SUPPLEMENT NO. 1 DATED MAY 27, 1997
TO
PROSPECTUS DATED APRIL 22, 1997
FOR
STATE STREET RESEARCH INVESTMENT TRUST
a series of State Street Research Master Investment Trust
Management Fees
Subject to shareholder approval as described below, the management fee is
expected to increase in the future, as reflected in the following revised parts
of the Table of Expenses (the Annual Trust Operating Expenses on page 2 of the
prospectus, and all of page 3).
The proposed increase in the management fee would be phased in over two
years. In the first phase, a partial increased fee would be applicable during
the first year after shareholder approval; and in the second phase, the final
proposed fee would be applicable to succeeding years. The charts below show the
current expenses of the Trust and the pro forma expenses of the Trust assuming
approval of the fee increase (based on results for 1996 and on the level of
assets at the end of that year). The management fee is computed as a percentage
of the average net assets of the Trust on an annualized basis.
Class A Shares
<TABLE>
<CAPTION>
Annual Trust Operating Expenses
(as a percentage of average net assets)
---------------------------------------
Actual Pro Forma Pro Forma
1996 First Year Succeeding Years
------ ---------- ----------------
<S> <C> <C> <C>
Management Fees............................. 0.31% 0.41% 0.51%
Other Expenses.............................. 0.19% 0.19% 0.19%
12b-1 Fees.................................. 0.25% 0.25% 0.25%
----- ----- -----
Total Trust Operating Expenses......... 0.75% 0.85% 0.95%
===== ===== =====
</TABLE>
Example(1)
You would pay the following expenses on a $1,000 investment including the
maximum applicable initial or contingent deferred sales charge and assuming (1)
5% annual return and (2) redemption of the entire investment at the end of each
time period:
1 Year................................. $ 52 $ 53 $ 54
3 Years................................ $ 68 $ 71 $ 74
5 Years................................ $ 85 $ 90 $ 95
10 Years............................... $134 $145 $156
<PAGE>
Class B Shares
<TABLE>
<CAPTION>
Annual Trust Operating Expenses
(as a percentage of average net assets)
---------------------------------------
Actual Pro Forma Pro Forma
1996 First Year Succeeding Years
------ ---------- ----------------
<S> <C> <C> <C>
Management Fees............................. 0.31% 0.41% 0.51%
Other Expenses.............................. 0.19% 0.19% 0.19%
12b-1 Fees.................................. 1.00% 1.00% 1.00%
----- ----- -----
Total Trust Operating Expenses......... 1.50% 1.60% 1.70%
===== ===== =====
</TABLE>
Example(1)
You would pay the following expenses on a $1,000 investment including the
maximum applicable initial or contingent deferred sales charge and assuming (1)
5% annual return and (2) redemption of the entire investment at the end of each
time period:
1 Year................................. $ 65 $ 66 $ 67
3 Years................................ $ 77 $ 80 $ 84
5 Years................................ $102 $107 $112
10 Years2.............................. $159 $170 $181
You would pay the following expenses on the same investment, assuming no
redemption:
1 Year................................. $ 15 $ 16 $ 17
3 Years................................ $ 47 $ 50 $ 54
5 Years................................ $ 82 $ 87 $ 92
10 Years2.............................. $159 $170 $181
Class C Shares
<TABLE>
<CAPTION>
Annual Trust Operating Expenses
(as a percentage of average net assets)
---------------------------------------
Actual Pro Forma Pro Forma
1996 First Year Succeeding Years
------ ---------- ---------------
<S> <C> <C> <C>
Management Fees............................. 0.31% 0.41% 0.51%
Other Expenses.............................. 0.19% 0.19% 0.19%
12b-1 Fees.................................. None None None
----- ----- -----
Total Trust Operating Expenses......... 0.50% 0.60% 0.70%
===== ===== =====
</TABLE>
Example(1)
You would pay the following expenses on a $1,000 investment (which is not
subject to any initial or contingent deferred sales charge) and assuming (1) 5%
annual return and (2) redemption of the entire investment at the end of each
time period:
1 Year................................. $ 5 $ 6 $ 7
3 Years................................ $16 $19 $22
5 Years................................ $28 $33 $39
10 Years............................... $63 $75 $87
<PAGE>
Class D Shares
<TABLE>
<CAPTION>
Annual Trust Operating Expenses
(as a percentage of average net assets)
---------------------------------------
Actual Pro Forma Pro Forma
1996 First Year Succeeding Years
------ ---------- ----------------
<S> <C> <C> <C>
Management Fees............................. 0.31% 0.41% 0.51%
Other Expenses.............................. 0.19% 0.19% 0.19%
12b-1 Fees.................................. 1.00% 1.00% 1.00%
----- ----- -----
Total Trust Operating Expenses......... 1.50% 1.60% 1.70%
===== ===== =====
</TABLE>
Example(1)
You would pay the following expenses on a $1,000 investment including the
maximum applicable initial or contingent deferred sales charge and assuming (1)
5% annual return and (2) redemption of the entire investment at the end of each
time period:
1 Year3................................ $ 25 $ 26 $ 27
3 Years................................ $ 47 $ 50 $ 54
5 Years................................ $ 82 $ 87 $ 92
10 Years............................... $179 $190 $201
You would pay the following expenses on the same investment, assuming no
redemption:
1 Year................................. $ 15 $ 16 $ 17
3 Years................................ $ 47 $ 50 $ 54
5 Years................................ $ 82 $ 87 $ 92
10 Years............................... $179 $190 $201
- -----------------
Footnotes:
1 The examples should not be considered a representation of past or future
return or expenses. Actual return or expenses may be greater or less than
shown.
2 Ten-year figures assume conversion of Class B shares to Class A shares at
the end of eight years. 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.
3 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.
<PAGE>
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, 1996; 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." For further information on
management fees, see "Management of the Trust."
The Trust has been advised that if the proposal to increase the
management fee is approved, the Investment Manager will undertake to voluntarily
assume the Trust's operating expenses, excluding Rule 12b-1 fees, to the extent
they exceed 0.75% of the Trust's average net assets on an annualized basis.
Under the caption "Management of the Trust," the third paragraph at page 24
is revised in its entirety to read as follows:
"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:
(a) for the interim first year after shareholder approval, 0.41% of such
assets; and (b) for succeeding years 0.55% of the first $500,000,000, 0.50%
of the next $500,000,000, and 0.45% of the amount over $1,000,000,000 of
such assets."
Investment and Other Policy Changes
Subject to shareholder approval as described below, the following policy
changes are expected to be made:
1. Amendment of the fundamental policy regarding securities lending to
provide greater investment flexibility (lending of portfolio securities up to 33
1/3% of the Trust's total assets would be permissible).
2. Amendment of the fundamental policy regarding diversification of
investments to provide greater investment flexibility (diversification
limitations which preclude investment in a security if the transaction would
result in more than 5% of the Trust's assets being invested in any one
nongovernmental issuer, or result in the Trust owning more than 10% of the
voting securities of an issuer, would apply to only 75% of the Trust's total
assets).
Shareholder Approval and Effective Date
The above management fee and policy changes will be effective upon, and
subject to, shareholder approval at a meeting scheduled for August 1997, or any
continued session thereof. For more detailed information about the changes,
obtain a copy of the related Proxy Statement by calling Shareholder Services at
1-800-562-0032.
