<PAGE>
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STATE STREET RESEARCH
- -------------------------------------------------------------------------------
INVESTMENT TRUST
----------------
SEMIANNUAL REPORT
June 30, 1998
--------------------
WHAT'S INSIDE
--------------------
INVESTMENT UPDATE
About the Fund,
economy and markets
FUND INFORMATION
Facts and figures
PLUS, COMPLETE PORTFOLIO HOLDINGS
AND FINANCIAL STATEMENTS
- ----------------------
DALBAR
HONORS COMMITMENT TO:
INVESTORS
1997
- ----------------------
For Excellence
in
Shareholder Service
STATE STREET RESEARCH FUNDS
<PAGE>
STATE STREET RESEARCH INVESTMENT TRUST
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INVESTMENT UPDATE
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INVESTMENT ENVIRONMENT
THE ECONOMY
o The first six months of 1998 provided solid economic growth, marked by low
inflation and good investment returns. Consumer confidence was high, personal
income rose, and interest rates remained stable.
o Favorable economic factors stimulated a boom in the housing market and strong
retail sales. Lower energy costs helped keep inflation in check.
o The economic crisis in Southeast Asia raised concerns about U.S. exports and
profits at companies with sizable foreign markets.
THE MARKETS
o The S&P 500, a broad measure of common stock performance, gained 17.72% for
the six months ended June 30, 1998.(1) Investors preferred large-cap stocks
and were willing to pay a premium for potential earnings stability. Small-cap
stocks delivered modest gains. The Russell 2000 Index, a common measure of
small company stock performance, was up 4.38% over the six-month period.
o U.S. Treasury bonds rallied as the yield on the 30-year benchmark fell to
5.6%. High- yield bonds continued to deliver relatively strong gains.
THE FUND
OVER THE PAST SIX MONTHS
o For the six months ended June 30, 1998, Class A shares of State Street
Research Investment Trust returned 19.87% [does not reflect sales charge](2).
That was significantly higher than the Lipper growth and income funds
average, which returned 12.11%.
o The Fund's emphasis on large, high-quality companies, especially in consumer
retailing and cable service, contributed significantly to performance.
o Some of the strongest performers were European stocks, accounting for
approximately 10% of the portfolio.
o The Fund's underweighting in energy stocks was helpful.
CURRENT STRATEGY
o Our strategy continues to emphasize companies with solid franchises and
market leadership. We recognize that the full impact of the Asian economic
slowdown has not yet been absorbed in the U.S. However, we believe that
market leaders with consistent records will continue to be an attractive
alternative in a slow-growth earnings environment. We remain cautious about
commodity-based and industrial segments that could be sensitive to a downturn
in the economy. However, we will continue to monitor opportunities which
could materialize if global pricing improves.
June 30, 1998
PLEASE NOTE THAT THE DISCUSSION THROUGHOUT THIS SHAREHOLDER REPORT IS DATED AS
INDICATED AND, BECAUSE OF POSSIBLE CHANGES IN VIEWPOINT, DATA AND TRANSACTIONS,
SHOULD NOT BE RELIED UPON AS BEING CURRENT THEREAFTER.
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FUND INFORMATION (all data are for periods ended June 30, 1998)
- -------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN
(at maximum applicable sales charge)(3)(4)(5)
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LIFE OF FUND
(since 7/29/24) 10 YEARS 5 YEARS 1 YEAR
- -------------------------------------------------------------------------------
Class A 13.26% 16.29% 19.29% 23.79%
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Class B 13.28% 16.38% 19.29% 23.66%
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Class C 13.28% 16.39% 19.49% 27.75%
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Class S 13.36% 17.00% 20.68% 29.91%
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TOP 10 STOCK POSITIONS
(by percentage of net assets)
(1) TYCO INTERNATIONAL Diversified manufacturer 3.1%
(2) GENERAL ELECTRIC Electrical equipment 3.1%
(3) MEDIAONE GROUP Cable/telecommunications 2.7%
(4) WARNER-LAMBERT Drugs, toiletries, food, gum 2.4%
(5) TOTAL Oil exploration 2.2%
(6) TRAVELERS GROUP Financial services 2.1%
(7) CHASE MANHATTAN Banking 2.1%
(8) UNUM Insurance 2.0%
(9) VIACOM Entertainment media 2.0%
(10) WORLDCOM Telephone 2.0%
These securities represent an aggregate of 23.7% of the
portfolio. Because of active management, there is no
guarantee that the Fund currently invests, or will continue
to invest, in the securities listed in this table or in the
text above.
TOP 5 INDUSTRIES
(by percentage of net assets)
RETAIL TRADE 10.9%
RECREATION 9.4%
INSURANCE 7.2%
BANK 6.5%
OIL 6.1%
Total: 40.1%
(1) The S&P 500 (officially the "Standard and Poor's 500 Stock Price Index") is
an unmanaged index of 500 U.S. stocks. The index does not take transaction
charges into consideration. It is not possible to invest directly in the
index.
(2) 19.46% for Class B shares; 19.49% for Class C shares; 20.04% for Class S
shares.
(3) Keep in mind that past performance is no guarantee of future results. The
Fund's share price, yield and return will fluctuate, and you may have a
gain or loss when you sell your shares. All returns assume reinvestment of
capital gain distributions and income dividends at net asset value.
Performance reflects a maximum 4.5% A share front-end sales charge, or 5% B
share or 1% C share contingent deferred sales charge, where applicable.
During the periods prior to 1990 that shares of the Fund were not offered
to the general public, the Fund was not subject to the cash inflows and
higher redemptions and expenses that have occurred during the Fund's
current, continuous public offering.
