<PAGE>
As filed with the Securities and Exchange Commission on April __, 1997
Securities Act File No. 33-73824
Investment Company Act File No. 811-8274
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [ ]
PRE-EFFECTIVE AMENDMENT NO. [ ]
POST-EFFECTIVE AMENDMENT NO. 3 [X]
and
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [ ]
AMENDMENT NO. 5 [X]
MASSMUTUAL INSTITUTIONAL FUNDS
------------------------------
(Exact Name of Registrant as Specified in Charter)
1295 State Street
Springfield, Massachusetts 01111
-------------------------- -----
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (413) 788-8411
--------------
Stephen L. Kuhn
MassMutual Institutional Funds
1295 State Street
Springfield, MA 01111
(Name and Address of Agent for Service)
Copies to:
Peter MacDougall, Esq.
Ropes & Gray
One International Place
Boston, MA 02110
Approximate date of commencement of proposed sale to the public: As soon as
practical after the effective date of the Registration Statement.
It is proposed that this filing will become effective (check appropriate box)
[ ] immediately upon filing pursuant to paragraph (b)
[x] on May 1, 1997 pursuant to paragraph (b)
[ ] 60 days after filing pursuant to paragraph (a)(1)
[ ] on (date) pursuant to paragraph (a)(1)
[ ] 75 days after filing pursuant to paragraph (a)(2)
[ ] on (date) pursuant to paragraph (a)(2) of rule 485.
DECLARATION PURSUANT TO RULE 24F-2
Pursuant to Rule 24f-2 under the Investment Company Act of 1940, the
Registrant hereby declares that an indefinite number or amount of its shares
have been registered under the Securities Act of 1933. Registrant's Rule 24f-2
Notice on Form 24F-2 for the fiscal year ending December 31, 1996 was filed on
February 25, 1997.
<PAGE>
MASSMUTUAL INSTITUTIONAL FUNDS
FORM N-1A
CROSS REFERENCE SHEET
------------------------------
<TABLE>
<CAPTION>
Part A
Item No. Prospectus Heading
- -------- ------------------
<S> <C> <C>
1 Cover Page Cover Page
2 Synopsis Expense Information
3 Condensed Financial Financial Highlights
Information
4 General Description of The Trust; Investment
Registrant Objectives and Policies
of the Funds; Investment
Practices of the Funds
and Related Risks;
Description of Shares;
5 Management of the Fund The Trust; Investment
Manager and Sub-Advisers;
Distributor, Transfer
Agent, Shareholder
Servicing Agent,
Custodian; Expense
Information
6 Capital Stock and The Trust; Distributions
Other Securities and Taxation; Description
of Shares
7 Purchase of Securities How to Purchase,
Being Offered Exchange, Convert and
Redeem Shares;
Distributor, Transfer
Agent, Shareholder
Servicing Agent,
Custodian; How Fund
Shares are Priced
8 Redemption or How to Purchase,
Repurchase Exchange, Convert and
Redeem Shares
9 Pending Legal Inapplicable
Proceedings
</TABLE>
ii
<PAGE>
<TABLE>
<CAPTION>
Part B Heading in Statement
Item No. of Additional Information
- -------- -------------------------
<S> <C> <C>
10 Cover Page Cover Page
11 Table of Contents Table of Contents
12 General Information General Information
and History
13 Investment Objectives Additional Investment
and Policies Policies; Fundamental
Investment Restrictions;
Non-Fundamental
Investment Restrictions
14 Management of the Fund Management of the Trust;
Compensation;
Compensation Table
15 Control Persons and Control Persons and
Principal Holders of Principal Holders of
Securities Securities
16 Investment Advisory Investment Manager and
and Other Services Sub-Advisers; The
Distributor; Custodian,
Dividend Disbursing Agent
and Transfer Agent
17 Brokerage Allocation Portfolio Transactions
and Other Practices and Brokerage
18 Capital Stock and Management of the Trust;
Other Securities Description of Shares
19 Purchase, Redemption Shareholder Investment
and Pricing of Account; Redemption of
Securities Being Shares; Valuation of
Offered Portfolio Securities
20 Tax Status Taxation
21 Underwriters The Distributor
22 Calculation of Investment Performance
Performance Data
23 Financial Statements Financial Statements
</TABLE>
iii
<PAGE>
Part C
- ------
Information required to be included in Part C is set forth under the
appropriate item, so numbered, in Part C to this Registration Statement.
iv
<PAGE>
MASSMUTUAL INSTITUTIONAL FUNDS
1295 STATE STREET
SPRINGFIELD, MASSACHUSETTS 01111
(413) 788-8411
MassMutual Institutional Funds (the "Trust") is a professionally managed
investment company consisting of seven separate series of shares (the "Funds").
The Trust is designed to offer investors both the opportunity to pursue long-
term investment goals and the flexibility to respond to changes in their
investment objectives and economic and market conditions. Each Fund has a
distinct investment objective.
(1) MASSMUTUAL PRIME FUND - Seeks to maximize current income to the extent
consistent with liquidity and the preservation of capital by investing
in a diversified portfolio of money market instruments. The Prime Fund
is not a money market fund.
(2) MASSMUTUAL SHORT-TERM BOND FUND - Seeks to achieve a high total rate
of return primarily from current income while minimizing fluctuations
in capital values by investing primarily in a diversified portfolio of
short-term investment grade fixed income securities.
(3) MASSMUTUAL CORE BOND FUND - Seeks to achieve a high total rate of
return consistent with prudent investment risk and the preservation of
capital by investing primarily in a diversified portfolio of
investment grade fixed income securities.
(4) MASSMUTUAL BALANCED FUND - Seeks to achieve a high total rate of
return over an extended period of time consistent with the
preservation of capital values by investing in a diversified portfolio
of equity securities, fixed income securities and money market
instruments.
(5) MASSMUTUAL VALUE EQUITY FUND - Seeks to achieve long-term growth of
capital and income by investing primarily in a diversified portfolio
of equity securities of larger well-established companies.
(6) MASSMUTUAL SMALL CAP VALUE EQUITY FUND - Seeks to achieve long-term
growth of capital and income by investing primarily in a diversified
portfolio of equity securities of smaller companies.
(7) MASSMUTUAL INTERNATIONAL EQUITY FUND - Seeks to achieve a high total
rate of return over the long term by investing in a diversified
portfolio of foreign and domestic securities, primarily common stocks
and securities having the characteristics of common stocks, such as
convertible securities.
This Prospectus sets forth concisely the information about the Funds and the
Trust that a prospective investor should know before investing. Please read it
carefully and retain it for future reference. Certain additional information
about the Funds and the Trust is contained in a Statement of Additional
Information dated May 1, 1997, which has been filed with the Securities and
Exchange Commission and is incorporated herein by reference. This additional
information is available without charge by writing to the Secretary, MassMutual
Institutional Funds, 1295 State Street, Springfield, MA 01111.
Massachusetts Mutual Life Insurance Company ("MassMutual" or the "Adviser") is
the investment manager to each of the Funds. David L. Babson and Company, Inc.
("Babson") is the investment sub-adviser to the Value Equity Fund, the Small
Cap Value Equity Fund and the Value Equity Sector of the Balanced Fund.
HarbourView Asset Management Corporation ("HarbourView") is the investment sub-
adviser to the International Equity Fund. Babson and HarbourView are
hereinafter collectively referred to as the "Sub-Adviser".
Each of the Funds offers four classes of shares. Class 1, Class 2 and Class?3
shares of each Fund are intended to be purchased primarily by defined
contribution plans that satisfy the qualification requirements of Section 401(a)
of the Internal Revenue Code of 1986, including 401(k) plans, profit sharing
plans, money purchase plans and target benefit plans. Class 1, Class 2 and Class
3 shares may be offered to defined benefit plans, to other retirement and
employee benefit plans, such as tax sheltered annuities and non-qualified plans,
IRAs, and to other institutional or sophisticated investors. Class 4 shares of
each Fund are available only to separate investment accounts of MassMutual in
which corporate qualified plans, including defined contribution plans and
defined benefit plans, and certain governmental plans are permitted to invest
pursuant to the issuance of group annuity contracts.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
DISTRIBUTOR
OPPENHEIMERFUNDS DISTRIBUTOR, INC.
Two World Trade Center
New York, New York 10048
PROSPECTUS May 1, 1997.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
Expense Information................................................................. 3
Financial Highlights................................................................ 6
The Trust........................................................................... 21
Investment Objectives And Policies Of The Funds..................................... 21
Investment Practices Of The Funds And Related Risks................................. 25
How To Purchase, Exchange, Convert And Redeem Shares................................ 27
Investment Manager And Sub-Advisers................................................. 28
Distributor, Transfer Agent, Shareholder Servicing Agent, Custodian................. 29
Description Of Shares............................................................... 29
How Fund Shares Are Priced.......................................................... 30
Distributions And Taxation.......................................................... 30
Investment Performance.............................................................. 31
Glossary............................................................................ 33
</TABLE>
2
<PAGE>
Expense Information
These tables should help you understand the kinds of expenses you will bear
directly or indirectly. The Expense Information provides estimates of how much
it will cost to operate the Funds for a year, based on expenses incurred by the
Funds during the fiscal year ended December 31, 1996.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
CLASS 1
- ------------------------------------------------------------------------------------------------------------------------------------
SMALL CAP
SHORT-TERM CORE VALUE VALUE INTERNATIONAL
PRIME BOND BOND BALANCED EQUITY EQUITY EQUITY
FUND FUND FUND FUND FUND FUND FUND
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES
(As a percentage of offering price)
Maximum Sales Charge
imposed on Purchases
and Reinvested Dividends.......... None None None None None None None
ANNUAL OPERATING EXPENSES
(As a percentage of average net assets)
Management Fees.................... .45% .45% .45% .45% .45% .55% .85%
12b-1 Fees......................... .65% .65% .65% .65% .65% .65% .65%
Other Expenses..................... .58% .58% .59% .59% .59% .59% .72%
====================================================================================================================================
TOTAL OPERATING EXPENSES/(1)/ 1.68% 1.68% 1.69% 1.69% 1.69% 1.79% 2.22%
====================================================================================================================================
</TABLE>
(1) MassMutual's voluntary agreement to waive a portion of its management fee
terminated May 1, 1997. The expenses in the above table have been restated
to show what 1996 expenses would have been without such waiver.
EXAMPLE: An investor would pay the following expenses on an investment of
$1,000 in the Fund assuming: (a) 5% annual return and (b) redemption
at the end of each time period.
<TABLE>
<CAPTION>
SMALL CAP
SHORT-TERM CORE VALUE VALUE INTERNATIONAL
PRIME BOND BOND BALANCED EQUITY EQUITY EQUITY
FUND FUND FUND FUND FUND FUND FUND
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 Year $ 17 $ 17 $ 17 $ 17 $ 17 $ 18 $ 23
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
3 Years $ 53 $ 53 $ 53 $ 53 $ 53 $ 56 $ 69
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
5 Years $ 91 $ 91 $ 92 $ 92 $ 92 $ 97 $119
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
10 Years $199 $199 $200 $200 $200 $211 $255
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF FUTURE EXPENSES AND
ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
Long-term shareholders may pay more in Rule 12b-1 fees than the equivalent of
the maximum front-end sales charges otherwise permitted by the National
Association of Securities Dealers' Rules. See "How to Purchase, Exchange,
Convert and Redeem Shares."
3
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
CLASS 2
- ------------------------------------------------------------------------------------------------------------------------------------
SMALL CAP
SHORT-TERM CORE VALUE VALUE INTERNATIONAL
PRIME BOND BOND BALANCED EQUITY EQUITY EQUITY
FUND FUND FUND FUND FUND FUND FUND
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES
(As a percentage of offering price)
Maximum Sales Charge
Imposed on Purchases
and Reinvested Dividends.......... NONE NONE NONE NONE NONE NONE NONE
ANNUAL OPERATING EXPENSES
(As a percentage of average net assets)
Management Fees.................... .45% .45% .45% .45% .45% .55% .85%
12b-1 Fees......................... .15% .15% .15% .15% .15% .15% .15%
Other Expenses..................... .53% .53% .54% .54% .54% .54% .67%
====================================================================================================================================
TOTAL OPERATING EXPENSES/(1)/ 1.13% 1.13% 1.14% 1.14% 1.14% 1.24% 1.67%
====================================================================================================================================
</TABLE>
(1) MassMutual's voluntary agreement to waive a portion of its management fee
terminated May 1, 1997. The expenses in the above table have been restated
to show what 1996 expenses would have been without such waiver.
EXAMPLE: An investor would pay the following expenses on an investment of
$1,000 in the Fund assuming: (a) 5% annual return and (b) redemption
at the end of each time period.
<TABLE>
<CAPTION>
SMALL CAP
SHORT-TERM CORE VALUE VALUE INTERNATIONAL
PRIME BOND BOND BALANCED EQUITY EQUITY EQUITY
FUND FUND FUND FUND FUND FUND FUND
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 Year $ 12 $ 12 $ 12 $ 12 $ 12 $ 13 $ 17
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
3 Years $ 36 $ 36 $ 36 $ 36 $ 36 $ 39 $ 53
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
5 Years $ 62 $ 62 $ 63 $ 63 $ 63 $ 68 $ 91
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
10 Years $137 $137 $139 $139 $139 $150 $198
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF FUTURE EXPENSES AND
ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
Long-term shareholders may pay more in Rule 12b-1 fees than the equivalent of
the maximum front-end sales charges otherwise permitted by the National
Association of Securities Dealers' Rules. See "How to Purchase, Exchange,
Convert and Redeem Shares."
4
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
CLASS 3
- ------------------------------------------------------------------------------------------------------------------------------------
SMALL CAP
SHORT-TERM CORE VALUE VALUE INTERNATIONAL
PRIME BOND BOND BALANCED EQUITY EQUITY EQUITY
FUND FUND FUND FUND FUND FUND FUND
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES
(As a percentage of offering price)
Maximum Sales Charge
Imposed on Purchases
and Reinvested Dividends.......... NONE NONE NONE NONE NONE NONE NONE
ANNUAL OPERATING EXPENSES
(As a percentage of average net assets)
Management Fees.................... .45% .45% .45% .45% .45% .55% .85%
12b-1 Fees......................... NONE NONE NONE NONE NONE NONE NONE
Other Expenses..................... .33% .34% .34% .34% .35% .34% .57%
====================================================================================================================================
TOTAL OPERATING EXPENSES/(1)/ .78% .79% .79% .79% .80% .89% 1.42%
====================================================================================================================================
</TABLE>
(1) MassMutual's voluntary agreement to waive a portion of its management fee
terminated May 1, 1997. The expenses in the above table have been restated
to show what 1996 expenses would have been without such waiver.
EXAMPLE: An investor would pay the following expenses on an investment of
$1,000 in the Fund assuming: (a) 5% annual return and (b) redemption
at the end of each time period.
<TABLE>
<CAPTION>
SMALL CAP
SHORT-TERM CORE VALUE VALUE INTERNATIONAL
PRIME BOND BOND BALANCED EQUITY EQUITY EQUITY
FUND FUND FUND FUND FUND FUND FUND
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 Year $ 8 $ 8 $ 8 $ 8 $ 8 $ 9 $ 14
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
3 Years $ 25 $ 25 $ 25 $ 25 $ 26 $ 28 $ 45
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
5 Years $ 43 $ 44 $ 44 $ 44 $ 44 $ 49 $ 78
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
10 Years $ 97 $ 98 $ 98 $ 98 $ 99 $110 $170
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF FUTURE EXPENSES AND
ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
5
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
CLASS 4
- ------------------------------------------------------------------------------------------------------------------------------------
SMALL CAP
SHORT-TERM CORE VALUE VALUE INTERNATIONAL
PRIME BOND BOND BALANCED EQUITY EQUITY EQUITY
FUND FUND FUND FUND FUND FUND FUND
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES
(As a percentage of offering price)
Maximum Sales Charge
Imposed on Purchases
and Reinvested Dividends.......... NONE NONE NONE NONE NONE NONE NONE
ANNUAL OPERATING EXPENSES
(As a percentage of average net assets)
Management Fees.................... .45% .45% .45% .45% .45% .55% .85%
12b-1 Fees......................... NONE NONE NONE NONE NONE NONE NONE
Custody............................ .008% .012% .013% .013% .0093% .013% .138%
Other Expenses..................... .0929% .0925% .092% .0892% .0941% .0916% .0838%
====================================================================================================================================
TOTAL OPERATING EXPENSES/(1)/(2)/ .5509% .5545% .5550% .5522% .5534% .6546% 1.0718%
====================================================================================================================================
</TABLE>
(1) MassMutual's voluntary agreement to waive a portion of its management fee
terminated May 1, 1997. The expenses in the above table have been restated
to show what 1996 expenses would have been without such waiver.
(2) There are no current client expenses for separate accounts, but employee
benefit plans that invest in the separate accounts are subject to charges
imposed in their group annuity contracts, as set forth in their respective
Plan Documents. See the Glossary for a definition of Plan Documents.
EXAMPLE: An investor would pay the following expenses on an investment of
$1,000 in the Fund assuming: (a) 5% annual return and (b) redemption
at the end of each time period.
<TABLE>
<CAPTION>
SMALL CAP
SHORT-TERM CORE VALUE VALUE INTERNATIONAL
PRIME BOND BOND BALANCED EQUITY EQUITY EQUITY
FUND FUND FUND FUND FUND FUND FUND
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 Year $ 6 $ 6 $ 6 $ 6 $ 6 $ 7 $ 11
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
3 Years $ 18 $ 18 $ 18 $ 18 $ 18 $ 21 $ 34
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
5 Years $ 31 $ 31 $ 31 $ 31 $ 31 $ 36 $ 59
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
10 Years $ 69 $ 69 $ 70 $ 69 $ 69 $ 82 $131
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF FUTURE EXPENSES AND
ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
FINANCIAL HIGHLIGHTS
The information in the following tables has been derived from the financial
statements audited by Coopers & Lybrand L.L.P., independent accountants, whose
report on the financial statements of the Funds is included in the Trust's
Annual Report which is part of the Statement of Additional Information. Further
information about the performance of the Funds is contained in the Annual
Report. The Statement of Additional Information and the Annual Report may be
obtained without charge by writing to the Trust's Secretary.
6
<PAGE>
MassMutual Prime Fund
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
CLASS 1
-------
YEAR ENDED YEAR ENDED PERIOD ENDED
12/31/96 12/31/95 12/31/94(up)**
---------- ---------- -----------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 151.05 $ 150.39 $ 150.00
---------- ---------- -----------
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income 6.09*** 6.90 *** 1.02
Net realized and unrealized gain (loss) on investments 0.03 (0.01) 0.42
---------- ---------- -----------
Total income (loss) from investment operations 6.12 6.89 1.44
---------- ---------- -----------
LESS DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income (6.14) (6.23) (1.05)
---------- ---------- -----------
NET ASSET VALUE, END OF PERIOD $ 151.03 $ 151.05 $ 150.39
========== ========== ===========
TOTAL RETURN 4.05% 4.58% 0.96%
RATIOS / SUPPLEMENTAL DATA:
Net assets, end of period (000's) $110 $105 $101
Net expenses to average daily net assets# 1.65% 1.65% 1.65%*
Net investment income to average daily net assets 3.97% 4.48% 4.07%*
#Computed after giving effect to the reduction in
management fee by MassMutual, which such voluntary
fee waiver terminated May 1, 1997. Without this reduction of
fees by the investment manager, the ratio of expenses
to average daily net assets would have been: 1.68% 1.68% 1.69%*
</TABLE>
<TABLE>
<CAPTION>
CLASS 2
----------
YEAR ENDED YEAR ENDED PERIOD ENDED
12/31/96 12/31/95 12/31/94(up)**
---------- ---------- -----------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 151.24 $ 150.56 $ 150.00
---------- ---------- -----------
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income 6.96*** 7.78 *** 1.16
Net realized and unrealized gain (loss) on investments 0.04 (0.02) 0.57
---------- ---------- -----------
Total income (loss) from investment operations 7.00 7.76 1.73
---------- ---------- -----------
LESS DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income (7.01) (7.08) (1.17)
---------- ---------- -----------
NET ASSET VALUE, END OF PERIOD $ 151.23 $ 151.24 $ 150.56
========== ========== ===========
TOTAL RETURN 4.63% 5.16% 1.15%
RATIOS / SUPPLEMENTAL DATA:
Net assets, end of period (000's) $111 $106 $101
Net expenses to average daily net assets# 1.10% 1.10% 1.10%*
Net investment income to average daily net assets 4.52% 5.03% 4.62%*
#Computed after giving effect to the reduction in
management fee by MassMutual, which such voluntary
fee waiver terminated May 1, 1997. Without this reduction of
fees by the investment manager, the ratio of expenses
to average daily net assets would have been: 1.13% 1.13% 1.14%*
</TABLE>
(up) All per share amounts for the period have been restated to reflect a 1-for-
15 reverse stock split effective December 16, 1994.
* Annualized
** For the period from October 3, 1994 (commencement of operations) through
December 31, 1994.
*** Per share amount calculated on the average shares method, which more
appropriately presents the per share data for the period since the use of
the undistributed income method does not accord with the results of
operations.
7
<PAGE>
MassMutual Prime Fund (Continued)
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
CLASS 3
-------
YEAR ENDED YEAR ENDED PERIOD ENDED
12/31/96 12/31/95 12/31/94(up)**
---------- ---------- -----------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 151.32 $ 150.61 $ 150.00
---------- ---------- -----------
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income 7.51*** 8.33 *** 1.21
Net realized and unrealized gain (loss) on investments 0.05 (0.01) 0.61
---------- ---------- -----------
Total income (loss) from investment operations 7.56 8.32 1.82
---------- ---------- -----------
LESS DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income (7.59) (7.61) (1.21)
---------- ---------- -----------
NET ASSET VALUE, END OF PERIOD $ 151.29 $ 151.32 $ 150.61
========== ========== ===========
TOTAL RETURN 5.00% 5.53% 1.21%
RATIOS / SUPPLEMENTAL DATA:
Net assets, end of period (000's) $112 $106 $101
Net expenses to average daily net assets# 0.75% 0.75% 0.75%*
Net investment income to average daily net assets 4.86% 5.38% 4.99%*
#Computed after giving effect to the reduction in
management fee by MassMutual, which such voluntary
fee waiver terminated May 1, 1997. Without this reduction of
fees by the investment manager, the ratio of expenses
to average daily net assets would have been: 0.78% 0.78% 0.79%*
</TABLE>
<TABLE>
<CAPTION>
CLASS 4
-------
YEAR ENDED YEAR ENDED PERIOD ENDED
12/31/96 12/31/95 12/31/94(up)**
---------- ---------- ----------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 151.06 $ 150.36 $ 150.00
---------- ---------- ----------
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income 7.85*** 8.70 *** 1.55
Net realized and unrealized gain (loss) on investments 0.06 (0.02) 0.34
---------- ---------- ----------
Total income (loss) from investment operations 7.91 8.68 1.89
---------- ---------- ----------
LESS DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income (7.97) (7.98) (1.53)
---------- ---------- ----------
NET ASSET VALUE, END OF PERIOD $ 151.00 $ 151.06 $ 150.36
========== ========== ==========
TOTAL RETURN@ 5.24% 5.78% 1.26%
RATIOS / SUPPLEMENTAL DATA:
Net assets, end of period (000's) $ 258,729 $ 253,936 $ 170,548
Net expenses to average daily net assets# 0.5160% 0.5160% 0.5160%*
Net investment income to average daily net assets 5.10% 5.61% 5.01%*
#Computed after giving effect to the reduction in
management fee by MassMutual, which such voluntary
fee waiver terminated May 1, 1997. Without this reduction of
fees by the investment manager, the ratio of expenses
to average daily net assets would have been: 0.5509% 0.5468% 0.5605%*
</TABLE>
(up) All per share amounts for the period have been restated to reflect a 1-for-
15 reverse stock split effective December 16, 1994.
*Annualized
**For the period from October 3, 1994 (commencement of operations) through
December 31, 1994.
***Per share amount calculated on the average shares method, which more
appropriately presents the per share data for the period since the use of the
undistributed income method does not accord with the results of operations.
@Employee retirement benefit plans that invest plan assets in the Separate
Investment Accounts (SIAs) may be subject to certain charges as set forth in
their respective Plan Documents. Total return figures would be lower for the
periods presented if they reflected these charges.
8
<PAGE>
MassMutual Short-Term Bond Fund
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
CLASS 1
-----------
YEAR ENDED YEAR ENDED PERIOD ENDED
12/31/96 12/31/95 12/31/94**
----------- ----------- -------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.19 $ 9.89 $ 10.00
----------- ----------- -------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income 0.50 0.55 0.09
Net realized and unrealized gain (loss) on investments (0.05) 0.49 (0.11)
----------- ----------- -------------
Total income (loss) from investment operations 0.45 1.04 (0.02)
----------- ----------- -------------
LESS DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income (0.48) (0.54) (0.09)
From net realized gains (0.01) (0.20) --
----------- ----------- -------------
Total distributions (0.49) (0.74) (0.09)
----------- ----------- -------------
NET ASSET VALUE, END OF PERIOD $ 10.15 $ 10.19 $ 9.89
=========== =========== =============
TOTAL RETURN 4.35% 10.54% (0.17)%
RATIOS / SUPPLEMENTAL DATA:
Net assets, end of period (000's) $ 116 $ 111 $ 100
Net expenses to average daily net assets# 1.65% 1.65% 1.65%*
Net investment income to average daily net assets 4.86% 5.20% 5.45%*
Portfolio turnover rate 61% 114% 15%
#Computed after giving effect to the reduction in
management fee by MassMutual, which such voluntary
fee waiver terminated May 1, 1997. Without this reduction of
fees by the investment manager, the ratio of expenses
to average daily net assets would have been: 1.68% 1.68% 1.70%*
</TABLE>
<TABLE>
<CAPTION>
CLASS 2
----------
YEAR ENDED YEAR ENDED PERIOD ENDED
12/31/96 12/31/95 12/31/94**
---------- ---------- ------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.19 $ 9.89 $ 10.00
---------- ---------- ------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income 0.56 0.61 0.10
Net realized and unrealized gain (loss) on investments (0.04) 0.49 (0.11)
---------- ---------- ------------
Total income (loss) from investment operations 0.52 1.10 (0.01)
---------- ---------- ------------
LESS DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income (0.54) (0.60) (0.10)
From net realized gains (0.01) (0.20) --
----------- ----------- ------------
Total distributions (0.55) (0.80) (0.10)
----------- ----------- ------------
NET ASSET VALUE, END OF PERIOD $ 10.16 $ 10.19 $ 9.89
=========== =========== ============
TOTAL RETURN 5.02% 11.11% (0.09)%
RATIOS / SUPPLEMENTAL DATA:
Net assets, end of period (000's) $ 117 $ 112 $ 101
Net expenses to average daily net assets# 1.10% 1.10% 1.10%*
Net investment income to average daily net assets 5.41% 5.75% 5.99%*
Portfolio turnover rate 61% 114% 15%
#Computed after giving effect to the reduction in
management fee by MassMutual, which such voluntary
fee waiver terminated May 1, 1997. Without this reduction of
fees by the investment manager, the ratio of expenses
to average daily net assets would have been: 1.13% 1.13% 1.15%*
</TABLE>
*Annualized
**For the period from October 3, 1994 (commencement of operations) through
December 31, 1994.
9
<PAGE>
MassMutual Short-Term Bond Fund (Continued)
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
CLASS 3
---------
YEAR ENDED YEAR ENDED PERIOD ENDED
12/31/96 12/31/95 12/31/94**
---------- ---------- ------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.21 $ 9.91 $ 10.00
INCOME (LOSS) FROM INVESTMENT OPERATIONS: ---------- ---------- ------------
Net investment income 0.60 0.64 0.10
Net realized and unrealized gain (loss) on investments (0.05) 0.49 (0.09)
---------- ----------- ------------
Total income (loss) from investment operations 0.55 1.13 0.01
---------- ----------- ------------
LESS DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income (0.58) (0.63) (0.10)
From net realized gains (0.01) (0.20) --
---------- ----------- ------------
Total distributions (0.59) (0.83) (0.10)
---------- ----------- ------------
NET ASSET VALUE, END OF PERIOD $ 10.17 $ 10.21 $ 9.91
========== =========== ============
TOTAL RETURN 5.28% 11.46% 0.13%
RATIOS / SUPPLEMENTAL DATA:
Net assets, end of period (000's) $ 118 $ 112 $ 100
Net expenses to average daily net assets# 0.75% 0.75% 0.75%*
Net investment income to average daily net assets 5.76% 6.10% 6.36%*
Portfolio turnover rate 61% 114% 15%
#Computed after giving effect to the reduction in
management fee by MassMutual, which such voluntary
fee waiver terminated May 1, 1997. Without this reduction of
fees by the investment manager, the ratio of expenses
to average daily net assets would have been: 0.79% 0.78% 0.80%*
</TABLE>
<TABLE>
<CAPTION>
CLASS 4
---------
YEAR ENDED YEAR ENDED PERIOD ENDED
12/31/96 12/31/95 12/31/94**
---------- ---------- ------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.15 $ 9.85 $ 10.00
---------- ---------- ------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income 0.60 0.66 0.16
Net realized and unrealized gain (loss) on investments (0.03) 0.50 (0.15)
---------- ---------- ------------
Total income (loss) from investment operations 0.57 1.16 0.01
---------- ---------- ------------
LESS DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income (0.60) (0.66) (0.16)
From net realized gains (0.01) (0.20) --
---------- ---------- ------------
Total distributions (0.61) (0.86) (0.16)
---------- ---------- ------------
NET ASSET VALUE, END OF PERIOD $ 10.11 $ 10.15 $ 9.85
========== ========== ============
TOTAL RETURN@ 5.57% 11.77% 0.13%
RATIOS / SUPPLEMENTAL DATA:
Net assets, end of period (000's) $ 145,182 $ 122,904 $ 106,846
Net expenses to average daily net assets# 0.5190% 0.5190% 0.5190%*
Net investment income to average daily net assets 6.00% 6.32% 6.37%*
Portfolio turnover rate 61% 114% 15%
#Computed after giving effect to the reduction in
management fee by MassMutual, which such voluntary
fee waiver terminated May 1, 1997. Without this reduction of
fees by the investment manager, the ratio of expenses
to average daily net assets would have been: 0.5545% 0.5524% 0.5654%*
</TABLE>
*Annualized
**For the period from October 3, 1994 (commencement of operations) through
December 31, 1994.
@ Employee retirement benefit plans that invest plan assets in the Separate
Investment Accounts (SIAs) may be subject to certain charges as set forth in
their respective Plan Documents. Total return figures would be lower for the
periods presented if they reflected these charges.
10
<PAGE>
MassMutual Core Bond Fund
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
CLASS 1
------------
YEAR ENDED YEAR ENDED PERIOD ENDED
12/31/96 12/31/95 12/31/94**
----------- ------------ --------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.79 $ 9.90 $ 10.00
----------- ------------ --------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income 0.53*** 0.50 0.10
Net realized and unrealized gain (loss) on investments (0.36) 1.26 (0.10)
----------- ------------ --------------
Total income (loss) from investment operations 0.17 1.76 --
----------- ------------ --------------
LESS DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income (0.40) (0.54) (0.10)
From net realized gains (0.08) (0.33) --
----------- ------------ --------------
Total distributions (0.46) (0.87) (0.10)
----------- ------------ --------------
NET ASSET VALUE, END OF PERIOD $ 10.50 $ 10.79 $ 9.90
=========== =========== ==============
TOTAL RETURN 1.60% 17.81% 0.00%
RATIOS / SUPPLEMENTAL DATA:
Net assets, end of period (000's) $ 121 $ 171 $ 101
Net expenses to average daily net assets# 1.65% 1.65% 1.65%*
Net investment income to average daily net assets 5.10% 5.39% 5.91%*
Portfolio turnover rate 54% 104% 7%
#Computed after giving effect to the reduction in
management fee by MassMutual, which such voluntary
fee waiver terminated May 1, 1997. Without this reduction of
fees by the investment manager, the ratio of expenses
to average daily net assets would have been: 1.69% 1.69% 1.71%*
</TABLE>
<TABLE>
<CAPTION>
CLASS 2
------------
YEAR ENDED YEAR ENDED PERIOD ENDED
12/31/96 12/31/95 12/31/94(UP)**
----------- ------------ ---------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.82 $ 9.90 $ 10.00
------------ ------------ --------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income 0.60*** 0.64 0.11
Net realized and unrealized gain (loss) on investments (0.38) 1.19 (0.10)
------------ ------------ --------------
Total income (loss) from investment operations 0.22 1.83 0.01
------------ ------------ --------------
LESS DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income (0.47) (0.58) (0.11)
From net realized gains (0.06) (0.33) --
------------ ------------ -------------
Total distributions (0.53) (0.91) (0.11)
------------ ------------ -------------
NET ASSET VALUE, END OF PERIOD $ 10.51 $ 10.82 $ 9.90
============ ============ =============
TOTAL RETURN 2.07% 18.51% 0.08%
RATIOS / SUPPLEMENTAL DATA:
Net assets, end of period (000's) $ 122 $ 120 $ 101
Net expenses to average daily net assets# 1.10% 1.10% 1.10%*
Net investment income to average daily net assets 5.67% 5.97% 6.46%*
Portfolio turnover rate 54% 104% 7%
#Computed after giving effect to the reduction in
management fee by MassMutual, which such voluntary
fee waiver terminated May 1, 1997. Without this reduction of
fees by the investment manager, the ratio of expenses
to average daily net assets would have been: 1.14% 1.14% 1.16%*
</TABLE>
*Annualized
**For the period from October 3, 1994 (commencement of operations) through
December 31, 1994.
***Per share amount calculated on the average shares method, which more
appropriately presents the per share data for the period since the use of the
undistributed income method does not accord with the results of operations.
11
<PAGE>
MassMutual Core Bond Fund (Continued)
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
CLASS 3
----------
YEAR ENDED YEAR ENDED PERIOD ENDED
12/31/96 12/31/95 12/31/94**
----------- ----------- --------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.82 $ 9.90 $ 10.00
----------- ----------- --------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income 0.64*** 0.68 0.11
Net realized and unrealized gain (loss) on investments (0.37) 1.19 (0.10)
----------- ----------- --------------
Total income (loss) from investment operations 0.27 1.87 0.01
----------- ----------- --------------
LESS DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income (0.51) (0.62) (0.11)
From net realized gains (0.06) (0.33) --
----------- ----------- --------------
Total distributions (0.57) (0.95) (0.11)
----------- ----------- --------------
NET ASSET VALUE, END OF PERIOD $ 10.52 $ 10.82 $ 9.90
=========== =========== ==============
TOTAL RETURN 2.52% 18.87% 0.09%
RATIOS / SUPPLEMENTAL DATA:
Net assets, end of period (000's) $ 123 $ 120 $ 101
Net expenses to average daily net assets# 0.75% 0.75% 0.75%*
Net investment income to average daily net assets 6.01% 6.32% 6.83%*
Portfolio turnover rate 54% 104% 7%
#Computed after giving effect to the reduction in
management fee by MassMutual, which such voluntary
fee waiver terminated May 1, 1997. Without this reduction of
fees by the investment manager, the ratio of expenses
to average daily net assets would have been: 0.79% 0.79% 0.81%*
</TABLE>
<TABLE>
<CAPTION>
CLASS 4
----------
YEAR ENDED YEAR ENDED PERIOD ENDED
12/31/96 12/31/95 12/31/94**
----------- ----------- --------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.75 $ 9.84 $ 10.00
----------- ----------- --------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income 0.67*** 0.72*** 0.18
Net realized and unrealized gain (loss) on investments (0.37) 1.17 (0.16)
----------- ----------- --------------
Total income (loss) from investment operations 0.30 1.89 0.02
----------- ----------- --------------
LESS DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income (0.54) (0.65) (0.18)
From net realized gains (0.06) (0.33) --
----------- ----------- --------------
Total distributions (0.60) (0.98) (0.18)
----------- ----------- --------------
NET ASSET VALUE, END OF PERIOD $ 10.45 $ 10.75 $ 9.84
=========== =========== ==============
TOTAL RETURN@ 2.80% 19.15% 0.20%
RATIOS / SUPPLEMENTAL DATA:
Net assets, end of period (000's) $ 356,699 $ 253,540 $ 194,150
Net expenses to average daily net assets# 0.5130% 0.5130% 0.5130%*
Net investment income to average daily net assets 6.26% 6.56% 6.86%*
Portfolio turnover rate 54% 104% 7%
#Computed after giving effect to the reduction in
management fee by MassMutual, which such voluntary
fee waiver terminated May 1, 1997. Without this reduction of
fees by the investment manager, the ratio of expenses
to average daily net assets would have been: 0.5550% 0.5553% 0.5672%*
</TABLE>
*Annualized
**For the period from October 3, 1994 (commencement of operations) through
December 31, 1994.
***Per share amount calculated on the average shares method, which more
appropriately presents the per share data for the period since the use of the
undistributed income method does not accord with the results of operations.
@Employee retirement benefit plans that invest plan assets in the Separate
Investment Accounts (SIAs) may be subject to certain charges as set forth in
their respective Plan Documents. Total return figures would be lower for the
periods presented if they reflected these charges.
12
<PAGE>
MassMutual Balanced Fund
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
CLASS 1
----------
YEAR ENDED YEAR ENDED PERIOD ENDED
12/31/96 12/31/95 12/31/94**
------------ ------------ -------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 11.50 $ 9.94 $ 10.00
------------ ------------ -------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income 0.34 0.28 0.06
Net realized and unrealized gain (loss) on investments 1.01 1.70 (0.06)
------------ ------------ -------------
Total income (loss) from investment operations 1.35 1.98 --
------------ ------------ -------------
LESS DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income (0.31) (0.33) (0.06)
From net realized gains (0.19) (0.09) --
------------ ------------ -------------
Total distributions (0.50) (0.42) (0.06)
------------ ------------ -------------
NET ASSET VALUE, END OF PERIOD $ 12.35 $ 11.50 $ 9.94
============ ============ =============
TOTAL RETURN 11.67% 19.92% 0.00%
RATIOS / SUPPLEMENTAL DATA:
Net assets, end of period (000's) $ 134 $ 173 $ 100
Net expenses to average daily net assets# 1.65% 1.65% 1.65%*
Net investment income to average daily net assets 2.71% 3.03% 3.39%*
Portfolio turnover rate 26% 23% 2%
Average broker commission rate (a) $ .0594 N/A N/A
#Computed after giving effect to the reduction in
management fee by MassMutual, which such voluntary
fee waiver terminated May 1, 1997. Without this reduction of
fees by the investment manager, the ratio of expenses
to average daily net assets would have been: 1.69% 1.69% 1.71%*
</TABLE>
<TABLE>
<CAPTION>
CLASS 2
----------
YEAR ENDED YEAR ENDED PERIOD ENDED
12/31/96 12/31/95 12/31/94**
----------- ----------- ---------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 11.53 $ 9.95 $ 10.00
----------- ----------- ---------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income 0.39 0.39 0.06
Net realized and unrealized gain (loss) on investments 1.03 1.65 (0.04)
----------- ----------- ---------------
Total income (loss) from investment operations 1.42 2.04 0.02
----------- ----------- ---------------
LESS DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income (0.39) (0.37) (0.07)
From net realized gains (0.19) (0.09) --
----------- ----------- ---------------
Total distributions (0.58) (0.46) (0.07)
----------- ----------- ---------------
NET ASSET VALUE, END OF PERIOD $ 12.37 $ 11.53 $ 9.95
=========== =========== ===============
TOTAL RETURN 12.25% 20.50% 0.17%
RATIOS / SUPPLEMENTAL DATA:
Net assets, end of period (000's) $ 135 $ 121 $ 100
Net expenses to average daily net assets# 1.10% 1.10% 1.10%*
Net investment income to average daily net assets 3.23% 3.60% 3.94%*
Portfolio turnover rate 26% 23% 2%
Average broker commission rate (a) $ .0594 N/A N/A
#Computed after giving effect to the reduction in
management fee by MassMutual, which such voluntary
fee waiver terminated May 1, 1997. Without this reduction of
fees by the investment manager, the ratio of expenses
to average daily net assets would have been: 1.14% 1.14% 1.16%*
</TABLE>
*Annualized
**For the period from October 3, 1994 (commencement of operations) through
December 31, 1994.
(a)Average commission rate paid is computed by dividing the total amount of
commissions paid during the fiscal year by the total number of shares
purchased and sold during the fiscal year for which commissions were charged.
For fiscal years beginning on or after September 1, 1995, a Fund
is required to disclose its average commission rate per share for security
trades on which commissions are charged.
13
<PAGE>
MassMutual Balanced Fund (Continued)
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
CLASS 3
----------
YEAR ENDED YEAR ENDED PERIOD ENDED
12/31/96 12/31/95 12/31/94**
----------- ------------ -------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 11.55 $ 9.96 $ 10.00
----------- ------------ -------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income 0.44 0.43 0.07
Net realized and unrealized gain (loss) on investments 1.02 1.66 (0.04)
----------- ------------ -------------
Total income (loss) from investment operations 1.46 2.09 0.03
----------- ------------ -------------
LESS DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income (0.43) (0.41) (0.07)
From net realized gains (0.19) (0.09) --
----------- ------------ -------------
Total distributions (0.62) (0.50) (0.07)
----------- ------------ -------------
NET ASSET VALUE, END OF PERIOD $ 12.39 $ 11.55 $ 9.96
=========== ============ =============
TOTAL RETURN 12.61% 20.96% 0.28%
RATIOS / SUPPLEMENTAL DATA:
Net assets, end of period (000's) $ 136 $ 121 $ 100
Net expenses to average daily net assets# 0.75% 0.75% 0.75%*
Net investment income to average daily net assets 3.60% 3.94% 4.32%*
Portfolio turnover rate 26% 23% 2%
Average broker commission rate (a) $ .0594 N/A N/A
#Computed after giving effect to the reduction in
management fee by MassMutual, which such voluntary
fee waiver terminated May 1, 1997. Without this reduction of
fees by the investment manager, the ratio of expenses
to average daily net assets would have been: 0.79% 0.79% 0.81%*
</TABLE>
<TABLE>
<CAPTION>
CLASS 4
-----------
YEAR ENDED YEAR ENDED PERIOD ENDED
12/31/96 12/31/95 12/31/94(up)**
------------ ----------- --------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 11.51 $ 9.92 $ 10.00
------------ ----------- --------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income 0.46 0.44 0.11
Net realized and unrealized gain (loss) on investments 1.02 1.68 (0.08)
------------ ----------- --------------
Total income (loss) from investment operations 1.48 2.12 0.03
------------ ----------- --------------
LESS DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income (0.46) (0.44) (0.11)
From net realized gains (0.19) (0.09) --
------------ ----------- --------------
Total distributions (0.65) (0.53) (0.11)
------------ ----------- --------------
NET ASSET VALUE, END OF PERIOD $ 12.34 $ 11.51 $ 9.92
============ =========== ==============
TOTAL RETURN@ 12.83% 21.31% 0.29%
RATIOS / SUPPLEMENTAL DATA:
Net assets, end of period (000's) $ 563,280 $ 456,773 $ 349,688
Net expenses to average daily net assets# 0.5120% 0.5120% 0.5120%*
Net investment income to average daily net assets 3.83% 4.18% 4.29%*
Portfolio turnover rate 26% 23% 2%
Average broker commission rate (a) $ .0594 N/A N/A
#Computed after giving effect to the reduction in
management fee by MassMutual, which such voluntary
fee waiver terminated May 1, 1997. Without this reduction of
fees by the investment manager, the ratio of expenses
to average daily net assets would have been: 0.5522% 0.5514% 0.5650%*
</TABLE>
*Annualized
**For the period from October 3, 1994 (commencement of operations) through
December 31, 1994.
@Employee retirement benefit plans that invest plan assets in the Separate
Investment Accounts (SIAs) may be subject to certain charges as set forth
in their respective Plan Documents. Total return figures would be lower for
the periods presented if they reflected these charges.
(a)Average commission rate paid is computed by dividing the total amount of
commissions paid during the fiscal year by the total number of shares
purchased and sold during the fiscal year for which commissions were charged.
For fiscal years beginning on or after September 1, 1995, a Fund
is required to disclose its average commission rate per share for security
trades on which commissions are charged.
14
<PAGE>
MassMutual Value Equity Fund
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
CLASS 1
----------
YEAR ENDED YEAR ENDED PERIOD ENDED
12/31/96 12/31/95 12/31/94**
------------ ------------ --------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 12.63 $ 9.92 $ 10.00
------------ ------------ --------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income 0.17 0.18 0.04
Net realized and unrealized gain (loss) on investments 2.21 2.81 (0.08)
------------ ------------ --------------
Total income (loss) from investment operations 2.38 2.99 (0.04)
------------ ------------ --------------
LESS DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income (0.18) (0.18) (0.04)
From net realized gains (0.39) (0.10) --
------------ ------------ --------------
Total distributions (0.57) (0.28) (0.04)
------------ ------------ --------------
NET ASSET VALUE, END OF PERIOD $ 14.44 $ 12.63 $ 9.92
============ ============ ==============
TOTAL RETURN 18.83% 30.10% (0.39)%
RATIOS / SUPPLEMENTAL DATA:
Net assets, end of period (000's) $ 154 $ 129 $ 99
Net expenses to average daily net assets# 1.65% 1.65% 1.65%*
Net investment income to average daily net assets 1.28% 1.58% 2.31%*
Portfolio turnover rate 13% 16% 3%
Average broker commission rate (a) $ .0585 N/A N/A
#Computed after giving effect to the reduction in
management fee by MassMutual, which such voluntary
fee waiver terminated May 1, 1997. Without this reduction of
fees by the investment manager, the ratio of expenses
to average daily net assets would have been: 1.69% 1.70% 1.71%*
</TABLE>
<TABLE>
<CAPTION>
CLASS 2
-----------
YEAR ENDED YEAR ENDED PERIOD ENDED
12/31/96 12/31/95 12/31/94**
----------- ----------- --------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 12.65 $ 9.93 $ 10.00
----------- ----------- --------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income 0.25 0.24 0.05
Net realized and unrealized gain (loss) on investments 2.22 2.82 (0.07)
----------- ----------- --------------
Total income (loss) from investment operations 2.47 3.06 (0.02)
----------- ----------- --------------
LESS DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income (0.26) (0.24) (0.05)
From net realized gains (0.39) (0.10) --
----------- ----------- --------------
Total distributions (0.65) (0.34) (0.05)
----------- ----------- --------------
NET ASSET VALUE, END OF PERIOD $ 14.47 $ 12.65 $ 9.93
=========== =========== ==============
TOTAL RETURN 19.46% 30.80% (0.22)%
RATIOS / SUPPLEMENTAL DATA:
Net assets, end of period (000's) $ 155 $ 130 $ 99
Net expenses to average daily net assets# 1.10% 1.10% 1.10%*
Net investment income to average daily net assets 1.82% 2.13% 2.86%*
Portfolio turnover rate 13% 16% 3%
Average broker commission rate (a) $ .0585 N/A N/A
#Computed after giving effect to the reduction in
management fee by MassMutual, which such voluntary
fee waiver terminated May 1, 1997. Without this reduction of
fees by the investment manager, the ratio of expenses
to average daily net assets would have been: 1.14% 1.15% 1.16%*
</TABLE>
*Annualized
**For the period from October 3, 1994 (commencement of operations) through
December 31, 1994.
(a)Average commission rate paid is computed by dividing the total amount of
commissions paid during the fiscal year by the total number of shares
purchased and sold during the fiscal year for which commissions were charged.
For fiscal years beginning on or after September 1, 1995, a Fund is required
to disclose its average commission rate per share for security trades on
which commissions are charged.
15
<PAGE>
MassMutual Value Equity Fund (Continued)
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
CLASS 3
----------
YEAR ENDED YEAR ENDED PERIOD ENDED
12/31/96 12/31/95 12/31/94**
---------- ---------- ------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 12.66 $ 9.93 $ 10.00
---------- ---------- ------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income 0.30 0.28 0.05
Net realized and unrealized gain (loss) on investments 2.23 2.83 (0.07)
---------- ---------- ------------
Total income (loss) from investment operations 2.53 3.11 (0.02)
---------- ---------- ------------
LESS DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income (0.31) (0.28) (0.05)
From net realized gains (0.39) (0.10) --
---------- ---------- ------------
Total distributions (0.70) (0.38) (0.05)
---------- ---------- ------------
NET ASSET VALUE, END OF PERIOD $ 14.49 $ 12.66 $ 9.93
========== ========== ============
TOTAL RETURN 19.92% 31.30% (0.18)%
RATIOS / SUPPLEMENTAL DATA:
Net assets, end of period (000's) $ 156 $ 130 $ 99
Net expenses to average daily net assets# 0.75% 0.75% 0.75%*
Net investment income to average daily net assets 2.17% 2.48% 3.23%*
Portfolio turnover rate 13% 16% 3%
Average broker commission rate (a) $ .0585 N/A N/A
#Computed after giving effect to the reduction in
management fee by MassMutual, which such voluntary
fee waiver terminated May 1, 1997. Without this reduction of
fees by the investment manager, the ratio of expenses
to average daily net assets would have been: 0.80% 0.80% 0.81%*
</TABLE>
<TABLE>
<CAPTION>
CLASS 4
----------
YEAR ENDED YEAR ENDED PERIOD ENDED
12/31/96 12/31/95 12/31/94**
---------- ---------- ------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 12.63 $ 9.91 $ 10.00
---------- ---------- ------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income 0.34 0.31 0.08
Net realized and unrealized gain (loss) on investments 2.22 2.82 (0.09)
---------- ---------- ------------
Total income (loss) from investment operations 2.56 3.13 (0.01)
---------- ---------- ------------
LESS DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income (0.34) (0.31) (0.08)
From net realized gains (0.39) (0.10) --
---------- ---------- ------------
Total distributions (0.73) (0.41) (0.08)
---------- ---------- ------------
NET ASSET VALUE, END OF PERIOD $ 14.46 $ 12.63 $ 9.91
========== ========== ============
TOTAL RETURN@ 20.24% 31.54% (0.10)%
RATIOS / SUPPLEMENTAL DATA:
Net assets, end of period (000's) $2,485,743 $2,125,248 $ 1,563,563
Net expenses to average daily net assets# 0.5067% 0.5067% 0.5067%*
Net investment income to average daily net assets 2.42% 2.72% 3.20%*
Portfolio turnover rate 13% 16% 3%
Average broker commission rate (a) $ .0585 N/A N/A
#Computed after giving effect to the reduction in
management fee by MassMutual, which such voluntary
fee waiver terminated May 1, 1997. Without this reduction of
fees by the investment manager, the ratio of expenses
to average daily net assets would have been: 0.5534% 0.5528% 0.5681%*
</TABLE>
*Annualized
**For the period from October 3, 1994 (commencement of operations) through
December 31, 1994.
@Employee retirement benefit plans that invest plan assets in the Separate
Investment Accounts (SIAs) may be subject to certain charges as set forth in
their respective Plan Documents. Total return figures would be lower for the
periods presented if they reflected these charges.
(a)Average commission rate paid is computed by dividing the total amount of
commissions paid during the fiscal year by the total number of shares
purchased and sold during the fiscal year for which commissions were charged.
For fiscal years beginning on or after September 1, 1995, a Fund is required
to disclose its average commission rate per share for security trades on
which commissions are charged.
16
<PAGE>
MassMutual Small Cap Value Equity Fund
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
CLASS 1
----------
YEAR ENDED YEAR ENDED PERIOD ENDED
12/31/96 12/31/95 12/31/94**
---------- ---------- ------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 11.40 $ 9.69 $ 10.00
---------- ---------- ------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income 0.21 0.06 0.02
Net realized and unrealized gain (loss) on investments 2.23 1.74 (0.31)
---------- ---------- ------------
Total income (loss) from investment operations 2.44 1.80 (0.29)
---------- ---------- ------------
LESS DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income (0.14) (0.09) (0.02)
From net realized gains (0.31) -- --
---------- ---------- ------------
Total distributions (0.45) (0.09) (0.02)
---------- ---------- ------------
NET ASSET VALUE, END OF PERIOD $ 13.39 $ 11.40 $ 9.69
========== ========== ============
TOTAL RETURN 21.43% 18.58% (2.89)%
RATIOS / SUPPLEMENTAL DATA:
Net assets, end of period (000's) $ 143 $ 172 $ 99
Net expenses to average daily net assets# 1.75% 1.75% 1.75%*
Net investment income to average daily net assets 1.56% 0.63% 1.14%*
Portfolio turnover rate 28% 28% 4%
Average broker commission rate (a) $ .0585 N/A N/A
#Computed after giving effect to the reduction in
management fee by MassMutual, which such voluntary
fee waiver terminated May 1, 1997. Without this reduction of
fees by the investment manager, the ratio of expenses
to average daily net assets would have been: 1.79% 1.79% 1.81%*
</TABLE>
<TABLE>
<CAPTION>
CLASS 2
----------
YEAR ENDED YEAR ENDED PERIOD ENDED
12/31/96 12/31/95 12/31/94**
---------- ---------- ------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 11.44 $ 9.70 $ 10.00
---------- ---------- ------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income 0.22 0.13 0.03
Net realized and unrealized gain (loss) on investments 2.30 1.74 (0.30)
---------- ---------- ------------
Total income (loss) from investment operations 2.52 1.87 (0.27)
---------- ---------- ------------
LESS DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income (0.23) (0.13) (0.03)
From net realized gains (0.31) -- --
---------- ---------- ------------
Total distributions (0.54) (0.13) (0.03)
---------- ---------- ------------
NET ASSET VALUE, END OF PERIOD $ 13.42 $ 11.44 $ 9.70
========== ========== ============
TOTAL RETURN 22.07% 19.25% (2.72)%
RATIOS / SUPPLEMENTAL DATA:
Net assets, end of period (000's) $ 145 $ 118 $ 99
Net expenses to average daily net assets# 1.20% 1.20% 1.20%*
Net investment income to average daily net assets 1.81% 1.19% 1.69%*
Portfolio turnover rate 28% 28% 4%
Average broker commission rate (a) $ .0585 N/A N/A
#Computed after giving effect to the reduction in
management fee by MassMutual, which such voluntary
fee waiver terminated May 1, 1997. Without this reduction of
fees by the investment manager, the ratio of expenses
to average daily net assets would have been: 1.24% 1.24% 1.26%*
</TABLE>
*Annualized
**For the period from October 3, 1994 (commencement of operations) through
December 31, 1994.
(a)Average commission rate paid is computed by dividing the total amount of
commissions paid during the fiscal year by the total number of shares
purchased and sold during the fiscal year for which commissions were charged.
For fiscal years beginning on or after September 1, 1995, a Fund is required
to disclose its average commission rate per share for security trades on
which commissions are charged.
17
<PAGE>
MassMutual Small Cap Value Equity Fund (Continued)
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
CLASS 3
----------
YEAR ENDED YEAR ENDED PERIOD ENDED
12/31/96 12/31/95 12/31/94**
---------- ---------- ------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 11.44 $ 9.70 $ 10.00
---------- ---------- ------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income 0.27 0.16 0.03
Net realized and unrealized gain (loss) on investments 2.31 1.74 (0.30)
---------- ---------- ------------
Total income (loss) from investment operations 2.58 1.90 (0.27)
---------- ---------- ------------
LESS DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income (0.27) (0.16) (0.03)
From net realized gains (0.31) -- --
---------- ---------- ------------
Total distributions (0.58) (0.16) (0.03)
---------- ---------- ------------
NET ASSET VALUE, END OF PERIOD $ 13.44 $ 11.44 $ 9.70
========== ========== ============
TOTAL RETURN 22.64% 19.62% (2.68)%
RATIOS / SUPPLEMENTAL DATA:
Net assets, end of period (000's) $ 146 $ 119 $ 99
Net expenses to average daily net assets# 0.85% 0.85% 0.85%*
Net investment income to average daily net assets 2.16% 1.54% 2.09%*
Portfolio turnover rate 28% 28% 4%
Average broker commission rate (a) $ .0585 N/A N/A
#Computed after giving effect to the reduction in
management fee by MassMutual, which such voluntary
fee waiver terminated May 1, 1997. Without this reduction of
fees by the investment manager, the ratio of expenses
to average daily net assets would have been: 0.89% 0.89% 0.91%*
</TABLE>
<TABLE>
<CAPTION>
CLASS 4
----------
YEAR ENDED YEAR ENDED PERIOD ENDED
12/31/96 12/31/95 12/31/94**
---------- ---------- ------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 11.44 $ 9.69 $ 10.00
---------- ---------- ------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income 0.31 0.19 0.04
Net realized and unrealized gain (loss) on investments 2.29 1.75 (0.31)
---------- ---------- ------------
Total income (loss) from investment operations 2.60 1.94 (0.27)
---------- ---------- ------------
LESS DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income (0.30) (0.19) (0.04)
From net realized gains (0.31) -- --
---------- ---------- ------------
Total distributions (0.61) (0.19) (0.04)
---------- ---------- ------------
NET ASSET VALUE, END OF PERIOD $ 13.43 $ 11.44 $ 9.69
========== ========== ============
TOTAL RETURN@ 22.82% 20.01% (2.66)%
RATIOS / SUPPLEMENTAL DATA:
Net assets, end of period (000's) $ 456,935 $ 380,398 $ 310,789
Net expenses to average daily net assets# 0.6110% 0.6110% 0.6110%*
Net investment income to average daily net assets 2.40% 1.78% 1.78%*
Portfolio turnover rate 28% 28% 4%
Average broker commission rate (a) $ .0585 N/A N/A
#Computed after giving effect to the reduction in
management fee by MassMutual, which such voluntary
fee waiver terminated May 1, 1997. Without this reduction of
fees by the investment manager, the ratio of expenses
to average daily net assets would have been: 0.6546% 0.6553% 0.6681%*
</TABLE>
*Annualized
**For the period from October 3, 1994 (commencement of operations) through
December 31, 1994.
@Employee retirement benefit plans that invest plan assets in the Separate
Investment Accounts (SIAs) may be subject to certain charges as set forth in
their respective Plan Documents. Total return figures would be lower for the
periods presented if they reflected these charges.
(a)Average commission rate paid is computed by dividing the total amount of
commissions paid during the fiscal year by the total number of shares
purchased and sold during the fiscal year for which commissions were charged.
For fiscal years beginning on or after September 1, 1995, a Fund is required
to disclose its average commission rate per share for security trades on
which commissions are charged.
18
<PAGE>
MassMutual International Equity Fund
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
CLASS 1
----------
YEAR ENDED YEAR ENDED PERIOD ENDED
12/31/96 12/31/95 12/31/94**
---------- ---------- ------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 9.54 $ 9.25 $ 10.00
---------- ---------- ------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income (0.07) (0.03) (0.02)
Net realized and unrealized gain (loss) on investments
and foreign currency 1.70 0.40 (0.73)
---------- ---------- ------------
Total income (loss) from investment operations 1.63 0.37 (0.75)
---------- ---------- ------------
LESS DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income (0.10) -- --
In excess of net investment income -- (0.08) --
---------- ---------- ------------
Total distributions (0.10) (0.08) --
---------- ---------- ------------
NET ASSET VALUE, END OF PERIOD $ 11.07 $ 9.54 $ 9.25
========== ========== ============
TOTAL RETURN 17.09% 3.96% (7.50)%
RATIOS / SUPPLEMENTAL DATA:
Net assets, end of period (000's) $ 113 $ 112 $ 93
Net expenses to average daily net assets# 2.15% 2.15% 2.15%*
Net investment income to average daily net assets (0.51)% (0.40)% (1.10)%*
Portfolio turnover rate 58% 121% 18%
Average broker commission rate (a) $ .0254 N/A N/A
#Computed after giving effect to the reduction in
management fee by MassMutual, which such voluntary
fee waiver terminated May 1, 1997. Without this reduction of
fees by the investment manager, the ratio of expenses
to average daily net assets would have been: 2.22% 2.24% 2.24%*
</TABLE>
<TABLE>
<CAPTION>
CLASS 2
----------
YEAR ENDED YEAR ENDED PERIOD ENDED
12/31/96 12/31/95 12/31/94**
---------- ---------- ------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 9.56 $ 9.26 $ 10.00
---------- ---------- ------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income 0.00 0.02 (0.01)
Net realized and unrealized gain (loss) on investments
and foreign currency 1.70 0.40 (0.73)
---------- ---------- ------------
Total income (loss) from investment operations 1.70 0.42 (0.74)
---------- ---------- ------------
LESS DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income (0.17) (0.02) --
In excess of net investment income -- (0.10) --
---------- ---------- ------------
Total distributions (0.17) (0.12) --
---------- ---------- ------------
NET ASSET VALUE, END OF PERIOD $ 11.09 $ 9.56 $ 9.26
========== ========== ============
TOTAL RETURN 17.85% 4.52% (7.40)%
RATIOS / SUPPLEMENTAL DATA:
Net assets, end of period (000's) $ 114 $ 97 $ 93
Net expenses to average daily net assets# 1.60% 1.60% 1.60%*
Net investment income to average daily net assets 0.02% 0.19% (0.55)%*
Portfolio turnover rate 58% 121% 18%
Average broker commission rate (a) $ .0254 N/A N/A
#Computed after giving effect to the reduction in
management fee by MassMutual, which such voluntary
fee waiver terminated May 1, 1997. Without this reduction of
fees by the investment manager, the ratio of expenses
to average daily net assets would have been: 1.67% 1.69% 1.69%*
</TABLE>
*Annualized
**For the period from October 3, 1994 (commencement of operations) through
December 31, 1994.
(a)Average commission rate paid is computed by dividing the total amount of
commissions paid during the fiscal year by the total number of shares
purchased and sold during the fiscal year for which commissions were charged.
For fiscal years beginning on or after September 1, 1995, a Fund is required
to disclose its average commission rate per share for security trades on
which commissions are charged.
19
<PAGE>
MassMutual International Equity Fund (Continued)
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
CLASS 3
----------
YEAR ENDED YEAR ENDED PERIOD ENDED
12/31/96 12/31/95 12/31/94**
---------- ---------- ------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 9.57 $ 9.27 $ 10.00
---------- ---------- ------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income 0.03 0.04 (0.00)
Net realized and unrealized gain (loss) on investments
and foreign currency 1.70 0.40 (0.73)
---------- ---------- ------------
Total income (loss) from investment operations 1.73 0.44 (0.73)
---------- ---------- ------------
LESS DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income (0.20) (0.05) --
In excess of net investment income -- (0.09) --
---------- ---------- ------------
Total distributions (0.20) (0.14) --
---------- ---------- ------------
NET ASSET VALUE, END OF PERIOD $ 11.10 $ 9.57 $ 9.27
========== ========== ============
TOTAL RETURN 18.11% 4.78% (7.30)%
RATIOS / SUPPLEMENTAL DATA:
Net assets, end of period (000's) $ 114 $ 97 $ 93
Net expenses to average daily net assets# 1.35% 1.35% 1.35%*
Net investment income to average daily net assets 0.27% 0.45% (0.30)%*
Portfolio turnover rate 58% 121% 18%
Average broker commission rate (a) $ .0254 N/A N/A
#Computed after giving effect to the reduction in
management fee by MassMutual, which such voluntary
fee waiver terminated May 1, 1997. Without this reduction of
fees by the investment manager, the ratio of expenses
to average daily net assets would have been: 1.42% 1.44% 1.44%*
</TABLE>
<TABLE>
<CAPTION>
CLASS 4
----------
YEAR ENDED YEAR ENDED PERIOD ENDED
12/31/96 12/31/95 12/31/94**
---------- ---------- ------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 9.58 $ 9.28 $ 10.00
---------- ---------- ------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income 0.06 0.07 0.00
Net realized and unrealized gain (loss) on investments
and foreign currency 1.71 0.41 (0.72)
---------- ---------- ------------
Total income (loss) from investment operations 1.77 0.48 (0.72)
---------- ---------- ------------
LESS DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income (0.24) (0.07) --
In excess of net investment income -- (0.11) --
---------- ---------- ------------
Total distributions (0.24) (0.18) --
---------- ---------- ------------
NET ASSET VALUE, END OF PERIOD $ 11.11 $ 9.58 $ 9.28
========== ========== ============
TOTAL RETURN@ 18.51% 5.13% (7.20)%
RATIOS / SUPPLEMENTAL DATA:
Net assets, end of period (000's) $ 356,311 $ 220,718 $ 150,199
Net expenses to average daily net assets# 1.0020% 1.0020% 1.0020%*
Net investment income to average daily net assets 0.59% 0.76% 0.04%*
Portfolio turnover rate 58% 121% 18%
Average broker commission rate (a) $ .0254 N/A N/A
#Computed after giving effect to the reduction in
management fee by MassMutual, which such voluntary
fee waiver terminated May 1, 1997. Without this reduction of
fees by the investment manager, the ratio of expenses
to average daily net assets would have been: 1.0718% 1.0920% 1.0877%*
</TABLE>
*Annualized
**For the period from October 3, 1994 (commencement of operations) through
December 31, 1994.
@Employee retirement benefit plans that invest plan assets in the Separate
Investment Accounts (SIAs) may be subject to certain charges as set forth
in their respective Plan Documents. Total return figures would be lower for the
periods presented if they reflected these charges.
(a)Average commission rate paid is computed by dividing the total amount of
commissions paid during the fiscal year by the total number of shares
purchased and sold during the fiscal year for which commissions were charged.
For fiscal years beginning on or after September 1, 1995, a Fund is required
to disclose its average commission rate per share for security trades on
which commissions are charged.
20
<PAGE>
THE TRUST
The Trust is an open-end, diversified management investment company (a "mutual
fund") designed to offer investors both the opportunity to pursue long-term
investment goals and the flexibility to respond to changes in their investment
objectives and economic and market conditions. The Trust consists of seven
separate series of shares (the "Funds"), each having four classes of shares.
. Class 1, Class 2 and Class 3 shares of each Fund are offered primarily
to employer-sponsored defined contribution plans that satisfy the
qualification requirements of Section 401(a) of the Internal Revenue
Code of 1986, as amended (the "Code"). Defined contribution plans -
which establish an individual account for each plan participant -
include 401(k) plans, profit sharing plans, money purchase plans and
target benefit plans. Class 1, Class 2 and Class 3 shares may be offered
to defined benefit plans, to other retirement and employee benefit
plans, such as tax sheltered annuities and non-qualified plans, IRAs,
and to other institutional or sophisticated investors.
. Class 4 shares of each Fund are available only to separate investment
accounts ("SIAs") of MassMutual in which corporate qualified plans,
including defined contribution plans and defined benefit plans, and
certain governmental plans are permitted to invest pursuant to the
issuance of group annuity contracts.
The Trust is organized under the laws of the Commonwealth of Massachusetts as a
Massachusetts business trust pursuant to an Agreement and Declaration of Trust
dated May 28, 1993, as amended from time to time (the ``Declaration of Trust").
Each share of a Fund represents an investment in that Fund's portfolio of
securities. The value of an investment in a Fund will vary as the value of the
underlying portfolio increases or decreases. Dividends paid for a class of the
Fund will vary in relation to the pro rata return received from the Fund's
investments and the expenses each class incurs.
The Board of Trustees of the Trust is generally responsible for management of
the business and affairs of the Trust. Trustees formulate the general policies
of the Trust and the Funds, approve contracts and authorize Trust officers to
carry out the decisions of the Board. As Adviser and Sub-Advisers to the Funds,
MassMutual, Babson and HarbourView may be considered part of the management of
the Trust. For more information concerning the management of the Trust,
reference should be made to the Statement of Additional Information.
INVESTMENT OBJECTIVES AND POLICIES OF THE FUNDS
Each Fund has a separate investment objective, which may not be changed without
the vote of a majority of that Fund's outstanding voting shares./1/ There can
be no assurance that a Fund will achieve its investment objective; the success
of a Fund depends to a great extent upon changes in market conditions.
(1) MASSMUTUAL PRIME FUND
THE INVESTMENT OBJECTIVE OF THE PRIME FUND IS TO MAXIMIZE CURRENT INCOME TO THE
EXTENT CONSISTENT WITH LIQUIDITY AND THE PRESERVATION OF CAPITAL BY INVESTING IN
A DIVERSIFIED PORTFOLIO OF MONEY MARKET INSTRUMENTS.
The Fund invests in high quality debt instruments having a remaining maturity
not exceeding 397 days. It is the Fund's policy to invest in the following
types of short-term instruments:
(a) Commercial paper and obligations of corporate issuers that at the date
of acquisition are rated in one of the two highest ratings of at least
one nationally recognized statistical rating organization ("NRSRO")
or, if unrated, are judged by MassMutual to be of equivalent
quality./2/
(b) U.S. Government Securities./3/
(c) Bank participation certificates that represent interests in all or
part of specific bank loans, provided that at the date of acquisition
(1) they have a remaining maturity of 397 days or less; and (2) each
of the underlying loans is made to an issuer of securities rated in
one of the two highest ratings of at least one NRSRO or, if unrated,
are judged by MassMutual to be of equivalent quality.
(d) Certificates of deposit and bankers' acceptances of banks and savings
and loan associations having deposits of at least $1 billion as of
their most recently published financial statements.
_____________
/1/ As used in this Prospectus, a majority of the outstanding voting shares of
any Fund means the lesser of (a) 67% of that Fund's outstanding shares present
at a meeting of shareholders if more than 50% of the outstanding shares are
present in person or by proxy, or (b) more than 50% of that Fund's outstanding
shares.
/2/ For a description of the ratings of two NRSROs, Standard & Poor's Ratings
Group ("S&P") and Moody's Investors Service, Inc. ("Moody's"), see the Appendix
to the Statement of Additional Information. For example, the two highest ratings
of Moody's for commercial paper are P-1 and P-2.
/3/ See the Glossary for a definition of U.S. Government Securities.
21
<PAGE>
(e) Obligations of foreign issuers, payable in U.S. dollars, provided that
no such investment will be made if as a result more than 25% of the
Fund's total assets would be invested in such securities.
The Fund will make portfolio investments primarily in response to changing
economic and money market conditions and trends. Trading activity is expected
to be low. It is anticipated, however, that from time to time the Fund will
take advantage of temporary disparities in the yield relationships among the
different segments of the money market or among particular instruments within
the same segment of the market to make purchases and sales when management deems
that such transactions will improve the yield or the quality of the portfolio.
The Fund is not a money market fund as defined in Rule 2a-7 under the Investment
Company Act of 1940 (the ``1940 Act''). The portfolio of the Fund is managed by
Mary E. Wilson, Senior Managing Director of MassMutual, with which she has been
associated since 1982.
(2) MASSMUTUAL SHORT-TERM BOND FUND
THE INVESTMENT OBJECTIVE OF THE SHORT-TERM BOND FUND IS TO ACHIEVE A HIGH TOTAL
RATE OF RETURN PRIMARILY FROM CURRENT INCOME WHILE MINIMIZING FLUCTUATIONS IN
CAPITAL VALUES BY INVESTING PRIMARILY IN A DIVERSIFIED PORTFOLIO OF SHORT-TERM
INVESTMENT GRADE FIXED INCOME SECURITIES.
