION>
Class A Class B
----------------------------- -------------------------------
Six months Six months
ended ended
April 30, 1995 1994** April 30, 1995 1994**
- -------------------------- --------------- ---------- --------------- ------------
<S> <C> <C> <C> <C>
Net asset value, beginning
of period $10.98 $ 10.54 $10.93 $10.54
Net investment loss* (.06) (.04) (.10) (.06)
Net realized and
unrealized gain (loss)
on investments (.87) .48 (.86) .45
Distributions from net
realized gains (.52) -- (.52) --
------------- -------- ------------- ----------
Net asset value, end of
period $ 9.53 $ 10.98 $ 9.45 $10.93
============= ======== ============= ==========
Total return (8.55)%+++ 4.17+++ (8.78)%+++ 3.70%+++
Net assets at end of
period (000s) $21,027 $22,579 $22,761 $18,904
Ratio of operating
expenses to average net
assets* 1.90%++ 1.90%++ 2.65%++ 2.65%++
Ratio of net investment
loss to average net
assets* (1.27)%++ (0.87)%++ (2.01)%++ (1.61)%++
Portfolio turnover rate 47.70% 80.60% 47.70% 80.60%
*Reflects voluntary
assumption of fees or
expenses per share in
each period. (Note 3) $ .03 $ .03 $ .03 $ .03
</TABLE>
<TABLE>
<CAPTION>
Class C Class D
------------------------------------------------------ --------------------------
Year ended October
31
January 22,
1992
(Commencement
Six months of Operations) Six months
ended to ended
April 30, October 31, April 30,
1995 1994 1993 1992 1995 1994**
- -------------------------- ------------- ------- ------- --------------- ------------- ---------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of period $11.01 $ 9.56 $6.50 $7.40 $10.93 $10.54
Net investment income
(loss)* (.05) (.07) (.02) .04 (.10) (.07)
Net realized and
unrealized gain (loss)
on investments (.86) 2.09 3.17 (.94) (.86) .46
Dividends from net
investment income -- (.05) (.04) -- -- --
Distributions from net
realized gains (.52) (.52) (.05) -- (.52) --
----------- ------ ------ ------------- ----------- -------
Net asset value, end of
period $ 9.58 $11.01 $9.56 $6.50 $ 9.45 $10.93
=========== ====== ====== ============= =========== =======
Total return (8.34)%+++ 22.73%+ 48.95%+ (12.16)%+++ (8.88)%+++ 3.70%+++
Net assets at end of
period (000s) $37,614 $54,631 $27,767 $10,418 $2,848 $2,134
Ratio of operating
expenses to average net
assets* 1.65%++ 1.65% 1.65% 1.65%++ 2.65%++ 2.65%++
Ratio of net investment
income (loss) to average
net assets* (1.03)%++ (0.75)% (0.37)% 0.79%++ (2.01)%++ (1.62)%++
Portfolio turnover rate 47.70% 80.60% 116.12% 77.83% 47.70% 80.60%
*Reflects voluntary
assumption of fees or
expenses per share in
each period. (Note 3) $ .03 $ .05 $ .08 $ .10 $ .03 $ .03
</TABLE>
** March 1, 1994 (commencement of share class designations) to October 31,
1994.
++ Annualized
+ Total return figures do not reflect any front-end or contingent deferred
sales charges. Total return would be lower if the Investment Manager 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 Investment Manager and its affiliates had
not voluntarily assumed a portion of the Fund's expenses.
9
<PAGE>
To the Board of Directors of State Street
Research Portfolios, Inc. and the Shareholders of
State Street Research International Equity Fund
We have audited the accompanying statement of assets and liabilities,
including the investment portfolio, of State Street Research International
Equity Fund, formerly MetLife International Equity Fund, (a series of State
Street Research Portfolios, Inc., formerly MetLife Portfolios, Inc.) as of
April 30, 1995, and the related statement of operations for the six months
then ended, the statement of changes in net assets for the six months then
ended and the year ended October 31, 1994 and the financial highlights for
the six months ended April 30, 1995 and for each of the years in the three
year period ended October 31, 1994. These financial statements and financial
highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on the financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned at April
30, 1995, by correspondence with the custodian and brokers. An audit also
includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the financial position of State Street
Research International Equity Fund (a series of State Street Research
Portfolios, Inc.) at April 30, 1995, the results of its operations, the
changes in its net assets, and its financial highlights for the respective
stated periods, in conformity with generally accepted accounting principles.
Deloitte & Touche LLP
Boston, Massachusetts
June 9, 1995
10
<PAGE>
Fund Information, Officers and Directors of State Street Research Portfolios,
Inc.
Fund Information
State Street Research
International Equity Fund
One Madison Avenue
New York, NY 10010
Investment Manager
and Distributor
State Street Research
Investment Services, Inc.
One Financial Center
Boston, MA 02111
Sub-Investment Manager
GFM International
Investors Limited
5 Upper St. Martins Lane
London, WC2H 9EA
England
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
Sullivan & Worcester
1025 Connecticut Avenue, N.W.
Washington, D.C. 20036
Independent Accountants
Deloitte & Touche LLP
125 Summer Street
Boston, MA 02110
Officers
Jeffrey J. Hodgman
President and
Chief Executive Officer
Gary Lineberry
Vice President
Albert Rosenthal
Vice President and
Chief Operating Officer
Elliot Reiter
Treasurer
Ronald Zito
Controller
Christopher P. Nicholas
Secretary
Directors
Steve A. Garban
Retired; formerly
Senior Vice President
for Finance and
Operations and Treasurer,
The Pennsylvania State University
Jeffrey J. Hodgman, Chairman
Senior Vice President,
Metropolitan Life Insurance
Company
Malcolm T. Hopkins
Former Vice Chairman of
the Board and
Chief Financial Officer,
St. Regis Corp.
Robert A. Lawrence
Partner, Saltonstall & Co.
Dean O. Morton
Retired; formerly
Executive Vice President,
Chief Operating Officer and Director,
Hewlett-Packard Company
Michael S. Scott Morton
Jay W. Forrester Professor of
Management, Sloan School
of Management, Massachusetts
Institute of Technology
John H. Tweedie
Senior Vice President,
Metropolitan Life Insurance
Company
11
<PAGE>
[Back Cover]
State Street Research Investment Services
One Financial Center
Boston, MA 02111
Bulk Rate
U.S. Postage
PAID
Brockton, MA
Permit No. 600
Questions? Comments?
Call us at 1-800-562-0032,
or write us at:
State Street Research
Shareholder Services
P.O. Box 8408
Boston, MA 02266-8408
[State Street 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: 2387-950620/(0796) SSB-LD
Cover Illustration by Dorothy Cullinan
IE-817D-695