(4) S shares, offered without a sales charge, are available through certain
employee benefit plans and special programs.
(5) Before November 1, 1997, Class C shares were designated Class D, and Class
S shares were designated Class C.
<PAGE>
STATE STREET RESEARCH INVESTMENT TRUST
- ----------------------------------------------------------------------
INVESTMENT PORTFOLIO
- ----------------------------------------------------------------------
June 30, 1998 (Unaudited)
VALUE
SHARES (NOTE 1)
- ---------------------------------------------------------------------
COMMON STOCKS 93.9%
BASIC INDUSTRIES 12.0%
CHEMICAL 3.7%
E.I. Du Pont De Nemours & Co. .......... 370,500 $ 27,648,562
Monsanto Co. ........................... 82,900 4,632,038
Qwest Communications International Inc.* 349,700 12,195,788
Rohm & Haas Co. ........................ 391,100 40,649,956
--------------
85,126,344
--------------
ELECTRICAL EQUIPMENT 3.1%
General Electric Co. ................... 798,700 72,681,700
--------------
FOREST PRODUCT 1.6%
Fort James Corp. ....................... 482,800 21,484,600
Weyerhaeuser Co. ....................... 347,600 16,054,775
--------------
37,539,375
--------------
MACHINERY 3.1%
Tyco International Ltd. ................ 1,156,300 72,846,900
--------------
METAL & MINING 0.5%
British Steel PLC ADR .................. 440,700 10,025,925
--------------
Total Basic Industries ................. 278,220,244
--------------
CONSUMER CYCLICAL 22.3%
AUTOMOTIVE 2.0%
General Motors Corp. ................... 294,300 19,662,919
Renault SA* ............................ 489,600 27,848,667
--------------
47,511,586
--------------
RECREATION 9.4%
CBS Corp. .............................. 940,500 29,860,875
International Game Technology Inc. ..... 714,400 17,324,200
MediaOne Group Inc.* ................... 1,412,100 62,044,144
News Corp. Ltd. ADR .................... 1,179,500 37,891,437
Time Warner Inc. ....................... 245,500 20,974,906
Viacom Inc. Cl. B* ..................... 789,100 45,965,075
Walt Disney Co. ........................ 40,632 4,268,900
--------------
218,329,537
--------------
RETAIL TRADE 10.9%
Cendant Corp.* ......................... 456,991 9,539,687
CVS Corp. .............................. 940,400 36,616,825
Dayton Hudson Corp. .................... 899,400 43,620,900
Family Dollar Stores Inc. .............. 628,800 11,632,800
Fred Meyer Inc.* ....................... 66,900 2,843,250
Home Depot Inc. ........................ 337,600 28,041,900
Kroger Co.* ............................ 815,600 34,968,850
Rite Aid Corp. ......................... 629,800 23,656,863
Safeway Inc.* .......................... 951,200 38,701,950
Wal-Mart Stores, Inc. .................. 393,100 23,880,825
--------------
253,503,850
--------------
Total Consumer Cyclical ................ 519,344,973
--------------
CONSUMER STAPLE 18.3%
BUSINESS SERVICE 1.4%
HBO & Co. .............................. 300,400 10,589,100
Interpublic Group of Companies, Inc. ... 359,650 21,826,260
Young & Rubicam Inc.* .................. 37,100 1,187,200
--------------
33,602,560
--------------
CONTAINER 0.8%
Owens-Illinois Inc. .................... 404,700 18,110,325
--------------
DRUG 5.3%
American Home Products Corp. ........... 402,000 20,803,500
Bristol-Myers Squibb Co. ............... 246,700 28,355,081
Pfizer Inc. ............................ 133,700 14,531,519
Rhodia SA ADR * ........................ 95,500 2,602,375
Warner-Lambert Co. ..................... 820,200 56,901,375
--------------
123,193,850
--------------
FOOD & BEVERAGE 5.2%
Coca-Cola Co. .......................... 345,700 29,557,350
H.J. Heinz Co. ......................... 555,600 31,183,050
PepsiCo Inc. ........................... 637,500 26,257,031
Sara Lee Corp. ......................... 612,000 34,233,750
--------------
121,231,181
--------------
HOSPITAL SUPPLY 3.5%
Boston Scientific Corp.* ............... 330,900 23,700,712
Guidant Corp. .......................... 231,000 16,473,188
Johnson & Johnson ...................... 555,900 40,997,625
--------------
81,171,525
--------------
PERSONAL CARE 1.5%
Gillette Co. ........................... 144,800 8,208,350
Procter & Gamble Co. ................... 283,200 25,788,900
--------------
33,997,250
--------------
TOBACCO 0.6%
Philip Morris Companies, Inc. .......... 381,600 15,025,500
--------------
Total Consumer Staple .................. 426,332,191
--------------
ENERGY 6.7%
OIL 6.1%
Amoco Corp. ............................ 430,300 17,911,237
Exxon Corp. ............................ 438,000 31,234,875
Oryx Energy Co.* ....................... 605,200 13,390,050
Seagull Energy Corp.* .................. 809,800 13,412,313
Shell Transport & Trading PLC .......... 323,700 13,716,788
Total SA Cl. B ADR ..................... 800,708 52,346,285
--------------
142,011,548
--------------
OIL SERVICE 0.6%
Schlumberger Ltd. ...................... 217,124 14,832,283
--------------
Total Energy ........................... 156,843,831
--------------
FINANCE 14.7%
BANK 6.5%
Banc One Corp. ......................... 618,409 34,514,952
BankAmerica Corp. ...................... 451,300 39,009,244