The Fund invests in investment grade fixed income securities. Investment grade
fixed income securities are securities that at the date of acquisition are rated
in one of the four highest ratings of at least one NRSRO or, if unrated, are
judged by MassMutual to be of equivalent quality./4/ For example, the Fund may
invest in the following types of debt instruments:
(a) Corporate securities.
(b) U.S. Government Securities.
(c) Obligations issued or guaranteed as to principal and interest by the
Government of Canada, a Province of Canada, or any instrumentality or
political subdivision thereof, provided that no such investment will
be made if as a result more than 25% of the Fund's total assets would
be invested in such securities.
(d) Obligations (including certificates of deposit, time deposits or
bankers' acceptances) of U.S. or Canadian chartered banks having total
deposits in excess of $1 billion, U.S. branches of foreign banks
having total deposits in excess of $1 billion, U.S. savings and loan
associations having total deposits in excess of $1 billion, and
Eurodollar certificates of deposit issued by foreign branches of U.S.
banks having total deposits in excess of $1 billion.
(e) Publicly traded debt securities issued or guaranteed by a national or
state bank or bank holding company (as defined in the Federal Bank
Holding Company Act, as amended) that at the date of acquisition are
rated in one of the three highest ratings of at least one NRSRO or, if
unrated, are judged by MassMutual to be of equivalent quality, and
certificates of deposit of such banks.
(f) Commercial paper that at the date of investment is rated in the two
highest ratings of at least one NRSRO or, if unrated, is judged by
MassMutual to be of equivalent quality.
(g) Bank participation certificates that represent interests in all or
part of specific bank loans, provided that at the date of investment
each of the underlying loans is made to an issuer of securities rated
in one of the two highest short-term debt ratings of at least one
NRSRO or, if unrated, are judged by MassMutual to be of equivalent
quality.
(h) Certificates of deposit and bankers' acceptances of banks and savings
and loan associations having deposits of at least $1 billion as of
their most recently published and audited financial statements.
(i) Securities of foreign issuers (other than those listed in (c) or (d)
above) that meet credit quality requirements similar to those above,
provided that no such investment will be made if as a result more than
25% of the Fund's total assets would be invested in such securities.
Under normal market conditions, the Fund generally will have an average
effective portfolio Duration of no more than three years. Portfolio Duration
changes may be accomplished primarily through the reinvestment of cash flows and
selective trading. See the Glossary for a definition of Duration . Neither
market timing nor interest rate anticipation methods are employed in managing
the Fund. The portfolio of the Fund is managed by Ronald E. Desautels, Managing
Director of MassMutual, with which he has been associated since 1989.
(3) MASSMUTUAL CORE BOND FUND
THE INVESTMENT OBJECTIVE OF THE CORE BOND FUND IS TO ACHIEVE A HIGH TOTAL RATE
OF RETURN CONSISTENT WITH PRUDENT INVESTMENT RISK AND THE PRESERVATION OF
CAPITAL BY INVESTING PRIMARILY IN A DIVERSIFIED PORTFOLIO OF INVESTMENT GRADE
FIXED INCOME SECURITIES.
The Fund invests in investment grade, publicly traded, readily marketable, fixed
income securities of such maturities as MassMutual deems appropriate from time
to time in light
____________
/4/ For example, the four highest ratings of Moody's for debt obligations are
Aaa, Aa, A, and Baa (including Baa3).
22
<PAGE>
of market conditions and prospects. Investment grade fixed income securities are
securities that at the date of acquisition are rated in one of the four highest
ratings of at least one NRSRO or, if unrated, are judged by MassMutual to be of
equivalent quality. For example, the Fund may invest in the following types of
debt instruments:
(a) Corporate securities.
(b) U.S. Government Securities.
(c) Obligations issued or guaranteed as to principal and interest by the
Government of Canada, a Province of Canada, or any instrumentality or
political subdivision thereof, provided that no such investment will
be made if as a result more than 25% of the Fund's total assets would
be invested in such securities.
(d) Obligations (including certificates of deposit, time deposits or
bankers' acceptances) of U.S. or Canadian chartered banks having total
deposits in excess of $1 billion, U.S. branches of foreign banks
having total deposits in excess of $1 billion, U.S. savings and loan
associations having total deposits in excess of $1 billion, and
Eurodollar certificates of deposit issued by foreign branches of U.S.
banks having total deposits in excess of $1 billion.
(e) Publicly traded debt securities issued or guaranteed by a national or
state bank or bank holding company (as defined in the Federal Bank
Holding Company Act, as amended) having a rating within the three
highest ratings as determined by at least one NRSRO or, if unrated,
are judged by MassMutual to be of equivalent quality, and certificates
of deposit of such banks.
(f) Securities of foreign issuers (other than those listed in (c) or (d)
above) that at the date of acquisition are rated in one of the four
highest ratings of at least one NRSRO or, if unrated, are judged by
MassMutual to be of equivalent quality, provided that no such
investment will be made if as a result more than 25% of the Fund's
total assets would be invested in such securities.
Normally, the Fund's portfolio Duration will range from four to seven years.
Portfolio Duration changes will be accomplished primarily through the
reinvestment of cash flows and selective trading. See the Glossary for a
definition of Duration. The portfolio of the Fund is managed by Mary E. Wilson,
Senior Managing Director of MassMutual, with which she has been associated since
1982.
(4) MASSMUTUAL BALANCED FUND
THE INVESTMENT OBJECTIVE OF THE BALANCED FUND IS TO ACHIEVE A HIGH TOTAL RATE OF
RETURN OVER AN EXTENDED PERIOD OF TIME CONSISTENT WITH THE PRESERVATION OF
CAPITAL VALUES BY INVESTING IN A DIVERSIFIED PORTFOLIO OF EQUITY SECURITIES,
FIXED INCOME SECURITIES AND MONEY MARKET INSTRUMENTS.
The Fund invests in three market sectors:
THE PRIME SECTOR - The Prime Sector invests in accordance with the
investment objective and policies of the Prime Fund.
THE CORE BOND SECTOR - The Core Bond Sector invests in accordance with the
investment objective and policies of the Core Bond Fund.
THE VALUE EQUITY SECTOR - The Value Equity Sector invests in accordance
with the investment objective and policies of the Value Equity Fund.
The Fund adjusts the mix of investments among its three market sectors to
capitalize on perceived variations in return potential produced by the
interaction of changing financial market and economic conditions. The Fund
expects that such adjustments normally will be made in a gradual manner over a
period of time. Under normal circumstances at least 25% of the Fund's total
assets will be invested in senior fixed income securities (including short-term
money market instruments). In addition, under normal circumstances, no
investment will be made that would result in more than 35% of the Fund's net
assets being invested in the Prime Sector, more than 35% in the Core Bond Sector
or more than 65% in the Value Equity Sector. In unusual circumstances, the Fund
may invest up to 70% of its total assets in the Equity Sector or up to 50% of
its total assets in the Bond Sector. The portfolio of the Fund is managed by
committee.
(5) MASSMUTUAL VALUE EQUITY FUND
THE INVESTMENT OBJECTIVE OF THE VALUE EQUITY FUND IS TO ACHIEVE LONG-TERM GROWTH
OF CAPITAL AND INCOME BY INVESTING PRIMARILY IN A DIVERSIFIED PORTFOLIO OF
EQUITY SECURITIES OF LARGER WELL-ESTABLISHED COMPANIES.
The Fund invests primarily in common stocks, securities convertible into common
stocks, and other equity securities (such as warrants and stock rights) which
are normally cash dividend-paying and listed on a national securities exchange
or traded in the over-the-counter market. The issuers of securities in which
the Fund will invest generally are companies with market capitalizations in
excess of $2 billion and a history of operations of five years or more.
The Fund utilizes a value-oriented, risk-averse strategy in making investment
decisions. As such, investments are made in securities of companies which, in
the opinion of Babson, are of high quality, offer above-average dividend growth
potential and are attractively valued in the marketplace. Investment quality
and dividend growth potential are evaluated using fundamental analysis
emphasizing each issuer's historical financial performance, balance sheet
strength, management capability and competitive position. Various valuation
parameters are examined to determine the attractiveness of individual
securities. On average, the Fund's portfolio securities will have
price/earnings ratios and price/book value ratios below those of the Standard &
poor's 500 Composite
23
<PAGE>
Stock Price Index (the "S&P 500 Stock Index"). Consideration also is given to
securities of companies whose current prices do not adequately reflect, in the
opinion of Babson, the ongoing business value of the enterprise. MassMutual is
the Fund's adviser, its Sub-Adviser is Babson. The Fund's portfolio is managed
by James W. MacAllen, Executive Vice President and Chief Investment Officer of
Babson. Mr. MacAllen has been associated with Babson since January 1, 1996.
During 1996, Mr. MacAllen was also Senior Vice President of Concert Capital
Management, Inc. (``Concert Capital"), and, as such, managed the portfolio of
the Fund. (Concert Capital merged with and into Babson effective as of December
31, 1996.) Prior to that, Mr. MacAllen was associated with Hagler, Mastrovita
and Hewitt and prior to that was President and Chief Investment Officer of
Wilmington Capital Management.
(6) MASSMUTUAL SMALL CAP VALUE EQUITY FUND
THE INVESTMENT OBJECTIVE OF THE SMALL CAP VALUE EQUITY FUND IS TO ACHIEVE LONG-
TERM GROWTH OF CAPITAL AND INCOME BY INVESTING PRIMARILY IN A DIVERSIFIED
PORTFOLIO OF EQUITY SECURITIES OF SMALLER COMPANIES.
The Fund invests primarily in common stocks, securities convertible into common
stocks and other equity securities (such as warrants and stock rights) which are
issued by companies with a market capitalization of less than $750 million and
which are listed on a national securities exchange or traded in the over-the-
counter market.
The Fund utilizes a value-oriented, risk-averse strategy in making investment
decisions. As such, investments are made in securities of companies that, in
the opinion of Babson, are of high quality or possess a unique product, market
position or operating characteristics which result in above-average levels of
profitability or superior growth potential and are attractively valued in the
marketplace. Traditional fundamental research techniques are employed to
determine investment quality and growth potential, emphasizing each issuer's
historic financial performance, balance sheet strength, management capability
and competitive position. Valuation parameters are examined to determine the
attractiveness of individual securities. On average, the Fund's holdings will
have price/earnings ratios and price/book value ratios below those of the S&P
500 Stock Index. Consideration also is given to securities of companies whose
current prices do not adequately reflect the ongoing business value of the
enterprise.
The Fund may purchase securities with above-average volatility relative to
indices like the S&P 500 Stock Index. While such volatility frequently may
involve the opportunity for greater gain, it also generally involves greater
risk of loss and, as a result, the Fund's shares are suitable only for those
investors who are in a financial position to assume such risk. MassMutual is
the Fund's adviser, its Sub-Adviser is Babson. The Fund's portfolio is managed
by George P. Ulrich, Senior Vice President of Babson. Mr. Ulrich has been
associated with Babson since 1996, Concert Capital from 1993 through 1996 and
with MassMutual from 1984 to 1993.
(7) MASSMUTUAL INTERNATIONAL EQUITY FUND
THE INVESTMENT OBJECTIVE OF THE INTERNATIONAL EQUITY FUND IS TO ACHIEVE A HIGH
TOTAL RATE OF RETURN OVER THE LONG TERM BY INVESTING IN A DIVERSIFIED PORTFOLIO
OF FOREIGN AND DOMESTIC EQUITY SECURITIES.
The Fund invests primarily in common stocks and securities having the
characteristics of common stocks, such as convertible securities, warrants and
stock rights. The Fund generally will have at least 75% of its total assets
invested in foreign securities, including securities of foreign issuers
represented by American Depository Receipts or traded in the U.S. over-the-
counter market or listed on a U.S. securities exchange. Under normal market
conditions, the Fund's assets will be invested in securities traded in markets
in at least three different countries, excluding the United States. In an
uncertain market or economic environment when it would be appropriate to
maintain a defensive position, the Fund may invest up to 100% of its assets in
debt securities, such as rated or unrated bonds and debentures, cash equivalents
and preferred stocks. It is expected that short-term debt securities (i.e.,
those maturing in one year or less from the date of purchase) will be emphasized
for defensive or liquidity purposes, since such securities usually may be
disposed of quickly at prices not involving significant losses. When
circumstances warrant, securities may be sold without regard to the length of
time held, although short-term trading may increase brokerage costs borne by the
Fund.
The share price of the International Equity Fund will reflect the movements of
both the prices of the portfolio securities and the currencies in which the
securities are denominated. Depending upon the extent of the Fund's investments
abroad, changes in the relative value of the U.S. dollar to the securities'
denominated currencies may have a positive or negative impact on the Fund's
share price.
The Fund's investment policies involve special risks. Risks of investing in
foreign securities include foreign taxation, changes in currency rates or
currency blockage, currency exchange costs, and differences between domestic and
foreign legal, accounting, auditing, brokerage and economic standards. See
"Foreign Securities" in the Statement of Additional Information for further
discussion of the possible risks and rewards of investing in foreign securities.
MassMutual is the Fund's adviser, its Sub-Adviser is HarbourView. The portfolio
of the Fund is managed by a committee composed of HarbourView investment
professionals.
24
<PAGE>
INVESTMENT PRACTICES OF THE FUNDS AND RELATED RISKS
The Funds may invest in a wide range of investments and engage in various
investment-related transactions and practices. These practices are pursuant to
non-fundamental policies and therefore may be changed by the Board of Trustees
without the consent of shareholders. Some of the more significant practices are
discussed below.
REPURCHASE AGREEMENTS AND REVERSE REPURCHASE AGREEMENTS
Each Fund may engage in repurchase agreements and reverse repurchase agreements.
A repurchase agreement is a contract pursuant to which a Fund agrees to purchase
a security and simultaneously agrees to resell it at an agreed-upon price at a
stated time, thereby determining the yield during the Fund's holding period. A
reverse repurchase agreement is a contract pursuant to which a Fund agrees to
sell a security and simultaneously agrees to repurchase it at an agreed-upon
price at a stated time. For a more detailed description of repurchase
agreements and reverse repurchase agreements and related risks, see the
Statement of Additional Information.
SECURITIES LENDING
Each Fund may make loans of portfolio securities of not more than 33% of its
total assets taken at current value, thereby realizing additional income.
Although lending portfolio securities may involve the risk of delay in recovery
of the securities loaned or possible loss of rights in the collateral should the
borrower fail financially, loans will be made only to borrowers deemed by the
Adviser or Sub-Adviser to be in good standing.
HEDGING INSTRUMENTS AND DERIVATIVES
Each Fund may buy or sell forward contracts and other similar instruments and
may engage in foreign currency transactions (collectively referred to as
"hedging instruments" or "derivatives"), as more fully discussed in the
Statement of Additional Information. Derivatives normally are used by a
portfolio manager to (a) protect against possible declines in the market value
of a Fund's portfolio resulting from downward trends in the debt securities
markets generally due to increasing interest rates; (b) protect a Fund's
unrealized gains or limit its unrealized losses; and (c) manage a Fund's
exposure to changing security prices. Derivatives also may be used to establish
a position in the debt or equity securities markets as a temporary substitute
for purchasing or selling particular debt or equity securities and to manage the
effective maturity or duration of fixed income securities in a Fund's portfolio.
The Funds will not use derivatives for speculative purposes.
(1) Forward Contracts - Each Fund may purchase or sell securities on a "when
issued" or delayed delivery basis or may purchase or sell securities on a
forward commitment basis ("forward contracts"). When such transactions are
negotiated, the price is fixed at the time of commitment, but delivery and
payment for the securities can take place a month or more after the
commitment date. The securities so purchased or sold are subject to market
fluctuations and no interest accrues to the purchaser during this period.
While a Fund also may enter into forward contracts with the initial
intention of acquiring securities for its portfolio, it may dispose of a
commitment prior to settlement if the Adviser or Sub-Adviser deem it
appropriate to do so.
(2) Currency Transactions - The International Equity Fund may engage in foreign
currency transactions with counterparties in order to hedge the value of
portfolio holdings denominated in particular currencies against
fluctuations in relative value. The Short-Term Bond Fund, the Core Bond
Fund and the Core Bond Sector of the Balanced Fund may invest in foreign
securities that are not denominated in U.S. dollars only if the Fund
contemporaneously enters into a foreign currency transaction to hedge the
currency risk associated with the particular foreign security.
Certain limitations apply to the use of forward contracts by the Funds. For
example, a Fund will not enter into a forward contract if as a result more than
25% of its total assets would be held in a segregated account covering such
contracts. For more information about forward contracts and currency
transactions and the extent to which tax considerations may limit a Fund's use
of such instruments, see the Statement of Additional Information.
There can be no assurance that the use of hedging instruments and derivatives by
a Fund will assist it in achieving its investment objective. Risks inherent in
the use of these instruments include: (a) the risk that interest rates and
securities prices will not move in the direction anticipated; (b) the imperfect
correlation between the prices of a forward contract and the price of the
securities being hedged; and (c) the fact that skills needed to use these
strategies are different from those needed to select portfolio securities. As
to forward contracts, the risk exists that the counterparty to the transaction
will be incapable of meeting its commitment, in which case the desired hedging
protection may not be obtained and the Fund may be exposed to risk of loss. As
to currency transactions, risks exist that purchases and sales of currency and
related instruments can be negatively affected by government exchange controls,
blockages, and manipulations or exchange restrictions imposed by governments
which could result in losses to the Fund if it is unable to deliver or receive
currency or funds in settlement of obligations. It also could cause hedges it
has entered into
25
<PAGE>
to be rendered useless, resulting in full currency exposure as well as incurring
transaction costs.
RESTRICTED AND ILLIQUID SECURITIES
None of the Funds currently expect to invest in restricted or illiquid
securities. However, each Fund may invest not more than 15% of its net assets
in illiquid securities. These policies do not limit the purchase of securities
eligible for resale to qualified institutional buyers pursuant to Rule 144A
under the Securities Act of 1933, as amended, provided that such securities are
determined to be liquid by the Board of Trustees, or by the Adviser or Sub-
Adviser pursuant to Board-approved guidelines. If there is a lack of trading
interest in particular Rule 144A securities, a Fund's holdings of those
securities may be illiquid, resulting in the possibility of undesirable delays
in selling these securities at prices representing fair value.
FOREIGN SECURITIES
Investments in foreign securities offer potential benefits not available from
investing solely in securities of domestic issuers, such as the opportunity to
invest in foreign issuers that appear to offer growth potential, or to invest in
foreign countries with economic policies or business cycles different from those
of the United States or foreign stock markets that do not move in a manner
parallel to U.S. markets, thereby reducing fluctuations in portfolio value.
Investments in foreign securities entail certain risks, such as the possibility
of one or more of the following: imposition of dividend or interest withholding
or confiscatory taxes; currency blockages or transfer restrictions;
expropriation, nationalization, military coups or other adverse political or
economic developments; less government supervision and regulation of securities
exchanges, brokers and listed companies, and the difficulty of enforcing
obligations in other countries. Certain markets may require payment for
securities before delivery. A Fund's ability and decisions to purchase and sell
portfolio securities may be affected by laws or regulations relating to the
convertibility of currencies and repatriation of assets. Further, it may be
more difficult for a Fund's agents to keep currently informed about corporate
actions which may affect the prices of portfolio securities. Communications
between the United States and foreign countries may be less reliable than within
the United States, thus increasing the risk of delayed settlements of portfolio
transactions or loss of certificates for portfolio securities.
PORTFOLIO MANAGEMENT
MassMutual, Babson and HarbourView may use trading as a means of managing the
portfolios of the Funds in seeking to achieve their investment objectives.
Transactions will occur when the Adviser or Sub-Adviser believe that the trade,
net of transaction costs, will improve interest income or capital appreciation
potential, or will lessen capital loss potential. Whether the goals discussed
above will be achieved through trading depends on the Adviser's or Sub-Adviser's
ability to evaluate particular securities and anticipate relevant market
factors, including interest rate trends and variations from such trends. If
such evaluations and expectations prove to be incorrect, a Fund's income or
capital appreciation may be reduced and its capital losses may be increased.
The portfolio turnover rates for the Funds for the fiscal years ended December
31, 1996 and 1995, respectively, are as follows: Short-Term Bond Fund 61% and
114%; Core Bond Fund 54% and 104%; Balanced Fund 26% and 23%; Value Equity Fund
13% and 16%; Small Cap Value Equity Fund 28% and 28%; and International Equity
Fund 58% and 121%. High turnover in any Fund could result in additional
brokerage commissions to be paid by the Fund.
CASH POSITIONS
Each Fund may hold cash or cash equivalents to provide for expenses and
anticipated redemption payments and so that an orderly investment program may be
carried out in accordance with the Fund's investment policies. To provide
liquidity or for temporary defensive purposes, each Fund may invest in
investment grade debt securities, government obligations, or money market
instruments.
INDUSTRY DIVERSIFICATION
As a general rule, a Fund will not acquire securities of issuers in any one
industry (as determined by the Board of Trustees) if as a result more than 25%
of the value of the total assets of the Fund would be invested in such industry,
with the following exceptions:
(1) There is no limitation for U.S. Government Securities.
(2) In the case of the Prime Fund and the Short-Term Bond Fund, there is no
industry concentration limitation for certificates of deposit and bankers'
acceptances.
CERTAIN DEBT SECURITIES
While the Funds, except for the Prime Fund, may invest in investment grade debt
securities that are rated in the fourth highest rating category by at least one
NRSRO (e.g., Baa3 by Moody's) or, if unrated, are judged by MassMutual to be of
equivalent quality, such securities have speculative characteristics, are
subject to greater credit risk, and may be subject to greater market risk than
higher rated investment grade securities.
FUNDAMENTAL INVESTMENT RESTRICTIONS
For a description of fundamental investment restrictions of the Funds which may
not be changed without the affirmative vote of a majority of the outstanding
voting shares of the Fund, reference should be made to the Statement of
Additional Information.
26
<PAGE>
HOW TO PURCHASE, EXCHANGE, CONVERT AND REDEEM SHARES
FEATURES AND ELIGIBILITY REQUIREMENTS OF EACH CLASS
No front-end or deferred sales charge is imposed on the Trust's shares.
Therefore, 100% of an Investor's money is invested in the Fund or Funds of its
choice.
CLASS 1, CLASS 2 AND CLASS 3 SHARES
These shares may be purchased only through registered broker-dealers.
Pursuant to a 12b-1 Plan adopted by the Trust, Class 1 and Class 2 shares of
each Fund are subject to distribution/service fees (12b-1 fees), as follows:
(1) Class 1 shares pay a distribution fee at the annual rate of .40% and a
service fee at the annual rate of .25% of the Fund's aggregate average net
assets attributable to the Class 1 shares.
(2) Class 2 shares pay a distribution fee at the annual rate of .15% of the
Fund's aggregate average net assets attributable to the Class 2 shares.
The Trust's Distributor receives distribution fees and may reallow all or a
portion of them as dealer discounts and brokerage commissions to dealers,
including MML Investors Services, Inc. ("MMLISI"), a wholly owned subsidiary of
MassMutual. From time to time, dealers who receive dealer discounts and
brokerage commissions from the Trust's Distributor may reallow all or a portion
of them to other dealers or brokers. The service fees will be paid to
MassMutual.
Class 3 shares of each Fund are "no load" because they are not subject to front-
end or deferred sales charges or to any distribution/service fees.
No initial investment minimum applies to Class 1 shares. Investors in Class 2
and Class 3 shares must meet certain eligibility requirements. An initial
Investor may purchase Class 2 shares of a Fund only if the net asset value of
such shares equals at least $2 million. An initial Investor may purchase Class
3 shares of a Fund only if the net asset value of such shares equals at least
$10 million. For purposes of determining whether a Plan Investor has satisfied
the initial investment minimum with respect to Class 2 or Class 3 shares, all
assets invested with MassMutual and/or in the Trust for that Plan will be
recognized - except for life insurance assets. For purposes of this
determination, a Plan also shall include those plans established by entities of
the Plan Sponsor that satisfy Section 414(b), (c), (m), or (o) of the Internal
Revenue Code of 1986, as amended, provided that all such Plans have common
trustees. Additionally, the Plan Investor will be deemed to have satisfied the
$2 million and $10 million requirements if the Plan Investor certifies that at
least such amounts are available for transfer and will be transferred from the
Plan to MassMutual and/or the Trust no later than six months from the date of
initial purchase. Alternatively, an initial Investor may purchase Class 2 or
Class 3 shares if the Investor's employee retirement benefit plan with
MassMutual has 400 or more Participants (with respect to Class 2) or 750 or more
Participants (with respect to Class 3). All subsequent investments by an
Investor will be of the same Class of shares already held until shares are
converted from one Class to another (see ``Converting From Class 1 to Class 2
Shares or Class 2 to Class 3 Shares'').
CLASS 4 SHARES
Class 4 shares may be purchased only by separate investment accounts of
MassMutual ("SIA Investors"). SIA Investors purchase Class 4 shares directly
from the Fund without a front-end or deferred sales charge and pay no
distribution or service fees.
PURCHASE OF SHARES
Shares of the Trust are offered on each day the New York Stock Exchange ("NYSE")
is open for trading (a "Business Day"). Purchase orders received by the
Transfer Agent from MassMutual (as an agent of the Distributor) on a Business
Day prior to the close of the NYSE (normally, 4:00 p.m. Eastern Time) will be
processed based on that day's closing net asset value.
Purchase orders must be placed in writing with MassMutual (as an agent of the
Distributor) at its home office and must be accompanied by sufficient funds.
Acceptable methods of payment include checks, federal funds wires, and automated
clearing house transactions ("ACH"). MassMutual, on behalf of the Distributor,
will not transmit a purchase order to the Trust's Transfer Agent until
MassMutual has determined that the purchase order is in good form. Generally, a
purchase order will be determined by MassMutual to be in good form if such
order: (a) includes all information and documentation necessary to make
appropriate Investor, Plan, trust and/or Plan Participant (if applicable)
allocations to the various Funds and/or Separate Accounts; and (b) is received
by MassMutual at its home office prior to the close of the NYSE. Purchase
orders by wire will be in good form only upon receipt by MassMutual of (i) the
funds, deposited to the appropriate MassMutual account, and (ii) a confirmation
of the wire receipt. Any order to purchase Fund shares which is received by
MassMutual after the close of the NYSE on a Business Day will be transmitted to
the Trust's Transfer Agent on the next Business Day. For more specific
information regarding what information and documentation are necessary for
MassMutual to determine that a purchase order is in good form with respect to a
particular plan, Plan Investors should refer to Plan Documents./5/
___________
/5/ See the Glossary for a definition of Plan Documents.
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<PAGE>
The sale of Trust shares will be suspended during any period when the
determination of net asset value is suspended. The sale of Trust shares also
may be suspended by the Board of Trustees whenever the Board determines that it
is in the Trust's best interest to do so. The Trust, in its complete
discretion, may reject any order for purchase of its shares.
EXCHANGE PRIVILEGES AND PROCEDURES
Investors have the privilege of exchanging shares of one Fund for the same class
of shares of another Fund, subject to the provisions of Plan Documents and
applicable state insurance laws. However, exchanges may be restricted or
refused by a Fund if, in the opinion of the Adviser, (i) an Investor has engaged
in excessive trading, (ii) the Fund receives or anticipates simultaneous orders
affecting significant portions of the Fund's assets, or (iii) a pattern of
exchanges coincides with a "market timing" strategy that might be disruptive to
the Fund. Each Fund also reserves the right to refuse exchange purchases by any
person or group of persons, if, in the Adviser's judgment, the Fund would be
unable to invest the funds effectively in accordance with its investment
objectives and policies, or otherwise potentially would be adversely affected.
The Trust reserves the right on 60 days' written notice to modify or terminate
the exchange privilege. Furthermore, any exchange limits imposed by a Fund may
be modified, in the sole discretion of the Fund, for Plan Investors so that the
Fund's exchange privileges are consistent with Plan or group annuity contract
exchange limits as set forth in Plan Documents and Department of Labor
regulations. Plan Investors and Plan Participants should refer to Plan
Documents and related materials to determine what, if any, exchange limitations
apply to them.
Exchange requests must be delivered in writing to MassMutual at its home office.
Any exchange will involve the redemption of shares and the purchase of shares in
another Fund on the basis of the next calculated net asset value per share of
each Fund after the exchange request is received by the Trust's Transfer Agent
from MassMutual. MassMutual will not transmit exchange requests to the Trust's
Transfer Agent until MassMutual has determined that the request is in good
form./6/
CONVERTING FROM CLASS 1 TO CLASS 2 SHARES OR CLASS 2 TO CLASS 3 SHARES
Investors that hold Class 1 shares may qualify for an automatic conversion to
Class 2 shares and Investors that hold Class 2 shares may qualify for an
automatic conversion to Class 3 shares. Specifically, twice each year, as of
March 1 and September 1 or, (if not a Business Day, then the next Business Day),
MassMutual will determine whether a Class 1 or Class 2 Investor meets the
eligibility requirements for the purchase of Class 2 or Class 3 shares,
respectively. If the Investor meets the eligibility requirements of Class 2 or
Class 3, its Class 1 or Class 2 shares automatically will convert on March 31 or
September 30, as applicable, (or, if not a Business Day, then the next Business
Day) into Class 2 or Class 3 shares, using that day's net asset value.
Class 1 or Class 2 Investors whose shares convert to Class 2 or Class 3 shares
will be subject to lower distribution/service fees (in the case of Class 2) or
no distribution/service fees (in the case of Class 3).
REDEEMING SHARES
Redemption requests must be in writing and sent to MassMutual at its home
office. Each Fund redeems its shares at their net asset value as next computed
after receipt by the Transfer Agent of a request for redemption from MassMutual.
MassMutual will not transmit redemption requests to the Trust's Transfer Agent
until MassMutual has determined that the request is in good form. No contingent
deferred sales charge or any other fee is charged on redemptions from any Class
of shares. Redemption payments will be made within seven days after receipt of
the written request therefor by the Trust, except that the right of redemption
may be suspended or payments postponed when permitted by applicable law and
regulations. When redemption is requested of shares recently purchased by
check, payment may be delayed until the check has been collected, which may take
up to 15 days from receipt of the check.
INVESTMENT MANAGER AND SUB-ADVISERS
INVESTMENT MANAGER
MassMutual is the investment manager to the Funds and is responsible for
providing all necessary investment management and administrative services.
MassMutual is a mutual life insurance company organized in 1851 under the laws
of the Commonwealth of Massachusetts. MassMutual is licensed to transact a life
insurance business in all states of the United States, the District of Columbia,
Puerto Rico and certain Provinces of Canada. As of December 31, 1996,
MassMutual, together with its subsidiaries, had assets in excess of $55.7
billion and assets under management in excess of $130.8 billion.
The persons responsible for management of the bond and money market portfolios
of MassMutual are also responsible for managing such investments of the Funds.
Gary E. Wendlandt, Chairman, CEO and Trustee of the Trust, and John V. Murphy,
Trustee of the Trust, are officers of MassMutual, as are Stuart H. Reese,
President of the Trust, Hamline C. Wilson, Vice President and Chief Accounting
and Financial Officer of the Trust, Stephen L. Kuhn, Vice President and
Secretary of the Trust, and Raymond B. Woolson, Treasurer of the Trust.
MassMutual serves as investment manager of each Fund pursuant to a separate
investment management agreement pursuant to which MassMutual is responsible for
providing investment management of the Fund and is authorized to engage in
portfolio transactions on behalf of the Fund, subject to such general or
spe-
____________
/6/ See "Purchase of Shares" above for a discussion of the term "in good form."
28
<PAGE>
cific instructions as may be given by the Board of Trustees of the Trust.
MassMutual may, at its expense, employ sub-advisers to manage the investments of
the Funds.
The Trust, on behalf of each Fund, pays MassMutual an investment advisory fee
monthly for the investment advisory services performed and the facilities
furnished at an annual rate of the average daily net assets of that Fund as
follows:
(1) .45% for the Prime Fund, the Short-Term Bond Fund, the Core Bond Fund, the
Balanced Fund and the Value Equity Fund.
(2) .55% for the Small Cap Value Equity Fund.
(3) .85% for the International Equity Fund.
For the fiscal year ended December 31, 1996, MassMutual received fees (after
giving effect to a fee waiver) based upon each Fund's average daily net assets,
as follows: Prime Fund .41%; Short-Term Bond Fund .41%; Core Bond Fund .41%;
Balanced Fund .41%; Value Equity Fund .40%; Small Cap Value Equity Fund .51%;
International Equity Fund .78%. The fee waiver terminated on May 1, 1997.
In addition, MassMutual has entered into a separate administrative services
agreement for each Fund pursuant to which MassMutual is obligated to provide all
necessary administrative and shareholder services and to bear some Class
expenses, such as federal and state registration fees, printing and postage.
The Funds are responsible for certain other expenses including brokerage, taxes,
interest, fees and expenses of non-interested trustees, legal fees, custody and
audit fees. MassMutual may, at its expense, employ others to supply all or any
part of the services to be provided to the Funds pursuant to the administrative
services agreements. The Trust, on behalf of each Fund, pays MassMutual an
administrative services fee monthly for the administrative services performed at
annual rates of the average daily net assets of the applicable class of shares
of the Fund which range from .55% to .59% for Class 1 shares, .50% to .54% for
Class 2 shares, .31% to .44% for Class 3 shares and .0782% to .0972% for Class 4
shares. Refer to ``Expense Information'' for more detailed information.
INVESTMENT SUB-ADVISERS
MassMutual has entered into investment sub-advisory agreements with Babson and
HarbourView. These agreements provide that (1) Babson will manage the
investment and reinvestment of the assets of the Value Equity Fund, the Small
Cap Value Equity Fund and the Value Equity Sector of the Balanced Fund, and (2)
HarbourView will manage the investment and reinvestment of the assets of the
International Equity Fund.
MassMutual pays Babson a fee equal to an annual rate of .13% of the average
daily net asset value of the Value Equity Fund, .13% of the average daily net
asset value of the Value Equity Sector of the Balanced Fund and .25% of the
average daily net asset value of the Small Cap Value Equity Fund. MassMutual
pays HarbourView a fee equal to an annual rate of .50% of the average daily net
asset value of the International Equity Fund.
Babson is a wholly-owned subsidiary of DLB Acquisition Corporation (``DLB
Acquisition"), a controlled subsidiary of MassMutual. Babson is a registered
investment adviser that has been providing investment counseling to institutions
and individuals for over 50 years. As of December 31, 1996, Babson had over $7.6
billion of assets under management. Babson serves as investment sub-adviser to
the MML Equity Fund and the Equity Sector of MML Blend Fund of MML Series
Investment Fund, a registered investment company managed by MassMutual.
HarbourView is a wholly owned subsidiary of OppenheimerFunds, Inc. which is a
wholly owned subsidiary of Oppenheimer Acquisition Corporation ("OAC"), a
holding company owned in part by senior management of OAC and ultimately
controlled by MassMutual by virtue of its ownership of approximately 86% of
OAC's voting stock.
HarbourView has operated as an investment adviser since 1986. As of April 10,
1997, HarbourView managed assets of approximately $700 million. HarbourView
manages the assets of the International Equity Fund and certain separate
investment accounts of MassMutual.
DISTRIBUTOR, TRANSFER AGENT, SHAREHOLDER SERVICING AGENT, CUSTODIAN
OppenheimerFunds Distributor, Inc. ("Oppenheimer") acts as Distributor to each
Fund. MML Investors Services, Inc. ("MMLISI") serves as Sub-Distributor for
each Fund. Investors Bank & Trust Company ("Investors Bank") serves as each
Fund's Sub-Administrator, Transfer Agent, and Custodian. MassMutual ultimately
has a controlling interest in Oppenheimer. MMLISI is a wholly owned subsidiary
of MassMutual. Both Oppenheimer and MMLISI may serve as distributors of
securities issued by other investment companies. As Custodian, Investors Bank
has custody of the Funds' securities, maintains certain financial and accounting
books and records, and generally assists in all aspects of the administration of
the Funds. Neither Oppenheimer, MMLISI nor Investors Bank assists in or is
responsible for the investment decisions and policies of the Funds. MassMutual
provides the Funds with certain shareholder services pursuant to its
administrative services agreements.
DESCRIPTION OF SHARES
The Trust is a series company which is authorized to issue shares in separate
series of multiple classes. The Trust may issue an unlimited number of shares
of multiple classes, in one or more series as the Trustees may authorize, with
or with-
29
<PAGE>
out par value as the Trustees may prescribe. Each share of a particular class of
a Fund represents an equal proportionate interest in that Fund with each other
share of the same class, none having priority or preference over another. Each
Fund is preferred over all other Funds in respect of the assets allocated to
that Fund. Each share of a particular class of a Fund is entitled to a pro rata
share of any distributions declared in respect of that class and, in the event
of liquidation, a pro rata share of the net assets of that class remaining after
satisfaction of outstanding liabilities. When issued, shares are fully paid and
nonassessable and have no preemptive or subscription rights. Under the Trust's
Declaration of Trust, the Board of Trustees is authorized to create new series
and classes without shareholder approval. Shares of each Fund entitle their
holder to one vote for each dollar (or proportionate fractional vote for each
fraction of a dollar) of net asset value per share of each Fund or class for
each share held as to any matter on which such shares are entitled to vote.
The Trust is not required to hold annual meetings of shareholders. Special
meetings may be called for such purposes as electing Trustees, voting on
management agreements and distribution plans, and with respect to such
additional matters relating to the Trust as may be required by the Trust's
Declaration of Trust and the 1940 Act.
HOW FUND SHARES ARE PRICED
The net asset value (closing price) of each class of each Fund's shares is
determined once daily as of the close of trading on the NYSE (currently 4:00
p.m. Eastern Time) on each day on which the Exchange is open for trading. Net
asset value for a class of shares is determined by dividing the total market
value of a Fund's portfolio investments and other assets attributable to that
class, less any liabilities, by the total outstanding shares of the class.
Securities which are traded on a national securities exchange or on the NASDAQ
national market system generally are valued at the last sale price. Debt
securities normally are valued at the last reported bid price on the primary
market for those securities. To the extent authorized by the Board of Trustees,
portfolio securities may be valued by a pricing service that determines values
based on market transactions for normal institutional-size trading units. Money
market obligations having a maturity of 60 days or less are generally valued at
amortized cost when the Board of Trustees of the Trust believes that amortized
cost approximates market value. In all other cases, assets and other securities
for which no quotations are readily available (including restricted securities)
are valued at fair value as determined in good faith by the Board of Trustees,
although the actual calculations may be made by persons acting pursuant to the
direction of the Board.
A dealer or other organization selling shares of Classes 1, 2, or 3 may receive
different levels of compensation for selling one particular class of shares over
another. Certain shares of the Funds, which may be purchased through the
Distributor at the net asset value per share next determined after receipt of a
purchase request in good order, are subject to sales charges which are part of
the 12b-1 fees set forth and expressed on an annual basis (see "Expense
Information"). The fees are charged on a daily basis and paid over to the
Distributor monthly. Based on a 365-day year, the daily sales charge portion of
the 12b-1 fee, expressed as a gross percentage of total Fund assets at the end
of the day rounded to the nearest 1/10,000 of percent, is 0.0011% for Class 1
shares and 0.0004% for Class 2 shares. The same percentages would apply when
expressing the sales charge portion as a percentage of the amount available for
investment the next day net of the fee.
No sales charges are associated with the sale of shares of Class 3 or Class 4.
However, registered representatives who are not employees of MassMutual may
receive certain cash compensation from MassMutual in consideration of their
sales of Class 3 shares of the Funds. If investment in the Funds is equal to or
less than $10 million, the fee will be 0.10% of such investment. If the
investment in the Funds exceeds $10 million, the fee will be the sum of 0.10% of
the first $10 million invested and 0.05% on amounts in excess of $10 million.
DISTRIBUTIONS AND TAXATION
Each Fund intends to continue to qualify as a regulated investment company under
Subchapter M of the Internal Revenue Code of 1986 (the "Code"). As a regulated
investment company, a Fund will not be subject to federal income taxes on its
ordinary income and net realized capital gain distributed to its shareholders.
In general, a Fund that fails to distribute at least 98% of such income and gain
in the calendar year in which earned will be subject to a 4% excise tax on the
undistributed amount.
Many Investors, including most tax qualified Plan Investors, may be eligible for
preferential federal income tax treatment on distributions received from a Fund
and dispositions of Fund shares. This Prospectus does not attempt to describe
in any respect such preferential tax treatment. Any prospective Investor that
is a trust or other entity eligible for special tax treatment under the Code
that is considering purchasing shares of a Fund, either directly or indirectly
through a life insurance company separate account, should consult its tax
advisers about the federal, state and local tax consequences particular to it,
as should persons considering whether to have amounts held for their benefit by
such trusts or other entities invested in shares of a Fund. Investors that do
not receive preferential tax treatment are subject to federal income taxes on
distributions received in respect of their shares. Distributions of the Fund's
ordinary income and short-term capital gain are taxable to the shareholder as
ordinary income whether received in cash or additional shares. Designated long-
term capital gain distributions are taxable as long-term capital gain whether
distributed in cash or additional shares and regardless of how long the Investor
has owned shares of the Fund; however, a loss recognized from the sale of Fund
shares held for six months or less will be treated as a long-term capital loss
to the extent of long-term capital gains distributions. Certain designated
dividends may
30
<PAGE>
be eligible for the dividends-received deduction for corporate shareholders.
Investors should consult with their tax advisers for additional information
concerning the federal, state and local tax consequences of purchasing shares of
a Fund.
Dividends from net investment income and distributions of any net realized
capital gains of each Fund are declared and paid annually or at other times as
necessary to meet regulatory requirements. Distributions shall be paid in full
and fractional shares of the applicable Class of the applicable Fund at net
asset value on the first Business Day after the record date for the
distribution, unless, subject to such terms and conditions of the underlying
Plan Documents, the Investor has elected to receive dividend payments in cash.
INVESTMENT PERFORMANCE
The Trust commenced operations on October 3, 1994 subsequent to the transfer of
assets by each of seven SIAs to the Fund having corresponding investment
objectives, policies and limitations in exchange for shares of such Fund. While
the SIAs continue to exist, their assets consist solely of shares of the
corresponding Fund. Except for the seed capital provided by MassMutual, each
Fund's portfolio of investments on October 3, 1994 was the same as the portfolio
of the corresponding SIA immediately prior to the transfer.
The SIAs are not registered investment companies as they each are exempt from
registration under the 1940 Act. Since, in a practical sense, the SIAs
constitute ``predecessors'' of the Funds, the Trust calculates the performance
for each Class of each Fund for periods commencing prior to the transfer of the
SIA assets to the Funds by including the corresponding SIA's total return
adjusted to reflect the deduction of fees and expenses applicable to each Class
as stated in the Fee Table of the Trust's initial prospectus which was effective
October 3, 1994 (i.e., adjusted to reflect anticipated expenses, net of
management fee waivers). These fees and expenses include sales charges (if any
should be imposed), Rule 12b-1 fees and, in the case of Class 4, any charges at
the SIA level. See ``Expense Information" regarding the elimination of the
management fee waiver.
The quoted performance data includes the performance of the SIAs for periods
before the Trust's Registration Statement became effective. As noted above, the
SIAs were not registered under the 1940 Act and thus were not subject to certain
investment restrictions that are imposed by the 1940 Act. If the SIAs had been
registered under the 1904 Act, the SIAs performance might have been adversely
affected. Employee benefit plans that invest plan assets in the SIAs may be
subject to certain charges as set forth in their respective Plan Documents.
Total return figures would be lower for the period if they reflected these
charges.
Each of the Funds from time to time may advertise certain investment performance
figures. These figures are based on historical earnings but past performance
data is not necessarily indicative of future performance of the Funds. All
performance information with respect to Class 4 shares will be provided net of
the Fund and SIA expenses. Each of the Funds may quote yield in conformance
with current Securities and Exchange Commission guidelines. Currently, the
yield for each Fund refers to the net investment income earned by the Fund over
a 30-day period, as defined in the advertisement. This income is then assumed
to be earned for a full year and to be reinvested each month for six months.
The resulting semi-annual yield is doubled.
Each of the Funds may advertise its total return and its holding period return
for various periods of time. Total return is calculated by determining, over a
period of time as stated in the advertisement, the average annual compounded
rate of return that an investment in the Fund earned over that period, assuming
reinvestment of all distributions. Holding period return refers to the
percentage change in the value of an investment in a Fund over a period of time
(as stated in the advertisement), assuming reinvestment of all distributions.
Total return and holding period return differ from yield in that the return
figures include capital changes in an investment while yield measures the rate
of net income generated by a Fund. Total return differs from holding period
return principally in that total return is an average annual figure while
holding period return is an aggregate figure for the entire period.
31
<PAGE>
AVERAGE ANNUAL TOTAL RETURN (ADJUSTED TO REFLECT EXPENSES, NET OF MANAGEMENT FEE
- ---------------------------
WAIVERS) FOR THE YEAR ENDED DECEMBER 31, 1996. THE FEE WAIVER TERMINATED MAY 1,
1997, WHICH WILL INCREASE EXPENSES.
<TABLE>
<CAPTION>
1 YEAR
- --------------------------------------------------------------------------------------------------------------
CLASS 1 CLASS 2 CLASS 3 CLASS 4
<S> <C> <C> <C> <C>
Prime Fund and its predecessor SIA - G 4.05% 4.63% 5.00% 5.24%
Short-Term Bond Fund and its predecessor SIA F 4.35% 5.02% 5.28% 5.57%
Core Bond Fund and its predecessor SIA E 1.60% 2.07% 2.52% 2.80%
Balanced Fund and its predecessor SIA M 11.67% 12.25% 12.61% 12.83%
Value Equity Fund and its predecessor SIA A 18.83% 19.46% 19.92% 20.24%
Small Cap Value Equity Fund and its predecessor SIA S 21.43% 22.07% 22.64% 22.82%
International Equity Fund and its predecessor SIA I 17.09% 17.85% 18.11% 18.51%
- --------------------------------------------------------------------------------------------------------------
<CAPTION>
3 YEARS
- --------------------------------------------------------------------------------------------------------------
CLASS 1 CLASS 2 CLASS 3 CLASS 4
<S> <C> <C> <C> <C>
Prime Fund and its predecessor SIA - G 3.83% 4.42% 4.77% 5.01%
Short-Term Bond Fund and its predecessor SIA F 4.12% 4.70% 5.07% 5.32%
Core Bond Fund and its predecessor SIA E 4.32% 4.86% 5.22% 5.51%
Balanced Fund and its predecessor SIA M 10.70% 11.28% 11.69% 11.92%
Value Equity Fund and its predecessor SIA A 16.74% 17.38% 17.79% 18.08%
Small Cap Value Equity fund and its predecessor SIA S 10.81% 11.44% 11.85% 12.10%
International Equity Fund and its predecessor SIA I 4.55% 5.15% 5.39% 5.80%
- --------------------------------------------------------------------------------------------------------------
<CAPTION>
5 YEARS
- --------------------------------------------------------------------------------------------------------------
CLASS 1 CLASS 2 CLASS 3 CLASS 4
<S> <C> <C> <C> <C>
Prime Fund and its predecessor SIA - G 3.18% 3.75% 4.10% 4.34%
Short-Term Bond Fund and its predecessor SIA F 4.93% 5.49% 5.85% 6.10%
Core Bond Fund and its predecessor SIA E 5.78% 6.33% 6.69% 6.96%
Balanced Fund and its predecessor SIA M 9.55% 10.12% 10.51% 10.74%
Value Equity Fund and its predecessor SIA A 13.54% 14.14% 14.53% 14.80%
Small Cap Value Equity Fund and its predecessor SIA S 12.25% 12.85% 13.23% 13.48%
International Equity Fund and its predecessor SIA I 11.84% 12.43% 12.67% 13.07%
- --------------------------------------------------------------------------------------------------------------
<CAPTION>
10 YEARS (or since inception)
- --------------------------------------------------------------------------------------------------------------
CLASS 1 CLASS 2 CLASS 3 CLASS 4
<S> <C> <C> <C> <C>
Prime Fund and its predecessor SIA - G 4.76% 5.31% 5.66% 5.90%
Short-Term Bond Fund and its predecessor SIA F (APRIL 30, 1989) 6.37% 6.93% 7.29% 7.53%
Core Bond Fund and its predecessor SIA E 7.07% 7.62% 7.98% 8.23%
Balanced Fund and its predecessor SIA M (October 10, 1987) 10.37% 10.93% 11.30% 11.54%
Value Equity Fund and its predecessor SIA A 12.56% 13.13% 13.50% 13.76%
Small Cap Value Equity Fund and its predecessor SIA S 13.02% 13.60% 13.97% 14.21%
International Equity Fund and its predecessor SIA I (JULY 31, 1981) 11.81% 12.41% 12.65% 13.05%
- --------------------------------------------------------------------------------------------------------------
</TABLE>
The quoted performance data includes the performance of the Separate Investment
Accounts (SIAs) for the period before the Trust's Registration Statement became
effective. The SIAs were not registered under the 1940 Act and therefore were
not subject to certain investment restrictions imposed by the Act. If the SIAs
had been registered under the 1940 Act, their performance may have been
adversely affected.
32
<PAGE>
GLOSSARY
BUSINESS DAY: each day the New York Stock Exchange is open for trading.
CURRENCY TRANSACTIONS: include forward currency contracts, exchange listed
currency futures, exchange listed and OTC options on currencies, and currency
swaps. A forward currency contract involves a privately negotiated obligation
to purchase or sell (with delivery generally required) a specific currency at a
future date, which may be any fixed number of days from the date of the contract
agreed upon by the parties, at a price set at the time of the contract. A
currency swap is an agreement to exchange cash flows based on the notional
difference among two or more currencies and operates similarly to an interest
rate swap.
DURATION: indicates how interest rate changes will affect a debt instrument's
price.
FOREIGN SECURITIES: include debt, equity, and hybrid instruments, obligations
and securities of foreign issuers, including governments of countries other than
the United States and companies organized under the laws of countries other than
the United States that are traded on foreign securities exchanges or foreign
over-the-counter markets. Foreign securities also include securities of foreign
issuers (i) represented by American Depository Receipts, (ii) traded in the
United States over-the-counter markets, or (iii) listed on a U.S. securities
exchange.
INVESTOR: includes a plan sponsor, plan fiduciary, trust, institutional
investor, and/or insurance company separate investment account that purchases
shares of the Trust and is hereinafter referred to as Investor or collectively
referred to as Investors. An Investor that is a separate investment account of
MassMutual is referred to as an SIA Investor to the extent it invests in the
Trust. Investors that are purchasing shares of a Fund on behalf of a Plan are
sometimes referred to as Plan Investors. The term Investor does not include a
Plan Participant.
NRSRO: means a nationally recognized statistical rating organization. For a
description of the ratings of two NRSROs, Standard & Poor's Ratings Group
("S&P") and Moody's Investors Service, Inc. ("Moody's"), see Appendix A to the
Statement of Additional Information. For example, the four investment grade
ratings in descending order for debt securities as rated by Moody's are Aaa, Aa,
A and Baa - including Baa3. The four investment grade ratings for debt
securities as rated by S&P are AAA, AA, A and BBB - including BBB-. For
commercial paper, Moody's two highest ratings are P-1 and P-2 and S&P's two
highest ratings are A-1 and A-2.
PLAN: refers to all defined contribution and defined benefit retirement plans
and any other employee retirement arrangement that invests in the Funds.
PLAN ASSETS: assets held by the Plan trustee of a particular qualified plan and
invested at MassMutual and/or in the Trust, exclusive of plan assets invested in
life insurance.
PLAN PARTICIPANT: includes active, deferred and suspended Plan Participants on
whose behalf Plan Assets are invested, as well as any other individual included
in the computation of active participants under the appropriate Form 5500 filed
with the Internal Revenue Service.
PLAN DOCUMENTS: refer to the documents that created and are related to a
particular employee retirement benefit plan. These documents might include
trust documents, insurance contracts (including group annuity contracts),
service agreements and other agreements providing for the provision of services
or benefits for the plan and its participants.
U.S. GOVERNMENT SECURITIES: include obligations issued, sponsored, assumed or
guaranteed as to principal and interest by the Government of the United States,
its agencies and instrumentalities, and securities backed by such obligations,
including FHA\VA guaranteed mortgages.
THE NAME MASSMUTUAL INSTITUTIONAL FUNDS IS THE DESIGNATION OF THE TRUST UNDER A
DECLARATION OF TRUST DATED MAY 28, 1993, AS AMENDED. THE OBLIGATIONS OF SUCH
TRUST ARE NOT PERSONALLY BINDING UPON, NOR SHALL RESORT BE HAD TO THE PROPERTY
OF, ANY OF THE TRUSTEES, SHAREHOLDERS, OFFICERS, EMPLOYEES OR AGENTS OF SUCH
TRUST, BUT THE TRUST'S PROPERTY ONLY SHALL BE BOUND.
33
<PAGE>
MASSMUTUAL INSTITUTIONAL FUNDS
1295 State Street
Springfield, Massachusetts 01111
INVESTMENT MANAGER
MASSACHUSETTS MUTUAL LIFE
INSURANCE COMPANY
1295 State Street
Springfield, Massachusetts 01111
INVESTMENT SUB-ADVISERS
HARBOURVIEW ASSET MANAGEMENT CORPORATION
Two World Trade Center
New York, New York 10048
DAVID L. BABSON AND COMPANY, INC.
One Memorial Drive
Cambridge, Massachusetts 02142
DISTRIBUTOR
OPPENHEIMERFUNDS DISTRIBUTOR, INC.
Two World Trade Center
New York, New York 10048
SUB-ADMINISTRATOR, TRANSFER AGENT
AND CUSTODIAN
INVESTORS BANK & TRUST COMPANY
200 Clarendon Street
Boston, Massachusetts 02116
INDEPENDENT ACCOUNTANTS
COOPERS & LYBRAND L.L.P.
2300 BayBank Tower
Springfield, Massachusetts 01101
LEGAL COUNSEL
ROPES & GRAY
One International Place
Boston, Massachusetts 02110
34
<PAGE>
MASSMUTUAL INSTITUTIONAL FUNDS
1295 State Street
Springfield, Massachusetts 01111
STATEMENT OF ADDITIONAL INFORMATION
THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS. IT SHOULD BE READ
IN CONJUNCTION WITH THE PROSPECTUS OF MASSMUTUAL INSTITUTIONAL FUNDS (THE
"TRUST") DATED MAY 1, 1997 (THE "PROSPECTUS"). TO OBTAIN A PROSPECTUS, CALL
YOUR REGISTERED REPRESENTATIVE, AT (413) 788-8411, OR WRITE THE TRUST.
No dealer, salesman or any other person has been authorized to give any
information or to make any representations, other than those contained in this
Statement of Additional Information or in the related Prospectus, in connection
with the offer contained herein, and, if given or made, such other information
or representation must not be relied upon as having been authorized by the Trust
or the Distributor. This Statement of Additional Information and the related
Prospectus do not constitute an offer by the Trust or by the Distributor to sell
or a solicitation of any offer to buy any of the securities offered hereby in
any jurisdiction to any person to whom it is unlawful to make such offer in such
jurisdiction.
This Statement of Additional Information relates to the following Funds:
. MassMutual Prime Fund
. MassMutual Short-Term Bond Fund
. MassMutual Core Bond Fund
. MassMutual Balanced Fund
. MassMutual Value Equity Fund
. MassMutual Small Cap Value Equity Fund
. MassMutual International Equity Fund
DATED MAY 1, 1997
B-1
<PAGE>
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
Page
----
<S> <C>
GENERAL INFORMATION....................................................... B-3
ADDITIONAL INVESTMENT POLICIES............................................ B-3
FUNDAMENTAL INVESTMENT RESTRICTIONS....................................... B-8
NON-FUNDAMENTAL INVESTMENT RESTRICTIONS................................... B-9
MANAGEMENT OF THE TRUST................................................... B-10
COMPENSATION.............................................................. B-14
COMPENSATION TABLE........................................................ B-14
CONTROL PERSON AND PRINCIPAL HOLDERS OF SECURITIES........................ B-15
INVESTMENT MANAGER AND SUB-ADVISERS....................................... B-15
THE DISTRIBUTOR........................................................... B-18
CUSTODIAN, DIVIDEND DISTRIBUTING AGENT AND TRANSFER AGENT................. B-18
PORTFOLIO TRANSACTIONS AND BROKERAGE...................................... B-19
SHAREHOLDER INVESTMENT ACCOUNT............................................ B-20
REDEMPTION OF SHARES...................................................... B-20
VALUATION OF PORTFOLIO SECURITIES......................................... B-20
DESCRIPTION OF SHARES..................................................... B-21
INVESTMENT PERFORMANCE.................................................... B-21
TAXATION.................................................................. B-22
EXPERTS................................................................... B-24
APPENDIX - DESCRIPTION OF SECURITIES RATINGS.............................. B-25
REPORT OF INDEPENDENT ACCOUNTANTS......................................... B-27
AUDITED FINANCIAL STATEMENTS.............................................. B-28
</TABLE>
B-2
<PAGE>
GENERAL INFORMATION
-------------------
MassMutual Institutional Funds (the "Trust") is a professionally managed, open-
end, diversified management investment company (a "mutual fund"). The Trust is
a series fund consisting of seven separate series: (1) MassMutual Prime Fund,
(2) MassMutual Short-Term Bond Fund, (3) MassMutual Core Bond Fund, (4)
MassMutual Balanced Fund, (5) MassMutual Value Equity Fund, (6) MassMutual Small
Cap Value Equity Fund, and (7) MassMutual International Equity Fund (each
individually referred to as a "Fund" or collectively as the "Funds").
The Trust is organized under the laws of the Commonwealth of Massachusetts as a
Massachusetts business trust pursuant to an Agreement and Declaration of Trust
dated May 28, 1993, as amended from time to time (the ``Declaration of Trust").
Additional series may be created by the Trustees from time to time. The
investment manager for each Fund is Massachusetts Mutual Life Insurance Company
("MassMutual"). The investment sub-adviser for the Value Equity Fund, the Small
Cap Value Equity Fund and the Equity Sector of the Balanced Fund is David L.
Babson and Company, Inc. (``Babson"). The investment sub-adviser for the
International Equity Fund is HarbourView Asset Management Corporation
("HarbourView"). Babson and HarbourView are each indirect subsidiaries of
MassMutual. MassMutual, Babson and HarbourView are sometimes referred to herein
as the "advisers."
ADDITIONAL INVESTMENT POLICIES
------------------------------
Each Fund has a distinct investment objective which it pursues through separate
investment policies, as described in the Prospectus and below. The investment
objective, fundamental investment policies and fundamental investment
restrictions of a Fund may not be changed without the vote of a majority of that
Fund's outstanding shares (which, under the Investment Company Act of 1940 (the
"1940 Act") and the rules thereunder and as used in this Statement of Additional
Information and in the Prospectus, means the lesser of (1) 67% of the shares of
that Fund present at a meeting if the holders of more than 50% of the
outstanding shares of that Fund are present in person or by proxy, or (2) more
policies and restrictions without shareholder approval.
The following discussion, when applicable, elaborates on the presentation of
each Fund's investment policies contained in the Prospectus. For a description
of the ratings of corporate debt securities and money market instruments in
which the various Funds may invest, reference should be made to the Appendix.
PRIME FUND
An instrument in which the Prime Fund may invest will be considered to be short-
term if its remaining maturity on the date of its purchase is 397 days or less.
In the case of a variable or floating rate obligation, the remaining maturity
will be deemed to be the period remaining until the next readjustment of the
interest rate or until maturity, whichever is less. In the case of an
obligation with a demand feature, the remaining maturity will be deemed to be
the period remaining until the principal amount may be recovered through the
demand provision or until the next readjustment of the interest rate or until
maturity, whichever is the shortest.
Certain money market instruments are available only in relatively large
denominations, and others may carry higher yields if purchased in relatively
large denominations. Also, it is believed by MassMutual that an institutional
purchaser of money market instruments who has the ability to invest relatively
large sums on a regular basis may have investment opportunities that are not
available to those who invest smaller sums less frequently. Certain of the
Prime Fund's investment restrictions limit the percentage of the Fund's assets
which may be invested in certain industries or in securities of any issuer.
Accordingly, if the Fund has relatively small net assets and net cash flow from
sales and redemptions of shares, the Fund may be unable to invest in money
market instruments paying the highest yield available at a particular time.
SHORT-TERM BOND FUND
The Fund's duration management strategy currently utilizes a quantitative, risk-
averse discipline that balances generating a high total rate of return primarily
from current income with minimizing fluctuations in capital values. The
duration of the portfolio will be lengthened by extending average maturities
when sufficient additional yield can
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be obtained. Conversely, the duration will be shortened when adequate
compensation for the additional risk associated with longer maturities cannot be
realized.
CORE BOND FUND
The Core Bond Fund's duration management strategy is to match (within 10%) the
duration of the Lehman Brothers Government/Corporate Bond Index. MassMutual
seeks to add value compared to this index through the use of sector rotation,
yield curve management and asset selection. Neither market timing nor interest
rate anticipation methods are employed in managing the Fund.
INTERNATIONAL EQUITY FUND
The Trustees are authorized to determine what constitutes a "foreign security"
and to modify any such definition as they deem appropriate. Opportunities for
long-term capital appreciation will be stressed.
Currency Transactions - The Fund may engage in currency transactions with
counterparties in order to hedge the value of portfolio holdings denominated in
particular currencies against fluctuations in relative value.
FIXED INCOME SECURITIES
While the Prime Fund invests in high quality securities and the Short-Term Bond
Fund, the Core Bond Fund and the Core Bond Sector of the Balanced Fund invest in
investment grade securities, investment in these Funds is not without risk. The
debt securities in which the Funds invest may not offer as high a yield as may
be achieved from lower quality instruments having less safety. If the Prime
Fund, the Short-Term Bond Fund or the Core Bond Fund disposes of an obligation
prior to maturity, it may realize a loss or a gain. An increase in interest
rates will generally reduce the value of portfolio investments, and a decline in
interest rates will generally increase the value of portfolio investments. In
addition, investments are subject to the ability of the issuer to make payment
at maturity. If an investment of the Short-Term Bond Fund or the Core Bond Fund
is downgraded below investment-grade level, the adviser will normally dispose of
such security in a reasonable period of time. In special circumstances the
adviser may determine that it is in the Fund's best interest to continue to hold
the security.
WARRANTS AND RIGHTS
A warrant typically gives the holder the right to purchase underlying stock at a
specified price for a designated period of time. Warrants may be a relatively
volatile investment. The holder of a warrant takes the risk that the market
price of the underlying stock may never equal or exceed the exercise price of
the warrant. A warrant will expire without value if it is not exercised or sold
during its exercise period. Rights are similar to warrants, but normally have a
short duration and are distributed directly by the issuer to its shareholders.
Warrants and rights have no voting rights, receive no dividends, and have no
rights to the assets of the issuer.
The Equity Sector of the Balanced Fund, the Value Equity Fund, the Small Cap
Value Equity Fund and the International Equity Fund may each invest up to 5% of
the value of their respective assets in warrants in an effort to build a
position in the underlying common stocks and, of such 5%, no more than 2% may be
invested in warrants that are not listed on the New York Stock Exchange or the
American Stock Exchange.
REPURCHASE AND REVERSE REPURCHASE AGREEMENTS
In a repurchase agreement transaction, a Fund acquires a security from, and
simultaneously resells it to, an approved vendor (a U.S. commercial bank or the
U.S. branch of a foreign bank, or a broker-dealer which has been designated a
primary dealer in government securities and which must meet the credit
requirements set by the Trust's Board of Trustees from time to time) for
delivery on an agreed-upon future date. The resale price exceeds the purchase
price by an amount that reflects an agreed-upon interest rate effective for the
period during which the repurchase agreement is in effect. The majority of
these agreements run from day to day, and delivery pursuant to the resale
agreement typically will occur within one to five days of the purchase.
Repurchase agreements are considered "loans" under the 1940 Act, collateralized
by the underlying security. A Fund's repurchase agreements require that at all
times while the repurchase agreement is in effect, the value of the collateral
must equal or exceed the repurchase price to fully collateralize the loan.
Additionally, a Fund's adviser will impose creditworthiness requirements to
confirm that the vendor is financially sound
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and will continuously monitor the collateral's value. However, if the seller
defaults, the Fund could realize a loss on the sale of the underlying security.
In addition, if the seller should be involved in bankruptcy or insolvency
proceedings, the Fund may incur delay and costs in selling the underlying
security or may suffer a loss of principal and interest if the Fund is treated
as an unsecured creditor and required to return the underlying securities to the
seller's estate.
A reverse repurchase agreement is a contract pursuant to which a Fund agrees to
sell a security and simultaneously agrees to repurchase it at an agreed-upon
price at a stated time. A Fund engaging in reverse repurchase agreements will
maintain a segregated account with its custodian containing cash or liquid
securities, having a current market value at all times in an amount sufficient
to repurchase securities pursuant to outstanding reverse repurchase agreements.
Reverse repurchase agreements are borrowings subject to Restriction (2) under
"Fundamental Investment Restrictions."
CERTAIN DEBT SECURITIES
Some U.S. Government Securities are backed by the full faith and credit of the
U.S. Government; others are secured by the right of the issuer to borrow from
the U.S. Treasury; while others are supported only by the credit of the issuing
agency or instrumentality. There can be no assurance that the U.S. Government
will pay interest and principal on securities on which it is not legally
obligated to do so.
The Funds will limit their investments in certificates of deposit and bankers'
acceptances to U.S. dollar denominated obligations of U.S. banks and savings and
loan associations, London branches of U.S. banks ("Eurodollar obligations") and
U.S. branches of foreign banks ("Yankeedollar obligations"). In the case of
foreign banks, the $1 billion deposit requirement will be computed using
exchange rates in effect at the time of the banks' most recently published
financial statements. Eurodollar obligations and Yankeedollar obligations will
not be acquired if as a result more than 25% of a Fund's net assets would be
invested in such obligations. Obligations of foreign banks and of foreign
branches of U.S. banks may be affected by foreign governmental action, including
imposition of currency controls, interest limitations, withholding taxes,
seizure of assets or the declaration of a moratorium or restriction on payments
of principal or interest. Foreign banks and foreign branches of U.S. banks may
provide less public information than, and may not be subject to the same
accounting, auditing and financial recordkeeping standards as, domestic banks.
SECURITIES LENDING
A Fund may make loans of portfolio securities of not more than 33% of its net
assets taken at current market value to attempt to increase its income. Under
applicable regulatory requirements and securities lending agreements (which are
subject to change), the loan collateral must, on each business day, be at least
equal to the value of the loaned securities and must consist of cash, bank
letters of credit or securities of the U.S. Government (or its agencies or
instrumentalities), or other cash equivalents in which the Fund is permitted to
invest. The terms of a Fund's loans must also meet certain tests under the
Internal Revenue Code and permit the Fund to reacquire loaned securities on five
business days' notice or in time to vote on any important matter.
HEDGING INSTRUMENTS AND DERIVATIVES
The Funds currently may use the hedging instruments and derivatives discussed
below. In the future, a Fund may employ hedging instruments and strategies that
are not currently contemplated but which may be developed, to the extent such
investment methods are consistent with the Fund's investment objective, legally
permissible and adequately disclosed.
(1) FORWARD CONTRACTS - Each Fund may purchase or sell securities on a forward
commitment basis ("forward contracts"). When such transactions are negotiated,
the price is fixed at the time of commitment, but delivery and payment for the
securities can take place a month or more after the commitment date. The
securities so purchased or sold are subject to market fluctuations and no
interest accrues to the purchaser during this period. At the time of delivery
the securities may be worth more or less than the purchase or sale price. While
a Fund also may enter into forward contracts with the initial intention of
acquiring securities for its portfolio, it may dispose of a commitment prior to
settlement if MassMutual deems it appropriate to do so. The Funds may realize
short-term gains or losses upon the sale of forward contracts. If a Fund enters
into a forward contract, it will establish a segregated account with its
custodian consisting of cash or liquid securities, having a current market value
equal to or greater than the aggregate amount of that Fund's commitment under
forward contracts (that is, the purchase price of the underlying
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security on the delivery date). As an alternative to maintaining all or part of
the segregated account, a Fund could buy call or put options to "cover" the
forward contracts. A Fund will not enter into a forward contract if as a result
more than 25% of its total assets would be held in a segregated account covering
such contracts.
(2) CURRENCY TRANSACTIONS -Each Fund may engage in currency transactions with
counterparties in order to convert foreign denominated securities or obligations
to U.S. dollar denominated investments. Further, the International Equity Fund
may engage currency transactions to hedge the value of portfolio holdings
denominated in particular currencies against fluctuations in relative value.
Currency transactions include forward currency contracts, exchange listed
currency futures, exchange listed and OTC options on currencies, and currency
swaps. A forward currency contract involves a privately negotiated obligation to
purchase or sell (with delivery generally required) a specific currency at a
future date, which may be any fixed number of days from the date of the contract
agreed upon by the parties, at a price set at the time of the contract. A
currency swap is an agreement to exchange cash flows based on the notional
difference among two or more currencies and operates similarly to an interest
rate swap, which is described below. A Fund may enter into currency transactions
with counterparties which have received (or the guarantors of the obligations of
which have received) a credit rating of A-1 or P-1 by Standard and Poor's
Ratings Group ("S & P") or Moody's, Investors Service ("Moody's"), respectively,
or that have an equivalent rating from a nationally recognized statistical
rating organization ("NRSRO") or (except for OTC currency options) are
determined to be of equivalent credit quality by the adviser.
The International Equity Fund's dealings in forward currency contracts and other
currency transactions such as futures, options, options on futures, and swaps
will be limited to hedging involving either specific transactions or portfolio
positions. Transaction hedging is entering into a currency transaction with
respect to specific assets or liabilities of a Fund, which will generally arise
in connection with the purchase or sale of its portfolio securities or the
receipt of income therefrom. Position hedging is entering into a currency
transaction with respect to portfolio security positions denominated or
generally quoted in that currency. For example, if the Fund believes that a
foreign currency may suffer a substantial decline against the U.S. dollar, it
may enter into a forward sale contract to sell an amount of that foreign
currency approximating the value of some or all of the Fund's portfolio
securities denominated in such foreign currency. The Funds may also cross-hedge
currencies by entering into transactions to purchase or sell one or more
currencies that are expected to decline in value relative to other currencies to
which the Fund has or in which the Fund expects to have portfolio exposure.
A Fund will not enter into a transaction to hedge currency exposure to an extent
greater, after netting all transactions intended wholly or partially to offset
other transactions, than the aggregate market value (at the time of entering
into the transaction) of the securities held in its portfolio that are
denominated or generally quoted in or currently convertible into such currency,
other than with respect to proxy hedging as described below.
To reduce the effect of currency fluctuations on the value of existing or
anticipated holdings of portfolio securities, the Funds may also engage in proxy
hedging. Proxy hedging is often used when the currency to which the Fund's
portfolio is exposed is difficult to hedge or to hedge against the dollar.
