Supplement No. 1 dated July 17, 1995
to
Prospectus dated May 1, 1995
for
STATE STREET RESEARCH INVESTMENT TRUST
a series of State Street Research Master Investment Trust
Other Programs
Immediately after the first sentence of the first paragraph under the caption
"Purchase of Shares--Class A Shares--Initial Sales Charges--Other
Programs," the following is added:
"Sales without a sales charge, or with a reduced sales charge, may also be made
through brokers, financial planners, institutions, and others, under managed
fee-based programs (e.g., "wrap fee" or similar programs) which meet certain
requirements established from time to time by the Distributor, in the event the
Distributor determines to implement such arrangements."
Additional Information
Under the caption "Redemption of Shares--Additional Information," the first
paragraph is revised in its entirety as follows:
"Because of the relatively high cost of maintaining small shareholder accounts,
the Trust reserves the right to involuntarily redeem at its option any
shareholder account which remains below $1,500 for a period of 60 days after
notice is mailed to the applicable shareholder, or to impose a maintenance fee
on such account after 60 days' notice. Such involuntary redemptions will be
subject to applicable sales charges, if any. The Trust may increase such minimum
account value above such amount in the future after notice to affected
shareholders. Involuntarily redeemed shares will be priced at the net asset
value on the date fixed for redemption by the Trust, and the proceeds of the
redemption will be mailed to the affected shareholder at the address of record.
Currently, the maintenance fee is $18 annually, which is paid to the Transfer
Agent. The fee does not apply to certain retirement accounts or if the
shareholder has more than an aggregate $50,000 invested in the Trust and other
Eligible Funds combined. Imposition of a maintenance fee on a small account
could, over time, exhaust the assets of such account."
CONTROL NUMBER: 2456L-950717(0896) SSR-LDSS-261E-795IBS
<PAGE>
State Street Research
Investment Trust
Prospectus--May 1, 1995
The investment objective of State Street Research Investment Trust is to provide
long-term growth of capital and, secondarily, long-term growth of income. In
seeking to achieve its investment objective, State Street Research Investment
Trust invests primarily in common stocks, or securities convertible into common
stocks, that have long-term growth potential.
State Street Research Investment Trust is the successor to State Street
Investment Corporation (collectively the "Trust") which was established in 1924
as one of the nation's first mutual funds. The Trust is a diversified series of
State Street Research Master Investment Trust (the "Master Trust"), an open-end
management investment company. State Street Research & Management Company (the
"Investment Manager") serves as investment adviser to the Trust. As of February
28, 1995, the Investment Manager had assets of approximately $23.9 billion under
management. State Street Research Investment Services, Inc. serves as
distributor (the "Distributor") for the Trust.
Shareholders may have their shares redeemed directly by the Trust at net
asset value plus the applicable contingent deferred sales charge, if any;
redemptions processed through securities dealers may be subject to processing
charges.
There are risks in any investment program, including the risk of changing
economic and market conditions, and there is no assurance that the Trust will
achieve its investment objective. The net asset value of the Trust's shares
fluctuates as market conditions change.
This Prospectus sets forth concisely the information a prospective investor
ought to know about the Trust before investing. It should be retained for future
reference. A Statement of Additional Information about the Trust dated May 1,
1995, has been filed with the Securities and Exchange Commission and is
incorporated by reference into this Prospectus. It is available at no charge
upon request to the Trust at the address indicated on the back cover or by
calling 1-800-562-0032.
The Trust offers four classes of shares which may be purchased at the next
determined net asset value per share plus, in the case of all classes except
Class C shares, a sales charge which, at the election of the investor, may be
imposed (i) at the time of purchase (the Class A shares) or (ii) on a deferred
basis (the Class B and Class D shares).
Class A shares are subject to (i) an initial sales charge of up to 4.5% and
(ii) an annual service fee of 0.25% of the average daily net asset value of
the Class A shares.
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 ON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
Table of Contents Page
Table of Expenses ......................................................... 2
Financial Highlights ...................................................... 4
The Trust's Investments ................................................... 5
Other Investment Practices ................................................ 5
Limiting Investment Risk .................................................. 7
Purchase of Shares ........................................................ 8
Redemption of Shares ...................................................... 16
Shareholder Services ...................................................... 17
The Trust and its Shares .................................................. 21
Management of the Trust ................................................... 22
Dividends and Distributions; Taxes ........................................ 23
Calculation of Performance Data ........................................... 24
<PAGE>
Class B shares are subject to (i) a contingent deferred sales charge
(declining from 5% to 2%), which will be imposed on most redemptions made within
five years of purchase, and (ii) annual distribution and service fees of 1% of
the average daily net asset value of such shares. Class B shares automatically
convert into Class A shares (which pay lower ongoing expenses) at the end of
eight years after purchase. No contingent deferred sales charge applies after
the fifth year following the purchase of Class B shares.
Class C shares are offered only 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 (i) a contingent deferred sales charge of 1% if
redeemed within one year following purchase and (ii) annual distribution and
service fees of 1% of the average daily net asset value of such shares.
Table of Expenses
<TABLE>
<CAPTION>
Class A Class B Class C Class D
<S> <C> <C> <C> <C>
Shareholder Transaction Expenses (1)
Maximum Sales Charge Imposed on Purchases
(as a percentage of offering price) ..... 4.5% None None None
Maximum Sales Charge Imposed on Reinvested
Dividends (as a percentage of offering
price) ................................. None None None None
Deferred Sales Charge (as a percentage of
original purchase price or redemption
proceeds, as applicable) ................ None(2) 5% None 1%
Redemption Fees (as a percentage of
amount redeemed, if applicable) ......... None None None None
Exchange Fee ............................. None None None None
Annual Trust Operating Expenses (as a
percentage of average net assets)
Management Fees .......................... 0.33% 0.33% 0.33% 0.33%
12b-1 Fees ............................... 0.25% 1.00% None 1.00%
Other Expenses ........................... 0.32% 0.32% 0.32% 0.32%
---- ---- ---- ----
Total Trust Operating Expenses ......... 0.90% 1.65% 0.65% 1.65%
==== ==== ==== ====
</TABLE>
(1) Reduced sales charge purchase plans are available for Class A shares. The
maximum 5% contingent deferred sales charge on Class B shares applies to
redemptions during the first year after purchase; the charge declines
thereafter, and no contingent deferred sales charge is imposed after the
fifth year. Class D shares are subject to a 1% contingent deferred sales
charge on any portion of the purchase redeemed within one year of the sale.
Long-term investors in a class of shares with a distribution fee may, over
a period of years, pay more than the economic equivalent of the maximum
sales charge permissible under applicable rules. See "Purchase of Shares."
(2) Purchases of Class A shares of $1 million or more are not subject to a
sales charge. If such shares are redeemed within 12 months of purchase, a
contingent deferred sales charge of 1% will be applied to the redemption.
See "Purchase of Shares."
2
<PAGE>
Example:
You would pay the following expenses on a $1,000 investment including, for Class
A shares, the maximum applicable initial sales charge, and assuming (1) 5%
annual return and (2) redemption of the entire investment at the end of each
time period:
<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
<S> <C> <C> <C> <C>
Class A shares ............. $ 54 $ 72 $ 93 $151
Class B shares (1) ......... $ 67 $ 82 $110 $175
Class C shares ............. $ 7 $ 21 $ 36 $ 81
Class D shares ............. $ 27 $ 52 $ 90 $195
</TABLE>
You would pay the following expenses on the same investment, assuming no
redemption:
<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
<S> <C> <C> <C> <C>
Class B shares (1) ......... $ 17 $ 52 $ 90 $175
Class D shares ............. $ 17 $ 52 $ 90 $195
</TABLE>
(1) Ten-year figures assume conversion of Class B shares to Class A shares at
the end of eight years.
The example should not be considered as a representation of past or future
return or expenses. Actual return or expenses may be greater or less than shown.
The purpose of the table above is to assist the investor in understanding the
various costs and expenses that an investor will bear directly or indirectly.
The percentage expense levels shown in the table are based on experience with
expenses during the fiscal year ended December 31, 1994; actual expense levels
for the current fiscal year and future years may vary from the amounts shown.
The table does not reflect charges for optional services elected by certain
shareholders, such as the $7.50 fee for remittance of redemption proceeds by
wire. For further information on sales charges, see "Purchase of
Shares--Alternative Purchase Program"; for further information on 12b-1 fees,
see "Purchase of Shares--Distribution Plan." The management fee is based on a
percentage of net assets and decreases as the amount of net assets under
management increases. The applicable percentage ranges from 1/2 of 1% on the
first $200,000,000 of net assets to 1/4 of 1% on the net assets over
$500,000,000. For further information on management fees, see "Management of the
Trust."
3
<PAGE>
FINANCIAL HIGHLIGHTS
The data set forth below has been examined by Coopers & Lybrand L.L.P.,
independent accountants, and their report thereon for the latest five years is
included in the Statement of Additional Information. For further information
about the performance of the Trust, see the Trust's Annual Report, which appears
under the caption "Financial Statements" in the Statement of Additional
Information.