Chase Manhattan Corp. .................. 636,300 48,040,650
H.F. Ahmanson & Co. .................... 415,200 29,479,200
--------------
151,044,046
--------------
FINANCIAL SERVICE 1.0%
Federal National Mortgage Association .. 366,800 22,283,100
--------------
INSURANCE 7.2%
Ace Ltd. ............................... 1,128,600 44,015,400
American General Corp. ................. 423,642 30,158,015
Travelers Group Inc. ................... 803,700 48,724,312
UNUM Corp. ............................. 831,000 46,120,500
--------------
169,018,227
--------------
Total Finance .......................... 342,345,373
--------------
SCIENCE & TECHNOLOGY 12.1%
AEROSPACE 1.3%
Boeing Co. ............................. 173,900 7,749,419
Raytheon Co. Cl. A ..................... 18,767 1,081,448
Raytheon Co. Cl. B ..................... 350,800 20,741,050
--------------
29,571,917
--------------
COMPUTER SOFTWARE & SERVICE 3.4%
America Online Inc.* ................... 51,100 5,416,600
Cadence Design Systems Inc. ............ 318,400 9,950,000
Cisco Systems Inc.* .................... 257,600 23,715,300
EMC Corp.* ............................. 256,900 11,512,331
Microsoft Corp.* ....................... 253,900 27,516,413
--------------
78,110,644
--------------
ELECTRONIC COMPONENTS 2.1%
Analog Devices Inc.* ................... 546,600 13,425,863
Intel Corp. ............................ 278,800 20,666,050
Texas Instruments Inc. ................. 244,900 14,280,731
--------------
48,372,644
--------------
ELECTRONIC EQUIPMENT 1.6%
Lucent Technologies Inc. ............... 123,200 10,248,700
Philips Electronics NV ................. 326,100 27,718,500
--------------
37,967,200
--------------
OFFICE EQUIPMENT 3.7%
Hewlett-Packard Co. .................... 264,000 15,807,000
International Business Machines Corp. .. 282,300 32,411,569
Xerox Corp. ............................ 382,900 38,912,212
--------------
87,130,781
--------------
Total Science & Technology ............. 281,153,186
--------------
UTILITY 7.8%
ELECTRIC 3.0%
FPL Group Inc. ......................... 259,000 16,317,000
Texas Utilities Co. .................... 778,100 32,388,413
Unicom Corp. ........................... 576,100 20,199,506
--------------
68,904,919
--------------
NATURAL GAS 1.0%
Enron Corp. ............................ 454,800 24,587,625
--------------
TELEPHONE 3.8%
AT&T Corp. ............................. 231,700 13,235,863
Bell Atlantic Corp. .................... 651,000 29,701,875
WorldCom Inc.* ......................... 946,200 45,831,562
--------------
88,769,300
--------------
Total Utility .......................... 182,261,844
--------------
Total Common Stocks (Cost $1,417,987,723) 2,186,501,642
--------------
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VALUE
SHARES (NOTE 1)
- -----------------------------------------------------------------------
SHORT-TERM INVESTMENTS 4.8%
State Street Navigator Securities
Lending Prime Portfolio .............. 113,123,186 $ 113,123,186
--------------
Total Short-Term Investments
(Cost $113,123,186) 113,123,186
--------------
<TABLE>
<CAPTION>
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PRINCIPAL MATURITY
AMOUNT DATE
- ---------------------------------------------------------------------------------------------------------------
COMMERCIAL PAPER 5.0%
<S> <C> <C> <C> <C> <C>
American Express Credit Corp., 5.57% $ 3,661,000 7/01/1998 3,661,000
American Express Credit Corp., 5.65% 2,006,000 7/07/1998 2,006,000
Chevron USA Inc., 5.60% ....................... 35,000,000 7/07/1998 35,000,000
Ford Motor Credit Co., 5.56% .................. 36,043,000 7/02/1998 36,043,000
General Electric Capital Corp., 5.58% 255,000 7/07/1998 255,000
Household Finance Corp., 5.62% ................ 28,385,000 7/10/1998 28,385,000
Household Finance Corp., 5.55% ................ 6,246,000 7/15/1998 6,246,000
Merrill Lynch & Company Inc., 5.59% 4,412,000 7/02/1998 4,411,315
--------------
Total Commercial Paper (Cost $116,007,315) ............................................ 116,007,315
--------------
Total Investments (Cost $1,647,118,224) - 103.7% ...................................... 2,415,632,143
Cash and Other Assets, Less Liabilities - (3.7%) ...................................... (86,350,619)
--------------
Net Assets - 100.0% ................................................................... $2,329,281,524
==============
Federal Income Tax Information:
At June 30, 1998, the net unrealized appreciation of
investments based on cost for Federal income tax
purposes of $1,645,991,215 was as follows:
Aggregate gross unrealized appreciation for all investments in which there is an excess
of value over tax cost ................................................................ $ 787,173,323
Aggregate gross unrealized depreciation for all investments in which there is an excess
of tax cost over value ................................................................ (17,532,395)
--------------
$ 769,640,928
==============
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* Non-income-producing securities.
ADR stands for American Depositary Receipt, representing ownership of foreign securities.
