[Front cover]
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State Street Research
Intermediate Bond Fund
Semiannual Report
October 31, 1995
[Graphic-fisherman by stream]
What's Inside
Investment Update:
About the Fund,
economy and markets
Fund Information:
Facts and figures
Plus, Complete Portfolio Holdings
and Financial Statements
<PAGE>
State Street Research Intermediate Bond Fund
Investment Update
Investment Environment
The Economy
[bullet] Economic growth has been moderate, and inflation remains low.
[bullet] Consumer debt levels are higher, which could lead to lower consumer
spending.
[bullet] The Federal Reserve cut interest rates by one-quarter point on July
6, 1995. As of October 31, 1995, there had been no further action
taken by the Fed.
The Markets
[bullet] Bonds continued their outstanding performance. The Lehman Brothers
Intermediate Government/Corporate Bond Index provided a total return
of +6.60% for the six months ended October 31, 1995.(1)
[bullet] Interest rates have fallen sharply. Yields on 30-year U.S. Treasury
bonds were 7.37% on October 31, 1995, compared to 7.99% on April 29,
1995.
[bullet] Stocks have also performed well. The S&P 500 provided a total return
of +14.44% for the six months ended October 31, 1995.(1)
The Fund
Over the past six months
[bullet] For the six months ended October 31, 1995, Intermediate Bond Fund's
Class A shares provided a total return of +6.25% (does not reflect
sales charge)(2). The average total return for 167 funds in Lipper
Analytical Services' Intermediate Investment Grade Debt Funds
category was +7.36% (does not reflect sales charge).
[bullet] The Fund's performance did not keep pace with the average for its
investment category. Our strategy of diversifying into mortgage
securities hurt performance somewhat because U.S. Treasury
securities performed better in this environment of falling interest
rates.
Current strategy
[bullet] The Fund's portfolio is currently divided among U.S. Treasury
securities, mortgage securities, corporate bonds and international
government bonds.
[bullet] The Fund's duration (a measure of how sensitive the Fund is to
interest rate changes) is slightly longer than the market average.
This will benefit the Fund if interest rates continue to fall, but
hurt the Fund should rates rise.
[bullet] The Fund focuses on high-quality bonds. On October 31, 1995, the
average quality of the bonds in the portfolio was AAA- (as rated by
Standard & Poor's or equivalent).
(1) The Standard & Poor's Composite Index (S&P 500) includes 500 widely
traded common stocks and is a commonly used measure of U.S. stock
performance. The Lehman Brothers Intermediate Government/Corporate Bond Index
is a commonly used measure of bond market performance. The indices are
unmanaged and do not take sales charges into account. Direct investment in
the indices is not possible; results are for illustrative purposes only.
(2) +6.25% for Class C shares.
(3) All returns represent past performance, which is no guarantee of future
results. The investment return and principal value of an investment made in
the Fund will fluctuate and shares, when redeemed, may be worth more or less
than their original cost. All returns assume reinvestment of capital gain
distributions and income dividends.(4) "A" share returns reflect the maximum
4.5% sales charge. "C" shares, offered without a sales charge, are available
only to certain employee benefit plans and large institutions.
Fund Information (all data are for periods ended October 31, 1995, except
where otherwise noted)
SEC Average Annual Compound
Rates of Return for periods ended 9/30/95
(at maximum applicable sales charge)3,4
Life of Fund
(since 5/16/94) 1 year
- -------- ----------------- -------------------
Class A +4.56%/+3.33% +5.90%/+4.65%
- -------- ---------------- -----------------
Class C +8.37%/+7.13% +11.14%/+9.85%
Average Annual Compound Rates of Return for periods ended 10/31/95
(at maximum applicable sales charge)3,4
Life of Fund
(since 5/16/94) 1 year
- -------- ----------------- -------------------
Class A +5.08%/+3.85% +7.07%/+5.82%
- -------- ---------------- -----------------
Class C +8.68%/+7.45% +12.37%/+11.07%
SEC Yield
(as of October 31, 1995)
Class A 5.35%/4.53%
- -------- ----------
Class C 5.85%/4.99%
SEC yield is calculated according to Securities and Exchange
Commission requirements and is based on the net investment
income produced for the 30 days ended October 31, 1995.