<TABLE>
<CAPTION>
Class C
Year ended December 31
1994 1993 1992 1991 1990 1989 1988 1987 1986 1985
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of year ..................... $8.70 $8.80 $9.04 $7.67 $8.65 $7.24 $7.30 $7.54 $7.61 $6.25
Net investment income ........ .13 .15 .16 .19 .22 .26 .21 .21 .22 .22
Net realized and unrealized
gain (loss) on investments .. (.43) .74 .40 1.96 (.31) 2.05 .54 .34 .69 1.77
Dividends from net
investment income ........... (.14) (.15) (.16) (.20) (.23) (.26) (.21) (.23) (.23) (.23)
Distributions from realized
capital gains ............... (.50) (.84) (.64) (.58) (.66) (.64) (.60) (.56) (.75) (.40)
----- ----- ----- ----- ----- ----- ----- ----- ----- -----
Net asset value, end of year . $7.76 $8.70 $8.80 $9.04 $7.67 $8.65 $7.24 $7.30 $7.54 $7.61
===== ===== ===== ===== ===== ===== ===== ===== ===== =====
Total return ................. (3.47)%+ 10.20%+ 6.28%+ 28.08%+ (0.95)%+ 32.14%+ 10.24%+ 6.88%+ 11.71%+ 32.03%+
Net assets at end of
year (000s) .................$627,551 $729,536 $726,671 $657,762 $519,475 $575,114 $486,385 $493,088 $514,047 $540,185
Ratio of operating expenses
to average net assets ....... 0.65% 0.49% 0.51% 0.50% 0.50% 0.47% 0.51% 0.46% 0.49% 0.50%
Ratio of net investment
income to average net assets 1.54% 1.63% 1.92% 2.24% 2.64% 3.09% 2.71% 2.26% 2.57% 3.16%
Portfolio turnover rate ...... 33.08% 43.57% 23.99% 16.28% 10.07% 12.35% 15.39% 3.65% 10.06% 19.37%
+ Total return figures do not reflect any front-end or contingent deferred sales charges.
</TABLE>
<TABLE>
<CAPTION>
Class A Class B Class D
March 15, 1993
February 17, 1993 (Commencement March 15, 1993
(Commencement Year of Share Class Year (Commencement
Year Of Share Class ended Designations) to ended of Share Class
December December 31, December 31, December 31, December 31, December 31,
31, 1994 1993 1994 1993 1994 1993
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year ....... $8.69 $8.75 $8.66 $9.15 $8.68 $9.15
Net investment income .................... .11 .10 .06 .06 .05 .06
Net realized and unrealized gain (loss) on
investments ............................. (.44) .81 (.44) .39 (.43) .40
Dividends from net investment income ..... (.12) (.13) (.06) (.10) (.06) (.09)
Distributions from realized capital gains (.50) (.84) (.50) (.84) (.50) (.84)
----- ----- ----- ----- ----- -----
Net asset value, end of year ............. $7.74 $8.69 $7.72 $8.66 $7.74 $8.68
===== ===== ===== ===== ===== =====
Total return ............................. (3.84)%+ 10.53%++ (4.43)%+ 4.95%++ (4.45)%+ 5.10%++
Net assets at end of year (000s) ......... $92,137 $75,259 $113,301 $73,110 $11,707 $9,729
Ratio of operating expenses to average net
assets .................................. 0.89% 0.75%# 1.64% 1.51%# 1.64% 1.51%#
Ratio of net investment income to average
net assets .............................. 1.26% 1.27%# 0.51% 0.48%# 0.51% 0.51%#
Portfolio turnover rate .................. 33.08% 43.57% 33.08% 43.57% 33.08% 43.57%
</TABLE>
# Annualized
+ Total return figures do not reflect any front-end or contingent deferred
sales charges.
++ Represents aggregate return for the period without annualization and does
not reflect any front-end or contingent deferred sales charges.
4
<PAGE>
The Trust's Investments
The Trust's investment objective is to provide long-term growth of capital and,
secondarily, long-term growth of income. The investment objective is a
fundamental policy that may not be changed without approval of the Trust's
shareholders.
Under normal circumstances at least 65% of the Trust's net assets will be
invested in common stocks, or securities (preferred stock, bonds and debentures)
convertible into common stocks, or which carry the right to acquire equities
(warrants), which have long-term growth potential.
In seeking to achieve its investment objective, the Trust invests in a
diversified portfolio of companies in a broad range of industries whose earnings
and/or assets are expected to grow at a rate above the average for the Standard
& Poor's 500 Stock Index (the "S&P 500") over the long term. Consequently, the
Investment Manager seeks to identify those industries offering the greatest
possibilities for profitable expansion and, within such industries, those
companies that appear most capable of sustained growth. The Trust also invests
in securities of companies believed by the Investment Manager to be selling
below their intrinsic values or in securities of cyclical companies believed by
the Investment Manager to be at low points in their cycles. Although the Trust's
investments are not limited to companies of any particular size, a majority of
the securities in which the Trust invests are listed on a national securities
exchange. The Trust may invest without limitation in securities of non-U.S.
issuers directly or in the form of American Depositary Receipts, European
Depositary Receipts or similar securities representing interests in the
securities of foreign issuers. For further information, see "Other Investment
Practices."
Although for the past ten years over 85% of the Trust's portfolio has been
invested as described above and the Trust does not presently anticipate any
significant change in the percentage of the portfolio so invested, the Trust
reserves the right to invest at any time up to 35% of its net assets in other
equity securities and debt securities, consisting of U.S. Government securities
issued by the U.S. Treasury or by U.S. Government agencies or instrumentalities,
and corporate debt securities of varying maturities. The Trust will generally
purchase debt securities that are considered investment grade securities (i.e.,
rated at the time of purchase AAA, AA, A or BBB by Standard & Poor's Corporation
("S&P") or Aaa, Aa, A or Baa by Moody's Investors Service, Inc. ("Moody's")), or
securities that are not rated but considered by the Investment Manager to be of
equivalent investment quality. Securities rated Baa by Moody's lack outstanding
investment characteristics and in fact have speculative characteristics as well.
Other Investment Practices
Foreign Investments
The Trust reserves the right to invest without limitation in securities of
non-U.S. issuers directly, or indirectly in the form of American Depositary
Receipts ("ADRs") and European Depositary Receipts ("EDRs"). Under current
policy, however, the Trust limits such investments, including ADRs and EDRs, to
a maximum of 35% of its total assets.
ADRs are receipts, typically issued by a U.S. bank or trust company, which
evidence ownership of underlying securities issued by a foreign corporation or
other entity. EDRs are receipts issued in Europe which evidence a similar
ownership arrangement. Generally, ADRs in registered form are designed for use
in U.S. securities markets and EDRs are designed for use in European securities
markets. The underlying securities are not always denominated in the same
currency as the ADRs or EDRs. Although investment in the form of ADRs or EDRs
facilitates trading in foreign securities, it does not mitigate all the risks
associated with investing in foreign securities.
ADRs are available through facilities which may be either "sponsored" or
"unsponsored." In a sponsored arrangement, the foreign issuer establishes the
facility, pays some or all of the depository's fees, and usually agrees to
provide shareholder communications. In an unsponsored arrangement, the foreign
issuer is not involved, and the ADR holders pay the fees of the depository.
Sponsored ADRs are generally more advantageous to the ADR holders and the
5
<PAGE>
issuer than are unsponsored ADRs. More and higher fees are generally charged in
an unsponsored program compared to a sponsored facility. Only sponsored ADRs may
be listed on the New York or American Stock Exchanges. Unsponsored ADRs may
prove to be more risky due to (a) the additional costs involved to the Trust;
(b) the relative illiquidity of the issue in U.S. markets; and (c) the
possibility of higher trading costs in the over-the-counter market as opposed to
exchange-based trading. The Trust will take these and other risk considerations
into account before making an investment in an unsponsored ADR.
The risks associated with investments in foreign securities include those
resulting from fluctuations in currency exchange rates, revaluation of
currencies, future political and economic developments, including the risks of
nationalization or expropriation, the possible imposition of currency exchange
blockages, higher operating expenses, foreign withholding and other taxes which
may reduce investment return, reduced availability of public information
concerning issuers and the fact that foreign issuers are not generally subject
to uniform accounting, auditing and financial reporting standards or to other
regulatory practices and requirements comparable to those applicable to domestic
issuers. Moreover, securities of many foreign issuers may be less liquid and
their prices more volatile than those of securities of comparable domestic
issuers.
It is anticipated that most of the foreign investments of the Trust will
consist of securities of issuers in countries with developed economies. However,
the Trust may also invest in the securities of issuers in countries with less
developed economies as deemed appropriate by the Investment Manager, although
the Trust does not presently expect to invest more than 5% of its total assets
in issuers in such less developed countries. Such countries include countries
that have an emerging stock market that trades a small number of securities;
countries with low- to middle- income economies; and/or countries with economies
that are based on only a few industries. Eastern European countries are
considered to have less developed capital markets.
For further information regarding foreign investments, see the Statement of
Additional Information.
Currency Transactions
In order to protect against the effect of uncertain future exchange rates on
securities denominated in foreign currencies, the Trust may engage in currency
exchange transactions either on a spot (i.e., cash) basis at the rate prevailing
in the currency exchange market or by entering into forward contracts to
purchase or sell currencies. Although such contracts tend to minimize the risk
of loss resulting from a correctly predicted decline in value of hedged
currency, they tend to limit any potential gain that might result should the
value of such currency increase. In entering a forward currency transaction, the
Trust is dependent upon the creditworthiness and good faith of the counterparty.
The Trust attempts to reduce the risks of nonperformance by the counterparty by
dealing only with established, large institutions with which the Investment
Manager has done substantial business in the past. For further information, see
the Statement of Additional Information.
Other Investment Considerations
To aid in achieving its investment objective, the Trust may, subject to certain
limitations, buy and sell options, futures contracts and options on futures
contracts on securities and securities indices. The Trust may not establish a
position in a commodity futures contract or purchase or sell a commodity option
contract for other than bona fide hedging purposes if immediately thereafter the
sum of the amount of initial margin deposits and premiums required to establish
such positions for such nonhedging purposes would exceed 5% of the market value
of the Trust's net assets; similar policies apply to options which are not
commodities. The Trust's positions in futures and options may be closed out only
on an exchange or in a market which provides liquidity, and there can be no
assurance that a liquid market will exist. The Trust may also enter various
forms of swap arrangements, which have simultaneously the characteristics of a
security and a futures contract, although the Trust does not presently expect to
invest more than 5% of its total assets in such items. These swap arrangements
include interest rate swaps, currency swaps and index swaps. See the Statement
of Additional Information.
6
<PAGE>
The Trust may enter into repurchase agreements involving U.S. Government
securities. Repurchase agreements could involve certain risks in the event of
default or insolvency of the other party, including possible delays or
restrictions upon the Trust's ability to dispose of the underlying securities.
See the Statement of Additional Information.