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
STATE STREET RESEARCH INVESTMENT TRUST
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STATEMENT OF ASSETS AND LIABILITIES
- -------------------------------------------------------------------------------
June 30, 1998 (Unaudited)
ASSETS
Investments, at value (Cost $1,647,118,224) (Note 1) $2,415,632,143
Cash ..................................................... 240
Receivable for securities sold ........................... 38,382,642
Dividends and interest receivable ........................ 2,627,283
Receivable for fund shares sold .......................... 2,617,929
Other assets ............................................. 147,208
--------------
2,459,407,445
LIABILITIES
Payable for collateral received on securities loaned 113,123,186
Payable for securities purchased ......................... 10,851,757
Accrued management fee (Note 2) .......................... 2,290,751
Payable for fund shares redeemed ......................... 1,153,476
Dividends payable ........................................ 964,133
Accrued transfer agent and shareholder services (Note 2) . 805,272
Accrued distribution and service fees (Note 4) ........... 790,195
Accrued trustees' fee (Note 2) ........................... 19,504
Other accrued expenses ................................... 127,647
--------------
130,125,921
--------------
NET ASSETS $2,329,281,524
==============
Net Assets consist of:
Undistributed net investment income .................... $ 1,517,805
Unrealized appreciation of investments ................. 768,513,919
Accumulated net realized gain .......................... 154,051,759
Paid-in capital ........................................ 1,405,198,041
--------------
$2,329,281,524
==============
Net Asset Value and redemption price per share of
Class A shares ($490,859,266 / 40,169,913 shares) ..... $12.22
======
Maximum Offering Price per share of Class A shares
($12.22 / .955) ........................................ $12.80
======
Net Asset Value and offering price per share of
Class B shares ($779,081,113 / 64,259,553 shares)* .... $12.12
======
Net Asset Value and offering price per share of
Class C shares ($45,428,321 / 3,734,343 shares)* ....... $12.17
======
Net Asset Value, offering price and redemption price
per share of Class S shares
($1,013,912,824 / 82,610,158 shares) ................... $12.27
======
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*Redemption price per share for Class B and Class C is equal to net asset
value less any applicable contingent deferred sales charge.
The accompanying notes are an integral part of the financial statements.
<PAGE>
STATE STREET RESEARCH INVESTMENT TRUST
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STATEMENT OF OPERATIONS
- -------------------------------------------------------------------------------
For the six months ended June 30, 1998 (Unaudited)
INVESTMENT INCOME
Dividends, net of foreign taxes of $119,311 .............. $ 13,307,826
Interest (Note 1) ........................................ 2,296,030
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15,603,856
EXPENSES
Management fee (Note 2) .................................. 4,254,247
Transfer agent and shareholder services (Note 2) ......... 1,145,515
Service fee-Class A (Note 4) ............................. 530,626
Distribution and service fees-Class B (Note 4) ........... 3,305,685
Distribution and service fees-Class C (Note 4) ........... 200,877
Custodian fee ............................................ 161,981
Registration fees ........................................ 99,292
Reports to shareholders .................................. 67,193
Trustees' fees (Note 2) .................................. 19,504
Audit fee ................................................ 16,962
Legal fees ............................................... 16,497
Miscellaneous ............................................ 15,040
-------------
9,833,419
-------------
Net investment income .................................... 5,770,437
-------------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Net realized gain on investments (Notes 1 and 3) ......... 155,481,969
Net unrealized appreciation of investments ............... 211,955,437
-------------
Net gain on investments .................................. 367,437,406
-------------
Net increase in net assets resulting from operations $ 373,207,843
=============
The accompanying notes are an integral part of the financial statements.
<PAGE>
STATE STREET RESEARCH INVESTMENT TRUST
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STATEMENT OF CHANGES IN NET ASSETS
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS ENDED
YEAR ENDED JUNE 30, 1998
DECEMBER 31, 1997 (UNAUDITED)
- -----------------------------------------------------------------------------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income ................................... $ 13,611,975 $ 5,770,437
Net realized gain on investments ........................ 233,740,026 155,481,969
Net unrealized appreciation of
investments ........................................... 153,903,428 211,955,437
-------------- --------------
Net increase resulting from
operations............................................. 401,255,429 373,207,843
-------------- --------------
Dividends from net investment income:
Class A ............................................... (2,789,737) (957,029)
Class B ............................................... (870,683) --
Class C ............................................... (52,743) --
Class S ............................................... (9,898,812) (3,295,603)
-------------- --------------
(13,611,975) (4,252,632)
-------------- --------------
Distributions from net realized gains:
Class A ............................................... (37,498,390) (8,394,749)
Class B ............................................... (56,883,383) (13,188,858)
Class C ............................................... (3,712,939) (806,163)
Class S ............................................... (96,107,440) (18,672,645)
-------------- --------------
(194,202,152) (41,062,415)
-------------- --------------
Net increase from fund share transactions (Note 5) ...... 306,531,257 155,496,094
-------------- --------------
Total increase in net assets............................. 499,972,559 483,388,890
NET ASSETS
Beginning of period ..................................... 1,345,920,075 1,845,892,634
-------------- --------------
End of period (including undistributed net investment
income of $0 and $1,517,805, respectively) ............ $1,845,892,634 $2,329,281,524
============== ==============
</TABLE>
<PAGE>
STATE STREET RESEARCH INVESTMENT TRUST
- -------------------------------------------------------------------------------
NOTES TO UNAUDITED FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------
June 30, 1998
NOTE 1
State Street Research Investment Trust (the "Trust"), is a series of State
Street Research Master Investment Trust (the "Master Trust"), which is a
Massachusetts business trust registered under the Investment Company Act of
1940, as amended, as an open-end management investment company. The Trust is
presently the only series of the Master Trust.
The investment objective of the Trust is to provide long-term growth of capital
and, secondarily, long-term growth of income. In seeking to achieve its
investment objective, the Trust invests primarily in common stocks, or
securities convertible into common stocks, that have long-term growth potential.