Proxy hedging entails entering into a forward contract to sell a currency whose
changes in value are generally considered to be linked to a currency or
currencies in which some or all of the Fund's portfolio securities are or are
expected to be denominated, and to buy U.S. dollars. The amount of the contract
would not exceed the value of the Fund's securities denominated in linked
currencies. For example, if the adviser considers that the Austrian schilling
is linked to the German deutsche mark (the "D-mark"), the Fund holds securities
denominated in schillings and the adviser believes that the value of schillings
will decline against the U.S. dollar, the adviser may enter into a contract to
sell D-marks and buy dollars. Currency hedging involves some of the same risks
and considerations as other transactions with similar instruments. Currency
transactions can result in losses to the Fund if the currency being hedged
fluctuates in value to a degree or in a direction that is not anticipated.
Further, there is the risk that the perceived linkage between various currencies
may not be present during the particular time that the Fund is engaging in proxy
hedging.
(3) RISKS REGARDING HEDGING INSTRUMENTS AND DERIVATIVES
Some of the general risks associated with hedging and the use of derivatives
include: (a) the possible absence of a liquid secondary market for any
particular hedging instrument at any time; (b) these instruments can be highly
volatile; and (c) the possible need to defer closing out certain positions to
avoid adverse tax consequences. More specific risks are set forth below.
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(A) FORWARD CONTRACTS: Forward contracts involve a risk of loss if the
value of the security to be purchased declines prior to the settlement
date, which risk is in addition to the risk of decline in value of the
Funds' other assets.
(B) CURRENCY TRANSACTIONS: Currency transactions are subject to risks
different from those of other portfolio transactions. Because currency
control is of great importance to the issuing governments and influences
economic planning and policy, purchases and sales of currency and related
instruments can be negatively affected by government exchange controls,
blockages, and manipulations or exchange restrictions imposed by
governments. These can result in losses to a Fund if it is unable to
deliver or receive currency or funds in settlement of obligations and could
also cause hedges it has entered into to be rendered useless, resulting in
full currency exposure as well as incurring transaction costs. Buyers and
sellers of currency futures are subject to the same risks that apply to the
use of futures generally. Further, settlement of a currency futures
contract for the purchase of most currencies must occur at a bank based in
the issuing nation. Trading options on currency futures is relatively new,
and the ability to establish and close out positions on such options is
subject to the maintenance of a liquid market which may not always be
available. Currency exchange rates may fluctuate based on factors
extrinsic to that country's economy.
RESTRICTED AND ILLIQUID SECURITIES
None of the Funds currently expect to invest in restricted or illiquid
securities, although, as a non-fundamental policy, each Fund may invest no more
than 15% of its net assets in illiquid securities. However, this policy does
not limit the purchases of securities eligible for resale to qualified
institutional buyers pursuant to Rule 144A under the Securities Act of 1933,
provided that such securities are determined to be liquid by the Board of
Trustees, or the adviser if such determination is pursuant to Board-approved
guidelines. Such guidelines shall take into account trading activity for such
securities and the availability of reliable pricing information, among other
factors. If there is a lack of trading interest in particular Rule 144A
securities, a Fund's holdings of those securities may be illiquid, resulting in
undesirable delays in selling these securities at prices representing fair
value.
FOREIGN SECURITIES
The International Equity Fund and to a lesser extent each of the other Funds are
permitted to invest in foreign securities. With the exception of the
International Equity Fund, each Fund intends to invest in foreign securities
only if: (i) such securities are U.S. denominated; or (ii) if such securities
are not U.S. denominated, the Fund contemporaneously enters into a foreign
currency transaction to hedge the currency risk associated with the particular
foreign security. If a Fund's securities are held abroad, the countries in
which such securities may be held and the sub-custodian holding them must be
approved by the Board of Trustees under applicable SEC rules. In buying foreign
securities, a Fund may convert U.S. dollars into foreign currency, but only to
effect securities transactions on foreign securities exchanges and not to hold
such currency as an investment.
Investments in foreign securities involve special risks and considerations. As
foreign companies are not generally subject to uniform accounting, auditing and
financial reporting standards, practices and requirements comparable to those
applicable to domestic companies, there may be less publicly available
information about a foreign company than about a domestic company. For example,
foreign markets have different clearance and settlement procedures. Delays in
settlement could result in temporary periods when assets of a Fund are
uninvested. The inability of a Fund to make intended security purchases due to
settlement problems could cause it to miss certain investment opportunities.
They may also entail certain other risks, such as the possibility of one or more
of the following: imposition of dividend or interest withholding or
confiscatory taxes, higher brokerage costs, thinner trading markets, currency
blockages or transfer restrictions, expropriation, nationalization, military
coups or other adverse political or economic developments; less government
supervision and regulation of securities exchanges, brokers and listed
companies; and the difficulty of enforcing obligations in other countries.
Purchases of foreign securities are usually made in foreign currencies and, as a
result, a Fund may incur currency conversion costs and may be affected favorably
or unfavorably by changes in the value of foreign currencies against the U.S.
dollar. Further, it may be more difficult for a Fund's agents to keep currently
informed about corporate actions which may affect the prices of portfolio
securities. Communications between the United States and foreign countries may
be less reliable than within the United States, thus increasing the risk of
delayed settlements of portfolio transactions or loss of certificates for
portfolio securities. Certain markets may require payment for securities before
delivery. A Fund's
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ability and decisions to purchase and sell portfolio securities may be affected
by laws or regulations relating to the convertibility of currencies and
repatriation of assets.
A number of current significant political, demographic and economic developments
may affect investments in foreign securities and in securities of companies with
operations overseas. Such developments include dramatic political changes in
government and economic policies in several Eastern European countries and the
republics composing the former Soviet Union, as well as the unification of the
European Economic Community. The course of any one or more of these events and
the effect on trade barriers, competition and markets for consumer goods and
services are uncertain. Similar considerations are of concern with respect to
developing countries. For example, the possibility of revolution and the
dependence on foreign economic assistance may be greater in these countries than
in developed countries. Management seeks to mitigate the risks associated with
these considerations through diversification and active professional management.
SHORT SALES AGAINST-THE-BOX
Selling short "against-the-box" refers to the sale of securities actually owned
by the seller but held in safekeeping. In such short sales, while the short
position is open, a Fund must own an equal amount of such securities, or by
virtue of ownership of securities have the right, without payment of further
consideration, to obtain an equal amount of securities sold short. Short sales
against-the-box may be made to defer, for federal income tax purposes,
recognition of gain or loss on the sale of securities "in the box" until the
short position is closed out. None of the Funds currently intend to engage in
short sales against-the-box.
INVESTMENT BASKET
Notwithstanding any Fund's fundamental investment restrictions (except those
imposed as a matter of law), the Board of Trustees may authorize one or more of
the Funds to invest in any security or investment-related instrument, or to
engage in investment-related transactions or practices, such as newly developed
debt securities or hedging programs, provided that the Board of Trustees has
determined that to do so is consistent with the Fund's investment objectives and
policies and has adopted reasonable guidelines for use by the Fund's advisers,
and provided further that at the time of making such investment or entering into
such transaction, such investments or instruments account for not more than 10%
of the Fund's total assets. The Trust has no current intention of using this
investment basket authority.
FUNDAMENTAL INVESTMENT RESTRICTIONS
-----------------------------------
Each Fund is subject to certain fundamental restrictions on its investments,
which may not be changed without the affirmative vote of a majority of the
outstanding shares of that Fund. Investment restrictions that appear below or
elsewhere in this Statement of Additional Information and in the Prospectus
which involve a maximum percentage of securities or assets shall not be
considered to be violated unless an excess over the percentage occurs
immediately after, and is caused by, an acquisition or encumbrance of securities
or assets of, or borrowings by or on behalf of, a Fund. The Trust may not, on
behalf of any Fund:
(1) Purchase any security (other than U.S. Treasury securities or U.S.
Government Securities) if as a result, with respect to 75% of the Fund's
assets, more than 5% of the value of the total assets (determined at the
time of investment) of a Fund would be invested in the securities of a
single issuer.
(2) Borrow money, except from banks for temporary or emergency purposes not
in excess of one-third of the value of a Fund's assets, except that a Fund
may enter into reverse repurchase agreements or roll transactions. For
purposes of calculating this limitation, entering into portfolio lending
agreements shall not be deemed to constitute borrowing money. A Fund would
not make any additional investments while its borrowings exceeded 5% of its
assets.
(3) Issue senior securities (as defined in the 1940 Act) except for
securities representing indebtedness not prevented by paragraph (2)
above.
(4) Make short sales, except for sales "against the box."
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(5) Act as an underwriter, except to the extent that, in connection with
the disposition of portfolio securities, a Fund may be deemed an
underwriter under applicable laws.
(6) Invest in oil, gas or other mineral leases, rights, royalty contracts
or exploration or development programs, real estate or real estate mortgage
loans. This restriction does not prevent a Fund from purchasing readily
marketable securities secured or issued by companies investing or dealing
in real estate and by companies that are not principally engaged in the
business of buying and selling such leases, rights, contracts or programs.
(7) Purchase physical commodities or commodity contracts (except futures
contracts, including but not limited to contracts for the future delivery
of securities and futures contracts based on securities indices).
(8) Make loans other than by investing in obligations in which a Fund may
invest consistent with its investment objective and policies and other than
repurchase agreements and loans of portfolio securities.
(9) Pledge, mortgage or hypothecate assets taken at market to an extent
greater than 15% of the total assets of the Fund except in connection with
permitted transactions in options, futures contracts and options on futures
contracts, reverse repurchase agreements and securities lending.
(10) Purchase any security (other than securities issued, guaranteed or
sponsored by the U.S. Government or its agencies or instrumentalities) if,
as a result, a Fund would hold more than 10% of the outstanding voting
securities of an issuer.
(11) Purchase or retain securities of any issuer if, to the knowledge of
the Trust, more than 5% of such issuer's securities are beneficially owned
by officers and trustees of the Trust or officers and directors of its
adviser who individually beneficially own more than 1/2 of 1% of the
securities of such issuer.
Notwithstanding any fundamental investment restriction set forth above or in the
Prospectus, each Fund may: (1) engage in hedging transactions, techniques, and
practices using forward contracts and similar instruments, to the extent and in
a manner permitted by law; and (2) invest in any security or investment-related
instrument, or engage in any investment-related transaction or practice,
provided that the Board of Trustees has determined that to do so is consistent
with the investment objective and policies of the Fund and has adopted
reasonable guidelines for use by the Fund's adviser, and provided further that
at the time of entering into such investment or transaction, such investments or
instruments account for no more than 10% of the Fund's total assets. For the
foreseeable future, the Funds do not expect to engage in futures and options
transactions or interest rate swap agreements.
NON-FUNDAMENTAL INVESTMENT RESTRICTIONS
---------------------------------------
In addition to the investment restrictions described above and those contained
in the Prospectus, the Trustees of the Trust have voluntarily adopted certain
policies and restrictions which are observed in the conduct of the affairs of
the Funds. These represent intentions of the Trustees based upon current
circumstances. They differ from fundamental investment policies in that the
following additional investment restrictions may be changed or amended by action
of the Trustees without requiring prior notice to or approval of shareholders.
In accordance with such policies and guidelines, each Fund may not:
(1) Invest for the purpose of exercising control over, or management of,
any company.
(2) Invest in securities of other investment companies, except by purchase
in the open market where no commission or profit to a sponsor or dealer
results from such purchase other than the customary broker's commission,
except when such purchase is part of a plan of merger, consolidation,
reorganization or acquisition or except shares of money market funds
advised by MassMutual or an affiliate thereof. It is expected that a Fund
would purchase shares of such money market funds only if arrangements are
made to eliminate duplicate advisory and distribution fees.
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MANAGEMENT OF THE TRUST
-----------------------
The Trust has a Board of Trustees, a majority of which must not be
"Interested Persons" as defined in the 1940 Act. The Trustees and principal
officers of the Trust are listed below together with information on their
positions with the Trust, address, age, principal occupations during the past
five years and other principal business affiliations.
GARY E. WENDLANDT* Chairman, Chief Executive Officer
1295 State Street and Trustee of the Trust
Springfield, MA 01111
Age: 46
Chief Investment Officer (since 1993), Executive Vice President (since
1992), Senior Vice President (1983-1992), MassMutual; Chairman (since
1995), Vice Chairman (1993-1995) and President (1988-1993), MML Series
Investment Fund (open-end investment company); Chairman (since 1995),
President (1983-1995) and Trustee: MassMutual Corporate Investors and
Chairman (since 1995), President (1988-1995) and Trustee, MassMutual
Participation Investors (closed-end investment companies); Chairman (since
1996), Antares Loveraged Capital Corp. (finance company); Chairman, HYP
Management, Inc. (managing member of MassMutual High Yield Partners LLC)
and MMHC Investment, Inc. (invested in MassMutual High Yield Partners LLC);
Advisory Board Member (since 1996), MassMutual High Yield Partners LLC
(high yield bond fund); President and Director (since 1995), DLB
Acquisition Corporation (holding company for investment advisers); Director
(since 1990), Oppenheimer Acquisition Corporation (investment advisory
holding company); Supervisory Director (since 1991) MassMutual/Carlson CBO
N.V. (collateralized bond fund); Director (since 1994), MassMutual
Corporate Value Partners Limited (investor in debt and equity securities)
and MassMutual Corporate Value Limited (parent of MassMutual Corporate
Value Partners Limited); Chairman (since 1994) and Director (since 1993),
MML Realty Management Corporation; Chairman (since 1994) and Chief
Executive Officer (1994-1996), Cornerstone Real Estate Advisers, Inc.
(wholly-owned real estate investment adviser subsidiary of MassMutual
Holding Company); Director (since 1992), MML Derivative Products, Inc.;
Chairman (1994-1995) and Director (1993-1995), MML Real Estate
Corporation.
RONALD J. ABDOW Trustee of the Trust
1400 Elm Street
West Springfield, MA 01089
Age: 65
President, Abdow Corporation (operator of restaurants); General Partner,
Grove Investment Group (apartment building syndicator); Trustee, Abdow G&R
Trust and Abdow G&R Co. (owners and operators of restaurant properties);
Partner, Abdow Partnership, Abdow Auburn Associates, and Abdow Hazard
Associates (owners and operators of restaurant properties); Trustee (since
1993) MML Series Investment Fund (open-end investment company).
RICHARD H. AYERS Trustee of the Trust
1000 Stanley Drive
New Britain, CT
Age: 54
Adviser to Chairman (since 1997), Chairman and Chief Executive Officer
(1989-1996) and Director (since 1985), The Stanley Works (manufacturer of
tools, hardware, specialty hardware and specialty hardware products);
Director (since 1986), Southern New England Telecommunications Corp.;
Director, (since 1988) Perkin Elmer Corp; Advisory Board Member (since
1996), MML Series Investment Company (open-end investment company).
_______________
* Trustee who is an "interested person" of the Trust within the definition set
forth in Section 2(a)(19) of the 1940 Act.
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MARY E. BOLAND Trustee of the Trust
67 Market Street
Springfield, MA 01118
Age: 57
Attorney at Law, Egan, Flanagan and Cohen, P.C. (law firm), Springfield,
MA; Director (since 1995), Trustee (until 1995), SIS Bank (formerly,
Springfield Institution for Savings); Trustee, MML Series Investment Fund
(open-end investment company).
DAVID E.A. CARSON Trustee of the Trust
850 Main Street
Bridgeport, CT 06604
Age: 62
President and Chief Executive Officer (since 1985), People's Bank;
Director, United Illuminating Co.; Trustee, American Skandia Trust (open-
end investment company). Advisory Board Member (since 1996), MML Series
Investment Fund (open-end investment company).
RICHARD G. DOOLEY* Trustee of the Trust
1295 State Street
Springfield, Massachusetts
Age: 67
Consultant (since 1993), Executive Vice President and Chief Investment
Officer (1978-1993), MassMutual; Director (since 1996), Investment
Technology Group Inc.; Director, The Advest Group, Inc. (financial services
holding company), Hartford Steam Boiler Inspection and Insurance Co., New
England Education Loan Marketing Corporation; Director (since 1992), Kimco
Realty Corp. (shopping center ownership and management); Director (since
1993), Jefferies Group, Inc. (financial services holding company); Director
and Vice President, Oppenheimer Acquisition Corporation (investment
advisory holding company); Vice Chairman (since 1995), Chairman (1982-
1995), MassMutual Corporate Investors, and Vice Chairman (since 1995),
Chairman (1988-1995), MassMutual Participation Investors (closed-end
investment companies); Director (1993-1995), Luxonen S.A. (Swedish
investment fund); Supervisory Director (1991-1995), MassMutual/Carlson CBO
N.V. (collateralized bond fund); Director (1984-1993), MML Real Estate
Corporation (real estate management subsidiary of MassMutual Holding
Company) and MML Realty Management Corporation (subsidiary of MassMutual
Holding Company to manage real estate projects); Vice Chairman (since
1995), Chairman (1988-1995), MML Series Investment Fund (open-end
investment company).
RICHARD W. GREENE Trustee of the Trust
University Of Rochester
Rochester, NY 14627
Age: 61
Executive Vice President and Treasurer (since 1986), University of
Rochester (private university). Advisory Board Member (since 1996), MML
Series Investment Fund (open-end investment company).
BEVERLY C.L. HAMILTON Trustee of the Trust
515 South Flower Street
Los Angeles, CA 90017
Age: 50
President (since 1991), ARCO Investment Management Co.; Vice President
(since 1991), Atlantic Richfield Company; Director (since 1992),
Connecticut Natural Gas; Director (since 1991), Emerging Markets Growth
Fund (closed-end investment company). Advisory Board Member (since 1996),
MML Series Investment Fund (open-end investment company).
_______________
* Trustee who is an "interested person" of the Trust within the definition set
forth in Section 2(a)(19) of the 1940 Act.
B-11
<PAGE>
F. WILLIAM MARSHALL, JR. Trustee of the Trust
1441 Main Street
Springfield, MA 01102-3034
Age: 55
President, Chief Executive Officer and Director (since 1993), SIS Bank
(formerly, Springfield Institution for Savings); Chairman and Chief
Executive Officer (1990-1993), Bank of Ireland First Holdings, Inc. and
First New Hampshire Banks; Trustee (since 1996), MML Series Investment Fund
(open-end investment company).
CHARLES J. MCCARTHY Trustee of the Trust
181 Eton Road
Longmeadow, MA 01106
Age: 73
Proprietor, Synectics Financial Company (venture capital activities,
business consulting and investments); Trustee, MML Series Investment Fund
(open-end investment company).
JOHN V. MURPHY* Trustee of the Trust
1295 State Street
Springfield, Massachusetts 01111
Age: 47
Executive Vice President (since 1997) of MassMutual; Executive Vice
President, Director and Chief Operating Officer (1995-1997), David L.
Babson and Company Incorporated; Chief Operating Officer (1993-1996),
Concert Capital Management, Inc.; Senior Vice President and Director (since
1995), Potomac Babson Incorporated; Chief Financial Officer (1985-1993),
Liberty Financial Companies (financial services).
JOHN H. SOUTHWORTH Trustee of the Trust
195 Eton Road
Longmeadow, MA 01106
Age: 69
Chairman (since 1993) and President (1984-1992), Southworth Company
(manufacturer of paper and calendars); Director (since 1995), Trustee
(until 1995), SIS Bank (formerly, Springfield Institution for Savings);
Trustee, MML Series Investment Fund (open-end investment company).
STUART H. REESE President of the Trust
1295 State Street
Springfield, MA 01111
Age: 41
Executive Director (since 1997), Senior Vice President (1993-1997),
MassMutual; President (since 1993), MML Series Investment Fund; President
(since 1995), Executive Vice President (1993-1995), MassMutual Corporate
Investors and MassMutual Participation Investors (close-end investment
companies); Director (since 1996), Antares Leveraged Capital Corp. (finance
company) and Charter Oak Capital Management, Inc. (investment adviser);
President and Director (since 1996), HYP Management, Inc. (managing member
of MassMutual High Yield Partners LLC), and MMHC Investment Inc. (investor
in MassMutual High Yield Partners LLC); Director (since 1994), MassMutual
Corporate Value Partners Limited (investor in debt and equity securities)
and MassMutual Corporate Value Limited (parent of MassMutual Corporate
Value Partners Limited); Supervisory Director (since 1994),
MassMutual/Carlson CBO (collateralized bond fund); Director and Member of
Investment Committee (since 1994), MML Bay State Life Insurance Company
(wholly-owned insurance subsidiary of MassMutual); Director and Member of
Investment and Auditing Committees, MML Pension Insurance Company (wholly-
owned insurance subsidiary of MassMutual Holding Company Two MSC, Inc.);
Director (since 1994), Pace Industries (aluminum die caster); Vice
President and Managing Director (1990-1992), Capital Markets Group of Aetna
Life & Casualty Company; Chairman and President (1990-1993), Aetna
Financial Services, Inc.
_______________
* Trustee who is an "interested person" of the Trust within the definition set
forth in Section 2(a)(19) of the 1940 Act.
B-12
<PAGE>
HAMLINE C. WILSON Vice President and Chief Financial
1295 State Street Officer of the Trust
Springfield, MA 0111
Age: 59
Senior Managing Director (since 1996), Vice President and Managing Director
(1989-1996), MassMutual; Vice President and Chief Financial Officer, MML
Series Investment Fund, MassMutual Corporate Investors and MassMutual
Participation Investors.
STEPHEN L. KUHN Vice President and Secretary
1295 State Street of the Trust
Springfield, MA 01111
Age: 50
Vice President and Associate General Counsel (since 1992), Second Vice
President and Associate General Counsel (1988-1992), MassMutual; Vice
President and Secretary, MML Series Investment Fund, MassMutual
Participation Investors and MassMutual Corporate Investors; President,
MassMutual/Carlson CBO Incorporated; Chief Legal Officer and Assistant
Secretary (since 1995), DLB Acquisition Corporation (holding company for
investment advisers); Assistant Secretary (since 1997), Oppenheimer
Acquisition Corporation (investment advisor holding company).
RAYMOND B. WOOLSON Treasurer of the Trust
1295 State Street
Springfield, MA 01111
Age: 38
Senior Managing Director (since 1996), Second Vice President (1992-1996),
Director/Fund Account Administration (1989-1992), MassMutual; Treasurer,
MassMutual Corporate Investors and MassMutual Participation Investors;
Treasurer (since 1996), MML Series Investment Fund (open-end investment
company).
Mark B. Ackerman Comptroller of the Trust
1295 State Street
Springfield, MA 01111
Age: 31
Investment Director (since 1996), Associate Director (1993-1996),
MassMutual; Associate Treasurer (since 1995), MassMutual Participation
Investors and MassMutual Corporate Investors; Comptroller (since 1997),
Associate Treasurer (1995-1996), MML Series Investment Fund (open-end
investment company).
The Audit Committee makes recommendations to the Trustees as to the engagement
or discharge of the Trust's independent auditors, supervises investigations into
matters relating to audit functions, reviews with the Trust's independent
auditors the results of the audit engagement, and considers the audit fees. The
Nominating Committee consists of Trustees who are not "interested persons" (as
defined in the 1940 Act) of the Trust or any adviser and considers making all
nominations for non-interested members of the Board of Trustees. The selection
and nomination of management nominees for such vacancies is committed to the
discretion of the Nominating Committee. The Investment Pricing Committee
determines the fair value of securities for which market quotations are not
readily available.
_______________
* Trustee who is an "interested person" of the Trust within the definition set
forth in Section 2(a)(19) of the 1940 Act.
B-13
<PAGE>
COMPENSATION
------------
The Trust, on behalf of each Fund, pays each of its Trustees who is not an
officer or employee of MassMutual a fee of $2,000 per quarter plus $2,000 per
meeting attended. Such Trustees who serve on the Audit Committee of the Trust
are paid an additional fee of $1,000 per year. Such Trustees who serve on the
Nominating Committee or the Investment Pricing Committee are paid an additional
fee of $500 per meeting attended. In addition, the Trust reimburses out-of-
pocket business travel expenses to such Trustees. Trustees who are officers or
employees of MassMutual receive no fees from the Trust.
COMPENSATION TABLE
------------------
The following table discloses the compensation paid to the Registrant's non-
interested trustees for the 1996 fiscal year. The Registrant has no pension,
retirement, or deferred compensation plans. All of the non-interested Trustees
also serve as Trustees or Advisory Board Members of one other investment company
managed by MassMutual. Total Compensation from Registrant and Fund Complex
reflects compensation paid in the 1996 fiscal year.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
TOTAL COMPENSATION
AGGREGATE FROM REGISTRANT AND
NAME/POSITION COMPENSATION FROM REGISTRANT FUND COMPLEX
- --------------------------------------------------------------------------------
<S> <C> <C>
Ronald J. Abdow
Trustee $16,000 $32,000
- --------------------------------------------------------------------------------
Richard H. Ayers
Trustee $2,000 6,000
- --------------------------------------------------------------------------------
Mary E. Boland
Trustee 16,000 32,000
- --------------------------------------------------------------------------------
David E.A. Carson
Trustee 2,000 6,000
- --------------------------------------------------------------------------------
Richard W. Greene
Trustee 2,000 6,000
- --------------------------------------------------------------------------------
Beverly C.L. Hamilton
Trustee 2,000 6,000
- --------------------------------------------------------------------------------
F. William Marshall, Jr.
Trustee 12,000 23,333
- --------------------------------------------------------------------------------
Charles J. McCarthy
Trustee 17,000 34,000
- --------------------------------------------------------------------------------
John H. Southworth
Trustee 17,000 73,246
- --------------------------------------------------------------------------------
</TABLE>
The officers and Trustees of the Trust as a group own less than 1% of any series
of outstanding shares of the Trust.
The Trust's shareholders have the right, upon the declaration in writing or vote
of at least two-thirds of the votes represented by its outstanding shares, to
remove a Trustee. The Trustees shall call a meeting of shareholders to vote on
the removal of a Trustee upon the written request of the record holders of
shares representing at least 10% of all of the votes represented by all
outstanding shares of the Trust. In addition, whenever ten or more shareholders
of record who have been such for at least six months preceding the date of
application, and who hold in the aggregate either shares having a net asset
value of at least $25,000 or at least 1% of the Trust's outstanding shares,
whichever is less, shall apply to the Trustees in writing, stating that they
wish to communicate with other shareholders with a view to obtaining signatures
for a request for a meeting for the purpose of voting upon the question of
removal of any Trustee or Trustees and accompanied by the form of communication
and request which they wish to transmit, the Trustees shall within five business
days after receipt of such application either: (1) afford to such applicants
access to a list of the names and addresses of all shareholders as recorded on
the books of the Trust; or (2) inform such applicants as to the approximate
number of shareholders of record, and the
B-14
<PAGE>
approximate cost of mailing to them the proposed communication and form of
request. If the Trustees elect to follow the latter course, the Trustees, upon
the written request of such applicants, accompanied by a tender of the material
to be mailed and of the reasonable expenses of mailing, shall, with reasonable
promptness, mail such material to all shareholders of record at their addresses
as recorded on the books of the Trust, unless within five business days after
such tender the Trustees shall mail to such applicants and file with the
Securities and Exchange Commission (the ``SEC"), together with a copy of the
material to be mailed, a written statement signed by at least a majority of the
Trustees to the effect that in their opinion either such material contains
untrue statements of fact or omits to state facts necessary to make the
statements contained therein not misleading, or would be in violation of
applicable law, and specifying the basis of such opinion.
After opportunity for hearing regarding the objections specified in the written
statement so filed, the SEC may, and if demanded by the Trustees or by such
applicants shall, enter an order either sustaining one or more of such
objections, or refusing to sustain any of them. If the SEC shall enter an order
refusing to sustain any such objections or if, after the entry of an order
sustaining one or more of such objections, the SEC shall find, after notice and
opportunity for hearing, that all objections so sustained have been met, and
shall enter an order so declaring, the Trustees shall mail copies of such
material to all shareholders with reasonable promptness after the entry of such
order and the renewal of such tender.
On any matters submitted to a vote of shareholders, all shares of the Trust then
entitled to vote shall be voted in the aggregate as a single class without
regard to Fund or class, except that: (i) when required by the 1940 Act or when
the Trustees shall have determined that the matter affects one or more of the
Funds or classes materially differently, shares will be voted by individual Fund
or class; and (ii) when the Trustees have determined that any matter affects
only the interests of one or more Funds or classes, then only shareholders of
such Fund or class shall be entitled to vote thereon. Shareholder inquiries
should be directed to MassMutual Institutional Funds, 1295 State Street,
Springfield, MA 01111.
CONTROL PERSON AND PRINCIPAL HOLDERS OF SECURITIES
--------------------------------------------------
MassMutual is a control person in that it owns, through certain of its separate
investment accounts and its provision of seed money for the Trust, 100% of the
shares of each class of each Fund of the Trust as of April 1, 1997.
INVESTMENT MANAGER AND SUB-ADVISERS
-----------------------------------
INVESTMENT MANAGER
MassMutual serves as investment manager to each Fund pursuant to an Investment
Management Agreement with the Trust on behalf of each Fund dated September 30,
1994 (each an "Advisory Agreement"). Under each Advisory Agreement, MassMutual
is obligated to provide for the management of each Fund's portfolio of
securities and makes investment decisions with respect to the purchase and sale
of investments for the Prime Fund, the Short-Term Bond Fund, the Core Bond Fund
and the Prime and Core Bond Sectors of the Balanced Fund, subject to policies
established by the Trustees of the Trust and in accordance with each Fund's
investment objective, policies and restrictions as set forth herein and in the
Prospectus.
Each Advisory Agreement may be terminated at any time without the payment of any
penalty by the Trustees, or by vote of a majority of the outstanding shares of
the Fund, or by MassMutual, on sixty days' written notice. In addition, each
Advisory Agreement automatically terminates if it is assigned or if its
continuance is not specifically approved at least annually (1) by the
affirmative vote of a majority of the Trustees or by the affirmative vote of a
majority of the Fund's shares, and (2) by an affirmative vote of a majority of
the Trustees who are not "interested persons" (as defined in the1940 Act) of the
Trust. Under the terms of each Advisory Agreement, a Fund recognizes
MassMutual's control of the name "MassMutual" and the Trust agrees that its
right to use such name is non-exclusive and can be terminated by MassMutual at
any time. MassMutual's liability regarding its investment management
obligations and duties is limited to situations involving its willful
misfeasance, bad faith, gross negligence or reckless disregard of such
obligations and duties.
MassMutual also serves as investment adviser to: MassMutual Corporate Investors
and MassMutual Participation Investors, closed-end management investment
companies; MML Money Market Fund, MML Equity Fund, MML Managed Bond Fund, MML
Blend Fund and MML Equity Index Fund, which are series of MML Series Investment
Fund, an open-end management investment company; certain wholly owned
subsidiaries of MassMutual; MassMutual/Carlson CBO N.V., a corporation that
issued Collateralized Bond Obligations on or about May 1, 1991; MassMutual
Corporate Value Partners, a partnership formed in 1994 to provide investment
opportunities on a leverage basis in the public or
B-15
<PAGE>
private high yield markets; MassMutual High Yield Partners LLC, a limited
liability company formed in 1996 to invest in publicly traded high yield bonds,
high yield syndicated bank debt and public convertible securities and various
employee benefit plans.
The Trust, on behalf of each Fund, pays MassMutual an investment advisory fee
monthly, at an annual rate based upon the average daily net assets of that Fund
as follows: .45% for the Prime Fund, the Short-Term Bond Fund, the Core Bond
Fund, the Balanced Fund and the Value Equity Fund; .55% for the Small Cap Value
Equity Fund; and .85% for the International Equity Fund.
For the last three fiscal periods, the Funds have paid the following amounts as
investment advisory fees to MassMutual pursuant to each Advisory Agreement:
<TABLE>
<CAPTION>
Gross Waiver** Net
<S> <C> <C> <C>
Prime Fund
Period ended 12/31/94* $ 161,361 $ (15,967) $ 145,394
Year ended 12/31/95 1,027,586 (70,814) 956,772
Year ended 12/31/96 1,150,292 (89,223) 1,061,069
Short-Term Bond Fund
Period ended 12/31/94* 123,543 (12,731) 110,812
Year ended 12/31/95 528,655 (39,446) 489,209
Year ended 12/31/96 606,206 (47,791) 558,415
Core Bond Fund
Period ended 12/31/94* 231,644 (27,892) 203,752
Year ended 12/31/95 964,830 (91,069) 873,761
Year ended 12/31/96 1,375,667 (128,270) 1,247,397
Balanced Fund
Period ended 12/31/94* 395,156 (46,523) 348,633
Year ended 12/31/95 1,801,770 (165,250) 1,636,520
Year ended 12/31/96 2,271,174 (203,071) 2,068,103
Value Equity Fund
Period ended 12/31/94* 1,792,257 (244,445) 1,547,812
Year ended 12/31/95 8,289,231 (852,771) 7,436,460
Year ended 12/31/96 10,377,627 (1,077,667) 9,299,960
Small Cap Value Equity Fund
Period ended 12/31/94* 433,941 (45,051) 388,890
Year ended 12/31/95 1,928,743 (155,450) 1,773,293
Year ended 12/31/96 2,298,488 (182,305) 2,116,183
International Equity Fund
Period ended 12/31/94* 331,042 (33,401) 297,641
Year ended 12/31/95 1,580,088 (170,788) 1,409,300
Year ended 12/31/96 2,398,114 (196,769) 2,201,345
</TABLE>
*The Funds commenced operations on October 3, 1994.
**MassMutual's voluntary agreement to waive a portion of its management fee
terminated May 1, 1997. See "Expense Information" in the Prospectus.
In addition, MassMutual has entered into a separate administrative services
agreement ("Administrative Services Agreement") for each Fund pursuant to which
MassMutual is obligated to provide all necessary administrative and shareholder
services and to bear some Class expenses, such as federal and state registration
fees, printing and postage. MassMutual may, at its expense, employ others to
supply all or any part of the services to be provided to
B-16
<PAGE>
the Funds pursuant to the Administrative Services Agreements. The Trust, on
behalf of each Fund, pays MassMutual an administrative services fee monthly at
an annual rate based upon the average daily net assets of the applicable class
of shares of the Fund which range from .55% to .59% for Class 1 shares; .50% to
.54% for Class 2 shares; .31% to .44% for Class 3 shares; and .0782% to .0972%
for Class 4 shares.
For the last three fiscal periods, the Funds have paid the following amounts as
administrative services fees to MassMutual pursuant to each Administrative
Services Agreement:
<TABLE>
<CAPTION>
Class 1 Class 2 Class 3 Class 4
<S> <C> <C> <C> <C>
Prime Fund
Period ended 12/31/94* $ 94 $ 85 $ 51 $ 29,077
Year ended 12/31/95 580 531 326 185,171
Year ended 12/31/96 605 557 344 207,299
Short-Term Bond Fund
Period ended 12/31/94* 92 84 50 21,430
Year ended 12/31/95 595 543 332 91,617
Year ended 12/31/96 628 577 353 105,079
Core Bond Fund
Period ended 12/31/94* 95 86 52 43,302
Year ended 12/31/95 762 575 357 180,231
Year ended 12/31/96 737 614 382 257,095
Balanced Fund
Period ended 12/31/94* 94 86 51 74,775
Year ended 12/31/95 766 576 358 340,832
Year ended 12/31/96 794 661 412 429,674
Value Equity Fund
Period ended 12/31/94* 95 87 53 360,399
Year ended 12/31/95 666 611 384 1,666,744
Year ended 12/31/96 814 751 474 2,086,673
Small Cap Value Equity Fund
Period ended 12/31/94* 92 84 50 67,969
Year ended 12/31/95 756 564 351 301,987
Year ended 12/31/96 844 667 417 359,887
International Equity Fund
Period ended 12/31/94* 93 85 67 37,811
Year ended 12/31/95 604 515 421 180,405
Year ended 12/31/96 698 569 465 273,938
</TABLE>
*The Funds commenced operations on October 3, 1994.
INVESTMENT SUB-ADVISERS
Securities held by the Funds are also frequently held by MassMutual investment
accounts and by other investment companies and accounts for which MassMutual or
Babson act as investment adviser or sub-adviser. If the same security is
purchased or sold for any Fund and such accounts or companies at or about the
same time, such purchases or sales normally will be combined, to the extent
practicable, and will be allocated as nearly as practicable on a pro rata basis
in proportion to the amounts to be purchased or sold for each. In determining
the amounts to be purchased and sold, the main factors to be considered will be
the investment objectives of the respective portfolios, the relative size of
portfolio holdings of the same or comparable security, availability of cash for
investment by the various portfolios and the size of their respective investment
commitments. It is believed that the ability of the Funds to participate in
larger volume transactions will, in most cases, produce better execution for the
Funds. In some cases,
B-17
<PAGE>
however, this procedure could have a detrimental effect on the price and amount
of a security available to a Fund or the price at which a security may be sold.
It is the opinion of the Trust's management that such execution advantage and
the desirability of retaining MassMutual and Babson as advisers of the Funds
outweigh the disadvantages, if any, which might result from this procedure.
Babson is a wholly-owned subsidiary of DLB Acquisition Corporation, an indirect,
controlled subsidiary of MassMutual. HarbourView is a wholly owned subsidiary
of OppenheimerFunds, Inc. which is a wholly owned subsidiary of Oppenheimer
Acquisition Corporation ("OAC"), a holding company owned in part by senior
management of OAC and ultimately controlled by MassMutual. MassMutual, Babson
and HarbourView are each registered with the SEC as investment advisers.
THE DISTRIBUTOR
---------------
The Trust's shares are continuously distributed by Oppenheimer Funds
Distributor, Inc. (the "Distributor") pursuant to a Distribution Agreement with
the Trust dated August 5, 1994. The Distributor pays commissions to its selling
dealers as well as the cost of printing and mailing Prospectuses to potential
investors and of any advertising incurred by it in connection with distribution
of shares of the Funds.
Pursuant to Rule 12b-1 under the 1940 Act, the plans of distribution ("Plans")
described in the Prospectus were approved on August 5, 1994 by the shareholders
of each of the Funds. The Trustees of the Trust, including a majority of the
Trustees who are not interested persons of the Trust and who have no direct or
indirect financial interest in the operation of the Plans, by vote cast in
person at a meeting called for the purpose of voting on such Plan, approved the
Plans of the Funds on August 5, 1994. Pursuant to the Plans, the Distributor
shall provide the Trustees, at least quarterly, a written report of the amounts
expended under each Plan and the purpose for which such expenditures were made.
Permissible purposes for payments of fees pursuant to the Plans may include:
brokerage commissions; sales bonuses; and expenses related to marketing,
printing and distribution of the Funds' prospectus, answering shareholder
inquiries and preparing shareholder reports.
Each Plan will remain in effect for more than one year, provided such
continuance is approved annually by a vote of the Trustees in the manner
described above. No Plan may be amended to increase materially the amount to be
spent for the services described therein without approval of the shareholders of
the class to which it applies, and all material amendments of each Plan must be
approved by the Trustees in the manner described above. Each Plan may be
terminated at any time, without payment of any penalty, by vote of a majority of
the Trustees who are not interested persons of the Trust and who have no direct
or indirect financial interest in the operations of the Plan, or by a vote of a
majority of the outstanding voting securities of the class to which it applies
(as defined in the 1940 Act). So long as any Plan is in effect, the selection
and nomination of Trustees who are not such interested persons have been
committed to those Trustees who are not interested persons. The Trustees have
determined that, in their judgment, there is a reasonable likelihood that each
Plan will benefit the respective class and its shareholders.
In addition, MassMutual may reimburse the Distributor for distribution and/or
service expenses from any source available to it, including management and
administration fees paid to it by the Funds. MassMutual directly, or through the
Distributor, may, subject to the approval of the Board of Trustees, make
payments to securities dealers and other third parties who engage in the sale of
shares or who render shareholder support services, including but not limited to
providing office space, equipment and telephone facilities, answering routine
inquiries regarding the Funds, processing shareholder transactions and providing
such other shareholder services as the Funds may reasonably request. To the
extent that any payments made by the Funds to MassMutual, including payment of
management and administration fees, should be deemed to be indirect financing of
any activity primarily intended to result in the sale of the shares issued by
the Funds within the context of Rule 12b-1 under the 1940 Act, then such
payments shall be deemed to be authorized by the Funds' Plan.
CUSTODIAN, DIVIDEND DISBURSING AGENT AND TRANSFER AGENT
-------------------------------------------------------
Investors Bank & Trust Company is the custodian of the Funds' investments (the
"Custodian") and is the Funds' transfer agent and dividend disbursing agent (the
"Transfer Agent"). The Custodian and the Transfer Agent do not assist in, and
are not responsible for, the investment decisions and policies of the Funds.
B-18
<PAGE>
PORTFOLIO TRANSACTIONS AND BROKERAGE
------------------------------------
Purchases and sales of securities on a securities exchange are effected by
brokers, and each Fund which purchases or sells securities on a securities
exchange pays a brokerage commission for this service. In transactions on stock
exchanges in the United States, these commissions are negotiated, whereas on
many foreign stock exchanges these commissions are fixed. In the over-the-
counter markets, securities are generally traded on a "net" basis with dealers
acting as principal for their own accounts without a stated commission, although
the price of the security usually includes a profit to the dealer. In
underwritten offerings, securities are purchased at a fixed price which includes
an amount of compensation to the underwriter, generally referred to as the
underwriter's concession or discount. On occasion, certain money market
instruments may be purchased directly from an issuer, in which case no
commissions or discounts are paid.
The primary consideration in placing portfolio security transactions with
broker-dealers for execution is to obtain and maintain the availability of
execution at the most favorable prices and in the most effective manner
possible. Each adviser attempts to achieve this result by selecting broker-
dealers to execute portfolio transactions on the basis of their professional
capability, the value and quality of their brokerage services and the level of
their brokerage commissions.
Under each Advisory Agreement and as permitted by Section 28(e) of the
Securities Exchange Act of 1934, an adviser may cause a Fund to pay a broker-
dealer which provides brokerage and research services to the adviser an amount
of commission for effecting a securities transaction for a Fund in excess of the
amount other broker-dealers would have charged for the transaction if the
adviser determines in good faith that the greater commission is reasonable in
relation to the value of the brokerage and research services provided by the
executing broker-dealer viewed in terms of either a particular transaction or
the adviser's overall responsibilities to the Trust and to its other clients.
The term "brokerage and research services" includes: advice as to the value of
securities, the advisability of investing in, purchasing, or selling securities,
and the availability of securities or of purchasers or sellers of securities;
furnishing analyses and reports concerning issuers, industries, securities,
economic factors and trends, portfolio strategy and the performance of accounts;
and effecting securities transactions and performing functions incidental
thereto such as clearance and settlement.
Although commissions paid on every transaction will, in the judgment of the
adviser, be reasonable in relation to the value of the brokerage services
provided, commissions exceeding those which another broker might charge may be
paid to broker-dealers (except the Distributor) who were selected to execute
transactions on behalf of the Trust and the adviser's other clients in part for
providing advice as to the availability of securities or of purchasers or
sellers of securities and services in effecting securities transactions and
performing functions incidental thereto such as clearance and settlement.
Broker-dealers may be willing to furnish statistical, research and other factual
information or services ("Research") to an adviser for no consideration other
than brokerage or underwriting commissions. Securities may be bought or sold
through such broker-dealers, but at present, unless otherwise directed by the
Trust, a commission higher than one charged elsewhere will not be paid to such a
firm solely because it provided Research to the adviser. Research provided by
brokers is used for the benefit of all of the adviser's clients and not solely
or necessarily for the benefit of the Trust. The adviser attempts to evaluate
the quality of Research provided by brokers. Results of this effort are
sometimes used by the adviser as a consideration in the selection of brokers to
execute portfolio transactions.
The investment advisory fee that the Trust pays on behalf of each Fund to
MassMutual will not be reduced as a consequence of an adviser's receipt of
brokerage and research services. To the extent the Trust's portfolio
transactions are used to obtain such services, the brokerage commissions paid by
the Trust will exceed those that might otherwise be paid, by an amount which
cannot now be determined. Such services would be useful and of value to an
adviser in serving both the Trust and other clients and, conversely, such
services obtained by the placement of brokerage business of other clients would
be useful to an adviser in carrying out its obligations to the Trust.
Brokerage commissions paid by the Funds for the fiscal years ended December 31,
1996 and December 31, 1995 and for the period ended December 31, 1994,
respectively, were as follows: Balanced Fund $115,756, $87,156 and
B-19
<PAGE>
$20,315; Value Equity Fund $933,716, $643,882 and $128,536; Small Cap Value
Equity Fund $430,964, $291,912 and $50,261; and International Equity Fund
$1,103,103, $1,218,802 and $55,656.
The Prime Fund, Short-Term Bond Fund and the Core Bond Fund did not incur
brokerage commissions during these periods.
SHAREHOLDER INVESTMENT ACCOUNT
------------------------------
A Shareholder Investment Account is established for each Investor in the
Funds./1/ Each account contains a record of the shares of each Fund maintained
by the Transfer Agent. No share certificate will be issued. Whenever a
transaction takes place in the Shareholder Investment Account, the Investor will
be mailed a statement showing the transaction and the status of the account.
REDEMPTION OF SHARES
--------------------
With respect to each Fund, the Trustees may suspend the right of redemption,
postpone the date of payment or suspend the determination of net asset value (a)
for any period during which the New York Stock Exchange ("NYSE") is closed
(other than for customary weekend and holiday closing), (b) for any period
during which trading in the markets the Fund normally uses is restricted, (c)
when an emergency exists as determined by the SEC so that disposal of the Fund's
investments or a determination of its net asset value is not reasonably
practicable, or (d) for such other periods as the SEC by order may permit for
the protection of the Trust's shareholders. While the Trust's Declaration of
Trust would permit it to redeem shares in cash or other assets of the Fund or
both, it has filed an irrevocable election with the SEC to pay in cash all
requests for redemption received from any shareholder if the aggregate amount of
such requests in any 90-day period does not exceed the lesser of $250,000 or 1%
of a Fund's net assets.
VALUATION OF PORTFOLIO SECURITIES
---------------------------------
The net asset value per share of each Fund is determined by the Transfer Agent
as of the close of the NYSE, currently 4:00 p.m., Eastern Time, on each day the
NYSE is open for trading and the Custodian is open for business.
Equity securities are valued on the basis of valuations furnished by a pricing
service, authorized by the Board of Trustees, which provides the last reported
sale price for securities listed on a national securities exchange or on the
NASDAQ national market system, or in the case of over-the-counter securities not
so listed, the last reported bid price. Debt securities (other than short-term
obligations with a remaining maturity of sixty days or less) are valued on the
basis of valuations furnished by a pricing service, authorized by the Board of
Trustees, which determines valuations taking into account appropriate factors
such as institutional-size trading in similar groups of securities, yield,
quality, coupon rate, maturity, type of issue, trading characteristics and other
market data. Money market obligations with a remaining maturity of sixty days
or less are valued at amortized cost unless such value does not represent fair
value. All other securities and other assets, including debt securities the
prices for which supplied by a pricing agent are deemed by MassMutual not to be
representative of market values, but excluding money market instruments with a
remaining maturity of sixty days or less and including restricted securities and
securities for which no market quotation is available, are valued at fair value
in accordance with procedures approved by and determined in good faith by the
Trustees, although the actual calculation may be done by others.
Portfolio securities traded on more than one U.S. national securities exchange
or foreign securities exchange are valued at the last price on the business day
as of which such value is being determined at the close of the exchange
representing the principal market for such securities. All assets and
liabilities expressed in foreign currencies will be converted into U.S. dollars
at the mean between the buying and selling rates of such currencies against U.S.
dollars last quoted by any major bank. If such quotations are not available,
the rate of exchange will be determined in accordance with policies established
by the Trustees.
The proceeds received by each Fund for each issue or sale of its shares, and all
net investment income, realized and unrealized gain will be specifically
allocated to such Fund and constitute the underlying assets of that Fund. The
___________________
/1/ "Investor" includes a plan sponsor, plan fiduciary, trust, institutional
investor, and/or insurance company separate investment account that purchases
shares of the Trust. An Investor that is a separate investment account of
MassMutual is referred to as a "SIA Investor." Investors that are purchasing
shares of a fund on behalf of a Plan are sometimes referred to as "Plan
Investors." The term Investor does not include a Plan Participant.
B-20
<PAGE>
underlying assets of each Fund will be segregated on the books of account, and
will be charged with the liabilities in respect of such Fund and with a share of
the general liabilities of the Trust. Expenses with respect to any two or more
Funds are to be allocated in proportion to the net asset values of the
respective Funds except where allocations of direct expenses can otherwise be
fairly made. Each class of shares of a Fund will be charged with liabilities
directly attributable to such class, and other Fund expenses are to be allocated
in proportion to the net asset values of the respective classes.
DESCRIPTION OF SHARES
---------------------
Under Massachusetts law, shareholders could, under certain circumstances, be
held personally liable for the obligations of the Trust. However, the Trust's
Declaration of Trust disclaims liability of the shareholders, Trustees, or
officers of the Trust for acts or obligations of the Trust, which are binding
only on the assets and property of the Trust, and requires that notice of such
disclaimer be given in each agreement, obligation, or instrument entered into or
executed by the Trust or the Trustees. The Trust's Declaration of Trust
provides for indemnification out of the Trust property for all loss and expense
of any shareholder held personally liable for the obligations of the Trust.
Thus, the risk of a shareholder incurring financial loss on account of
shareholder liability is considered remote since it is limited to circumstances
in which the disclaimer is inoperative and the Trust itself would be unable to
meet its obligations.
INVESTMENT PERFORMANCE
----------------------
The yield of the Prime Fund, the Short-Term Bond Fund and the Core Bond Fund, as
well as total return figures for all of the Funds, may be provided in reports,
sales literature and advertisements. Any performance information with respect
to Class 4 shares will be provided net of SIA and Fund expenses.
Yield for each class of shares of such Funds will be based upon a stated 30-day
period and will be computed by dividing the net investment income per share
earned during the period by the maximum offering price per share on the last day
of the period, according to the following formula:
YIELD = 2[(a - b + 1)/6/ - 1]
-----
cd
Where: a = dividends and interest earned during the period.
b = expenses accrued for the period (net of reimbursements, if
any).
c = the average daily number of shares outstanding during the
period that were entitled to receive dividends.
d = the maximum offering price (which is the net asset value) per
share on the last day of the period.
Each of the Funds may also advertise its total return for each class of shares.
Total return quotations will be based upon a stated period and will be computed
by determining the average annual compounded rate of return over the stated
period that would equate an initial amount invested to the ending redeemable
value of the investment (assuming reinvestment of all distributions), according
to the following formula:
P(1 + T)/n/ = ERV
Where: P = a hypothetical initial payment of $1000.
T = average annual total return.
n = number of years.
ERV = ending redeemable value at the end of the stated period of a
hypothetical $1000 payment made at the beginning of the
stated period.
The Funds may show total return calculated without giving effect to the expense
reduction in management fee by MassMutual under "Expense Information" in the
Prospectus ("Standardized Total Return Without Reduction in Management Fee").
Each investment performance figure will be carried to the nearest hundredth of
one percent. The expense reduction in management fees has been eliminated
effective May 1, 1997. See "Expense Information" in the Prospectus.
B-21
<PAGE>
A Fund's yield or total return is not fixed or guaranteed and the Fund's
principal is not insured. Investment performance quotations should not be
considered to be representations of the performance for any period in the
future. The yield is a function of available interest rates on securities in
which the Fund invests, which can be expected to fluctuate, as well as of the
quality, maturity and types of portfolio instruments held by the Fund and of the
Fund's operating expenses. The yield may be affected if, through net sales of
its shares, there is a net investment of new money in the Fund which the Fund
invests at returns different from those being earned on current portfolio
instruments. Yield may also vary if the Fund experiences net redemptions, which
may require the disposition of some of the Fund's current portfolio instruments.
Total return is a function of the value of the Fund's portfolio securities over
time, which may be expected to fluctuate, as well as of income earned by the
Fund on such securities and of the Fund's operating expenses.
Set forth below is the average annual total return information for Class 3
shares of the Prime Fund, Short-Term Bond Fund, Core Bond Fund, Balanced Fund,
Value Equity Fund, Small Cap Value Equity Fund and International Equity Fund for
the one-year and since inception* periods ended December 31, 1996. Also set
forth below is the yield for Class 3 shares of the Prime Fund, Short-Term Bond
Fund and Core Bond Fund for the 30-day period ended December 31, 1996.
AVERAGE ANNUAL TOTAL RETURN
FOR PERIODS ENDED DECEMBER 31, 1996
CLASS 3 SHARES
<TABLE>
<CAPTION>
1-YEAR PERIOD SINCE INCEPTION*
FUND (AUDITED) (AUDITED)
<S> <C> <C>
Prime Fund 5.00% 5.23%
Short-Term Bond Fund 5.28% 7.43%
Core Bond Fund 2.52% 9.23%
Balanced Fund 12.61% 14.88%
Value Equity Fund 19.92% 22.26%
Small Cap Value Equity Fund 22.64% 17.15%
International Equity Fund 18.11% 6.30%
</TABLE>
*Class 3 shares of all Funds listed above began operations on October 3, 1994.
Total return for Class 1, 2, and 4 shares may differ due to different expense
structures.
YIELD FOR THE 30-DAY PERIOD ENDED DECEMBER 31, 1996
CLASS 3 SHARES* (UNAUDITED)
<TABLE>
<CAPTION>
FUND YIELD
<S> <C>
Prime Fund 5.24%
Short-Term Bond Fund 5.69%
Core Bond Fund 6.20%
</TABLE>
*Yield for Class 1, 2 and 4 shares may differ due to different expense
structures.
TAXATION
--------
Each Fund intends to qualify each year and elect to be taxed as a regulated
investment company under Subchapter M of the Internal Revenue Code of 1986, as
amended (the "Code"). In order to qualify as a "regulated investment company,"
a Fund must, among other things: (a) derive at least 90% of its gross income
from dividends, interest, payments with respect to securities loans, gains from
the sale or other disposition of stock, securities, or foreign currencies, and
other income (including gains from forward contracts) derived with respect to
its business of investing in such stock, securities, or currencies; (b) derive
less than 30% of its gross income from the sale or other disposition of certain
assets (including stock and securities) held less than three months; (c)
diversify its holdings so that, at the close of each quarter of its taxable
year, (i) at least 50% of the value of its total assets consists of cash,
B-22
<PAGE>
cash items, U.S. Government securities, and other securities limited generally
with respect to any one issuer to not more than 5% of the total assets of the
Fund and not more than 10% of the outstanding voting securities of such issuer,
and (ii) not more than 25% of the value of its assets is invested in the
securities of any issuer (other than U.S. Government securities). If a Fund
fails to qualify as a regulated investment company, it will be treated as an
ordinary corporation for federal income tax purposes.
As a regulated investment company electing to have its tax liability determined
under Subchapter M, in general a Fund will not be subject to federal income tax
on its ordinary income or capital gains that are distributed. As a
Massachusetts business trust, a Fund under present law will not be subject to
any excise or income taxes imposed by Massachusetts.
An excise tax at the rate of 4% will be imposed on the excess, if any, of each
Fund's "required distribution" over its actual distributions in any calendar
year. Generally, the "required distribution" is 98% of the Fund's ordinary
income for the calendar year plus 98% of its capital gain net income recognized
during the one-year period ending on October 31 (or December 31, if the Fund so
elects) plus undistributed amounts from prior years. Each Fund intends to make
distributions sufficient to avoid imposition of the excise tax. Distributions
declared by a Fund during October, November or December to shareholders of
record on a date in any such month and paid by the Fund during the following
January will be treated for federal tax purposes as paid by the Fund and
received by shareholders on December 31 of the year in which declared.
Except in the case of certain shareholders eligible for preferential tax
treatment, e.g., qualified retirement or pension trusts, shareholders of each
Fund will be subject to federal income taxes on distributions made by the Fund
whether received in cash or additional shares of the Fund. Distributions by
each Fund of net income and short-term capital gains, if any, will be taxable to
shareholders as ordinary income. Designated distributions of long-term capital
gains, if any, will be taxable to shareholders as long-term capital gains,
without regard to how long a shareholder has held shares of the Fund. A loss on
the sale of shares held for six months or less will be treated as a long-term
capital loss to the extent of any long-term capital gain dividend paid to the
shareholder with respect to such shares.
Dividends and distributions on Fund shares received shortly after their
purchase, although in effect a return of capital, are subject to federal income
taxes. Investment income and gains received by a Fund from sources outside the
United States might be subject to foreign taxes which are withheld at the
source. The effective rate of these foreign taxes cannot be determined in
advance because it depends on the specific countries in which its assets will be
invested, the amount of the assets invested in each such country and the
possible applicability of treaty relief.
The International Equity Fund may be eligible to make an election under Section
853 of the Code so that any of its shareholders subject to federal income taxes
will be able to claim a credit or deduction on their income tax returns for, and
will be required to treat as part of the amounts distributed to them, their pro
rata portion of qualified taxes paid by the Fund to foreign countries. The
ability of shareholders of the Fund to claim a foreign tax credit is subject to
certain limitations imposed by Section 904 of the Code, which in general limits
the amount of foreign tax that may be used to reduce a shareholder's U.S. tax
liability to that amount of U.S. tax which would be imposed on the amount and
type of income in respect of which the foreign tax was paid. A shareholder who
for U.S. income tax purposes claims a foreign tax credit in respect of Fund
distributions may not claim a deduction for foreign taxes paid by the Fund,
regardless of whether the shareholder itemizes deductions. Also, under Section
63 of the Code, no deduction for foreign taxes may be claimed by shareholders
who do not itemize deductions on their federal income tax returns. It should
also be noted that a tax-exempt shareholder, like other shareholders, will be
required to treat as part of the amounts distributed to it a pro rata portion of
the income taxes paid by the Fund to foreign countries. However, that income
will generally be exempt from U.S. taxation by virtue of such shareholder's tax-
exempt status and such a shareholder will not be entitled to either a tax credit
or a deduction with respect to such income. The International Equity Fund will
notify shareholders each year of the amount of dividends and distributions and
the shareholder's pro rata share of qualified taxes paid by the Fund to foreign
countries. Each Fund may limit its investments in certain "passive foreign
investment companies" in order to avoid certain taxes that arise as a result of
such investments.
Redemptions and exchanges of each Fund's shares are taxable events and,
accordingly, shareholders subject to federal income taxes may realize gains and
losses on these transactions. If shares have been held for more than one year,
gain or loss realized will be long-term capital gain or loss, provided the
shareholder holds the shares as a
B-23
<PAGE>
capital asset. Furthermore, no loss will be allowed on the sale of Fund shares
to the extent the shareholder acquired other shares of the same Fund within 30
days prior to the sale of the loss shares or 30 days after such sale. The state
and local tax effects of distributions received from a Fund, and any special tax
considerations associated with foreign investments of the Fund, should be
examined by investors with regard to their own tax situation.
A Fund's ability to use forward contracts and other hedging techniques, and to
engage in certain other transactions, may be limited by tax considerations. In
order to ensure that it derives less than 30% of its gross income from
securities and certain other investment assets held less than three months, a
Fund will be restricted in selling securities held or considered to have been
held less than three months, and in engaging in hedging or other activities
which may cause the Fund's holding period in certain of its assets to be less
than three months. These rules could also affect the amount, timing and
character of distributions.
A Fund's transactions in foreign currency-denominated debt instruments and its
hedging activities will likely produce a difference between its book income and
its taxable income. This difference may cause a portion of the Fund's
distributions of book income to constitute returns of capital for tax purposes
or require the Fund to make distributions exceeding book income in order to
permit the Fund to continue to qualify, and be taxed under Subchapter M of the
Code, as a regulated investment company.
Under federal income tax law, a portion of the difference between the purchase
price of zero-coupon securities in which a Fund has invested and their face
value ("original issue discount") is considered to be income to the Fund each
year even though the Fund will not receive cash interest payments from these
securities. This original issue discount (imputed income) will make up a part
of the net investment income of the Fund which must be distributed to
shareholders in order to maintain the qualification of the Fund as a regulated
investment company and to avoid federal income tax at the level of the Fund.
Moreover, under regulations to be issued, a Fund may be limited in its ability
to borrow money, including through the use of reverse repurchase agreements.
The foregoing is a general and abbreviated summary of the applicable provisions
of the Code and regulations currently in effect. For the complete provisions,
reference should be made to the pertinent Code sections and regulations. The
Code and regulations are subject to change by legislative or administrative
action. This discussion of the federal income tax treatment of the Fund and its
shareholders does not describe in any respect the tax treatment of any
particular arrangement, e.g., tax-exempt trusts or insurance products, pursuant
to which or by which investments in the Fund may be made.
EXPERTS
-------
The financial statements of the MassMutual Prime Fund, MassMutual Short-Term
Bond Fund, MassMutual Core Bond Fund, MassMutual Balanced Fund, MassMutual Value
Equity Fund, MassMutual Small Cap Value Equity Fund, and MassMutual
International Equity Fund, included in this Statement of Additional Information
have been included herein in reliance on the report of Coopers & Lybrand L.L.P.,
independent accountants, given on the authority of that firm as experts in
accounting and auditing.
THE NAME MASSMUTUAL INSTITUTIONAL FUNDS IS THE DESIGNATION OF THE TRUSTEES UNDER
A DECLARATION OF TRUST DATED MAY 28, 1993, AS AMENDED FROM TIME TO TIME. THE
OBLIGATIONS OF SUCH TRUST ARE NOT PERSONALLY BINDING UPON, NOR SHALL RESORT BE
HAD TO THE PROPERTY OF ANY OF THE TRUSTEES, SHAREHOLDERS, OFFICERS, EMPLOYEES OR
AGENTS OF SUCH TRUST, BUT THE TRUST'S PROPERTY ONLY SHALL BE BOUND.
B-24
<PAGE>
APPENDIX - DESCRIPTION OF SECURITIES RATINGS
Although the ratings of fixed-income securities by Standard & Poor's Ratings
Group ("S&P") and Moody's Investors Service, Inc. ("Moody's") are a
generally accepted measurement of credit risk, they are subject to certain
limitations. For example, ratings are based primarily upon historical events
and do not necessarily reflect the future. Furthermore, there is a period of
time between the issuance of a rating and the update of the rating, during which
time a published rating may be inaccurate.
The descriptions of the S&P and Moody's commercial paper, bond and municipal
securities ratings are set forth below.
COMMERCIAL PAPER RATINGS:
S&P commercial paper ratings are graded into four categories, ranging from A for
the highest quality obligations to D for the lowest. The A, A-1 and A-w
categories are described as follows:
A Issues assigned this highest rating are regarded as having the greatest
capacity for timely payment. Issues in this category are further refined with
the designations 1, 2, and 3 to indicate the relative degree of safety.
A-1 This designation indicates that the degree of safety regarding timely
payment is either overwhelming or very strong. Those issues determined to
possess overwhelming safety characteristics will be noted with a plus (+) sign
designation.
A-2 Capacity for timely payment on issues with this designation is strong.
However, the relative degree of safety is not as high as for issues designated
A-1.
Moody's employs three designations, all judged to be investment grade, to
indicate the relative repayment ability of rated issuers. The two highest
designations are as follows:
Issuers (or supporting institutions) rated Prime-1 (or P-1) have a superior
ability for repayment of senior short-term debt obligations. Prime-1 (or P-1)
repayment ability will normally be evidenced by many of the following
characteristics:
. Leading market positions in well-established industries.
. High rates of return on funds employed.
. Conservative capitalization structure with moderate reliance on debt and
ample asset protection.
. Broad margins in earnings coverage of fixed financial charges and high
internal cash generation.
. Well-established access to a range of financial markets and assured sources
of alternate liquidity.
Issuers (or supporting institutions) rated Prime-2 (or P-2) have a strong
ability for repayment of senior short-term debt obligations. This will
normally be evidenced by many of the characteristics cited above but to a
lesser degree. Earnings trends and coverage ratios, while sound, may be more
subject to variation. Capitalization characteristics, while still appropriate,
may be more affected by external conditions. Ample alternate liquidity is
maintained.
BOND RATINGS:
S&P describes its four highest ratings for corporate debt as follows:
AAA Debt rated AAA has the highest rating assigned by S&P. Capacity to pay
interest and repay principal is extremely strong.
AA Debt rated AA has a very strong capacity to pay interest and repay
principal and differs from the higher rated issues only in a small degree.
A Debt rated A has a strong capacity to pay interest and repay principal
although it is somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions than debt in higher rated categories.
BBB Debt rated BBB is regarded as having an adequate capacity to pay interest
and repay principal. Whereas such debt normally exhibits adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay interest and repay principal for
debt in this category than in higher rated categories.
B-25
<PAGE>
The ratings from AA to CCC may be modified by the addition of a plus or minus
sign to show relative standing within the major rating categories.
Moody's describes its four highest corporate bond ratings as follows:
AAA Bonds which are rated Aaa are judged to be of the best quality. They carry
the smallest degree of investment risk and are generally referred to as "gilt-
edged." Interest payments are protected by a large or by an exceptionally
stable margin and principal is secure. While the various protective elements
are likely to change, such changes as can be visualized are most unlikely to
impair the fundamentally strong position of such issues.
AA Bonds which are rated Aa are judged to be of high quality by all standards.
Together with the Aaa group they compose what are generally known as high grade
bonds. They are rated lower than the best bonds because margins of protection
may not be as large as in Aaa securities or fluctuation of protective elements
may be of greater amplitude or there may be other elements present which make
the long-term risks appear somewhat larger than in Aaa securities.
A Bonds which are rated A possess many favorable investment attributes and may
be considered as upper medium grade obligations. Factors giving security to
principal and interest are considered adequate but elements may be present
which suggest a susceptibility to impairment in the future.
BAA Bonds which are rated Baa are considered as medium grade obligations,
i.e., they are neither highly protected nor poorly secured. Interest payments
and principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.
Moody's applies numerical modifiers 1, 2 and 3 in each generic rating
classification from Aa through B in its corporate bond rating system. The
modifier 1 indicates that the security ranks in the higher end of its generic
rating category; the modifier 2 indicates a mid-range ranking; and the modifier
3 indicates that the issue ranks in the lower end of its generic rating
category.
B-26
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Trustees and Shareholders of the
MassMutual Institutional Funds:
We have audited the accompanying statements of assets and liabilities of the
MassMutual Institutional Funds, comprising, respectively, the Prime, Short-Term
Bond, Core Bond, Balanced, Value Equity, Small Cap Value Equity and
International Equity Funds, (the ``Funds"), including the portfolios of
investments, as of December 31, 1996, and the related statement of operations
for the year then ended, the statement of changes in net assets for each of the
two years in the period then ended and the financial highlights for each of the
two years in the period then ended and for the period from October 3, 1994
(commencement of operations) through December 31, 1994. These financial
statements and financial highlights are the responsibility of the Funds'
management. Our responsibility is to express an opinion on these financial
statements and financial highlights 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 as of
December 31, 1996, 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, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the respective Funds constituting the MassMutual Institutional Funds as of
December 31, 1996 and the results of their operations for the year then ended,
the changes in their net assets for each of the two years in the period then
ended, and their financial highlights for each of the two years in the period
then ended and for the period from October 3, 1994 (commencement of operations)
through December 31, 1994, in conformity with generally accepted accounting
principles.
/s/ Coopers & Lybrand L.L.P.
Springfield, Massachusetts
February 14, 1997
B-27
<PAGE>
MASSMUTUAL PRIME FUND - PORTFOLIO OF INVESTMENTS
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1996
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MARKET VALUE
--------- ------------
<S> <C> <C>
SHORT-TERM INVESTMENTS - 100.4%
COMMERCIAL PAPER - 99.8%
American Brands, Inc.
5.320% 2/10/1997 $ 4,925,000 $ 4,895,888
Aristar, Inc.
5.380% 1/28/1997 4,445,000 4,427,064
Baxter International Inc.
5.500% 3/21/1997 4,425,000 4,370,622
Burlington Northern Santa Fe Corp.
5.850% 1/30/1997 8,800,000 8,758,530
Carter Holt Harvey Limited
5.560% 3/11/1997 5,270,000 5,213,435
Carter Holt Harvey Limited
5.700% 1/10/1997 3,855,000 3,849,507
Central and South West Corporation
5.520% 1/14/1997 9,435,000 9,416,193
Comdisco, Inc.
5.520% 2/13/1997 4,015,000 3,988,528
Comdisco, Inc.
5.580% 3/14/1997 5,000,000 4,944,000
ConAgra, Inc.
5.500% 2/18/1997 7,750,000 7,693,167
Cox Enterprises, Inc.
5.480% 2/24/1997 4,185,000 4,150,599
Cox Enterprises, Inc.
5.530% 3/07/1997 1,250,000 1,237,361
Crown Cork & Seal Company Inc.
5.650% 3/06/1997 2,865,000 2,836,477
CSX Corporation
5.470% 1/31/1997 4,980,000 4,957,299
CSX Corporation
5.470% 2/14/1997 4,450,000 4,420,249
Dana Credit Corporation
5.470% 1/21/1997 4,165,000 4,152,343
<CAPTION>
PRINCIPAL
AMOUNT MARKET VALUE
--------- ------------
<S> <C> <C>
Dana Credit Corporation
5.550% 1/10/1997 $ 890,000 $ 888,765
Dean Witter, Discover & Company
5.380% 1/31/1997 4,955,000 4,932,785
Dominion Resources, Inc.
5.500% 1/29/1997 7,000,000 6,970,055
Dominion Resources, Inc.
5.500% 2/20/1997 2,300,000 2,282,431
Federal Signal Corp.
5.450% 1/07/1997 4,670,000 4,665,758
Frontier Corporation
5.600% 2/14/1997 5,385,000 5,348,143
General Motors Acceptance Corporation
5.822% 2/04/1997 7,690,000 7,881,516
Illinois Power Company
5.590% 2/12/1997 1,140,000 1,132,565
Illinois Power Company
5.680% 2/19/1997 7,800,000 7,739,697
ITT Corporation
5.720% 2/06/1997 4,870,000 4,842,144
ITT Corporation
5.730% 1/13/1997 4,900,000 4,890,641
Kerr-McGee Credit Corporation
5.700% 2/11/1997 6,475,000 6,432,966
Lockheed Martin Corporation
5.480% 3/07/1997 4,700,000 4,652,478
Lockheed Martin Corporation
5.720% 1/24/1997 2,290,000 2,281,632
Lockheed Martin Corporation
5.750% 2/07/1997 2,495,000 2,480,256
<CAPTION>
PRINCIPAL
AMOUNT MARKET VALUE
--------- ------------
<S> <C> <C>
NYNEX Corporation
5.420% 3/26/1997 $ 5,690,000 $ 5,615,651
ORIX Credit Alliance, Inc.
5.530% 2/28/1997 4,700,000 4,658,125
ORIX Credit Alliance, Inc.
5.550% 1/16/1997 4,780,000 4,768,947
Praxair, Inc.
5.450% 2/25/1997 3,835,000 3,803,069
Praxair, Inc.
5.450% 2/27/1997 2,660,000 2,637,046
Praxair, Inc.
5.450% 3/27/1997 2,985,000 2,945,532
Public Service Company of Colorado
5.600% 2/07/1997 4,870,000 4,841,971
Public Service Electric and Gas Company
5.520% 1/24/1997 410,000 408,554
Ralston Purina Company
5.500% 1/06/1997 1,475,000 1,473,873
Rite Aid Corporation
5.600% 3/04/1997 5,510,000 5,456,859
Service Corporation International
5.480% 2/03/1997 7,170,000 7,133,983
Texas Utilities Electric Co.