The Trust may lend portfolio securities with a value of up to 33-1/3% of its
total assets. The Trust will receive cash or cash equivalents (e.g., U.S.
Government obligations) as collateral in an amount equal to at least 100% of the
current market value of the loaned securities plus accrued interest. Collateral
received by the Trust will generally be held in the form tendered, although cash
may be invested in securities issued or guaranteed by the U.S. Government or its
agencies or instrumentalities, irrevocable stand-by letters of credit issued by
a bank, or any combination thereof. The investing of cash collateral received
from loaning portfolio securities involves leverage which magnifies the
potential for gain or loss on monies invested and, therefore, results in an
increase in the volatility of the Trust's outstanding securities. Such loans may
be terminated at any time.
The Trust will retain most rights of ownership including rights to dividends,
interest or other distributions on the loaned securities. Voting rights pass
with the lending, although the Trust may call loans to vote proxies if desired.
Should the borrower of the securities fail financially, there is a risk of delay
in recovery of the securities or loss of rights in the collateral. Loans are
made only to borrowers which are deemed by the Investment Manager to be of good
financial standing.
Limiting Investment Risk
In seeking to lessen investment risk, the Trust operates under certain
fundamental investment restrictions. Under these restrictions the Trust may not
(a) purchase for its portfolio a security of any one issuer (other than the
United States or its instrumentalities) if such purchase at the time would cause
more than 5% of the total assets of the Trust (taken at market value) to be
invested in the securities of such issuer; (b) purchase for its portfolio a
security of any one issuer if such purchase at the time thereof would cause more
than 10% of any class of securities of such issuer to be held by the Trust; (c)
purchase securities of any issuer that has a record of less than three years'
continuous operation if such purchase would cause more than 5% of the Trust's
total assets (taken at market value) to be invested in the securities of such
issuers, provided that any such three-year period may include the operation of
any predecessor company, partnership, or individual enterprise if the issuer
whose securities are to be purchased came into existence as a result of a
merger, consolidation, reorganization, or the purchase of substantially all the
assets of such predecessor; or (d) make any investment that would cause more
than 25% of its total assets, taken at market value, to be invested in any one
industry. The fundamental investment restrictions set forth in this paragraph
may not be changed except by vote of the holders of a majority of the
outstanding voting securities of the Trust. The vote of a majority of the
outstanding voting securities of the Trust means the vote (a) of 67 per centum
or more of the voting securities present at a meeting, if the holders of more
than 50 per centum of the outstanding voting securities of the Trust are present
or represented by proxy; or (b) of more than 50 per centum of the outstanding
voting securities of the Trust, whichever is less. For further information on
these and other investment restrictions, including nonfundamental investment
restrictions that may be changed without a shareholder vote, see the Statement
of Additional Information.
The Trust may hold up to 100% of its assets in cash or certain short-term
securities for temporary defensive purposes. The Trust will adopt a temporary
defensive position when, in the opinion of the Investment Manager, such a
position is more likely to provide protection against adverse market conditions
than adherence to the Trust's other investment policies. The types of short-term
instruments in which the Trust may invest for such purposes are, as more fully
described in the Statement of Additional Information: securities issued or
guaranteed by the U.S. Government or its agencies or instrumentalities (U.S.
Treasury bills, notes, bonds,
7
<PAGE>
Government National Mortgage Association certificates), custodial receipts,
certificates of deposit, time deposits and bankers' acceptances of certain
qualified financial institutions and corporate commercial paper rated at least
"A" by S&P or "Prime" by Moody's (or, if not rated, issued by companies having
an outstanding long-term unsecured debt issue rated at least "A" by S&P or
Moody's). See the Statement of Additional Information.
Portfolio Turnover
The Trust reserves full freedom with respect to portfolio turnover. In periods
when there are rapid changes in economic conditions or security price levels or
when investment strategy is changed significantly, portfolio turnover may be
significantly higher than during times of economic and market price stability or
when investment strategy remains relatively constant. Increases in the rate of
portfolio turnover will result in increased transaction costs for the Trust and
may also result in an increase in the realization of short-term capital gains.
Information on the Purchase of Shares, Redemption of Shares and Shareholder
Services is set forth below on pages 8 to 21.
The Trust is available for investment by many kinds of investors including
participants investing through 401(k) or other retirement plan sponsors,
employees investing through savings plans sponsored by employers, Individual
Retirement Accounts ("IRAs"), trusts, corporations, individuals, etc. The
applicability of the general information and administrative procedures set forth
below accordingly will vary depending on the investor and the recordkeeping
system established for a shareholder's investment in the Trust. Participants in
401(k) and other plans should first consult with the appropriate person at their
employer or refer to the plan materials before following any of the procedures
below. For more information or assistance, anyone may call 1-800-562-0032.
Purchase of Shares
Methods of Purchase
Through Dealers
Shares of the Trust are continuously offered through securities dealers who have
entered into sales agreements with the Distributor. Purchases through dealers
are confirmed at the offering price, which is the net asset value plus the
applicable sales charge, next determined after the order is duly received by
State Street Research Shareholder Services ("Shareholder Services"), a division
of State Street Research Investment Services, Inc., from the dealer. ("Duly
received" for purposes herein means in accordance with the conditions of the
applicable method of purchase as described below.) The dealer is responsible for
transmitting the order promptly to Shareholder Services in order to permit the
investor to obtain the current price. See "Purchase of Shares--Net Asset Value"
herein.
By Mail
Initial investments in the Trust may be made by mailing or delivering to the
investor's securities dealer a completed Application (accompanying this
Prospectus), together with a check for the total purchase price payable to the
Trust. The dealer must forward the Application and check in accordance with the
instructions on the Application.
Additional shares may be purchased by mailing to Shareholder Services a check
payable to the Trust in the amount of the total purchase price together with any
one of the following: (i) an Application; (ii) the stub from the shareholder's
account statement; or (iii) a letter setting forth the name of the Trust, the
class of shares and the account name and number. Shareholder Services will
deliver the purchase order to the transfer agent and dividend paying agent,
State Street Bank and Trust Company (the "Transfer Agent").
If the check is not honored for its full amount, the purchaser could be
subject to additional charges to cover collection costs and any investment loss,
and the purchase may be cancelled.
8
<PAGE>
By Wire
An investor may purchase shares by wiring Federal Funds of not less than $5,000
to State Street Bank and Trust Company, which also serves as the Master Trust's
custodian (the "Custodian"), as set forth below. Prior to making an investment
by wire, an investor must notify Shareholder Services at 1-800-521-6548 and
obtain a control number and instructions. Following such notification, Federal
Funds should be wired through the Federal Reserve System to:
ABA #011000028
State Street Bank and Trust Company
Boston, MA
BNF = State Street Research Investment Trust
and class of shares (A, B, C or D)
AC = 99029761
OBI = Shareholder Name
Shareholder Account Number
Control #K (assigned by State Street Research
Shareholder Services)
In order for a wire investment to be processed on the same day (i) the
investor must notify Shareholder Services of his or her intention to make such
investment by 12 noon Boston time on the day of his or her investment; and (ii)
the wire must be received by 4 P.M. Boston time that same day.
An investor making an initial investment by wire must promptly complete the
Application accompanying this Prospectus and deliver it to his or her securities
dealer, who should forward it as required. No redemptions will be effected until
the Application has been duly processed.
The Trust may in its discretion discontinue, suspend or change the practice
of accepting orders by any of the methods described above. Orders for the
purchase of shares are subject to acceptance by the Trust. The Trust reserves
the right to reject any purchase order, including orders in connection with
exchanges, for any reason which the Trust in its sole discretion deems
appropriate. The Trust reserves the right to suspend the sale of shares.
Minimum Investment
<TABLE>
<CAPTION>
Class of Shares
A B C D
<S> <C> <C> <C> <C>
Minimum Initial Investment
By Wire .................... $5,000 $5,000 (a) $5,000
IRAs ....................... $2,000 $2,000 (a) $2,000
By Investamatic ............ $1,000 $1,000 (a) $1,000
All other .................. $2,500 $2,500 (a) $2,500
Minimum Subsequent Investment
By Wire .................... $5,000 $5,000 (a) $5,000
IRAs ....................... $ 50 $ 50 (a) $ 50
By Investamatic ............ $ 50 $ 50 (a) $ 50
All other .................. $ 50 $ 50 (a) $ 50
</TABLE>
(a) Special conditions apply; contact the Distributor.
The Trust reserves the right to vary the minimums for initial or subsequent
investments from time to time as in the case of, for example, exchanges and
investments under various retirement and employee benefit plans, sponsored
arrangements involving group solicitations of the members of an organization, or
other investment plans such as for reinvestment of dividends and distributions
or for periodic investments (e.g., Investamatic Check Program).
Alternative Purchase Program
General
Alternative classes of shares permit investors to select a purchase program
which they believe will be the most advantageous for them, given the amount of
their purchase, the length of time they anticipate holding Trust shares or the
flexibility they desire in this regard, and other relevant circumstances.
Investors will be able to determine whether in their particular circumstances it
is more advantageous to incur an initial sales charge and not be subject to
certain ongoing charges or to have their entire initial purchase price invested
in the Trust with the investment being subject thereafter to ongoing service
fees and distribution fees.
As described in greater detail below, securities dealers are paid differing
amounts of commission and other compensation depending on which class of shares
they sell.
9
<PAGE>
The major differences among the various classes of shares are as follows:
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C CLASS D
<S> <C> <C> <C> <C>
Sales Charges Initial sales charge Contingent deferred None Contingent deferred
at time of investment sales charge of 5% to sales charge of 1%
of up to 4.5% 2% applies to any applies to any shares
depending on amount shares redeemed redeemed within one
of investment within first five year following their
years following their purchase
purchase; no
contingent deferred
sales charge after
five years
On investments of $1
million or more, no
initial sales charge;
but contingent
deferred sales charge
of 1% applies to any
shares redeemed
within one year
following their
purchase
Distribution Fee None 0.75% for first eight None 0.75% each year
years; Class B shares
convert automatically
to Class A shares
after eight years
Service Fee 0.25% each year 0.25% each year None 0.25% each year
Initial Above described 4% None 1%
Commission initial sales charge
Received by less 0.25% to 0.50%
Selling retained by
Securities Distributor
Dealer
On investments of $1
million or more,
0.25% to 1% paid to
dealer by Distributor
</TABLE>
10
<PAGE>
In deciding which class of shares to purchase, the investor should consider
the amount of the investment, the length of time the investment is expected to
be held, and the ongoing service fee and distribution fee, among other factors.