The Trust offers four classes of shares. Before November 1, 1997, Class C shares
were designated Class D and Class S shares were designated Class C. Class A
shares are subject to an initial sales charge of up to 4.50% and pay a service
fee equal to 0.25% of average daily net assets. Class B shares are subject to a
contingent deferred sales charge on certain redemptions made within five years
of purchase and pay annual distribution and service fees of 1.00%. Class B
shares automatically convert into Class A shares (which pay lower ongoing
expenses) at the end of eight years after the issuance of the Class B shares.
Class C shares are subject to a contingent deferred sales charge of 1.00% on any
shares redeemed within one year of their purchase. Class C shares also pay
annual distribution and service fees of 1.00%. Class S shares are only offered
to certain retirement accounts, advisory accounts of State Street Research &
Management Company (the "Adviser"), an indirect wholly owned subsidiary of
Metropolitan Life Insurance Company ("Metropolitan"), and special programs. No
sales charge is imposed at the time of purchase or redemption of Class S shares.
Class S shares do not pay any distribution or service fees. The Trust's expenses
are borne pro-rata by each class, except that each class bears expenses, and has
exclusive voting rights with respect to provisions of the Plan of Distribution,
related specifically to that class. The Trustees declare separate dividends on
each class of shares.
The following significant accounting policies are consistently followed by the
Trust in preparing its financial statements, and such policies are in conformity
with generally accepted accounting principles for investment companies.
A. INVESTMENTS IN SECURITIES
Values for listed securities represent the last sale on national securities
exchanges quoted prior to the close of the New York Stock Exchange. Over-the-
counter securities quoted on the National Association of Securities Dealers
Automated Quotation ("NASDAQ") system are valued at the closing price supplied
through such system. In the absence of recorded sales and for those over-the-
counter securities not quoted on the NASDAQ system, valuations are at the mean
of the closing bid and asked quotations, except for securities that may be
restricted as to public resale, which are valued in accordance with methods
adopted by the Trustees. Security transactions are accounted for on the trade
date (date the order to buy or sell is executed), and dividends declared but not
received are accrued on the ex-dividend date. Interest income is determined on
the accrual basis. Realized gains and losses from security transactions are
reported on the basis of identified cost of securities delivered.
B. FEDERAL INCOME TAXES
No provision for Federal income taxes is necessary since the Trust has elected
to qualify under Subchapter M of the Internal Revenue Code and maintains a
policy to distribute all of its taxable income, including net realized capital
gains, within the prescribed time periods. It is also the intention of the Trust
to distribute an amount sufficient to avoid imposition of any Federal Excise Tax
under Section 4982 of the Internal Revenue Code.
C. DIVIDENDS
Dividends from net investment income are declared and paid or reinvested
quarterly. Net realized capital gains are distributed annually, unless
additional distributions are required for compliance with applicable tax
regulations.
Income dividends and capital gain distributions are determined in accordance
with Federal income tax regulations which may differ from generally accepted
accounting principles. The difference is due to the disposition of securities
that have different bases for financial reporting and tax purposes.
D. ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of income and expenses during the reporting period. Actual
results could differ from those estimates.
E. SECURITIES LENDING
The Trust may seek additional income by lending portfolio securities to
qualified institutions. The Trust will receive cash or securities as collateral
in an amount equal to at least 100% of the current market value of any loaned
securities plus accrued interest. If the borrower fails to return the securities
and the value of the collateral has declined during the term of the loan, the
Trust will bear the loss. At June 30, 1998, the value of the securities loaned
and the value of collateral were $110,423,815 and $113,123,186, respectively.
During the six months ended June 30, 1998, income from securities lending
amounted to $112,734 and is included in interest income.
NOTE 2
Effective August 18, 1997 and continuing for a period of one year, the
management fee is equal to 0.41% of average daily net assets on an annualized
basis. Beginning on August 18, 1998 and continuing thereafter, the management
fee will be equal to 0.55% annually on average net assets up to $500,000,000,
0.50% annually of the next $500,000,000 in average net assets, and 0.45%
annually of average net assets in excess of $1,000,000,000. In consideration of
these fees, the Adviser furnishes the Trust with management, investment
advisory, statistical and research facilities and services. The Adviser also
pays all salaries, rent and certain other expenses of management. During the six
months ended June 30, 1998, the fees pursuant to such agreement amounted to
$4,254,247.
State Street Research Service Center, a division of State Street Research
Investment Services, Inc., the Trust's principal underwriter (the
"Distributor"), an indirect wholly owned subsidiary of Metropolitan, provides
certain shareholder services to the Trust such as responding to inquiries and
instructions from investors with respect to the purchase and redemption of
shares of the Trust. In addition, Metropolitan receives a fee for maintenance of
the accounts of certain shareholders who are participants in sponsored
arrangements, employee benefit plans and similar programs or plans, through or
under which shares of the Trust may be purchased. During the six months ended
June 30, 1998, the amount of such shareholder servicing and account expenses was
$275,667.
The fees of the Trustees not currently affiliated with the Adviser amounted to
$19,504 during the six months ended June 30, 1998.
NOTE 3
For the six months ended June 30, 1998, exclusive of short-term investments and
U.S. Government obligations, purchases and sales of securities aggregated
$773,774,299 and $705,767,471, respectively.
NOTE 4
The Trust has adopted a Plan of Distribution pursuant to Rule 12b-1 (the "Plan")
under the Investment Company Act of 1940, as amended. Under the Plan, the Trust
pays annual service fees to the Distributor at a rate of 0.25% of average daily
net assets for Class A, Class B and Class C shares. In addition, the Trust pays
annual distribution fees of 0.75% of average daily net assets for Class B and
Class C shares. The Distributor uses such payments for personal services and/or
the maintenance or servicing of shareholder accounts, to reimburse securities
dealers for distribution and marketing services, to furnish ongoing assistance
to investors and to defray a portion of its distribution and marketing expenses.