Asset Allocation
(as of October 31, 1995, by percentage of net assets)
[Pie graph]
U.S. Treasury securities 53%
Corporate bonds 27%
Mortgage securities 13%
Foreign government bonds 2%
Cash 5%
Performance results for the Fund are increased by the Distributor's voluntary
reduction of fund fees and expenses related to the Fund. The first figure
reflects expense reduction; the second shows what results would have been
without subsidization.
<PAGE>
State Street Research Intermediate Bond Fund
Investment Portfolio
October 31, 1995 (Unaudited)
Principal Maturity Value
Amount Date (Note 1)
--------------------------------- ----------- --------- ------------
FIXED INCOME securities 95.5%
U.S. Treasury 53.0%
U.S. Treasury Bond, 12.00% $ 275,000 8/15/2013 $ 412,544
U.S. Treasury Note, 5.875% 1,300,000 5/31/1996 1,302,028
U.S. Treasury Note, 8.50% 1,525,000 5/15/1997 1,588,852
U.S. Treasury Note, 7.125% 725,000 9/30/1999 758,415
U.S. Treasury Note, 6.875% 1,175,000 3/31/2000 1,223,105
U.S. Treasury Note, 7.50% 900,000 11/15/2001 973,269
U.S. Treasury Note, 6.375% 475,000 8/15/2002 487,245
U.S. Treasury Note, 6.25% 775,000 2/15/2003 788,687
U.S. Treasury Note, 5.75% 1,025,000 8/15/2003 1,011,070
----------
8,545,215
----------
U.S. Agency 0.9%
Federal Home Loan Mortgage Corp.
Note, 7.25% 150,000 5/15/2002 153,070
----------
U.S. Agency Mortgage 12.6%
Federal Home Loan Mortgage Corp.
Gold, 6.50% 280,343 7/01/2008 278,240
Federal Home Loan Mortgage Corp.
Gold, 7.00% 243,249 6/01/2024 241,347
Federal Home Loan Mortgage Corp.
Gold, 7.50%+ 150,000 11/13/2025 151,594
Federal National Mortgage
Association REMIC Series
93-52-C, 5.00% 175,000 2/25/2001 172,921
Government National Mortgage
Association, 8.00% 305,010 5/15/2008 313,779
Government National Mortgage
Association, 6.50% 318,552 4/15/2009 317,456
Government National Mortgage
Association, 7.00% 103,516 1/15/2025 102,804
Government National Mortgage
Association, 7.00% 301,756 9/15/2025 299,680
Government National Mortgage
Association, 5.50%+ 75,000 12/21/2025 74,227
Government National Mortgage
Association, 6.00%+ 75,000 12/21/2025 75,070
----------
2,027,118
----------
Bank 3.3%
First Chicago Credit Master Trust
Series 1991-D, 8.40% 225,000 6/15/1998 227,813
NationsBank Master Trust Series
1995-1, 6.45% 150,000 4/15/2003 151,781
Standard Credit Card Master Trust
Series 1994-3A, 6.80% 150,000 4/07/2001 153,187
----------
532,781
----------
Canadian--Yankee 6.7%
British Columbia Hydroelectric
Authority Deb. Series FH,
15.50% $ 125,000 7/15/2011 $140,889
Hydro-Quebec Deb. Series FL,
13.25% 250,000 12/15/2013 307,565
Laidlaw Inc. Deb. 8.75% 75,000 4/15/2025 85,339
Province of Manitoba Global Note,
6.75% 75,000 3/01/2003 75,924
Province of Ontario Deb., 11.50% 175,000 3/10/2013 202,202
Province of Quebec, 8.80% 100,000 4/15/2003 112,019
Talisman Energy Deb., 7.125% 150,000 6/01/2007 151,914
----------
1,075,852
----------
Finance 12.7%
American General Finance Corp.
Note, 8.00% 250,000 2/15/2000 265,065
Beneficial Corp. Master Trust
Note, 8.17% 200,000 11/09/1999 212,780
Community Program Loan Trust
Series 1987 A-3, 4.50% 134,579 4/01/2002 133,149
Discover Credit Card Trust Series
1993 A, 6.25% 150,000 8/16/2000 150,656
Ford Credit Auto Loan Master
Trust Series 95-1, 6.50% 425,000 8/15/2000 429,250
General Electric Capital Corp.
Master Trust Note, 7.625% 175,000 7/24/1996 177,240
General Motors Acceptance Corp.