Class A shares are sold at net asset value plus an initial sales charge of up
to 4.5% of the public offering price. Because of the sales charge, not all of an
investor's purchase amount is invested unless the purchase equals $1,000,000 or
more. Class B shareholders pay no initial sales charge, but a contingent
deferred sales charge of up to 5% generally applies to shares redeemed within
five years of purchase. Class D shareholders also pay no initial sales charge,
but a contingent deferred sales charge of 1% generally applies to redemptions
made within one year of purchase. For Class B and Class D shareholders,
therefore, the entire purchase amount is immediately invested in the Trust.
An investor who qualifies for a significantly reduced initial sales charge,
or a complete waiver of the sales charge on investments of $1,000,000 or more,
on the purchase of Class A shares might elect that option to take advantage of
the lower ongoing service and distribution fees that characterize Class A shares
compared with Class B or Class D shares.
Class A, Class B and Class D shares are assessed an annual service fee of
0.25% of average daily net assets. In addition, Class B shares are assessed an
annual distribution fee of 0.75% of daily net assets for an eight-year period
following the date of purchase and are then automatically converted to Class A
shares. Class D shares are assessed an annual distribution fee of 0.75% of daily
net assets for as long as the shares are held. The prospective investor should
consider these fees plus the initial or contingent deferred sales charges in
estimating the costs of investing in the various classes of the Trust's shares.
Only certain employee benefit plans and large institutions may make
investments in Class C shares.
Some of the service and distribution fees are allocated to dealers (see
"Distribution Plan" below). In addition, the Distributor will, at its expense,
provide additional cash and noncash incentives to securities dealers that sell
shares. Such incentives may be extended only to those dealers that have sold or
may sell significant amounts of shares and/or meet other conditions established
by the Distributor; for example, the Distributor may sponsor special promotions
to develop particular distribution channels or to reach certain investor groups.
The incentives may include merchandise and trips to and attendance at sales
seminars at resorts.
Class A Shares--Initial Sales Charges
Sales Charges
The purchase price of a Class A share of the Trust is the Trust's per share net
asset value next determined after the purchase order is duly received, as
defined herein, plus a sales charge which varies depending on the dollar amount
of the shares purchased as set forth in the table below. A major portion of this
sales charge is reallowed by the Distributor to the securities dealer
responsible for the sale.
<TABLE>
<CAPTION>
Sales
Sales Charge
Charge Paid
Paid By By Dealer
Dollar Investor Investor Concession
Amount of As % of As % of As % of
Purchase Purchase Net Asset Purchase
Transaction Price Value Price
<S> <C> <C> <C>
Less than $100,000 4.50% 4.71% 4.00%
$100,000 or above but less than $250,000 3.50% 3.63% 3.00%
$250,000 or above but less than $500,000 2.50% 2.56% 2.00%
$500,000 or above but less than $1 million 2.00% 2.04% 1.75%
$1 million and above 0% 0% See
following
discussion
</TABLE>
On any sale of Class A shares to a single investor in the amount of
$1,000,000 or more, the Distributor will pay the authorized securities dealer a
commission at the time of sale as follows:
11
<PAGE>
<TABLE>
<CAPTION>
Amount of Sale Commission
<S> <C>
(a) $1 million to $3 million ..................................... 1.00%
(b) Next $2 million .............................................. 0.50%
(c) Amount over $5 million ....................................... 0.25%
</TABLE>
On such sales of $1,000,000 or more, the investor is subject to a 1%
contingent deferred sales charge on any portion of the purchase redeemed within
one year of the sale. However, such redeemed shares will not be subject to the
contingent deferred sales charge to the extent that their value represents (1)
capital appreciation or (2) reinvestment of dividends or capital gains
distributions. In addition, the contingent deferred sales charge will be waived
for certain other redemptions as described under "Contingent Deferred Sales
Charge Waivers" below (as otherwise applicable to Class B shares).
Class A shares of the Trust that are purchased without a sales charge may be
exchanged for Class A shares of certain other Eligible Funds, as described
below, without the imposition of a contingent deferred sales charge, although
contingent deferred sales charges may apply upon a subsequent redemption within
one year of the Class A shares which are acquired through such exchange. For
federal income tax purposes, the amount of the contingent deferred sales charge
will reduce the gain or increase the loss, as the case may be, on the amount
realized on redemption. The amount of any contingent deferred sales charge will
be paid to the Distributor.
Reduced Sales Charges
The reduced sales charges set forth in the table above are applicable to
purchases made at any one time by any "person," as defined in the Statement of
Additional Information, of $100,000 or more of Class A shares of the Trust or a
combination of "Eligible Funds." "Eligible Funds" include the Trust and other
funds so designated by the Distributor from time to time. Class B, Class C and
Class D shares may also be included in the combination under certain
circumstances. Securities dealers should call Shareholder Services for details
concerning the other Eligible Funds and any persons who may qualify for reduced
sales charges and related information. See the Statement of Additional
Information.
Letter of Intent
Any investor who provides a Letter of Intent may qualify for a reduced sales
charge on purchases of no less than an aggregate of $100,000 of Class A shares
of the Trust and any other Eligible Funds within a 13-month period. Class B,
Class C and Class D shares may also be included in the combination under certain
circumstances. Additional information on a Letter of Intent is available from
dealers, or from the Distributor, and also appears in the Statement of
Additional Information.
Right of Accumulation
Investors may purchase Class A shares of the Trust or a combination of shares of
the Trust and other Eligible Funds at reduced sales charges pursuant to a Right
of Accumulation. Under the Right of Accumulation, the sales charge is determined
by combining the current purchase with the value of the Class A shares of other
Eligible Funds held at the time of purchase. Class B, Class C and Class D shares
may also be included in the combination under certain circumstances. See the
Statement of Additional Information and call Shareholder Services for details
concerning the Right of Accumulation.
Other Programs
Class A shares of the Trust may be sold at a reduced sales charge or without a
sales charge pursuant to certain sponsored arrangements, which include programs
under which a company, employee benefit plan or other organization makes
recommendations to, or permits group solicitation of, its employees, members or
participants, except any organization created primarily for the purpose of
obtaining shares of the Trust at a reduced sales charge or without a sales
charge. Information on such arrangements and further conditions and limitations
is available from the Distributor.
In addition, no sales charge is imposed in connection with the sale of Class
A shares of the Trust to the following entities and persons: (A) the Investment
Manager, the Distributor, or any affiliated entities, including any direct or
indirect parent companies and other subsidiaries of such parents (collectively
"Affiliated Companies"); (B) employees, officers, sales representatives or
current or retired directors or
12
<PAGE>
trustees of the Affiliated Companies or any investment company managed by any of
the Affiliated Companies, any relatives of any such individuals whose
relationship is directly verified by such individuals to the Distributor, or any
beneficial account for such relatives or individuals; and (C) employees,
officers, sales representatives or directors of dealers and other entities with
a selling agreement with the Distributor to sell shares of any aforementioned
investment company, any spouse or child of such person, or any beneficial
account for any of them. The purchase must be made for investment and the shares
purchased may not be resold except through redemption. This purchase program is
subject to such administrative policies, regarding the qualification of
purchasers and any other matters, as may be adopted by the Distributor from time
to time.
Class B Shares--Contingent Deferred Sales Charges
Contingent Deferred Sales Charges
The public offering price of Class B shares is the net asset value per share
next determined after the purchase order is duly received, as defined herein. No
sales charge is imposed at the time of purchase; thus the full amount of the
investor's purchase payment will be invested in the Trust. However, a contingent
deferred sales charge may be imposed upon redemptions of Class B shares as
described below.
The Distributor will pay securities dealers at the time of sale a 4%
commission for selling Class B shares. The proceeds of the contingent deferred
sales charge and the distribution fee are used to offset distribution expenses
and thereby permit the sale of Class B shares without an initial sales charge.
Class B shares that are redeemed within a five-year period after their
purchase will not be subject to a contingent deferred sales charge to the extent
that the value of such shares represents (1) capital appreciation of Trust
assets or (2) reinvestment of dividends or capital gains distributions. The
amount of any applicable contingent deferred sales charge will be calculated by
multiplying the net asset value of such shares at the time of redemption or at
the time of purchase, whichever is lower, by the applicable percentage shown in
the table below:
<TABLE>
<CAPTION>
Contingent Deferred Sales
Charge As A Percentage
Of Net Asset Value
Redemption During At Redemption
<S> <C>
1st Year Since Purchase 5%
2nd Year Since Purchase 4
3rd Year Since Purchase 3
4th Year Since Purchase 3
5th Year Since Purchase 2
6th Year Since Purchase
and Thereafter None
</TABLE>
In determining the applicability and rate of any contingent deferred sales
charge, it will be assumed that a redemption of Class B shares is made first of
those shares having the greatest capital appreciation, next of shares
representing reinvestment of dividends and capital gains distributions and
finally of remaining shares held by the shareholder for the longest period of
time. The holding period for purposes of applying a contingent deferred sales
charge on Class B shares of the Trust acquired through an exchange from another
Eligible Fund will be measured from the date that such shares were initially
acquired in the other Eligible Funds, and Class B shares being redeemed will be
considered to represent, as applicable, capital appreciation or dividend and
capital gains distribution reinvestments in such other Eligible Fund. These
determinations will result in any contingent deferred sales charge being imposed
at the lowest possible rate. For federal income tax purposes, the amount of the
contingent deferred sales charge will reduce the gain or increase the loss, as
the case may be, on the amount realized on redemption. The amount of any
contingent deferred sales charge will be paid to the Distributor.