5.590% 2/12/1997 8,800,000 8,742,609
Textron Financial Corporation
5.550% 3/03/1997 1,325,000 1,312,427
Textron Financial Corporation
5.670% 3/24/1997 8,700,000 8,589,027
Timken Company
5.510% 3/04/1997 5,000,000 4,951,778
Tyson Foods, Inc.
5.720% 1/22/1997 2,300,000 2,292,326
Union Camp Corp.
5.475% 2/26/1997 3,390,000 3,361,128
</TABLE>
(Continued)
The accompanying notes are an integral part of the financial statements.
B-28
<PAGE>
MASSMUTUAL PRIME FUND - PORTFOLIO OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MARKET VALUE
--------- ------------
<S> <C> <C>
Union Pacific Corporation
5.620% 3/18/1997 $ 7,635,000 $ 7,544,737
UOP
5.620% 2/26/1997 1,645,000 1,630,619
UOP
5.650% 3/05/1997 7,425,000 7,352,235
UOP
6.000% 2/10/1997 3,150,000 3,129,000
Western Resources Inc.
5.470% 2/27/1997 490,000 485,756
Western Resources Inc.
5.600% 1/15/1997 8,625,000 8,606,217
Whirlpool Financial Corporation
5.600% 1/17/1997 10,070,000 10,044,936
-------------
258,519,499
=============
DISCOUNT NOTE - 0.6%
Federal Farm Credit Bank
5.230% 8/19/1997 1,530,000 1,475,260
-------------
TOTAL SHORT-TERM INVESTMENTS 259,994,759
-------------
(COST $260,002,847)+
TOTAL INVESTMENTS - 100.4% 259,994,759
OTHER ASSETS/(LIABILITIES) - (0.4%) (933,278)
-------------
NET ASSETS - 100.0% $259,061,481
=============
</TABLE>
NOTES TO PORTFOLIO OF INVESTMENTS
+Aggregate cost for Federal tax purposes (Note 7)
The remainder of this page intentionally left blank.
The accompanying notes are an integral part of the financial statements.
B-29
<PAGE>
MASSMUTUAL PRIME FUND - FINANCIAL STATEMENTS
Statement of Assets and Liabilities
<TABLE>
<CAPTION>
DECEMBER 31, 1996
------------------
<S> <C>
Assets:
Short-term investments, at value (cost $260,002,847) (Note 2)..... $ 259,994,759
Cash.............................................................. 1,293
Receivables from:
Fund shares sold................................................ 967,627
Investment manager (Note 3)..................................... 9,209
--------------
Total assets.................................................. 260,972,888
--------------
Liabilities:
Payables for:
Fund shares redeemed............................................ 1,784,741
Directors' fees and expenses (Note 3)........................... 5,177
Affiliates (Note 3):
Investment management fees.................................... 95,194
Administration fees........................................... 17,288
Service and distribution fees................................. 220
Accrued expenses and other liabilities............................ 8,787
--------------
Total liabilities............................................. 1,911,407
--------------
NET ASSETS........................................................ $ 259,061,481
==============
Net assets consist of:
Paid-in capital................................................... $ 258,996,044
Undistributed net investment income............................... 80,676
Accumulated net realized loss on investments...................... (7,151)
Net unrealized depreciation on investments........................ (8,088)
--------------
$ 259,061,481
==============
Net assets:
Class 1........................................................... $ 109,724
==============
Class 2........................................................... $ 111,039
==============
Class 3........................................................... $ 111,694
==============
Class 4........................................................... $ 258,729,024
==============
Shares outstanding:
Class 1........................................................... 726.501
==============
Class 2........................................................... 734.255
==============
Class 3........................................................... 738.294
==============
Class 4........................................................... 1,713,473.880
==============
Net asset value, offering price and
redemption price per share:
Class 1........................................................... $ 151.03
==============
Class 2........................................................... $ 151.23
==============
Class 3........................................................... $ 151.29
==============
Class 4........................................................... $ 151.00
==============
</TABLE>
The accompanying notes are an integral part of the financial statements.
B-30
<PAGE>
MASSMUTUAL PRIME FUND - FINANCIAL STATEMENTS (CONTINUED)
Statement Of Operations
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31, 1996
-----------------
<S> <C>
Investment income:
Interest............................................. $ 14,350,850
-----------------
Expenses (Note 1):
Investment management fees (Note 3)................. 1,150,292
Custody fees........................................ 26,962
Audit and legal fees................................ 8,160
Directors' fees (Note 3)............................ 15,247
Fees waived by the investment manager (Note 3)...... (89,223)
-----------------
1,111,438
Administration fees (Note 3):
Class 1............................................ 605
Class 2............................................ 557
Class 3............................................ 344
Class 4............................................ 207,299
Distribution and service fees (Note 3):
Class 1............................................ 699
Class 2............................................ 163
-----------------
Net expenses...................................... 1,321,105
-----------------
NET INVESTMENT INCOME............................. 13,029,745
-----------------
Realized and unrealized gain (loss):
Net realized loss on investment transactions........ (5,068)
Net change in unrealized appreciation
(depreciation) on investments...................... 11,447
-----------------
NET REALIZED AND UNREALIZED GAIN................. 6,379
NET INCREASE IN NET ASSETS RESULTING
-----------------
FROM OPERATIONS................................... $ 13,036,124
=================
</TABLE>
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
DECEMBER 31, 1996 DECEMBER 31, 1995
----------------- -----------------
<S> <C> <C>
Increase (Decrease) in Net Assets:
Operations:
Net investment income................ $ 13,029,745 $ 12,817,140
Net realized loss on investment...... (5,068) (1,781)
transactions
Net change in unrealized appreciation
(depreciation) on investments....... 11,447 (15,459)
NET INCREASE IN NET ASSETS
----------------- -----------------
RESULTING FROM OPERATIONS......... 13,036,124 12,799,900
----------------- -----------------
Distributions to shareholders
(Note 2):
From net investment income:
Class 1............................... (4,288) (4,178)
Class 2............................... (4,922) (4,746)
Class 3............................... (5,335) (5,095)
Class 4............................... (13,067,477) (12,693,331)
TOTAL DISTRIBUTIONS FROM NET
------------------ -----------------
INVESTMENT INCOME................... (13,082,022) (12,707,350)
------------------ -----------------
Net fund share transactions (Note 5):
Class 1............................... 4,288 4,178
Class 2............................... 4,922 4,746
Class 3............................... 5,335 5,095
Class 4............................... 4,838,727 83,297,102
INCREASE IN NET ASSETS FROM NET FUND
----------------- -----------------
SHARE TRANSACTIONS.................. 4,853,272 83,311,121
----------------- -----------------
TOTAL INCREASE IN NET ASSETS.......... 4,807,374 83,403,671
Net assets:
Beginning of period................... 254,254,107 170,850,436
----------------- -----------------
End of period (including
undistributed net investment income
of $80,676 and $132,953,
----------------- -----------------
respectively)....................... $ 259,061,481 $ 254,254,107
================= =================
</TABLE>
The accompanying notes are an integral part of the financial statements.
B-31
<PAGE>
MASSMUTUAL PRIME FUND - FINANCIAL STATEMENTS (CONTINUED)
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
CLASS 1
YEAR ENDED YEAR ENDED PERIOD ENDED
12/31/96 12/31/95 12/31/94(up)**
---------- ---------- -------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 151.05 $ 150.39 $ 150.00
---------- ---------- -------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income 6.09*** 6.90 *** 1.02
Net realized and unrealized gain (loss) on investments 0.03 (0.01) 0.42
---------- ---------- -------------
Total income (loss) from investment operations 6.12 6.89 1.44
---------- ---------- -------------
LESS DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income (6.14) (6.23) (1.05)
---------- ---------- -----------
NET ASSET VALUE, END OF PERIOD $ 151.03 $ 151.05 $ 150.39
========== ========== ===========
TOTAL RETURN 4.05% 4.58% 0.96%
RATIOS / SUPPLEMENTAL DATA:
Net assets, end of period (000's) $ 110 $ 105 $ 101
Net expenses to average daily net assets# 1.65% 1.65% 1.65%*
Net investment income to average daily net assets 3.97% 4.48% 4.07%*
#Computed after giving effect to the reduction in
management fee by MassMutual. Without this reduction of
fees by the investment manager, the ratio of expenses
to average daily net assets would have been: 1.68% 1.68% 1.69%*
</TABLE>
<TABLE>
<CAPTION>
CLASS 2
----------
YEAR ENDED YEAR ENDED PERIOD ENDED
12/31/96 12/31/95 12/31/94(up)**
---------- --------- -----------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 151.24 $ 150.56 $ 150.00
---------- --------- -----------
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income 6.96*** 7.78 *** 1.16
Net realized and unrealized gain (loss) on investments 0.04 (0.02) 0.57
---------- --------- ----------
Total income (loss) from investment operations 7.00 7.76 1.73
---------- --------- ----------
LESS DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income (7.01) (7.08) (1.17)
---------- --------- ----------
NET ASSET VALUE, END OF PERIOD $ 151.23 $ 151.24 $ 150.56
========== ========= ==========
TOTAL RETURN 4.63% 5.16% 1.15%
RATIOS / SUPPLEMENTAL DATA:
Net assets, end of period (000's) $ 111 $ 106 $ 101
Net expenses to average daily net assets# 1.10% 1.10% 1.10%*
Net investment income to average daily net assets 4.52% 5.03% 4.62%*
#Computed after giving effect to the reduction in
management fee by MassMutual. Without this reduction of
fees by the investment manager, the ratio of expenses
to average daily net assets would have been: 1.13% 1.13% 1.14%*
</TABLE>
(up)All per share amounts for the period have been restated to reflect a 1-for-
15 reverse stock split effective December 16, 1994.
*Annualized
**For the period from October 3, 1994 (commencement of operations) through
December 31, 1994.
***Per share amount calculated on the average shares method, which more
appropriately presents the per share data for the period since the use of the
undistributed income method does not accord with the results of operations.
The accompanying notes are an integral part of the financial statements.
B-32
<PAGE>
MASSMUTUAL PRIME FUND - FINANCIAL STATEMENTS (CONTINUED)
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
CLASS 3
----------
YEAR ENDED YEAR ENDED PERIOD ENDED
12/31/96 12/31/95 12/31/94(up)**
---------- ---------- -----------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 151.32 $ 150.61 $ 150.00
---------- ---------- -----------
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income 7.51*** 8.33 *** 1.21
Net realized and unrealized gain (loss) on investments 0.05 (0.01) 0.61
---------- ---------- -----------
Total income (loss) from investment operations 7.56 8.32 1.82
---------- ---------- -----------
LESS DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income (7.59) (7.61) (1.21)
---------- ---------- -----------
NET ASSET VALUE, END OF PERIOD $ 151.29 $ 151.32 $ 150.61
---------- ---------- -----------
TOTAL RETURN 5.00% 5.53% 1.21%
RATIOS / SUPPLEMENTAL DATA:
Net assets, end of period (000's) $ 112 $ 106 $ 101
Net expenses to average daily net assets# 0.75% 0.75% 0.75%*
Net investment income to average daily net assets 4.86% 5.38% 4.99%*
#Computed after giving effect to the reduction in
management fee by MassMutual. Without this reduction of
fees by the investment manager, the ratio of expenses
to average daily net assets would have been: 0.78% 0.78% 0.79%*
</TABLE>
<TABLE>
<CAPTION>
CLASS 4
----------
YEAR ENDED YEAR ENDED PERIOD ENDED
12/31/96 12/31/95 12/31/94(up)**
---------- ---------- ------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 151.06 $ 150.36 $ 150.00
---------- ---------- ------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income 7.85*** 8.70 *** 1.55
Net realized and unrealized gain (loss) on investments 0.06 (0.02) 0.34
---------- ---------- ------------
Total income (loss) from investment operations 7.91 8.68 1.89
---------- ---------- ------------
LESS DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income (7.97) (7.98) (1.53)
---------- ---------- ------------
NET ASSET VALUE, END OF PERIOD $ 151.00 $ 151.06 $ 150.36
========== ========== ============
TOTAL RETURN@ 5.24% 5.78% 1.26%
RATIOS / SUPPLEMENTAL DATA:
Net assets, end of period (000's) $ 258,729 $ 253,936 $ 170,548
Net expenses to average daily net assets# 0.5160% 0.5160% 0.5160%*
Net investment income to average daily net assets 5.10% 5.61% 5.01%*
#Computed after giving effect to the reduction in
management fee by MassMutual. Without this reduction of
fees by the investment manager, the ratio of expenses
to average daily net assets would have been: 0.5509% 0.5468% 0.5605%*
</TABLE>
(up)All per share amounts for the period have been restated to reflect a 1-for-
15 reverse stock split effective December 16, 1994.
*Annualized
**For the period from October 3, 1994 (commencement of operations) through
December 31, 1994.
***Per share amount calculated on the average shares method, which more
appropriately presents the per share data for the period since the use of the
undistributed income method does not accord with the results of operations.
@Employee retirement benefit plans that invest plan assets in the Separate
Investment Accounts (SIAs) may be subject to certain charges as set forth in
their respective Plan Documents. Total return figures would be lower for the
periods presented if they reflected these charges.
The accompanying notes are an integral part of the financial statements.
B-33
<PAGE>
MASSMUTUAL SHORT-TERM BOND FUND - PORTFOLIO OF INVESTMENTS
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1996
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MARKET VALUE
----- ------------
<S> <C> <C>
BONDS & NOTES - 83.9%
ASSET BACKED SECURITIES -- 7.6%
Capita Equipment
Receivables Trust
1996-1, Class A4
6.280% 6/15/2000 $1,000,000 $ 1,001,560
Chase Manhattan Auto
Grantor Trust 1996-B,
Class A
6.610% 9/15/2002 1,829,055 1,841,621
Ford Credit 1994-B
Grantor Trust
7.300% 10/15/1999 357,498 361,520
Ford Credit Auto
Loan Master Trust,
Series 1992-1
6.875% 1/15/1999 1,500,000 1,500,465
Ford Credit Auto
Owner Trust 1996-B,
Class A-4
6.300% 1/15/2001 2,000,000 2,007,980
Nissan Auto
Receivables 1994-A
Grantor Trust,
Class A
6.450% 9/15/1999 626,917 628,484
Railcar Trust No.
1992-1
7.750% 6/01/2004 1,196,415 1,250,254
World Omni 1996-A
Automobile Lease
Securitization Trust,
Class A1
6.300% 6/25/2002 2,500,000 2,508,575
-------------
TOTAL ASSET BACKED
SECURITIES 11,100,459
-------------
(COST $11,074,953)
CORPORATE DEBT -- 16.1%
AirTouch
Communications, Inc.
7.500% 7/15/2006 1,000,000 1,026,480
America West Airlines
1996-1, Class A
6.850% 7/02/2009 2,000,000 1,960,000
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MARKET VALUE
----- ------------
<S> <C> <C>
Analog Devices, Inc.
6.625% 3/01/2000 $1,000,000 $ 987,300
Associates Corporation
of North America
6.750% 8/01/2001 1,500,000 1,505,505
Bell Atlantic Financial
Services, Inc.
6.610% 2/07/2000 2,000,000 2,012,380
CSC Enterprises 144A
6.500% 11/15/2001 2,000,000 1,992,380
Ford Motor Credit Company
9.350% 6/10/1997 1,000,000 1,015,200
General American Transportation
Corporation
6.750% 3/01/2006 1,000,000 971,900
Lockheed Martin Corporation
7.700% 6/15/2008 1,000,000 1,046,230
McDonnell Douglas Corporation
6.875% 11/01/2006 1,000,000 981,260
Norfolk Southern Corporation
7.400% 9/15/2006 1,000,000 1,015,570
NYNEX Capital Funding Company
7.450% 5/01/1997 1,000,000 1,005,680
ORIX Credit Alliance, Inc. 144A
6.480% 4/20/1999 2,000,000 1,997,600
Polaroid Corporation
7.250% 1/15/1997 1,500,000 1,500,330
Rite Aid Corporation
6.700% 12/15/2001 1,000,000 998,090
WR Grace & Co.
8.000% 8/15/2004 3,240,000 3,430,253
-----------
TOTAL CORPORATE DEBT 23,446,158
===========
(Cost $23,230,308)
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MARKET VALUE
----- ------------
<S> <C> <C>
U.S. GOVERNMENT AGENCY
OBLIGATIONS -- 16.9%
FEDERAL HOME LOAN MORTGAGE
CORPORATION (FHLMC) -- 3.0%
COLLATERALIZED MORTGAGE
OBLIGATIONS -- 2.7%
FHLMC Series 1693
Class G
6.000% 7/15/2007 $2,000,000 $ 1,946,240
FHLMC Series 1704
Class PE
6.000% 7/15/2007 2,000,000 1,972,500
-------------
3,918,740
-------------
PASS-THROUGH SECURITIES -- 0.3%
FHLMC
4.750% 2/01/1997 - 9/01/2006 531,541 508,060
-------------
4,426,800
-------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION
(FNMA) -- 3.9%
COLLATERALIZED MORTGAGE
OBLIGATIONS -- 2.7%
FNMA Series 1992-86
Class C
7.000% 6/25/2003 57,873 57,709
FNMA Series 1993-175
Class PL
5.000% 10/25/2002 1,390,909 1,381,770
FNMA Series 1993-71
Class PG
6.250% 7/25/2007 2,500,000 2,471,875
-------------
3,911,354
-------------
PASS-THROUGH SECURITIES -- 1.2%
FNMA
8.000% 5/01/2013 832,639 856,772
FNMA
9.000% 10/01/2009 864,176 918,023
-------------
1,774,795
-------------
5,686,149
-------------
</TABLE>
(Continued)
The accompanying notes are an integral part of the financial statements.
B-34
<PAGE>
MASSMUTUAL SHORT-TERM BOND FUND - PORTFOLIO OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MARKET VALUE
------ ------------
<S> <C> <C>
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
(GNMA) -- 1.3%
PASS-THROUGH SECURITIES -- 1.3%
GNMA
8.000% 5/15/2001 -
11/15/2007 $ 1,808,533 $ 1,868,991
------------
U.S. GOVERNMENT GUARANTEED NOTES -- 8.7%
1991-A Jacksonville,
FL
8.400% 8/01/1997 1,150,000 1,167,250
1991-A St. Louis, MO
8.400% 8/01/1997 3,350,000 3,400,250
1944-A Baxter
Springs, KS
6.310% 8/01/2001 500,000 497,390
1994-A Detroit, MI
6.310% 8/01/2001 450,000 447,651
1994-A Jacksonville, FL
6.310% 8/01/2001 1,485,000 1,477,248
1994-A Los Angeles
County, CA
6.310% 8/01/2001 225,000 223,826
1994-A Tacoma, WA
6.310% 8/01/2001 195,000 193,982
1994-A Trenton, NJ
6.310% 8/01/2001 145,000 144,243
U.S. Dept of Housing
and Urban Development, Series
1995-A
8.080% 8/01/1998 3,000,000 3,090,000
U.S. Dept. of Housing an Urban
Development, Series 1996-A
6.440% 8/01/1999 2,000,000 2,012,500
------------
12,654,340
============
TOTAL U.S. GOVERNMENT
AGENCY OBLIGATIONS 24,636,280
============
(COST $24,077,001)
<CAPTION>
PRINCIPAL
AMOUNT MARKET VALUE
------ ------------
<S> <C> <C>
U.S. TREASURY OBLIGATIONS -- 43.3%
U.S. TREASURY NOTES
U.S. Treasury Note
5.750% 8/15/2003 $ 6,000,000 $ 5,820,000
U.S. Treasury Note
7.125% 2/29/2000 22,000,000 22,649,660
U.S. Treasury Note
7.250% 5/15/2004 15,200,000 15,993,288
U.S. Treasury Note
8.875% 2/15/1999 17,500,000 18,514,475
============
TOTAL U.S. TREASURY
OBLIGATIONS 62,977,423
------------
(COST $62,760,329)
TOTAL BONDS & NOTES 122,160,320
============
(COST $121,142,591)
<CAPTION>
PRINCIPAL
AMOUNT MARKET VALUE
------ ------------
<S> <C> <C>
SHORT-TERM INVESTMENT -- 14.7%
COMMERCIAL PAPER
Rausch & Lomb Inc.
5.600% 1/24/1997 $ 4,435,000 $ 4,419,133
Countrywide Home
Loans, Inc.
5.970% 1/14/1997 780,000 778,318
Crown Cork & Seal
Company Inc.
5.720% 1/09/1997 490,000 489,377
Crown Cork & Seal
Company Inc.
5.830% 2/13/1997 1,480,000 1,469,694
Crown Cork & Seal
Company Inc.
5.950% 2/13/1997 520,000 516,304
Dana Credit
Corporation
5.650% 1/30/1997 510,000 507,679
Illnois Power
Company
5.540% 1/16/1997 5,360,000 5,347,628
NYNEX Corporation
6.250% 1/03/1997 4,360,000 4,358,486
ORIX Credit Alliance,
Inc.
6.080% 2/03/1997 1,210,000 1,203,256
Public Service
Company of Colorado
5.550% 1/03/1997 472,000 471,855
Public Service
Electric and Gas Company
5.600% 1/09/1997 1,840,000 1,837,710
--------------
TOTAL SHORT-TERM
INVESTMENTS 21,399,440
--------------
AT AMORTIZED COST)
TOTAL INVESTMENTS -- 98.6% 143,559,760
(COST $142,542,031)+
OTHER ASSETS/
(LIABILITIES) - 1.4% 1,973,649
--------------
NET ASSETS -- 100.0% $145,533,409
--------------
</TABLE>
NOTES TO PORTFOLIO OF INVESTMENTS
+Aggregate cost for Federal tax purposes (Note 7)
144A: Securities exempt from registration under rule 144A of the Securities Act
of 1933. The Securities may be resold in transactions exempt from registration
normally to qualified institutional buyers.
The accompanying notes are an integral part of the financial statements.
B-35
<PAGE>
MASSMUTUAL SHORT-TERM BOND FUND - FINANCIAL STATEMENTS
Statement of Assets and Liabilities
<TABLE>
<CAPTION>
DECEMBER 31, 1996
-----------------
<S> <C>
Assets:
Investments, at value (cost $121,142,591) (Note 2)......................... $ 122,160,320
Short-term investments, at amortized cost (Note 2)......................... 21,399,440
-----------------
Total Investments......................................................... 143,559,760
Cash....................................................................... 1,576
Receivables from:
Fund shares sold.......................................................... 25,221
Interest.................................................................. 2,325,244
Investment manager (Note 3)............................................... 7,243
-----------------
Total assets............................................................. 145,919,044
-----------------
Liabilities:
Payables for:
Fund shares redeemed...................................................... 305,355
Directors' fees and expenses (Note 3)..................................... 5,177
Affiliates (Note 3):
Investment management fees............................................... 57,775
Administration fees...................................................... 10,156
Service and distribution fees............................................ 232
Accrued expenses and other liabilities..................................... 6,940
-----------------
Total liabilities........................................................ 385,635
-----------------
NET ASSETS................................................................. $ 145,533,409
-----------------
Net assets consist of:
Paid-in capital............................................................ $ 144,792,097
Undistributed net investment income........................................ 18,783
Accumulated net realized loss on investments............................... (295,200)
Net unrealized appreciation on investments................................. 1,017,729
-----------------
$ 145,533,409
=================
Net assets:
Class 1.................................................................... $ 115,863
=================
Class 2.................................................................... $ 117,250
=================
Class 3.................................................................... $ 118,001
=================
Class 4.................................................................... $ 145,182,295
=================
Shares outstanding:
Class 1.................................................................... 11,415
=================
Class 2.................................................................... 11,544
=================
Class 3.................................................................... 11,599
=================
Class 4.................................................................... 14,365,202
=================
Net asset value, offering price and
redemption price per share:
Class 1.................................................................... $ 10.15
=================
Class 2.................................................................... $ 10.16
=================
Class 3.................................................................... $ 10.17
=================
Class 4.................................................................... $ 10.11
=================
</TABLE>
The accompanying notes are an integral part of the financial statements.
B-36
<PAGE>
MASSMUTUAL SHORT-TERM BOND FUND - FINANCIAL STATEMENTS (CONTINUED)
Statement of Operations
<TABLE>
<CAPTION>
Year ended
December 31, 1996
-----------------
<S> <C>
Investment income:
Interest................................................................... $ 8,783,175
---------------
Expenses (Note 1):
Investment management fees (Note 3)........................................ 606,206
Custody fees............................................................... 15,494
Audit and legal fees....................................................... 4,657
Directors' fees (Note 3)................................................... 15,247
Fees waived by the investment manager (Note 3)............................. (47,791)
---------------
593,813
Administration fees (Note 3):
Class 1.................................................................. 628
Class 2.................................................................. 577
Class 3.................................................................. 353
Class 4.................................................................. 105,079
Distribution and service fees (Note 3):
Class 1.................................................................. 733
Class 2.................................................................. 171
---------------
Net expenses........................................................... 701,354
---------------
NET INVESTMENT INCOME.................................................. 8,081,821
---------------
Realized and unrealized gain (loss):
Net realized loss on investment transactions........................... (274,845)
Net change in unrealized appreciation (depreciation) on investments.... (384,702)
---------------
NET REALIZED AND UNREALIZED GAIN..................................... (659,547)
---------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS................... 7,422,274
===============
</TABLE>
The accompanying notes are an integral part of the financial statements.
B-37
<PAGE>
MASSMUTUAL SHORT-TERM BOND FUND - FINANCIAL STATEMENTS (CONTINUED)
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
DECEMBER 31, 1996 DECEMBER 31, 1995
----------------- -----------------
<S> <C> <C>
Increase (Decrease) in Net Assets:
Operations:
Net investment income.................................................. $ 8,081,821 $ 7,424,141
Net realized gain (loss) on investment transactions.................... (274,845) 2,489,218
Net change in unrealized appreciation (depreciation)
on investments........................................................ (384,702) 2,855,699
-------------- --------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS.................. 7,422,274 12,769,058
-------------- --------------
Distributions to shareholders (Note 2):
From net investment income:
Class 1................................................................ (5,225) (5,481)
Class 2................................................................ (5,891) (6,066)
Class 3................................................................ (6,321) (6,421)
Class 4................................................................ (8,133,246) (7,354,246)
-------------- --------------
TOTAL DISTRIBUTIONS FROM NET INVESTMENT INCOME........................ (8,150,683) (7,372,214)
-------------- --------------
In excess of net investment income:
Class 1................................................................ (1) --
Class 2................................................................ (1) --
Class 3................................................................ (1) --
Class 4................................................................ (1,569) --
-------------- --------------
TOTAL DISTRIBUTIONS FROM NET INVESTMENT INCOME........................ (1,572) --
-------------- --------------
From net realized gains:
Class 1................................................................ (59) (2,049)
Class 2................................................................ (59) (2,050)
Class 3................................................................ (59) (2,046)
Class 4................................................................ (71,288) (2,256,969)
-------------- --------------
TOTAL DISTRIBUTIONS FROM NET REALIZED GAINS........................... (71,465) (2,263,114)
-------------- --------------
Net fund share transactions (Note 5):
Class 1................................................................ 5,285 7,530
Class 2................................................................ 5,951 8,116
Class 3................................................................ 6,381 8,467
Class 4................................................................ 23,078,364 12,933,618
-------------- --------------
INCREASE IN NET ASSETS FROM NET FUND SHARE TRANSACTIONS................ 23,095,981 12,957,731
-------------- --------------
TOTAL INCREASE IN NET ASSETS........................................... 22,294,535 16,091,461
Net assets:
Beginning of period.................................................... 123,238,874 107,147,413
-------------- --------------
End of period (including undistributed net investment income
of $18,783 and $68,862, respectively).................................. $ 145,533,409 $ 123,238,874
============== ==============
</TABLE>
The accompanying notes are an integral part of the financial statements.
B-38
<PAGE>
MassMutual Short-Term Bond Fund
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
CLASS 1
-------
YEAR ENDED YEAR ENDED PERIOD ENDED
12/31/96 12/31/95 12/31/94**
---------- ---------- ------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.19 $ 9.89 $ 10.00
---------- ---------- ------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income 0.50 0.55 0.09
Net realized and unrealized gain (loss) on investments (0.05) 0.49 (0.11)
---------- ---------- ------------
Total income (loss) from investment operations 0.45 1.04 (0.02)
---------- ---------- ------------
LESS DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income (0.48) (0.54) (0.09)
From net realized gains (0.01) (0.20) --
---------- ---------- ------------
Total distributions (0.49) (0.74) (0.09)
---------- ---------- ------------
NET ASSET VALUE, END OF PERIOD $ 10.15 $ 10.19 $ 9.89
========== ========== ============
TOTAL RETURN 4.35% 10.54% (0.17)%
RATIOS / SUPPLEMENTAL DATA:
Net assets, end of period (000's) $ 116 $ 111 $ 100
Net expenses to average daily net assets# 1.65% 1.65% 1.65%*
Net investment income to average daily net assets 4.86% 5.20% 5.45%*
Portfolio turnover rate 61% 114% 15%
#Computed after giving effect to the reduction in
management fee by MassMutual, Without this reduction of
fee by the investment manager, the ration of expenses
to average daily net assets would have been: 1.68% 1.68% 1.70%*
</TABLE>
<TABLE>
<CAPTION>
CLASS 2
-------
YEAR ENDED YEAR ENDED PERIOD ENDED
12/31/96 12/31/95 12/31/94**
---------- ---------- ------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.19 $ 9.89 $ 10.00
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income 0.56 0.61 0.10
Net realized and unrealized gain (loss) on investments (0.04) 0.49 (0.11)
Total income (loss) from investment operations 0.52 1.10 (0.01)
LESS DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income (0.54) (0.60) (0.10)
From net realized gains (0.01) (0.20) --
Total distributions (0.55) (0.80) (0.10)
NET ASSET VALUE, END OF PERIOD $ 10.16 $ 10.19 $ 9.89
TOTAL RETURN 5.02% 11.11% (0.09)%
RATIOS / SUPPLEMENTAL DATA:
Net assets, end of period (000's) $ 117 $ 112 $ 101
Net expenses to average daily net assets# 1.10% 1.10% 1.10%*
Net investment income to average daily net assets 5.41% 5.75% 5.99%*
Portfolio turnover rate 61% 114% 15%
#Computed after giving effect to the reduction in
management fee by MassMutual, without this reduction of
fee by the investment manager, the ration of expenses
to average daily net assets would have been: 1.13% 1.13% 1.15%*
</TABLE>
* Annualized
** For the period from October 3, 1994 (commencement of operations) through
December 31, 1994.
The accompanying notes are an integral part of the financial statements.
B-39
<PAGE>
MASSMUTUAL SHORT-TERM BOND FUND - FINANCIAL STATEMENTS (CONTINUED)
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
CLASS 3
----------
YEAR ENDED YEAR ENDED PERIOD ENDED
12/31/96 12/31/95 12/31/94**
---------- ---------- ------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.21 $ 9.91 $ 10.00
---------- ---------- ------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income 0.60 0.64 0.10
Net realized and unrealized gain (loss) on investments (0.05) 0.49 (0.09)
---------- ---------- -----------
Total income (loss) from investment operations 0.55 1.13 0.01
---------- ---------- -----------
LESS DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income (0.58) (0.63) (0.10)
From net realized gains (0.01) (0.20) --
---------- ---------- ------------
Total distributions (0.59) (0.83) (0.10)
---------- ---------- ------------
NET ASSET VALUE, END OF PERIOD $ 10.17 $ 10.21 $ 9.91
========== ========== ============
TOTAL RETURN 5.28% 11.46% 0.13%
RATIOS / SUPPLEMENTAL DATA:
Net assets, end of period (000's) $ 118 $ 112 $ 100
Net expenses to average daily net assets# 0.75% 0.75% 0.75%*
Net investment income to average daily net assets 5.76% 6.10% 6.36%*
Portfolio turnover rate 61% 114% 15%
#Computed after giving effect to the reduction in
management fee by MassMutual. Without this reduction of
fees by the investment manager, the ratio of expenses
to average daily net assets would have been: 0.79% 0.78% 0.80%*
</TABLE>
<TABLE>
<CAPTION>
CLASS 4
----------
YEAR ENDED YEAR ENDED PERIOD ENDED
12/31/96 12/31/95 12/31/94**
---------- ---------- ------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.15 $ 9.85 $ 10.00
---------- ---------- ------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income 0.60 0.66 0.16
Net realized and unrealized gain (loss) on investments (0.03) 0.50 (0.15)
---------- ---------- ------------
Total income (loss) from investment operations 0.57 1.16 0.01
---------- ---------- ------------
LESS DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income (0.60) (0.66) (0.16)
From net realized gains (0.01) (0.20) --
---------- ---------- ------------
Total distributions (0.61) (0.86) (0.16)
---------- ---------- ------------
NET ASSET VALUE, END OF PERIOD $ 10.11 $ 10.15 $ 9.85
========== ========== ============
TOTAL RETURN @ 5.57% 11.77% 0.13%
RATIOS / SUPPLEMENTAL DATA:
Net assets, end of period (000's) $ 145,182 $ 122,904 $ 106,846
Net expenses to average daily net assets# 0.5190% 0.5190% 0.5190%*
Net investment income to average daily net assets 6.00% 6.32% 6.37%*
Portfolio turnover rate 61% 114% 15%
#Computed after giving effect to the reduction in
management fee by MassMutual. Without this reduction of
fees by the investment manager, the ratio of expenses
to average daily net assets would have been: 0.5545% 0.5524% 0.5654%*
</TABLE>
*Annualized
**For the period from October 3, 1994 (commencement of operations) through
December 31, 1994.
@Employee retirement benefit plans that invest plan assets in the Separate
Investment Accounts (SIAs) may be subject to certain charges as set forth in
their respective Plan Documents. Total return figures would be lower for the
periods presented if they reflected these charges.
The accompanying notes are an integral part of the financial statements.
B-40
<PAGE>
MASSMUTUAL CORE BOND FUND - PORTFOLIO OF INVESTMENTS
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1996
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MARKET VALUE
------ ------------
<S> <C> <C>
BONDS & NOTES - 97.0%
ASSET BACKED SECURITIES -- 8.1%
Capita Equipment
Receivables Trust
1996-1, Class A4
6.280% 6/15/2000 $3,000,000 $3,004,680
Chase Manhattan Auto
Grantor Trust 1996-B,
Class A
6.610% 9/15/2002 4,572,639 4,604,053
Daimler-Benz Auto
Grantor Trust 1995-A,
Class A
5.850% 5/15/2002 2,505,290 2,503,712
Daimler-Benz Vehicle
Trust 1994-A
5.950% 12/15/2000 220,873 221,079
Ford Credit 1994-B
Grantor Trust
7.300% 10/15/1999 536,247 542,280
Ford Credit Auto
Loan Master Trust,
Series 1992-1
6.875% 1/15/1999 2,000,000 2,000,620
Ford Credit Auto
Owner Trust 1996-B,
Class A-4
6.300% 1/15/2001 5,000,000 5,019,950
Keystone Auto
Grantor Trust 1996-B,
Class A 144A
6.150% 4/15/2003 2,801,590 2,799,349
Nissan Auto
Receivables 1994-A
Grantor Trust,
Class A
6.450% 9/15/1999 1,253,833 1,256,967
Railcar Trust No.
1992-1
7.750% 6/01/2004 1,395,818 1,458,629
World Omni 1995-A
Automobile Lease
Securitization Trust,
Class A
6.050% 11/25/2001 2,835,307 2,838,852
<CAPTION>
PRINCIPAL
AMOUNT MARKET VALUE
------ ------------
<S> <C> <C>
World Omni 1996-A
Automobile Lease
Securitization Trust,
Class A1
6.300% 6/25/2002 $2,650,000 $ 2,659,090
-----------
TOTAL ASSET BACKED
SECURITIES 28,909,261
----------
(COST $28,855,243)
CORPORATE DEBT -- 33.0%
AirTouch
Communications, Inc.
7.500% 7/15/2006 3,000,000 3,079,440
America West Airlines
1996-1, Class A
6.850% 7/02/2009 4,000,000 3,920,000
American Airlines, Inc..
9.780% 11/26/2011 2,000,000 2,277,500
AMR Corporation .
9.000% 8/01/2012 2,000,000 2,263,880
Analog Devices, Inc. .
6.625% 3/01/2000 1,500,000 1,480,950
Associates Corporation
of North America
6.750% 8/01/2001 2,000,000 2,007,340
Associates Corporation
of North America .
7.875% 9/30/2001 1,500,000 1,573,275
Bell Atlantic Financial
Services, Inc.
6.610% 2/04/2000 1,750,000 1,760,868
BHP Finance (USA)
Limited
6.420% 3/01/2026 3,500,000 3,464,685
Capital Cities/ABC,
Inc.
8.875% 12/15/2000 875,000 944,151
Champion International
Corporation
6.400% 2/15/2026 2,500,000 2,386,725
The Charles Schwab
Corporation
6.250% 1/23/2003 2,500,000 2,409,375
Chrysler Corporation
10.400% 8/01/1999 1,500,000 1,537,440
<CAPTION>
PRINCIPAL
AMOUNT MARKET VALUE
------ ------------
<S> <C> <C>
CITGO Petroleum
Corporation
7.875% 5/15/2006 $1,000,000 $1,019,600
Columbia Gas System,
Inc.
6.610% 11/28/2002 3,000,000 2,976,750
Commercial Credit
Company .
7.750% 3/01/2005 3,000,000 3,133,380
Continental Airlines,
Inc., Series 1996-2B
8.560% 7/02/2014 1,749,640 1,904,921
Continental Airlines,
Inc., Series 1996-B
7.820% 10/15/2013 2,000,000 2,067,400
Corning Glass Works .
8.875% 3/15/2016 1,000,000 1,128,240
English China Clays
Delaware Inc. .
7.375% 10/01/2002 1,000,000 1,027,760
Equifax Inc.
6.500% 6/15/2003 1,000,000 973,260
ERAC USA Finance
Company 144A
6.950% 1/15/2006 1,500,000 1,475,625
FBG Finance Ltd.
144A
7.875% 6/01/2016 3,000,000 3,049,830
Fletcher Challenge Ltd.
7.750% 6/20/2006 2,000,000 2,074,100
Foster Wheeler
Corporation
6.750% 11/15/2005 2,000,000 1,932,440
General American
Transportation
Corporation
6.750% 3/01/2006 3,000,000 2,915,700
General Electric
Capital Corporation
8.750% 5/21/2007 1,500,000 1,700,370
General Telephone
Company of Florida
7.500% 8/01/2002 1,000,000 1,011,310
The Goldman Sachs
Group, L.P. 144A
6.200% 2/15/2001 2,500,000 2,450,000
</TABLE>
(Continued)
The accompanying notes are an integral part of the financial statements.
B-41
<PAGE>
MASSMUTUAL CORE BOND FUND - PORTFOLIO OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MARKET VALUE
------ ------------
<S> <C> <C>
Harrahs Operating Inc.
8.750% 3/15/2000 $1,100,000 $1,113,750
Hercules Incorporated .
6.625% 6/01/2003 2,000,000 1,979,860
IMCERA Group Inc. .
6.000% 10/15/2003 1,000,000 957,700
Leucadia National
Corporation
7.750% 8/15/2013 2,500,000 2,471,425
Lockheed Martin
Corporation
7.700% 6/15/2008 3,000,000 3,138,690
McDonnell Douglas
Corporation
6.875% 11/01/2006 3,000,000 2,943,780
McDonnell Douglas
Corporation .
9.250% 4/01/2002 1,500,000 1,675,350
Newmont Mining
Corporation .
8.625% 4/01/2002 2,000,000 2,111,380
News America
Holdings Incorporated
9.250% 2/01/2013 3,000,000 3,360,870
Norfolk Southern
Corporation
7.220% 9/15/2006 3,000,000 3,056,580
Norfolk Southern
Corporation
7.400% 9/15/2006 2,000,000 2,031,140
North Finance
(Bermuda) Limited
144A
7.000% 9/15/2005 2,000,000 1,970,000
Pearson Inc. 144A
7.375% 9/15/2006 3,000,000 3,012,900
Penske Truck Leasing
Co., L.P.
7.750% 5/15/1999 1,500,000 1,548,210
Ralston Purina
Company
7.750% 10/01/2015 2,000,000 2,050,920
Rite Aid Corporation
6.700% 12/15/2001 2,000,000 1,996,180
Rolls-Royce Capital
Inc.
7.125% 7/29/2003 2,000,000 2,002,980
Scholastic Corporation
7.000% 12/15/2003 4,000,000 3,992,280
Thomas & Betts
Corporation .
8.250% 1/15/2004 2,500,000 2,597,825
Time Warner Inc.
7.750% 6/15/2005 3,000,000 3,017,790
United Air Lines, Inc.
10.110% 2/19/2006 939,710 1,040,390
US Air, Inc.
7.500% 10/15/2009 1,461,057 1,475,667
<CAPTION>
PRINCIPAL
AMOUNT MARKET VALUE
------ ------------
<S> <C> <C>
Valassis
Communications, Inc.
9.550% 12/01/2003 $2,000,000 $ 2,081,280
Westinghouse Electric
Corporation
8.375% 6/15/2002 1,000,000 1,019,670
W.R. Grace & Co.
8.000% 8/15/2004 5,000,000 5,293,600
------------
TOTAL CORPORATE DEBT 117,886,532
------------
(COST $114,776,584)
NON - U.S. GOVERNMENT
AGENCY OBLIGATIONS -- 1.1%
COLLATERALIZED MORTGAGE OBLIGATION
Prudential Home
Mortgage Securities
1993-26 Class A6
6.750% 7/25/2008 4,000,000 4,008,720
------------
(COST $3,955,000)
U.S. GOVERNMENT
AGENCY OBLIGATIONS -- 20.2%
FEDERAL HOME LOAN MORTGAGE
CORPORATION (FHLMC) -- 4.6%
COLLATERALIZED MORTGAGE
OBLIGATIONS -- 4.5% FHLMC
Series 1080
Class D
7.000% 7/15/2020 2,900,319 2,933,847
FHLMC Series 1322
Class G
7.500% 2/15/2007 2,000,000 2,048,120
FHLMC Series 1460
Class H
7.000% 5/15/2007 2,000,000 2,020,000
FHLMC Series 1490
Class PJ
6.000% 5/15/2007 600,000 589,122
FHLMC Series 1612
Class PD
5.750% 5/15/2006 5,000,000 4,915,600
FHLMC Series 1625
Class EA
5.750% 3/15/2007 3,500,000 3,436,545
------------
15,943,234
------------
PASS-THROUGH
SECURITIES -- 0.1% FHLMC
9.000% 3/01/2017 368,612 392,225
------------
16,335,459
------------
FEDERAL NATIONAL MORTGAGE
ASSOCIATION (FNMA) -- 5.6%
COLLATERALIZED MORTGAGE
OBLIGATIONS -- 5.4%
FNMA Series 1989-20
Class A
6.750% 4/25/2018 4,267,616 4,107,580
FNMA Series 1992-86
Class C
7.000% 6/25/2003 115,745 115,419
<CAPTION>
PRINCIPAL
AMOUNT MARKET VALUE
------ ------------
<S> <C> <C>
FNMA Series 1993-134
Class GA
6.500% 2/25/2007 $5,000,000 $4,964,050
FNMA Series 1993-175
Class PL
5.000% 10/25/2002 1,390,909 1,381,770
FNMA Series 1993-191
Class PD
5.400% 3/25/2004 1,500,000 1,487,340
FNMA Series 1993-221
Class D
6.000% 12/25/2008 2,500,000 2,390,625
FNMA Series 1996-54
Class C
6.000% 9/25/2008 5,000,000 4,800,000
------------
19,246,784
------------
PASS-THROUGH SECURITIES -- 0.2%
FNMA
8.000% 5/01/2013 555,094 571,180
------------
19,817,964
------------
GOVERNMENT NATIONAL MORTGAGE
ASSOCIATION (GNMA) -- 8.3%
COLLATERALIZED MORTGAGE OBLIGATION -- 0.5%
JHM Acceptance
Corporation Series E
Class 5
8.960% 4/01/2019 1,633,748 1,718,491
------------
PASS-THROUGH SECURITIES -- 7.8%
GNMA
6.000% 12/20/2025 5,579,916 5,706,355
GNMA
7.000% 7/20/2025 -
9/20/2025 5,474,412 5,591,443
GNMA
7.500% 1/15/2017 -
6/15/2017 7,142,857 7,188,784
GNMA
8.000% 4/15/2001 -
3/15/2008 8,808,388 9,102,855
GNMA
9.000% 12/15/2004 -
10/15/2009 500,156 532,822
------------
28,122,259
------------
29,840,750
------------
U.S. GOVERNMENT GUARANTEED NOTES -- 1.7%
1994-A Baxter
Springs, KS
5.930% 8/01/1999 700,000 696,500
1994-A Erie, PA
5.930% 8/01/1999 1,590,000 1,582,050
1994-A Los Angeles
County, CA
5.930% 8/01/1999 190,000 189,050
</TABLE>
(Continued)
The accompanying notes are an integral part of the financial statements.
B-42
<PAGE>
MASSMUTUAL CORE BOND FUND - PORTFOLIO OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MARKET VALUE
----------- ------------
<S> <C> <C>
1994-A Montgomery
County, PA
5.930% 8/01/1999 $ 150,000 $ 149,250
1994-A Pohatcong
Township, NJ
5.930% 8/01/1999 255,000 253,725
1994-A Rochester, NY
5.930% 8/01/1999 135,000 134,325
1994-A Sacramento,
CA
5.930% 8/01/1999 60,000 59,700
1994-A Santa Ana,
CA
5.930% 8/01/1999 920,000 915,400
U.S. Dept. of Housing
and Urban
Development, Series
1996-A
6.670% 8/01/2001 2,000,000 2,020,000
-------------
6,000,000
TOTAL U.S. GOVERNMENT
AGENCY OBLIGATIONS 71,994,173
-------------
(COST $70,455,483)
U.S. TREASURY OBLIGATIONS - 34.6%
U.S. TREASURY BONDS - 15.4%
U.S. Treasury Bond
7.250% 5/15/2016 20,700,000 21,857,958
U.S. Treasury Bond
8.875% 8/15/2017 26,750,000 33,040,530
------------
54,898,488
------------
U.S. TREASURY NOTES - 13.6%
U.S. Treasury Note
5.875% 4/30/1998 7,000,000 7,010,920
U.S. Treasury Note
6.375% 5/15/1999 23,500,000 23,701,865
U.S. Treasury Note
8.875% 11/15/1998 17,000,000 17,887,230
------------
48,600,015
------------
U.S. TREASURY STRIPS - 5.6%
U.S. Treasury Strip - Principal Only
0.000% 2/15/1999 19,500,000 17,237,220
U.S. Treasury Strip - Principal Only
0.000% 2/15/2015 9,250,000 2,708,308
------------
19,945,528
TOTAL U.S. TREASURY
OBLIGATIONS 123,444,031
------------
(COST $123,480,345)
TOTAL BONDS & NOTES 346,242,717
------------
(COST $341,522,655)
<CAPTION>
PRINCIPAL
AMOUNT MARKET VALUE
----------- ------------
<S> <C> <C>
SHORT-TERM INVESTMENTS - 1.8%
COMMERCIAL PAPER
Bausch & Lomb Inc.
6.850% 1/08/1997 $ 1,140,000 $ 1,138,482
Indiana Michigan
Power Company
6.700% 1/03/1997 3,000,000 2,998,883
Lockheed Martin
Corporation
7.000% 1/02/1997 2,355,000 2,354,542
------------
TOTAL SHORT-TERM
INVESTMENTS 6,491,907
------------
(AT AMORTIZED COST)
TOTAL INVESTMENTS - 98.8% 352,734,624
(COST $348,014,562)+
OTHER ASSETS/
(LIABILITIES) - 1.2% 4,330,553
------------
NET ASSETS - 100.0% $357,065,177
NOTES TO PORTFOLIO OF INVESTMENTS
</TABLE>
+Aggregate cost for Federal tax purposes (Note 7)
144A: Securities exempt from registration under rule 144A of the Securities Act
of 1933. The Securities may be resold in transactions exempt from registration,
normally to qualified institutional buyers.
. All or a portion of this security is segregated to cover forward purchase
commitments (Note 2).
The accompanying notes are an integral part of the financial statements.
B-43
<PAGE>
MASSMUTUAL CORE BOND FUND - FINANCIAL STATEMENTS
Statement of Assets and Liabilities
<TABLE>
<CAPTION>
DECEMBER 31, 1996
-----------------
<S> <C>
Assets:
Investments, at value (cost $341,522,655) (Note 2)....................... $ 346,242,717
Short-term investments, at amortized cost (Note 2)......................... 6,491,907
---------------
Total Investments........................................................ 352,734,624
Cash....................................................................... 4,936
---------------
Receivables from:
Fund shares sold.......................................................... 380,193
Interest.................................................................. 4,574,725
Investment manager (Note 3)............................................... 17,663
---------------
Total assets............................................................. 357,712,141
===============
Liabilities:
Payables for:
Investments purchased..................................................... 142,615
Settlement of investments purchased on a
forward commitment basis (Note 2)........................................ 11,739
Fund shares redeemed...................................................... 306,112
Directors' fees and expenses (Note 3)..................................... 5,176
Affiliates (Note 3):
Investment management fees............................................... 139,334
Administration fees...................................................... 26,194
Service and distribution fees............................................ 243
Accrued expenses and other liabilities.................................... 15,551
---------------
Total liabilities........................................................ 646,964
===============
NET ASSETS................................................................ $ 357,065,177
===============
Net assets consist of:
Paid-in capital............................................................ 352,396,989
Undistributed net investment income........................................ 1,845,746
Accumulated net realized loss on investments............................... (1,885,881)
Net unrealized appreciation on investments
and forward commitments.................................................. 4,708,323
---------------
$ 357,065,177
===============
Net assets:
Class 1.................................................................... $ 120,838
===============
Class 2.................................................................... $ 122,293
===============
Class 3.................................................................... $ 123,107
===============
Class 4.................................................................... $ 356,698,939
===============
Shares outstanding:
Class 1.................................................................... 11,512
===============
Class 2.................................................................... 11,631
===============
Class 3.................................................................... 11,699
===============
Class 4.................................................................... 34,141,922
===============
Net asset value, offering price and
redemption price per share:
Class 1.................................................................... $ 10.50
==============
Class 2.................................................................... $ 10.51
==============
Class 3.................................................................... $ 10.52
==============
Class 4.................................................................... $ 10.45
==============
</TABLE>
The accompanying notes are an integral part of the financial statements.
B-44
<PAGE>
MASSMUTUAL CORE BOND FUND - FINANCIAL STATEMENTS (CONTINUED)
Statement of Operations
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31, 1996
-----------------
<S> <C>
Investment income:
Interest.................................................................. $ 20,691,459
Expenses (Note 1):
Investment management fees (Note 3)....................................... 1,375,667
Custody fees.............................................................. 38,056
Audit and legal fees...................................................... 10,158
Directors' fees (Note 3).................................................. 15,247
Fees waived by the investment manager (Note 3)............................ (128,270)
---------------
1,310,858
Administration fees (Note 3):
Class 1.................................................................. 737
Class 2.................................................................. 614
Class 3.................................................................. 382
Class 4.................................................................. 257,095
Distribution and service fees (Note 3):
Class 1.................................................................. 842
Class 2.................................................................. 178
---------------
Net expenses............................................................ 1,570,706
---------------
NET INVESTMENT INCOME................................................... 19,120,753
---------------
Realized and unrealized gain (loss):
Net realized loss on investment transactions and forward commitments...... (1,886,093)
Net change in unrealized appreciation (depreciation) on
investments and forward commitments...................................... (6,456,882)
---------------
NET REALIZED AND UNREALIZED LOSS........................................ (8,342,975)
---------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS...................... $ 10,777,778
===============
</TABLE>
The accompanying notes are an integral part of the financial statements.
B-45
<PAGE>
MASSMUTUAL CORE BOND FUND - FINANCIAL STATEMENTS (CONTINUED)
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
DECEMBER 31, 1996 DECEMBER 31, 1995
------------------ ------------------
<S> <C> <C>
Increase (Decrease) in Net Assets:
Operations:
Net investment income............................................. $ 19,120,753 $ 14,053,804
Net realized gain (loss) on investment transactions
and forward commitments.......................................... (1,886,093) 9,143,745
Net change in unrealized appreciation (depreciation) on
investments and forward commitments.............................. (6,456,882) 14,064,619
------------ ------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS............. 10,777,778 37,262,168
------------ ------------
Distributions to shareholders (Note 2):
From net investment income:
Class 1........................................................... (4,416) (7,975)
Class 2........................................................... (5,227) (5,956)
Class 3........................................................... (5,674) (6,329)
Class 4........................................................... (17,374,307) (13,924,661)
------------ ------------
TOTAL DISTRIBUTIONS FROM NET INVESTMENT INCOME................... (17,389,624) (13,944,921)
------------ ------------
From net realized gains:
Class 1........................................................... (740) (4,784)
Class 2........................................................... (714) (3,332)
Class 3........................................................... (715) (3,329)
Class 4........................................................... (1,942,817) (7,028,844)
------------ ------------
TOTAL DISTRIBUTIONS FROM NET REALIZED GAINS...................... (1,944,986) (7,040,289)
------------ ------------
Net fund share transactions (Note 5):
Class 1........................................................... (45,858) 61,915
Class 2........................................................... 5,941 9,288
Class 3........................................................... 6,389 9,658
Class 4........................................................... 111,704,711 43,139,641
------------ ------------
INCREASE IN NET ASSETS FROM NET FUND SHARE TRANSACTIONS.......... 111,671,183 43,220,502
------------ ------------
TOTAL INCREASE IN NET ASSETS...................................... 103,114,351 59,497,460
Net assets:
Beginning of period............................................... 253,950,826 194,453,366
------------ ------------
End of period (including undistributed net investment income
of $1,845,746 and $114,829, respectively)........................ $357,065,177 $253,950,826
============ ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
B-46
<PAGE>
MASSMUTUAL CORE BOND FUND - FINANCIAL STATEMENTS (CONTINUED)
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
CLASS 1
----------
YEAR ENDED YEAR ENDED PERIOD ENDED
12/31/96 12/31/95 12/31/94**
<S> <C> <C> <C>
--------- ---------- ------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.79 $ 9.90 $ 10.00
--------- ---------- ------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income 0.53*** 0.50 0.10
Net realized and unrealized gain (loss) on investments (0.36) 1.26 (0.10)
---------- ---------- ------------
Total income (loss) from investment operations 0.17 1.76 --
---------- ---------- ------------
LESS DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income (0.40) (0.54) (0.10)
From net realized gains (0.08) (0.33) --
---------- ---------- ------------
Total distributions (0.46) (0.87) (0.10)
---------- ---------- ------------
NET ASSET VALUE, END OF PERIOD $ 10.50 $ 10.79 $ 9.90
========== ========== ============
TOTAL RETURN 1.60% 17.81% 0.00%
RATIOS / SUPPLEMENTAL DATA:
Net assets, end of period (000's) $ 121 $ 171 $ 101
Net expenses to average daily net assets# 1.65% 1.65% 1.65%*
Net investment income to average daily net assets 5.10% 5.39% 5.91%*
Portfolio turnover rate 54% 104% 7%
#Computed after giving effect to the reduction in
management fee by MassMutual. Without this reduction of
fees by the investment manager, the ratio of expenses
to average daily net assets would have been: 1.69% 1.69% 1.71%*
</TABLE>
<TABLE>
<CAPTION>
CLASS 2
YEAR ENDED YEAR ENDED PERIOD ENDED
12/31/96 12/31/95 12/31/94**
<S> <C> <C> <C>
---------- ---------- ------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.82 $ 9.90 $ 10.00
---------- ---------- ------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income 0.60*** 0.64 0.11
Net realized and unrealized gain (loss) on investments (0.38) 1.19 (0.10)
---------- ---------- ------------
Total income (loss) from investment operations 0.22 1.83 0.01
---------- ----------- ------------
LESS DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income (0.47) (0.58) (0.11)
From net realized gains (0.06) (0.33) -
---------- ----------- ------------
Total distributions (0.53) (0.91) (0.11)
---------- ----------- ------------
NET ASSET VALUE, END OF PERIOD $ 10.51 $ 10.82 $ 9.90
========== =========== ============
TOTAL RETURN 2.07% 18.51% 0.08%
RATIOS / SUPPLEMENTAL DATA:
Net assets, end of period (000's) $ 122 $ 120 $ 101
Net expenses to average daily net assets# 1.10% 1.10% 1.10%*
Net investment income to average daily net assets 5.67% 5.97% 6.46%*
Portfolio turnover rate 54% 104% 7%
#Computed after giving effect to the reduction in
management fee by MassMutual. Without this reduction of
fees by the investment manager, the ratio of expenses
to average daily net assets would have been: 1.14% 1.14% 1.16%*
</TABLE>
*Annualized
**For the period from October 3, 1994 (commencement of operations) through
December 31, 1994.
***Per share amount calculated on the average shares method, which more
appropriately presents the per share data for the period since the use of the
undistributed income method does not accord with the results of operations.
The accompanying notes are an integral part of the financial statements.
B-47
<PAGE>
MASSMUTUAL CORE BOND FUND - FINANCIAL STATEMENTS (CONTINUED)
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
CLASS 3
-----------
YEAR ENDED YEAR ENDED PERIOD ENDED
12/31/96 12/31/95 12/31/94**
<S> <C> <C> <C>
--------- ----------- -------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.82 $ 9.90 $ 10.00
---------- ----------- -------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income 0.64*** 0.68 0.11
Net realized and unrealized gain (loss) on investments (0.37) 1.19 (0.10)
---------- ----------- -------------
Total income (loss) from investment operations 0.27 1.87 0.01
LESS DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income (0.51) (0.62) (0.11)
From net realized gains (0.06) (0.33) -
---------- ----------- -------------
Total distributions (0.57) (0.95) (0.11)
---------- ----------- -------------
NET ASSET VALUE, END OF PERIOD $ 10.52 $ 10.82 $ 9.90
========== =========== =============
TOTAL RETURN 2.52% 18.87% 0.09%
RATIOS / SUPPLEMENTAL DATA:
Net assets, end of period (000's) $ 123 $ 120 $ 101
Net expenses to average daily net assets# 0.75% 0.75% 0.75%*
Net investment income to average daily net assets 6.01% 6.32% 6.83%*
Portfolio turnover rate 54% 104% 7%
#Computed after giving effect to the reduction in
management fee by MassMutual. Without this reduction of
fees by the investment manager, the ratio of expenses
to average daily net assets would have been: 0.79% 0.79% 0.81%*
</TABLE>
<TABLE>
<CAPTION>
CLASS 4
-----------
YEAR ENDED YEAR ENDED PERIOD ENDED
12/31/96 12/31/95 12/31/94**
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.75 $ 9.84 $ 10.00
<S> <C> <C> <C>
---------- ----------- -------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income 0.67*** 0.72 *** 0.18
Net realized and unrealized gain (loss) on investments (0.37) 1.17 (0.16)
---------- ----------- -------------
Total income (loss) from investment operations 0.30 1.89 0.02
---------- ----------- -------------
LESS DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income (0.54) (0.65) (0.18)
From net realized gains (0.06) (0.33) -
---------- ----------- -------------
Total distributions (0.60) (0.98) (0.18)
---------- ----------- -------------
NET ASSET VALUE, END OF PERIOD $ 10.45 $ 10.75 $ 9.84
========== =========== =============
TOTAL RETURN@ 2.80% 19.15% 0.20%
RATIOS / SUPPLEMENTAL DATA:
Net assets, end of period (000's) $ 356,699 $ 253,540 $ 194,150
Net expenses to average daily net assets# 0.5130% 0.5130% 0.5130%*
Net investment income to average daily net assets 6.26% 6.56% 6.86%*
Portfolio turnover rate 54% 104% 7%
#Computed after giving effect to the reduction in
management fee by MassMutual. Without this reduction of
fees by the investment manager, the ratio of expenses
to average daily net assets would have been: 0.5550% 0.5553% 0.5672%*
</TABLE>
*Annualized
**For the period from October 3, 1994 (commencement of operations) through
December 31, 1994.
***Per share amount calculated on the average shares method, which more
appropriately presents the per share data for the period since the use of the
undistributed income method does not accord with the results of operations.
@Employee retirement benefit plans that invest plan assets in the Separate
Investment Accounts (SIAs) may be subject to certain charges as set forth in
their respective Plan Documents. Total return figures would be lower for the
periods presented if they reflected these charges.
The accompanying notes are an integral part of the financial statements.
B-48
<PAGE>
MASSMUTUAL BALANCED FUND - PORTFOLIO OF INVESTMENTS
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1996
<TABLE>
<CAPTION>
NUMBER OF
SHARES MARKET VALUE
------- ------------
<S> <C> <C>
EQUITIES - 50.2%
AEROSPACE & DEFENSE -- 0.9%
Boeing Company 27,000 $2,872,125
Raytheon Company 1,200 57,750
TRW, Inc. 48,200 2,385,900
------------
5,315,775
============
AGRIBUSINESS -- 0.6%
Pioneer Hi-Bred
International, Inc. 45,500 3,185,000
============
APPAREL, TEXTILES & SHOES -- 0.5%
VF Corporation 44,500 3,003,750
============
AUTOMOTIVE & PARTS -- 2.4%
Ford Motor Company 97,300 3,101,438
Genuine Parts
Company 103,000 4,583,500
Goodyear Tire &
Rubber Company 113,700 5,841,338
------------
13,526,276
============
BANKING, SAVINGS & LOANS -- 3.2%
The Bank of New
York Company,
Incorporated 170,000 5,737,500
Comerica, Incorporated 41,500 2,173,563
CoreStates Financial
Corp. 81,500 4,227,813
Norwest Corporation 57,000 2,479,500
Wachovia Corp. 60,100 3,395,650
------------
18,014,026
============
BEVERAGES -- 1.0%
Brown-Forman
Corporation (Class B) 66,600 3,046,950
Pepsico, Inc. 84,000 2,457,000
------------
5,503,950
============
CHEMICALS -- 2.0%
E. I. du Pont de
Nemours and Company 33,000 3,114,375
The Lubrizol
Corporation 63,300 1,962,300
<CAPTION>
NUMBER OF
SHARES MARKET VALUE
------- ------------
<S> <C> <C>
Nalco Chemical
Company 81,500 $2,944,188
Rohm & Haas
Company 39,000 3,183,375
------------
11,204,238
============
COMMUNICATIONS -- 0.6%
AT & T Corporation 84,000 3,654,000
============
COMPUTERS & OFFICE EQUIPMENT -- 3.7%
Hewlett-Packard
Company 122,000 6,130,500
International Business
Machines Corporation 35,000 5,285,000
Pitney Bowes, Inc. 84,000 4,578,000
Xerox Corporation 90,000 4,736,250
------------
20,729,750
============
CONTAINERS -- 0.6%
Temple-Inland, Inc. 63,000 3,409,875
============
COSMETICS & PERSONAL CARE -- 0.8%
Kimberly-Clark
Corporation 48,400 4,610,100
============
DRUGS -- 0.6%
Pharmacia & Upjohn,
Inc. 85,000 3,368,125
============
ELECTRIC UTILITIES -- 0.6%
NIPSCO Industries,
Inc. 40,000 1,585,000
SCANA Corporation 75,000 2,006,250
------------
3,591,250
============
ELECTRICAL EQUIPMENT & ELECTRONICS -- 3.8%
AMP, Incorporated 156,700 6,013,363
General Electric
Company 82,000 8,107,750
Honeywell Inc. 44,000 2,893,000
Hubbell, Incorporated
(Class B) 96,023 4,152,986
------------
21,167,099
============
<CAPTION>
NUMBER OF
SHARES MARKET VALUE
------- ------------
<S> <C> <C>
ENERGY -- 4.3%
Amoco Corporation 74,000 $5,957,000
Atlantic Richfield
Company 20,300 2,689,750
Chevron Corporation 70,500 4,582,500
Kerr-McGee
Corporation 43,500 3,132,000
Mobil Corporation 35,000 4,278,750
Teco Energy, Inc. 57,000 1,375,125
Unocal Corporation 68,900 2,799,063
------------
24,814,188
============
FINANCIAL SERVICES -- 0.8%
American Express
Company 76,500 4,322,250
============
FOODS -- 1.4%
ConAgra, Inc. 62,200 3,094,450
CPC International, Inc. 61,000 4,727,500
------------
7,821,950
============
FOREST PRODUCTS & PAPER -- 1.3%
Westvaco Corporation 101,500 2,918,125
Weyerhaeuser Company 90,400 4,282,700
------------
7,200,825
============
HARDWARE & TOOLS -- 0.6%
The Stanley Works 123,000 3,321,000
============
HEALTHCARE -- 4.4%
Becton, Dickinson and
Company 102,000 4,424,250
Bristol-Myers Squibb
Company 89,000 9,678,750
Pfizer, Incorporated 74,000 6,132,750
Schering-Plough Corp. 69,800 4,519,550
------------
24,755,300
============
INDUSTRIAL DISTRIBUTION -- 0.7%
W.W. Grainger, Inc. 48,000 3,852,000
============
INDUSTRIAL TRANSPORTATION -- 0.7%
Norfolk Southern
Corporation 48,000 4,200,000
============
</TABLE>
(Continued)
The accompanying notes are an integral part of the financial statements.
B-49
<PAGE>
MASSMUTUAL BALANCED FUND - PORTFOLIO OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
NUMBER OF
SHARES MARKET VALUE
------ ------------
<S> <C> <C>
INSURANCE -- 4.0%
Allstate Corporation 36,544 $2,114,984
Jefferson-Pilot
Corporation 39,750 2,250,844
Marsh & McLennan
Companies, Inc. 55,000 5,720,000
MBIA, Inc. 51,500 5,214,375
SAFECO Corporation 149,000 5,876,188
Unitrin, Inc. 28,500 1,588,875
------------
22,765,266
============
MACHINERY & COMPONENTS -- 0.9%
Dover Corporation 62,000 3,115,500
Parker-Hannifin
Corporation 48,000 1,860,000
------------
4,975,500
============
MISCELLANEOUS -- 1.4%
Harsco Corporation 34,500 2,363,250
Minnesota Mining &
Manufacturing
Company 68,000 5,635,500
------------
7,998,750
============
OIL & GAS -- 1.0%
Occidental Petroleum
Corporation 128,500 3,003,688
Union Pacific
Resources Group Inc. 89,500 2,617,875
------------
5,621,563
============
PHOTOGRAPHY -- 0.7%
Eastman Kodak
Company 49,300 3,956,325
============
PUBLISHING & PRINTING -- 1.1%
The McGraw-Hill
Companies, Inc. 89,000 4,105,125
R.R. Donnelley & Sons
Company 75,500 2,368,813
------------
6,473,938
============
RETAIL -- 1.0%
The May Department
Stores Company 70,500 3,295,875
Sears Roebuck and Co. 48,000 2,214,000
------------
5,509,875
============
RETAIL-GROCERY -- 1.0%
Albertson's, Inc. 119,000 4,239,375
American Stores
Company 31,900 1,303,913
------------
5,543,288
============
TELECOMMUNICATIONS -- 0.5%
GTE Corporation 57,000 2,593,500
============
<CAPTION>
NUMBER OF
SHARES MARKET VALUE
------ ------------
<S> <C> <C>
TELEPHONE UTILITIES -- 1.5%
Ameritech Corporation 44,500 $2,697,813
Frontier Corporation 134,500 3,043,063
Southern New England
Telecommunications
Corporation 66,000 2,565,750
------------
8,306,626
============
TOBACCO -- 1.6%
American Brands, Inc. 88,500 4,391,813
UST Inc. 135,000 4,370,625
============
8,762,438
------------
TOTAL EQUITIES 283,077,796
============
(COST $198,917,229)
<CAPTION>
PRINCIPAL
AMOUNT MARKET VALUE
------ ------------
<S> <C> <C>
BONDS & NOTES -- 15.9%
ASSET BACKED SECURITIES -- 1.5%
Capita Equipment
Receivables Trust
1996-1, Class A4
6.280% 6/15/2000 $1,000,000 $1,001,560
Chase Manhattan Auto
Grantor Trust 1996-B,
Class A
6.610% 9/15/2002 2,286,319 2,302,026
Daimler-Benz Auto
Grantor Trust 1995-A,
Class A
5.850% 5/15/2002 1,113,462 1,112,761
Daimler-Benz Vehicle
Trust 1994-A
5.950% 12/15/2000 147,249 147,386
Ford Credit 1994-B
Grantor Trust
7.300% 10/15/1999 357,498 361,520
Ford Credit Auto
Owner Trust 1996-B,
Class A-4
6.300% 1/15/2001 1,000,000 1,003,990
Nissan Auto
Receivables 1994-A
Grantor Trust, Class A
6.450% 9/15/1999 438,841 439,939
Railcar Trust No.
1992-1
7.750% 6/01/2004 398,805 416,751
World Omni 1996-A
Automobile Lease
Securitization Trust,
Class A1
6.300% 6/25/2002 1,500,000 1,505,145
============
TOTAL ASSET BACKED
SECURITIES 8,291,078
============
(COST $8,269,339)
<CAPTION>
PRINCIPAL
AMOUNT MARKET VALUE
------ ------------
<S> <C> <C>
CORPORATE DEBT -- 5.6%
AirTouch
Communications, Inc.
7.500% 7/15/2006 $1,000,000 $1,026,480
America West Airlines
1996-1, Class A
6.850% 7/02/2009 1,000,000 980,000
American Airlines, Inc. .
9.780% 11/26/2011 1,000,000 1,138,750
AMR Corporation .
9.000% 8/01/2012 500,000 565,970
Analog Devices, Inc.
6.625% 3/01/2000 500,000 493,650
Associates Corporation
of North America
6.750% 8/01/2001 1,000,000 1,003,670
Bell Atlantic Financial
Services, Inc. .
6.610% 2/04/2000 1,000,000 1,006,210
BHP Finance (USA)
Limited
6.420% 3/01/2026 1,000,000 989,910
Cardinal Distribution,
Inc.
8.000% 3/01/1997 500,000 501,565
Champion International
Corporation
6.400% 2/15/2026 1,000,000 954,690
The Charles Schwab
Corporation
6.250% 1/23/2003 1,000,000 963,750
CITGO Petroleum
Corporation
7.875% 5/15/2006 250,000 254,900
Continental Airlines,
Inc., Series 1996-2B
8.560% 7/02/2014 499,897 544,263
Continental Airlines,
Inc., Series 1996-B
7.820% 10/15/2013 500,000 516,850
Delta Air Lines, Inc.
8.540% 1/02/2007 437,643 465,066
English China Clays
Delaware Inc. .
7.375% 10/01/2002 500,000 513,880
ERAC USA Finance
Company 144A
6.950% 1/15/2006 500,000 491,875
FBG Finance Ltd.
144A
7.875% 6/01/2016 1,000,000 1,016,610
Fletcher Challenge Ltd.
7.750% 6/20/2006 500,000 518,525
General American
Transportation
Corporation
6.750% 3/01/2006 1,000,000 971,900
</TABLE>
(Continued)
The accompanying notes are an integral part of the financial statements.