Master Trust Note, 7.85% 275,000 11/17/1997 284,031
Household Affinity Credit Card
Master Trust Series 1994- 1A,
6.025% 150,000 5/15/2001 149,718
Los Angeles County, CA Pension
Series 94-D, 6.65% 100,000 6/30/2003 100,225
Sears Credit Account Master Trust
Series 1995-2, 8.10% 125,000 6/15/2004 133,437
Tandy Master Trust Certificates
Series 1991-A, 8.25% 19,351 4/15/1999 19,400
----------
2,054,951
----------
The accompanying notes are an integral part of the financial statements.
2
<PAGE>
Principal Maturity Value
Amount Date (Note 1)
--------------------------------- ----------- --------- ------------
Foreign Government 1.7%
Danish
Krone
Kingdom of Denmark, 8.00% 750,000 3/15/2006 $ 138,085
Deutsche
Mark
Republic of Germany, 6.625% 100,000 7/09/2003 72,194
Italian
Lira
Republic of Italy, 10.00% 50,000,000 8/01/2003 29,119
Spanish
Peseta
Government of Spain, 10.90% 5,000,000 8/30/2003 41,178
----------
280,576
----------
Industrial 3.2%
Chevron Corp. Profit Sharing
Amortized Note, 8.11% $125,000 12/01/2004 135,910
Columbia/HCA Healthcare Corp.
Master Trust Note, 6.87% 125,000 9/15/2003 125,465
Electronic Data Systems Corp.
6.85%++ 250,000 5/15/2000 255,385
----------
516,760
----------
Mortgage 0.5%
American Southwest Financial
Services Corp. Series 94-C2,
8.00% 80,416 8/25/2010 82,175
----------
Trust Certificates 0.9%
Rural Electric Cooperative
Grantor Trust Certificates,
10.11% 125,000 12/15/2017 139,483
----------
Total Fixed Income Securities
(Cost $15,073,790) 15,407,981
----------
SHORT-TERM OBLIGATIONS 5.2%
American Express Credit Corp.,
5.75% $ 471,000 11/02/1995 $ 471,000
Ford Motor Credit Co., 5.66% 105,000 11/01/1995 105,000
Ford Motor Credit Co., 5.73% 254,000 11/13/1995 254,000
----------
Total Short-Term Obligations
(Cost $830,000) 830,000
----------
Total Investments (Cost
$15,903,790)--100.7% 16,237,981
Cash and Other Assets, Less
Liabilities--(0.7%) (107,734)
----------
Net Assets--100.0% $16,130,247
==========
Federal Income Tax Information:
At October 31, 1995, the net unrealized appreciation
of investments based on cost for Federal income
tax purposes of $15,912,853 was as follows:
Aggregate gross unrealized appreciation for all
investments in which there is an excess of value
over tax cost $374,663
Aggregate gross unrealized depreciation for all
investments in which there is an excess of tax
cost over value (49,535)
----------
$ 325,128
==========
+ Represents "TBA" (to be announced) purchase commitment to purchase
securities for a fixed unit price at a future date beyond customary
settlement time. Although the unit price has been established, the
principal value has not been finalized and may vary by no more than 2%.
++ Security restricted in accordance with Rule 144A under the Securities Act
of 1933, which allows for the resale of such securities among certain
qualified buyers. The cost and market value of the Rule 144A security
owned at October 31, 1995 was $249,803 and $255,385 (1.58% of net assets),
respectively.
Forward currency exchange contracts outstanding at October 31, 1995 are as
follows:
Unrealized
Total Contract Appreciation Delivery
Value Price (Depreciation) Date
- --------------------- ----------- --------- ----------- ---------
Sell Danish krone,
buy U.S. dollars 710,000 DKK .17960 DKK $(2,447) 11/16/95
Sell Deutsche mark,
buy U.S. dollars 192,200 DEM .67476 DEM (6,965) 11/16/95
Sell U.S. dollars,
buy Deutsche mark 97,300 DEM .67916 DEM 3,098 11/16/95
Sell Italian lira,
buy U.S. dollars 42,500,000 ITL .00061 ITL (550) 11/16/95
Sell Spanish peseta,
buy U.S. dollars 4,480,000 ESP .00789 ESP (1,307) 11/16/95
---------
$(8,171)
=========
The accompanying notes are an integral part of the financial statements.