Contingent Deferred Sales Charge Waivers
The contingent deferred sales charge does not apply to exchanges, or to
redemptions under a systematic withdrawal plan which meets certain conditions.
In addition, the contingent deferred sales charge will be waived for: (i)
redemptions made within one year of the death or total disability, as defined by
the Social Security Administration, of all shareholders of an account; (ii)
redemptions made after attainment of a specific age in an amount which
represents the minimum distribution required at such age under Section
13
<PAGE>
401(a)(9) of the Internal Revenue Code for retirement accounts or plans (e.g.,
age 70-1/2 for IRAs and Section 403(b) plans), calculated solely on the basis of
assets invested in the Trust or other Eligible Funds; and (iii) a redemption
resulting from a tax-free return of an excess contribution to an IRA. (The
foregoing waivers do not apply to a tax-free rollover or transfer of assets out
of the Trust.) The Trust may modify or terminate the waivers at any time; for
example, the Trust may limit the application of multiple waivers.
Conversion of Class B Shares to Class A Shares
A shareholder's Class B shares, including all shares received as dividends or
distributions with respect to such shares, will automatically convert to Class A
shares of the Trust at the end of eight years following the issuance of such
Class B shares; consequently, they will no longer be subject to the higher
expenses borne by Class B shares. The conversion rate will be determined on the
basis of the relative per-share net asset values of the two classes and may
result in a shareholder receiving either a greater or fewer number of Class A
shares than the Class B shares so converted. As noted above, holding periods for
Class B shares received in exchange for Class B shares of other Eligible Funds
will be counted toward the eight-year period.
Class C Shares--Institutional; No Sales Charge
The purchase price of a Class C share of the Trust is the Trust's per share net
asset value next determined after the purchase order is duly received, as
defined herein. No sales charge is imposed at the time of purchase or
redemption. The Trust will receive the full amount of the investor's purchase
payment.
Class C shares are only available for new investments by certain employee
benefit plans and large institutions. See the Statement of Additional
Information. Information on the availability of Class C shares and further
conditions and limitations with respect thereto is available from the
Distributor.
Class C shares may be also issued in connection with mergers and acquisitions
involving the Trust, and under certain other circumstances as described in this
Prospectus (e.g., see "Shareholder Services--Exchange Privilege").
Shares held prior to February 17, 1993 are deemed to be Class C shares, but
shareholders thereof may not acquire additional Class C shares except through
reinvestment of dividends and distributions. Class C shares may have also been
issued directly or through exchanges to those shareholders of the Trust or other
Eligible Funds who previously held shares not subject to any future sales charge
or service fees or distribution fees.
Class D Shares--Spread Sales Charges
The purchase price of a Class D share of the Trust is the Trust's per share net
asset value next determined after the purchase order is duly received, as
defined herein. No sales charge is imposed at the time of purchase; thus the
full amount of the investor's purchase payment will be invested in the Trust.
Class D shares are subject to a 1% contingent deferred sales charge on any
portion of the purchase redeemed within one year of the sale. The contingent
deferred sales charge will be 1% of the lesser of the net asset value of the
shares at the time of purchase or at the time of redemption. The Distributor
pays securities dealers a 1% commission for selling Class D shares at the time
of purchase. The proceeds of the contingent deferred sales charge and the
distribution fee are used to offset distribution expenses and thereby permit the
sale of Class D shares without an initial sales charge.
Class D shares that are redeemed within one year after purchase will not be
subject to the contingent deferred sales charge to the extent that the value of
such shares represents (1) capital appreciation of Trust assets or (2)
reinvestment of dividends or capital gains distributions. In addition, the
contingent deferred sales charge will be waived for certain other redemptions as
described under "Contingent Deferred Sales Charge Waivers" above (as otherwise
applicable to Class B shares). For federal income tax purposes, the amount of
the contingent deferred sales charge will reduce the gain or increase the loss,
as the case may be, on the amount realized on redemption. The amount of any
contingent deferred sales charge will be paid to the Distributor.
Net Asset Value
The Trust's per share net asset values are determined Monday through Friday
as of the close of the New
14
<PAGE>
York Stock Exchange (the "NYSE") exclusive of days on which the NYSE is closed.
The NYSE ordinarily closes at 4 P.M. New York City time. Assets held by the
Trust are valued on the basis of the last reported sale price or quotations as
of the close of business on the valuation date, except that securities and
assets for which market quotations are not readily available are valued as
determined in good faith by or under the authority of the Trustees of the Master
Trust. In determining the value of certain assets for which market quotations
are not readily available, the Trust may use one or more pricing services. The
pricing services utilize information with respect to market transactions,
quotations from dealers and various relationships among securities in
determining value and may provide prices determined as of times prior to the
close of the NYSE. The Trustees have authorized the use of the amortized cost
method to value short-term debt instruments issued with a maturity of one year
or less and having a remaining maturity of 60 days or less when the value
obtained reflects fair value. Further information with respect to the valuation
of the Trust's assets is included in the Statement of Additional Information.
Distribution Plan
The Trust has adopted a Plan of Distribution Pursuant to Rule 12b-1 (the
"Distribution Plan") in accordance with the regulations under the Investment
Company Act of 1940, as amended (the "1940 Act"). Under the provisions of the
Distribution Plan, the Trust makes payments to the Distributor based on an
annual percentage of the average daily value of the net assets of each class of
shares as follows:
<TABLE>
<CAPTION>
Class Service Fee Distribution Fee
<S> <C> <C>
A 0.25% None
B 0.25% 0.75%
C None None
D 0.25% 0.75%
</TABLE>
Some or all of the service fees are used to reimburse securities dealers
(including securities dealers that are affiliates of the Distributor) for
personal services and/or the maintenance of shareholder accounts. A portion of
any initial commission paid to dealers for the sale of shares of the Trust
represents payment for personal services and/or the maintenance of shareholder
accounts by such dealers. Dealers who have sold Class A shares are eligible for
further reimbursement commencing as of the time of such sale. Dealers who have
sold Class B and Class D shares are eligible for further reimbursement after the
first year during which such shares have been held of record by such dealer as
nominee for its clients (or by such clients directly). Any service fees received
by the Distributor and not allocated to dealers may be applied by the
Distributor in reduction of expenses incurred by it directly for personal
services and the maintenance of shareholder accounts.
The distribution fees are used primarily to offset initial and ongoing
commissions paid to securities dealers for selling such shares. Any distribution
fees received by the Distributor and not allocated to dealers may be applied by
the Distributor in connection with sales or marketing efforts, including special
promotional fees and cash and noncash incentives based upon sales by securities
dealers.
The Distributor provides distribution services on behalf of other funds
having distribution plans and receives similar payments from, and incurs similar
expenses on behalf of, such other funds. When expenses of the Distributor cannot
be identified as relating to a specific fund, the Distributor allocates expenses
among the funds in a manner deemed fair and equitable to each fund.
Commissions and other cash and noncash incentives and payments to dealers, to
the extent payable out of the general profits, revenues or other sources of the
Distributor (including the advisory fees paid by the Trust), have also been
authorized pursuant to the Distribution Plan.
A rule of the National Association of Securities Dealers, Inc. ("NASD")
limits the annual expenditures which the Trust may incur under the Distribution
Plan to 1%, of which 0.75% may be used to pay distribution expenses and 0.25%
may be used to pay shareholder service fees. The NASD rule also limits the
aggregate amount which the Trust may pay for such distribution costs to 6.25% of
gross share sales of a class since the inception of any asset-based sales charge
plus interest at the prime rate plus 1% on unpaid amounts thereof (less any
contingent deferred sales charges). Such limitation does not apply to
15
<PAGE>
shareholder service fees. Payments to the Distributor or to dealers funded under
the Distribution Plan may be discontinued at any time by the Trustees of the
Master Trust.
Redemption of Shares
Shareholders may redeem all or any portion of their accounts on any day the NYSE
is open for business. Redemptions will be effective at the applicable net asset
value per share next determined (see "Purchase of Shares--Net Asset Value"
herein) after receipt of the redemption request, in accordance with the
requirements described below, by Shareholder Services and delivery of the
request by Shareholder Services to the Transfer Agent. To allow time for the
clearance of checks used for the purchase of any shares which are tendered for
redemption shortly after purchase, the remittance of the redemption proceeds for
such shares could be delayed for 15 days or more after the purchase.
Shareholders who anticipate a potential need for immediate access to their
investments should, therefore, purchase shares by wire. Except as noted,
redemption proceeds are normally remitted within seven days after receipt of the
redemption request and any necessary documents in good order.
Methods of Redemption Request
By Mail
A shareholder may request redemption of shares, with proceeds to be mailed to
the shareholder or wired to a predesignated bank account (see "Proceeds By Wire"
below) by sending to State Street Research Shareholder Services, P.O. Box 8408,
Boston, Massachusetts 02266-8408: (1) a written request for redemption signed by
the registered owner(s) of the shares, exactly as the account is registered; (2)
an endorsed stock power in good order with respect to the shares or, if issued,
the share certificates for the shares endorsed for transfer or accompanied by an
endorsed stock power; (3) any required signature guarantees see "Redemption of
Shares--Signature Guarantees" below); and (4) any additional documents which may
be required for redemption in the case of corporations, trustees, etc., such as
certified copies of corporate resolutions, governing instruments, powers of
attorney, and the like. The Transfer Agent will not process requests for
redemption until it has received all necessary documents in good order. A
shareholder will be notified promptly if a redemption request cannot be
accepted. Shareholders having any questions about the requirements for
redemption should call Shareholder Services toll-free at 1-800-562-0032.
Request By Telephone
Shareholders may request redemption by telephone with proceeds to be transmitted
by check or by wire (see "Proceeds By Wire" below). A shareholder can request a
redemption for $50,000 or less to be transmitted by check. Such check for the
proceeds will be made payable to the shareholder of record and will be mailed to
the address of record. There is no fee for this service. It is not available for
shares held in certificate form or if the address of record has been changed
within 30 days of the redemption request. The Trust may revoke or suspend the
telephone redemption privilege at any time and without notice. See "Shareholder
Services--Telephone Services" for a discussion of the conditions and risks
associated with Telephone Privileges.