B-50
<PAGE>
MASSMUTUAL BALANCED FUND - PORTFOLIO OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MARKET VALUE
------ ------------
<S> <C> <C>
The Goldman Sachs
Group, L.P. 144A
6.200% 2/15/2001 $1,000,000 $ 980,000
GTE Corporation
9.100% 6/01/2003 500,000 557,745
Leucadia National
Corporation
7.750% 8/15/2013 1,000,000 988,570
Lockheed Martin
Corporation
7.700% 6/15/2008 1,000,000 1,046,230
McDonnell Douglas
Corporation
6.875% 11/01/2006 500,000 490,630
McDonnell Douglas
Corporation .
9.250% 4/01/2002 500,000 558,450
Newmont Mining
Corporation .
8.625% 4/01/2002 1,000,000 1,055,690
News America
Holdings Incorporated
9.250% 2/01/2013 1,000,000 1,120,290
Norfolk Southern
Corporation
7.220% 9/15/2006 850,000 866,031
Norfolk Southern
Corporation
7.400% 9/15/2006 1,000,000 1,015,570
North Finance
(Bermuda) Limited
144A
7.000% 9/15/2005 1,000,000 985,000
Pearson Inc. 144A
7.375% 9/15/2006 500,000 502,150
Polaroid Corporation
7.250% 1/15/1997 1,000,000 1,000,220
Rite Aid Corporation
6.700% 12/15/2001 500,000 499,045
Rolls-Royce Capital
Inc.
7.125% 7/29/2003 1,000,000 1,001,490
Scholastic Corporation
7.000% 12/15/2003 1,000,000 998,070
Thomas & Betts
Corporation
8.250% 1/15/2004 500,000 519,565
Time Warner Inc.
7.750% 6/15/2005 1,000,000 1,005,930
US Air, Inc.
7.500% 10/15/2009 487,019 491,889
W.R. Grace & Co.
8.000% 8/15/2004 1,000,000 1,058,720
------------
TOTAL CORPORATE DEBT 31,659,799
============
(COST $30,638,759)
<CAPTION>
PRINCIPAL
AMOUNT MARKET VALUE
------ ------------
<S> <C> <C>
U.S. GOVERNMENT AGENCY
OBLIGATIONS -- 4.4%
FEDERAL HOME LOAN MORTGAGE CORPORATION
(FHLMC) -- 0.9%
COLLATERALIZED MORTGAGE OBLIGATIONS -- 0.8%
FHLMC Series 1322
Class G
7.500% 2/15/2007 $1,000,000 $1,024,060
FHLMC Series 1625
Class D
5.250% 7/15/2004 3,100,000 3,067,047
FHLMC Series 1625
Class EA
5.750% 3/15/2007 1,000,000 981,870
-----------
5,072,977
===========
PASS-THROUGH SECURITIES -- 0.1%
FHLMC
9.000% 3/01/2017 184,306 196,112
-----------
5,269,089
===========
FEDERAL NATIONAL MORTGAGE ASSOCIATION
(FNMA) -- 1.0%
COLLATERALIZED MORTGAGE OBLIGATIONS -- 0.9%
FNMA Series 1993-134
Class GA
6.500% 2/25/2007 1,000,000 992,810
FNMA Series 1993-191
Class PD
5.400% 3/25/2004 1,000,000 991,560
FNMA Series 1993-221
Class D
6.000% 12/25/2008 1,000,000 956,250
FNMA Series 1996-54
Class C
6.000% 9/25/2008 2,000,000 1,920,000
-----------
4,860,620
===========
PASS-THROUGH SECURITIES -- 0.1%
FNMA
8.000% 5/01/2013 555,094 571,180
-----------
5,431,800
===========
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
(GNMA) -- 1.4%
PASS-THROUGH SECURITIES
GNMA
6.000% 12/20/2025 464,993 475,530
GNMA
7.000% 7/20/2025 1,837,048 1,876,085
GNMA
7.500% 10/15/2006 -
6/15/2017 3,020,543 3,054,435
<CAPTION>
PRINCIPAL
AMOUNT MARKET VALUE
------ ------------
<S> <C> <C>
GNMA
8.000% 11/15/2004 -
7/15/2008 $1,863,588 $ 1,925,887
GNMA
9.000% 12/15/2008 -
5/15/2009 607,143 646,796
-----------
7,978,733
===========
U.S. GOVERNMENT GUARANTEED NOTES -- 1.1%
1991-A Fairfax
County, VA
8.740% 8/01/2001 200,000 216,374
1991-A Jefferson
Park, CA
8.740% 8/01/2001 1,740,000 1,882,454
1991-A Monroe
County, NY
8.740% 8/01/2001 500,000 540,935
1991-A Rochester, NY
8.740% 8/01/2001 60,000 64,912
U.S. Dept. of Housing
and Urban
Development, Series
1995-A (C)
8.240% 8/01/2002 3,000,000 3,255,060
-----------
5,959,735
===========
TOTAL U.S. GOVERNMENT
AGENCY OBLIGATIONS 24,639,357
===========
(COST $23,963,711)
U.S. TREASURY OBLIGATIONS -- 4.4%
U.S. TREASURY BONDS -- 2.7%
U.S. Treasury Bond
7.250% 5/15/2016 5,250,000 5,543,685
U.S. Treasury Bond
8.750% 5/15/2017 8,250,000 10,066,320
-----------
15,610,005
===========
U.S. TREASURY NOTES -- 1.3%
U.S. Treasury Note
6.125% 3/31/1998 3,700,000 3,717,908
U.S. Treasury Note
7.125% 2/29/2000 3,300,000 3,397,449
-----------
7,115,357
===========
U.S. TREASURY STRIP -- 0.4%
U.S. Treasury Strip -- Principal Only
0.000% 2/15/1999 2,250,000 1,988,910
TOTAL U.S. TREASURY
OBLIGATIONS 24,714,272
===========
(COST $24,499,494)
TOTAL BONDS & NOTES 89,304,506
===========
(COST $87,371,303)
</TABLE>
(Continued)
The accompanying notes are an integral part of the financial statements.
B-51
<PAGE>
MASSMUTUAL BALANCED FUND - PORTFOLIO OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MARKET VALUE
---------- ------------
<S> <C> <C>
SHORT-TERM INVESTMENTS -- 30.2%
COMMERCIAL PAPER
Burlington Northern
Santa Fe Corp.
5.500% 1/21/1997 7,090,000 $7,068,336
Burlington Northern
Santa Fe Corp.
5.970% 1/03/1997 4,290,000 4,288,577
Carter Holt Harvey
Limited
5.500% 1/23/1997 3,750,000 3,737,396
Central and South
West Corporation
5.520% 1/14/1997 3,140,000 3,133,741
Central and South
West Corporation
5.620% 2/07/1997 3,470,000 3,449,957
Central and South
West Corporation
5.630% 1/17/1997 5,550,000 5,536,113
Comdisco, Inc.
5.520% 1/15/1997 2,790,000 2,784,011
Comdisco, Inc.
5.820% 1/29/1997 5,530,000 5,504,968
ConAgra, Inc.
5.490% 2/04/1997 4,135,000 4,113,560
Cox Enterprises, Inc.
5.470% 2/28/1997 3,000,000 2,973,562
Cox Enterprises, Inc.
5.480% 2/05/1997 2,680,000 2,665,722
Cox Enterprises, Inc.
5.500% 2/13/1997 6,170,000 6,129,467
Crown Cork & Seal
Company Inc.
5.800% 2/11/1997 4,000,000 3,973,578
CSX Corporation
5.800% 2/20/1997 5,990,000 5,941,747
Dana Credit
Corporation
5.460% 1/02/1997 4,320,000 4,319,345
Dana Credit
Corporation
5.530% 1/31/1997 2,635,000 2,622,857
Dominion Resources,
Inc.
5.470% 1/22/1997 4,300,000 4,286,279
Dominion Resources,
Inc.
5.520% 1/27/1997 5,915,000 5,891,419
Dominion Resources,
Inc.
5.520% 1/28/1997 3,335,000 3,321,193
ORIX Credit Alliance,
Inc.
5.490% 2/03/1997 3,685,000 3,666,455
ORIX Credit Alliance,
Inc.
5.520% 1/08/1997 2,230,000 2,227,606
<CAPTION>
PRINCIPAL
AMOUNT MARKET VALUE
---------- ------------
<S> <C> <C>
ORIX Credit Alliance,
Inc.
5.620% 1/14/1997 $ 170,000 $ 169,655
ORIX Credit Alliance,
Inc.
5.800% 1/06/1997 5,335,000 5,330,702
ORIX Credit Alliance,
Inc.
5.850% 3/03/1997 3,750,000 3,714,417
ORIX Credit Alliance,
Inc.
6.020% 2/27/1997 2,285,000 2,263,220
Praxair, Inc.
5.650% 2/21/1997 3,435,000 3,407,506
Public Service
Company of Colorado
5.470% 1/17/1997 2,355,000 2,349,275
Public Service
Company of Colorado
5.800% 2/25/1997 4,200,000 4,162,783
Public Service
Electric and Gas
Company
5.470% 1/10/1997 3,955,000 3,949,592
Public Service
Electric and Gas
Company
5.470% 1/24/1997 2,360,000 2,351,753
Public Service
Electric and Gas
Company
5.490% 1/13/1997 3,655,000 3,648,311
Public Service
Electric and Gas
Company
5.570% 2/06/1997 5,655,000 5,623,502
Rayonier Inc.
5.540% 1/07/1997 3,000,000 2,997,230
Rite Aid Corporation
5.600% 3/04/1997 4,900,000 4,852,742
<CAPTION>
PRINCIPAL
AMOUNT MARKET VALUE
---------- ------------
<S> <C> <C>
Sonat Inc.
5.650% 1/09/1997 $5,030,000 $5,023,685
Texas Utilities
Electric Co.
5.590% 2/14/1997 4,500,000 4,469,255
Texas Utilities
Electric Co.
5.600% 2/10/1997 3,800,000 3,776,356
Textron Financial
Corporation
5.500% 1/16/1997 1,642,000 1,638,237
Textron Financial
Corporation
5.500% 2/18/1997 3,000,000 2,978,000
Textron Financial
Corporation
5.560% 2/12/1997 2,800,000 2,781,837
Union Pacific
Corporation
5.650% 1/30/1997 2,920,000 2,906,710
Union Pacific
Corporation
5.800% 2/24/1997 2,550,000 2,527,815
UOP
5.600% 1/31/1997 3,255,000 3,239,810
UOP
5.620% 2/26/1997 4,635,000 4,594,478
UOP
5.750% 2/19/1997 4,125,000 4,092,716
-------------
TOTAL SHORT-TERM
INVESTMENTS 170,485,476
-------------
(COST $170,483,887)
TOTAL INVESTMENTS -- 96.3% 542,867,778
(COST $456,772,419)+
OTHER ASSETS/
(LIABILITIES) - 3.7% 20,818,070
-------------
NET ASSETS -- 100.0% $ 563,685,848
-------------
</TABLE>
NOTES TO PORTFOLIO OF INVESTMENTS
+Aggregate cost for Federal tax purposes (Note 7)
144A: Securities exempt from registration under 144A: Rule 144A of the
Securities Act of 1933. 144A: These securities may be resold in transac-
tions exempt from registration, normally to qualified institutional
buyers.
. All or a portion of this security is segregated to cover forward purchase
commitments. (Note 2).
The accompanying notes are an integral part of the financial statements.
B-52
<PAGE>
MASSMUTUAL BALANCED FUND - FINANCIAL STATEMENTS
Statements of Assets and Liabilities
<TABLE>
<CAPTION>
DECEMBER 31, 1996
-----------------
<S> <C>
Assets:
Investments, at value (cost $286,288,532) (Note 2)..................... $ 372,382,302
Short-term investments, at value (cost $170,483,887) (Note 2).......... 170,485,476
---------------
Total Investments..................................................... 542,867,778
Cash................................................................... 1,546
Receivables from:
Investments sold...................................................... 246,752
Fund shares sold...................................................... 19,719,860
Interest and dividends................................................ 1,898,035
Investment manager (Note 3)........................................... 22,488
---------------
Total assets........................................................ 564,756,459
---------------
Liabilities:
Payables for:
Investments purchased................................................ 87,044
Settlement of investments purchased on a
forward commitment basis (Note 2)................................... 2,411
Fund shares redeemed................................................... 702,735
Directors' fees and expenses (Note 3).................................. 5,176
Affiliates (Note 3):...................................................
Investment management fees........................................... 213,324
Administration fees.................................................. 40,525
Service and distribution fees........................................ 266
Accrued expenses and other liabilities................................. 19,130
---------------
Total liabilities.................................................... 1,070,611
---------------
NET ASSETS............................................................ $ 563,685,848
===============
Net assets consist of:
Paid-in capital....................................................... $ 475,645,805
Undistributed net investment income................................... 26,102
Accumulated net realized gain on investments.......................... 1,920,993
Net unrealized appreciation on investments
and forward commitments........................................... 86,092,948
---------------
$ 563,685,848
===============
Net assets:
Class 1............................................................... $ 133,821
===============
Class 2............................................................... $ 135,418
===============
Class 3............................................................... $ 136,218
===============
Class 4............................................................... $ 563,280,391
===============
Shares outstanding:
Class 1............................................................... 10,838
===============
Class 2............................................................... 10,948
===============
Class 3............................................................... 10,994
===============
Class 4............................................................... 45,632,444
===============
Net asset value, offering price and
redemption price per share:
Class 1............................................................... $ 12.35
===============
Class 2............................................................... $ 12.37
===============
Class 3............................................................... $ 12.39
===============
Class 4............................................................... $ 12.34
===============
</TABLE>
The accompanying notes are an integral part of the financial statements.
B-53
<PAGE>
MASSMUTUAL BALANCED FUND - FINANCIAL STATEMENTS (CONTINUED)
Statement of Operations
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31, 1996
-----------------
<S> <C>
Investment income:
Interest.............................................................. $ 15,133,862
Dividends............................................................. 6,800,485
-------------
Total investment income............................................. 21,934,347
-------------
Expenses (Note 1):
Investment management fees (Note 3)................................... 2,271,174
Custody fees.......................................................... 53,996
Audit and legal fees.................................................. 16,737
Directors' fees (Note 3).............................................. 15,247
Fees waived by the investment manager (Note 3)........................ (203,071)
-------------
2,154,083
Administration fees (Note 3):
Class 1............................................................. 794
Class 2............................................................. 661
Class 3............................................................. 412
Class 4............................................................. 429,674
Distribution and service fees (Note 3):...............................
Class 1............................................................. 903
Class 2............................................................. 191
-------------
Net expenses...................................................... 2,586,718
-------------
NET INVESTMENT INCOME............................................. 19,347,629
-------------
Realized and unrealized gain (loss):.....................................
Net realized gain on investment transactions and forward commitments.. 8,885,806
Net change in unrealized appreciation (depreciation) on...............
investments and forward commitments................................... 33,108,845
-------------
Net realized and unrealized gain...................................... 41,994,651
-------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS.................. $ 61,342,280
=============
</TABLE>
The accompanying notes are an integral part of the financial statements.
B-54
<PAGE>
MASSMUTUAL BALANCED FUND - FINANCIAL STATEMENTS (CONTINUED)
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
DECEMBER 31, 1996 DECEMBER 31, 1995
----------------- -----------------
<S> <C> <C>
Increase(Decrease) in Net Assets:
Operations:
Net investment income............................................ $ 19,347,629 $ 16,724,229
Net realized gain on investment transactions
and forward commitments......................................... 8,885,806 4,359,989
Net change in unrealized appreciation (depreciation) on
investments and forward commitments............................. 33,108,845 55,498,858
------------ ------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........... 61,342,280 76,583,076
------------ ------------
Distributions to shareholders (Note 2):
From net investment income:
Class 1......................................................... (3,204) (4,846)
Class 2......................................................... (4,068) (3,751)
Class 3......................................................... (4,538) (4,120)
Class 4......................................................... (19,441,756) (16,528,781)
------------ ------------
TOTAL DISTRIBUTIONS FROM NET INVESTMENT INCOME................. (19,453,566) (16,541,498)
------------ ------------
From net realized gains:
Class 1......................................................... (1,969) (1,239)
Class 2......................................................... (1,970) (859)
Class 3......................................................... (1,972) (857)
Class 4......................................................... (7,883,759) (3,230,318)
------------ ------------
TOTAL DISTRIBUTIONS FROM NET REALIZED GAINS.................... (7,889,670) (3,233,273)
------------ ------------
Net fund share transactions (Note 5):
Class 1......................................................... (49,367) 55,401
Class 2......................................................... 6,038 4,610
Class 3......................................................... 6,510 4,977
Class 4......................................................... 72,536,092 50,326,522
------------ ------------
INCREASE IN NET ASSETS FROM NET FUND SHARE TRANSACTIONS........ 72,499,273 50,391,510
------------ ------------
TOTAL INCREASE IN NET ASSETS.................................... 106,498,317 107,199,815
Net assets:
Beginning of period............................................. 457,187,531 349,987,716
------------ ------------
End of period (including undistributed net investment income
of $26,102 and $179,574, respectively)......................... $563,685,848 $457,187,531
============ ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
B-55
<PAGE>
MASSMUTUAL BALANCED FUND - FINANCIAL STATEMENTS (CONTINUED)
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
CLASS 1
-------
YEAR ENDED YEAR ENDED PERIOD ENDED
12/31/96 12/31/95 12/31/94**
---------- ---------- ------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 11.50 $ 9.94 $ 10.00
---------- ---------- ------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income 0.34 0.28 0.06
Net realized and unrealized gain (loss) on investments 1.01 1.70 (0.06)
---------- ---------- ------------
Total income (loss) from investment operations 1.35 1.98 --
---------- ---------- ------------
LESS DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income (0.31) (0.33) (0.06)
From net realized gains (0.19) (0.09) --
---------- ---------- ------------
Total distributions (0.50) (0.42) (0.06)
---------- ---------- ------------
NET ASSET VALUE, END OF PERIOD $ 12.35 $ 11.50 $ 9.94
========== ========== ============
TOTAL RETURN 11.67% 19.92% 0.00%
RATIOS / SUPPLEMENTAL DATA:
Net assets, end of period (000's) $ 134 $ 173 $ 100
Net expenses to average daily net assets# 1.65% 1.65% 1.65%*
Net investment income to average daily net assets 2.71% 3.03% 3.39%*
Portfolio turnover rate 26% 23% 2%
Average broker commission rate (a) $ .0594 N/A N/A
#Computed after giving effect to the reduction in
management fee by MassMutual. Without this reduction of
fees by the investment manager, the ratio of expenses
to average daily net assets would have been: 1.69% 1.69% 1.71%*
</TABLE>
<TABLE>
<CAPTION>
CLASS 2
-------
YEAR ENDED YEAR ENDED PERIOD ENDED
12/31/96 12/31/95 12/31/94**
---------- ---------- ------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 11.53 $ 9.95 $ 10.00
---------- ---------- ------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income 0.39 0.39 0.06
Net realized and unrealized gain (loss) on investments 1.03 1.65 (0.04)
---------- ---------- ------------
Total income (loss) from investment operations 1.42 2.04 0.02
---------- ---------- ------------
LESS DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income (0.39) (0.37) (0.07)
From net realized gains (0.19) (0.09) --
---------- ---------- ------------
Total distributions (0.58) (0.46) (0.07)
---------- ---------- ------------
NET ASSET VALUE, END OF PERIOD $ 12.37 $ 11.53 $ 9.95
========== ========== ============
TOTAL RETURN 12.25% 20.50% 0.17%
RATIOS / SUPPLEMENTAL DATA:
Net assets, end of period (000's) $ 135 $ 121 $ 100
Net expenses to average daily net assets# 1.10% 1.10% 1.10%*
Net investment income to average daily net assets 3.23% 3.60% 3.94%*
Portfolio turnover rate 26% 23% 2%
Average broker commission rate (a) $ .0594 N/A N/A
#Computed after giving effect to the reduction in
management fee by MassMutual. Without this reduction of
fees by the investment manager, the ratio of expenses
to average daily net assets would have been: 1.14% 1.14% 1.16%*
</TABLE>
* Annualized
** For the period from October 3, 1994 (commencement of operations) through
December 31, 1994.
(a) Average commission rate paid is computed by dividing the total amount of
commissions paid during the fiscal year by the total number of shares
purchased and sold during the fiscal year for which commissions were
charged. For fiscal years beginning on or after September 1, 1995, a Fund is
required to disclose its average commission rate per share for security
trades on which commissions are charged.
The accompanying notes are an integral part of the financial statements.
B-56
<PAGE>
MASSMUTUAL BALANCED FUND - FINANCIAL STATEMENTS (CONTINUED)
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
CLASS 3
-------
YEAR ENDED YEAR ENDED PERIOD ENDED
12/31/96 12/31/95 12/31/94**
---------- ---------- ------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 11.55 $ 9.96 $ 10.00
---------- ---------- ------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income 0.44 0.43 0.07
Net realized and unrealized gain (loss) on investments 1.02 1.66 (0.04)
---------- ---------- ------------
Total income (loss) from investment operations 1.46 2.09 0.03
---------- ---------- ------------
LESS DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income (0.43) (0.41) (0.07)
From net realized gains (0.19) (0.09) --
---------- ---------- ------------
Total distributions (0.62) (0.50) (0.07)
---------- ---------- ------------
NET ASSET VALUE, END OF PERIOD $ 12.39 $ 11.55 $ 9.96
========== ========== ============
TOTAL RETURN 12.61% 20.96% 0.28%
RATIOS / SUPPLEMENTAL DATA:
Net assets, end of period (000's) $ 136 $ 121 $ 100
Net expenses to average daily net assets# 0.75% 0.75% 0.75%*
Net investment income to average daily net assets 3.60% 3.94% 4.32%*
Portfolio turnover rate 26% 23% 2%
Average broker commission rate (a) $ .0594 N/A N/A
#Computed after giving effect to the reduction in
management fee by MassMutual. Without this reduction of
fees by the investment manager, the ratio of expenses
to average daily net assets would have been: 0.79% 0.79% 0.81%*
</TABLE>
<TABLE>
<CAPTION>
CLASS 4
----------
YEAR ENDED YEAR ENDED PERIOD ENDED
12/31/96 12/31/95 12/31/94(up)**
----------- ---------- ------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 11.51 $ 9.92 $ 10.00
----------- ---------- ------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income 0.46 0.44 0.11
Net realized and unrealized gain (loss) on investments 1.02 1.68 (0.08)
----------- ---------- ------------
Total income (loss) from investment operations 1.48 2.12 0.03
----------- ---------- ------------
LESS DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income (0.46) (0.44) (0.11)
From net realized gains (0.19) (0.09) --
----------- ---------- ------------
Total distributions (0.65) (0.53) (0.11)
----------- ---------- ------------
NET ASSET VALUE, END OF PERIOD $ 12.34 $ 11.51 $ 9.92
=========== ========== ============
TOTAL RETURN@ 12.83% 21.31% 0.29%
RATIOS / SUPPLEMENTAL DATA:
Net assets, end of period (000's) $ 563,280 $ 456,773 $ 349,688
Net expenses to average daily net assets# 0.5120% 0.5120% 0.5120%*
Net investment income to average daily net assets 3.83% 4.18% 4.29%*
Portfolio turnover rate 26% 23% 2%
Average broker commission rate (a) $ .0594 N/A N/A
#Computed after giving effect to the reduction in
management fee by MassMutual. Without this reduction of
fees by the investment manager, the ratio of expenses
to average daily net assets would have been: 0.5522% 0.5514% 0.5650%*
</TABLE>
* Annualized
** For the period from October 3, 1994 (commencement of operations) through
December 31, 1994.
@ Employee retirement benefit plans that invest plan assets in the Separate
Investment Accounts (SIAs) may be subject to certain charges as set forth in
their respective Plan Documents. Total return figures would be lower for the
periods presented if they reflected these charges.
(a) Average commission rate paid is computed by dividing the total amount of
commissions paid during the fiscal year by the total number of shares
purchased and sold during the fiscal year for which commissions were
charged. For fiscal years beginning on or after September 1, 1995, a Fund is
required to disclose its average commission rate per share for security
trades on which commissions are charged.
The accompanying notes are an integral part of the financial statements.
B-57
<PAGE>
MASSMUTUAL VALUE EQUITY FUND - PORTFOLIO OF INVESTMENTS
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1996
<TABLE>
<CAPTION>
NUMBER OF
SHARES MARKET VALUE
--------- ------------
<S> <C> <C>
EQUITIES - 95.2%
AEROSPACE & DEFENSE -- 1.8%
Boeing Company 230,000 $24,466,250
Raytheon Company 10,000 481,250
TRW, Inc. 396,600 19,631,700
------------
44,579,200
------------
AGRIBUSINESS -- 1.1%
Pioneer Hi-Bred
International, Inc. 385,000 26,950,000
------------
APPAREL, TEXTILES & SHOES -- 1.0%
VF Corporation 365,000 24,637,500
------------
AUTOMOTIVE & PARTS -- 4.7%
Ford Motor Company 945,300 30,131,438
Genuine Parts
Company 860,000 38,270,000
Goodyear Tire &
Rubber Company 955,000 49,063,125
------------
117,464,563
------------
BANKING, SAVINGS & LOANS -- 6.1%
The Bank of New
York Company,
Incorporated 1,440,000 48,600,000
Comerica, Incorporated 338,000 17,702,750
CoreStates Financial
Corp. 700,000 36,312,500
Norwest Corporation 485,000 21,097,500
Wachovia Corp. 494,000 27,911,000
------------
151,623,750
------------
BEVERAGES -- 1.9%
Brown-Forman
Corporation (Class B) 575,000 26,306,250
Pepsico, Inc. 700,000 20,475,000
------------
46,781,250
------------
<CAPTION>
NUMBER OF
SHARES MARKET VALUE
--------- ------------
<S> <C> <C>
CHEMICALS -- 3.7%
E. I. du Pont de
Nemours and Company 275,000 $25,953,125
The Lubrizol
Corporation 529,500 16,414,500
Nalco Chemical
Company 680,000 24,565,000
Rohm & Haas
Company 315,000 25,711,875
------------
92,644,500
------------
COMMUNICATIONS -- 1.2%
AT & T Corporation 700,000 30,450,000
------------
COMPUTERS & OFFICE EQUIPMENT -- 6.9%
Hewlett-Packard
Company 1,020,000 51,255,000
International Business
Machines Corporation 291,000 43,941,000
Pitney Bowes, Inc. 700,000 38,150,000
Xerox Corporation 723,000 38,047,875
------------
171,393,875
------------
CONTAINERS -- 1.1%
Temple-Inland, Inc. 525,000 28,415,625
------------
COSMETICS & PERSONAL CARE -- 1.5%
Kimberly-Clark
Corporation 403,000 38,385,750
------------
DRUGS -- 1.2%
Pharmacia & Upjohn,
Inc. 725,000 28,728,125
------------
ELECTRIC UTILITIES -- 1.2%
NIPSCO Industries,
Inc. 330,000 13,076,250
SCANA Corporation 625,000 16,718,750
------------
29,795,000
------------
<CAPTION>
NUMBER OF
SHARES MARKET VALUE
--------- ------------
<S> <C> <C>
ELECTRICAL EQUIPMENT & ELECTRONICS -- 7.0%
AMP, Incorporated 1,313,000 $ 50,386,375
General Electric
Company 680,000 67,235,000
Honeywell Inc. 365,000 23,998,750
Hubbell, Incorporated
(Class B) 800,071 34,603,088
------------
176,223,213
------------
ENERGY -- 8.3%
Amoco Corporation 615,000 49,507,500
Atlantic Richfield
Company 168,000 22,260,000
Chevron Corporation 600,000 39,000,000
Kerr-McGee
Corporation 360,000 25,920,000
Mobil Corporation 290,000 35,452,500
Teco Energy, Inc. 487,700 11,765,763
Unocal Corporation 574,900 23,355,313
------------
207,261,076
------------
FINANCIAL SERVICES -- 1.5%
American Express
Company 665,000 37,572,500
------------
FOODS -- 2.5%
ConAgra, Inc. 518,000 25,770,500
CPC International, Inc. 462,500 35,843,748
------------
61,614,248
------------
FOREST PRODUCTS & PAPER -- 2.5%
Westvaco Corporation 855,000 24,581,250
Weyerhaeuser Company 775,000 36,715,625
------------
61,296,875
------------
HARDWARE & TOOLS -- 1.1%
The Stanley Works 1,030,000 27,810,000
------------
</TABLE>
B-58
<PAGE>
MASSMUTUAL VALUE EQUITY FUND - PORTFOLIO OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
NUMBER OF
SHARES MARKET VALUE
--------- ------------
<S> <C> <C>
HEALTHCARE -- 8.3%
Becton, Dickinson and
Company 850,000 $ 36,868,750
Bristol-Myers Squibb
Company 750,000 81,562,500
Pfizer, Incorporated 610,000 50,553,750
Schering-Plough Corp. 565,600 36,622,600
------------
205,607,600
------------
INDUSTRIAL DISTRIBUTION -- 1.3%
W.W. Grainger, Inc. 400,000 32,100,000
------------
INDUSTRIAL TRANSPORTATION -- 1.4%
Norfolk Southern
Corporation 400,000 35,000,000
------------
INSURANCE -- 7.7%
Allstate Corporation 305,921 17,705,178
Jefferson-Pilot
Corporation 345,000 19,535,625
Marsh & McLennan
Companies, Inc. 454,900 47,309,600
MBIA, Inc. 435,000 44,043,750
SAFECO Corporation 1,240,000 48,902,500
Unitrin, Inc. 234,950 13,098,463
------------
190,595,116
------------
MACHINERY & COMPONENTS -- 1.7%
Dover Corporation 540,000 27,135,000
Parker-Hannifin
Corporation 400,000 15,500,000
------------
42,635,000
------------
MISCELLANEOUS -- 2.7%
Harsco Corporation 300,000 20,550,000
Minnesota Mining &
Manufacturing
Company 565,000 46,824,375
------------
67,374,375
------------
OIL & GAS -- 1.9%
Occidental Petroleum
Corporation 1,067,000 24,941,125
Union Pacific
Resources Group Inc. 729,700 21,343,725
------------
46,284,850
------------
PHOTOGRAPHY -- 1.3%
Eastman Kodak
Company 413,600 33,191,400
------------
PUBLISHING & PRINTING -- 2.2%
The McGraw-Hill
Companies, Inc. 740,000 34,132,500
R.R. Donnelley & Sons
Company 630,000 19,766,250
------------
53,898,750
------------
<CAPTION>
NUMBER OF
SHARES MARKET VALUE
--------- ------------
<S> <C> <C>
RETAIL -- 1.9%
The May Department
Stores Company 600,000 $ 28,050,000
Sears Roebuck and Co. 400,000 18,450,000
------------
46,500,000
------------
RETAIL-GROCERY -- 1.9%
Albertson's, Inc. 1,000,001 35,625,010
American Stores
Company 262,300 10,721,513
------------
46,346,523
------------
TELECOMMUNICATIONS -- 0.9%
GTE Corporation 475,300 21,626,150
------------
TELEPHONE UTILITIES -- 2.8%
Ameritech Corporation 372,000 22,552,500
Frontier Corporation 1,112,200 25,163,525
Southern New England
Telecommunications
Corporation 555,000 21,575,625
------------
69,291,650
TOBACCO -- 2.9%
American Brands, Inc. 735,000 36,474,375
UST Inc. 1,111,000 35,968,625
------------
72,443,000
TOTAL EQUITIES 2,366,521,464
-------------
(COST $1,654,626,282)
<CAPTION>
PRINCIPAL
AMOUNT MARKET VALUE
---------- ------------
<S> <C> <C>
SHORT-TERM INVESTMENTS -- 4.6%
COMMERCIAL PAPER
AIG Funding Inc.
5.280% 2/28/1997 5,668,000 5,619,784
CoreStates Capital
Corporation
5.270% 4/28/1997 2,000,000 1,963,600
E. I. du Pont de
Nemours and Company
5.250% 5/09/1997 5,000,000 4,900,444
E. I. du Pont de
Nemours and Company
5.250% 5/19/1997 9,000,000 8,806,800
First Union
Corporation
5.270% 4/23/1997 3,000,000 2,947,733
First Union
Corporation
5.280% 3/28/1997 5,000,000 4,933,111
Ford Motor Credit
Company
5.290% 3/10/1997 14,000,000 13,851,912
Heinz (H.J.) Company
5.330% 1/21/1997 3,000,000 2,991,117
<CAPTION>
PRINCIPAL
AMOUNT MARKET VALUE
----------- ------------
<S> <C> <C>
Heinz (H.J.) Company
5.400% 1/21/1997 $ 8,000,000 $ 7,976,000
J. P. Morgan &
Company Incorporated
5.280% 2/03/1997 14,000,000 13,932,240
Shell Oil Company
6.500% 1/02/1997 6,861,000 6,859,761
Sunoco Credit
Corporation
5.320% 2/04/1997 8,000,000 7,959,804
Sunoco Credit
Corporation
5.370% 1/21/1997 6,000,000 5,982,100
Transamerica
Financial Corporation
5.270% 3/14/1997 2,595,000 2,565,936
The Walt Disney
Company
5.320% 1/24/1997 10,000,000 9,966,011
Weyerhaeuser Company
5.300% 2/10/1997 9,000,000 8,947,000
Weyerhaeuser Company
5.300% 2/12/1997 4,000,000 3,975,267
------------
TOTAL SHORT-TERM
INVESTMENTS 114,178,620
------------
(COST $114,215,876)
TOTAL INVESTMENTS -- 99.8% 2,480,700,084
(COST $1,768,842,158)+
OTHER ASSETS/
(LIABILITIES) - 0.2% 5,508,151
-------------
NET ASSETS -- 100.0% $2,486,208,235
-------------
</TABLE>
NOTES TO PORTFOLIO OF INVESTMENTS
+Aggregate cost for Federal tax purposes (Note 7)
The accompanying notes are an integral part of the financial statio
B-59
<PAGE>
MASSMUTUAL VALUE EQUITY FUND - FINANCIAL STATEMENTS
Statement of Assets and Liabilities
<TABLE>
<CAPTION>
DECEMBER 31, 1996
-----------------
<S> <C>
Assets:
Investments, at value (cost $1,654,626,282) (Note 2)............. $ 2,366,521,464
Short-term investments, at value (cost $114,215,876) (Note 2).... 114,178,620
----------------
Total Investments.............................................. 2,480,700,084
Cash............................................................. 190
Receivables from:
Investments sold............................................... 2,044,107
Fund shares sold............................................... 1,696,480
Interest and dividends......................................... 5,329,158
Investment manager (Note 3).................................... 106,983
----------------
Total assets................................................... 2,489,877,002
----------------
Liabilities:
Payables for:
Investments purchased.......................................... 481,850
Fund shares redeemed........................................... 1,916,768
Directors' fees and expenses (Note 3).......................... 5,176
Affiliates (Note 3):
Investment management fees................................... 987,506
Administration fees.......................................... 198,758
Service and distribution fees................................ 303
Accrued expenses and other liabilities......................... 78,406
----------------
Total liabilities............................................ 3,668,767
----------------
NET ASSETS..................................................... $ 2,486,208,235
================
Net assets consist of:
Paid-in capital................................................ $ 1,759,761,092
Undistributed net investment income............................ 410,862
Accumulated net realized gain on investments................... 14,178,355
Net unrealized appreciation on investments..................... 711,857,926
----------------
$ 2,486,208,235
================
Net assets:
Class 1.......................................................... $ 153,607
================
Class 2.......................................................... $ 155,446
================
Class 3.......................................................... $ 156,351
================
Class 4.......................................................... $ 2,485,742,831
================
Shares outstanding:
Class 1.......................................................... 10,640
================
Class 2.......................................................... 10,740
================
Class 3.......................................................... 10,793
================
Class 4.......................................................... 171,928,663
================
Net asset value, offering price and
redemption price per share:
Class 1.......................................................... $ 14.44
================
Class 2.......................................................... $ 14.47
================
Class 3.......................................................... $ 14.49
================
Class 4.......................................................... $ 14.46
================
</TABLE>
The accompanying notes are an integal part of the financial statements.
B-60
<PAGE>
MASSMUTUAL VALUE EQUITY FUND - FINANCIAL STATEMENTS (CONTINUED)
Statement of Operations
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31, 1996
-----------------
<S> <C>
Investment income:
Dividends................................................. $ 56,941,194
Interest.................................................. 10,459,062
--------------
Total investment income................................. 67,400,256
--------------
Expenses (Note 1):
Investment management fees (Note 3)....................... 10,377,627
Custody fees.............................................. 205,814
Audit and legal fees...................................... 77,183
Directors' fees (Note 3).................................. 15,195
Fees waived by the investment manager (Note 3)............ (1,077,667)
--------------
9,598,152
Administration fees (Note 3):
Class 1................................................. 814
Class 2................................................. 751
Class 3................................................. 474
Class 4................................................. 2,086,673
Distribution and service fees (Note 3):
Class 1................................................. 911
Class 2................................................. 212
--------------
Net expenses.......................................... 11,687,987
--------------
NET INVESTMENT INCOME................................. 55,712,269
--------------
Realized and unrealized gain (loss):
Net realized gain on investment transactions.............. 74,040,546
Net change in unrealized appreciation (depreciation)......
on investments........................................... 296,454,766
--------------
NET REALIZED AND UNREALIZED GAIN...................... 370,495,312
--------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS...... $ 426,207,581
==============
</TABLE>
The accompanying notes are an integral part of the financial statements.
B-61
<PAGE>
MASSMUTUAL VALUE EQUITY FUND - FINANCIAL STATEMENTS (CONTINUED)
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
DECEMBER 31, 1996 DECEMBER 31, 1995
----------------- -----------------
<S> <C> <C>
Increase (Decrease) in Net Assets:
Operations:
Net investment income......................................... $ 55,712,269 $ 50,082,342
Net realized gain on investment transactions.................. 74,040,546 21,371,652
Net change in unrealized appreciation (depreciation)
on investments............................................... 296,454,766 429,724,511
-------------- --------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS......... 426,207,581 501,178,505
-------------- --------------
Distributions to shareholders (Note 2):
From net investment income:
Class 1....................................................... (1,849) (1,761)
Class 2....................................................... (2,628) (2,382)
Class 3....................................................... (3,152) (2,774)
Class 4....................................................... (55,920,646) (49,597,273)
-------------- --------------
TOTAL DISTRIBUTIONS FROM NET INVESTMENT INCOME............... (55,928,275) (49,604,190)
-------------- --------------
From net realized gains:.
Class 1....................................................... (4,035) (990)
Class 2....................................................... (4,054) (990)
Class 3....................................................... (4,061) (988)
Class 4....................................................... (64,653,761) (16,056,271)
-------------- --------------
TOTAL DISTRIBUTIONS FROM NET REALIZED GAINS.................. (64,665,911) (16,059,239)
-------------- --------------
Net fund share transactions (Note 5):
Class 1....................................................... 5,884 2,751
Class 2....................................................... 6,682 3,372
Class 3....................................................... 7,213 3,763
Class 4....................................................... 54,936,919 126,252,551
-------------- --------------
INCREASE IN NET ASSETS FROM NET FUND SHARE TRANSACTIONS...... 54,956,698 126,262,437
-------------- --------------
TOTAL INCREASE IN NET ASSETS.................................. 360,570,093 561,777,513
Net assets:
Beginning of period........................................... 2,125,638,142 1,563,860,629
-------------- --------------
End of period (including undistributed net investment income
of $410,862 and $626,868, respectively)....................... $2,486,208,235 $2,125,638,142
============== ==============
</TABLE>
The accompanying notes are an integral part of the financial statements.
B-62
<PAGE>
MASSMUTUAL VALUE EQUITY FUND - FINANCIAL STATEMENTS (CONTINUED)
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
CLASS 1
----------
YEAR ENDED YEAR ENDED PERIOD ENDED
12/31/96 12/31/95 12/31/94**
---------- ---------- ------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 12.63 $ 9.92 $ 10.00
---------- ---------- ------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income 0.17 0.18 0.04
Net realized and unrealized gain (loss) on investments 2.21 2.81 (0.08)
---------- ---------- ------------
Total income (loss) from investment operations 2.38 2.99 (0.04)
---------- ---------- ------------
LESS DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income (0.18) (0.18) (0.04)
From net realized gains (0.39) (0.10) --
---------- ---------- ------------
Total distributions (0.57) (0.28) (0.04)
---------- ---------- ------------
NET ASSET VALUE, END OF PERIOD $ 14.44 $ 12.63 $ 9.92
========== ========== ============
TOTAL RETURN 18.83% 30.10% (0.39)%
RATIOS / SUPPLEMENTAL DATA:
Net assets, end of period (000's) $ 154 $ 129 $ 99
Net expenses to average daily net assets# 1.65% 1.65% 1.65%*
Net investment income to average daily net assets 1.28% 1.58% 2.31%*
Portfolio turnover rate 13% 16% 3%
Average broker commission rate (a) $ .0585 N/A N/A
#Computed after giving effect to the reduction in
management fee by MassMutual. Without this reduction of
fees by the investment manager, the ratio of expenses
to average daily net assets would have been: 1.69% 1.70% 1.71%*
</TABLE>
<TABLE>
<CAPTION>
CLASS 2
----------
YEAR ENDED YEAR ENDED PERIOD ENDED
12/31/96 12/31/95 12/31/94**
---------- ---------- ------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 12.65 $ 9.93 $ 10.00
---------- ---------- -----------
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income 0.25 0.24 0.05
Net realized and unrealized gain (loss) on investments 2.22 2.82 (0.07)
---------- ---------- -----------
Total income (loss) from investment operations 2.47 3.06 (0.02)
---------- ---------- -----------
LESS DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income (0.26) (0.24) (0.05)
From net realized gains (0.39) (0.10) --
---------- ---------- -----------
Total distributions (0.65) (0.34) (0.05)
---------- ---------- -----------
NET ASSET VALUE, END OF PERIOD $ 14.47 $ 12.65 $ 9.93
========== ========== ===========
TOTAL RETURN 19.46% 30.80% (0.22)%
RATIOS / SUPPLEMENTAL DATA:
Net assets, end of period (000's) $ 155 $ 130 $ 99
Net expenses to average daily net assets# 1.10% 1.10% 1.10%*
Net investment income to average daily net assets 1.82% 2.13% 2.86%*
Portfolio turnover rate 13% 16% 3%
Average broker commission rate (a) $ .0585 N/A N/A
#Computed after giving effect to the reduction in
management fee by MassMutual. Without this reduction of
fees by the investment manager, the ratio of expenses
to average daily net assets would have been: 1.14% 1.15% 1.16%*
</TABLE>
*Annualized
**For the period from October 3, 1994 (commencement of operations) through
December 31, 1994.
(a)Average commission rate paid is computed by dividing the total amount of
commissions paid during the fiscal year by the total number of shares purchased
and sold during the fiscal year for which commissions were charged. For fiscal
years beginning on or after September 1, 1995, a Fund is required to disclose
its average commission rate per share for security trades on which commissions
are charged.
The accompanying notes are an integral part of the financial statements.
B-63
<PAGE>
MASSMUTUAL VALUE EQUITY FUND - FINANCIAL STATEMENTS (CONTINUED)
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
CLASS 3
----------
YEAR ENDED YEAR ENDED PERIOD ENDED
12/31/96 12/31/95 12/31/94**
---------- ---------- -----------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 12.66 $ 9.93 $ 10.00
---------- ---------- -----------
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income 0.30 0.28 0.05
Net realized and unrealized gain (loss) on investments 2.23 2.83 (0.07)
---------- ---------- -----------
Total income (loss) from investment operations 2.53 3.11 (0.02)
---------- ---------- -----------
LESS DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income (0.31) (0.28) (0.05)
From net realized gains (0.39) (0.10) --
---------- ---------- -----------
Total distributions (0.70) (0.38) (0.05)
---------- ---------- -----------
NET ASSET VALUE, END OF PERIOD $ 14.49 $ 12.66 $ 9.93
========== ========== ===========
TOTAL RETURN 19.92% 31.30% (0.18)%
RATIOS / SUPPLEMENTAL DATA:
Net assets, end of period (000's) $ 156 $ 130 $ 99
Net expenses to average daily net assets# 0.75% 0.75% 0.75%*
Net investment income to average daily net assets 2.17% 2.48% 3.23%*
Portfolio turnover rate 13% 16% 3%
Average broker commission rate (a) $ .0585 N/A N/A
#Computed after giving effect to the reduction in
management fee by MassMutual. Without this reduction of
fees by the investment manager, the ratio of expenses
to average daily net assets would have been: 0.80% 0.80% 0.81%*
</TABLE>
<TABLE>
<CAPTION>
CLASS 4
----------
YEAR ENDED YEAR ENDED PERIOD ENDED
12/31/96 12/31/95 12/31/94**
---------- ---------- -----------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 12.63 $ 9.91 $ 10.00
---------- ---------- -----------
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income 0.34 0.31 0.08
Net realized and unrealized gain (loss) on investments 2.22 2.82 (0.09)
---------- ---------- -----------
Total income (loss) from investment operations 2.56 3.13 (0.01)
---------- ---------- -----------
LESS DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income (0.34) (0.31) (0.08)
From net realized gains (0.39) (0.10) --
---------- ---------- -----------
Total distributions (0.73) (0.41) (0.08)
---------- ---------- -----------
NET ASSET VALUE, END OF PERIOD $ 14.46 $ 12.63 $ 9.91
========== ========== ===========
TOTAL RETURN@ 20.24% 31.54% (0.10)%
RATIOS / SUPPLEMENTAL DATA:
Net assets, end of period (000's) $2,485,743 $2,125,248 $ 1,563,563
Net expenses to average daily net assets# 0.5067% 0.5067% 0.5067%*
Net investment income to average daily net assets 2.42% 2.72% 3.20%*
Portfolio turnover rate 13% 16% 3%
Average broker commission rate (a) $ .0585 N/A N/A
#Computed after giving effect to the reduction in
management fee by MassMutual. Without this reduction of
fees by the investment manager, the ratio of expenses
to average daily net assets would have been: 0.5534% 0.5528% 0.5681%*
</TABLE>
*Annualized
**For the period from October 3, 1994 (commencement of operations) through
December 31, 1994.
@Employee retirement benefit plans that invest plan assets in the Separate
Investment Accounts (SIAs) may be subject to certain charges as set forth in
their respective Plan Documents. Total return figures would be lower for the
periods presented if they reflected these charges.
(a)Average commission rate paid is computed by dividing the total amount of
commissions paid during the fiscal year by the total number of shares
purchased and sold during the fiscal year for which commissions were charged.
For fiscal years beginning on or after September 1, 1995, a Fund is required
to disclose its average commission rate per share for security trades on
which commissions are charged.
The accompanying notes are an integral part of the financial statements.
B-64
<PAGE>
MASSMUTUAL SMALL CAP VALUE EQUITY - PORTFOLIO OF INVESTMENTS
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1996
<TABLE>
<CAPTION>
NUMBER OF
SHARES MARKET VALUE
------ ------------
<S> <C> <C>
EQUITIES - 98.4%
AIR TRANSPORTATION -- 1.4%
Atlantic Southeast
Airlines, Inc. 297,800 $ 6,514,375
------------
APPAREL, TEXTILES & SHOES -- 1.2%
Unitog Company 206,500 5,627,125
------------
AUTOMOTIVE & PARTS -- 5.7%
Amcast Industrial
Corporation 228,100 5,645,475
Excel Industries, Inc. 355,100 5,903,538
Myers Industries, Inc. 321,154 5,419,469
Titan Wheel
International, Inc. 698,500 8,905,875
------------
25,874,357
------------
BANKING, SAVINGS & LOANS -- 10.9%
Astoria Financial
Corporation 293,000 10,804,375
Bank United Corp.
Class A 173,200 4,633,100
CCB Financial
Corporation 139,900 9,548,175
First Colorado
Bancorp, Inc. 284,200 4,831,400
Keystone Financial,
Inc. 221,150 5,528,750
One Valley Bancorp of
West Virginia, Inc. 183,750 6,821,719
Security Capital
Corporation 102,800 7,581,500
------------
49,749,019
------------
BUILDING MATERIALS & CONSTRUCTION -- 0.7%
Apogee Enterprises,
Inc. 76,800 3,052,800
------------
CHEMICALS -- 1.1%
OM Group, Inc. 188,100 5,078,700
------------
COMMUNICATIONS -- 2.3%
True North
Communications, Inc. 483,500 10,576,563
------------
<CAPTION>
NUMBER OF
SHARES MARKET VALUE
------ ------------
<S> <C> <C>
COMPUTERS & OFFICE EQUIPMENT -- 1.0%
Cognex Corporation (C) 238,500 $ 4,412,250
------------
CONTAINERS -- 1.7%
Rock-Tenn Company
(Class A) 391,490 7,731,928
------------
ELECTRICAL EQUIPMENT & ELECTRONICS -- 8.2%
Belden, Inc. 293,700 10,866,900
Dallas Semiconductor
Corporation 468,600 10,777,800
Teleflex, Incorporated 128,100 6,677,213
Wyle Laboratories 227,200 8,974,390
------------
37,296,303
------------
ENERGY -- 3.2%
NGC Corporation 165,595 3,850,084
Production Operators
Corp. 156,100 7,258,650
TNP Enterprises, Inc. 137,100 3,753,113
------------
14,861,847
------------
FOODS -- 3.2%
Midwest Grain
Products, Inc. (C) 167,100 2,840,700
Morrison Health Care,
Inc. 377,200 5,563,700
Riser Foods, Inc.
Class A 197,700 6,276,975
------------
14,681,375
------------
FOREST PRODUCTS & PAPER -- 2.4%
Mosinee Paper
Corporation 125,833 4,467,072
Wausau Paper Mills
Company 357,775 6,618,838
------------
11,085,910
------------
GAS DISTRIBUTION -- 1.9%
WICOR, Inc. 237,300 8,513,138
------------
HEALTHCARE -- 1.0%
Beckman Instruments,
Inc. 113,800 4,367,075
<CAPTION>
NUMBER OF
SHARES MARKET VALUE
------- ------------
<S> <C> <C>
INDUSTRIAL TRANSPORTATION -- 3.1%
ABC Rail Products
Corporation (C) 115,000 $ 2,285,625
Arnold Industries, Inc. 511,500 8,120,063
The Greenbrier
Companies, Inc. 385,300 3,997,488
------------
14,403,176
------------
INSURANCE -- 11.7%
ALLIED Group,
Incorporated 346,350 11,299,669
Capital RE Corp. 334,500 15,596,063
Executive Risk, Inc. 172,900 6,397,300
Frontier Insurance
Group, Inc. 290,080 11,095,560
Orion Capital
Corporation 147,137 8,993,749
------------
53,382,341
------------
LEASING COMPANIES -- 2.0%
Rollins Truck Leasing
Company 715,750 9,036,344
------------
MACHINERY & COMPONENTS -- 13.3%
Columbus McKinnon
Corporation 266,500 4,164,063
DT Industries, Inc. 269,200 9,422,000
The Gorman-Rupp
Company 257,825 3,512,866
Graco, Incorporated 427,000 10,461,500
Greenfield Industries,
Inc. 327,600 10,032,750
Hardinge, Inc. 224,300 5,971,988
Helix Technology
Corporation 247,300 7,171,700
Regal-Beloit
Corporation 297,750 5,843,344
Roper Industries, Inc. 109,200 4,272,450
------------
60,852,661
------------
METALS & MINING -- 1.8%
Reliance Steel &
Aluminum Company 229,600 8,036,000
------------
</TABLE>
(Continued)
The accompanying notes are an integral part of the financial statements.
B-65
<PAGE>
MASSMUTUAL SMALL CAP VALUE EQUITY - PORTFOLIO OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
NUMBER OF
SHARES MARKET VALUE
------- ------------
<S> <C> <C>
MISCELLANEOUS -- 2.1%
Trimas Corporation 407,100 $ 9,719,513
------------
MISCELLANEOUS DISTRIBUTOR WHOLESALE -- 1.2%
Hughes Supply, Inc. 130,200 5,614,875
------------
OFFICE PRODUCTS -- 1.1%
American Business
Products, Inc. 197,700 4,967,213
OIL & GAS -- 2.9%
The Houston
Exploration Company (C) 261,800 4,581,500
Stone Energy
Corporation (C) 211,000 6,303,625
Titan Exploration, Inc. 200,000 2,400,000
------------
13,285,125
------------
OTHER SERVICES -- 3.0%
Analysts International
Corporation 340,200 9,610,650
Landauer, Inc. 173,900 4,260,550
------------
13,871,200
------------
PUBLISHING & PRINTING -- 8.4%
Banta Corporation 284,250 6,502,219
Harte Hanks
Communications, Inc. 398,300 11,052,825
Houghton Mifflin
Company 173,200 9,807,450
McClatchy
Newspapers, Inc. 327,400 11,459,000
------------
38,821,494
------------
RETAIL -- 1.9%
Arbor Drugs, Inc. 502,250 8,726,594
------------
TOTAL EQUITIES 450,139,301
------------
(COST $338,729,733)
<CAPTION>
PRINCIPAL
AMOUNT MARKET VALUE
------ ------------
<S> <C> <C>
SHORT-TERM INVESTMENTS -- 1.4%
COMMERCIAL PAPER
Ford Motor Credit
Company
5.330% 1/29/1997 $1,000,000 $ 995,854
Shell Oil Company
6.500% 1/02/1997 4,350,000 4,349,215
Sunoco Credit
Corporation
5.370% 1/21/1997 1,000,000 997,017
------------
TOTAL SHORT-TERM
INVESTMENTS 6,342,086
------------
(AT AMORTIZED COST)
TOTAL INVESTMENTS -- 99.8% 456,481,387
(COST $345,071,819)
OTHER ASSETS/
(LIABILITIES) - .2% 886,996
------------
NET ASSETS -- 100.0% $457,368,383
------------
</TABLE>
The accompanying notes are integral part of the financial statements.
B-66
<PAGE>
MASSMUTUAL SMALL CAP VALUE EQUITY - FINANCIAL STATEMENTS
Statement of Assets and Liabilities
<TABLE>
<CAPTION>
DECEMBER 31, 1996
-----------------
<S> <C>
Assets:
Investments, at value (cost $338,729,733) (Note 2).................. $450,139,301
Short-term investments, at amortized cost (Note 2).................. 6,342,086
------------
Total Investments................................................. 456,481,387
Cash................................................................ 16,575
Receivables from:
Investments sold.................................................. 590,252
Fund shares sold.................................................. 391,223
Interest and dividends............................................ 614,637
Investment manager (Note 3)....................................... 20,289
------------
Total assets.................................................... 458,114,363
------------
Liabilities:
Payables for:
Investments purchased............................................. 124,059
Fund shares redeemed.............................................. 349,247
Directors' fees and expenses (Note 3)............................. 5,176
Affiliates (Note 3):
Investment management fees...................................... 216,574
Administration fees............................................. 34,087
Service and distribution fees................................... 274
Accrued expenses and other liabilities.............................. 16,563
------------
Total liabilities............................................... 745,980
------------
NET ASSETS.......................................................... $457,368,383
============
Net assets consist of:
Paid-in capital..................................................... $340,794,078
Undistributed net investment income................................. 192,363
Accumulated net realized gain on investments........................ 4,972,374
Net unrealized appreciation on investments.......................... 111,409,568
------------
$457,368,383
============
Net assets:
Class 1............................................................. $ 142,813
============
Class 2............................................................. $ 144,545
============
Class 3............................................................. $ 145,609
============
Class 4............................................................. $456,935,416
============
Shares outstanding:
Class 1............................................................. 10,666
============
Class 2............................................................. 10,767
============
Class 3............................................................. 10,837
============
Class 4............................................................. 34,013,589
============
Net asset value, offering price and
redemption price per share:
Class 1............................................................. $ 13.39
============
Class 2............................................................. $ 13.42
============
Class 3............................................................. $ 13.44
============
Class 4............................................................. $ 13.43
============
</TABLE>
The accompanying notes are an integral part of the financial statements.
B-67
<PAGE>
MASSMUTUAL SMALL CAP VALUE EQUITY - FINANCIAL STATEMENTS (CONTINUED)
Statement of Operations
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31, 1996
-----------------
<S> <C>
Investment income:
Dividends........................................................... $ 10,401,752
Interest............................................................ 2,168,316
------------
Total investment income........................................... 12,570,068
------------
Expenses (Note 1):
Investment management fees (Note 3)................................. 2,298,488
Custody fees........................................................ 47,464
Audit and legal fees................................................ 14,282
Directors' fees (Note 3)............................................ 15,246
Fees waived by the investment manager (Note 3)...................... (182,305)
------------
2,193,175
Administration fees (Note 3):
Class 1.......................................................... 844
Class 2.......................................................... 667
Class 3.......................................................... 417
Class 4.......................................................... 359,887
Distribution and service fees (Note 3):
Class 1.......................................................... 958
Class 2.......................................................... 191
------------
Net expenses................................................... 2,556,139
------------
NET INVESTMENT INCOME.......................................... 10,013,929
------------
Realized and unrealized gain (loss):
Net realized gain on investment transactions....................... 15,188,213
Net change in unrealized appreciation (depreciation) on
investments....................................................... 63,151,095
------------
NET REALIZED AND UNREALIZED GAIN................................ 78,339,308
------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS............... $ 88,353,237
============
</TABLE>
The accompanying notes are an integral part of the financial statements.
B-68
<PAGE>
MASSMUTUAL SMALL CAP VALUE EQUITY - FINANCIAL STATEMENTS (CONTINUED)
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
DECEMBER 31, 1996 DECEMBER 31, 1995
----------------- -----------------
<S> <C> <C>
Increase (Decrease) in Net Assets:
Operations:
Net investment income............................................ $ 10,013,929 $ 6,234,130
Net realized gain on investment transactions..................... 15,188,213 776,790
Net change in unrealized appreciation (depreciation)
on investments.................................................. 63,151,095 57,391,484
------------ ------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS............ 88,353,237 64,402,404
------------ ------------
Distributions to shareholders (Note 2):
From net investment income:
Class 1.......................................................... (1,430) (1,356)
Class 2.......................................................... (2,382) (1,300)
Class 3.......................................................... (2,845) (1,672)
Class 4.......................................................... (9,914,239) (6,159,231)
------------ ------------
TOTAL DISTRIBUTIONS FROM NET INVESTMENT INCOME.................. (9,920,896) (6,163,559)
------------ ------------
From net realized gains:
Class 1.......................................................... (3,230) --
Class 2.......................................................... (3,240) --
Class 3.......................................................... (3,251) --
Class 4.......................................................... (10,172,978) --
------------ ------------
TOTAL DISTRIBUTIONS FROM NET REALIZED GAINS..................... (10,182,699) --
------------ ------------
Net fund share transactions (Note 5):
Class 1.......................................................... (49,286) 51,075
Class 2.......................................................... 5,622 1,300
Class 3.......................................................... 6,096 1,672
Class 4.......................................................... 8,348,780 11,428,353
------------ ------------
INCREASE IN NET ASSETS FROM NET FUND SHARE TRANSACTIONS......... 8,311,212 11,482,400
------------ ------------
TOTAL INCREASE IN NET ASSETS..................................... 76,560,854 69,721,245
Net assets:
Beginning of period............................................. 380,807,529 311,086,284
------------ ------------
End of period (including undistributed net investment income
of $192,363 and $99,330, respectively)......................... $457,368,383 $380,807,529
============ ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
B-69
<PAGE>
MASSMUTUAL SMALL CAP VALUE EQUITY - FINANCIAL STATEMENTS (CONTINUED)
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
CLASS 1
----------
YEAR ENDED YEAR ENDED PERIOD ENDED
12/31/96 12/31/95 12/31/94**
---------- ---------- ------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 11.40 $ 9.69 $ 10.00
---------- ---------- ------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income 0.21 0.06 0.02
Net realized and unrealized gain (loss) on investments 2.23 1.74 (0.31)
---------- ---------- ------------
Total income (loss) from investment operations 2.44 1.80 (0.29)
---------- ---------- ------------
LESS DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income (0.14) (0.09) (0.02)
From net realized gains (0.31) -- --
---------- ---------- ------------
Total distributions (0.45) (0.09) (0.02)
---------- ---------- ------------
NET ASSET VALUE, END OF PERIOD $ 13.39 $ 11.40 $ 9.69
========== ========== ============
TOTAL RETURN 21.43% 18.58% (2.89)%
RATIOS / SUPPLEMENTAL DATA:
Net assets, end of period (000's) $ 143 $ 172 $ 99
Net expenses to average daily net assets# 1.75% 1.75% 1.75%*
Net investment income to average daily net assets 1.56% 0.63% 1.14%*
Portfolio turnover rate 28% 28% 4%
Average broker commission rate (a) $ .0585 N/A N/A
#Computed after giving effect to the reduction in
management fee by MassMutual, which such voluntary
fee waiver terminated May 1, 1997. Without this reduction of
fees by the investment manager, the ratio of expenses
to average daily net assets would have been: 1.79% 1.79% 1.81%*
</TABLE>
<TABLE>
<CAPTION>
CLASS 2
----------
YEAR ENDED YEAR ENDED PERIOD ENDED
12/31/96 12/31/95 12/31/94**
---------- ---------- ------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 11.44 $ 9.70 $ 10.00
---------- ---------- ------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income 0.22 0.13 0.03
Net realized and unrealized gain (loss) on investments 2.30 1.74 (0.30)
---------- ---------- ------------
Total income (loss) from investment operations 2.52 1.87 (0.27)
---------- ---------- ------------
LESS DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income (0.23) (0.13) (0.03)
From net realized gains (0.31) -- --
---------- ---------- ------------
Total distributions (0.54) (0.13) (0.03)
---------- ---------- ------------
NET ASSET VALUE, END OF PERIOD $ 13.42 $ 11.44 $ 9.70
========== ========== ============
TOTAL RETURN 22.07% 19.25% (2.72)%
RATIOS / SUPPLEMENTAL DATA:
Net assets, end of period (000's) $ 145 $ 118 $ 99
Net expenses to average daily net assets# 1.20% 1.20% 1.20%*
Net investment income to average daily net assets 1.81% 1.19% 1.69%*
Portfolio turnover rate 28% 28% 4%
Average broker commission rate (a) $ .0585 N/A N/A
#Computed after giving effect to the reduction in
management fee by MassMutual, which such voluntary
fee waiver terminated May 1, 1997. Without this reduction of
fees by the investment manager, the ratio of expenses
to average daily net assets would have been: 1.24% 1.24% 1.26%*
</TABLE>
*Annualized
**For the period from October 3, 1994 (commencement of operations) through
December 31, 1994.
(a)Average commission rate paid is computed by dividing the total amount of
commissions paid during the fiscal year by the total number of shares
purchased and sold during the fiscal year for which commissions were charged.
For fiscal years beginning on or after September 1, 1995, a Fund is required
to disclose its average commission rate per share for security trades on
which commissions are charged.
The accompanying notes are an integral part of the financial statements.
B-70
<PAGE>
MASSMUTUAL SMALL CAP VALUE EQUITY FINANCIAL STATEMENTS (CONTINUED)
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
CLASS 3
----------
YEAR ENDED YEAR ENDED PERIOD ENDED
12/31/96 12/31/95 12/31/94**
---------- ---------- ------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 11.44 $ 9.70 $ 10.00
---------- ---------- ------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income 0.27 0.16 0.03
Net realized and unrealized gain (loss) on investments 2.31 1.74 (0.30)
---------- ---------- ------------
Total income (loss) from investment operations 2.58 1.90 (0.27)
---------- ---------- ------------
LESS DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income (0.27) (0.16) (0.03)
From net realized gains (0.31) -- --
---------- ---------- ------------
Total distributions (0.58) (0.16) (0.03)
---------- ---------- ------------
NET ASSET VALUE, END OF PERIOD $ 13.44 $ 11.44 $ 9.70
========== ========== ============
TOTAL RETURN 22.64% 19.62% (2.68)%
RATIOS / SUPPLEMENTAL DATA:
Net assets, end of period (000's) $ 146 $ 119 $ 99
Net expenses to average daily net assets# 0.85% 0.85% 0.85%*
Net investment income to average daily net assets 2.16% 1.54% 2.09%*
Portfolio turnover rate 28% 28% 4%
Average broker commission rate (a) $ .0585 N/A N/A
#Computed after giving effect to the reduction in
management fee by MassMutual, which such voluntary
fee waiver terminated May 1, 1997. Without this reduction of
fees by the investment manager, the ratio of expenses
to average daily net assets would have been: 0.89% 0.89% 0.91%*
</TABLE>
<TABLE>
<CAPTION>
CLASS 4
----------
YEAR ENDED YEAR ENDED PERIOD ENDED
12/31/96 12/31/95 12/31/94**
---------- ---------- ------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 11.44 $ 9.69 $ 10.00
---------- ---------- ------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income 0.31 0.19 0.04
Net realized and unrealized gain (loss) on investments 2.29 1.75 (0.31)
---------- ---------- ------------
Total income (loss) from investment operations 2.60 1.94 (0.27)
---------- ---------- ------------
LESS DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income (0.30) (0.19) (0.04)
From net realized gains (0.31) -- --
---------- ---------- ------------
Total distributions (0.61) (0.19) (0.04)
---------- ---------- ------------
NET ASSET VALUE, END OF PERIOD $ 13.43 $ 11.44 $ 9.69
========== ========== ============
TOTAL RETURN@ 22.82% 20.01% (2.66)%
RATIOS / SUPPLEMENTAL DATA:
Net assets, end of period (000's) $ 456,935 $ 380,398 $ 310,789
Net expenses to average daily net assets# 0.6110% 0.6110% 0.6110%*
Net investment income to average daily net assets 2.40% 1.78% 1.78%*
Portfolio turnover rate 28% 28% 4%
Average broker commission rate (a) $ .0585 N/A N/A
#Computed after giving effect to the reduction in
management fee by MassMutual, which such voluntary
fee waiver terminated May 1, 1997. Without this reduction of
fees by the investment manager, the ratio of expenses
to average daily net assets would have been: 0.6546% 0.6553% 0.6681%*
</TABLE>
*Annualized
**For the period from October 3, 1994 (commencement of operations) through
December 31, 1994.
@Employee retirement benefit plans that invest plan assets in the Separate
Investment Accounts (SIAs) may be subject to certain charges as set forth in
their respective Plan Documents. Total return figures would be lower for the
periods presented if they reflected these charges.
(a)Average commission rate paid is computed by dividing the total amount of
commissions paid during the fiscal year by the total number of shares
purchased and sold during the fiscal year for which commissions were charged.
For fiscal years beginning on or after September 1, 1995, a Fund is required
to disclose its average commission rate per share for security trades on
which commissions are charged.
The accompanying notes are an integral part of the financial statements.
B-71
<PAGE>
MASSMUTUAL INTERNATIONAL EQUITY FUND - PORTFOLIO OF INVESTMENTS
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1996
<TABLE>
<CAPTION>
NUMBER OF
SHARES MARKET VALUE
------ ------------
<S> <C> <C>
EQUITIES - 99.9%
AUTOMOBILES - 2.8%
Ciadea SA . 280,885 $ 1,334,428
Mahindra & Mahindra Ltd., GDR 140,683 1,653,025
Orbital Engine Corporation Ltd. . 2,000,000 1,509,000
Porsche AG, Preference 6,000 5,353,287
-----------
9,849,740
-----------
BANKING - 8.3%
Banco Bradesco SA, Preference 230,260,951 1,657,879
Banco de Galicia y
Buenos Aires SA de CV, Sponsored ADR 127,000 3,079,750
Banco Frances del Rio de la Plata SA, ADR 57,500 1,581,250
Bank of Scotland 1,250,000 6,588,500
Bil GT Gruppe AG 2,500 1,277,256
Development Bank of Singapore Limited 200,000 2,702,260
HSBC Holdings PLC 261,214 5,588,987
Skandinaviska Enskilda Banken Group 150,000 1,537,770
Standard Chartered Bank PLC 350,000 4,294,500
Turkiye Garanti Bankasi, ADR 252,000 1,131,808
-----------
29,439,960
-----------
COMMERCIAL SERVICES - 0.3%
Adecco SA 4,000 1,000,952
-----------
COMPUTER HARDWARE - 0.8%
Canon, Inc. 100,000 2,205,560
PT Multipolar Corporation 933,000 533,116
-----------
2,738,676
-----------
COMPUTER SERVICES - 1.1%
Sligos SA 30,000 3,924,027
-----------
COMPUTER SOFTWARE - 7.4%
Ines Corp. 42,000 611,524
Misys PLC 450,872 8,572,204
Nintendo Co. Ltd. 185,000 13,213,144
SAP AG, Preference 30,000 4,123,002
-----------
26,519,874
-----------
<CAPTION>
NUMBER OF
SHARES MARKET VALUE
------ ------------
<S> <C> <C>
CONGLOMERATES - 2.1%
Chargeurs International SA . 120,000 $ 5,932,200
First Philippine Holdings Corp., B Shares 700,000 1,596,910
-----------
7,529,110
-----------
DIVERSIFIED FINANCIAL - 5.8%
ABN Amro Holding NV 101,630 6,604,009
ING Groep NV 137,500 4,944,390
IRSA Inversiones y Representaciones, SA 1,014,404 3,256,744
Nomura Securities Company Ltd. 250,000 3,747,725
Societe Generale de Paris 20,000 2,158,216
-----------
20,711,084
-----------
DRUGS - 9.3%
Altana AG 6,000 4,668,067
Ares-Serono Group B 10,500 9,986,057
Biocompatibles International PLC . 411,665 5,762,651
Glaxo Wellcome PLC, Sponsored ADR 250,000 4,064,325
Sanofi SA 35,000 3,473,918
Takeda Chemical Industries Ltd. 250,000 5,233,900
-----------
33,188,918
-----------
ELECTRIC UTILITIES - 0.4%
Capex SA, GDR 76,000 1,262,360
-----------
ELECTRICAL EQUIPMENT & ELECTRONICS - 6.5%
Austria Mikro Systeme International AG 54,800 4,226,450
Keyence Corporation 20,000 2,464,030
LEM Holdings SA 11,192 2,258,868
Matsushita Electric Industrial Company Ltd. 175,000 2,849,560
Rohm Company 40,000 2,619,108
SGS-Thomson Microelectronics NV . 58,800 4,116,000
Yamatake-Honeywell Co., Ltd. 70,000 1,127,763
Yokogawa Electric Corp. 400,000 3,446,160
-----------
23,107,939
-----------
<CAPTION>
NUMBER OF
SHARES MARKET VALUE
------ ------------
<S> <C> <C>
ENERGY SERVICES & PRODUCERS - 1.0%
Compagnie Generale de Geophysique SA . 50,000 $ 3,462,375
-----------
ENGINEERING - 1.7%
Fugro NV 200,000 3,549,660
Internatio-Muller NV 100,000 2,509,050
-----------
6,058,710
-----------
FINANCIAL SERVICES - 3.8%
Compagnie Bancaire SA 35,000 4,133,693
CS Holding AG 40,000 4,096,156
Merita Ltd. A Shares . 1,399,600 4,342,399
Van der Hoop Effektenbank NV 145,000 1,106,524
-----------
13,678,772
-----------
FOOD & BEVERAGE - 2.5%
Hellenic Bottling Co., SA 70,000 2,242,912
Remy Cointreau 120,000 3,393,120
Sermsuk Public Company Limited 50,000 725,425
South African Breweries Limited 100,000 2,533,400
-----------
8,894,857
-----------
HEALTHCARE - 1.4%
Novartis AG 4,264 4,868,254
-----------
HOTEL/GAMING - 0.8%
Lusomundo, SGPS, SA . 257,500 2,962,280
-----------
HOUSEHOLD PRODUCTS - 0.2%
Srithai Superware Co. Ltd. 175,000 846,318
-----------
INDUSTRIAL SERVICES - 3.2%
Boskalis Westminster 347,290 7,027,135
PT Citra Marga Nusaphala Persada 2,120,000 1,660,106
VBH - Vereinigter
Baubeschlag Handel AG 125,000 2,778,025
-----------
11,465,266
-----------
</TABLE>
(Continued)
The accompanying notes are an integral part of the financial statements.