3
<PAGE>
State Street Research intermediate Bond Fund
Statement of Assets and Liabilities
October 31, 1995 (Unaudited)Statement of Operations
For the six months ended October 31, 1995 (Unaudited)
Assets
Investments, at value (Cost $15,903,790) (Note 1) $16,237,981
Cash 61
Receivable for securities sold 499,259
Interest receivable 267,504
Receivable from Distributor (Note 3) 11,326
Receivable for open forward contracts 3,098
Receivable for fund shares sold 1,075
Deferred organization costs and other assets (Note 1) 69,501
----------
17,089,805
Liabilities
Payable for securities purchased 889,015
Payable for open forward contracts 11,269
Accrued trustees' fees (Note 2) 10,773
Accrued management fee (Note 2) 7,500
Accrued distribution fee (Note 5) 2,244
Accrued transfer agent and shareholder services (Note 2) 306
Other accrued expenses 38,451
----------
959,558
----------
$16,130,247
==========
Net Assets
Net Assets consist of:
Undistributed net investment income $ 262,137
Unrealized appreciation of investments 334,191
Unrealized depreciation of forward contracts and
foreign currency (8,107)
Accumulated net realized gain 100,131
Shares of beneficial interest 15,441,895
----------
$16,130,247
==========
Net Asset Value and redemption price per share of Class A
shares ($10,615,286 / 1,057,613 shares of beneficial
interest) $10.04
==========
Maximum Offering Price per share of Class A shares
($10.04 / .955) $10.51
==========
Net Asset Value, offering price and redemption price per
share of Class C shares ($5,514,961 / 549,307
shares of beneficial interest) $10.04
==========
Statement of Operations
For the six months ended October 31, 1995 (Unaudited)
Investment Income
Interest, net of foreign taxes of $721 $541,210
Expenses
Management fee (Note 2) 43,101
Custodian fee 33,980
Distribution fee--Class A (Note 5) 13,249
Report to shareholders 11,615
Amortization of organization costs (Note 1) 8,885
Registration fees 8,341
Audit fee 7,499
Trustees' fees (Note 2) 6,901
Legal fees 2,550
Transfer agent and shareholder services (Note 2) 918
Miscellaneous 1,788
-------
138,827
Expenses borne by the Distributor (Note 3) (66,804)
-------
72,023
-------
Net investment income 469,187
-------
Realized and Unrealized Gain (Loss)
on Investments, Forward Contracts
and Foreign Currency
Net realized gain on investments (Notes 1 and 4) 246,398
Net realized gain on forward contracts and foreign currency
(Note 1) 6,635
-------
Total net realized gain 253,033
-------
Net unrealized appreciation of investments 188,204
Net unrealized depreciation of forward contracts and foreign
currency (7,184)
-------
Total net unrealized apppreciation 181,020
-------
Net gain on investments, foreign currency and forward
contracts 434,053
-------
Net increase in net assets resulting from operations $903,240
=======
The accompanying notes are an integral part of the financial statements.
4
<PAGE>
State Street Research Intermediate Bond Fund
Statement of Changes in Net Assets
For the period
May 16, 1994
Six months ended (commencement of
October 31, 1995 operations) to
(Unaudited) April 30, 1995
--------------------------------- ----------------- -----------------
Increase (Decrease) in Net Assets
Operations:
Net investment income $ 469,187 $ 786,765
Net realized gain (loss) on
investments, forward contracts
and foreign currency* 253,033 (144,687)
Net unrealized appreciation of
investments, forward contracts
and foreign currency 181,020 145,064
---------------- ----------------
Net increase resulting from
operations 903,240 787,142
---------------- ----------------
Dividends from net investment
income:
Class A (232,675) (465,343)
Class C (126,002) (178,010)
---------------- ----------------
(358,677) (643,353)
---------------- ----------------
Net increase from fund share
transactions (Note 6) 1,626,002 13,815,893
---------------- ----------------
Total increase in net assets 2,170,565 13,959,682
Net Assets
Beginning of period 13,959,682 --
---------------- ----------------
End of period (including
undistributed net investment
income of $262,137 and
$151,627, respectively) $16,130,247 $13,959,682
================ ================
*Net realized gain (loss) for
Federal income tax
purposes (Note 1) $ 134,246 $ (37,239)
================ ================
Notes to Unaudited Financial Statements
October 31, 1995
Note 1
State Street Research Intermediate Bond Fund (the "Fund") is a series of
State Street Research Securities Trust (the "Trust"), which was organized as
a Massachusetts business trust in January, 1994 and is registered under the
Investment Company Act of 1940, as amended, as an open-end management
investment company. The Fund commenced operations in May, 1994. The Fund is
presently the only active series of the Trust, although the Trustees have the
authority to create an unlimited number of series.