For the six months ended June 30, 1998, fees pursuant to such plan amounted to
$530,626, $3,305,685 and $200,877 for Class A, Class B and Class C shares,
respectively.
The Trust has been informed that the Distributor and MetLife Securities, Inc.,
a wholly owned subsidiary of Metropolitan, earned initial sales charges
aggregating $264,001 and $1,661,061, respectively, on sales of Class A shares
of the Trust during the six months ended June 30, 1998, and that MetLife
Securities, Inc. earned commissions aggregating $3,863,070 on sales of Class B
shares, and that the Distributor collected contingent deferred sales charges
of $444,774 and $1,929 on redemptions of Class B and Class C shares,
respectively, during the same period.
NOTE 5
The Trustees have the authority to issue an unlimited number of shares of
beneficial interest, $.001 par value per share.
Share transactions were as follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED
YEAR ENDED JUNE 30, 1998
DECEMBER 31, 1997 (UNAUDITED)
---------------------------------- ----------------------------------
CLASS A SHARES AMOUNT SHARES AMOUNT
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold ................... 11,892,218 $125,284,553 7,536,561 $ 86,720,198
Issued upon reinvestment of:
Distributions from net
realized gains ............. 3,437,670 36,542,436 696,090 8,248,033
Dividends from net investment
income ..................... 269,405 2,789,580 76,478 919,056
Shares redeemed ............... (4,933,408) (51,867,529) (3,476,510) (39,912,613)
---------- ------------ ---------- -------------
Net increase .................. 10,665,885 $112,749,040 4,832,619 $ 55,974,674
========== ============ ========== =============
<CAPTION>
CLASS B SHARES AMOUNT SHARES AMOUNT
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold ................... 19,674,761 $206,270,802 13,634,017 $156,018,262
Issued upon reinvestment of:
Distributions from net
realized gains ............. 5,211,853 54,985,047 1,084,232 12,760,311
Dividend from net investment
income ..................... 79,052 792,716 -- --
Shares redeemed ............... (5,930,757) (62,779,979) (4,465,664) (51,103,747)
---------- ------------ ---------- -------------
Net increase .................. 19,034,909 $199,268,586 10,252,585 $ 117,674,826
========== ============ ========== =============
<CAPTION>
CLASS C (FORMERLY CLASS D) SHARES AMOUNT SHARES AMOUNT
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold ................... 1,100,245 $ 11,484,215 649,708 $ 7,400,561
Issued upon reinvestment of:
Distributions from net
realized gains ............. 334,491 3,539,567 64,573 762,610
Dividend from net investment
income ..................... 3,760 37,536 -- --
Shares redeemed ............... (775,363) (8,173,619) (476,972) (5,327,199)
---------- ------------ ---------- -------------
Net increase .................. 663,133 $ 6,887,699 237,309 $ 2,835,972
========== ============ ========== =============
<CAPTION>
CLASS S (FORMERLY CLASS C) SHARES AMOUNT SHARES AMOUNT
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold ................... 1,718,321 $ 18,233,635 914,427 $ 10,530,082
Issued upon reinvestment of:
Distributions from net
realized gains ............. 5,286,697 56,461,922 819,546 9,752,601
Dividends from net investment
income ..................... 361,083 3,744,987 132,339 1,602,978
Shares redeemed ............... (8,574,756) (90,814,612) (3,768,789) (42,875,039)
---------- ------------ ---------- -------------
Net decrease .................. (1,208,655) $(12,374,068) (1,902,477) $ (20,989,378)
========== ============ ========== =============
</TABLE>
<PAGE>
STATE STREET RESEARCH INVESTMENT TRUST
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- -------------------------------------------------------------------------------
For a share outstanding throughout each period:
<TABLE>
<CAPTION>
CLASS A
--------------------------------------------------------------------------------------------------------
YEARS ENDED DECEMBER 31 SIX MONTHS ENDED
------------------------------------------------------------------------------ JUNE 30, 1998
1993(2) 1994 1995(1) 1996(1) 1997(1) (UNAUDITED)(1)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD($) 8.75 8.69 7.74 9.16 9.07 10.41
---- ---- ---- ---- ---- -----
Net investment income ($) 0.10 0.11 0.14 0.12 0.10 0.04
Net realized and unrealized gain
(loss) on investments ($) 0.81 (0.44) 2.39 1.80 2.54 2.03
---- ---- ---- ---- ---- -----
TOTAL FROM INVESTMENT OPERATIONS ($) 0.91 (0.33) 2.53 1.92 2.64 2.07
---- ---- ---- ---- ---- -----
Dividends from net investment
income ($) (0.13) (0.12) (0.13) (0.13) (0.10) (0.03)
Distributions from net realized gains($) (0.84) (0.50) (0.98) (1.87) (1.20) (0.23)
Distribution in excess of net
realized gains ($) -- -- -- (0.01) -- --
---- ---- ---- ---- ---- -----
TOTAL DISTRIBUTIONS ($) (0.97) (0.62) (1.11) (2.01) (1.30) (0.26)
---- ---- ---- ---- ---- -----
NET ASSET VALUE, END OF PERIOD ($) 8.69 7.74 9.16 9.07 10.41 12.22