B-72
<PAGE>
MASSMUTUAL INTERNATIONAL EQUITY FUND - PORTFOLIO OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
NUMBER OF
SHARES MARKET VALUE
------ ------------
<S> <C> <C>
INSURANCE -- 7.1%
AXA SA 75,000 $ 4,760,768
Marschollek,
Lautenschlaeger und
Partner AG 44,000 6,109,884
National Mutual Asia
Ltd. 1,816,000 1,725,563
Ockham Holdings PLC 1,000,000 1,283,400
Reinsurance Australia
Corp. Ltd. 2,910,000 11,325,138
------------
25,204,753
------------
MANUFACTURING -- 3.8%
Bucher Holding AG, B
Shares 1,750 1,199,057
Powerscreen
International PLC 494,100 4,777,354
Rolls-Royce PLC 750,000 3,298,500
SMH AG (Registered) 30,000 4,267,449
------------
13,542,360
------------
MEDICAL PRODUCTS -- 0.4%
Elekta Instrument AB
Free, Series B 40,000 1,420,612
------------
METALS & MINING -- 2.1%
Boehler-Uddeholm AG 12,000 857,970
Boehler-Uddeholm AG
144A (C) 24,000 1,715,946
Compania de Minas
Buenaventura SA,
Sponsored ADR 200,000 3,375,000
Hoganas AB Cl. B 40,000 1,400,108
------------
7,349,024
------------
NON-DURABLE HOUSEHOLD GOODS -- 1.8%
Wella AG 2,000 1,057,680
Wella AG Preference 10,000 5,320,843
------------
6,378,523
------------
OIL & GAS -- 5.2%
Belle Corporation (C) 5,000,000 1,387,500
Coflexip SA,
Sponsored ADR 90,000 2,362,500
Expro International
Group PLC 775,000 6,266,495
Hong Kong and China
Gas Company Ltd. 720,000 1,391,544
PTT Exploration and
Production 50,000 721,525
Smedvig ASA A
Shares 165,000 3,617,625
Smedvig ASA B
Shares (C) 160,000 3,282,496
------------
19,029,685
------------
<CAPTION>
NUMBER OF
SHARES MARKET VALUE
------ ------------
<S> <C> <C>
PUBLISHING & PRINTING -- 0.9%
News Corp. Ltd., ADR 150,000 $ 3,131,250
REAL ESTATE -- 1.3%
Brazil Realty SA,
GDR 144A 59,000 1,121,000
MRC Allied Industries,
Inc. (C) 4,000,000 532,000
Sun Hung Kai
Properties Ltd. 250,000 3,062,375
------------
4,715,375
------------
RETAIL -- 2.4%
Autobacs Seven Co.
Limited 50,000 3,528,040
PT Matahari Putra
Prima 700,000 818,518
Vendex International
NV 100,000 4,272,320
------------
8,618,878
------------
SHIPPING -- 0.2%
Lisnave-Estaleiros
Navais de Lisbona SA (C) 306,300 806,917
SPECIALTY RETAIL -- 3.7%
Adidas AG 42,200 3,641,919
FamilyMart Co. 60,000 2,393,382
Giordano International
Ltd. 1,500,000 1,279,800
Jusco Co. 100,000 3,385,880
Moebel Walther AG,
Preference 40,000 2,621,488
------------
13,322,469
------------
TELECOMMUNICATIONS -- 4.0%
CPT Telefonica del
Peru SA, Cl. B 1,600,000 2,994,080
Korea Mobile
Telecommunications
Corporation 4,300 4,368,962
Millicom International
Cellular SA (C) 37,500 1,204,688
Portugal Telecom SA 86,000 2,448,437
Telecom Italia Mobile
SpA 1,299,900 3,278,478
------------
14,294,645
------------
TELEPHONE UTILITIES -- 1.4%
Telecomunicacoes
Brasileiras S/A-
Telebras 18,500 1,415,250
Telefonica de Espana
ADS 150,000 3,476,835
------------
4,892,085
------------
<CAPTION>
NUMBER OF
SHARES MARKET VALUE
------ ------------
<S> <C> <C>
TELEVISION -- 0.7%
Groupe AB SA (C) 165,000 $ 2,371,875
------------
TEXTILES -- 1.9%
Bulgari SpA 225,000 4,557,690
Gucci Group NV 35,000 2,235,625
------------
6,793,315
------------
TOBACCO -- 0.4%
Compagnie Financiere
Richemont AG 1,000 1,400,141
------------
TRANSPORTATION -- 3.2%
Argonaut AB-B Shares (C) 1,100,000 2,207,040
East Japan Railway Co. 750 3,366,503
Frontline AB (C) 650,000 2,246,595
MIF Ltd. 250,000 3,719,425
------------
11,539,563
------------
TOTAL EQUITIES 356,320,942
------------
(COST $309,944,622)
WARRANTS -- 0.3%
DRUGS -- 0.3%
Biocompatibles
International PLC (C) 71,593 912,676
------------
OIL & GAS -- 0.0%
Hong Kong and China
Gas Company Ltd. (C) 72,000 3,723
------------
TOTAL WARRANTS 916,399
------------
(COST $0)
TOTAL INVESTMENTS -- 100.2% 357,237,341
(COST $309,944,622)[
OTHER ASSETS/
(LIABILITIES) - (0.2%) (585,529)
------------
NET ASSETS -- 100.0% $356,651,812
------------
</TABLE>
NOTES TO PORTFOLIO OF INVESTMENTS
(C)Non-income producing security
[Aggregate cost for Federal tax purposes (Note 7)
ADR: American Depository Receipt
GDR: Global Depository Receipt
ADS: American Depository Shares
144A: Securities exempt from registration under
rule 144A of the Securities Act of 1933. The Secur-
ities may be resold in transactions exempt from
registration, normally to qualified institutional
buyers.
The accompanying notes are an integral part of the financial statements.
B-73
<PAGE>
MASSMUTUAL INTERNATIONAL EQUITY FUND - FINANCIAL STATEMENTS
Statement of Assets and Liabilities
<TABLE>
<CAPTION>
DECEMBER 31, 1996
-----------------
<S> <C>
Assets:
Investments, at value (cost $309,944,622) (Note 2)............................ $ 357,237,341
Cash.......................................................................... 83,359
Foreign currency, at value (cost $4,918,907).................................. 4,903,738
Receivables from:
Investments sold............................................................ 1,783,534
Open forward foreign currency contracts (Note 2)............................ 612,258
Fund shares sold............................................................ 216,824
Interest and dividends...................................................... 267,791
Foreign taxes withheld...................................................... 274,223
Investment manager (Note 3)................................................. 54,877
-----------------
Total assets.............................................................. 365,433,945
-----------------
Liabilities:
Payables for:
Investments purchased....................................................... 6,371,010
Borrowings under line of credit (Note 8).................................... 1,600,000
Fund shares redeemed........................................................ 456,891
Directors' fees and expenses (Note 3)....................................... 5,177
Affiliates (Note 3):
Investment management fees................................................ 254,834
Administration fees....................................................... 29,289
Service and distribution fees............................................. 219
Accrued expenses and other liabilities........................................ 64,713
-----------------
Total liabilities......................................................... 8,782,133
-----------------
NET ASSETS.................................................................... $ 356,651,812
=================
Net assets consist of:
Paid-in capital............................................................... $ 320,990,580
Undistributed net investment income........................................... 113,978
Accumulated net realized loss on investments and
foreign currency translations............................................... (12,355,482)
Net unrealized appreciation on investments, forward foreign currency
contracts, foreign currency and other assets and liabilities................ 47,902,736
-----------------
$ 356,651,812
=================
Net assets:
Class 1....................................................................... $ 112,681
=================
Class 2....................................................................... $ 114,019
=================
Class 3....................................................................... $ 114,468
=================
Class 4....................................................................... $ 356,310,644
=================
Shares outstanding:
Class 1....................................................................... 10,176
=================
Class 2....................................................................... 10,281
=================
Class 3....................................................................... 10,315
=================
Class 4....................................................................... 32,070,618
=================
Net asset value, offering price and
redemption price per share:
Class 1....................................................................... $ 11.07
=================
Class 2....................................................................... $ 11.09
=================
Class 3....................................................................... $ 11.10
=================
Class 4....................................................................... $ 11.11
=================
</TABLE>
The accompanying notes are an integral part of the financial statements.
B-74
<PAGE>
MASSMUTUAL INTERNATIONAL EQUITY FUND - FINANCIAL STATEMENTS (CONTINUED)
Statement of Operations
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,1996
-----------------
<S> <C>
Investment income:
Dividends (net of withholding tax of $468,717)................................ $ 4,155,451
Interest...................................................................... 350,237
-----------------
Total investment income..................................................... 4,505,688
-----------------
Expenses (Note 1):
Investment management fees (Note 3)........................................... 2,398,114
Custody fees.................................................................. 319,874
Audit and legal fees.......................................................... 9,403
Excise taxes.................................................................. 6,854
Directors' fees (Note 3)...................................................... 15,246
Fees waived by the investment manager (Note 3)................................ (196,769)
-----------------
2,552,722
Administration fees (Note 3):
Class 1..................................................................... 698
Class 2..................................................................... 569
Class 3..................................................................... 465
Class 4..................................................................... 273,938
Distribution and service fees (Note 3):
Class 1..................................................................... 763
Class 2..................................................................... 157
-----------------
Net operating expenses.................................................... 2,829,312
Interest expense (Note 8)..................................................... 25,373
-----------------
NET INVESTMENT INCOME..................................................... 1,651,003
-----------------
Realized and unrealized gain (loss) from investments
and foreign currency:
Net realized gain on:
Investment transactions..................................................... 5,099,336
Foreign currency transactions............................................... 5,633,016
-----------------
NET REALIZED GAIN......................................................... 10,732,352
-----------------
Net change in unrealized appreciation (depreciation) on:
Investments................................................................. 36,945,058
Translation of assets and liabilities in foreign currencies................. (414,384)
-----------------
NET UNREALIZED GAIN....................................................... 36,530,674
-----------------
NET REALIZED AND UNREALIZED GAIN FROM INVESTMENTS
AND FOREIGN CURRENCY.................................................... 47,263,026
-----------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS......................... $ 48,914,029
=================
</TABLE>
The accompanying notes are an integral of the financial statements.
B-75
<PAGE>
sMASSMUTUAL INTERNATIONAL EQUITY FUND - FINANCIAL STATEMENTS (CONTINUED)
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
DECEMBER 31, 1996 DECEMBER 31, 1995
----------------- -----------------
<S> <C> <C>
Increase (Decrease) in Net Assets:
Operations:
Net investment income................................................... $ 1,651,003 $ 1,410,289
Net realized gain (loss) on investment and foreign
currency transactions.................................................. 10,732,352 (11,680,240)
Net change in unrealized appreciation (depreciation) on
investments and translation of assets and liabilities in.............
foreign currencies................................................... 36,530,674 19,939,116
------------ ------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS............... 48,914,029 9,669,165
------------ ------------
Distributions to shareholders (Note 2):..................................
From net investment income:...........................................
Class 1............................................................... (263) --
Class 2............................................................... (433) (195)
Class 3............................................................... (501) (467)
Class 4............................................................... (1,825,896) (1,565,611)
------------ ------------
TOTAL DISTRIBUTIONS FROM NET INVESTMENT INCOME..................... (1,827,093) (1,566,273)
------------ ------------
In excess of net investment income:......................................
Class 1............................................................... (794) (830)
Class 2............................................................... (1,308) (952)
Class 3............................................................... (1,513) (947)
Class 4.................................................................. (5,515,423) (2,389,653)
------------ ------------
TOTAL DISTRIBUTIONS IN EXCESS OF NET INVESTMENT INCOME................... (5,519,038) (2,392,382)
------------ ------------
Net fund share transactions (Note 5):
Class 1...............................................................
(13,956) 16,103
Class 2............................................................... 1,742 1,191
Class 3............................................................... 2,018 1,430
Class 4............................................................... 94,070,522 64,817,475
------------ ------------
INCREASE IN NET ASSETS FROM NET FUND SHARE TRANSACTIONS............. 94,060,326 64,836,199
------------ ------------
TOTAL INCREASE IN NET ASSETS.......................................... 135,628,224 70,546,709
Net assets:
Beginning of period................................................ 221,023,588 150,476,879
------------ ------------
End of period (including undistributed net investment income
of $113,978 and distributions in excess of net investment
income of $215,389)................................................ $356,651,812 $221,023,588
============ ============
</TABLE>
The accompanying notes are an integral part of the financial statements
B-76
<PAGE>
MASSMUTUAL INTERNATIONAL EQUITY FUND - FINANCIAL STATEMENTS (CONTINUED)
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
CLASS 1
-------------
YEAR ENDED YEAR ENDED PERIOD ENDED
12/31/96 12/31/95 12/31/94**
<S> <C> <C> <C>
------------ ------------- -------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 9.54 $ 9.25 $ 10.00
------------ ------------- -------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income (0.07) (0.03) (0.02)
Net realized and unrealized gain (loss) on investments
and foreign currency 1.70 0.40 (0.73)
------------ ------------- -------------
Total income (loss) from investment operations 1.63 0.37 (0.75)
------------ ------------- -------------
LESS DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income (0.10) -- --
In excess of net investment income -- (0.08) --
------------ ------------- -------------
Total distributions (0.10) (0.08) --
------------ ------------- -------------
NET ASSET VALUE, END OF PERIOD $ 11.07 $ 9.54 $ 9.25
============ ============= =============
TOTAL RETURN 17.09% 3.96% (7.50)%
RATIOS / SUPPLEMENTAL DATA:
Net assets, end of period (000's) $ 113 $ 112 $ 93
Net expenses to average daily net assets# 2.15% 2.15% 2.15%*
Net investment income to average daily net assets (0.51)% (0.40)% (1.10)%*
Portfolio turnover rate 58% 121% 18%
Average broker commission rate (a) $ .0254 N/A N/A
#Computed after giving effect to the reduction in
management fee by MassMutual. Without this reduction of
fees by the investment manager, the ratio of expenses
to average daily net assets would have been: 2.22% 2.24% 2.24%*
</TABLE>
<TABLE>
<CAPTION>
CLASS 2
-----------
YEAR ENDED YEAR ENDED PERIOD ENDED
12/31/96 12/31/95 12/31/94**
<S> <C> <C> <C>
------------ ------------- -------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 9.56 $ 9.26 $ 10.00
------------ ------------- -------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income 0.00 0.02 (0.01)
Net realized and unrealized gain (loss) on investments
and foreign currency 1.70 0.40 (0.73)
------------ ------------- -------------
Total income (loss) from investment operations 1.70 0.42 (0.74)
------------ ------------- -------------
LESS DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income (0.17) (0.02) --
In excess of net investment income -- (0.10) --
------------ ------------- -------------
Total distributions (0.17) (0.12) --
------------ ------------- -------------
NET ASSET VALUE, END OF PERIOD $ 11.09 $ 9.56 $ 9.26
============ ============= =============
TOTAL RETURN 17.85% 4.52% (7.40)%
RATIOS / SUPPLEMENTAL DATA:
Net assets, end of period (000's) $ 114 $ 97 $ 93
Net expenses to average daily net assets# 1.60% 1.60% 1.60%*
Net investment income to average daily net assets 0.02% 0.19% (0.55)%*
Portfolio turnover rate 58% 121% 18%
Average broker commission rate (a) $ .0254 N/A N/A
#Computed after giving effect to the reduction in
management fee by MassMutual. Without this reduction of
fees by the investment manager, the ratio of expenses
to average daily net assets would have been: 1.67% 1.69% 1.69%*
</TABLE>
*Annualized
**For the period from October 3, 1994 (commencement of operations) through
December 31, 1994.
(a)Average commission rate paid is computed by dividing the total amount of
commissions paid during the fiscal year by the total number of shares
purchased and sold during the fiscal year for which commissions were charged.
For fiscal years beginning on or after September 1, 1995, a Fund is required
to disclose its average commission rate per share for security trades on
which commissions are charged.
The accompanying notes are an integral part of the financial statements.
B-77
<PAGE>
MASSMUTUAL INTERNATIONAL EQUITY FUND - FINANCIAL STATEMENTS (CONTINUED)
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
CLASS 3
-----------
YEAR ENDED YEAR ENDED PERIOD ENDED
12/31/96 12/31/95 12/31/94**
<S> <C> <C> <C>
---------- ---------- -------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 9.57 $ 9.27 $ 10.00
---------- ---------- -------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income 0.03 0.04 (0.00)
Net realized and unrealized gain (loss) on investments
and foreign currency 1.70 0.40 (0.73)
---------- ---------- -------------
Total income (loss) from investment operations 1.73 0.44 (0.73)
---------- ---------- -------------
LESS DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income (0.20) (0.05) --
In excess of net investment income -- (0.09) --
Total distributions (0.20) (0.14) --
---------- ---------- -------------
NET ASSET VALUE, END OF PERIOD $ 11.10 $ 9.57 $ 9.27
========== ========== =============
TOTAL RETURN 18.11% 4.78% (7.30)%
RATIOS / SUPPLEMENTAL DATA:
Net assets, end of period (000's) $ 114 $ 97 $ 93
Net expenses to average daily net assets# 1.35% 1.35% 1.35%*
Net investment income to average daily net assets 0.27% 0.45% (0.30)%*
Portfolio turnover rate 58% 121% 18%
Average broker commission rate (a) $ .0254 N/A N/A
#Computed after giving effect to the reduction in
management fee by MassMutual. Without this reduction of
fees by the investment manager, the ratio of expenses
to average daily net assets would have been: 1.42% 1.44% 1.44%*
</TABLE>
<TABLE>
<CAPTION>
CLASS 4
------------
YEAR ENDED YEAR ENDED PERIOD ENDED
12/31/96 12/31/95 12/31/94**
<S> <C> <C> <C>
---------- ---------- -------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 9.58 $ 9.28 $ 10.00
---------- ---------- -------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income 0.06 0.07 0.00
Net realized and unrealized gain (loss) on investments
and foreign currency 1.71 0.41 (0.72)
---------- ---------- -------------
Total income (loss) from investment operations 1.77 0.48 (0.72)
---------- ---------- -------------
LESS DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income (0.24) (0.07) --
In excess of net investment income -- (0.11) --
---------- ---------- -------------
Total distributions (0.24) (0.18) --
---------- ---------- -------------
NET ASSET VALUE, END OF PERIOD $ 11.11 $ 9.58 $ 9.28
========== ========== =============
TOTAL RETURN@ 18.51% 5.13% (7.20)%
RATIOS / SUPPLEMENTAL DATA:
Net assets, end of period (000's) $ 356.311 $ 220.718 $ 150.199
Net expenses to average daily net assets# 1.0020% 1.0020% 1.0020%*
Net investment income to average daily net assets 0.59% 0.76% 0.04%*
Portfolio turnover rate 58% 121% 18%
Average broker commission rate (a) $ .0254 N/A N/A
#Computed after giving effect to the reduction in
management fee by MassMutual. Without this reduction of
fees by the investment manager, the ratio of expenses
to average daily net assets would have been: 1.0718% 1.0920% 1.0877%*
</TABLE>
*Annualized
**For the period from October 3, 1994 (commencement of operations) through
December 31, 1994.
@Employee retirement benefit plans that invest plan assets in the Separate
Investment Accounts (SIAs) may be subject to certain charges as set forth in
their respective Plan Documents. Total return figures would be lower for the
periods presented if they reflected these charges.
(a)Average commission rate paid is computed by dividing the total amount of
commissions paid during the fiscal year by the total number of shares
purchased and sold during the fiscal year for which commissions were charged.
For fiscal years beginning on or after September 1, 1995, a Fund is required
to disclose its average commission rate per share for security trades on
which commissions are charged.
The accompanying notes are an integral part of the financial statements.
B-78
<PAGE>
NOTES TO FINANCIAL STATEMENTS
1. The Trust
MassMutual Institutional Funds (the "Trust") is registered under the
Investment Company Act of 1940, as amended (the "1940 Act"), as an
open-end, diversified management investment company. The Trust is
organized under the laws of the Commonwealth of Massachusetts as a
Massachusetts business trust pursuant to an Agreement and Declaration
of Trust dated May 28, 1993, as amended. The Trust consists of seven
separate series of shares (each individually referred to as a "Fund"
or collectively as the "Funds"), each having four classes of shares:
Class 1, Class 2, Class 3 and Class 4. Class 1, Class 2 and Class 3
shares of each Fund are offered primarily to employer-sponsored
defined contribution plans that satisfy the qualification requirements
of Section 401(a) of the Internal Revenue Code of 1986, as amended
(the "Code"). Class 4 shares of each Fund are available only to
separate investment accounts ("SIAs") of Massachusetts Mutual Life
Insurance Company ("MassMutual") in which corporate qualified plans
including defined contribution plans and defined benefit plans are
permitted to invest pursuant to the issuance of group annuity
contracts. The Funds are MassMutual Prime Fund ("Prime Fund"),
MassMutual Short-Term Bond Fund ("Short-Term Bond Fund"), MassMutual
Core Bond Fund ("Core Bond Fund"), MassMutual Balanced Fund ("Balanced
Fund"), MassMutual Value Equity Fund ("Value Equity Fund"), MassMutual
Small Cap Value Equity Fund ("Small Cap Value Equity Fund"), and
MassMutual International Equity Fund ("International Equity Fund"),
all of which commenced operations on October 3, 1994.
2. Significant Accounting Policies
The following is a summary of significant accounting policies followed
consistently by each Fund in the preparation of the financial
statements in conformity with generally accepted accounting
principles. The preparation of the financial statements in accordance
with generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts and
disclosures in the financial statements. Actual results could differ
from those estimates.
Investment Valuation
Equity securities are valued on the basis of valuations furnished by a
pricing service, authorized by the Board of Trustees ("Trustees"),
which provides the last reported sale price for securities listed on a
national securities exchange or on the NASDAQ national market system,
or in the case of over-the-counter securities not so listed, the last
reported bid price. Debt securities (other than short-term obligations
with a remaining maturity of sixty days or less) are valued on the
basis of valuations furnished by a pricing service, authorized by the
Trustees, which determines valuations taking into account appropriate
factors such as institutional-size trading in similar groups of
securities, yield, quality, coupon rate, maturity, type of issue,
trading characteristics and other market data. Money market
obligations with a remaining maturity of sixty days or less are valued
at either amortized cost or at original cost plus accrued interest,
whichever approximates current market value. All other securities and
other assets, including debt securities for which the prices supplied
by a pricing agent are deemed by MassMutual not to be representative
of market values, and including restricted securities and securities
for which no market quotation is available, are valued at fair value
in accordance with procedures approved by and determined in good faith
by the Trustees, although the actual calculation may be done by
others.
Portfolio securities traded on more than one national securities
exchange are valued at the last price on the business day as of which
such value is being determined at the close of the exchange
representing the principal market for such securities. All assets and
liabilities expressed in foreign currencies will be converted into
U.S. dollars at the mean between the buying and selling rates of such
currencies against U.S. dollars last quoted by any major bank. If such
quotations are not available, the rate of exchange will be determined
in accordance with policies established by the Trustees.
B-79
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Accounting for Investments
Investment transactions are accounted for on the trade date. Realized
gains and losses on sales of investments and unrealized appreciation
and depreciation of investments are computed on the specific
identification cost method. Interest income, adjusted for amortization
of discounts and premiums on investments, is earned from the
settlement date and is recorded on the accrual basis. Dividend income
is recorded on the ex-dividend date.
Federal Income Tax
It is each Fund's intent to continue to comply with the provisions of
subchapter M of the Code applicable to a regulated investment company.
Under such provisions, the Funds will not be subject to federal income
taxes on their ordinary income and net realized capital gain to the
extent they are distributed or deemed to have been distributed to
their shareholders. Therefore, no Federal income tax provision is
required.
Dividends and Distributions to Shareholders
Dividends from net investment income and distributions of any net
realized capital gains of each Fund are declared and paid annually and
at other times as may be required to satisfy tax or regulatory
requirements. Distributions to shareholders are recorded on the ex-
dividend date. Income and capital gain distributions are determined in
accordance with income tax regulations which may differ from generally
accepted accounting principles. These differences are primarily due to
investments in forward contracts, passive foreign investment
companies, the deferral of wash sale losses, and paydowns on certain
mortgage-backed securities. As a result, net investment income (loss)
and net realized gain (loss) on investment transactions for a
reporting period may differ significantly from distributions during
such period. Accordingly, the Funds may periodically make
reclassifications among certain of their capital accounts without
impacting the net asset value of the Funds.
Foreign Currency Translation
The books and records of the Funds are maintained in U.S. dollars. The
market values of foreign currencies, foreign securities and other
assets and liabilities denominated in foreign currencies are
translated into U.S. dollars at the mean of the buying and selling
rates of such currencies against the U.S. dollar at the end of each
business day. Purchases and sales of foreign securities and income and
expense items are translated at the rates of exchange prevailing on
the respective dates of such transactions. The Funds do not isolate
that portion of the results of operations arising from changes in the
exchange rates from that portion arising from changes in the market
prices of securities.
Net realized foreign currency gains and losses resulting from changes
in exchange rates include foreign currency gains and losses between
trade date and settlement date on investment securities transactions,
foreign currency transactions and the difference between the amounts
of dividends recorded on the books of the Funds and the amount
actually received.
Forward Foreign Currency Contracts
Each Fund may enter into forward foreign currency contracts in order
to convert foreign denominated securities or obligations to U.S.
dollar denominated investments. The International Equity Fund may
engage in such transactions to manage the value of portfolio holdings
against future movements in certain foreign currency exchange rates. A
forward foreign currency contract is an agreement between two parties
to buy and sell a currency at a set price on a future date. The market
value of a forward currency contract fluctuates with changes in
forward foreign currency exchange rates. Forward foreign currency
contracts are marked to market daily and the change in their value is
recorded by the Funds as an unrealized gain or loss. When a forward
foreign currency contract is extinguished, through delivery or offset
by entering into another forward foreign currency contract, the Funds
record a realized gain or loss equal to the difference between the
value of the contract at the time it was opened and the value of the
contract at the time it was extinguished or offset.
Forward foreign currency contracts involve a risk of loss from the
potential inability of counterparties to meet the terms of their
contracts and from unanticipated movements in foreign currency values
and interest rates.
B-80
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
The notional or contractual amounts of these instruments represent the
investments the Funds have in particular classes of financial
instruments and do not necessarily represent the amounts potentially
subject to risk. The measurement of the risk associated with these
instruments is meaningful only when all related and offsetting
transactions are considered. A summary of obligations for the
International Equity Fund under these financial instruments at
December 31, 1996 is as follows:
<TABLE>
<CAPTION>
IN
CONTRACTS EXCHANGE UNREALIZED
SETTLEMENT TO UNITS OF FOR U.S. CONTRACTS AT APPRECIATION
DATE DELIVER/RECEIVE CURRENCY DOLLARS VALUE (DEPRECIATION)
---------- --------------- --------- ----------- ------------ --------------
<S> <C> <C> <C> <C> <C>
BUYS
01/13/97 Austrian Schilling 2,124,732 $ 196,807 $ 196,017 $ (790)
-----------
SELLS
01/02/97 British Pound 114,041 190,471 195,147 (4,676)
01/03/97 British Pound 334,350 562,433 572,139 (9,706)
01/07/97 British Pound 110,538 188,114 189,153 (1,039)
01/27/97 Japanese Yen 4,007,200,000 35,305,727 34,677,258 628,469
-----------
613,048
-----------
$ 612,258
===========
</TABLE>
Forward Commitments
Each Fund may purchase or sell securities on a "when issued" or
delayed delivery or on a forward commitment basis. The Funds use
forward commitments to manage interest rate exposure or as a temporary
substitute for purchasing or selling particular debt securities.
Forward commitments are not used for purposes of trading. Delivery and
payment for securities purchased on a forward commitment basis can
take place a month or more after the date of the transaction. The
Funds instruct the custodian to segregate assets in a separate account
with a current market value at least equal to the amount of its
forward purchase commitments. The price of the underlying security and
the date when the securities will be delivered and paid for are fixed
at the time the transaction is negotiated. The value of the forward
commitment is determined by management using a commonly accepted
pricing model and fluctuates based upon changes in the value of the
underlying security and market repurchase rates. Such rates equate the
counterparty's cost to purchase and finance the underlying security to
the earnings received on the security and forward delivery proceeds.
The Funds record on a daily basis the unrealized
appreciation/depreciation based upon changes in the value of the
forward commitment. When a forward commitment contract is closed, the
Funds record a realized gain or loss equal to the difference between
the value of the contract at the time it was opened and the value of
the contract at the time it was extinguished. Forward commitments
involve a risk of loss if the value of the security to be purchased
declines prior to the settlement date. The Funds could also be exposed
to loss if they cannot close out their forward commitments because of
an illiquid secondary market, or the inability of counterparties to
perform. The Funds monitor exposure to ensure counterparties are
creditworthy and concentration of exposure is minimized. A summary of
open obligations under these forward commitments at December 31, 1996,
is as follows:
<TABLE>
<CAPTION>
FORWARD EXPIRATION AGGREGATE
COMMITMENT OF FACE VALUE MARKET UNREALIZED
CONTRACTS TO BUY CONTRACTS OF CONTRACTS COST VALUE (DEPRECIATION)
---------------- --------- ------------ ---- ----- --------------
<S> <C> <C> <C> <C> <C>
CORE BOND FUND
U.S. Treasury Note
5.875% 11/15/1999 February 1997 $ 9,250,000 $9,215,674 $ 9,203,935 ($11,739)
BALANCED FUND
U.S. Treasury Note
5.875% 11/15/1999 February 1997 $ 1,900,000 $1,892,949 $ 1,890,538 ($ 2,411)
</TABLE>
B-81
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Allocation of Operating Activity
In maintaining the records for the Funds, the income and expense
accounts are allocated to each class of shares. Investment income,
unrealized and realized gains or losses are prorated among the classes
of shares based on the relative net assets of each. Expenses are
allocated to each class of shares depending on the nature of the
expenditures. Administration and distribution and service fees, which
are directly attributable to a class of shares, are charged to that
class' operations. Expenses of the Fund not directly attributable to
the operations of any class of shares or Fund are prorated among the
Funds and classes to which the expense relates based on the relative
net assets of each. Total expenses per class are currently limited to
a percentage of average daily net assets, as discussed in Note 3.
3. Management Fees and Other Transactions With Affiliates
Investment Management Fees
Under an agreement between the Trust and MassMutual, MassMutual is
responsible for providing investment management of each Fund. In
return for this service, MassMutual receives advisory fees monthly
based upon each Fund's average daily net assets at the following
annual rates:
<TABLE>
<CAPTION>
<S> <C>
Prime Fund .45%
Short-Term Bond Fund .45%
Core Bond Fund .45%
Balanced Fund .45%
Value Equity Fund .45%
Small Cap Value Equity Fund .55%
International Equity Fund .85%
</TABLE>
MassMutual has entered into investment sub-advisory agreements with
two subsidiaries: David L. Babson & Company, Inc. ("Babson") and
HarbourView Asset Management Corporation ("HarbourView"). These
agreements provide that (1) effective January 1, 1997, Babson will
manage the investment and reinvestment of the assets of the Value
Equity Fund, the Small Cap Value Equity Fund and the Value Equity
sector of the Balanced Fund, and (2) HarbourView will manage the
investment and reinvestment of the assets of the International Equity
Fund. Prior to January 1, 1997, Concert Capital Management ("Concert
Capital") served as the investment sub-advisor to the Value Equity
Fund, the Small Cap Value Equity Fund and the Value Equity sector of
the Balanced Fund. On January 1, 1996, the employees of Concert
Capital became co-employees of Babson. At the time, both Concert
Capital and Babson were wholly-owned subsidiaries of DLB Acquisition
Corporation, a controlled subsidiary of MassMutual. Concert Capital
merged with and into Babson effective December 31, 1996.
MassMutual pays Babson a fee equal to an annual rate of .13% of the
average daily net asset value of the Value Equity Fund and the Value
Equity sector of the Balanced Fund and .25% of the average daily net
asset value of the Small Cap Value Equity Fund. MassMutual pays
HarbourView a fee equal to an annual rate of .50% of the average daily
net asset value of the International Equity Fund.
Administration Fees
Under separate administrative and shareholder services agreements
between each Fund and MassMutual, MassMutual provides certain
administrative and shareholder services and bears some class specific
administrative expenses. In return for these services, MassMutual
receives an administrative services fee monthly based upon the average
daily net assets of the applicable class of shares of the Fund at the
following annual rates:
<TABLE>
<CAPTION>
Class 1 Class 2 Class 3 Class 4
-------- ------- ------- -------
<S> <C> <C> <C> <C>
Prime Fund .5628% .5128% .3152% .0812%
Short-Term Bond Fund .5568% .5068% .3092% .0782%
Core Bond Fund .5688% .5188% .3212% .0842%
Balanced Fund .5708% .5208% .3232% .0852%
Value Equity Fund .5814% .5314% .3338% .0905%
Small Cap Value Equity Fund .5728% .5228% .3252% .0862%
International Equity Fund .5948% .5448% .4448% .0972%
</TABLE>
B-82
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Distribution and Service Fees
OppenheimerFunds Distributor, Inc. ("Oppenheimer") acts as distributor
to each Fund. MML Investor Services, Inc. ("MMLISI") serves as sub-
distributor to each Fund. MassMutual has a controlling interest in
OppenheimerFunds and MMLISI is a wholly owned subsidiary of
MassMutual. Oppenheimer is paid a distribution fee with respect to
Class 1 and Class 2 at the annual rate of .40% and .15%, respectively,
of the value of average daily net assets attributable to those classes
of shares of which a portion is subsequently allocated to MMLISI. The
Funds do not pay any fees directly to MMLISI. MassMutual is also paid
a fee for shareholder services with respect to Class 1 shares of the
Funds at the annual rate of .25% of the value of the average daily net
assets of the respective class of each Fund. These fees are authorized
pursuant to separate service and distribution plans for each of the
classes of shares adopted by the Funds pursuant to Rule 12b-1 under
the Investment Company Act and are used by Oppenheimer to cover
expenses primarily intended to result in the sale of those shares of
the Funds.
Expense Limitations
MassMutual has voluntarily agreed to waive a portion of its management
fee to the extent that the aggregate annual operating expenses
incurred during the year exceed the following percentages of the
average daily net assets:
<TABLE>
<CAPTION>
Class 1 Class 2 Class 3 Class 4
------- ------- ------- -------
<S> <C> <C> <C> <C>
Prime Fund 1.65% 1.10% .75% .5160%
Short-Term Bond Fund 1.65% 1.10% .75% .5190%
Core Bond Fund 1.65% 1.10% .75% .5130%
Balanced Fund 1.65% 1.10% .75% .5120%
Value Equity Fund 1.65% 1.10% .75% .5067%
Small Cap Value Equity Fund 1.75% 1.20% .85% .6110%
International Equity Fund 2.15% 1.60% 1.35% 1.002%
</TABLE>
MassMutual's management fee for the year ended December 31, 1996 was
$20,477,568, of which $1,925,096 was reimbursed to the Funds.
Other
Certain officers and directors of the Funds are also officers of
MassMutual. The compensation of unaffiliated directors of the Funds is
borne by the Funds.
At December 31, 1996, MassMutual or separate investment accounts
thereof owned all of the outstanding shares of the Trust.
4. Purchases And Sales of Investments
Cost of purchases and proceeds from sales of investment securities
(excluding short-term investments) for the year ended December 31,
1996 were as follows:
<TABLE>
<CAPTION>
LONG-TERM U.S.
GOVERNMENT OTHER LONG-TERM
SECURITIES SECURITIES
-------------- ---------------
<S> <C> <C>
Purchases
Short-Term Bond Fund...................... $102,126,595 $ 32,662,257
Core Bond Fund............................ 168,040,130 117,409,164
Balanced Fund............................. 48,825,564 81,833,743
Value Equity Fund......................... -- 366,428,008
Small Cap Value Equity Fund............... -- 126,866,361
International Equity Fund................. -- 255,790,219
Sales
Short-Term Bond Fund...................... $ 39,099,687 $ 14,835,789
Core Bond Fund............................ 111,228,535 37,231,689
Balanced Fund............................. 39,076,581 45,001,025
Value Equity Fund......................... -- 281,828,695
Small Cap Value Equity Fund............... -- 107,156,414
International Equity Fund................. -- 161,400,001
</TABLE>
B-83
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
5. Capital Share Transactions
The Funds are authorized to issue an unlimited number of shares, with
no par value, in one or more of four classes of shares: Class 1, Class
2, Class 3 and Class 4. Class 1 and Class 2 shares of each Fund are
subject to distribution and service fees. Class 3 shares are not
subject to any distribution or service fees. SIA Investors purchase
Class 4 shares directly from the Funds and pay no distribution or
service fees. Changes in shares outstanding for each Fund are as
follows:
<TABLE>
<CAPTION>
CLASS 1 CLASS 2
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
DECEMBER 31, 1996 DECEMBER 31, 1995 DECEMBER 31, 1996 DECEMBER 31, 1995
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
-------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
PRIME FUND
Sold -- -- -- -- -- -- -- --
Issued as reinvestment
of dividends 28 4,288 28 4,178 33 4,922 32 4,746
Redeemed -- -- -- -- -- -- -- --
--------- ---------- -------- --------- --------- ---------- --------- ----------
Net increase 28 $ 4,288 28 $ 4,178 33 $ 4,922 32 $ 4,746
========= ========== ======== ========= ========= ========== ========= ==========
SHORT-TERM BOND FUND
Sold -- -- -- -- -- -- -- --
Issued as reinvestment
of dividends 519 5,285 740 7,530 584 5,951 796 8,116
Redeemed -- -- -- -- -- -- -- --
--------- ---------- -------- --------- --------- --------- --------- ---------
Net increase 519 $ 5,285 740 $ 7,530 584 $ 5,951 796 $ 8,116
========= ========== ======== ========= ========= ========= ========= =========
CORE BOND FUND
Sold 429 4,520 4,457 49,156 -- -- -- --
Issued as reinvestment
of dividends 489 5,156 1,186 12,759 562 5,941 861 9,288
Redeemed (5,250) (55,534) -- -- -- -- -- --
--------- --------- -------- -------- --------- --------- --------- ---------
Net increase (decrease) (4,332) $ (45,858) 5,643 $ 61,915 562 $ 5,941 861 $ 9,288
========= ========= ======== ======== ========= ========= ========= =========
BALANCED FUND
Sold 931 10,969 4,480 49,577 -- -- -- --
Issued as reinvestment
of dividends 416 5,173 530 6,084 484 6,038 401 4,610
Redeemed (5,552) (65,509) (23) (260) -- -- -- --
--------- --------- -------- -------- --------- --------- --------- ---------
Net increase (decrease) (4,205) $ (49,367) 4,987 $ 55,401 484 $ 6,038 401 $ 4,610
========= ========= ======== ======== ========= ========= ========= =========
VALUE EQUITY FUND
Sold -- -- -- -- -- -- -- --
Issued as reinvestment
of dividends 403 5,884 219 2,751 456 6,682 267 3,372
Redeemed -- -- -- -- -- -- -- --
--------- --------- -------- -------- --------- --------- --------- ---------
Net increase 403 $ 5,884 219 $ 2,751 456 $ 6,682 267 $ 3,372
========= ========= ======== ======== ========= ========= ========= =========
SMALL CAP VALUE EQUITY FUND
Sold 4,373 54,090 4,740 49,719 -- -- -- --
Issued as reinvestment
of dividends 349 4,660 119 1,356 420 5,622 114 1,300
Redeemed (9,150) (108,036) -- -- -- -- -- --
--------- --------- -------- -------- --------- --------- --------- ---------
Net increase (decrease) (4,428) $ (49,286) 4,859 $ 51,075 420 $ 5,622 114 $ 1,300
========= ========= ======== ======== ========= ========= ========= =========
INTERNATIONAL EQUITY FUND
Sold 5,377 55,098 1,610 15,218 -- -- -- --
Issued as reinvestment
of dividends 100 1,065 93 885 161 1,742 124 1,191
Redeemed (7,009) (70,119) -- -- -- -- -- --
--------- --------- -------- -------- --------- --------- --------- ---------
Net increase (decrease) (1,532) $ (13,956) 1,703 $ 16,103 161 $ 1,742 124 $ 1,191
========= ========= ======== ======== ========= ========= ========= =========
</TABLE>
B-84
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
<TABLE>
<CAPTION>
CLASS 3 CLASS 4
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
DECEMBER 31, 1996 DECEMBER 31, 1995 DECEMBER 31, 1996 DECEMBER 31, 1995
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
--------- ---------- ------ -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
PRIME FUND
Sold -- -- -- -- 2,391,584 370,653,176 1,826,450 281,187,060
Issued as reinvestment
of dividends 35 5,335 34 5,095 86,522 13,067,477 84,068 12,693,332
Redeemed -- -- -- -- (2,445,697) (378,881,926) (1,363,706) (210,583,290)
-------- ----------- ------- -------- ----------- ------------- ----------- ------------
Net increase 35 $ 5,335 34 $ 5,095 32,409 $ 4,838,727 546,812 $ 83,297,102
======== =========== ======= ======== =========== ============= =========== ============
SHORT-TERM BOND FUND
Sold -- -- -- -- 6,074,656 62,871,971 5,136,925 53,696,509
Issued as reinvestment
of dividends 625 6,381 830 8,467 808,935 8,206,104 947,825 9,611,215
Redeemed -- -- -- -- (4,631,745) (47,999,711) (4,819,336) (50,374,106)
-------- ---------- ------ -------- ----------- ------------- ----------- -------------
Net increase 625 $ 6,381 830 $ 8,467 2,251,846 $ 23,078,364 1,265,414 $ 12,933,618
======== =========== ======= ======== =========== ============= =========== =============
CORE BOND FUND
Sold -- -- -- -- 15,244,478 161,638,362 8,241,236 89,191,723
Issued as reinvestment
of dividends 604 6,389 894 9,658 1,838,613 19,317,124 1,952,750 20,953,505
Redeemed -- -- -- -- (6,519,179) (69,250,775) (6,340,632) (67,005,587)
-------- ---------- ------ -------- ----------- ------------- ----------- --------------
Net increase 604 $ 6,389 894 $ 9,658 10,563,912 $111,704,711 3,853,354 $ 43,139,641
======== =========== ======= ======== =========== ============= =========== =============
BALANCED FUND
Sold -- -- -- -- 16,529,257 200,170,935 17,612,664 191,493,187
Issued as reinvestment
of dividends 521 6,510 433 4,977 2,193,746 27,325,515 1,722,693 19,759,099
Redeemed -- -- -- -- (12,780,860) (154,960,358) (14,889,389) (160,925,764)
--------- ---------- ------ -------- ----------- ------------- ----------- -------------
Net increase 521 $ 6,510 433 $ 4,977 5,942,143 $ 72,536,092 4,445,968 $ 50,326,522
======== ========== ======= ======== =========== ============= =========== =============
VALUE EQUITY FUND
Sold -- -- -- -- 42,761,147 585,609,490 39,224,457 451,052,424
Issued as reinvestment
of dividends 492 7,213 299 3,763 8,235,214 120,574,407 5,223,526 65,653,544
Redeemed -- -- -- -- (47,300,940) (651,246,978) (34,020,780) (390,453,417)
--------- ---------- ------ -------- ----------- ------------- ----------- -------------
Net increase 492 $ 7,213 299 $ 3,763 3,695,421 $ 54,936,919 10,427,203 $ 126,252,551
======== ========== ======= ======== =========== ============= =========== =============
SMALL CAP VALUE EQUITY FUND
Sold -- -- -- -- 10,428,037 129,033,258 9,765,741 102,623,894
Issued as reinvestment
of dividends 455 6,096 146 1,672 1,500,824 20,087,217 539,817 $ 6,159,231
Redeemed -- -- -- -- (11,168,365) (140,771,695) (9,110,662) (97,354,772)
-------- --------- ------ -------- ----------- ------------- ----------- -------------
Net increase 455 $ 6,096 146 $ 1,672 760,496 $ 8,348,780 1,194,896 $ 11,428,353
======== ========== ======= ======== =========== ============= =========== =============
INTERNATIONAL EQUITY FUND
Sold -- -- -- -- 14,964,804 154,912,942 11,931,440 112,672,627
Issued as reinvestment
of dividends 186 2,018 149 1,430 672,906 7,341,306 412,266 3,955,148
Redeemed -- -- -- -- (6,611,341) (68,183,726) (5,487,562) (51,810,300)
-------- ---------- ------ -------- ----------- ------------- ----------- -------------
Net increase 186 $ 2,018 149 $ 1,430 9,026,369 $ 94,070,522 6,856,144 $ 64,817,475
========= ========== ====== ======== =========== ============= =========== =============
</TABLE>
B-85
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
6. Foreign The International Equity Fund invests substantially all of its
Securities assets in foreign securities. The other Funds may also invest in
foreign securities, subject to certain percentage restrictions.
Investing in securities of foreign companies and foreign
governments involves special risks and considerations not
typically associated with investing in securities of U.S.
companies and the U.S. Government. These risks include
revaluation of currencies and future adverse political and
economic developments. Moreover, securities of many foreign
companies and foreign governments and their markets may be less
liquid and their prices more volatile than those of securities of
comparable U.S. companies and the U.S. Government.
7. Federal At December 31, 1996, the cost of securities and the unrealized
Income appreciation (depreciation) in the value of investments owned by
Tax the Funds, as computed on a Federal income tax basis, are as
Information follows:
<TABLE>
<CAPTION>
FEDERAL TAX BASIS TAX BASIS NET UNREALIZED
INCOME TAX UNREALIZED UNREALIZED APPRECIATION
COST APPRECIATION DEPRECIATION (DEPRECIATION)
-------------- ------------ ------------- ------------------
<S> <C> <C> <C> <C>
Prime Fund $ 260,002,847 $ 2,614 $ (10,702) $ (8,088)
Short-Term Bond Fund 142,542,031 1,257,932 (240,203) 1,017,729
Core Bond Fund 348,014,562 6,739,419 (2,019,357) 4,720,062
Balanced Fund 456,772,419 86,711,748 (616,389) 86,095,359
Value Equity Fund 1,768,842,158 713,420,243 (1,562,317) 711,857,926
Small Cap Value Equity Fund 345,263,421 119,498,338 (8,280,372) 111,217,966
International Equity Fund 309,948,749 59,397,218 (12,108,626) 47,288,592
</TABLE>
At December 31, 1996, the following Funds have available, for
Federal income tax purposes, unused capital losses:
<TABLE>
<CAPTION>
AMOUNT EXPIRATION DATE
-------------- --------------------
<S> <C> <C>
Prime Fund $ 2,082 December 31, 2003
Prime Fund 2,368 December 31, 2004
Short-Term Bond Fund 295,197 December 31, 2004
Core Bond Fund 1,885,881 December 31, 2004
International Equity Fund 11,789,843 December 31, 2003
</TABLE>
8. Line of On January 11, 1996, the Trust, on behalf of each Fund, entered
Credit into a discretionary line of credit agreement with PNC Bank, N.A.
Each Fund may borrow under the line of credit, provided that the
Trust's borrowings do not exceed $50,000,000 in the aggregate at
any one time. Interest is charged based on outstanding borrowings
at the Federal Funds Rate plus .45%. Only the International
Equity Fund utilized the line of credit during the year ended
December 31, 1996. Average daily borrowings for the year ended
December 31, 1996 were $3,517,944 and the average interest rate
was 5.77%. The maximum borrowing outstanding during the year
ended December 31, 1996 was $9,870,500.
B-86
<PAGE>
PART C: OTHER INFORMATION
Item 24: Financial Statements and Exhibits
(a) Financial Statements:
(1) Financial Statements included in the Prospectus constituting Part A
of this Registration Statement
Financial Highlights for the years ended December 31, 1996,
December 31, 1995 and for the period ended December 31, 1994
(2) Financial Statements included in the Statement of Additional
Information constituting Part B of this Registration Statement
Portfolio of Investments at December 31, 1996
Statement of Assets and Liabilities at December 31, 1996
Statement of Operations at December 31, 1996
Statements of Changes in Net Assets for the years ended
December 31, 1996 and December 31, 1995
Financial Highlights for the years ended December 31, 1996, and
December 31, 1995 and for the period ended December 31, 1994
Notes to Financial Statements
Report of Independent Accountants
(b) Exhibits:
Exhibit 1: Copy of Registrant's Agreement and Declaration of Trust, as
amended November 29, 1993./1/
Exhibit 2: Copy of Registrant's By-Laws, as now in effect./1/
Exhibit 3: None.
Exhibit 4: None.
Exhibit 5: Copy of specimen Investment Management Agreement between
each of Registrant's seven series and MassMutual Life
Insurance Company ("MassMutual")./3/
C-1
<PAGE>
(b): Copy of specimen Investment Sub-Advisory Agreements
between MassMutual and David L. Babson and Company,
Inc. ("Babson")/5/
(c): Copy of specimen Investment Sub-Advisory Agreement
between MassMutual and HarbourView Asset Management
Corporation ("HarbourView")./3/
Exhibit 6(a): Copy of specimen distribution agreements between the
Trust and Oppenheimer Funds Distributor, Inc.
("Oppenheimer")./3/
(b): Copy of specimen sub-distribution agreement between
Oppenheimer and MML Investors Services, Inc./3/
Exhibit 7: None.
Exhibit 8(a): Copy of specimen Custodian Agreement between the Trust
and Investors Bank & Trust Company ("IBT")./3/
(b): Copy of specimen Comprehensive Administrative and
Shareholder Services Agreement between the Trust and
MassMutual for the provision of administrative and
shareholder services./3/
(c): Copy of specimen Transfer Agency Agreement among the
Trust, MassMutual and IBT./3/
Exhibit 9: None.
Exhibit 10: Opinion of counsel as to the legality of shares being
registered is incorporated herein by reference to the
Rule 24f-2 Notice on Form 24F-2 with Opinion of Counsel
filed electronically on February 25, 1997.
Exhibit 11(a): Consent of Ropes & Gray./5/
C-2
<PAGE>
(b): Consent of Coopers & Lybrand L.L.P./5/
(c)-(h): Powers of Attorney for Gary E. Wendlandt, Ronald J.
Abdow, Mary E. Boland, John M. Naughton, Charles J.
McCarthy and John H. Southworth./3/
(i)-(o): Powers of Attorney for Richard H. Ayers, David E. A.
Carson, Richard G. Dooley, Richard W. Greene, Beverly
C. L. Hamilton, F. William Marshall, Jr., and John V.
Murphy./5/
Exhibit 12: None.
Exhibit 13: None.
Exhibit 14: None.
Exhibit 15: Copy of 12b-1 Plans adopted by Trust's Board of Trustees
and shareholders./3/
Exhibit 16: None.
Exhibit 17: Financial Data Schedules./5/
Exhibit 18: Rule 18f-3 Plan./4/
_______________
/1/ Incorporated by reference to the Registrant's initial Registration Statement
on Form N-1A ("Registration Statement") filed January 4, 1994.
/2/ Incorporated by reference to Registrant's Pre-Effective Amendment No. 2 to
the Registration Statement filed August 30, 1994.
/3/ Incorporated by reference to Registrant's Post-Effective Amendment No. 1 to
the Registration Statement filed March 1, 1995.
/4/ Incorporated by reference to Registrant's Post-Effective Amendment No. 2 to
the Registration filed via EDGAR April 26, 1996.
/5/ Filed herewith.
Item 25: Person Controlled by or Under Common Control with Registrant
At the date of this Post-Effective Amendment to the Registration Statement,
Registrant did not, directly or indirectly, control any person.
Registrant was organized by MassMutual primarily to offer investors both the
opportunity to pursue long-term investment goals and the flexibility to respond
to changes in their investment objectives and economic and market conditions.
Initially, the Registrant will provide a vehicle for the investment of assets of
various separate investment accounts established by MassMutual and life
insurance company subsidiaries of MassMutual. The assets in such separate
accounts are, under state law, assets of the life insurance companies which have
established such accounts. Thus, at any time MassMutual and its life insurance
company subsidiaries will own such outstanding shares of Registrant's series as
are purchased with separate account assets. As a result, MassMutual will own
substantially all of the shares of Registrant, probably for a number of years.
The following entities are, or may be deemed to be, controlled by MassMutual
through the direct or indirect ownership of such entities' stock.
C-3
<PAGE>
1. MML Series Investment Fund, a registered open-end investment company
organized as a Massachusetts business trust, all of the shares of which are
owned by separate accounts of MassMutual and companies controlled by
MassMutual.
2. MassMutual Institutional Funds, a registered open-end investment company
organized as a Massachusetts business trust, all of the shares of which are
owned by MassMutual.
3. MassMutual Holding Company, a Delaware corporation, all the stock of which
is owned by MassMutual.
4. MML Bay State Life Insurance Company, a Missouri corporation, all the stock
of which is owned by MassMutual.
5. MassMutual of Ireland, Ltd., incorporated in the Republic of Ireland, that
formerly provided claims service to group life and health contract holders
for MassMutual, all of the stock of which is owned by MassMutual.
6. CM Assurance Company, a Connecticut life, accident, disability and health
insurer, all the stock of which is owned by MassMutual.
7. CM Benefit Insurance Company, a Connecticut life, accident, disability and
health insurer, all the stock of which is owned by MassMutual.
8. C.M. Life Insurance Company, a Connecticut life, accident, disability and
health insurer, all the stock of which is owned by MassMutual.
9. MML Distributors, LLC, formerly known as Connecticut Mutual Financial
Services, LLC, a registered broker-dealer incorporated as a limited
liability company in Connecticut. MassMutual has a 99% ownership interest
and G.R. Phelps & Co. has a 1% ownership interest.
10. Panorama Series Fund, Inc., a registered open-end investment company
organized as a Maryland corporation. Shares of the fund are sold only to
MassMutual and its affiliates.
11. MassMutual Holding Trust I, a Massachusetts business trust, which acts as a
holding company for certain MassMutual subsidiaries and affiliates, all of
the stock of which is owned by MassMutual Holding Company.
12. MassMutual Holding Trust II, a Massachusetts business trust, which acts as
a holding company for certain MassMutual subsidiaries and affiliates, all
of the stock of which is owned by MassMutual Holding Company.
13. MassMutual Holding MSC, Inc., a Massachusetts corporation, which acts as a
holding company for certain MassMutual subsidiaries and affiliates, all of
the stock of which is owned by MassMutual Holding Company.
14. MML Investors Services, Inc., a registered broker-dealer incorporated in
Massachusetts, all the stock of which is owned by MassMutual Holding
Company and G. R. Phelps & Co.
C-4
<PAGE>
15. G.R. Phelps & Company, Inc., a Connecticut corporation which formerly
operated as a securities broker-dealer and investment adviser, all the
stock of which is owned by MassMutual Holding Company.
16. MassMutual International, Inc., a Delaware corporation that acts as a
holding company of and provides services to international insurance
companies, all of the stock of which is owned by MassMutual Holding
Company.
17. MassLife Seguros de Vida S.A. (Argentina), a life insurance company
incorporated in Argentina. MassMutual International Inc. owns 99.99% of the
outstanding capital stock of MassLife Seguros de Vida S.A.
18. Cornerstone Real Estate Advisers, Inc., a Massachusetts equity real estate
advisory corporation, all the stock of which is owned by MassMutual Holding
Trust I.
19. DLB Acquisition Corporation ("DLB") is a Delaware corporation, which serves
as a holding company for certain investment advisory subsidiaries of
MassMutual. MassMutual Holding Trust I owns 83.7% of the outstanding
capital stock of DLB.
20. Oppenheimer Acquisition Corporation ("OAC") is a Delaware corporation,
which serves as a holding company for OppenheimerFunds, Inc. MassMutual
Holding Trust I owns 86% of the capital stock of OAC
21. Antares Leveraged Capital Corp., a Delaware corporation that operates as a
finance company, all of the stock of which is owned by MassMutual Holding
Trust I.
22. Charter Oak Capital Management, Inc., a Delaware corporation that operates
as an investment manager. MassMutual Holding Trust I owns 80% of the
capital stock of Charter Oak.
23. MML Realty Management Corporation, a property manager incorporated in
Massachusetts, all the stock of which is owned by MassMutual Holding Trust
II.
24. Westheimer 335 Suites, Inc., was incorporated in Delaware to serve as a
general partner of the Westheimer 335 Suites Limited Partnership.
MassMutual Holding Trust II owns all the stock of Westheimer 335 Suites,
Inc.
25. CM Advantage, Inc., a Connecticut corporation that acts as a general
partner in real estate limited partnerships. MassMutual Holding Trust II
owns all of the outstanding stock.
26. CM International, Inc., a Delaware corporation that holds a mortgage pool
and issues collateralized bond obligations. MassMutual Holding Trust II
owns all the outstanding stock of CM International, Inc.
27. CM Property Management, Inc., a Connecticut real estate holding company,
all the stock of which is owned by MassMutual Holding Trust II.
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28. Urban Properties, Inc., a Delaware real estate holding and development
company, all the stock of which is owned by MassMutual Holding Trust II.
29. MMHC Investment, Inc., a Delaware corporation which is a passive investor
in MassMutual High Yield Partners LLC. MassMutual Holding Trust II owns all
the outstanding stock of MMHC Investment, Inc.
30. HYP Management, Inc., a Delaware corporation which is the LLC Manager for
MassMutual High Yield Partners LLC and owns 1.28% of the LLC units of such
entity. MassMutual Holding Trust II owns all the outstanding stock of HYP
Management, Inc.
31. MassMutual Corporate Value Limited, a Cayman Islands corporation that owns
approximately 90% of MassMutual Corporate Value Partners Limited.
MassMutual Holding MSC, Inc. owns 46.19% of the outstanding capital stock
of MassMutual Corporate Value Limited.
32. MassMutual International (Bermuda) Ltd., a Bermuda life insurance company,
all of the stock of which is owned by MassMutual International Inc.
33. MassMutual Internacional (Chile) S.A. a Chilean corporation, which operates
as a holding company. MassMutual International Inc. owns 99% of the
outstanding shares and MassMutual Holding Company owns the remaining 1% of
the shares.
34. MassMutual International (Luxembourg) S.A. a Luxembourg corporation, which
operates as an insurance company. MassMutual International Inc. owns 99% of
the outstanding shares and MassMutual Holding Company owns the remaining 1%
of the shares.
35. Mass Seguros de Vida S.A., a life insurance company incorporated in Chile.
MassMutual International, Inc. owns 33.5% of the outstanding capital stock
of Mass Seguros de Vida S.A.
36. MML Insurance Agency, Inc., a licensed insurance broker incorporated in
Massachusetts, all of the stock of which is owned by MML Investors
Services, Inc.
37. MML Securities Corporation, a Massachusetts securities corporation, all of
the stock of which is owned by MML Investors Services, Inc.
38. OppenheimerFunds, Inc., a registered investment adviser incorporated in
Colorado, all of the stock of which is owned by Oppenheimer Acquisition
Corporation
39. David L. Babson and Company, Incorporated, a registered investment adviser
incorporated in Massachusetts, all of the stock of which is owned by DLB
Acquisition Corporation.
40. Cornerstone Office Management, LLC, a Delaware limited liability company
that is 50% owned by Cornerstone Real Estate Advisers, Inc. and 50% owned
by MML Realty Management Corporation.
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41. Westheimer 335 Suites Limited Partnership, a Texas limited partnership of
which Westheimer 335 Suites, Inc. is the general partner.
42. MassMutual High Yield Partners LLC, a Delaware limited liability company,
that operates as a high yield bond fund. MassMutual holds 5.28%, MMHC
Investment Inc. holds 35.99%, and HYP Management, Inc. hold 1.28% for a
total of 42.55% of the ownership interest in this company.
43. MassMutual Corporate Value Partners Limited, a Cayman Islands corporation
that operates as a high yield bond fund. MassMutual Corporate Value Limited
holds an approximately 90% ownership interest in this company.
44. DISA Insurance Services of America, Inc. (Alabama), a licensed insurance
broker incorporated in Alabama. MML Insurance Agency, Inc. owns all the
shares of outstanding stock.
45. Diversified Insurance Services of America, Inc. (Hawaii), a licensed
insurance broker incorporated in Hawaii. MML Insurance Agency, Inc. owns
all the shares of outstanding stock.
46. MML Insurance Agency of Nevada, Inc., a Nevada corporation that operates as
an insurance broker, all of the stock of which is owned by MML
Insurance Agency, Inc.
47. MML Insurance Agency of Ohio, Inc., a subsidiary of MML Insurance Agency,
Inc., is incorporated in the state of Ohio and operates as an insurance
broker. The outstanding capital stock is controlled by MML Insurance
Agency, Inc. by means of a voting trust.
48. MML Insurance Agency of Texas, Inc., a subsidiary of MML Insurance Agency,
Inc., is incorporated in the state of Texas and operates as an insurance
broker. The outstanding capital stock is controlled by MML Insurance
Agency, Inc. by means of a voting trust.
49. MML Insurance Agency of Mississippi, P.C., a Mississippi professional
corporation that operates as an insurance broker and is controlled MML
Insurance Agency, Inc.
50. Origen Inversiones S.A., a Chilean corporation which operates as a holding
company. MassMutual Internacional (Chile) S.A. holds a 33.5% ownership
interest in this corporation.
51. Babson Securities Corporation, a registered broker-dealer incorporated in
Massachusetts, all of the stock of which is owned by David L. Babson and
Company, Incorporated.
52. Potomac Babson Incorporated, a Massachusetts corporation, is a registered
investment adviser. David L. Babson and Company Incorporated owns 60% of
the outstanding shares of Potomac Babson Incorporated.
53. Babson-Stewart-Ivory International, a Massachusetts general partnership,
which operates as a registered investment adviser. David L. Babson and
Company Incorporated holds a 50% ownership interest in the partnership.
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54. Oppenheimer Value Stock Fund ("OVSF") is a series of Oppenheimer Integrity
Funds, a Massachusetts business trust. OVSF is a registered open-end
investment company of which MassMutual and its affiliates own 29% of the
outstanding shares of beneficial interest.
55. Oppenheimer Series Fund Inc., a Maryland corporation and a registered open-
end investment company of which MassMutual and its affiliates owns at least
15% of the outstanding shares of beneficial interest of each of four
series.
56. Centennial Asset Management Corporation, a Delaware corporation that serves
as the investment adviser and general distributor of the Centennial Funds.
OppenheimerFunds, Inc. owns all the stock of Centennial Asset Management
Corporation.
57. HarbourView Asset Management Corporation, a registered investment adviser
incorporated in New York, all the stock of which is owned by
OppenheimerFunds, Inc.
58. Oppenheimer Real Asset Management, Inc., a Delaware corporation, all the
stock of which is owned by OppenheimerFunds, Inc.
59. OppenheimerFunds Distributor, Inc., a registered broker-dealer incorporated
in New York, all the stock of which is owned by OppenheimerFunds, Inc.
60. Oppenheimer Partnership Holdings, Inc., a Delaware holding company, all the
stock of which is owned by OppenheimerFunds, Inc.
61. Shareholder Financial Services, Inc., a transfer agent incorporated in
Colorado, all the stock of which is owned by OppenheimerFunds, Inc.
62. Shareholder Services, Inc., a transfer agent incorporated in Colorado, all
the stock of which is owned by OppenheimerFunds, Inc.
63. MultiSource Service, Inc., a Colorado corporation that operates as a
clearing broker, 80% of the stock of which is owned by OppenheimerFunds,
Inc.
64. Centennial Capital Corporation, a former sponsor of unit investment trust
incorporated in Delaware, all the stock of which is owned by Centennial
Asset Management Corporation.
65. Compensa Compania Seguros De Vida, a Chilean insurance company. Origen
Inversiones S.A. owns 99% of the outstanding shares of this company
66. Cornerstone Suburban Office Investors, LP, a Delaware limited partnership,
which operates as a real estate operating company. Cornerstone Office
Management, LLC holds a 1% general partnership interest in this fund and
MassMutual holds a 99% limited partnership interest.
67. 505 Waterford Park Limited Partnership, a Delaware limited partnership,
which holds title to an office building in Minneapolis, Minnesota. MML
Realty Management Corporation holds a 1% general partnership interest in
this partnership and MassMutual holds a 99% limited partnership interest.
68. The DLB Fund Group, an open-end management investment company, of which
MassMutual owns at least 25% of each series.
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MassMutual is the investment adviser for the following investment companies, and
as such may be deemed to control them.
1. MassMutual Corporate Investors, a registered closed-end Massachusetts
business trust.
2. MassMutual Participation Investors, a registered closed-end
Massachusetts business trust.
3. MML Series Investment Fund, a registered open-end Massachusetts
business trust, all of the shares are owned by separate accounts of
MassMutual and companies controlled by MassMutual.
4. MassMutual Institutional Funds, a registered open-end Massachusetts
business trust, substantially all of the shares are owned by
MassMutual.
5. MassMutual/Carlson CBO N.V., a Netherlands Antilles corporation that
issued Collateralized Bond Obligations on or about May 1, 1991, owned
equally by MassMutual interests (MassMutual and MassMutual Holding
MSC, Inc.)and Carlson Investment Management Co.
6. MassMutual Corporate Value Partners, Limited, an off-shore
unregistered investment company.
7. MassMutual High Yield Partners LLC, a high yield bond fund organized
as a Delaware limited liability company.
Item 26: Number of Holders of Securities
As of April 1, 1997, the number of holders of record of each class of
securities of Registrant was as follows:
Title of Class Number of Record Holders
-------------- ------------------------
Shares of
Beneficial 2
Interest
Item 27: Indemnification
Article VIII of Registrant's Agreement and Declaration of Trust provides for the
indemnification of Registrant's Trustees and officers. Registrant undertakes to
apply the indemnification provisions of its Agreement and Declaration of Trust
in a manner consistent with Securities and Exchange Commission Release No. IC-
11330 so long as the interpretation of Section 17(h) and 17(i) of the Investment
Company Act of 1940 (the "1940 Act") set forth in such Release shall remain in
effect and be consistently applied.
Trustees and officers of Registrant are also indemnified by MassMutual pursuant
to its by-laws which apply to subsidiaries, including Registrant. No
indemnification is provided with respect to
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any liability to any entity which is registered as an investment company under
the 1940 Act or to the security holders thereof, where the basis for such
liability is willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of office.
MassMutual's directors' and officers' liability insurance program, which covers
Registrant's Trustees and officers, consists of two distinct coverages. The
first coverage reimburses MassMutual, subject to specified limitations, for
amounts which MassMutual is legally obligated to pay out under its
indemnification by-law, discussed above. The second coverage directly protects
a Trustee or officer of Registrant against liability from shareholder derivative
and similar lawsuits which are indemnifiable under the law. There are, however,
specific acts giving rise to liability which are excluded from this coverage.
For example, no Trustee or officer is insured against personal liability for
libel or slander, acts of deliberate dishonesty, fines or penalties, illegal
personal profit or advantage at the expense of Registrant or its shareholders,
violation of employee benefit plans, regulatory statutes, and similar acts which
would traditionally run contrary to public policy and hence reimbursement by
insurance.
MassMutual's present insurance coverage has an overall limit of $60 million
annually ($15 million of which is underwritten by National Union Fire Insurance
Company, $15 million of which is underwritten by Executive Risk Indemnity, Inc.,
$10 million of which is underwritten by Continental, Casualty Co., $5 million of
which is underwritten by Federal Insurance Co. and $15 million of which is
underwritten by Sargasso Mutual Insurance Company). There is a deductible of
$200,000 per claim under the corporate coverage. There is no deductible for
individual trustees or officers.
Insofar as indemnification for liabilities arising under the Securities Act of
1933 (the "1933 Act") may be permitted to trustees, officers and controlling
persons of Registrant pursuant to the foregoing provisions, or otherwise,
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
1933 Act, and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by Registrant
of expenses incurred or paid by a Trustee, officer or controlling person of
Registrant in the successful defense of any action, suit or proceeding) is
asserted by such Trustee, officer or controlling person in connection with the
securities being registered, Registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the 1933 Act and will be governed by the
final adjudication of such issue.
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ITEM 28: BUSINESS AND OTHER CONNECTIONS OF THE INVESTMENT ADVISER
- -----------------------------------------------------------------
A. THE INVESTMENT ADVISER
MassMutual is the investment adviser for Registrant. MassMutual conducts is a
mutual life insurance company organized as a Massachusetts corporation which was
orginally chartered in 1851. As a mutual life insurance company, MassMutual has
no shareholders. MassMutual's primary business is ordinary life insurance. It
also provides, directly or through its subsidiaries, a wide range of annuity and
disability products, and pension and pension-related products and services, as
well as investment services to individuals, and corporations and other
institutions, in all 50 states of the United States and the District of
Columbia. MassMutual is also licensed to transact business in Puerto Rico, and
six provinces of Canada, but has no export sales. Effective February 29, 1996,
Connecticut Mutual Life Insurance Company merged into MassMutual.
MassMutual's principal lines of business are (i) the Individual Line, which
provides life insurance including variable and universal life insurance,
annuities and disability income insurance to individuals and small businesses;
(ii) Pension Management which provides group pension investment products and
administrative services, primarily to sponsors of tax qualified retirement
plans; (iii) Life and Health Benefits Management, which previously provided
group life and health insurance products and related services to corporations
and other institutions; this line was transferred to a subsidiary in December
1994, and the subsidiary was subsequently sold in March of 1996; and (iv)
MassMutual Investment Management Group, which provides advisory services for
MassMutual's general investment account and separate investment accounts, as
well as for various closed-end and open-end investment companies and external
institutional clients, through its own staff and those of Oppenheimer Funds Inc.
and David L. Babson and Company, Inc., in which MassMutual indirectly owns a
controlling interest.
The directors and executive vice presidents of MassMutual, their positions and
their other business affiliations and business experience for the past two years
are listed below.
DIRECTORS
ROGER G. ACKERMAN, DIRECTOR AND MEMBER, AUDITING AND HUMAN RESOURCES COMMITTEES
Chairman and Chief Executive Officer (since 1996), President and Chief
Operating Officer (1990-1996), Corning Incorporated (manufacturer of
specialty materials, communication equipment and consumer products), One
Riverfront Plaza, Corning, New York; Director (since 1993), Dow Corning
Corporation (producer of silicone products), 2200 West Salzburg Road,
Midland, Michigan; Director, The Pittson Company (mining and marketing of
coal for electric utility and steel industries) One Pickwick Plaza,
Greenwich, Connecticut.