The Fund is authorized to issue four classes of shares. Only Class A and
Class C shares are presently available for purchase. Class B and Class D
shares are not being offered at this time. Class A shares are subject to an
initial sales charge of up to 4.50% and an annual service fee of 0.25% of
average daily net assets. Class B shares will be subject to a contingent
deferred sales charge on certain redemptions made within five years of
purchase and pay annual distribution and service fees of 1.00%. Class B
shares automatically convert into Class A shares (which pay lower ongoing
expenses) at the end of eight years after the issuance of the Class B shares.
Class C shares are only offered to certain employee benefit plans and large
institutions. No sales charge is imposed at the time of purchase or
redemption of Class C shares. Class C shares do not pay any distribution or
service fees. Class D shares are subject to a contingent deferred sales
charge of 1.00% on any shares redeemed within one year of their purchase.
Class D shares also pay annual distribution and service fees of 1.00%. The
Fund's expenses are borne pro-rata by each class, except that each class
bears expenses, and has exclusive voting rights with respect to provisions of
the Plan of Distribution, related specifically to that class. The Trustees
declare separate dividends on each class of shares.
The following significant accounting policies are consistently followed by
the Fund in preparing its financial statements, and such policies are in
conformity with generally accepted accounting principles for investment
companies.
A. Investment Valuation
Securities are valued by a pricing service, which utilizes market
transactions, quotations from dealers, and various relationships among
securities in determining value. Short-term securities maturing within sixty
days are valued at amortized cost. Securities quoted in foreign currencies
are translated into U.S. dollars at the current exchange rate.
B. Security Transactions
Security transactions are accounted for on the trade date (date the order to
buy or sell is executed). Realized gains or losses are reported on the basis
of identified cost of securities delivered. Gains and losses that arise from
changes in exchange rates are not segregated from gains and losses that arise
from changes in market prices of investments.
The accompanying notes are an integral part of the financial statements.
5
<PAGE>
State Street Research Intermediate Bond Fund
C. Net Investment Income
Net investment income is determined daily and consists of interest accrued
and discount earned, less the estimated daily expenses of the Fund. Interest
income is accrued daily as earned. Discount on debt obligations is amortized
under the effective yield method.
D. Dividends
Dividends from net investment income are declared and paid or reinvested
quarterly. Net realized capital gains, if any, are distributed annually,
unless additional distributions are required for compliance with applicable
tax regulations.
Income dividends and capital gain distributions are determined in accordance
with Federal income tax regulations which may differ from generally accepted
accounting principles. The difference is primarily due to differing
treatments for foreign currency transactions and paydown gains and losses.
E. Federal Income Taxes
No provision for Federal income taxes is necessary because the Fund intends
to qualify under Subchapter M of the Internal Revenue Code and its policy is
to distribute all of its taxable income, including net realized capital
gains, within the prescribed time periods. At April 30, 1995, the Fund had a
capital loss carryforward of $37,239 available, to the extent provided in
regulations, to offset future capital gains, if any, which expires on April
30, 2003.
In order to meet certain excise tax distribution requirements under Section
4982 of the Internal Revenue Code, the Fund is required to measure and
distribute annually, if necessary, net capital gains realized during a
twelve-month period ending October 31. In this connection, the Fund is
permitted to defer into its next fiscal year any net capital losses incurred
between each November 1 and the end of its fiscal year. From November 1, 1994
through April 30, 1995, the Fund incurred net capital losses of approximately
$94,000 and intends to defer and treat such losses as arising in the fiscal
year ending April 30, 1996.
F. Deferred Organization Costs
Certain costs incurred in the organization and registration of the Fund were
capitalized and are being amortized under the straight-line method over a
period of five years.