==== ==== ==== ==== ===== =====
Total return(4) (%) 10.53(5) (3.84) 32.85 21.03 28.91 19.87(5)
RATIOS/SUPPLEMENTAL DATA:
Net assets at end of period ($ thousands) 75,259 92,137 135,676 223,868 367,759 490,859
Ratio of operating expenses to average
net assets (%) 0.75(6) 0.89 0.78 0.75 0.76 0.81(6)
Ratio of net investment income
to average net assets (%) 1.27(6) 1.26 1.54 1.17 0.90 0.70(6)
Portfolio turnover rate (%) 43.57 33.08 39.21 73.51 75.21 34.91
<CAPTION>
CLASS B
--------------------------------------------------------------------------------------------------------
YEARS ENDED DECEMBER 31 SIX MONTHS ENDED
------------------------------------------------------------------------------- JUNE 30, 1998
1993(3) 1994 1995(1) 1996(1) 1997(1) (UNAUDITED)(1)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD ($) 9.15 8.66 7.72 9.13 9.03 10.34
------ ------ ------- ------- ------ ------
Net investment income (loss) ($) 0.06 0.06 0.07 0.04 0.02 (0.00)
Net realized and unrealized gain
(loss) on investments($) 0.39 (0.44) 2.38 1.80 2.51 2.01
------ ------ ------- ------- ------ ------
TOTAL FROM INVESTMENT OPERATIONS ($) 0.45 (0.38) 2.45 1.84 2.53 2.01
------ ------ ------- ------- ------ ------
Dividends from net investment income($) (0.10) (0.06) (0.06) (0.06) (0.02) --
Distributions from net realized gains ($) (0.84) (0.50) (0.98) (1.87) (1.20) (0.23)
Distribution in excess of net realized
gains ($) -- -- -- (0.01) -- --
------ ------ ------- ------- ------ ------
TOTAL DISTRIBUTIONS ($) (0.94) (0.56) (1.04) (1.94) (1.22) (0.23)
------ ------ ------- ------- ------ ------
NET ASSET VALUE, END OF PERIOD ($) 8.66 7.72 9.13 9.03 10.34 12.12
====== ====== ======= ======= ====== ======
Total return(4) (%) 4.95(5) (4.43) 31.86 20.15 27.80 19.46(5)
RATIOS/SUPPLEMENTAL DATA:
Net assets at end of period ($ thousands) 73,110 113,301 183,446 315,766 558,568 779,081
Ratio of operating expenses to average net
assets (%) 1.51(6) 1.64 1.53 1.50 1.51 1.56(6)
Ratio of net investment income (loss) to
average net assets (%) 0.48(6) 0.51 0.79 0.41 0.15 (0.05)(6)
Portfolio turnover rate(%) 43.57 33.08 39.21 73.51 75.21 34.91
- -----------------------------------------------------------------------------------------------------------------------------------
(1) Per-share figures have been calculated using the average shares method.
(2) February 17, 1993 (commencement of share class designations) to December 31, 1993.
(3) March 15, 1993 (commencement of share class designations) to December 31, 1993.
(4) Does not reflect any front-end or contingent deferred sales charges.
(5) Not annualized.
(6) Annualized.
</TABLE>
<PAGE>
STATE STREET RESEARCH INVESTMENT TRUST
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (cont'd)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CLASS C (FORMERLY CLASS D)
---------------------------------------------------------------------------------------------------------
YEARS ENDED DECEMBER 31 SIX MONTHS ENDED
------------------------------------------------------------------------------- JUNE 30, 1998
1993(3) 1994 1995(1) 1996(1) 1997(1) (UNAUDITED)(1)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD ($) 9.15 8.68 7.74 9.15 9.05 10.38
------- ------- ------- ------- ------- -------
Net investment income (loss) ($) 0.06 0.05 0.07 0.04 0.02 (0.00)
Net realized and unrealized gain
(loss) on investments ($) 0.40 (0.43) 2.38 1.79 2.53 2.02
------- ------- ------- ------- ------- -------
TOTAL FROM INVESTMENT OPERATIONS ($) 0.46 (0.38) 2.45 1.83 2.55 2.02
------- ------- ------- ------- ------- -------
Dividends from net investment income ($) (0.09) (0.06) (0.06) (0.05) (0.02) --
Distributions from net realized gains ($) (0.84) (0.50) (0.98) (1.87) (1.20) (0.23)
Distribution in excess of net realized
gains ($) -- -- -- (0.01) -- --
------- ------- ------- ------- ------- -------
TOTAL DISTRIBUTIONS ($) (0.93) (0.56) (1.04) (1.93) (1.22) (0.23)
------- ------- ------- ------- ------- -------
NET ASSET VALUE, END OF PERIOD ($) 8.68 7.74 9.15 9.05 10.38 12.17
======= ======= ======= ======= ======= =======
Total return(4) (%) 5.10(5) (4.45) 31.75 20.09 27.93 19.49(5)
RATIOS/SUPPLEMENTAL DATA:
Net assets at end of period ($ thousands) 9,729 11,707 16,841 25,658 36,290 45,428
Ratio of operating expenses to average
net assets (%) 1.51(6) 1.64 1.53 1.50 1.51 1.56(6)
Ratio of net investment income (loss) to
average net assets (%) 0.51(6) 0.51 0.79 0.42 0.15 (0.05)(6)
Portfolio turnover rate(%) 43.57 33.08 39.21 73.51 75.21 34.91
<CAPTION>
CLASS S (FORMERLY CLASS C)
---------------------------------------------------------------------------------------------------------
YEARS ENDED DECEMBER 31 SIX MONTHS ENDED
-------------------------------------------------------------------------------- JUNE 30, 1998
1993 1994 1995(1) 1996(1) 1997(1) (UNAUDITED)(1)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD ($) 8.80 8.70 7.76 9.18 9.11 10.45
------- ------- ------- ------- ------- -------
Net investment income($) 0.15 0.13 0.16 0.14 0.12 0.05