JAMES R. BIRLE, DIRECTOR, CHAIRMAN, DIVIDEND POLICY COMMITTEE AND MEMBER,
INVESTMENT COMMITTEE
Chairman (since 1997), President (1994-1997) and Founder (since 1994),
Resolute Partners, LLC (private merchant bank), 2 Greenwich Plaza, Suite
100, Greenwich, Connecticut; General Partner (1988-1994), The Blackstone
Group, 34 Park Avenue, New York, New York; Co-Chairman and Chief Executive
Officer, Wickes Companies, Inc. (diversified manufacturer and distributor),
3340 Ocean Park Boulevard, Santa Monica, California; Director (since 1996),
IKON Office Solutions (diversified office products and technology
solutions), 825 Duportail Road,
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Valley Forge, Pennsylvania; Director: Drexel Industries, Inc., Connecticut
Health and Education Facilities Authority, and Transparency International;
Trustee, Villanova University and The Sea Research Foundation; Director
(1991-1996), Connecticut Mutual Life Insurance Company, 140 Garden Street,
Hartford, Connecticut.
FRANK C. CARLUCCI, III, DIRECTOR AND MEMBER, BOARD AFFAIRS AND DIVIDEND POLICY
COMMITTEES
Chairman (since 1993), Vice Chairman (1989-1993), The Carlyle Group
(merchant banking corporation), 1001 Pennsylvania Avenue, N.W., Washington,
D.C.; Director: Ashland Oil Inc. (producer of petroleum products), 1000
Ashland Drive, Russell, Kentucky; BDM International, Inc. (professional and
technical services to public and private sector), 7915 Jones Branch Drive,
McLean, Virginia; East New York Savings Bank; General Dynamics Corporation
(manufacturer of military equipment), 3190 Fairview Park Drive, Falls
Church, Virginia; Kaman Corporation (diversified manufacturer), 1332 Blue
Hills Avenue, Bloomfield, Connecticut; Northern Telecom Ltd. (digital
telecommunications systems), 2920 Matheson Boulevard East, Mississauga,
Ontario, Canada; The Quaker Oats Company (manufacturer of food products),
321 North Clark Street, Chicago, Illinois; Sun Resorts Ltd., N.V.;
Westinghouse Electric Corporation (electronic systems, electric power
generating equipment and broadcasting), 11 Stanwix Street, Pittsburgh,
Pennsylvania; Chairman, Neurogen Corporation and Texas Biotechnology
Corporation; Trustee, The Rand Corporation; Director (until 1997) CB
Commercial Real Estate Group, Inc. (real estate broker subsidiary of
Carlyle Holding Corporation), 533 Fremont Avenue, Los Angeles, California
Bell Atlantic Corporation (telecommunications), 1717 Arch Street,
Philadelphia, Pennsylvania; Chairman; Director (1989-1996), Connecticut
Mutual Life Insurance Company, 140 Garden Street, Hartford, Connecticut.
GENE CHAO, DIRECTOR AND MEMBER, AUDITING AND AUDITING COMMITTEES
Chairman and Chief Executive Officer, Computer Projections, Inc. (computer
graphics), 733 S.W. Vista Avenue, Portland, Oregon; Director (1990-1996),
Connecticut Mutual Life Insurance Company, 140 Garden Street, Hartford,
Connecticut.
PATRICIA DIAZ DENNIS, DIRECTOR AND MEMBER, AUDITING AND HUMAN RESOURCES
COMMITTEES
Senior Vice President and Assistant General Counsel (since 1995), SBC
Communications Inc. (telecommunications), 175 East Houston, San Antonio,
Texas; Special Counsel-Communication Law Matters (1993-1995), Sullivan &
Cromwell (law firm), 1701 Pennsylvania Avenue, N.W., Washington, D.C.;
Trustee (since 1995), Federal Communications Bar Association Foundation;
Trustee, Tomas Rivera Policy Institute and Radio and Television News
Directors Foundation; Director: National Public Radio, Reading Is
Fundamental and Foundation for Women's Resources; Director (1995-1996),
Connecticut Mutual Life Insurance Company, 140 Garden Street, Hartford,
Connecticut.
ANTHONY DOWNS, DIRECTOR AND MEMBER, DIVIDEND POLICY AND INVESTMENT COMMITTEES
Senior Fellow, The Brookings Institution (non-profit policy research
center), 1775 Massachusetts Avenue, N.W., Washington, D.C.; Director: The
Pittway Corporation (publications and security equipment), 200 South Wacker
Drive, Suite 700, Chicago, Illinois;
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National Housing Partnerships Foundation (non-profit organization to own
and manage rental housing), 1225 Eye Street, N.W., Washington, D.C.;
Bedford Property Investors, Inc. (real estate investment trust), 3658 Mt.
Diablo Boulevard, Lafayette, California; General Growth Properties, Inc.
(real estate investment trust), 215 Keo Way, Des Moines, Iowa; NAACP Legal
and Educational Defense Fund, Inc. (civil rights organization), 99 Hudson
Street, New York, New York; Trustee: Urban Institute (public policy
research organization), 2100 M Street, N.W., Washington, D.C. and Urban
Land Institute (educational and research organization, 625 Indiana Avenue,
N.W., Washington, D.C.
JAMES L. DUNLAP, DIRECTOR AND MEMBER, HUMAN RESOURCES AND BOARD AFFAIRS
COMMITTEES
President and Chief Operating Officer (since 1996), United Meridian
Corporation (oil exploration), 1201 Louisiana, Houston, Texas; Senior Vice
President (1987-1996), Texaco, Inc. (producer of petroleum products), 2000
Westchester Avenue, White Plains, New York.
WILLIAM B. ELLIS, DIRECTOR AND MEMBER, AUDITING AND INVESTMENT COMMITTEES
Senior Fellow (since 1995), Yale University School of Forestry and
Environmental Studies, New Haven, Connecticut; Chairman (1983-1995) and
Chief Executive Officer (1983-1993), Northeast Utilities (electric
utility), 107 Selden Street, Berlin, Connecticut; Director, The Hartford
Steam Boiler Inspection and Insurance Company (property and casualty
insurer), One State Street, Hartford, Connecticut; Director (since 1996),
Advest Group, Inc. (financial services holding company), 280 Trumbull
Street, Hartford, Connecticut; Director (since 1995), Catalytica Combustion
Systems, Inc.; Director, The National Museum of National History of the
Smithsonian Institution, Washington, D.C.; Director (1985-1996),
Connecticut Mutual Life Insurance Company, 140 Garden Street, Hartford,
Connecticut.
ROBERT M. FUREK, DIRECTOR AND MEMBER, DIVIDEND POLICY AND INVESTMENT COMMITTEES
President (since 1995), International Distillers and Vintners, Inc.;
President and Chief Executive Officer (1987-1996), Heublein, Inc. (beverage
distributor), 450 Columbus Boulevard, Hartford, Connecticut; Director, The
Dexter Corporation (producer of specialty chemicals and papers), One Elm
Street, Windsor Locks, Connecticut; Corporator, Hartford Hospital and The
Bushnell Memorial, Hartford, Connecticut; Trustee, Colby College, Mayflower
Hill Drive, Waterville, Maine; Director (1990-1996), Connecticut Mutual
Life Insurance Company, 140 Garden Street, Hartford, Connecticut.
CHARLES K. GIFFORD, DIRECTOR AND MEMBER, INVESTMENT AND AUDITING COMMITTEES
Chief Executive Officer (since 1995), Chairman (1995-1996) and President
(1989-1996), The First National Bank of Boston and Bank of Boston
Corporation (bank holding company), 100 Federal Street, Boston,
Massachusetts; Director, Member of Audit and Compensation Committees,
Boston Edison Co. (public utility electric company), 800 Boylston Street,
Boston, Massachusetts.
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WILLIAM N. GRIGGS, DIRECTOR, CHAIRMAN, AUDITING COMMITTEE AND MEMBER, INVESTMENT
COMMITTEE
Managing Director, Griggs & Santow Inc. (financial consultants), 75 Wall
Street, New York, New York; Director, T/SF Communications, Inc.
(diversified publishing and communications company), Tulsa, Oklahoma.
GEORGE B. HARVEY, DIRECTOR, CHAIRMAN, HUMAN RESOURCES COMMITTEE AND MEMBER,
BOARD AFFAIRS COMMITTEE
Retired; Chairman, President and Chief Executive Officer (1983-1996),
Pitney Bowes, Inc. (office machines manufacturer), One Elmcroft Road,
Stamford, Connecticut; Director: Merrill Lynch & Co., Inc. (financial
services holding company), 250 Vesey Street, World Financial Center, North
Tower, New York, New York; The McGraw-Hill Companies, Inc. (multimedia
publishing and information services), 1221 Avenue of the Americas, New
York, New York; Stamford Hospital, Stamford, Connecticut; Pfizer, Inc.
(pharmaceutical and health-care products), 235 East 42nd Street, New York,
New York; The Catalyst; Member, Board of Overseers, Wharton School of
Finance, University of Pennsylvania; Director (1989-1996), Connecticut
Mutual Life Insurance Company, 140 Garden Street, Hartford, Connecticut.
BARBARA B. HAUPTFUHRER, DIRECTOR AND MEMBER, BOARD AFFAIRS AND INVESTMENT
COMMITTEES
Director and Member, Compensation, Nominating and Audit Committees, The
Vanguard Group of Investment Companies including among others the following
funds: Vanguard/Windsor Fund, Vanguard/Wellington Fund, Vanguard/Morgan
Growth Fund, Vanguard/Wellesley Income Fund, Vanguard/Gemini Fund,
Vanguard/Explorer Fund, Vanguard Municipal Bond Fund, Vanguard Fixed Income
Securities Fund, Vanguard Index Trust, Vanguard World Fund, Vanguard/Star
Fund, Vanguard Ginnie Mae Fund, Vanguard/Primecap Fund, Vanguard
Convertible Securities Fund, Vanguard Quantitative Fund, Vanguard/Trustees
Commingled Equity Fund, Vanguard/Trustees Commingled Fund-International,
Vanguard Money Market Trust, Vanguard/Windsor II, Vanguard Asset Allocation
Fund and Vanguard Equity Income Fund (principal offices, Drummers Lane,
Valley Forge, Pennsylvania); Director, Chairman of Retirement Benefits
Committee and Pension Fund Investment Review - USA and Canada and Member,
Audit, Finance and Executive Committees, The Great Atlantic & Pacific Tea
Company, Inc. (operator of retail food stores), 2 Paragon Drive, Montvale,
New Jersey; Director, Chairman of Nominating Committee and Member,
Compensation Committee, Knight-Ridder, Inc. (publisher of daily newspapers
and operator of cable television and business information systems), One
Herald Plaza, Miami, Florida; Director and Member, Compensation Committee,
Raytheon Company (electronics manufacturer), 141 Spring Street, Lexington,
Massachusetts; Director and Member, Executive Committee and Chairman, Human
Resources and Independent Directors Committees, IKON Office Solutions,
(diversified office products and technology solutions), 825 Duportail Road,
Valley Forge, Pennsylvania.
SHELDON B. LUBAR, DIRECTOR, CHAIRMAN, BOARD AFFAIRS COMMITTEE AND MEMBER,
INVESTMENT COMMITTEE
Chairman, Lubar & Co. Incorporated (investment management and advisory
company), 777 East Wisconsin Avenue, Milwaukee, Wisconsin; Chairman and
Director, The Christiana Companies,
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Inc. (real estate development); Director: Firstar Bank, Firstar Corporation
(bank holding company), SLX Energy, Inc. (oil and gas exploration); Member,
Advisory Committee, Venture Capital Fund, L.P. (principal offices, 777 East
Wisconsin Avenue, Milwaukee, Wisconsin); Director: Grey Wolf Drilling Co.
(contract oil and gas drilling), 2000 Post Oak Boulevard, Houston, Texas;
Marshall Erdman and Associates, Inc. (design, engineering, and construction
firm), 5117 University Avenue, Madison, Wisconsin; MGIC Investment
Corporation (investment company), MGIC Plaza, 111 E. Kilbourn Avenue,
Milwaukee, Wisconsin; Ameritech, Inc. (regional holding company for
telephone companies), 30 South Wacker Drive, Chicago, Illinois, Director
(since 1995), Energy Ventures, Inc., 5 Post Oak Park, Houston, Texas;
Director (1989-1995), Prideco, Inc. (drill collar manufacturer), 6039
Thomas Road, Houston, Texas.
WILLIAM B. MARX, JR., DIRECTOR AND MEMBER, DIVIDEND POLICY AND BOARD AFFAIRS
COMMITTEES
Consultant (since 1996); Senior Executive Vice President (1996), Lucent
Technologies, Inc. (public telecommunications systems and software), 600
Mountain Road, Murray Hill, New Jersey; Executive Vice President and Chief
Executive Officer, Multimedia Products Group (1994-1995), AT&T (global
communications and network computing company), 295 North Maple Avenue,
Basking Ridge, New Jersey; Director (since 1996), California Microwave,
Inc., Redwood City, California; Member (since 1996), Advisory Council,
Graduate School of Business, Stanford University, Stanford, California;
Chairman, Executive Committee (since 1996), National Minority Supplier
Development Council, Inc., 15 West 39th Street, New York, New York.
JOHN F. MAYPOLE, DIRECTOR AND MEMBER, BOARD AFFAIRS AND HUMAN RESOURCES
COMMITTEES
Managing Partner, Peach State Real Estate Holding Company (real estate
investment company), P.O. Box 1223, Toccoa, Georgia; Consultant to
institutional investors; Co-owner of family businesses (including Maypole
Chevrolet-Geo, Inc. and South Georgia Car Rentals, Inc.); Director (since
1996), Coating Technologies International; Director, Chairman, Finance
Committee and Member, Executive Committee and Human Resources Committee on
Directors, Bell Atlantic Corporation (telecommunications), 1717 Arch
Street, Philadelphia, Pennsylvania; Director and Chairman, Compensation
Committee, Briggs Industries, Inc. (plumbing fixtures), 4350 W. Cypress
Street, Tampa, Florida; Director, Chairman, Audit Committee and Member,
Compensation Committee, Blodgett Corporation; Director, Chairman, Products
Committee and Member, Compensation and Audit Committee (until 1996), Igloo
Corporation (portable coolers), 1001 W. Sam Houston Parkway North, Houston,
Texas; Director and Member, Senior Management Committee, Dan River, Inc.
(textile manufacturer), 2291 Memorial Drive, Danville, Virginia; Director,
Davies, Turner & Company; Director (1989-1996), Connecticut Mutual Life
Insurance Company, 140 Garden Street, Hartford, Connecticut.
DONALD F. MCCULLOUGH, DIRECTOR AND MEMBER, DIVIDEND POLICY AND AUDITING
COMMITTEES
Retired (since 1988); former Chairman and Chief Executive Officer, Collins
& Aikman Corp. (manufacturer of textile products), 210 Madison Avenue, New
York, New York; Director (1971-1996); Bankers Trust New York Corp. (bank
holding company) and Bankers Trust Company (principal offices, 280 Park
Avenue, New York, New York); Director (1975-1996), Melville Corporation
(specialty retailer), One Theall Road, Rye, New York.
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JOHN J. PAJAK, PRESIDENT AND CHIEF OPERATING OFFICER, DIRECTOR AND MEMBER,
DIVIDEND POLICY AND INVESTMENT COMMITTEES
President, Director and Chief Operating Officer (since 1996), Vice Chairman
and Chief Administrative Officer (1996), Executive Vice President (1987-
1996) of MassMutual; Director (since 1994), MassMutual Holding Company
(wholly-owned holding company subsidiary of MassMutual); Trustee (since
1996), MassMutual Holding Trust I (wholly-owned holding company subsidiary
of MassMutual Holding Company); Director (since 1996), MassMutual
International Inc. (wholly-owned subsidiary of MassMutual Holding Company
to act as service provider for international insurance companies); Director
(1994-1996), MassMutual Holding Company Two, Inc. (former wholly-owned
holding company subsidiary of MassMutual); MassMutual Holding Company Two
MSC, Inc. (former wholly-owned holding company subsidiary of MassMutual
Holding Company Two, Inc.); and Mirus Insurance Company (formerly MML
Pension Insurance Company, a wholly-owned insurance subsidiary of
MassMutual Holding Company Two MSC, Inc.) (principal offices, 1295 State
Street, Springfield, Massachusetts); Director (1995-1996), National Capital
Health Plan, Inc. (health maintenance organization), Washington, D.C.
THOMAS B. WHEELER, CHAIRMAN, CHIEF EXECUTIVE OFFICER, CHAIRMAN, INVESTMENT
COMMITTEE AND MEMBER, DIVIDEND POLICY AND BOARD AFFAIRS COMMITTEES
Chairman (since 1996), Chief Executive Officer (since 1988), and President
(1987-1996) of MassMutual; Chairman (since 1996), MassMutual Holding Trust
I (wholly-owned holding company subsidiary of MassMutual Holding Company);
Director (since 1996), MassMutual International Inc. (wholly-owned
subsidiary of MassMutual Holding Company to act as service provider for
international insurance companies); Chairman and Chief Executive Officer
(since 1995), DLB Acquisition Corporation (holding company for investment
advisers); Chairman of the Board of Directors (1994-1996), Mirus Insurance
Company (formerly MML Pension Insurance Company, a wholly-owned insurance
subsidiary of MassMutual Holding Company Two MSC, Inc.) (principal offices,
1295 State Street, Springfield, Massachusetts); Director, The First
National Bank of Boston and Bank of Boston Corporation (bank holding
company), 100 Federal Street, Boston, Massachusetts and Massachusetts
Capital Resources Company, 545 Boylston Street, Boston, Massachusetts;
Chairman and Director, Oppenheimer Acquisition Corp. (parent of
OppenheimerFunds, Inc., an investment management company), Two World Trade
Center, New York, New York; Director (since 1993), Textron, Inc.
(diversified manufacturing company), 40 Westminster Street, Providence,
Rhode Island; Chairman of the Board of Directors (1992-1995), Concert
Capital Management, Inc. (wholly-owned investment advisory subsidiary of
DLB Acquisition Corporation), One Memorial Drive, Cambridge, Massachusetts.
ALFRED M. ZEIEN, DIRECTOR AND MEMBER, BOARD AFFAIRS AND HUMAN RESOURCES
COMMITTEES
Chairman and Chief Executive Officer, The Gillette Company (manufacturer of
personal care products), Prudential Tower Building, Boston, Massachusetts;
Director: Polaroid Corporation (manufacturer of photographic products), 549
Technology Square, Cambridge, Massachusetts; Repligen Corporation
(biotechnology), One Kendall Square, Cambridge, Massachusetts; Bank of
Boston Corporation (bank holding company), 100 Federal Street, Boston,
Massachusetts; and Raytheon Corporation (electronics manufacturer), 141
Spring Street, Lexington, Massachusetts;
C-16
<PAGE>
Trustee, University Hospital of Boston, Massachusetts; Trustee, Marine
Biology Laboratory and Woods Hole Oceanographic Institute, Woods Hole,
Massachusetts.
EXECUTIVE VICE PRESIDENTS
LAWRENCE V. BURKETT, JR., EXECUTIVE VICE PRESIDENT AND GENERAL COUNSEL
Executive Vice President and General Counsel (since 1993) of MassMutual;
President, Chief Executive Officer and Director (since 1996), CM Assurance
Company, CM Benefit Insurance Company, C.M. Life Insurance Company and MML
Bay State Life Insurance Company (wholly-owned insurance company
subsidiaries of MassMutual); Director (since 1996), MassMutual Holding MSC,
Inc. and Trustee (since 1996), MassMutual Holding Trust I and MassMutual
Holding Trust II (wholly-owned holding company subsidiaries of MassMutual
Holding Company); Director (since 1996): MassMutual International Inc.
(wholly-owned subsidiary of MassMutual Holding Company to act as service
provider for international insurance companies); G.R. Phelps, Inc. (wholly-
owned broker-dealer subsidiary of MassMutual Holding Company); CM Advantage
Inc.(wholly-owned subsidiary of MassMutual Holding Trust II to act as
general partner in real estate limited partnerships); Director, MassMutual
Holding Company (wholly-owned holding company subsidiary of MassMutual);
Director (1994-1996), MassMutual Holding Company Two, Inc. (former wholly-
owned holding company subsidiary of MassMutual), MassMutual Holding Company
Two MSC, Inc. (former wholly-owned holding company subsidiary of MassMutual
Holding Company Two, Inc.) and Mirus Insurance Company (formerly MML
Pension Insurance Company, a wholly-owned insurance subsidiary of
MassMutual Holding Company Two MSC, Inc.) (principal offices, 1295 State
Street, Springfield, Massachusetts); Chairman and Director (since 1996),
MML Investors Services, Inc. (wholly-owned broker-dealer subsidiary of
MassMutual Holding Company), 1414 Main Street, Springfield, Massachusetts;
Director, Cornerstone Real Estate Advisers, Inc. (wholly-owned real estate
investment adviser subsidiary of MassMutual Holding Company), One Financial
Plaza, Suite 1700, Hartford, Connecticut; Vice President (since 1996) and
Director, Sargasso Mutual Insurance Co., Ltd., Victoria Hall, Victoria
Street, Hamilton, Bermuda; Director, MassMutual of Ireland, Ltd. (wholly-
owned subsidiary of MassMutual that formerly provided group insurance claim
services), One Earlsfort Centre, Hatch Street, Dublin, Ireland; Chairman
(1994-1996), Director (1993-1996), MML Reinsurance (Bermuda) Ltd. (wholly-
owned property and casualty reinsurance subsidiary of MassMutual Holding
Company) and Director (since 1995), MassMutual International (Bermuda) Ltd.
(wholly-owned subsidiary of MassMutual Holding Company that distributes
variable insurance products in overseas markets) (principal offices, 41
Cedar Avenue, Hamilton, Bermuda).
JOHN B. DAVIES, EXECUTIVE VICE PRESIDENT
Executive Vice President (since 1994) of MassMutual; Director (since 1996), CM
Assurance Company, CM Benefit Insurance Company, C.M. Life Insurance Company and
MML Bay State Life Insurance Company (wholly-owned insurance company
subsidiaries of MassMutual); Director (since 1996), MassMutual Holding MSC, Inc.
and Trustee (since 1996), MassMutual Holding Trust II (wholly-owned holding
company subsidiaries of MassMutual Holding Company) (principal offices, 1295
State Street, Springfield, Massachusetts); Director, MML Investors Services,
Inc. (wholly-owned broker-dealer subsidiary of MassMutual Holding Company), MML
Insurance Agency, Inc. (wholly-owned subsidiary of MML Investors Services,
Inc.), MML Insurance Agency of Ohio, Inc. (subsidiary of MML Insurance Agency,
Inc.); Director (since 1995), MML Insurance Agency of Nevada, Inc. (subsidiary
of MML
C-17
<PAGE>
Insurance Agency, Inc.); Director (since 1996), MML Insurance Agency of
Mississippi, P.C., DISA Insurance Services of America, Inc. (Alabama), and
Diversified Insurance Services of America, Inc. (Hawaii) (subsidiaries of MML
Insurance Agency, Inc.) (principal offices, 1414 Main Street, Springfield,
Massachusetts); Director: Cornerstone Real Estate Advisers, Inc. (wholly-owned
real estate investment adviser subsidiary of MassMutual Holding Company), One
Financial Plaza, Suite 1700, Hartford, Connecticut; and Life Underwriter
Training Council, 7625 Wisconsin Avenue, Bethesda, Maryland.
DANIEL J. FITZGERALD, EXECUTIVE VICE PRESIDENT, CORPORATE FINANCIAL OPERATIONS
Executive Vice President, Corporate Financial Operations of MassMutual;
Director (since 1996), CM Assurance Company, CM Benefit Insurance Company,
and C.M. Life Insurance Company (wholly-owned insurance company
subsidiaries of MassMutual); Antares Leveraged Capital Corp. (finance
company); CM Advantage Inc. and Westheimer 335 Suites, Inc. (wholly-owned
subsidiaries of MassMutual Holding Trust II to act as general partners in
real estate limited partnerships); HYP Management, Inc. (wholly-owned
subsidiary of MassMutual Holding Trust II to act as managing member of
MassMutual High Yield Partners LLC); MMHC Investment, Inc. (wholly-owned
subsidiary of MassMutual Holding Trust II); MassMutual International Inc.
(wholly-owned subsidiary of MassMutual Holding Company to act as service
provider for international insurance companies); MassMutual Holding MSC,
Inc. (wholly-owned holding company subsidiary of MassMutual Holding
Company); Trustee (since 1996), MassMutual Holding Trust I and MassMutual
Holding Trust II (wholly-owned holding company subsidiaries of MassMutual
Holding Company); Director (since 1995), DLB Acquisition Corporation
(holding company for investment advisers); Vice President and Director,
MassMutual Holding Company (wholly-owned holding company subsidiary of
MassMutual); Director, MML Bay State Life Insurance Company (wholly-owned
insurance subsidiary of MassMutual); and MML Realty Management Corporation
(wholly-owned real estate management subsidiary of MassMutual Holding
Company); Vice President and Director (1994-1996), MassMutual Holding
Company Two, Inc. and MassMutual Holding Company Two MSC, Inc. (former
direct and indirect wholly-owned holding company subsidiaries of
MassMutual); Director (1994-1996), Mirus Insurance Company (formerly MML
Pension Insurance Company, a wholly-owned insurance subsidiary of
MassMutual Holding Company Two MSC, Inc.); Director (1994-1995), MML Real
Estate Corporation (wholly-owned real estate management subsidiary of
MassMutual Holding Company) (principal offices, 1295 State Street,
Springfield, Massachusetts); Director (1994-1996), Concert Capital
Management, Inc. (former investment advisory subsidiary of DLB Acquisition
Corporation), One Memorial Drive, Cambridge, Massachusetts; Director and
Member, Compensation Committee, Cornerstone Real Estate Advisers, Inc., One
Financial Plaza, Suite 1700, Hartford, Connecticut; Director, and Member,
Audit and Compensation Committees, MML Investors Services, Inc. (wholly-
owned broker dealer subsidiary of MassMutual Holding Company); Director,
MML Insurance Agency, Inc. (wholly-owned subsidiary of MML Investors
Services, Inc.); Director (since 1996), MML Insurance Agency of Ohio, Inc.,
MML Insurance Agency of Nevada, Inc., MML Insurance Agency of Mississippi,
P.C., DISA Insurance Services of America, Inc. (Alabama), and Diversified
Insurance Services of America, Inc. (Hawaii) (subsidiaries of MML Insurance
Agency, Inc.) (principal offices, 1414 Main Street, Springfield,
Massachusetts); Director, MassMutual of Ireland, Ltd. (wholly-owned
subsidiary of MassMutual that formerly provided group insurance claim
services), One Earlsfort Centre, Hatch Street, Dublin, Ireland.
JOHN V. MURPHY, EXECUTIVE VICE PRESIDENT
C-18
<PAGE>
Executive Vice President (since 1997) of MassMutual; Executive Vice
President, Director and Chief Operating Officer (1995-1997), David L.
Babson and Company Incorporated (wholly-owned investment advisory
subsidiary of DLB Acquisition Corporation), Chief Operating Officer (1993-
1996), Concert Capital Management, Inc. (wholly-owned investment advisory
subsidiary of DLB Acquisition Corporation), (principal offices, One
Memorial Drive, Cambridge, Massachusetts); Senior Vice President and
Director (since 1995), Potomac Babson Incorporated (investment advisory
subsidiary of David L. Babson and Company Incorporated), New York, New
York; Director and Senior Vice President (since 1995), DLB Acquisition
Corporation (holding company for investment advisers) and Trustee (since
1997), MassMutual Institutional Funds (open-end investment company)
(principal offices, 1295 State Street, Springfield, Massachusetts).
GARY E. WENDLANDT, EXECUTIVE VICE PRESIDENT AND CHIEF INVESTMENT OFFICER
Chief Investment Officer and Executive Vice President of MassMutual;
Chairman (since 1995), Trustee (since 1986) and President (1983-1995),
MassMutual Corporate Investors and Chairman (since 1995), Trustee (since
1988) and President (1988-1995), MassMutual Participation Investors
(closed-end investment companies); Chairman (since 1995), Vice Chairman
(1993-1995) and Trustee, MML Series Investment Fund (open-end investment
company); Chairman, Chief Executive Officer and Member, Investment Pricing
Committee, MassMutual Institutional Funds (open-end investment company);
Advisory Board Member (since 1996), MassMutual High Yield Partners LLC
(high yield bond fund); Chairman and President (since 1996), MassMutual
Holding MSC, Inc. and MassMutual Holding Trust II (wholly-owned holding
company subsidiaries of MassMutual Holding Company); Chairman (since 1996):
Antares Leveraged Capital Corp. (finance company); HYP Management, Inc.
(wholly-owned subsidiary of MassMutual Holding Trust II to act as managing
member of MassMutual High Yield Partners LLC); and MMHC Investment, Inc.
(wholly-owned subsidiary of MassMutual Holding Trust II); President and
Trustee (since 1996), MassMutual Holding Trust I (wholly-owned holding
company subsidiary of MassMutual Holding Company); Vice Chairman and
Director (since 1996), MassMutual International Inc. (wholly-owned
subsidiary of MassMutual Holding Company to act as service provider for
international insurance companies); Director (since 1996), CM Advantage
Inc. (wholly-owned subsidiary of MassMutual Holding Trust II to act as
general partner in real estate limited partnerships); President and
Director (since 1995), DLB Acquisition Corporation (holding company for
investment advisers); Chairman, Chief Executive Officer, President and
Director, MassMutual Holding Company (wholly-owned holding company
subsidiary of MassMutual); Chairman and Director, MML Realty Management
Corporation (wholly-owned real estate management subsidiary of MassMutual
Holding Company); Chairman (1994-1995) and Director (1993-1995), MML Real
Estate Corporation (wholly-owned real estate management subsidiary of
MassMutual Holding Company) Chairman, President and Chief Executive Officer
(1994-1996), MassMutual Holding Company Two, Inc. (former wholly-owned
holding company subsidiary of MassMutual); Chairman and President (1994-
1996), Chief Executive Officer (1995-1996), MassMutual Holding Company Two
MSC, Inc. (former wholly-owned holding company subsidiary of MassMutual
Holding Company Two, Inc.); (principal offices, 1295 State Street,
Springfield, Massachusetts); Chairman and Member, Executive and
Compensation Committees (since 1994), Member, Audit Committee (since 1995),
and Chief Executive Officer (1994-1996), Cornerstone Real Estate Advisers,
Inc. (wholly-owned real estate investment advisory subsidiary of MassMutual
Holding Trust I), One Financial Plaza, Suite 1700, Hartford, Connecticut;
President and Chief Executive Officer (1994-1996) and
C-19
<PAGE>
Director (1992-1996), Concert Capital Management, Inc.(former investment
advisory subsidiary of DLB Acquisition Corporation) One Memorial Drive,
Cambridge, Massachusetts; Director, Oppenheimer Acquisition Corporation
(parent of OppenheimerFunds, Inc., an investment management company), Two
World Trade Center, New York, New York; Supervisory Director,
MassMutual/Carlson CBO N.V. (collateralized bond fund), 14 John Gorsiraweg,
Willemstad, Curacao, Netherlands Antilles; Director, Merrill Lynch
Derivative Products, Inc., World Financial Center, North Tower, New York,
New York; MassMutual Corporate Value Partners Limited (investor in debt and
equity securities) and MassMutual Corporate Value Limited (parent of
MassMutual Corporate Value Partners Limited) (principal offices, c/o
BankAmerica Trust and Banking Corporation, Box 1092, George Town, Grand
Cayman, Cayman Islands, British West Indies); Director (since 1995), Mass
Seguros de Vida, S.A., Huerfanos No. 770, Santiago, Chile; President and
Director (since 1995), MassMutual International (Bermuda) Ltd. (wholly-
owned subsidiary of MassMutual Holding Company that distributes variable
insurance products in overseas markets), 41 Cedar Avenue, Hamilton,
Bermuda.
B. THE INVESTMENT SUB-ADVISERS
The directors and executive officers of Babson, their positions and their other
business affiliations and business experience for the past two years are as
follows:
DIRECTORS AND EXECUTIVE OFFICERS
HANI K. FINDAKLY, DIRECTOR
Director (since 1996), David L. Babson & Company, Inc., One Memorial Drive,
Cambridge, Massachusetts; President (since 1996), Potomac Babson Inc.
(registered investment adviser), 1290 Avenue of the Americas, New York, New
York; President (1989-1995), Potomac Capital, Inc. (registered investment
adviser), 1290 Avenue of the Americas, New York, New York.
RONALD E. GWOZDZ, DIRECTOR AND EXECUTIVE VICE PRESIDENT
Director (since 1996), Executive Vice President (since 1996) and Senior Vice
President (1991-1996), David L. Babson & Company, Inc., One Memorial Drive,
Cambridge, Massachusetts.
JAMES W. MACALLEN, DIRECTOR AND EXECUTIVE VICE PRESIDENT
Director and Executive Vice President (since 1996), David L. Babson & Company,
Inc., One Memorial Drive, Cambridge, Massachusetts; Senior Vice President
(1996), Concert Capital Management, Inc., One Memorial Drive, Cambridge,
Massachusetts; Principal (1994-1995), Hagler, Mastrovita & Hewitt (investment
counsel), 225 Franklin Street, Boston, Massachusetts; President (1992-1994),
Chief Investment Officer (1991-1994), and Vice President (1983-1992), Wilmington
Capital Management, Inc. (investment counsel), 1 Rodney Square, Wilmington,
Delaware.
EDWARD L. MARTIN, DIRECTOR AND EXECUTIVE VICE PRESIDENT
Director (since 1990), Executive Vice President (since 1995) and Senior Vice
President (1988-1995), David L. Babson & Company, Inc., One Memorial Drive,
Cambridge, Massachusetts; Director and Senior Vice President (since 1996),
Potomac Babson Inc. (registered investment adviser), 1290 Avenue of the
Americas, New York, New York.
C-20
<PAGE>
PETER C. SCHLIEMANN, DIRECTOR AND EXECUTIVE VICE PRESIDENT
Executive Vice President (since 1992), Senior Vice President (1984-1992) and
Director (since 1982), David L. Babson & Company, Inc. (registered investment
adviser), One Memorial Drive, Cambridge, Massachusetts; Director (1995-1996),
Concert Capital Management, Inc. (former investment advisory subsidiary of DLB
Acquisition Corporation), One Memorial Drive, Cambridge, Massachusetts;
FRANK L. TARANTINO, SENIOR VICE PRESIDENT, CLERK AND CHIEF OPERATING OFFICER
Senior Vice President, Clerk and Chief Operating Officer (since 1997), David L.
Babson & Company, Inc., One Memorial Drive, Cambridge, Massachusetts; President
(1993-1997), Liberty Securities Corporation (broker-dealer), 600 Atlantic
Avenue, Boston, Massachusetts.
PETER C. THOMPSON, DIRECTOR AND PRESIDENT
President and Director (since 1983), David L. Babson & Company, Inc. (registered
investment adviser), One Memorial Drive, Cambridge, Massachusetts.; Director
(1995-1996), Concert Capital Management, Inc. (former investment advisory
subsidiary of DLB Acquisition Corporation), One Memorial Drive, Cambridge,
Massachusetts; Director (since 1996), Potomac Babson Inc. (registered investment
adviser) 1290 Avenue of the Americas, New York, New York.
JONATHAN B. TREAT, DIRECTOR AND SENIOR VICE PRESIDENT
Director and Senior Vice President (since 1992), David L. Babson & Company,
Inc., One Memorial Drive, Cambridge, Massachusetts.
ROLAND W. WHITRIDGE, DIRECTOR AND SENIOR VICE PRESIDENT
Director (since 1990) and Senior Vice President (since 1992), David L. Babson &
Company, Inc., One Memorial Drive, Cambridge, Massachusetts.
HarbourView is the investment sub-adviser for the International Equity Fund of
the Registrant. HarbourView is a wholly owned subsidiary of OppenheimerFunds,
Inc. and was incorporated in the State of New York on April 17, 1986.
The directors and executive vice presidents of HarbourView, their positions and
their other business affiliations and business experience for the past two years
are as follows:
BRIDGET A. MACASKILL, PRESIDENT, CHIEF EXECUTIVE OFFICER AND DIRECTOR
President, Chief Executive Officer and a Director of OppenheimerFunds, Inc.
("OFI"); Chairman and Director of Shareholder Services Inc. ("SSI") and
Shareholder Financial Services, Inc. ("SFSI"); President and a Director of
Oppenheimer Acquisition Corp.("OAC") and Oppenheimer Partnership Holdings, Inc.,
a holding company subsidiary of OFI; a Director of Oppenheimer Real Asset
Management, Inc.; formerly an Executive Vice President of the Manager.
C-21
<PAGE>
ANDREW J. DONOHUE, EXECUTIVE VICE PRESIDENT, GENERAL COUNSEL AND DIRECTOR
Executive Vice President, General Counsel and a Director of OFI, the
OppenheimerFunds Distributor, Inc., SSI, SFSI, Oppenheimer Partnership Holdings,
Inc. and MultiSource Services, Inc. (a broker-dealer); President and a Director
of Centennial Asset Management Corporation; President and a Director of
Oppenheimer Real Asset Management, Inc.; General Counsel of OAC; and officer of
other Oppenheimer Funds.
ROBERT C. DOLL, JR. EXECUTIVE VICE PRESIDENT
Executive Vice President and a Director of OFI; Vice President and a Director of
OAC; an officer of other Oppenheimer Funds.
C-22
<PAGE>
Item 29: Principal Underwriters
(a) OppenheimerFunds Distributor, Inc. is the General Distributor of
the Trust's shares and is also general distributor of the following open-end
management investment companies:
1. The "Denver-Based" Oppenheimer Funds. The address for these funds
is 3410 South Galena Street, Denver, CO 80231.
Centennial America Fund, L.P.
Centennial California Tax Exempt Trust
Centennial Government Trust
Centennial Money Market Trust
Centennial New York Tax Exempt Trust
Centennial Tax Exempt Trust
Daily Cash Accumulation Fund, Inc.
Oppenheimer Cash Reserves
Oppenheimer Champion Income Fund
Oppenheimer Equity Income Fund
Oppenheimer Limited-Term Government Fund
C-23
<PAGE>
Oppenheimer Integrity Funds
Oppenheimer International Bond Fund
Oppenheimer High Yield Fund
Oppenheimer Main Street Funds, Inc.
Oppenheimer Strategic Income Fund
Oppenheimer Strategic Income & Growth Fund
Oppenheimer Tax-Exempt Fund
Oppenheimer Total Return Fund, Inc.
Oppenheimer Total Return Fund, Inc. Capital Accumulation Plan
Oppenheimer Variable Account Funds
The New York Tax-Exempt Income Fund, Inc.
2. The "New York-Based" Oppenheimer Funds. The address for these
---------------------------------------
funds is 2 World Trade Center, New York, NY 10048-0203.
Oppenheimer Asset Allocation Fund
Oppenheimer California Tax-Exempt Fund
Oppenheimer Discovery Fund
Oppenheimer Enterprise Fund
Oppenheimer Global Emerging Growth Fund
Oppenheimer Global Fund
Oppenheimer Global Growth & Income Fund
Oppenheimer Gold & Special Minerals Fund
Oppenheimer Growth Fund
----------------------------------
Oppenheimer Fund
Oppenheimer International Growth Fund
Oppenheimer Money Market Fund, Inc.
Oppenheimer Multi-Government Trust
Oppenheimer Multi-Sector Income Trust
Oppenheimer Multi-State Tax Exempt Trust
Oppenheimer New York Tax-Exempt Fund
Oppenheimer Target Fund
Oppenheimer Tax-Free Bond Fund
Oppenheimer U.S. Government Trust
3. The "Quest" Oppenheimer Funds. OpCap Advisors (previously named
------------------------------
Quest for Value Advisors) is sub-adviser. The address for these
funds is 2 World Trade Center, New York, NY 10048-0203.
Oppenheimer Quest Value Fund, Inc.
Oppenheimer Quest for Value Funds
Oppenheimer Quest Global Value Fund, Inc.
4. The "Rochester" Oppenheimer Funds. The address for these funds is
----------------------------------
350 Linden Oaks, Rochester, NY 14625.
C-24
<PAGE>
Bond Fund Series - Oppenheimer Bond Fund for Growth
Rochester Fund Municipals
Rochester Portfolio Series - Limited Term New York Municipal Fund
5. The "Connecticut Mutual" Oppenheimer Funds. The address for these
funds is 2 World Trade Center, New York, NY 10048-0203.
Oppenheimer Series Funds, Inc.
6. The "Connecticut Mutual" VA Funds. The address for these funds is
3410 South Galena Street, Denver, CO 80231.
Panorama Series Funds, Inc.
(b) The information contained in the registration on Form BD of
OppenheimerFunds Distributor, Inc., filed under the Securities Exchange Act of
1934, is incorporated herein by reference.
Item 30: Location of Accounts and Records
Each account, book or other document required to be maintained by
Registrant pursuant to Section 31 (a) of the Investment Company Act of 1940 and
Rules 31a-1 to 31a-3 thereunder are maintained as follows:
(Articles of Incorporation and Bylaws)
MassMutual Institutional Funds
1295 State Street
Springfield, Massachusetts 01111
(With respect to its services as Advisor)
Massachusetts Mutual Life Insurance Company
1295 State Street
Springfield, Massachusetts 01111
(With respect to its services as Sub-Advisor)
David L. Babson and Company, Inc.
One Memorial Drive
Cambridge, Massachusetts
(With respect to its services as Sub-Advisor)
HarbourView Asset Management Corporation
Two World Trade Center
New York, New York
C-25
<PAGE>
(With respect to its services as Distributor)
OppenheimerFunds Distributor, Inc.
Two World Trade Center
New York, New York
(With respect to its services as Sub-Administrator, Transfer Agent and
Custodian)
Investors Bank & Trust Company
200 Clarendon Street
Boston, Massachusetts
(With respect to their services as counsel)
Ropes & Gray
One International Place
Boston, Massachusetts
Item 31: Management Services
Not Applicable.
Item 32: Undertakings
(a) The Registrant hereby undertakes to call a meeting of shareholders for
the purposes of voting upon the question of removal of a trustee or trustees,
and to assist in communications with other shareholders as required by
Section 16(c) of the Securities Act of 1933, as amended, but only where it is
requested to do so by the holders of at least 10% of the Registrant's
outstanding voting securities.
(b) The Registrant undertakes to furnish each person to whom a prospectus
is delivered with a copy of the Registrant's latest annual report to
shareholders, upon request and without charge.
C-26
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, as amended, and
the Investment Company Act of 1940, as amended, the Registrant has duly caused
this post-effective amendment to the Registration Statement to be signed on its
behalf by the undersigned, thereto duly authorized, in the City of Springfield
and the State of Massachusetts on the 25th day of April, 1997. The Registrant
certifies that this Post-Effective Amendment meets all the requirements for
effectiveness pursuant to Rule 485(b) under the Securities Act of 1933.
MASSMUTUAL INSTITUTIONAL FUNDS
By: /s/ Hamline C. Wilson
------------------------
Hamline C. Wilson
Vice President & Chief Financial Officer
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities indicated on the 25th day of April, 1996.
Signature Title
--------- -----
/s/ Gary E. Wendlandt Chairman, Trustee &
---------------------------- Chief Executive Officer
Gary E. Wendlandt
/s/ Stephen Kuhn * Trustee
----------------------------
Ronald J. Abdow
/s/ Stephen Kuhn Trustee
----------------------------
Richard H. Ayers
/s/ Stephen Kuhn * Trustee
----------------------------
Mary E. Boland
/s/ Stephen Kuhn * Trustee
----------------------------
David E. A. Carson
/s/ Stephen Kuhn * Trustee
----------------------------
Richard G. Dooley
/s/ Stephen Kuhn * Trustee
----------------------------
Richard W. Greene
/s/ Stephen Kuhn * Trustee
----------------------------
Beverly C. L. Hamilton
/s/ Stephen Kuhn * Trustee
----------------------------
F. William Marshall, Jr.
/s/ Stephen Kuhn * Trustee
----------------------------
Charles J. McCarthy
/s/ Stephen Kuhn * Trustee
----------------------------
John V. Murphy
/s/ Stephen Kuhn * Trustee
----------------------------
John H. Southworth
/s/ Hamline C. Wilson Vice President &
---------------------------- Chief Financial Officer
Hamline C. Wilson
/s/ Stephen L. Kuhn
----------------------------
* Stephen L. Kuhn, as Attorney-in-fact pursuant to Powers of Attorney granted on
or about August 5, 1994, April 18, 1996 and April 21, 1997.
<PAGE>
The name MassMutual Institutional Investment Fund is the designation of the
Trustees under a Declaration of Trust dated May 28, 1994, as amended, from time
to time. The obligations of such Trust are not personally binding upon, nor
shall resort be had to the property of, any of the Trustees, shareholders,
officers, employees or agents of such Trust, but the Trust's property only
shall be bound.
<PAGE>
INDEX TO EXHIBITS
-----------------
Exhibit No. Title of Exhibit
- ----------- ----------------
5(b) Specimen Investment Sub-Advisory Agreements between Mass Mutual and
David L. Babson and Company, Inc.
11(b). Consent of Coopers & Lybrand L.L.P.
11(i)-(o) Powers of Attorney
27. Financial Data Schedules.
<PAGE>
EXHIBIT 5(B)
INVESTMENT SUB-ADVISORY AGREEMENT
BETWEEN
MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY
AND
DAVID L. BABSON AND COMPANY INCORPORATED
(WITH RESPECT TO MASSMUTUAL SMALL CAP VALUE EQUITY FUND)
<PAGE>
INVESTMENT SUB-ADVISORY AGREEMENT
---------------------------------
This INVESTMENT SUB-ADVISORY AGREEMENT (the "Sub-Advisory Agreement"),
is by and between David L. Babson and Company Incorporated, organized under the
laws of the Commonwealth of Massachusetts (the "Sub-Adviser"), and Massachusetts
Mutual Life Insurance Company, a Massachusetts corporation ("MassMutual"),
effective this 1st day of January, 1997.
WHEREAS, the MassMutual Small Cap Value Equity Fund (the "Fund") is a
series of MassMutual Institutional Funds (the "Trust"), a Massachusetts business
trust which is an open-end diversified management investment company registered
as such with the Securities and Exchange Commission (the "Commission") pursuant
to the Investment Company Act of 1940, as amended (the "Act"), and the Trust has
appointed MassMutual as the investment adviser for the Fund pursuant to the
terms of an Investment Advisory Agreement (the "Advisory Agreement");
WHEREAS, the Advisory Agreement provides that MassMutual may, at its
option, subject to approval by the Trustees of the Trust and, to the extent
necessary, shareholders of the Fund, appoint a sub-adviser to assume certain
responsibilities and obligations of MassMutual under the Advisory Agreement;
WHEREAS, MassMutual and the Sub-Adviser are investment advisers
registered with the Commission as such under the Investment Advisers Act of
1940, as amended (the "Advisers Act"); and
WHEREAS, MassMutual desires to appoint the Sub-Adviser as its sub-
adviser for the Fund and the Sub-Adviser is willing to act in such capacity upon
the terms herein set forth;
NOW THEREFORE, in consideration of the premises and of the mutual
covenants herein contained, MassMutual and the Sub-Adviser, the parties hereto,
intending to be legally bound, hereby agree as follows:
1. GENERAL PROVISION.
------------------
MassMutual hereby employs the Sub-Adviser and the Sub-Adviser hereby
undertakes to act as the investment sub-adviser of the Fund to provide
investment advice and to perform for the Fund such other duties and
functions as are hereinafter set forth. The Sub-Adviser shall, in all
matters, give to the Fund and the Trust's Board of Trustees, directly
or through MassMutual, the benefit of the Sub-Adviser's best judgment,
effort, advice and recommendations and shall, at all times conform to,
and use its best efforts to enable the Fund to conform to:
(a) the provisions of the Act and any rules or regulations
thereunder;
(b) any other applicable provisions of state or federal law;
<PAGE>
(c) the provisions of the Agreement and Declaration of Trust and
Bylaws of the Trust, as amended from time to time (collectively
referred to as the "Trust Documents");
(d) policies and determinations of the Board of Trustees of the Trust
and MassMutual;
(e) the fundamental and non-fundamental policies and investment
restrictions of the Fund as reflected in the Trust's registration
statement under the Investment Company Act or as such policies
may, from time to time, be amended by the Fund's shareholders;
and
(f) the Prospectus and Statement of Additional Information of the
Fund in effect from time to time.
The appropriate officers and employees of the Sub-Adviser shall be
available upon reasonable notice for consultation with any of the
Trustees and officers of the Trust and MassMutual with respect to any
matter dealing with the business and affairs of the Fund, such as the
valuation of portfolio securities of the Fund, including but not
limited to securities that are either not registered for public sale
or securities not traded on any securities market.
2. DUTIES OF THE SUB-ADVISER.
--------------------------
(a) The Sub-Adviser shall, subject to the direction and control by
the Trust's Board of Trustees or MassMutual, to the extent
MassMutual's direction is not inconsistent with that of the Board
of Trustees, (i) regularly provide investment advice and
recommendations to the Fund, directly or through MassMutual, with
respect to the Fund's investments, investment policies and the
purchase and sale of securities; (ii) supervise and monitor
continuously the investment program of the Fund and the
composition of its portfolio and determine what securities shall
be purchased or sold by the Fund; (iii) arrange, subject to the
provisions of Section 5 hereof, for the purchase of securities
and other investments for the Fund and the sale of securities and
other investments held in the portfolio of the Fund; and (iv)
provide reports on the foregoing to the Board of Trustees at each
Board meeting.
(b) Provided that none of MassMutual, the Fund or the Trust shall be
required to pay any compensation other than as provided by the
terms of this Sub-Advisory Agreement and subject to the
provisions of Section 5 hereof, the Sub-Adviser may obtain
investment information, research or assistance from any other
person, firm or corporation to supplement, update or otherwise
improve its investment management services.
(c) Provided that nothing herein shall be deemed to protect the Sub-
Adviser from willful misfeasance, bad faith or gross negligence
in the performance of its duties, or reckless disregard to its
obligations and duties under this Sub-Advisory
3
<PAGE>
Agreement, the Sub-Adviser shall not be liable for any loss
sustained by reason of good faith errors or omissions in
connection with any matters to which this Sub-Advisory Agreement
relates.
(d) Nothing in this Sub-Advisory Agreement shall prevent MassMutual
or the Sub-Adviser or any officer thereof from acting as
investment adviser or sub-adviser for any other person, firm or
corporation and shall not in any way limit or restrict MassMutual
or the Sub-Adviser or any of their respective directors,
officers, members, stockholders or employees from buying,
selling, or trading any securities for its own account or for the
account of others for whom it or they may be acting, provided
that such activities will not adversely affect or otherwise
impair the performance by any party of its duties and obligations
under this Sub-Advisory Agreement.
(e) The Sub-Adviser shall cooperate with MassMutual by providing
MassMutual with any information in the Sub-Adviser's possession
necessary for supervising the activities of all administrative
and clerical personnel as shall be required to provide corporate
administration for the Fund, including the compilation and
maintenance of such records with respect to its operations as may
reasonably be required. The Sub-Adviser shall, at its own
expense, provide such officers for the Trust as its Board may
request.
3. DUTIES OF MASSMUTUAL
--------------------
MassMutual shall provide the Sub-Adviser with the following
information about the Fund:
(a) cash flow estimates on request;
(b) notice of the Fund's "investable funds" by 9:00 a.m. each
business day;
(c) as they are modified, from time to time, current versions of the
documents and policies referred to in Subsections (c), (d), (e)
and (f) of Section 1 hereof, above.
4. COMPENSATION OF THE SUB-ADVISER.
--------------------------------
MassMutual agrees to pay the Sub-Adviser and the Sub-Adviser agrees to
accept as full compensation for the performance of all functions and
duties on its part to be performed pursuant to the provisions hereof,
a fee paid weekly at the annual rate .25% of the average daily net
asset value of the Fund, determined at the close of the New York Stock
Exchange on each day that the Exchange is open for trading and paid on
the last day of each week.
4
<PAGE>
5. PORTFOLIO TRANSACTIONS AND BROKERAGE.
-------------------------------------
(a) The Sub-Adviser is authorized, in arranging the purchase and sale
of the Fund's publicly-traded portfolio securities, to employ or
deal with such members of securities exchanges, brokers or
dealers (hereinafter "broker- dealers"), including "affiliated"
broker-dealers, as that term is defined in the Act, as may, in
its best judgment, implement the policy of the Fund to obtain, at
reasonable expense, the best execution (prompt and reliable
execution at the most favorable security price obtainable) of the
Fund's portfolio transactions.
(b) The Sub-Adviser may effect the purchase and sale of securities
(which are otherwise publicly traded) in private transactions on
such terms and conditions as are customary in such transactions,
may use a broker in such to effect said transactions, and may
enter into a contract in which the broker acts either as
principal or as agent.
(c) The Sub-Adviser shall select broker-dealers to effect the Fund's
portfolio transactions on the basis of its estimate of their
ability to obtain best execution of particular and related
portfolio transactions. The abilities of a broker-dealer to
obtain best execution of particular portfolio transaction(s) will
be judged by the Sub-Adviser on the basis of all relevant factors
and considerations including, insofar as feasible, the execution
capabilities required by the transaction or transactions; the
ability and willingness of the broker-dealer to facilitate the
Fund's portfolio transactions by participating therein for its
own account; the importance to the Fund of speed, efficiency or
confidentiality; the broker-dealer's apparent familiarity with
sources from or to whom particular securities might be purchased
or sold; as well as any other matters relevant to the selection
of a broker-dealer for particular and related transactions of the
Fund.
6. DURATION.
---------
Unless terminated earlier pursuant to Section 7 hereof, this Sub-
Advisory Agreement shall remain in effect until August 2, 1997.
Thereafter it shall continue in effect from year to year, so long as
such continuance shall be approved at least annually by the Trust's
Board of Trustees, including the vote of the majority of the Trustees
of the Trust who are not parties to this Sub-Advisory Agreement or
"interested persons" (as defined in the Act) of any such party cast in
person at a meeting called for the purpose of voting on such approval,
or by the holders of a "majority" (as defined in the Act) of the
outstanding voting securities of the Fund.
7. TERMINATION.
------------
This Sub-Advisory Agreement shall terminate automatically upon its
assignment or in the event upon the termination of the Advisory
Agreement; it may also be terminated: (i) for cause or with the
consent of the parties and the Trust by MassMutual or the Sub-Adviser
5
<PAGE>
at any time without penalty upon sixty days' written notice to the
other party and the Trust; or (ii) by the Trust at any time without
penalty upon sixty days' written notice to MassMutual and the Sub-
Adviser provided that such termination by the Trust shall be directed
or approved by a vote of a majority of all of the Trustees of the
Trust then in office or by the vote of the holders of a "majority" of
the outstanding voting securities of the Fund (as defined in the Act).
8. DISCLAIMER OF SHAREHOLDER LIABILITY.
------------------------------------
MassMutual and the Sub-Adviser understand that the obligations of the
Trust under this Sub-Advisory Agreement are not binding upon any
Trustee or shareholder of the Trust personally, but bind only the
Trust and the Trust's property. MassMutual and the Sub-Adviser
represent that each has notice of the provisions of the Trust
Documents disclaiming shareholder and Trustee liability for acts or
obligations of the Trust.
9. NOTICE.
-------
Any notice under this Sub-Advisory Agreement shall be in writing,
addressed and delivered or mailed, postage prepaid, to the other
party, with a copy to the Trust, at the addresses below or such other
address as such other party may designate for the receipt of such
notice.
If to MassMutual:
Massachusetts Mutual Life Insurance Company
1295 State Street
Springfield, MA 01111
Attention: Hamline C. Wilson
Senior Managing Director
If to the Sub-Adviser:
David L. Babson and Company Incorporated
One Memorial Drive
Cambridge, MA 02142
Attention: John V. Murphy
Chief Operating Officer
If to either party, copies to:
MassMutual Institutional Funds
1295 State Street
Springfield, MA 01111
Attention: Stuart H. Reese
President
6
<PAGE>
Investors Bank & Trust
89 South Street
Boston, MA 02111
Attention: Susan Mosher, Esq.
IN WITNESS WHEREOF, MassMutual and the Sub-Adviser have caused this
Sub-Advisory Agreement to be executed on the day and year first above written.
MASSACHUSETTS MUTUAL LIFE
INSURANCE COMPANY
BY: ___________________________________
Hamline C. Wilson
Senior Managing Director
DAVID L. BABSON AND COMPANY INCORPORATED
BY: ____________________________________
John V. Murphy
Chief Operating Officer
ACCEPTED AND ACKNOWLEDGED:
--------------------------
MASSMUTUAL INSTITUTIONAL FUNDS ON BEHALF OF
MASSMUTUAL SMALL CAP VALUE EQUITY FUND
BY: _____________________________________
Stuart H. Reese
President
7
<PAGE>
EXHIBIT 5(B)
INVESTMENT SUB-ADVISORY AGREEMENT
BETWEEN
MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY
AND
DAVID L. BABSON AND COMPANY INCORPORATED
(WITH RESPECT TO THE VALUE EQUITY SECTOR OF THE MASSMUTUAL BALANCED FUND)
<PAGE>
INVESTMENT SUB-ADVISORY AGREEMENT
---------------------------------
This INVESTMENT SUB-ADVISORY AGREEMENT (the "Sub-Advisory Agreement"), is
by and between David L. Babson and Company Incorporated, organized under the
laws of the Commonwealth of Massachusetts (the "Sub-Adviser"), and Massachusetts
Mutual Life Insurance Company, a Massachusetts corporation ("MassMutual"),
effective this 1st day of January, 1997.
WHEREAS, the MassMutual Balanced Fund (the "Fund") is a series of
MassMutual Institutional Funds (the "Trust"), a Massachusetts business trust
which is an open-end diversified management investment company registered as
such with the Securities and Exchange Commission (the "Commission") pursuant to
the Investment Company Act of 1940, as amended (the "Act"), and the Trust has
appointed MassMutual as the investment adviser for the Fund, including the
Equity Sector of the Fund, pursuant to the terms of an Investment Advisory
Agreement (the "Advisory Agreement");
WHEREAS, the Advisory Agreement provides that MassMutual may, at its
option, subject to approval by the Trustees of the Trust and, to the extent
necessary, shareholders of the Fund, appoint a sub-adviser to assume certain
responsibilities and obligations of MassMutual under the Advisory Agreement;
WHEREAS, MassMutual and the Sub-Adviser are investment advisers registered
with the Commission as such under the Investment Advisers Act of 1940, as
amended (the "Advisers Act"); and
WHEREAS, MassMutual desires to appoint the Sub-Adviser as its sub-adviser
for the Fund and the Sub-Adviser is willing to act in such capacity upon the
terms herein set forth;
NOW THEREFORE, in consideration of the premises and of the mutual covenants
herein contained, MassMutual and the Sub-Adviser, the parties hereto, intending
to be legally bound, hereby agree as follows:
1. GENERAL PROVISION.
------------------
MassMutual hereby employs the Sub-Adviser and the Sub-Adviser hereby
undertakes to act as the investment sub-adviser of the Fund to provide
investment advice and to perform for the Fund such other duties and
functions as are hereinafter set forth. The Sub-Adviser shall, in all
matters, give to the Fund and the Trust's Board of Trustees, directly or
through MassMutual, the benefit of the Sub-Adviser's best judgment, effort,
advice and recommendations and shall, at all times conform to, and use its
best efforts to enable the Fund to conform to:
(a) the provisions of the Act and any rules or regulations thereunder;
<PAGE>
(b) any other applicable provisions of state or federal law;
(c) the provisions of the Agreement and Declaration of Trust and Bylaws of
the Trust, as amended from time to time (collectively referred to as
the "Trust Documents");
(d) policies and determinations of the Board of Trustees of the Trust and
MassMutual;
(e) the fundamental and non-fundamental policies and investment
restrictions of the Fund as reflected in the Trust's registration
statement under the Investment Company Act or as such policies may,
from time to time, be amended by the Fund's shareholders; and
(f) the Prospectus and Statement of Additional Information of the Fund in
effect from time to time.
The appropriate officers and employees of the Sub-Adviser shall be
available upon reasonable notice for consultation with any of the Trustees
and officers of the Trust and MassMutual with respect to any matter dealing
with the business and affairs of the Fund, such as the valuation of
portfolio securities of the Fund, including but not limited to securities
that are either not registered for public sale or securities not traded on
any securities market.
2. DUTIES OF THE SUB-ADVISER.
--------------------------
(a) The Sub-Adviser shall, subject to the direction and control by the
Trust's Board of Trustees or MassMutual, to the extent MassMutual's
direction is not inconsistent with that of the Board of Trustees, (i)
regularly provide investment advice and recommendations to the Fund,
directly or through MassMutual, with respect to the Fund's
investments, investment policies and the purchase and sale of
securities; (ii) supervise and monitor continuously the investment
program of the Fund and the composition of its portfolio and determine
what securities shall be purchased or sold by the Fund; (iii) arrange,
subject to the provisions of Section 5 hereof, for the purchase of
securities and other investments for the Fund and the sale of
securities and other investments held in the portfolio of the Fund;
and (iv) provide reports on the foregoing to the Board of Trustees at
each Board meeting.
(b) Provided that none of MassMutual, the Fund or the Trust shall be
required to pay any compensation other than as provided by the terms
of this Sub-Advisory Agreement and subject to the provisions of
Section 5 hereof, the Sub-Adviser may obtain investment information,
research or assistance from any other person, firm or corporation to
supplement, update or otherwise improve its investment management
services.
(c) Provided that nothing herein shall be deemed to protect the
Sub-Adviser from willful misfeasance, bad faith or gross negligence
in the performance of its duties,
3
<PAGE>
or reckless disregard to its obligations and duties under this Sub-
Advisory Agreement, the Sub-Adviser shall not be liable for any loss
sustained by reason of good faith errors or omissions in connection
with any matters to which this Sub-Advisory Agreement relates.
(d) Nothing in this Sub-Advisory Agreement shall prevent MassMutual or
the Sub-Adviser or any officer thereof from acting as investment
adviser or sub-adviser for any other person, firm or corporation and
shall not in any way limit or restrict MassMutual or the Sub-Adviser
or any of their respective directors, officers, members, stockholders
or employees from buying, selling, or trading any securities for its
own account or for the account of others for whom it or they may be
acting, provided that such activities will not adversely affect or
otherwise impair the performance by any party of its duties and
obligations under this Sub-Advisory Agreement.
(e) The Sub-Adviser shall cooperate with MassMutual by providing
MassMutual with any information in the Sub-Adviser's possession
necessary for supervising the activities of all administrative and
clerical personnel as shall be required to provide corporate
administration for the Fund, including the compilation and maintenance
of such records with respect to its operations as may reasonably be
required. The Sub-Adviser shall, at its own expense, provide su ch
officers for the Trust as its Board may request.
3. DUTIES OF MASSMUTUAL
--------------------
MassMutual shall provide the Sub-Adviser with the following information
about the Fund:
(a) cash flow estimates on request;
(b) notice of the Fund's "investable funds" by 9:00 a.m. each business
day;
(c) as they are modified, from time to time, current versions of the
documents and policies referred to in Subsections (c), (d), (e) and
(f) of Section 1 hereof, above.
4. COMPENSATION OF THE SUB-ADVISER.
--------------------------------
MassMutual agrees to pay the Sub-Adviser and the Sub-Adviser agrees to
accept as full compensation for the performance of all functions and duties
on its part to be performed pursuant to the provisions hereof, a fee paid
weekly at the annual rate .13% of the average daily net asset value of the
Fund, determined at the close of the New York Stock Exchange on each day
that the Exchange is open for trading and paid on the last day of each
week.
4
<PAGE>
5. PORTFOLIO TRANSACTIONS AND BROKERAGE.
-------------------------------------
(a) The Sub-Adviser is authorized, in arranging the purchase and sale of
the Fund's publicly-traded portfolio securities, to employ or deal
with such members of securities exchanges, brokers or dealers
(hereinafter "broker-dealers"), including "affiliated" broker-dealers,
as that term is defined in the Act, as may, in its best judgment,
implement the policy of the Fund to obtain, at reasonable expense, the
best execution (prompt and reliable execution at the most favorable
security price obtainable) of the Fund's portfolio transactions.
(b) The Sub-Adviser may effect the purchase and sale of securities (which
are otherwise publicly traded) in private transactions on such terms
and conditions as are customary in such transactions, may use a broker
in such to effect said transactions, and may enter into a contract in
which the broker acts either as principal or as agent.
(c) The Sub-Adviser shall select broker-dealers to effect the Fund's
portfolio transactions on the basis of its estimate of their ability
to obtain best execution of particular and related portfolio
transactions. The abilities of a broker-dealer to obtain best
execution of particular portfolio transaction(s) will be judged by the
Sub-Adviser on the basis of all relevant factors and considerations
including, insofar as feasible, the execution capabilities required by
the transaction or transactions; the ability and willingness of the
broker-dealer to facilitate the Fund's portfolio transactions by
participating therein for its own account; the importance to the Fund
of speed, efficiency or confidentiality; the broker-dealer's apparent
familiarity with sources from or to whom particular securities might
be purchased or sold; as well as any other matters relevant to the
selection of a broker-dealer for particular and related transactions
of the Fund.
6. DURATION.
---------
Unless terminated earlier pursuant to Section 7 hereof, this Sub-Advisory
Agreement shall remain in effect until August 2, 1997. Thereafter it shall
continue in effect from year to year, so long as such continuance shall be
approved at least annually by the Trust's Board of Trustees, including the
vote of the majority of the Trustees of the Trust who are not parties to
this Sub-Advisory Agreement or "interested persons" (as defined in the Act)
of any such party cast in person at a meeting called for the purpose of
voting on such approval, or by the holders of a "majority" (as defined in
the Act) of the outstanding voting securities of the Fund.
7. TERMINATION.
------------
This Sub-Advisory Agreement shall terminate automatically upon its
assignment or in the event upon the termination of the Advisory Agreement;
it may also be terminated: (i) for
5
<PAGE>
cause or with the consent of the parties and the Trust by MassMutual or the
Sub-Adviser at any time without penalty upon sixty days' written notice to
the other party and the Trust; or (ii) by the Trust at any time without
penalty upon sixty days' written notice to MassMutual and the Sub-Adviser
provided that such termination by the Trust shall be directed or approved
by a vote of a majority of all of the Trustees of the Trust then in office
or by the vote of the holders of a "majority" of the outstanding voting
securities of the Fund (as defined in the Act).
8. DISCLAIMER OF SHAREHOLDER LIABILITY.
------------------------------------
MassMutual and the Sub-Adviser understand that the obligations of the Trust
under this Sub-Advisory Agreement are not binding upon any Trustee or
shareholder of the Trust personally, but bind only the Trust and the
Trust's property. MassMutual and the Sub-Adviser represent that each has
notice of the provisions of the Trust Documents disclaiming shareholder and
Trustee liability for acts or obligations of the Trust.
9. NOTICE.
-------
Any notice under this Sub-Advisory Agreement shall be in writing, addressed
and delivered or mailed, postage prepaid, to the other party, with a copy
to the Trust, at the addresses below or such other address as such other
party may designate for the receipt of such notice.
If to MassMutual:
Massachusetts Mutual Life Insurance Company
1295 State Street
Springfield, MA 01111
Attention: Hamline C. Wilson
Senior Managing Director
If to the Sub-Adviser:
David L. Babson and Company Incorporated
One Memorial Drive
Cambridge, MA 02142
Attention: John V. Murphy
Chief Operating Officer
If to either party, copies to:
MassMutual Institutional Funds
1295 State Street
Springfield, MA 01111
Attention: Stuart H. Reese
6
<PAGE>
President
Investors Bank & Trust
89 South Street
Boston, MA 02111
Attention: Susan Mosher, Esq.
IN WITNESS WHEREOF, MassMutual and the Sub-Adviser have caused this Sub-
Advisory Agreement to be executed on the day and year first above written.
MASSACHUSETTS MUTUAL LIFE
INSURANCE COMPANY
By: ___________________________________
Hamline C. Wilson
Senior Managing Director
DAVID L. BABSON AND COMPANY
INCORPORATED
By: ____________________________________
John V. Murphy
Chief Operating Officer
ACCEPTED AND ACKNOWLEDGED:
--------------------------
MASSMUTUAL INSTITUTIONAL FUNDS on behalf of
the Value Equity Sector of the MASSMUTUAL BALANCED FUND
By: _____________________________________
Stuart H. Reese
President
7
<PAGE>
INVESTMENT SUB-ADVISORY AGREEMENT
Between
MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY
And
DAVID L. BABSON AND COMPANY INCORPORATED
(With respect to MassMutual Value Equity Fund)
<PAGE>
INVESTMENT SUB-ADVISORY AGREEMENT
---------------------------------
This INVESTMENT SUB-ADVISORY AGREEMENT (the "Sub-Advisory Agreement"), is
by and between David L. Babson and Company Incorporated, organized under the
laws of the Commonwealth of Massachusetts (the "Sub-Adviser"), and Massachusetts
Mutual Life Insurance Company, a Massachusetts corporation ("MassMutual"),
effective this 1st day of January, 1997.
WHEREAS, the MassMutual Value Equity Fund (the "Fund") is a series of
MassMutual Institutional Funds (the "Trust"), a Massachusetts business trust
which is an open-end diversified management investment company registered as
such with the Securities and Exchange Commission (the "Commission") pursuant to
the Investment Company Act of 1940, as amended (the "Act"), and the Trust has
appointed MassMutual as the investment adviser for the Fund pursuant to the
terms of an Investment Advisory Agreement (the "Advisory Agreement");
WHEREAS, the Advisory Agreement provides that MassMutual may, at its
option, subject to approval by the Trustees of the Trust and, to the extent
necessary, shareholders of the Fund, appoint a sub-adviser to assume certain
responsibilities and obligations of MassMutual under the Advisory Agreement;
WHEREAS, MassMutual and the Sub-Adviser are investment advisers registered
with the Commission as such under the Investment Advisers Act of 1940, as
amended (the "Advisers Act"); and
WHEREAS, MassMutual desires to appoint the Sub-Adviser as its sub-adviser
for the Fund and the Sub-Adviser is willing to act in such capacity upon the
terms herein set forth;
NOW THEREFORE, in consideration of the premises and of the mutual covenants
herein contained, MassMutual and the Sub-Adviser, the parties hereto, intending
to be legally bound, hereby agree as follows:
1. GENERAL PROVISION.
-----------------
MassMutual hereby employs the Sub-Adviser and the Sub-Adviser hereby
undertakes to act as the investment sub-adviser of the Fund to provide
investment advice and to perform for the Fund such other duties and
functions as are hereinafter set forth. The Sub-Adviser shall, in all
matters, give to the Fund and the Trust's Board of Trustees, directly or
through MassMutual, the benefit of the Sub-Adviser's best judgment, effort,
advice and recommendations and shall, at all times conform to, and use its
best efforts to enable the Fund to conform to:
(a) the provisions of the Act and any rules or regulations thereunder;
<PAGE>
(b) any other applicable provisions of state or federal law;
(c) the provisions of the Agreement and Declaration of Trust and Bylaws of
the Trust, as amended from time to time (collectively referred to as
the "Trust Documents");
(d) policies and determinations of the Board of Trustees of the Trust
and MassMutual;
(e) the fundamental and non-fundamental policies and investment
restrictions of the Fund as reflected in the Trust's registration
statement under the Investment Company Act or as such policies may,
from time to time, be amended by the Fund's shareholders; and
(f) the Prospectus and Statement of Additional Information of the Fund in
effect from time to time.