Proceeds By Wire
Upon a shareholder's written request or by telephone if the shareholder has
Telephone Privileges (see "Shareholder Services--Telephone Services" herein),
the Master Trust's custodian will wire redemption proceeds to the shareholder's
predesignated bank account. To make the request, the shareholder should call
1-800-521-6548 prior to 4 P.M. Boston time. A $7.50 charge against the
shareholder's account will be imposed for each wire redemption. This charge is
subject to change without notice. The shareholder's bank may also impose a
charge for receiving wires of redemption proceeds. The minimum redemption by
wire is $5,000.
Request to Dealer to Repurchase
For the convenience of shareholders, the Trust has authorized the Distributor as
its agent to accept orders from dealers by wire or telephone for the repurchase
of shares by the Distributor from the dealer. The Trust may revoke or suspend
this authorization at any time. The repurchase price is the net asset value for
the applicable shares next determined
16
<PAGE>
following the time at which the shares are offered for repurchase by the dealer
to the Distributor. The dealer is responsible for promptly transmitting a
shareholder's order to the Distributor. Payment of the repurchase proceeds is
made to the dealer who placed the order promptly upon delivery of certificates
for shares in proper form for transfer or, for Open Accounts, upon the receipt
of a stock power with signatures guaranteed as described below, and, if
required, any supporting documents. Neither the Trust nor the Distributor
imposes any charge upon such a repurchase. However, a dealer may impose a charge
as agent for a shareholder in the repurchase of his or her shares.
The Trust has reserved the right to change, modify or terminate the services
described above at any time.
Additional Information
Because of the relatively high cost of maintaining small shareholder accounts,
the Trust reserves the right to involuntarily redeem at its option any
shareholder account which remains below $1,500 for a period of 60 days after
notice is mailed to the applicable shareholder, or to impose a maintenance fee
on such account after 60 days' notice. Such involuntary redemptions will be
subject to applicable sales charges, if any. The Trust may increase such minimum
account value above such amount in the future after notice to affected
shareholders. Involuntarily redeemed shares will be priced at the net asset
value on the date fixed for redemption by the Trust, and the proceeds of the
redemption will be mailed promptly to the affected shareholder at the address of
record. Imposition of a maintenance fee on a small account could, over time,
exhaust the assets of such account.
To cover the cost of additional compliance administration, a $20 fee will be
charged against any shareholder account that has been determined to be subject
to escheat under applicable state laws.
The Trust may not suspend the right of redemption or postpone the date of
payment of redemption proceeds for more than seven days, except that (a) it may
elect to suspend the redemption of shares or postpone the date of payment of
redemption proceeds: (1) during any period that the NYSE is closed (other than
customary weekend and holiday closings) or trading on the NYSE is restricted;
(2) during any period in which an emergency exists as a result of which disposal
of portfolio securities is not reasonably practicable or it is not reasonably
practicable to fairly determine the Trust's net asset values; or (3) during such
other periods as the Securities and Exchange Commission may by order permit for
the protection of investors; and (b) the payment of redemption proceeds may be
postponed as otherwise provided under "Redemption of Shares" herein.
Signature Guarantees
To protect shareholder accounts, the Transfer Agent, the Trust, the Investment
Manager and the Distributor from possible fraud, signature guarantees are
required for certain redemptions. Signature guarantees enable the Transfer Agent
to be sure that the person who has authorized a redemption from the account is,
in fact, the shareholder. Signature guarantees are required for: (1) all
redemptions requested by mail and (2) requests to transfer the registration of
shares to another owner. Signatures must be guaranteed by a bank, a member firm
of a national stock exchange, or other eligible guarantor institution. The
Transfer Agent will not accept guarantees (or notarizations) from notaries
public. The above requirements may be waived by the Trust in certain instances.
Shareholder Services
The Open Account System
Under the Open Account System full and fractional shares of the Trust owned by
shareholders are credited to their accounts by the Transfer Agent, State Street
Bank and Trust Company, 225 Franklin Street, Boston, Massachusetts 02110.
Certificates representing Class B or Class D shares will not be issued, while
certificates representing Class A or Class C shares will only be issued if
specifically requested in writing and, in any case, will only be issued for full
shares, with any fractional shares to be carried on the shareholder's account.
Shareholders will receive periodic statements of transactions in their account.
The Trust's Open Account System provides the following options:
1. Additional purchases of shares of the Trust may be made through dealers,
by wire or by mailing
17
<PAGE>
a check payable to the Trust, to Shareholder Services under the terms set
forth above under "Purchase of Shares."
2. The following methods of receiving dividends from investment income and
distributions from capital gains are available:
(a) All income dividends and capital gains distributions reinvested in
additional shares of the Trust.
(b) All income dividends in cash; all capital gains distributions
reinvested in additional shares of the Trust.
(c) All income dividends and capital gains distributions in cash.
(d) All income dividends and capital gains distributions invested in any
one available Eligible Fund designated by the shareholder as described
below. See "Dividend Allocation Plan" herein.
Dividend and distribution selections should be made on the Application
accompanying the initial investment. If no selection is indicated on the
Application, the account will automatically be coded for reinvestment of all
dividends and distributions in additional shares of the same class of the Trust.
Selections may be changed at any time by telephone or written notice to
Shareholder Services. Dividends and distributions are reinvested at net asset
value without a sales charge.
Exchange Privilege
Shareholders of the Trust may exchange their shares for available shares with
corresponding characteristics of any of the other Eligible Funds at any time on
the basis of the relative net asset values of the respective shares to be
exchanged, subject to compliance with applicable securities laws. Shareholders
of any other Eligible Fund may similarly exchange their shares for Trust shares
with corresponding characteristics. Prior to making an exchange, shareholders
should obtain the Prospectus of the Eligible Fund into which they are
exchanging. Under the Direct Program, subject to certain conditions,
shareholders may make arrangements for regular exchanges from the Trust into
other Eligible Funds. To effect an exchange, Class A, Class B and Class D shares
may be redeemed without the payment of any contingent deferred sales charge that
might otherwise be due upon an ordinary redemption of such shares. The MetLife -
State Street Research Money Market Fund issues Class E shares which are sold
without any sales charge. Exchanges of MetLife - State Street Research Money
Market Fund Class E shares into Class A shares of the Trust or any other
Eligible Fund are subject to the initial sales charge or contingent deferred
sales charge applicable to an initial investment in such Class A shares, unless
a prior Class A sales charge has been paid directly or indirectly with respect
to the shares redeemed. For purposes of computing the contingent deferred sales
charge that may be payable upon disposition of the acquired Class A, Class B and
Class D shares, the holding period of the redeemed shares is "tacked" to the
holding period of the acquired shares. The period any Class E shares are held is
not tacked to the holding period of any acquired shares. No exchange transaction
fee is currently imposed on any exchange.
For the convenience of its shareholders who have Telephone Privileges, the
Trust permits exchanges by telephone request from either the shareholder or his
or her dealer. Shares may be exchanged by telephone provided that the
registration of the two accounts is the same. The toll-free number for exchanges
is 1-800-521-6548. See "Telephone Services" herein for a discussion of
conditions and risks associated with Telephone Privileges.
The exchange privilege may be exercised only in those states where shares of
the relevant other Eligible Fund may legally be sold. For tax purposes, each
exchange actually represents the sale of shares of one fund and the purchase of
shares of another. Accordingly, exchanges may produce a capital gain or loss for
tax purposes. The exchange privilege may be terminated or suspended or its terms
changed at any time, subject, if required under applicable regulations, to 60
days' prior notice. New accounts established for investments upon exchange from
an existing account in another fund will have the same Telephone Privileges as
the existing account, unless Shareholder Services is instructed otherwise.
Related administrative policies and procedures may also be
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adopted with regard to a series of exchanges, street name accounts, sponsored
arrangements and other matters.
The exchange privilege is not designed for use in connection with short-term
trading or market timing strategies. In order to limit exchange activity where
the Trust believes doing so would be in the best interests of the Trust, it
reserves the right to revise or terminate the exchange privilege, limit the
amount or number of exchanges or reject any exchange for any person. These
measures may be imposed at any time. Subject to the foregoing, if an exchange
request in good order is received by Shareholder Services and delivered by
Shareholder Services to the Transfer Agent by 12 noon Boston time on any
business day, the exchange usually will occur that day. Contact Shareholder
Services before requesting an exchange or for further information.
Reinvestment Privilege
A shareholder of the Trust who has redeemed shares or had shares repurchased at
his or her request may reinvest all or any portion of the proceeds (plus that
amount necessary to acquire a fractional share to round off his or her
reinvestment to full shares) in shares, of the same class as the shares
redeemed, of the Trust or any other Eligible Fund at net asset value and without
subjecting the reinvestment to an initial sales charge, provided such
reinvestment is made within 30 calendar days after a redemption or repurchase.
Upon such reinvestment, the shareholder will be credited with any contingent
deferred sales charge previously charged with respect to the amount reinvested.
The redemption of shares is, for federal income tax purposes, a sale on which
the shareholder may realize a gain or a loss. If a redemption at a loss is
followed by a reinvestment within 30 days, the transaction may be a "wash sale"
resulting in a denial of the loss for federal income tax purposes.
Any reinvestment pursuant to the reinvestment privilege will be subject to
any applicable minimum account standards imposed by the fund into which the
reinvestment is made. Shares are sold to a reinvesting shareholder at the net
asset value thereof next determined following timely receipt by Shareholder
Services of such shareholder's written purchase request and delivery of the
request by Shareholder Services to the Transfer Agent. A shareholder may
exercise this reinvestment privilege only once with respect to his or her shares
of the Trust. No charge is imposed by the Trust for such reinvestments; however,
dealers may charge fees in connection with the reinvestment privilege. The
reinvestment privilege may be exercised with respect to an Eligible Fund only in
those states where shares of the relevant other Eligible Fund may legally be
sold.