Net realized and unrealized gain (loss)
on investments ($) 0.74 (0.43) 2.39 1.82 2.54 2.04
------- ------- ------- ------- ------- -------
TOTAL FROM INVESTMENT OPERATIONS ($) 0.89 (0.30) 2.55 1.96 2.66 2.09
------- ------- ------- ------- ------- -------
Dividends from net investment income ($) (0.15) (0.14) (0.15) (0.15) (0.12) (0.04)
Distributions from net realized gains ($) (0.84) (0.50) (0.98) (1.87) (1.20) (0.23)
Distribution in excess of net realized
gains($) -- -- -- (0.01) -- --
------- ------- ------- ------- ------- -------
TOTAL DISTRIBUTIONS ($) (0.99) (0.64) (1.13) (2.03) (1.32) (0.27)
------- ------- ------- ------- ------- -------
NET ASSET VALUE, END OF PERIOD ($) 8.70 7.76 9.18 9.11 10.45 12.27
======= ======= ======= ======= ======= =======
Total return(4) (%) 10.20 (3.47) 33.07 21.48 29.08 20.04(5)
RATIOS/SUPPLEMENTAL DATA:
Net assets at end of period ($ thousands) 729,536 627,551 738,649 780,627 883,276 1,013,913
Ratio of operating expenses to average
net assets (%) 0.49 0.65 0.54 0.50 0.51 0.56(6)
Ratio of net investment income to average
net assets (%) 1.63 1.54 1.81 1.44 1.17 0.94(6)
Portfolio turnover rate(%) 43.57 33.08 39.21 73.51 75.21 34.91
- -----------------------------------------------------------------------------------------------------------------------------------
(1) Per-share figures have been calculated using the average shares method.
(2) February 17, 1993 (commencement of share class designations) to December 31, 1993.
(3) March 15, 1993 (commencement of share class designations) to December 31, 1993.
(4) Does not reflect any front-end or contingent deferred sales charges.
(5) Not annualized.
(6) Annualized.
</TABLE>
<PAGE>
STATE STREET RESEARCH INVESTMENT TRUST
<TABLE>
- -------------------------------------------------------------------------------------------------------------------
FUND INFORMATION, OFFICERS AND TRUSTEES OF STATE STREET RESEARCH MASTER INVESTMENT TRUST
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
FUND INFORMATION OFFICERS TRUSTEES
STATE STREET RESEARCH RALPH F. VERNI RALPH F. VERNI
INVESTMENT TRUST Chairman of the Board, Chairman of the Board,
One Financial Center President and President, Chief Executive
Boston, MA 02111 Chief Executive Officer Officer and Director,
State Street Research &
INVESTMENT ADVISER PETER C. BENNETT Management Company
State Street Research & Vice President
Management Company STEVE A. GARBAN
One Financial Center DUDLEY F. WADE Retired; formerly Senior Vice
Boston, MA 02111 Vice President President for Finance and
Operations and Treasurer, The
DISTRIBUTOR JAMES M. WEISS Pennsylvania State University
State Street Research Vice President
Investment Services, Inc. MALCOLM T. HOPKINS
One Financial Center JOHN T. WILSON Former Vice Chairman of the
Boston, MA 02111 Vice President Board and Chief Financial
Officer, St. Regis Corp.
SHAREHOLDER SERVICES GERARD P. MAUS
State Street Research Treasurer EDWARD M. LAMONT
Service Center Formerly in banking
P.O. Box 8408 JOSEPH W. CANAVAN (with an affiliate of
Boston, MA 02266-8408 Assistant Treasurer J.P. Morgan & Co. in New York);
1-800-562-0032 presently engaged in private
DOUGLAS A. ROMICH investments and civic affairs
CUSTODIAN Assistant Treasurer
State Street Bank and ROBERT A. LAWRENCE
Trust Company FRANCIS J. MCNAMARA, III Formerly Partner, Saltonstall & Co.
225 Franklin Street Secretary and General Counsel
Boston, MA 02110
DARMAN A. WING DEAN O. MORTON
Assistant Secretary and Retired; formerly Executive
Assistant General Counsel Vice President, Chief
Operating Officer and Director,
AMY L. SIMMONS Hewlett-Packard Company
Assistant Secretary
TOBY ROSENBLATT
President,
The Glen Ellen Company
Vice President,
Founders Investments Ltd.
MICHAEL S. SCOTT MORTON
Jay W. Forrester Professor of
Management, Sloan School of
Management, Massachusetts
Institute of Technology
</TABLE>
<PAGE>
STATE STREET RESEARCH INVESTMENT TRUST -------------
One Financial Center Bulk Rate
Boston, MA 02111 U.S. Postage
PAID
Permit #6
Hartford, CT
-------------
QUESTIONS? COMMENTS?
CALL us at 1-800-562-0032 or
WRITE us at:
State Street Research
Service Center
P.O. Box 8408
Boston, MA 02266-8408
E-MAIL us at:
[email protected]
INTERNET site:
www.ssrfund.com
[logo] STATE STREET RESEARCH
This report is prepared for the general information of current shareholders.
When used in the general solicitation of investors, this report must be
accompanied or preceded by a current State Street Research Investment Trust
prospectus. When used after September 30, 1998, this report must be accompanied
by a current Quarterly Performance Update.
Portfolio changes should not be considered recommendations for action by
individual investors.
The Dalbar awards recognize quality shareholder service and should not be
considered a rating of fund performance. The survey included mutual fund
complexes that volunteered or were otherwise selected to participate and was not
industry-wide.
CONTROL NUMBER: 5187-980814(exp0899)SSR-LD IT-202F-0898