The appropriate officers and employees of the Sub-Adviser shall be
available upon reasonable notice for consultation with any of the Trustees
and officers of the Trust and MassMutual with respect to any matter dealing
with the business and affairs of the Fund, such as the valuation of
portfolio securities of the Fund, including but not limited to securities
that are either not registered for public sale or securities not traded on
any securities market.
2. DUTIES OF THE SUB-ADVISER.
-------------------------
(a) The Sub-Adviser shall, subject to the direction and control by the
Trust's Board of Trustees or MassMutual, to the extent MassMutual's
direction is not inconsistent with that of the Board of Trustees, (i)
regularly provide investment advice and recommendations to the Fund,
directly or through MassMutual, with respect to the Fund's
investments, investment policies and the purchase and sale of
securities; (ii) supervise and monitor continuously the investment
program of the Fund and the composition of its portfolio and determine
what securities shall be purchased or sold by the Fund; (iii) arrange,
subject to the provisions of Section 5 hereof, for the purchase of
securities and other investments for the Fund and the sale of
securities and other investments held in the portfolio of the Fund;
and (iv) provide reports on the foregoing to the Board of Trustees at
each Board meeting.
(b) Provided that none of MassMutual, the Fund or the Trust shall be
required to pay any compensation other than as provided by the terms
of this Sub-Advisory Agreement and subject to the provisions of
Section 5 hereof, the Sub-Adviser may obtain investment information,
research or assistance from any other person, firm or corporation to
supplement, update or otherwise improve its investment management
services.
(c) Provided that nothing herein shall be deemed to protect the Sub-
Adviser from willful misfeasance, bad faith or gross negligence in the
performance of its duties,
3
<PAGE>
or reckless disregard to its obligations and duties under this Sub-
Advisory Agreement, the Sub-Adviser shall not be liable for any loss
sustained by reason of good faith errors omissions in connection with
any matters to which this Sub-Advisory Agreement relates.
(d) Nothing in this Sub-Advisory Agreement shall prevent MassMutual or the
Sub-Adviser or any officer thereof from acting as investment adviser
or sub-adviser for any other person, firm or corporation and shall not
in any way limit or restrict MassMutual or the Sub-Adviser or any of
their respective directors, officers, members, stockholders or
employees from buying, selling, or trading any securities for its own
account or for the account of others for whom it or they may be
acting, provided that such activities will not adversely affect or
otherwise impair the performance by any party of its duties and
obligations under this Sub-Advisory Agreement.
(e) The Sub-Adviser shall cooperate with MassMutual by providing
MassMutual with any information in the Sub-Adviser's possession
necessary for supervising the activities of all administrative and
clerical personnel as shall be required to provide corporate
administration for the Fund, including the compilation and maintenance
of such records with respect to its operations as may reasonably be
required. The Sub-Adviser shall, at its own expense, provide such
officers for the Trust as its Board may request.
3. DUTIES OF MASSMUTUAL
--------------------
MassMutual shall provide the Sub-Adviser with the following information
about the Fund:
(a) cash flow estimates on request;
(b) notice of the Fund's "investable funds" by 9:00 a.m. each business
day;
(c) as they are modified, from time to time, current versions of the
documents and policies referred to in Subsections (c), (d), (e) and
(f) of Section 1 hereof, above.
4. COMPENSATION OF THE SUB-ADVISER.
-------------------------------
MassMutual agrees to pay the Sub-Adviser and the Sub-Adviser agrees to
accept as full compensation for the performance of all functions and duties
on its part to be performed pursuant to the provisions hereof, a fee paid
weekly at the annual rate .13% of the average daily net asset value of the
Fund, determined at the close of the New York Stock Exchange on each day
that the Exchange is open for trading and paid on the last day of each
week.
4
<PAGE>
5. PORTFOLIO TRANSACTIONS AND BROKERAGE.
------------------------------------
(a) The Sub-Adviser is authorized, in arranging the purchase and sale of
the Fund's publicly-traded portfolio securities, to employ or deal
with such members of securities exchanges, brokers or dealers
(hereinafter "broker- dealers"), including "affiliated" broker-
dealers, as that term is defined in the Act, as may, in its best
judgment, implement the policy of the Fund to obtain, at reasonable
expense, the best execution (prompt and reliable execution at the most
favorable security price obtainable) of the Fund's portfolio
transactions.
(b) The Sub-Adviser may effect the purchase and sale of securities (which
are otherwise publicly traded) in private transactions on such terms
and conditions as are customary in such transactions, may use a broker
in such to effect said transactions, and may enter into acts a
contract either in which as the broker principal or as agent.
(c) The Sub-Adviser shall select broker-dealer to effect the Fund's
portfolio transactions on the basis of its estimate of their ability
to obtain best execution of particular and related portfolio
transactions. The abilities of a broker-dealer to obtain best
execution of particular portfolio transaction(s) will be judged by the
Sub-Adviser on the basis of all relevant factors and considerations
including, insofar as feasible, the execution capabilities required by
the transaction or transactions; the ability and willingness of the
broker-dealer to facilitate the Fund's portfolio transactions by
participating therein for its own account; the importance to the Fund
of speed, efficiency or confidentiality; the broker-dealer's apparent
familiarity with sources from or to whom particular securities might
be purchased or sold; as well as any other matters relevant to the
selection of a broker-dealer for particular transactions of the Fund.
6. DURATION.
---------
Unless terminated earlier pursuant to Section 7 hereof, this Sub-Advisory
Agreement shall remain in effect until August 2, 1997. Thereafter it shall
continue in effect from year to year, so long as such continuance shall be
approved at least annually by the Trust's Board of Trustees, including the
vote of the majority of the Trustees of the Trust who are not parties to
this Sub-Advisory Agreement or "interested persons" (as defined in the Act)
of any such party cast in person at a meeting called for the purpose of
voting on such approval, or by the holders of a "majority" (as defined in
the Act) of the outstanding voting securities of the Fund.
7. TERMINATION.
------------
This Sub-Advisory Agreement shall terminate automatically upon its
assignment or in the event upon the termination of the Advisory Agreement;
it may also be terminated: (i) for
5
<PAGE>
cause or with the consent of the parties and the Trust by MassMutual or the
Sub-Adviser at any time without penalty upon sixty days' written notice to
the other party and the Trust; or (ii) by the Trust at any time without
penalty upon sixty days' written notice to MassMutual and the Sub-Adviser
provided that such termination by the Trust shall be directed or approved
by a vote of a majority of all of the Trustees of the Trust then in office
or by the vote of the holders of a "majority" of the outstanding voting
securities of the Fund (as defined in the Act).
8. DISCLAIMER OF SHAREHOLDER LIABILITY.
------------------------------------
MassMutual and the Sub-Adviser understand that the obligations of the Trust
under this Sub-Advisory Agreement are not binding upon any Trustee or
shareholder of the Trust personally, but bind only the Trust and the
Trust's property. MassMutual and the Sub-Adviser represent that each has
notice of the provisions of the Trust Documents disclaiming shareholder and
Trustee liability for acts or obligations of the Trust.
9. NOTICE.
-------
Any notice under this Sub-Advisory Agreement shall be in writing, addressed
and delivered or mailed, postage prepaid, to the other party, with a copy
to the Trust, at the addresses below or such other address as such other
party may designate for the receipt of such notice.
If to MassMutual:
Massachusetts Mutual Life Insurance Company
1295 State Street
Springfield, MA 01111
Attention: Hamline C. Wilson
Senior Managing Director
If to the Sub-Adviser:
David L. Babson and Company Incorporated
One Memorial Drive
Cambridge, MA 02142
Attention: John V. Murphy
Chief Operating Officer
If to either party, copies to:
MassMutual Institutional Funds
1295 State Street
Springfield, MA 01111
Attention: Stuart H. Reese
6
<PAGE>
President
Investors Bank & Trust
89 South Street
Boston, MA 02111
Attention: Susan Mosher, Esq.
IN WITNESS WHEREOF, MassMutual and the Sub-Adviser have caused this Sub-
Advisory Agreement to be executed on the day and year first above written.
MASSACHUSETTS MUTUAL LIFE
INSURANCE COMPANY
By:___________________________________
Hamline C. Wilson
Senior Managing Director
DAVID L. BABSON AND COMPANY
INCORPORATED
By:____________________________________
John V. Murphy
Chief Operating Officer
Accepted and Acknowledged:
--------------------------
MASSMUTUAL INSTITUTIONAL FUNDS on behalf of
MASSMUTUAL VALUE EQUITY FUND
By:_____________________________________
Stuart H. Reese
President
7
<PAGE>
Exhibit 11(b)
CONSENT OF INDEPENDENT ACCOUNTANTS
To the Board of Trustees of
MassMutual Institutional Funds:
We consent to the inclusion in Post-Effective Amendment No. 3 to the
Registration Statement under the Securities Act of 1933 of MassMutual
Institutional Funds on Form N-1A (File No. 33-73824) of our report dated
February 14, 1997 on our audit of the financial statements and financial
highlights of MassMutual Institutional Funds (comprising the MassMutual Prime
Fund, MassMutual Short-Term Bond Fund, MassMutual Core Bond Fund, MassMutual
Balanced Fund, MassMutual Value Equity Fund, MassMutual SmallCap Value Equity
Fund, and MassMutual International Equity Fund), which report is included in the
Annual Report for the year ended December 31, 1996, which is included in this
Registration Statement. We also consent to the reference to our Firm under the
caption "Experts" in the Statement of Additional Information.
/s/ COOPERS & LYBRAND L.L.P.
Springfield, Massachusetts
April 24, 1997
<PAGE>
EX11.I.O
POWER OF ATTORNEY
------------------
The Undersigned, Richard G. Dooley, Trustee of MassMutual Institutional
Funds (the "Fund"), does hereby constitute and appoint Stephen L. Kuhn, Richard
M. Howe, Margaret A. Sheehan and Peter MacDougall, and each of them
individually, as his true and lawful attorneys and agents.
Such attorneys and agents shall have full power of substitution and to take
any and all action and execute any and all instruments on the Undersigned's
behalf as Trustee of the Fund that said attorneys and agents may deem necessary
or advisable to enable the Fund to comply with the Securities Act of 1933, as
amended (the "1933 Act"), the Investment Company Act of 1940, as amended (the
"1940 Act"), and any rules, regulations, orders or other requirements of the
Securities and Exchange Commission (the "Commission") thereunder. This power of
attorney applies to the registration, under the 1933 Act and the 1940 Act, of
shares of beneficial interest of the Fund to be offered by the Fund. It
specifically authorizes such attorneys and agents to sign the Undersigned's name
on his behalf as Trustee of the Fund to the Registration Statements and to any
instruments or documents filed or to be filed with the Commission under the 1933
Act and the 1940 Act in connection with such Registration Statements, including
any and all amendments to such statements, documents, or instruments.
The Undersigned hereby ratifies and confirms all that said attorneys and
agents shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF the undersigned has set his hand this 10th day of April,
1996.
/s/ Richard G. Dooley
---------------------
Richard G. Dooley
Trustee of MassMutual
Institutional Funds
Witness:
/s/ Anne V. Moszynski
- ---------------------
<PAGE>
POWER OF ATTORNEY
-----------------
The Undersigned, F. William Marshall, Jr., Trustee of MassMutual
Institutional Funds (the "Fund"), does hereby constitute and appoint Stephen L.
Kuhn, Richard M. Howe, Margaret A. Sheehan and Peter MacDougall, and each of
them individually, as his true and lawful attorneys and agents.
Such attorneys and agents shall have full power of substitution and to take
any and all action and execute any and all instruments on the Undersigned's
behalf as Trustee of the Fund that said attorneys and agents may deem necessary
or advisable to enable the Fund to comply with the Securities Act of 1933, as
amended (the "1933 Act"), the Investment Company Act of 1940, as amended (the
"1940 Act"), and any rules, regulations, orders or other requirements of the
Securities and Exchange Commission (the "Commission") thereunder. This power of
attorney applies to the registration, under the 1933 Act and the 1940 Act, of
shares of beneficial interest of the Fund to be offered by the Fund. It
specifically authorizes such attorneys and agents to sign the Undersigned's name
on his behalf as Trustee of the Fund to the Registration Statements and to any
instruments or documents filed or to be filed with the Commission under the 1933
Act and the 1940 Act in connection with such Registration Statements, including
any and all amendments to such statements, documents, or instruments.
The Undersigned hereby ratifies and confirms all that said attorneys and
agents shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF the undersigned has set his hand this 18th day of April,
1996.
/s/ F. William Marshall, Jr.
----------------------------
F. William Marshall, Jr.
Trustee of MassMutual
Institutional Funds
Witness:
/s/ Anne V. Moszynski
- ---------------------
<PAGE>
POWER OF ATTORNEY
-----------------
The Undersigned, Richard H. Ayers, Trustee of MassMutual Institutional
Funds (the "Fund"), does hereby constitute and appoint Stephen L. Kuhn, Hamline
C. Wilson and John E. Deitelbaum, and each of them individually, as his true and
lawful attorneys and agents.
Such attorneys and agents shall have full power of substitution and to take
any and all action and execute any and all instruments on the Undersigned's
behalf as Trustee of the Fund that said attorneys and agents may deem necessary
or advisable to enable the Fund to comply with the Securities Act of 1933, as
amended (the "1933 Act"), the Investment Company Act of 1940, as amended (the
"1940 Act"), and any rules, regulations, orders or other requirements of the
Securities and Exchange Commission (the "Commission") thereunder. This power of
attorney applies to the registration, under the 1933 Act and the 1940 Act, of
shares of beneficial interest of the Fund to be offered by the Fund. It
specifically authorizes such attorneys and agents to sign the Undersigned's name
on his behalf as Trustee of the Fund to the Registration Statements and to any
instruments or documents filed or to be filed with the Commission under the 1933
Act and the 1940 Act in connection with such Registration Statements, including
any and all amendments to such statements, documents, or instruments.
The Undersigned hereby ratifies and confirms all that said attorneys and
agents shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF the undersigned has set his hand this 21st day of April,
1997.
/s/ Richard H. Ayers
--------------------
Richard H. Ayers
Trustee of MassMutual
Institutional Funds
Witness:
/s/ Stephen Kuhn
-------------------------
<PAGE>
POWER OF ATTORNEY
------------------
The Undersigned, David E.A. Carson, Trustee of MassMutual Institutional
Funds (the "Fund"), does hereby constitute and appoint Stephen L. Kuhn, Hamline
C. Wilson and John E. Deitelbaum, and each of them individually, as his true and
lawful attorneys and agents.
Such attorneys and agents shall have full power of substitution and to take
any and all action and execute any and all instruments on the Undersigned's
behalf as Trustee of the Fund that said attorneys and agents may deem necessary
or advisable to enable the Fund to comply with the Securities Act of 1933, as
amended (the "1933 Act"), the Investment Company Act of 1940, as amended (the
"1940 Act"), and any rules, regulations, orders or other requirements of the
Securities and Exchange Commission (the "Commission") thereunder. This power of
attorney applies to the registration, under the 1933 Act and the 1940 Act, of
shares of beneficial interest of the Fund to be offered by the Fund. It
specifically authorizes such attorneys and agents to sign the Undersigned's name
on his behalf as Trustee of the Fund to the Registration Statements and to any
instruments or documents filed or to be filed with the Commission under the 1933
Act and the 1940 Act in connection with such Registration Statements, including
any and all amendments to such statements, documents, or instruments.
The Undersigned hereby ratifies and confirms all that said attorneys and
agents shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF the undersigned has set his hand this 21st day of April,
1997.
/s/ David E.A. Carson
---------------------
David E.A. Carson
Trustee of MassMutual
Institutional Funds
Witness:
/s/ Stephen Kuhn
-------------------------
<PAGE>
POWER OF ATTORNEY
-----------------
The Undersigned, Richard W. Greene, Trustee of MassMutual Institutional
Funds (the "Fund"), does hereby constitute and appoint Stephen L. Kuhn, Hamline
C. Wilson and John E. Deitelbaum, and each of them individually, as his true and
lawful attorneys and agents.
Such attorneys and agents shall have full power of substitution and to take
any and all action and execute any and all instruments on the Undersigned's
behalf as Trustee of the Fund that said attorneys and agents may deem necessary
or advisable to enable the Fund to comply with the Securities Act of 1933, as
amended (the "1933 Act"), the Investment Company Act of 1940, as amended (the
"1940 Act"), and any rules, regulations, orders or other requirements of the
Securities and Exchange Commission (the "Commission") thereunder. This power of
attorney applies to the registration, under the 1933 Act and the 1940 Act, of
shares of beneficial interest of the Fund to be offered by the Fund. It
specifically authorizes such attorneys and agents to sign the Undersigned's name
on his behalf as Trustee of the Fund to the Registration Statements and to any
instruments or documents filed or to be filed with the Commission under the 1933
Act and the 1940 Act in connection with such Registration Statements, including
any and all amendments to such statements, documents, or instruments.
The Undersigned hereby ratifies and confirms all that said attorneys and
agents shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF the undersigned has set his hand this 21st day of April,
1997.
/s/ Richard W. Greene
------------------------
Richard W. Greene
Trustee of MassMutual
Institutional Funds
Witness:
/s/ Stephen Kuhn
-----------------------
<PAGE>
POWER OF ATTORNEY
-----------------
The Undersigned, Beverly C.L. Hamilton, Trustee of MassMutual Institutional
Funds (the "Fund"), does hereby constitute and appoint Stephen L. Kuhn, Hamline
C. Wilson and John E. Deitelbaum, and each of them individually, as his true and
lawful attorneys and agents.
Such attorneys and agents shall have full power of substitution and to take
any and all action and execute any and all instruments on the Undersigned's
behalf as Trustee of the Fund that said attorneys and agents may deem necessary
or advisable to enable the Fund to comply with the Securities Act of 1933, as
amended (the "1933 Act"), the Investment Company Act of 1940, as amended (the
"1940 Act"), and any rules, regulations, orders or other requirements of the
Securities and Exchange Commission (the "Commission") thereunder. This power of
attorney applies to the registration, under the 1933 Act and the 1940 Act, of
shares of beneficial interest of the Fund to be offered by the Fund. It
specifically authorizes such attorneys and agents to sign the Undersigned's name
on his behalf as Trustee of the Fund to the Registration Statements and to any
instruments or documents filed or to be filed with the Commission under the 1933
Act and the 1940 Act in connection with such Registration Statements, including
any and all amendments to such statements, documents, or instruments.
The Undersigned hereby ratifies and confirms all that said attorneys and
agents shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF the undersigned has set his hand this 21st day of April,
1997.
/s/ Beverly C.L. Hamilton
-------------------------
Beverly C.L. Hamilton
Trustee of MassMutual
Institutional Funds
Witness:
/s/ Stephen Kuhn
-----------------------
<PAGE>
POWER OF ATTORNEY
-----------------
The Undersigned, John V. Murphy, Trustee of MassMutual Institutional Funds
(the "Fund"), does hereby constitute and appoint Stephen L. Kuhn, Hamline C.
Wilson and John E. Deitelbaum, and each of them individually, as his true and
lawful attorneys and agents.
Such attorneys and agents shall have full power of substitution and to take
any and all action and execute any and all instruments on the Undersigned's
behalf as Trustee of the Fund that said attorneys and agents may deem necessary
or advisable to enable the Fund to comply with the Securities Act of 1933, as
amended (the "1933 Act"), the Investment Company Act of 1940, as amended (the
"1940 Act"), and any rules, regulations, orders or other requirements of the
Securities and Exchange Commission (the "Commission") thereunder. This power of
attorney applies to the registration, under the 1933 Act and the 1940 Act, of
shares of beneficial interest of the Fund to be offered by the Fund. It
specifically authorizes such attorneys and agents to sign the Undersigned's name
on his behalf as Trustee of the Fund to the Registration Statements and to any
instruments or documents filed or to be filed with the Commission under the 1933
Act and the 1940 Act in connection with such Registration Statements, including
any and all amendments to such statements, documents, or instruments.
The Undersigned hereby ratifies and confirms all that said attorneys and
agents shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF the undersigned has set his hand this 21st day of April,
1997.
/s/ John V. Murphy
------------------
John V. Murphy
Trustee of MassMutual
Institutional Funds
Witness:
/s/ Stephen Kuhn
-----------------------
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from The
MassMutual Institutional Funds, Inc. form N-SAR for the year ended December 31,
1996 and is qualified in its entirety by reference to such financial statements.
</LEGEND>
<SERIES>
<NUMBER> 31
<NAME> Core Bond Fund, Class 1
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 348,014,562
<INVESTMENTS-AT-VALUE> 352,734,624
<RECEIVABLES> 4,972,581
<ASSETS-OTHER> 4,936
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 357,712,141
<PAYABLE-FOR-SECURITIES> 142,615
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 504,349
<TOTAL-LIABILITIES> 646,964
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 352,396,989
<SHARES-COMMON-STOCK> 11,512
<SHARES-COMMON-PRIOR> 15,844
<ACCUMULATED-NII-CURRENT> 1,845,746
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (1,885,881)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 4,708,323
<NET-ASSETS> 120,838
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 8,751
<OTHER-INCOME> 0
<EXPENSES-NET> 2,135
<NET-INVESTMENT-INCOME> 6,616
<REALIZED-GAINS-CURRENT> (433)
<APPREC-INCREASE-CURRENT> (5,258)
<NET-CHANGE-FROM-OPS> 925
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 4,416
<DISTRIBUTIONS-OF-GAINS> 740
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 429
<NUMBER-OF-SHARES-REDEEMED> 5,250
<SHARES-REINVESTED> 489
<NET-CHANGE-IN-ASSETS> (50,089)
<ACCUMULATED-NII-PRIOR> 114,829
<ACCUMULATED-GAINS-PRIOR> 1,944,986
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1,375,667
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,698,976
<AVERAGE-NET-ASSETS> 129,650
<PER-SHARE-NAV-BEGIN> 10.79
<PER-SHARE-NII> 0.53
<PER-SHARE-GAIN-APPREC> (0.36)
<PER-SHARE-DIVIDEND> (0.40)
<PER-SHARE-DISTRIBUTIONS> (0.06)
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 10.50
<EXPENSE-RATIO> 1.65
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from The
MassMutual Institutional Funds, Inc. form N-SAR for the year ended December 31,
1996 and is qualified in its entirety by reference to such financial statements.
</LEGEND>
<SERIES>
<NUMBER> 32
<NAME> Core Bond Fund, Class 2
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 348,014,562
<INVESTMENTS-AT-VALUE> 352,734,624
<RECEIVABLES> 4,972,581
<ASSETS-OTHER> 4,936
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 357,712,141
<PAYABLE-FOR-SECURITIES> 142,615
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 504,349
<TOTAL-LIABILITIES> 646,964
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 352,396,989
<SHARES-COMMON-STOCK> 11,631
<SHARES-COMMON-PRIOR> 11,069
<ACCUMULATED-NII-CURRENT> 1,845,746
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (1,885,881)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 4,708,323
<NET-ASSETS> 122,293
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 8,013
<OTHER-INCOME> 0
<EXPENSES-NET> 1,299
<NET-INVESTMENT-INCOME> 6,714
<REALIZED-GAINS-CURRENT> (663)
<APPREC-INCREASE-CURRENT> (3,478)
<NET-CHANGE-FROM-OPS> 2,573
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 5,227
<DISTRIBUTIONS-OF-GAINS> 714
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 562
<NET-CHANGE-IN-ASSETS> 2,573
<ACCUMULATED-NII-PRIOR> 114,829
<ACCUMULATED-GAINS-PRIOR> 1,944,986
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1,375,667
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,698,976
<AVERAGE-NET-ASSETS> 118,456
<PER-SHARE-NAV-BEGIN> 10.82
<PER-SHARE-NII> 0.60
<PER-SHARE-GAIN-APPREC> (0.38)
<PER-SHARE-DIVIDEND> (0.47)
<PER-SHARE-DISTRIBUTIONS> (0.06)
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 10.51
<EXPENSE-RATIO> 1.10
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from The
MassMutual Institutional Funds, Inc. form N-SAR for the year ended December 31,
1996 and is qualified in its entirety by reference to such financial statements.
</LEGEND>
<SERIES>
<NUMBER> 33
<NAME> Core Bond Fund, Class 3
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 348,014,562
<INVESTMENTS-AT-VALUE> 352,734,624
<RECEIVABLES> 4,972,581
<ASSETS-OTHER> 4,936
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 357,712,141
<PAYABLE-FOR-SECURITIES> 142,615
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 504,349
<TOTAL-LIABILITIES> 646,964
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 352,396,989
<SHARES-COMMON-STOCK> 11,699
<SHARES-COMMON-PRIOR> 11,095
<ACCUMULATED-NII-CURRENT> 1,845,746
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (1,885,881)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 4,708,323
<NET-ASSETS> 123,107
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 8,051
<OTHER-INCOME> 0
<EXPENSES-NET> 892
<NET-INVESTMENT-INCOME> 7,159
<REALIZED-GAINS-CURRENT> (665)
<APPREC-INCREASE-CURRENT> (3,487)
<NET-CHANGE-FROM-OPS> 3,007
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 5,674
<DISTRIBUTIONS-OF-GAINS> 715
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 604
<NET-CHANGE-IN-ASSETS> 3,007
<ACCUMULATED-NII-PRIOR> 114,829
<ACCUMULATED-GAINS-PRIOR> 1,944,986
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1,375,667
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,698,976
<AVERAGE-NET-ASSETS> 119,036
<PER-SHARE-NAV-BEGIN> 10.82
<PER-SHARE-NII> 0.64
<PER-SHARE-GAIN-APPREC> (0.37)
<PER-SHARE-DIVIDEND> (0.51)
<PER-SHARE-DISTRIBUTIONS> (0.06)
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 10.52
<EXPENSE-RATIO> 0.75
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from The
MassMutual Institutional Funds, Inc. form N-SAR for the year ended December 31,
1996 and is qualified in its entirety by reference to such financial statements.
</LEGEND>
<SERIES>
<NUMBER> 34
<NAME> Core Bond Fund, Class 4
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 348,014,562
<INVESTMENTS-AT-VALUE> 352,734,624
<RECEIVABLES> 4,972,581
<ASSETS-OTHER> 4,936
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 357,712,141
<PAYABLE-FOR-SECURITIES> 142,615
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 504,349
<TOTAL-LIABILITIES> 646,964
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 352,396,989
<SHARES-COMMON-STOCK> 34,141,922
<SHARES-COMMON-PRIOR> 23,578,010
<ACCUMULATED-NII-CURRENT> 1,845,746
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (1,885,881)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 4,708,323
<NET-ASSETS> 356,698,939
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 20,666,644
<OTHER-INCOME> 0
<EXPENSES-NET> 1,566,380
<NET-INVESTMENT-INCOME> 19,100,264
<REALIZED-GAINS-CURRENT> (1,884,332)
<APPREC-INCREASE-CURRENT> (6,444,659)
<NET-CHANGE-FROM-OPS> 10,771,273
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 17,374,307
<DISTRIBUTIONS-OF-GAINS> 1,942,817
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 15,244,478
<NUMBER-OF-SHARES-REDEEMED> 6,519,179
<SHARES-REINVESTED> 1,838,613
<NET-CHANGE-IN-ASSETS> 103,158,860
<ACCUMULATED-NII-PRIOR> 114,829
<ACCUMULATED-GAINS-PRIOR> 1,944,986
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1,375,667
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,698,976
<AVERAGE-NET-ASSETS> 305,336,628
<PER-SHARE-NAV-BEGIN> 10.75
<PER-SHARE-NII> 0.67
<PER-SHARE-GAIN-APPREC> (0.37)
<PER-SHARE-DIVIDEND> (0.54)
<PER-SHARE-DISTRIBUTIONS> (0.06)
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 10.45
<EXPENSE-RATIO> 0.51
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from The
MassMutual Institutional Funds, Inc. form N-SAR for the year ended December 31,
1996 and is qualified in its entirety by reference to such financial statements.
</LEGEND>
<SERIES>
<NUMBER> 51
<NAME> Value Equity Fund, Class 1
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 1,768,842,158
<INVESTMENTS-AT-VALUE> 2,480,700,084
<RECEIVABLES> 9,176,728
<ASSETS-OTHER> 190
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 2,489,877,002
<PAYABLE-FOR-SECURITIES> 481,850
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 3,186,917
<TOTAL-LIABILITIES> 3,668,767
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 1,759,761,092
<SHARES-COMMON-STOCK> 10,640
<SHARES-COMMON-PRIOR> 10,237
<ACCUMULATED-NII-CURRENT> 410,862
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 14,178,355
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 711,857,926
<NET-ASSETS> 153,607
<DIVIDEND-INCOME> 4,094
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 2,308
<NET-INVESTMENT-INCOME> 1,786
<REALIZED-GAINS-CURRENT> 4,508
<APPREC-INCREASE-CURRENT> 18,055
<NET-CHANGE-FROM-OPS> 24,349
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 1,849
<DISTRIBUTIONS-OF-GAINS> 4,035
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 403
<NET-CHANGE-IN-ASSETS> 24,349
<ACCUMULATED-NII-PRIOR> 626,868
<ACCUMULATED-GAINS-PRIOR> 4,803,720
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 10,377,627
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 12,765,654
<AVERAGE-NET-ASSETS> 140,077
<PER-SHARE-NAV-BEGIN> 12.63
<PER-SHARE-NII> 0.17
<PER-SHARE-GAIN-APPREC> 2.21
<PER-SHARE-DIVIDEND> (0.18)
<PER-SHARE-DISTRIBUTIONS> (0.39)
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 14.44
<EXPENSE-RATIO> 1.65
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from The
MassMutual Institutional Funds, Inc. form N-SAR for the year ended December 31,
1996 and is qualified in its entirety by reference to such financial statements.
</LEGEND>
<SERIES>
<NUMBER> 52
<NAME> Value Equity Fund, Class 2
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 1,768,842,158
<INVESTMENTS-AT-VALUE> 2,480,700,084
<RECEIVABLES> 9,176,728
<ASSETS-OTHER> 190
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 2,489,877,002
<PAYABLE-FOR-SECURITIES> 481,850
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 3,186,917
<TOTAL-LIABILITIES> 3,668,767
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 1,759,761,092
<SHARES-COMMON-STOCK> 10,740
<SHARES-COMMON-PRIOR> 10,284
<ACCUMULATED-NII-CURRENT> 410,862
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 14,178,355
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 711,857,926
<NET-ASSETS> 155,446
<DIVIDEND-INCOME> 4,132
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 1,552
<NET-INVESTMENT-INCOME> 2,580
<REALIZED-GAINS-CURRENT> 4,552
<APPREC-INCREASE-CURRENT> 18,226
<NET-CHANGE-FROM-OPS> 25,358
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 2,628
<DISTRIBUTIONS-OF-GAINS> 4,054
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 456
<NET-CHANGE-IN-ASSETS> 25,358
<ACCUMULATED-NII-PRIOR> 626,868
<ACCUMULATED-GAINS-PRIOR> 4,803,720
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 10,377,627
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 12,765,654
<AVERAGE-NET-ASSETS> 141,371
<PER-SHARE-NAV-BEGIN> 12.65
<PER-SHARE-NII> 0.25
<PER-SHARE-GAIN-APPREC> 2.22
<PER-SHARE-DIVIDEND> (0.26)
<PER-SHARE-DISTRIBUTIONS> (0.39)
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 14.47
<EXPENSE-RATIO> 1.10
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from The
MassMutual Institutional Funds, Inc. form N-SAR for the year ended December 31,
1996 and is qualified in its entirety by reference to such financial statements.
</LEGEND>
<SERIES>
<NUMBER> 53
<NAME> Value Equity Fund, Class 3
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 1,768,842,158
<INVESTMENTS-AT-VALUE> 2,480,700,084
<RECEIVABLES> 9,176,728
<ASSETS-OTHER> 190
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 2,489,877,002
<PAYABLE-FOR-SECURITIES> 481,850
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 3,186,917
<TOTAL-LIABILITIES> 3,668,767
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 1,759,761,092
<SHARES-COMMON-STOCK> 10,793
<SHARES-COMMON-PRIOR> 10,301
<ACCUMULATED-NII-CURRENT> 410,862
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 14,178,355
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 711,857,926
<NET-ASSETS> 156,351
<DIVIDEND-INCOME> 4,149
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 1,065
<NET-INVESTMENT-INCOME> 3,084
<REALIZED-GAINS-CURRENT> 4,571
<APPREC-INCREASE-CURRENT> 18,305
<NET-CHANGE-FROM-OPS> 25,960
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 3,152
<DISTRIBUTIONS-OF-GAINS> 4,061
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 492
<NET-CHANGE-IN-ASSETS> 25,960
<ACCUMULATED-NII-PRIOR> 626,868
<ACCUMULATED-GAINS-PRIOR> 4,803,720
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 10,377,627
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 12,765,654
<AVERAGE-NET-ASSETS> 141,951
<PER-SHARE-NAV-BEGIN> 12.66
<PER-SHARE-NII> 0.30
<PER-SHARE-GAIN-APPREC> 2.23
<PER-SHARE-DIVIDEND> (0.31)
<PER-SHARE-DISTRIBUTIONS> (0.39)
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 14.49
<EXPENSE-RATIO> 0.75
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from The
MassMutual Institutional Funds, Inc. form N-SAR for the year ended December 31,
1996 and is qualified in its entirety by reference to such financial statements.
</LEGEND>
<SERIES>
<NUMBER> 54
<NAME> Value Equity Fund, Class 4
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 1,768,842,158
<INVESTMENTS-AT-VALUE> 2,480,700,084
<RECEIVABLES> 9,176,728
<ASSETS-OTHER> 190
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 2,489,877,002
<PAYABLE-FOR-SECURITIES> 481,850
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 3,186,917
<TOTAL-LIABILITIES> 3,668,767
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 1,759,761,092
<SHARES-COMMON-STOCK> 171,928,663
<SHARES-COMMON-PRIOR> 168,233,242
<ACCUMULATED-NII-CURRENT> 410,862
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 14,178,355
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 711,857,926
<NET-ASSETS> 2,485,742,831
<DIVIDEND-INCOME> 67,387,881
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 11,683,062
<NET-INVESTMENT-INCOME> 55,704,819
<REALIZED-GAINS-CURRENT> 74,026,915
<APPREC-INCREASE-CURRENT> 296,400,180
<NET-CHANGE-FROM-OPS> 426,131,914
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 55,920,646
<DISTRIBUTIONS-OF-GAINS> 64,653,761
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 42,761,147
<NUMBER-OF-SHARES-REDEEMED> 47,300,940
<SHARES-REINVESTED> 8,235,214
<NET-CHANGE-IN-ASSETS> 360,494,426
<ACCUMULATED-NII-PRIOR> 626,868
<ACCUMULATED-GAINS-PRIOR> 4,803,720
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 10,377,627
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 12,765,654
<AVERAGE-NET-ASSETS> 2,305,715,939
<PER-SHARE-NAV-BEGIN> 12.63
<PER-SHARE-NII> 0.34
<PER-SHARE-GAIN-APPREC> 2.22
<PER-SHARE-DIVIDEND> (0.34)
<PER-SHARE-DISTRIBUTIONS> (0.39)
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 14.46
<EXPENSE-RATIO> 0.51
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from The
MassMutual Institutional Funds, Inc. form N-SAR for the year ended December 31,
1996 and is qualified in its entirety by reference to such financial statements.
</LEGEND>
<SERIES>
<NUMBER> 11
<NAME> Prime Fund, Class 1
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 260,002,847
<INVESTMENTS-AT-VALUE> 259,994,759
<RECEIVABLES> 976,836
<ASSETS-OTHER> 1,293
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 260,972,888
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1,911,407
<TOTAL-LIABILITIES> 1,911,407
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 258,996,044
<SHARES-COMMON-STOCK> 727
<SHARES-COMMON-PRIOR> 698
<ACCUMULATED-NII-CURRENT> 80,676
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (7,151)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (8,088)
<NET-ASSETS> 109,724
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 6,040
<OTHER-INCOME> 0
<EXPENSES-NET> 1,772
<NET-INVESTMENT-INCOME> 4,268
<REALIZED-GAINS-CURRENT> (2)
<APPREC-INCREASE-CURRENT> 11
<NET-CHANGE-FROM-OPS> 4,276
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 4,288
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 28
<NET-CHANGE-IN-ASSETS> 4,276
<ACCUMULATED-NII-PRIOR> 132,953
<ACCUMULATED-GAINS-PRIOR> (2,083)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1,150,292
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,410,328
<AVERAGE-NET-ASSETS> 107,583
<PER-SHARE-NAV-BEGIN> 151.05
<PER-SHARE-NII> 6.09
<PER-SHARE-GAIN-APPREC> 0.03
<PER-SHARE-DIVIDEND> (6.14)
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 151.03
<EXPENSE-RATIO> 1.65
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from The
MassMutual Institutional Funds, Inc. form N-SAR for the year ended December 31,
1996 and is qualified in its entirety by reference to such financial statements.
</LEGEND>
<SERIES>
<NUMBER> 12
<NAME> Prime Fund, Class 2
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 260,002,847
<INVESTMENTS-AT-VALUE> 259,994,759
<RECEIVABLES> 976,836
<ASSETS-OTHER> 1,293
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 260,972,888
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1,911,407
<TOTAL-LIABILITIES> 1,911,407
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 258,996,044
<SHARES-COMMON-STOCK> 734
<SHARES-COMMON-PRIOR> 702
<ACCUMULATED-NII-CURRENT> 80,676
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (7,151)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (8,088)
<NET-ASSETS> 111,039
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 6,095
<OTHER-INCOME> 0
<EXPENSES-NET> 1,191
<NET-INVESTMENT-INCOME> 4,904
<REALIZED-GAINS-CURRENT> (2)
<APPREC-INCREASE-CURRENT> 11
<NET-CHANGE-FROM-OPS> 4,913
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 4,922
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 33
<NET-CHANGE-IN-ASSETS> 4,913
<ACCUMULATED-NII-PRIOR> 132,953
<ACCUMULATED-GAINS-PRIOR> (2,083)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1,150,292
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,410,328
<AVERAGE-NET-ASSETS> 108,572
<PER-SHARE-NAV-BEGIN> 151.24
<PER-SHARE-NII> 6.96
<PER-SHARE-GAIN-APPREC> 0.04
<PER-SHARE-DIVIDEND> (7.01)
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 151.23
<EXPENSE-RATIO> 1.10
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from The
MassMutual Institutional Funds, Inc. form N-SAR for the year ended December 31,
1996 and is qualified in its entirety by reference to such financial statements.
</LEGEND>
<SERIES>
<NUMBER> 13
<NAME> Prime Fund, Class 3
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 260,002,847
<INVESTMENTS-AT-VALUE> 259,994,759
<RECEIVABLES> 976,836
<ASSETS-OTHER> 1,293
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 260,972,888
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1,911,407
<TOTAL-LIABILITIES> 1,911,407
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 258,996,044
<SHARES-COMMON-STOCK> 738
<SHARES-COMMON-PRIOR> 703
<ACCUMULATED-NII-CURRENT> 80,676
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (7,151)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (8,088)
<NET-ASSETS> 111,694
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 6,120
<OTHER-INCOME> 0
<EXPENSES-NET> 817
<NET-INVESTMENT-INCOME> 5,303
<REALIZED-GAINS-CURRENT> (2)
<APPREC-INCREASE-CURRENT> 11
<NET-CHANGE-FROM-OPS> 5,312
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 5,335
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 35
<NET-CHANGE-IN-ASSETS> 5,312
<ACCUMULATED-NII-PRIOR> 132,953
<ACCUMULATED-GAINS-PRIOR> (2,083)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1,150,292
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,410,328
<AVERAGE-NET-ASSETS> 109,023
<PER-SHARE-NAV-BEGIN> 151.32
<PER-SHARE-NII> 7.51
<PER-SHARE-GAIN-APPREC> 0.05
<PER-SHARE-DIVIDEND> (7.59)
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 151.29
<EXPENSE-RATIO> 0.75
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from The
MassMutual Institutional Funds, Inc. form N-SAR for the year ended December 31,
1996 and is qualified in its entirety by reference to such financial statements.
</LEGEND>
<SERIES>
<NUMBER> 14
<NAME> Prime Fund, Class 4
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 260,002,847
<INVESTMENTS-AT-VALUE> 259,994,759
<RECEIVABLES> 976,836
<ASSETS-OTHER> 1,293
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 260,972,888
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1,911,407
<TOTAL-LIABILITIES> 1,911,407
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 258,996,044
<SHARES-COMMON-STOCK> 1,713,474
<SHARES-COMMON-PRIOR> 1,681,065
<ACCUMULATED-NII-CURRENT> 80,676
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (7,151)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (8,088)
<NET-ASSETS> 258,729,024
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 14,332,595
<OTHER-INCOME> 0
<EXPENSES-NET> 1,317,325
<NET-INVESTMENT-INCOME> 13,015,270
<REALIZED-GAINS-CURRENT> (5,061)
<APPREC-INCREASE-CURRENT> 11,415
<NET-CHANGE-FROM-OPS> 13,021,624
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 13,067,477
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 2,391,584
<NUMBER-OF-SHARES-REDEEMED> 2,445,697
<SHARES-REINVESTED> 86,522
<NET-CHANGE-IN-ASSETS> 4,792,873
<ACCUMULATED-NII-PRIOR> 132,953
<ACCUMULATED-GAINS-PRIOR> (2,083)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1,150,292
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,410,328
<AVERAGE-NET-ASSETS> 255,295,137
<PER-SHARE-NAV-BEGIN> 151.06
<PER-SHARE-NII> 7.85
<PER-SHARE-GAIN-APPREC> 0.06
<PER-SHARE-DIVIDEND> (7.97)
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 151.00
<EXPENSE-RATIO> 0.52
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from The
MassMutual Institutional Funds, Inc. form N-SAR for the year ended December 31,
1996 and is qualified in its entirety by reference to such financial statements.
</LEGEND>
<SERIES>
<NUMBER> 61
<NAME> Small CAP Value Equity Fund, Class 1
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 345,071,819
<INVESTMENTS-AT-VALUE> 456,481,387
<RECEIVABLES> 1,616,401
<ASSETS-OTHER> 16,575
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 458,114,363
<PAYABLE-FOR-SECURITIES> 124,059
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 621,921
<TOTAL-LIABILITIES> 745,980
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 340,794,078
<SHARES-COMMON-STOCK> 10,666
<SHARES-COMMON-PRIOR> 15,094
<ACCUMULATED-NII-CURRENT> 192,363
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 4,972,374
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 111,409,568
<NET-ASSETS> 142,813
<DIVIDEND-INCOME> 4,876
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 2,573
<NET-INVESTMENT-INCOME> 2,303
<REALIZED-GAINS-CURRENT> 5,689
<APPREC-INCREASE-CURRENT> 16,721
<NET-CHANGE-FROM-OPS> 24,713
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 1,430
<DISTRIBUTIONS-OF-GAINS> 3,230
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 4,373
<NUMBER-OF-SHARES-REDEEMED> 9,150
<SHARES-REINVESTED> 349
<NET-CHANGE-IN-ASSETS> (29,232)
<ACCUMULATED-NII-PRIOR> 99,330
<ACCUMULATED-GAINS-PRIOR> (33,140)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 2,298,488
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2,738,444
<AVERAGE-NET-ASSETS> 147,278
<PER-SHARE-NAV-BEGIN> 11.40
<PER-SHARE-NII> 0.21
<PER-SHARE-GAIN-APPREC> 2.23
<PER-SHARE-DIVIDEND> (0.14)
<PER-SHARE-DISTRIBUTIONS> (0.31)
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 13.39
<EXPENSE-RATIO> 1.75
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from The
MassMutual Institutional Funds, Inc. form N-SAR for the year ended December 31,
1996 and is qualified in its entirety by reference to such financial statements.
</LEGEND>
<SERIES>
<NUMBER> 62
<NAME> Small CAP Value Equity Fund, Class 2
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 345,071,819
<INVESTMENTS-AT-VALUE> 456,481,387
<RECEIVABLES> 1,616,401
<ASSETS-OTHER> 16,575
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 458,114,363
<PAYABLE-FOR-SECURITIES> 124,059
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 621,921
<TOTAL-LIABILITIES> 745,980
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 340,794,078
<SHARES-COMMON-STOCK> 10,767
<SHARES-COMMON-PRIOR> 10,347
<ACCUMULATED-NII-CURRENT> 192,363
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 4,972,374
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 111,409,568
<NET-ASSETS> 144,545
<DIVIDEND-INCOME> 3,839
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 1,527
<NET-INVESTMENT-INCOME> 2,312
<REALIZED-GAINS-CURRENT> 4,657
<APPREC-INCREASE-CURRENT> 19,237
<NET-CHANGE-FROM-OPS> 26,206
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 2,382
<DISTRIBUTIONS-OF-GAINS> 3,240
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 420
<NET-CHANGE-IN-ASSETS> 26,206
<ACCUMULATED-NII-PRIOR> 99,330
<ACCUMULATED-GAINS-PRIOR> (33,140)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 2,298,488
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2,738,444
<AVERAGE-NET-ASSETS> 127,503
<PER-SHARE-NAV-BEGIN> 11.44
<PER-SHARE-NII> 0.22
<PER-SHARE-GAIN-APPREC> 2.30
<PER-SHARE-DIVIDEND> (0.23)
<PER-SHARE-DISTRIBUTIONS> (0.31)
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 13.42
<EXPENSE-RATIO> 1.20
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from The
MassMutual Institutional Funds, Inc. form N-SAR for the year ended December 31,
1996 and is qualified in its entirety by reference to such financial statements.
</LEGEND>
<SERIES>
<NUMBER> 63
<NAME> Small CAP Value Equity Fund, Class 3
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 345,071,819
<INVESTMENTS-AT-VALUE> 456,481,387
<RECEIVABLES> 1,616,401
<ASSETS-OTHER> 16,575
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 458,114,363
<PAYABLE-FOR-SECURITIES> 124,059
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 621,921
<TOTAL-LIABILITIES> 745,980
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 340,794,078
<SHARES-COMMON-STOCK> 10,837
<SHARES-COMMON-PRIOR> 10,382
<ACCUMULATED-NII-CURRENT> 192,363
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 4,972,374
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 111,409,568
<NET-ASSETS> 145,609
<DIVIDEND-INCOME> 3,859
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 1,090
<NET-INVESTMENT-INCOME> 2,769
<REALIZED-GAINS-CURRENT> 4,685
<APPREC-INCREASE-CURRENT> 19,358
<NET-CHANGE-FROM-OPS> 26,812
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 2,845
<DISTRIBUTIONS-OF-GAINS> 3,251
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 455
<NET-CHANGE-IN-ASSETS> 26,812
<ACCUMULATED-NII-PRIOR> 99,330
<ACCUMULATED-GAINS-PRIOR> (33,140)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 2,298,488
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2,738,444
<AVERAGE-NET-ASSETS> 128,222
<PER-SHARE-NAV-BEGIN> 11.44
<PER-SHARE-NII> 0.27
<PER-SHARE-GAIN-APPREC> 2.31
<PER-SHARE-DIVIDEND> (0.27)
<PER-SHARE-DISTRIBUTIONS> (0.31)
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 13.44
<EXPENSE-RATIO> 0.85
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from The
MassMutual Institutional Funds, Inc. form N-SAR for the year ended December 31,
1996 and is qualified in its entirety by reference to such financial statements.
</LEGEND>
<SERIES>
<NUMBER> 64
<NAME> Small CAP Value Equity Fund, Class 4
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 345,071,819
<INVESTMENTS-AT-VALUE> 456,481,387
<RECEIVABLES> 1,616,401
<ASSETS-OTHER> 16,575
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 458,114,363
<PAYABLE-FOR-SECURITIES> 124,059
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 621,921
<TOTAL-LIABILITIES> 745,980
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 340,794,078
<SHARES-COMMON-STOCK> 34,013,589
<SHARES-COMMON-PRIOR> 33,253,093
<ACCUMULATED-NII-CURRENT> 192,363
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 4,972,374
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 111,409,568
<NET-ASSETS> 456,935,416
<DIVIDEND-INCOME> 12,557,494
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 2,550,949
<NET-INVESTMENT-INCOME> 10,006,545
<REALIZED-GAINS-CURRENT> 15,173,182
<APPREC-INCREASE-CURRENT> 63,095,779
<NET-CHANGE-FROM-OPS> 88,275,506
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 9,914,239
<DISTRIBUTIONS-OF-GAINS> 10,172,978
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 10,428,037
<NUMBER-OF-SHARES-REDEEMED> 11,168,365
<SHARES-REINVESTED> 1,500,824
<NET-CHANGE-IN-ASSETS> 76,537,068
<ACCUMULATED-NII-PRIOR> 99,330
<ACCUMULATED-GAINS-PRIOR> (33,140)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 2,298,488
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2,738,444
<AVERAGE-NET-ASSETS> 417,503,927
<PER-SHARE-NAV-BEGIN> 11.44
<PER-SHARE-NII> 0.31
<PER-SHARE-GAIN-APPREC> 2.29
<PER-SHARE-DIVIDEND> (0.30)
<PER-SHARE-DISTRIBUTIONS> (0.31)
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 13.43
<EXPENSE-RATIO> 0.61
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from The
MassMutual Institutional Funds, Inc. form N-SAR for the year ended December 31,
1996 and is qualified in its entirety by reference to such financial statements.
</LEGEND>
<SERIES>
<NUMBER> 41
<NAME> Balanced Fund, Class 1
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 456,772,419
<INVESTMENTS-AT-VALUE> 542,867,778
<RECEIVABLES> 21,887,135
<ASSETS-OTHER> 1,546
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 564,756,459
<PAYABLE-FOR-SECURITIES> 87,044
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 983,567
<TOTAL-LIABILITIES> 1,070,611
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 475,645,805
<SHARES-COMMON-STOCK> 10,838
<SHARES-COMMON-PRIOR> 15,043
<ACCUMULATED-NII-CURRENT> 26,102
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 1,920,993
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 86,092,948
<NET-ASSETS> 133,821
<DIVIDEND-INCOME> 6,053
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 2,290
<NET-INVESTMENT-INCOME> 3,763
<REALIZED-GAINS-CURRENT> 2,360
<APPREC-INCREASE-CURRENT> 9,196
<NET-CHANGE-FROM-OPS> 15,319
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 3,204
<DISTRIBUTIONS-OF-GAINS> 1,969
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 931
<NUMBER-OF-SHARES-REDEEMED> 5,552
<SHARES-REINVESTED> 416
<NET-CHANGE-IN-ASSETS> (39,222)
<ACCUMULATED-NII-PRIOR> 179,574
<ACCUMULATED-GAINS-PRIOR> 877,322
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 2,271,174
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2,789,789
<AVERAGE-NET-ASSETS> 139,036
<PER-SHARE-NAV-BEGIN> 11.50
<PER-SHARE-NII> 0.34
<PER-SHARE-GAIN-APPREC> 1.01
<PER-SHARE-DIVIDEND> (0.31)
<PER-SHARE-DISTRIBUTIONS> (0.19)
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 12.35
<EXPENSE-RATIO> 1.65
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from The
MassMutual Institutional Funds, Inc. form N-SAR for the year ended December 31,
1996 and is qualified in its entirety by reference to such financial statements.
</LEGEND>
<SERIES>
<NUMBER> 42
<NAME> Balanced Fund, Class 2
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 456,772,419
<INVESTMENTS-AT-VALUE> 542,867,778
<RECEIVABLES> 21,887,135
<ASSETS-OTHER> 1,546
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 564,756,459
<PAYABLE-FOR-SECURITIES> 87,044
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 983,567
<TOTAL-LIABILITIES> 1,070,611
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 475,645,805
<SHARES-COMMON-STOCK> 10,948
<SHARES-COMMON-PRIOR> 10,464
<ACCUMULATED-NII-CURRENT> 26,102
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 1,920,993
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 86,092,948
<NET-ASSETS> 135,418
<DIVIDEND-INCOME> 5,519
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 1,394
<NET-INVESTMENT-INCOME> 4,125
<REALIZED-GAINS-CURRENT> 2,230
<APPREC-INCREASE-CURRENT> 8,395
<NET-CHANGE-FROM-OPS> 14,750
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 4,068
<DISTRIBUTIONS-OF-GAINS> 1,970
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 484
<NET-CHANGE-IN-ASSETS> 14,750
<ACCUMULATED-NII-PRIOR> 179,574
<ACCUMULATED-GAINS-PRIOR> 877,322
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 2,271,174
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2,789,789
<AVERAGE-NET-ASSETS> 127,006
<PER-SHARE-NAV-BEGIN> 11.53
<PER-SHARE-NII> 0.39
<PER-SHARE-GAIN-APPREC> 1.03
<PER-SHARE-DIVIDEND> (0.39)
<PER-SHARE-DISTRIBUTIONS> (0.19)
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 12.37
<EXPENSE-RATIO> 1.10
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from The
MassMutual Institutional Funds, Inc. form N-SAR for the year ended December 31,
1996 and is qualified in its entirety by reference to such financial statements.
</LEGEND>
<SERIES>
<NUMBER> 43
<NAME> Balanced Fund, Class 3
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 456,772,419
<INVESTMENTS-AT-VALUE> 542,867,778
<RECEIVABLES> 21,887,135
<ASSETS-OTHER> 1,546
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 564,756,459
<PAYABLE-FOR-SECURITIES> 87,044
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 983,567
<TOTAL-LIABILITIES> 1,070,611
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 475,645,805
<SHARES-COMMON-STOCK> 10,994
<SHARES-COMMON-PRIOR> 10,473
<ACCUMULATED-NII-CURRENT> 26,102
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 1,920,993
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 86,092,948
<NET-ASSETS> 136,218
<DIVIDEND-INCOME> 5,542
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 956
<NET-INVESTMENT-INCOME> 4,586
<REALIZED-GAINS-CURRENT> 2,239
<APPREC-INCREASE-CURRENT> 8,433
<NET-CHANGE-FROM-OPS> 15,258
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 4,538
<DISTRIBUTIONS-OF-GAINS> 1,972
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 521
<NET-CHANGE-IN-ASSETS> 15,258
<ACCUMULATED-NII-PRIOR> 179,574
<ACCUMULATED-GAINS-PRIOR> 877,322
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 2,271,174
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2,789,789
<AVERAGE-NET-ASSETS> 127,536
<PER-SHARE-NAV-BEGIN> 11.55
<PER-SHARE-NII> 0.44
<PER-SHARE-GAIN-APPREC> 1.02
<PER-SHARE-DIVIDEND> (0.43)
<PER-SHARE-DISTRIBUTIONS> (0.19)
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 12.39
<EXPENSE-RATIO> 0.75
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from The
MassMutual Institutional Funds, Inc. form N-SAR for the year ended December 31,
1996 and is qualified in its entirety by reference to such financial statements.
</LEGEND>
<SERIES>
<NUMBER> 44
<NAME> Balanced Fund, Class 4
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 456,772,419
<INVESTMENTS-AT-VALUE> 542,867,778
<RECEIVABLES> 21,887,135
<ASSETS-OTHER> 1,546
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 564,756,459
<PAYABLE-FOR-SECURITIES> 87,044
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 983,567
<TOTAL-LIABILITIES> 1,070,611
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 475,645,805
<SHARES-COMMON-STOCK> 45,632,444
<SHARES-COMMON-PRIOR> 39,690,301
<ACCUMULATED-NII-CURRENT> 26,102
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 1,920,993
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 86,092,948
<NET-ASSETS> 563,280,391
<DIVIDEND-INCOME> 21,917,233
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 2,582,078
<NET-INVESTMENT-INCOME> 19,335,155
<REALIZED-GAINS-CURRENT> 8,878,977
<APPREC-INCREASE-CURRENT> 33,082,821
<NET-CHANGE-FROM-OPS> 61,296,953
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 19,441,756
<DISTRIBUTIONS-OF-GAINS> 7,883,759
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 16,529,257
<NUMBER-OF-SHARES-REDEEMED> 12,780,860
<SHARES-REINVESTED> 2,193,746
<NET-CHANGE-IN-ASSETS> 106,507,531
<ACCUMULATED-NII-PRIOR> 179,574
<ACCUMULATED-GAINS-PRIOR> 877,322
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 2,271,174
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2,789,789
<AVERAGE-NET-ASSETS> 504,311,686
<PER-SHARE-NAV-BEGIN> 11.51
<PER-SHARE-NII> 0.46
<PER-SHARE-GAIN-APPREC> 1.02
<PER-SHARE-DIVIDEND> (0.46)
<PER-SHARE-DISTRIBUTIONS> (0.19)
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 12.34
<EXPENSE-RATIO> 0.51
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from The
MassMutual Institutional Funds, Inc. form N-SAR for the year ended December 31,
1996 and is qualified in its entirety by reference to such financial statements.
</LEGEND>
<SERIES>
<NUMBER> 71
<NAME> International Equity Fund, Class 1
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 309,944,622
<INVESTMENTS-AT-VALUE> 357,237,341
<RECEIVABLES> 3,209,507
<ASSETS-OTHER> 4,987,097
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 365,433,945
<PAYABLE-FOR-SECURITIES> 6,371,010
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 2,411,123
<TOTAL-LIABILITIES> 8,782,133
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 320,990,580
<SHARES-COMMON-STOCK> 10,176
<SHARES-COMMON-PRIOR> 11,708
<ACCUMULATED-NII-CURRENT> 113,978
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (12,355,482)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 47,902,736
<NET-ASSETS> 112,681
<DIVIDEND-INCOME> 1,921
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 2,524
<NET-INVESTMENT-INCOME> (603)
<REALIZED-GAINS-CURRENT> 4,628
<APPREC-INCREASE-CURRENT> 11,747
<NET-CHANGE-FROM-OPS> 15,772
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 1,057
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 5,377
<NUMBER-OF-SHARES-REDEEMED> 7,009
<SHARES-REINVESTED> 100
<NET-CHANGE-IN-ASSETS> 1,038
<ACCUMULATED-NII-PRIOR> (215,389)
<ACCUMULATED-GAINS-PRIOR> (17,063,339)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 2,398,114
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 3,051,454
<AVERAGE-NET-ASSETS> 117,494
<PER-SHARE-NAV-BEGIN> 9.54
<PER-SHARE-NII> (0.07)
<PER-SHARE-GAIN-APPREC> 1.70
<PER-SHARE-DIVIDEND> (0.10)
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 11.07
<EXPENSE-RATIO> 2.15
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from The
MassMutual Institutional Funds, Inc. form N-SAR for the year ended December 31,
1996 and is qualified in its entirety by reference to such financial statements.
</LEGEND>
<SERIES>
<NUMBER> 72
<NAME> International Equity Fund, Class 2
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 309,944,622
<INVESTMENTS-AT-VALUE> 357,237,341
<RECEIVABLES> 3,209,507
<ASSETS-OTHER> 4,987,097
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 365,433,945
<PAYABLE-FOR-SECURITIES> 6,371,010
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 2,411,123
<TOTAL-LIABILITIES> 8,782,133
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 320,990,580
<SHARES-COMMON-STOCK> 10,281
<SHARES-COMMON-PRIOR> 10,120
<ACCUMULATED-NII-CURRENT> 113,978
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (12,355,482)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 47,902,736
<NET-ASSETS> 114,019
<DIVIDEND-INCOME> 1,684
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 1,668
<NET-INVESTMENT-INCOME> 16
<REALIZED-GAINS-CURRENT> 4,134
<APPREC-INCREASE-CURRENT> 13,151
<NET-CHANGE-FROM-OPS> 17,301
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 1,741
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 161
<NET-CHANGE-IN-ASSETS> 17,250
<ACCUMULATED-NII-PRIOR> (215,389)
<ACCUMULATED-GAINS-PRIOR> (17,063,339)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 2,398,114
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 3,051,454
<AVERAGE-NET-ASSETS> 104,334
<PER-SHARE-NAV-BEGIN> 9.56
<PER-SHARE-NII> 0.00
<PER-SHARE-GAIN-APPREC> 1.70
<PER-SHARE-DIVIDEND> (0.17)
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 11.09
<EXPENSE-RATIO> 1.60
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from The
MassMutual Institutional Funds, Inc. form N-SAR for the year ended December 31,
1996 and is qualified in its entirety by reference to such financial statements.
</LEGEND>
<SERIES>
<NUMBER> 73
<NAME> International Equity Fund, Class 3
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 309,944,622
<INVESTMENTS-AT-VALUE> 357,237,341
<RECEIVABLES> 3,209,507
<ASSETS-OTHER> 4,987,097
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 365,433,945
<PAYABLE-FOR-SECURITIES> 6,371,010
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 2,411,123
<TOTAL-LIABILITIES> 8,782,133
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 320,990,580
<SHARES-COMMON-STOCK> 10,315
<SHARES-COMMON-PRIOR> 10,129
<ACCUMULATED-NII-CURRENT> 113,978
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (12,355,482)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 47,902,736
<NET-ASSETS> 114,468
<DIVIDEND-INCOME> 1,688
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 1,410
<NET-INVESTMENT-INCOME> 278
<REALIZED-GAINS-CURRENT> 4,144
<APPREC-INCREASE-CURRENT> 12,486
<NET-CHANGE-FROM-OPS> 16,908
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 2,014
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 186
<NET-CHANGE-IN-ASSETS> 17,560
<ACCUMULATED-NII-PRIOR> (215,389)
<ACCUMULATED-GAINS-PRIOR> (17,063,339)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 2,398,114
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 3,051,454
<AVERAGE-NET-ASSETS> 104,615
<PER-SHARE-NAV-BEGIN> 9.57
<PER-SHARE-NII> 0.03
<PER-SHARE-GAIN-APPREC> 1.70
<PER-SHARE-DIVIDEND> (0.20)
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 11.10
<EXPENSE-RATIO> 1.35
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from The
MassMutual Institutional Funds, Inc. form N-SAR for the year ended December 31,
1996 and is qualified in its entirety by reference to such financial statements.
</LEGEND>
<SERIES>
<NUMBER> 74
<NAME> International Equity Fund, Class 4
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 309,944,622
<INVESTMENTS-AT-VALUE> 357,237,341
<RECEIVABLES> 3,209,507
<ASSETS-OTHER> 4,987,097
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 365,433,945
<PAYABLE-FOR-SECURITIES> 6,371,010
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 2,411,123
<TOTAL-LIABILITIES> 8,782,133
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 320,990,580
<SHARES-COMMON-STOCK> 32,070,618
<SHARES-COMMON-PRIOR> 23,044,249
<ACCUMULATED-NII-CURRENT> 113,978
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (12,355,482)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 47,902,736
<NET-ASSETS> 356,310,644
<DIVIDEND-INCOME> 4,500,395
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 2,849,083
<NET-INVESTMENT-INCOME> 1,651,312
<REALIZED-GAINS-CURRENT> 10,719,446
<APPREC-INCREASE-CURRENT> 36,493,290
<NET-CHANGE-FROM-OPS> 48,864,048
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 7,341,319
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 14,964,804
<NUMBER-OF-SHARES-REDEEMED> 6,611,341
<SHARES-REINVESTED> 672,906
<NET-CHANGE-IN-ASSETS> 135,592,376
<ACCUMULATED-NII-PRIOR> (215,389)
<ACCUMULATED-GAINS-PRIOR> (17,063,339)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 2,398,114
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 3,051,454
<AVERAGE-NET-ASSETS> 281,804,600
<PER-SHARE-NAV-BEGIN> 9.58
<PER-SHARE-NII> 0.06
<PER-SHARE-GAIN-APPREC> 1.71
<PER-SHARE-DIVIDEND> (0.24)
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 11.11
<EXPENSE-RATIO> 1.00
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from The
MassMutual Institutional Funds, Inc. form N-SAR for the year ended December 31,
1996 and is qualified in its entirety by reference to such financial statements.
</LEGEND>
<SERIES>
<NUMBER> 21
<NAME> Short Term Bond Fund, Class 1
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 142,542,031
<INVESTMENTS-AT-VALUE> 143,559,760
<RECEIVABLES> 2,357,708
<ASSETS-OTHER> 1,576
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 145,919,044
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 385,635
<TOTAL-LIABILITIES> 385,635
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 144,792,097
<SHARES-COMMON-STOCK> 11,415
<SHARES-COMMON-PRIOR> 10,896
<ACCUMULATED-NII-CURRENT> 18,783
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (295,200)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 1,017,729
<NET-ASSETS> 115,863
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 7,341
<OTHER-INCOME> 0
<EXPENSES-NET> 1,858
<NET-INVESTMENT-INCOME> 5,483
<REALIZED-GAINS-CURRENT> (222)
<APPREC-INCREASE-CURRENT> (387)
<NET-CHANGE-FROM-OPS> 4,874
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 5,226
<DISTRIBUTIONS-OF-GAINS> 59
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 519
<NET-CHANGE-IN-ASSETS> 4,874
<ACCUMULATED-NII-PRIOR> 68,862
<ACCUMULATED-GAINS-PRIOR> 71,465
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 606,206
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 749,145
<AVERAGE-NET-ASSETS> 112,826
<PER-SHARE-NAV-BEGIN> 10.19
<PER-SHARE-NII> 0.50
<PER-SHARE-GAIN-APPREC> (0.05)
<PER-SHARE-DIVIDEND> (0.48)
<PER-SHARE-DISTRIBUTIONS> (0.01)
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 10.15
<EXPENSE-RATIO> 1.65
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from The
MassMutual Institutional Funds, Inc. form N-SAR for the year ended December 31,
1996 and is qualified in its entirety by reference to such financial statements.
</LEGEND>
<SERIES>
<NUMBER> 22
<NAME> Short Term Bond Fund, Class 2
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 142,542,031
<INVESTMENTS-AT-VALUE> 143,559,760
<RECEIVABLES> 2,357,708
<ASSETS-OTHER> 1,576
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 145,919,044
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 385,635
<TOTAL-LIABILITIES> 385,635
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 144,792,097
<SHARES-COMMON-STOCK> 11,544
<SHARES-COMMON-PRIOR> 10,960
<ACCUMULATED-NII-CURRENT> 18,783
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (295,200)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 1,017,729
<NET-ASSETS> 117,250
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 7,409
<OTHER-INCOME> 0
<EXPENSES-NET> 1,249
<NET-INVESTMENT-INCOME> 6,160
<REALIZED-GAINS-CURRENT> (224)
<APPREC-INCREASE-CURRENT> (388)
<NET-CHANGE-FROM-OPS> 5,548
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 5,892
<DISTRIBUTIONS-OF-GAINS> 59
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 584
<NET-CHANGE-IN-ASSETS> 5,548
<ACCUMULATED-NII-PRIOR> 68,862
<ACCUMULATED-GAINS-PRIOR> 71,465
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 606,206
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 749,145
<AVERAGE-NET-ASSETS> 113,863
<PER-SHARE-NAV-BEGIN> 10.19
<PER-SHARE-NII> 0.56
<PER-SHARE-GAIN-APPREC> (0.04)
<PER-SHARE-DIVIDEND> (0.54)
<PER-SHARE-DISTRIBUTIONS> (0.01)
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 10.16
<EXPENSE-RATIO> 1.10
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from The
MassMutual Institutional Funds, Inc. form N-SAR for the year ended December 31,
1996 and is qualified in its entirety by reference to such financial statements.
</LEGEND>
<SERIES>
<NUMBER> 23
<NAME> Short Term Bond Fund, Class 3
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 142,542,031
<INVESTMENTS-AT-VALUE> 143,559,760
<RECEIVABLES> 2,357,708
<ASSETS-OTHER> 1,576
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 145,919,044
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 385,635
<TOTAL-LIABILITIES> 385,635
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 144,792,097
<SHARES-COMMON-STOCK> 11,599
<SHARES-COMMON-PRIOR> 10,974
<ACCUMULATED-NII-CURRENT> 18,783
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (295,200)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 1,017,729
<NET-ASSETS> 118,001
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 7,444
<OTHER-INCOME> 0
<EXPENSES-NET> 858
<NET-INVESTMENT-INCOME> 6,586
<REALIZED-GAINS-CURRENT> (225)
<APPREC-INCREASE-CURRENT> (387)
<NET-CHANGE-FROM-OPS> 5,974
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 6,322
<DISTRIBUTIONS-OF-GAINS> 59
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 625
<NET-CHANGE-IN-ASSETS> 5,974
<ACCUMULATED-NII-PRIOR> 68,862
<ACCUMULATED-GAINS-PRIOR> 71,465
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 606,206
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 749,145
<AVERAGE-NET-ASSETS> 114,393
<PER-SHARE-NAV-BEGIN> 10.21
<PER-SHARE-NII> 0.60
<PER-SHARE-GAIN-APPREC> (0.05)
<PER-SHARE-DIVIDEND> (0.58)
<PER-SHARE-DISTRIBUTIONS> (0.01)
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 10.17
<EXPENSE-RATIO> 0.75
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from The
MassMutual Institutional Funds, Inc. form N-SAR for the year ended December 31,
1996 and is qualified in its entirety by reference to such financial statements.
</LEGEND>
<SERIES>
<NUMBER> 24
<NAME> Short Term Bond Fund, Class 4
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 142,542,031
<INVESTMENTS-AT-VALUE> 143,559,760
<RECEIVABLES> 2,357,708
<ASSETS-OTHER> 1,576
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 145,919,044
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 385,635
<TOTAL-LIABILITIES> 385,635
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 144,792,097
<SHARES-COMMON-STOCK> 14,365,202
<SHARES-COMMON-PRIOR> 12,113,356
<ACCUMULATED-NII-CURRENT> 18,783
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (295,200)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 1,017,729
<NET-ASSETS> 145,182,295
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 8,760,981
<OTHER-INCOME> 0
<EXPENSES-NET> 697,389
<NET-INVESTMENT-INCOME> 8,063,592
<REALIZED-GAINS-CURRENT> (274,174)
<APPREC-INCREASE-CURRENT> (383,540)
<NET-CHANGE-FROM-OPS> 7,405,878
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 8,134,815
<DISTRIBUTIONS-OF-GAINS> 71,288
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 6,074,656
<NUMBER-OF-SHARES-REDEEMED> 4,631,745
<SHARES-REINVESTED> 808,935
<NET-CHANGE-IN-ASSETS> 22,278,139
<ACCUMULATED-NII-PRIOR> 68,862
<ACCUMULATED-GAINS-PRIOR> 71,465
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 606,206
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 749,145
<AVERAGE-NET-ASSETS> 134,371,356
<PER-SHARE-NAV-BEGIN> 10.15
<PER-SHARE-NII> 0.60
<PER-SHARE-GAIN-APPREC> (0.03)
<PER-SHARE-DIVIDEND> (0.60)
<PER-SHARE-DISTRIBUTIONS> (0.01)
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 10.11
<EXPENSE-RATIO> 0.52
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00
</TABLE>