Investment Plans
The Trust offers Class A, Class B and Class D shareholders the Investamatic
Check Program. Under this Program, shareholders may make regular investments by
authorizing withdrawals from their bank accounts each month or quarter on the
Investamatic application form available from Shareholder Services.
The Trust also offers tax-sheltered retirement plans, including prototype and
other employee benefit plans for employees, sole proprietors, partnerships and
corporations and IRAs. Details of these investment plans and their availability
may be obtained from securities dealers or from Shareholder Services.
Systematic Withdrawal Plan
A shareholder who owns noncertificated Class A or Class C shares with a value of
$5,000 or more, or Class B or Class D shares with a value of $10,000 or more,
may elect by participating in the Trust's Systematic Withdrawal Plan to have
periodic checks issued for specified amounts. These amounts may not be less than
certain minimums, depending on the class of shares held. The Plan provides that
all income dividends and capital gains distributions of the Trust shall be
credited to participating shareholders in additional shares of the Trust. Thus,
the withdrawal amounts paid can only be realized by redeeming shares of the
Trust under the Plan. To the extent such amounts paid exceed dividends and
distributions from the Trust, a shareholder's investment will decrease and may
eventually be exhausted.
In the case of shares otherwise subject to contingent deferred sales charges,
no such charges will be imposed on withdrawals of up to 8% annually of
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either (a) the value, at the time the Plan is initiated, of the shares then in
the account or (b) the value, at the time of a withdrawal, of the same number of
shares as in the account when the Plan was initiated, whichever is higher.
Expenses of the Plan are borne by the Trust. A participating shareholder may
withdraw from the Plan and the Trust may terminate the Plan at any time on
written notice. Purchase of additional shares while a shareholder is receiving
payments under a Plan is ordinarily disadvantageous because of duplicative sales
charges. For this reason, a shareholder may not participate in the Investamatic
Check Program and the Systematic Withdrawal Plan at the same time.
Dividend Allocation Plan
The Dividend Allocation Plan allows shareholders to elect to have all of their
dividends and any other distributions from the Trust or any Eligible Fund
automatically invested at net asset value in one other such Eligible Fund
designated by the shareholder, provided the account into which the investment is
made is initially funded with the requisite minimum amount. The number of shares
purchased will be determined as of the dividend payment date. The Dividend
Allocation Plan is subject to state securities law requirements, to suspension
at any time, and to such policies, limitations and restrictions, as, for
instance, may be applicable to street name or master accounts, that may be
adopted from time to time.
Automatic Bank Connection
A shareholder may elect, by participating in the Trust's Automatic Bank
Connection ("ABC"), to have dividends and other distributions, including
Systematic Withdrawal Plan payments, automatically deposited in the
shareholder's bank account by electronic funds transfer. Some contingent
deferred sales charges may apply. See "Systematic Withdrawal Plan" herein.
Reports
Reports for the Trust will be sent to shareholders of record at least
semiannually. These reports will include a list of the securities owned by the
Trust as well as the Trust's financial statements.
Telephone Services
The following telephone privileges ("Telephone Privileges") can be used:
(1) the privilege allowing the shareholder to make telephone redemptions for
amounts up to $50,000 to be mailed to the shareholder's address of record
is available automatically;
(2) the privilege allowing the shareholder or his or her dealer to make
telephone exchanges is available automatically; and
(3) the privilege allowing the shareholder to make telephone redemptions for
amounts over $5,000, to be remitted by wire to the shareholder's
predesignated bank account, is available by election on the Application
accompanying this Prospectus. A current shareholder who did not previously
request such telephone wire privilege on his or her original Application
may request the privilege by completing a Telephone Redemption-by-Wire Form
which may be obtained by calling 1-800-521-6548. The Telephone
Redemption-by-Wire Form requires a signature guarantee.
A shareholder may decline the automatic Telephone Privileges set forth in (1)
and (2) above by so indicating on the Application accompanying this Prospectus.
A shareholder may discontinue any Telephone Privilege at any time by advising
Shareholder Services that the shareholder wishes to discontinue the use of such
privileges in the future.
Unless such Telephone Privileges are declined, a shareholder is deemed to
authorize Shareholder Services and the Transfer Agent to: (1) act upon the
telephone instructions of any person purporting to be the shareholder to redeem,
or purporting to be the shareholder or the shareholder's dealer to exchange,
shares from any account; and (2) honor any written instructions for a change of
address regardless of whether such request is accompanied by a signature
guarantee. All telephone calls will be recorded. None of the Trust, the other
Eligible Funds, the Transfer Agent, the Investment Manager or the Distributor
will be liable for any loss, expense or cost arising out
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of any request, including any fraudulent or unauthorized requests. Shareholders
assume the risk to the full extent of their accounts that telephone requests may
be unauthorized. Reasonable procedures will be followed to confirm that
instructions communicated by telephone are genuine. The shareholder will not be
liable for any losses arising from unauthorized or fraudulent instructions if
such procedures are not followed.
Shareholders may redeem or exchange shares by calling toll free
1-800-521-6548. Although it is unlikely, during periods of extraordinary market
conditions, a shareholder may have difficulty in reaching Shareholder Services
at such telephone number. In that event, the shareholder should contact
Shareholder Services at 1-800-562-0032, 1-617-357-7805 or otherwise at its main
office at One Financial Center, Boston, Massachusetts 02111-2690.
Shareholder Account Inquiries:
Please call 1-800-562-0032
Call this number for assistance in answering general questions on your account,
including account balance, available shareholder services, statement information
and performance of the Trust. Account inquiries may also be made in writing to
State Street Research Shareholder Services, P.O. Box 8408, Boston, Massachusetts
02266-8408. A fee of up to $10 will be charged against an account for providing
additional account transcripts or photocopies of paid redemption checks or for
researching records in response to special requests.
Shareholder Telephone Transactions:
Please call 1-800-521-6548
Call this number for assistance in purchasing shares by wire and for telephone
redemptions or telephone exchange transactions. Shareholder Services will
require some form of personal identification prior to acting upon instructions
received by telephone. Written confirmation of each transaction will be
provided.
The Trust and its Shares
The Trust was organized in February 1989 as a series of State Street Research
Master Investment Trust, a Massachusetts business trust. The Trustees have
authorized shares of the Trust to be issued in four classes: Class A, Class B,
Class C and Class D shares. The Trust is the successor to State Street
Investment Corporation, whose assets, liabilities and business were acquired by
the Trust in May 1989. State Street Investment Corporation was organized in
1924, and registered with the Securities and Exchange Commission under the
Investment Company Act of 1940 as an open-end management investment company upon
the adoption of said Act. The Master Trust became the successor registrant in
May 1989. The fiscal year end of the Trust is December 31.
Except for those differences between the classes of shares described below
and elsewhere in the Prospectus, each share of the Trust has equal dividend,
redemption and liquidation rights with other shares of the Trust and when issued
is fully paid and nonassessable. In the future, certain classes may be
redesignated, for administrative purposes only, to conform to standard class
designations and common usage of terms which may develop in the mutual fund
industry. For example, Class C shares may be redesignated as Class Y shares and
Class D shares may be redesignated as Class C shares. Any redesignation would
not affect any substantive rights respecting the shares.
Each share of each class of shares represents an identical legal interest in
the same portfolio of investments of the Trust, has the same rights and is
identical in all respects, except that Class B and Class D shares bear the
expenses of the deferred sales arrangement and any expenses (including the
higher service and distribution fees) resulting from such sales arrangement, and
certain other incremental expenses related to a class. Each class will have
exclusive voting rights with respect to provisions of the Rule 12b-1
distribution plan pursuant to which the service and distribution fees, if any,
are paid. Although the legal rights of holders of each class of shares are
identical, it is likely that the different expenses borne by each class will
result in different net asset values and dividends. The different classes of
shares of the Trust also have different exchange privileges.
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The rights of holders of shares may be modified by the Trustees at any time,
so long as such modifications do not have a material adverse effect on the
rights of any shareholder. On any matter submitted to the shareholders, the
holder of each Trust share is entitled to one vote per share (with proportionate
voting for fractional shares) regardless of the relative net asset value
thereof.
Under the Master Trust Agreement of the Master Trust, no annual or regular
meeting of shareholders is required. Thus, there will ordinarily be no
shareholder meetings unless required by the 1940 Act. Except as otherwise
provided under said Act, the Board of Trustees will be a self-perpetuating body
until fewer than two thirds of the Trustees serving as such are Trustees who
were elected by shareholders of the Master Trust. In the event less than a
majority of the Trustees serving as such were elected by shareholders of the
Master Trust, a meeting of shareholders will be called to elect Trustees. Under
the Master Trust Agreement, any Trustee may be removed by vote of two thirds of
the outstanding Master Trust shares; holders of 10% or more of the outstanding
shares of the Master Trust can require that the Trustees call a meeting of
shareholders for purposes of voting on the removal of one or more Trustees. In
connection with such meetings called by shareholders, shareholders will be
assisted in shareholder communications to the extent required by applicable law.
Under Massachusetts law, the shareholders of the Master Trust could, under
certain circumstances, be held personally liable for the obligations of the
Master Trust. However, the Master Trust Agreement of the Master Trust disclaims
shareholder liability for acts or obligations of the Master Trust and provides
for indemnification for all losses and expenses of any shareholder of the Trust
held personally liable for the obligations of the Master Trust. Thus, the risk
of a shareholder's incurring financial loss on account of shareholder liability
is limited to circumstances in which the Trust would be unable to meet its
obligations. The Investment Manager believes that, in view of the above, the
risk of personal liability to shareholders is remote.
Management of the Trust
Under the provisions of the Master Trust Agreement and the laws of
Massachusetts, primary responsibility for the management and supervision of the
Trust rests with the Trustees.
The Trust's investment manager is State Street Research & Management Company.
The Investment Manager is charged with the overall responsibility for managing
the investments and business affairs of the Trust, subject to the authority of
the Board of Trustees.