G. Forward Contracts and Foreign Currencies
The Fund enters into forward foreign currency exchange contracts in order to
hedge its exposure to changes in foreign currency exchange rates on its
foreign portfolio holdings and to hedge certain purchase and sale commitments
denominated in foreign currencies. A forward foreign currency exchange
contract is an obligation by the Fund to purchase or sell a specific currency
at a future date, which may be any fixed number of days from the origination
date of the contract. Forward foreign currency exchange contracts establish
an exchange rate at a future date. These contracts are transferable in the
interbank market conducted directly between currency traders (usually large
commercial banks) and their customers. Risks may arise from the potential
inability of a counterparty to meet the terms of a contract and from
unanticipated movements in the value of foreign currencies relative to the
U.S. dollar. The aggregate principal amount of forward currency exchange
contracts is recorded in the Fund's accounts. All commitments are
marked-to-market at the applicable transaction rates resulting in unrealized
gains or losses. The Fund records realized gains or losses at the time the
forward contracts are extinguished by entry into a closing contract or by
delivery of the currency. Neither spot transactions nor forward currency
exchange contracts eliminate fluctuations in the prices of the Fund's
portfolio securities or in foreign exchange rates, or prevent loss if the
price of these securities should decline.
Note 2
The Trust and State Street Research & Management Company (the "Adviser"), an
indirect wholly owned subsidiary of Metropolitan Life Insurance Company
("Metropolitan"), have entered into an agreement under which the Adviser
earns monthly fees at an annual rate of 0.55% of the Fund's average daily net
assets. In consideration of these fees, the Adviser furnishes the Fund with
management, investment advisory, statistical and research facilities and
services. The Adviser also pays all salaries, rent and certain other expenses
of management. During the six months ended October 31, 1995, the fees
pursuant to such agreement amounted to $43,101.
State Street Research Shareholder Services, a division of State Street
Research Investment Services, Inc., the Trust's principal underwriter (the
"Distributor"), an indirect wholly owned subsidiary of Metropolitan, provides
certain shareholder services to the Fund such as responding to inquiries and
instructions from investors with respect to the purchase and redemption of
shares of the Fund. During the six months ended October 31, 1995, the amount
of such expenses was $688.
The fees of the Trustees not currently affiliated with the Adviser amounted
to $6,901 during the six months ended October 31, 1995.
Note 3
The Distributor and its affiliates may from time to time and in varying
amounts voluntarily assume some portion of fees or expenses relating to the
Fund. During the six months ended October 31, 1995, the amount of such
expenses assumed by the Distributor and its affiliates was $66,804.
Note 4
For the six months ended October 31, 1995, purchases and sales of securities,
exclusive of short-term obligations, aggregated $9,781,566 and $7,996,881
(including $8,970,286 and $7,203,205 of U.S. Government securities),
respectively.
6
<PAGE>
State Street Research Intermediate Bond Fund
Notes (cont'd)
Note 5
The Trust has adopted a Plan of Distribution Pursuant to Rule 12b-1 (the
"Plan") under the Investment Company Act of 1940. Under the Plan, the Fund
will pay annual service fees to the Distributor at a rate of 0.25% of average
daily net assets for Class A, Class B and Class D shares. In addition, the
Fund will pay annual distribution fees of 0.75% of average daily net assets
for Class B and Class D shares. The Distributor uses such payments for
personal service and/or the maintenance of shareholder accounts, to reimburse
securities dealers for distribution and marketing services, to furnish
ongoing assistance to investors and to defray a portion of its distribution
and marketing expenses. For the six months ended October 31, 1995, fees
pursuant to such plan amounted to $13,249 for Class A.
Note 6
The Trustees have the authority to issue an unlimited number of shares of
beneficial interest, $.001 par value per share. At October 31, 1995,
Metropolitan owned 1,047,121 Class A shares and 386,133 Class C shares of the
Fund and the Adviser owned 10,471 Class A shares of the Fund. Share
transactions were as follows:
May 16, 1994
Six months ended (Commencement of
October 31, 1995 Operations) to
(Unaudited) April 30, 1995
---------------------- ---------------------------
Class A Shares Amount Shares Amount
------------------- ------- ------- --------- -----------
Shares sold -- -- 1,057,613 $10,100,193
------- ------- --------- -----------
Net increase -- -- 1,057,613 $10,100,193
======= ======= ========= ===========
Class C Shares Amount Shares Amount
------------------- ------- ------- --------- -----------
Shares sold 169,539 $1,695,026 654,776 $ 6,291,798
Issued upon
reinvestment of
dividends 1,993 19,792 -- --
Shares repurchased (8,937) (88,816) (268,064) (2,576,098)
------- ------- --------- -----------
Net increase 162,595 $1,626,002 386,712 $ 3,715,700
======= ======= ========= ===========
7
<PAGE>
State Street Research Intermediate Bond Fund
Financial Highlights
For a share outstanding throughout each period.