State Street Research Investment Trust is the successor to State Street
Investment Corporation created in 1924 by Paul Cabot, Richard Saltonstall and
Richard Paine. Their investment management philosophy emphasized comprehensive
fundamental research and analysis, including meetings with the management of
companies under consideration for investment. After the formation of State
Street Investment Corporation, the three men founded State Street Research &
Management Company, as investment adviser to the Trust. The Investment Manager's
portfolio management group has extensive investment industry experience managing
equity and debt securities. In managing debt securities, if any, for a
portfolio, the Investment Manager may consider yield curve positioning, sector
rotation and duration, among other factors.
The Investment Manager is an indirect wholly- owned subsidiary of
Metropolitan Life Insurance Company and the Distributor is a wholly-owned
subsidiary of the Investment Manager, and both are located at One Financial
Center, Boston, Massachusetts 02111-2690.
Under the Investment Advisory Contract between the Master Trust and the
Investment Manager, the Trust pays a quarterly advisory fee to the Investment
Manager. The advisory fee is computed as a percentage of the average of the
values of the net assets of the Trust as determined at the close of each
business day during the quarter at the following annual rates: 1/2 of 1% of the
first $200,000,000 of such assets; 3/8 of 1% of the next $100,000,000 of such
assets; 3/10 of 1% of the next $200,000,000 of such assets; and 1/4 of 1% of the
average market value of such assets in excess of $500,000,000.
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The Investment Advisory Contract provides that the Investment Manager shall
furnish the Trust with suitable office space and facilities and such management,
investment advisory, statistical and research facilities and services as may be
required from time to time by the Trust. Although under such contract the Trust
is responsible for all of its other expenses and services, the Investment
Manager currently follows, and expects to continue to follow, the practice of
keeping the Trust's general books and accounts relative to the net asset value
of the Trust's shares and of calculating such net asset value, both at no
additional charge. The Investment Manager compensates Trustees of the Trust if
such persons are employees or affiliates of the Investment Manager or its
affiliates.
The Trust is managed by Steven P. Somes. Mr. Somes has co-managed the Trust
since August 1994, and assumed primary responsibility for managing the Trust in
May 1995. Mr. Somes's principal occupation currently is Vice President of State
Street Research & Management Company. During the past five years he has also
served as Senior Vice President of Gardner & Preston Moss, a Boston-based
investment advisory firm, and, prior thereto, as Vice President and portfolio
manager for State Street Research & Management Company.
Subject to the policy of seeking best overall price and execution, sales of
shares of the Trust may be considered by the Investment Manager in the selection
of broker or dealer firms for the Trust's portfolio transactions.
The Investment Manager has a Code of Ethics governing personal securities
transactions of its employees; see the Statement of Additional Information.
Dividends and Distributions; Taxes
The Trust qualified and elected to be treated as a regulated investment company
under Subchapter M of the Internal Revenue Code for its most recent fiscal year
and intends to qualify as such in future fiscal years, although it cannot give
complete assurance that it will do so. As long as it so qualifies and satisfies
certain distribution requirements, it will not be subject to federal income tax
on its taxable income (including capital gains, if any) distributed to its
shareholders. Consequently, the Trust intends to distribute annually to its
shareholders substantially all of its net investment income and any capital gain
net income (capital gains net of capital losses).
The Trust declares dividends from net investment income quarterly and pays
such dividends, if any, four times each year. Distributions of capital gain net
income will generally be made on an annual basis or as otherwise required for
compliance with applicable tax regulations. Both dividends from net investment
income and distributions of capital gain net income will be declared and paid to
shareholders in additional shares of the Trust at net asset value (except in the
case of shareholders who elect a different available distribution method). The
Trust will provide its shareholders of record with annual information on a
timely basis concerning the federal tax status of dividends and distributions
during the preceding calendar year.
Dividends paid by the Trust from taxable net investment income and
distributions of net short-term capital gains, whether paid in cash or
reinvested in additional shares, will be taxable for federal income tax purposes
to shareholders as ordinary income, and a portion may be eligible for the 70%
dividends-received deduction for corporations. The percentage of the Trust's
dividends eligible for such tax treatment may be less than 100% to the extent
that less than 100% of the Trust's gross income may be from qualifying dividends
of domestic corporations. Distributions of net capital gains (the excess of net
long-term capital gains over net short-term capital losses) which are
designated as capital gains distributions, whether paid in cash or reinvested in
additional shares, will be taxable for federal income tax purposes to
shareholders as long-term capital gains, regardless of how long shareholders
have held their shares, and are not eligible for the dividends-received
deduction. If shares of the Trust which are sold at a loss have been held six
months or less, the loss will be considered as a long-term capital loss to the
extent of any capital gains distributions received.
As of December 31, 1994, approximately 32% of the net asset value per share
of the Trust consisted of net unrealized appreciation on portfolio assets. In
the
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event that the Trust realizes some or all of such appreciation and distributes
any net gain to shareholders, such distribution will reduce the net asset value
of the shares held by, and will be taxable to, shareholders.
Dividends and other distributions and proceeds of redemptions of Trust shares
paid to individuals and other nonexempt payees will be subject to a 31% federal
backup withholding tax if the Transfer Agent is not provided with the
shareholder's correct taxpayer identification number and certification that the
shareholder is not subject to such backup withholding.
The foregoing discussion relates only to generally applicable federal income
tax provisions in effect as of the date of this Prospectus. Therefore,
prospective shareholders are urged to consult their own tax advisers regarding
tax matters, including state and local tax consequences.
CALCULATION OF PERFORMANCE DATA
From time to time, in advertisements or in communications to shareholders or
prospective investors, the Trust may compare the performance of its Class A,
Class B, Class C and Class D shares to that of other mutual funds with similar
investment objectives, to certificates of deposit and/or to other financial
alternatives. The Trust may also compare the performance of such classes to
appropriate indices such as Standard & Poor's 500 Index, Consumer Price Index
and Dow Jones Industrial Average and/or to appropriate rankings or averages such
as those compiled by Lipper Analytical Services, Inc. for the Growth and Income
category and the Long-Term Taxable Funds category or to those compiled by
Morningstar, Inc., Money Magazine, Business Week, Forbes Magazine, Fortune
Magazine, The Wall Street Journal, Investor's Daily or Wiesenberger Mutual Funds
Investment Report.
Total return and yield are computed separately for each class of shares of
the Trust. The average annual total return ("standard total return") for shares
of the Trust is computed by determining the average annual compounded rate of
return for a designated period that, if applied to a hypothetical $1,000 initial
investment (less the maximum initial or contingent deferred sales charge, if
applicable), would produce the redeemable value of that investment at the end of
the period, assuming reinvestment of all dividends and distributions and with
recognition of all recurring charges. Standard total return may be accompanied
by nonstandard total return information computed in the same manner, but for
differing periods and with or without annualizing the total return or taking
sales charges into account.
Yield, for each of the Trust's Class A, Class B, Class C and Class D shares,
is computed by dividing the net investment income, after recognition of all
recurring charges, per share of each class earned during the most recent month
or other specified 30-day period by the applicable maximum offering price per
share of each class on the last day of such period and annualizing the result.
The standard total return and yield results take sales charges into account,
if applicable, but do not take into account recurring and nonrecurring charges
for optional services which only certain shareholders elect and which involve
nominal fees, such as the $7.50 fee for remittance of redemption proceeds by
wire. Where sales charges are not applicable and therefore not taken into
account in the calculation of standard total return and yield, the result will
be increased.
The Trust's distribution rate is calculated by dividing the distributions for
the latest 12 months by the current maximum offering price per share. The
distribution rate is not computed in the same manner as the above described
yield, and therefore can be significantly different from it. In its supplemental
sales literature, the Trust may quote its distribution rate together with the
above described standard total return and yield information. The use of such
distribution rates would be subject to an appropriate explanation of how the
components of the distribution rate differ from the above described yield.
During the period 1945 through April 1990, and in certain years prior, shares
of the Trust were not offered to the general public and the Trust was not
subject to the cash inflows and higher level of redemptions or expenses that
could occur during a period when shares are continuously offered to the public.
In May 1990, the Trust commenced a continuous public offering.
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Performance information may be useful in evaluating the Trust and for
providing a basis for comparison with other financial alternatives. Because the
performance of the Trust changes in response to fluctuations in economic and
market conditions, interest rates and Trust expenses, among other things, no
performance quotation should be considered a representation as to the Trust's
performance for any future period. In addition, the net asset value of shares of
the Trust will fluctuate so that shares of the Trust, when redeemed, may be
worth more or less than their original cost. Neither an investment in the Trust
nor its performance is insured or guaranteed; such lack of insurance or
guarantees should accordingly be given appropriate consideration when comparing
the Trust to financial alternatives which have such features.
Shares of the Trust had no class designations until February 17, 1993, when
Class A and Class C designations were assigned, and March 15, 1993, when Class B
and Class D designations were assigned, based on the pricing and Rule 12b-1 fees
applicable to shares sold thereafter. Performance data for a specified class
includes periods prior to the adoption of class designations.
Performance data for periods prior to February 17, 1993 will not reflect
additional Rule 12b-1 Distribution Plan fees, if any, of up to 1% per year
depending on the class of shares, which will adversely affect performance
results for periods after such date. Performance data or rankings for a given
class of shares should be interpreted carefully by investors who hold or may
invest in a different class of shares.
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(LOGO) State Street Research
State Street Research
Investment Trust
May 1, 1995
PROSPECTUS
STATE STREET RESEARCH
INVESTMENT TRUST
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
800-562-0032
CUSTODIAN
State Street Bank and
Trust Company
225 Franklin Street
Boston, MA 02110
LEGAL COUNSEL
Mintz, Levin, Cohn, Ferris,
Glovsky and Popeo, P.C.
One Financial Center
Boston, MA 02111
INDEPENDENT ACCOUNTANTS
Coopers & Lybrand L.L.P.
One Post Office Square
Boston, MA 02109