<TABLE>
<CAPTION>
Class A Class C
-------------------------------- --------------------------------
Six months Six months
ended May 16, 1994 ended May 16, 1994
October 31, (Commencement of October 31, (Commencement of
1995 Operations) to 1995 Operations) to
(Unaudited) April 30, 1995 (Unaudited) April 30, 1995
- ---------------------------------------- ------------ ---------------- ------------ ----------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $ 9.66 $ 9.55 $ 9.67 $ 9.55
Net investment income* .30 .54 .31 .56
Net realized and unrealized gain on
investments, foreign currency and
forward contracts .30 .01 .29 .02
Dividends from net investment income (.22) (.44) (.23) (.46)
---------- -------------- ---------- ---------------
Net asset value, end of period $ 10.04 $ 9.66 $10.04 $ 9.67
========== ============== ========== ===============
Total return+++ 6.25% 5.96% 6.25% 6.30%
Net assets at end of period (000s) $10,615 $10,222 $5,515 $3,738
Ratio of operating expenses to average
net assets* 1.00%++ 1.00%++ 0.75%++ 0.75%++
Ratio of net investment income to
average net assets* 5.91%++ 5.92%++ 6.15%++ 6.17%++
Portfolio turnover rate 54.38% 157.75% 54.38% 157.75%
*Reflects voluntary assumption of fees
or expenses per share. (Note 3) $ .04 $ .11 $ .04 $ .10
</TABLE>
++ Annualized
+++ Represents aggregate return for the period without annualization and does
not reflect any front-end or contingent deferred sales charges. Total
return would be lower if the Distributor and its affiliates had not
voluntarily assumed a portion of the Fund's expenses.
8
<PAGE>
Fund Information, Officers and Trustees of State Street Research Securities
Trust
Fund Information
State Street Research
Intermediate Bond Fund
One Financial Center
Boston, MA 02111
Investment Adviser
State Street Research &
Management Company
One Financial Center
Boston, MA 02111
Distributor
State Street Research
Investment Services, Inc.
One Financial Center
Boston, MA 02111
Shareholder Services
State Street Research
Shareholder Services
P.O. Box 8408
Boston, MA 02266-8408
1-800-562-0032
Custodian
State Street Bank and
Trust Company
225 Franklin Street
Boston, MA 02110
Legal Counsel
Goodwin, Procter & Hoar
Exchange Place
Boston, MA 02109
Officers
Ralph F. Verni
Chairman of the Board,
President and
Chief Executive Officer
John H. Kallis
Vice President
Kim M. Peters
Vice President
Thomas A. Shively
Vice President
Gerard P. Maus
Treasurer
Joseph W. Canavan
Assistant Treasurer
Douglas A. Romich
Assistant Treasurer
Francis J. McNamara, III
Secretary and General Counsel
Darman A. Wing
Assistant Secretary and
Assistant General Counsel
Amy L. Simmons
Assistant Secretary
Trustees
Ralph F. Verni
Chairman of the Board,
President, Chief Executive
Officer and Director,
State Street Research &
Management Company
Edward M. Lamont
Formerly in banking (Morgan
Guaranty Trust Company of
New York); presently engaged
in private investments and
civic affairs
Robert A. Lawrence
Partner, Saltonstall & Co.
Dean O. Morton
Retired; formerly Executive
Vice President, Chief
Operating Officer and Director,
Hewlett-Packard Company
Thomas L. Phillips
Retired; formerly Chairman of
the Board and Chief Executive
Officer, Raytheon
Company
Toby Rosenblatt
President,
The Glen Ellen Company
Vice President,
Founders Investments Ltd.
Michael S. Scott Morton
Jay W. Forrester Professor of
Management, Sloan School
of Management, Massachusetts
Institute of Technology
Jeptha H. Wade
Retired; formerly Of Counsel,
Choate, Hall & Stewart
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[Back cover]
State Street Research Intermediate Bond Fund
One Financial Center
Boston, MA 02111
[Indicia]
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U.S. Postage
PAID
Brockton, MA
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Questions? Comments?
Call us at 1-800-562-0032,
or write us at:
State Street Research
Shareholder Services
P.O. Box 8408
Boston, MA 02266-8408
[logo-State Street Research]
This report is prepared for the general information of current shareholders
only. It is not authorized for use as sales material with prospective
investors.
CONTROL NUMBER: 2851-951226(0197)SSR-LD
Cover Illustration by Dorothy Cullinan IB-110E-1295
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